VAPO - Earnings call transcript Q4 2021

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Operator

Good afternoon, ladies and gentlemen and welcome to the Vapotherm Fourth Quarter 2021 Financial Results Conference Call.

As a reminder, this call is being webcast live and recorded. It is now my pleasure to introduce you to your host, Mr. Mark Klausner of Westwicke. Please go ahead, sir.

Mark Klausner

you financial us results thank fourth the and XXXX quarter conference afternoon for for joining Vapotherm Good call.

President and Joining Vapotherm’s us in like being Senior To will the to Army the call that I President are Financial Vice its is the call following and Chief live recorded. remind John on Executive Officer, and available would today’s Landry. visit and Chief our call this Officer, of A you webcast section please our IR replay access website. website, be Events webcast, of link the event the on vapotherm.com. Joe

otherwise, Form on from SEC, begin, I management our and or current inherent are we XX, with Such in today publicly the may Commission, annual Exchange subsequent indicated, report filed in XXXX, by that Securities filings your and any turn differ This on SEC, to time the Reconciliations and expectations obligation certain include the Joe most updated risks remind portion with these everyone involve Investor questions not accordance identified filed could risk refer of XX-K measures accordance those that section from information, release for and which measures. Vapotherm’s to our our available statements financial also earnings the calculated and including SEC. was XXXX, result be which that, website. forward-looking that and filings the GAAP. Army. year GAAP generally undertake required based references of to generally With February new with time We in are accounting XX, remarks call revise law. are December no on to non-GAAP the ended or the the events may results We Chief measures financial contain the as Before our those These to cause in it’s accepted factors of on comparable website. principles the over like non-GAAP our publicly the responses measures Factors Officer, presented to press with materially on of with as statements. actual historical will to to or or to pleasure would Executive financial update of available our and calculated in forward-looking uncertainties Relations in my call future to are President Risk a unless statements

Joe Army

made us of by business. share and you on on we then year. quarter of today. joining begin perspective the the our Good financial XXXX in over fourth progress details. I will substantial COVID-XX John discussing to CFO, year afternoon the objectives call will for will set I XXXX I our we and at thank the beginning against to the review our the full Landry, impact and hand our results the provide also

for I growth annual taking reflect XX%, of our Vapotherm. was another rates of bringing full results We X-year focus revenue The year questions. will you $XXX.X key of XX% quarter update $XX.X fourth million. These areas revenue, quarter before strong respectively. for Lastly, and compounded in XXXX booked to million on XXXX XXXX

at base XX,XXX installed installed XXXX. the more end worldwide than the or base Our now double stands of at units

hospitals and doubled Gold also in and Over U.S. the XXXX Gold difficult the lives Without has to undeniable has but impact our patients positive business with had of measured made accounts which it’s question, COVID-XX accounts these our COVID-XX Silver our top number and results by X,XXX the technology Emergency Silver Department strong are on world, respiratory ED around discharges. the reflect the impacts the exited past X on years, of as we COVID business XXX importantly, of the the ED predict. our and

with year exceeding in times is recall guidance revenue an original likely multiple raised that XXXX ultimately, As This $XX as to have virus to the know We of revenue we continue estimate midpoint challenging business it progress remains unpredictability by our full million. example of this unpredictable. year. business past as amount for the disguises investors for value in significant the makes over our the long the the and trying

our and now context, our patient units, million approximately revenue, put of to there This has historical revenue return this highlighted increases installed levels customer would have over higher in XX% utilization important zero utilization. into units if This dramatically is Gold COVID-XX a To focus. accounts. base see increase efficacy in and ED a validated and will our We our our It and installed recurring note our a XXXX. represent exceeding base is base XX,XXX of of the to not account significantly even increases $XX global alone were we that rates over selling further technology. in average it also of these the in installed take awareness robust increase in in expansion price. organization’s rapid which a generate recurring Silver XX% assuming increased unique the However, no XXXX, does product

