Sensus Healthcare, Inc.

Good day, ladies and gentlemen, and welcome to the Census Healthcare Second Quarter 2022 Earnings Conference Call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. If you should require assistance throughout the conference, please press star zero to reach a live operator. At this time, it is my pleasure to turn the floor over to your host, Kim Gallaudet. Ma'am, the floor is yours.

Thank you. This is Kim Golodos with LHA. Thank you all for participating in today's call. Joining me from Census Health Care are Joe Sardano, 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 Census 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 are management's beliefs based on currently available information as of the date of this conference call, August 4, 2022. Census 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 and 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 call, there will also be reference to certain non-GAAP financial measures. Census 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 results press release. With that said, I'd like to turn the call over to Joe Sardano. Joe?

Thank you, Kim, and good afternoon, everyone. I'm delighted to be reporting on another quarter of strong financial performance with significant year-over-year revenue growth and continued profitability. Our revenue of $12.1 million was more than double last year's Q2 revenue. In addition, we earned 21 cents a share compared with 20 cents from continuing operations in the first quarter of this year and a loss of 2 cents last year. We've maintained our momentum since the close of the quarter, and we're optimistic the second half of the year will be terrific. If you recall, in January 2021, our SRT therapy received improved reimbursement when the Centers for Medicare and Medicaid Services, or CMS, revalued our main code upwards by 66% for a course of SRT in non-melanoma skin cancers. In addition, ancillary codes received a double-digit boost. Of note, Mohs surgery reimbursement went down. Last quarter, we reported continued growth in patient volumes at customer sites, in part because SRT became so much more prominent during the pandemic, while surgeries were kept to a minimum. This has continued in a best practice migration towards SRT, That will not only be a permanent gain for Census, but will continue to generate demand for a non-invasive treatment approach. We continue to leverage the improved reimbursement for SRT via a number of activities. First, we embarked on a rigorous education program to ensure our physician customers were educated on the improved ROI. This work is ongoing and is especially significant at dermatology conferences and trade shows. More recently, early this year, we established our fair market value lease program with our banking partners, and that has driven increased sales of our premium SRT100 vision, with more than half of vision sales now occurring under lease. Importantly, the leasing program brought vision into a more affordable price point, while providing census with the premium economics the features deserve. We expect that vision sales growth in the U.S. will continue to exceed basic systems. We believe that through features such as image guidance and ultrasound, plus the software to track disease progression, guide therapy, and plan treatments, vision systems provide better patient care, and we are delighted that physicians increasingly recognize this. As you know, we spend a great deal of time with our physicians, including key opinion leaders, at important medical conferences. In addition, we engaged a new advertising firm for a digital marketing program directed at patients to make them aware of SRT. We also began television advertising in select markets, specifically Florida, Texas, and Arizona. Although there is particular focus on these regions of the country, you may have caught some of our ads nationwide on HGTV, The Cooking Channel, PGA Golf Tournaments, Valley Sports, Baseball, and Wimbledon. We're running 10, 15, and 30-second clips. The ads have been posted on our website, so feel free to view them. The 2022 midterm election may influence the frequency of ads over the near term, as we expect greater exposure as more ad times free up post-election. 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 their one-year warranty are covered by service agreements. Note that our ability to diagnose any issues, including before they happen, has been made easier with our Sentinel technology and that has 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 our SRT customers and for Census, as it clearly demonstrates the attractive ROI for the SRT100 Vision and the SRT100 Plus systems. We've also included Sentinel in all five of our Census-branded Aesthetic Smart Lasers. While treating skin cancer is of great importance to the company, dermatologists also are mindful of the economics in the aesthetic space. With this in mind, we remain focused on leveraging our sales organization to provide products that our customers demand. Late last year, we entered into an exclusive U.S. distribution agreement for a non-invasive drug delivery system called the Transdermal Infusion System, or TDI. This system is cleared by the U.S. FDA for the local administration of ionic drug solutions into the body for medical purposes. The TDI launch is going very well and is generating significant interest among potential customers who recognize its ability to eliminate injections. The system permits many procedures to be less painful for patients, and interest is particularly high for the aesthetic facial procedures, hair growth, and hyperhidrosis, or excessive sweating. As validation, we were excited to take orders to deliver 10 systems to hair enhancement centers. HEC will be delivering U.SK Underskin's hair growth serum called Skin Savers Hair. U.SK Underskin is a subsidiary of EMS Pharma, the largest pharmaceutical company in Brazil, and it's a subsidiary of one of Brazil's largest conglomerates. Two systems will be delivered in this year's third quarter, and the remainder will be delivered in the fourth quarter. HEC is rapidly growing and currently operates nine centers in Texas, and we aim to support their expansion plans beyond this year. In addition, work to study the delivery of finasteride for hair growth is underway by Dr. Glynis Ablon of the Ablon Skin Institute and Research Center and Associate Clinical Professor at UCLA. Finasteride is more commonly known as Propecia. Work has also been done by Dr. Mark Nestor, the founder of the Center for Clinical and Cosmetic Research in Aventura, Florida, who presented an abstract at the Hawaii Winter Clinical outlining the efficacy of utilizing TDI for subjects with axillary hyperhidrosis or excessive sweat glands. We were delighted to ship a second SRT100 system to Colorado State University School of Veterinary Medicine during Q2. CSU is a highly regarded equine program, and this system will be used in their new dedicated facility. Recall that last year we shipped an SRT system that was being used to treat a variety of tumor types in companion and other smaller animals, including squamous cell carcinoma in a Matamata turtle at the Denver Zoo. Research on horses is expected to be published next year, and if the research continues to show beneficial outcomes as it has so far in a small number, veterinary medicine could be an important new market for our SRT systems, with approximately 30,000 veterinary practices in the U.S. I'll briefly mention our international business now, as I think the fact that we shipped five SRT systems to Asia, including to China, in spite of the never-ending pandemic in that country, reflects the importance of treating patients for skin cancer and keloids despite the geopolitical uncertainty. That certainly holds true in the U.S. as non-melanoma skin cancer needs to be treated regardless of the economy. Before I turn the call over to Javier to review our financial results, I want to underscore how pleased I am with our financial performance and just as important with the dedication of our staff and our customers. We believe we are providing important products to benefit the health of people around the world, and our organization not only feels it, we live it. As I said last quarter, we are always cognizant of our surroundings. Notwithstanding the geopolitical and financial turmoil that abounds and noting our usual seasonality, we are very much aware of the threats of inflation, wars, and pandemics. Despite of these factors, we expect continued profitability for the year. We have a robust backlog of orders, and we continue to keep a keen eye on expenses. We also have the strongest balance sheet in the company's history, and we will deploy cash to benefit our shareholders, be it in the form of stock repurchases or accredited acquisitions of companies and products that complements our dermatology footprint. I'll turn the call over to Javier.