Proton Revenue Increased 11.3%; Net Income
Increased 69.7%
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 third quarter and nine months
ended September 30, 2018.
Recent Highlights
- Total revenue in the third quarter was
$4,470,000, a 3.1% decrease vs. comparable period in 2017. Proton
therapy revenue of $1,041,000 increased 11.3% year over year. Gamma
Knife revenue of $3,194,000 declined 10.4% year over year due to
normal, cyclical fluctuations.
- Total proton therapy fractions in the
third quarter increased 15.0% year over year. The increase for the
third quarter was the result of continuing increased awareness of
the benefits of proton therapy treatment.
- Net income in the third quarter was
$168,000, a 69.7% increase vs. comparable period in 2017. The
increase in net income was due to a decrease in income tax expense
due to the Tax Act.
Chairman and Chief Executive Officer Ernest A. Bates, M.D.,
said, "Our third quarter 2018 results demonstrated continued strong
performance from our proton therapy business, in spite of a
previously disclosed two week business disruption from a water
system leak. Excluding the impact of this event, we estimate proton
therapy revenue would have increased 41.8%. Our UF Health Cancer
Center – Orlando Health (“Orlando Health”) single room proton
system, on increased awareness of clinical benefits across several
indications, posted steady gains in patients served, with firm
reimbursement trends. We remain focused on driving this business
and look forward to generating value as we replicate Orlando
Health’s success in new markets."
Financial Results for the Three Months Ended September 30,
2018
For the three months ended September 30, 2018, rental income
from medical services decreased 3.1% to $4,470,000 compared to
rental income from medical services of $4,613,000 for the third
quarter of 2017. Net income attributable to the Company for the
third quarter of 2018 was $168,000, or $0.03 per share. This
compares to net income attributable to the Company for the third
quarter of 2017 of $99,000, or $0.02 per share.
Third quarter revenue for the Company's initial proton therapy
system installed at Orlando Health in Florida increased 11.3% to
$1,041,000 compared to revenue for the third quarter of 2017 of
$935,000.
During the three-month period ended September 30, 2018, the PBRT
unit at Orlando Health sustained water damage resulting from the
facility’s water evacuation system. The PBRT system was down for
two weeks as a result. The Company expects to receive approximately
$185,000 of reimbursement from its business interruption insurance,
or approximately 185 fractions, following a five-day waiting
period. The reimbursement from business interruption insurance is
included in other income (or loss) for the three-month period ended
September 30, 2018.
Revenue for the Company's Gamma Knife operations decreased 10.4%
to $3,194,000 for the third quarter of 2018 compared to $3,564,000
for the third quarter of 2017. As previously noted, the decline was
due to lower volumes at existing sites, driven by normal, cyclical
fluctuations.
Rental income from medical services gross margin for the third
quarter of 2018 decreased to $1,634,000 or 36.6% of revenue,
compared to rental income from medical services gross margin of
$1,882,000 or 40.8% of revenue for the third quarter of 2017. This
reflected a decline in Gamma Knife revenue and 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 in September 2017.
Non-GAAP pre-tax income, net of income attributable to
non-controlling interest, was $250,000 for the third quarter of
2018. This compares to non-GAAP pre-tax income, net of income
attributable to non-controlling interest, of $263,000 for the third
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 $2,467,000
for the third quarter of 2018, compared to $2,412,000 for the third
quarter of 2017.
Financial Results for the Nine Months Ended September 30,
2018
For the nine months ended September 30, 2018, rental income from
medical services increased 3.3% to $14,944,000 compared to rental
income from medical services of $14,472,000 for the first nine
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, which began treating patients in July and August 2017, Gamma
Knife revenue decreased 8.0% for the first nine months of 2018
compared to the same periods of 2017.
Proton therapy revenue increased 22.7% to $3,622,000 for the
first nine months of 2018 compared to $2,953,000 for the same
periods of 2017.
