Sensus Healthcare, Inc.
Q4 2021 Earnings Call Transcript

Published: 10 Feb 2022

[Operator:]

Good day, and welcome to your Sensus Healthcare 4Q 2021 Earnings Conference Call. All lines have been placed on a listen-only mode and the floor will be open for your questions and comments following the presentation. At this time, it is my pleasure to turn the floor over to Kim Golodetz. Ma'am, the floor is yours.

[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 Sardano, Chief Executive Officer; and Javier Rampolla, Chief Financial Officer. In addition, Michael Sardano, President and General Counsel will be available during the Q&A portion of this call. 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 assumes, plans, expects, believes, intends or anticipates or 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. Sensus Healthcare undertakes no obligation to update or revise any forward-looking statements, except as required by law. All forward-looking statements are subject to risks and uncertainties, including the continuation 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. Sensus believes these measures provide useful information for investors, yet should not be considered as a substitute for GAAP nor should they be viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non-GAAP to GAAP results is included in today's financial results press release. With that said, I'd like to turn the call over to Joe Sardano. Joe?

[Joe Sardano:]

Thank you, Kim, and good afternoon, everyone. I'm delighted to be reporting record revenues and earnings for the fourth quarter of 2021 and congratulate the entire Sensus team on this achievement. As I mentioned during our last conference call in November and then again in the press release issued in early January, our fourth quarter was so strong that we're reporting positive earnings for the full year. Specifically, revenues for 2021 were $27 million, up 182% over 2020 and we earned $0.25 per share. During Q4, we shipped a record 35 units, including three to China. China remains an important avenue for growth, which I'll discuss in just a moment. I'm confident we have the momentum to continue year-over-year revenue growth and positive net income in the coming quarters. A number of forces came together that allowed us to regain our growth trajectory after a few challenging quarters caused by the economic shutdown owing to the COVID-19 pandemic. The most important was the increase in CMS reimbursement for superficial radiation therapy that became effective as of January 2021. The delivery code for SRT, along with other codes associated with SRT were revalued upward. These changes have had a direct and positive impact for patients' access to care. Leading to charge to get these revaluations was Michael Sardano, who recently was promoted to President and General Counsel. Michael's experience in Capitol Hill was invaluable as he helped us to navigate the complexities of government and to tirelessly knock on the appropriate doors. In addition, the Company's Sentinel IT software technology embedded into our new products allows the physician to easily and accurately document which codes they are billing and state the medical necessity for the treatment. Sentinel has proven to be extremely helpful for the operation of SRT in a physician's practice, and we have begun implementing this exclusive technology into all future Sensus products. Our recent sales growth reflects our ability to effectively introduce the attributes of our SRT systems combined with the fair market value leasing program as we continue to educate the market on these new CMS reimbursement schedules. We are also seeing growing patient volumes at customer sites, in part because SRT became so much more prominent in the midst of the pandemic, while surgeries were kept to a minimum. We believe this positive shift resulted in a best practice migration towards SRT that will not only be a permanent gain for Sensus, but will continue to grow demand for non-invasive treatment approach. While instituting a new fair market value leasing program, we continue to be highly encouraged by the initial reception. Growing numbers of our physician customers have taken advantage of this program and appreciate its ability to provide a positive ROI for the SRT Vision by treating just two patients per month. Recall that the Vision has several premium features, along with image-guided ultrasound capabilities, the Vision includes Sentinel, a powerful IT platform that provides Sensus with the opportunity for remote diagnostics, while providing customers with asset management capabilities, as well as HIPAA-compliant patient data collection for accurate reporting of patient conditions and treatments. As we plan for future growth, we are mindful of the ways to leverage one of our core competencies, our sales organization with a view toward adding another product