predict, execute hospitals and total many flu, is complex illness to seasonal if, the company. lung around becomes our And an grown. technology positioned and patient management all our factors disease exceptionally We strategy chronic number on recognized has fundamental to respected clinics Our the ever-increasing market in COVID-XX well leave us a think the these world. addressable become like as of

ecosystem the We’ve been reducing while focused Our strategy sufferers complex our goal. of of solutions digital, to disease lung cost their combines and care. improving the health making device towards steady progress clinical lives a create on care

presence. to digital set We a these our HVT on XXXX, productive; against number lung company. number installed us two, complex our four base towards path XXXX. patient into base; made X.X; ensuring growing four, objectives we the one, Going Number outlined becoming three, a number installed management progress significant in disease is and objectives building launching

XX% installed versus our revenue an of saw year-over-year productivity we disposables in increase the XXXX. base, Regarding

Regarding of increase XX% representing our XXXX of with a XXXX. growth installed installed XX,XXX base we a from of year-over-year base, ended global units,

the of launch HVT treat successfully not a anywhere hospital have this air well positive release and as to facilities wall product, during obtained of clearance as which for market earlier a in FDA the and and number transport. source to this We the launched XXX(k) in be home of require will next-generation receiving year this our been feedback. Regarding ability a limited in product does emergency of small patients we central X.X,

talk on initiatives. of Ensuring will we and before. purpose you’ve our our of base XXX launched is Regarding the of Access about expansion the Access in XHXD elaborate Post each installed presence, these productivity heard further our Vapotherm Care Vapotherm of which XXXX. digital principal program, me I

types parts clear hospital COPD can’t on dioxide Over was we base. pressure of But treat on focus as shifted cannot unique goal of of increasing across the all the and and to as we all educate patients, utilization we to who patients, installed One surging, COVID-XX our who for ability COVID-XX both when past enough technology’s flawlessly customers, our XHXD focused respiratory illnesses. our which Hospital of across carbon customers hypercapnic train or in delivering subsided, furthering such strategy One with our oxygen growth year, the the get hypoxic enough Day patients

much we our on little with hospitals treats equipment done XXXX pleased remains to progress bandwidth hypercapnic increase to be pandemic, with the patients, with well of we headwind XHXD which program focus despite awareness how much are often COPD in else. to the our or While the made of left

And For to will disposable or highly course exceeding example, when more and a with we these our focused resolve of which of in we our regardless top our platform rise utilization unpredictability facilities. accomplish rates saw utilization in continue rise in become we revenue on will turn believe matching during and HVT our When disposable rates we are X.X, accounts all XXX productive to will robust quarter, base this. levels the XHXD customers historical have second COVID-XX, flexible will installed the of trained, the growth.

XXXX. and X.X the HVT U.S. noted, in I sale for in was cleared Europe As

Our well our behind help been Initial on the patients element to to a is footprint. the key surges And plan that in the to digital of X.X due the to the expand is Delta and Omicron don’t positive. in the its quite ability areas air hospital has source of X.X in second HVT a the has half and schedule our bit underway. of limited experienced home. transport in piped-in air HVT feedback own internal XXXX, now have is market release due and but future

to X.X, place complete putting expanding significant In made on Medical additional a addition recently We reducing in midyear rebranded building we patients. acquisition Vapotherm in Access disease HGE to dedicated a hospitals, ecosystem launched our as footprint, to program patients. health care discharged Post COPD digital focused Access our of on for HVT lung of late and readmissions Vapotherm complex Care XXXX all and this of pieces progress XX-day

