Full Press Release Details
American Shared Hospital Services Reports
Second Quarter 2018 Results
Revenue Increased 4.5% and Net Income
San Francisco, CA - August 9, 2018
- 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.
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
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
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
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.
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
Ernest A. Bates, M.D., (415) 788-5300