Full Press Release Details
Sensus Healthcare Reports First Quarter
2020 Financial Results
Conference call begins
at 4:30 p.m. Eastern time today
BOCA RATON, Fla. (May 7, 2020) -
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 months
ended March 31, 2020.
Highlights from the first quarter of 2020
and recent weeks include (all comparisons are with the first quarter of 2019, unless otherwise indicated):
Management Commentary
"I am so very proud of the Sensus
team and how together we are navigating the challenges of the COVID-19 pandemic, which significantly impacted our first quarter
financial results. Our intra-quarter sales historically have skewed toward the end of the quarter, and that is the time period
in Q1 when the pandemic began closing the U.S. economy," said Joe Sardano, Sensus Healthcare's chairman and chief executive
officer. "We are taking multiple actions to prepare for the resumption of post-pandemic daily life. We continue to expand
awareness of SRT and its utility in treating non-melanoma skin cancer, while supporting physician customers and protecting cash
so we emerge from this crisis ready to do business.
"We have used this time of social
distancing as an opportunity to reach out to customers on a personal level as never before. Sensus has built an impressive network
of contacts over many years, and we are leveraging our contacts to help customers as much as possible, including sourcing items
such as protective masks and critical medicines. We are sponsoring a series of online programs for dermatologists, during which
they share information and practice regimens with one another. Of note, these programs are affirming the use of SRT as an alternative
to Mohs surgery, as physicians are reluctant to incur the risks of infection and adverse events during this time. We are hopeful
SRT may replace many more Mohs surgeries on a permanent basis as physicians and patients alike see the excellent curative results
and the ease of use of SRT. With our main reimbursement code expected to be revalued upward by the Centers for Medicare and Medicaid
Services this summer, and Mohs surgery reimbursement expected to be revalued downward, we believe SRT will make significant market
inroads once the new rates go into effect on January 2, 2021. To date we have penetrated only about 2% of the U.S. market, so clearly
there is plenty of opportunity," Mr. Sardano added.
"The COVID-19 pandemic also is impacting
research work with Sculptura at luminary hospitals, including the University of Pennsylvania. Sculptura is our Anisotropic
Radiation Therapy with Beam Sculpting capabilities and Robotic Respiratory Tracking for up to 17 different indications.
Given current treatment constraints at hospitals, our sales forecasts are guarded this year. Although recent interest has been
very high, we believe sales of these systems will largely be pushed into 2021.
"During the fourth quarter of 2019,
we reduced expenses including rightsizing our staff. Given these actions, along with our cash position and revolving line of credit,
I am confident we are well prepared for the resumption of sales," Mr. Sardano concluded.
First Quarter Financial Results
Revenues for the first quarter of 2020
were $1.7 million, compared with $5.4 million for the first quarter of 2019. Revenues were adversely impacted by COVID-19, primarily
near the end of the quarter.
Gross profit for the first quarter of 2020
was $0.7 million, or 42.2% of revenues, compared with $3.3 million, or 61.0% of revenues, for the first quarter of 2019. The decrease
was primarily due to the lower sales previously noted.
Selling and marketing expense for the first
quarter of 2020 was $1.8 million, down from $2.5 million for the first quarter of 2019. The decrease was primarily attributable
to lower trade show expense due to cancellations related to COVID-19, decreased commission expense due to lower sales, and lower
overall spending on marketing activities.
General and administrative expense for
the first quarter of 2020 was $1.3 million, compared with $1.0 million for the first quarter of 2019. The increase was primarily
due to one-time severance expense and related legal fees.
Research and development expense for the
first quarter of 2020 was $1.2 million, compared with $2.0 million for the first quarter of 2019. The decrease was primarily due
to the reduction of research and development related to the Sculptura system.
Net loss for the first quarter of 2020
was $3.6 million, or $0.22 per share, compared with a net loss of $2.1 million, or $0.13 per share, for the first quarter of 2019.
Adjusted EBITDA for the first quarter of
2020 was negative $3.3 million, compared with negative $1.9 million for the first quarter of 2019. Adjusted EBITDA is defined as
earnings before interest, taxes, depreciation, amortization and stock-compensation expense. Please see below for a reconciliation
between GAAP and non-GAAP financial measures, and the specific reasons these non-GAAP financial measures are provided.
Cash, cash equivalents and
investments were $15.8 million as of March 31, 2020, compared with $15.5 million as of December 31, 2019. At quarter-end the
Company had no long-term debt and no outstanding borrowings on its revolving line of credit. Subsequent to the close of the
first quarter, Sensus expanded its revolving credit agreement with Silicon Valley Bank to $10.0 million, up from $5.0 million
previously. In addition, Sensus received a loan under the Small Business Administration Paycheck Protection Program enabled
by the Coronavirus Aid, Relief and Economic Security Act of 2020, to be used for employee compensation and facilities
Use of Non-GAAP Financial Information
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 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.
SENSUS HEALTHCARE, INC.
GAAP TO NON-GAAP RECONCILIATION
| For the Three Months Ended March 31, | ||||||||
| 2020 | 2019 | |||||||
| Net Loss, as reported | $ | (3,587,106 | ) | $ | (2,121,018 | ) | ||
| Add: | ||||||||
| Depreciation and amortization | 152,742 | 128,435 | ||||||
| Stock compensation expense | 155,779 | 154,535 | ||||||
| Interest, net | (50,102 | ) | (72,019 | ) | ||||
| Adjusted EBITDA, non GAAP | $ | (3,328,687 | ) | $ | (1,910,067 | ) |
Conference Call and Webcast
The Company 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 2020
first quarter, provide a business update and answer questions. To access the conference call, the dial-in numbers are 888-567-1603
(U.S. and Canada) or 862-298-0702 (International). Please direct the operator to be connected to the Sensus Healthcare conference
call. The call will be webcast live and can be accessed here and may also be found in the Investor Relations section of the Company's
website at www.sensushealthcare.com.
Following the conclusion of the conference
call, a replay will be available and can be accessed by dialing 888-539-4649 (U.S. and Canada), or 754-333-7735 (International).
At the prompt, enter replay code 152025 followed by the # sign. An archived webcast of the call will also be available in the Investor
Relations section of the Company's website for a period of time.
About Sensus Healthcare
Sensus Healthcare, Inc. is a medical device
company specializing in highly effective, non-invasive, minimally-invasive and cost-effective treatments for both oncological and
non-oncological conditions. The Sculptura modulated robotic brachytherapy radiation oncology system provides targeted directional
anisotropic radiation therapy (ART) and brachytherapy utilizing our proprietary, state-of-the-art 3D Beam Sculpting to treat
patients undergoing cancer treatment during surgery, or at the tumor site, fast and efficiently. Sensus also offers its proprietary
low-energy X-ray technology known as superficial radiation therapy (SRT), which is the culmination of more than a decade of research
and development, to treat non-melanoma skin cancers and keloids with its SRT-100 , SRT-100+ and SRT-100 Vision