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 fourth quarter and 2013.
Fourth Quarter Results
Medical services revenue for the three months ended December 31,
2013 decreased 4.6% to $3,937,000, compared to medical services
revenue for the fourth quarter of 2012 of $4,125,000.
The net loss for the fourth quarter of 2013 of $82,000, or $0.02
per basic and diluted share, included a pre-tax loss from foreign
currency transactions of $334,000 due to the weakening of the
Turkish Lira against the U.S. Dollar. Before this foreign currency
transaction loss, pre-tax income for the fourth quarter of 2013 was
$151,000, net of losses attributable to non-controlling interests.
In comparison, net income for the fourth quarter of 2012 of $5,000,
or $0.00 per basic and diluted share, included a pre-tax gain from
foreign currency transactions of $137,000. Before this foreign
currency transaction gain, the pre-tax loss for the fourth quarter
of 2012 was $18,000, net of income attributable to non-controlling
interests.
Operating income for the fourth quarter of 2013 increased to
$262,000, compared to operating income for the fourth quarter of
2012 of $56,000.
The number of procedures performed on Gamma Knife® PerfexionTM
systems supplied by AMS increased 5% for the fourth quarter and 18%
for 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 7% for the
fourth quarter and 19% for 2013 compared to the same periods of
2012.
Medical services gross margin for the fourth quarter of 2013 was
34.3%, compared to medical services gross margin of 37.0% for the
fourth quarter of 2012.
Selling and administrative expenses for the fourth quarter of
2013 decreased 21.2% to $750,000 compared to $952,000 for the
fourth quarter of 2012.
Twelve Months Results
For the twelve months ended December 31, 2013, medical services
revenue increased 3.1% to $17,584,000, compared to medical services
revenue of $17,048,000 for 2012.
The net loss for 2013 of $312,000, or $0.07 per basic and
diluted share, included a pre-tax loss from foreign currency
transactions of $1,174,000. Before this foreign currency
transaction loss, pre-tax income for 2013 was $438,000, net of
losses attributable to non-controlling interests. Net income for
2012 of $38,000, or $0.01 per basic and diluted share, included a
pre-tax gain from foreign currency transactions of $132,000. Before
this foreign currency transaction gain, pre-tax income for 2012 was
$70,000, net of income attributable to non-controlling
interests.
Cash flow, as measured by earnings before interest, taxes,
depreciation and amortization (EBITDA), was $1,984,000 for the
fourth quarter and $7,969,000 for 2013, compared to $2,067,000 for
the fourth quarter and $8,306,000 for 2012.
Balance Sheet Highlights
At December 31, 2013, cash, cash equivalents and certificates of
deposit were $10,909,000 compared to $10,564,000 at December 31,
2012. Shareholders' equity December 31, 2013 was $24,055,000, or
$5.22 per outstanding share. This compares to shareholders' equity
at December 31, 2012 of $24,830,000, or $5.39 per outstanding
share.
CEO Comments
Chairman and Chief Executive Officer Ernest A. Bates, M.D.,
said, "We delivered higher operating and pre-tax income before
foreign currency transaction charges for the fourth quarter and
2013 compared to the same periods of 2012 in one of the most
challenging environments we have faced in AMS's history. The
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, was a significant headwind, as was an
unfavorable mix of procedures by location in the fourth
quarter.
"We were able to offset the impact of reduced reimbursement to
some extent with higher patient volume at a number of our
established sites, as well as the addition of two Gamma Knife
Perfexion units to our portfolio during the past year. We also
reduced our costs aggressively. We cut selling and administrative
expenses by about 21% for the fourth quarter of 2013 compared to
prior year, partly the anticipated result of the program we
announced in late April to reduce future cash outlays by
approximately $1,000,000 annually. Additionally, we reduced
interest expense by refinancing some of our more mature Gamma Knife
units, and paid off one of the Company's debt obligations in
2013.
"Reimbursement for Gamma Knife services will increase in 2014.
