Vapotherm Inc (VAPO) 2023 Q3 法說會逐字稿

Good afternoon, and welcome to the Vapotherm's third-quarter 2023 financial results conference call. All participants are in listen-only mode and this call is being recorded. After the speakers' remarks, there will be a question-and-answer session. It is now my pleasure to turn today's conference over to Dorota McKay, Vapotherm's Vice President and Chief Accounting Officer. Dorota, you may begin.

下午好，歡迎參加 Vapotherm 2023 年第三季財務業績電話會議。所有參與者均處於只聽模式，並且正在對此次通話進行錄音。演講者發言後，將進行問答環節。現在我很高興將今天的會議交給 Vapotherm 副總裁兼首席會計官 Dorota McKay。多羅塔，你可以開始了。

Good afternoon and thank you for joining us for the Vapotherm third-quarter 2023 financial results conference call. Joining us on today's call are Vapotherm's President and Chief Executive Officer, Joe Army; and the Senior Vice President and Chief Financial Officer, John Landry. This call is being webcast live and recorded. A replay of the event will be available following the call on our website. To access the webcast, please visit the events link in the IR section of our website at vapotherm.com.

下午好，感謝您參加 Vapotherm 2023 年第三季財務業績電話會議。參加今天電話會議的有 Vapotherm 總裁兼執行長 Joe Army；以及資深副總裁兼財務長約翰·蘭德里。此次通話正在進行網路直播並進行錄音。電話會議結束後，我們的網站將提供該活動的重播。若要觀看網路廣播，請造訪我們網站 vapotherm.com IR 部分的活動連結。

Before we begin, I would like to remind everyone that our remarks and responses to your questions today may contain forward-looking statements. These statements are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including those identified in the risk factors section of our annual report, filed on Form 10-K for the year ended December 31, 2022, and Form 10-Q, which will be filed today, and then any subsequent filings with the SEC. Such risk factors may be updated from time-to-time in our filings with the SEC, which are publicly available on our website.

在開始之前，我想提醒大家，我們今天的言論和大家問題的回答可能包含前瞻性陳述。這些陳述是基於管理階層目前的預期，涉及固有風險和不確定性，可能導致實際結果與所示結果有重大差異，包括我們在本年度表格 10-K 上提交的年度報告的風險因素部分中確定的結果截至2022 年12 月31 日，以及將於今天提交的10-Q 表格，以及隨後向SEC 提交的任何文件。此類風險因素可能會在我們向 SEC 提交的文件中不時更新，這些文件可在我們的網站上公開取得。

We undertake no obligation to publicly update or revise our forward-looking statements, as a result of new information, future events, or otherwise, unless required by law. This call will also include references to certain financial measures that are not calculated in accordance with Generally Accepted Accounting Principles or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of the historical non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP, are available in the earnings press release on the investor relations portion of our website. And with that, it's my pleasure to turn the call over to Vapotherm President and Chief Executive Officer, Joe Army.

除非法律要求，否則我們沒有義務因新資訊、未來事件或其他情況而公開更新或修改我們的前瞻性聲明。這次電話會議也將提及某些未依公認會計原則或公認會計原則計算的財務指標。我們通常將這些稱為非公認會計準則財務指標。我們網站投資者關係部分的收益新聞稿中提供了歷史非公認會計原則財務指標與根據公認會計原則計算和呈現的最具可比性指標的調節表。至此，我很高興將電話轉給 Vapotherm 總裁兼執行長 Joe Army。

Thank you all for joining us. On today's call, I will review the progress we made during the third quarter, and John will review you our financial results. I will then provide my thoughts on the fourth quarter before we open the call for Q&A. Revenue, excluding revenue from the Vapotherm Access call center business, which we commercially exited in the fourth quarter of '22, grew 18% in the third quarter as compared to the third quarter of 2022.

感謝大家加入我們。在今天的電話會議上，我將回顧我們在第三季度的進展，約翰將回顧我們的財務表現。然後，在我們開始問答之前，我將提供我對第四季的想法。不包括我們在 2022 年第四季商業退出的 Vapotherm Access 呼叫中心業務的收入，與 2022 年第三季相比，第三季的收入成長了 18%。

Now that the underlying market has returned to more normal year-over-year comparability, the progress we're making on the top-line is clear to see, with growth in the high teens this quarter. We continued to execute well against our path to profitability initiatives, which saw another sequential quarter, our sixth quarter in a row, of reduced non-GAAP cash operating expenses from lower inventory balances and reduced cash burn. The significant progress we've made in these key metrics when combined with the additional actions we took in the third quarter of this year to further reduce our non-GAAP cash operating expenses, gives us confidence that we will become adjusted EBITDA positive in the fourth quarter of 2023. Thus, along with further expected reductions in our inventory levels, should allow us to in turn cash flow positive in mid-2024, which means that we should have enough cash in our balance sheet to execute on our business plans without raising additional capital.

