AMERICAN SHARED HOSPITAL SERVICES (NYSE AMERICAN: 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 and first six
months of 2017.
Second Quarter Results
For the three months ended June 30, 2017, medical services
revenue increased 9.5% to $4,945,000 compared to medical services
revenue of $4,518,000 for the second quarter of 2016. Net income
attributable to the Company for the second quarter of 2017 was
$113,000, or $0.02 per share. This compares to net income
attributable to the Company for the second quarter of 2016 of
$93,000, or $0.02 per share.
This year's second quarter net income reflected unusually high
selling and administrative expenses, consisting primarily of
certain one-time legal and consulting fees and non-recurring costs
associated with the start-up of AMS' Gamma Knife center in Lima,
Peru, which began treating patients in July. Income tax expense
also was unusually high in the second quarter, relative to pre-tax
income, as the start-up losses associated with the Peru Gamma Knife
project could not be included in the Company's income tax
computation for financial reporting purposes. These non-recurring
transactions amounted to approximately $0.02 per share, after
taxes.
Second quarter revenue for the Company's initial proton therapy
system installed at The Marjorie and Leonard Williams Center for
Proton Therapy at Orlando Health – UF Health Cancer Center in
Florida was $862,000. This center, which began treating patients in
April 2016, generated revenue for the second quarter of 2016 of
$446,000.
Revenue for the Company's Gamma Knife operations increased to
$3,968,000 for the second quarter of 2017 compared to $3,962,000
for the second quarter of 2016. As previously announced, AMS lost
one of its Gamma Knife units due to the expiration of its contract
term at the end of April 2017. Excluding this site, Gamma Knife
revenue increased 6% for this year's second quarter compared to the
second quarter of 2016.
Medical services gross margin for the second quarter of 2017
increased to 45.5% of revenue, compared to medical services gross
margin of 40.7% of revenue for the second quarter of 2016. The
positive impact on gross margin from the increase in proton therapy
revenue in this year's second quarter versus prior year was
partially offset by higher depreciation expense associated with
Cobalt-60 reloads at two Gamma Knife centers in this year's first
quarter and depreciation expense for the proton system.
Operating income increased 51.0% to $669,000 for the second
quarter of 2017 compared to operating income of $443,000 for the
same period a year earlier. Income before income taxes increased
48.9% to $664,000 for the second quarter of 2017 compared to
$446,000 for the second quarter of 2016. Non-GAAP pre-tax income,
net of income attributable to non-controlling interest, was
$333,000 for the second quarter of 2017. This compares to non-GAAP
pre-tax income, net of income attributable to non-controlling
interest, of $186,000 for the second quarter of 2016. Please refer
to the financial statements included with this press release for a
reconciliation of GAAP to non-GAAP financial measures.
Adjusted EBITDA, a non-GAAP financial measure, was $2,549,000
for the second quarter of 2017, compared to $2,328,000 for the
second quarter of 2016.
Six Months Results
For the six months ended June 30, 2017, medical services revenue
increased 12.6% to $9,859,000 compared to medical services revenue
of $8,756,000 for the first six months of 2016.
Excluding treatments at a customer site lost due to the
expiration of its contract term in April 2017, Gamma Knife revenue
decreased 3.5% for the first half of 2017 compared to the first
half of 2016.
Proton therapy revenue increased to $2,017,000 for the first
half of 2017 compared to $446,000 for the first half of 2016.
Net income attributable to the Company for the first six months
of 2017 was $406,000, or $0.07 per share. This compares to net
income attributable to the Company for the first six months of 2016
of $144,000, or $0.03 per share.
Adjusted EBITDA, a non-GAAP financial measure, was $5,165,000
for the first six months of 2017, compared to $4,457,000 for the
first six months of 2016.
Balance Sheet Highlights
At June 30, 2017, cash and cash equivalents was $2,851,000,
compared to $3,121,000 at December 31, 2016. Shareholders' equity
at June 30, 2017 was $28,083,000, or $4.92 per outstanding share.
This compares to shareholders' equity at December 31, 2016 of
$27,173,000, or $4.97 per outstanding share.
CEO Comments
Chairman and Chief Executive Officer Ernest A. Bates, M.D.,
said, "Treatment volume at our proton therapy center at UF Health
Cancer Center-Orlando Health increased to 1,189 fractions in this
year's second quarter, compared to 442 fractions during the
center's initial quarter of operations last year. Treatment volume
for this year's second quarter decreased slightly compared to this
year's first quarter, however, which we attribute to random
variation in patient flow that we also have experienced from time
to time in our Gamma Knife business. We expect treatment volume to
resume its upward trend in the second half of 2017. The MEVION S250
proton system we supplied Orlando Health continues to perform
admirably, and we continue to believe there is room for further
growth in treatment volume.
