UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 13, 2014 |
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AMERICAN SHARED HOSPITAL SERVICES |
(Exact name of registrant
as specified in charter) |
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California |
1-08789 |
94-2918118 |
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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Four Embarcadero Center, Suite 3700, San Francisco, CA 94111 |
(Address of principal executive offices) |
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Registrant’s telephone number, including area code 415-788-5300 |
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(Former name or former address, if changed since last report) |
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Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
¨ Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02 Results of Operations and Financial
Conditions
On November 13, 2014, the Company issued
a press release announcing its financial results for the third quarter of 2014. The full text of the press release is furnished
as Exhibit 99.1 to this report. The Company does not intend for this exhibit to be incorporated by reference into future filings
under the Securities Exchange Act of 1934.
Item 9.01 Financial Statements and Exhibits.
Exhibit 99.1 — Earnings press
release dated November 13, 2014
The information in this report is summary
information that is intended to be considered in the context of our SEC filings and other public announcements that we may make,
by press release or otherwise, from time to time. We disclaim any current intention to revise or update the information contained
in this report, although we may do so from time to time as our management believes is warranted. Any such updating may be made
through the filing of other documents or reports with the SEC, through press releases or through other public disclosures.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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American Shared Hospital Services |
Date: |
November 13, 2014 |
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By: |
/s/ Ernest A. Bates, M.D. |
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Name: |
Ernest A. Bates, M.D. |
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Title: |
Chairman and CEO |
Exhibit 99.1
AMERICAN SHARED HOSPITAL SERVICES
REPORTS THIRD QUARTER RESULTS
San Francisco, CA -- November 13,
2014 -- 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 third quarter and first nine months of
2014.
Third Quarter Results
For the three months ended September 30,
2014, medical services revenue decreased to $3,982,000 compared to $4,396,000 for the third quarter of 2013. This decrease primarily
reflected the sale of the Company's operations in Turkey effective May 31, 2014. Net of last year's revenue in Turkey, Gamma Knife
revenues increased slightly for this year's third quarter compared to the third quarter of 2013.
Net income for the third quarter of 2014
was $13,000, or $0.00 per share. Net income included income tax expense of $29,000, which represents income tax expense for the
third quarter and adjustments to prior period estimates. This compares to a net loss for the third quarter of 2013 of $134,000,
or $0.03 per share, which included a pre-tax loss from foreign currency transactions of $306,000 due to the weakening of the Turkish
Lira against the U.S. Dollar.
The number of procedures performed on Gamma
Knife® PerfexionTM systems supplied by AMS in the United States decreased 6.2% for the third quarter and 11.5% for
the first nine months of 2014 compared to the same periods of 2013. The total number of procedures performed in AMS' U.S. Gamma
Knife business, including Gamma Knife and Gamma Knife Perfexion procedures, decreased 2.4% for the third quarter and 10.1% for
the first nine months of 2014 compared to the same periods of 2013. Gamma Knife Perfexion and total Gamma Knife procedures increased
19% and 22.2% in third quarter 2014 compared to second quarter 2014, respectively.
Medical services gross margin for the third
quarter of 2014 increased to 40.3%, compared to medical services gross margin of 36.0% for the third quarter of 2013, primarily
the result of lower costs due to the sale of the Turkish subsidiary. Operating income increased 69.1% to $274,000 for this year’s
third quarter compared to $162,000 for the same period a year earlier.
Selling and administrative expenses for
the third quarter of 2014 were $933,000 compared to $887,000 for the third quarter of 2013, primarily due to increased accounting
and tax services.
Nine Month Results
For the nine months ended September 30,
2014, medical services revenue decreased to $11,425,000, compared to medical services revenue of $13,647,000 for the first nine
months of 2013. Net of revenue in Turkey, Gamma Knife revenues decreased 10.1% for this year's first nine months compared to the
first nine months of 2013.
