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 fourth quarter and full year
2017.
Fourth Quarter Results
For the three months ended December 31, 2017, rental income from
medical services increased 0.5% to $5,084,000 compared to rental
income from medical services of $5,060,000 for the fourth quarter
of 2016. Net income attributable to the Company for the fourth
quarter of 2017 was $1,418,000, or $0.24 per basic and diluted
share, which included an income tax benefit of $1,546,000
attributable to the revaluation of the Company’s federal and state
deferred tax liabilities following recently enacted federal tax
legislation and the full write-down of the Company’s investment in
equity securities of $579,000. For the fourth quarter of 2016, net
income attributable to the Company was $452,000, or $0.08 per
diluted share.
Fourth quarter revenue for the Company's proton therapy system
installed at The Marjorie and Leonard Williams Center for Proton
Therapy at Orlando Health – UF Health Cancer Center in Florida
increased 29.3% to $1,168,000 compared to revenue of $903,000 for
the fourth quarter of 2016.
Revenue for the Company's Gamma Knife operations decreased 8.9%
to $3,697,000 for the fourth quarter of 2017 compared to $4,057,000
for the fourth 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 partially offset by
revenue from two new sites, in Lima, Peru and Lincoln, Nebraska,
that began operations in the third quarter of 2017. Excluding the
two sites whose contracts expired in 2017 and the Company’s two new
sites, Gamma Knife revenue for the fourth quarter of 2017 was
consistent with the fourth quarter of 2016.
Rental income from medical services gross margin for the fourth
quarter of 2017 decreased to $2,184,000, or 43.0% of revenue,
compared to rental income from medical services gross margin of
$2,827,000, or 55.9% of revenue for the fourth quarter of 2016.
This reflected an increase in costs of revenue primarily
attributable to the initiation of maintenance and service costs for
the Company’s proton system in Orlando and certain one-time
expenses associated with the launch of the Company’s Gamma Knife
service in Peru.
Non-GAAP adjusted net income, net of the tax benefit from tax
reform and the loss on the write-down of the Company’s investment
in equity securities, was $451,000. This compares to non-GAAP
adjusted net income of $452,000 for the fourth 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 $2,673,000
for the fourth quarter of 2017, compared to $2,877,000 for the
fourth quarter of 2016.
Twelve Months Results
For the twelve months ended December 31, 2017, rental income
from medical services increased 4.6% to $19,556,000 compared to
rental income from medical services of $18,700,000 for 2016.
Proton therapy revenue increased 91.7% to $4,120,000 for 2017
compared to $2,149,000 for 2016.
Excluding treatments at customer sites lost due to the
expiration of their contract terms in April 2017 and August 2017
and the Company’s two new sites, Gamma Knife revenue for 2017 was
consistent with 2016.
Net income attributable to the Company for 2017 was $1,923,000,
or $0.33 per basic and diluted share. This compares to net income
attributable to the Company for the 2016 of $930,000, or $0.17 per
basic and diluted share.
Adjusted EBITDA, a non-GAAP financial measure, was $10,250,000
for 2017, compared to $10,165,000 for 2016.
Balance Sheet Highlights
At December 31, 2017, cash and cash equivalents was $2,152,000,
compared to $2,871,000 at December 31, 2016. Shareholders' equity
at December 31, 2017 was $29,885,000, or $5.23 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 UF Health
Cancer Center-Orlando Health – UF Health Cancer Center increased
18.3% to 1,205 fractions for the fourth quarter of 2017 compared to
1,019 fractions for the fourth quarter of 2016 and was up 28.2%
compared to the 940 fractions performed in the third quarter of
2017. We are optimistic that the pace of proton treatment volume
will continue to increase in 2018.
"We continue to see an increase in the proton therapy adoption
rate among the leading U.S. cancer centers. But more importantly,
clinical indications that can benefit from proton therapy are on
the rise. With only 26 operating proton centers in the United
States, proton therapy development is still in its early stages but
we believe the clinical benefits of proton therapy will make this a
large market place for years to come.
"Our Gamma Knife business remains a successful, consistent
business. Our new sites in Lima, Peru and Lincoln, Nebraska are
ramping up their volumes and are expected to be accretive in 2018.
AMS’s risk sharing arrangements are generating increased interest
in today’s health care environment and we anticipate will result in
additional new sites in the future.
