AMERICAN SHARED HOSPITAL SERVICES (NYSE MKT:AMS)
(the "Company"), a leading provider of turnkey technology solutions
for advanced radiosurgical and radiation therapy services, today
announced financial results for the third quarter of 2016.
Third Quarter Results
For the three months ended September 30, 2016, medical services
revenue increased 26.0% to $4,884,000 compared to medical services
revenue of $3,875,000 for the third quarter of 2015.
Revenue for the Company's initial proton therapy system
installed at The Marjorie and Leonard Williams Center for Proton
Therapy at UF Health Cancer Center-Orlando Health in Florida, which
began treating patients in April, was $800,000.
Revenue for the Company's Gamma Knife operations increased to
$3,932,000 for the third quarter of 2016 compared to $3,770,000 for
the third quarter of 2015. This increase was primarily due to a
favorable mix of treatments at the Company's retail sites, as
treatment volume was flat versus prior year.
Net income attributable to the Company for the third quarter of
2016 was $334,000, or $0.06 per share. This compares to net income
attributable to the Company for the third quarter of 2015 of
$43,000, or $0.01 per share.
Medical services gross margin for the third quarter of 2016
increased to 49.1% of revenue, compared to medical services gross
margin of 37.5% of revenue for the third quarter of 2015,
reflecting the increase in revenue from proton therapy as well as
the favorable mix of Gamma Knife procedures.
Operating income nearly tripled to $896,000 for the third
quarter of 2016 compared to operating income of $315,000 for the
same period a year earlier. Income before income taxes was $899,000
for the third quarter of 2016 compared to $318,000 for the third
quarter of 2015. Adjusted pre-tax income, net of income
attributable to non-controlling interest, was $601,000 for the
third quarter of 2016. This compares to adjusted pre-tax income,
net of income attributable to non-controlling interest, of $135,000
for the third quarter of 2015.
Selling and administrative expenses for the third quarter of
2016 increased to $999,000, compared to selling and administrative
expenses of $904,000 for the third quarter of 2015. With the
addition of the proton center in Orlando, interest expense
increased to $501,000 for the third quarter of 2016, compared to
interest expense of $235,000 for the third quarter of 2015.
Adjusted EBITDA, a non-GAAP financial measure, was $2,831,000
for the third quarter of 2016, compared to $1,949,000 for the third
quarter of 2015. Please refer to the financial statements included
with this press release for a reconciliation of GAAP to this
non-GAAP financial measure.
Nine Months Results
For the nine months ended September 30, 2016, medical services
revenue increased 10.1% to $13,640,000 compared to medical services
revenue of $12,386,000 for the first nine months of 2015.
Excluding treatments at a customer site whose contract expired
at the end of the first quarter of 2015, Gamma Knife volume
decreased marginally for this year's first nine months to the first
nine months of 2015.
Net income attributable to the Company for the first nine months
of 2016 was $478,000, or $0.09 per share. This compares to a net
loss attributable to the Company for the first nine months of 2015
of ($1,799,000), or ($0.33) per share. Excluding the loss on early
extinguishment of debt of $108,000, net of estimated taxes,
adjusted net income attributable to the Company for the first nine
months of 2016 was $542,000, or $0.10 per share. This compares to
adjusted net income attributable to the Company for the first nine
months of 2015, excluding the loss attributable to an impairment
charge, of $315,000, or $0.06 per share.
Adjusted EBITDA was $7,288,000 for the first nine months of
2016, compared to $6,314,000 for the first nine months of 2015.
Balance Sheet Highlights
At September 30, 2016, cash, cash equivalents and restricted
cash was $2,096,000 compared to $2,259,000 at December 31, 2015.
Shareholders' equity at September 30, 2016 was $26,151,000, or
$4.87 per outstanding share. This compares to shareholders' equity
at December 31, 2015 of $25,180,000, or $4.69 per outstanding
share.
CEO Comments
Chairman and Chief Executive Officer Ernest A. Bates, M.D.,
said, "We are pleased by our third quarter performance. AMS is
running increasingly efficiently, our Gamma Knife business is
delivering solid results, and our proton therapy initiatives, so
long in the making, are now beginning to generate the growth we are
striving for.
"Treatment volume, system reliability and throughput of the
MEVION S250 we supplied our first proton center, at UF Health
Cancer Center-Orlando Health, are all exceeding our expectations.
Volume ramped rapidly in the third quarter to 869 fractions, nearly
double the 442 fractions performed during the second quarter. The
MEVION S250 still has considerable additional treatment capacity,
so we expect further gains in treatment volume in the fourth
quarter.
"What's more, by demonstrating that AMS has the ability to bring
a proton project from inception to completion, the success of our
initial proton center has opened the door to new opportunities for
AMS with other hospitals seeking to develop proton centers of their
own. We are increasingly confident that the leadership position we
have built in proton therapy has set the foundation for AMS's long
term growth."
CMS Gamma Knife and Proton Therapy Reimbursement Rates for
2017
Based on the hospital outpatient prospective payment rates for
2017 recently announced by the Centers for Medicare and Medicaid
Services (CMS), AMS estimates that the average CMS
reimbursement rate per Gamma Knife one session cranial radiosurgery
will increase to approximately $9,000 from $8,800 in 2016.
