Q3 2022 Sensus Healthcare Inc Earnings Call
Hello, and welcome to the Sensus healthcare third quarter 2022 earnings conference call.
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I would now turn the conference over to Kim Sutton Golar, That's L. H a investor Relations. Please go ahead ma'am.
Thank you. This is Kim Collins access that Lei Zhang. Thank you all for participating in today's call. Joining me from Sensus healthcare are Joe So Danner, Chairman and Chief Executive Officer.
Okay, Garneau, President and General Counsel and hobby, Iran, Paul Our Chief Financial Officer.
As a reminder, some of the matters that will be discussed during today's call contains forward looking statements within the meaning of federal Securities law.
All statements other than historical facts that address activities Sensus healthcare assumes plans expects believes intends or anticipates and other similar expressions will should or may occur in the future are forward looking statements.
The forward looking statements of management's beliefs based on currently available information as of the date of this conference call November three 2022.
Healthcare undertakes no obligation to revise or update any forward looking statements, except as required by law.
Forward looking statements are subject to risks and uncertainties, including the continuation of severity 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 conference call references will be made to certain non-GAAP financial measures Sensus believes these measures provide useful information for investors that they should not be considered a substitute for GAAP nor.
Should they be.
That's a substitute for operating results determined in accordance with GAAP a reconciliation of non-GAAP to GAAP results is included in today's financial results press release.
With that said I'd like to turn the call over to Joe Santana Jeff.
Thank you Kim and good afternoon, everyone I'm delighted to be reporting continued excellent execution of our growth strategy strong financial performance evidenced by our very good year over year revenue growth and continued profitability our revenue of $9 million was up 64% over last year and.
Addition, we posted diluted earnings per share of <unk> 11, compared with one <unk> a year ago. Despite some economic uncertainty and the impacts of hurricane in on many of our customers. We're optimistic the fourth quarter will be profitable as well as you know last January our SRT therapy received improve.
Reimbursement from the centers for Medicare and Medicaid services or CMS, when they re valued our main code upwards by 66% for a course of SRT and non melanoma skin cancer.
In addition, ancillary codes received a double digit boost.
Note most surgery reimbursement went down these actions have been game changers for SRT, we have capitalized on these reimbursement changes throughout the pandemic and beyond as patient volumes at customer sites remain robust and more and more practitioners recognized SRT as a.
Best practice for the noninvasive treatment of non melanoma skin cancer or.
This past quarter note that the interest rates have not yet dampened demand for the vision systems as return on investment is still robust for physicians, but of course, a bit lower than it was before the fed began raising interest rates.
In August we introduced new state of the art solid state high frequency ultrasound, which provides the best view of the epidermis in the market and utilizes a new ergonomically designed probe employing single use disposables. The upgrades operates in the ideal megahertz range for visual.
<unk> of all layers of the skin, which is essential for treating skin cancer lesions. In addition, it is built in electronic medical record capability that allows the operator to easily and accurately record and capture the ultrasound images.
Disability improves patient treatments the new ergonomic probe features single use disposable standoffs on the tip to create the best skin to probe distance setup time is also fast which both our customers and their patients. Appreciate all SRT vision units sold from now on will include the new <unk>.
<unk> technology.
Last quarter I mentioned that we engaged in new advertising firm for a digital marketing program to increase patient awareness of SRP. You may have noticed that our Facebook page has been very active as we work to engage the public were also running television advertising in markets, where we have the largest presence for exam.
<unk>, Florida, Texas, and Arizona, along with some select national spots, owing to the upcoming midterm elections AD space is very expensive. So we've pulled back on purchases will resume more television advertising after the elections and holidays, we still have clips on our website. So if you haven't yet.
Had the opportunity to view them you can do so we.
We are also recognizing increased recurring revenues as the business grows in the form of service agreements at this point approximately 80% of the systems that come off of their own warrants a one year warranty are covered by service agreements and 40% of our customers who are eligible for service agreements have opted for them.
Note that our ability to diagnose any issues, including before they happen have been made easier with our Sentinel technology and that is greatly enhanced our customer service. As a reminder, Sentinel is our proprietary HIPAA compliant software and is available on all our new products. It allows physicians to easily.
And accurately document patient data for clinical billing and asset management purposes. This technology has been a game changer for RSR teak customers and for census is clearly demonstrates the attractive R Y for the <unk> 100 vision and the <unk> 100, plus systems, we've all.
