VapoTherm (NYSE:VAPO) shares fell this morning on third-quarter results that came up short of the consensus forecast.
The Exeter, New Hampshire-based company posted losses of $91.8 million. That equals 98¢ per share on sales of $13.55 million for the three months ended Sept. 30, 2022.
VapoTherm registered a massive bottom-line slide deeper into the red on a sales decline of 64.5%. The company attributed year-over-year revenue declines as the Delta variant of COVID-19 drove demand for the company’s products this time last year. That failed to repeat in the three-month period this year.
The company’s losses per share of 98¢ came in 20¢ behind expectations on Wall Street. Analysts projected revenues of $13.54 million.
“Our revenue increased sequentially from the second quarter to the third quarter which is not typical given the seasonality in our business,” said Joseph Army, president and CEO. “Growth was driven primarily by consistent monthly improvement in U.S. disposables turn rates… and the ongoing launch of our new product platform HVT 2.0. … We are on track to complete the move of operations to Mexico by year-end which we believe will improve our gross margins to 60% once we work through our higher costed inventory and initial production builds.”
Vapotherm expects a net revenue range between $64 million and $66 million. The previous guidance fell between $75 million and $81 million. Its guidance reflects a light flu season which typically begins in the fourth quarter in the U.S. The guidance does not reflect any significant COVID-19 impact.
BTIG analyst Marie Thibault wrote that she maintains her “Neutral” rating on VapoTherm. Its guidance, among other issues, offset positive news in its third-quarter results, she said.
“We remain concerned with the revenue covenant overhang, the need to quickly convert inventory to cash, and long-term efforts needed to reach profitability,” wrote Thibault.
Shares of VAPO dipped 21.8% at $1.65 apiece in early-morning trading today. MassDevice’s MedTech 100 Index — which includes stocks of the world’s largest medical device companies — fell by 4%.
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