Nuheara Limited (ASX:NUH) Managing Director & CEO Justin Miller provides an update on the company's range of innovative audio wearables, changes in its marketing and distribution as a result of COVID19, financial position and outlook.
Rachael Jones: Hello. I'm Rachael Jones for the Finance News Network. Joining me from Nuheara (ASX:NUH) is MD and CEO Justin Miller. Justin, welcome back to FNN.
Justin Miller: Thank you. Thanks for having us.
Rachael Jones: Now, Nuheara produce earbuds that improve hearing for people with and without hearing challenges. How is the company progressing?
Justin Miller: Very well, thank you. Yeah, look, it's been a challenging time, obviously, in a COVID period, but with the company just having released its third generation of our hearing buds, the business is in a strong position, having now started to come out of COVID. So, yeah. I mean, it's a fair journey in. There's a lot of R&D going into our products, but the business is on an upwards trajectory.
Rachael Jones: Thanks, Justin. Now, before we talk about your products in more detail, let's just talk a little bit more about the impact COVID-19 has had on the business.
Justin Miller: Yeah, both the good and bad. We released our third-generation IQbuds2 MAX, which I'm wearing today, at CES in Las Vegas in January. Just post that, we won three awards. The business was going well, pre-orders were going through the roof, and we obviously hit supply chain issues out of China for our buds. And then, ultimately, with our product manufactured in Malaysia, we had a shutdown in Malaysia of our plant. So, where we had anticipated shipping thousands of units, we weren't able to do that last financial year. But, having said that, we were able to maintain the orders and started shipping just before the end of the financial year in June this year, and I'm pleased to say business has recovered very well from a financial point of view, and the orders continue.
Rachael Jones: Now, can you tell me more about your products?
Justin Miller: We're selling products into a category that ultimately we're creating between what's offered today from a hearing aid perspective and ultimately what sits at the other end, which is premium headphones. We're trying to combine functionality that provides some hearing assistance, but also offers those features that we would use a traditional headphone for. We deem that smart hearing, so we've enabled personalisation of your earbuds, and able to craft, I guess, your own personalisation into the configuration of the earbuds. So, yeah. It's a new category that we're now starting to have some real success in selling into.
Rachael Jones: And can you tell me about the market growth for earbuds?
Justin Miller: Obviously, COVID's had a big effect on that as well. I mean, a lot of what we're seeing here today has seen the need for these types of headphones or earbuds to be used in these sorts of situations. So, there's a lot of normalisation in terms of having things on your ears now, and working from home and these sorts of things have added a lot of growth potential to our potential market.
Rachael Jones: That all sounds very positive. Now, let's talk about your finances and strategy. Can you provide an update, starting with your sales?
Justin Miller: The first two months of this financial year have actually exceeded the total for the entire of last financial year. So, we've been able to recover quite well, as I touched on earlier in the interview, and that bodes well for the remainder of the financial year. So, some of that's coming from our Nuheara hearing healthcare, so our own buds, but more importantly, we've also been able to introduce some good collaborations and partnerships. One that was recently announced was one with HP, so we expect to get more benefit out of those collaborations as well from other big tech companies.
Rachael Jones: And Justin, what can you tell me about your strategy?
Justin Miller: Our strategy is very clear. It's to be the global leader in smart hearing or hearable type devices. And with a new product now on the market with a very solid order book, a fairly significant capital raise under our belt, and strong inventory levels, we're in a really strong position to be able to deliver on that over the course of the next 18 to 24 months.
Rachael Jones: And can you provide a comment, Justin, on the share price?
Justin Miller: Again, improving, and I think that's a reflection of our improved financial position as well and our increasing sales. So, we're at around a 12-month high and the market cap's around 70 to 80 million, so there's a lot of improvement to come through sales that we'll be able to generate over the course of this financial year.
Rachael Jones: Excellent. And to the last question now, is there anything else you'd like to add?
Justin Miller: The business is in a really strong position. Having launched when we had a prototype five years ago, having proven our product, 85 per cent of our sales come from international sources. As an Australian tech company, we're in a really solid position with collaborations, with our own direct-to-consumer sales, to really take advantage of a strengthening earbud market in the next 12 to 18 months.
Rachael Jones: Justin Miller, thanks for the update and congratulations on your progress.
Justin Miller: Thank you. Appreciate your time.