AMERICAN SHARED HOSPITAL SERVICES (NYSE MKT:AMS)
(the "Company"), a leading provider of turnkey technology solutions
for advanced radiosurgical and radiation therapy services, today
announced financial results for the second quarter of 2016.
Second Quarter Results
For the three months ended June 30, 2016, medical services
revenue increased 2.8% to $4,518,000 compared to medical services
revenue of $4,394,000 for the second quarter of 2015.
Revenue for the Company's initial proton therapy system
installed at The Marjorie and Leonard Williams Center for Proton
Therapy at UF Health Cancer Center-Orlando Health in Florida, which
began treating patients in April, was $446,000.
Revenue for the Company's Gamma Knife operations decreased to
$3,962,000 for the second quarter of 2016 compared to $4,281,000
for the second quarter of 2015, reflecting a 6.9% decrease in
treatment volume versus prior year.
Net income attributable to the Company for the second quarter of
2016 was $93,000, or $0.02 per share. This compares to a net loss
attributable to the Company for the second quarter of 2015 of
$1,970,000, or $0.36 per share, which included the loss
attributable to an impairment charge of $2,114,000 related to the
Company’s strategic equity investment in Mevion Medical Systems.
Adjusted net income attributable to the Company for the second
quarter of 2015, after excluding the loss attributable to the
impairment charge, was $144,000, or $0.03 per share.
Medical services gross margin for the second quarter of 2016 was
essentially unchanged at 40.7% of revenue, compared to medical
services gross margin of 41.0% of revenue for the second quarter of
2015.
Operating income decreased to $443,000 for the second quarter of
2016 compared to operating income of $478,000 for the same period a
year earlier, primarily the result of higher interest expense
associated with the proton system in Florida. Adjusted pre-tax
income, net of income attributable to non-controlling interest, was
$186,000 for the second quarter of 2016. This compares to adjusted
pre-tax income, net of income attributable to non-controlling
interest and the loss attributable to the impairment charge related
to the Company’s equity investment in Mevion, of $250,000 for the
second quarter of 2015.
Selling and administrative expenses for the second quarter of
2016 decreased slightly to $963,000, compared to selling and
administrative expenses of $979,000 for the second quarter of
2015.
Adjusted EBITDA, a non-GAAP financial measure, was $2,328,000
for the second quarter of 2016, compared to $2,246,000 for the
second quarter of 2015. Please refer to the financial statements
included with this press release for a reconciliation of GAAP to
this non-GAAP financial measure.
Six Months Results
For the six months ended June 30, 2016, medical services revenue
increased 2.9% to $8,756,000 compared to medical services revenue
of $8,511,000 for the first six months of 2015.
Gamma Knife treatment volume decreased 3.4% for the first six
months of 2016 compared to the same period of 2015. Excluding
treatments at a customer site whose contract expired at the end of
the first quarter of 2015, Gamma Knife volume was down 0.8% for
this year's first half compared to the first half of 2015.
Net income attributable to the Company for the first six months
of 2016 was $144,000, or $0.03 per share. This compares to a net
loss attributable to the Company for the first six months of 2015
of $1,842,000, or $0.34 per share. Excluding the loss on early
extinguishment of debt of $108,000 during the first half of 2016,
net of estimated taxes, adjusted net income attributable to the
Company for the first half of 2016 was $208,000, or $0.04 per
share. This compares to adjusted net income attributable to the
Company for the first half of 2015, excluding the loss attributable
to the impairment charge, of $272,000, or $0.05 per share.
Adjusted EBITDA was $4,457,000 for the first six months of 2016,
compared to $4,365,000 for the first six months of 2015.
Balance Sheet Highlights
At June 30, 2016, cash, cash equivalents and restricted cash was
$1,814,000 compared to $2,259,000 at December 31, 2015.
Shareholders' equity at June 30, 2016 was $25,690,000, or $4.79 per
outstanding share. This compares to shareholders' equity at
December 31, 2015 of $25,180,000, or $4.69 per outstanding
share.
