Revenue Increased 4.5% and Net Income
Increased 154%
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 second quarter and six months
ended June 30, 2018.
Recent Highlights
- Total revenue in the second quarter was
$5,169,000, a 4.5% increase vs. comparable period in 2017. Proton
therapy revenue of $1,363,000 increased 58.1% year over year. Gamma
Knife revenue of $3,594,000 declined 9.4% year over year due to
contract term expirations at three Gamma Knife sites in April 2017,
August 2017, and April 2018, which was partially offset by revenues
from two new Gamma Knife sites that began treating patients in July
2017 and August 2017.
- Total proton therapy factions in the
second quarter increased 9.2% year over year. The increase for the
second quarter was the result of the continued expected ramp up of
the PBRT system at Orlando Health – UF Health Cancer Center
(“Orlando Health”).
- Secured 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.
- Announced proposed 2019 Centers for
Medicare and Medicaid Services (CMS) proton therapy reimbursement
rate increases of 1.6% for a simple treatment without compensation
and 2.6% increase for a simple treatment with compensation, or an
intermediate or a complex treatment. CMS proposed comprehensive
reimbursement increase of 2.9% for the Gamma Knife.
- Net income in the second quarter was
$287,000, a 154% increase vs. comparable period in 2017. The
increase in net income was due to increased revenues, a decrease in
selling and administrative costs, and a decrease in income tax
expense due to the Tax Act.
Chairman and Chief Executive Officer Ernest A. Bates, M.D.,
said, “We are pleased to report another strong quarter for AMS, on
sustained performance by our proton therapy business, a key driver
in our revenue and earnings growth. Our Orlando Health single room
proton system continues to deliver to expectations, with
utilization gains supported by a growing number of clinical
evidence demonstrating the benefits of this therapeutic technology.
On Saturday, July 28, 2018, certain components of the Company’s
proton therapy system sustained water damage resulting from the
facility’s water evacuation system. We currently estimate that the
proton therapy service will be down for two weeks from the date
damaged, pending further developments. We expect repairs to the
system to be covered under existing insurance and any interruption
in service also to be an insurable event after a five-day waiting
period. Accordingly, we do not currently anticipate that this
interruption in service will have a significant impact on our
financial performance. This is a temporary interruption and will
not impact the expected long-term growth of the program.”
Dr. Bates added, “As expected, our Gamma Knife business reflects
the transition into new centers as well as the winding down of a
few sites. Looking ahead, we expect positive gains on patient
traction from new sites in Lima, Peru and Lincoln, Nebraska, in
addition to a third site coming on line in Merrillville, Indiana
later this year.
“We are executing to plan, driving utilization on existing
systems and implementing focused expansion plans into new
territories, in line with our goal to make the best healthcare
technology accessible,” concludes Dr. Bates.
Financial Results for the Three Months Ended June 30,
2018
For the three months ended June 30, 2018, rental income from
medical services increased 4.5% to $5,169,000 compared to rental
income from medical services of $4,945,000 for the second quarter
of 2017. Net income attributable to the Company for the second
quarter of 2018 was $287,000, or $0.05 per share. This compares to
net income attributable to the Company for the second quarter of
2017 of $113,000, or $0.02 per share.
Second quarter revenue for the Company's initial proton therapy
system installed at Orlando Health in Florida increased 58.1% to
$1,363,000 compared to revenue for the second quarter of 2017 of
$862,000.
Revenue for the Company's Gamma Knife operations decreased 9.4%
to $3,594,000 for the second quarter of 2018 compared to $3,968,000
for the second 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, a second unit in August 2017, and
one in April 2018. The decrease in revenue from these 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.
Rental income from medical services gross margin for the second
quarter of 2018 decreased to $2,081,000 or 40.3% of revenue,
compared to rental income from medical services gross margin of
$2,251,000 or 45.5% of revenue for the second 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 therapy system at Orlando Health.
Non-GAAP pre-tax income, net of income attributable to
non-controlling interest, was $456,000 for the second quarter of
2018. This compares to non-GAAP pre-tax income, net of income
attributable to non-controlling interest, of $333,000 for the
second 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 $2,561,000
for the second quarter of 2018, compared to $2,549,000 for the
second quarter of 2017.
Financial Results for the Six Months Ended June 30,
2018
For the six months ended June 30, 2018, rental income from
medical services increased 6.2% to $10,474,000 compared to rental
income from medical services of $9,859,000 for the first six months
of 2017.