that would be of great interest to our customers, we entered into an exclusive U.S. distribution agreement for a non-invasive drug delivery system, which we have branded as the Transdermal Infusion System. This system is cleared by the U.S. FDA for the local administration of ionic drug solutions into the body for medical purposes and can be used as an alternative to injections, offering patient treatments with no pain, no needles and no downtime. We have begun marketing the system for skin rejuvenation treatments, pre-laser treatments, pre and post-plastic surgery, hair restoration and other applications. The Transdermal Infusion System is remarkable and that allows drugs to penetrate the skin's innermost hypodermic layer by increasing permeability. It's faster than traditional iontophoresis and allows delivery of drugs that are otherwise not able to be absorbed, including Botox, hyaluronic acid, lidocaine, collagen and others typically used in aesthetic procedures. This system was demonstrated by several KOLs at the Winter Clinical in Hawaii and discussed how to integrate into a typical dermatology practice. We were delighted with the reception that this system received and are working to pursue the sales leads generated at the conference. We're looking forward to the American Academy of Dermatology Annual Meeting to be held in Boston at the end of March, where we'll also be demonstrating the Transdermal Infusion System. Of course, we'll also be demonstrating our SRT systems and highlighting SRT's impact on treating non-melanoma skin cancer and keloids, as well as the new fair market value leasing programs. We'll have more information for you on KOL presentations as we approach the date of the meeting. Turning now to international markets. Sales in China continue to be promising, and as I mentioned, we sold three systems there in the fourth quarter for a total of nine during 2021. Our new distribution partner that we engaged in late 2020 by our VP of International Sales, Benson Suen are doing a terrific job. During Q4, the Ministry of Health of the People's Republic of China renewed our license to market the SRT-100 system for an additional five years. This new license runs through December 2026 and covers the sale of our superficial radiation therapy to treat non-melanoma skin cancers and keloids. China is an important market for our products, accounting for 20% of the world's population. The indication for SRT-100 to treat keloids, which we received in 2017 is of particular interest to women and their physicians to prevent and treat keloids following Cesarean section. We currently have over 50 systems installed in hospitals and clinics throughout China. And yet another area of our business, our relationship with Colorado State University Veterinary School continues to evolve, and we've been told that they are using our SRT system to treat not only cats and dogs, but also horses. The school has an affiliation with the Denver Zoo, and the Zoo is called upon CSU to use SRT to treat some of their rarest animals. We will have further data from CSU later in the year. As discussed during last quarter's conference call, we expanded into the aesthetic laser business with the formation of Sensus Laser Aesthetic Solutions. SLAS, as we call it, is comprised of Mobile Laser Services in Central and Northern Florida. The rationale is to use SLAS to expand our customer base, provide a beachhead for further acquisitions and improve access to laser technology. We provide customers with both short and long-term laser rentals by delivering these lasers on an as-needed basis to treat their patients. The integration of our proprietary Sentinel IT Solutions software into our new Sensus Smart Lasers is complete, and these lasers are now available through our direct sales force and SLAS. We implemented creative rental and leasing options for our lasers and believe the combination of Sentinel technology, which provides asset management and HIPAA-compliant patient data and storage capability and also contains the software to support shared service models, including direct patient billing is an important avenue for growth. We've been actively evaluating expansion of our mobile aesthetic laser business beyond Florida via strategic transactions and geographies where we have an existing SRT customer base. Over the long-term, we expect SLAS to become a meaningful source of recurring revenue for the Company. Before I turn the call over to Javier to review our financial results in more detail, I want to reiterate how delighted I am with our quarter and record sales. With the pandemic increasingly behind us, a robust backlog of orders, expectations for expansion of sales and marketing this year and our keen focus on expenses, Sensus is positioned for continued profitability this year, noting the typical pattern of sales seasonality. With that, I'll turn it over to Javier.

