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 first quarter of 2018.
First Quarter Results
For the three months ended March 31, 2018, rental income from
medical services increased 8.0% to $5,305,000 compared to rental
income from medical services of $4,914,000 for the first quarter of
2017. Net income attributable to the Company for the first quarter
of 2018 increased 33.1% to $390,000, or $0.07 per basic and diluted
share, compared to net income attributable to the Company for the
first quarter of 2017 of $293,000, or $0.05 per basic and diluted
share.
First 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 5.5% to $1,218,000 compared to revenue of $1,155,000 for
the first quarter of 2017.
Revenue for the Company's Gamma Knife operations increased 1.9%
to $3,688,000 for the first quarter of 2018 compared to $3,619,000
for the first quarter of 2017. 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 first quarter of 2018 was
consistent with the first quarter of 2017.
Rental income from medical services gross margin for the first
quarter of 2018 decreased to $2,206,000, or 41.6% of revenue,
compared to rental income from medical services gross margin of
$2,346,000, or 47.7% of revenue for the first quarter of 2017. 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.
Non-GAAP pre-tax income, net of income attributable to
non-controlling interest, increased 6.1% to $540,000 compared to
non-GAAP pre-tax income, net of income attributable to
non-controlling interest, of $509,000 for the first quarter of
2017. 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 $2,677,000
for the first quarter of 2018, compared to $2,616,000 for the first
quarter of 2017.
Balance Sheet Highlights
At March 31, 2018, cash and cash equivalents was $2,751,000,
compared to $2,152,000 at December 31, 2017. Shareholders' equity
at March 31, 2018 was $30,590,000, or $5.36 per outstanding share.
This compares to shareholders' equity at December 31, 2017 of
$29,885,000, or $5.23 per outstanding share.
CEO Comments
Chairman and Chief Executive Officer Ernest A. Bates, M.D.,
said, "This was a strong first quarter for AMS, with the increases
in revenue and earnings providing a solid foundation for the
year.
"The profitability from our Orlando Health – UF Health Cancer
Center proton therapy system was a significant contributor to first
quarter results. The success of our Orlando Health system validates
our belief of the economic and clinical soundness of a single room
proton therapy center and we remain confident that single treatment
room proton therapy represents a significant long-term growth
opportunity from which AMS is uniquely positioned to benefit. With
the steady flow of new studies demonstrating the clinical benefits
of this advanced therapeutic technology, we remain optimistic that
the pace of proton treatment volume in Orlando will increase in
2018.
"An increase in the average reimbursement rate compared to the
Company’s historical average generated higher first quarter revenue
in our Gamma Knife business as well. Volumes at our new sites in
Lima, Peru and Lincoln, Nebraska continued to ramp up, and we
expect these sites to be accretive in 2018. While we lost one of
our Gamma Knife units due to the expiration of its contract term
earlier this month, we recently announced a new contract to supply
a Gamma Knife® Perfexion™ system to Methodist Hospitals–Southlake
Campus, Merrillville, Indiana. This new Gamma Knife system
is expected to begin treating patients in late 2018. We are seeing
a resurgence in interest for the Gamma Knife both in the United
States and Latin America and anticipate additional new sites coming
on board. As always, we are pleased that AMS’s risk sharing
arrangements will make the Gamma Knife Perfexion system available
to even more brain tumor, trigeminal neuralgia and vascular
malformation patients."
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) 471-6718 at least 5 minutes prior to the scheduled start
time, and mention confirmation number 46931110. 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 46931110# 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, 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, 2017, and the definitive Proxy Statement for the
Annual Meeting of Shareholders to be held on June 14, 2018.
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
stock-based compensation expense. 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 May 10, 2018 Page 4 First Quarter 2018 Financial
Results
Selected Financial Data Summary of
Operations Data Three months ended March 31, 2018
2017 Rental income from medical services $ 5,305,000 $ 4,914,000
Costs of revenue 3,099,000 2,568,000
Gross margin 2,206,000 2,346,000 Selling & administrative
expense 986,000 1,139,000 Interest expense 425,000
453,000 Operating income 795,000 754,000 Interest
& other income 5,000 4,000 Income
before income taxes 800,000 758,000 Income tax expense
150,000 216,000 Net income 650,000 542,000
Less: Net income attributable to non-controlling interest
(260,000
)
(249,000
)
Net income attributable to American Shared
Hospital Services
$ 390,000 $ 293,000 Earnings per common share: Basic
$ 0.07 $ 0.05 Assuming dilution $ 0.07 $ 0.05
Balance Sheet Data
Mar. 31, Dec. 31, 2018 2017 Cash and cash equivalents $ 2,751,000 $
2,152,000 Current assets $ 9,947,000 $ 8,893,000 Total assets $
58,031,000 $ 58,176,000 Current liabilities $ 9,497,000 $ 9,007,000
Shareholders' equity $ 30,590,000 $ 29,885,000
AMERICAN SHARED HOSPITAL
SERVICES
PRESS RELEASE
May 10, 2018
Page 5
First Quarter 2018 Financial Results
Adjusted EBITDA Three months ended March 31,
2018
2017
Net Income
$
390,000
$
293,000
Plus:
Income tax expense
150,000
216,000
Interest expense
425,000
453,000
Depreciation and amortization expense
1,657,000
1,604,000
Stock-based compensation expense
55,000
50,000
Adjusted EBITDA
$
2,677,000
$
2,616,000
AMERICAN SHARED HOSPITAL SERVICES
PRESS RELEASE
May 10, 2018
Page 6
First Quarter 2018 Financial Results
Non-GAAP Pre-Tax Income
Three Months ended
March 31,
2018
2017
Income before income taxes
$
800,000
$
758,000
Less: Net (income) attributable to
non-controlling interest
(260,000
)
(249,000
)
Non-GAAP pre-tax income
$
540,000
$
509,000
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version on businesswire.com: https://www.businesswire.com/news/home/20180510005310/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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