現在基礎市場已經恢復到更正常的同比可比性，我們在營收方面取得的進展是顯而易見的，本季的成長達到了兩位數的成長。我們繼續良好地執行獲利計劃，連續第六個季度，由於庫存餘額減少和現金消耗減少，非公認會計原則現金營運費用減少。我們在這些關鍵指標上取得的重大進展，再加上我們在今年第三季度為進一步減少非公認會計準則現金運營支出而採取的額外行動，使我們有信心在第四季度實現調整後EBITDA 為正價值2023 年第四季。因此，隨著庫存水準的進一步預期減少，我們應該能夠在2024 年中期實現正現金流，這意味著我們的資產負債表中應該有足夠的現金來執行我們的業務計劃，而無需籌集資金額外資本。

Revenue in the third quarter was $15.2 million. Worldwide capital equipment revenue growth of 25% versus the third quarter of 2022 was driven by HVT 2.0 sales in the US, with precision for sales in Brazil and [supported a tender] that was awarded to our distributor. In the US, customers continue to upgrade their installed base of Precision Flow units to HVT 2.0 units, given its ease-of-use and built-in resource, which allows it to be of use at the hospital. We're also excited to announce that we recently received regulatory clearance of HVT 2.0 in Brazil, which will allow us to bring HVT 2.0 to our to our second largest market.

第三季營收為1520萬美元。與 2022 年第三季相比，全球資本設備收入成長了 25%，這得益於美國 HVT 2.0 的銷售、巴西的精確銷售以及授予我們經銷商的[支援招標]。在美國，鑑於 HVT 2.0 設備的易用性和內建資源，客戶不斷將其安裝的 Precision Flow 設備升級到 HVT 2.0 設備，這使得它可以在醫院使用。我們也很高興地宣布，我們最近在巴西獲得了 HVT 2.0 的監管許可，這將使我們能夠將 HVT 2.0 引入我們的第二大市場。

Worldwide disposables revenue increased by 18% compared to the third quarter of 2022. We expect to increase worldwide disposables revenue by growing our HVT 2.0 installed base, in our ongoing efforts to increase awareness of the effectiveness of our technology in treating acute hypercapnic respiratory failure in COPD patients, as well as other non-seasonal conditions requiring respiratory support. The HYPERACT study, which we'll discuss in a moment, was specifically designed to show the effectiveness of our technology in hypercapnic patients.

與2022 年第三季相比，全球一次性收入成長了18%。我們預計透過擴大HVT 2.0 安裝基礎來增加全球一次性收入，我們不斷努力提高人們對我們的技術在治療急性高碳酸血症呼吸衰竭方面的有效性的認識。慢性阻塞性肺病患者，以及其他需要呼吸支持的非季節性疾病。我們稍後將討論的 HYPERACT 研究是專門為展示我們的技術在高碳酸血症患者中的有效性而設計的。

Change to our gross margin improvement initiatives and gross margin of 40%, as compared to gross margin of 14% in the third quarter of 2022, which included inventory write-offs and reserves to be transitioned from the Precision Flow to HVT 2.0. Gross margin in the third quarter decreased by 300-basis-points from the second quarter of 2023, as we scaled our Mexico operation to run 24/7 for the first time in advance of the upcoming [RSP and leases]. Doing so, we include higher scrap rates and lower first price yields, as we work through the new higher learning curve of the additional shifts and incurred higher freight costs. Overall, the transition to our Mexico operation has been incredibly smooth, as evidenced by our consistent sequential improvement in gross margin for several quarters.

我們改變了毛利率改善計劃，毛利率達到 40%，而 2022 年第三季的毛利率為 14%，其中包括庫存沖銷和從 Precision Flow 過渡到 HVT 2.0 的準備金。第三季的毛利率較 2023 年第二季下降了 300 個基點，因為我們在即將到來的 [RSP 和租賃] 之前首次將墨西哥業務規模擴大到 24/7 運作。這樣做，我們包括了更高的廢品率和更低的首次價格收益率，因為我們通過額外班次的新的更高學習曲線並產生了更高的運費。總體而言，我們向墨西哥業務的過渡非常順利，幾季毛利率的連續改善證明了這一點。

That stepped back this quarter but we believe that these one-time costs are behind us and performance back on track, and we expect to see significant gross margin improvement return in the fourth quarter of this year. Early in the quarter, we took steps to further reduce operating cash expenses, which reduced cash operating expenses in the third quarter to $12.3 million from $14.2 million in the second quarter of this year, and from $19.5 million in the third quarter of 2022. We expect that our annual cash OpEx run rate going into 2024 will be for $48 million to $50 million. At that level of spend, we expect to be cash flow positive sometime in the middle of 2024 and believe that our current cash balance is sufficient to get us to that point.

