Sixth graph, first sentence of release should read: Cash flow,
as measured by earnings before interest, taxes, depreciation and
amortization (EBITDA), increased to $2,493,000 for the fourth
quarter and $9,265,000 for 2011...(sted...increased to $3,119,000
for the fourth quarter and $11,258,000 for 2011...)
The corrected release reads:
AMERICAN SHARED HOSPITAL SERVICES REPORTS
FOURTH QUARTER AND 2011 RESULTS
AMERICAN SHARED HOSPITAL SERVICES (NYSE AMEX:AMS),
a leading provider of turnkey technology solutions for advanced
radiosurgical and radiation therapy services, today announced
financial results for the fourth quarter and 2011.
Fourth Quarter Results
For the three months ended December 31, 2011, revenue increased
8.4% to $4,500,000 compared to $4,152,000 for the fourth quarter of
2010. Net income for the fourth quarter of 2011 rose to $244,000,
or $0.05 per share. This compares to net income of $40,000, or
$0.00 per share, for the fourth quarter of 2010.
The number of procedures performed on Gamma Knife® PerfexionTM
systems supplied by AMS increased 7.6% for the fourth quarter of
2011, and increased 7.1% for 2011, compared to the fourth quarter
and 2010, respectively. The total number of procedures performed in
AMS' Gamma Knife business increased 11.4% for this year's fourth
quarter, and increased 4.8% for 2011, compared to the fourth
quarter and 2010, respectively.
Gross margin for this year's fourth quarter decreased to 39.5%
compared to 46.1% for the fourth quarter of 2010. This was
primarily the result of an increase in depreciation expense
associated with the upgrade of a number of Gamma Knife systems to
Perfexion specifications during the past year. Gross margin also
was affected to a lesser extent by the initiation of patient
treatments during the quarter of the new devices supplied by AMS to
St. Vincent's Medical Center in Jacksonville, Florida and Baskent
University in Adana, Turkey.
Selling and administrative expenses for the fourth quarter of
2011 decreased 16.4% to $840,000 compared to $1,005,000 for the
fourth quarter of 2010. Reflecting the addition of new Perfexion
systems to AMS' Gamma Knife portfolio, interest expense increased
to $613,000 for this year's fourth quarter compared to $562,000 for
the fourth quarter last year.
Cash flow, as measured by earnings before interest, taxes,
depreciation and amortization (EBITDA), increased to $2,493,000 for
the fourth quarter and $9,265,000 for 2011, compared to $2,159,000
for the fourth quarter and $8,211,000 for 2010.
Balance Sheet Highlights
At December 31, 2011, AMS cash, cash equivalents and
certificates of deposit increased to $11,580,000 compared to
$10,438,000 at December 31, 2010. Shareholders' equity at December
31, 2011 was $25,171,000, or $5.46 per outstanding share. This
compares to shareholders' equity at December 31, 2010 of
$23,044,000, or $5.01 per outstanding share.
Twelve Month Results
For the twelve months ended December 31, 2011, revenue increased
to $22,221,000, consisting of medical services revenue of
$17,237,000 and revenue from equipment sales of $4,984,000. This
compares to medical services revenue of $16,675,000 for 2010. Net
income for 2011 increased to $506,000, or $0.11 per diluted share,
compared to net income for 2010 of $57,000, or 0.01 per diluted
share.
In March 2011 AMS announced a contract to upgrade a Gamma Knife
to Perfexion specifications at Lehigh Valley Hospital in Allentown,
Pennsylvania. As part of this upgrade, AMS agreed to the early
termination of the existing 10-year lease on the Gamma Knife system
it supplied to Lehigh in 2004, and Lehigh agreed to purchase the
Perfexion system. Pre-tax income from this transaction of $844,000
was recognized in the third quarter of 2011.
CEO Comments
Chairman and Chief Executive Officer Ernest A. Bates, M.D.,
said, "We are pleased with our fourth quarter growth, which
featured initial revenue from our newest Perfexion site, St.
Vincent's Medical Center, and the Elekta AxesseTM Radiosurgery
system we supplied to the Kisla Campus of Baskent University under
a contract announced in March, 2011. For sites in operation for
more than one year, same site revenue increased 9% over the third
quarter of 2011.
"Our strategy to upgrade many of our existing Gamma Knife sites
to Gamma Knife Perfexion specifications, and to expand our base of
Perfexion clients, is delivering the growth we are striving for.
The higher throughput and increased clinical utility of the
Perfexion units compared to the Gamma Knife units they replace is
allowing us to realize significant incremental revenue within just
a few months of installation. We expect this trend to continue. As
a result, while higher depreciation expense associated with the new
Perfexion units affected gross margin in the second half of 2011,
gross margin should improve in 2012 with the additional gains in
revenue we anticipate.
"In January, 2012, AMS entered into a contract to supply its
twelfth Perfexion system in the United States to Sacred Heart
Health System in Pensacola, Florida. Pending regulatory approval,
patient treatments on this Perfexion system are expected to begin
later this year. We are pleased to welcome Sacred Heart Health
System as a new AMS client. We are seeing increased opportunities
to place Gamma Knife Perfexions at new and existing AMS sites both
in the U.S. and internationally." Dr. Bates noted that the
Perfexion unit AMS will supply to Florence Nightingale Hospital
Group in Istanbul, Turkey is expected to begin treating patients in
the second quarter, and the Gamma Knife unit AMS will provide to
Hospital Central FAP in Lima, Peru and the linear accelerator site
in São Paulo, Brazil are expected to begin treating patients later
this year.