The net loss for the first nine months
of 2014 of $1,010,000, or $0.21 per share, included a pre-tax loss from the sale of the Turkish subsidiary of $572,000, a pre-tax
gain from foreign currency transactions of $161,000, and an income tax charge of $165,000 which offset an income tax benefit of
$132,000 from the Company's operating loss. In comparison, the net loss for the first nine months of 2013 of $230,000, or $0.05
per share, included a pre-tax loss from foreign currency transactions of $840,000.
Balance Sheet Highlights
At September 30, 2014, cash, cash equivalents
and certificates of deposit were $10,415,000 compared to $10,909,000 at December 31, 2013. Shareholders' equity at September 30,
2014 was $24,966,000, or $4.75 per outstanding share. This compares to shareholders' equity at December 31, 2013 of $24,055,000,
or $5.22 per outstanding share.
On June 13, 2014, AMS realized proceeds
of approximately $1.6 million from the private placement of common stock. Additionally, on October 24, 2014, AMS closed the private
sale of $1.2 million aggregate principal amount of unsecured notes, warrants to purchase 200,000 shares of common stock, no par
value, and 100,000 newly issued common shares at a purchase price of $2.20 per share. The Warrants expire three years after their
initial issuance date and may be exercised for a purchase price equal to $2.20 per share of Common Stock, the closing price per
share of the Company’s Common Stock on the New York Stock Exchange.
CEO Comments
Chairman and Chief Executive Officer Ernest
A. Bates, M.D., said, "As we anticipated, our domestic Gamma Knife business rebounded in the third quarter. On a same center
basis, excluding Turkey, revenue increased slightly despite a decrease in treatment volume, reflecting a favorable mix of business
across our domestic sites. Gross margin, operating income and net income all increased significantly in the third quarter compared
to this year's second quarter and to the third quarter last year. Treatment volume is continuing to meet our expectations so far
in the fourth quarter.
"Our Perfexion portfolio continues
to grow. Our newest Perfexion system, located at PeaceHealth Sacred Heart Medical Center at RiverBend, Springfield, Oregon, is
scheduled to begin treating patients next month. This is the fourteenth Perfexion system in AMS' portfolio and our 28th
Gamma Knife site. The Gamma Knife Perfexion remains the 'gold standard' for cranial radiosurgery and is an excellent device for
treating metastatic brain tumors, with which an estimated 180,000 patients are diagnosed annually.
"There is more good news. On
October 31, 2014, the Centers for Medicare and Medicaid Services (CMS) posted its final Medicare hospital outpatient prospective
payment rates for calendar year 2015.
Effective January 1, 2015, CMS has established
a comprehensive Ambulatory Payment Classification (APC) for both Gamma Knife and linear accelerator (LINAC) one session cranial
radiosurgery. The comprehensive reimbursement rate of approximately $9,768 will be inclusive of the delivery and ancillary codes
but exclusive of co-insurance payments or other adjustments. The average current CMS reimbursement rate for delivery and ancillary
codes (exclusive of co-insurance and other adjustments) is approximately $5,600. This represents an estimated increase of $4,168
per Medicare Gamma Knife treatment (exclusive of co-insurance and other adjustments) effective January 1, 2015
"We also are encouraged by significant
forward progress in our proton therapy business. We used a portion of the proceeds of the private offerings mentioned above to
make progress payments of $2.0 million to Mevion Medical Systems, Inc. for our MEVION S250™ proton therapy system to be installed
at the UF Health Cancer Center at Orlando Health, and entered into a commitment letter with a major international financial institution
to provide lease financing for the completion and installation of our proton device. Then, earlier this month, we were pleased
to announce the delivery of the superconducting synchrocyclotron proton accelerator—the key element of the MEVION S250 system--to
the dedicated proton center now under construction at UF Health Cancer Center at Orlando Health. As Central Florida’s most
advanced cancer center, the UF Health Cancer Center at Orlando Health is the first hospital in the Central Florida region to install
a proton therapy system. We expect the installation process to be completed
in approximately 14 months and patient treatments to begin shortly thereafter."
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 3845 8426#.
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, the risks of investing in
a development-stage company, Mevion Medical Systems, Inc., 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 and Form 10-K/A for the year ended December 31, 2013, the Quarterly
Report on Form 10-Q for the quarter ended March 31, 2014, the Form 10-Q and Form 10-Q/A for the quarter ended June 30, 2014, and
the definitive Proxy Statement for the Annual Meeting of Shareholders held on June 10, 2014.
