Nano-X Imaging (NNOX) 28 Nov 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Nanox Q3 2023 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

And I would now like to hand the conference over to your speaker today, Mr. Mike Cavanaugh, Investor Relations. ahead. go please Sir,

on thank Ran Ltd. joining the released XXXX. host Chief call. currently September and company's morning's of today, Erez this Chief website. quarter today. Financial Nanox XX, Meltzer, available is release Imaging financial Officer; The Investors you afternoon, section us the and for Executive Earlier ended the Daniel, Good results will for Officer,

call to making not views that as to like current the as updated forward-looking Before subject and based in company's uncertainties we of regulatory statements everyone be statements management are representing company's Therefore, the not during will I process These this that and and the on expectations statements these relied get regarding be are remind be future. management's date. upon research development, should include that statements would operations and today risks, results, of commercialization matters. started, assumptions financial other as manufacturing and subsequent any may activities,

that with investors. to each include, the those release non-GAAP company's financial refer measures cause certain company's the today. are information Exchange additional GAAP in nearest described not of measure limited filings press to, issued to Factors a Securities in Management financial but will the such financial Commission. A also to and reconciliation provided provide to the difference non-GAAP may measure is

non-GAAP non-GAAP and cost and non-GAAP and non-GAAP gross The non-GAAP other expenses, revenue, research shares, sales expenses, financial measures loss per of development share. non-GAAP non-GAAP marketing non-GAAP ordinary include non-GAAP profit, expenses general loss to profit and non-GAAP net administrative gross expenses, gross margin, attributable

the to Meltzer. that, Erez now over With call like turn I'd to

us our you and Thanks, all results thank for always, call Mike. today And for joining corporate update. financial as

on market, States the increased and in To last the the over efforts, previously few we jump months focus presence these our U.S. commercialization currently efforts in in and United support our team I have intensified to have region. efforts start I'm U.S. noted, important and As our our the the

discussions care clinical with key in implementation workflow strategic advance focusing We to health and potential infrastructure have on particularly U.S. aim commercial partners, future our We and professionals, the customers, expedite stakeholders. engaged plans. our of reimbursement and other medical sector

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[Audio While currently these are are growing. revenues Gap]

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make further we provide progress. will substantial as this development on detail We

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number some efforts progress despite the independent process. across regulatory regulatory of would U.S. of markets to sometimes jurisdiction to world, has in our like an regulations our our path, contributing set the approval slower FDA regulatory complexity we instances, in gain with than as Regarding is such a the Each of the the in

stopped our regulatory to challenges, these Nanox. approvals continue compliance. we which swift while prioritizing pushing ensuring have regulatory with navigating and be ] our diligently are to importance ahead accuracy efforts, [ forment We not Nevertheless,

body credible have for on happy Kingdom first in review BSI announce notified As eventual to file according upon updates we obtaining our and process. quarter of to will that the I'm begin time review providing Group United submitted marking forward Mark. we based previously technical communicated, the conclusion the XXXX approval. and CE this and partnered of the CE look a with for BSI's planned to formula line, I the

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Following in Health granted the Ministry free some approval, requirement Israel Nanox.ARC, cell regulatory a submission is markets. this certificate of which for the

efforts. clinical our to Turning

clinical As of is collecting images human anatomies disclosed, phase the multiple second Hospital previously body in Nanox.ARC continuing. at a Israel sample with of deployed Shamir system

and agreement world. to a Beilinson end Additionally, the trial of service is assess organization Ministry Services, Beilinson and by required lung with Clalit chest institutional hospital. diagnostic part Nanox.ARC the committee of to the of approval this human Health and will has been Health Israelian and to scheduled commence largest Hospital, in Nanox of the diseases XXXX. the in in trial All the ethics agreement, one the a According in of designed reached an Israel capabilities be detecting launched largest health the obtained

of we it will Mark provide calcium Now I review This compelling found FDA known Nanox.AI a of this announced revenue study in like utilizing proven Nanox.AI and end Health, indicator our CAC, Ron future designed unknowingly CE which cardiac quarter, We Hospital Nanox.AI conducted product cardiac as to patients would quarter, was on by coronary moderate of results, XX% severe Nanox.AI had segment. to shortly. health business the detail specifically demonstrated an events. by that an in approximately cleared for tool sponsored during update At $XXX,XXX assessment. and the study Beilinson generated also of that and artery level more