Also included Sentinel and all six of our census, branded aesthetic smart lasers, including the new hair removal system silk by census that we're very proud of we launch the system at the fall clinical Dermatology conference last month generating initial interest silk is a diode laser that's truly.
Portable with a lightweight handpiece super cold cooling tip and high repetition rates the ability to blend wavelengths, while emitting light vertically toward the skin increases efficiency by maintaining the density of the laser and the selected areas, resulting in deeper and better truck penetration.
<unk> and more homogeneous energy distribution importantly, the laser is sensitive to all skin types, making laser hair removable available to everyone. We're very excited about silks potential and its development is in direct response to our customers needs. We will continue to showcase the product that conferences.
Tradeshows as we work to build awareness for this new aesthetic laser. We also continue to build awareness for our transdermal infusion system or TDI, we call that late last year, we entered into an exclusive U S distribution agreement with this noninvasive drug delivery system, which is cleared by the U S. FDA.
For the local administration.
Iconic ionic drug solutions in the body for medical purposes.
TDI launch continues to go very well and is generating significant interest among potential customers recognize its ability to eliminate injections the.
The system permits many procedures to be less painful for patients and interest is particularly high for aesthetic facial procedures hair growth and hyperhidrosis or excessive sweating.
We took orders during the quarter for 10 systems from her enhancement centers.
Her enhancement centers will be using our TDI systems to deliver their U dot S. K under skins hair growth serum call skin savers hair U S. Dot S. K under skin is a subsidiary of <unk> pharma, the largest pharmaceutical company in Brazil and in itself a subsidiary of one of.
Brazil's largest conglomerates.
We delivered one TDI system during the third quarter and the remainder will be delivered in the fourth quarter HCC is rapidly growing and currently operates 10 centers in Texas and we.
Intend to and support their expansion plans beyond this year. In addition work by Dr. Glynis Adblock of the Avalon Skin Institute and Research Center at Associate clinical Professor of UCLA to study the delivery of phenomenon for an asteroid for hair growth is ongoing to an asteroid is more commonly.
Known as Propecia, Dr. Avalon presented or positive studied data at the fall clinical in addition, Dr. Mark Nester, the founder of center for clinical and cosmetic research in <unk>, Florida continue.
Continues to present data on the efficacy of utilizing TDI for subjects with.
Agricola hyperhidrosis or excessive sweat glands. He highlighted his work at the fall clinical which followed as abstract at the winter clinical earlier this year in Hawaii.
Turning briefly to our international business. During Q3, we shipped four <unk> 100 systems to China, while the pandemic rages on in China take zero tolerance stance on Covid.
There has been some discussion about China relaxing that policy, which I would expect to be a positive development for us.
That said no matter, where in the world you are and regardless of economic headwinds or geopolitical uncertainty skin cancer needs to be treated.
Before I turn the call over to Javier to review our financial results I want to praise are dedicated staff in particular as hurricane Ian bore down on US here in Florida, our staff never stopped thinking about our customers their patients and how we can help many of our customers and prospective customers in southwest.
Florida suffered severe damage and have not yet reopened their clinics. This is imperfect impacted our near term expectations for sales, while we're still looking to post the profit in queue for at this point, we can't say, how the quarter will turn out we have a robust backlog of orders and we continued to keep a kenai unexpected.
We also have the strongest balance sheet in the company's history and will deploy cash to benefit our shareholders be it in the form of stock repurchases or acquisitions with that I'll turn the call over to Javier.
Thanks, Joe is our pleasure to be speaking with all of you. This afternoon.
Don't mention a revenue for the third quarter of 2022 or nine Malian and this compares with revenues of $5 5 million for the third quarter of 2021, which was still impacted by the COVID-19 pandemic.
Revenues for different document 20 per quarter reflect a higher number of units sold including four <unk> 100 system that was worth ship through Asia, along with service contract revenue in itself up our work from terminal infusion of the system.
Gross profit for the third quarter of 2022 $159 million or 65.6% of revenues and this compares favorably with $3.2 million or 57.9% of revenue for the third quarter of 2021.
The increase in some word mostly driven by a higher number of units sold in 2022 service revenue on installed units and the impact of COVID-19 on their 2021 floor.
Seven on the market and expense for the third quarter of 2020 $218 million.
Up from 1.2 million for the third floor of 2021.
The increase in was mostly attributable to a higher ratio on advertising expenses.
And then ill and administrative expand for the third quarter of 2020 $212 million compared with $1.1 million for the third quarter of 2021.
A slight increase was mostly due to hire professional fees.
Research and development expand for the second quarter of $2000 to one point.
