Ladies and gentlemen, thank you for standing by. All participants are at present in listen-only mode. Welcome to today’s conference call to discuss Nano Dimension’s 2021 Full Year and Fourth Quarter Results. On the call with us today are Yoav Stern, CEO; and Yael Sandler, CFO.

Before we begin, may I remind our listeners that certain information provided on this call may contain forward-looking statements and the Safe Harbor statement outlined in today’s earnings press release also pertains to this call.

If you have not received a copy of the press release, please review it in the Investor Relations section of the company’s website. Yoav will begin the call with a business update, followed by a question-and-answer session, at which time Yael will answer questions regarding the fourth quarter 2021 financial results.

As a reminder, this conference is being recorded, March 31, 2022. I would now like to hand over the call to Mr. Yoav Stern. Mr.

Stern, would you like to begin?.

Sure. Thank you very much. Thank you, everyone, for participating, and good morning. So, it is a news release with a letter to the shareholders, which is quite long. And I'm not sure all of you or part of you had the attention spent to read it, but I recommend that you will because everything I have to say is written there.

I've done it before, and I find out that being all this information in front of you is very helpful when I speak with investors later because those were seriously diving into the business of the company, read it, and they're very educated. So, that's point number one.

Just in case you don't have the time, and I'll try to summarize really quickly and leave more time for questions. So, if you ask when you ask something relating to what I've either written or didn't write, I will dive into that based on your interest.

In general, it's a very exciting news release, obviously, if we're saying that we expect to be this year 2022, 200% above last year, it's only shadowed by the fact that last year 2021, we were 209% above 2020. So, it's exciting. If you combine this together, multiply it properly, then in 2022 and maybe 10 times over 2020. So, that's exciting.

It's ahead of my expectations. I must admit as much as revenue is concerned and we'll speak about the numbers specifically in a few minutes. So, I'm very encouraged. I'm not, however, illusion to say that we are now in rest on our laurels because now we are close to -- if you multiply Q4, there remained revenue or more just by multiplying Q4 by four.

No, we measure our advancement not by only revenue or margins, eventually, this is, of course, the goal, but by what is happening internally in the development and what we see in the market and those are also very exciting news with the new technologies that we merged from acquisitions into our product lines, and we merged the sales organizations and the leverage we get from that.

And what we see out there as much as prices of M&A, and we have looked by now at 300 companies over the last two years -- no, less than two years because I didn't have money, that probably a year and a quarter. So, let's say, since July, August 2020 until today, it's about 1.25 year and 1.5 year.

And there – we have a whole department not used by the way, not 25 people, just 3, 4 people that are searching the market for the technologies and the companies that will be interested and what we see is, prices that's going down.

That justifies our patients under pressure of the last year of not to buy neither sparks nor things that sounds like a spark, but it doesn't sound so well to say it. And we don't -- didn't do it. And from the company, we said no to, over the last year as much as synergistic acquisitions.

I think maybe 20% were sold at the prices that we didn't want to buy and 80% were not and by now, the prices are down. Do I think the prices are down and time to buy? I don't judge if the prices are down and are going to be down more. I'm not able to judge the market. Nobody actually can and we all know that.

What I'm judging is, if the prices are low enough in so much as what am I buying? And is it worth the money? And can I make this worth more by paying $10 million or $100 million fleet. Because if I pay $100, it should be worth $200 and more within a year, 1.5 years, if not then $100 too much. So that's just an example.

So, let's dive now that we can and somebody asked me in last call when we're going to speak about numbers. Let's dive into numbers a little bit. I'm not going to go through the balance sheet because it speaks for itself, and it's strong and the numbers are pretty much clear. Let's speak for a second about the profit and loss the P&L.

And by the way, just let me tell you, somebody asked me in the last call or maybe in somebody that call me, when are we going to publish our cash flows? Because it's important to show how strong our cash flows are – cash flow positions are. And he was right and I promised that we're going to do it.

So, the cash flow is published today in the 20-F, not in a news release and the 20-F was published today as well. But starting from next quarter, we will also publish the cash flow on the news release itself. So, on a quarterly basis, you will have also cash flow, if you need it for today, you can open in the 20-F and it's all there.

As much as the profit and loss statements, I'll just point a few highlights for you.

First of all, the gross margins are about 46%, not high enough and the reason they are lower than what I think, I know, it should be and what it is on our high-tech machines that we're selling is because it's a mixture of gross margins between many product lines, some of them are lower gross margins, some of them from the acquisitions, lower gross margin.

So the average is 46%. And when I am speaking about the gross margins, I'm taking out this line, the third line in P&L is called cost of revenue amortization of intangible.

