Q3 2023 Sensus Healthcare Inc Earnings Call
Participants
Kim Golodetz; IR; LHA
Joe Sardano; Co-Founder, Chairman & CEO; Sensus Healthcare, Inc.
Michael Sardano; President & General Counsel; Sensus Healthcare, Inc.
Javier Rampolla; CFO; Sensus Healthcare Inc.
Alexander Nowak; Analyst; Craig-Hallum Capital Group LLC
Benjamin Haynor; Analyst; Alliance Global Partners
Presentation
Operator
Good afternoon, and welcome to the Sensus Healthcare third quarter 2023 financial results conference call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Kim Sutton, Golodetz, LHA Investor Relations. Please go ahead.
Kim Golodetz
Thank you. This is Kim Golodetz with LHA. Thank you all for participating in today's call. Joining me from Sensus Healthcare are Joe Saradano, Chairman and Chief Executive Officer; Michael Sardano, President and General Counsel; and Javier Rampolla, Chief Financial Officer.
As a reminder, some of the matters that will be discussed during today's call contain forward-looking statements within the meaning of Federal Securities Laws. All statements other than historical facts that address activities Sensus Healthcare assume plans, expects, believes, intends or anticipates and other similar expressions well should or may occur in the future are forward-looking statements.
The forward-looking statements are management's beliefs based on currently available information as of the date of this conference call, November 9, 2023. Sensus Healthcare undertakes no obligation to revise or update any looking for any forward-looking statements except as required by law. All forward-looking statements are subject to risks and uncertainties as described in the company's Forms 10-K and 10-Q.
During today's call, references will be made to certain non-GAAP financial measures. Sensus believes these measures provide useful information for investors. They 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 results press release. With that said, I'd like to turn the call over to Joe Sardano. Joe?
Joe Sardano
Thank you, Kim. Good afternoon, everyone. Our third quarter financial results reflected typical summer seasonality and macro-economic conditions with economic challenges continuing to affect many dermatologists.
During Q3, we shipped 11 systems, including three SRT systems outside the US and five SRT-100 Visions to a very large customer. Total unit sales now stand at almost 720 units, and we expect the seasonally strong fourth quarter to help us advance towards our yearly and long-term goal.
For Q3, revenues were $3.9 million compared with $9.0 million a year ago. As discussed last quarter's conference call, many of our customers depend on the elective aesthetic procedures as a meaningful source of practice and revenue profit.
And despite hearing encouraging feedback that patient volumes and procedures mix are improving macro-economic conditions, along with our usual seasonal summer lull made for a soft quarter. However, please note that our main focus has always been on the second half of 2023.
We continue to believe in a strong Q4 with five weeks in. We used our strong cash position to continue to build inventory, so we will be able to quickly address demand as our customers adjust to inflation and interest rates. Utilization of SRT to treat non-melanoma skin cancer continues to increase, driven by favorable reimbursement and aging population and clinical results that are at least as good if not better than Mohs surgery.
I'll remind you the last quarter, we told you that our review of Medicare's shows that SRT experienced a 27% year over year treatment growth rate for the past six years. If this growth rate continues at its current pace, SRT will soon become the treatment of choice for non-melanoma skin cancer. Our confidence remains high, and we continue to work concurrently on programs that will address any remaining hesitancy for our prospects and put us back in a growth trajectory.
Our advanced technology is expected to play a key role in our growth with central IT front and center. This is our HIPAA compliance software with clinical billing and asset management utility that also allows us to track utilization. We enhanced Sentinel earlier this year by adding census cloud with its remote monitoring capabilities to track and monitor SRT systems.
This is ideal for better managing dermatology clinics. We showcased Sentinel and Sensus Cloud at the American Academy of Dermatology annual meeting this past March. And looking ahead, the fourth quarter is off to a good start with participation in the Fall Clinical Dermatology Conference and the American Association of Radiation Oncology annual meeting both in October.
We are seeing a trend based on the activity at our booth and the attention our products received at these important trade shows, in particular, the SRT-100 Vision, Sentinel IT and Sensus Cloud capabilities. It bolsters our optimism for the future as we enter Q4, which traditionally is our year's strongest sales quarter. As a reminder, the Sensus Cloud system also allows providers to monitor any service issues such as calibration, monitoring voltage and temperature without having to send an engineer to the field.
