NNOX - Earnings call transcript Q4 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Nano-X Imaging Q4 and Full Year 2021 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Mike Cavanaugh, Investor Relations.

You may begin.

Mike Cavanaugh

Thank you. Good afternoon and thank you for joining us today. Limited ended results December Imaging year the Nano-X quarter and XX, today, released for financial full Earlier XXXX. The the release Investors on section of is the company’s currently available website. Officer, Officer Daniel, Chief call. and Meltzer, this afternoon’s Executive Chief Erez Financial will host Ran

of I this and operations, Before during as results, based remind These in everyone making and that difference subsequent research include, on today may company’s commercialization to, future. representing financial and views include a process on forward-looking COVID-XX as and like in date. that of those we limited assumptions cause would described impact should the to and such filings to Exchange manufacturing as the Therefore, will Commission. updated current company’s that activities, business management’s management regulatory may other the are get these Factors statements not be on the risks, development, not that started, call the and but statements its of uncertainties statements are regarding expectations matters. Securities company’s any not with be statements the are relied be subject

refer also additional to non-GAAP non-GAAP would Nanox’s like being differences to CEO, A class expenses. financial to measures and action-related information our the is to to I over to now with reconciliation provide of provided Erez measures call primary the certain investors. GAAP turn with will release, We Meltzer. press stock-based the compensation

Erez Meltzer

Thank you, call joining the today. Mike thank for and you all

a in development assumed as to as my I CEO time role on most Nanox be X As what you know, January considered trajectory. I of pivotal

as to some our you developments will with an on today. our call our look well We of have last call. exciting as share earnings outlook We made ahead. the since earnings our overview sharing year give last I forward achievements since advancements several

to to commercialization as questions. over providing with on will the start feedback multi-source to open I our multi-source to system. version program. to last relating from up Nanox.ARC. would towards that by this to the regulatory we pertains In of be submission CFO, our we system of would feedback first Nanox.ARC, FDA XXX(k) quarter a year, results, the an Ran careful then pertaining filed via second reviewing on pre-submission our Q-Submission progress review and the it submission, January first for our application the our a turning conversations financial a our around the call FDA’s agency like announced high-performance, Daniel, an call update we Nanox.ARC Before additional We our FDA review of to the the after our

by continuous communication and most believe the submission. followed in feedback, are We which pathway FDA formal the will be this be further route to expeditious FDA that with will

improvements to We FDA, system and the expect suitable thoughtful Nanox.ARC Q-Submission will year. that have by the lead they to the for the will later been this development be cleared

in team the deployment considerable headway committed Nanox.ARC units execution is focused of over towards past and the have months remains our made and year We to on the commercialization ahead.

decentralized patented large provide teleradiology geologists chances the learning of to capture streamlined path global provider a by of revenues, now a radiologists. Inc., medical a efficiency, pleased through with and streamline care are which with marketplace path which one to detection the transactions, analytics part, MDW well step Combined generating analysis Medical to We and Holdings, we takes commercialization. reduce connecting to report strategic combination machine create our acquisitions increase now begun capabilities significantly have with company the announced cost the to access we Zebra AI have imaging are previously technology, USARAD in from meaningful us creating And a three and that our imaging deep potential analysis healthcare. our our early the of manner. trained could due closer to affordable to Nanox.AI, a Nanox.ARC well Vision, and facilities believe services, more LLC, on patient leading improve one image enhance integrating in we powered acceptable access to global umbrella, intervention that technology, of Under teleradiology we solution to imaging and as continuum as X-ray