[Javier Rampolla:]

Thanks, Joe. It's a pleasure to be speaking with all of you this afternoon. As Joe mentioned, revenues for the fourth quarter of 2021 were a record $13 million, and this compares with revenues of $5.1 million for the fourth quarter of 2020, which was impacted by the COVID-19 pandemic. Revenues for the 2021 quarter reflect the sale of 35 SRT systems, including three SRT-100 system shipped to China, as well as revenue from service contracts and our new mobile laser business. Also, the pandemic continues and we're mindful that, of course, it's difficult to predict, it appears that its negative impact is largely behind us. Gross profit for Q4 of 2021 was $8.9 million or 68% of revenue, and this compares with gross profit of $3.2 million or 63.4% of revenue for the prior year quarter. The increases were primarily driven by the higher number of units sold in 2021, service revenue on installed units and the impact of COVID-19 on the 2020 quarter. Selling and marketing expense for the fourth quarter of 2021 was $1.3 million, unchanged from the fourth quarter of 2020. General and administrative expense for the Q4 of 2021 was $1.1 million compared with $0.8 million for the fourth quarter of 2020. The increase was primarily due to higher compensation expense and higher bad debt expense due to write-off of all receivables. Research and development expense for the fourth quarter of 2021 was $1.1 million compared with $0.8 million for the prior year quarter, with the increase mainly due to higher regulatory consulting fees. Net income for the fourth quarter of 2021 was $5.3 million or $0.32 per diluted share, and this compares with a net income of $1 million or $0.06 per diluted share for the fourth quarter of 2020. Adjusted EBITDA, which is defined as earnings before interest, taxes, depreciation, amortization and stock compensation expense, was a positive $5.6 million for 2021 fourth quarter compared with $1.3 million for the fourth quarter of last year. I will briefly review our full year 2021 financial results. Revenues for 2021 were $27 million, and this compares with $9.6 million for 2020. The 182% increase was primarily driven by the higher number of units sold in 2021, service revenue on installed units and the impact of COVID-19 on 2020 results. Gross profit for 2021 was $17 million or 68.2% of revenue compared with $5.2 million or 54.8% of revenue for 2020. The increases were primarily driven by the higher number of units sold in 2021, service revenue on installed units and the impact of COVID-19 on 2020 results. We believe that maintaining this level of gross margin is slightly dependent upon the market's response to the ongoing COVID-19 pandemic. Selling and marketing expense was $4.8 million for 2021 compared with $5.3 million for 2020. The decrease was primarily attributable to reduced spending on marketing activity and headcount. General and administrative expense was $4.6 million for 2021 compared with $4 million for the prior year, with the increase primarily due to higher professional fees and insurance premium costs. Research and development expense for 2021 was $3.4 million, down from $4.2 million in 2020, reflecting lower spending as the Sculptura project entered the production phase during 2020. Net income for 2021 was $4.1 million or $0.25 per diluted share compared with a net loss for 2020 of $6.8 million or a loss of $0.42 per share. Adjusted EBITDA for 2021 was $5.1 million compared with a negative $5.8 million for 2020. Turning now to our balance sheet. Cash and investments as of December 31, 2021 were $14.5 million, and this compares to $14.9 million as of December 31, 2020. The Company had no outstanding borrowings under its revolving line of credit during either year. We're confident that with our ongoing attention to expense management, along with the current cash and access to our existing line of credit, we continue to be well positioned to support expected growth for 2022 and beyond. As a final comment, please see the table in the news release we issued earlier today for a reconciliation of GAAP to non-GAAP financial measures. With that, I'll turn the call back over to Joe.