and care. scans medical offering PAC mechanism cardiovascular, to utilizes automatically preventing solution quantify detection CPS routine from early chest for imaging and calcium potentially data cardiac CT analyze Health an

liver These updates fatty assessment. Health Nanox.AI forward FDA to [ routine early the FLD diseases highly signs Nanox.AI in XXX(k) submitted are known of submission detect Another to liver was liver from designed XXX(k) chest CT fatty scans, as Health is and and for a specifically and not pending for business XXXX. promising, is detection look updates additional ]. clearness September Nanox I on throughout abdominal FLD providing

delivery system as the call a one we Health I'd product IDMs successfully now use their integrated agreement turning strategic recognizing Corewell of our identifying over on previously. with Corewell value management health CCS that medium AI its new announced population CT Before like flow, one level in we reports has care AI of announced Spectrum mid-XXXX, chest known the In calcium Health integrated have revisit leading the Nanox.AI scans. into patients the Health, solution that to to with to agreement of Ron, significant high solutions. and their patient team

from care received We also have using another similar positive health feedback system solutions. Nanox.AI

Ran I'd to results. turn review that, call like over financial to our with Ran? the Daniel to And now

$X.X period. XXXX, million, and of million. and amount Thank the of quarter due you, the million a We $XX.X an third in The of $XX.X largely with sales a loss the general expenses, of our reported was in quarter net expenses of Erez. $X.X decrease increase was million marketing goodwill impairment a of in the a loss net for which in of offset the by increase is GAAP compared XXXX to $X.X million comparable administration third which

$X.X basis. million a third Our and GAAP a was gross loss $X.X of of the was with million the comparable on the $X.X increase of period. XXXX were expenses. was were due $X.X loss marketing an the Revenue for a to loss gross million XXXX $X.X comparable expenses increase third basis. was the million in $X.X The for period $X.X million quarter of million non-GAAP quarter on and million largely sales loss and GAAP $X.X million net net compared in for other Revenues and

on approximately XXXX XX, XX% gross non-GAAP months basis comparable X months ended to September for million in margin a the non-GAAP XX, basis the for a period, the X of was as compared represents XXXX, $X.X $X.X in on period. comparable XX% Non-GAAP September to million profit gross as ended a compared profit which the

with basis gross million months Revenue from approximately compared a as XXXX, in GAAP to GAAP gross of the a in basis which the XX% for on September a XX% the profit margin basis on GAAP XX, of GAAP ended a $X.X $X.X X profit XXXX, million on comparable period. a comparable represents period, teleradiology $X.X September compared revenue months to $X.X as a XX, on X basis gross of the was with for of ended services profit million a million

Non-GAAP decrease the is of represents in to comparable XX, on margin the compared gross engaging mainly to for basis of can the company The cost the radiology and incentive GAAP an due radiology to in pays September services the company's gross as on X ended of to period, basis profit gross the non-GAAP of X profit to the a in non-GAAP company's approximately XX% XXXX, $X.X shift. which the profit $X.X during which period. margin overnight rate and months million teleradiology due ended XX, the the was and we the basis the September on a [indiscernible] for the compared payments months comparable the in decrease reading a company's payments, XX% increase a non-GAAP XXXX, in million

a due for Research comparable decrease [ ] million our ended XXXX. systems, a and period the the the of $X.X $X.X GAAP the imaging $X.X quarter The a of its compared as and approximately in X deployment profit was profit development first for a $XX,XXX started the which Africa. million of XXXX, to in gross and which million and expenses mainly XXXX non-GAAP sales non-GAAP amounted were XD $X.X through the generate September development the to company's in in basis. deployment offset the and During million, increase of labor in to months decrease cost million. revenue a basis, the on an the by with $X.X amount sales company of stems $XX,XXX systems expenses of of to which of was margin systems XX, GAAP of Those gross represents in XX% revenue ARC of from

