AMS - Earnings call transcript Q1 2020 | American Shared Hospital Services

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Operator

Good afternoon, and welcome to the First Quarter 2020 Conference. My name is Brandon, and I'll be your operator for today. [Operator Instructions].

Please note, this conference is being recorded. And I will now turn it over to Stephanie Prince. begin. may you Stephanie,

Stephanie Prince

and to Operator, today. joining thank you, everyone you us Thank

the of proxy various by note that turning annual these for from company's management, Actual factors, obligation the conference forward-looking remarks the statements June definitive Please and This to call Litigation held on call to Private concerning various report plans as a the the statements with the would XX-K Reform those result statements. Before at in shareholders for call. over contained make about includes the XXXX. information I of year future be this and the on be those The results may safe in made Form like expectations, assumes company's of Act December company annual to important forward-looking on the that meeting this remarks XX, statement purposes discussed conference prospects SEC. XXXX. the may Securities including materially vary harbor update filings indicated forward-looking for of XX, constitute the company provisions no to under XXXX the following ended

CEO. to to Ray would call I President and now turn the Ray? Stachowiak, like over Interim

Raymond Stachowiak

and then Thank the remarks, our provide Wallace, through XXXX then afternoon for operational go ask earnings COO will you, today Tagawa, CFO, with to and review. quarter to opening Stephanie. Craig a Good our results. conference begin Controller, first everyone us joining some call. and business I'll financial Alexis our

questions. the Ernie call Following will your I Alexis, open that, Craig, Bates and for

end and Hospital Chairman by Services and the and personal great appointed of the Bates respect XX admiration Officer. had the all Board Chief begin American what Board at years. relationship Bates reminding continue that advance the as work Executive for together and have long, he'll be that everyone I'd as for Dr. we through was of Bates President last to by professional Dr. a I'm retired. to he is glad Executive I've as with Interim has and remaining I built over like this month, here Shared involved Dr. company. year, to

in have which for technology I are of a in need and medical I Imaging Shared shared flexible creative financing interest Bates in capital-intensive, great advanced Dr. hospitals, founded Shared over XXXX. solutions. provider Imaging of PET/CT CT, We in and Imaging and is a sales. year Shared equipment profitable. grew independent were to preferred services. $XX MRI a from $X I million and million

that interested Bates Dr. when asked selling sold many AMS' was Dr. that board, I At MRI while In business. to CT ago XXXX, Bates Shared years in for years. in decided continues Shared Shared he join he role XX% which the to I to serving of and met President XX time, Imaging, I over In I as retire of Imaging. XXXX, Imaging serve.

I today, owner. and of of continue serve to Shared As own its founder continue Imaging, as to XX%

the Since uncertainty shares. the over hit the company's XXXX, company get can from holding to steadily to $XX XX% AMS the I tangible have In markets. and now and I Bates that ownership having management take that this think of I improve I'm deserves in increased it of market Board. time, million hard the all been has credit AMS equity. stock. company despite largest the recognition because help COVID-XX, of in of asked value Dr. join me The the role my pleased on outstanding am AMS I shareholder, about

on this. that wait. equipment provide to and The cancer services through cancer I'm pleased patients, not we and will take

has have should in be particular, health Interim Shared other the ensure softness its impacted in demand leadership not industries President the during pandemic. fairly belief I CEO as and care result, opportunities. cancer opportunities procedure here industry, will in company this a some negatively Any realize I'm and treatment be or made best to As American as that that delay believe as quickly. great for up I the growth. and to in those

turn of Thank the support review. you Craig our operational for company. Craig? continued I your over will call the now quarter first to for

Craig Tagawa

and Since COVID-XX Thank we've good pandemic the you, Ray, our at our closely afternoon, of of call year-end conference beginning on the monitoring been business. April, everyone. the impact

to also on in not be there for patients on was whose no cancer PBRT procedures indefinitely. the expected volumes patients. the quarter, postponed cancer Most Knife focused procedures first impact due are As our material should therapies Gamma

said XX% possibly and we treatment. procedures may on delayed approximately be Although, quarter the of subject to nonurgent the call, last as considered

