Vapotherm Reports First Quarter 2022 Financial Results
Vapotherm reported first-quarter 2022 revenue of $21.6 million, a 33.1% decrease compared to the same quarter in 2021. Disposables revenue fell by 13.3% to $14.9 million. The company noted lower patient census for respiratory illnesses and COVID-19-related hospitalizations. Gross profit was $7.9 million, with a gross margin of 36.6%. Operating expenses increased by $0.9 million year-over-year to $27.8 million. The net loss for the quarter was $22.9 million, or $0.87 per share. The company reinstated revenue guidance for fiscal 2022, projecting $81 million to $86 million.
- Installed base of Precision Flow systems grew by over 500 units to over 35,700.
- Management plans to achieve 20% year-over-year revenue growth starting in 2023.
- Cash and cash equivalents increased to $72.9 million as of March 31, 2022.
- Revenue decreased 33.1% year-over-year.
- Net loss increased to $22.9 million compared to $10.4 million in Q1 2021.
- Operating expenses rose to $27.8 million due to increased R&D costs.
Revenue of
First Quarter 2022 Summary
-
Total revenue for the first quarter of 2022 was
, a decrease of$21.6 million 33.1% over the first quarter of 2021 -
Disposables revenue for the first quarter of 2022 was
, a decrease of$14.9 million 13.3% over the first quarter of 2021 - Worldwide installed base of Precision Flow systems increased by over 500 units in the first quarter of 2022 to over 35,700
“The first quarter of 2022 was challenging as respiratory patient census was low for both seasonal respiratory illnesses such as flu and RSV and for patients suffering from COPD and CHF. We also saw a significant decline in COVID-related hospitalizations starting in mid to late February, especially those patients needing acute respiratory interventions,” said Joseph Army, President and CEO. “Despite lower than expected revenue in the quarter, we are very bullish about Vapotherm’s future. In the last two years, we have transformed our business with increases in our Installed Base and new Customers. Meeting all of our Customers’ needs no matter what during the pandemic required us to make significant one-time expenditures, which impacted our margins. As we move into the endemic phase of COVID, we plan to get the business to profitability by delivering
Results for the Three Months
The following table reflects the Company’s net revenue for the three months ended
|
|
Three Months Ended |
|
|
|
|
|
|
|
|||||||||||||||
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|||||||||||||||
|
|
(in thousands, except percentages) |
|
|||||||||||||||||||||
|
|
Amount |
|
|
% of Revenue |
|
|
Amount |
|
|
% of Revenue |
|
|
$ |
|
|
% |
|
||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Capital (product & lease revenue) |
|
$ |
4,050 |
|
|
|
18.7 |
% |
|
$ |
13,454 |
|
|
|
41.6 |
% |
|
$ |
(9,404 |
) |
|
|
(69.9 |
)% |
Disposables |
|
|
14,879 |
|
|
|
68.8 |
% |
|
|
17,156 |
|
|
|
53.1 |
% |
|
|
(2,277 |
) |
|
|
(13.3 |
)% |
Service and other |
|
|
2,693 |
|
|
|
12.5 |
% |
|
|
1,698 |
|
|
|
5.3 |
% |
|
|
995 |
|
|
|
58.6 |
% |
Total net revenue |
|
$ |
21,622 |
|
|
|
100.0 |
% |
|
$ |
32,308 |
|
|
|
100.0 |
% |
|
$ |
(10,686 |
) |
|
|
(33.1 |
)% |
Net revenue for the first quarter of 2022 was
Revenue information by geography is summarized as follows:
|
|
Three Months Ended |
|
|
|
|
|
|
|
|||||||||||||||
|
|
2022 |
|
|
2021 |
|
|
Change |
|
|||||||||||||||
|
|
(in thousands, except percentages) |
|
|||||||||||||||||||||
|
|
Amount |
|
|
% of Revenue |
|
|
Amount |
|
|
% of Revenue |
|
|
$ |
|
|
% |
|
||||||
|
|
$ |
16,499 |
|
|
|
76.3 |
% |
|
$ |
22,069 |
|
|
|
68.3 |
% |
|
$ |
(5,570 |
) |
|
|
(25.2 |
)% |
International |
|
|
5,123 |
|
|
|
23.7 |
% |
|
|
10,239 |
|
|
|
31.7 |
% |
|
|
(5,116 |
) |
|
|
(50.0 |
)% |
Total net revenue |
|
$ |
21,622 |
|
|
|
100.0 |
% |
|
$ |
32,308 |
|
|
|
100.0 |
% |
|
$ |
(10,686 |
) |
|
|
(33.1 |
)% |
Gross profit and gross margin for the first quarter of 2022 was
Operating expenses were
Net loss for the first quarter of 2022 was
Adjusted EBITDA was negative
Cash Position
Cash and cash equivalents were
Fiscal 2022 Outlook
The Company withdrew its previously announced annual revenue, gross margin, operating expense, and adjusted EBITDA guidance on
The Company is reinstating annual revenue, gross margin, and operating expense guidance for fiscal 2022.
