Vapotherm Reports Second Quarter 2023 Financial Results

Vapotherm, Inc. (NYSE: VAPO), (“Vapotherm” or the “Company”), today announced second quarter 2023 financial results.

Second Quarter 2023 Summary and Highlights

  • Net revenue for the second quarter of 2023 was $16.0 million, an increase of 23.6% as compared to the second quarter of 2022
    • Disposables revenue increased by 38.1% as compared to the second quarter of 2022 due to recovery of customer demand post-COVID
    • Capital revenue increased by 42.0% as compared to the second quarter of 2022 due to strong HVT 2.0 sales
    • Non-GAAP net revenue excluding Vapotherm Access, which the Company exited in the fourth quarter of 2022, increased by 33.8% as compared to the second quarter of 2022
  • Gross margin in the second quarter of 2023 was 42.8%
    • Gross margin increased by 780 basis points over the first quarter of 2023 due to continued benefits from the transition of the Company’s manufacturing operations to Mexico
  • For the second quarter of 2023, GAAP operating expenses were $17.0 million and non-GAAP cash operating expenses were $14.2 million. Both decreased compared to the prior year period and first quarter of 2023 as a result of the Company’s Path to Profitability initiatives:
    • GAAP operating expenses decreased by $2.8 million over the first quarter of 2023 and by $25.2 million over the second quarter of 2022
    • Non-GAAP cash operating expenses decreased by $2.2 million over the first quarter of 2023 and by $7.6 million over the second quarter of 2022
  • The Company’s unrestricted cash balance was $18.0 million at the end of the second quarter of 2023
    • Net cash burn of $7.8 million in the second quarter was $3.2 million less than net cash burn in the first quarter of 2023

“We delivered a good second quarter and are pleased with the progress we continue to see in the business as we drive forward on our path to profitability,” said Joseph Army, President and CEO. “HVT 2.0 sales continue to be strong and we are seeing encouraging trends in U.S. disposable sales exiting the second quarter. We saw a nearly 800 basis point sequential improvement in gross margin, as well as significant progress in reducing cash operating expenses, inventory and cash burn as we move meaningfully towards profitability.”

Results for the Three Months June 30, 2023

The following table reflects the Company’s net revenue for the three months ended June 30, 2023 and 2022:

 

 

Three Months Ended June 30,

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

Change

 

 

 

(in thousands, except percentages)

 

 

 

Amount

 

 

% of Revenue

 

 

Amount

 

 

% of Revenue

 

 

$

 

 

%

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital (product & lease revenue)

 

$

3,646

 

 

 

22.7

%

 

$

2,568

 

 

 

19.8

%

 

$

1,078

 

 

 

42.0

%

Disposables

 

 

10,927

 

 

 

68.1

%

 

 

7,913

 

 

 

61.0

%

 

 

3,014

 

 

 

38.1

%

Service and other

 

 

1,464

 

 

 

9.2

%

 

 

2,490

 

 

 

19.2

%

 

 

(1,026

)

 

 

(41.2

)%

Total net revenue

 

$

16,037

 

 

 

100.0

%

 

$

12,971

 

 

 

100.0

%

 

$

3,066

 

 

 

23.6

%

Net revenue for the second quarter of 2023 was $16.0 million. This increase reflects a recovery of post-COVID demand from customers as there was little to no COVID-related customer demand in both comparison periods. Excluding revenue from Vapotherm Access, which the Company exited in the fourth quarter of 2022, net revenue would have increased by 33.8% as compared to the second quarter of 2022.

Revenue information by geography is summarized as follows:

 

 

Three Months Ended June 30,

 

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

Change

 

 

 

(in thousands, except percentages)

 

 

 

Amount

 

 

% of Revenue

 

 

Amount

 

 

% of Revenue

 

 

$

 

 

%

 

United States

 

$

11,847

 

 

 

73.9

%

 

$

9,498

 

 

 

73.2

%

 

$

2,349

 

 

 

24.7

%

International

 

 

4,190

 

 

 

26.1

%

 

 

3,473

 

 

 

26.8

%

 

 

717

 

 

 

20.6

%

Total net revenue

 

$

16,037

 

 

 

100.0

%

 

$

12,971

 

 

 

100.0

%

 

$

3,066

 

 

 

23.6

%

Gross profit and gross margin for the second quarter of 2023 was $6.9 million and 42.8%, respectively. In the second quarter of 2023, gross margin increased by 780 basis points over gross margin of 35.0% in the first quarter of 2023.