本季有所回落，但我們相信這些一次性成本已經過去，業績也回到正軌，我們預計今年第四季毛利率將顯著改善。本季初，我們採取措施進一步減少營運現金支出，將第三季的現金營運支出從今年第二季的1,420 萬美元減少到1,230 萬美元，從2022 年第三季的1,950 萬美元減少到1,230萬美元。預計到 2024 年，我們的年度現金營運支出將為 4,800 萬美元至 5,000 萬美元。按照這一支出水平，我們預計現金流將在 2024 年中期的某個時候出現正數，並相信我們目前的現金餘額足以讓我們實現這一目標。

We continued to reduce our inventory levels and converted another $1.5 million of excess inventory into cash in the quarter, remain on track to normalize our inventory levels by the end of 2024, by selling off excess inventory we purposefully built or purchased during the pandemic to ensure we could fulfill every customer need during COVID surges. Last but not least, we ended the quarter with $14.4 million of unrestricted cash, our cash burn was $3.6 million this quarter. We have consistently reduced our cash burn every quarter for the past six quarters, through a combination of revenue growth, gross margin improvement, and reduced cash operating expenses.

我們繼續降低庫存水平，並在本季度將另外 150 萬美元的過剩庫存轉換為現金，透過出售我們在疫情期間特意建造或購買的過剩庫存，繼續在 2024 年底前實現庫存水平正常化，以確保在新冠疫情高峰期間，我們可以滿足每位顧客的需求。最後但並非最不重要的一點是，本季末我們擁有 1,440 萬美元的非限制性現金，本季我們的現金消耗為 360 萬美元。在過去的六個季度中，我們透過收入成長、毛利率提高和現金營運支出減少，持續減少了每季的現金消耗。

We are not cash flow positive yet, but we've made incredible progress and getting to adjusted EBITDA is the first step, which we expect to see this upcoming quarter. Through continued execution, we then expect to become cash flow positive in mid-2024. On the clinical front, I'd like to update you on three important clinical trials. First, the HYPERACT clinical trial has been accepted for initial presentation at the Society for Critical Care Medicine congress in January of 2024.

我們的現金流尚未為正，但我們已經取得了令人難以置信的進展，調整後的 EBITDA 是第一步，我們預計將在下個季度看到這一點。透過持續執行，我們預計將在 2024 年中期實現正現金流。在臨床方面，我想向您介紹三個重要臨床試驗的最新情況。首先，HYPERACT 臨床試驗已被接受在 2024 年 1 月的重症醫學會大會上進行初步展示。

The HYPERACT trial was designed to compare the ability of our HVNI technology to treat acute hypercapnic respiratory failure in the emergency departments, compared to bi-level positive airway pressure or BiPAP. BiPAP is a form of non-invasive ventilation delivered by a form fitting facemask, which is the current standard of care for hypercapnic patients. Acute hypercapnia is a life-threatening condition in which patient is unable to effectively remove excess carbon dioxide out of body. While bi-level pressure systems are the current standard of care, many patients cannot tolerate the discomfort and complications associated with the mask required for those systems.

HYPERACT 試驗旨在比較我們的 HVNI 技術與雙水平氣道正壓通氣或 BiPAP 相比，在急診室治療急性高碳酸血症性呼吸衰竭的能力。 BiPAP 是一種透過貼合面罩提供的非侵入性通氣形式，是目前高碳酸血症患者的護理標準。急性高碳酸血症是一種危及生命的疾病，患者無法有效地將多餘的二氧化碳排出體外。雖然雙級壓力系統是目前的護理標準，但許多患者無法忍受與這些系統所需的面罩相關的不適和併發症。

HVNI delivered via a mask-free interface, providing greater patient comfort and protecting the patients to relieve their ability to speak. The primary endpoint of the trial was non-inferiority of HVNI with traditional measurements, associated laboratory values, ease of use, and patient output. There were no adverse events and we're excited to share the results of this important study with the medical community.

HVNI 透過無面罩介面提供，為患者提供更大的舒適度並保護患者以減輕他們的說話能力。該試驗的主要終點是 HVNI 與傳統測量、相關實驗室值、易用性和患者輸出的非劣效性。沒有發生任何不良事件，我們很高興與醫學界分享這項重要研究的結果。

Second, we have stopped our moderation Neo clinical trial that was designed to support the safety of the Oxygen Assist Module on the Precision Flow platform and rework. Our ultimate goal is approval of the Oxygen Assist Module on the HVT 2.0 platform. Based on our work to date, we believe the quickest path to this goal is to stop the current trial and start a trial with the Oxygen Assist Module on the HVT 2.0 platform once our development work is complete. We are pleased to note, there were no adverse events and then publish the results to date as a pilot study. Our international business continues to successfully sell the Oxygen Assist Module for Precision Flow and we expect it to be a major contributor of growth in our international business.