Net income attributable to the Company for the first nine months
of 2018 was $845,000, or $0.14 per share. This compares to net
income attributable to the Company for the first nine months of
2017 of $505,000, or $0.09 per share.
Adjusted EBITDA, a non-GAAP financial measure, was $7,705,000
for the first nine months of 2018, compared to $7,577,000 for the
same periods of 2017.
Balance Sheet Highlights
At September 30, 2018, cash, cash equivalents, and restricted
cash was $2,189,000, compared to $2,502,000 at December 31, 2017.
Shareholders' equity at September 30, 2018 was $31,023,000, or
$5.43 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) 474-4883 at least 5 minutes prior to the scheduled start time
and mention confirmation number 47843863. 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 November 22, 2018 at the same
internet addresses, or by dialing 1 (888) 843-7419 and entering
47843863# 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 Reports on Form 10-Q for the
three months ended March 31, 2018, and June 30, 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 September 30, Nine months ended
September 30, 2018 2017 2018 2017 Rental income from
medical services revenue $4,470,000 $4,613,000 $14,944,000
$14,472,000 Costs of revenue 2,836,000 2,731,000 9,023,000
7,993,000 Gross margin 1,634,000 1,882,000 5,921,000 6,479,000
Selling & administrative expense 1,050,000 1,026,000 3,067,000
3,303,000 Interest expense 399,000 417,000 1,230,000 1,314,000
Operating income 185,000 439,000 1,624,000 1,862,000 Proceeds
received from investment in equity securities 0 0 22,000 0 Other
income (loss) 185,000 0 194,000 (1,000) Income before income taxes
370,000 439,000 1,840,000 1,861,000 Income tax expense 82,000
164,000 401,000 600,000 Net income 288,000 275,000 1,439,000
1,261,000 Less: Net (income) attributable to non-controlling
interest (120,000) (176,000) (594,000) (756,000) Net income
attributable to American Shared Hospital Services $168,000 $99,000
$845,000 $505,000 Earnings per common share: Basic $0.03
$0.02 $0.14 $0.09 Assuming dilution $0.03 $0.02 $0.14 $0.09
American Shared Hospital
Services
Balance Sheet Data
9/30/2018 12/31/2017 Cash, cash equivalents and
restricted cash $2,189,000 $2,502,000 Current assets 9,534,000
8,893,000 Total assets $56,470,000 $58,176,000 Current
liabilities $8,782,000 $9,007,000 Shareholders' equity $31,023,000
$29,885,000
American Shared Hospital
Services
Adjusted EBITDA
Sep 30, Sep 30,
YTD YTD 2018 2017 2018 2017 Net Income $168,000
$99,000 $845,000 $505,000 Plus: Income Tax Expense 82,000 164,000
401,000 600,000 Interest Expense 399,000 417,000 1,230,000
1,314,000 Depreciation and Amortization Expense 1,761,000 1,674,000
5,082,000 5,000,000 Stock-Based Compensation Expense 57,000 58,000
169,000 158,000 Proceeds received from investment in equity
securities - - (22,000) - Adjusted EBITDA $2,467,000
$2,412,000 $7,705,000 $7,577,000
American Shared Hospital
Services
Non-GAAP Pre-Tax Income
Sep 30, Sep 30, YTD YTD 2018
2017 2018 2017 Income before income taxes $370,000 $439,000
$1,840,000 $1,861,000 Less: Net (income) attributable to
non-controlling interest (120,000) (176,000) (594,000) (756,000)
Non-GAAP Pre-tax Income
$250,000 $263,000 $1,246,000 $1,105,000
View source
version on businesswire.com: https://www.businesswire.com/news/home/20181108005185/en/
American Shared Hospital ServicesErnest A. Bates, M.D.,
415-788-5300Chairman and Chief Executive
Officereabates@ashs.comorPCG Advisory Group, Investor
RelationsVivian Cervantes,
646-863-6274vivian@pcgadvisory.com
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