For fiscal 2022, net revenue is expected to be in the range of
For fiscal 2022, gross margin is expected to be in the range of
For fiscal 2022, GAAP operating expenses are expected to be in the range of
For fiscal 2022, operating expenses excluding depreciation, amortization and stock-based compensation expense are expected to be in the range of
Conference Call
Management will host a conference call at
Website Information
Non-GAAP Financial Measures
This press release includes the non-GAAP financial measures of EBITDA, Adjusted EBITDA and operating expenses excluding depreciation, amortization and stock-based compensation expense, which differ from financial measures calculated in accordance with
These non-GAAP financial measures are presented because the Company believes they are useful indicators of its operating performance. Management uses Adjusted EBITDA principally as a measure 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 this measure is useful to investors as supplemental information because it is 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 this 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 definition of Adjusted EBITDA is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation.
About
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 plan to get its business to profitability by delivering
Financial Statements:
|
||||||||
|
|
|
|
|
|
|
||
|
|
(unaudited) |
|
|
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
72,907 |
|
|
$ |
57,071 |
|
Accounts receivable, net |
|
|
9,912 |
|
|
|
10,909 |
|
Inventories |
|
|
38,048 |
|
|
|
36,562 |
|
Prepaid expenses and other current assets |
|
|
4,909 |
|
|
|
5,205 |
|
Total current assets |
|
|
125,776 |
|
|
|
109,747 |
|
Property and equipment, net |
|
|
25,336 |
|
|
|
22,157 |
|
Operating lease right-of-use assets |
|
|
7,770 |
|
|
|
7,045 |
|
Restricted cash |
|
|
1,109 |
|
|
|
253 |
|
|
|
|
15,283 |
|
|
|
15,300 |
|
Intangible assets, net |
|
|
4,245 |
|
|
|
4,398 |
|
Deferred income tax assets |
|
|
8 |
|
|
|
78 |
|
Other long-term assets |
|
|
1,027 |
|
|
|
1,107 |
|
Total assets |
|
$ |
180,554 |
|
|
$ |
160,085 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
||
Current liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
6,608 |
|
|
$ |
5,923 |
|
Contract liabilities |
|
|
1,424 |
|
|
|
2,081 |
|
Accrued expenses and other current liabilities |
|
|
15,375 |
|
|
|
28,559 |
|
Revolving loan facility |
|
|
- |
|
|
|
6,608 |
|
Total current liabilities |
|
|
23,407 |
|
|
|
43,171 |
|
Long-term loans payable, net |
|
|
96,491 |
|
|
|
39,726 |
|
Other long-term liabilities |
|
|
6,727 |
|
|
|
10,521 |
|
Total liabilities |
|
|
126,625 |
|
|
|
93,418 |
|
Commitments and contingencies |
|
|
|
|
|
|
||
Stockholders' equity |
|
|
|
|
|
|
||
Preferred stock ( |
|
|
- |
|
|
|
- |
|
Common stock ( |
|
|
27 |
|
|
|
26 |
|
Additional paid-in capital |
|
|
453,612 |
|
|
|
443,358 |
|
Accumulated other comprehensive (loss) income |
|
|
(29 |
) |
|
|
26 |
|
Accumulated deficit |
|
|
(399,681 |
) |
|
|
(376,743 |
) |
Total stockholders' equity |
|
|
53,929 |
|
|
|
66,667 |
|
Total liabilities and stockholders’ equity |
|
$ |
180,554 |
|
|
$ |
160,085 |
|
|
||||||||
|
|
Three Months Ended |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
|
|
(unaudited) |
|
|||||
Net revenue |
