Q4 2020 Sensus Healthcare Inc Earnings Call
For in the future are forward looking statements. The forward looking statements on management's beliefs based on currently available information Sensus healthcare undertakes no obligation to update or revise any forward looking statements, except as required by law. All forward looking statements are subject to risks and uncertainties, including the continuation on severity.
80 of the COVID-19, pandemic and its impact on sales and marketing as described in the company's forms 10-K and 10-Q.
During today's call. There will also be reference to certain non-GAAP financial measures Sensus believes these measures provide useful information for investors yet should not be considered as a substitute for GAAP, nor should they be viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non-GAAP to GAAP results is included in today's financial.
<unk> press release with that said I'd like to turn the call over to Joe Sardana Joe.
Thank you Kim and good afternoon, everyone. Thank you all for joining us and once again I Express my hopes that you have all remained healthy and are keeping safe in that before too long, we'll be able to put the COVID-19 pandemic behind us.
We are pleased with our fourth quarter revenues of $5 $1 million, which were well above our third quarter revenues of $1 6 million. This increase reflects the gradual reopening of the economy in certain geographic areas as well as our continued dedication to our physician customers and preparation.
For resumption of normal practice activities.
While our business continues to be impacted by the pandemic the cautious reopening of regional economies allows centers to resume sales.
We were delighted to ship 18, SRT systems during the quarter, including 12 domestic direct sales and three to China.
On a year over year basis, our revenues continued to reflect the impact of the pandemic as compared to Q4, 2019, which were well below the $8 5 million. We recorded a year ago. We continue to take all the steps necessary to keep sensus on firm footing and prepare our company for rapid <unk>.
Growth when the pandemic subsides.
This is a credit for the entire sensus team for their cooperation and discipline and adhering to our strict financial guidelines established at the beginning of 2020.
To that end, reflecting our keen attention to operating expenses, we generated net income of $1 million for the quarter, which is a positive finish to a very challenging year. We are cautiously optimistic that markets will show modest recovery. During the first half of 2021, and we plan to step up select high.
<unk> and our sales organization.
During the fourth quarter receipt, we received news that we had been waiting many years to receive the centers for Medicare and Medicaid services or CMS increased reimbursement for the main SRT code, along with meaningful increases in evaluation and management or A&M codes.
We are delighted with the progress following years of lobbying specifically CMS issued new reimbursement amounts for CPT treatment code 77, 401, and <unk> codes. The combination of these increased values provides SRT users as much as a 50% increase.
For the reimbursement values of the past several years. In addition codes were revalued upward for the ultrasound capability in our SRT 100 vision systems we.
We are delighted that our physician customers will now be more fairly reimbursed for a procedure with outcomes at least comparable to surgery without the potential complications. We also believe new reimbursement amounts will catalyze additional physicians physician interest in adding SRT to their treatment.
Armamentarium, especially after working through the pandemic when surgeries were halted while SRT units continued to treat we are now tasked with educating our market of these new codes to date, we have penetrated only about 2% of the U S market. So clearly there is plenty of upside for growth.
We are also delighted that so many key opinion leaders went the bad for us with CMS highly highlighting the efficacy and safety of SRT. The American cutaneous oncology Society. In particular was most helpful working alongside sensus with the AAD and CMS, we have a lot.
Of people to thank for believing in us and our technology.
Also during the fourth quarter there were two separate peer reviewed publications highlighting the efficacy of SRT against the recurrence of keloid scars. The first study I discussed on our last conference call in November that one showed keloid SME followed by SRT had an approximate 10% recurrence.
Compared with an expected recurrence rate of more than 80% following surgical excision alone. The other was published by the journal of clinical and aesthetic dermatology and it was a retrospective study is showing that a single low dose of SRT. Following excision of 14 keloid had an approximate six.
Two for 5% recurrence rate at six months and for the 10 patients available for follow up follow up at 24 months, none of the key Lloyd's had recurred. These are tremendous data points that impact people with skin color. They finally have a choice to their keloid problems.
We also exhibited virtually at the South Beach Symposium held in early February over 1000 Dermatologists were registered for this for day conference with a faculty of renowned physicians presenting the latest in clinical dermatology.
Although COVID-19 impacted sales. It also presented an opportunity for sensus to offer treatment for pneumonia in COVID-19 patients by delivering superficial radiation therapy to the lung during the fourth quarter, we shipped an SRT system for all the name hospitals in Teaneck, New Jersey, Holy name has been at the forefront of Coke.
With 19 therapy since the start of the pandemic, we expect to receive data on the efficacy of our system for this use during the second quarter and evaluating this opportunity to help our frontline workers and patients history showed a very successful approach to treating pneumonia with radiation going back almost 75 years.
We engaged an outside physics laboratory to evaluate our radiation and provide us with a non biased opinion on whether or not a radiation could penetrate the body enough to treat the lungs. They published a paper that provided us the confidence that our SRT technology was capable.
