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
2013.
Third Quarter Results
Medical services revenue for the three months ended September
30, 2013 increased 3.8% to $4,396,000, compared to medical services
revenue for the third quarter of 2012 of $4,236,000.
The net loss for the third quarter of 2013 of $134,000, or $0.03
per diluted share, included a pre-tax loss from foreign currency
transactions of $306,000 due to the weakening of the Turkish Lira
against the U.S. Dollar. Before this foreign currency transaction
loss, pre-tax income for the third quarter of 2013 was $40,000, net
of losses attributable to non-controlling interests. In comparison,
for the third quarter of 2012, pre-tax income net of losses
attributable to non-controlling interests was $37,000, and net
income was $9,000, or $0.00 per diluted share.
Operating income for the third quarter of 2013 decreased to
$162,000, compared to operating income for the third quarter of
2012 of $210,000.
The number of procedures performed on Gamma KnifeĀ® PerfexionTM
systems supplied by AMS increased 18% for the third quarter and 23%
for the first nine months of 2013 compared to the same periods of
2012. The total number of procedures performed in AMS' Gamma Knife
business, including Gamma Knife and Gamma Knife Perfexion
procedures, increased 21% for the third quarter and 23% for the
first nine months of 2013 compared to the same periods of 2012.
Medical services gross margin for the third quarter of 2013 was
36.0%, compared to medical services gross margin of 40.0% for the
third quarter of 2012.
Selling and administrative expenses for the third quarter of
2013 decreased 7.6% to $887,000 compared to $960,000 for the third
quarter of 2012.
Nine Months Results
For the nine months ended September 30, 2013, medical services
revenue increased 5.6% to $13,647,000, compared to medical services
revenue of $12,923,000 for the first nine months of 2012.
The net loss for the first nine months of 2013 of $230,000, or
$0.05 per diluted share, included a pre-tax loss from foreign
currency transactions of $840,000. Before this foreign currency
transaction loss, pre-tax income for the first nine months of 2013
was $246,000, net of losses attributable to non-controlling
interests. For the first nine months of 2012, pre-tax income net of
losses attributable to non-controlling interests was $85,000, and
net income was $33,000, or $0.01 per diluted share.
Cash flow, as measured by earnings before interest, taxes,
depreciation and amortization (EBITDA), was $2,025,000 for the
third quarter and $5,993,000 for the first nine months of 2013,
compared to $2,275,000 for the third quarter and $6,076,000 for the
first nine months of 2012.
Balance Sheet Highlights
At September 30, 2013, cash, cash equivalents and certificates
of deposit were $10,955,000 compared to $10,564,000 at December 31,
2012. Shareholders' equity September 30, 2013 was $24,444,000, or
$5.30 per outstanding share. This compares to shareholders' equity
at December 31, 2012 of $24,830,000, or $5.39 per outstanding
share.
CEO Comments
Chairman and Chief Executive Officer Ernest A. Bates, M.D.,
said, "The increase in third quarter revenue despite the reduction
in Medicare reimbursement for Gamma Knife services that went into
effect on April 1, 2013, as mandated by the American Taxpayer
Relief Act of 2012, is a noteworthy accomplishment for AMS that
reflected higher patient volume at a number of our established
sites, as well as the addition of two Gamma Knife Perfexion units
to our portfolio during the past year and a favorable mix of
procedures by location.
"Also noteworthy is the reduction in selling and administrative
expenses for this year's third quarter compared to last year, as
the program we announced in late April to reduce future cash
outlays by approximately $1,000,000 annually begins to take effect.
We expect to realize additional savings once all steps are fully
implemented.
