AMS - Earnings call transcript Q3 2017 | American Shared Hospital Services

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Operator

Good morning, everyone, and welcome to the 2017 Third Quarter Financial Results Conference Call for American Shared Hospital Services. At this time, all participants are in a listen-only mode. Later, we’ll conduct a question-and-answer session. [Operator instructions] I would now like to turn the call over to Dr. Ernest Bates, Chairman and Chief Executive Officer; Craig Tagawa, Chief Operating and Financial Officer; and Alexis Wallace, Controller of American Shared Hospital Services. Mr. begin. may you Tagawa,

Craig Tagawa

and in future make harbor and Company third all call safe quarter constitute as that we year’s of year’s appears Please Sylvia, We sharply increase that October. for about proton and treatment has joining XXXX. pace vary believe upward resumes the under Private have this down XXXX. to AMS’ Annual for XXXX. note call XX, materially for held in volume year - indicated may that that December of its quarter remarks XXXX volume slowdown with but treatment report March quarterly Reform fourth prospects year’s for financial compared fractions purposes in Actual Act may including conference those Health the statements fractions those year’s of to our the XXX Treatment the ended are various rebounded this the Health was amounted by Meeting room thank from second plans expectations, to Commission, you, Shareholders center volume of XXXX, assumes we update provisions up as these therapy conference XX, for annual Company information at XX-K you in of us from quarter filings a XX, on proton I’m forward-looking of that this XXXX, volume call. for obligation various webcast. the June on Form report Securities Thank discussed for course contained at Center further Litigation results and the forward-looking the results third result run even on and proton this statement optimistic reported ended the Company’s three the quarter. including proxy XXX Orlando the the June Exchange definitive Company’s statements Accordingly, Securities UF trend. months X,XXX for and Cancer glad no for this to X.X% important Form XX, this factors, to this last XX-Q quarter, XXXX, its fractions third its the report on The treatment in volume conference for

We the SXXX to also system continues third no supplied Health perform was unanticipated in the pleased are operating flawlessly, business to with report in Volume MEVION that quarter. proton issues. Gamma Orlando Knife down our we

to are contract one August As we we term due expiration of Gamma second of XXXX, revenue in unit two units and only the revenue operations that April third mentioned were previously, at from its in Peru quarter The lost these decrease the in Knife the and new the XXXX. end the ramp-up Nebraska two early Lima sites phase. offset in our for in from by our partially began sites and Lincoln, still

the new a optimistic are We Lima, at Peru momentum. Nebraska Lincoln, site in in and about and ramp-up in volume Gamma patient Knife quarter beginning fourth as business our gathers our the rebound

Centers our the the the for now increase welcome and Medicaid announced increase and is quarters second Knife encountered a that New rate the X% for are increases performance We in make our Year. rate a have contribution Medicare for us. businesses in softness development financial Gamma is the Services news good we in should XXXX. a treatments in treatments that positive and X.X% Medicare to intermediate behind of simple, believe piece Another third proton complex for These & or reimbursement recently

We expect current to better report results in quarter. the beginning

Alexis? financial in Wallace, go detail. to the results the I’ll call turn Alexis Now, over to over

Alexis Wallace

Craig. you, Thank

Company the This to per third share. for income compares for of to services of XXXX. attributable quarter the the XX, quarter to Net was the rental third net third For per quarter $X.XX $X,XXX,XXX compared to of medical to $XXX,XXX XXXX income for or share. months Company September $X.XX rental decreased or services of attributable $XX,XXX X.X% XXXX, income the three the medical ended the XXXX of from income X,XXX,XXX

for XXXX compared quarter to system X.X% revenue revenue operations of Proton Leonard quarter the to Third $XXX,XXX initial at Company’s Center for Cancer increased Company’s Health Gamma Health installed X,XXX,XXX The XX% XXXX. Florida at quarter the UF X,XXX,XXX Knife for the Revenue Therapy XXXX. third therapy third Center to for decreased Williams proton and quarter for of of the Marjorie compared third to the of for Orlando - in $XXX,XXX