其次，我們已經停止了旨在支援 Precision Flow 平台上氧氣輔助模組安全性的 Neo 臨床試驗並進行返工。我們的最終目標是在 HVT 2.0 平台上批准氧氣輔助模組。根據我們迄今為止的工作，我們認為實現這一目標的最快途徑是停止當前試驗，並在開發工作完成後開始在 HVT 2.0 平台上使用氧氣輔助模組進行試驗。我們很高興地註意到，沒有發生任何不良事件，然後將迄今為止的結果作為試點研究發布。我們的國際業務繼續成功銷售用於精密流量的氧氣輔助模組，我們預計它將成為我們國際業務成長的主要貢獻者。

Lastly, the results of a UK-based investigator-initiated clinical trial will be presented at the European Respiratory Society International congress. This study showed that use of our technology is more effective than standard option therapy for the treatment of acute asthma in children. 50 children were enrolled in the study, 22 were treated with standard oxygen therapy and 28 were treated with our technology. 86% of the children treated with standard action therapy require escalation of therapy. Following 61% of the children treated with our technology needed further escalation.

最後，英國研究人員發起的臨床試驗的結果將在歐洲呼吸學會國際大會上發表。這項研究表明，使用我們的技術治療兒童急性氣喘比標準選擇療法更有效。 50 名兒童參與了這項研究，其中 22 名兒童接受了標準氧氣治療，28 名兒童接受了我們的技術治療。 86% 接受標準行動治療的兒童需要升級治療。接受我們技術治療的 61% 兒童需要進一步升級。

In addition, children treated with our technology met hospital discharge criteria in a median time of 29 hours compared to a median time of 37 hours for those treated with standard options. In conclusion, I'm pleased with the progress we've made on our path to profitability initiatives. At the midpoint of our 2023 revenue guidance range, we expect to deliver revenue growth, excluding revenue from the Vapotherm Access call center business, up 20% in the last three quarters of this year versus the same three quarters of 2022, despite an almost 50% reduction in cash operating expenses from 2021 to 2023.

此外，使用我們的技術治療的兒童達到出院標準的中位數時間為 29 小時，而使用標準方案治療的兒童的中位數時間為 37 小時。總之，我對我們在獲利計畫方面取得的進展感到滿意。在我們 2023 年營收指引範圍的中點，我們預計今年最後三個季度的營收成長（不包括 Vapotherm Access 呼叫中心業務的營收）將比 2022 年同期三個季度成長 20%，儘管成長了近 50% 2021 年至2023 年現金營運支出減少百分比。

Our differentiated technology, large installed base have recently launched HVT 2.0 product, give us the opportunity to drive significant revenue growth. The last three quarters of this year will be the first three quarters without the impact of COVID skewing the results and demonstrate the strong growth potential in our underlying business without incremental embarrassments. Also, the combination of expected revenue growth, continued gross margin improvement, and decreased cash OpEx positions us to become adjusted EBITDA positive in the fourth quarter of '23, and then cash flow positive in mid-2024. I will now turn the call over to John who will review the financial results for the quarter.

我們的差異化技術、龐大的安裝基礎最近推出了 HVT 2.0 產品，使我們有機會推動營收的顯著成長。今年最後三個季度將是前三個季度沒有受到新冠疫情影響而影響業績的情況，並展示了我們基礎業務的強勁增長潛力，而不會出現增量尷尬。此外，預期收入成長、毛利率持續改善以及現金營運支出下降，使我們在 2023 年第四季調整後 EBITDA 為正，然後在 2024 年中期現金流為正。我現在將把電話轉給約翰，他將審查本季的財務表現。

Thanks, Joe. Worldwide revenue in the third quarter of 2023 was $15.2 million. US revenue was $11.2 million and international revenue was $4 million. Worldwide capital and worldwide disposables revenue grew 25% and 18%, respectively, as compared to the third quarter of 2022. HVT. 2.0 capital sales represented 73% of our US unit sales in the third quarter of 2023. Gross margin was 39.6% in the third quarter, which is down from 42.8% in the second quarter of 2023, due to inefficiencies in our Mexico facility as we significantly ramped production in anticipation of RSV and flu season in the Northern Hemisphere.

謝謝，喬。 2023 年第三季全球營收為 1,520 萬美元。美國收入為 1,120 萬美元，國際收入為 400 萬美元。與 2022 年第三季相比，全球資本和全球可支配收入分別成長 25% 和 18%。HVT。 2.0 資本銷售佔 2023 年第三季我們美國單位銷售額的 73%。第三季毛利率為 39.6%，低於 2023 年第二季的 42.8%，原因是我們墨西哥工廠效率低下，因為我們由於預計北半球將出現RSV 和流感季節，產量大幅增加。

Gross margin in the third quarter of 39.6%, increased from 13.8% in the third quarter of 2022. This increase is largely due to the absence of inventory reserves and write-offs we made in connection with the transition from Precision Flow to HVT 2.0 in the third quarter of 2022, year-over-year revenue growth and a lower cost of operations in Mexico. GAAP operating expenses were $16.3 million in the third quarter, down from $24.8 million in the third quarter of 2022. Non-GAAP cash operating expenses were $12.3 million in the third quarter, down from $14.2 million in the second quarter of 2023. Non-GAAP cash operating expenses decreased from $19.5 million in the third quarter of 2022, a year-over-year reduction of $7.2 million or 37%.