Dr. Bates continued, "Also in January, 2012, Mevion Medical
Systems, formerly Still River Systems, announced a $45 million
investment in Mevion by a group of leading private venture capital
firms. After this funding, AMS owns approximately 1% of Mevion, the
manufacturer of the MEVION S250 Proton Therapy System. Proton
therapy permits more precise dose targeting at predictable tissue
depth than conventional X-rays, allowing the treatment of targets
adjacent to critical structures without inadvertent damage.
However, due to the high cost, large footprint, and technical
complexity of traditional proton systems, the availability of
proton therapy currently is limited. The MEVION S250 significantly
reduces the cost, size and complexity to levels similar to other
modern X-ray radiation therapy devices, and promises to bring
accessibility, affordability and practicality to proton
therapy.
"Just yesterday, Mevion announced that it has received CE Mark
certification for the MEVION S250 Proton Therapy System. This
important commercial milestone indicates that Mevion has completed
its development in compliance with the European Union's Medical
Device Directive. The CE Marking allows the MEVION S250 to be
marketed, sold, and installed in the European Union and in any
country recognizing CE Mark approval.
"AMS is developing proton therapy centers in Boston,
Massachusetts, Orlando, Florida and Long Beach, California which
are expected to employ the MEVION S250 proton therapy device. The
MEVION S250 at Barnes Jewish Hospital in St. Louis is now producing
a powerful 250 MeV energy beam. Mevion has filed a 510(k)
application for marketing clearance with the FDA. We are also
developing a two room proton therapy center in Dayton, Ohio.
"Finally, I am pleased to report that a U.S. patent has been
allowed on a variety of technologies jointly owned by AMS and NBBJ
LP, a leading global architecture and design firm, that are
designed to increase efficiency and improve patient outcomes in the
operating room. These technologies, which we will incorporate in
our Operating Room for the 21st Century concept, have applications
ranging from novel operating room lighting systems to innovative
operating table design. We believe they have the potential to
improve patient safety and comfort, surgical team efficiency and
satisfaction, and enhance returns for healthcare institutions."
Earnings Conference Call
American Shared has scheduled a conference call at 12:00 p.m.
PST (3:00 p.m. EST) today. To participate in the live call, dial
(800) 588-4973 at least 5 minutes prior to the scheduled start
time. A simultaneous WebCast of the call may be accessed through
the Company's website, www.ashs.com, or through CCBN,
www.earnings.com (individual investors) or www.streetevents.com
(institutional investors). A replay will be available for 30 days
at these same internet addresses, or by calling (888) 843-7419,
pass code 31962119.
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 the latest IGRT
and IMRT systems, as well as its proprietary Operating Room for the
21st Century® concept. Through its preferred stock investment in
Mevion Medical Systems, Inc., formerly Still River Systems, AMS
also plans to complement these services with the MEVION S250 proton
beam radiation therapy (PBRT) system, which has not yet been
approved by the FDA.
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, 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, and the risks of investing in a development-stage
company, Mevion Medical Systems, Inc., without a proven product.
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, 2010, the Quarterly Report on Form 10-Q for the quarter ended
March 31, 2011, Form 10-Q and 10-Q/A for the quarter ended June 30,
2011, and Form 10-Q for the quarter ended September 30, 2011, and
the definitive Proxy Statement for the Annual Meeting of
Shareholders held on June 9, 2011.
AMERICAN SHARED HOSPITAL
SERVICES
Selected Financial
Data(unaudited)
Summary of Operations Data
Three months endedDecember 31,
Twelve months endedDecember 31,
2011
2010
2011
2010
Medical services revenue
$
4,500,000
$
4,152,000
$
17,237,000
$
16,675,000
Equipment sales
--
--
4,984,000
--
4,500,000
4,152,000
22,221,000
16,675,000
Costs of revenue
2,716,000
2,237,000
10,078,000
9,466,000
Costs of equipment sales
6,000
--
4,146,000
--
Gross margin
1,778,000
1,915,000
7,997,000
7,209,000
Selling & administrative expense
840,000
1,005,000
4,041,000
4,240,000
Interest expense
613,000
562,000
2,367,000
2,104,000
Operating income
325,000
348,000
1,589,000
865,000
Other income
20,000
18,000
108,000
107,000
Income before income taxes
345,000
366,000
1,697,000
972,000
Income tax expense
(120,000
)
115,000
208,000
166,000
Net income
$
465,000
$
251,000
$
1,489,000
$
806,000
Less: Net income attributable to
non-controlling interest
(221,000
)
(211,000
)
(983,000
)
(749,000
)
Net income attributable to American Shared
Hospital Services
$
244,000
$
40,000
$
506,000
$
57,000
Earnings per common share:
Basic $ 0.05 $ 0.01 $ 0.11 $ 0.01
Assuming dilution
$
0.05
$
0.01
$
0.11
$
0.01
Balance Sheet DataDecember 31,
2011 2010 Cash and cash equivalents $ 2,580,000 $
1,438,000 Certificate of deposit $ 9,000,000 $ 9,000,000 Current
assets $ 17,615,000 $ 15,075,000 Investment in preferred stock $
2,656,000 $ 2,617,000 Total assets $ 74,535,000 $ 65,340,000
Current liabilities $ 9,944,000 $ 7,444,000 Shareholders' equity $
25,171,000 $ 23,044,000
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