[Joe Sardano:]

Thank you, Javier. As I've said before, I'm very proud of our entire sales -- Sensus team and the way they've navigated through the pandemic to post record sales for the fourth quarter and the year. Their work to keep the Sensus name in front of existing and potential customers is paying off, and I expect it will continue to do so throughout 2022 and beyond. Our SRT systems are well positioned in a large market consisting of some 14,000 dermatologists and 1,000 Mohs surgeons in the U.S., representing more than 7,500 offices, not to mention a further 6,500 plastic surgeons and 5,500 radiation oncologists. Our systems provide a compelling alternative to surgery for millions of patients and arguably the only solution to prevent the recurrence of keloids following surgical excision. I'd like to note the recent -- recently announced retirement of our Co-Founder and my dear friend, Steve Cohen. Steve has definitely led the sales and marketing team at Sensus, and on a personal note, I will miss him greatly. He leaves the Company in great hands with the well-deserved promotion of two tenured Region Managers to Vice Presidents with Chris Machuzak now Vice President of Sales for the West Coast region; and Jeff Starling now Vice President of Sales for the East Coast region. These promotions had already been contemplated for some time as a major strategy to expand our business with our new products and continuing to grow our relationships in our market. Both Chris and Jeff have played a significant role in making that happen for Sensus. Before we open the call for questions, I want to flag that we have a business schedule of investment conferences ahead of us. We'll be at the 34th Annual ROTH Conference in Dana Point, California, March 13 through the 15. We'll be participating in Maxim's Second Annual Virtual Growth Conference being held March 28 and 29, where I'll be sitting on an aesthetic medicine panel. And we'll also be at the H.C. Wainwright Global Investment Conference being held in Miami Beach, May 23 to 25. I hope to see some of you there. With those comments, I thank you for your time and attention. And now operator, we're ready to take questions.

[Operator:]

The floor is now open for questions. We'll take our first question from Alex Nowak with Craig-Hallum Capital.

[Alex Nowak:]

Great. After an impressive year here, a great Q4. I'm just curious how you're thinking about growth into 2022. I know profitability certainly, as you mentioned in the press release is going to be a big component of it, but perhaps comment how you're thinking about Q1 2022? And then maybe give a little bit of color on the backlogs that you see in the SRT-100 systems today compare that to last year in 2021?

[Joe Sardano:]

Sure. Thanks, first of all, for being on the call, Alex. We appreciate it. We're very, very hopeful for 2022 that the momentum that we've gathered through the last three quarters of 2021 will continue on beyond quarter one, because we feel quarter one, we'll have a great start. So the rest of the year, I believe will follow. So we're very, very excited to go after the profitability in each and every quarter that will work throughout 2022. Numbers yet to be determined, but backlog coming into the new year is very, very strong. And I think that, that will continue based on the demand that we have from our customers throughout 2022. I think the momentum will continue to grow as the year goes on.

[Alex Nowak:]

The acceleration in demand for the SRT system, can you call out if it's all coming from the better CMS reimbursement or are you starting to see the sea change in how non-melanoma skin cancer is being treated now?

[Joe Sardano:]

Well, I think it's a combination of both. Number one, the increase in reimbursement certainly helps, but you still have to get in front of the customer or the client and prospect and you still have to explain what that means to them and you have to help them understand how it fits into their practice. Obviously, the increase in reimbursement helps them pay more attention to it. And then when you combine that with the fair market value lease that we brought in, which allows them to experience perhaps a better ROI on their total investment is also real important. But I think the main factor here from it, if you recall, during the time of COVID, there was a period of anywhere between 8 to 12 weeks, where a lot of the clinics across the country were shut down. And the American Academy of Dermatology even recommended to the physicians that they should cease all Mohs surgery, if you will. And at that time, I made the statement that the last machine that was turned off when they shut down their offices was the SRT machine and the first machine they turned back on was the SRT machine when they reopened. So those best practices I think will continue. And I think that the doctors really respect the fact that COVID is developing a new standard for everybody. It's a new normal. And I don't think you're going to see people piled up in the waiting rooms and the back rooms being ready for Mohs surgery with the responsibility of social distancing. And I think the doctors have also seen how good it is for the patient and how successful their outcomes are in using SRT. And the fact that they're getting paid for all these things, I think is a combination of the three things that happened, COVID, increase in reimbursement, fair market value lease, I think that quite frankly, is the holy triangle, if you will, for the success that we've had. And the more that we're able to get in front of prospects, customers, in front of the diagnostic or the dermatology community, I think the word is going to get out. You have to remember that after what we've accomplished in 2022, we really had no trade shows to go to. So the face-to-face interaction of the masses was done, I would say, in hand-to-hand combat, knocking on doors, kicking the things down and being able to talk to the physicians one by one. So I think as we open up the doors to more trade shows with the upcoming American Academy of Dermatology followed by SCALE in May, which is in Nashville, followed by The Aesthetic Show in Las Vegas and then the Fall Clinical, again, all these things opening up and being face-to-face with customers, I think, are only going to make it better for us.