第三季的毛利率為 39.6%，較 2022 年第三季的 13.8% 有所增長。這一增長主要是由於我們在 2022 年從 Precision Flow 過渡到 HVT 2.0 時沒有進行庫存儲備和沖銷。2022 年第三季度，墨西哥的營收年增，營運成本降低。第三季 GAAP 營運支出為 1,630 萬美元，低於 2022 年第三季的 2,480 萬美元。第三季非 GAAP 現金營運支出為 1,230 萬美元，低於 2023 年第二季的 1,420 萬美元。非 GAAP現金營運支出從2022 年第三季的1,950 萬美元減少，年減720 萬美元，即37%。

We recorded an adjusted EBITDA loss of $6.1 million in the third quarter of 2023, which is $300,000 less than our adjusted EBITDA loss of $6.4 million in the second quarter of 2023 and significant improvement over our adjusted EBITDA loss of $17.7 million in the third quarter of 2022. We continue to make progress in reducing inventory from the peak of $38.4 million in the second quarter of 2022. We ended the quarter with $23.1 million of inventory, a reduction of almost $50 million over the last five quarters. We remain on track to further reduce our inventory levels by another $10 million over the next five quarters, resulting in inventory of roughly $13 million by the end of 2024.

2023 年第三季度，我們的調整後EBITDA 虧損為610 萬美元，比2023 年第二季調整後EBITDA 虧損640 萬美元少了30 萬美元，比2023 年第三季調整後EBITDA 虧損1,770 萬美元有了顯著改善。2022 年。我們在減少庫存方面繼續取得進展，從2022 年第二季度3840 萬美元的峰值開始。本季度結束時，我們的庫存為2310 萬美元，比過去五個季度減少了近5000 萬美元。我們仍將在接下來的五個季度中進一步減少庫存水準 1,000 萬美元，到 2024 年底庫存將達到約 1,300 萬美元。

We ended the quarter with $14.4 million of unrestricted cash, a decrease of $3.6 million in the quarter versus a decrease in cash of $7.7 million in the second quarter of 2023. Lastly, I'm pleased to report that we met our 2023 one-time minimum net revenue covenant requirement of $25 million for the six-month period ended September 30, 2023. We recorded net revenue of $31.2 million for this measurement period. Our next minimum net revenue covenant test will begin in 2024, with the minimum net revenue level set at a discount to the company's 2024 annual operating plan. We also remain in compliance with our minimum unrestricted cash and cash equivalents covenant of $5 million.

本季末，我們的非限制性現金為1,440 萬美元，與2023 年第二季現金減少770 萬美元相比，本季減少了360 萬美元。最後，我很高興地向大家報告，我們實現了2023 年的一次性目標截至 2023 年 9 月 30 日的六個月期間，最低淨收入契約要求為 2,500 萬美元。在此衡量期間，我們記錄的淨收入為 3,120 萬美元。我們的下一次最低淨收入契約測試將於 2024 年開始，最低淨收入水準設定為較公司 2024 年年度營運計畫有所折扣。我們也繼續遵守 500 萬美元的最低無限現金和現金等價物承諾。

I'll now turn to guidance. We now expect annual revenue of $69 million to $71 million, which represents an annual growth rate of 8% to 11%, excluding revenue from the Vapotherm Access call center business, which we exited commercially in the fourth quarter of 2022. Excluding Vapotherm Access, revenue growth in the fourth quarter will be 13% at the midpoint of our updated revenue expectations. This is a deceleration from the third quarter, primarily due to a tough comp in the fourth quarter of last year, due to an unusually early flu season.

我現在轉向指導。我們現在預計年收入為 6,900 萬至 7,100 萬美元，年增長率為 8% 至 11%，不包括我們於 2022 年第四季度商業退出的 Vapotherm Access 呼叫中心業務的收入。不包括 Vapotherm Access，按照我們更新的營收預期的中點計算，第四季的營收成長將為13%。與第三季相比有所放緩，主要是由於去年第四季流感季節異常提前，導致經濟狀況嚴峻。

Our revenue guidance at the midpoint of the range, and excluding Vapotherm Access, reflects net revenue growth of 20% over the last three quarters of last year, which we believe accurately reflects the underlying trajectory of the business. In full-year 2023, we continue to expect that 65% to 75% of our revenue will come from disposables revenue and the remainder will come from capital and service revenue. We now expect gross margin for the full-year 2023 to be in the range of 41% to 43%. We now expect that GAAP operating expenses will be between $68 million to $70 million, a decrease of $2 million from previous guidance.

