via NEWMEDIAWIRE -- 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 ended June 30, 2020.
Second Quarter Financial Highlights
- The Company completed its acquisition of Gamma Knife Center
Ecuador S. A.
- Total revenue in the second quarter was $3,991,000, a decline
of 23.2% from the comparable period in 2019. Proton therapy
revenue of $1,401,000 was consistent with the second quarter of
2019. Gamma Knife revenue of $2,590,000 declined 28.1%
compared to the second quarter of 2019 due to the impact of the
COVID-19 pandemic on volumes, as well as lower average
reimbursement at the Company’s retail sites.
- Total proton therapy fractions in the second quarter decreased
4.1% compared to the second quarter of 2019. The decrease for
the second quarter resulted from the impact of the COVID-19
pandemic. Gamma Knife volumes for centers in operation decreased
8.9% from Gamma Knife volumes for those same centers during the
same period of the prior year, also primarily as a result of the
COVID-19 pandemic.
- Net loss in the second quarter was $483,000 compared to net
income of $31,000 for the second quarter of 2019. The decrease in
net income was due to lower Gamma Knife revenue, and higher
expenses, including, but not limited to, the COVID-19 pandemic, the
switch to a virtual annual meeting and transaction costs from the
June acquisition of the Gamma Knife Center in Ecuador.
Ray Stachowiak, Interim President and Chief
Executive Officer, commented, “In the second quarter, the COVID-19
pandemic impacted our financial results more than expected, with
many patients delaying their treatments during the early months of
this unprecedented health crisis. Lower volumes for both proton
beam therapy and Gamma Knife procedures, as well as lower total
reimbursement for Gamma Knife procedures, combined with a high
level of fixed costs, reduced our gross margin. This was further
negatively impacted by other pandemic related costs, such as the
expense required to switch to a virtual format for the annual
meeting of shareholders. The Company’s purchase of Gamma Knife
Center, Ecuador S.A. in June also resulted in additional expenses
related to the costs of completing the acquisition. As a result of
these economic issues and activities, AMS reported a loss for the
second quarter.
“Volumes on both sides of our business began to
pick up in early July, despite typical seasonal headwinds. PBRT
volume in particular rebounded especially well during the month.
However, with COVID-19 hot spots rearing up again around the U.S.,
we remain uncertain as to when volumes will return to a sustained
normalcy. In the third quarter we expect to expense the remaining
transaction costs related to our acquisition in Ecuador, where
volumes have also been impacted by the virus. We remain on track to
upgrade the Gamma Knife Perfexion to the Icon platform at the
Lovelace Medical Center in September and continue to advance
discussions with prospective partners to develop new PBRT,
MR/LINAC, Gamma Knife and LINAC projects, as we’ve previously
disclosed,” concluded Mr. Stachowiak.
Financial Results for the Three Months Ended June 30,
2020
For the three months ended June 30, 2020,
revenues decreased 23.2% to $3,991,000 compared to revenues of
$5,197,000 for the second quarter of 2019. The Company
recorded no revenue from its IGRT equipment compared to $188,000 in
the second quarter of 2019. The equipment was fully depreciated and
sold in July, after expiration of the Company’s contract.
Second quarter revenue for the Company's proton
therapy system installed at Orlando Health in Florida decreased
0.6% to $1,401,000 compared to revenue for the second quarter of
2019 of $1,409,000. Total proton therapy fractions in the
second quarter were 1,351, a decrease of 4.1% compared to 1,409
proton therapy fractions in the second quarter of 2019.
Revenue for the Company's Gamma Knife operations
decreased 28.1% to $2,590,000 for the second quarter of 2020
compared to $3,600,000 for the second quarter of 2019. The
decline was due to lower volumes as well as lower average
reimbursement at the Company’s retail sites, which was driven by a
higher mix of Medicare patients. Gamma Knife procedures
declined by 3.0% to 350 for the second quarter of 2020 from 361 in
the same period of the prior year. Gamma Knife volumes for centers
in operation decreased 8.9% from Gamma Knife volumes for those same
centers during the same period of the prior year, due to the impact
of the COVID-19 pandemic.
Gross margin for the second quarter of 2020
decreased to $907,000, or 22.7% of revenue, compared to gross
margin of $1,729,000, or 33.3% of revenue, for the second quarter
of 2019.
Net loss for the second quarter of 2020 was
$483,000, or $(0.08) per share. This compares to net income
for the second quarter of 2019 of $31,000, or $0.01 per
share. Fully diluted weighted average common shares
outstanding were 6,077,000 and 5,906,000 for the second quarter of
2020 and 2019, respectively.
Adjusted EBITDA, a non-GAAP financial measure,
was $1,437,000 for the second quarter of 2020, compared to
$2,465,000 for the second quarter of 2019. The decline was
primarily due to the net income loss as well as lower depreciation
and amortization due to the Company’s IGRT equipment, which became
fully depreciated in the fourth quarter of 2019.