Total operating expenses were $17.0 million in the second quarter of 2023, a decrease of $25.2 million as compared to the same period last year. Non-GAAP cash operating expenses, excluding impairment charges, gain (loss) on disposal of property and equipment, depreciation and amortization, stock-based compensation expense, termination benefits, gain from deconsolidation, and change in fair value of contingent consideration were $14.2 million in the second quarter of 2023 compared to $21.7 million in the second quarter of 2022 and $16.4 million in the first quarter of 2023. The decreases in operating expenses and non-GAAP cash operating expenses were primarily due to the Company’s Path-to-Profitability initiatives.

Net loss for the second quarter of 2023 was $14.8 million, or $0.29 per share, compared to $42.7 million, or $1.61 per share, in the second quarter of 2022. Net loss per share was based on 50,625,778 and 26,574,027 weighted average shares outstanding for the second quarter of 2023 and 2022, respectively.

Adjusted EBITDA was negative $6.4 million for the second quarter of 2023 as compared to negative $20.2 million for the second quarter of 2022. The improvement in Adjusted EBITDA was primarily due to the Company’s Path-to-Profitability initiatives.

Cash Position

Cash and cash equivalents were $18.0 million as of June 30, 2023 compared to $25.7 million as of March 31, 2023.

Fiscal 2023 Outlook

For fiscal 2023, the Company now expects full year revenue to be between $70 million and $73 million, a decrease from its previous expectation of $77 million to $79 million. The Company now expects full year gross margins of 43% to 45%, a decrease from its previous expectation of 48% to 50%. The Company now expects full year operating expenses of $70 million to $72 million, a decrease from its previous expectation of $76 million to $78 million. For fiscal 2023, non-GAAP cash operating expenses, excluding additional items as detailed below, are now expected to be in the range of $55 million to $57 million, a decrease from its previous expectation of $60 million to $62 million. The Company expects cash burn for the second half of 2023 to be between $3 million to $8 million resulting in cash and cash equivalents of $10 million to $15 million at the end of the year. While the Company expects disposables revenue to account for 75% of its total revenue over the long-term, the Company anticipates that the contribution of disposables revenue as a percentage of total revenue may be slightly lower than this in 2023 given the market receptivity to HVT 2.0.

Reverse Stock Split

At the Company’s annual meeting of stockholders held on June 20, 2023, the stockholders approved a proposal granting the Board of Directors the discretion to effect a reverse stock split of the Company’s common stock at a ratio of between 1-for-3 and 1-for-8 at any point through the next annual meeting to be held in 2024. On August 8, 2023, the Company’s Board of Directors approved a 1-for-8 reverse stock split and a corresponding reduction in authorized shares of the Company’s common stock, effective as of 12:01 a.m., Eastern Time, on August 18, 2023, with shares expected to begin trading on a split-adjusted basis at market open on August 18, 2023 under the existing symbol “VAPO” and new CUSIP number 922107 305. In connection with the reverse stock split, every eight shares of the Company’s common stock issued and outstanding as of the effective date of the split will be automatically converted into one share of the Company’s common stock. Fractional shares will not be issued in connection with the reverse stock split and stockholders who would otherwise hold fractional shares because the number of shares of common stock they hold before the reverse stock split is not evenly divisible by eight will be entitled to receive a cash payment in lieu of such fractional shares. The intent of the reverse stock split is to regain compliance with minimum share price requirement, although no assurance can be provided that the reverse stock split will result in the Company’s compliance with the NYSE minimum share price requirement, or that the Company will be able to regain or maintain compliance with the applicable NYSE listing standards.

Conference Call Information

Management will host a conference call at 4:30 p.m. Eastern Time on August 8, 2023 to discuss the results of the quarter with a question and answer session. To listen to the conference call on your telephone, please dial +1 (888) 330-2391 for U.S. callers, or +1 (240) 789-2702 for international callers, approximately ten minutes prior to the start time and reference conference code 6585549. To listen to a live webcast, please visit the Investors section of the Vapotherm website at: http://investors.vapotherm.com/events-and-presentations/events. The webcast replay will be available on the Vapotherm website for 12 months following completion of the call. A replay of this conference call will be available by telephone through August 15, 2023 by dialing +1 (800) 770-2030 in the U.S. or +1 (647) 362-9199 outside of the U.S. The replay access code is 6585549.