volumes last the of compared period of to same the were XXX. second impacted first procedures to impact of consistent in In the COVID-XX. first had Gamma modest initially totaled than were Gamma compared March, number in decreased the softening quarter Knife appeared procedures increased the some did Knife, XXX that XX.X% related first with of revenue believe quarter was to the Procedures although we more fourth in The anticipated. experience for decline we the by XXXX first, which of half XXXX. we factors: year to Procedures XXX XXXX. of potentially X the quarter quarter

rates in in compared by this The year's received in was overall to period we year. lower average we year's quarter Secondly, the decline lower the quarter. to magnified similar rate same last reimbursement also last rate procedures growth a first in registered fourth reimbursement as

increased or increased X,XXX the X,XXX proton increased in quarter X,XXX compared Sequentially, sequentially fourth business increases to or drive by First in of fractions the to fractions X.X% proton to XXXX. Total of by benefits quarter Steady quarter quarter-over-quarter last X% XX.X% therapy the quarter for year. in quarter-over-quarter and from fourth and indications first revenue therapy X.X% compared continuing XX in XXXX. of XXX therapy across the quarter growth. are the awareness treatment to of proton

and additional that but XXXX the and balance an by SG&A slowed also the first higher timing not discussed upgrades the transition to, contracted several these related interested and at and PBRT of completed bit reloads quarter was quarter to in senior in There MRI-LINAC limited Cobalt-XX are X X time. pandemic legal pinpoint to And current placements. a during first the for COVID-XX completed to, we've although the discussions of of to this operating upgrade year, fees install the especially parties existing hold has installations ICON with additional may being income also the management. during customer. environment, We Our related impacted to hard it's pace with while costs in the the also continued be other

our full quarter. impacted, but to regard month of to versus and consistent quarter year. be months remain the the second with be fairly second impact last of second prior quarter-to-date, volumes Looking COVID-XX's appear greater the only COVID-XX the of the X Also, in over first the will still ahead, the half

alter morning CMS, noted our intended across services Medicaid release mandatory this and discussed payment press episodic and a be announced projects the payment would certain for X providers in The of our continue bundled approximately randomly fee-for-service methodology. model, to structure for as calls, approximately Medicare that an oncology reimbursement payment XX% model past services. in Services, XX% As quarterly radiation and conference radiation suppliers. CMS' this payment to on proposed providers is that therapy or payment in selected significantly for will XXXX, oncology proposed the oncology receive will model based test or methodology CMS in Centers and July included and current radiation radiation

XX.X% most model, the reimbursement commonly used For the delivery the in X.X% XXXX and therapy Gamma in XX% for to proposed the proposed of approximately the Knife. Medicare centers codes for is not increase included proton to

However, of on timing the in the additional proposed as selection to details environment, be yet we any have payment models. expected received from information and current CMS the not

the As of proposed a estimate of rule. adoption potential result, the we cannot impact

radiation in However, reductions rates results. of revenues administration therapy financial reimbursement methodology, for reimbursement changes that could keep affect and information in We'll informed or our any additional we received. and adversely the new you radiosurgery

a over turn I'll that, financial discussion. to the Alexis Alexis? for detailed With call

Alexis Wallace

afternoon, Craig, you, Thank good and everyone.

first Before that earnings like my to I we've prepared I'd this release press issued our quarter your to morning. call remarks, begin attention

at you copy, can a on at Investors access If Releases tab. need ashes.com Press website our the you it under

revenue to first quarter ended revenue XXXX. $X,XXX,XXX the total For March to in XX.X% of $X,XXX,XXX XXXX, of months compared the three XX, decreased

proton revenue for quarter to system $X,XXX,XXX installed for of the of Orlando therapy revenue at the company's $X,XXX,XXX. Health compared first XXXX X.X% to First quarter increased in Florida