Financial Results for the Six Months Ended June 30,
2020
For the six months ended June 30, 2020, revenue
decreased 18.6% to $8,559,000 compared to revenue of $10,518,000
for the first six months of 2019. Gamma Knife revenue decreased
21.8% to $5,482,000 for the first half of 2020 compared to
$7,011,000 for the first half of 2019. The number of Gamma Knife
procedures in the first six months of 2020 was 726, a decrease of
1.4% compared to 736 Gamma Knife procedures in the comparable
period of 2019. Proton therapy revenue increased 0.9% to $3,077,000
for the first half of 2020 compared to $3,051,000 for the first
half of 2019. Total proton therapy fractions in the first six
months of 2020 were 3,027, an increase of 2.4% compared to 2,955
proton therapy fractions in the comparable period of 2019.
Net loss for the first six months of 2020 was
$618,000, or $(0.10) per share. This compares to net income
for the first six months of 2019 of $301,000, or $0.05 per share.
Adjusted EBITDA, a non-GAAP financial measure, was $3,259,000 for
the first six months of 2020, compared to $5,175,000 for the first
six months of 2019.
Balance Sheet Highlights
At June 30, 2020, cash, cash equivalents, and
restricted cash was $4,409,000, compared to $1,779,000 at December
31, 2019. Shareholders' equity at June 30, 2020 was
$30,973,000, or $5.44 per outstanding share. This compares to
shareholders' equity at December 31, 2019 of $31,811,000, or $5.47
per outstanding share.
Conference Call and Webcast Information
AMS has scheduled a conference call at 12:00
p.m. PDT (3:00 p.m. EDT) today. To participate, please call 1 (800)
774-6070 at least 5 minutes prior to the start of the call and
enter passcode number: 7610094#. A simultaneous Webcast of the call
may be accessed through the Company's website, www.ashs.com, or at
www.streetevents.com for institutional investors.
A replay of the call will be available at the
following link through August 28, 2020:
https://onlinexperiences.com/Launch/QReg/ShowUUID=941ED238-DFC5-4A86-8B87-49596816D143&LangLocaleID=1033. Passcode:
49891409.
About American Shared Hospital Services (NYSE American:
AMS)
American Shared Hospital Services provides
turnkey technology solutions for advanced radiosurgical and
radiation therapy services. AMS is a 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, IMRT and MR/LINAC systems. For
more information, please visit: www.ashs.com.
Earnings Disclosure
The outbreak of the novel coronavirus COVID-19,
is now a pandemic as declared by the World Health Organization and
has led to adverse impacts on the U.S. and global economies and
will likely continue to impact business activity, including the
Company’s. The pandemic has impacted and could further impact the
Company’s operations and the operations of its customers as a
result of quarantines, facility closures, and travel and logistics
restrictions. While the disruption caused by the pandemic is
currently expected to be temporary, there is uncertainty regarding
its duration. Therefore, while the COVID-19 pandemic has impacted
the Company’s results of operations, financial position, and
liquidity, the duration and intensity of the impact of the COVID-19
pandemic and resulting disruption to the Company’s operations is
uncertain. The Company will continue to monitor the situation
closely and assess the impact on its operations and financial
results for the remainder of the year.
In July 2019, the Centers for Medicare and
Medicaid Services (“CMS”) announced a proposed new mandatory
payment model for radiation oncology services intended to test an
episodic payment structure across certain radiation therapy
providers and suppliers. CMS projects that approximately 40% of
radiation oncology providers, selected randomly by geographic area,
will be included in the model and approximately 60% will continue
to receive reimbursement based on fee-for-service methodology. The
proposed payment model would significantly alter CMS’ payment
methodology for radiation oncology services. The timing and details
of the proposed payment model are uncertain. As a result, the
Company cannot estimate the potential impact of adoption of the
proposed rule. However, reductions in the reimbursement rates or
changes in reimbursement methodology or administration for
radiosurgery and radiation therapy could adversely affect the
Company’s revenues and financial results. For centers not included
in the proposed model, Medicare reimbursement in 2021 for the most
commonly used proton therapy delivery codes is proposed (pending
final determination) to increase approximately 4.9% and to decrease
0.1% for Gamma Knife.
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 of the Company and the expansion of the
Company’s Gamma Knife, proton therapy and MR/LINAC business, which
involve risks and uncertainties including, but not limited to, the
risks of economic and market conditions, the risks of variability
of financial results between quarters, the risks of the Gamma Knife
and proton therapy businesses, the risks of developing The
Operating Room for the 21st Century program, the risks of
changes to CMS reimbursement rates or reimbursement methodology,
the risks of the timing, financing, and operations of the Company’s
Gamma Knife, proton therapy, and MR/LINAC businesses, the risks of
the COVID-19 pandemic and its effect on the Company’s business
operations and financial condition, the risk that the Company will
be unable to conduct an effective executive search, the risk that
the Company will be unable to identify and attract a permanent
successor to the Company’s President and Chief Executive Officer,
the risk of expanding within or into new markets, the risk that the
integration or continued operation of acquired businesses could
adversely affect financial results and the risk that current and
future acquisitions may negatively affect the Company’s financial
position. 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, 2019, its Quarterly Report on Form 10-Q for the
three months ended March 31, 2020 and the definitive Proxy
Statement for the Annual Meeting of Shareholders that was held on
June 26, 2020.