Website Information

Vapotherm routinely posts important information for investors on the Investor Relations section of its website, http://investors.vapotherm.com/. Vapotherm intends to use this website as a means of disclosing material, non-public information and for complying with Vapotherm’s disclosure obligations under Regulation FD. Accordingly, investors should monitor the Investor Relations section of Vapotherm’s website, in addition to following Vapotherm’s press releases, Securities and Exchange Commission (“SEC”) filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, Vapotherm’s website is not incorporated by reference into, and is not a part of, this document.

Non-GAAP Financial Measures

This press release includes non-GAAP financial measures, including non-GAAP net revenue excluding Vapotherm Access, EBITDA, Adjusted EBITDA, non-GAAP operating expenses excluding impairment of goodwill, impairment of long-lived and intangible assets and gain (loss) on disposal of property and equipment, and non-GAAP cash operating expenses excluding additional items, including stock-based compensation expense, depreciation and amortization, termination benefits, gain from deconsolidation, and change in fair value of contingent consideration, which differ from operating expenses calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Non-GAAP net revenue excluding Vapotherm Access represents net revenue less net revenue of Vapotherm Access, which the Company exited in the fourth quarter of 2022. EBITDA represents net loss less interest expense, net, income tax provision or benefit, and depreciation and amortization, and Adjusted EBITDA represents EBITDA as further adjusted for the impact of foreign currency loss or gain, change in fair value of contingent consideration, stock-based compensation expense, impairment of goodwill, impairment of long-lived and intangible assets, gain from deconsolidation, and gain on disposal of property and equipment. Since these adjustments to the GAAP measures are highly variable, difficult to predict and of a size that could have substantial impact on Vapotherm’s reported results of operations for a period, Vapotherm cannot provide without unreasonable effort a quantitative reconciliation to the most directly comparable GAAP measures for its 2023 financial guidance regarding non-GAAP cash operating expenses. The Company has reconciled all historical non-GAAP financial measures with the most directly comparable GAAP financial measures in tables accompanying this release.

These non-GAAP financial measures are presented because the Company believes they are useful indicators of its operating performance. Management uses these non-GAAP financial measures, as measures of the Company’s operating performance and for planning purposes, including the preparation of the Company’s annual operating budget and financial projections. The Company believes these measures are useful to investors as supplemental information because they are frequently used by analysts, investors and other interested parties to evaluate companies in its industry. The Company believes Adjusted EBITDA is useful to its management and investors as a measure of comparative operating performance from period to period.

These non-GAAP financial measures should not be considered alternatives to, or superior to, net income or loss as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP. They should not be construed to imply that the Company’s future results will be unaffected by unusual or non-recurring items. In addition, Adjusted EBITDA is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect certain cash requirements such as tax payments, debt service requirements, capital expenditures and certain other cash costs that may recur in the future. Adjusted EBITDA contains certain other limitations, including the failure to reflect our capital expenditures, cash requirements for working capital needs and cash costs to replace assets being depreciated and amortized. In evaluating Adjusted EBITDA, you should be aware that in the future the Company may incur expenses that are the same as or similar to some of the adjustments in the Adjusted EBITDA presentation. The Company’s presentation of Adjusted EBITDA should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on the Company’s GAAP results in addition to using Adjusted EBITDA and other non-GAAP financial measures on a supplemental basis. The Company’s definitions of Adjusted EBITDA and non-GAAP operating expenses excluding impairment of long-lived and intangible assets and loss on disposal of property and equipment and non-GAAP cash operating expenses excluding the additional items detailed below, are not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation.

About Vapotherm

Vapotherm, Inc. (NYSE: VAPO) is a publicly traded developer and manufacturer of advanced respiratory technology based in Exeter, New Hampshire, USA. The Company develops innovative, comfortable, non-invasive technologies for respiratory support of patients with chronic or acute breathing disorders. Over 4.0 million patients have been treated with the use of Vapotherm high velocity therapy® systems. For more information, visit www.vapotherm.com.