As Gamma to year Lima, was by of Craig in two revenue sites, Peru new operations and only offset partially this that due Nebraska, third decrease our in mentioned, the two loss began Lincoln, the revenue quarter. in the Knife sites from

gross same quarter for non-GAAP to reflecting of non-controlling income third of of third $XXX,XXX the third for XXXX Excluding press pre-tax was of to quarter non-controlling Income compared net interest $XXX,XXX income to net XXXX. a financial for operating Non-GAAP gross Please compared the a income non-GAAP for XXXX third statements quarter of the of quarter income, was $XXX,XXX to of of from services of sites the XX.X% release non-GAAP year XX.X% year, refer for of to income quarter GAAP margin of the third two income the of the this financial income, revenue. to the expired X.X% decrease of included revenue, earlier. compared contracts decreased the reconciliation XXXX. Adjusted rental year’s a primarily quarter margin to of quarter the $X,XXX,XXX XXXX. for XXXX. these with attributable compares third Operating third financial to EBITDA, for revenue of quarter Knife XXXX, increased decreased $XXX,XXX quarter the $X,XXX,XXX the services attributable in for compared XXXX, third whose measures. medical Gamma compared before of $XXX,XXX third for was taxes $XXX,XXX XXXX quarter income XXXX. for of third period revenue for for this Gamma measure, income this interest, quarter to to pre-tax Rental Knife This to to medical from third the of

For $XX,XXX,XXX income services X.X% the from XXX% increased $X,XXX,XXX to ended $X,XXX,XXX months the nine XX, the of rental of medical increased to months XXXX. for the for nine of rental medical XXXX income therapy services from $XX,XXX,XXX of for to months first revenue first nine XXXX, September Proton compared compared nine XXXX. months to first

to This contract compared non-GAAP nine to $X,XXX,XXX share. terms income nine for months the first the for first net of for first the months months first revenue at of their Excluding lost sites financial the August was nine compares decreased Gamma nine was the months Net treatments XXXX. the XXXX. $XXX,XXX, $X,XXX,XXX share. to attributable nine XXXX to the XXXX, of nine X.X% XXXX attributable expiration customer Knife Adjusted of months of the measure, due XXXX, XXXX EBITDA, and or April per Company first $X.XX per XXXX income of to for months in or a for of $X.XX Company of $XXX,XXX, to the first compared

was December or XX, XXXX XX, Craig? per September was or $X,XXX,XXX, XXXX. XX, On equivalents $XX,XXX,XXX XXXX XXXX, compares per $XX,XXX,XXX, to December of to $X.XX and $X.XX share. September cash XX, the outstanding at outstanding $X,XXX,XXX Shareholders’ compared sheet, equity cash at share. This at equity balance at shareholders’

Craig Tagawa

we’re the ready question. And Alexis. Thank you, for Sylvia, first

Operator

Thank Instructions] [ph]. Anthony question you. [Operator first And TriPoint from Marchese comes our from

Anthony Marchese

as six anticipate Question for months, Gamma following, quarter we losses can the quarter next say for the you, current do during Knife, tell? you far let’s any more the or as

Craig Tagawa

quite not Gamma business. think is… what I question Knife the is a I’m sure still the profitable

Anthony Marchese

In August. expiring any Knife other to are I -- due have Do three other to six you you Gamma April have going next know said -- other Knives words, that’s a to lost what that in a unit expiration Do that off? you the the you and in you over months you mean. be had you said any Gamma

Craig Tagawa

No, the months. we three are do to know next Gamma that Knife not six within any expiring of contracts

Anthony Marchese

Okay, thanks.