$7 million unchanged from the prior year quarter.
We recorded approbation for income tax in the third quarter of 2022.
$5 million and we hadn't they'll start to probation in the third quarter of last year.
Net income for the third quarter of two document 22 was $1.8 million or 11 cents per diluted share and this compares with net income off point $2 million or one stand per share for the third quarter of 2021.
Adjusted EBITDA, which we define earnings before interest taxes, depreciation and amortization stock compensation expense was $2.3 million 42000, 2000 food per quarter.
5 million a year ago.
Groaning briefly to a year to date financial results.
Revenues for the first nine months of 2022 $31.4 million one.
Hundred 24% over 14 million for the first nine months of 2021.
The increase was mostly driven by a higher number of units sold service revenue on installed unit on the impact of COVID-19 under 2021 results.
Profit for the first nine months of 2022.
$21.3 million or 60, 78% of revenue confirm with $8 $1 million or 58% of revenue for the first nine months of 2021.
As with the revenue they increase is worth multiple driven by higher number of units sold in 2002 thousand.
Revenue fell on the impact of COVID-19, comparable 2041 survey results.
For the first nine months of 2022.
Selling a market and expand to up for a million dollars compared with $3.5 million for the same period. After the document 21.
The increase was mostly attributable to hire crenshaw expand advertising on commission expense.
And it all on him any sort of expands what 3.6 million Federal September 30th 2000, 2000 to compare with $3. Finally in the same period a year ago, while researching on development expansive was unchanged from the prior year at 2.3 mankind.
Net income for the first nine months of $2000 to.
$21 for a meal or one dollar and 28 cents per diluted share <unk>.
Compared with a net loss of one certainly on the or seven cents per share for the first nine months of 2021 net.
Net income for the first nine months of the document 2000 to include $12 8 million gain on itself of a non core assets within the first war maybe.
Net income for the ninth month and at the front of 32022, excluding people gain what $8.6 million or 50% per diluted share.
Adjusted EBITDA for the first nine months of 2022 $23.8 million compared with a negative for me not for the same period of 2021.
Turning known to all of our balance sheet.
Got some investments worth $37.6 million as of September 30th 2022.
Up from $14 5 million opposite for December 31st 2021, The company had no outstanding borrowings on there it's a revolving line of credit.
All of the score while we have been saying for some time or attention to expensive management is front and center, while we continue to be in the strongest finance our position in the company's history.
Balance sheet position awesome, well to take advantage of the continuing growth opportunities we may come across.
Final comments, please see the table in the news release, we each were earlier today for a reconciliation of gas and non-GAAP financial measures.
With that I'll turn that back over to Joe.
Thank you Javier I'd like to stress once again, how proud I am of our entire census team and their dedication to our patients our financial results to continue to reflect that dedication are srt's systems are well positioned in a large and largely untapped market consisting of 14000 dermatologist and one.
Most surgeons in the U S representing more than 8500 offices not to mention a further 6500 plastic surgeons in 5500 radiation oncologists. Our system provides a compelling alternative to surgery for millions of patients and arguably the only solution to prevent the recurrence of keloid swallowing surgical.
Excision.
Before we opened the call for questions I want to mention that will be available for in person meetings in New York City at the Greg Hallam Alpha Select conference on November 17th Please contact Greg Callum If you would like a meeting we also will be available in person meetings. During the J P. Morgan Health conference in San Francisco, which is taking place January 9th through.
Do the 12th hour IR firm Lahat will be scheduling the meeting so please contact them if you'd like to meet with those comments. Thank you for your time and attention and now operator, we're ready to take questions. Yes. Thank you. We will now begin the question and answer session last question Press Star then one on your telephone keypad.
If you're using a speaker phone please pick up your handset before pressing the case to Australia question. Please press Star then too.
At this time, we will pause momentarily to assemble the roster.
And the first question comes from Alex Network with Craig Hallum Capital Group.
Hey, Joe and team. So this is <unk> just starting off from US we were all pretty excited around to you too.
And I think we were thinking about potential for sequential but also into Q3 macro certainly changed but can you speak a little bit more specifically.
And an extra changed in the corner you know.
Was it predominantly the macro environment cloud, causing some some parts some connection.
And then going into Q for you know I know, you're not giving guidance, but where do you think that's 30 placements Kengo and you know is there still a chance that year over year girls can continue in the queue for as well. Thanks.
Thanks for being on and thanks for the question.