In presenting this finding to Holy name Medical Center, the agreed to acquiring the assets SRT 100 vision to treat the lung. This is a hospital in Teaneck, New Jersey that has been at the forefront of the epidemic, while performing drug discovery with the major drug companies, who now have FDA approvals, our SRT systems are well.
Suited for COVID-19, because they are portable and allow for bedside treatment in the ICU rather than short transporting patients to a cancer treatment center for radiation therapy, and possibly exposing vulnerable oncology patients to the virus.
We will introduce a family of for FDA cleared aesthetic lasers powered by our Sentinel. It solutions software in April Central provides asset management, and HIPAA compliant patient data and storage capability and also contains the software necessary to support shared service models, including direct.
Patient billing.
We will be integrating these lasers into our sensus laser aesthetic services. This is our mobile aesthetic laser division that we expect will become a meaningful source of revenue growth in particular, as we roll out disruptive rental strategies during the first quarter of 2021.
These strategies are designed to generate consistent revenue for sensus, while providing physician customers with access to multiple different lasers. We're also looking at expanding our mobile aesthetic laser business beyond Florida via strategic transactions Sentinel has started to generate high margin recurring revenue.
Although still in its lifecycle Sentinel hold significant promise as an integrated feature not only the new lasers, but also of the SRT 100, plus and SRT 100 vision.
Turning now to our international efforts business in China picked up during the fourth quarter with the sale of three systems.
As of January one 2021, we have new distribution partner for China, and Hong Kong, our new VP of International sales has developed an extensive network of prospects in China, and we're optimistic that China represents an excellent growth opportunity. This year, we will be engaged with the Chinese health authority and renewal.
<unk> license for another four years this will be an expensive endeavor and require almost the entire year to accomplish this will be our third renewal. In addition, we are finalizing a new distributor in Taiwan and are preparing to sculpt tourer for the regulatory process in China sculptor is our Anessa Tropic radiation therapy.
Beam sculpting capabilities and robotic respiratory tracking for up to 17 different indications.
We announced earlier this week that we were granted an important U S patent for sculpt tourer, which describes the method of beam splitting and sculpting. This patent covers 31 separate claims dealing with how our electron beam generator is able to sculpt and direct X rays precisely where they're wanted the technology.
That's embedded in our sculpt tourist system differs from conventional inter operative radiation therapy, and its ability to control the radiation beam and has a longer useful operating life.
<unk> is the first device in the world with this capability and we believe it opens new doors for the delivery of radiation to treat solid tumors of all kinds. In addition, there may be used for this technology and devices other than sculpt tourer as well providing potential licensing opportunities as I mentioned last quarter, we've been making solid progress.
Yes, with commercializing the sculptor system and showcasing its unique technology capabilities when the pandemic stopped us on our tracks.
Also researched by the luminary hospitals engaged to provide data to support our marketing efforts for sculptor came to a standstill, while breast cancer piece appears to be the initial focus of these cancer centers. We expect sculptor ultimately will be used for up to 17 different oncology indications.
We are hopeful sales will resume later this year.
With that I'll turn the call over to Javier around Paula our CFO, who will go over our Q4 and full year financial results in more detail Javier.
Thanks, Joe is a pleasure speaking with all of the other software known as <unk>.
John mentioned revenue for the fourth quarter of 2020 were $5 1 million and this compares with revenue up eight 5 million for the fourth quarter of 2019 rent.
Revenue for the fourth quarter of development on 'twenty were derived from the sell up 18, SRT systems, including 12 direct domestic sales and play systems to China as well on service contracts and our normal other laser business day.
The decrease from the fourth quarter of 2019 reflects a lower number of units sold due to the impact for COVID-19.
Gross profit for the fourth quarter of 2023.
$3 2 million for 63% up revenue compared with $5 5 million for 64% of revenue for the fourth quarter of 2019.
Selling and marketing expense for the fourth quarter of 2000 on 'twenty.
$1 3 million down from $2 5 million on for the fourth quarter of 2019.
The decrease was primarily due to a reduction on trade show expense on a lower sales Commission.
General and administrative expense for the fourth quarter of 2020 watts for $8 million compared with $1 1 million for the fourth quarter of 2019. The decrease primarily reflects the impact from bad debt expense in 2019.
Research and development expense for the fourth quarter of 2021 8 million compared with <unk> 9 million on for the fourth quarter up to about that on my team.
The slight decrease was mainly due to lower expenses related to this growth towards the development as commercial production started.
Net income for both the fourth quarter of 2020 on 2019 was $1 million or six cents per diluted share.
Adjusted EBITDA defined as earnings before interest taxes, depreciation amortization and stock compensation expense for both the fourth quarter of 2020 on 2019 was one.
Many of them.
Turning briefly now to the full year financial results.
