Sensus Healthcare Reports Fourth Quarter and Full Year 2023 Financial Results
- Fourth quarter revenues of $12.6 million, a three-fold increase sequentially
- Introduces recurring revenue model for the SRT-100 Vision™ to address dermatologist demand
- Net income of $4.2 million, or $0.26 per diluted share
- Ended the year with $23.1 million in cash and cash equivalents, and no debt
- Showcased the full line of SRT systems for treating non-melanoma skin cancer at the Fall Clinical 2023 dermatology conference
- Engaged CureRays to provide oversight and supervision for Sensus’ dermatology customers
- Revenues for 2023 were $24.4 million, compared with $44.5 million for 2022
- Cost of sales was $10.3 million for 2023, compared with $14.9 million for 2022
- Net income for 2023 was $0.5 million, or $0.03 per diluted share, compared with net income of $24.2 million, or $1.46 per diluted share, for 2022
Insights
The reported fourth quarter revenues of $12.6 million, although a significant increase from the third quarter, indicate a slight year-over-year decline compared to the $13.1 million in the prior-year fourth quarter. This contraction could be a result of the macroeconomic pressures that have led to cautious spending in the healthcare sector. The sequential revenue growth is encouraging, but stakeholders should analyze whether this is a sustainable trend or a temporary adjustment.
Furthermore, the introduction of a recurring revenue model for the SRT-100 Vision is a strategic move to stabilize cash flow and may attract long-term investors seeking consistent returns. However, it's crucial to monitor the adoption rate of this new model and its impact on future revenues.
The company's strong balance sheet, highlighted by an increase in net income to $4.2 million and no debt, positions it well for future investments and may provide a buffer against ongoing economic challenges. The increased inventory levels also suggest optimism regarding demand in 2024, which could be a positive signal for investors.
With Sensus Healthcare's focus on expanding the use of Superficial Radiotherapy (SRT) beyond non-melanoma skin cancer and keloids, there's potential for significant market growth. The collaboration with CureRays to conduct clinical studies for new indications could unlock additional revenue streams and diversify the company's portfolio.
However, the decrease in the number of SRT units sold year-over-year needs to be contextualized within the broader medical device market trends. If the decline is in line with industry trends, it may not be a major concern. Conversely, if the industry is growing and Sensus is not keeping pace, this could be a red flag for investors.
The international expansion strategy, including entering new geographies, can be a double-edged sword. While it presents opportunities for growth, it also introduces risks related to regulatory hurdles, market acceptance and competition. Success in international markets will be a key factor to watch in evaluating the company's long-term growth trajectory.
The company's performance must be viewed against the backdrop of the broader macroeconomic environment. The end-of-year cash position, while slightly lower than the previous year, is robust, especially considering the lack of debt. This indicates prudent financial management in an inflationary environment.
Investors should also consider the implications of the company's increased finished goods inventory. While this suggests confidence in future sales, it also represents tied-up capital and could lead to increased carrying costs. The balance between preparedness for demand spikes and the risk of overstocking will be important to monitor in the coming fiscal period.
The move towards a recurring revenue model is a strategic response to inflationary pressures and a way to provide a steady revenue stream. This could make the company's financials more resilient to economic downturns, but it also requires a careful analysis of the customer lifetime value and churn rates.
- Fourth quarter revenues of
$12.6 million up three-fold sequentially, reflect ongoing customer adjustment to macroeconomic conditions - Introduces recurring revenue model for the SRT-100 Vision™ (IG-SRT) to address dermatologist demand
Conference call begins at 4:30 p.m. Eastern time today
BOCA RATON, Fla., Feb. 08, 2024 (GLOBE NEWSWIRE) -- Sensus Healthcare, Inc. (Nasdaq: SRTS), a medical device company specializing in highly effective, non-invasive, minimally-invasive and cost-effective treatments for oncological and non-oncological conditions, announces financial results for the three and 12 months ended December 31, 2023.