[Alex Nowak:]

That's great to hear. On the transdermal system, can you maybe talk about the commercialization plan there? Is this going to be a capital or recurring model? Just how to think about potential revenue contribution from each system, the launch of the sales force? Just some more details around how to commercialize it?

[Joe Sardano:]

The principal model is going to be the capital element to it. So it's really a capital model, although there is very strong possibility for recurring revenue. We will be providing patients or the customers with some of the toxins that they may be looking at, although we don't want to become competitors to some of the bigger companies that provide that, so we'll be anxious to work with many of them with our doctors who already have relationships in that area. There's also some smaller components that we'll be able to include with each one of the products that the customers will have to buy. So there is a component that is a recurring revenue, although the main component is going to be the capital sale, which is going to be the model. But we'll see how big the recurring revenue piece yet, because there's unlimited potential there and we'll pursue every opportunity that we have, especially working with some of the big companies out there that provide the fillers, the Botoxes and things like that and some of the other things that they use.

[Alex Nowak:]

All right. Understood. And then just lastly for me, just congrats to Michael on the promotion there. But can you just talk to the changes in the President title, just what that means for the Company?

[Javier Rampolla:]

Thanks, Alex.

[Joe Sardano:]

Well, it's something that we were looking at over the last year or two. And then with Steve's retirement, I think the Board felt that since we were going to do it at some point in the very near future that the time was now to make that happen. It helps for succession, not that I'm going anywhere, but I step in front of a lot of buses sometimes and they're not looking where they're going. So I have to dodge them. But you never know what those things do. And I think it's always good to have the people in place to make sure that everything stays the way it can be or even improve. So we have a very strong team of people that are able to step up, namely the two people that we promoted into the sales function. I think that we're going to be stronger because we're going to be closer to our customers and to our prospects. So all of that bodes well for the future of the Company, and we're very, very excited for the youthfulness and for the eagerness that we have and the energy that everybody is bringing.

[Alex Nowak:]

Fantastic. Appreciate the update. Thank you.

[Joe Sardano:]

Thank you.

[Javier Rampolla:]

Thank you, Alex.

[Michael Sardano:]

Thanks again, Alex. Appreciate it.

[Operator:]

We'll take our next question from Anthony Vendetti with Maxim Group.

[Anthony Vendetti:]

Let me extend my congratulations to Michael too. I've met him. So I think it's a well-deserved promotion. I know he worked very hard on the CMS reimbursement.

[Michael Sardano:]

Thanks so much. I look forward to seeing you soon.

[Anthony Vendetti:]

Yes, that would be great. But on the other note there, Joe, I would hope that you figure out a way to stay out of the way of those buses.

[Joe Sardano:]

So far, I'm still faster than they are.

[Michael Sardano:]

I a few times last year.

[Anthony Vendetti:]

Based on what I've heard, I imagine that is true. So just to the questions, clearly, the CMS reimbursement increases help, but like you said, you still have to go out there and sell. And during COVID, it was obviously difficult to do that. You figured out how to do that as practices open back up as evidenced by the really strong fourth quarter. But it seems like also the idea of selling the SRT for fair market lease has also really helped, because as you said, all the practitioner has to do is do two procedures for a month and the system pays for itself. Can you talk a little bit about the impact you think that's had? I know it's probably going to be hard to quantify directly, but how much do you think that's helped? And then out of the sales in the fourth quarter, approximately what percent was an outright sale versus a lease?

