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 third quarter and first nine
months of 2017.
Third Quarter Results
For the three months ended September 30, 2017, rental income
from medical services decreased 5.5% to $4,613,000 compared to
rental income from medical services of $4,884,000 for the third
quarter of 2016. Net income attributable to the Company for the
third quarter of 2017 was $99,000, or $0.02 per share. This
compares to net income attributable to the Company for the third
quarter of 2016 of $334,000, or $0.06 per share.
Third 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 increased 17.0% to $935,000 compared to revenue of $799,000
for the third quarter of 2016.
Revenue for the Company's Gamma Knife operations decreased 9.4%
to $3,564,000 for the third quarter of 2017 compared to $3,933,000
for the third 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 and a second unit in August 2017. The
decrease in revenue from these two sites was only partially offset
by revenue from two new sites, in Lima, Peru and Lincoln, Nebraska,
that began operations in the third quarter and are still early in
the ramp-up phase. Excluding the two sites whose contracts expired
this year, Gamma Knife revenue increased 4.1% for this year's third
quarter compared to the third quarter of 2016.
Rental income from medical services gross margin for the third
quarter of 2017 decreased to 40.8% of revenue, compared to rental
income from medical services gross margin of 49.1% of revenue for
the third quarter of 2016, primarily reflecting the decrease in
Gamma Knife revenue.
Operating income decreased to $439,000 for the third quarter of
2017 compared to operating income of $896,000 for the same period a
year earlier. Income before income taxes was $439,000 for the third
quarter of 2017 compared to $899,000 for the third quarter of 2016.
Non-GAAP pre-tax income, net of income attributable to
non-controlling interest, was $263,000 for the third quarter of
2017. This compares to non-GAAP pre-tax income, net of income
attributable to non-controlling interest, of $601,000 for the third
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 $2,412,000
for the third quarter of 2017, compared to $2,831,000 for the third
quarter of 2016.
Nine Months Results
For the nine months ended September 30, 2017, rental income from
medical services increased 6.1% to $14,472,000 compared to rental
income from medical services of $13,640,000 for the first nine
months of 2016.
Proton therapy revenue increased 137.0% to $2,953,000 for the
first nine months of 2017 compared to $1,246,000 for the first nine
months of 2016.
Excluding treatments at customer sites lost due to the
expiration of their contract terms in April 2017 and August 2017,
Gamma Knife revenue decreased 0.5% for the first nine months of
2017 compared to the first nine months of 2016.
Net income attributable to the Company for the first nine months
of 2017 was $505,000, or $0.09 per share. This compares to net
income attributable to the Company for the first nine months of
2016 of $478,000, or $0.09 per share.
Adjusted EBITDA, a non-GAAP financial measure, was $7,577,000
for the first nine months of 2017, compared to $7,288,000 for the
first nine months of 2016.
Balance Sheet Highlights
At September 30, 2017, cash and cash equivalents was $1,665,000,
compared to $3,121,000 at December 31, 2016. Shareholders' equity
at September 30, 2017 was $28,188,000, or $4.94 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 Orlando
Health - UF Health Cancer Center increased to 940 fractions for
this year's third quarter, up from 869 fractions for the same
period a year ago but below the 1,189 fractions reported for this
year's second quarter. This slowdown in proton treatment volume
appears to have run its course, as volume rebounded sharply in
October. Accordingly, we are optimistic that proton treatment
volume for this year's fourth quarter will resume its upward trend.
We believe the pace of treatment volume has room to increase even
further in 2018. We also are pleased to report that the MEVION S250
proton system we supplied Orlando Health continues to perform
flawlessly, with no unanticipated operating issues.
"We also are optimistic about a rebound in our Gamma Knife
business beginning in the fourth quarter, as the ramp-up in patient
volume at our new sites in Lima, Peru and Lincoln, Nebraska gathers
momentum.
