Unidentified Analyst: That is really helpful. Just a quick follow-up for you. Thinking about the product launches this year. How should we think about the contribution of some of these platforms to sales throughout the year? And do you expect that any of these platforms will cannibalize sales of your other platforms?
Moshe Mizrahy: Well, a second generation of minimal invasive, usually I would not say cannibalized because it will take long time to cannibalize an old generation. But in the first few years, it’s over and above it’s an addition, because we did not stop selling the first generation, [indiscernible] we continue to sell it. We launched the second generation right now only in few countries. All the rest of the countries were still selling their – the regular body type and not the Ignite or the regular Optimus and not the Optimus Max. But yes, eventually some of doctor would prefer to buy the new generation, even if it’s a little bit more expensive than to buy the old generation. But they’re always market for the old generation.
So we’re keeping two lines. The top line, which is the second generation and the baseline, which is the – I would say the first generation, which is the body type platforms and the regular Optimus. And I believe that it will take at least 4 or 5 years before the first generation will disappear or fully cannibalize.
Unidentified Analyst: That’s helpful. Thank you.
Operator: The next question comes from Caitlin Cronin of Canaccord Genuity. Please go ahead.
Unidentified Analyst: Hey, this is George on for Caitlin. Thanks for taking our questions. So our first one just kind of builds off the last question. As we think about these new platforms, especially with the delays in delivery, how long do you see that kind of lasting throughout the year? And then more so looking at your guidance, how much of a contribution of these, new platforms, these pre-orders is kind of accounted in your current guidance numbers?
Moshe Mizrahy: Okay, regarding the first quarter, we believe that it will take at least the second quarter and the third quarter in order to fulfill all the pre-orders. Because remember, in the third quarter, we’re still accepting orders for the new devices and we still have something like I would say 120 devices or platforms that we have to deliver which were pre-ordered. So it will last more than one quarter. I hope that in the fourth quarter, everything will be in-line and we will deliver the system without any need to accept pre-orders. So before the end of the year, our business will go back to usual. Now remind me the second – the second question.
Unidentified Analyst: Yes, just on the new platforms like the pre-orders, how much of that is currently considered within your guidance?
Moshe Mizrahy: I mean, it was all considered within the guidance. I mean the guidance, that we gave took into account the pre-orders of Q1.
Unidentified Analyst: Okay, great. And then our second question, any more color you can give on the sales force changes in the U.S?
Moshe Mizrahy: Shakil, can you answer that?
Shakil Lakhani: Yes. Sure. We have actually had some changes at the top of management. We have also added a separate group of directors. Which were internal promotions, which in turn will create some upward mobility and has for some of the people that have obviously deserved it and those who will be deserving it. So, once the things change a little bit and the macroeconomic environment becomes a little more favorable for us, we are just planning on that bounce back, as I mentioned in the script earlier. So, we are obviously trying to prepare for it. We are trying to move forward. We are trying not to do what many other companies do at times like this, while we are still trying to control our balance sheet as well. So, we are trying to get primed for when things bounce back.
Operator: The next question comes from Mike Matson of Needham & Company. Please go ahead.
Joseph Stringer: Hey everyone, this is Joseph on from Mike today. Wanted to maybe – some of these may have already been asked, so apologies, I joined late. But I wanted to maybe just get an update on the manufacturing facilities, you are still seeing pressure on delivery times or I guess as that gotten better or worse? What’s the labor capacity look like? And I guess how is that affecting the pre-order backlog? I just want to kind of get a gauge of how much of this pre-ordered backlog is more or less just demand versus reduced delivery times and manufacturing ability there?
Moshe Mizrahy: Okay. Good. We have two facilities, two manufacturing facilities in Israel, one in Tiberias and one in a small city called Migdal HaEmek. And we are manufacturing all the product in both of them. So, that basically every line that we have, every manufacturing line can be adjusted to every product. So, it’s a full backup, okay. That’s the way we design it and that’s the way we build it. As we go to the new platforms, yes, we are in some delay and this is because of the situation and in Israel. Everybody know that now in Israel, the army is built from a reserve duty and therefore some of our employees were drafted for a long time and that’s created some delay in the manufacturing. But we are catching up right now.
We are working two-shift in order to catch-up and create enough inventory to enable us sufficiently to deliver every pre-order. But as I have said, we will not – we don’t think it will take one quarter. It will take more than one quarter to fulfill all the pre-order, but these orders are already been accepted, or most of them already been paid. So, we are 100% sure, that we will deliver 100% of them in the next, I would say three months to six months. As far as the manufacturing facility, we have capacity to double the sales. Last year, we basically manufactured more than 6,000 systems, and if necessary we can bring the production level or the production capacity to 10,000 without adding any capital equipment, it’s only to run the production line more than one shift.
So, as far as the logistic and the purchasing of component, there is no problem. A little bit delay because of logistic issue due to the war in Israel. But other than that, we are building a safety inventory to make sure that the production line will never stop. So, we are working on it 24 hours a day and we believe so far, even with the war that is running now for more than six months, we have successful delivery. The only thing that we did not deliver on time are those pre-orders, but we can assure the investors that all of these orders will be shipped within a timeframe that I said before few months. And we will – basically we will get back to normal.