Revenue for 2000 on twin were $9 6 million and this compares with revenue up $27 $3 million for 2019.
The decrease was primarily due to the lower of units sold.
Salt of COVID-19.
Selling and marketing expense decreased to $5 3 million for 2020 from $9 1 million in the prior year, primarily due to cancellation of upgrade sales due to COVID-19, I'd be curious and commission expense due to lower sales and reduced spending on marketing activity.
General and administrative expense was unchanged at $4 million for both years.
On development explains whats for $2 million for 2000 on twin compared with $6 4 million for 2019.
The decrease was primarily due to lower spending assets projects enter commercial production during 2020.
The net loss for 2020.
$6 8 million for 42 cents per share compared with a net loss for 2019 of $1 7 million for 10.
Per share.
Adjusted EBITDA for 2020 was negative $5 8 million compared with negative $8 million for 2000 on my team.
Cash and investments was $14 9 million as of December 31, 2020.
<unk> with $15 5 million as of December 31, 2019.
Company had a small long term debt and no outstanding borrowings under its revolving.
Credit both during 2020 and as of December 31, 2000 on 'twenty.
We're confident that with our continued attention to expenses along with current cash on access to all of our existing revolving credit agreement, we continue to be financially well positioned to support our expected growth during 2021.
That I will turn the call back over to Joe.
Thank you Javier I am so very proud of our staff and the way we kept our focus on customers and patients throughout the pandemic I think you can see from our activities that the team continues to push the envelope in many areas. We believe the worst is now behind us and that we are well positioned.
<unk> to resume the growth trajectory that was interrupted almost exactly one year ago. We're looking forward to 2021 with higher reimbursement amounts for SRT and elevated presence for Sculpsure and commercial sales as well as the contribution from our newly acquired companies Sensus laser aesthetics solutions.
I'll remind you that our products have enormous room to grow our SRT systems are well positioned in a large market consisting of some 14000 dermatologists and 1000, most surgeons in the U S representing more than 7500 offices and growing not to measure a further 6500 plastic surgeons and <unk> 5500 radiation oncology.
As we.
We provide a compelling alternative to surgery for millions of patients and arguably the only solution to prevent the recurrence of keloid following surgical excision with those comments I'd like to thank you for your time and attention and now operator, we are ready to take questions. Thank you.
Thank you ladies and gentlemen, if you do have a question or comment it is star one on your Touchtone telephone at this time.
One for any questions or comments.
Our first question will come from Alex Nowak at Craig Hallum Capital.
Hey, good afternoon, everyone. This is trend Mccarthy on for Alex for.
First off I just wanted to congratulate you guys on getting the increase in reimbursement from CMS that was that was great to see.
And on trend.
One quick question on that front, what is the percentage of like.
What percentage of the beat this quarter would you attribute to people getting excited for this.
The fourth quarter I would have to say that it was very very little only because we couldnt announce it marketed or anything because it didn't become.
Wasn't announced by CMS until the very first week of December so it didn't give us a whole lot of chance.
Use it as a selling tool most of our sales were earlier in the quarter.
And then of course CMS doesn't make an announcement that says oh by the way everybody in dermatology you have an increase in SRT.
Reimbursement, we have to physically take that bull by the horns and go out into the market and now tell the customer is exactly or the prospects exactly what that reimbursement is.
We have to educate them and train them on our own. So that's a lot of heavy blocking and tackling.
How long do you expect for that to really start to ramp and start to materialize if growth.
But we have.
Partners, such as Pinnacle, who will use as our main consultant on this where customers can call them up and.
And find out exactly what that reimbursement is but we always projected that the first six months of the year is going to be the heavy part.
And hopefully that will start seeing some.
Some revenues as a result of that in the second half it will see business picking up in the second half, but again a lot of it is reliant on the pandemic and how much how aggressive the dermatologist theyre going to be and within their own practices.
Got it that's helpful. Just pivoting real quick over to the recurring side.
You guys are expanding these rental businesses to begin offering SRT 100 on a recurring basis.
What is the latest with that and also the latest on expanding into other rental markets.
Well.
We acquired these two companies because of the opportunity, we felt and growing that rental business not just to have daily rentals or procedure rentals.
But also weekly monthly and yearly rentals and we've come across several prospects that are also interested in superficial radiation therapy is being part of those rentals now theres a lot of things that you have to go through to satisfy the regulatory people on each and every one of the states, but the fact that there is interest there I think.
A good lead in with a lot of these customers and we will see where they end up going whether they go with a rental or whether they actually buy because of the new reimbursement codes that are out there, but either way. It gives us another opportunity in another topic to discuss with potential prospects, who may not have been interested in the past. So this is an exciting.
<unk> opportunity for us.
And with regard to the laser rentals, we think that organically, we're going to see some business increase in debt as we get back to where we were pre COVID-19.