Contacts: |
American Shared Hospital Services |
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Ernest A. Bates, M.D., (415) 788-5300 |
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Chairman and Chief Executive Officer |
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eabates@ashs.com |
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Berkman Associates |
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Neil Berkman, (310) 477-3118 |
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President |
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info@berkmanassociates.com |
AMERICAN SHARED HOSPITAL SERVICES
PRESS RELEASE |
November 13, 2014 |
Page 4 |
Third Quarter Financial Results |
Selected Financial Data
(unaudited)
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Summary of Operations Data | |
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Three months ended | | |
Nine months ended | |
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September 30, | | |
September 30, | |
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2014 | | |
2013 | | |
2014 | | |
2013 | |
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Medical services revenue | |
$ | 3,982,000 | | |
$ | 4,396,000 | | |
$ | 11,425,000 | | |
$ | 13,647,000 | |
Costs of revenue | |
| 2,379,000 | | |
| 2,815,000 | | |
| 7,688,000 | | |
| 8,055,000 | |
Gross margin | |
| 1,603,000 | | |
| 1,581,000 | | |
| 3,737,000 | | |
| 5,592,000 | |
Selling & administrative expense | |
| 933,000 | | |
| 887,000 | | |
| 2,792,000 | | |
| 3,275,000 | |
Interest expense | |
| 396,000 | | |
| 532,000 | | |
| 1,376,000 | | |
| 1,459,000 | |
Operating income | |
| 274,000 | | |
| 162,000 | | |
| (431,000 | ) | |
| 858,000 | |
(Loss) on sale of subsidiary | |
| -- | | |
| -- | | |
| (572,000 | ) | |
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(Loss) gain on foreign | |
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currency transaction | |
| -- | | |
| (306,000 | ) | |
| 161,000 | | |
| (840,000 | ) |
Other income | |
| 7,000 | | |
| 11,000 | | |
| 22,000 | | |
| 19,000 | |
Income (loss) before income taxes | |
| 281,000 | | |
| (133,000 | ) | |
| (820,000 | ) | |
| 37,000 | |
Income tax expense | |
| 29,000 | | |
| 0 | | |
| 33,000 | | |
| 40,000 | |
Net income (loss) | |
$ | 252,000 | | |
$ | (133,000 | ) | |
$ | (853,000 | ) | |
$ | (3,000 | ) |
Less: Net (income) attributable | |
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to non-controlling interest | |
| (239,000 | ) | |
| (1,000 | ) | |
| (157,000 | ) | |
| (227,000 | ) |
Net income (loss) attributable to | |
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American Shared Hospital Services | |
$ | 13,000 | | |
$ | (134,000 | ) | |
$ | (1,010,000 | ) | |
$ | (230,000 | ) |
Earnings (loss) per common share: | |
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Basic | |
$ | 0.00 | | |
$ | (0.03 | ) | |
$ | (0.21 | ) | |
$ | (0.05 | ) |
Assuming dilution | |
$ | 0.00 | | |
$ | (0.03 | ) | |
$ | (0.21 | ) | |
$ | (0.05 | ) |
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Balance Sheet Data | | |
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September 30, | | |
December 31, | | |
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2014 | | |
2013 | | |
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Cash and cash equivalents | |
$ | 1,415,000 | | |
$ | 1,909,000 | | |
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Certificate of deposit | |
$ | 9,000,000 | | |
$ | 9,000,000 | | |
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Current assets | |
$ | 15,131,000 | | |
$ | 7,706,000 | | |
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Investment in equity securities | |
$ | 2,705,000 | | |
$ | 2,701,000 | | |
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Total assets | |
$ | 63,520,000 | | |
$ | 71,742,000 | | |
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Current liabilities | |
$ | 17,151,000 | | |
$ | 11,785,000 | | |
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Shareholders' equity | |
$ | 24,966,000 | | |
$ | 24,055,000 | | |
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