Vapotherm high velocity therapy is mask-free non-invasive respiratory support and is a front-line tool for relieving respiratory distress—including hypercapnia, hypoxemia, and dyspnea. It allows for the fast, safe treatment of undifferentiated respiratory distress with one tool. The HVT 2.0 and Precision Flow systems’ mask-free interface delivers optimally conditioned breathing gases, making it comfortable for patients and reducing the risks and care complexities associated with mask therapies. While being treated, patients can talk, eat, drink and take oral medication.

Legal Notice Regarding Forward-Looking Statements

This press release contains forward-looking statements under the Private Securities Litigation Reform Act of 1995, including statements about the Company’s expected net revenue, including revenue breakdown, gross margin, operating expenses, non-GAAP cash operating expenses and cash burn for fiscal year 2023 and the timing and effect of the reverse stock split. In some cases, you can identify forward-looking statements by terms such as “expect,” “continue,” “plan,” “intend,” “will,” “outlook,” “guidance,” or “typically,” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words, and the use of future dates. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such statement. Applicable risks and uncertainties include, but are not limited to the following: Vapotherm has incurred losses in the past and may be unable to achieve or sustain profitability in the future or achieve its 2023 financial guidance including reduced cash burn; risks associated with its manufacturing operations in Mexico; Vapotherm’s ability to raise additional capital to fund its existing commercial operations, develop and commercialize new products, and expand its operations; Vapotherm’s ability to comply with its financial covenants, execute on its path-to-profitability initiative, convert excess inventory into cash and fund its business through 2023; Vapotherm’s dependence on sales generated from its High Velocity Therapy systems, competition from multi-national corporations who have significantly greater resources than Vapotherm and are more established in the respiratory market; the ability for Precision Flow systems to gain increased market acceptance; Vapotherm’s inexperience directly marketing and selling its products; the potential loss of one or more suppliers and dependence on its new third party manufacturer; Vapotherm’s susceptibility to seasonal fluctuations; Vapotherm’s failure to comply with applicable United States and foreign regulatory requirements; the failure to obtain U.S. Food and Drug Administration or other regulatory authorization to market and sell future products or its inability to secure, maintain or enforce patent or other intellectual property protection for its products; the impact of COVID on its business, including its supply chain, risks associated with the reverse stock split, Vapotherm’s ability to regain compliance with the continued listing standards of the NYSE, market conditions and the impact of the reverse stock split on the trading price of Vapotherm’s common stock, a possible delisting of Vapotherm’s common stock and the other risks and uncertainties included under the heading “Risk Factors” in Vapotherm’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, as filed with the SEC on February 23, 2023, and in its subsequent filings with the SEC, including its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2023. The forward-looking statements contained in this press release reflect Vapotherm’s views as of the date hereof, and Vapotherm does not assume and specifically disclaims any obligation to update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.

Financial Statements:

VAPOTHERM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share amounts)

 

 

June 30, 2023

 

 

December 31, 2022

 

 

 

(unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

18,000

 

 

$

15,738

 

Accounts receivable, net of expected credit losses of $193 and $227, respectively

 

 

8,918

 

 

 

9,102

 

Inventories, net

 

 

25,144

 

 

 

32,980

 

Prepaid expenses and other current assets

 

 

4,518

 

 

 

2,081

 

Total current assets

 

 

56,580

 

 

 

59,901

 

Property and equipment, net

 

 

24,444

 

 

 

26,636

 

Operating lease right-of-use assets

 

 

4,673

 

 

 

5,805

 

Restricted cash

 

 

1,109

 

 

 

1,109

 

Goodwill

 

 

562

 

 

 

536

 

Deferred income tax assets

 

 

128

 

 

 

96

 

Other long-term assets

 

 

2,588

 

 

 

2,112

 

Total assets

 

$

90,084

 

 

$

96,195

 

Liabilities and Stockholders’ Deficit

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

2,160

 

 

$

2,739

 

Contract liabilities

 

 

1,301

 

 

 

1,216

 

Accrued expenses and other current liabilities

 

 

11,661

 

 

 

15,609

 

Total current liabilities

 

 

15,122

 

 

 

19,564

 

Long-term loans payable, net

 

 

101,820

 

 

 

96,994

 

Other long-term liabilities

 

 

7,598

 

 

 

7,827

 

Total liabilities

 

 

