Vapotherm closes Exeter plant as production moves to Mexico

Dec. 29—An Exeter medical technology company will shut down its manufacturing facility Dec. 30 and move production to Tijuana, Mexico.

The company's products help people suffering from respiratory distress.

Approximately 49 employees will lose their jobs because of the closure, according to an announcement made on Oct. 28 under the New Hampshire Work Adjustment and Retraining Notification Act.

Joseph Army, president and CEO, called 2022 a transitional year during an earnings call last month.

He said the closing of the 100 Domain Drive facility and move to Mexico is on track for the end of the year and expected to improve gross margins to 60% "once we work through our higher cost inventory and initial production builds."

In 2020, Vapotherm Inc. announced plans to expand its manufacturing capabilities to dramatically increase production of its Precision Flow Hi-VNI system in response to the COVID-19 pandemic.

"The sudden onset of COVID in early 2020 was a significant benefit to Vapotherm because it demonstrated the efficacy of our technology, increased our visibility with customers and dramatically grew our install base."

He said the drop in COVID and flu hospital visits in the first quarter of 2022 "took us by surprise."

The company saw a net loss of $26.2 million in the third quarter.

Last year, the company saw a net loss of $59.8 million and $51.5 million in 2020, according to earning statements.

Army said the company is dealing with unsustainable cost and inventory structure even as business started to match pre-COVID levels. The company is working to "right-size" its cost structure.

The company hopes to drive 20% revenue growth increasing its revenue from $64-$66 million to $77-79 million.

He said the move to Mexico will reduce operating costs and higher revenue from new products. The goal is to decrease expenses from $100 million in 2021 to $60 million to $62 million in 2023, according to a news release. The company is also establishing a research and development facility in Singapore.

The company is also facing delisting from the New York Stock Exchange because the average closing price of the company's common stock was less than $1 per share over a consecutive 30 trading-day period.

Vapotherm was a finalist for Product of the Year in 2021 by the New Hampshire Tech Alliance for its next generation HVT 2.0, a medical device developed for respiratory therapy in hospital and home settings.

At the time, the company employed 363 people, including 165 in New Hampshire. The company was founded in 1999.