UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
| Date of report (Date of earliest event reported): November 12, 2015 |
| |
| AMERICAN SHARED HOSPITAL SERVICES |
(Exact name of registrant
as specified in charter) |
| California |
1-08789 |
94-2918118 |
| (State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
Four Embarcadero Center, Suite 3700,
San Francisco, CA 94111
(Address of principal executive offices)
Registrant’s telephone number, including
area code 415-788-5300
(Former name or former address, if changed
since last report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial
Conditions
On November 12, 2015, the Company issued
a press release announcing its financial results for the third quarter of 2015. The full text of the press release is furnished
as Exhibit 99.1 to this report. The Company does not intend for this exhibit to be incorporated by reference into future filings
under the Securities Exchange Act of 1934.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit 99.1 — Earnings press
release dated November 12, 2015
The information in this report is summary
information that is intended to be considered in the context of our SEC filings and other public announcements that we may make,
by press release or otherwise, from time to time. We disclaim any current intention to revise or update the information contained
in this report, although we may do so from time to time as our management believes is warranted. Any such updating may be made
through the filing of other documents or reports with the SEC, through press releases or through other public disclosures.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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American Shared Hospital Services |
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| Date: |
November 12, 2015 |
|
By: |
/s/ Ernest A. Bates, M.D. |
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Name: |
Ernest A. Bates, M.D. |
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Title: |
Chairman and CEO |
Exhibit 99.1
AMERICAN SHARED HOSPITAL SERVICES
REPORTS THIRD QUARTER RESULTS
San Francisco, CA – November
12, 2015 -- 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.
| Contacts: | American Shared Hospital Services |
Ernest A. Bates, M.D.,
(415) 788-5300
Chairman and Chief Executive
Officer
eabates@ashs.com
Berkman Associates
Neil Berkman, (310) 477-3118
President
info@berkmanassociates.com
| AMERICAN SHARED HOSPITAL SERVICES |
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| PRESS RELEASE |
November 12, 2015 |
| Page 4 of 4 |
Third Quarter 2015 Financial Results |
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| Selected Financial Data |
| (unaudited) |
| | |
Summary of Operations Data | |
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Three months ended | | |
Nine months ended | |
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September 30, | | |
September 30, | |
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2015 | | |
2014 | | |
2015 | | |
2014 | |
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| 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 | ) |
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| 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 | |
|
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Sep. 30, | | |
Dec. 31, | |
|
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2015 | | |
2014 | |
|
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|
| 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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