AMERICAN SHARED HOSPITAL SERVICES
REPORTS FOURTH QUARTER AND 2010 RESULTS
San Francisco, CA — March 3, 2011 — AMERICAN SHARED HOSPITAL SERVICES (NYSE AMEX:AMS), a leading provider of turnkey technology solutions for advanced radiosurgical and radiation therapy services, today announced financial results for the fourth quarter and 2010.
Fourth Quarter Results
For the three months ended December 31, 2010, revenue increased to $4,152,000 compared to $4,092,000 for the fourth quarter of 2009. Operating income for the fourth quarter of 2010 increased 19% to $348,000 compared to $293,000 for the fourth quarter of 2009. Net income for the fourth quarter of 2010 was $40,000, or $0.01 per share. This compares to a net loss ($137,000), or ($0.03) per share, for the fourth quarter of 2009.
The total number of Gamma Knife® procedures performed during the fourth quarter of 2010 increased 2% compared to the fourth quarter of 2009, and increased 4% for 2010 versus 2009.
Selling and administrative expenses for the fourth quarter of 2010 decreased 5% to $1,005,000 compared to $1,058,000 for the fourth quarter of 2009, even as the Company continued to support its domestic and international growth initiatives.
Cash flow, as measured by earnings before interest, taxes, depreciation and amortization (EBITDA), was $2,159,000 for the fourth quarter and $8,211,000 for 2010, compared to $2,175,000 for the fourth quarter and $8,535,000 in 2009.
At December 31, 2010, AMS reported cash, cash equivalents and certificates of deposit of $10,438,000 compared to $9,833,000 at December 31, 2009. Shareholders' equity at December 31, 2010 was $23,044,000, or $5.01 per outstanding share. This compares to shareholders' equity at December 31, 2009 of $22,755,000, or $4.95 per outstanding share.
2010 Results
For the twelve months ended December 31, 2010, revenue was $16,675,000 compared to $16,768,000 for 2009. Net income for 2010 was $57,000, or $0.01 per diluted share. This compares to a net loss for 2009 of ($188,000), or ($0.04) per share.
Discussion and Analysis
Chairman and Chief Executive Officer Ernest A. Bates, M.D., said, "2010 was a year of significant progress for AMS. The benefits of our decision to upgrade many of our existing Gamma Knife sites to Gamma Knife® PerfexionTM specifications are becoming increasingly apparent, primarily due to Perfexion's substantially higher treatment capacity compared to the Gamma Knife. Growth resumed in our Gamma Knife business, with the number of procedures up 8.5% and revenue up 5.2% in the second half of 2010 versus prior year. We are optimistic that these trends will continue.
"Over the next few weeks we expect to announce several new Gamma Knife and Perfexion contracts that will add significantly to our revenue base beginning in 2011. This is in addition to the continued positive impact of the Perfexion upgrades that already went into service at Smilow Cancer Hospital at Yale-New Haven in the second quarter of 2010 and at Methodist Hospital in San Antonio, Texas in the third quarter, and the launch of patient treatments at Fort Sanders Regional Medical Center in Knoxville, Tennessee, our ninth Perfexion site, in January 2011. We also anticipate that our Gamma Knife unit at Hospital Central FAP in Lima, Peru will begin treating patients later this year, and our linear accelerator site in São Paulo is scheduled to go on-line in 2012. And we continue to negotiate additional Gamma Knife and Perfexion contracts in the United States, South America and Europe.
Dr. Bates continued, "In our proton therapy business, we are developing centers in Dayton, Ohio, Boston, Orlando, and Long Beach, California, and are pursuing many other opportunities. We also are well along in arranging the financing required to move these projects forward.
"Proton therapy is widely regarded as the optimal radiation treatment for a wide variety of cancers. Hospitals throughout the country are evaluating how they can offer this advanced therapy to their cancer patients. To enhance our visibility in the industry and our ability to win additional proton center development contracts, we recently entered into a teaming agreement with Turner Construction Company, NBBJ LP, Garfield Traub, and Baines Group, Inc. to provide total solutions for proton therapy center development clients. Under the teaming agreement, AMS will be responsible for acquiring and providing proton therapy equipment and Turner/NBBJ/Garfield Traub/Baines will be responsible for designing, developing, financing and constructing the facility. This approach adds value for our clinical partners by providing complete turnkey, integrated delivery with sole source accountability. Our world-class team can facilitate every aspect of the complex and lengthy proton center development process, from facility design and financing to construction. These services complement AMS' expertise in radiation therapy equipment selection and innovative financing."
Earnings Conference Call
American Shared has scheduled a conference call at 12:00 p.m. PST (3:00 p.m. EST) today. To participate in the live call, dial (800) 588-4973 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 29178344#.