That's not part of business cost of sales because it's non-cash expense from needing to amortize all kind of things like historical capitalization of R&D, which we don't do anymore and other things that Yoav can give you details.

So I'm looking at the gross -- the real gross margins, which are the revenue in percentages minus the real cost of goods sold. So 46%, I believe, is -- I know it's an average. I'm quite satisfied with the gross margins on the current product line. I'm not going to disclose it because it's very competition-sensitive.

But obviously, the components that we sell or the subassemblies are at lower gross margins and the full machines that we sell are much higher gross margins and the materials that we sell are also much higher gross margins than 46%, I'm saying. By the way, I will mention this moment, important note. Don't ask me when we come to the Q&A, please.

What is the revenue based on what was the revenue of what companies we acquired separate from companies we didn't acquire or product lines that we need sell or so before. We don't have this breakdown. It's very competition-sensitive.

Because we sometimes intend to sell different machines as a package deal and combine that together for the customer, and we don't want the customer to know exactly the machines, which they're coming from product line and what are we selling them in a different market with different prices when they stand alone.

The company by now is so well integrated. Again, this is also ahead of my expectations. I'm not happy integration is fitter complete. I still think we should -- we are increasing the integration, but the product lines and the sales of the acquisitions emerged. The early acquisitions are already merging R&D as well and operations and manufacturing.

So it's a real one company with a product line that is sold to different verticals, most of them overlapping and some of them are even in packaged deals. So that's the reason we're not going to disclose sensitive information I guess.

Anyhow moving on, on the P& L, the profit and loss, noticed the research and development contrary to what may sound, I think I spoke about it many times in the calls before. It's a very important note that the research and development went up from $9.8 million in 2020 to $42 million. I'm rounding the figures.

Because this is the manifestation that the money we raised is put to work because this is what's going to create and is creating the value that is going to create the return.

And it's not so simple to increase $10 million to $42 million, A, because there's issues of hiring top scientists and Type A researchers, both in the United States and Europe, very difficult.

Secondly, when you grow R&D, you can’t just grow it by hiring people, you have to grow it in a way that you create the right culture and you dive into the right research projects. And the fact that our R&D is four times bigger by now is very encouraging from year-to-year. Sales and marketing, same thing.

We declared mid-2021 actually, second quarter that we are now going to start to invest in a go-to-market cost, the expense went up from 6.6 to 22.7. It's again, manifestation of the go-to-market network and distribution channels that we've built in North America and in Europe.

We didn't invest in Far East because of political risks that we find in China and it's another subject. So most of our investments are United States, Europe, and now we opened -- these days, we have the same -- we had the first showing in Australia in a very big electronic show. So it's very, very exciting.

That's on the go-to-market sales and marketing expense. The G&A number is high. But if you notice, it's actually similar to last year 20% down to 19.6% is because the G&A didn't change a lot and the number is high, not because we have so much expenses in G&A.

We don't have $20 million paid out to either employees or rental is -- a lot of it is non-cash expenses that Yael can speak about, if you want, the non-cash expense, including granting of stock options to new employees, which is we hired a lot of people. Remember, we hired 350 employees over the last 11 months, actually more than that, probably 360.

So this is the expense as we hire. We try not to increase their salaries or pay them per pay them in order to bring the type As. But we give them stock options and that's the non-cash expense that falls into the G&A. So the number in cash is actually much, much, much lower. And if somebody is interested, can ask Yael later.

So overall, the operating loss is -- seems like big, right, $220 million, but here is another one that we were obligated to do to write down $140 million because of the regulation of the SEC when they compare the price of the share to the value of the non-cash non-tangible assets that the company has.

So again, if you want details about that, what is it combined from, obviously, nothing is non-cash. So that's the write-down. It happens once, not once a year, once in many, many years because once you write it down, you don't need to write it down anymore. We pretty much wrote down everything to whatever was non-tangible to zero.

And Yael can give you more details if you have questions. So the net operating loss is actually $83 million, not $220 million. And the net comprehensive loss after tax is actually less, it's $60 million and this $60 million, interestingly enough.

If you go up and look at the research and development expense and the sales and marketing expense, combine them together, it is $63 million. And $63 million of investment are showing the total comprehensive loss of $60 million.

Of course, by GAAP or IFRS, this is a loss, but it's actually an investment, $40 million investment in R&D and 20 something million dollar investment in building up the marketing and sales, and I like that.

I think at this point, after talking for about 15, 20 minutes, it will be much more effective for all of you for me to open it up for Q&A, and I would be happy to answer your questions, please..