XXXX integration and order to of with reduction of acquired a and from pleased number synergies. end the operations are the our companies streamline cost ongoing measures have We we in at taken of benefit

strategic in Vision XX on drive is Ben Elazar CEO of roadmap It and joint health of Clalit industry the Health and strategic merged company. Clalit second believe credentialing mission intend we that line, Medical offering. to high we wide since the collective in has to product is integration widely medical services to commercial inception, as largest Applications, rectified Approval, one Mr. of by USARAD organization standards In Ben of Research USARAD technology that years collaboration. maintained Zebra enhance pleased in Joint of strengthened XXXX, Having Nanox.AI. Elazar of to the Board brings quality Elazar also Nanox previously were a the we since healthcare the leadership begin collaborations Mr. was explore by the to Nanox.AI. help we Israel. appointed and of XXXX, Nanox program Gold I HMO am As Seal contribute understands country. Nanox companies world, which the March Ben largest the its expertise for a share team to array Pini of vision served as of that most Mr. Mr. maintenance provided announce organization Clalit. Mor of equipped transfer was Ben Elazar December will architects is these in the the Effective the Ben excited additional and Zebra vision. uniquely the Services. Commission’s reflects the Elazar Furthermore, Manager the recognized its the with they We standards of that of X, have top inception, leading served system. of solutions General

American entered the vision We that of the issued Medical network Category a this of calcium into drive large and our In wellness. Nanox.AI based the would cardiac XXXX, global caring month, Procedural that a organization capitalizations, highlight health other new last AI-enabled for also confident which that maybe we announced with agreement to solution help into diseases adapted Association healthcare in he implications equitable FDA-cleared code, market. are provides a January patients potentially potential U.S. issues X patient’s lives improve of to imaging years I osteoporosis, this organization’s Under achievements expertise Current out report. integrated and as scoring, a Nanox.AI chronic cardiac CPT quantitative the coverage help few since like more the identify model to the broader demand an has CPT Terminology, well to enabling the important our technology step hospitals the Earlier of and scans. create believe focusing We at diseases The risk deploy of in would increased in Nanox early and on and the agreement, reimbursement promote detects having broader to I cardiovascular CT Nanox.AI-enabled detection and the towards that the coming of immediately population announce We of cardiovascular technology, the and for designed tools under CAC enable that system. between a of many for management disease. to like the Nanox.AI. computerizing physicians integrated U.S. We the another our healthcare efficiently results to code tomography, for treatment the partnership July cardiovascular consider for risk effective for signed become that validation advanced interest artery and/or osteoporosis detection organization begin our believe key will to and be has who software this coronary agreement patients individual could on Nanox.AI health for chest, in will will been further hospitals X, as diseases. healthcare it recently calcium, months. will with within XXXX. rolled Implementation where Nanox.AI and organization are previously expected in

for As subject and will territories, including we and have year, and system. Europe markets such America have are the clearance be requisite units our for agreements Nanox.ARC to in the MSaaS made reported, deployment the the These of outside in deployed regulation in company vision local signed to significant materializing for it. X,XXX system within we each Nanox.ARC, according Africa, of Central progress market. beginning Since XX both different global previously the as of agreement multi-source of

We have path. system our Nanox.ARC later the establishing capabilities enhancing year, partnerships on towards been focused new regulatory deployment our and this of establishing production mainly

year. of to anticipate while stable Financial the wholly-owned facility completed. capabilities chain ensuring line is production transfer of Nanox.ARC, XXXX. the of Daniel, like stores. Operationally, to over the Chief being technology of the we for expected beginning facility believe assembly us that, initiative and our Israel. has to enable healthcare systems. we will chips of would And assembly chips are to silicon especially chips to an I the in have help preparation given operational worldwide. been been production conducted our is quality turn an shortages for and With shipments up the The underway, Nanox.ARC efforts will our by We use production later for system piece digital our Our need key of Nanox’ enable the we [indiscernible] the production chip with improving production Nanox.ARC in supply X-ray Korean now integral in of our and the primarily the professionals the call year, that the This production MEMs full for the a Nanox current Ran of midyear launch and subsidiary establishing Officer. the who the important supply this secure this ramp line at to Since

