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 third quarter and first nine months of
2015.
Third Quarter Results
For the three months ended September 30, 2015, medical services
revenue decreased 2.7% to $3,875,000 compared to medical services
revenue of $3,982,000 for the third quarter of 2014. The decrease
in revenue for this year's third quarter was due, in part, to
scheduled downtime at a customer site in order to perform a
Cobalt-60 reload.
Net income for this year's third quarter increased to $43,000,
or $0.01 per share. This compares to net income of $13,000, or
$0.00 per share, for the third quarter of 2014.
The total number of procedures performed in AMS' U.S. Gamma
Knife business decreased 3.0% for the third quarter
compared to the same period of 2014, reflecting downtime for the
Cobalt reload.
Medical services gross margin for the third quarter of 2015
decreased to 37.5%, compared to medical services gross margin of
40.3% for the third quarter of 2014, primarily the result of lower
treatment volume and a change in the mix of treatments by
location.
Operating income increased 15.0% to $315,000 for the third
quarter of 2015 compared to operating income of $274,000 for the
same period a year earlier. Pre-tax income, net of income
attributable to non-controlling interest, increased to $135,000 for
the third quarter of 2015 compared to pre-tax income, net of income
attributable to non-controlling interest, of $42,000 for the third
quarter of 2014.
Selling and administrative expenses for the third quarter of
2015 decreased to $904,000 compared to SG&A expenses of
$933,000 for the third quarter of 2014, primarily reflecting lower
consulting fees. Interest expense decreased to $235,000 compared to
interest expense of $396,000 for the third of 2014, the result of
the closure of the Company's line of credit on January 2, 2015, the
pay-down of the AMS's existing debt obligation for its IGRT device,
and a one-time benefit for a lease modification recorded in this
year's third quarter.
Nine Months Results
For the nine months ended September 30, 2015, medical services
revenue increased 8.4% to $12,386,000 compared to medical services
revenue of $11,425,000 for the first nine months of 2014. Excluding
prior year's revenue in Turkey, medical services revenue increased
13.7% for this year's first nine months compared to the first nine
months of 2014.
For the nine months ended September 30, 2015, the Company
incurred a net loss of $1,799,000, or $0.33 per share. The loss was
solely attributable to a non-cash charge of $2,114,000, or $0.39
per share, related to AMS' strategic equity investment in Mevion
Medical Systems. Excluding this charge, the Company would have
reported net income of $315,000, or $0.06 per share, for the first
nine months of 2015. This compares to a net loss for the first nine
months of 2014 of $1,010,000, or $0.21 per share, which included a
pre-tax loss on the sale of the Turkey subsidiary of $572,000 and a
pre-tax gain on foreign currency transactions of $161,000 due to
the strengthening of the Turkish Lira against the U.S. Dollar.
The total number of procedures performed in AMS' U.S. Gamma
Knife business increased 9.9% for the first nine months of 2015
compared to the same period of 2014, excluding procedures performed
in Turkey.
Operating income for the first nine months of 2015 increased to
$1,249,000 compared to an operating loss of $431,000 for last
year's first nine months.
Interest expense decreased for this year's first nine months to
$900,000 compared to $1,376,000 for the same period a year earlier.
Excluding interest expense in Turkey, this decrease was due to the
closure of the Company’s line of credit on January 2, 2015, the
pay-down of the Company’s existing debt obligation for its IGRT
device at the end of 2014 and an existing lease obligation for a
Gamma Knife site at the end of the first quarter 2014, and a
one-time benefit for a lease modification, recorded in this year's
third quarter.
Balance Sheet Highlights
At September 30, 2015, cash and cash equivalents were $2,184,000
compared to $1,059,000 at December 31, 2014. As of December 31,
2014, AMS had a $9,000,000 renewable line of credit with a bank
secured by a certificate of deposit. This line was paid in full on
January 2, 2015 using the proceeds from the certificate of deposit.
As a result, current liabilities decreased to $9,015,000 at
September 30, 2015 compared to $16,251,000 at December 31, 2014.
Shareholders' equity at September 30, 2015 was $24,766,000, or
$4.62 per outstanding share. This compares to shareholders' equity
at December 31, 2014 of $26,154,000, or $4.88 per outstanding
share.
CEO Comments
Chairman and Chief Executive Officer Ernest A. Bates, M.D.,
said, "Procedure volume remained solid in the third quarter, albeit
down marginally compared to last year's exceptionally strong third
quarter volume primarily as a result of a Cobalt reload at one of
our sites this year. Operating income nevertheless increased, the
result of lower interest expense, as explained above, and reduced
SG&A, as we remained focused on tightly controlling our
operating costs. Net income attributable to AMS shareholders also
increased. We believe our Gamma Knife business is well positioned
for continued success.