As you may expect, Sentinel IT allows us to track system used in real time, an important feature that may support new sales programs. We also introduced this year an important new and improved high-resolution ultrasound technology to provide seat entry capability. This leads to great outcomes and patient reassurances because the physician can actually see the impact of each treatment on the lesion and lesion resolution after treatment.
Turning to the hospital market, radiation oncology is a highly attractive opportunity as it gains interest in the skin cancer treatment market. Although selling to hospitals is a longer selling cycle, it is a market well worth pursuing, as we build footholds in the channel.
Recall that earlier this year, we sold a system to a hospital in the Northeast to Beth Israel Deaconess Hospital in Plymouth, Massachusetts. And now during Q3, we sold another SRT to Cape Cod Hospital in Hyannis, Massachusetts, and we are engaged with several more hospital systems and believe that the positive experiences of these recent hospital customers will serve as supporting references, as we penetrate this market.
The veterinary market also offers some longer-term potential for growth. We were delighted that the Colorado State University Veterinary Teaching Hospital posted on social media this week, that in a clinical trials that they call groundbreaking. They treated horses diagnosed with squamous cell carcinoma with SRT.
This is the most common Island tumor in horses. See as you said I quote; The initial results are showing excellent success were eagerly awaiting the eventual completion of this trial and the publication of its results in a peer-reviewed journal. So, with that overview, I'd like to turn the call over to Michael Sardano for a bit more color on our plans and priorities. Michael?
Michael Sardano
Thanks, Joe. Last quarter, I spoke about our efforts to open up new international territories, a demanding process that requires regulatory approvals and engaging the right distributors.
Earlier this year, we were thrilled to sell our first SRT system to Beacon hospital in Dublin, Ireland, which came just before, we announced a new distribution partner in the United Kingdom, Mis Healthcare. We are delighted with this partnership and Mis has a good backlog of potential hospitals interested in our SRT systems.
Our focus on international opportunities continues, and during the quarter we sold three systems outside the United States for a total of 10 systems sold internationally so far this year. Our goal is to enter three to four new territories over the coming years. Building upon our recently added opportunities in the UK, Ireland and Latin America, where we sold the first unit into Guatemala during the second quarter.
With regard to the near future, as we discussed previously, our plan is to expand our Latin American and Asian footprint as quickly as possible with Brazil and Japan being longer-term goals, as they are highly regulated. With that, I'll turn the call over to Javier for a discussion of our financial results.
Javier Rampolla
Thank you, Michael, and good afternoon, everyone. As Joe mentioned, our revenues for the third quarter of 2023 were $3.9 million as compared with revenues of $9 million a year ago and $4.5 million in the second quarter of 2023. The decreases versus the prior year was primarily due to a lower number of SRT units sold as customers continued to defer purchases as well as lower sales to a large customer.
Now that the third quarter is typically slower. Gross profit for the third quarter of 2023, was $2 million or 51% of revenues compared with $5.9 million or 65.6% of revenues for the third quarter of 2022. The decrease was primarily due to the lower number of units sold in the 2023, quarter. Going forward, we anticipate that gross margins will remain to the mid 60% range up ourselves continue to improve.
Selling and marketing expense for the third quarter of 2023, was $1.3 million compared with $1.8 million for the third quarter of 2022. The decrease was primarily attributable to a decrease in marketing activity as well as lower tradeshow costs and commission expense.
General and administrative expense for the third quarter of 2023, was $1.5 million compared with $1.2 million for the third quarter of 2022. The increase was mostly due to higher professionals and bank fees, including costs associated with entering into a new credit facility.
Research and development expense for the third quarter of 2023, was $1.1 million compared with $0.7 million in the same quarter, last year. The increase was primarily due to expenses related to our project to develop a drug delivery system for the aesthetic market. We recently submitted our 510k application to the US Food and Drug Administration, and we expect the completion of work on this project by the end of 2023.
Other income of $0.3 million for the third quarter of 2023, was mostly related to interest income, and this compares with $0.1 million in other income for the third quarter of 2022.