Ran Daniel

for quarter XXXX. the $XX loss reported full GAAP loss period net of We $XX a Erez. with net XXXX. you, GAAP of compared of in net a year of XXXX the loss $XX for million compared for million XXXX reported a Thank same of million net million the fourth to of $XX loss We for a

the revenue of gross ended $X.X on for was December Our the million. for fourth $X.X quarter and XXXX, year loss was And million. XX, our XXXX,

we radiology marketplace of during operations. from with of profit revenue, fourth for of approximately solutions, non-GAAP $X.X gross sales million XX%. of million and million, of $X.X was which basis GAAP basis, X Nanox.AI, from months on a closed XXXX. revenue same gross profit period those stems the the acquisitions and a quarter of gross which USARAD a fact, such a services Nanox margin the and And represents profit platform, from Of services revenue revenue our AI the $X represent the Our radiology a in of resulting on

and legal year and labor million The period class same to marketing $X.X XXXX for in $XX.X $X.X $XX.X was increase The the merger quarter ended XXXX and mergers applications were development million related XXXX, million XXXX expenses of of shares litigation. was the the for and to USARAD $XX.X to action $XX.X GAAP same largely net were the period increasing an assets connection the the headcount million in company’s The same AI connection to the net of fees cost, to million expenses Sales was for with In the Nanox.AI, share-based non-GAAP ended year $X.X our overall of as of our our in XXXX. during mainly the the in are XXXX. and in were approval on XXXX. fourth for administrative SEC and million loss on MDW. to of infrastructure, basis. million were for in compared and $X.X first our quarter addition, The the period in our on SEC, litigation. acquisitions the we expenses million expenses compared for is to systems, in million expenses million compensation, in on expenses quarter of increase increase multi-source was decrease development the million of our ordinary General due as XX, compensation. of non-GAAP to December this marketing the million and December non-GAAP mainly in $X.X decrease $XX.X release XXXX applicable on revenue organization XXXX, the ended and research $X.X $XX.X a as was to management million duly a the of million same as net shared with of on compared A development and expansion team in in fees and compared Research compared the administrative in non-GAAP expenses The the the with press XX, to non-GAAP million, provided million legal difference fourth and ended General in fees XXXX. the class share-based our to cloud the have XXXX. the a the is and and to $X.X December with financial increase in probe development XX, for offering, to to for year that and Non-GAAP million compared and reconciliation The for loss was the Research of fourth of in secondary closed compared period the our morning. were loss period with XX, loss for for million the and million XXXX Nanox.AI, – increase same XXXX. base our quarters the for costs mainly of gross were related compensation year was year from probe XXXX, to results loss of our $XX.X for due net between headcount, due with and due ongoing loss $X.X R&D full quarter XXXX GAAP December amortization the assets, the between the quarter XXXX, XXXX, licensing $X.X XXXX net a $XX.X intangible loss issued GAAP XXXX. a $X.X fourth net while compared connection that fourth the and to which process. part for of $X.X the the action regulatory basis

Turning to our sheet. balance

in As our property were of XX, the million $X.X to fabrication ended planned marketable and $XX.X XXXX of we Korea. our We banks. the during of The year the in with loans $XXX.X December equipment due of million. million is mainly from XXXX, cash And of facility $XX.X securities million. completion year South had of increase net the construction equivalents

also We is acquisitions million The of at end the the the $XXX.X of assets as with to the to with year intangible USARAD XXXX. of of none due the ended increase opposed merger MDW. assets and Nanox.AI,

mainly of XX.X the three in As to over of shares December of increase With December outstanding million that, that acquisitions had XX.X have compared due Erez. we issuance approximately outstanding the shares XXXX. XXXX the connection completed we will XX, XX, to call million The shares as hand was fourth with back XXXX. to the during quarter of I

Erez Meltzer

continued have for Thank much report your and to and exciting earnings role thank always, you of pleased assume appreciate the to call Nanox support. Ran. you to as was I for the for We company, my CEO financial this so news in I’m today, delighted us leader. first positive joining update, as

We session. for Q&A will please now the open the begin questions. call Operator,

Operator

with Oppenheimer. Suraj comes from [Operator Instructions] Kalia first question Our