124,540

 

 

 

124,385

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ deficit

 

 

 

 

 

 

Preferred stock ($0.001 par value) 25,000,000 shares authorized; no shares issued and outstanding as of June 30, 2023 and December 31, 2022

 

 

-

 

 

 

-

 

Common stock ($0.001 par value) 175,000,000 shares authorized as of June 30, 2023 and December 31, 2022, 49,047,502 and 28,516,047 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

 

 

49

 

 

 

29

 

Additional paid-in capital

 

 

488,419

 

 

 

461,940

 

Accumulated other comprehensive loss

 

 

(44

)

 

 

(157

)

Accumulated deficit

 

 

(522,880

)

 

 

(490,002

)

Total stockholders’ deficit

 

 

(34,456

)

 

 

(28,190

)

Total liabilities and stockholders’ deficit

 

$

90,084

 

 

$

96,195

 

VAPOTHERM, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share amounts)

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

(unaudited)

 

 

(unaudited)

 

Net revenue

 

$

16,037

 

 

$

12,971

 

 

$

33,768

 

 

$

34,593

 

Cost of revenue

 

 

9,177

 

 

 

10,606

 

 

 

20,696

 

 

 

24,336

 

Gross profit

 

 

6,860

 

 

 

2,365

 

 

 

13,072

 

 

 

10,257

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

3,723

 

 

 

6,310

 

 

 

7,710

 

 

 

11,859

 

Sales and marketing

 

 

8,276

 

 

 

11,833

 

 

 

17,868

 

 

 

25,155

 

General and administrative

 

 

5,019

 

 

 

5,323

 

 

 

10,789

 

 

 

14,277

 

Impairment of goodwill

 

 

-

 

 

 

14,701

 

 

 

-

 

 

 

14,701

 

Impairment of right-of-use assets

 

 

-

 

 

 

4,036

 

 

 

432

 

 

 

4,036

 

(Gain) loss on disposal of property and equipment

 

 

(2

)

 

 

-

 

 

 

53

 

 

 

-

 

Total operating expenses

 

 

17,016

 

 

 

42,203

 

 

 

36,852

 

 

 

70,028

 

Loss from operations

 

 

(10,156

)

 

 

(39,838

)

 

 

(23,780

)

 

 

(59,771

)

Other (expense) income

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(4,642

)

 

 

(2,849

)

 

 

(8,973

)

 

 

(4,596

)

Interest income

 

 

26

 

 

 

40

 

 

 

54

 

 

 

57

 

Foreign currency gain (loss)

 

 

9

 

 

 

(46

)

 

 

(145

)

 

 

(115

)

Loss on extinguishment of debt

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1,114

)

Net loss before income taxes

 

$

(14,763

)

 

$

(42,693

)

 

$

(32,844

)

 

$

(65,539

)

Provision (benefit) for income taxes

 

 

25

 

 

 

(10

)

 

 

34

 

 

 

82

 

Net loss

 

$

(14,788

)

 

$

(42,683

)

 

$

(32,878

)

 

$

(65,621

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

 

(22

)

 

 

(185

)

 

 

113

 

 

 

(240

)

Total other comprehensive (loss) gain

 

 

(22

)

 

 

(185

)

 

 

113

 

 

 

(240

)

Total comprehensive loss

 

$

(14,810

)

 

$

(42,868

)

 

$

(32,765

)

 

$

(65,861

)

Net loss per share basic and diluted

 

$

(0.29

)

 

$

(1.61

)

 

$

(0.72

)

 

$

(2.48

)

Weighted-average number of shares used in calculating net loss per share, basic and diluted

 

 

50,625,778

 

 

 

26,574,027

 

 

 

45,644,863

 

 

 

26,448,257

 

VAPOTHERM, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(32,878

)

 

$

(65,621

)

Adjustments to reconcile net loss to net cash used in operating activities

 

 

 

 

 

 

Stock-based compensation expense

 

 

5,405

 

 

 

5,944

 

Depreciation and amortization

 

 

2,445

 

 

 

2,739

 

Provision for credit losses

 

 

(2

)

 

 

285

 

Provision for inventory valuation

 

 

283

 

 

 

815

 

Non-cash lease expense

 

 

733

 

 

 

1,082

 

Change in fair value of contingent consideration

 

 

-

 

