Sensus Healthcare(SRTS) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported fourth quarter revenue of $13.1 million, up from$ 12.6 million a year ago, and full year revenue of $41.8 million, a 71% increase from$ 24.4 million in 2023 [9][24][27] - Net income for Q4 2024 was $1.5 million or$ 0.09 per diluted share, compared to $4.2 million or$ 0.26 per diluted share a year ago [26] - Adjusted EBITDA for 2024 was $8.7 million compared to$ 0.3 million in 2023, indicating significant improvement [29] Business Line Data and Key Metrics Changes - The company achieved a quarterly record of 39 SRT-100 systems shipped in Q4 and 115 for the full year, increases of 18% and 74% respectively [10] - Gross profit for Q4 was $7.1 million, or 54.4% of revenues, down from 62.3% in the prior year due to a one-time discount and higher service costs [24] Market Data and Key Metrics Changes - The company noted that five systems were shipped to international customers in Q4 and ten for the full year, indicating a focus on expanding international sales [11] - The Fair Deal Agreement program has gained traction, particularly among large dermatology groups and private equity-backed practices [8][14] Company Strategy and Development Direction - The company is focusing on expanding its Fair Deal Agreement program, which allows practices to acquire SRT systems without significant upfront costs, thus enhancing customer relationships and driving recurring revenue [15][16] - The company is exploring new markets, including veterinary medicine, which demonstrates the versatility of its SRT technology [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth trajectory for 2025, particularly from the Fair Deal Agreement program, which is expected to contribute meaningfully to revenue in the second half of the year [14][36] - The company is preparing to resubmit its TBI-510K application in the first half of 2025, aiming to diversify its product line and solidify its market position [22] Other Important Information - The company ended 2024 with$ 22.1 million in cash and cash equivalents, with no debt, reflecting a strong capital position [12][29] - The company anticipates that first quarter 2025 sales could be considerably lower than the first quarter of 2024 due to seasonal factors [32] Q&A Session Summary Question: How many units shipped in Q4 were part of the Fair Deal Agreement? - The number of units shipped in Q4 was 39, none of which were part of the Fair Deal Agreement [44] Question: What percentage of new customers are inclined to sign up for the Fair Deal Agreement? - Management indicated that many customers are deciding between purchasing and the Fair Deal Agreement, suggesting a strategic shift towards the latter for long-term benefits [46] Question: Are there any new competitors emerging in the space? - Management noted that the main competitor remains Mohs surgery, and there have been no significant new entrants or dropouts in the market [60] Question: What percent of sales came from the largest customer? - Of the 39 units delivered, 25 came from the largest customer, and they are expected to continue purchasing throughout the year [66] Question: Can you provide more color on the interest from private equity groups? - There are between 12 and 15 major private equity-backed roll-ups, representing about 20% of dermatology clinics, and interest in the Fair Deal Agreement is growing among these groups [70]