我們的營收指引處於該範圍的中點（不包括 Vapotherm Access），反映了去年最後三個季度 20% 的淨收入成長，我們相信這準確地反映了業務的基本軌跡。 2023 年全年，我們繼續預期 65% 至 75% 的收入將來自可支配收入，其餘部分將來自資本和服務收入。我們目前預計 2023 年全年毛利率將在 41% 至 43% 之間。我們現在預計 GAAP 營運費用將在 6,800 萬美元至 7,000 萬美元之間，比先前的指導減少 200 萬美元。

We now expect that non-GAAP cash operating expenses will be between $54 million to $56 million, a decrease of [$1 million] from previous guidance. We expect to exit the year with an annual non-GAAP cash operating expense run rate of $48 million to $50 million. We believe that the additional reduction in non-GAAP cash operating expenses taken in the third quarter and our continued focus on reducing our inventory balance, will offset the reduction in our revenue and gross margin expectations for 2023. Therefore, we continue to expect to end 2023 with unrestricted cash of between $10 million to $15 million. With that I'll now turn it back over to you, Joe.

我們現在預計非 GAAP 現金營運支出將在 5,400 萬美元至 5,600 萬美元之間，比先前的指引減少 [100 萬美元]。我們預計今年結束時的年度非公認會計準則現金營運費用運行率為 4,800 萬美元至 5,000 萬美元。我們認為，第三季非公認會計準則現金營運費用的進一步減少以及我們繼續致力於減少庫存餘額，將抵消我們對 2023 年收入和毛利率預期的減少。因此，我們繼續預計到2023 年，無限制現金在1000 萬至1500 萬美元之間。現在我將把它轉回給你，喬。

Thanks, John. As we look to close out the year strong, our focus will continue to be driving towards profitability through revenue growth, gross margin improvement, and driving cash operating expenses below pre-IPO levels, while investing prudently in future growth drivers such as the hallmark of our clinical studies. By delivering fourth-quarter results including positive adjusted EBITDA, we should be well positioned to execute on our 2024 plans and achieve financial self-sustainability. We made a lot of structural changes over the past six quarters and very proud of our execution.

謝謝，約翰。當我們希望以強勁的業績結束這一年時，我們的重點將繼續透過收入成長、毛利率改善和將現金營運支出降低至首次公開募股前水平以下來推動盈利，同時謹慎投資於未來的成長動力，例如我們的臨床研究。透過提供包括正向調整 EBITDA 在內的第四季度業績，我們應該能夠很好地執行 2024 年計劃並實現財務自我可持續性。在過去的六個季度中，我們進行了許多結構性變革，並對我們的執行感到非常自豪。

I'd like to thank our team for their ongoing efforts as we are now on the verge of adjusted EBITDA profitability, while still driving top-line growth. As always, we appreciate your support of Vapotherm and look forward to updating you on our next quarterly call. I will now open up the call for questions. Thank you.

我要感謝我們的團隊所做的持續努力，因為我們現在正處於調整後的 EBITDA 盈利能力的邊緣，同時仍在推動營收成長。一如既往，我們感謝您對 Vapotherm 的支持，並期待在下一次季度電話會議上向您通報最新情況。我現在開始提問。謝謝。

(Operator Instructions) [Ryan Merkel], William Blair.

（操作員說明）[瑞安·默克爾]，威廉·布萊爾。

Hey, everyone, this is Merkel, Ryan for Margaret tonight. Thanks for taking our questions. And just to start on cash, obviously, good to see cash burn continue to improve this quarter. So I guess, should we expect a similar level the next few quarters as you work towards that cash flow positive next year? And I know you mentioned the cash OpEx run rate in 2024 but are there any additional other levers you could pull to maybe even improve upon that further?

大家好，我是梅克爾，今晚的瑪格麗特是瑞安。感謝您回答我們的問題。顯然，從現金開始，很高興看到本季現金消耗繼續改善。所以我想，當您努力實現明年的正現金流時，我們是否應該預期未來幾季會出現類似的水平？我知道您提到了 2024 年的現金營運支出運行率，但是您是否可以利用其他任何其他槓桿來進一步提高這一點？

Hey, Merkel, this is John, thanks for your question tonight. Yes, we're pleased with the reduction in our cash burn this past quarter. I think as we look forward here to the fourth quarter, it's a two-step process we call it. First step is really to get to adjusted EBIT positive, which we're targeting here in the fourth quarter. And then the next step is cash flow breakeven midyear 2024. And really, a couple of steps -- that two step processes in place, I think the major driver that we have, as you pointed out, is cash OpEx reductions. We've taken all the actions we believe we need to take to allow us to get to that point.