"The Centers for Medicare and Medicaid Services (CMS) has posted
its Medicare hospital outpatient prospective payment rates for
calendar year 2016. The CMS comprehensive reimbursement rate for
both Gamma Knife and LINAC one session cranial radiosurgery of
approximately $7,300 will be inclusive of the delivery and certain
ancillary codes but exclusive of co-insurance payments or other
adjustments. Effective in 2016, treatment planning and MRI
treatment imaging codes will be reimbursed separately. The average
2016 CMS reimbursement rate for delivery and separately
reimbursable ancillary codes (exclusive of co-insurance and other
adjustments) is estimated at $8,781 compared to the current rate of
$9,768, a decrease of 10.1%. To put this in perspective, we
estimate that CMS’s Gamma Knife rate reduction would have reduced
AMS' annualized 2015 revenue by approximately 2%.
"CMS' 2016 proton therapy delivery code rates per daily session
are $506, a 0.4% decrease ($508 in 2015) for a simple treatment
without compensation; $1,151, a 7.4% increase ($1,072 in 2015), for
a simple treatment with compensation; and $1,151, a 7.4% increase
($1,072 in 2015), for an intermediate or complex treatment.
"AMS' first proton therapy center is now under construction at
UF Health Cancer Center at Orlando Health in Florida. This center,
which will employ the MEVION S250 proton therapy system, is
expected to begin treating patients in the first quarter of 2016.
We expect to finalize and announce a permanent financing package
for this project soon.
"We believe proton therapy represents an extraordinary growth
opportunity for AMS. Hospitals around the country have expressed
interest in partnering with AMS to develop proton centers of their
own, also employing the MEVION S250 proton therapy system being
installed in Orlando. Clinical results from the MEVION S250 systems
already treating patients at cancer centers in St. Louis,
Jacksonville and New Brunswick, New Jersey have demonstrated the
device's reliability and rapid patient throughput, as well as its
ability to treat a diverse and complex array of cancers in both
children and adults. We believe that the clinical advantages of
proton therapy in the treatment of a wide range of cancers will
support rapid growth in the application of this advanced
therapeutic technology."
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 4119 8398#.
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 for the year ended December
31, 2014, its quarterly reports on Form 10-Q for the three months
ended March 31, 2015 and June 30, 2015, and the definitive Proxy
Statement for the Annual Meeting of Shareholders held on June 16,
2015.
Selected Financial Data
(unaudited)
Summary of Operations Data Three months
ended
Nine months ended September 30, September 30, 2015
2014 2015 2014
Medical services revenue $ 3,875,000 $ 3,982,000 $ 12,386,000 $
11,425,000 Costs of revenue 2,421,000
2,379,000 7,533,000 7,688,000
Gross margin 1,454,000 1,603,000 4,853,000 3,737,000 Selling &
administrative expense 904,000 933,000 2,704,000 2,792,000 Interest
expense 235,000 396,000 900,000
1,376,000 Operating income (loss) 315,000
274,000 1,249,000 (431,000 )
(Loss) on write down investment in equity
securities
-- -- (2,114,000 ) -- (Loss) on sale of subsidiary -- -- --
(572,000 ) Gain on foreign currency transaction -- -- -- 161,000
Other income 3,000 7,000 14,000
22,000 Income (loss) before income taxes
318,000 281,000 (851,000 ) (820,000 ) Income tax expense
92,000 29,000 328,000
33,000 Net income (loss) $ 226,000 $ 252,000 $ (1,179,000 )
$ (853,000 )
Less: Net (income) attributable to
non-controlling interest
(183,000 ) (239,000 ) (620,000 )
(157,000 )
Net income (loss) attributable to American
Shared Hospital Services
$ 43,000 $ 13,000 $ (1,799,000 ) $ (1,010,000 )
Earnings (loss) per common share: Basic $ 0.01 $ 0.00
$ (0.33 ) $ (0.21 )
Assuming dilution
$
0.01
$
0.00
$
(0.33
)
$
(0.21
)
Balance Sheet Data Sep. 30, Dec. 31, 2015 2014
Cash and cash equivalents $ 2,184,000 $ 1,059,000
Certificate of deposit $ -- $ 9,000,000 Current assets $ 6,588,000
$ 14,247,000 Investment in equity securities $ 605,000 $ 2,709,000
Total assets $ 55,886,000 $ 67,528,000 Current liabilities $
9,015,000 $ 16,251,000 Shareholders' equity $ 24,766,000 $
26,154,000
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version on businesswire.com: http://www.businesswire.com/news/home/20151112005202/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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