[Joe Sardano:]

That's a good perspective. First of all, let me say this, the fair market value lease is very common with medical devices and big capital equipment in the hospital world. Hospitals will do everything to make sure that their monthly payments or their costs on a monthly basis are as low as possible so that they can meet all their targets with breakevens, as well as to bring fair market value leases into the dermatology world. And we started working on this quite frankly at the end of 2020 before it really became something that we were able to present. And when I say the end of 2020 was more like the beginning of 2020 when we started talking to our bankers and providing that solution for our customers. So I think it's really, really important. Now I would say that out of all the orders that we took in the fourth quarter, there was only one customer that decided in the end to pay cash. And he was upgrading his SRT system that he's been using for three or four years to the Vision product. Everybody else was encouraged and did take advantage of the fair market value lease rather than pulling the cash out of their pockets. Now prior to that, I would tell you that out of all the units that we would sell, about 50% was leased and the other 50% was cash out of pocket. So I think we're seeing a change in perspective with the fair market value lease encouraging the physicians to buy the Vision product versus the SRT, because the Vision clearly with all its features and benefits provides the doctors, each one of the doctors with added reimbursement opportunities and, therefore, added revenue. So I think it's a win-win-win for everybody.

[Anthony Vendetti:]

That's helpful color. Just in terms of -- a lot of companies obviously dealing with supply chain issues, some with raw material -- increased cost in raw materials. Are you seeing any of that in your business at this time or you've been able to mitigate that?

[Joe Sardano:]

Well, I think one of the advantages that we had again with our team, with our COO, Javier, myself, we started getting involved with our supply chain back in April of 2021. We started hearing about all these situations with other companies, and we wanted to make sure that our contract manufacturer didn't have those problems. So we immediately were in contact with them and trying to understand what the problems could be in resourcing any of the components that they were looking at. Now one of the things that helped was the fact that about 95% of the components that we have are all made in the U.S.A. And so that was a major, major opportunity that we have. Two of the other major components that we have are manufactured in Europe. And early on, we started speaking to either the CEOs, the Presidents and other business leaders within those organizations to make sure that those principal components, which are mainly used in the Vision product were readily available and they went out of their way to make sure that we had product. Now everybody that we ever talked to for those resources, we're always worried that every conversation that they had with their suppliers could bring up another situation that they weren't prepared for. But since we've started so early in April and that we were able to work with our customers to gain a relative good picture of what the volumes could be with our forecast, we took the chance of ordering a lot of things in advance, recognizing the opportunities that we had, and therefore, we're able to get ahead of it. So there's two keys for the future here with regard to supply chain. Number one, we have to continue to have the conversation with all of the supply chain people, including the resources that our contract manufacturer has, which we will continue to do. We've been on a rhythm call, if you will, on a bimonthly and now a monthly call because we feel comfortable, they feel comfortable with everything. But the key to everything to stay ahead of things in order to make sure that we have product for our customers is to provide our contract manufacturer with as good a forecast and as good an order as soon as possible in order to stay ahead of the game because if we get caught behind, that's where the tough part is, we might not be able to catch up. So I credit the management team here for staying ahead of it and being on top of it before it became a problem. But I think the key here is we have to continue to do that so that it doesn't become a problem with the demand that we're anticipating.

[Anthony Vendetti:]

No, that's great. You've been able to navigate that and anticipate. Just lastly, and then I'll hop back in the queue. On the Transdermal Infusion System, where you're the -- you have now exclusive rights here in the U.S. What's the sort of the time -- the time line for rolling out that device, and what's your expectation in terms of generating material revenues this year?