CEO Comments
Chairman and Chief Executive Officer Ernest A. Bates, M.D.,
said, "Treatment volume at our first proton therapy center, at UF
Health Cancer Center-Orlando Health, ramped up much faster than we
anticipated when the system began treating patients in April. The
MEVION S250 system we supplied the Orlando center performed 442
fractions during the quarter, reliably and with outstanding patient
throughput. We expect this system to contribute more significantly
to revenue in this year's second half as the center moves further
up the learning curve and volume increases. We plan to expand our
proton therapy business, and are currently in discussions with
several other hospitals seeking to partner with AMS to develop
proton centers of their own.
"Volume in our Gamma Knife business was down marginally for this
year's first six months compared to the same period of 2015,
excluding volume lost due to the expiration of a customer contract
at the end of last year's first quarter. We attribute this slight
decrease to normal variation in the flow of new cancer patients at
several of our sites this year compared to last. Nevertheless,
gross margins in our Gamma Knife business remain robust, and we
continue to work diligently to improve profitability and
utilization of the 17 Gamma Knife systems AMS currently has placed
at hospitals around the country."
Earnings Conference Call
American Shared has scheduled a conference call at 12:00 p.m.
PDT (3:00 p.m. EDT) today. To participate in the live call, dial
(800) 588-4973 at least 5 minutes prior to the scheduled start
time, and mention confirmation number 4314 7466. A simultaneous
webcast of the call may be accessed through the Company's website,
www.ashs.com, or www.streetevents.com (institutional investors). A
replay will be available for 30 days at these same internet
addresses, or by dialing 888-843-7419 and entering 4314 7466# when
prompted.
About AMS
American Shared Hospital Services provides turnkey technology
solutions for advanced radiosurgical and radiation therapy
services. AMS is the world leader in providing Gamma Knife
radiosurgery equipment, a non-invasive treatment for malignant and
benign brain tumors, vascular malformations and trigeminal
neuralgia (facial pain). The Company also offers proton therapy,
the latest IGRT and IMRT systems, as well as its proprietary
Operating Room for the 21st CenturySM concept. AMS owns a common
stock investment in Mevion Medical Systems, Inc., developer of the
compact MEVION S250 Proton Therapy System.
Safe Harbor Statement
This press release may be deemed to contain certain
forward-looking statements with respect to the financial condition,
results of operations and future plans of American Shared Hospital
Services (including statements regarding the expected contribution
to revenue from the MEVION S250 system, the expansion of the
Company's proton therapy business, and efforts to improve
profitability and utilization) which involve risks and
uncertainties including, but not limited to, the risks of the Gamma
Knife and radiation therapy businesses, the risks of developing The
Operating Room for the 21st Century program, the risks of investing
in Mevion Medical Systems, Inc., and the risks of the timing,
financing, and operations of the Company’s proton therapy business.
Further information on potential factors that could affect the
financial condition, results of operations and future plans of
American Shared Hospital Services is included in the filings of the
Company with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K for the year ended December
31, 2015, its Form 10-Q for the quarter ended March 31, 2016, and
the definitive Proxy Statement for the Annual Meeting of
Shareholders held on June 21, 2016.
Non-GAAP Financial Measures
None of adjusted EBITDA, adjusted pre-tax income and adjusted
net income attributable to the Company, the non-GAAP measures
presented in this press release and supplementary information, is a
measure of performance under the accounting principles generally
accepted in the United States ("GAAP"). These non-GAAP financial
measures should not be considered as substitute for, and investors
should also consider, income (loss) before income taxes, income
from operations, net income attributable to the Company, earnings
(loss) per share and other measures of performance as defined by
GAAP as indicators of the Company's performance or profitability.
We use these non-GAAP financial measures as a means to evaluate
period-to-period comparisons. Our management believes that these
non-GAAP financial measures provide meaningful supplemental
information regarding our performance by excluding certain expenses
and charges that may not be indicative of the operating results of
our recurring core business, such as the impairment charge related
to the Company's equity investment in Mevion and the loss on early
extinguishment of debt. We believe that both management and
investors benefit from referring to these non-GAAP financial
measures in assessing our performance.