Thank you, sir. Ladies and gentlemen, at this time we will begin the question-and-answer session. [Operator Instructions] The first question is from Rich Brun [ph]. Please go ahead..

Hello. Good morning, Yoav. Hi, it's Rich Brun. So you talked a little bit about gross margin.

Just hypothetically speaking, with the Type A acquisition, what profit margin would you be anticipating from such an acquisition?.

I don't know. It's like asking me with the type acquisitions, a, what do you expect to pay? It depends. The acquisitions we are buying from Type A are now changing.

We are -- because of the prices of PCB manufacturers that by now are going down and the complexity that we found out in -- after a lot of due diligence, we are -- the Type A that we are looking at are usually margins of high-tech equipment manufacturers and are definitely above 50%, but some of them are 55%, some of them are 80%.

So this is the range. It depends what's the size of the company, what's the stage of the company and its product life cycle. If it's a more mature company and higher revenue, the product life cycles are usually at a later stage and their gross margins are usually closer to the 55%.

If they are in earlier stage of certain product lines of those companies are in earlier stages than the gross margins are usually 65, 68. So it depends..

Okay. No, I just asked, because I looked over some PCB manufacturers, just assuming that Type A acquisition will be a PCB manufacturer. A lot of the gross margins are really, really low, somewhere like under 10%. So that's why I'm just asking..

PCB manufacturers gross margins are at best 30%. I'm thinking about gross margins. Net margins are much lower. You're right, 10%. No, it's been, but gross margins. And we are slowly shying away of this search. It's already half a year or three quarters of a year.

And to remind you, I spoke about it when PCB manufacturers like this, once -- in fact, many have started or even before, were sold for 10 to 12 times -- actually more, 11 to 13 times EBITDA. When these businesses with 30% gross margins should not be sold for more than 6.5 times EBITDA, higher fees to pay those prices.

And when these prices insisted, then I shied away, more than just the price. We found out that the PCB that we like and the numbers were better, and the gross margins were 35, 40, were only the PCB players that had manufacturing in China. And we were very close to a couple of deals, and then I decided not to do it.

I felt that the Chinese situation is getting worse. And we're not going to do it. So I don't expect it to happen soon..

Okay. Just a follow-up question.

When it comes to -- because you know we are focusing on complex geometries and miniaturization, have you looked at any type of advanced functional materials that deal with energy storage for those products that may have complex geometries?.

You mean energy storage, you mean heat dissipation? What do you mean energy storage?.

Energy storage as far as -- that I don’t want to….

Batteries?.

Yes. Correct. Right..

The battery market, which is very hot, obviously, with all what's happening with the electronic vehicles and more than that, is very hot, problematic but good. The battery printing market is embryonic and starting people. There's about three or four companies trying to get into that. We looked at them.

They're still very small with material issues, but materials is our business. So, the answer to the question is we're looking at it carefully because it's even more premature from the general 3-dimensional additive manufacturing electronics. But I believe in that market, I believe the battery market will lend itself vice versa.

The additive manufacturing will lend itself to the battery market in a beautiful way, subject to materials, as you said, smartly. And as you know, more than a third of our research are material scientists. So, we're very, very focused on that..

All right. That's good to hear.

And as much as you can review, how was your trip Austria?.

First of all, Vienna is a beautiful city. And we have already been there for three times over the last two months. And we have seen a very interesting phenomenon in Austrian environment. I don't want to talk about it too much because I don't want my competitors to know.

The University of Austria -- sorry, the University of Vienna, sorry, has developed over the last few years, very, very strong research and knowledge and people in the area of materials and of actually additive manufacturing and advanced digital industry. And we identified that. And we are in very, very strong contracted network.

So, if you see my travel schedule and the reason I'm there so many times, you can guess why..

All right. Thank you for your time Yoav..

Thank you..

The next question is from [indiscernible]. Please go ahead..

Are you expecting any new analyst coverage in the near future?.

Sorry, expecting, what?.

New analyst coverage? Any broker, some coverage in the near future?.

I see. If I'm expecting, I'm not on the point of knowing to say expect, but I'm working on it. I know there's interest and I'm talking to high-quality analysts that are starting to be interested. And therefore, I guess, I should say you should expect that I will be successful or I should hope that I'll be successful.

It's one of my main goals that is not involved in running the company and growing its value is to help the share is to expose it better with knowledge and that -- those are the research analysts I'm chasing..

Okay. Thank you..

Thank you..

Thank you. [Operator Instructions] The next question is from Steve Dillon of [indiscernible] Capital Management. Please go ahead..

Good morning.

What's your current share count at year-end?.

