false 0000744825 0000744825 2024-08-14 2024-08-14
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM 8-K 
 
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): August 14, 2024
 
AMERICAN SHARED HOSPITAL SERVICES
(Exact Name of Registrant as Specified in Its Charter)
 
California
 
1-08789
 
94-2918118
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
   
601 Montgomery Street, Suite 1112
San Francisco, California
 
94111
(Address of Principal Executive Offices)
 
(Zip Code)
 
Registrant’s telephone number, including area code: (415) 788-5300 
 
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) 
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) 
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of Each Class
 
Trading Symbol
 
Name of Each Exchange on Which Registered
American Shared Hospital Services Common Stock, No Par Value
 
AMS
 
NYSE AMERICAN
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter)
 
Emerging growth company
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 

 
Item 2.02. Results of Operations and Financial Condition.
 
On August 14, 2024, the American Shared Hospital Services (the "Company") issued a press release announcing its financial results for the second quarter ending June 30, 2024. The full text of the press release is furnished as Exhibit 99.1 to this report. The Company does not intend for this exhibit to be incorporated by reference into future filings under the Securities Exchange Act of 1934.
 
Item 9.01. Financial Statements and Exhibits.
 
(d) Exhibits.
 
Exhibit No.
Description
Exhibit 99.1
104
Cover page Interactive Data File (embedded within the Inline XBRL document)
 
 

 
SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
             
           
AMERICAN SHARED HOSPITAL SERVICES
           
(Registrant)
       
Dated: August 14, 2024
         
/s/ Raymond C. Stachowiak
           
By: Raymond C. Stachowiak
           
Title: Executive Chairman of the Board and Chief Executive Officer
 
 

Exhibit 99.1

 

American Shared Hospital Services Reports Strong Second Quarter 2024 Financial Results

 

- Revenue increases 27% year over year

 

- Reports gain of $3.7 million from strategic acquisition of Rhode Island Radiation Therapy Cancer Centers -

 

- Now treating patients at new Puebla, Mexico center -

 

- Conference Call on August 14th at 6:30 pm ET -

 

SAN FRANCISCO, CA, August 14, 2024 ‒ 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 second quarter ended June 30, 2024.

 

Second Quarter 2024 and Recent Highlights

 

 

Total revenue in the second quarter was $7.1 million, an increase of 27% from the comparable period in 2023 bolstered by the completion of our acquisition of 60% of the equity interest of three Rhode Island radiation therapy facilities in May which accounted for $1.9 million of the increase. Total proton beam radiation therapy revenue decreased 5% period-over-period; fractions decreased 10%. Gamma Knife procedures increased 10% due to strong volume at our international sites, the related Gamma Knife revenue decreased by 9% period-over-period due to lower average reimbursement in the quarter.  

 

 

Gross margin was $2.5 million, a period-over-period decrease of 2%. The gross margin percentage was 35% of revenue compared to 45% in the year-ago period reflecting the expansion in the retail segment.

 

 

Operating income for the second quarter of 2024 increased by $324,000 compared to second quarter of 2023 primarily due to reduced impaired assets and removal costs.

 

 

Net income attributable to American Shared Hospital Services in the second quarter of 2024 was $3.6 million, or $0.55 per diluted share, compared to a net loss of $111,000, or $0.02 per diluted share, for the second quarter of 2023. The increase was primarily due to the $3.7 million bargain purchase gain from the acquisition of 60% of the equity interest of three Rhode Island radiation therapy facilities.

 

 

Adjusted EBITDA, a non-GAAP financial measure, was $2,010,000 for the second quarter of 2024, compared to $1,938,000 for the second quarter of 2023. The increase was due to the contribution from the Rhode Island facilities.

 

 

Cash at June 30, 2024 was $14.5 million compared to $13.8 million at December 31, 2023.

 

 

Signed 1 new order to upgrade an existing customer to a Leksell Gamma Knife Esprit, the latest model.

 

 

1

 

 

Signed a joint venture agreement for Gamma Knife facility in Guadalajara, Mexico, establishes Company’s 4th International Center.

 

 

Announced start of patient treatments at its Radiation Therapy Facility, A.B. Radiocirugía y Radioterapia de Puebla, in Puebla, Mexico.