AMERICAN SHARED HOSPITAL
SERVICES
Selected Financial Data
(unaudited)
Summary of Operations Data
Three months ended
Six months ended June 30, June 30, 2016 2015 2016
2015 Medical services revenue $ 4,518,000 $ 4,394,000 $
8,756,000 $ 8,511,000 Costs of revenue 2,679,000
2,592,000 5,184,000 5,112,000
Gross margin 1,839,000 1,802,000 3,572,000 3,399,000 Selling
& administrative expense 963,000 979,000 1,912,000 1,800,000
Interest expense 433,000 345,000
718,000 665,000 Operating income 443,000
478,000 942,000 934,000
(Loss) on write down investment in equity
securities
-- (2,114,000 ) -- (2,114,000 ) (Loss) on early extinguishment of
debt -- -- (108,000 ) -- Other income 3,000
5,000 8,000 11,000 Income (loss)
before income taxes 446,000 (1,631,000 ) 842,000 (1,169,000 )
Income tax expense 93,000 106,000
157,000 236,000 Net income (loss) $
353,000 $ (1,737,000 ) $ 685,000 $ (1,405,000 )
Less: Net (income) attributable to
non-controlling interest
(260,000 ) (233,000 ) (541,000 )
(437,000 )
Net income (loss) attributable to American
Shared Hospital Services
$ 93,000 $ (1,970,000 ) $ 144,000 $ (1,842,000 )
Income (loss) per common share: Basic $ 0.02 $ (0.36 ) $
0.03 $ (0.34 ) Assuming dilution $ 0.02 $ (0.36 ) $
0.03 $ (0.34 )
Balance Sheet Data
Jun. 30, Dec. 31, 2016 2015 Cash and cash equivalents $
1,814,000 $ 2,259,000 Current assets $ 6,527,000 $ 6,007,000
Investment in equity securities $ 579,000 $ 579,000 Total assets $
59,301,000 $ 54,114,000 Current liabilities $ 9,577,000 $
8,698,000 Shareholders' equity $ 25,690,000 $ 25,180,000
AMERICAN SHARED HOSPITAL
SERVICES
Reconciliation of non-GAAP results of
operations to the nearest comparable GAAP measures
Three months ended
Six months ended
2016 2015 2016 2015 Income (loss) before
income taxes $ 446,000 $ (1,631,000 ) $ 842,000 $ (1,169,000 )
Less: Net (income) attributable to
non-controlling interest
$ (260,000 ) $ (233,000 ) $ (541,000 ) $ (437,000 )
Income before income taxes, net of income
attributable to non-controlling interest
$ 186,000 $ (1,864,000 ) $ 301,000 $ (1,606,000 )
Loss on write down of investment in equity
securities
$
--
$
2,114,000
$
--
$
2,114,000
Early extinguishment of debt, net of
estimated tax
$ -- $ -- $ 64,000 $ -- Adjusted
pre-tax income $ 186,000 $ 250,000 $ 365,000 $
508,000 Net income (loss) $ 93,000 $ (1,970,000 ) $ 144,000
$ (1,842,000 )
Loss on write down of investment in equity
securities
$
--
$
2,114,000
$
--
$
2,114,000
Early extinguishment of debt, net of estimated tax $ -- $ --
$ 64,000 $ -- Adjusted net income $ 93,000
$ 144,000 $ 208,000 $ 272,000 Adjusted
net income per common share: $ 0.02 $ 0.03 $ 0.04
$ 0.05
AMERICAN SHARED HOSPITAL
SERVICES
Adjusted EBITDA
Three months ended Six months ended June 30,
June 30, 2016 2015 2016 2015 Net Income (loss)
$ 93,000 $ (1,970,000 ) $ 144,000 $ (1,842,000 )
Plus:
Income Tax Expense
$
93,000
$
106,000
$
157,000
$
236,000
Interest Expense
$
433,000
$
345,000
$
718,000
$
665,000
Depreciation and Amortization Expense
$
1,649,000
$
1,593,000
$
3,211,000
$
3,098,000
Share-Based Payment
$
60,000
$
58,000
$
119,000
$
94,000
Loss on Write Down Mevion
$
--
$
2,114,000
$
--
$
2,114,000
Early Extinguishment of Debt
$
--
$
--
$
108,000
$
--
Adjusted EBITDA $ 2,328,000 $ 2,246,000 $
4,457,000 $ 4,365,000
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version on businesswire.com: http://www.businesswire.com/news/home/20160810005416/en/
American Shared Hospital ServicesErnest A. Bates, M.D., (415)
788-5300Chairman and Chief Executive
Officereabates@ashs.comorBerkman AssociatesNeil Berkman, (310)
477-3118Presidentinfo@berkmanassociates.com
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