XX.X% reported first to for first First $X,XXX,XXX $X,XXX,XXX to XXXX. quarter decreased the proton from Gamma $X,XXX,XXX therapy revenue increased in XX.X% the sequentially of for the quarter XXXX operations of Knife for quarter XXXX. the compared of quarter company's the fourth Revenue

the year. Craig sites due reimbursement first average as last about, at to quarter was the lower As decline to the retail company's spoke compared

for XX.X% the quarter or for $X,XXX,XXX to of margin the compared the share. XXXX for $X.XX of net XXXX gross or Net revenue $X.XX first comparison of $XXX,XXX decreased This first per XXXX. XXXX first revenue or the to or first $X,XXX,XXX for loss quarter margin income of quarter per $XXX,XXX quarter share. was of Gross of XX.X% of of

financial of the fully first the XXXX. average primarily a well XXXX. which measure, weighted for were of net $X,XXX,XXX first common first XXXX. company's diluted depreciation of depreciated and was X,XXX,XXX Fully as to non-GAAP the first to for was XXXX as X,XXX,XXX EBITDA, of shares lower quarter of compared outstanding lower for Adjusted quarter XXXX to the equipment, to quarter fourth the for income, due in compared decline the $X,XXX,XXX became quarter The due amortization IGRT quarter

at and $X.XX cash, to at of or $X.XX XXXX, Shareholders' at equity December December or XXXX restricted XX, was cash equity to $XX,XXX,XXX March XX, outstanding outstanding share. XX, compared $X,XXX,XXX share. per equivalents XX, XXXX, This XXXX. March compares $X,XXX,XXX $XX,XXX,XXX cash shareholders' per At was

now presentation. questions. back This call like you Brandon, for of turn we'd part the formal to concludes the over to our

Operator

And Instructions]. we Anthony have online. Marchese [Operator

Anthony Marchese

Ray, tangible new of currently X/X and book. your The congratulations Good trades afternoon, role. stock at on

standpoint, with been of to from gap? Board, not you've company that, your an your you the it close discount to trading exists? what the So this more plans that what a Because curious, company, the be below I'm type is had book. tangible the should are from perspective, me And your association on reason you've seems importantly, believe it the

Raymond Stachowiak

your for question. you Thank

an myself about X/X of, think of marketplace book said, determined valuation like question. excellent sure that's I you I'm this how has not value. our the

tangible got equity that is and the frankly, of the has, book in company, the reasons share. it's One my substantial value fact for per quite investment there been

if a let good think it's we see company today. determination. with at I place marketplace what to be But get So I'll we Dr. Bates, of retirement able can value where in make the from team might I that the added think leadership we take the can

Operator

Dunn Lenny have online. We

Lenny Dunn

that's actually even person questions. The a few Dunn right a it's clear actually Yes. but company, value explain a the and though is I This And is Craig little profitable a is. difference if know okay. we to that, book reported not don't have that up -- we're I the Lenny loss. I have quite maybe, I'm to me but what sure went

could explain So that, if and have then you another I question.

Craig Tagawa

address I'll question, let Alexis Lenny. your

Alexis Wallace

Yes.

book issued shares So awards and the we on the had some for value expired in issued management. up that legally reason they back is XXXX, performance considered March were went were XX. because Those

So the plan. back went into they

And see are accounted period. you discussion the how later you'll shares our which for. There up some look that today. So a outstanding take that's actually down for our should filing, go went detailed at in if

Lenny Dunn

those to worth, earnings. it fine. are I little other and And should model bit? extraordinary reported the can you costs that Okay. they legal And me, when is I what company that other have explains in And nonrecurring? to and down that that's brought just thing want that. think be the can break Are do our down a Well, so I then understand some nonrecurring, you that I

Craig Tagawa

what in fees transition Well, and would in part we senior pandemic that to and say fees I fees is the were these management. Lenny, and other is COVID-XX said related legal the

little to try also of that be add have consulting some whether these, services lot and difficult. they But to more as hopefully, to a nonrecurring. transactions company new that the a expect and We be be we fees, we're may do continue or going will legal

don't these expect time, new just further. we expect So there ability of fees may grow that over to to our a although the set related fees we perpetuate to be company

Lenny Dunn

sort overwhelmed so seems I control be under disastrous likely I so elective. that's for now with barring answer. beds were my be area, there the the is bit least at little I think And reversal hospitals procedures. I appear hospitals don't I these are don't They're be of guess backlog with in a forward there'd the guess, of it COVID-XX least the procedures." -- think are doing needing in COVID-XX "elective to at just, going that guess that's opinion, I in case that likely and Okay. think But And they our Wisconsin a be to -- and then some government that that. an to getting elective situation, they're felt people their necessarily the anymore moving they're use postponable. nationally. And the the wisdom, people, probably on,