Effective January 1, 2014, CMS Gamma Knife delivery code
reimbursement increased to $3,592 from the previous rate of $3,301.
It is estimated that including ancillary services and outlier
adjustments, if applicable, Gamma Knife centers may receive
Medicare reimbursement of up to $9,000 per treatment under the
recently announced CMS rates.
"CMS also announced 2014 proton therapy delivery code rates per
daily session of $872 (versus $1,137 in 2013) for a simple
treatment and $1,205 (versus $682 in 2013) for an intermediate or
complex treatment. These rates are consistent with our proton
therapy business plan.
"Construction of the dedicated proton center at the University
of Florida Health Cancer Center at Orlando Health is moving
steadily forward. AMS will supply a MEVION S250TM Proton Therapy
System for this facility. FDA approval of the MEVION S250 was
received last year. Delivery of the MEVION synchrocyclotron to the
UF Health Cancer Center is expected late this summer, and the
facility is expected to begin treating patients in late 2015. We
see the UF Health Cancer Center at Orlando Health as the model for
additional proton centers AMS is developing."
Dr. Bates noted that in December 2013, Mevion announced that the
world's first MEVION S250 proton therapy treatment was delivered to
a patient at the S. Lee Kling Center for Proton Therapy at the
Siteman Cancer Center at Barnes-Jewish Hospital and Washington
University School of Medicine in St. Louis, the initial site for
the system. This was followed by the first MEVION S250 proton
therapy treatment delivered to a pediatric patient at Barnes-Jewish
Hospital in February 2014.
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 3696 5752#.
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 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 quarters ended
on March 31, 2013, June 30, 2013, and September 30, 2013, and the
definitive Proxy Statement for the Annual Meeting of Shareholders
held on June 11, 2013.
Selected Financial Data
(unaudited)
Summary of Operations Data
Three months ended Twelve months ended
December 31, December 31, 2013 2012 2013 2012 Medical services
revenue $ 3,937,000 $ 4,125,000 $ 17,584,000 $ 17,048,000 Costs of
revenue 2,585,000 2,600,000
10,640,000 10,118,000 Gross margin 1,352,000
1,525,000 6,944,000 6,930,000 Selling & administrative expense
750,000 952,000 4,025,000 4,045,000 Interest expense 340,000
517,000 1,799,000
2,155,000 Operating income 262,000 56,000 1,120,000 730,000
Gain (loss) foreign currency transactions (334,000 ) 137,000
(1,174,000 ) 132,000 Other income 6,000 28,000
25,000 58,000 Income (loss)
before income taxes (66,000 ) 221,000 (29,000 ) 920,000 Income tax
expense 44,000 55,000 84,000
107,000 Net income (loss) $ (110,000 ) $
166,000 $ (113,000 ) $ 813,000
Less: Net (income) loss attributable to
non-controlling interest
28,000 (161,000 ) (199,000 )
(775,000 )
Net income (loss) attributable to American
Shared Hospital Services
$ (82,000 ) $ 5,000 $ (312,000 ) $ 38,000
Earnings (loss) per common share: Basic $ (0.02 ) $ 0.00 $
(0.07 ) $ 0.01 Assuming dilution $ (0.02 ) $ 0.00 $
(0.07 ) $ 0.01
Balance Sheet Data
December 31, 2013 2012 Cash and cash equivalents $ 1,909,000 $
1,564,000 Current assets $ 7,706,000 $ 6,956,000 Certificate of
deposit $ 9,000,000 $ 9,000,000 Investment in equity securities $
2,701,000 $ 2,687,000 Total assets $ 71,742,000 $ 73,323,000
Current liabilities $ 11,785,000 $ 9,653,000 Shareholders' equity $
24,055,000 $ 24,830,000
American Shared Hospital ServicesErnest A. Bates, M.D.,
(415) 788-5300Chairman and Chief Executive
Officere.bates@ashs.comorBerkman AssociatesNeil Berkman,
(310) 477-3118Presidentinfo@berkmanassociates.com
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