The number of shares that we have is 300….

312 million, I believe..

312 million. One second, we're checking it just to give you the exact number..

On not-fully-diluted basis, it's 257 million..

And fully diluted?.

318 million..

Okay, 257 million..

And I'm sorry that fully diluted was--.

312 million -- 318 million..

Thank you..

Yoav Stern:.

There are no further questions at this time. Mr.

Stern, would you like to make your concluding statement?.

Well, let's wait for two, three more minutes and if there will be no -- there are more questions coming, I can say..

There is a question from Byron Neo [ph] of Nano Dimension. Please go ahead. .

Hi.

Looking at your most exciting areas of growth opportunity and new clients, I like -- I mean, I don't know you mentioned your clients, but what are some of the bigger prospects you might have or the clients that you think could grow from where they are now and be substantially much larger in the next 18 months or so?.

Well, we're talking about $30 million, $40 million of revenue, which grew 200%. So, you realize that we have by now hundreds of customers.

So, I can -- first of all, I will not be able to tell you names of customers that I said informally to people, which are leading defense players in the United States and Europe and other leading customers, which are leading 3-letter agencies from all the Western world, all the leading 3-letter agencies in the western world, which I can’t tell you and those are subject to buying more machines.

So, I will try to define for you verticals. So, we see customers from 3 main verticals right now for one, the defense industry very interested. The research departments, they're high-tech -- high advanced electronic groups, 3 dimension -- looking for 3-dimensional and layers printing. Aviation aerospace.

We published our work together with Harris -- L3Harris and with NASA. This high interest from there not necessarily only them, but other people who play there.

The medical industry -- specialized medical, a lot of interest and a lot of customers in the printed circuit board assembly, both OEM and large subcontractors and pines circuit board assembly, which are buying dozens and dozens of our machines.

We have 130 customers in the general printing industry, which is both 3-dimensional printing and 2-dimension printing by now, which are buying our printing engines and in-delivery systems.

So from this 130 million, you have companies that are from Fortune 50 and 100 as well, all in the 3D printing and most and a lot in the 2D printing as well, very advanced. We have – from the automotive industry, major players are talking to us because of both 3D printing and the 2D printing for painting.

Done painting of automotive industry parts instead of the way that bring were wasting a lot of chemicals in closed sales of spray. They're doing it now with 3D printing, which we do 3-dimensional. So gave you a few examples. Next question please..

The next question is from Joseph Alex [ph]. Please go ahead..

Congratulations on the progress that you've been making. I was just wondering what your thoughts are, why is the price per share so below cash? And just -- this doesn't seem reasonable to me. While we at $5 to with the progress that we've been making, you're sticking to your business plan, and it looks like things are working.

What's the problem?.

Okay.

Did you read the news release?.

Yes..

Okay. So on Page 2, the news is on the bottom of the page, there is a paragraph that spends for about one-third of the page, that's start by speaking about expectations, hopes and disappointments, it behooves on us to refer to the share price. While we cannot be sure it may be affected by the following factors.

What I suggest is -- and I'll summarize it for you in a second, of course, really attentively. I wrote there and when you need to write things sometimes -- not sometimes, always, I find out that you need to be much more accurate than just talking and waving hands.

So my writing there is totally and precisely what I can tell you as an answer to your question. But since you asked it, and I don't want to read the whole program, which would be too long.

I'll just tell you that in general, you should look at something really interesting, which I'm following every day, I don't that I have every day time to look at the share price, but every time I look at it during the week, I'm comparing it to a list I have of all the additive manufacturing companies that are traded publicly in United States, in Europe and in Israel, there's about one or two in Israel.

And that including the leaders, the strategies and the three deals, which are kind of $0.5 billion each. And all the others that met with parks and ridiculous prices like desktop metal and others.

And our price is following their price and their prices following our price up and down with an accuracy of 20% standard deviation, which means if we go up 5%, they go up 5%. If we go down 3%, they go down between 1% and 4%. It goes together.

So this is a result of behavior, which is typical to market trends that are created by algorithm trading that the following market segments by name. And we still didn't penetrate through that to show that we are better than the rest, part of it is because we were small. We started very small.

Just now suddenly, we are $30-something-million and we're starting to appear on the horizon. And the whole market is going down, as you know, for the last at least two quarters, the market beyond additive manufacturing and the specific additive manufacturing follow-up. And you will see, we're going with them.

But we're going to penetrate that kind of a little glass selling by our performance, and I'm focusing on that. Second thing is our shareholders' construct is unique. We have -- I remember now we have 60, 70, 80 institutional shareholders. Many of them I spoke personally, and I do speak personally as we proceed. Those are sophisticated investors.

