Anthony Vendetti: So you talked about the fair market. Joe, you talked about the fair market value lease program as being a program that’s helped with 2022 sales. Interest rates went up, but maybe it’s had some impact, but you said, obviously, on the fair market value lease, they may have to see only about another 1, 1.5 patients. I think it’s a month to still be able to make that. The program itself profitable. In other words, I think it was like one a month, and then if they see now 2.5 a month, it still comes — after 2.5, it’s still profitable. Could you just — I might not be getting those numbers exactly right. So if you just go through that with me. And then as best you can say, how much of an impact has rising interest rates you think had on the — on your sales or the fair market value lease program?
And just what’s your outlook for that program? I think it was 80% of sales last quarter. What was it approximately this quarter? And do you expect that trend to be the same in ’23?
Joseph Sardano: Okay. Thanks, Anthony. The — again, I’ll go back to the analogy that in the early times when we introduced fair market value lease, the interest rate was low, but we still told the customer that they required 2 patients a month to breakeven. It was actually about 1.25, 1.5 patients, but you can’t breakup a patient into a quarter or half. It’s either a full patient or not. So we consistently told the customer being as conservative as we were requires 2 patients a month. Now with the increase over the last year as the Fed increased it, it really is about 2 patients a month. It’s still slightly under, but maybe 1 in 7/8 of a patient, but we still claim we still show pro formas based on 2 patients a month. And the physicians are okay with that, but it does require an additional conversation because of the increase.
So it’s not like we say, oh, okay, your interest rate is 4%. We have to go to and say, okay, now your interest rate is 9%. So there is a difference, and it requires an additional conversation or two to go through that, but the breakeven is still 2 patients a month. Now the ROI is still very, very good, as we were saying. It still provides them the opportunity to get into that technology, and we still don’t see any of our customers doing less than 10 patients a month. So they don’t have a shortage of patients. And then the big point of the fair market value lease is the fact that its characteristics is that it’s a nonrecourse off-balance sheet lease, which means the doctor, if he’s in business for 3 years, and we deal with all doctors that are in business for more than 3 years, they don’t have to come up with any personal guarantees.
Not signing personal guarantees and having off-balance sheet financing is tremendously important, especially when they bring in their CPAs. Their CPAs are telling them this is — it’s a no-brainer, you need to go into this. Now with all that being said, we’re still seeing the majority of the physicians buying in cash, okay? They have the cash because they have the volume, and they have the confidence with the cash to buy the products. So the majority of our sales are still with cash purchases. And these — the fair market value lease is a great adjunct to get into the conversation, but when push comes to shove and it comes to the end and they’re starting to talk to their CPAs, their CPAs are saying, buy it outright? You got the cash do it. I think — a lot of it has to do with Section 179 of the IRS code.