As far as Q3, I don't think we ever represented that Q3 was going to be bigger or better than any of the other quarters as a matter of fact, there is seasonality in Q3 and I think we've made that clear after the queue to call based on the fact that after two years of Covid, our doctors for many of them took extended vacation.
With their families and went on some extravagant vacations, which I think they deserved after.
Having two years of not being able to go anywhere with their families. So we fully expected Q3 to be seasonal as we had projected and to that point I think one of the reasons. Why Q2 was so good in recognition of having that kind of vision, we really work extra hard in queue to to try to bring a lot of orders into Q.
Into Q2 versus waiting for Q3, because we thought of that so I think it was one of the reasons why we had the exceptional two two of 12 plus million dollars in revenue and we made that statement during our calls with our analysts at that time.
So.
The other thing that may have impacted some of our revenues we know for a fact that it impacted some of our revenues as <unk>.
During the week of Hurricane, Ian coming closer and closer to Florida, and not knowing exactly where it was going to hit but understanding exactly where it ended up hitting.
We closed our offices for three days, because we were suffering quite a bit of storm damage with a lot of rain and a lot of wind in our area. So we sent our employees home to make sure that their homes were secure and that they were able to get home rather than waiting for the last minute.
Not being able to get home with floods. So I can I can assure you that our employees safety.
Utmost interest to us and we wanted to make sure that we kept with that theme and so therefore, a lot of things that could have been shipped and maybe one or two to some of the areas that ended up getting hit.
Ended up were impacted and not shipping some things. So all of those things combined I think resulted in a phenomenal quarter for us with great results. In spite of the fact that we had major storms and we were facing seasonality and we had a successful Q2 as well regarding Q4, there's no question in our mind that were.
Going to remain profitable for the balance of the year and that we have a sufficient backlog to have a successful Q4. So we're excited for for the future and for every quarter here on it.
Yeah, and I'll, certainly <unk> method to that and hope the team is all safe down there and get then you pick those matters.
I. Thank you for the man that and you're right everybody was safe everybody was able to secure their places. Some damage was encouraged by some households, but other than that everybody remain safe and we're fine. Thank you.
Concerning the backlog.
You know any more color you can give us their.
<unk> from from Q2 or are we starting to feel a little bit of that backlog potentially you know any more color you can give us there would be helpful.
Yeah, I think that we had some backlog coming into the queue for caused by some of the things that happen in queue. In Q3. So we do have some backlog and I think that the backlog from Q4 will probably grow greater into the backlog for Q1 of next year. So.
All of that still continues we also have the I R. S code 179, which is going to impact our queue for with a lot of doctors wanting to take advantage of that tax relief 50 will based on the what I would consider exceptional revenues that they are experiencing right now, but you have to remember that in the in the world.
Dermatology and aesthetics it's.
The economy has a huge impact on dermatology, who rely heavily.
On aesthetic practices, the cash business, so, we'll see where the economy goes the inflation.
Right is is impacting it we know that already in speaking to some of our doctors, but we're hopeful that everything will continue because one thing for sure inflation doesn't stop skin cancer and.
So it's something that needs to be continued to be treated in the patients and to continue to be need to be treated so we.
We'll keep pushing forward, we expect the good Q4.
Yeah, absolutely. Thanks for the color and then last from Us.
You're generating a fair amount of profit now balance sheet is looking like you can go on offense update here what account the capital allocation priorities between buybacks further salesforce investments and then M&A maybe on the M&A front you know how are you thinking about potential additions, there's more capital products.
Is it procedural volume link products I mean, any any sort of strategic thoughts you can give us sir I'd be helping you.
You know, we're we're being very aggressive in our pursuit of technology, we Wanna have very unique.
Opportunistic technology that we can add to our portfolio and we want to give our salespeople as much technology as possible. So that our doctors who were you know.
A single decision makers and a lot of their practices with several influencers throughout can have the opportunity to decide on a.
A bundle of products that we might be able to offer them. So for instance, the TDI product is very unique in that it offers patient say pain free experience without having to experience needles and needles. We know is very excessive for hyperhidrosis for the sweat glands. Those needles are injected into the armpits. This now deletes the need for.
We're having to do that Dr nesters.
Paper that was presented the last two shows that we were present at highly indicated that in generating a lot of interest.
Can tell you that you know we don't have the supply to to meet the demand at this point and we're pushing like crazy to increase our.
Our resources for manufacturing so that's that's a big opportunity for us the new product that we just added which is for hair removal. The fact that it has multiple laser Cape.
Capabilities in one unique form provide and it's able to treat.
