Nanosonics stock price rises despite 57% drop in FY22 earnings

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The Nanosonics Ltd (ASX:NAN) The stock price rebounded from its earlier plunge after the company released its annual results.

The S&P/ASX 200 Index (ASX:XJO) The healthcare stock opened at $4.53 this morning, marking a 4.8% drop.

It has since recovered to trade at $4.88, 2.52% higher than its previous close.

Nanosonics stock price rises on FY22 results

Here are the key takeaways from the company’s fiscal year 2022 (FY22) results focused on disinfection technology:

  • Revenues were $120.3 million, an improvement of 17% over the prior corresponding period (pcp)
  • Earnings before interest, taxes, depreciation and amortization (EBITDA) fell 51% to $7.5 million
  • After-tax operating profit fell 57% to $3.7 million
  • Gross profit increased 14% to $91.9 million
  • Gross profit margin fell slightly to 76.4% – ahead of forecast – due to higher freight costs
  • Ended the period with $94.5 million in cash and cash equivalents and no debt

The company’s revenue increased through continued growth in its new installed base, upgrades, consumables and services.

Its operating expenses also increased to $90.5 million as the company continued to invest in its growth strategy, research and development and revised North American sales model, as well as expansion. location and capabilities.

Finally, supply chain issues caused it to increase inventory by 91%.

What else happened in FY22?

The main company news in the last fiscal year was the decision of Nanosonic and GE Healthcare to revise the ASX 200 Company’s North American sales model to a primarily direct model. Nanosonic’s stock price fell 5% following the news.

Under the new agreement, GE transferred all of its trophon customers to Nanosonics for the supply of all consumables. Additionally, Nanosonics was responsible for the majority of capital sales while GE still has access to capital equipment as a non-storage capital reseller.

It has also established partnerships to enable it to sell directly to US federal government accounts.

What did management say?

Nanosonics CEO and President Michael Kavanagh commented on the company’s earnings saying:

Fiscal 2022 was an important year in the continued growth of the organization through the successful implementation of a number of key strategic priorities.

Central to these was the successful evolution of our North American sales model to an expanded and largely direct model. Nanosonics now directly manages all trophon customers for the ongoing supply of consumables. This largely direct sales model is intended to capture all market opportunities for the trophon in North America and prepare for future product expansion plans.

And after?

Nanosonics is targeting revenue growth of between 20% and 25% in FY23.

He also estimates that his gross margin will be between 75% and 76%. This is expected to be driven by an increase in the proportion of capital income resulting from growth in sales of new installed base units and unit upgrades, continued rise in transportation costs and rising costs components.

Its operating expenses are also expected to increase between 15% and 18%, mainly due to market development activities and product innovation.

Nanosonics Stock Price Overview

This has been a tough year for the Nanosonic stock price.

It’s down 26% since the start of 2022. It’s also 19% lower than it was this time last year.

For comparison, the ASX 200 is down about 8% year-to-date and 6% over the past 12 months.

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