|
$ |
21,622 |
|
|
$ |
32,308 |
|
Cost of revenue |
|
|
13,730 |
|
|
|
15,140 |
|
Gross profit |
|
|
7,892 |
|
|
|
17,168 |
|
Operating expenses |
|
|
|
|
|
|
||
Research and development |
|
|
5,549 |
|
|
|
4,910 |
|
Sales and marketing |
|
|
13,322 |
|
|
|
13,900 |
|
General and administrative |
|
|
8,954 |
|
|
|
8,059 |
|
Total operating expenses |
|
|
27,825 |
|
|
|
26,869 |
|
Loss from operations |
|
|
(19,933 |
) |
|
|
(9,701 |
) |
Other (expense) income |
|
|
|
|
|
|
||
Interest expense |
|
|
(1,747 |
) |
|
|
(665 |
) |
Interest income |
|
|
17 |
|
|
|
29 |
|
Foreign currency loss |
|
|
(69 |
) |
|
|
(70 |
) |
Loss on extinguishment of debt |
|
|
(1,114 |
) |
|
|
- |
|
Net loss before income taxes |
|
$ |
(22,846 |
) |
|
$ |
(10,407 |
) |
Provision for income taxes |
|
|
92 |
|
|
|
- |
|
Net loss |
|
$ |
(22,938 |
) |
|
$ |
(10,407 |
) |
Other comprehensive loss, net of tax: |
|
|
|
|
|
|
||
Change in foreign currency translation adjustments |
|
|
(55 |
) |
|
|
11 |
|
Total other comprehensive loss |
|
|
(55 |
) |
|
|
11 |
|
Total comprehensive loss |
|
$ |
(22,993 |
) |
|
$ |
(10,396 |
) |
|
|
|
|
|
|
|
||
Net loss per share basic and diluted |
|
$ |
(0.87 |
) |
|
$ |
(0.40 |
) |
Weighted-average number of shares used in calculating net loss per share, basic and diluted |
|
|
26,321,087 |
|
|
|
25,796,065 |
|
|
||||||||
|
|
|
|
|
|
|
||
|
|
Three Months Ended |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
(22,938 |
) |
|
$ |
(10,407 |
) |
Adjustments to reconcile net loss to net cash used in operating activities |
|
|
|
|
|
|
||
Stock-based compensation expense |
|
|
3,446 |
|
|
|
2,685 |
|
Depreciation and amortization |
|
|
1,391 |
|
|
|
1,574 |
|
Provision for bad debts |
|
|
177 |
|
|
|
(156 |
) |
Provision for inventory valuation |
|
|
150 |
|
|
|
(12 |
) |
Non-cash lease expense |
|
|
519 |
|
|
|
422 |
|
Change in fair value of contingent consideration |
|
|
(188 |
) |
|
|
202 |
|
Loss on disposal of property and equipment |
|
|
151 |
|
|
|
23 |
|
Amortization of discount on debt |
|
|
139 |
|
|
|
32 |
|
Deferred income taxes |
|
|
83 |
|
|
|
3 |
|
Loss on extinguishment of debt |
|
|
1,114 |
|
|
|
- |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
805 |
|
|
|
9,987 |
|
Inventories |
|
|
(1,650 |
) |
|
|
(7,042 |
) |
Prepaid expenses and other assets |
|
|
(927 |
) |
|
|
(1,651 |
) |
Accounts payable |
|
|
84 |
|
|
|
870 |
|
Contract liabilities |
|
|
(652 |
) |
|
|
(1,730 |
) |
Accrued expenses and other current liabilities |
|
|
(11,882 |
) |
|
|
(14,338 |
) |
Operating lease liabilities, current and long-term |
|
|
(293 |
) |
|
|
(424 |
) |
Net cash used in operating activities |
|
|
(30,471 |
) |
|
|
(19,962 |
) |
Cash flows from investing activities |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(3,008 |
) |
|
|
(2,256 |
) |
Net cash used in investing activities |
|
|
(3,008 |
) |
|
|
(2,256 |
) |
Cash flows from financing activities |
|
|
|
|
|
|
||
Proceeds from loans, net of discount |
|
|
99,094 |
|
|
|
- |
|
Repayment of loans |
|
|
(40,000 |
) |
|
|
- |
|
Payments of debt extinguishment costs |
|
|
(817 |
) |
|
|
- |
|
Payment of debt issuance costs |
|
|
(1,365 |
) |
|
|
- |
|
Repayments on revolving loan facility |
|
|
(6,608 |
) |
|
|
- |
|
Payment of contingent consideration |
|
|
(135 |
) |
|
|
- |
|