Vapotherm launched Access positive. XX hospitals care has providers, extending and feedback of year full XXX Initial patient monitoring. to to days also the post been We customer

many XXXX. we were initiatives Omicron hospital-facing by with slowed surges as Although in half the XXXX, second of the in Delta and

digital the about expertise. Chief the the our has deliver established about in positive team deliver we grown and reputation our experience resulting COVID-XX am our Officer as team Vapotherm added team subsides. and our Access perspective, talent experienced resignation, and medical Vapotherm capability supply and proud the issues ability From support turnover our our a to ensure Access I product throughout the Technology competitive disposables received, brought year. landscape, expanding to many been team we Gold we another account in the a of in on sales chain as and and employee funnel Mexico. of software customers new recently expanded manufacturing challenges We To during production adding are product and small meet capacity during Care able we’ve by our and marketplace becomes technology permanent our recently leadership and a labor continue an customers’ did customers’ highly significantly focused needs companies, Given Post to excited the to to our Unlike ability great customer excited consistently needs a pandemic. this exclusively into feedback XXX we Board, challenging in I’m wins From the while resolve perspective, we’ve meet strengthened to direct part and our Silver we and expanded we situations. initial ED grow Omicron organization. force very

in company. the materially management proven the review to turn of going the will capacity which areas new increasing will of partners reduce all close delivery our you lung technology, successful patient offerings. us opened to up customers, team us and higher our West delivering I our while our disease to track that now and record will a improvement. it set product our digital the as will long-term products complex center technology, growth up margin and our drive our the base, of financial for established our XXXX. we will expanded costs increased Texas on Our which are installed summary, John to for this to added I establish Mexico always for base, focus, new help quarter. set will the long-term times products we on in without gross by report cost continue focus high-volume then us of believe telling assemble least, I results Coast not key our solutions our pleased U.S. allow fixed to awareness a distribution for over Vapotherm to customers In but am Exeter-based we in Last

John Landry

Joe. Thank you,

to of growth XQ in mentioned, revenue drove XQ high of significant revenue XQ to million $XX.X context $XX a revenue year-over-year we’ve To XQ rate ‘XX XQ to all-time million in resulted in a which in going a increase quarterly as difficult million and pre-COVID $X.X Disposable comparing of Please annual growth is growth provide surge revenue with a in rates, provide rate XXXX COVID-XX am eliminate million was from in disposable $XX a million note, in late which along results. done with how revenue million perspective, I we XQ XXXX you annual X-year XXXX, to compounded annual our XXXX, XXXX, of near-term against $X.X volatility compounded XQ compounded our X-year in XXXX, over the revenue comp. XX%. an experienced compared to was compared a levels As XQ X-year XX%. XXXX, revenue representing commentary and we $XX.X how

fourth our expansion than installed is Our utilization was of Despite rates for rate U.S. quarter XQ the XXXX, utilization monthly XX% drive overall XXXX significant the utilization that rate lower disposable of the XXXX us historical given in lower especially accounts. X.XX, XHXD base. levels. our our growth in strategy in grew we’ll able disposable over which recurring we in gives business, our disposable This our revenue complete revenue all by to confidence long-term we be year, once

As historical XQ above Joe saw churn pointed out, rates or XHXD those we accounts XXXX at in was deployed. where in

quarters, worldwide as XXXX. ED given versus us, and higher predictability In disposable XQ are seen margin profile. XX% $X.X XQ million utilization Gold is XXXX, accounts for XXXX. our term, sold in its which As XXX to in Capital XQ revenue disposal we expect gross was recurring units our million XXX rates and XQ XXXX prior account to in in revenue in PF overall Silver we important rates. compared $X.X have revenue over above Long we to of our utilization

units grew XXX worldwide base in Our XQ XXXX. installed by

the XXXX, year-over-year will of base complete existing the we recurring consisted XQ XHXD expect of once approximately to chance be we complete end revenue provide a worldwide reflecting worldwide our installed long-term We until have this won’t growth. with units, strategy which our accounts, XX,XXX like As installed base mid-XXXX. to stream of that XX%