Excluding treatments at three customer sites lost due to the
expiration of their contract terms and the Company’s two new sites,
Gamma Knife revenue decreased 4.0% for the first half of 2018
compared to the first half of 2017.
Proton therapy revenue increased 28.0% to $2,582,000 for the
first half of 2018 compared to $2,017,000 for the first half of
2017.
Net income attributable to the Company for the first six months
of 2018 was $677,000, or $0.12 per share. This compares to net
income attributable to the Company for the first six months of 2017
of $406,000, or $0.07 per share.
Adjusted EBITDA, a non-GAAP financial measure, was $5,238,000
for the first six months of 2018, compared to $5,165,000 for the
first six months of 2017.
Balance Sheet Highlights
At June 30, 2018, cash and cash equivalents was $3,493,000,
compared to $2,152,000 at December 31, 2017. Shareholders' equity
at June 30, 2018 was $31,071,000, or $5.44 per outstanding share.
This compares to shareholders' equity at December 31, 2017 of
$29,885,000, or $5.23 per outstanding share.
Conference Call and Webcast Information
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 1
(800) 471-6718 at least 5 minutes prior to the scheduled start
time, and mention confirmation number 47389256. 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 until August 23, 2018 at the same internet
addresses, or by dialing 1 (888) 843-7419 and entering 47389256#
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.
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, its Quarterly Report on Form 10-Q for the
three months ended March 31, 2018, and the definitive Proxy
Statement for the Annual Meeting of Shareholders 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
Statement of Operations
Three months ended June 30, Six months ended June 30, 2018
2017 2018 2017 Rental income from medical services $
5,169,000 $ 4,945,000 $ 10,474,000 $ 9,859,000 Costs of revenue
3,088,000 2,694,000 6,187,000
5,262,000 Gross margin 2,081,000 2,251,000
4,287,000 4,597,000 Selling & administrative expense 1,032,000
1,138,000 2,017,000 2,277,000 Interest expense 406,000
444,000 831,000 897,000
Operating income 643,000 669,000 1,439,000 1,423,000
Proceeds from investment in equity securities 22,000 0 22,000 0
Other income (loss) 4,000 (5,000 )
9,000 (1,000 ) Income before income taxes 669,000
664,000 1,470,000 1,422,000 Income tax expense 169,000
220,000 319,000 436,000
Net income 500,000 444,000 1,151,000 986,000 Less: Net
(income) attributable to non-controlling interest (213,000 )
(331,000 ) (474,000 ) (580,000 ) Net income
attributable to American Shared Hospital Services $ 287,000
$ 113,000 $ 677,000 $ 406,000 Income
per common share: Basic $ 0.05 $ 0.02 $ 0.12 $
0.07 Assuming dilution $ 0.05 $ 0.02 $ 0.12
$ 0.07
American Shared Hospital
Services
Balance Sheet Data
6/30/2018 12/31/2017 Cash and cash equivalents $ 3,493,000 $
2,152,000 Current assets $ 9,764,000 $ 8,893,000 Total assets $
58,074,000 $ 58,176,000 Current liabilities $ 8,804,000 $
9,007,000 Shareholders' equity $ 31,071,000 $ 29,885,000
American Shared Hospital
Services
Adjusted EBITDA
June 30 June 30 YTD YTD 2018 2017 2018 2017
Net Income Attributable to American Shared Hospital Services $ 287
$ 113 $ 677 $ 406 Plus: Income Tax Expense 169 220 319 436
Interest Expense 406 444 831 897 Depreciation and
Amortization Expense 1,664 1,722 3,321 3,326 Stock-Based
Compensation Expense 57 50 112 100 Proceeds from investment
in equity securities (22 ) - (22 )
- Adjusted EBITDA $ 2,561 $ 2,549 $
5,238 $ 5,165
American Shared Hospital
Services
Non-GAAP Pre-Tax Income
June 30 June 30 YTD YTD 2018 2017 2018 2017
Income before income taxes $ 669 $ 664 $ 1,470 $ 1,422 Less: Net
(income) attributable to non-controlling interest (213 ) (331 )
(474 ) (580 ) Non-GAAP
Pre-tax Income $ 456 $ 333 $ 996
$ 842
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180809005161/en/
American Shared Hospital ServicesErnest A. Bates, M.D.,
(415) 788-5300Chairman and Chief Executive
Officereabates@ashs.comorPCG Advisory Group, Investor
RelationsVivian CervantesP:
646-863-6274vivian@pcgadvisory.com
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