 

 

(3,113

)

Impairment of goodwill

 

 

-

 

 

 

14,701

 

Impairment of long-lived and intangible assets

 

 

432

 

 

 

4,036

 

Loss on disposal of property and equipment

 

 

53

 

 

 

-

 

Placed units reserve

 

 

418

 

 

 

198

 

Interest paid in-kind

 

 

4,553

 

 

 

-

 

Amortization of discount on debt

 

 

368

 

 

 

320

 

Deferred income taxes

 

 

34

 

 

 

82

 

Loss on extinguishment of debt

 

 

-

 

 

 

1,114

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

212

 

 

 

3,520

 

Inventories

 

 

7,646

 

 

 

(2,683

)

Prepaid expenses and other assets

 

 

(2,794

)

 

 

(408

)

Accounts payable

 

 

(315

)

 

 

(2,441

)

Contract liabilities

 

 

72

 

 

 

(812

)

Accrued expenses and other current liabilities

 

 

(2,840

)

 

 

(8,884

)

Operating lease liabilities, current and long-term

 

 

(1,213

)

 

 

(1,013

)

Net cash used in operating activities

 

 

(17,388

)

 

 

(50,139

)

Cash flows from investing activities

 

 

 

 

 

 

Purchases of property and equipment

 

 

(1,408

)

 

 

(6,289

)

Net cash used in investing activities

 

 

(1,408

)

 

 

(6,289

)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from issuance of common stock and pre-funded warrants and

accompanying warrants in private placement, net of issuance costs

 

 

20,943

 

 

 

-

 

Proceeds from loans, net of discount

 

 

-

 

 

 

99,094

 

Repayment of loans

 

 

-

 

 

 

(40,000

)

Payments of debt extinguishment costs

 

 

-

 

 

 

(817

)

Payment of debt issuance costs

 

 

-

 

 

 

(1,567

)

Repayments on revolving loan facility

 

 

-

 

 

 

(6,608

)

Payment of contingent consideration

 

 

-

 

 

 

(135

)

Proceeds from exercise of stock options

 

 

-

 

 

 

55

 

Proceeds from exercise of warrants

 

 

3

 

 

 

-

 

Proceeds from issuance of common stock under Employee Stock Purchase Plan

 

 

77

 

 

 

135

 

Net cash provided by financing activities

 

 

21,023

 

 

 

50,157

 

Effect of exchange rate changes on cash, cash equivalents and restricted cash

 

 

35

 

 

 

(62

)

Net increase (decrease) in cash, cash equivalents and restricted cash

 

 

2,262

 

 

 

(6,333

)

Cash, cash equivalents and restricted cash

 

 

 

 

 

 

Beginning of period

 

 

16,847

 

 

 

57,324

 

End of period

 

$

19,109

 

 

$

50,991

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

Interest paid during the period

 

$

2,720

 

 

$

3,294

 

Property and equipment purchases in accounts payable and accrued expenses

 

$

175

 

 

$

224

 

Issuance of common stock to satisfy contingent consideration

 

$

-

 

 

$

5,630

 

Issuance of common stock warrants in conjunction with long term debt

 

$

71

 

 

$

1,157

 

Issuance of common stock upon vesting of restricted stock units

 

$

-

 

 

$

12

 

Non-GAAP Financial Measures

The following table contains a reconciliation of GAAP net revenue to non-GAAP net revenue excluding Vapotherm Access for the three months ended June 30, 2023 and 2022, respectively, and the growth of such GAAP net revenue and non-GAAP net revenue excluding Vapotherm Access over the prior year period.

 

 

Three Months Ended June 30,

 

 

Change

 

 

 

2023

 

 

2022

 

 

$

 

 

%

 

(Unaudited)

 

(in thousands, except percentages)

 

GAAP net revenue

 

$

16,037

 

 

$

12,971

 

 

$

3,066

 

 

 

23.6

%

Vapotherm Access net revenue

 

 

-

 

 

 

(987

)

 

 

987

 

 

 

(100.0

)%

Non-GAAP net revenue excluding Vapotherm Access

 

$

16,037

 

 

$

11,984

 

 

$

4,053

 

 

 

33.8

%

The following table contains a reconciliation of net loss to Adjusted EBITDA for the three months ended June 30, 2023 and 2022, respectively.

