Sensus Healthcare reports Q4 and full year 2023 financial results

Sensus Healthcare, Inc. announced financial results for the three and 12 months ended December 31, 2023.

Management commentary
“The strength of our fourth quarter resulted in positive net income not only for the quarter, but also for the full year. This performance reflects the practice benefits of SRT to our customers and the treatment benefits to their patients, as well as our customers’ ongoing adjustment to prolonged higher inflation,” said Joe Sardano, Chairman and Chief Executive Officer of Sensus.

“During 2023 we embarked on several important initiatives to position Sensus for long-term growth,” he continued. “We built inventory throughout the year and used cash judiciously to ensure sufficient resources to offer the SRT-100 Vision (IG-SRT) under a recurring revenue model. For years our customers and prospects alike have been asking for new ways to add SRT to their practices, and we’re delighted to meet their needs with a highly-competitive offering that makes the most economic sense for them. This new option complements our capital equipment sales and fair market value lease models, provides recurring revenue to Sensus and expands our market as utilization of SRT to treat non-melanoma skin cancer continues to increase. During the fourth quarter we made our first placement under this model and have several more in the pipeline.”

Sardano added, “We were delighted to enter into a collaboration with CureRays whereby they will provide oversight for our customers to ensure the utmost efficiency and effectiveness of the dermatology practice. In addition, CureRays will begin clinical studies that are intended to expand the use of SRT into areas beyond skin cancer and keloids. While this is a longer-term goal, it presents enormous growth opportunities for Sensus. We know the leaders of CureRays very well from their work at Emory University, investigating low-dose radiation as a treatment for Covid-19 pneumonia. This collaboration provides our customers with unprecedented world-class support.

“During the quarter we continued to focus on international opportunities as we sold three SRT systems outside the U.S. We reaffirm our goal to enter three to four new geographies over the coming years, building upon our success in international markets where we sold 13 systems in 2023, and our recently added opportunities in Latin America, the UK and Ireland,” Sardano concluded.

Fourth quarter financial results
Revenues for the fourth quarter of 2023 were $12.6 million, compared with $13.1 million for the fourth quarter of 2022. The decrease reflects fewer SRT units sold.

Cost of sales was $4.7 million for the fourth quarter of 2023, compared with $4.8 million for the prior-year quarter. The decrease was primarily related to fewer SRT units sold.

Gross profit for the fourth quarter of 2023 was $7.8 million, or 62.3% of revenues, compared with $8.4 million, or 63.7% of revenues, for the fourth quarter of 2022. The decrease was primarily due to the lower number of units sold.

Selling and marketing expense was $0.6 million for the fourth quarter of 2023, compared with $1.6 million for the prior-year quarter. The decrease was primarily attributable to lower compensation expense, offset by higher tradeshow expense.

General and administrative expense was $1.0 million for the fourth quarter of 2023, compared with $1.4 million for the fourth quarter of 2022. The decrease was primarily due to lower compensation expense in the 2023 quarter and higher bad debt expense in the prior-year quarter.

Research and development expense was $0.7 million for the fourth quarter of 2023, compared with $1.2 million for the fourth quarter of 2022. The decrease was primarily due to the completion of development of a drug delivery system for the aesthetic market.

Other income of $0.2 million for the fourth quarter of 2023 was mostly related to interest income and was unchanged from the prior-year quarter.

Net income for the fourth quarter of 2023 was $4.2 million, or $0.26 per diluted share, compared with net income of $2.8 million, or $0.17 per diluted share, for the fourth quarter of 2022.

Adjusted EBITDA for the fourth quarter of 2023 was $5.7 million, compared with $4.3 million for the fourth 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 $23.1 million as of December 31, 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 $3.0 million as of December 31, 2023, compared with $6.3 million as of December 31, 2022. Inventories were $11.9 million as of December 31, 2023, compared with $3.5 million as of December 31, 2022, with the increase reflecting preparations for higher expected unit sales for 2024.

Full-year financial results
Revenues for 2023 were $24.4 million, compared with $44.5 million for 2022, reflecting a lower number of SRT units sold as customers deferred purchases due to macroeconomic conditions and lower sales to a large customer in 2023.

Cost of sales was $10.3 million for 2023, compared with $14.9 million for 2022. The decrease was primarily related to lower sales in 2023.

Gross profit was $14.1 million for 2023, or 57.6% of revenues, compared with $29.6 million, or 66.5% of revenues, for 2022. The decrease was primarily driven by the lower number of units sold and higher costs charged by vendors in 2023.

Selling and marketing expense was $5.6 million for 2023, compared with $6.3 million for 2022. The decrease was primarily attributable to the Company lower compensation expense offset by an increase in tradeshow expense.

General and administrative expense for 2023 was $5.2 million, compared with $5.0 million for 2022. The increase was primarily due to higher professional fees and compensation expense.

Research and development expense was $3.7 million for 2023, compared with $3.5 million for 2022. The increase was primarily due to expenses related to a project to develop a drug-delivery system for the aesthetic market during 2023.

Other income, net of $1.0 million in 2023 was mostly related to interest income. Other income, net of $13.2 million for 2022 was primarily related to the gain on the sale of a non-core asset.

Net income for 2023 was $0.5 million, or $0.03 per diluted share, compared with net income of $24.2 million, or $1.46 per diluted share, for 2022. Net income for 2022 excluding the gain on the sale of a non-core asset was $11.5 million, or $0.69 per diluted share.

Adjusted EBITDA for 2023 was $0.3 million, compared with $28.1 million for 2022.
MB Bureau