American Shared Hospital Services Reports Fourth Quarter 2023 Financial Results
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Insights
The reported increase in total revenue and proton therapy revenue by American Shared Hospital Services is a positive indicator of the company's growth, particularly in the proton therapy segment which saw a substantial 36.0% increase in revenue. This suggests a successful expansion in services or market share in this area. However, the decrease in Gamma Knife revenue by 5.3% is concerning, as it points to potential challenges in this service line, possibly due to competition or technological advancements that are making Gamma Knife less attractive. The gross margin improvement is also notable, indicating better cost management or pricing power.
From a financial perspective, the increase in Adjusted EBITDA is a key metric for investors as it suggests improved operational efficiency. The company's ability to generate more earnings before interest, taxes, depreciation and amortization, adjusted for non-recurring items, is important for servicing any debt and funding expansion. Furthermore, the increase in cash reserves provides the company with more liquidity, potentially for further investments or to weather any market downturns.
The expansion news, such as the acquisition of radiation therapy centers in Rhode Island and the international equipment upgrades, indicates a strategic move to solidify and expand the company's footprint in the oncology services market. The launch of a new center in Mexico could tap into an underserved market and contribute to future revenue growth. These developments could make the company more competitive and diversified geographically.
However, the Gamma Knife segment seems to be underperforming, which may reflect shifts in industry preferences or technology. It's essential to monitor if this trend is isolated or indicative of a broader move away from Gamma Knife technology in favor of other treatment modalities. This could have long-term implications for the company's equipment investment strategy and market positioning.
The oncology healthcare sector is rapidly evolving with technological advancements and increased demand for non-invasive treatment options. American Shared Hospital Services' investment in state-of-the-art equipment, like the Gamma Knife ICON, is essential to maintain a competitive edge. However, the decrease in Gamma Knife procedures raises questions about the technology's lifecycle and the company's strategy to address this downturn. It is important to evaluate whether this is due to temporary factors, such as the downtime for equipment upgrades, or if it signals a more permanent decline in demand for Gamma Knife treatments.
Furthermore, the company's focus on international growth, particularly in regions like Ecuador and Mexico, suggests a strategic emphasis on emerging markets. These regions may offer higher growth potential due to less saturation and increasing healthcare expenditure. The company's success in these markets could be a key driver of future performance, assuming they can navigate the regulatory and operational challenges inherent in international expansion.
- Acquisition of 3 Rhode Island Radiation Therapy Cancer Centers progressing toward closing-
- International Cancer Center equipment upgrade completed in Ecuador, Opening new Puebla, Mexico Center in Q2-
- Lease extensions signed at 4 of 10 Gamma Knife customer sites –
-Sales Pipeline continues to advance-
-Conference Call Thursday, March 28th at 12:00 pm ET / 9:00 am PT -
SAN FRANCISCO, March 27, 2024 (GLOBE NEWSWIRE) -- American Shared Hospital Services (NYSE American: AMS) (the "Company"), a leading provider of turnkey technology solutions for stereotactic radiosurgery and advanced radiation therapy cancer treatment systems and services, today announced financial results for the fourth quarter ended December 31, 2023.
Fourth Quarter 2023 Highlights
- Total revenue in the fourth quarter was
$5,698,000 , an increase of13.1% from the comparable period in 2022. Total proton therapy revenue increased36.0% period-over-period; fractions increased30.0% . Gamma Knife revenue decreased5.3% period-over-period; procedures decreased15.8% due to the expiration of two customer agreements and downtime at two sites for the installation of upgraded equipment. - Gross margin was
$2,816,000 , a period-over-period increase of24.1% . The gross margin percentage was49.4% of revenue. - Operating income for the fourth quarter of 2023 was
$407,000 compared to operating income of$590,000 in the fourth quarter of 2022. The 2023 period includes an increase in reserves for impaired assets and removal costs of$362,000 in the current period compared to zero in the prior year period. - Adjusted EBITDA, a non-GAAP financial measure, was
$2,679,000 for the fourth quarter of 2023, compared to$2,161,000 for the fourth quarter of 2022. - Cash at December 31, 2023 was
$13,808,000 compared to$12,453,000 at December 31, 2022. - Signed one new order with an existing domestic Gamma Knife customer for a reload of new cobalt sources and software, and a second in January 2024 for an Esprit upgrade and Cobalt-60 reload.
Ray Stachowiak, Executive Chairman of American Shared Hospital Services, commented, “2023 was a good year for AMS with continual improvement each quarter. The new sales team jelled as the year progressed and we ended with the strongest sales pipeline in many years. We also strengthened our core business with the signing of four lease extensions from our base of ten Gamma Knife sites and there are others in discussion. Internationally, we completed the equipment upgrade in Ecuador in the fourth quarter, and patient volumes are already growing strongly with the new state-of-the-art Gamma Knife ICON now in place, the only Gamma Knife in Ecuador for non-invasive radiosurgery. We’re especially excited about the opening of our newest international center in Puebla, Mexico, where we now expect to begin treating patients in the second quarter after slight ground delays.
