AMERICAN SHARED HOSPITAL SERVICES FOURTH QUARTER REVENUE INCREASED 19% OPERATING INCOME INCREASED TO A NEW RECORD San Francisco, CA

AMERICAN SHARED HOSPITAL SERVICES

FOURTH QUARTER REVENUE INCREASED 19%

OPERATING INCOME INCREASED TO A NEW RECORD

San Francisco, CA, February 22, 2006 AMERICAN SHARED HOSPITAL SERVICES (AMEX,PCX:AMS), the

leading provider of Gamma Knife radiosurgery services, today announced financial results for the

fourth quarter and 2005, highlighted by a 19% increase in fourth quarter revenue and record

Fourth Quarter Results

For the three months ended December 31, 2005, revenue increased 19% to $4,650,000 compared to

$3,910,000 for the same period last year. Operating income increased for the 20th consecutive

quarter to a record $914,000, and pre-tax income increased 9% compared to the prior-year period.

Net income for fourth quarter 2005 increased to $479,000, or $0.09 per diluted share. This

compares to net income for fourth quarter 2004 of $386,000, or $0.08 per diluted share. The

effective tax rate for the fourth quarter 2005 was 30% compared to 38% for the same period in 2004,

primarily reflecting adjustments to the estimated state income tax effective rates.

At December 31, 2005, AMS reported working capital of $2,423,000, cash, cash equivalents and

short-term securities of $5,835,000, and long-term securities of $2,797,000. At December 31, 2004,

cash, cash equivalents and short-term securities were $9,078,000 and the Company held no long-term

securities. Shareholders equity increased to $18,320,000 compared to $17,546,000 at December 31,

For the twelve months ended December 31, 2005, revenue increased 11% to $18,231,000 from

$16,389,000 for 2004. Operating income increased 6% to a record $3,471,000 from $3,278,000 for the

prior year. Income before income taxes increased 6%, to $2,547,000 from $2,397,000 a year earlier.

Net income for 2005 decreased to $1,767,000, or $0.35 per diluted share, from $1,985,000, or $0.39

per diluted share, for 2004, reflecting primarily a reduction in income tax benefit for 2005

Growth in 2005 was driven by the addition of three new Gamma Knife units to our portfolio during

the year, as well as higher same-center treatment volume. Profitability also benefited from our

focus on effective cost management at the corporate level and at our 21 Gamma Knife units now in

operation, said Ernest A. Bates, M.D., Chairman and Chief Executive Officer.

As a leader in the market for Gamma Knife units and other advanced therapeutic equipment, AMS has

an outstanding long-term growth opportunity. While we were disappointed that we did not enter into

any new contracts in 2005, we continue to work through the sales process with several potential new

clients and we are confident that contracts will be awarded to AMS soon. We continue to explore

opportunities for Gamma Knife units, the latest Intensity Modulated Radiation Therapy (IMRT) and

Image Guided Radiation Therapy (IGRT) equipment and our proprietary Operating Room for the 21st

Century concept. We are optimistic about the outlook for 2006, Dr. Bates added.

Earnings Conference Call

American Shared has scheduled a conference call at 4:00 pm EDT (1:00 pm PDT) today. To participate

in the live call, dial 800-471-6718 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. A replay will be available for 30

days at these same internet addresses, or by calling 888-843-8996, pass code 13832223.

American Shared Hospital Services is building a profitable medical services company in an

underserved niche turnkey technology solutions for advanced radiosurgical procedures. The

Company s core business is supplying hospitals with the Gamma Knife a non-invasive treatment for

malignant and benign brain tumors, vascular malformations and trigeminal neuralgia (facial pain).

The Gamma Knife, the gold standard in radiosurgery, reduces surgical risk and patient discomfort,

resulting in a shorter hospital stay and lower risk of complications. In most cases, Gamma Knife

patients resume their normal activities within a few days of treatment, compared to weeks or months

for patients who undergo conventional surgery. More than 250,000 patients worldwide have already

received this treatment. American Shared Hospital Services is the world leader in providing Gamma

Knife radiosurgery services.

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

business and the risks of developing its IMRT and The Operating Room for the 21st

Century programs. 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, 2004, its Quarterly Report on Form 10-Q

for the periods ended March 31, 2005, June 30, 2005 and September 30, 2005 and the definitive Proxy

Statement for the Annual Meeting of Shareholders held on June 16, 2005.

AMERICAN SHARED HOSPITAL SERVICES