 

 

Three Months Ended June 30,

 

 

 

2023

 

 

2022

 

(Unaudited)

 

(in thousands)

 

Net loss

 

$

(14,788

)

 

$

(42,683

)

Interest expense, net

 

 

4,616

 

 

 

2,809

 

Provision (benefit) for income taxes

 

 

25

 

 

 

(10

)

Depreciation and amortization

 

 

1,197

 

 

 

1,348

 

EBITDA

 

$

(8,950

)

 

$

(38,536

)

Stock-based compensation

 

 

2,585

 

 

 

2,498

 

Impairment of goodwill

 

 

-

 

 

 

14,701

 

Impairment of long-lived and intangible assets

 

 

-

 

 

 

4,036

 

Foreign currency

 

 

(9

)

 

 

46

 

Gain from deconsolidation

 

 

(5

)

 

 

-

 

Gain on disposal of property and equipment

 

 

(2

)

 

 

-

 

Change in fair value of contingent consideration

 

 

-

 

 

 

(2,925

)

Adjusted EBITDA

 

$

(6,381

)

 

$

(20,180

)

The following table contains a reconciliation of operating expenses to non-GAAP operating expenses and non-GAAP cash operating expenses for the three months ended June 30, 2023, March 31, 2023 and June 30, 2022, respectively.

 

 

Three Months Ended

 

 

 

June 30, 2023

 

 

March 31, 2023

 

 

June 30, 2022

 

(Unaudited)

 

(in thousands)

 

GAAP operating expenses

 

$

17,016

 

 

$

19,836

 

 

$

42,203

 

Impairment of goodwill

 

 

-

 

 

 

-

 

 

 

(14,701

)

Impairment of long-lived and intangible assets

 

 

-

 

 

 

(432

)

 

 

(4,036

)

Gain (loss) on disposal of property and equipment

 

 

2

 

 

 

(55

)

 

 

-

 

Non-GAAP operating expenses

 

 

17,018

 

 

 

19,349

 

 

 

23,466

 

Stock-based compensation

 

 

(2,534

)

 

 

(2,773

)

 

 

(2,299

)

Termination benefits

 

 

-

 

 

 

-

 

 

 

(1,844

)

Depreciation and amortization

 

 

(293

)

 

 

(305

)

 

 

(500

)

Gain from deconsolidation

 

 

5

 

 

 

114

 

 

 

-

 

Change in fair value of contingent consideration

 

 

-

 

 

 

-

 

 

 

2,925

 

Non-GAAP cash operating expenses

 

$

14,196

 

 

$

16,385

 

 

$

21,748

 

Supplemental Operating Metrics

 

June 30,

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

Change

 

 

Amount

 

 

Amount

 

 

Amount

 

 

%

 

HVT 2.0 and precision flow units installed base

 

 

 

 

 

 

 

 

 

 

 

United States

 

24,563

 

 

 

23,865

 

 

 

698

 

 

 

2.9

%

International

 

12,729

 

 

 

12,269

 

 

 

460

 

 

 

3.7

%

Total

 

37,292

 

 

 

36,134

 

 

 

1,158

 

 

 

3.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30,

 

 

 

 

 

 

 

 

2023

 

 

2022

 

 

Change

 

 

Amount

 

 

Amount

 

 

Amount

 

 

%

 

HVT 2.0 and precision flow units sold and leased

 

 

 

 

 

 

 

 

 

 

 

United States

 

293

 

 

 

129

 

 

 

164

 

 

 

127.1

%

International

 

146

 

 

 

220

 

 

 

(74

)

 

 

(33.6

)%

Total

 

439

 

 

 

349

 

 

 

90

 

 

 

25.8

%

 

 

 

 

 

 

 

 

 

 

 

 

Disposable patient circuits sold

 

 

 

 

 

 

 

 

 

 

 

United States

 

69,323

 

 

 

55,333

 

 

 

13,990

 

 

 

25.3

%

International

 

35,744

 

 

 

24,785

 

 

 

10,959

 

 

 

44.2

%

Total

 

105,067

 

 

 

80,118

 

 

 

24,949

 

 

 

31.1

%

 

Contacts

Investor Relations:

Mark Klausner or Mike Vallie, Westwicke, an ICR Company, ir@vtherm.com, +1 (603) 658-0011

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