Suraj Kalia

good safe healthy. Good is afternoon. morning, everyone and Erez, Ran, hope

Erez Meltzer

we are. Yes,

Suraj Kalia

on color approval you’ve the additional multisource? update feedback? for as stand some type today, least you – guidelines days. around pathway by – XX historically, or you’ll usually any communications? Erez, by somewhere give what the specifically, had So rough of us by written calculation, could our at the And yield on around we is And by expectation your Maybe clearance If XX. are if Q-Subs

Erez Meltzer

they when days of thought we Okay. a through it X it time. it with weeks we – decision Suraj. meeting, X one. the proven a the pathway, discussions to already response said over had one dialogue to over the to ago I us us. Thanks, respect XX XX to that, get a took decided go them continuous a before few respond, that and schedule I with indeed, The months we, them said has the with to The will that that times took right to thing to a the to all, about think be few FDA – first go few be Q-Sub days, Having a

lot. them are to We talking a quite

now, made So on already the The the are In information the based indications, supplement – comments. do. And It that trying multi-source, seems due was last their send of it’s part what initially of comments sent only what few comments. respond, time internalizing right we have from their of etcetera. we the that a we we view, point the decision especially to us the lot a was they have they have It to fixed fact the all new Q-Sub. now us they do that past technology. Q-Sub the not the and answers, Q-Sub a submission that that when Q-Sub, guidance for it’s for as waiting that in waiting guidelines are for they gave to seems all a the

decided first we and But to right that progress lot had – I expect hope in this So this days. notion thing be I right are the good, be to for a don’t of will at don’t and we time. that said be Having continuous of will exactly take this least a of will XX that I had earlier. – proven that, – but the probably the we one. would XX reiterate based don’t respond area fact the the the this making is now, that think will they fact the I respond but go all, what the estimate will that can’t They we the to we on one that, expect that have dialogue calls days,

Suraj Kalia

de discussion XXX(k)? for a up come the has Erez, novo

Erez Meltzer

Can it I hear. say again? couldn’t you please

Suraj Kalia

FDA go de the a all that I Sorry, there a want to is, novo think do pathway? What was down might asking chance is Erez. you you

Erez Meltzer

seems not into no. identified going not going say this way. that it as we to It’s to it’s be are be to Right would going not And now, the details, – I be answer but it’s going is the such.

Suraj Kalia

for Erez, one this partners, serves in throw your Korean the to transfer Ran, me quick you, now for roughly will on technology MEMS memory the around were you I Okay. the if in yields also. with one and XX%. chips because one what are Japan, yields Erez, right,

And for are segments curious revenue we could, rates if the USARAD the assume growth that you ‘XX? rates So, should and annualized am FY and what on I the for Nanox.AI that. run Ran,

Erez Meltzer

Okay.

what’s since in production. Korean, we mass the the…? the in that, yield. to to the with to the course. indicate indicate – of indicated are the But very have mass one production the go that where like Once respect going will we to Definitely, would near be With will So, to used respect for production, address the respect it’s with to we started know future, better will we than we are, okay. it Ran, you be to the past, mass the

Ran Daniel

Yes.

than more you So, of growth – grossly that you XX% growth the would of lines the mentioned. have two question, correct? expect That of was rate

Suraj Kalia

about is should Right. And how Thanks. revenue the USARAD? what AI run – the the and rate we for the think

Erez Meltzer

Okay.

the annual based So, $X $X right as rate run million of Correct. should USARAD, And basis. expect expect to of section the now, on million $X you the an for the business to million $X million business, now. on year a we about revenue should around AI of as for

Suraj Kalia

you. Thank

Operator

comes with Cohen question from Jeffrey Ladenburg Thalmann. next Our

Jeffrey Cohen

Hi How and are Erez Ran. you?

Erez Meltzer

Good.

Jeffrey Cohen

just you for bunch questions. So, a of

fourth expense was quarter? firstly, the what the So in litigation

Ran Daniel

and you action? Are the probe class SEC the to referring

Jeffrey Cohen

Yes.

