Earnings Reports (August 19th-23rd)
Earnings Reports (August 19th-23rd)
Taking a Look at Earnings Reports for Nano-X Imaging (NNOX) & Planet 13 (PLNH).
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1. Nano-X Imaging (NNOX)
This past week Nano-X Imaging released their Q2 2024 earnings results along with new initiatives.
Key Highlights
Revenue: NNOX generated $2.7M in revenue during Q2 2024, a slight increase from $2.6M in Q2 2023.
Net Loss: The company reported a net loss of $13.6M, a decrease from the $17.4M loss reported in the same period last year. This improvement was driven by reduced research and development (R&D) and general and administrative (G&A) expenses.
Gross Loss: The gross loss for the quarter was $2.9M, compared to $1.7M in the previous year. The GAAP gross loss margin increased to 106%, while the non-GAAP gross loss was $0.2M.
Operational Developments
Nanox.ARC Deployment: The company has accelerated the deployment of its Nanox.ARC technology in the U.S., with systems now installed across seven states. Initial systems have been deployed with three major medical imaging service providers.
FDA Submissions: Nanox submitted a new 510(k) application to the FDA, aiming to expand the Nanox.ARC's indications for general use, including chest imaging.
Product Innovation: The company announced the development of the Nanox.ARC X, which will be introduced in the next investor relations event.
AI Solutions and Approvals
Nanox.AI: The company's AI cardiac solution, HealthCCSng V2.0, received FDA 510(k) clearance. The upgraded version introduces an additional ‘zero calcium’ categorization and generates an exact calcium score, enhancing coronary calcium (CAC) detection.
Financial Performance
Revenue Sources: The revenue was primarily generated through teleradiology services, sales of imaging devices, and AI solutions.
Teleradiology Services: Revenue remained consistent at $2.5M, with a GAAP gross profit of $0.4M.
Imaging Systems: The company generated $68,000 from the sale and deployment of its imaging systems, with a gross loss of $1.3M.
AI Solutions: AI solutions generated $113,000 in revenue, with a gross loss of $2.0M.
Expenses and Cost Management
R&D Expenses: R&D expenses decreased to $4.8M, driven by lower salaries, wages, and reduced share-based compensation.
G&A Expenses: G&A expenses dropped to $5.9M due to lower legal expenses following the finalization of the SEC investigation and class-action settlement.
Liquidity and Capital Resources
Cash Position: As of June 30, 2024, Nanox had $64.2M in cash, cash equivalents, restricted deposits, and marketable securities, down from $82.8M at the end of 2023. The decrease was primarily due to negative cash flow from operations.
My Take
It appears that this management team and company are increasingly struggling to demonstrate competence. Investors are still left without clarity on future cash flow projections and commercial rollouts—issues that have been plagued by years of overpromising and underdelivering. Additionally, the success of their MSaaS model remains unproven, compounded by an unsustainable cash burn rate. The harsh reality is that if NNOX does not start generating significant revenue from their primary medical devices, the company could face severe liquidity issues. Some might argue that the company is already on the brink, but in the coming year, this management team must scale the business substantially to shift the negative sentiment surrounding the stock, or it will lead to ruin in stock price and in the overall business.
To be clear, I’m not bearish—I hold a small position in this company. I want them to succeed. However, we must be realistic and only invest in companies that justify our confidence. It’s becoming increasingly evident that this management team may lack the ability to execute their vision. Personally, I’m moving NNOX to my potential sell list and will give them until the EOY to show meaningful progress.
2. Planet 13 (PLNH)
Planet 13 (PLNH) released their earnings over the past couple weeks, so I’ll dive into their results.
Q2 2024 Financial Highlights:
Revenue: $31.1M, up 20.3% from $25.8 million in Q2 2023, driven by revenue contributions from Florida and strong sales at the Planet 13 SuperStore and Illinois store.
Gross Profit: $15.8M (50.9% margin), an improvement from $11.9M (46.0% margin) in Q2 2023, primarily due to lower cultivation costs and a higher proportion of sales from owned brands.
Total Expenses: $19.4M, up 26.0% from $15.4M in Q2 2023, reflecting the consolidation of Florida operations.
Net Loss: $8.1M, compared to a net loss of $4.6M in the same period last year.
Adjusted EBITDA: $3.2M, up from $2.8M, driven by better gross margins, strong cost control, and increased operating leverage.
Balance Sheet (as of June 30, 2024):
Cash: $26.7M, up from $11.8M as of December 31, 2023.
Total Assets: $242.4M, compared to $151.7M as of December 31, 2023.
Total Liabilities: $84.4M, up from $44.1M as of December 31, 2023.
Recent Developments:
April 30, 2024: Launched new Medizin Branded Topicals powered by Planet 13.
May 6, 2024: Closed the sale of Planet 13 Florida Inc., which held its Medical Marijuana Treatment Center license in Florida.
May 10, 2024: Acquired VidaCann LLC, adding 26 medical retail stores, 1 cultivation facility, and 1 production facility in Florida.
June 11, 2024: Held the Annual General Meeting of Stockholders.
June 12, 2024: Appointed David Loop to the Board of Directors.
June 18, 2024: Launched Planet 13 Fight Club.
July 24, 2024: Introduced the new lifestyle brand, Planet 13 Lifestyles.
My Take
This quarter was solid for PLNH, demonstrating noticeable progress in their financial performance. While there’s still a long road ahead, the improvements are evident in their recent statements. The primary challenge preventing this company from scaling like a typical business is legislation. However, once this barrier is lifted, I remain optimistic about PLNH’s potential for success. Additionally, the completion of the VidaCann acquisition should contribute positively to cash flow. I’m closely monitoring PLNH and will likely consider increasing my position at the beginning of 2025 if their execution continues to improve.