Full Press Release Details
SHARED HOSPITAL SERVICES
SECOND QUARTER AND FIRST HALF RESULTS
San Francisco, CA -- August 14,
2013 -- AMERICAN SHARED HOSPITAL SERVICES (NYSE MKT:AMS), a leading provider of turnkey technology solutions for advanced
radiosurgical and radiation therapy services, today announced financial results for the second quarter and first six months of
Second Quarter Results
Medical services revenue for the three
months ended June 30, 2013 increased 7.0% to $4,583,000, compared to medical services revenue for the second quarter of 2012 of
$4,284,000. The net loss for the second quarter of 2013 was $122,000, or $0.03 per diluted share. In comparison, for the second
quarter of 2012, net income was $15,000, or $0.00 per diluted share.
This year's second quarter net loss included
a loss from foreign currency transactions of $393,000, due to the weakening of the Turkish Lira against the U.S. Dollar. This foreign
currency transaction loss impacted pre-tax income by $223,000, net of losses attributable to non-controlling interests.
Operating income for the second quarter
of 2013 increased 26.2% to $284,000, compared to operating income for the second quarter of 2012 of $225,000.
The number of procedures performed on Gamma
Knife Perfexion systems supplied by AMS increased 35% for the second quarter and 25% for the first half of 2013 compared
to the same periods of 2012. The total number of procedures performed in AMS' Gamma Knife business, including Gamma Knife and Gamma
Knife Perfexion procedures, increased 26% for the second quarter and 24% for the first six months of 2013 compared to the same
Medical services gross margin for the second
quarter of 2013 was 41.3%, compared to medical services gross margin of 43.7% for the second quarter of 2012.
Selling and administrative expenses for
the second quarter of 2013 was $1,153,000 compared to $1,109,000 for the second quarter of 2012.
For the six months ended June 30, 2013,
medical services revenue increased 6.5% to $9,251,000, compared to medical services revenue of $8,687,000 for the first six months
of 2012. The net loss for the first six months of 2013 was $97,000, or $0.02 per diluted share, which included a pre-tax loss from
foreign currency transactions of $534,000. For the first six months of 2012, net income was $24,000, or $0.01 per diluted share.
The net loss for this year's first half
included a pre-tax loss from foreign currency transactions of $534,000. This foreign currency transaction loss reduced pre-tax
income by $303,000, net of losses attributable to non-controlling interests.
Cash flow, as measured by earnings before
interest, taxes, depreciation and amortization (EBITDA), was $1,940,000 for the second quarter and $3,961,000 for the first six
months of 2013, compared to $1,988,000 for the second quarter and $4,127,000 for the first six months of 2012.
Balance Sheet Highlights
At June 30, 2013, cash, cash equivalents
and certificates of deposit were $10,345,000 compared to $10,564,000 at December 31, 2012. Shareholders' equity June 30, 2013 was
$24,605,000, or $5.34 per outstanding share. This compares to shareholders' equity at December 31, 2012 of $24,830,000, or $5.39
per outstanding share.
Chairman and Chief Executive Officer Ernest
A. Bates, M.D., said, "AMS reported higher revenue and operating income for the second quarter despite the substantial reduction
in Medicare reimbursement for Gamma Knife services that went into effect on April 1, 2013, as mandated by the American Taxpayer
Relief Act of 2012. The improvement in revenue reflected higher patient volume at a number of our established sites, as well as
the addition of two Gamma Knife Perfexion units to our portfolio since the end of last year's second quarter. The increase in revenue
also reflected a favorable mix of procedures by location.
"Even more impressive, these gains
were achieved despite realizing in the second quarter only a small fraction of the savings from the program we announced in late
April to reduce future cash outlays by approximately $1,000,000 annually. We expect to realize the bulk of these savings once all
steps are fully implemented during the third and fourth quarters.
"Last month, the Centers for Medicare
and Medicaid Services (CMS) posted the proposed rule for Medicare's hospital outpatient prospective payment system for calendar
year 2014. Within this proposed rule, CMS proposes updates for the delivery codes used for stereotactic radiosurgery (SRS), including
Gamma Knife services. Specifically, CMS proposes to reimburse hospitals for a complete course of treatment comprised of a single
session of SRS at $8,576 in 2014. This payment level would apply to single session treatment for all forms of SRS-Cobalt-60 SRS
(Gamma Knife), robotic linear accelerator (LINAC) SRS or non-robotic LINAC SRS. By comparison, effective April 1, 2013, the Gamma
Knife was reimbursed by CMS at $3,300 and during the period January 1, 2013 to March 31, 2013 at $7,910. This CMS proposed reimbursement
rate is subject to comments from interested parties, and could change. Final CMS reimbursement rates are anticipated to be issued
"As the world's largest provider of
Gamma Knife services, the proposed reimbursement rates for SRS for 2014, if adopted, could be expected to have a positive impact
on AMS' Gamma Knife business. In the meantime, as evidenced by our solid second quarter results, we believe we have positioned
the company to deal effectively with reduced Medicare reimbursement for the balance of 2013."