Multiple skin of color.
Is a huge opportunity for is the fact that it's mobile and compact. Those are features that are exclusive to the product. So again, providing unique features.
Two products that nobody else has we continue to look for those products and we have to be very careful because we found ourselves probably window shopping if you were looking at opportunities and we made ourselves avoid the fact that we're gonna potentially bite off more than we can chew one of the things that we <unk>.
Cherish is the fact that we do not have any debt and going into this period of I would say questionable finances with inflation rates and things like that I don't think it would be very wise for us to incur any major kind of that to make an acquisition.
<unk>, regardless of how good that acquisition may be I think that we have to make sure that we live within our means and that we continue to work with technologies that we can afford and that we know we can provide are good at R. A y to our customers as well as to our investors because I don't think our investors.
It'd be too happy if if we had a high that going into this inflation period.
Yep noted there. Thanks, Thanks again, Joe I appreciate question Oh, Thank you I appreciate it.
Thank you and the next question comes from Scott Henry with Roth Capital.
Thank you and good afternoon, Joe you certainly picked a good time to put cash on the balance sheet. When you can make.
Make a return on it at least.
Mmm.
A couple of questions first did you mentioned, how many units SRT units were sold in the quarter I didn't seem to catch that.
Yeah, we actually thought we'd share 27 systems out of them.
<unk> S. R 100.
Okay. When you say you ship that you booked revenues on 27, Alright, correct, Okay, and you know as we start to get more sources of revenue Yeah are you gonna going to disclose.
Revenue for different products and I I I guess, maybe another way to ask hated is what percent of the revenues in the quarter, where from SRT vision or 100.
You have to remember Scott that the TDI product is a very low cost product average selling price is somewhere around $28000. So we.
We didn't ship 10 systems and to identify that has that kind of revenue.
It's it's pretty small so the vision overall was the biggest number at at $5.5 million revenue and then you're looking at approximately $1.6 million in in service revenue so that generates pretty much. The the majority of the revenue that we have totaling the $9 million. So I think that.
It's going to be appropriate someday when we have significant numbers to reflect what each one of those units have if we're if we're gonna be over a half a million or over a million dollars on a quarterly basis with D. T D I or with the <unk> the aesthetic product or the the laser product I think that that that there'll be appropriate.
Right now just launching.
The new laser product the mobile laser product and T. V. I is pretty early and I don't see the numbers as being that significant but we'll get there will make a significant.
Okay, Great and then I know there was some discussion on the fourth quarter outlook, I guess, a little less clear given the hurricane I a T is it fair to say that you would expect sequential growth from Q3 Q for.
I.
That's what we're driving for I mean, there's no question that that's that's sort of objective, but fourth quarter has always proved to be the best quarter of the year. So we're continuing to anticipate that we see activities towards that for sure.
Okay, Alright, that's that's great. That's that is perfect now gross margin.
I think you know according to my first pass numbers or 68, 69% in the last two call her in first and second quarter, it's about 65% in the third quarter would you expect them to bounce back a little or I guess is it just the volume thing.
<unk> is all about the mixed it's all about the makeup of these shows on the answers to 100 and the deals and things like that we have always experienced margins in the mid sixties and I expect that to maintain when we have higher down in the mid sixties is because I mean, we were able to make them close what deals.
With significant higher margins Donna I'm normally but.
I think that made sense, because saddam was that we should be looking into it.
Mmk, great and.
Final question.
Mentioned, a little bit about the backlog could you talk about the you know how we should think about the backlog at the current.
Time versus you know a couple of quarters ago.
Just trying to get a sense of the magnitude of the backlog and how to think about that relative to quarterly revenues.
Again, because Q4 has always been the best quarter for us It seems like our prospect base as well as a backlog grows.
You know pretty good during the course of the of the quarter and as I mentioned to everybody. After the last quarter. When they asked me what what are my observations what am I thinking I think we identified the fact that doctors were gonna take expensive vacations in Q3, which could cause us to.
See the <unk> the seasonality about and then I also mentioned the fact that because we were going into an election year and again irregardless of whether it's midterms or for presidential elections, there always seems to be a holding pattern with all decision, making as people keep their hands in their pocket until after a decision is made or an after the result.
Our our made final so we have another week to go and so we've seen decision, making being held true to that where people are waiting for for those types of things to happen, but then again after that I see the floodgates opening up and everybody's going to be very very busy I can see the activity already starting to grow.
I know that a lot of us are going to be on the road between now and the end of the year and.