嘿，梅克爾，我是約翰，謝謝你今晚的問題。是的，我們對上個季度現金消耗的減少感到高興。我認為，當我們展望第四季時，我們稱之為一個兩步驟過程。第一步其實是實現調整後的息稅前利潤為正，這是我們在第四季的目標。然後下一步是 2024 年年中實現現金流盈虧平衡。實際上，有幾個步驟——即兩步驟流程，我認為，正如您所指出的，我們的主要驅動力是現金營運支出的減少。我們已經採取了我們認為需要採取的所有行動，以幫助我們實現這一目標。

And the second real main lever that we have, Merkel, is around our inventory reduction. As you probably can tell, we have about $23 million of inventory at the end of the fourth quarter. Basically, we want to drive that back to four turns per year in terms of inventory levels, which will free up about $10 million of incremental cash by the end of 2024. So over the next five quarters, we plan to unlock about $10 million of cash from our balance sheet and return it back to our cash books by the end of the year. So that's our that's our plan from a cash perspective.

梅克爾，我們擁有的第二個真正的主要槓桿是我們的庫存減少。您可能已經知道，第四季末我們的庫存約為 2300 萬美元。基本上，我們希望將庫存水準提高到每年四周，這將在 2024 年底釋放約 1000 萬美元的增量現金。因此，在接下來的五個季度中，我們計劃釋放約 1000 萬美元的現金。從我們的資產負債表中提取現金，並在年底前將其返還至我們的現金帳簿中。從現金角度來看，這就是我們的計畫。

Great. Thanks, very helpful. And then to just tied to HVT 2.0 into one here as a follow-up. I think you mentioned last quarter HVT 2.0 accounts for roughly 70% of the US capital sales. So was it similar this quarter? And then I guess, how should we think about the timing of entering the market in Brazil after the regulatory approval you mentioned?

偉大的。謝謝，非常有幫助。然後將 HVT 2.0 綁定到此處作為後續。我想您提到上個季度 HVT 2.0 約占美國資本銷售的 70%。那麼本季情況是否相似？那麼我想，你提到的監管部門批准後，我們應該如何考慮進入巴西市場的時機？

Yes, [McAuley], I'll take this one as well as. From an HVT 2.0 perspective, we did see a little bit of a bump-up in terms with a concentration of HVT 2.0 capital sales, as a percentage of the total unit sales from the low 70s, about 73% this past quarter. We expect to see HVT 2.0 continue to be a large percentage of the overall capital unit sales longer-term. In terms of our international HVT. 2.0 approval from Brazil perspective, we're looking to close that as quickly as possible. Brazil is a very important market to us, second largest in the world for us. So getting that product into Brazil and being in position to help treat those patients is what we're looking to do here as quickly as possible.

是的，[麥考利]，我也會選擇這個。從 HVT 2.0 的角度來看，我們確實看到 HVT 2.0 資本銷售的集中度有所上升，佔總銷量的百分比從 70 年代低點上升，上個季度約為 73%。我們預計，從長遠來看，HVT 2.0 將繼續在總資本單位銷售中佔據很大比例。就我們的國際 HVT 而言。從巴西的角度來看，2.0 的批准，我們希望盡快完成。巴西對我們來說是一個非常重要的市場，也是我們的世界第二大市場。因此，我們希望盡快將該產品引入巴西並幫助治療這些患者。

Great. Thanks again for taking my questions.

偉大的。再次感謝您回答我的問題。

Welcome.

歡迎。

Marie Thibault, BTIG.

瑪麗蒂博，BTIG。

Hi, Joe. Hi, John. Thanks for taking the questions this evening. I wanted to ask a two parter on capital and disposables. HVT 2.0 sounds like there's continues to be strong demand for it, and it's certainly a big growth driver year-over-year, but I noticed that the step down a decent amount sequentially. Is this just seasonality? Has there been any change in demand or CapEx environment on that sort of thing? And then on disposables, looks like you've had a nice recovery up to about 60% of pre-COVID turn rates. Very nice to see. I wanted to understand if that meaningfully changes your outlook on the disposable turn rate going forward?

嗨，喬。你好，約翰。感謝您今晚接受提問。我想詢問兩個人有關資本和可支配資金的問題。 HVT 2.0 聽起來對它的需求仍然強勁，而且它肯定是同比增長的一大推動力，但我注意到，需求量連續下降了相當大的幅度。這只是季節性嗎？此類事情的需求或資本支出環境是否有任何變化？然後，在一次性用品方面，看起來您的恢復情況良好，恢復率約為新冠疫情前的 60%。很高興看到。我想了解這是否會有意義地改變您對未來一次性週轉率的看法？

Hi, Marie, I can take those questions, so I'll start first with capital. So from a CapEx perspective, we saw hospital CapEx spending tighten up a bit here in the third quarter. In fact, we saw a lot of deals that we had with the US government pushed into the fourth quarter, which is unusual since September 30 is a typical fiscal year end after the government, so an unusual pattern there. We're not losing deals, but just taking longer to get done.