In AMS' proton therapy business, Dr. Bates
noted that construction of MD Anderson Orlando's dedicated proton center is underway. As previously announced, AMS has received
a firm financing commitment for the MEVION S250TM Proton Therapy System it will supply for this $25 million facility.
FDA approval of the MEVION S250 was received last year. Delivery of the MEVION synchrocyclotron is now scheduled for April 2014,
and the facility is expected to begin treating patients in first half of 2015. The MD Anderson Cancer Center Orlando will be the
model for additional proton centers AMS is developing.
Earnings Conference Call
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 (800) 351-9852 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 3548 8058#.
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 CenturySM concept. AMS owns a common stock investment in Mevion Medical Systems, Inc., developer of the compact
MEVION S250 Proton Therapy System.
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, 2012, the Quarterly Report on Form 10-Q for the quarter ended March 31, 2013, and the definitive Proxy
Statement for the Annual Meeting of Shareholders held on June 11, 2013.
| Contacts: | American Shared Hospital Services |
| Ernest A. Bates, M.D., (415) 788-5300 | |
| Chairman and Chief Executive Officer | |
| e.bates@ashs.com | |
| Berkman Associates | |
| Neil Berkman, (310) 477-3118 | |
| President | |
| info@berkmanassociates.com |
AMERICAN SHARED HOSPITAL SERVICES
| PRESS RELEASE | August 14, 2013 |
| Page 4 | Second Quarter Financial Results |
Selected Financial Data
| Summary of Operations Data | ||||||||||||||||
| Three months ended | Six months ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
| 2013 | 2012 | 2013 | 2012 | |||||||||||||
| Medical services revenue | $ | 4,583,000 | $ | 4,284,000 | $ | 9,251,000 | $ | 8,687,000 | ||||||||
| Costs of revenue | 2,690,000 | 2,411,000 | 5,240,000 | 4,977,000 | ||||||||||||
| Gross margin | 1,893,000 | 1,873,000 | 4,011,000 | 3,710,000 | ||||||||||||
| Selling & administrative expense | 1,153,000 | 1,109,000 | 2,388,000 | 2,133,000 | ||||||||||||
| Interest expense | 456,000 | 539,000 | 927,000 | 1,113,000 | ||||||||||||
| Operating income | 284,000 | 225,000 | 696,000 | 464,000 | ||||||||||||
| Loss on foreign | ||||||||||||||||
| currency transaction | (393,000 | ) | -- | (534,000 | ) | -- | ||||||||||
| Other (loss) income | (6,000 | ) | 14,000 | 8,000 | 15,000 | |||||||||||
| (Loss) income before income taxes | (115,000 | ) | 239,000 | 170,000 | 479,000 | |||||||||||
| Income tax (benefit) expense | (12,000 | ) | 13,000 | 40,000 | 24,000 | |||||||||||
| Net (loss) income | $ | (103,000 | ) | $ | 226,000 | $ | 130,000 | $ | 455,000 | |||||||
| Less: Net income attributable | ||||||||||||||||
| to non-controlling interest | (19,000 | ) | (211,000 | ) | (227,000 | ) | (431,000 | ) | ||||||||
| Net (loss) income attributable to | ||||||||||||||||
| American Shared Hospital Services | $ | (122,000 | ) | $ | 15,000 | $ | (97,000 | ) | $ | 24,000 | ||||||
| (Loss) earnings per common share: | ||||||||||||||||
| Basic | $ | (0.03 | ) | $ | 0.00 | $ | (0.02 | ) | $ | 0.01 | ||||||
| Assuming dilution | $ | (0.03 | ) | $ | 0.00 | $ | (0.02 | ) | $ | 0.01 |
| Balance Sheet Data | ||||||||
| June 30, | December 31, | |||||||
| 2013 | 2012 | |||||||
| Cash and cash equivalents | $ | 1,345,000 | $ | 1,564,000 | ||||
| Certificate of deposit | $ | 9,000,000 | $ | 9,000,000 | ||||
| Current assets | $ | 16,839,000 | $ | 15,956,000 | ||||
| Investment in common stock | $ | 2,701,000 | $ | -- | ||||
| Investment in preferred stock | $ | -- | $ | 2,687,000 | ||||
| Total assets | $ | 73,835,000 | $ | 73,323,000 | ||||
| Current liabilities | $ | 11,211,000 | $ | 9,653,000 | ||||
| Shareholders' equity | $ | 24,605,000 | $ | 24,830,000 |