I'm, hoping that everybody makes it home by Christmas Eve.
Okay, Alright, great. Thank you for taking the question no. Thanks, Scott appreciate it on here.
Thank you and the next question comes on you chat with H C ran right.
Oh, Thank you for taking my questions Uhm, just to clarify that you would expect the fourth quarter to be the best quarter of 2022, you give them the.
Negatively impact her on the hurricane and the January economy correct.
Yes.
Okay.
And regarding the SRT vision systems being shipped or are they all equipped with the did you Oh <unk> Pro <unk>.
Everything that's being shipped now is with the new Ultracet.
Mister price increase or.
The price has increased yes, okay.
Okay. Thank you.
So.
<unk> SP January economies recession persists throughout 2023 would it be reasonable to say that it could have.
Pretty significant impact on the number of new orders for the transdermal infusion systems, but not necessarily impact.
The number of S. R. T systems is that correct.
Say that again I'm not I'm not sure I understood. So said, if if the recession <unk> throughout 2023.
Would it be reasonable to say it could it could have a significant negative impact.
Number of orders for T B, I assistance, but not necessarily the S. R T systems.
I think that it might be a little bit the other way around because you have to remember that as we introduced a new fair market value lease.
Since it's based on what the interest rates are and the government has decided to habits third rays of interest.
This year those interest rates continue to grow to continue to go up so although there is still an excellent <unk> why it's still going to be a little less than it was before each time that there's a race.
So we're hoping that it's not going to impact that that much but I think that we have to expect that it will.
So you're saying because people purchase your Sosa S. R. T systems was was alone that good to have a negative impact on the order number I'm, just saying that it could I don't think that it's going to have any negative impact on the on the products that they purchase. So if you have if you look at the mix for instance that Scott had asked before.
Four where we had 17 visions and 10 S. R. T. One hundreds that were shipped.
If you look at the quarter before we had many more visions being shipped versus S. R. T. One hundreds so we're still going to sell the the S. R. T technology, but now we're going to still pushed towards the vision and we'll still have many more orders for vision, but I think that we're gonna sell more srt's, because it's going to have a better Roy.
Because of the lower cost and so when you look at what our numbers were from Q2 to Q3. We are 27 units totally sold I think if you go back to Q2. There was about 36 units that were that were sold so.
There's not that many units in difference.
And compared to what the the headwinds were with the the hurricane as well as the vacation time for the doctors eight units was not a big number it was very very small and I think that there's two or three numbers in there that were delayed because of hurricane in that are going to be shipped in the next quarter. So it gives us that had started on a few things.
Okay.
I mean, the the press release measure that a recession could affect your pathetic procedures. So I.
I mean, if the recession <unk>.
Mmm.
It means out there may not be that many patients who would like to pay for you said a procedure that could negative negatively impact the order for TTS systems as well yeah, I don't I don't think it's going to impact TDI systems, only because it's such a small amount of money that the doctor has to pay for this and it makes sense for them.
To purchase a TDI system because it provides their patients who are going to go through the procedures no matter, what a much better experience because there's no pain involved no needles involved. So it's an enhancement that will help the doctors and a lot of cases that doesn't cost a whole lot of money. So although there might be fewer aesthetic procedures.
I don't see it happen.
Happening in the area that it's going to impact TDI.
Okay. So I think where it's going to impact on the aesthetics as people that are going to have micro needling for facial.
Rejuvenation or some of those other things but.
We're going to be impacting hyperhidrosis.
Almost a medical condition that people have to have needles.
Stuck into their armpits, which is extremely painful for for excessive sweating and things and then you have hair restoration somebody who wants their hair restored.
This helps the doctor cut the pain cut the cost of.
Cuts the time, so I think it's going to attract more patients to their table everything that we're doing again as the hands the patient experienced in the treatment and I think this allows the physician to see that they can draw more patient since of their practice I think all these doctors are going to be looking for that kind of a solution. During this kind of a period. So we're not in the same vein as.
The other aesthetics as I mentioned with facial respiration instead of a patient going every four months now they'll go may be over every six months. So that's two times a year versus three times a year, that's a big cut that's a 33 per cent cut.
And their expenditure in in a doctor's revenue, but I don't think the TVA is going to have that kind of an impact.
Got it thank you.
Just just that also to answer that I see your point I think that will sell more.
As time goes on a television I just need more manufacturer.
Got it thank you.
Thank you and the next question comes from Benjamin Hanger was the Lions club will partners.
