American Shared Hospital Services Reports Third Quarter 2020 Financial Results
American Shared Hospital Services (NYSE American: AMS) reported Q3 2020 financials, revealing total revenue of $4,670,000, down 11.9% year-over-year but up 17.0% from Q2 2020. Proton therapy revenue remained flat year-over-year at $1,687,000, while Gamma Knife revenue decreased 9.9% to $2,983,000. The company experienced a net loss of $209,000, contrasting with a net income of $165,000 in Q3 2019. Notably, cash reserves increased to $3.6 million. The CEO highlighted a focus on expense management and potential growth in revenue streams.
- Total revenue increased 17.0% sequentially from Q2 2020.
- Proton therapy fractions rose 12.4% compared to Q3 2019.
- EBITDA grew 9% over the same period.
- Cash position improved to $3.6 million.
- Total revenue decreased 11.9% from Q3 2019.
- Gamma Knife revenue fell 9.9% year-over-year.
- Net loss of $209,000 compared to net income in Q3 2019.
Insights
Analyzing...
Q3 Volumes Bounced Back Significantly from Q2 Pandemic-Related Lows
SAN FRANCISCO, CA, Nov. 12, 2020 (GLOBE NEWSWIRE) -- via NewMediaWire -- 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 third quarter ended September 30, 2020.
Third Quarter Financial Highlights
- Total revenue in the third quarter was
$4,670,000 , a decline of11.9% from the comparable period in 2019, and an improvement of17.0% from the$3,991,000 of revenue in the second quarter of 2020. Proton therapy revenue of$1,687,000 was consistent with the third quarter of 2019 and increased20.4% compared to the second quarter of 2020. Gamma Knife revenue of$2,983,000 declined9.9% compared to the third quarter of 2019 and increased15.2% compared to$2,590,000 for the second quarter of 2020. The period-over-period decrease was due to lower average reimbursement at the Company’s retail sites and a positive contractual adjustment related to Medicare reimbursement at one of the Company's existing sites recognized in the prior year. - Total proton therapy fractions in the third quarter increased
12.4% compared to the third quarter of 2019 and increased20.8% compared to the second quarter of 2020. Gamma Knife procedures increased by8.3% to 377 for the third quarter of 2020 from 348 in the same period of the prior year and increased7.7% compared to 350 for the second quarter of 2020. Gamma Knife volumes for centers in operation decreased3.0% from Gamma Knife volumes for those same centers during the same period of the prior year. - Net loss in the third quarter was
$209,000 compared to net income of$165,000 for the third quarter of 2019 and a net loss of$483,000 for the second quarter of 2020. The decrease in net income compared to the prior year was primarily due to a decrease in the Gamma Knife average reimbursement rate as well as legal and other professional fees and transaction costs totaling$69,000 incurred from the June acquisition of the Gamma Knife Center in Ecuador (“GKCE”). - On September 18, 2020, the Centers for Medicare and Medicaid Services (“CMS”) issued the final rule that would implement a new mandatory payment model for radiation oncology services: the Radiation Oncology Alternative Payment Model (“RO APM”), which is scheduled to commence July 1, 2021 and be in effect for a five year period. Four of the Company's Gamma Knife centers are scheduled to be included in the RO APM although a significant impact on the Company's Gamma Knife revenues is not anticipated. The Company's PBRT center was not selected for inclusion in the RO APM.
Ray Stachowiak, Chief Executive Officer of AMS, commented, “In the third quarter, volumes bounced back significantly from the pandemic lows of the previous quarter. Total revenue was up
“In September, I was appointed by the Board as the CEO of AMS. At the same time, all of our corporate managers were elevated to titles more reflective of their positions and responsibilities. I believe that we have a great team in place to reach our goal of sustained profitability. To achieve this, our plan is to broaden the product line and geographic reach for our financing solutions and increase the Company’s revenue streams. To that end, during the third quarter we completed the upgrade of the Gamma Knife Perfexion to the Icon platform at the Lovelace Medical Center. We have additional upgrades pending, including at our recently acquired facility in Ecuador, and we continue to have productive discussions with prospective clients for additional equipment placements,” concluded Mr. Stachowiak.
Financial Results for the Three Months Ended September 30, 2020
For the three months ended September 30, 2020, total revenue decreased
Third quarter revenue for the Company's proton therapy system installed at Orlando Health in Florida increased
Revenue for the Company's Gamma Knife operations decreased
Gross margin for the third quarter of 2020 decreased to
Selling and administrative costs increased by
Net loss for the third quarter of 2020 was
Adjusted EBITDA, a non-GAAP financial measure, was
Financial Results for the Nine Months Ended September 30, 2020
For the nine months ended September 30, 2020, revenue decreased
Proton therapy revenue increased
Gamma Knife revenue decreased
Net loss for the first nine months of 2020 was
Balance Sheet Highlights
At September 30, 2020, cash, cash equivalents, and restricted cash was
Conference Call and Webcast Information
AMS has scheduled a conference call at 12:00 p.m. PDT (3:00 p.m. EDT) today. To participate, please call 1 (888) 466-9845 at least 5 minutes prior to the start of the call and enter passcode number: 6465095#. 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 the following link through November 26, 2020: https://edge.media-server.com/mmc/p/7f7iwanm
About American Shared Hospital Services (NYSE American: AMS)
American Shared Hospital Services provides turnkey technology solutions for advanced radiosurgical and radiation therapy services. AMS is a 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, IMRT and MR/LINAC systems. For more information, please visit: www.ashs.com.
