Full Press Release Details
Sensus Healthcare Reports Third Quarter
2020 Financial Results
Conference call begins
at 4:30 p.m. Eastern time today
BOCA RATON, Fla. (November 5, 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 nine
months ended September 30, 2020.
Highlights from the third quarter of 2020
and recent weeks include (all comparisons are with the third quarter of 2019, unless otherwise indicated):
Management Commentary
"Our revenues improved sequentially
during the third quarter, although our business continues to be significantly impacted by the COVID-19 pandemic," said Joe
Sardano, chairman and chief executive officer of Sensus Healthcare. "While our physician customers are focused on rebuilding
patient traffic, we have used the past months wisely to lay the foundation for what we believe will be a profitable 2021. We continued
to maintain strong customer ties via consistent outreach and sponsorship of helpful Zoom meetings with topics of interest to our
customers. We continued to affirm SRT as an attractive alternative to Mohs surgery, as physicians are reluctant to incur the risks
of infection and adverse events during this time. Our communications also included the recent American Society of Radiation Oncology's
recommendation of SRT as the first-line alternative to surgery when treating patients with non-melanoma skin cancer. In addition,
a retrospective study was published in October in the Journal of Clinical and Aesthetic Dermatology showing keloidectomy
followed by SRT had an approximate 10% recurrence rate, compared with an expected recurrence rate of more than 80% following surgical
excision alone. We believe that SRT will become a standard of care for keloid treatment as awareness grows.
"With respect to reimbursement for
SRT, we continue to work with the Centers for Medicare & Medicaid Services in order to revalue our main SRT billing code upward
by January 2, 2021. While we do expect an increase in reimbursement, we have been actively engaged in providing information to
the Relative Value Scale Update Committee. Final reimbursement levels will be determined in December. We believe given the efficacy
and patient-friendly attributes of SRT for the treatment of non-melanoma skin cancer, reimbursement levels will be commensurate
with the value of the treatment. We are also looking forward to benefitting from our new director Megan Cornish's advice
as we work with U.S. government entities.
"Our Sentinel IT Solutions software
provides asset management and HIPAA-compliant patient data and storage capability, and we are particularly pleased Sentinel IT
has started to generate high-margin recurring revenue. Although early in its lifecycle, Sentinel holds significant promise as an
integrated feature of the SRT-100 Vision and the new lasers we anticipate launching early next year. In the meantime, we also generated
modest revenue from our new mobile laser business during the six weeks since their acquisitions. We plan new laser rental programs
for 2021, including a monthly rental program, which are expected to grow this business into a meaningful contributor.
"While the U.S. has been struggling
to reopen safely in the midst of COVID-19, we note that China's economy has largely returned to pre-pandemic levels. We are
making solid headway in China, helped by our newly-hired Vice President of International Sales, Benson Suen, and sold two SRT-100
systems there during the third quarter. We believe we will sell two more systems to public hospitals in China during the fourth
quarter. We are optimistic about our prospects elsewhere in Asia, and are working to complete regulatory filing in India, while
finalizing distribution in Taiwan and elsewhere in Southeast Asia," Mr. Sardano continued.
"Research by the three luminary hospitals
engaged to provide data to support our marketing efforts for the Sculptura System had come to a standstill during the pandemic,
but is now poised to resume in the fourth quarter. We also are speaking with at least 10 more hospitals that have shown interest
in Sculptura's capabilities and its unique Anisotropic Radiation Therapy with Beam Sculpting and Robotic Respiratory
Tracking. While breast cancer appears to be the main focus of these cancer centers, we expect Sculptura ultimately to be used for
up to 17 different oncology indications. We are hopeful sales will begin again in 2021.
"Lastly, we have judiciously controlled
our expenses and this careful attention, along with non-dilutive capital, resulted in an increase in cash and equivalents to $16.1
million as of September 30, from $15.5 million as of December 31, 2019. We believe our capital structure is healthy and will support
the resumption of growth we expect in the fourth quarter and throughout the coming year," Mr. Sardano concluded.
Third Quarter Financial Results
Revenues for the third quarter of 2020
were $1.6 million, compared with $5.8 million for the third quarter of 2019. Revenues were adversely impacted by lower unit sales
throughout the quarter due to the COVID-19 pandemic.
Gross profit for the third quarter of
2020 was $0.7 million, or 41.5% of revenues, compared with $3.8 million, or 65.8% of revenues, for the third quarter of 2019.
The overall decrease in gross profit was mostly due to the decrease in units sold as a result of the COVID-19 outbreak while
still incurring fixed costs, depreciation, and amortization expenses.
Selling and marketing expense for the third
quarter of 2020 was $1.0 million, compared with $2.1 million for the third quarter of 2019. The decrease was primarily attributable
to cancellations of in-person trade shows due to COVID-19, a decrease in commission expense due to lower sales and reduced spending
on marketing activities.
General and administrative expense for
the third quarter of 2020 was $1.0 million, relatively unchanged from the third quarter 2019.
Research and development expense for the
third quarter of 2020 was $0.9 million, compared with $1.6 million for the third quarter of 2019. The decrease was primarily due
to a reduction in expenses related to development of the Sculptura system.
Other income was $0.6 million for the third
quarter of 2020, compared with $0.1 million for the third quarter of 2019. The net increase was primarily attributable to a bargain
purchase gain recorded as a result of the two acquisitions, offset by interest expense in connection with the Company's loan
under the Small Business Administration Paycheck Protection Program.
Net loss for the third quarter of 2020
was $(1.7) million, or $(0.10) per share, compared with net loss of $(0.7) million, or $(0.04) per share, for the third quarter
Adjusted EBITDA for the third quarter of
2020 was $(1.5) million, compared with $(0.5) million for the third 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 $16.1 million as of September 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.
Nine Month Financial Results
Revenues for the nine months of 2020 were
$4.5 million, compared with $18.8 million for the nine months of 2019. The decline was due to lower unit sales related to the COVID-19
Gross profit for the nine months of 2020
was $2.0 million, or 45.1% of revenue, compared with $12.1 million, or 64.5% of revenue, for the nine months of 2019.
Selling and marketing expense was $4.0
million for the nine months of 2020, compared with $6.6 million for the nine months of 2019.
General and administrative expense was
$3.2 million year-to-date, compared with $2.9 million for the prior-year period.
Research and development expense for the
nine months of 2020 was $3.3 million, compared with $5.5 million for the nine months of 2019.
Other income was $0.6 million for the nine
months ended September 30, 2020 compared to $0.2 million for the nine months ended September 30, 2019. The net increase was primarily
attributable to a bargain purchase gain of recorded as a result of the two acquisitions, offset by interest expense in connection
with the Company's loan under the Small Business Administration Paycheck Protection Program.
The net loss for the nine months of 2020
was $7.9 million, or ($0.48) per share, compared with a net loss of $(2.7) million, or $(0.17) per share, for the nine months of
Adjusted EBITDA for the nine months ended
September 30, 2020 was $(7.1) million compared with $(2.1) million for the nine months ended September 30, 2019.