So gentlemen, thanks for taking the questions just wanted to kind of hit on the the the product the product updates and the launch of the cell you mentioned that the silk lasers that you mentioned that the.
There's an updated disposable with the vision.
That's something that can be a meaningful revenue opportunity or is it still mostly the revenue that you see from the issue, that's mostly going to be due to.
The the the capital purchase well.
Well on the vision, there's a recurring revenue peace because there's a cap that goes with the transducers that they use for ultrasound so that checked with something that's needed. It's a very low cost item. It's a plastic piece that goes over the the transducer and it keeps the actual transducer from.
Touching the patient skin, so something that's required for for sanitation and things like that but.
That is something that we've got and I think that that'll that'll be sold on a regular basis I don't think that's going to impact into the hundreds of thousands or millions of dollars for us, but it's definitely.
Revenues source for us.
Far as the the new silk product.
What are doctors have been asking us for us they don't like to have consumables sold with those products. They want low cost lasers with no consumables and so that's exactly what this does it has.
Literally no consumables, we will have a service component, which will create a revenue source for us, but what we try to.
Bring to market is something that's extremely reliable something that's productive and something that's cost effective for for our customers as well as providing the best outcomes for patients with the best experience. So that's the theme that we're going to keep moving along because that seems what what the doctors one.
Okay that makes us any kind of anticipated my question there isn't that does.
Does a tougher aesthetic market benefit you guys in that.
You know the the the Doctor wanted to get away from consumer walls.
Some of the vendors out there in this market I've gotten.
Be a little bit aggressive it chew on an unneeded consumer.
Consumables into that.
Laser products that they offer.
So it's I mean, I guess do you think you'd get more consideration with a low cost kind of no disposable type laser as the market.
Maybe it gets a little bit tougher it is in a way almost a more ideal market <unk> yeah.
Yeah, I think you hit it right on the head that's our goal with our products is to bring something that's that first of all a physician can say this is a unique technology number two it's easy to acquire no I don't have to worry about keeping my my shelves full with all of these consumable products.
And without those consumables, they don't have to charge the patient as much or if they want to charge the patient as much they make more money themselves. So there's a larger margin for it. So I would think that there would be a favorable decision for our products over somebody else's and that's what we Wanna do is we want to have an advantage over selling our products versus somebody else.
Excellent.
Back to the the vision improvements in the workflow or set up a time improvements that you have.
I know, it's definitely a shorter procedure that most surgery, but.
How much of a needle vulgar is <unk>.
Or are these.
Kind of approved workflow elements that that you have with the the the upgrade to the vision well.
Well again, a good 0.1st of all there's less prep for the patient because the patient usually has to get prepped to have an ultrasound I mean, if any of us have any experience with our wives or significant others going for for birth and things like that we know what the ultrasound process is and how the patient perhaps for that ultrasound well now we eliminate.
Eight that prep and all that goo and stuff that's added to the patient's body in order to apply the transducer isn't necessary for for these and so non top of that the resolution that we have for the.
Physician and for the imaging peace, it's much more productive for for the for the.
The trader or physician is going to treat the patient because they don't have to apply all that stuff. They don't have the same time to apply for the patient prep. The other thing is the the importance of the transducer itself and the image quality that it gives you because now they can see very clearly the trends the dermis part of this.
Skin, which is very evident so that when we're identifying skin cancer to put together treatment planning. This makes it very very beneficial to the dock.
And we have to keep in mind that SRT is recession proof in any way because again skin cancer patients want their skin cancer treated doctors want a treatment.
Yeah Yeah.
It makes sense and then lastly for me.
On the the digital advertising television advertising fraud.
You know I think you mentioned that the <unk> the the the level of interest that you got you got on the queue to call tried from these efforts.
Any updates there.
Turns out you know like one of those per day or inquiries per day, or however, you glad you're kind of I've heard internally.
Yeah, no thanks for bringing that up because the fact of the matter is is that we see our patient inquiries continued to grow I would say that were in excess of 30, a day in answering those questions and providing feedback to the physicians and setting up times with physicians.
So that they are there practices are getting these patients and they're very appreciative of it.
It's funny I just got one today from one of the plastic surgeons in Orlando Who's very.
Adept at doing keloid, and we've had a bunch of people from from the Islands for instance, who have keloid any referred our system to one of the doctors in Jamaica, who I'm in contact now wants to buy a system because we've got five or six patients on a regular basis from the islands.
Looking for treatment of keloid and so.