Proceeds from exercise of stock options |
|
|
12 |
|
|
|
761 |
|
Net cash provided by financing activities |
|
|
50,181 |
|
|
|
761 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
|
(10 |
) |
|
|
2 |
|
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
|
16,692 |
|
|
|
(21,455 |
) |
Cash, cash equivalents and restricted cash |
|
|
|
|
|
|
||
Beginning of period |
|
|
57,324 |
|
|
|
115,536 |
|
End of period |
|
$ |
74,016 |
|
|
$ |
94,081 |
|
Supplemental disclosures of cash flow information |
|
|
|
|
|
|
||
Interest paid during the period |
|
$ |
983 |
|
|
$ |
639 |
|
Property and equipment purchases in accounts payable and accrued expenses |
|
$ |
1,581 |
|
|
$ |
263 |
|
Debt issuance costs in accounts payable and accrued expenses |
|
$ |
202 |
|
|
$ |
- |
|
Issuance of common stock to satisfy contingent consideration |
|
$ |
5,630 |
|
|
$ |
- |
|
Issuance of common stock warrants in conjunction with debt draw down |
|
$ |
1,157 |
|
|
$ |
- |
|
Issuance of common stock upon vesting of restricted stock units |
|
$ |
10 |
|
|
$ |
47 |
|
Non-GAAP Financial Measures
The following tables contain a reconciliation of net loss to Adjusted EBITDA for the three months ended
(unaudited)
|
|
Three Months Ended |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
|
|
(in thousands) |
|
|||||
Net loss |
|
$ |
(22,938 |
) |
|
$ |
(10,407 |
) |
Interest expense, net |
|
|
1,730 |
|
|
|
636 |
|
Provision for income taxes |
|
|
92 |
|
|
|
- |
|
Depreciation and amortization |
|
|
1,391 |
|
|
|
1,574 |
|
EBITDA |
|
$ |
(19,725 |
) |
|
$ |
(8,197 |
) |
Foreign currency |
|
|
69 |
|
|
|
70 |
|
Loss on extinguishment of debt |
|
|
1,114 |
|
|
|
- |
|
Change in fair value of contingent consideration |
|
|
(188 |
) |
|
|
202 |
|
Stock-based compensation |
|
|
3,446 |
|
|
|
2,685 |
|
Adjusted EBITDA |
|
$ |
(15,284 |
) |
|
$ |
(5,240 |
) |
Supplemental Operating Metrics
|
|
|
|
|
|
|
|
|
|||||||
|
2022 |
|
|
2021 |
|
|
Change |
|
|||||||
|
Amount |
|
|
Amount |
|
|
Amount |
|
|
% |
|
||||
Precision Flow Units Installed Base |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
23,693 |
|
|
|
20,720 |
|
|
|
2,973 |
|
|
|
14.3 |
% |
International |
|
12,038 |
|
|
|
10,109 |
|
|
|
1,929 |
|
|
|
19.1 |
% |
Total |
|
35,731 |
|
|
|
30,829 |
|
|
|
4,902 |
|
|
|
15.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Three Months Ended |
|
|
|
|
|
|
|
|||||||
|
2022 |
|
|
2021 |
|
|
Change |
|
|||||||
|
Amount |
|
|
Amount |
|
|
Amount |
|
|
% |
|
||||
Precision Flow Units Sold and Leased |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
322 |
|
|
|
875 |
|
|
|
(553 |
) |
|
|
(63.2 |
)% |
International |
|
185 |
|
|
|
1,322 |
|
|
|
(1,137 |
) |
|
|
(86.0 |
)% |
Total |
|
507 |
|
|
|
2,197 |
|
|
|
(1,690 |
) |
|
|
(76.9 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Disposable Patient Circuits Sold |
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
99,591 |
|
|
|
110,381 |
|
|
|
(10,790 |
) |
|
|
(9.8 |
)% |
International |
|
48,036 |
|
|
|
62,539 |
|
|
|
(14,503 |
) |
|
|
(23.2 |
)% |
Total |
|
147,627 |
|
|
|
172,920 |
|
|
|
(25,293 |
) |
|
|
(14.6 |
)% |
|
|
|
|
|
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View source version on businesswire.com: https://www.businesswire.com/news/home/20220504006017/en/
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