Net loss for the third quarter of 2023, was $1.5 million or $0.09 per share, and this compares with net income of $1.8 million or $0.11 per diluted share for the third quarter of 2022. Adjusted EBITDA, which we define as earnings before interest, taxes, depreciation and amortization and stock-compensation expense was negative $1.7 million for the third quarter of 2023, compared with positive $2.3 million for the third quarter of 2022.
Our brief review of our year-to-date financial results. Revenues for the first nine months of 2023 were $11.8 million compared with $31.4 million for the same period of 2022, reflecting a lower number of SRT units sold as well as lower sales to a large customer.
Gross profit year to date was $6.2 million or 52.6% of revenue compared with $21.3 million or 67.8% of revenue for the first nine months of 2022. The decrease was primarily driven by the lower number of units sold and higher cost charged by vendors in the 2023 period.
Selling and marketing expense was $5 million for the first nine months of 2023, compared with $4.8 million for the same period of 2022. The increase was primarily attributable to higher trade show expense and headcount cost, partially offset by lower commissions on marketing expenses.
General and administrative expense was $4.2 million for the nine months ended September 30, 2023, compared with $3.6 million for the same period of 2022. The increase were primarily due to higher professional and bank fees.
Research and development expense was $3 million for the first nine months of 2023, compared with $2.3 million for the first nine months of 2022. The increase was mostly due to expenses related to the development of a drug delivery system for aesthetic use as I just mentioned, we recently submitted our 510k application to the FDA for this product and expect the project to be completed by the end of this year.
Other income of $0.8 million for the first nine months of 2023, was related to interest income, other income of $12.9 million for the same period of 2022, was related primarily to the gain of $12.8 million on the sale of a non-core asset.
Net loss for the nine months ended September 30, 2023 was $3.7 million or $0.23 per share, and this compares with net income of $21.4 million or $1.28 per diluted share for the nine months ended September 30, 2022. Net income for the 2022, period includes a $12.8 million gain on the sale of our non-core assets. Adjusted EBITDA for the first nine months of 2023, was negative $5.4 million compared with positive $23.8 million for the first nine months of 2022.
Turning now to our balance sheet. Cash and cash equivalents as of September 30, 2023, were $20.5 million, down from $25.5 million as of September 31, 2022 (sic- "December 31, 2022") The company had no outstanding borrowings under its revolving line of credit as of September 30, 2023 or December 31, 2022.
In previous quarters, we continue to prepare for the [growth envision] most immediately for higher expected unit sales during the fourth quarter of 2023. We've been building finished goods inventories on prepaying for materials in part to get ahead of inflationary price increases.
At the end of the third quarter of 2023, inventories were $13.2 million, up from $3.5 million as of December 31, 2022. Prepaid assets were $3.9 million on September 30, 2023, versus $6.3 million as of December 31, 2022. Our [cash spending] very focused on highly disciplined and is intended to support our ability to achieve our business goals.
Nevertheless, our pursuit continues to position us well to take advantage of the compelling growth opportunities we may come across or that we may create ourselves. A final comment, please see the table in the news release, we issued earlier today for our (inaudible) of GAAP to non-GAAP financial measures. With that, I'll turn the call back over to Joe.
Joe Sardano
Thanks, Javier. Thank you, Michael. As I mentioned last quarter, SRT treatments surpassed 480,000 in the last two years alone and the ROI for our premium SRT system under our fair market value leasing program continues to be compelling.
Interest and SRT remains high, especially as it relates to our premium product, the SRT-100 Vision. We do expect to ship significantly more SRT systems in the fourth quarter of this year and a statement I make based on historical trends as well as the high interest in SRT and the booth traffic and recent important trade conferences and current prospect activities.
Clinical results in treating non-melanoma skin cancer noninvasively are excellent with published studies showing that SRT is as good or better than most surgery. This should be reason enough to choose SRT. Add to that fact that most procedures can leave scars and raised the risk of infection even death and the fact that our reimbursement is so much higher than it was two years ago, while most surgery reimbursement has come down.
And SRT becomes the clear choice. We're very excited to be working to make this choice even easier as treating skin cancer and keloids with SRT becomes a meaningful way of supporting one's practice considering the current state of aesthetics.
As a final topic before we take your questions, I want to provide you some color on our Transdermal Drug Delivery system known as TDI. As Javier mentioned, we recently submitted our 510k application to the FDA and expect to receive clearance in early 2024. This system will, for example, allow PRP could be applied to the scalp, but a pain-free hair restoration experience.
