Sensus Healthcare, Inc. (NASDAQ:SRTS) has emerged as a leading provider of innovative radiation therapy solutions, particularly in the treatment of non-melanoma skin cancer and keloids. The company's impressive financial performance in the first quarter of 2024, coupled with its strategic initiatives and technological advancements, position it for sustained growth in the years ahead.
Financial Highlights
In the first quarter of 2024, Sensus Healthcare reported revenue of $10.7 million, more than tripling the $3.4 million generated in the same period of the previous year. This remarkable increase was driven by a higher number of units sold, with the company shipping 26 systems during the quarter compared to 10 in the prior-year period. Gross profit for the quarter reached $6.7 million, or 62.5% of revenue, up from $1.6 million, or 47.5% of revenue, in the first quarter of 2023.The company's strong financial performance extended to the bottom line, with Sensus Healthcare reporting net income of $2.3 million, or $0.14 per diluted share, in the first quarter of 2024, compared to a net loss of $1.9 million, or $0.12 per share, in the same quarter of the prior year. Adjusted EBITDA, a non-GAAP metric that excludes the impact of interest, taxes, depreciation, amortization, and stock-based compensation, was $3 million for the first quarter of 2024, a significant improvement from the negative $2.7 million reported in the first quarter of 2023.
The company's strong financial performance in the first quarter of 2024 builds on its solid full-year 2023 results, which saw annual revenue of $24.4 million and net income of $485,000. Operating cash flow for the year was negative $2.1 million, while free cash flow was negative $2.4 million.
Business Overview
Sensus Healthcare is a medical device company committed to providing highly effective, non-invasive, and cost-effective treatments for both oncological and non-oncological skin conditions. The company's primary focus is on the development and commercialization of its image-guided superficial radiotherapy (IG-SRT) technology, which is used to treat non-melanoma skin cancer and keloids.The company's flagship product, the SRT-100 Vision, combines radiation therapy with high-frequency ultrasound imaging, allowing physicians to see and treat skin lesions with precision. This technology has been proven to deliver cure rates of up to 99.1% for non-melanoma skin cancer, making it a highly attractive alternative to traditional surgical interventions.
In addition to its core IG-SRT technology, Sensus Healthcare is also developing a TransDermal Infusion (TDI) system, which is designed to enable the delivery of various therapeutic agents, such as platelet-rich plasma (PRP), in a pain-free and effective manner. The company filed a 510(k) application with the U.S. Food and Drug Administration (FDA) for the TDI system in the fourth quarter of 2023 and is awaiting a response from the agency.
Geographical Expansion and Strategic Partnerships
Sensus Healthcare has been actively expanding its global footprint, with recent sales to new territories including Ireland, Guatemala, and Turkey. The company also made its first sale of the SRT-100 Vision system in Asia, to the Far Eastern Memorial Hospital in Taiwan, a leading private hospital with over 1,000 beds.To further enhance its capabilities, Sensus Healthcare has partnered with CureRays, a group of radiation oncologists, to provide customers with oversight, supervision, and research support for its IG-SRT technology. This partnership is expected to facilitate the efficient and effective deployment of Sensus' solutions, as well as explore new indications for the company's superficial radiotherapy offerings.
Innovative Sales Strategies
Sensus Healthcare has introduced a new sales model, the Fair Deal Agreement, which complements its existing capital equipment sales and fair market value lease options. The Fair Deal Agreement is a recurring revenue model that addresses customers' needs to deploy capital to other areas of their business, while providing them with access to Sensus' cutting-edge IG-SRT technology.The response to the Fair Deal Agreement has been overwhelmingly positive, with the company already entering into several contracts and building a growing pipeline of leads. This new sales model, combined with the company's proven technology and strong customer service, is expected to drive further adoption of Sensus' solutions in the dermatology market.
Robust Demand and Growth Opportunities
The demand for Sensus Healthcare's solutions continues to be strong, as evidenced by the company's impressive first-quarter performance. The company's primary market, the U.S. dermatology sector, is poised for growth, with an estimated 1 in 5 Americans expected to develop non-melanoma skin cancer during their lifetime.Furthermore, Sensus Healthcare's technology has experienced a 27% annual growth rate in Medicare claims over the past six years, indicating that IG-SRT is gaining traction as a preferred treatment option for non-melanoma skin cancer. The company's ability to offer multiple purchase options, including the new Fair Deal Agreement, positions it well to capitalize on this growing demand.