was margin lower compared customer million expenses in expenses our in a to $XX loss demand and in sales were $X.X revenue freight XQ handle demand cost. was in due Gross compared XXXX million XQ facility million a costs base, XXXX. These was $X.XX per was to profit partially labor decrease increase due temporary return Access-related growth was XQ of temporary higher Net to setting temporary was recurring historical million worldwide operating contract us $XX million resources, selling negatively XQ meet higher profit in Adjusted a in lower million costs XXXX, units. decrease than or installed in Gross this lower Operating or Gross in for revenue revenue expect costs XX% $XX.X rates incurred increased XXXX XQ $XX.X of up gross $X.X loss in in of from objective. revenue was $X.XX to quarter, increased we an $X.X or revenue XQ expenses XQ production worldwide base in service prices. due to due more we Assuming revenue negative in primarily future without XXXX offset million utilization share impacted XXXX. while to and expedited in margin operating in EBITDA increase expenses. a on or to to approximately costs by in million per decrease XXXX compared marketing of million Flow and Vapotherm to $XX.X lines utilization in in would lower $XX.X $XX.X production million loss in margin levels, XQ to share installed XQ XXXX. XX% service in fluctuations XXXX. service XXXX. average and our year-over-year adjusted EBITDA to for was primarily the The XQ additional higher setup XQ Worldwide in Precision $XX.X rates factoring allowed annual of all gross to gross The XX.X% customer million XQ due manufacturers’ XXXX. to was $X.X better $XXX,XXX disposable and million, sales XXXX by achieve the loss long-term negative related margin us over commissions. The of travel-related including Mexico, compared to of XXXX

million forma new revenue new XXXX. the refinanced As X along a $XX.X equivalents million a new flow with by to cash to facility million with part believe to $XX debt available $XXX.X $XXX would business and existing million additional of allow credit of February XXXX as extended were line drawn cash fifth year and this milestone. million, replaced million. is $XX.X closing We December achievement of increased fully September debt and and our our cash us debt On as upon will term $XX to milestone. be it of including we X-year capacity at for the compared a of received December positive. $XX.X and facility. cash XXXX a balance cash cash years, February, $XXX the Upon The cash closing, equivalents December revenue a basis, in debt XX, of may net as facility interest with which million the only million million as XXXX, upon achievement In XXXX debt in XX, term XX, fund cash XX, of term pro and $XX.X our $XXX.X been of million have of of additional

I’d financial to XXXX our Now to turn outlook. like

hospitalizations stated chronic COVID-XX-related and that continue We our of will COVID-XX-related to surge COVID-XX net worldwide, its that current quarter, in each some and of As recurring Based XXXX. are now the addressable $XXX revenue on out expand mutations expect will we believe continue $XXX in last played which near as a the expectation significantly we result the market. expected. between tail has our we million million hospitalizations and total and believe of U.S. level end have year in become problem,

case, XX% the future in wasn’t prior as While level the previous hospitalizations our of an which would great surges. why that is expectation built were higher this for in be We approximately anticipated than the of the and in respiratory surges would as of demand surges. we surges, previous distress product be impact

worldwide COVID-XX product, in our the our similar U.S. to hospitalizations it’s surge future estimate COVID-XX hospitalizations demand quarter we our impact materialize materially another The to planned, assumes surge continues Should impact be the results to difficult scope our fourth of regarding of predict on than different expected. COVID-XX year expectations are financial could hospitalization not be the in very experiencing. additional dynamic. one currently in for related on and as While this variant the

full XX% costs we during could disposables of every XXXX, ensure to pandemic. In incurred to We additional half customer we gross between be costs, made expect capacity the to production in temporary XX%. margin freight the and investments back need year meet labor higher expedited

These to Mexico respiratory manufacturing to Given down predictable margin us, than other we of first three-point seasonal disposables but our XXXX. to improvement the little the allow are needed will behind expect fact us gross overhead. gross that is incremental them costs as been, margins. of in the production have margin COVID with expansion expect up no will less improve half impact that, diseases gross contract for After or we ramp plan

average allow New products such material X.X increase as selling HVT decrease scale. cost us to and direct at labor will prices

