Full Press Release Details
Sensus Healthcare Reports Third Quarter 2023
Revenues of $3.9 million reflect seasonality
and macroeconomic conditions
Conference call begins at 4:30 p.m. Eastern
BOCA RATON, Fla. (November 9, 2023) -
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, 2023.
Highlights from the third quarter of 2023 and
recent weeks include the following:
Management Commentary
"Our third quarter results reflect typical
summer seasonality and macroeconomic conditions," said Joe Sardano, chairman and chief executive officer of Sensus Healthcare.
"While economic challenges continue to affect many dermatologists, we used our strong cash position to build inventory in order
to be able to quickly address demand as our customers adjust to higher inflation and interest rates. Utilization of SRT to treat non-melanoma
skin cancer continues to increase, driven by favorable reimbursement, an aging population and clinical results that are as good, if not
better than Mohs surgery.
"The fourth quarter is off to a good start with participation in the Fall Clinical dermatology conference
and the American Association of Radiation Oncology annual meeting, both in October. The attention our products received at these important
trade shows bolsters our optimism for the future as we enter the year's strongest sales quarter with new features to improve the
use of SRT in dermatology and oncology practice settings," he added. "For example, our HIPAA-compliant Sentinel IT software
allows customers to document and store patient data for clinical, billing and asset-management purposes, and also allows us to track
utilization. We enhanced Sentinel earlier this year by adding Sensus Cloud with its remote monitoring capabilities to track and monitor
SRT systems. This is ideal for better managing dermatology clinics.
"The community hospital channel is gaining
momentum, and we were delighted to sell an SRT-100+ System to Cape Cod Hospital in Hyannis. This was the second system we sold to
a hospital in Massachusetts, and we are optimistic that the Northeast U.S. will be an important market.
"Our focus on international opportunities
continued during the quarter as we sold four systems outside the U.S. We affirm our goal to enter three to four new geographies over the
coming years, building upon our success in international markets, where we sold 10 systems so far this year, and our recently added
opportunities in Latin America, the UK and Ireland," Mr. Sardano concluded.
Third Quarter Financial Results
Revenues for the third quarter of 2023 were $3.9
million, compared with $9.0 million for the third quarter of 2022. The decrease was primarily due to a lower number of SRT units sold
and lower sales to a large customer.
Cost of sales was $1.9 million for the third quarter
of 2023, compared with $3.1 million for the prior-year quarter. The decrease was primarily due to lower sales in the 2023 quarter.
Gross profit for the third quarter of 2023 was
$2.0 million, or 51.0% of revenues, compared with $5.9 million, or 65.6% of revenues, for the third quarter of 2022. The decrease was
primarily due to the lower number of units sold and higher costs charged by vendors in the 2023 quarter.
Selling and marketing expense was $1.3 million
for the third quarter of 2023, compared with $1.8 million for the prior-year quarter. The decrease was primarily attributable to a decrease
in marketing activity, as well as lower tradeshow costs and commission expense.
General and administrative expense was $1.5 million
for the third quarter of 2023, compared with $1.2 million for the third quarter of 2022. The increase was primarily due to higher professional
and bank fees, including costs associated with entering into a new credit facility
Research and development expense was $1.1 million
for the third quarter of 2023, compared with $0.7 million for the third quarter of 2022. The increase was primarily due to expenses related
to a project to develop a drug delivery system for an aesthetic project. The Company recently submitted a 510(k) application for this
product and expects the completion of this project by the end of 2023.
Other income of $0.3 million for the third quarter
of 2023 was mostly related to interest income and compares with other income of $0.1 million for the third quarter of 2022.
Net loss for the third quarter of 2023 was $1.5
million, or $(0.09) per share, compared with net income of $1.8 million, or $0.11 per diluted share, for the third quarter of 2022.
Adjusted EBITDA for the third quarter of 2023
was negative $1.7 million, compared with positive $2.3 million for the third quarter of 2022. Adjusted EBITDA, a non-GAAP financial measure,
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 reasons these non-GAAP financial measures are provided.
Cash and cash equivalents were $20.5 million as
of September 30, 2023, compared with $25.5 million as of December 31, 2022. The Company had no outstanding borrowings under its revolving
line of credit. Prepaid inventory was $3.9 million as of September 30, 2023, compared with $6.3 million as of December 31, 2022. Inventories
were $13.2 million as of September 30, 2023, compared with $3.5 million as of December 31, 2022, with the increase reflecting preparations
for higher expected unit sales during the fourth quarter of 2023.
Nine Month Financial Results
Revenues were $11.8 million for the nine months
ended September 30, 2023, compared with $31.4 million for the nine months ended September 30, 2022, reflecting a lower number of units
sold and lower sales to a large customer.
Cost of sales was $5.6 million for the first nine
months of 2023, compared with $10.2 million for the first nine months of 2022. The decrease was primarily related to lower sales in the
Gross profit was $6.2 million for the first nine
months of 2023, or 52.6% of revenues, compared with $21.3 million, or 67.8% of revenues, for the year-ago period. The decrease was primarily
driven by the lower number of units sold and higher costs charged by vendors in the 2023 period.
Selling and marketing expense was $5.0 million
for the first nine months of 2023, compared with $4.8 million for the same period of 2022. The increase was primarily attributable to
an increase in tradeshow expense and higher headcount, offset by a reduction in commission and advertising expenses.
General and administrative expense was $4.2 million
for the first nine months of 2023, compared with $3.6 million for prior-year period. The increase was primarily due to higher professional
and bank fees, including costs associated with entering into a new credit facility
Research and development expense was $3.0 million
for the first nine months of 2023, compared with $2.3 million for the same period of 2022. The increase was primarily due to expenses
related to a project to develop a drug-delivery system for aesthetic use.
Other income of $0.8 million for the first nine
months of 2023 was mostly related to interest income. Other income of $12.9 million for the first nine months of 2022 was related to the
gain on the sale of a non-core asset.
Net loss for the nine months ended September 30,
2023 was $3.7 million, or $(0.23) per share, compared with net income of $21.4 million, or $1.28 per diluted share, for the nine months
ended September 30, 2022. Net income for the 2022 period included a $12.8 million gain on the sale of a non-core asset.
Adjusted EBITDA for the first nine months of 2023
was negative $5.4 million, compared with positive $23.8 million for the first nine months of 2022.
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 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