嗨，瑪麗，我可以回答這些問題，所以我先從資本開始。因此，從資本支出的角度來看，我們看到第三季醫院資本支出略有收緊。事實上，我們看到我們與美國政府達成的許多交易都被推遲到了第四季度，這很不尋常，因為 9 月 30 日是政府結束後的典型財政年度，所以這是一個不尋常的模式。我們並沒有失去交易，只是需要更長的時間才能完成。

Receptivity to our HVT 2.0 continues to be strong from a customer perspective. And we're now just starting to see some inbound requests for quotations for the HVT. 2.0, given that the AC611 high-flow nasal cannula solution for the V60 will be coming off the market soon. So that's from a from a capital perspective. On the disposables perspective, we did see a recovery in the turn rate as against the prior COVID three-year average. So we did bump up. It's approaching 60% here in the third quarter.

從客戶的角度來看，我們對 HVT 2.0 的接受度仍然很高。我們現在剛開始看到一些 HVT 報價請求。 2.0，考慮到 V60 的 AC611 高流量鼻插管解決方案即將退市。這是從資本角度來看的。從一次性用品的角度來看，我們確實看到週轉率與之前的新冠疫情三年平均值相比有所回升。所以我們確實碰上了。第三季這一比例接近 60%。

As we look forward to the fourth quarter, our focus is going to be really on driving usage and hypercalcemia in BiPAP patients and the existing accounts. Our goal is to get back to our historical DPC turn rates over time. And if we do that over the next three years, we can grow our business 15% plus per year, just by getting back to those turn rates in our gold account. So as we look at the mix of disposables, we expect that there will be 65% to 70% this year, just given the HVT 2.0 capital strength this year. But longer-term, we expect them to be about 75% contribution of our total revenue.

當我們展望第四季度時，我們的重點將真正放在推動 BiPAP 患者和現有帳戶的使用和高鈣血症。我們的目標是隨著時間的推移恢復到歷史 DPC 週轉率。如果我們在未來三年內做到這一點，只需回到我們黃金帳戶中的周轉率，我們的業務將每年增長 15% 以上。因此，當我們審視一次性資產的組合時，考慮到今年 HVT 2.0 的資本實力，我們預計今年將有 65% 到 70% 的比例。但從長遠來看，我們預計它們將占我們總收入的 75% 左右。

Perfect. Very helpful. Very encouraging, John. And then maybe my follow-up, I heard mention of the impact to gross margins from building inventory ahead of RSV flu season. What are your expectations for the winter season this year and those illnesses? Just curious to level set post-COVID now that it does feel like we're truly in a post-COVID era. Thanks for taking the questions.

完美的。很有幫助。非常令人鼓舞，約翰。也許我的後續行動是，我聽說在 RSV 流感季節之前建立庫存對毛利率的影響。您對今年冬季以及那些疾病有什麼期望？只是對後新冠疫情後的水平設定感到好奇，因為我們確實感覺我們確實處於後新冠疫情時代。感謝您提出問題。

Yeah, sure. Thanks, Marie. So we're just starting to see the impact of the RSV and the flu season here in the US, which is prior to COVID, typically happened around this time in the fourth quarter. So our guidance is really based on the expectation that we'll see a mild to moderate flu season in the fourth quarter, with about 25% of the overall 2023-2024 flu season taking place in the fourth quarter this year and the balance taking place in the first quarter of 2024. That's what we experienced prior to the pandemic. And you expect to return back to that type of traditional pattern here going forward. So that's what you're looking at from a modeling perspective and how we developed our guidance here for the balance of the year.

好，當然。謝謝，瑪麗。因此，我們剛開始看到 RSV 和美國流感季節的影響，流感季節發生在新冠疫情之前，通常發生在第四季度的這個時候。因此，我們的指導實際上是基於這樣的預期，即我們將在第四季度看到輕度至中度流感季節，2023-2024 年整個流感季節的約25% 發生在今年第四季度，其餘部分發生在2024 年第一季。這就是我們在大流行之前經歷的情況。您希望未來能回到這種傳統模式。這就是您從建模角度看到的內容，以及我們如何制定今年剩餘時間的指導。

Understood. Thank you.

明白了。謝謝。

Thank you.

謝謝。

(Operator Instructions) There are no further questions at this time. Please proceed.

（操作員說明） 目前沒有其他問題。請繼續。

Thank you for joining us on today's call. We look forward to updating you again next quarter. Have a nice evening.

感謝您參加今天的電話會議。我們期待下個季度再次為您提供最新消息。祝你今晚愉快。

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

女士們、先生們，今天的電話會議到此結束。我們感謝您的參與，並請您斷開線路。