"Additionally, the Centers for Medicare & Medicaid Services
recently announced a 6% increase in the Medicare reimbursement rate
for simple, intermediate or complex proton treatments, and a 1.5%
increase for Gamma Knife treatments, for 2018. These rate increases
are a welcome development and should make a positive contribution
to our financial performance in the new 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) 588-4973 at least 5 minutes prior to the scheduled start
time, and mention confirmation number 4597 0345. 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 14 days at these same internet
addresses, or by dialing (888) 843-7419 and entering 4597 0345#
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 June 30, 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
PRESS RELEASE
November 13, 2017
Page 4
Third Quarter 2017 Financial Results
Selected Financial Data
Summary of Operations Data Three months ended
Nine months ended September 30, September 30, 2017 2016 2017
2016 Rental income from medical services
$
4,613,000
$
4,884,000
$
14,472,000
$
13,640,000
Costs of revenue 2,731,000 2,488,000
7,993,000 7,672,000 Gross margin
1,882,000 2,396,000 6,479,000 5,968,000 Selling &
administrative expense 1,026,000 999,000 3,303,000 2,911,000
Interest expense 417,000 501,000
1,314,000 1,219,000 Operating income
439,000 896,000 1,862,000 1,838,000 (Loss) on early extinguishment
of debt -- -- -- (108,000 ) Other income (loss) --
3,000 (1,000 ) 11,000
Income before income taxes 439,000 899,000 1,861,000 1,741,000
Income tax expense 164,000 267,000
600,000 424,000 Net income $
275,000 $ 632,000 $ 1,261,000 $ 1,317,000
Less: Net (income) attributable to
non-controlling interest
(176,000 ) (298,000 ) (756,000 )
(839,000 )
Net income attributable to American Shared
Hospital Services
$ 99,000 $ 334,000 $ 505,000 $ 478,000
Earnings per common share: Basic $ 0.02 $ 0.06
$ 0.09 $ 0.09
Assuming dilution
$
0.02
$
0.06
$
0.09
$
0.09
Balance Sheet Data September 30,
December 31, 2017 2016 Cash and cash equivalents $ 1,665,000
$ 3,121,000 Current assets $ 9,090,000 $ 8,388,000 Investment in
equity securities $ 579,000 $ 579,000 Total assets $ 59,976,000 $
60,598,000 Current liabilities $ 8,823,000 $ 8,681,000
Shareholders' equity $ 28,188,000 $ 27,173,000
AMERICAN SHARED HOSPITAL
SERVICES
PRESS RELEASE November 13, 2017 Page 5 Third Quarter 2017
Financial Results
Selected Financial Data (unaudited)
Adjusted EBITDA Three months ended Nine
months ended September 30, September 30, 2017 2016 2017
2016 Net Income $ 99,000 $ 334,000 $ 505,000 $ 478,000
Plus: Income Tax Expense 164,000 267,000 600,000 424,000
Interest Expense 417,000 501,000 1,314,000 1,219,000 Depreciation
and Amortization Expense 1,674,000 1,687,000 5,000,000 4,898,000
Stock-Based Compensation Expense 58,000 42,000 158,000 161,000
(Loss) on Early Extinguishment of Debt -- --
-- 108,000 Adjusted EBITDA $ 2,412,000 $ 2,831,000 $
7,577,000 $ 7,288,000
AMERICAN SHARED HOSPITAL
SERVICES
PRESS RELEASE
November 13, 2017
Page 6
Third Quarter 2017 Financial Results
Selected Financial Data
(unaudited)
Non-GAAP Pre-tax Income
Three months ended
Nine months ended
September 30,
September 30,
2017
2016
2017
2016
Income before income taxes
$
439,000
$
899,000
$
1,861,000
$
1,741,000
Less: Net (income) attributable to
non-controlling interest
(176,000
)
(298,000
)
(756,000
)
(839,000
)
Non-GAAP Pre-tax Income
$
263,000
$
601,000
$
1,105,000
$
902,000
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version on businesswire.com: http://www.businesswire.com/news/home/20171113005292/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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