That might happen sooner than not because of the type of patients that we have involved there as well as the fact that it's a different business model. So we're looking forward to developing that business too.
Richer environment.
Got it thanks for the questions.
Thank you Trent.
We'll move next to Scott Henry at Roth Capital.
Okay.
Thank you good afternoon, and a really strong quarter, Joe congratulate thank you Scott.
We did have a couple of questions.
First.
We're a couple months or almost two months into Q1.
I know you tend to be strong in Q4 anyway.
How should we think about Q1 sequentially from these levels at Q4, I don't know if I would expect it to match this but.
We think perhaps it will be stronger than what we've seen in Q2 on Q3, just wanted to get your thoughts on that.
Number one it better be stronger than Q1 Q3 because.
We're planning on it and.
Listen it's a very very good question.
It's difficult to answer but we.
We see our market opening up a little in those regions, where there are a majority of areas in the country that are open in spite of COVID-19 versus the major lockdowns that exist in other parts of the country.
And we've got another point.
Of topic to discuss and that being the new reimbursement codes. So we're going to go through a series of zoom meetings with prospects and our existing customers to talk about this it's really not us, but it's the American cutaneous oncology society will be hosting this with the presentation.
To let everybody know what those reimbursement codes are and then of course pinnacle is the main focus of our customers where they can follow up with with those folks on a regular basis and understand exactly what that reimbursement is so we're hoping that this catches on sooner rather than later and we see people.
Our interest, but again to what extent that theyre going to buy.
To push real hard to do a whole lot better than we did in the previous quarters, one two and three of last year and hopefully replicate what we did in Q4 for for 2019, it's a tall order and.
I don't think anybody can tell us that everything is going to be normal anytime soon but we're going to push as hard as we can.
Okay, great. Thank you for that color and then also on the income statement.
Gross margins bounce back strong in Q4.
I'm sure a lot of that was volume, but do you think we could maintain gross margins at that level, assuming debt do you do still have a bit higher volume than we saw on the first part of 2020.
The last for five years, the sales team has done an excellent job in maintaining our average selling prices, including whatever we sold during the Covid period, and so our customers are absolutely realizing how important this technology and how valuable this technology is and it's not a question of the <unk>.
Price they pay it's more of a question is how do we support them on how do we get patients because theres plenty of patients out there. So I think that there is a value that's been established for the product and I think that we should be able to maintain those margins of between 62% and 65% as we have had for the last for $5.
Six years, and it's just a matter of how many units can we sell in order to stay up there thats the big deal as we've seen this quarter versus the previous quarters.
Okay and then.
Operating expenses.
If we combine the three categories together they bounced around a lot in 2020.
But the question is but as a whole if we take the yearly operating expenses for 2020 would you expect for 2021 to look similar.
The neat thing of what <unk> and the timing of the R&D that we've had for the past.
Several years is the fact that.
I would say, 90% to 95% 99% of the R&D is behind us because those products have been developed.
Not only sculpt toura, but also the development of lasers that were going to be introducing around April one so.
My expectation I think Javier I will let you discuss it as well we went from $6 5 million in 2019 to about $4 5 million in 2020, and I'm, hoping that we should be considerably a whole lot less than $4 5 million.
In 2021, what I am looking forward to spending a whole lot more money on sales and marketing expense, especially in.
And the commission side, we want to we want our people to make a lot of money, which means that they're going to be selling a lot of product.
That's correct Joe.
Selling and marketing to be a little bit higher for us on 'twenty, one DNA will sustain our debt.
On a $4 million and then R&D definitely we want to push that on two.
So for a decrease from deduct on in 'twenty as well.
Okay, great and in the past you've broken out SRT, one hundred's versus the vision, it's not that critical but I don't know if you have those numbers available.
Javier I think you have those numbers.
I don't have the numbers, we ship out eight.
Vision systems in Q4.
Okay.
Great then that should do it for me. Thank you for taking the questions. Thanks, Scott appreciate it.
We'll take our next question from Anthony Vendetti of Maxim Group.
Thanks, Good afternoon.
Okay, Anthony how are you.
Very well thanks.
Just you mentioned.
On the last question. There you brought up the fact that theres going to be some some new lasers.
Probably around April one can you talk about can you just talk about that are those proprietary sensus lasers is that going to complementing the rental strategy that debt you have.
On that just a little more color on that.
Sure.
Ill describe.
The lasers to you we will have a cotwo laser we will have a Q switched laser.
We will have a pico laser as well as in IPL laser I am not going to get into the actual specifics of each one but they are pretty common lasers that'll be out there they will be available to sell by our direct sales team that's already selling SRT and talking to the same customers and we will integrate.
These systems over a period of time to be included in our laser services Division, which is providing the rentals. The key thing as we've been talking about with all of these lasers was implementing the Sentinel program into this and the Sentinel feature which provides will be exclusive to <unk>.