Non-GAAP Financial Measure
Adjusted EBITDA, the non-GAAP measure presented
in this press release and supplementary information, is not a
measure of performance under the accounting principles generally
accepted in the United States ("GAAP"). This non-GAAP
financial measure has limitations as an analytical tool, including
that it does not have a standardized meaning. When assessing our
operating performance, this non-GAAP financial measure should not
be considered a substitute for, and investors should also consider,
income (loss) before income taxes, income (loss) from operations,
net income (loss) attributable to the Company, earnings (loss) per
share and other measures of performance as defined by GAAP as
indicators of the Company's performance or
profitability.
Adjusted EBITDA is a non-GAAP financial measure
representing our (loss) earnings before interest, taxes,
depreciation, and amortization. We define Adjusted EBITDA as net
(loss) income before interest expense, income tax (benefit)
expense, depreciation and amortization expense, stock-based
compensation expense, and acquisition transaction costs.
We use this non-GAAP financial measure as a
means to evaluate period-to-period comparisons. Our management
believes that this non-GAAP financial measure provides 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 this non-GAAP
financial measure in assessing our performance.
Contacts:
American Shared Hospital Services Ray Stachowiak Interim
President and Chief Executive Officer rstachowiak@ashs.com
Investor Relations PCG Advisory Stephanie Prince P: (646)
762-4518 sprince@pcgadvisory.com
American
Shared Hospital Services |
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Statement of
Operations |
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Three months ended June 30, |
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Six months ended June 30, |
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2020 |
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2019 |
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2020 |
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2019 |
Revenues |
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$3,991,000 |
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$5,197,000 |
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$8,559,000 |
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$10,518,000 |
Costs of revenue |
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3,084,000 |
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3,468,000 |
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6,258,000 |
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6,852,000 |
Gross margin |
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907,000 |
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1,729,000 |
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2,301,000 |
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3,666,000 |
Selling & administrative
expense |
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1,210,000 |
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1,081,000 |
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2,421,000 |
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2,136,000 |
Interest expense |
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267,000 |
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346,000 |
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549,000 |
|
713,000 |
Operating (loss)
income |
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(570,000) |
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302,000 |
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(669,000) |
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817,000 |
Other income |
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1,000 |
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4,000 |
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4,000 |
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8,000 |
(Loss) income before income
taxes |
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(569,000) |
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306,000 |
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(665,000) |
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825,000 |
Income tax (benefit)
expense |
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(130,000) |
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27,000 |
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(158,000) |
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151,000 |
Net (loss) income |
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(439,000) |
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279,000 |
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(507,000) |
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674,000 |
Less: Net (income)
attributable to non-controlling interest |
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(44,000) |
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(248,000) |
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(111,000) |
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(373,000) |
Net (loss) income attributable
to American Shared Hospital Services |
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($483,000) |
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$31,000 |
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($618,000) |
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$301,000 |
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(Loss) income per common
share: |
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Basic |
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($0.08) |
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$0.01 |
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($0.10) |
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$0.05 |
Assuming dilution |
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($0.08) |
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$0.01 |
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($0.10) |
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$0.05 |
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American Shared Hospital
Services |
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Balance Sheet Data |
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6/30/2020 |
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12/31/2019 |
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Cash, cash equivalents and
restricted cash |
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$4,409,000 |
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$1,779,000 |
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Current assets |
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$10,823,000 |
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$10,742,000 |
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Total assets |
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$53,885,000 |
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$53,783,000 |
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Current liabilities |
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$8,679,000 |
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$8,214,000 |
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Shareholders' equity |
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$30,973,000 |
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$31,811,000 |
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American Shared Hospital Services |
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Adjusted
EBITDA |
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Q2 |
Q2 |
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YTD |
YTD |
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2020 |
2019 |
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2020 |
2019 |
Net (Loss)
Income |
$ (483,000) |
$ 31,000 |
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$ (618,000) |
301,000 |
Plus: |
Income Tax (Benefit)
Expense |
(130,000) |
27,000 |
|
(158,000) |
151,000 |
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Interest Expense |
267,000 |
346,000 |
|
549,000 |
713,000 |
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Depreciation and Amortization
Expense |
1,637,000 |
2,008,000 |
|
3,284,000 |
3,902,000 |
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Stock-Based Compensation
Expense |
53,000 |
53,000 |
|
109,000 |
108,000 |
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Acquisition Transaction
Costs |
93,000 |
- |
|
93,000 |
- |
Adjusted
EBITDA |
$ 1,437,000 |
$ 2,465,000 |
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$ 3,259,000 |
$ 5,175,000 |
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