"We expect reimbursement for Gamma Knife services to increase
beginning in January. The Centers for Medicare and Medicaid
Services (CMS) recently posted a revision of the previously
proposed rule for Medicare's hospital outpatient prospective
payment system for calendar year 2014. Within this proposed rule,
CMS proposes updates for the delivery codes used for stereotactic
radiosurgery (SRS), including Gamma Knife services. In this
revision, CMS proposed to reimburse hospitals for a complete course
of treatment comprised of a single session of SRS at $5,615 in
2014, a 70% increase over the current rate. This payment level
would apply to single session treatment for all forms of
SRS-Cobalt-60 SRS (Gamma Knife), robotic linear accelerator (LINAC)
SRS or non-robotic LINAC SRS. By comparison, effective April 1,
2013, the Gamma Knife was reimbursed by CMS at $3,300 and during
the period January 1, 2013 to March 31, 2013 at $7,910. This CMS
proposed reimbursement rate was subject to comments from interested
parties, and could change. Final CMS reimbursement rates are
anticipated to be issued in fall 2013.
"In AMS' proton therapy business, construction of MD Anderson
Orlando's dedicated proton center is underway. As previously
announced, AMS will supply a MEVION S250TM Proton Therapy System
for this $25 million facility. FDA approval of the MEVION S250 was
received last year. Delivery of the MEVION synchrocyclotron to MD
Anderson Orlando is scheduled for the second quarter of 2014, and
the facility is expected to begin treating patients in first half
of 2015. We see the MD Anderson Cancer Center Orlando as the model
for additional proton centers AMS is developing."
In September, Mevion announced the transition from acceptance
testing to the clinical commissioning phase of its MEVION S250
installed at the S. Lee Kling Center for Proton Therapy at the
Siteman Cancer Center at Barnes-Jewish Hospital and Washington
University School of Medicine in St. Louis, the initial site for
the system. This is the final clinical preparation for the
initiation of patient treatments expected later this year.
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 3606 7135#.
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, and the risks of investing in a development-stage
company, Mevion Medical Systems, Inc., without a proven product.
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, 2012, the Quarterly Report on Form 10-Q for the quarters ended
March 31 and June 30, 2013, and the definitive Proxy Statement for
the Annual Meeting of Shareholders held on June 11, 2013.
AMERICAN SHARED HOSPITAL
SERVICES
November 13, 2013
Third Quarter Financial Results
Selected Financial Data
(unaudited)
Summary of Operations Data Three months
ended Nine months ended September 30, September 30, 2013
2012 2013 2012 Medical services revenue $
4,396,000 $ 4,236,000 $ 13,647,000 $ 12,923,000 Costs of revenue
2,815,000 2,541,000 8,055,000
7,518,000 Gross margin 1,581,000
1,695,000 5,592,000 5,405,000 Selling & administrative
expense 887,000 960,000 3,275,000 3,093,000 Interest expense
532,000 525,000 1,459,000
1,638,000 Operating income 162,000 210,000
858,000 674,000
(Loss) gain on foreign
currency transaction
(306,000 ) -- (840,000 ) -- Other income 11,000
10,000 19,000 25,000
Income (loss) before income taxes (133,000 ) 220,000 37,000 699,000
Income tax expense -- 28,000
40,000 52,000 Net income (loss) $
(133,000 ) $ 192,000 $ (3,000 ) $ 647,000
Less: Net income attributable
to non-controlling interest
(1,000 ) (183,000 ) (227,000 ) (614,000 ) Net income (loss)
attributable to American Shared Hospital Services $ (134,000 ) $
9,000 $ (230,000 ) $ 33,000 Earnings (loss) per common
share: Basic $ (0.03 ) $ 0.00 $ (0.05 ) $ 0.01 Assuming dilution $
(0.03 ) $ 0.00 $ (0.05 ) $ 0.01
Balance
Sheet Data September 30, December 31, 2013 2012 Cash and
cash equivalents $ 1,955,000 $ 1,564,000 Certificate of deposit $
9,000,000 $ 9,000,000 Current assets $ 16,949,000 $ 15,956,000
Investment in common stock $ 2,701,000 $ -- Investment in preferred
stock $ -- $ 2,687,000 Total assets $ 72,154,000 $ 73,323,000
Current liabilities $ 11,619,000 $ 9,653,000 Shareholders'
equity $ 24,444,000 $ 24,830,000
American Shared Hospital ServicesErnest A. Bates, M.D.,
415-788-5300Chairman and Chief Executive Officere.bates@ashs.comorBerkman AssociatesNeil
Berkman, 310-477-3118Presidentinfo@berkmanassociates.com
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