Our company in this market, whether it's <unk> lasers that being.
On the solutions piece that provides an asset management program to all of our customers. So a lot of other customers that have multiple sites can manage each one of these lasers as well as us RT remotely from a workstation a laptop.
IPad.
IPhone or even on I watch and so all of this and that was the the length of time that it took to integrate these because a lot of these lasers just didn't have that capability and that was the big things that are.
Our.
Engineering team has been doing over the last couple of years. So we're excited to be bringing these out we do have models that we're presenting.
Our marketing team will be taking pictures developing brochures and having it already for for an April one launch.
We can do it sooner we could but we are.
Looking at April one as being a right thing to do because we will have all the support data behind it.
Excellent Okay, great and then.
On the on the 18th system shipped 12 domestic three China.
The other three.
Obviously, we'd have to be international.
Well.
Yes.
What other countries did you did you sell into I'll, let Javier talk to that because the out of the 18.
Two were not counted as revenue, but they were shipped.
They will be counted as revenue for this quarter and one of them was a vision.
One of them had gone to a hospital, which I think everybody understands they don't quite move as fast as a dermatology practice so.
Yes.
I'll, let go ahead Javier.
Let me ask when it goes in for Us.
So in Q4, which is aviation system of which we had to defer one three <unk> that went to China, and then seven SRT I wish shape for the U S domestically and other.
Seven.
We also defer one of them due to.
Assets in clubs up on all of that.
So a total of 18 units shipped in the quarter.
Okay excellent so.
Maybe just.
Joe If you could talk a little bit then just to shift gears to the COVID-19.
What you're doing there in Teaneck, New Jersey, do you see that as as.
On opportunity commercially beyond COVID-19, assuming obviously COVID-19.
Starts to fade somewhat over the rest of 'twenty, one do you see debt as an opportunity though for for treatment of pneumonia post COVID-19, how do you look at that opportunity.
It's an excellent question and I'm, hoping that you are right that the COVID-19 in 2021 gets behind us, but here's here's what we did and we started this about six seven months ago as far as looking at this.
Again, we look back on the history books on the predecessor to our SRT product was the ortho voltage unit. The ortho voltage unit did everything that we thought it would do because that was the ultimate radiation device at that time and one other thing is the primary way to treat pneumonia in the lung was radiating the long and the ortho voltage unit was the <unk>.
Primary source of doing it when drugs started coming into play and other medications to help clear lungs, and pneumonia and things like that.
In the Seventy's it became lesser used obviously and so.
So therefore people started going to those other medications if you will to clear up pneumonia. When we started looking at COVID-19.
We said well if it was impactful for pneumonia in the long because thats. What COVID-19 is it's just an expansion or extension of pneumonia I'm wondering if our radiation would be helpful and so we contracted with an independent outside.
Physics organization, who took a look at our radiation and the penetration capability of our system and said you know you're radiation would penetrate into the lungs and provide.
An equal distribution of radiation sufficient enough to clear pneumonia in the lung and so they ended up because of that they ended up writing an independent paper on that and so we took that paper and because of my past experience with.
Zero.
<unk> medical systems.
Teaneck, New Jersey was an important part of our life. When we introduced positron emission tomography back then and pet scanning and one of the chief investigators who is still there and in charge of one of the major departments I discussed it with her and she said where the epicenter.
COVID-19 here in New Jersey, we're just overwhelmed in England dated with Covid patients and we would be very very happy to take a look at anything that might be able to help us and she recalled.
The fact that.
Pneumonia was treated with with the older ortho voltage units so with that being said, we made presentations of the independent study two.
The doctors or the hospital the radiation oncologist the Pulmonologist radiologist.
The administration of the hospital and they came back after the presentation and said you know anything is worth it if we can save a life. It's worth it. So we want to do it. So now the next thing that we had to come up with was.
How do we find.
The fact that we need to have a shield and so we had to find a place somewhere in the world that can manufacturer on mobile shield and this is what I am going to say that I think is very very important with this was another part of why we were looking into this we had discovered that theres about a dozen facilities in the United States headed up by Emory.
The James Cancer Center at Ohio State University, Miami Cancer Institute, they're doing studies under an IRB and they were using radiation low dose radiation to treat COVID-19, However that low road low dose radiation came from their linear accelerators and their cancer centers and if you go.
Through the papers that have been published by them. So far there is not a large amount of patients that they've done and the reason being is they've seen this as a major obstacle in bringing COVID-19 patients which is highly infected.
Two an area or a department filled with cancer patients, whose immune systems are usually at the lowest and infecting those rooms with COVID-19 and they found out debt.
Cleaning those rooms, disinfecting, those rooms, which puts downtime on those rooms impact their cancer centers and if they could only find a way to treat the patient bedside and where the solution if it works.
And so it was easy for me to call.
