Healthcare stock Nanosonics [ASX:NAN] announced a transition to a direct sales model in North America.
Nanosonics, a producer of infection prevention products, said its direct sales model transition is ‘progressing well’.
Year-to-date, NAN shares are down 35%:
Source: Tradingview.com
Nanosonics switches to direct sales
Nanosonics today provided an update on its transition to a direct sales model and its Q3 2022 outlook.
Customers originally with GE Healthcare will now transfer over to Nanosonics, with NAN shifting to a direct sales approach in North America.
Under the new model, all existing GE customers will transition to Nanosonics for the ongoing provision of consumables like the trophon® — a device used in the disinfection of ultrasound probes.
NAN anticipates making a ‘significant majority of future new capital sales’ by itself, without relying on GE Healthcare.
Nanosonics doesn’t expect the transition to impact sales of consumables.
Nanosonics trading update and outlook
Regarding the broader business outlook, Nanosonics reported that installed base growth numbers seen in Q2 FY22 ‘continued into Q3’, with total global installed bases growing to 28,900 at the end of March. The monthly run rate of sales of consumables in Q3 was ‘broadly in line with Q2 FY22’.
Nanosonics said it anticipates total revenue for the year to be in line with current market consensus.
Michael Kavanagh, Nanosonics’ CEO, said:
‘The continued transition to a more direct sales channel model in North America brings many benefits to Nanosonics and its customers. Our North American team can now manage the overall growth strategy associated with new installed base, upgrade adoption and consumables usage.
‘This deeper relationship with our North American customers together with our corresponding infrastructure expansion also supports planned product expansion beyond Trophon.
‘We are very pleased with the ongoing progress being made with the transition to the updated sales model. Our North American team and the GE healthcare ultrasound team continue to collaborate well ensuring the current and future infection prevention needs of all customers and their patients are fully met.’
NAN’s share price outlook and going against the grain
In February, Nanosonics released its half-year results.
NAN reported half-year revenue of $60.6 million, up 41% on the prior corresponding period.
Net profit came in at $3.9 million for the half, yet Nanosonics did register negative free cash flow of $3.7 million.
The healthcare stock ended the half with $91.3 million in cash and cash equivalents.
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Regards,
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For Money Morning