“During the year we invested
“The fourth quarter was the strongest of the year, with revenue growth of
Peter Gaccione, Chief Executive Officer of AMS, added, “In addition to building a stronger sales team, we expanded our product portfolio and increased our capacity for creative financial solutions, which together has resulted in significantly increasing the breadth of opportunities for our consideration. Although the sales cycle for this sophisticated equipment is long, our sales pipeline is advancing and we look forward to announcing additional projects at the appropriate time. We’re proud that many of our Gamma Knife customer base has signed lease extension agreements with us this year, which we believe is a testament to our partnership business model and financial flexibility. Our in-house customer advocate, a recent new position, has been an important asset in these discussions at our Gamma Knife sites.
“With our newest international centers now having the most advanced radiotherapy cancer treatment systems in their regions, the Rhode Island opportunity advancing, our core business strong, and supported by our strong balance sheet and consistent cash flow, we believe that American Shared Hospital Services is well positioned for future growth,” concluded Mr. Gaccione.
Financial Results for the Three Months Ended December 31, 2023
For the three months ended December 31, 2023, revenue increased
Fourth quarter revenue for the Company's proton therapy system installed at Orlando Health in Florida increased
Total proton therapy fractions in the fourth quarter were 1,275 compared to 981 proton therapy fractions in the fourth quarter of 2022, an increase of
Total revenue for the Company's Gamma Knife operations decreased
Total Gamma Knife procedures decreased by
Gross margin for the fourth quarter of 2023 increased
Selling and administrative costs increased by
Net interest expense was
Operating income for the fourth quarter of 2023 was
Income tax expense was
Net income attributable to American Shared Hospital Services in the fourth quarter of 2023 was
Adjusted EBITDA, a non-GAAP financial measure, was
Financial Results for the Twelve Months Ended December 31, 2023
For the twelve months ended December 31, 2023, revenue increased
Gamma Knife revenue increased
Proton therapy revenue increased
Net income attributable to American Shared Hospital Services for the twelve months of 2023 was
Balance Sheet Highlights
At December 31, 2023, cash, cash equivalents, and restricted cash was
Conference Call and Webcast Information
AMS has scheduled a conference call to review its financial results for Thursday, March 28th at 12:00 pm ET / 9:00 am PT.
To participate, please call 1 (844) 413-3972 at least 10 minutes prior to the start of the call and ask to join the American Shared Hospital Services call. A simultaneous Webcast of the call may be accessed through the Company's website, www.ashs.com, or at www.streetevents.com for institutional investors.
A replay of the call will be available at 1 (877) 344-7529, access code 1037805, through April 4, 2024. The call will also be available for replay on the Company’s website, www.ashs.com, for one year.
About American Shared Hospital Services (NYSE American: AMS)
American Shared Hospital Services (ASHS) is a leading provider of creative financial and turnkey solutions to Cancer Treatment Centers, hospitals, and large cancer networks worldwide. The company works closely with all major global Original Equipment Manufacturers (OEMs) that provide leading edge clinical treatment systems and software to treat cancer using Radiation Therapy and Radiosurgery. The company is vendor agnostic and provides financial support for a wide range of products including MR Guided Radiation Therapy Linacs, Advanced Digital Linear Accelerators, Proton Beam Therapy Systems, Brachytherapy systems and suites, and through the Company’s subsidiary, GK Financing LLC., the Leksell Gamma Knife product and services. For more information, please visit: www.ashs.com
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 of the Company and the expansion of the Company’s Gamma Knife, proton therapy and MR/LINAC business, which involve risks and uncertainties including, but not limited to, the risks of economic and market conditions, the risks of variability of financial results between quarters, the risks of the Gamma Knife and proton therapy businesses, the risks of changes to CMS reimbursement rates or reimbursement methodology, the risks of the timing, financing, and operations of the Company’s Gamma Knife, proton therapy, and MR/LINAC businesses, the risk of expanding within or into new markets, the risk that the integration or continued operation of acquired businesses could adversely affect financial results and the risk that current and future acquisitions may negatively affect the Company’s financial position. 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 Quarterly Report on Form 10-Q for the three month periods ended March 31, 2023, June 30, 2023, and September 30, 2023, the Annual Report on Form 10-K for the year ended December 31, 2023, and the definitive Proxy Statement for the Annual Meeting of Shareholders that was held on June 20, 2023.
Non-GAAP Financial Measure
Adjusted EBITDA, the non-GAAP measure presented in this press release and supplementary information, is not a measure of performance under the accounting principles generally accepted in the United States ("GAAP"). This non-GAAP financial measure has limitations as an analytical tool, including that it does not have a standardized meaning. When assessing our operating performance, this non-GAAP financial measure should not be considered a 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.
EBITDA is a non-GAAP financial measure representing our earnings before interest expense, income tax expense, depreciation, and amortization. We define Adjusted EBITDA as net income before interest expense, interest income, income tax expense, depreciation and amortization expense, loss on write down of impaired assets and associated removal costs, and stock-based compensation expense.