So more going level Knife. of the Could proton able normal we criticize for full obviously, resume beam you be Gamma or to is comment blast, the either should The was but Gamma business Knife it? restrained. on a to my opinion business, procedures

Craig Tagawa

on comment I'll it. Well,

elective I to think starting you're of the Many procedures. treat hospitals correct. are now

delay Until were that the longer. That's their the factor. to they their little diagnosed I unknowns. though think to saw people in, coming a treatment, to even and feel may one treatment, delay they receive of they and patients, already treatment elected we scheduled due comfortable was COVID-XX pandemic, a that

COVID-XX And hospital impact because timely the patients of get as being diagnosed. manner a to go fact was not the to in other weren't diagnosed people into want the that the did

So well. both the as see the as of continue itself a But will the comfortable will take and pandemic on hopefully, people Knife to think, more we for to into the COVID-XX normalcy and feel little we progress as make terms coming treatments, I Gamma in to PBRT. return unwind hospital, our patient that time a long

Lenny Dunn

would But have an lot we PBRT that I Is -- your clearly unlikely normalcy statement? major because a hospitals Okay. want all to see on contracts see you Because of hold they could potential accurate could why for certainly will to be until and use the make okay, reasons. future. a can commitment

Craig Tagawa

Yes.

uncertainty As and has as APM prepared before, some we've the for brought call on in remarks, PBRT. mentioned my model mentioned I this in

well. we're that as to I waiting for So think clear up

Lenny Dunn

little to appreciate but the company full years, with XX I'd comment not was the Bates' maybe that over And like also leadership. around. I've I a Okay. involved been Dr. only he that XX

too. I So that, on comment just wanted to

Craig Tagawa

Lenny. Thank you,

Operator

We line. have Tony on Kamin

Tony Kamin

following Question, proton on a beam. little bit the

think have I deposits installed. little fact, Orlando forget, of X it I consistently really believe, results a know And that strikes the think, that larger Mevion. Center gets had still I to you out me by since on bit Gamma really, And great what was people more a I is has an that Knife is business. the sort subsumed also do down,

-- for not at you this finance factor environment more there that? access in more to wondering, curiosity anything is on in the what really my some a time, results at perhaps the is is now? do Or understanding Does having this as ways down guess this the the environment, the I'm thing environment PBRT, pushing side to I rates in So good sort more that inexpensive hospitals do it look cautious, does interest COVID finance of may AMS? creative, same just effect, be people with overwhelming better, ability of fear wanting

Craig Tagawa

I'll sales that business standpoint. answer from cycle let Ernie development the

Ernest Bates

Bates. excellent what clinical are finding question. pandemic, and anything, an are we're they acquire Ernie solutions creative financing actually capital-intensive other we the It's the given for is uncertainty is looking this partners from that that finding If can Tony, this equipment. hospitals

that discussions So are uncertainty. in pointed Craig of capital-intensive in placed technology. the discussions. on interested with these we're But there those decisions are are place this given are still yes, lot or that as suspension And centers a hold having being deploying out, taking

for alternative to centers. are So I that say would many in your that financing solution question, many, answer we

Tony Kamin

I release was MR/LINAC conference that And good of great. in growth. sort just it does press a it I think I area exciting was seem And is a extension call, so product of like potentially can assume first today, it AMS on the that offer. mentioned was one But -- do company press the be in time even this curious, pretty could for the think an feels I line the mentioned. the prior release that then That's Yes. that this though was

could you comment if maybe So that. on

Craig Tagawa

comment want you Ernie, on? to

Ernest Bates

Tony. Sure. do, Yes, we

previous replaced that need to are every X,XXX years. X X,XXX mentioned have I on calls roughly there think here those States. X of approximately the LINAC accelerators I units And United be in may to

unique the changes that best to is the on care it shape, And that of about a clinicians a environment. something we're provide the the Craig visualization seeing, The that there's that an radiation tumor. anatomy. we're And So what's high doses dose provide can't importance care, LINAC capitalize see to treating. bundled based with fewer what and a with And accurate providers and finding on and size ways find given that to to what oncology, these finding and daily do provides opportunities enables enables as rate. are MR/LINAC that the just ability real-time reshape And of with the radiation it fractions. healthy in turnover treatment MR/LINAC radiation basically fairly And tumor capability episodic mentioned, APM alone. enables to clinical is trying delivery the higher position are -- to you're that's with effective you with of surrounding dose potentially the that, in