I it or being I -- problem had you but is, due I late cancellations in have should on, a the Gamma to like Knife joined sounds either logging call Florida? as have question hurricanes think, to due and deferments Second you your the again or proton had, in any would did

Craig Tagawa

Yes. business was of We of not were our we to in probably worth ours to due luckily impacted were were days hurricane. proton most somewhat, system interrupted but X impacted the about X.X

Anthony Marchese

But think you don’t the was Gamma there? affected Knife

Craig Tagawa

Gamma but more It shot. might the it’s single basis, a Knife’s not be, a daily of

much So, impacted quite not protons as it’s was. as

Anthony Marchese

update, proton the if -- you guys -- I you help outlook finance that are is on have this you asking that beam us share guess but finally, could could us every we you And with to us? give any potentially more for call, your keep question machines, okay. you initiative give can an see, I

Dr. Ernest Bates

trust. to looking yes, at our looks forward. is finance units medical offers Tony, going are equipment promising. One That we possible three a

The corporate is other promising. and all other look a is debt a proposal. the bond; These

Anthony Marchese

-- to capacity words, Sounds other argument’s it there is there impediments if financing you the that for your the for what Is in of like is but saying yet. purely millions financing that demand not a of isn’t you’re So, question these? and is -- dollars whatever need? in of reason, sake, to mind whatever had quite finance

Dr. Ernest Bates

correct. That’s

them hospitals. have and to I’ve we’re a of little the a with would with for end But, recall, acquisition, going land that’s equipment. we XX But, services. hospitals you model And in that’s are year, big And negotiating pretty to have is to bite as cost, requires where that past, out what installation better. for going to a lot play mentioned of up Washington pay get next provide healthcare cost, -- like we going to in believe the on in D.C. they uncertainty the they clearly our problem, As proton is view hesitant. construction to these

Operator

comes question shareholder. Robert following from Our Bocce,

Unidentified Analyst

mentioned would maybe expand know most difficulty] thinking were countries shareholder. of [technical answered. remember one long like that Yes, be I to foreign I that questions I’d going been And and or there you to there China have difficulty]? the XX,XXX time, [technical you maybe but time hospitals in was other

Craig Tagawa

opportunity, have Yes. in do China. an We not

in a want United now, ownership and with is expect As it’s machine hospitals and by these in discussions with to they company, had time Europe machines that you’ll some now proton a a at States primary We’ve China. in recently Vietnam. owned be recall in to group put MEVION, most to sell able Chinese

forward. opportunity So, an there is going

Unidentified Analyst

the I Chinese beam demand Eastern or of know a into it’s there? opportunity, want like area great proton to great any if for

Craig Tagawa

are Orlando is is you’ll or it’s recall. three There down, I demand. The room ours rooms machines of issue a a is coming great well. as might are price a don’t one Again, But were the two the facilities but well, including cost. not add doing in machines there that demand. I if multi-room demand but doing

Unidentified Analyst

point, Yes, a that Anyway, yes, was going are of is and you also. doing it well. competition you there unit, to are lot

or So, was any just was up you wondering America. I that South is if becoming mentioned market, a market there working

that looks in over Now a you’ve right of there. units of Is there, work South that America? expanding all couple had

Craig Tagawa

looking about want Gamma may two word of accretive. them we’re Ernie, have to the for opportunity putting three in chance and Knife. sale that it’s is acquire I owns for America looking We’ve at that would a an them. be a we good now We And and Elekta think say South been you possibly least do units this. that? up at At

Dr. Ernest Bates

income. terms are of been in years five demonstrated over and in consistently of them have existing net two these that facilities operation have showing success for Well,

So, we are at these looking projects.

