Full Press Release Details
Sensus Healthcare Reports Second Quarter
2020 Financial Results
Conference call begins
at 4:30 p.m. Eastern time today
BOCA RATON, Fla. (August 6, 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 and six
months ended June 30, 2020.
Highlights from the second quarter of 2020
and recent weeks include (all comparisons are with the second quarter of 2019, unless otherwise indicated):
Management Commentary
"Our quarterly revenues
continued to be negatively impacted by COVID-19, yet I am pleased with our ability to maintain strong customer ties during
the pandemic as well as with recent activities that position Sensus Healthcare for significant future growth," said Joe
Sardano, chairman and chief executive officer. "The acquisition of two mobile laser companies announced earlier this
week, and the subsequent formation of the Sensus Laser Aesthetic Solutions (SLAS) division is expected to generate base
revenues of $1.0 million over the next 12 months. We also have the opportunity to layer into this division our new aesthetic
lasers, which are expected to receive 510(k) clearance from the U.S. Food and Drug Administration by year-end. Together,
these two acquired companies have approximately 30 lasers and six vans, and service some 150 dermatology practices across the
State of Florida, including more than 500 that are not current Sensus customers. We also were attracted to this business as we expect aesthetic laser treatments to continue to grow, with
demand from an aging demographic driving sales.
"We were delighted to announce the
appointment of Benson Suen as Vice President of International Sales. Benson joined Sensus from one of our distribution partners
in China, and he wasted no time in resuming shipments to China with the sale of an SRT-100 during July. We have known Benson
for years and he is a terrific addition to our team. We expect Benson will be able to jump-start our sales not only to China, but
also to other Southeast Asian countries.
"Our preparations for the post-pandemic
environment are ongoing. 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. During the quarter we began sponsoring
a series of online programs for dermatologists, providing a forum for sharing information and practice regimens with one another.
These programs affirm SRT as an alternative to Mohs surgery, as physicians are reluctant to incur the risks of infection and adverse
events during this time. To that end, we were delighted that ASTRO recently recommended SRT as the first-line alternative to surgery
when treating patients with non-melanoma skin cancer.
"Lastly, we continue to work
with Centers for Medicare & Medicaid Services (CMS) in order to revalue our main SRT billing code upward by Jan. 2, 2021.
CMS has recommended the use of Evaluation and Management (E/M) codes for the treatment of NMSC using SRT. The E/M codes were
increased. In the meantime, CMS has requested additional information from the Relative Value Scale Update Committee,
otherwise known as RUC. We will promptly comply with all requests through the proper channels. As a result, we continue to
believe SRT will make significant market inroads commencing January 2, 2021. To date, we have penetrated only about 2% of the
U.S. market, so clearly there is plenty of opportunity, and this COVID -19 impact has clearly identified SRT as a most
valuable tool to treat NMSC as we share the very same patient profile" Mr. Sardano concluded.
Second Quarter Financial Results
Revenues for the second quarter of 2020
were $1.2 million, compared with $7.5 million for the second quarter of 2019. Revenues were adversely impacted by lower unit sales
throughout the quarter due to the COVID-19 pandemic.
Gross profit for the second quarter of
2020 was $0.6 million, or 54.1% of revenues, compared with $4.9 million, or 66.1% of revenues, for the second quarter of 2019.
The decrease in gross profit and gross margin are due to lower revenues.
Selling and marketing expense for the second
quarter of 2020 was $1.2 million, compared with $2.0 million for the second quarter of 2019. The decrease was primarily attributable
to cancellations of trade shows due to COVID-19, a decrease in commission expense due to lower sales and reduced spending on marketing
General and administrative expense
for the second quarter of 2020 was $0.9 million, compared with $1.0 million for the second quarter of 2019. The decrease was
primarily due to a reduction in headcount. The Company's G&A expense going forward is expected to be around $1.1
million per quarter.
Research and development expense for the
second quarter of 2020 was $1.1 million, compared with $1.9 million for the second quarter of 2019. The decrease was primarily
due to a reduction in expenses related to development of the Sculptura system.
Net loss for the second quarter of 2020
was $2.6 million, or $0.16 per share, compared with net income of $0.1 million, or $0.01 per diluted share, for the second quarter
Adjusted EBITDA for the second quarter
of 2020 was negative $2.3 million, compared with $0.4 million for the second 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 $18.9 million as of June 30, 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.
Six Month Financial Results
Revenues for the first half of 2020 were
$2.9 million, compared with $12.9 million for the first half of 2019.
Gross profit for the first half of 2020
was $1.3 million, or 47.1% of revenue, compared with $8.3 million, or 63.9% of revenue, for the first half of 2019.
Selling and marketing expense was $3.0
million for the first half of 2020, compared with $4.5 million for the first half of 2019. General and administrative expense was
$2.2 million year-to-date, compared with $2.0 million for the prior-year period. Research and development expense for the first
half of 2020 was $2.4 million, compared with $3.9 million for the first half of 2019.
The net loss for the first half of 2020
was $6.2 million, or $0.38 per share, compared with a net loss of $2.0 million, or $0.12 per share, for the first half of 2019.
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 June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net Income (Loss), as reported | $ | (2,574,582 | ) | $ | 112,308 | $ | (6,161,688 | ) | $ | (2,008,710 | ) | |||||
| Add: | ||||||||||||||||
| Depreciation and amortization | 147,409 | 152,727 | 300,151 | 281,162 | ||||||||||||
| Stock compensation expense | 130,994 | 158,144 | 286,772 | 312,680 | ||||||||||||
| Interest, net | (39 | ) | (66,824 | ) | (50,140 | ) | (138,844 | ) | ||||||||
| Adjusted EBITDA, non GAAP | $ | (2,296,218 | ) | $ | 356,355 | $ | (5,624,905 | ) | $ | (1,553,712 | ) |
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
second 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.