It's funny, how this thing transitions, but I think it's it bodes pretty well for what we're doing and how the patients are are responding the interesting point about it is like you and I or anybody else, how we get on the internet in the evenings or on weekends. When we have less to do away from our work, we're getting a ton load a page.
<unk>, we come into the morning, Monday morning, and we've got 20 or 30 that are just waiting for us from the weekend from patients enquiring on the weekend and then every night, we've got a backlog in when we start first thing in the morning with five to 10 and that continues to grow. So we're excited for it and now we're going to grow R. S. C O <unk>.
Compatibility and working on Google and everything else to to even draw it even higher.
Okay, great well, thanks for all the color gentleman and it's taking the questions. That's it for me. Thank you. Thanks then.
Thank you and we have time for one more question that comes from Anthony Vendetti with maximum growth.
Thanks, Thanks, Hi, Joe.
Hey, Anthony how are Ya.
Good how are you.
Good.
Good good <unk> and Javier and just a quick follow up to the T. B I took the 10 system sold this quarter you said the H PS around 28000.
<unk> work for the parents enhancement centers I know it can be used for.
It can be used for other.
A transdermal techniques you mentioned.
People with.
I guess hyperhidrosis is one area.
Is it being sold and in the U S. Five senses for anything else at this point or is that what that's what's out there in the pipeline and do you expect.
Sale outside of parents Hanson centers in the fourth quarter or early next year.
Good question I will tell you that we've sold several system is just for the facial rejuvenation portion. So we're seeing a lot of activity there, but it seems like there's a significant activity because of the need for hyperhidrosis, because that's a real.
Real problem for those patients that are going through that and then hair restoration.
If you understand that market and we're learning from our doctors as we go tremendous pain and blood involved with using needles through the scalp thousands of needles to rejuvenate hair follicles and things like that to get that growing not having to go through that pain with the multiple needles.
And the blood involved is making physicians drool over the opportunity to have more patients go through the procedures because it's usually the patients that stopped the procedure after two or three times. They said I can't stand it anymore I don't want to go any further so do enhance that that experience for that patient.
Is is great I think that we had one of our personnel who came back from witnessing the hyperhidrosis, one and the patient literally said man bring it on this is what exactly what we need because they couldn't stand having the needle injected into their armpits I mean, just thinking about it is beyond acceptable to me, but I'd.
Rather sweat that would make me sweat just the thing, but I think that we're seeing a whole lot of more applications coming about in the doctor's using it wherever patients have a problem with with needles. One thing I want to bring up is an experience that I had in the past is when I first introduced M. R I's to the market back in 1980.
It was assumed that the U S market that there was about 3% of the mark of the market that of the people that were definitely a fair afraid of very close spaces.
And they couldn't take it.
Since mris come in.
It's grown to over 20%.
People that are afraid of those closed in spaces and that's the reason why you're seeing open M. R. I's today that expand more to the patient's needs and to provide a better experience I think we're seeing that experienced splendor renew with with TDI, where there's more patients that are gonna be <unk>.
More afraid of needles, and the fact that they've got a choice now those doctors are going to reap the rewards of having more patients walk through their doors, just like yes, our T vs. Most.
Right right. Okay. No. That's that's helpful. Lastly on the on the New S. R. T vision system.
Uhm.
Salt date high frequency ultrasound.
And you'd better view, the <unk> or the older systems.
Eligible for an upgrade or is this.
Okay, just incrementally better and therefore.
Mm not words doing upgrades for and and this is more for for the newer sales or or do you have an upgrade program in place.
This is <unk>.
Not something that we're gonna be able to do by retrofitting existing units.
In the field. So it's like any other evolution of technology, there's going to be advancements. This is something that our customers were asking for so they have to buy the new equipment at the higher cost due to the the capabilities of the ultrasound, but it's.
It's just that's the way it is but I think it's a huge advantage for them and their and their patients.
Okay. So so <unk>. So there is there isn't really an upgrade program that they want the new vision system they'd have to purchase it like like anyone else as a <unk> as a new.
<unk> yeah, Okay correct.
That's what I thought okay. Good I was just checking alright, I think that's all I have for now I appreciate it.
Thank you Anthony.
Thank you and this concludes our question and answer session I would like to turn the conference back to management for any closing comments.
Okay. Thank you once again for your time this afternoon and for your interest incense is health care. We look forward to our next financial results in conference call. When we report our fourth quarter results in late February or early March. So thank you everyone for your interest and be well, we'll talk to you soon thanks. Thank.
Thank you.
Francis <unk>. Thank you for attending today's presentation may now disconnect your lines.