to bundled with at And and if you to I a receive case to that. provide a be you're able if mentioned reimbursement do rate, fewer the so it's will, as to clinical fractions big payments, advantage provider able earlier,

the we're So opportunities with excited about MR/LINAC. very

Raymond Stachowiak

searching at MR/LINAC. capital-intensive I very do make is fits Share too, financing that product. just product creative because investors -- this company's our long-term American I'd to vision. out in Bates understand a in be just to reinforce think Hospitals strategic marketplace. into our flexible I'd this And bit, are can the entry that like there Ray. started a that and this into looking And It's it sure like Dr. Tony, for into really solutions. that technology, fits

Tony Kamin

machines. Elekta, Great. longtime is understand actually Is your that And a of those correct? I partner, manufacturer

Craig Tagawa

correct. That's

Operator

line. Dorico have on We [ph] Nick

Unidentified Analyst

continue first I proton, I feel with of that, will that Tony's about AMS. big on feel, the driver be to a few questions

first trends the How I'd interaction Orlando for out growth in is about So I'll find there? pay your because about those country? what my across like two the insurance that more industry on we've out but seen that companies claims, the questions. to units opinion and to what allowing on many regarding are Health, what's -- pause proton

Craig Tagawa

the answer question of I'll Well, in indications. the terms

fair I a And can and think think insurance the certain the reimbursed. well that seeing basis, for they're reimburse issues having rapport terms And for prostate getting with. over have that time as they of they're to patients therapy. Orlando, really have on of work cases, will that a really some build of companies of are treating. radiation in I complex more And difficult are number But treating there pediatric their very we treat types as up patients they benefit do conventional a purposes, opposed know certain been that as of as mix Medicare they as well. they protons to a no there from companies how indications they commercial various insurance with cases patients

and an insurance better see I it's getting companies. think it's over happening time, And I the better. educational I and that that's So with think process

Unidentified Analyst

as protons there? versus for the are margin versus margins what photons, is -- Okay. what the And

Craig Tagawa

disclosed haven't that We individually.

this at break don't out point. we it So

Unidentified Analyst

at little that? Are year. we places type on last couple XX% see. couple there can and you a a color I know California was whatnot, aggressively of Where Is Like discussions? it's looking we through? a update more bit in units, XX%? hold to what are? an at that? was of on there the that but believe of give company I I

Craig Tagawa

to I'll Southern let at question we're California. in where answer Ernie as that

Ernest Bates

X One that Nick, group take with understood California. cycles has is we to long thing and are complex is these Oftentimes, discussions more have in a to years. be a it than very cycle. sales about sales X protons continuing to Southern that

some California. the room Southern in strong So development a in still been community is interest engaged center. of for time for we But have clinical very there single

apprised as will continue opportunities keep we these to you on there. we work So

Raymond Stachowiak

will that say, new years, room also U.S., XX mention, with past with centers meaning single which over the that the vast in cases; development $XXX radiation on sites very have of Nick, cost at or that a Connecticut just capital-intensive believed, recent also proton would States. other future are been new Dr. room I built one would X maker majority continued more being million, lower and single thing ROI of we've that rooms. were be adoption widespread of of that's over we of based requirements. couple, in respect Letters less Intent, Bates United the X, X proton in the operations of centers of made expensive years single this see those solutions, Mevion, just There centers solutions, far solution, are of And in and in more the over to future the proton than the or exactly compact been adoption therapy And many what no of would I room in And seeing. room the announcements, many they not ago, as X Danbury, potential compact Texas. much

movement So in we're see to that direction. continuing

Operator

[Operator Instructions].

to turn further for Okay. now I at closing Ray moment. Looks remarks. like the no it questions will back

Raymond Stachowiak

joining well for mid-August. to Please and everyone, forward Goodbye. to be us excited questions my I'm AMS. you in really here safe, to adding the if have quarter stay look Stay today. second us role, contact week. before you, have any call Thank a and value great in new conference

Operator

Thank conference. you you, Thank concludes This ladies and gentlemen. joining. today's for

now disconnect. You may

American Shared Hospital Services (AMS) 11 May 202020 Q1 Earnings call transcript