[8-K] Delcath Systems Inc Reports Material Event

Rhea-AI Filing Summary

Holley Inc. (HLLY) Q2 FY25 10-Q highlights

• Sales softened: Q2 net sales slipped 1.7 % YoY to $166.7 m; 1H sales down 2.6 % to $319.7 m.
• Margins resilient: Gross margin improved 40 bp to 41.8 %, keeping operating margin steady at 16.5 % despite volume pressure.
• Earnings contracted: Q2 net income fell 36 % YoY to $10.9 m; diluted EPS $0.09 vs $0.14. 1H EPS $0.11 vs $0.17.
• Cost headwinds: Interest expense rose 1.5 % to $13.4 m; effective tax rate normalised to 24.4 % (prior-year 10.7 %), magnifying EPS drop.
• Cash & liquidity: Cash increased $7.8 m to $63.8 m; operating cash flow down to $32.6 m (-27 %). Net debt trimmed $2.4 m to $486.3 m, leverage remains high (≈4.6× EBITDA*).
• Inventory & working-capital: Inventory reduced $11.7 m QoQ, aiding cash; A/R up $14.9 m on timing.
• Strategic move: Closed $23.8 m Cataclean perpetual North-America license (paid $13.1 m, $10.7 m accrual) to expand emissions-cleaning portfolio.
• Hedging: Added $400 m SOFR collar (floor 3.35 %, cap 4.99 %) through Nov-28; collar liability marked at $5.3 m (P&L drag).
• Legal overhang: Securities class action continues; motion to dismiss pending.
• Shares outstanding: 120.5 m (incl. 1.09 m earn-out) as of 4 Aug 25.

*EBITDA approximated as operating income plus D&A and non-cash items.

Positive

• Gross margin expanded 40 bp YoY despite lower volume, signalling pricing power and cost control.
• Cash balance increased $7.8 m QoQ, providing ~$64 m liquidity plus $100 m revolver capacity.
• Inventory reduced by $11.7 m, improving working-capital efficiency.
• Cataclean perpetual license adds new product category and long-term revenue potential.

Negative

• Net sales fell 1.7 % YoY in Q2 and 2.6 % YTD, indicating demand softness.
• Net income plunged 36 % and diluted EPS dropped to $0.09, pressured by higher tax and interest.
• Operating cash flow down 27 % to $32.6 m; free cash flow negative after $20.9 m investing outlay.
• High leverage persists (~4.6× est. EBITDA) with $550 m term loan due 2028.
• Securities class-action lawsuit adds legal uncertainty and potential costs.

Insights

Equity Analyst

TL;DR: Soft top-line and higher taxes cut EPS 36 %; margins held, leverage steady; Cataclean license adds growth optionality.

Revenue contraction across Domestic Muscle and Safety & Racing shows discretionary demand still muted, yet 40 bp gross-margin gain demonstrates pricing and mix discipline. Operating costs were flat, cushioning profit. However, normalised tax rate and persistent 8 % borrowing cost eroded net income. Cash build stemmed mainly from inventory unwind; FCF after $21 m investing outflows turned slightly negative. New Cataclean license could open emission-chemicals cross-sell, but adds $23.8 m intangible and $10.7 m near-term cash need. Ongoing class-action risk and 4.6× leverage limit rerating. Overall bias negative but manageable.

Credit Analyst

TL;DR: Credit profile largely unchanged; collar hedges rate risk but EBITDA erosion slows deleveraging.

Term loan balance edged down to $558 m with no revolver draw—liquidity cushion of $64 m cash plus $97 m undrawn revolver (after LOCs). Interest-rate collars cap SOFR near 5 %, containing further expense escalation. EBITDA slippage keeps net leverage around mid-4×, still within covenant relief thresholds. Free cash flow compression and $13 m Cataclean payment temper flexibility. No near-term maturities until 2028; covenant compliance solid. Risk skew from litigation and cyclical aftermarket exposure, yet refinancing risk low.

FALSE000087291200008729122025-08-062025-08-06

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

_____________________

FORM 8-K

_____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 6, 2025

_____________________

DELCATH SYSTEMS, INC.

(Exact Name of Registrant as Specified in its Charter)

_____________________

Delaware

001-16133

06-1245881

(State or other jurisdiction of incorporation or organization)

(Commission File Number)

(IRS Employer Identification No.)

566 Queensbury Avenue

Queensbury, NY 12804

(Address of principal executive offices) (Zip Code)

(518) 743-8892

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

_____________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Name of each exchange

symbol(s)

on which registered

Common Stock, $.01 par value

DCTH

The Nasdaq Capital Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02    

Results of Operations and Financial Condition.

On August 6, 2025, Delcath Systems, Inc. (“Delcath”) issued a press release announcing financial results and business highlights for the quarter ended June 30, 2025 (the “Press Release”). A copy of the press release is furnished pursuant to Item 2.02 as Exhibit 99.1 hereto and is incorporated herein by reference.

The information contained in this Current Report on Form 8-K, including the Press Release, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained herein and in the Press Release shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission by Delcath whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01    

Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.						Description
99.1						Press Release, dated August 6, 2025
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			DELCATH SYSTEMS, INC.
Date: August 6, 2025			By:						/s/ Sandra Pennell
									Name: Sandra Pennell
									Title: Chief Financial Officer

FAQ

How did Holley (HLLY) perform financially in Q2 2025?

Net sales were $166.7 m (-1.7 % YoY); net income $10.9 m (-36 %); diluted EPS $0.09.

Why did Holley’s EPS drop despite stable operating margin?

A higher effective tax rate (24.4 % vs 10.7 %) and increased interest expense reduced net income.

What is the status of Holley’s debt and leverage?

Term loan $558 m with 8.2 % avg. rate; net leverage estimated mid-4× EBITDA, no revolver borrowings.

What strategic investment occurred in 2025?

Holley bought a $23.8 m perpetual Cataclean license for North American fuel & emissions cleaning products.

Are there any significant legal risks noted?

Yes, a putative securities class action filed in Nov 2023 is ongoing; motion to dismiss is pending.

How much liquidity does Holley have?

Cash of $63.8 m plus roughly $97 m availability on the $100 m revolver (after $2.5 m LCs).