In addition, posters have already been presented on the application for hyperhidrosis or overactive sweat glands. Our transdermal system includes Sentinel IT solutions capabilities. As do all six of our Sensus branded aesthetic smart lasers and SRT devices.
We are still in the early stages of tapping the enormous market opportunity for SRT. Our systems are well positioned in a large and largely untapped market. They provide a compelling alternative to surgery for millions of patients and arguably the only solution to prevent the recurrence of keywords following surgical excision.
As an overlay to all this, an estimated one in five Americans will develop skin cancer during their lifetime. This tells us that nearly 70 million people will have non-melanoma skin cancer. So clearly, there's a need for our SRT systems both now and even more so in the future. We are confident that Sensus is positioned for success, despite the challenges we faced since February. We have a great staff to driving growth and implement our strategies, which is why we have built inventory to meet the expected demand.
With those comments, I thank you for your time and attention. And now, Operator, ready to take questions.
Question and Answer Session
Operator
Thank you. (Operator Instructions)
Yi Chen, HC. Wainwright.
Hi, this is (inaudible) dialing in for Yi Chen, thanks for taking our questions. A couple from us from maybe firstly, so the cost of sales remained the same despite a drop in revenue. So, is there anything to take note of and also how should we think about gross margin for the next quarter and maybe in 2024?
Javier Rampolla
So, for the next quarter, I think about like the low 60s in that gross margin.
Okay.
All right. And then do you expect the macroeconomic challenges to remain in place to 2024 that could impact your business?
Joe Sardano
We're expecting Q4 to give us a nice rebound and hopefully launches into a successful 2024 to what point that success will be is going to be determined. We'll see how Q4 lays out, but we're very confident that Q4 will be a good fourth quarter as it usually is. And I think it launches into a better 2024 than, of course, what we're experiencing for 2023.
Okay. Maybe one final from us. So, I was wondering if you could provide some color on the current trend of device utilization rate in the office of dermatology?
Joe Sardano
Say that again, I need to understand it better.
So, we'd like some extra color on the current trends of device utilization rate in the office of dermatology?
Joe Sardano
What, particularly for SRT?
Yeah.
Joe Sardano
Yeah. I think that the SRT utilization rate is starting to move up as we've done a review of Medicare Medicaid over the last six years, which shows a 27% compounded increase year over year for the last six years. So, we're seeing the volumes in our offices picking up. That doesn't seem to be a deterrent in any way, shape or form.
A lot more people are choosing SRT versus Mohs surgery, which is more invasive as we know. So, we see that trend continuing for the foreseeable future. And we fully expect that at some point in the very near future to have SRT, possibly overtake and most surgery as the treatment of choice.
Thank you very much.
Operator
Alex Nowak of Craig-Hallum Capital Group.
Alexander Nowak
Okay, great. Good afternoon, everyone. The Q4 bounce back, less Q4 in 2022 I think you did about 36 systems. Based on the trends, the macro environment, everything has changed. I can't imagine going to 36, but like what's the kind of a ballpark number that you would be guiding towards?
Joe Sardano
Well, I think, it's one of those questions where right from day one, I think we talked about 60 units for the year. I think that we will reach our 60-unit goal after this quarter we're at 33 systems, I believe. So, I think that we'll get to that 60-unit goal by the end of the fourth quarter.
Alexander Nowak
And that's I mean that's great to hear. Can you speak to your big partners skincare? Just what are they seeing out there because obviously in the capital environment is tough. We all know that go into the earnings season here, but other aesthetic names seen impact in the dermatology office, but it sounds like procedures for SRT are continuing very well. Is that the same with your partner skincare?
Joe Sardano
Skincare is seeing that increase as well. So, that's encouraging. But the hesitation for signing on the dotted line to add new installations as we've had the same problem as they've had. So, we're seeing the same of what we can compare notes and see the same results there. But we're also seeing together with them a much better fourth quarter.
I think that we've consistently said that the doctors will learn, or patients will come back, as they learn how to live with the inflationary numbers that's on the aesthetic side. The fact of the matter is that skin cancer is something that's not going to go away unless it's treated and there's more skin cancers being discovered each and every day.
