Nephros, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, showing a mixed performance compared to the previous fiscal period. For the three months ended September 30, 2024, net revenue decreased to $3,518,000, down 6% from $3,742,000 in the same period of 2023. Similarly, for the nine months, net revenue fell to $10,292,000 from $10,984,000, also a 6% decline. The gross margin for the third quarter was $2,149,000, slightly lower than $2,194,000 in 2023, but the gross margin percentage improved from 59% to 61%.

Operating income for the third quarter turned positive at $206,000, a significant improvement from an operating loss of $(203,000) in the prior year. For the nine months, however, the company reported an operating loss of $(311,000), although this was an improvement from $(944,000) in the same period of 2023. Net income for the third quarter was $183,000, compared to a net loss of $(182,000) in the previous year, while the nine-month net loss decreased to $(275,000) from $(921,000).

The company’s cash and cash equivalents as of September 30, 2024, were $2,457,000, down from $4,307,000 at the end of 2023. Total current assets also decreased to $7,356,000 from $8,405,000, while total assets fell to $10,386,000 from $11,861,000. Total liabilities decreased significantly to $2,212,000 from $3,503,000, leading to total stockholders’ equity of $8,174,000, slightly down from $8,358,000.

Nephros has focused on managing expenses, with selling, general, and administrative expenses for the third quarter decreasing by 19% to $1,721,000. Research and development expenses also saw a reduction, contributing to the overall improvement in operating income. The company has been preparing for higher sales volumes by increasing inventory, which rose to $3,099,000 from $2,470,000.

Strategically, Nephros dissolved its subsidiary, Specialty Renal Products, Inc. (SRP), in April 2023, which has impacted its financials. The company is now concentrating on its core business of developing advanced water filtration solutions for medical and commercial markets, with a focus on increasing sales and managing costs to achieve positive cash flow. The company believes its current cash balances will support operations for at least the next 12 months, although it may need to further reduce discretionary expenditures if operating results do not meet expectations.