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Strata Skin Sciences, Inc. Message Board

  • e11ndofwar e11ndofwar Aug 8, 2012 6:42 PM Flag

    The potential here

    Imho, it is a mistake to focus on the placement fee income. Some of the shorts here are kicking their heels because the revenue was only $76,000 in the 2nd quarter. They have absolutely no long term perspective. The real key is the income that will be generated by the cards. Please feel free to correct the following math if it is wrong.

    A device is placed and within 6 weeks or so a reasonably conservative 6 cards are being used per day. So 6 cards over 300 days at $50 per card is $90,000 per machine per year. I use 300 days because most Derm offices are open on Saturdays. So in the U.S. alone the 200 machines that will be placed during the commercialization phase will be generating $18,000,000 per year. Then we go into full production and sale of devices.

    As someone here stated today, the upside for the shorts is relatively limited at this point but their risk should adoption really accelerate could be significant. This situation is really going to get interesting over the next year.
    regards endo

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    • sandale111@bellsouth.net sandale111 Aug 12, 2012 10:40 AM Flag

      <<device is placed and within 6 weeks or so a reasonably conservative 6 cards are being used per day. So 6 cards over 300 days at $50 per card is $90,000 per machine per year. I use 300 days because most Derm offices are open on Saturdays. So in the U.S. alone the 200 machines that will be placed during the commercialization phase will be generating $18,000,000 per year. Then we go into full production and sale of devices. >>

      The reality though is that last quarter started after commercialization (but not a full 6 weeks) and your total revenue was 75,000--less than your number for the annual revenue from a SINGLE machine.

      • 1 Reply to sandale111
      • <<The reality though is that last quarter started after commercialization (but not a full 6 weeks) and your total revenue was 75,000--less than your number for the annual revenue from a SINGLE machine.>>

        Fringing General and your B.S. spin. 45K of that 75 came from the initial placement fee of the 30 units placed, $1,500 X 30.
        The real revenue will start flowing in after the Derms use their initial cards included with the placements and start ordering the cards.

    • Plus card and equipment price increases after the introductory period. Plus contract renewals. Plus revenues from marketing in other countries besides the US and Germany.

      Plus synergy from the drug companies selling meds for melanoma--the drug companies know increased screening will yield increased number of patients diagnosed early (and treated), therefore they will promote increased screening.

    • Also as Oat pointed out, the initial placement includes the first 25 cards. If they had 30 units placed minus three or four for Q1, that would give them around 40K declared for placement revenue for Q2 (27 X $1500) therefore, they only had around 35K of revenue for replacement cards in Q2. Q3 revenue should show a significant increase in replacement card revenue.

 
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