They know what we're doing. They may be trading in the market, I'm not sure, but I have a feeling that very little. Then we have 149,450 and 950. Close to 150,000 other retail shareholders.

Those shareholders joined in the last 1.5 years, they are not and we respect them as much we respect to any shareholder, but they're not the type of investors or professional investors in general that the institutions. So the attention spend and their risk return, time line and time horizon is very different.

Some are day trader’s time, some are week traders, some are five weeks. And those are waiting for announcements and those are waiting for quarterly results. None of them are going to get it, not for me. I will announce only when I have something to announce, and the quarterly results will proceed, but not on a quarterly basis necessarily.

But with inflection points, sometimes they'll jump. And those people may be disappointed. I'm not sure that the share is not going up, so they're selling. And there's many of them. So that may be another reason.

The end results, the bottom line and as a gentleman from Omaha that said it starting 50 years ago, all the way until today, we are a company that's building value. We are not just a regular growth company that is looking for a hyper media excitement on a quarterly basis. The value is going up.

And when the value goes up, the share price eventually catches up, but it's not every quarter that it catches up. That's the best I can tell you..

So I understand exactly what you're saying. I'm a frustrated shareholder, because I like what you're doing. I like that you're actually stingy with the money that you have, you're not slowing it around, like you explained yourself earlier on the call. And I own a lot of shares. And I'm attracted to it because there are possibilities going forward.

And also you're selling under cash to me is ridiculous. Just I'll stop price, even now should be $5, $6, $7..

Does relate with you, and thank you for saying it. And I'll add to what you said. I own a lot of shares. And as late as month and half ago, I bought $0.5 million more in shares, and it was $4.12. And, of course, it went down now it goes up again. I don't worry. In a year time, it will double or more. So am I promising this? Absolutely not.

Am I hoping and aiming for this? Absolutely, yes..

Okay, great. Thank you so much. Continue with the progress and building the business..

Thank you so much for your support..

You're welcome..

The next question is from Quinn Larson [ph]. Please go ahead..

Yes.

Could you talk just a little bit about your integration of your various products like what am I trying to think your DeepCube as well as Fabrica?.

Sure. DeepCube by now is almost on the forefront of our leading R&D efforts of building machines and our forefront of M&A because on every M&A that we do, we use the DeepCube scientists to study and to see how fast can you -- can we apply the DeepCube engine, robotic brain into acquisition before we make decisions for acquisition.

And as our existing machines, it's totally part of building a machine right now. The only issue I have with DeepCube is, it's very difficult to double their size. If it was up to me, we brought them there 24 people, but I think by now, we have 30.

And we have 10, 12 more open positions for top notch scientists, and they can't get them for any price almost. So it becomes a very -- like a building block that is the center of our attention. And it works well. We're also integrating with the Fabrica guys you asked.

Fabrica has sold their first machine to a three-letter agency, which you would know their name and leading in the western world, and we're very proud of it. They are continuing on their program.

They are short to my taste, they are short in what I wanted them to be on the side of the number of machines to be sold until what I see the middle to the end of this year, but we're pushing them, and we're building their sales organization, which is part of our sales organization.

And signs from the three beta sites that they already have in machines working are good, but there's a ways to go..

Okay.

So as far as common products, will Fabrica and Nano Dimension ever merge into like a single printer, or will they always be separated?.

No, no, no, no, no, no, no. The technologies are not manageable to a single printer, absolutely. Nano Dimension has many printers by now. Is one of our printer families, it's going to become a printer family, certain technologies we integrate like the DeepCube into Nano Fabrica.

But the printing machines are not going to merge, because we have printing machines for micro parts, which is Fabrica. We have printing machines for -- as we manufacturing electronics. And soon, we'll have more which we're announcing. And we have surface mount technology machines for printed circuit boards, which has nothing to do with Fabrica.

And we have drivers for printing -- two-dimensional operating, which will be integrated into Fabrica, but it's a subassembly, not a machine..

Okay. I appreciate your time..

Thank you..

There are no further questions at this time. Mr.

Stern, would you like to make your concluding statement?.

Sure. In conclusion, again, this was quite a long call. Its 45 minutes, close to that. So I appreciate your patience and listening. And again, in order to be able to reflect, I think, most of what we spoke here today is written in the document, the new release and some, which was not and I added today.

It's recorded, so you can always re-listen to the recording. And if you have more questions, we are here to answer. Thank you very much..

Thank you. This concludes the Nano Dimension 2021 full year and fourth quarter financial results call. Thank you for your participation. You may go ahead and disconnect..