AMERICAN SHARED HOSPITAL SERVICES (NYSE MKT:AMS),
a leading provider of turnkey technology solutions for advanced
radiosurgical and radiation therapy services, today announced
financial results for the fourth quarter and 2014.
Fourth Quarter Results
For the three months ended December 31, 2014, medical services
revenue increased 1.4% to $3,992,000 compared to medical services
revenue of $3,937,000 for the fourth quarter of 2013. Revenue for
the fourth quarter of 2013 included the Company's operations in
Turkey, which were sold effective May 31, 2014. Excluding prior
year's revenue in Turkey, medical services revenue increased 12.0%
for the fourth quarter of 2014 compared to the fourth quarter of
2013.
Net income for the fourth quarter of 2014 was $58,000, or $0.01
per share. This compares to a net loss for the fourth quarter of
2013 of $82,000, or $0.02 per share, which included a pre-tax loss
from foreign currency transactions of $334,000 due to the weakening
of the Turkish Lira against the U.S. Dollar.
The number of procedures performed on Gamma Knife® PerfexionTM
systems supplied by AMS in the United States increased 5.8% for the
fourth quarter and decreased 7.7% for all of 2014 compared to the
same periods of 2013, excluding procedures performed in Turkey. The
total number of procedures performed in AMS' U.S. Gamma Knife
business, including Gamma Knife and Gamma Knife Perfexion
procedures, increased 13.8% for the fourth quarter and decreased
4.9% for all of 2014 compared to the same periods of 2013,
excluding procedures performed in Turkey.
Medical services gross margin for the fourth quarter of 2014
increased to 38.6%, compared to medical services gross margin of
34.3% for the fourth quarter of 2013, primarily the result of lower
costs due to the sale of the Turkish subsidiary. Operating income
increased 45.4% to $381,000 for the fourth quarter of 2014 compared
to $262,000 for the same period a year earlier. Pretax income
increased to $154,000 for the fourth quarter of 2014 compared to a
pretax loss of $38,000 for the fourth quarter of 2013.
Selling and administrative expenses for the fourth quarter of
2014 were $838,000 compared to $750,000 for the fourth quarter of
2013, primarily due to increased accounting and tax services and
legal fees.
Twelve Months Results
For the twelve months ended December 31, 2014, medical services
revenue decreased to $15,417,000, compared to medical services
revenue of $17,584,000 for 2013. Excluding revenue in Turkey,
medical services revenue decreased 7.3% for 2014 compared to
2013.
The net loss for 2014 of $952,000, or $0.19 per share, included
a pre-tax loss from the sale of the Turkish subsidiary of $572,000,
and a pre-tax gain from foreign currency transactions of $161,000.
In comparison, the net loss for 2013 of $312,000, or $0.07 per
share, included a pre-tax loss from foreign currency transactions
of $1,174,000.
Balance Sheet Highlights
At December 31, 2014, cash, cash equivalents and certificates of
deposit were $1,059,000 compared to $1,909,000 at December 31,
2013. Shareholders' equity at December 31, 2014 was $26,154,000, or
$4.88 per outstanding share. This compares to shareholders' equity
at December 31, 2013 of $24,055,000, or $5.22 per outstanding
share.
On June 13, 2014, AMS realized proceeds of approximately $1.6
million from the private placement of common stock. Additionally,
on October 24, 2014, AMS closed the private sale of $1.2 million
aggregate principal amount of unsecured notes, warrants to purchase
200,000 shares of common stock, no par value, and 100,000 newly
issued common shares at a purchase price of $2.20 per share. The
Warrants expire three years after their initial issuance date and
may be exercised for a purchase price equal to $2.20 per share of
Common Stock, the closing price per share of the Company’s Common
Stock on the New York Stock Exchange.
CEO Comments
Chairman and Chief Executive Officer Ernest A. Bates, M.D.,
said, "We enjoyed a healthy increase in procedure volume in our
domestic Gamma Knife business in the fourth quarter compared to
prior year, as we did in the third quarter. AMS' financial results
reflected this gain, with gross margin, operating income and net
income all up versus the fourth quarter of 2013.
"We are optimistic about our Gamma Knife business in 2015. One
reason is the increase in reimbursement for both Gamma Knife and
linear accelerator (LINAC) radiosurgery that went into effect on
January 1, 2015. The Centers for Medicare and Medicaid Services
(CMS) has established a comprehensive Ambulatory Payment
Classification (APC) for Gamma Knife and LINAC one session cranial
radiosurgery, one of the most common procedures performed on these
devices. The comprehensive reimbursement rate of approximately
$9,768 will be inclusive of the delivery and ancillary codes but
exclusive of co-insurance payments or other adjustments. For 2014,
the average current CMS reimbursement rate for delivery and
ancillary codes (exclusive of co-insurance and other adjustments)
was approximately $5,600--an estimated increase of $4,168 per
Medicare Gamma Knife treatment (exclusive of co-insurance and other
adjustments).
