One doozy of an assumption
OEM's need about anywhere from approx 9-12mths lead time, give or take. If they are targeting a 2024 release with the next Gen RealTek chip product, the announcments regarding this will need to be made relatively soon. OEM deals are not announced on the release of the product. Go back to the HP Dragonfly deal, that was announced around the July 2020, the product wasnt released to HP until April 2021, approx 9 mths. There are significant lead times involved. NUH only need one OEM to get the ball going. they dont have the capacity for 10 and why would they do 10, they have 10 proposals (we don't know if they bid on proposals via an RFP or were ask for a proposal, Ronn didnt ask the question during the webinar)
I suspect that they will target Jan 2024 for some type of release , the CES is then and that would be a yr on from the last CES when there was a prototype shown.
OEM's will result in cash upfront and along the contract supply term. NUH wont have to worry about sales, marketing or anything. Landing one OEM may well result in landing a couple more.
Retail: For whatever reason and it has still not been explained, why didnt NUH have some product ready straight after FDA approval. Whatever. The Best Buy rollout started with up to 300 stores to July 2023 and is now expanding 554 stores. While good it is still not enough stores. Assuming a very conservative 0.5 avg units per store per month equates to roughly $300K revenue per qtr for 300 stores.(they make roughly $699AUD per unit) It is early days and the terms for invoicing appear to be 90days. Which seems where they are at presently, probably doing better than that.
The 4000POS as far I can tell is predominatly one very large bricks and mortar retailer , the only one with such a footprint is Walmart. Maybe a combination of retailers , however speaking with IR as to why announce the POS but the not which retailer/s the response was it cannot be announced until the retailer (singular) make the announcement at there end. I am around 60-70% sure it is Walmart. Walmart also announced it is pulling out of selling hearing aids at there medical centres but will be selling OTC products in their stores and via their online store. 4000 POS changes the cashflow equation considerably again assuming 0.5 units per POS per month equates to $4.2mln per qtr.
Add in Best Buys 554 POS plus 4000 POS on bricks and mortar stores alone roughly $4.8mln per qtr excluding all online sales
One would expect the avg to move from 0.5 per store per month to at least 1 or more as the OTC category becomes established and people become more aware of it.
At 4554 POS they need around 7000 units per qtr to fulfil requiements. Production costs are around $150 per unit. In fact they are less that that but assume $150, and the price will fall more significantly when they move to the next gen chip, really boosting margins. Based on the Jun 23 4C manufacturing cost was $1.2mln which is roughly 8000 units. the March 23 4C the spent $824K which is roughly 5400 units. That is over 13K units based on a $150per unit cost. During July they may well have had a production run.
They have plenty of stock on hand to supply initially, they will have funds coming in via the invoicing. CR? maybe but maybe not, perhaps a small top up from one of the big invetsors, retail wont get any licks. But if OEM lands and upfront invoicing to meet initial supply ordering, CR becomes moot.
On top of that the online stuff with CVS, Target etc , it appears these are not included in the 4000 additional POS because , on page 2 NUH specifically states "In addition to new online retail expansion ....", definitely a new bricks and mortar retailer.
It is a volume game
They seem to be now at an inflection point. An OEM and a large bricks and mortar retailer, and NUH may finally take off.
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