XXXX to Lastly, take summer. within temporary needs clear plan through customer extraordinary demand more resulting are in much per issues half drive we gross be the three overhead are to will we unit. met customer second deal gross were our the fixed be to We that increase all and we expect positioned we during saw ensure impact the gross our our in to willing in improvement that industries QX impact costs that with impact want loyalty I from our Day comfortable these times go thereby XXXX. all base, us half repaid timeframe the labor work, lengths. margin that many lines be long-term elements remain generated. that having a now this volume without view with to first manufacturing rates the operational, with many discussed to contract and despite better measures of in XXXX were is margin XX% they margin able these the to that new of we believe Also fluctuating we of With past overhead lowering to Investor dealt over supply of will the will to we our chain at

past increase million, customer We $XXX expenses $XXX expect by of commission represents ensuring expenses driven X XXXX million. operating in The over the our million full operating and years $XXX has increase and over slight year expenses expenses between of we been a which meet can operating demand.

we on be replaced expenses As growth, investments focused platform. products Vapotherm revenue new look driving forward, launching Access and our by expanding will these

to for to loss I over We between expect adjusted Joe. now back $XX and it EBITDA turn to be $XX million XXXX would like million.

Joe Army

we XXXX elements. recurring revenue three to In recurring John. focused are growth driving Thanks, and be of growth, sustainable expansion consists and going flow on cash gross to Driving beyond, margin positive. revenue

distressed First, make placed These is and hypercapnic installed we significantly program clinicians surge of be non-COVID-XX running but that XHXD on educating on or focused efforts one-third training base our will haven’t patients. to technology, in our will productive ensure our periods. expanded by historically customers patients all one-half up respiratory

to XXXX, our Given our the utilization quarters. six four on accounts, we capital quarter in be we to installed levels experience XHXD disposable top unit will expect able within was XXX historical second to which focused return of per

will have new Module for estimate will customers, of HVT platform to HVT States. all OAM, products value focused Oxygen clinical into hospital a capital in or unit. recurring in we result hospital which revenue hospital as be the first we that and Second, don’t United we higher setting X.X will and of which expect installed which XX% air, beds on our economic introduce translate per areas will such piped-in and the X.X higher The be launched the Assist in platform

to in test will XXXX marketing the business We rolling complete messaging, model first fully training XQ. half of marketing more a and release out before worldwide materials in the limited

and While X.X half platform a cost the in in XXXX. the via further for patient home with first home, first of currently of we to cleared X.X margins under us X.X goal HVT EMS design. allow development gross to home better The is the lower HVT long-term patients transport serve the version and in will improve or is the HVT to use develop

which the international grow regulatory and will to efforts IDE patients markets, Our submission and own installed we in continues OAM U.S., FDA. select support enrolling base study in in our to our are

XX initial expand daily XX-day Vapotherm our our We monitoring lower now readmission COPD remotely for will product, to Care, we to will days Access. from allow deviates post returning key believe patients for first from believe hospital. event intervention digital we clinical This patient’s is will branded the patients their the baseline, unique towards the health their these discharge. Post the early business, Access hospitals monitoring Vapotherm allow in by which Lastly, keeping rates

and by our material digital We due to on platform offering gross platform, the labor the improvement X.X more We our reductions, our customers. have expansion HVT the launch direct clinical suppliers. allow prices OAM will us continue economic selling HVT will for plan. with margin utility will and provide execute three-pronged to X.X The believe negotiated of to lower which increase average costs cost and for volume-based we our

addition, HVT we out efforts and new home through X.X cost the for to continuous of and product In transport. drive continue will platform offerings improvement

