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):
- Significantly expanded its market opportunity with the
acquisition of two mobile laser companies operating throughout the
State of Florida
- Appointed Benson Suen as Vice President of International sales
and sold an SRT-100™ in China due to his contribution
- New guidelines issued by the American Society for Radiation
Oncology (ASTRO) recommended superficial radiation therapy (SRT) as
the first-line alternative to surgery when treating patients with
non-melanoma skin cancer (NMSC)
- Revenues were $1.2 million, compared with $7.5 million
- Net loss was $2.6 million, or $0.16 per share, compared with
net income of $0.1 million, or $0.01 per diluted share
- Worldwide installed base of SRT systems as of June 30, 2020 was
473 systems
- Maintained customer support via frequent direct outreach and a
series of online programs highlighting the benefits of SRT to treat
of non-melanoma skin cancer
- Cash, cash equivalents and investments were $18.9 million as of
June 30, 2020, compared with $15.5 million as of December 31, 2019
due to expense reduction and cash provided in operating
activities
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 the 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 activities.
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 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 of
2019.
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.
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 – 153112 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™ systems. With its portfolio of innovative
medical device products, Sensus provides revolutionary treatment
options to enhance the quality of life of patients around the
world.
For more information, 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 forward-looking statements can be identified by the use of
forward-looking terminology including "believes," "estimates,"
"anticipates," "expects," "plans," "intends," "may," "could,"
"might," "will," "should," "approximately," "potential" or, in each
case, their negative or other variations thereon or comparable
terminology, although not all forward-looking statements contain
these words.
By their nature, forward-looking statements
involve risks and uncertainties because they relate to events,
competitive dynamics and healthcare, regulatory and scientific
developments, and depend on the economic circumstances that may or
may not occur in the future or may occur on longer or shorter
timelines than anticipated. Although we believe that we have a
reasonable basis for each forward-looking statement contained in
this press release, we caution you that forward-looking statements
are not guarantees of future performance and that 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, among other factors: the
continuation and severity of the COVID-19 pandemic, including its
impact on sales and marketing; our ability to achieve and sustain
profitability; market acceptance of our product lines; our ability
to successfully commercialize our products; our ability to compete
effectively in selling our products and services, including
responding to technological change and cost containment efforts of
our customers; our need and ability to obtain additional financing
in the future; our ability to expand, manage and maintain our
direct sales and marketing organizations; our ability to obtain and
maintain intellectual property of sufficient scope to adequately
protect our products, and our ability to avoid infringing or
otherwise violating the intellectual property rights of third
parties; the willingness of healthcare providers to purchase our
products if coverage, reimbursement and pricing from third party
payors for procedures using our products declines; the level and
availability of government and third party payor reimbursement for
clinical procedures using our products; our ability to effectively
manage our anticipated growth, including hiring and retaining
qualified personnel; the regulatory requirements applicable to us
and our competitors; our ability to manufacture our products to
meet demand; our current reliance on third party manufacturers and
sole- or single-source suppliers, as well as our ability to
successfully transition manufacturing of our products in-house; our
ability to reduce the per unit manufacturing costs; our ability to
efficiently manage our manufacturing processes; the regulatory and
legal risks, and certain operating risks, that our international
operations subject us to; the fact that product quality issues or
product defects may harm our business; the accuracy of our
financial statements and accounting estimates, including allowances
for accounts receivable and inventory obsolescence; any product
liability claims; new legislation, administrative rules, or
executive orders, including those that impact taxes and
international trade regulation; concentration of our customers in
the U.S. and China, including the concentration of sales to one
particular customer in the U.S.; and other risks described from
time to time in Sensus Healthcare's filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K.
In addition, even if our results of operations,
financial condition and liquidity, and the development of the
industry in which we operate are consistent with the
forward-looking statements contained in this press release, they
may not be predictive of results or developments in future periods.
