Vapotherm(US:VAPO)2023-11-07 16:00Financial Performance - Net revenue for Q3 2023 was $15,167,000, an increase of 12% compared to $13,545,000 in Q3 2022[20] - The net loss for Q3 2023 was $15,130,000, a reduction from a net loss of $26,201,000 in Q3 2022, indicating improved financial performance[20] - The company reported a net loss of $48,008,000 for the nine months ended September 30, 2023, compared to a net loss of $91,822,000 for the same period in 2022, indicating a 47.8% improvement in losses year-over-year[31] - Adjusted non-GAAP net revenue increased by $2.3 million, or 17.6%, for Q3 2023 compared to the same period in 2022[181] - The company expects to incur net losses for the next several years and may require additional funding[182] Revenue Breakdown - Product revenue for the three months ended September 30, 2023 was $13.060 million, up from $10.856 million in the same period of 2022, reflecting a growth of 20.2%[152] - Revenue from single-use disposables represented approximately 70.5% of net revenue for the nine months ended September 30, 2023, increasing by 7.0% year over year[186] - Capital equipment revenue increased by 35.7% in Q3 2023 due to higher sales volume and average sale prices from the next generation HVT 2.0 platform[184] - Net revenue generated in the United States increased by $0.2 million, or 1.5%, to $11.2 million for Q3 2023[185] - International net revenue increased by $1.5 million, or 58.6%, to $3.9 million for Q3 2023[185] Cost Management - Gross profit for Q3 2023 was $6,013,000, significantly up from $1,863,000 in Q3 2022, reflecting improved cost management[20] - Gross profit as a percentage of revenue increased to 39.6% in Q3 2023 compared to 13.8% in Q3 2022[191] - Cost of revenue decreased by $2.5 million, or 21.6%, to $9.2 million in Q3 2023 compared to $11.7 million in Q3 2022[189] - Research and development expenses for Q3 2023 were $3,132,000, down from $4,382,000 in Q3 2022, reflecting a strategic focus on cost control[20] - Sales and marketing expenses decreased by $3.5 million, or 30.5%, to $8.0 million in Q3 2023 compared to Q3 2022, representing 52.5% of revenue[195] Assets and Liabilities - Total current assets decreased to $49,154,000 as of September 30, 2023, down from $59,901,000 at the end of 2022, primarily due to a reduction in inventories[16] - Total liabilities increased to $128,100,000 as of September 30, 2023, compared to $124,385,000 at the end of 2022, driven by higher long-term loans payable[16] - The accumulated deficit increased to $538,010,000 as of September 30, 2023, compared to $490,002,000 at the end of 2022, reflecting ongoing operational losses[16] - The company’s total stockholders' deficit was $47,496,000 as of September 30, 2023, compared to $28,190,000 at the end of 2022, highlighting financial challenges[16] Cash Flow and Liquidity - Cash and cash equivalents decreased to $14,418,000 as of September 30, 2023, from $15,738,000 at the end of 2022, indicating tighter liquidity[16] - The company reported a net cash used in operating activities of $20,347,000 for the nine months ended September 30, 2023, compared to $69,265,000 in the same period of 2022, reflecting a significant reduction in cash burn[31] - The company reported a net cash used in operating activities of $3.0 million and $19.1 million for the three and nine months ended September 30, 2023, respectively, a significant decrease from $19.1 million and $69.3 million for the same periods in 2022[176] - The net decrease in cash, cash equivalents, and restricted cash was $1.3 million in the first nine months of 2023[212] - The company anticipates that its cash and working capital will be sufficient to meet capital requirements for at least the next 12 months[211] Stock and Financing Activities - The company completed a private placement on February 10, 2023, raising approximately $23.0 million in gross proceeds by issuing 2,187,781 shares of common stock and accompanying warrants[39] - The company executed a reverse stock split at a ratio of 1-for-8, reducing issued and outstanding shares from approximately 49,081,000 to 6,135,000 shares[41][42] - As of September 30, 2023, the outstanding balance under the Fifth Amended SLR Loan Agreement was $106.9 million, with an interest rate of 14.73%[123] - The Company paid interest in-kind totaling $2.4 million and $7.0 million during the three and nine months ended September 30, 2023, respectively[123] - The company granted SLR warrants to purchase a total of 66,990 shares of common stock in the third quarter of 2023, valued using the Black-Scholes pricing model[101] Operational Developments - The company exited the Vapotherm Access call center business in the fourth quarter of 2022 as part of its path to profitability[37] - The company has treated over 4.1 million patients with its High Velocity Therapy systems, with a global installed base of over 37,400 units, reflecting a 3.1% increase compared to September 30, 2022[174] - The company has established a Technology Center in Singapore to enhance its research and development capabilities and reduce costs[176] - The company received FDA clearance for expanded respiratory distress indications for its HVT 2.0 platform in December 2022, which is cleared for therapy in multiple care settings[174] Impairments and Restructuring - The company recognized an impairment charge of $14.7 million for the Vapotherm Access reporting unit during the second quarter of 2022, with no impairments of goodwill during the three or nine months ended September 30, 2023[111] - The Company incurred restructuring expenses of approximately $0.8 million and $1.0 million for the three and nine months ended September 30, 2023, related to impairments of right-of-use assets and termination benefits[138] - The Company recognized impairment charges of $0.8 million and $0.9 million for the Domain Sublease asset group during the three and nine months ended September 30, 2023, respectively[139]