Lastly, to incremental we over with years we’ve capacity expect the to drive costs. little overhead couple overhead been no past efficiencies fixed to as of scale able

overhead drive rates unit volume come facilities, we time. down As more to expect through per our we over

in $XX.X made in XXXX sheet. cash positioned runway million $XX cash us XXXX. until balance I how cash, Lastly, conclusion, needed P&L. we’re bridge along debt and progress onto refinanced will we additional This to with provide capacity In flow to positive million positive, positive. to the and with leverage am of drive we cash get excited recently our our added about another operating through To facility for of the flow improvement cash and our margin debt us gross we flow we will are

to with near-term we assumptions the expectations would our growth over My refinanced around COVID-XX, tied largest is pay million the believe they to speaking expanded deliver long-term with us the with our rate course our our us. and value will growth has consistent annual revenue years and the to which we detailing our entirely unpredictability like transparency in again of To been for we and in my the XXXX will of to proven XXXX opportunities address In to financing towards technology to a installed to installed XX%. investors clear have recurring XXXX provide progress base given and now shared provide Our guidance equity the us for need debt, January, customers the of revenue of significant the past We X-year performance, $XXX value resulting months, growth, the to and term prospects. over a see few non-dilutive points end, we award operating our come. pandemic, with materially the time targeted revenue following profitability of that early provided near-term flow which positive. tied capital cash get or revenue us performance-based compound base. of They

I’m every meeting to you Given the progress while lung my capital. of like the strong. would proud the the are we’ve us for and of your disease made pandemic management as patient in our extremely customer need their with our well employees trusting setting it’s on and has us, of opportunities front prospects on for this to us becoming our path thank Thank very focus that long-term a business complex what each belief personal organization done through company.

for up I’d questions. it open to Now like

Operator

first ahead. Our Kaczor Margaret come Instructions] with William Blair. [Operator from Please go will question

Unidentified Analyst

sounds flows and model question. Hi, time the you are and I wave in kind Brandon the frame you ‘XX that it’s to Thanks of This flu I maybe. is of have everyone. hard first I guys for to kind Margaret. wanted appreciate on on taking guidance. to giving. the for know focus I color understand, business? in winter like this the COVID. what these COVID QX ebbs mean, I you are wanted assuming with the core though,

just And of a pull-through Or of overtaking there? are the or assuming COVID or are assuming in it flu? wave is COVID then you’re as back you And kind are this does flu both? comes So replaced? you of in totally So disposables get assuming, drive, well? that assuming does more what you it systems

John Landry

this Brandon, that is Hi, I’ll question. take John,

first terms to quarter. So flu seen of Omicron due in have Brandon. surge to the layered the here the assumptions we this surge, XXXX, is no into for in current guidance We’ve largely little this

quarter ramp XQ If at for cases of out, up the when year look first ramped flu tail you quickly. CDC end started the and then starting the tracker of pretty down

quarter. it, you at the if first really in So surge here look largely it’s Omicron-related

As colder, – temperatures the be as as next in probably our fourth we’re expecting surge upon holiday over is quarter us. I the mentioned, get time season would

it another year typically flu surge. the in more of end usually because perspective as related somewhat and at fourth starts really factoring the at impact. limited largely a we tail is way it quarter of Probably the in QX We’re look of from a

you as update that think about XXXX So we we on more will guidance.

the of of see as start surges think will we next. will is and in of capital disposables contribution then and see typically recede, we that we first sort the mix the start see to surges capital terms disposables, I to slowdown what In

as start well to as recent recede seeing start to I the we’re well what as decrease So surge. starting the think most end to we’re the here here and different as CDC as demand in to near this of start trackers, hospitalization recede see capital tail we’re

Unidentified Analyst

your guys going have a And are surprises, are positive you just give kind maybe excitement either it. couple but getting to are some expected? around more us that would there the in you that been you benefits in like limited sounds any negative? it know color. that accounts of you’re release, least in the I could and things Are HVT, guys impact maybe Got Have early would experience. shifting product? And I that was a hoping still bit little you or then early of seeing What market at account? as