A trusted physician that we had past experiences with <unk>.
See if this thing would work and because of the number of patients that they had they said they wanted to work at because this makes a lot of sense. They were originally invited to be part of that initial study and there are pulmonologists refused because they didn't want those patients from the cancer Center.
So I don't know if this will be the solution. They will decide if it's a solution, but it's certainly an opportunity and then the last question that you had how would this work I.
I don't think Covid is going away I think COVID-19 is going to be part of the new standard it's going to be part of our life for the rest of our lives. There was an article I think yesterday or today that said since Covid has come the flu has gone away there arent any any flu symptoms. So it's COVID-19 now instead of having an annual <unk>.
<unk> our vaccine for the flu, we're going to have two injections for the COVID-19 from either Pfizer or someplace else.
And if they can get it down to one word sufficient that'll be fine, but in my opinion.
If you're in an ICU and you've got a problem irregardless of the vaccine because these are for patients that the vaccine didn't help it could be possible at every hospital in the world needs. One of these machines because this is a pandemic thats world worldwide.
So this is a very inexpensive way of treating COVID-19 patients around the world. So if it works, it's going to be big if it doesn't work. It's it's a good try.
It's just an extra shot on goal Okay, and then just lastly on best way to put it in Euro hockey Guy.
Yeah.
Sure sculpture now.
Sure.
We're into 'twenty, one and I agree with you I don't think Covid is going away, but hopefully it starts to circulate it at a much lower level for the rest of this rest of this year vaccination.
And but for sure.
Okay.
For you that we've talked about for a while in 2020.
GAAP revenue sales for that.
Do you feel like the pipeline for that has has come back.
How should we think about sculpsure in 2021.
We had a face to face visit with our team and the <unk> team.
In January we.
Our management team decided to go and see them regarding all of the engineering that we were looking at and we had a face to face conversation based on obligations on both sides to meet.
Sure.
We see in their faces in their eyes, and they've indicated they are more anxious than ever to get going with the sculpt tourists system.
On the pandemic is still impacting their resources.
But they also seeing it subside and getting more involved in the sculpt tourer I would have to say from my own predictions will follow up with meetings with them, but my own sense is that I think that we might see some movement on their side in the second quarter I am thinking that we will have patients treated in the third quarter and I'll.
I'll also tell you that they consistently are getting calls from other sites wanting to know what's going on because of their interest.
Just this week alone I've had two separate phone calls with other facilities in the country that are wanting to know what's going on with this.
Even for the point, where they want to push for a zoom meeting presentation not just from us, but they also want to have the ability to talk for the U Penn people and these are things that I think are going to be conducted over the next three to six months and I think that they're anxious to get going and I think that they will get going and I'm thinking that we might.
Have an opportunity to make one extra sales this year, which I think would be huge for us. So we're pushing for that because I think we've got prospects that are interested.
Okay excellent.
Thanks, Joe Thanks, Javier I appreciate it I'll hop back in the queue. Thanks, Thanks, Anthony Hope to see you soon.
And ladies and gentlemen, if you did have a question or comment it is star one on your telephone keypad again Thats star one for any questions or comments. We will go next to Ben Hayner at Alliance Global partners.
Good afternoon, gentlemen, thanks for taking the questions.
Thanks for being on.
Yeah No problem. The first for me just with the.
The system you have out there on Holy name.
And kind of.
It was great to hear the background on the kind of the Orthovoltage and how you came across the opportunity and we're able to.
Do the research and get it out there with the pass relationship but have you seen on the other incoming interest from folks once that was announced and then kind of a light bulbs go off on other folks' his head.
Yes and.
We have an opportunity at several other centers.
Not as.
How can I put it not.
<unk>.
Reputed as as Holy name, but just to give you an idea in rural Tennessee.
The regional community Hospital, that's very very interested in.
They talk to people at holding names because we connected them there and.
They can't wait for results from holding names because they're inundated with a lot of COVID-19 patients and I think we know that within the last for five months. There has been a major spike in Tennessee, whereas before it was pretty quiet, but this is a hospital that has 6700 patients.
In ICU, where they've turned to other floors into ICU, so huge opportunity there.
On opportunities that other hospitals that are awaiting to see how this turns out because it's not optimum to be treating those patients in the cancer Center and this is something that I think everybody wants to see successful.
That makes sense.
And then you mentioned the coming on for the mobile Shield does that help you with.
State regulators in other jurisdictions or in other states.
With just the regular type installs.
We hope we hope.
But you have to remember that because of Covid a lot of state regulators and we have to check with the state regulators of New Jersey has softened a lot of the regulations due to COVID-19. So I don't expect that it will be there forever, but I think debt for this time period because of Covid.
19, and the urgency I think that they are allowing us to do this will this be a standard I hope it becomes a standard the physics and the physicist team at Holy Holy name is looking at this as a very very sufficient they've done the studies of the unit because it was it was delivered last week install this.