Highlights from the fourth quarter of 2023 and recent weeks include the following:
- Revenues were
$12.6 million , compared with$13.1 million in the prior-year fourth quarter and$3.9 million in the third quarter of 2023, reflecting higher superficial radiotherapy (SRT and IG-SRT) unit sales sequentially as customers adjust to macroeconomic conditions - Shipped 33 SRT systems in the fourth quarter, bringing the total number of units shipped in 2023 to 66
- Net income was
$4.2 million , or$0.26 per diluted share, compared with net income of$2.8 million , or$0.17 per diluted share, for the prior-year quarter and earnings per diluted share for 2023 of$0.03 - Ended the year with
$23.1 million in cash and cash equivalents, and no debt - Increased finished goods inventory in preparation for anticipated continued growth in 2024
- Placed the first SRT-100 Vision under a recurring revenue model
- Appointed President and General Counsel Michael Sardano to the Company’s Board of Directors
- Showcased the full line of SRT systems for treating non-melanoma skin cancer at the Fall Clinical 2023 dermatology conference; preparing to showcase all products and services including the recurring revenue model at the Winter Clinical and South Beach Symposium in February, and at the American Academy of Dermatology Annual Meeting in March
- Engaged CureRays to provide oversight and supervision for Sensus’ dermatology customers involved with the recurring revenue model and to ensure patient safety; CureRays will also conduct clinical studies to expand indications for SRT, beginning with inflammatory diseases
Management Commentary
“The strength of our fourth quarter resulted in positive net income not only for the quarter, but also for the full year. This performance reflects the practice benefits of SRT to our customers and the treatment benefits to their patients, as well as our customers’ ongoing adjustment to prolonged higher inflation,” said Joe Sardano, Chairman and Chief Executive Officer of Sensus.
“During 2023 we embarked on several important initiatives to position Sensus for long-term growth,” he continued. “We built inventory throughout the year and used cash judiciously to ensure sufficient resources to offer the SRT-100 Vision (IG-SRT) under a recurring revenue model. For years our customers and prospects alike have been asking for new ways to add SRT to their practices, and we’re delighted to meet their needs with a highly-competitive offering that makes the most economic sense for them. This new option complements our capital equipment sales and fair market value lease models, provides recurring revenue to Sensus and expands our market as utilization of SRT to treat non-melanoma skin cancer continues to increase. During the fourth quarter we made our first placement under this model and have several more in the pipeline.”
Mr. Sardano added, “We were delighted to enter into a collaboration with CureRays whereby they will provide oversight for our customers to ensure the utmost efficiency and effectiveness of the dermatology practice. In addition, CureRays will begin clinical studies that are intended to expand the use of SRT into areas beyond skin cancer and keloids. While this is a longer-term goal, it presents enormous growth opportunities for Sensus. We know the leaders of CureRays very well from their work at Emory University, investigating low-dose radiation as a treatment for COVID-19 pneumonia. This collaboration provides our customers with unprecedented world-class support.
“During the quarter we continued to focus on international opportunities as we sold three SRT systems outside the U.S. We reaffirm our goal to enter three to four new geographies over the coming years, building upon our success in international markets where we sold 13 systems in 2023, and our recently added opportunities in Latin America, the UK and Ireland,” Mr. Sardano concluded.
Fourth Quarter Financial Results
Revenues for the fourth quarter of 2023 were
Cost of sales was
Gross profit for the fourth quarter of 2023 was
Selling and marketing expense was
General and administrative expense was
Research and development expense was
Other income of
Net income for the fourth quarter of 2023 was
Adjusted EBITDA for the fourth quarter of 2023 was
Cash and cash equivalents were
Full-Year Financial Results
Revenues for 2023 were
Cost of sales was
Gross profit was
Selling and marketing expense was
General and administrative expense for 2023 was
Research and development expense was
Other income, net of
Net income for 2023 was
Adjusted EBITDA for 2023 was
Use of Non-GAAP Financial Information
| SENSUS HEALTHCARE, INC. | |||||||||||||||
| GAAP TO NON-GAAP RECONCILIATION | |||||||||||||||
| (unaudited) | |||||||||||||||
| For the Three Months Ended | For the Years Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | |||||||||||
| Net income, as reported | $ | 4,210 | $ | 2,831 | $ | 485 | $ | 24,244 | |||||||
| Add: | |||||||||||||||
| Depreciation and amortization | 60 | 71 | 275 | 316 | |||||||||||
| Stock compensation expense | 52 | 50 | 328 | 188 | |||||||||||
| Income tax expense | 1,595 | 1,577 | 167 | 3,746 | |||||||||||
| Interest income, net | (228 | ) | (235 | ) | (992 | ) | (380 | ) | |||||||
| Adjusted EBITDA, non GAAP | $ | 5,689 | $ | 4,294 | $ | 263 | $ | 28,114 | |||||||
This press release contains supplemental financial information determined by methods other than in accordance with accounting principles generally accepted in the United States (GAAP). Sensus Healthcare management uses Adjusted EBITDA, a non-GAAP financial measure, in its analysis of the Company’s performance. Adjusted EBITDA should not be considered a substitute for GAAP basis measures, nor should it be viewed as a substitute for operating results determined in accordance with GAAP. Management believes the presentation of Adjusted EBITDA, which excludes the impact of interest, income taxes, depreciation, amortization and stock-compensation expense, provides useful supplemental information that is essential to a proper understanding of the financial results of Sensus Healthcare. Non-GAAP financial measures are not formally defined by GAAP, and other entities may use calculation methods that differ from those used by Sensus Healthcare. As a complement to GAAP financial measures, management believes that Adjusted EBITDA assists investors who follow the practice of some investment analysts who adjust GAAP financial measures to exclude items that may obscure underlying performance and distort comparability. A reconciliation of the GAAP net loss to Adjusted EBITDA is provided in the schedule below.