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. You should read
carefully our "Cautionary 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 Golodetz212-838-3777kgolodetz@lhai.com
(Tables to follow)
SENSUS
HEALTHCARE, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
As of June 30, |
|
|
As of December 31, |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
Current Assets |
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
18,414,542 |
|
|
|
$ |
8,100,288 |
|
Investment in debt securities |
|
|
459,295 |
|
|
|
|
7,389,407 |
|
Accounts receivable, net |
|
|
1,086,258 |
|
|
|
|
14,011,180 |
|
Inventories |
|
|
5,462,996 |
|
|
|
|
2,997,120 |
|
Prepaid and other current assets |
|
|
1,683,976 |
|
|
|
|
1,505,175 |
|
Total Current Assets |
|
|
27,107,067 |
|
|
|
|
34,003,170 |
|
Property and Equipment, Net |
|
|
979,022 |
|
|
|
|
1,082,428 |
|
Patent Rights, Net |
|
|
289,158 |
|
|
|
|
337,351 |
|
Deposits |
|
|
101,988 |
|
|
|
|
101,561 |
|
Operating Lease Right-of-Use Assets, Net |
|
|
1,232,568 |
|
|
|
|
1,400,037 |
|
Total Assets |
|
$ |
29,709,803 |
|
|
|
$ |
36,924,547 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
|
Current Liabilities |
|
|
|
|
|
|
|
Accounts payable and accrued expenses |
|
$ |
2,860,885 |
|
|
|
$ |
4,779,435 |
|
Deferred revenue, current portion |
|
|
1,518,255 |
|
|
|
|
1,191,898 |
|
Operating lease liabilities, current portion |
|
|
301,217 |
|
|
|
|
309,524 |
|
Product warranties |
|
|
119,692 |
|
|
|
|
187,454 |
|
Total Current Liabilities |
|
|
4,800,049 |
|
|
|
|
6,468,311 |
|
Loan Payable |
|
|
1,022,785 |
|
|
|
|
- |
|
Operating lease liabilities, Net of Current
Portion |
|
|
965,718 |
|
|
|
|
1,115,529 |
|
Deferred Revenue, Net of Current Portion |
|
|
851,515 |
|
|
|
|
1,339,285 |
|
Total Liabilities |
|
|
7,640,067 |
|
|
|
|
8,923,125 |
|
Commitments and Contingencies |
|
|
|
|
|
|
|
Stockholders’ Equity |
|
|
|
|
|
|
|
Preferred stock, 5,000,000 shares authorized and none issued
and outstanding |
|
|
— |
|
|
|
|
— |
|
Common stock, $0.01 par value – 50,000,000 authorized;
16,575,561 issued and 16,502,353 outstanding at June 30,
2020; 16,540,478 and 16,485,780 issued and outstanding at
December 31, 2019. |
|
|
165,755 |
|
|
|
|
165,404 |
|
Additional paid-in capital |
|
|
43,601,105 |
|
|
|
|
43,314,123 |
|
Treasury stock, 73,208 and 54,698 shares at cost, at June 30,
2020 and December 31, 2019, respectively. |
|
|
(309,901 |
) |
|
|
|
(252,570 |
) |
Accumulated deficit |
|
|
(21,387,223 |
) |
|
|
|
(15,225,535 |
) |
Total Stockholders’ Equity |
|
|
22,069,736 |
|
|
|
|
28,001,422 |
|
Total Liabilities and Stockholders’
Equity |
|
$ |
29,709,803 |
|
|
|
$ |
36,924,547 |
|
|
|
|
|
|
|
|
|
SENSUS HEALTHCARE, INC. |
CONDENSED STATEMENTS OF OPERATIONS |
|
|
|
|
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|
|
2020 |
|
|
|
2019 |
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
1,182,948 |
|
|
$ |
7,476,296 |
|
$ |
2,862,394 |
|
|
$ |
12,912,895 |
|
Cost of
Sales |
|
543,294 |
|
|
|
2,537,102 |
|
|
1,514,238 |
|
|
|
4,657,723 |
|
Gross
Profit |
|
639,654 |
|
|
|
4,939,194 |
|
|
1,348,156 |
|
|
|
8,255,172 |
|
Operating
Expenses |
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing |
|
1,161,845 |
|
|
|
1,995,263 |
|
|
2,952,815 |
|
|
|
4,525,608 |
|
General and administrative |
|
904,103 |
|
|
|
963,641 |
|
|
2,233,660 |
|
|
|
1,976,803 |
|
Research and development |
|
1,148,328 |
|
|
|
1,934,807 |
|
|
2,373,510 |
|
|
|
3,900,314 |
|
Total Operating
Expenses |
|
3,214,276 |
|
|
|
4,893,711 |
|
|
7,559,985 |
|
|
|
10,402,725 |
|
Income (Loss) From
Operations |
|
(2,574,622 |
) |
|
|
45,483 |
|
|
(6,211,829 |
) |
|
|
(2,147,553 |
) |
Other Income
(Expense) |
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
14,485 |
|
|
|
66,825 |
|
|
64,586 |
|
|
|
138,843 |
|
Interest expense |
|
(14,445 |
) |
|
|
- |
|
|
(14,445 |
) |
|
|
- |
|
Other Income
(Expense), net |
|
40 |
|
|
|
66,825 |
|
|
50,141 |
|
|
|
138,843 |
|
Net Income
(Loss) |
|
(2,574,582 |
) |
|
|
112,308 |
|
|
(6,161,688 |
) |
|
|
(2,008,710 |
) |
Net Income (Loss) per
share – Basic |
$ |
(0.16 |
) |
|
$ |
0.01 |
|
$ |
(0.38 |
) |
|
$ |
(0.12 |
) |
Diluted |
$ |
(0.16 |
) |
|
$ |
0.01 |
|
$ |
(0.38 |
) |
|
$ |
(0.12 |
) |
Weighted average
number of shares used in computing net loss per share –
Basic |
|
16,421,928 |
|
|
|
16,368,171 |
|
|
16,414,341 |
|
|
|
16,244,635 |
|
Diluted |
|
16,421,928 |
|
|
|
16,382,918 |
|
|
16,414,341 |
|
|
|
16,244,635 |
|
|
|
|
|
|
|
|
|
|
|
|
|
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