comparable mainly expenses million period the a General anticipation of $X.X decrease marketing The as quarter XXXX $X.X The a expenses in of for expenses million million as million, the increase to and cost quarter liability our third of the amount the were the compared insurance U.S. of for million to for of investigation, market were share-based of the in million. comparable $X.X of go-to-market products the compensation XXXX of legal in launch due was soft compared million to period our $X.X U.S. in million and XXXX. largely XXXX. finalization directors of efforts the the administrative our decrease Sales due of market. in mainly $XX.X SEC $X.X for the in for $X.X result first in in officers and decrease the decrease the in in of premium amount in to the a amount and a $X.X was

it largely unit will in million, to the to impairment quarter the the goodwill discount due operating to third teleradiology flow original in and originally Nanox.AI and of of segment. $X.X gross million profit take reporting Go-to the amount million the growth revenues, of due to amount in $X.X of increase estimates $X.X and than impairment longer positive for was teleradiology and unit management generate the reporting XXXX we the business that would rate in expected AI related the cash the

we $X.X for accrued expenses million During had X the in SEC of investigation. settlement with months future connection the first XXXX, the

previously of SEC. the the and company Chairman Codeine, the Board discussed, Ron agreement have settlement our the reached As of with Directors

under the XXXX, [indiscernible] this in in penalties company October During $XXX,XXX paid agreement.

Turning our balance to sheet.

We XX, equipment ] a cash, the property $XX.X marketable deposits and of a million. equivalents, of and net a As XXXX, million September of with million quarter [ $XX.X approximately loan with from securities bank. and $X.X fixed cash ended

gross As of X.X shares a [ of the and million of proceeds registered comparing USARAD approximately XX.X XX, the approximately [ to net we compared X.X $XX previously million of September proceed in shares former to shareholders of $XX.X million shares agreement as ] a to shares outstanding million the the mainly due increase under The consideration December the ] of had to amendment direct approximately ordinary offering XX, in XX.X the approximately of and issuance of million XXX,XXX outstanding shares sales purchase million purchase as XXXX, XXXX. stock was of USARAD to discussed.

hand will to over I back the that, Erez. call With

support our for of once all you for call joining Thank and Nanox. again today ongoing your

early Investor I'm next significant deployment Nanox.ARC forward are both update making U.S. to looking at the system call and QX the markets, week, scale We progress toward in of other our and and Day our XXXX. in

we'll have like New Investor you meet area, for Q&A. the register ICR Relations team partners to while to good are open If Investor the with Day, would we our Nanox Westlie, day. Operator, York in a please our please contact session at

Instructions] Thalmann. from Jeff come question of will Cohen first [Operator Ladenburg Our

So from end. a questions few our

goods Or a and luggage? be You for a about that screening, this agency is it stupid security government but question, may some spoke for people? and such is as

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that's can So I that's -- the what say.

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what way, anticipated kind ahead So to year. of do we it next in a are of we

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complicated the challenging to with ], give of saying I been and when in estimation, is want is equipment will time quality the lot in we better that we is don't and I the all the have facets have than XXXX, regulation of clinical always better information but until that quality think I assume something but would very of clarity have a we of with the what that the reasonably be faster of and -- we -- it [ to all be any get it an that has that medical [ ISO this, that and and we passed ] get trials quality the we will wait a [indiscernible] the it.

hopeful you're you'll say to safe it clearance XXXX? that get Is in a currently Okay. EU

that Say view I from point would say. of to it -- from who's would reasonable be say --

it. Got

back for anticipated quarter to their there assembled talk be us, facility you lastly as or Varex month per Utah could in or could capabilities then that [ number and as go year. units about And per far and per Okay. ] produced of

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Osborn Our of Fitzgerald. from next Ross question Cantor will come

provide and patients senator the when to running Jersey and up expect the with at Imaging more some synergy types starting we Center, the color New the manages on can would you scale? So off be of

Okay. Up right running and now.

we The second January. will what it in the be scale at I would of are the right beginning or year do next is hope scale -- we probably on. And the in of that is end now year be by focusing will say,

another planning visits although to Israel, will and that everything some who would postponed we come this that to in that we we visit usual supposed visits. demos and do have or now open create We business are their willing right say doing, as site to that people to since were planning, are for see. be I this are also Israel for through some be managed would have we people solution

come So will to and Jersey to going come be be able they and to see New and there. we're