This week and they've done some of the testing on it.
And so they are finding that any radiation scatter is no worse than having it in the room, so far so far but when youre using it with ICU patients they want to get to the patient and.
Things could change, but over time, we will find out the data will be accumulated and we'll put it together and we'll see where it goes but certainly.
On an opportunity, but I'm also going to give you at this point the cost of that mobile unit.
Was almost more than what it cost to do on the entire room.
Okay.
So it would be more of eliminate the headache with the regulators rather than cost savings.
Yes potentially.
This potentially so could it be something that we do on the hospitals, yes, I think that can be done on the hospitals can it be done in private setting probably not.
Okay. Okay, that's fair and then you.
You mentioned these disruptive Ren.
Our rental strategy, coupled new rental strategies that you have.
Can you give us any more color on.
How disruptive term applies on.
Not.
We expect to hear more on on that front.
Well the disruptive disruption comes from.
Our customer doesn't have to buy anything they don't have to put out cash to buy a medical device and therefore, if they rented.
What does that do so if were provided with a service that pace X by them and we say, okay. We have a fleet of 345 different lasers that they have access to for.
For their various treatments that they have if they had to buy those for five lasers. You are looking at probably a 150 to $300000 for them to outlay for those for fiber lasers, we would have a an agreement with them that pays X dollars per month over a two or three year period that certainly wouldn't come close.
To that 150 to $300000 periods. They wouldn't have to worry about service contracts. They wouldn't have to worry about downtime with breakage and things like that and they would have a fleet of lasers that they are at their fingertips whenever they need it and I think that thats, an opportunity for them and I think thats, where the disc.
<unk> comes in it's a great way for us to avoid the competition that exists and I think some of you are very knowledgeable about the laser business has tremendous competition with all the companies out there we want to provide a different thing for our customers and especially the customers that have multiple sites. We think that we can provide.
Them with something unique.
Sure.
Makes sense.
And then just finally for me.
The mobile van.
Opportunities that youre looking at outside of Florida is that.
On a single state in multiple states.
Kind of color you might be able to provide there would be hell.
And then <unk>.
That's on the quarter guys on the progress on thank you Ben appreciate it.
One of the opportunities that we've already looked at three markets that we're very interested and knock on the name what those markets are but it's clearly.
Around the cluster of SRT machines that we have in those areas those pockets why because we have already have a customer base. We have good relationships with those customers. So we want to further develop and expand those markets with other technologies. After all those other doctors that asked us I wish I could buy more stuff from you on the answer was lasers.
So we want to expound on that so we've already identified several operators in those areas that might be good fits for us we're not looking for the biggest we're looking for the best we want the best management.
Volume and more importantly, we want the ones that have the best relationships with their customers, we strive on those relationships and we enjoy those relationships and we want to strengthen the Moreover, we can.
So those are the things that we're looking at and.
We're seeing signs of.
This organic growth and building, what we already have and if that continues.
We probably want to make some things happen and start conversations in the second quarter to make these things effective in the third quarter. So that at least we have an impact on our revenues for this year, because we like the business.
Sure.
No that's definitely helpful. On again, thanks for taking the questions gentlemen.
Thanks, Ben I appreciate it. Thank you. Thank you.
And just one final reminder, it is star one for any questions or comments.
Well, maybe next to James Terwilliger at Northland Securities.
Hey, Joe can you hear me.
Yes, Sir James how are you doing out there in Memphis.
I'm doing well first of all congratulations on a on a fantastic quarter, considering what you were navigating with everything going on I've been jumping between calls so I apologize if I've missed a lot of things have been covered I think have been great questions. On this call I may have missed a few things, though on the reimbursement side, you've talked about <unk>, 7%.
401 in PNM evaluation and monitoring and the percentage increase can you quantify what's the what's the dollar increase I mean, my thesis is that clinicians should be gravitating to the sorry for the clinical thesis, but it's always nice to have.
Reimbursement tailwind reimbursement increase.
Pushing the sales so to speak as you move into 2021, what is the and you have multiple treatments. There. So what is the dollar increase can you back into that.
Yes, I can go to that and what I will say is this realize that in various parts of the country. There are various.
Levels of that revenue so it could vary anywhere between $1 and $5 from what CMS has provided as an average across the country. So it could be a little bit more and it could be a little less percentage wise, it's about a 67% increase in 770 <unk> hundred one versus what it was.
Was the previous several years and when it comes to the A&M codes, they've gone up 30%. So the combination of the two <unk>.
Pending what protocols the Doctor brings together for the number of treatments. He is going to plan or she is going to plan on patients.
It's approximately 50% increase across the board. So in the last several years, we've seen an average reimbursement being somewhere around $2100 for <unk>.
On average.
Treatment plan of about 14 or 15 fractions.