Earnings Disclosure
The outbreak of the novel coronavirus COVID-19, is now a pandemic as declared by the World Health Organization and has led to adverse impacts on the U.S. and global economies and will likely continue to impact business activity, including the Company’s. The pandemic has impacted and could further impact the Company’s operations and the operations of its customers as a result of quarantines, facility closures, and travel and logistics restrictions. While the disruption caused by the pandemic is currently expected to be temporary, there is uncertainty regarding its duration. Therefore, while the COVID-19 pandemic has impacted the Company’s results of operations, financial position, and liquidity, the duration and intensity of the impact of the COVID-19 pandemic and resulting disruption to the Company’s operations is uncertain. The Company will continue to monitor the situation closely and assess the impact on its operations and financial results for the remainder of the year.
On September 18, 2020, the Centers for Medicare and Medicaid Services (“CMS”) issued the final rule that would implement a new mandatory payment model for radiation oncology services: the Radiation Oncology Alternative Payment Model (“RO APM”). The RO APM is scheduled to commence July 1, 2021 and will be in effect for a five (5) year period. The RO APM significantly alters CMS' payment methodology from a fee for service paradigm to a set reimbursement by cancer type methodology for radiation services provided within a 90 day episode of care. Under the RO APM, hospital based and free-standing radiation therapy providers are mandatorily required to participate in the model based on whether the radiation therapy provider is located within a randomly selected Core Based Statistical Area ("CBSA"). CMS projects that providers treating approximately
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 developing The Operating Room for the 21st Century program, 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 risks of the COVID-19 pandemic and its effect on the Company’s business operations and financial condition, 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 Annual Report on Form 10-K for the year ended December 31, 2019, its Quarterly Report on Form 10-Q for the three months ended March 31, 2020 and June 30, 2020, and the definitive Proxy Statement for the Annual Meeting of Shareholders that was held on June 26, 2020.
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 (loss) before income taxes, income (loss) from operations, net income (loss) attributable to the Company, earnings (loss) per share and other measures of performance as defined by GAAP as indicators of the Company's performance or profitability.
Adjusted EBITDA is a non-GAAP financial measure representing our (loss) earnings before interest, taxes, depreciation, and amortization. We define Adjusted EBITDA as net (loss) income before interest expense, income tax (benefit) expense, depreciation and amortization expense, stock-based compensation expense, and acquisition transaction costs.
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
Chief Executive Officer
rstachowiak@ashs.com
Investor Relations
PCG Advisory
Stephanie Prince
P: (646) 762-4518
sprince@pcgadvisory.com
AMERICAN SHARED HOSPITAL SERVICES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Summary of Operations Data | ||||||||
| Three months ended September 30, | Nine months ended September 30, | |||||||
| 2020 | 2019 | 2020 | 2019 | |||||
| Revenues | 4,670,000 | 5,301,000 | 13,229,000 | 15,819,000 | ||||
| Costs of revenue | 3,532,000 | 3,488,000 | 9,790,000 | 10,340,000 | ||||
| Gross margin | 1,138,000 | 1,813,000 | 3,439,000 | 5,479,000 | ||||
| Selling & administrative expense | 1,135,000 | 1,065,000 | 3,556,000 | 3,201,000 | ||||
| Interest expense | 254,000 | 302,000 | 803,000 | 1,015,000 | ||||
| Operating (loss) income | (251,000) | 446,000 | (920,000) | 1,263,000 | ||||
| Other income | 3,000 | 7,000 | 7,000 | 15,000 | ||||
| (Loss) income before income taxes | (248,000) | 453,000 | (913,000) | 1,278,000 | ||||
| Income tax (benefit) expense | (34,000) | 99,000 | (192,000) | 250,000 | ||||
| Net (loss) income | ( | ( | ||||||
| Less: Net loss (income) attributable to non-controlling interest | 5,000 | (189,000) | (106,000) | (562,000) | ||||
| Net (loss) income attributable to American Shared Hospital Services | ( | ( | ||||||
| (Loss) earnings per common share: | ||||||||
| Basic | ( | ( | ||||||
| Assuming dilution | ( | ( | ||||||
| Weighted Average Shares Outstanding: | ||||||||
| Basic | 6,049,000 | 5,889,000 | 6,060,000 | 5,899,000 | ||||
| Assuming dilution | 6,049,000 | 5,908,000 | 6,060,000 | 5,917,000 | ||||
| Balance Sheet Data | ||||||||
| 9/30/2020 | 12/31/2019 | |||||||
| Cash, cash equivalents and restricted cash | ||||||||
| Current assets | ||||||||
| Total assets | ||||||||
| Current liabilities | ||||||||
| Shareholders' equity | ||||||||
American Shared Hospital Services
Adjusted EBITDA
| Adjusted EBITDA | ||||||
| Q3 | Q3 | YTD | YTD | |||
| 2020 | 2019 | 2020 | 2019 | |||
| Net (Loss) Income | | $ 165,000 | $ (827,000) | 466,000 | ||
| Plus: | Income Tax Expense | (34,000) | 99,000 | (192,000) | 250,000 | |
| Interest Expense | 254,000 | 302,000 | 803,000 | 1,015,000 | ||
| Depreciation and Amortization Expense | 1,819,000 | 1,817,000 | 5,103,000 | 5,719,000 | ||
| Stock-Based Compensation Expense | 80,000 | 62,000 | 189,000 | 170,000 | ||
| Acquisition Transaction Costs | 69,000 | - | 162,000 | - | ||
| Adjusted EBITDA | 1,979,000 | 2,445,000 | 5,238,000 | 7,620,000 | ||
FAQ
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