And so, the doctors are finding a very good way of treating that with SRT. And I think that it's also a nice complement to the fact that, if they're seeing lower numbers on the aesthetic side, this is certainly a way of gaining back some of the revenue that they're losing on the aesthetic side, so that they're more balanced as far as their offerings between medical dermatology versus aesthetic dermatology.
So, I think you're going to see a lot of the practices starting to even out on those things. I think over the last several years, the whole industry migrated towards the aesthetic side, which was the cash business. It's an easy path to fall into. And I think this is a big awakening.
I remember four or five years ago going to all the trade shows and all of the speakers were talking about having a balanced offering to their customers. So, they're not too heavily weighted one versus the other. I think this is a reset, if you will, and it's going to help people get back onto the equilibrium, if you will. And of course, SRT is going to be one of the main players in that.
Alexander Nowak
Got it. Thank you. That's really helpful. And the company, Joe, you and the team. You've taken the company now through two different environments. One of the lower interest rate environment where maybe a fair value lease could come a lot cheaper.
There is more access to capital by these clinics, so they could take a place and SRT for called it a little bit of a lower risk. And now we've gone through this higher interest rate environment, where now it's becoming it's more difficult for a clinic to sign on the dotted line, as you mentioned, does it at all, make you question or look towards sharing in the economics on the procedures where, if a clinic is going to do X number of procedure. You can actually and you get a piece of that economic benefit versus just the capital sale upfront and then the service contract?
Joe Sardano
It's always been on our minds as far as the ability for us to do that. It's always available to our customers if they if they want to bring that up with us, but we have a very good partner that is right now fulfilling that, they have a very successful model. I think it's a proven model.
The fair market value lease that we offer is not so much laden by the interest rate because of the fact that it's an off balance sheet vehicle that provides with no personal guarantees for the customer and it allows them to get into something where literally there's a huge residual base on the system that they are not having to pay for.
So, it's a much less costly way of doing it. And it's still an opportunity for them to keep 100% of their revenues , if they have high patient population, which we're seeing it grow, it's difficult for a customer to want to give up a certain percentage of that revenue when they can keep it all.
So, I think we provide them with a very, very good alternative to what our biggest customers doing. And I think that's one way of supporting our market. And until we start seeing a greater demand from our market for us to be involved with that. It's always being considered. I can assure you that and then maybe one day and it will happen, but it's not going to be this day.
Alexander Nowak
Okay. It's make sense. And then just lastly on the expenses. The team's done a great job keeping the expenses at a, I think a reasonable run rate even during this challenging macro times. So, going into Q4 and I guess more 2024, do you expect to hold the expenses largely flat or originate addition a little bit of increasing, but the profitability comes back in store in Q4 and (multiple speakers)
Joe Sardano
Well. First of all, I appreciate you bringing that up because I think the team, the financial team, in particular led by a half year has really kept us on track and very disciplined on what we do with our dollars. And if you notice, we have more cash in the bank at the end of this quarter than we did after the second quarter.
So, we're very cognizant of it. We're strict on it. It's part of our DNA and the way we manage our business. I think that it will remain flat for the balance of the year. We're not looking at increasing expenses. We've had increase in some of the R&D expenses due to the TDI product that we've put through the FDA and all of the fixes that it has to go through as well as the testing which is extremely expensive, even before you get to the FDA, it's done by a third party group.
All of those things are very, very important for us, but it's something that we live with every day. So, I don't think that we're going to increase any of the expenses. It's one of the notes that you had from half year that was increases in some expenses due to sales and trade shows. We had the American Academy of Dermatology Trade Show was in a very expensive state.
And then most recently Astro was in San Diego, if you know anything about the trade shows, everything in the trade shows that have already been scheduled. We got the upcoming American Academy of Dermatology in March also in San Diego. The actual costs to us to any manufacturer to exhibit in California is almost three times that it was two years ago.
I mean they've increased across the cost tremendously. I'm not sure, if we're going to continue to see a lot of these big societies continue to have their meetings in California because of those costs. But I mean, we were as shocked as everybody else was when we showed up and we learned of the extra costs that were involved.
So, that's pretty much the difference the expense that we've had in 2022 versus 2023, was just that one very show. But I would tell you, we do it again only because the show was very valuable to us. We had as much activity that I had our booth at Astro, the American Society for Therapeutic Radiation, as we did several months earlier at the American Academy of Dermatology.