[Joe Sardano:]

We're currently rolling it out to several KOLs in the market, who are extremely interested in working with the device because of the applications that it represents. We're working with the manufacturer to make sure that we have all the products in place. The biggest situation for us, and this is working on all of the collateral that we need in setting up a marketing plan for it. We want to make sure that we have all those materials in advance so that our sales force is completely prepared every time they get in front of a potential customer with training products. We have demo products that are already going into the field for demonstrations. And we're working with KOLs all over the country that are extremely interested in the product. So if you look back at the situation in Europe, Europe, especially Italy, is just coming out of a second COVID, let's say, lockdown, and so things are getting back to work. And this is a fairly routine product for them to manufacture. So we don't expect many delays for any length of period and we're excited for being able to present this product at the American Academy of Dermatology, which is literally in about five weeks. And customers will be able to get a hands-on demonstration in mass at the American Academy of Dermatology, where I think that will have a huge impact with the device. This is a device that is not very expensive for the customers to use, but has a whole huge pile of applications that the customer can use with their patients. And I mean, just imagine everything that you use with needles and now you don't have to use a needle, which means there's no pain. There's literally no downtime for the patient. And it's just a much better way of applying all these toxins that the patients are demanding and that the doctors are looking to use. So we're excited for the opportunity.

[Anthony Vendetti:]

That sounds great. Okay. I'll hop back in the queue. Thanks again. Appreciate it.

[Joe Sardano:]

Thank you, Anthony.

[Operator:]

We'll take our next question from Yi Chen with H.C. Wainwright.

[Yi Chen:]

Could you comment on the expectation for the frequency of orders from the Chinese market? Do you expect it to be relatively stable from quarter-to-quarter or it could be volatile in the coming quarters?

[Joe Sardano:]

Well, anything outside of our country could be volatile. We have to understand that the pandemic in China is alive and well. It's being very aggressively pursued there with a lot of people that have COVID conditions, so there's even cities that are shut down. However, Benson has done a very, very good job in navigating through those situations with our distribution partner there. We sold nine systems as was mentioned in the preliminary presentation for 2021, which is a big year for us and really the first year that we've been able to get back to that number for the last several four, five years, I expect us to surpass that in 2022. I don't know what number that will be, but I expect to surpass it in 2022. Plus we have to consider that we have a couple of other countries that we've opened up like Taiwan, for instance. And I'm fully expecting some orders out of Taiwan for this year as well. So we're excited for that opportunity. It's a valuable market for us, and we cherish it very, very much, and we want to pay attention to it and give it the attention it deserves.

[Yi Chen:]

Got it. And next question, could you comment on how many sales reps you currently have, and whether you expect to increase the sales force during the rest of 2022, specifically with respect to the marketing of the Transdermal Infusion System?

[Joe Sardano:]

Yes. The total market reps or people that are involved in our sales department is about 20 right now. We want to increase that. We hired an extra person today. We're looking to add three to four more people before the end of the quarter. I would like us to see being between 25 and 30 people before the end of the year and possibly before the end of the first half of the year. I think that we need to be ready to gear up. We don't have to add any other people because of transdermal, that's going to go through the existing sales pipeline that we have in channel. So that's the nice thing about it is that we don't have to add any extra people we can work through the channel that we already have.

[Operator:]

We'll take our next question from Ben Haynor with Alliance Global Partners.

[Ben Haynor:]

Congrats on the quarter and congrats, Michael on the promotion. Just kind of a quick one for you, Michael. I know you have been fairly busy keeping your CEO out of traffic. But obviously, you've done a lot of work on the CMS front, and I know there's a lot of credit that accrues to you for that. But can you talk a little bit about some of the efforts that went into that and how you -- the activities that you're involved in to ultimately secure the CMS reimbursement boost?

[Michael Sardano:]

Well, thanks, Ben. And first, I appreciate the question. I was beginning to think I wasn't going to get one. So that's -- I only have one. Good talking to you again.

[Ben Haynor:]

Yes.