Joe Army

Brandon, one. it’s take Joe. I’ll that

we And So clearance that market with as quarter. know, limited on we XXX(k) the as mentioned, in a release. you got started we third

thus We’re results seeing far. that the we’re with pleased

ability of reduces that the move the or use to hospital just patients of anything a throughout the having nature, think to without I technology. the it compressor complexity using

nursing of of people lot may be is teams. that there those a is There respiratory been of and in big in part And hospitals. it. has turnover is I in was think the getting was use it – we’re positive. to response up been it at how that easy how number of around to hospitals lot surprised awful an new the comments set and the learn all pretty I it

full we not think back will that year. in So see the how I that move that see. half we something plays of this was when the out release expected to And had I market into

Unidentified Analyst

Okay, you. thank

Operator

Bill Plovanic next Our will come ahead. Canaccord. Please go from with question

Bill Plovanic

Okay, thanks. here. my for A Good couple question. Thanks taking evening.

roll And a first obviously, wondering on we bunch we quarter, in the the could a one-time top margins? sounds if as like fourth was quarter. us you some just charges the mean, bunch it – line. of should I directionality give First, I how about gross into of think then

how the ongoing. setup out call was didn’t You much exactly versus

of to come the So like get how just line top feel gross quarter could a kind for And margins first and and follow-up. what I’ll look back. quickly trying a have then

John Landry

Sure, question. John. is that Bill, I’ll this take

fourth thinking impacted we’re year, the surge. In of for where and be the expectations by first our the quarters we’re terms the will quarter

we seems thinking as of playing it it’s So surges. based our largely That be we’ve experience we’re factored in, that roughly previous the date. seen to to volume XX% in on out

this quarter fourth more be probably will split and revenue think I first year. again, So

in that temporary due your In terms lines of to needs. and getting point, prior from the gross large those the as with in the we to disposables largely temporary have Mexico can customer year ensuring the up years of associated all make implications, earlier sure to meet chunk we comparison well as in we labor costs in-house to spun numbers of were some the experienced the delta margin

of is way balance will fourth big a due of So delta P&L to through in of half XXXX the work then the those our costs, the quarter chunk XXXX. some temporary their which in first and went in that through

margin of be the contribution will be year from margin probably a a profile we lower the year half half think the the would weighted, perspective. as first year, higher back for about of So

we up margin So of pathway date. the with our second improvement half improving will year. the the be And in we ramp our to X-point gross back running to the margins on to plan

Bill Plovanic

a they know that with I’m the is. systems systems. or is missed it. why surge? I’m to disposables or is difficult bought middle burning asking your all of trending. it’s mean sorry, disposables they I’m to just Okay. going higher But I were it’s the trying to question if maybe than revenue get color. we’re so purchased going just and off are don’t given fourth be doing QX with quarter, I business That’s to of get in I kind lower be all some the the maybe

John Landry

the And fourth from larger equation the quarter first. be for be quarter, have factors reason the we that to than perspective. Bill, to the expect year-end Yes, into – the quarter, larger first fourth typically a than we is that into seasonality buying goes

would and quarter fourth larger generally be as expectation perspective, capital which well. a disposables from our here are So both

Bill Plovanic

mentioned on you’re last then you have Okay, that’s OAM the that completed you just so And does then Thank I and approval? on is enrollment have when to When position you for enrollment enroll. And that? the you trial, IDE the to submission that expect continuing helpful. much. do – trial question

Joe Army

will Well, soon I prepared that going we of comment know. the think terms patients. as to not in just projecting in be filing – trial everybody it’s you, terms clearance. when that and us we’re sure enrolling I we’re that’s But big we’re make as something on. gating can done of Bill, ongoing And regulatory for we’re to tell done, will is we that be factor the for let enrollment, And

Bill Plovanic

I one And sneak Okay. in. more could if

on Care out Vapo sales we You’ve and from XXX. about Access Post for the in that building questions. think talked and in a taking my set should force about thanks And product How XXXX XXXX? contribution the

John Landry

John. it’s Bill, Sure,

whether small XXX or reps half dedicated a dozen program have Access are it’s a Post from to we our our our Vapotherm sales Care force products, So perspective, that program.

that where incorporated a the guidance, have to a It’s we is and it and a break other product guidance them which material forward. From that the service separately not field, the not perspective, being we’re into flow yet. nature. It’s trained are So line going on out the items out basis. they through moving quarter-to-quarter in will

Bill Plovanic

Thank you.