Alexander Nowak
Now that's good to hear. Appreciate the update. Thank you.
Joe Sardano
No. Thank you.
Operator
Ben Haynor, Alliance Global Partners.
Benjamin Haynor
Good afternoon, gentlemen. Thanks for taking the questions. Just kind of following up on that tradeshow commentary you just made, can you share a little bit more on that front, just kind of the leads that you've seen maybe relative to past years, I know COVID kind of messes with that a little bit, but or quite a lot, I guess, but just any trends you've seen over time and the level of interest for SRT?
Joe Sardano
Yes. Ben, thanks for being on the call. First and foremost, we started to see this trend since COVID, if everybody understands the American or the Radiological Society and radiation oncology. But CMS Centers for Medicare Medicaid Services is putting an awful lot of pressure on treatments for cancer and reducing a lot of the reimbursement for the treatment of cancer.
When I'm saying the treatment of cancer, I'm talking about the regular cancers, lung cancer, breast cancer, prostate, all of those cancers, there's a huge reduction and a huge push by Centers for Medicare Medicaid Services to cut those reimbursements because of the high volumes that are occurring in those areas and those treatments of cancer.
With that being said, a lot of these hospital administrators are saying, okay, we're losing revenue on our treatment of cancer with our cancer centers. What are we not doing, where can we go and find more revenue to make up for those losses. And of course, as they're looking over the fence into somebody else's backyard, what aren't they treating?
They're not treating skin cancer and skin cancer is the low hanging fruit. They can certainly attract a lot of the patients and they certainly can attract treatment for that. But they have to have the right equipment. And so, they've identified which they've identified a long time ago, that SRT is a very low cost system that would get them back into the game for treating skin cancer and to make up for the losses that they're seeing in the reimbursement for all of their other cancers.
So, at this meeting, we had dozens of hospitals that were pre scheduled coming to our booth for demonstrations on the SRT, they were physicians, they were physics, they were administrators. They were all coming to find out what this SRT is all about and how it can treat skin cancer and how big this skin cancer market is.
And so, we were very, very happy to help them understand how big the market is and what they can do. Now you have a lot of also independent radiation oncology centers that are also suffering through the same thing, but want to learn what else can they do. And if you recall, just a few years ago, we had a doctor out of Red Rock, Colorado that had a system in a private setting and he was doing 50 to 60 treatments a month in skin cancer.
He was doing a tremendous job until he sold the practice, retired and move back to his home state of Indiana, but that we've had tremendous interest in that market. We think that market is going to continue to grow.
If you noticed, we talked about the three major hospitals that we signed up just in the United States this year alone with one also being signed up, which is Beacon hospital in Dublin, Ireland, which is a private hospital, which is much like the US market. So, we're starting to see that market grow and gain a lot of interest, and we expect to have some activity over the next several months with that market.
Benjamin Haynor
Okay. That's very helpful commentary. And then just kind of recapping, it sounds like you got a lot of answers from non-dermatology sort of institution. On the dermatology side, you mentioned that, we'll see there may be a reset getting back to more of a balanced practice.
What's your thoughts on some of these folks sticking kind of with the unbalanced or hoping for the unbalanced aesthetics versus traditional medical treatments that they've gone to date, are they hoping against hope that a lot of the aesthetic stuff come back soon and maybe sit on their hands when it comes to getting in SRT or any additional thoughts there?
Joe Sardano
Well, an interesting fact been the, we have a bunch of groups out there that are going through roll-ups that are supporting being supported by private equity money. And they have anywhere from 100 to close to 300 centers depending on these groups. And I would say that there's about 15 that participates in that area with the private equity money and they're closing in on representing about 20% of the total market.
And how they go about evaluating to buy a practice. They buy a practice in the highest evaluation that they get for practices based on their medical dermatology. Not there is aesthetic dermatology. On the aesthetic side, they're looking at anywhere between 0.5% and 0.75% of their value, whereas on the medical dermatology side, the medical dermatology meaning there are CPT codes.
CMS supports it reimburses that there's existing coding that pays for it. They're valued at somewhere between 1.25 and 1.75. So, if a dermatology practice is looking for an exit, the best way to get the most money out of it is to have everything leaning towards the medical dermatology space. They get less money based on the aesthetics space.