"AMS will benefit from the lower federal tax rates that take
effect in 2018. It’s also important to keep in mind that the
Centers for Medicare & Medicaid Services implemented 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 should make
a positive contribution to our financial performance in the new
year as well."
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 4668 7612. 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 46687612# 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 Reports on Form 10-Q for the three months
ended March 31, 2017, June 30, 2017, and September 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 adjusted net 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
stock-based compensation expense, the loss on early extinguishment
of debt and write-down of investment in equity securities, and tax
benefit associated with the new tax law. 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
March 26, 2018
Page 4
Fourth Quarter 2017 Financial Results
Selected Financial Data
Summary of Operations Data Three months ended
December 31,
Twelve months ended
December 31,
2017 2016 2017 2016 Rental income from medical
services revenue $ 5,084,000 $ 5,060,000 $ 19,556,000 $ 18,700,000
Costs of revenue 2,900,000 2,233,000
10,893,000 9,905,000 Gross
margin 2,184,000 2,827,000 8,663,000 8,795,000 Selling &
administrative expense 1,020,000 891,000 4,323,000 3,802,000
Interest expense 613,000 488,000
1,927,000 1,707,000 Operating income 551,000
1,448,000 2,413,000 3,286,000 (Loss) on early extinguishment of
debt -- -- -- (108,000 )
(Loss) write down investment in equity
securities
(579,000 ) -- (579,000 ) -- Other income 4,000
4,000 3,000 15,000 (Loss) income
before income taxes (24,000 ) 1,452,000 1,837,000 3,193,000 Income
tax (benefit) expense (1,703,000 ) 519,000
(1,103,000 ) 943,000 Net income $ 1,679,000 $
933,000 $ 2,940,000 $ 2,250,000
Less: Net (income) attributable to
non-controlling interest
(261,000 ) (481,000 ) (1,017,000 )
(1,320,000 )
Net income attributable to American Shared
Hospital Services
$ 1,418,000 $ 452,000 $ 1,923,000 $ 930,000
Earnings per common share: Basic $ 0.24 $ 0.08
$ 0.33 $ 0.17 Assuming dilution $ 0.24 $ 0.08
$ 0.33 $ 0.17
Balance Sheet Data
December 31, 2017 2016 Cash and cash equivalents $ 2,152,000 $
2,871,000 Current assets $ 8,893,000 $ 7,866,000 Investment in
equity securities $ -- $ 579,000 Total assets $ 58,176,000 $
60,598,000 Current liabilities $ 9,007,000 $ 8,681,000
Shareholders' equity $ 29,885,000 $ 27,173,000
AMERICAN SHARED HOSPITAL
SERVICES
PRESS RELEASE
March 26, 2018
Page 5
Fourth Quarter 2017 Financial Results
Adjusted EBITDA
Three months ended Twelve months ended
December 31, December 31, 2017 2016 2017 2016 Net
Income $ 1,418,000 $ 452,000 $ 1,923,000 $ 930,000 Plus:
Income Tax (Benefit) Expense (1,703,000 ) 519,000 (1,103,000 )
943,000 Interest Expense 613,000 488,000 1,927,000 1,707,000
Depreciation and Amortization Expense 1,601,000 1,364,000 6,601,000
6,262,000 Stock-Based Compensation Expense 165,000 54,000 323,000
215,000
Loss on Write Down of Investment in Equity
Securities
579,000 -- 579,000 -- (Loss) on Early Extinguishment of Debt
-- -- -- 108,000
Adjusted EBITDA $ 2,673,000 $ 2,877,000 $ 10,250,000
$ 10,165,000
AMERICAN SHARED HOSPITAL
SERVICES
PRESS RELEASE
March 26, 2018
Page 6
Fourth Quarter 2017 Financial Results
Non-GAAP Adjusted Net Income
Three months ended
Twelve months ended
December 31,
December 31,
2017
2016
2017
2016
Net income
$
1,418,000
$
452,000
$
1,923,000
$
930,000
Tax (benefit) from US tax reform
(1,546,000
)
--
(1,546,000
)
--
Loss on write down of equity
investment
579,000
--
579,000
--
debt, net of estimated tax
--
--
--
64,000
Non-GAAP net income
$
451,000
$
452,000
$
956,000
$
994,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180326005202/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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