SRTS (3.83) Looks like the market is being a little more realistic today. I still just find this one absolutely perplexing. I can't ever recall a company being so optimistic and then sales collapsing like 70% in one quarter. Still seems like something blew up somewhere with their one major customer.
FWIW, I did re-listen to the call at the dial-in number and I think I heard most of the stuff correctly that I previously mentioned in this message:
The one additional thing I heard this time was that some of their smaller doc's offices will service 10-12 clients each month, whereas the busier ones can do 40 or 50 a month (I think that's what I heard). So here again, the "inflation" argument, or "interest rates rising" arguments, just don't make sense for the massive sales decline. CEO has said before that it used to take only 2 clients a month for a doc to break even on the lease program, and even with higher interest rates it's only about 2.5 clients a month. So even a low volume office of 10-12 clients, it should make plenty of sense.
One other thing struck me when listening to the call again regarding why the recurring rev model might make sense for some docs. Sensus has said in the past that many (or maybe even most) of their docs are also Mohs surgeons. I think Mohs is a much higher dollar value procedure and there are plenty of them to do. As it is, the doc might have to give up his time doing a Mohs surgery on a melanoma, in order to do the lower cost SRT procedures on non-melanoma. Just totally making up these numbers, but would you give up $1,500 an hour work to do $200 an hour work? So to steal Munger's line it's sort of a "show me the incentive, and I'll show you the outcome" type of thing. In theory, SRT may be a better procedure for the patient with a non-melanoma and the doc could even agree with that, but if it actually takes away from a Mohs surgeon's time when he can be booked solid on the more serious stuff, the incentive just isn't there. With the recurring model, the doc could keep his full schedule of high dollar Mohs melanoma surgeries, and let somebody else handle the non-melanoma stuff. So this would be free additional profit.
Having said all that, I'm in agreement with gil that the company is currently still more of a suspect than a prospect for me. IN THEORY, the recurring rev thing might work, but has yet to be proven. And when they still don't give a plausible explanation for such a huge loss of revenue, there's every reason to be suspect.
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