And for the specific reason that it's controlled by how the markets are, how the economy is going, how the middle class is going, who's going to go to get their Botox, remove the wrinkles at this remove that all of those things becomes skeptical and reliant on inflation in the economy. So, this is a perfect period for a lot of these places to get a reset.
And so, I think that we're seeing that happen. And I have to give credit to our team overall and the flexibility that we show and how we manage our business in being able to go through those things. Imagine, just in the last two years, we've come through COVID, and now we're going through an inflationary period time and the reset time or the economics in our space is very, very difficult.
And so, if you look at where our market is and in our industry, you look at all of the companies that are involved on the aesthetic side of dermatology, the laser companies, the [in modes] of the world, all of and see where they're valued this year versus where they were valued a year ago when the economy was a whole lot better. I think that we're seeing exactly where it is.
And then when you look on the oncology side, you had a magnificent company called ViewRay, which came out with the first product that was an MR based electron beam system that used MRI in real time to treat patients for the regular cancers.
That was a company over $200 billion was put into it and it recently filed bankruptcy. And so, if you're not managing your business, right, I think that you have a severe chance of getting hurt. And all of these things hurt our market in totality. You don't like to see anybody get hurt. But I think that overall, we've done a very, very good job navigating through these headwinds that we're faced with. And I think that will come out of it doing very, very well.
Benjamin Haynor
Okay. That's also very helpful commentary. And lastly for me, and maybe this is more of my own curiosity than anything, utilization for international systems versus what you see in the US. I mean, the international folks keep these things humming at a greater rate. Or what's the way? Is there any way that you can characterize how these things get used internationally versus in the US and what that might do for future purchases?
Joe Sardano
Yeah, internationally, everything relates to the radiation oncology world. It's very seldom that dermatologists are allowed to use this technology in their practices. There's a couple of places in the world Germany is one of those places. There's a couple of states in Latin America. Brazil is one, but it's very difficult for us to break into, which we will break into it just cost us a lot of money and a lot of time to get there, but we will get there.
But the rest of the world is pretty much a socialized health care system. So, everything has to go to the radiation oncology department, acquiring technology and medical devices is not something that they want to do. So, a physician who does surgery only in the United States as they consider Mohs surgery of practice, everywhere else in the world, it's just surgery.
And so all of these surgeons that exist are walking around the hospitals, mostly 99% of them are employees of the state. They're part of the social welfare state. And so, they don't they don't have to buy equipment. They just throw the surgeon on it to cut it out. It's just the way it is. And so, it's a much more difficult sale.
But it also relates to the fact that, if you look at a hospital like Beacon hospital, Beacon hospitals, a private hospital, it helps pay. They have much more sophisticated people. The wealthier people who can afford separate insurance go to those hospitals and they get treated better.
I know in Canada, they started now a practice where you can buy insurance, if you are above the poverty line or if you're in the middle moderate area of the middle class and you get treated perhaps you don't have to wait for a year and a half to have a CT scan, you might get it in six weeks, if you're on one of these things. So, all of these things are taking place. There's always a group of people that can afford it, and it's always going to go to those people first, but that's what we're seeing in the rest of the world.
Michael Sardano
Additionally, Ben, just to add to Joe's comments, they even in China, Vietnam, Taiwan and other places in Asia kind of experimentally, sometimes because of the low dose of radiation. So, there's all sorts of future potential for indications for uses based on preclinical studies, we know going over there.
Benjamin Haynor
Okay, got it.
Well, thanks. Thanks for taking the questions and all the color, Joe and Michael.
Joe Sardano
Thank you, Ben.
Michael Sardano
Thanks, Ben.
Operator
This concludes our question-and-answer session. I would like to turn the conference back over to Joe Sardano for any closing remarks.
Joe Sardano
Thank you, Laura. Thank you once again for your time this afternoon. And for your interest in Sensus Healthcare. I'd like to mention that we'll be holding virtual one-on-one meetings during the JPMorgan Healthcare Conference the week of January 8.
Please contact LHA, if you'd like to get on the schedule. We'll speak with you again when we report fourth-quarter financial results in early February. In the meantime, thanks again for joining us today. Happy Thanksgiving. Happy holidays to all.
Operator
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