And so now youre looking at somewhere closer to between 3200 3800, depending on the number of fractionation that a doctor is going to choose for that treatment plan.
Okay fantastic.
The second question and I think you've talked about this a little bit earlier, and I don't want to box and a corner, but I'm a big fan of sculptor.
And clearly everyone's talking Covid, but no offense I just had my college roommates wife actually passed away on that 50 by the time they caught the cancer.
And are responding and it had moved.
The bone marrow three different places it came on them on the tissue at this stage for fast moving he has got three kids.
The cancer market is not going away, we're talking a lot about COVID-19. How is your and I know looking backward it was almost impossible to get to the hospitals in 2020.
With the shutdown on Covid to talk about a thing like sculptor how do you view sculptor on 2021.
In terms of the excitement around that product <unk> got.
Some of the best facilities out there using it youre talking to some of the other some of the best facilities that that I'm sure interest and how should we think about sculptor on in 2021.
Ah.
I think that the.
What's exciting for US is the fact that we had a face to face meeting with our friends at U Penn in late January.
Our management team on the engineering side felt that it was important to visit them and they were happy to receive us in spite of all the restrictions and getting into their hospital and of course, they had to go through all kinds of things to get in with.
With testing and everything else before they even got there and then having everything duplicated by the time, they got there, but the enthusiasm for the sculpt tour product there has not waned in any way shape or form as a matter of fact, it's almost like being at a horse race on holding the horse into gate when everybody else is left the gate. This horse wants to catch up in <unk>.
Even faster so they are more willing than ever to get going with this so they are as committed as they ever were however, they are restricted because all of the focus on all of the resources within that hospital are being directed towards Covid and theyre being and it's very very costly very time consuming and very expensive, but here's what I feel.
From that meeting I think that at some point in the second quarter that theyre going to get back onto the bandwagon, where we're going to have a lot of interface with them in the final touches if you will of developing exactly what they want because part of that collaboration is them tweaking things to their own purse.
<unk> needs, which we are doing and that development is pretty much done for the most part.
But we just have to put it in there and make it work for them and everything will be satisfactory. So I see that happening in the second quarter early in the second quarter than I see them finally getting on their protocols either by the end of the second quarter on early in the third quarter, where we should have some data and results.
All of that testing.
And from those clinical studies that they are going to do on patients with the first set of patients being breast cancer.
With that being said, we've got and we continue to get calls as they continue to get calls as well from hospitals that are very interested in the technology that want to get updates and so I'm thinking that we have an opportunity maybe to sell a unit. Okay. Before the end of the year not sure it's going to happen.
Of hospitals and things like that and they've got a lot of restrictions on their medical or other device acquisitions on their capital budgets, but if we're able to get a sale, whether it's within the country or outside the country I think that we've got an opportunity to do that before the end of the year and then I think that will set us off for a for a diesel.
2022 with Sculpsure.
Alright, Fantastic and then.
Lastly, we have these these ice storms in Texas and other places in the south not necessarily Florida. So you guys have escaped it.
I spoke to a lot of different doctors and dentists.
Their practices, we're pretty much closed for the week does that is that going to have a major impact on you guys or is that more of kind of a just a push.
The push back one or two weeks some other things you're working on.
That impacts the doctors, who already have our equipment and the volume of patients that they are already trading. So they will probably have to reengage those patients redo their treatment planning, it's nothing for us, but I have to say and this is not something that we want to have happen, but we did have a customer who had damage.
To their device because of consequent snow rain flooding and that kind of stuff. So there was damage to a unit.
They are applying for their insurance and if the insurance pays for it we've got another unit going so not that its a negative it might be a positive, but it's not the way we want to build our business, but I don't think its holding back any of the decisions other than the time for that week that we werent able to see those customers.
Okay Fantastic again, congratulations on a great quarter and keep it up thanks, a lot Joe thanks.
I appreciate it very banking.
And with no other questions holding I'll turn the conference back to management for any additional or closing comments.
Thank you Jeff.
So in closing I want to thank you once again for your time this afternoon and for your interest in Sensus, we continue to move forward on multiple fronts and are optimistic about our prospects. When we return to a more typical business pattern and we hope it soon.
Before we conclude I want to let you know that we will be participating in three virtual conferences. Later. This month next week, we'll be presenting at the H C. Wainwright Global conference. The week after that we'll be presenting at the Roth Virtual conference followed by the Maxim Virtual conference. Shortly after that we will be issuing a.
Press release to let you know how you can listen to our presentation, if you'd like for one on one meeting at either of these conferences. Please contact your sales rep at either bank and will be more than happy to accommodate again, we want to recognize and thank the many frontline workers, who continue to help the many COVID-19 stricken patients please stay safe.
For everyone and thank you so much.
Ladies and gentlemen that will conclude today's conference. We thank you. So much for your participation you may disconnect at this time and have a great day.
[music].