"We had anticipated relatively flat revenue in our Gamma Knife
business in this year's first half versus prior year, the result of
routine Cobalt-60 reload at two of our centers in the first
quarter, as well as the loss of one of our sites due to the
expiration of its contract term in this year's second quarter.
Looking ahead, we expect the performance of our Gamma Knife
business to improve as AMS' Gamma Knife del Pacífico Institute at
the Air Force Hospital in Lima, Peru ramps up patient treatments
that began last month, and the Gamma Knife® Perfexion™ system we
contracted to supply to Bryan Medical Center in Lincoln,
Nebraska begins treating patients in August. Volume at these new
centers should more than offset a Gamma Knife customer contract
that will end in fourth quarter of 2017.
"With start-up costs for our Gamma Knife center in Peru now
behind us, and renewed growth in treatment volume anticipated at
our proton therapy center in Orlando as well as in our Gamma Knife
business, we expect substantially improved financial performance
beginning in the current quarter."
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 4543 5421. 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 4543 5421#
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,
and the latest IGRT and IMRT systems. 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 continued
growth in volume of the MEVION S250 system, the expansion of the
Company's proton therapy business, and the timing of treatments by
new Gamma Knife systems) which involve risks and uncertainties
including, but not limited to, the risks of variability of
financial results between quarters, 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, 2016, its Quarterly Report on Form 10-Q for the three months
ended March 31, 2017, and the definitive Proxy Statement for the
Annual Meeting of Shareholders held on June 27, 2017.
Non-GAAP Financial Measure
Neither Adjusted EBITDA nor non-GAAP pre-tax income, 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 before income
taxes, income from operations, net income attributable to the
Company, earnings 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 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 June 30, Six months ended June 30, 2017
2016 2017 2016 Revenue $ 4,945,000 $ 4,518,000 $ 9,859,000 $
8,756,000 Costs of revenue 2,694,000 2,679,000
5,262,000 5,184,000 Gross margin
2,251,000 1,839,000 4,597,000 3,572,000 Selling &
administrative expense 1,138,000 963,000 2,277,000 1,912,000
Interest expense 444,000 433,000
897,000 718,000 Operating income 669,000
443,000 1,423,000 942,000 (Loss) on early extinguishment of debt --
-- --
(108,000
)
Interest & Other (loss) income
(5,000
)
3,000
(1,000
)
8,000 Income before income taxes 664,000 446,000
1,422,000 842,000 Income tax expense 220,000
93,000 436,000 157,000 Net
income $ 444,000 $ 353,000 $ 986,000 $ 685,000
Less: Net (income) attributable to
non-controlling interest
(331,000
)
(260,000
)
(580,000
)
(541,000
)
Net income attributable to American Shared
Hospital Services
$ 113,000 $ 93,000 $ 406,000 $ 144,000
Income per common share: Basic $ 0.02 $ 0.02 $
0.07 $ 0.03 Diluted $ 0.02 $ 0.02 $
0.07 $ 0.03
Balance Sheet Data June 30,
December 31, 2017 2016 Cash and cash equivalents $
2,851,000 $ 3,121,000 Current assets $ 8,845,000 $ 8,388,000
Investment in equity securities $ 579,000 $ 579,000 Total assets $
58,994,000 $ 60,598,000 Current liabilities $ 8,447,000 $
8,681,000 Shareholders' equity $ 28,083,000 $ 27,173,000
AMERICAN SHARED HOSPITAL SERVICES Selected
Financial Data (unaudited)
Adjusted EBITDA
Three months ended
Six months ended
June 30,
June 30,
2017
2016
2017
2016
Net Income
$
113,000
$
93,000
$
406,000
$
144,000
Plus:
Income Tax Expense
$
220,000
$
93,000
$
436,000
$
157,000
Interest Expense
$
444,000
$
433,000
$
897,000
$
718,000
Depreciation and Amortization Expense
$
1,722,000
$
1,649,000
$
3,326,000
$
3,211,000
Stock-Based Compensation Expense
$
50,000
$
60,000
$
100,000
$
119,000
Early Extinguishment of Debt
$
--
$
--
$
--
$
108,000
Adjusted EBITDA
$ 2,549,000
$
2,328,000
$
5,165,000
$
4,457,000
AMERICAN SHARED HOSPITAL SERVICES Selected
Financial Data (unaudited) Non-GAAP Pre-tax Income
Three months ended Six months ended June 30,
June 30, 2017 2016 2017 2016 Income before
income taxes $ 664,000 $ 446,000 $ 1,422,000 $ 842,000
Less: Net (income) attributable to
non-controlling interest
$ (331,000 ) $ (260,000 ) $ (580,000 ) $ (541,000 )
Non-GAAP Pre-tax Income
$ 333,000
$
186,000
$
842,000
$
301,000
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170810005291/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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