Conference Call and Webcast
Sensus Healthcare will host an investment community conference call today beginning at 4:30 p.m. Eastern time during which management will discuss financial results for the 2023 fourth quarter and full year, provide a business update and answer questions. To access the conference call, dial 844-481-2811 (U.S. and Canada Toll Free) or 412-317-0676 (International). The call will be webcast live and can be accessed at this link, or in the Investors section of the Company’s website at www.sensushealthcare.com.
Following the conclusion of the conference call, a replay will be available until March 8, 2024 and can be accessed by dialing 877-344-7529 (U.S. Toll Free), 855-669-9658 (Canada Toll Free) or 412-317-0088 (International), using replay code 4664378. An archived webcast of the call will also be available in the Investors section of the Company’s website.
About Sensus Healthcare
Sensus Healthcare, Inc. is a global pioneer in the development and delivery of non-invasive treatments for skin cancer and keloids. Leveraging its cutting-edge superficial radiotherapy (SRT and IG-SRT) technology, the company provides healthcare providers with a highly effective, patient-centric treatment platform. With a dedication to driving innovation in radiation oncology, Sensus Healthcare offers solutions that are safe, precise, and adaptable to a variety of clinical settings. For more information, please visit www.sensushealthcare.com.
Forward-Looking Statements
This press release includes statements that are, or may be deemed, ''forward-looking statements.'' In some cases, these statements can be identified by the use of forward-looking terminology such as "believes," "estimates," "anticipates," "expects," "plans," "intends," "may," "could," "might," "will," "should," “approximately,” "potential" or negative or other variations of those terms or comparable terminology, although not all forward-looking statements contain these words.
Forward-looking statements involve risks and uncertainties because they relate to events, developments, and circumstances relating to Sensus, our industry, and/or general economic or other conditions that may or may not occur in the future or may occur on longer or shorter timelines or to a greater or lesser degree than anticipated. In addition, even if future events, developments, and circumstances are consistent with the forward-looking statements contained in this press release, they may not be predictive of results or developments in future periods. Although we believe that we have a reasonable basis for each forward-looking statement contained in this press release, forward-looking statements are not guarantees of future performance, and our actual results of operations, financial condition and liquidity, and the development of the industry in which we operate may differ materially from the forward looking statements contained in this press release, as a result of the following factors, among others: our ability to maintain profitability; our ability to sell the number of SRT units we anticipate for the balance of 2024; the possibility that inflationary pressures continue to impact our sales; the level and availability of government and/or third party payor reimbursement for clinical procedures using our products, and the willingness of healthcare providers to purchase our products if the level of reimbursement declines; the regulatory requirements applicable to us and our competitors; our ability to efficiently manage our manufacturing processes and costs; the risks arising from doing business in China and other foreign countries; legislation, regulation, or other governmental action that affects our products, taxes, international trade regulation, or other aspects of our business; concentration of our customers in the U.S. and China, including the concentration of sales to one particular customer in the U.S.; the performance of the Company’s information technology systems and its ability to maintain data security; our ability to obtain and maintain the intellectual property needed to adequately protect our products, and our ability to avoid infringing or otherwise violating the intellectual property rights of third parties; and other risks described from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
To date, we do not expect that the Middle East conflict, the Russian invasion of Ukraine and global geopolitical uncertainty have had any particular impact on our business, but we continue to monitor developments and will address them in future disclosures, if applicable
Any forward-looking statements that we make in this press release speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect events or circumstances after the date of this press release, except as may be required by applicable law. You should read carefully our "Introductory Note Regarding Forward-Looking Information" and the factors described in the "Risk Factors" section of our periodic reports filed with the Securities and Exchange Commission to better understand the risks and uncertainties inherent in our business.