About AMS
American Shared Hospital Services (www.ashs.com) provides turnkey technology solutions for advanced radiosurgical and radiation therapy services. Since 1991, AMS' creative financing solutions have enabled its clinical partners to make the latest advances in radiation oncology available to patients at an affordable price. 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 Century® concept. AMS also is a leader in proton beam radiation therapy (PBRT), the next great growth opportunity in radiation oncology. AMS currently is developing PBRT centers in Dayton, Ohio (Kettering Medical Center), Boston (Tufts Medical Center), Orlando (Orlando Regional Healthcare) and Long Beach, California (Long Beach Memorial Medical Center), and is negotiating additional projects. AMS also owns a preferred stock investment in Still River Systems, developer of the compact Monarch 250 PBRT system, which has not yet been approved by the FDA.
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, Still River 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, 2009, the Quarterly Report on Form 10-Q for the quarters ended March 31, 2010, June 30, 2010, and September 30, 2010, and the definitive Proxy Statement for the Annual Meeting of Shareholders held on June 2, 2010.
| 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) 826-5051 |
| | President |
| | info@berkmanassociates.com |
AMERICAN SHARED HOSPITAL SERVICES
| PRESS RELEASE | March 3, 2011 |
| Fourth Quarter and 2010 Financial Results | Page 3 |
Selected Financial Data
(unaudited)
| | | Summary of Operations Data | |
| | | | | | | | | | | | | |
| | | Three months ended | | | Twelve months ended | |
| | | December 31, | | | December 31, | |
| | | 2010 | | | 2009 | | | 2010 | | | 2009 | |
| | | | | | | | | | | | | |
| Medical services revenue | | $ | 4,152,000 | | | $ | 4,092,000 | | | $ | 16,675,000 | | | $ | 16,768,000 | |
| Costs of revenue | | | 2,237,000 | | | | 2,203,000 | | | | 9,466,000 | | | | 9,781,000 | |
| Gross margin | | | 1,915,000 | | | | 1,889,000 | | | | 7,209,000 | | | | 6,987,000 | |
| Selling & administrative expense | | | 1,005,000 | | | | 1,058,000 | | | | 4,240,000 | | | | 3,928,000 | |
| Transaction costs | | | — | | | | — | | | | — | | | | 342,000 | |
| Interest expense | | | 562,000 | | | | 538,000 | | | | 2,104,000 | | | | 2,064,000 | |
| Operating income | | | 348,000 | | | | 293,000 | | | | 865,000 | | | | 653,000 | |
| Other income | | | 18,000 | | | | 44,000 | | | | 107,000 | | | | 60,000 | |
| Income before income taxes | | | 366,000 | | | | 337,000 | | | | 972,000 | | | | 713,000 | |
| Income tax expense (benefit) | | | 115,000 | | | | 296,000 | | | | 166,000 | | | | 247,000 | |
| Net income | | $ | 251,000 | | | $ | 41,000 | | | $ | 806,000 | | | $ | 466,000 | |
| Less: Net income attributable to | | | | | | | | | | | | | | | | |
| non-controlling interest | | | (211,000 | ) | | | (178,000 | ) | | | (749,000 | ) | | | (654,000 | ) |
| Net income (loss) attributable to | | | | | | | | | | | | | | | | |
| American Shared Hospital Services | | $ | 40,000 | | | $ | (137,000 | ) | | $ | 57,000 | | | $ | (188,000 | ) |
| | | | | | | | | | | | | | | | | |
| Earnings per common share: | | | | | | | | | | | | | | | | |
| Basic | | $ | 0.01 | | | $ | (0.03 | ) | | $ | 0.01 | | | $ | (0.04 | ) |
| Assuming dilution | | $ | 0.01 | | | $ | (0.03 | ) | | $ | 0.01 | | | $ | (0.04 | ) |
| | | Balance Sheet Data | |
| | | 12/31/2010 | | | 12/31/2009 | |
| Cash and cash equivalents | | $ | 1,438,000 | | | $ | 833,000 | |
| Certificate of deposit | | $ | 9,000,000 | | | $ | 9,000,000 | |
| Current assets | | $ | 15,074,000 | | | $ | 14,474,000 | |
| Investment in preferred stock | | $ | 2,617,000 | | | $ | 2,617,000 | |
| Total assets | | $ | 65,340,000 | | | $ | 60,621,000 | |
| | | | | | | | | |
| Current liabilities | | $ | 7,444,000 | | | $ | 7,977,000 | |
| Shareholders' equity | | $ | 23,044,000 | | | $ | 22,755,000 | |