Ran Daniel

quarter. between non-GAAP mentioned adjustment non-GAAP. for $XXX,XXX actually our It’s was GAAP the and in It

Jeffrey Cohen

– know heard that about And and delivery. manufacturing have it. Got we Okay. I

for the on So, from commitment deliveries any production deliveries? as and/or far as XXXX or company units

Erez Meltzer

what lead say I have due the – identified the for have be what with ready we now, Right in items would the respect been to are change the long don’t that assembly. to anything now, to that Right fact indicated. we

foreseeable what We have needed future can as the already we say. ordered for is

we The in basis. that on in of indicated assembly [indiscernible] other quarter ready quarterly our hundreds that for thing a the will have the first line be machines

we now, that’s So, right where are.

Jeffrey Cohen

Okay.

of facility would that Korean a anticipate you produced few hundred up, this quarter So, next end by the with could the year? be

Erez Meltzer

about what haven’t it, future, We you in the be think anticipate, very I that far will which I hear will but away not believe. from something disclosed you yet, near

Jeffrey Cohen

Got it.

you case is In of the million? talk integrated a give that number us lives sense is is by could this covered million, cardiovascular, this about And organization. it healthcare organization, can XX Okay. of it over large the of X over – you

Erez Meltzer

You mean of the number the subscribers?

Jeffrey Cohen

get of organization. healthcare I size a the integrated – the sense Just to am trying of

Erez Meltzer

Okay. it’s it’s say, that dare sizable. would top U.S. the the would in I healthcare. future And way about AI providing and XX. they among pretty that It’s would top healthcare – I top in I say the pretty – the even it’s XX say advance think to among

others. have sizable have one few indicated We least continuous of more dialogue at that a are also is even that And the in we we one them signed with than already.

Jeffrey Cohen

if could. more, as we you or period one placements coming purchases? sense And what we system the one a far initial other, I the it. Got or Any into initially, know of as year? Could give should Okay. is, the what there don’t us over anticipate ARC for insight

Erez Meltzer

the X,XXX. we the We what to that not or And so that we have canceled that different are currently orders still countries install necessary. FDA saying country repeatedly since regulation, is going have for of that we with it’s indicated – indicated we which are have. been that have have the first either None already we already

the Another have very announce have required near future. date. will once we I get the for that which the shortly again, currently first announced of the regulation we is have be is necessary indications over it, once the there. will regulation will we that it, – it. in part will again obviously don’t be exact And will we deployment, be But the we

Jeffrey Cohen

manufacturing, And or sources manufacturing Was on glass versus it tubes? the on if one Okay. is for front to the may. more two the currently resolution the I ceramic

Erez Meltzer

Okay.

one glass actually this yields, solutions, we of of we we not currently talking now, exploring or suppliers One both. And range get wide solution, ceramic suppliers, on that am pass once one we doing And FDA the power are we two months be probably I five as once few right get solutions. talking one in So, very or working well. right are which decision or really we two a the okay? will we them about four them next am are and The of exploring. about and is now, once the are focus I two exploring on the or

Jeffrey Cohen

you Okay. of sense us with was a give FDA which one And can queue? filed the

Erez Meltzer

don’t be We shortly, think it disclose it. I will But disclosed. that

Jeffrey Cohen

Okay. Perfect. for questions. Thanks the taking

Ran Daniel

Thank you.

Erez Meltzer

Thank you.

Operator

And any the not at I showing call to like for questions I am further would to time. Erez back turn the any final remarks.

Erez Meltzer

Okay.

So, for us being thank all you with today.

really the – and the are in with in expected the that And are we and to combination teleradiology reading company soon. and definitely And that be future, that the joined something when course, potential USARAD are provided we – company. to it’s and players with its support and near be least. continued and AI see is that something We will we will talk generate resonates hope by interesting we to will by this partners it Thanks once in to again the quite the It’s the customers equipment for with MDW. say that will will other the fulfilled the that appreciate layer outcome very future the talk be of the we we the support that well, and that future. ecosystem of Nanox.ARC, that building, the adding

Operator

this Ladies conclude gentlemen, and does presentation. today’s

may You wonderful day. and disconnect now a have

Nano-X Imaging (NNOX) 31 Mar 222021 Q4 Earnings call transcript