Contact:
LHA Investor Relations
Kim Sutton Golodetz
212-838-3777
kgolodetz@lhai.com
(Tables to follow)
| SENSUS HEALTHCARE, INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| For the Three Months Ended | For the Years Ended | |||||||||||||||
| (in thousands, except share and per share data) | December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
| Revenues | $ | 12,566 | $ | 13,105 | $ | 24,405 | $ | 44,532 | ||||||||
| Cost of sales | 4,737 | 4,754 | 10,345 | 14,904 | ||||||||||||
| Gross profit | 7,829 | 8,351 | 14,060 | 29,628 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling and marketing | 625 | 1,576 | 5,608 | 6,329 | ||||||||||||
| General and administrative | 949 | 1,444 | 5,156 | 5,008 | ||||||||||||
| Research and development | 678 | 1,158 | 3,678 | 3,460 | ||||||||||||
| Total operating expenses | 2,252 | 4,178 | 14,442 | 14,797 | ||||||||||||
| Income (loss) from operations | 5,577 | 4,173 | (382 | ) | 14,831 | |||||||||||
| Other income: | ||||||||||||||||
| Gain on sale of assets | - | - | 42 | 12,779 | ||||||||||||
| Interest income, net | 228 | 235 | 992 | 380 | ||||||||||||
| Other income, net | 228 | 235 | 1,034 | 13,159 | ||||||||||||
| Net Income before income tax | 5,805 | 4,408 | 652 | 27,990 | ||||||||||||
| Provision for income tax | 1,595 | 1,577 | 167 | 3,746 | ||||||||||||
| Net Income | $ | 4,210 | $ | 2,831 | $ | 485 | $ | 24,244 | ||||||||
| Net income per share – basic | $ | 0.26 | $ | 0.17 | $ | 0.03 | $ | 1.47 | ||||||||
| – diluted | $ | 0.26 | $ | 0.17 | $ | 0.03 | $ | 1.46 | ||||||||
| Weighted average number of shares used in computing net income per share – basic | 16,271,097 | 16,474,739 | 16,259,254 | 16,480,991 | ||||||||||||
| – diluted | 16,271,097 | 16,577,055 | 16,266,139 | 16,618,214 | ||||||||||||
| SENSUS HEALTHCARE, INC. | |||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
| As of December 31, | As of December 31, | ||||||
| (in thousands, except shares and per share data) | 2023 | 2022 | |||||
| (unaudited) | |||||||
| Assets | |||||||
| Current assets | |||||||
| Cash and cash equivalents | $ | 23,148 | $ | 25,520 | |||
| Accounts receivable, net | 10,645 | 17,299 | |||||
| Inventories | 11,861 | 3,501 | |||||
| Prepaid inventory | 2,986 | 6,261 | |||||
| Other current assets | 888 | 660 | |||||
| Total current assets | 49,528 | 53,241 | |||||
| Property and equipment, net | 464 | 243 | |||||
| Deferred tax asset | 2,140 | 1,713 | |||||
| Operating lease right-of-use assets, net | 774 | 996 | |||||
| Other noncurrent assets | 804 | 542 | |||||
| Total assets | $ | 53,710 | $ | 56,735 | |||
| Liabilities and stockholders' equity | |||||||
| Current liabilities | |||||||
| Accounts payable and accrued expenses | $ | 2,793 | $ | 5,521 | |||
| Product warranties | 538 | 403 | |||||
| Operating lease liabilities, current portion | 187 | 190 | |||||
| Income tax payable | 37 | 890 | |||||
| Deferred revenue, current portion | 657 | 693 | |||||
| Total current Liabilities | 4,212 | 7,697 | |||||
| Operating lease liabilities, net of current portion | 596 | 830 | |||||
| Deferred revenue, net of current portion | 60 | 139 | |||||
| Total liabilities | 4,868 | 8,666 | |||||
| Commitments and contingencies | |||||||
| Stockholders' equity | |||||||
| Preferred stock, 5,000,000 shares authorized and none issued and outstanding | - | - | |||||
| Common stock, | 169 | 169 | |||||
| Additional paid-in capital | 45,405 | 45,031 | |||||
| Treasury stock, 532,924 and 512,342 shares at cost, at December 31, 2023 and December 31, 2022, respectively | (3,519 | ) | (3,433 | ) | |||
| Retained earnings | 6,787 | 6,302 | |||||
| Total stockholders' equity | 48,842 | 48,069 | |||||
| Total liabilities and stockholders' equity | $ | 53,710 | $ | 56,735 | |||
FAQ
What were the fourth quarter revenues for Sensus Healthcare, Inc. (SRTS)?
What was the net income for the fourth quarter of 2023?
What is the recurring revenue model introduced by Sensus Healthcare, Inc. (SRTS)?
How much cash and cash equivalents did Sensus Healthcare, Inc. (SRTS) end the year with?
What was the major event showcased by Sensus Healthcare, Inc. (SRTS) at the Fall Clinical 2023 dermatology conference?
What is the role of CureRays in relation to Sensus Healthcare, Inc. (SRTS)?