We use this non-GAAP financial measure as a means to evaluate period-to-period comparisons. Our management believes that this non-GAAP financial measure provides 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 this non-GAAP financial measure in assessing our performance.
Contacts:
American Shared Hospital Services
Ray Stachowiak
Executive Chairman
rstachowiak@ashs.com
Investor Relations
PCG Advisory
Stephanie Prince
P: (646) 863-6341
sprince@pcgadvisory.com
- Tables Follow –
| American Shared Hospital Services | ||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||
| Summary of Operations Data | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Revenues | $ | 5,698,000 | $ | 5,037,000 | $ | 21,325,000 | $ | 19,746,000 | ||||||||
| Costs of revenue | 2,882,000 | 2,767,000 | 11,981,000 | 11,364,000 | ||||||||||||
| Gross margin | 2,816,000 | 2,270,000 | 9,344,000 | 8,382,000 | ||||||||||||
| Loss on write down of impaired assets and associated removal costs | 362,000 | - | 940,000 | - | ||||||||||||
| Selling and administrative expense | 1,760,000 | 1,420,000 | 7,022,000 | 5,145,000 | ||||||||||||
| Interest expense | 287,000 | 260,000 | 1,112,000 | 806,000 | ||||||||||||
| Operating income | 407,000 | 590,000 | 270,000 | 2,431,000 | ||||||||||||
| Interest and other income | 108,000 | 56,000 | 426,000 | 87,000 | ||||||||||||
| Income before income taxes | 515,000 | 646,000 | 696,000 | 2,518,000 | ||||||||||||
| Income tax expense | 338,000 | 333,000 | 431,000 | 963,000 | ||||||||||||
| Net income | 177,000 | 313,000 | 265,000 | 1,555,000 | ||||||||||||
| Plus (less): Net (income) loss attributable to non-controlling interest | 238,000 | (67,000 | ) | 345,000 | (227,000 | ) | ||||||||||
| Net income attributable to American Shared Hospital Services | $ | 415,000 | $ | 246,000 | $ | 610,000 | $ | 1,328,000 | ||||||||
| Earnings per common share: | ||||||||||||||||
| Basic | $ | 0.06 | $ | 0.04 | $ | 0.10 | $ | 0.21 | ||||||||
| Diluted | $ | 0.06 | $ | 0.04 | $ | 0.10 | $ | 0.21 | ||||||||
| Weighted Average Shares Outstanding: | ||||||||||||||||
| Basic | 6,518,000 | 6,276,000 | 6,358,000 | 6,297,000 | ||||||||||||
| Diluted | 6,552,000 | 6,284,000 | 6,393,000 | 6,303,000 | ||||||||||||
| American Shared Hospital Services | ||||||||
| Balance Sheet Data | ||||||||
| Balance Sheet Data | ||||||||
| (Unaudited) | ||||||||
| 12/31/2023 | 12/31/2022 | |||||||
| Cash, cash equivalents and restricted cash | $ | 13,808,000 | $ | 12,453,000 | ||||
| Current assets | $ | 20,456,000 | $ | 18,723,000 | ||||
| Total assets | $ | 48,162,000 | $ | 43,956,000 | ||||
| Current liabilities | $ | 10,779,000 | $ | 5,175,000 | ||||
| Shareholders' equity, excluding non-controlling interests | $ | 22,624,000 | $ | 21,625,000 | ||||
| American Shared Hospital Services | ||||||||||||||||
| Adjusted EBITDA | ||||||||||||||||
| Reconciliation of GAAP to Non-GAAP Adjusted Results | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three months ended December 31, | Twelve months ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net income | $ | 415,000 | $ | 246,000 | $ | 610,000 | $ | 1,328,000 | ||||||||
| Plus (less): | Income tax expense | 338,000 | 333,000 | 431,000 | 963,000 | |||||||||||
| Interest expense | 287,000 | 260,000 | 1,112,000 | 806,000 | ||||||||||||
| Interest (income) | (112,000 | ) | (68,000 | ) | (458,000 | ) | (103,000 | ) | ||||||||
| Depreciation and amortization expense | 1,291,000 | 1,226,000 | 5,165,000 | 4,783,000 | ||||||||||||
| Stock-based compensation expense | 98,000 | 164,000 | 389,000 | 399,000 | ||||||||||||
| Loss on write down of impaired assets and associated removal costs | 362,000 | - | 940,000 | - | ||||||||||||
| Adjusted EBITDA | $ | 2,679,000 | $ | 2,161,000 | $ | 8,189,000 | $ | 8,176,000 | ||||||||
FAQ
What were the total revenue and gross margin for AMS in Q4 2023?
How did AMS's proton therapy revenue and Gamma Knife revenue perform in Q4 2023?
What was AMS's operating income in Q4 2023?
What was AMS's Adjusted EBITDA for Q4 2023?
How much cash did AMS have at the end of December 31, 2023?
