Sensus Healthcare spent last year lobbying for dedicated billing codes that would make in-office superficial radiotherapy economically obvious for dermatologists treating non-melanoma skin cancer. Those codes took effect at the start of this year, and management entered the year talking about sequential growth and full-year profitability. The second quarter is the first real test of whether that reimbursement reset converts into diversified capital sales. It did not. A third-party lender failed to fund eight already-sold systems before the quarter closed, the historically largest customer contributed no units, and the company recorded a valuation allowance against deferred tax assets that treats near-term taxable income as unlikely.
Recognized revenue printed just above $2 million. The year-ago quarter cleared a bit over $7 million. Only eleven systems counted, and six of those were outright sales, because Fair Deal and rental placements spread consideration over the contract life rather than at shipment. Gross margin slipped into the mid thirties as international mix and the cost of seeding Fair Deal sites hit the income statement before utilization does. Operating expenses did come down, which is the honest part of the print. The GAAP loss exploded mainly because of a tax charge above $5 million, not because cash operating costs exploded.
The eight delayed systems are now approved at another bank, and management talks as if they land in the third quarter near a quarter-million average selling price. Website traffic and inbound interest rose after the codes went live, and the Centers for Medicare and Medicaid Services later proposed a further lift in the hospital delivery code. The company still used nearly $7 million of operating cash in the first half. Inventory climbed above $18 million while that cash went out the door. The open question is whether a noisier pipeline converts into cash before the mix shift finishes resetting the revenue base.