[Michael Sardano:]

So I've been with Sensus for about a decade, and I know that since we started here, we've been working on the reimbursement cut. So when I was on the Hill with Senator Lamar Alexander's Office, luckily, I still have some contacts in his office, and he went over to the HELP Committee, which is the Health Education Labor and Pension Committee of the Senate. So it's very fortunate to have those contacts, and I was able to utilize them for Sensus' benefit really. There's still some upside on the reimbursement side of things and we're hoping to capture that as well of course.

[Ben Haynor:]

And is that going to -- I mean, do you get the sense that, that could happen on a more accelerated time frame than the initial battle they fought to get -- get it boosted?

[Michael Sardano:]

Yes, I do think so because we were able to have some of the in-ways on the Hill and really convince them that SRT in general is a great technology and it needs to be offered to the patient. We've convinced a lot of the people at CMS, AMA, et cetera, including the AAD as well, that this technology is here to stay. And we're very, very fortunate to have -- have been heard by those people. And I really don't think that it would take seven years again to ensure our upside.

[Ben Haynor:]

Okay. And, I mean -- and then I think it was in -- I don't know it was in the prepared remarks. But the best price -- you mentioned the best practice is sort of moving towards SRT, I would imagine that you guys believe that, that helps you ultimately with the payers?

[Joe Sardano:]

I think one of the things, Ben, that everybody identifies within healthcare is that in every other part of healthcare, surgery is usually the last resort, and everything else is usually done in advance. There hasn't been a whole lot of technology that's come into dermatology in the last 60 years until SRT reappeared, if you will. And so I think that recognizing the needs of the patients and the growing population of our elderly folks that are coming into more contact with skin cancer, I think that we're going to see within the next 24 to 36 months that patients being treated on SRT are probably going to overcome being treated surgically. And so when I look back in the '70s when they really started to work on Mohs, and Dr. Frederic Mohs, when he developed his practice or his technique, 1 in 1,500 people had skin cancer. Today, it's one in seven. So there's a huge difference in how you have to treat patients. There's a lot more patients than there are doctors. And therefore, they have to have better ways and means to help these patients because of preexisting conditions and things like that. So I think that it's inevitable that physicians are going to lean a lot more in the future on SRT. And I made the statement that it took us 10 years to have a little over 500 units installed. And I think that it will be half that time to get another 500 units installed.

[Ben Haynor:]

Okay. Great, great. And -- that color is definitely helpful. And then I guess on the unit front, maybe I missed this or misunderstood it, but a couple of things. It sounds like the vast, vast majority are taking advantage of the FMV lease and consequently, most of them are choosing the Vision. So of the 32 or what -- or so non-Chinese or non-China systems, what was kind of the breakdown between Vision and SRT-100?

[Joe Sardano:]

It was about 80%.

[Ben Haynor:]

Okay. Okay. That makes sense. And presumably, that's kind of the mix that you would expect going forward just based upon what you're seeing now?

[Joe Sardano:]

Yes. The reimbursement, as well as the fair market value lease certainly drives the customer to think more about the Vision product. And then keep in mind, because of the increase in reimbursements, they have access to more dollars in their treatments as well.

[Ben Haynor:]

Yes. Yes, makes sense. Good deal. Well, that's all I had gentlemen. Congrats again on the promotion and the quarter.

[Michael Sardano:]

Thanks a lot.

[Joe Sardano:]

Hey, Ben, thank you so much. Appreciate it.

[Operator:]

There appear to be no further questions at this time. I would now like to turn the call back over to Mr. Sardano for closing remarks.

[Joe Sardano:]

Thank you, Karen. So in closing, I want to thank everybody for their questions and being on the call today. Thank you once again for your time this afternoon and for your interest in Sensus Healthcare. We look forward to our next financial results conference when we report our first quarter results in early May. Be well, everybody. Thank you.

[Operator:]

This does conclude today's teleconference. We thank you again for your participation. You may disconnect your lines at this time. And have a great day.