NEPHROS INC SEC 10-Q Report

Nephros Inc., a leading provider of high-performance water solutions, has released its latest Form 10-Q report, showcasing significant improvements in both financial and operational metrics. The company's focus on infection control and dialysis water solutions has driven substantial growth, as reflected in the key highlights of the report.

Financial Highlights

Nephros Inc. has reported robust financial performance for the latest quarter, marked by significant improvements across various key metrics:

• Total Net Revenues: $4.877 million, a 38% increase compared to the same period in 2024, driven by increased revenue in both programmatic and emergency response segments.
• Gross Margin: $3.154 million, representing a 65% gross margin, up from 62% in the prior year, attributed to a favorable product mix and a price increase.
• Operating Income: $0.566 million, a significant improvement from an operating loss of $0.200 million in the same period in 2024, reflecting better cost management and increased sales.
• Net Income: $0.558 million, compared to a net loss of $0.169 million in the same period in 2024, indicating improved profitability.
• Net Income Per Common Share, Basic: $0.05, compared to a loss of $0.02 per share in the same period in 2024, reflecting the company's return to profitability.

Business Highlights

Nephros Inc. has also demonstrated strong operational performance, with key developments and strategic initiatives driving growth:

• Revenue Segments: Nephros operates in one business segment focused on high-performance water solutions, with primary product lines in infection control and dialysis water. The infection control segment includes microfilters and ultrafilters used to prevent infections from waterborne pathogens, while the dialysis segment consists of ultrafilters designed to remove biological contaminants from water and bicarbonate concentrate used in dialysis treatment.
• Product Lines: The company's medical-grade filters are FDA 510(k)-cleared as Class II medical devices, used in healthcare settings and other industries where water quality is critical. Nephros also offers commercial water filters that improve taste and odor, reduce biofilm formation and scale buildup, and remove cysts, particulates, and soluble lead from water systems.
• Target Markets: Nephros targets hospitals and healthcare facilities for infection control, dialysis centers for water and bicarbonate filtration, and commercial facilities for water purification. The company leverages distributors and a direct salesforce to expand its reach in these markets.
• Geographical Performance: The company has expanded its distribution in the commercial market to pursue national accounts, which may result in increased revenue over time. The change in U.S. presidential administrations in January 2025 is expected to impact the levels of emergency response-related sales.
• Sales Strategy: Nephros primarily sells through distributors, enabling rapid expansion with limited sales staff. The company also uses a direct salesforce targeting key geographic regions and focuses on hospital and dialysis markets.
• Future Outlook: Nephros anticipates that water safety management programs currently used in medical facilities may migrate to commercial markets, potentially increasing demand for its products. The company is prepared to deploy its expertise and solutions to meet this growing demand.

SEC Filing: NEPHROS INC [ NEPH ] - 10-Q - May. 15, 2025