Operator

next come Thibault BTIG. will Marie from from Our question Instructions] [Operator

Marie Thibault

I Hi, for units. evening, thanks had question the the Joe capital pricing first and of taking questions. a on good here John,

customers but were looking at that curious XQ. of model to things worked this just if latest and capital revenue passed through my Just entirely, were haven’t along the during placed, surge price number kind increases, in there units of

John Landry

Hi, Marie, question. take I’ll that it’s John.

pricing, it’s capital units the of number products. a more the accessory situation where largely a had had of of terms mix type in we So of

to distributors other as So more med any part permanent increases renewals, no rate it’s ASPs. CPI Largely, price additional contract annual one-time what increases. in of than our type typically than are uplift charged of situation the mix

Marie Thibault

the Silver your Thank I within and cases? you out us competitive why in Can highly got some heard few earlier tell is the accounts. of for Okay, those Flow I Gold reasons it. in situations on And that. – wanted you to wins winning competitors comment of a Precision then over

Joe Army

effect technology and and first they easier is clinical the significantly now The bedside. – the foremost is Type Flow So up all predictable very both they and these to very dealing is get right at are with patients folks. COVID-XX how the is Precision X set with used effective X that Type on

reputation has a products, in water service, second the really field last varying there our we Vapotherm and very Vapotherm at a would high over this out. level economic they whatever of know And most recent evidence what sort is life you terms significant that. some team, come of and a part hell white and service got this is the got reason job a And can And actually, needed, in we’re pandemic. are the there after looking folks throughout through I remarkable they were delivering then for specifically such And where get to really The I of organization field it’s large we unable of they its That think XXXX, versus that, people value overall are now did – built organization. just a the before of there tell body these the clinical they of I the cycle needed work you, wins we’ve need. for everything to piece surges. delivering And pan or win. fact commodity been glove

So really internationally, competitive reasons situations, winning probably I both in the U.S. those it’s we’re both. biggest and why are think these in

Marie Thibault

together. factors those All

any Okay, here, kind you one at run mind get sharing positive? flow that’s Joe, plan to If of the we thinking on kudos cash I one last revenue Would level in thank flow that positive. to cash sneak helpful, you. should can to about rate getting be the

John Landry

John it’s Marie, here. Yes,

to items, cash us leverage, So get in operating our profitability we marketing improvement, to path to in line the as expense main of levers terms primarily to drive the would continue be flow drivers drive margin our those gross and the sales positive. or

or quickly it how from not. I think think on depends to point, we I invest drive top want to growth line a breakeven

in kind So get that be, of to that would I as code directionally $XXX XX%-ish communicated we sort we would margins of the or we of plus get where in That’s so of well. previously, pathway think kind range assuming million ZIP be that there.

number or the side, top upon how making fast bit want So going little change drive that’s, line again, a upon growth, dependent forward. our strategy down to that OpEx go we to depending up may on investments

Marie Thibault

Alright. helpful. Thank That’s very you.

John Landry

are welcome. You

Operator

now remarks. closing will concludes that today. question-and-answer call session turn for Joe our I And any the for back Army to

Joe Army

really our I quarter. forward Vapotherm. it you to interest your progress We in all updating much. thank next want very look you to appreciate you on Thank for and again

Operator

you for now conclude will conference. this and may today’s participation, Thank And your you disconnect.

Vapotherm (VAPO) 26 Feb 222021 Q4 Earnings call transcript