"The expansion of our Gamma Knife portfolio is another reason
for optimism for the new year. Our newest Gamma Knife Perfexion
system, located at PeaceHealth Sacred Heart Medical Center at
RiverBend, Springfield, Oregon, began treating patients in December
2014. This is the fourteenth Perfexion system in AMS' portfolio.
The Gamma Knife Perfexion remains the 'gold standard' for cranial
radiosurgery. It is an excellent device for treating metastatic
brain tumors, which are diagnosed in an estimated 180,000 new
patients annually.
"Construction of the dedicated proton therapy center at UF
Health Center Cancer Center at Orlando Health, AMS' first proton
center, continues apace. The superconducting synchrocyclotron
proton accelerator—the key element of the MEVION S250™ proton
therapy system to be installed at the center—was delivered in
November 2014. We continue to expect the installation process to be
completed late this year and patient treatments to begin shortly
thereafter. The UF Health Cancer Center at Orlando Health, Central
Florida’s most advanced cancer center, is the first hospital in the
Central Florida region to install a proton therapy system.
"The world's first MEVION S250 went into service just over a
year ago at the S. Lee Kling Proton Therapy Center at Barnes-Jewish
Hospital and Washington University School of Medicine in St. Louis.
The clinical data from the first year of treating patients at this
site recently reported by Mevion are remarkable. The MEVION S250
took just 11 months to treat its first 100 patients--the fastest
per treatment room ramp-up of any proton therapy system. The system
has already treated more than 20 patients in a single day and in a
single work shift. Additionally, the system demonstrated efficient
treatment times, with 97% operational uptime just five months after
opening, and the ability to treat a diverse and complex array of
cancers in both children and adults. These reliability and patient
throughput data are enormously significant to hospitals considering
the development of a proton center, and helpful to us as we
negotiate additional proton projects."
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) 351-9852 at least 5 minutes prior to the scheduled start
time. A simultaneous WebCast of the call may be accessed through
the Company's website, www.ashs.com, or through CCBN,
www.earnings.com (individual investors) or www.streetevents.com
(institutional investors). A replay will be available for 30 days
at these same internet addresses, or by calling (888) 843-7419,
pass code 3931 0536#.
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 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, 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 a development-stage
company, 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 and Form 10-K/A for the year
ended December 31, 2013, the Quarterly Report on Form 10-Q for the
quarter ended March 31, 2014, the Form 10-Q and Form 10-Q/A for the
quarter ended June 30, 2014, the Form 10-Q for the quarter ended
September 30, 2014,and the definitive Proxy Statement for the
Annual Meeting of Shareholders held on June 10, 2014.
Selected Financial Data
(unaudited)
Summary of Operations Data Three months
ended Twelve months ended December 31, December 31, 2014 2013 2014
2013 Medical services revenue $ 3,992,000 $ 3,937,000 $ 15,417,000
$ 17,584,000 Costs of revenue 2,450,000
2,585,000 10,138,000 10,640,000
Gross margin 1,542,000 1,352,000 5,279,000 6,944,000 Selling &
administrative expense 838,000 750,000 3,630,000 4,025,000 Interest
expense 323,000 340,000
1,699,000 1,799,000 Operating income (loss)
381,000 262,000 (50,000 ) 1,120,000 (Loss) on sale of subsidiary
-- -- (572,000 ) --
Gain (loss) foreign currency transactions -- (334,000 )
161,000 (1,174,000 ) Other income 6,000 6,000
28,000 25,000 Income (loss)
before income taxes 387,000 (66,000 ) (433,000 ) (29,000 ) Income
tax expense 96,000 44,000
129,000 84,000
Net income (loss)
$ 291,000 $ (110,000 ) $ (562,000 ) $ (113,000 ) Less: Net (income)
loss attributable
to non-controlling interest (233,000 ) 28,000
(390,000 ) (199,000 ) Net income (loss) attributable
to American Shared Hospital Services $ 58,000 $ (82,000 ) $
(952,000 ) $ (312,000 ) Earnings (loss) per common share: Basic $
0.01 $ (0.02 ) $ (0.19 ) $ (0.07 )
Assuming dilution
$
0.01
$
(0.02
)
$
(0.19
)
$
(0.07
)
Balance Sheet Data December 31, 2014 2013
Cash and cash equivalents $ 1,059,000 $ 1,909,000 Current
assets $ 14,247,000 $ 7,706,000 Certificate of deposit $ 9,000,000
$ 9,000,000 Investment in equity securities $ 2,709,000 $ 2,701,000
Total assets $ 67,528,000 $ 71,742,000 Current liabilities $
16,251,000 $ 11,785,000 Shareholders' equity $ 26,154,000 $
24,055,000
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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