It's going were already to we be the served that that installations for example, part one mentioned the of as we there. have the XXX,

we of for year. for concept, before the -- all that purposes of of kind going mentioned benefits and the are making demonstration So proof operational. ensure we're that the we also year of to us end speak, a the before installations the environment as both friendly next to take for We the

basically, in to aiming the U.S. agreement strategy the and the the plan So We're the are and up action building U.S. is scan and we We signed days. team. the patients in go-to-market running. go-to-market coming the first

do. but we're have approvals, we planning necessary to that this all the So something is

be the get commence there the We scanning physics patients, have certification came managed us to enable all of the to cetera. defining et to that

So it's good.

are happy We it. with

the the systems your or of you of there? great. amount of level have And to of you per Morocco, turning can scans terms to delivered discuss date. in metric Sounds utilization day then then And choice

we would it's -- this I Day share next anticipated. line that is week. Basically, think light with we that Investors in the it of will in shed in I line -- say some now what will something is we that

then expect Ghana deployments new And recent Nigeria. think starting of to given when some we geographies system manufacturing and in your Okay. Morocco, year, Got outside into and expansion an should inflection about next agreements, it. of

for for trying now get have these hundreds XXXX, Just an systems. some cadence contracts commercial understanding you're geographies of to of placement the and with given

in I the the progress one each fulfill agreements work we about -- regulation of to we mentioned asked terms in have that that approval. [indiscernible] already think next that had we we of you making So them, originally are orders indicated to the

So and part in countries, in of be of Africa, them which Asia will on Latin countries in them part be of will European other EU. be dependent part America, will are not them and

But So color approvals. the all that's give will this something regulation it's on on so also But that and we that the far. the more process some is depend we with the progress next plan week. made

Our will next the Haynor Ben of come question from Alliance Partners. Capital

can you hear gentlemen, Good okay? day me

morning. Good

Great.

little It of to So the just for sales. from better came some a revenue understand that looking sounds quarter. the like Nanox.ARC bit

sense of you're you sense from me you -- there? of was from revenue And grow give in much if going a forward? systems give to us out the how would the of that or then So capital could expect revenue QX a level included Africa these generating

Yes.

to referred that in you So $XX,XXX [indiscernible] recorded we the the

Correct, yes.

Okay.

So stems XD countries. those actually from sales systems. our X split The imaging the are from revenue is between

is first The one Cameron.

the The Morocco one of of the revenue and We're is Ghana. one sales region. of other usage from units. systems and units second those in the those some each one comes a talking and other the from of is few -- the

ones is, pick I Okay. those But at, getting what you $XX,XXX revenue what the I'm geographies? systems at from that in that's to level, the up are would those from getting currently guess the expect helpful. I'm

saying, and units that will become we for purposes, commercial demo Generally training yes, of because provided expect and some those use. the

revenue Of And the ARC from we on ones. course, those course, units add revenue we'll regions start the and U.S. of the the those more in in systems from expect -- generating itself to itself.

by where would the of say original operational their that actually day, is the way, I numbers are the numbers expectations. per exceeding units, scans our these In

Or is about the of a Varex achieve? to on relatively anticipated I annual think Or that's fraction that something small kind curious on the to Is helpful. then utilization? to good agreement, that. it of way that? and amount That's about And Okay. minimal hear the was just the what's easy right

who's From side?

of From view? view or our from of our point point

Both

of disclosed more over XX-F. First add but into minimums, yet, formula next you? can because... I There's want details will the but we the some of in point going we some the there Yes details but is current in agreement just time. build not tell in some this to get and percentage, that to What our don't in all, have not

of we way to our very the structure The business. want agreement way we for manage the terms beneficial is in us

to You that agreement. a sides a a in have it's remember buildup long-term both is execute. can that way in There agreement

Okay. we Got But all it. I that's think have.

we'll you the Analyst next week. see Day So guys at

time is like as This the the turn Meltzer we for to Erez ending have questions for closing all Q&A the remarks. session. now I would to back conference

thank us So being you with for all today.

see and well the you to in to going The to as clinical. the when be U.S. the and some on have Investor forward the as that Looking will of we part week Day give on we're shed next the technology, go-to-market when on colors others the there. hear will team some and operational present able management

the support day. So us and week, with for thank Nanox. next of you Good see being and you

Thank call. participating. all conference for today's concludes This you

You may now disconnect, pleasant day. have and a