The 2017 CMS reimbursement rates for delivery of proton therapy
will be $494 ($506 in 2016) for a simple treatment without
compensation, $994 ($1,150 in 2016) for a simple treatment with
compensation, and $994 ($1,150 in 2016) for an intermediate or
complex treatment.
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 4377 6965. 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 4377 6965# 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,
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 (including statements regarding the expected growth in
volume and contribution to revenue of the MEVION S250 system, the
expansion of the Company's proton therapy business, and efforts to
improve profitability and utilization) 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 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, 2015, its Form 10-Q for the quarters ended March 31, 2016 and
June 30, 2016, and the definitive Proxy Statement for the Annual
Meeting of Shareholders held on June 21, 2016.
Non-GAAP Financial Measure
None of adjusted EBITDA, adjusted pre-tax income, adjusted net
income attributable to the Company, and adjusted net income per
share, 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 (loss) before income taxes, income from operations, net
income attributable to the Company, earnings (loss) 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 impairment charge related to the Company's
equity investment in Mevion and 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 Nine months ended September 30,
September 30, 2016 2015 2016 2015 Medical services revenue $
4,884,000 $ 3,875,000 $ 13,640,000 $ 12,386,000 Costs of revenue
2,488,000 2,421,000 7,672,000
7,533,000 Gross margin 2,396,000 1,454,000
5,968,000 4,853,000 Selling & administrative expense 999,000
904,000 2,911,000 2,704,000 Interest expense 501,000
235,000 1,219,000 900,000
Operating income 896,000 315,000 1,838,000 1,249,000
(Loss) on write down of investment in
equity securities
-- -- -- (2,114,000 ) (Loss) on early extinguishment of debt -- --
(108,000 ) -- Other income 3,000 3,000
11,000 14,000 Income (loss) before
income taxes 899,000 318,000 1,741,000 (851,000 ) Income tax
expense 267,000 92,000 424,000
328,000 Net income (loss) $ 632,000 $ 226,000
$ 1,317,000 $ (1,179,000 )
Less: Net (income) attributable to
non-controlling interest
(298,000 ) (183,000 ) (839,000 )
(620,000 ) Net income (loss) attributable to American Shared
Hospital Services $ 334,000 $ 43,000 $ 478,000
$ (1,799,000 ) Earnings (loss) per common share: Basic $
0.06 $ 0.01 $ 0.09 $ (0.33 ) Assuming dilution
$ 0.06 $ 0.01 $ 0.09 $ (0.33 )
Balance Sheet Data Sep. 30, Dec. 31, 2016 2015
Cash, cash equivalents and restricted
cash
$ 2,096,000 $ 2,259,000 Current assets $ 7,255,000 $ 6,007,000
Investment in equity securities $ 579,000 $ 579,000 Total assets $
59,854,000 $ 54,114,000 Current liabilities $ 9,310,000 $
8,698,000 Shareholders' equity $ 26,151,000 $ 25,180,000
AMERICAN SHARED HOSPITAL
SERVICES
Selected Financial Data
(unaudited)
Adjusted EBITDA
Three months ended
Nine months ended
September 30,
September 30,
2016
2015
2016
2015
Net Income (loss)
$
334,000
$
43,000
$
478,000
$
(1,799,000
)
Plus:
Income Tax Expense
$
267,000
$
92,000
$
424,000
$
328,000
Interest Expense
$
501,000
$
235,000
$
1,219,000
$
900,000
Depreciation and Amortization Expense
$
1,687,000
$
1,521,000
$
4,898,000
$
4,619,000
Share-Based Payment
$
42,000
$
58,000
$
161,000
$
152,000
Loss on Write Down of Investment In equity
securities
$
--
$
--
$
--
$
2,114,000
Early Extinguishment of Debt
$
--
$
--
$
108,000
$
--
Adjusted EBITDA
$
2,831,000
$
1,949,000
$
7,288,000
$
6,314,000
AMERICAN SHARED HOSPITAL
SERVICES
Selected Financial Data
(unaudited)
Adjusted Pre-tax and Net Income
Three months ended
Nine months ended
September 30,
September 30,
2016
2015
2016
2015
Income (loss) before income taxes
$
899,000
$
318,000
$
1,741,000
$
(851,000
)
Less: Net (income) attributable to
non-controlling interest
$
(298,000
)
$
(183,000
)
$
(839,000
)
$
(620,000
)
Income before income taxes, net of income
attributable to non-controlling interest
$
601,000
$
135,000
$
902,000
$
(1,471,000
)
Loss on write down of investment in equity
securities
$
--
$
--
$
--
$
2,114,000
Early extinguishment of debt, net of
estimated tax
$
--
$
--
$
64,000
$
--
Adjusted Pre-tax Income
$
601,000
$
135,000
$
966,000
$
643,000
Net Income (loss)
$
334,000
$
43,000
$
478,000
$
(1,799,000
)
Loss on write down of investment in equity
securities
$
--
$
--
$
--
$
2,114,000
Early extinguishment of debt, net of
estimated tax
$
--
$
--
$
64,000
$
--
Adjusted Net Income
$
334,000
$
43,000
$
542,000
$
315,000
Adjusted Net Income Per Share
$
0.06
$
0.01
$
0.10
$
0.06
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161110005373/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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