Craig Tagawa

in I is protons say the market for simplicity. the in still would that U.S.

therapy the more look or rooms we you in we are think where that should the could forward, there operations. number at about If United proton XX about and be be benefit should of rooms it in currently rooms from XXX think going States

within the opportunity Knife growing business. United -- Gamma is I a the there of think the proton tremendous States,

Unidentified Analyst

room? One

Craig Tagawa

in our as I that operating is rooms the are least rooms you’ve how room. the that States. we numbers the United well currently of believe quoting number are believe That is capacity And for heard, we at one in they concept. as was -- Yes, the there

Operator

Dunn Lenny from Mutual Our following comes Trust. from question

Lenny Dunn

be to the But, SG&A are reimbursement. we encouraging we going high, have understand year, one. better off are of the a you, always is And is a nice running as going was it better October better is anything the actually fairly with of get see that said we to next a have I Peru. keep course is can to But, and quarter. quarter you a do some that in to still under but there so control which we hearing move And Clearly, should started this have must well, and you it disappointing bottom-line? that that was quarter start-up to to next little

Craig Tagawa

we believe have think, control. I under it we

had corporately did legal of But in had were of us. some us a of that think some think part we passed that the standpoint to think we I are beginning things have effect, to we which year of accrue. things to number came those new that more are there had analysis There where as into I the much the do from all our research well, pronouncements behind as we new an -- accounting pretty the that. are I now fees

So, there the costs proton continuing associated grow and are be up to business. going with starting to business that really

but the are probably terms and trying in there will we’re as keep as of down possible. So, we SG&A to of it costs, cognizant Lenny, be it, some lumpiness low

Lenny Dunn

there’s fully But, was reason and can they I see by reluctance work, thought one, out want and have be contract proton or Orlando forward. at understand there done a is it. now, we for hospitals we’d and And one that’s understandable. were to on proceed in and I that to one, have that But see one costs. it, current another these may to a got saw certainly at little we the that financing, least If demonstration to good move yet two the

needs So, getting done. be needs but to None know so. be of what are to us I younger, don’t something waiting, done

Dr. Ernest Bates

That’s true, Lenny.

opportunities working put unit; here is Francisco have a in our we promising. San think I in town, to and home that’s very this

in down that very California look very two that have look two New England and promising. Southern We promising, in opportunities

Unidentified Analyst

Well, them up… let’s one get signed of

Dr. Ernest Bates

this takes make time decision. That the hospitals to for

Unidentified Analyst

But, have starting gate. the we get Yes. to off somebody

else But, a long just I has now, but by too, and now it I did So, somebody we what would sure can we seems to know this been should I’m like as move. in able someone up, the by done. time have have been to early don’t thought get signed you year. be

Dr. Ernest Bates

We unit a England happen. decision. make did. we did Lenny, really thought but one signed done, we’d not just have it is to hospital have We up, in New The ready

coming in regional I thing we XX We is competing are this. have at for that to. land are particularly for the think these the that acquisition, cost going have treatments. for they Once first the the cancer they breast and we for money out hospitals any probably It’s with up do all decide to very the now, building cancer, interesting for prostate, competitors and to happen. talking think this the choices their and not come it’s clear hospitals point the that good esophageal clinical proton results looks that compared we County to

We going that seeing this point, if for to provide some need now realize their is that communities. hospitals and better going they’re cancer total are at survivorship to something are care they

Unidentified Analyst

it. got me of but you have these get on You sold sold it, to on hospitals one

Dr. Ernest Bates

You are right about that.

Unidentified Analyst

the going extremely Again, patient. today have this further the been keeps and because down carrot public is we And negatively road. reacting is market a company the

time. So, you. Thank let’s get it done this

Dr. Ernest Bates

We will.

Operator

closing are there like questions. Would make Tagawa, no to remarks? further Mr.

Craig Tagawa

And thank like joining us conference speaking with to this for everyone look afternoon. our call quarter we’ll to in fourth on just forward you March. We’d

Operator

concludes digital available www.streetevents.com. following of will today’s be will conference. access and followed at replay. passcode today’s to you the call be and by dial immediately To Thank the This the on the call participating. webcast pound www.ashs.com The system, XXX-XXX-XXXX access available sign for This this XXXXXXXX enter replay teleconference.

may You now disconnect.

American Shared Hospital Services (AMS) 13 Nov 172017 Q3 Earnings call transcript