 

Ray Stachowiak, CEO and Executive Chairman of American Shared Hospital Services, commented, “With the acquisition of 60% of three Rhode Island radiation therapy cancer centers now closed, we are excited to report a gain of $3.7 million that we were able to realize immediately. This came about from the valuation of the assets acquired that exceeded our purchase price.”

 

“Our Q2’2024 was a strong quarter for AMS with improvement in operations and a strong focus on continued execution. Our leasing business also remains solid with the signing of 5 lease extensions over the last 15 months from our base of ten domestic Gamma Knife sites and we have several others in discussion.”

 

“Additionally, we continue to see international patient volumes growing nicely with the new state-of-the-art Gamma Knife ICON firmly in place, the only Gamma Knife in Ecuador for non-invasive radiosurgery. Our Gamma Knife in Peru, the only Gamma Knife in the country also showed strong results in the second quarter. And in addition to our joint venture agreement for Gamma Knife facility in Guadalajara, Mexico that we recently announced, our international center in Puebla, Mexico has begun treating patients which we expect to be another solid revenue contributor going forward.”

 

“The second quarter marks a strong start to the year, with revenue growth of 27% to $7.1 million and we earned $3.6 million in net income or $0.55 per share compared to a net loss of ($111,000) or ($0.02) due to the solid expansion of our retail segment and the bargain purchase from the Rhode Island acquisition. Our balance sheet remains strong, and we ended the second quarter with cash and equivalents of $14.5 million, or approximately $2.24 per share.”

 

Craig Tagawa, President and Chief Operating Officer, added, “It is extremely gratifying to see our growth strategy taking hold as we expanded our product portfolio and increased our capacity for creative financial solutions. We have continued to see a significant increase the breadth of opportunities for consideration and our sales pipeline remains extremely strong with additional projects in the works. The traction continues to grow and with the strength of our overall business supported by our strong balance sheet and consistent cash flow, we are well positioned for future growth,” concluded Mr. Tagawa.

 

Financial Results for the Three Months Ended June 30, 2024

 

For the three months ended June 30, 2024, revenue increased 27% to $7,056,000 compared to $5,568,000 in the year-ago period. Revenue from the Company’s medical equipment leasing (“leasing”) segment was $3,899,000 for the three months ended June 30, 2024, compared to $4,812,000 for the same period in the prior year, a decrease of 19%. Revenue from the Company’s direct patient services (“retail”) segment was $3,157,000 for the three months ended June 30, 2024, compared to $756,000 for the same period in the prior year, an increase of 318%. The increase was due to the acquisition in Rhode Island and increased volumes at our existing retail locations.

 

2

 

Second quarter revenue for the Company's proton beam radiation therapy system installed at Orlando Health in Florida decreased 5% to $2,420,000 compared to revenue for the second quarter of 2023 of $2,545,000 due to continued cyclical volume changes.

 

Total proton beam radiation therapy fractions in the second quarter were 1,236 compared to 1,370 proton beam radiation therapy fractions in the second quarter of 2023, a 10% decline.

 

Total revenue for the Company's Gamma Knife operations decreased by 9% to $2,744,000 for the second quarter of 2024 compared to $3,023,000 for the second quarter of 2023. The decrease in overall Gamma Knife revenue was primarily due to the expiration of 2 contracts in 2023 partially offset by a 67% increase in international Gamma Knife revenue.

 

Total Gamma Knife procedures increased by 10% to 340 for the second quarter of 2024 compared to 309 in the second quarter of 2023, reflecting the growth at our international sites, offset by the two expired contracts in the second and third quarters of 2023.

 

Gross margin for the second quarter of 2024 decreased 2% to $2,468,000, or 35% of revenue, compared to gross margin of $2,518,000 million, or 45% of revenue, for the second quarter of 2023.  The expansion of our retail segment with its lower gross margin percentages will reduce Company wide margin percentages going forward. 

 

Selling and administrative costs decreased by 5% to $1,896,000 for the second quarter of 2024 compared to $1,988,000 for the same period in the prior year, due to the expiration of the Company’s corporate office space lease, offset by related sublease income.

 

Interest expense was $385,000 in the 2024 period compared to $277,000 in the comparable period of last year. The increase is due to an increase in the interest rate and borrowings on the Company’s variable rate debt.

 

Operating income for the second quarter was breakeven due to the additional costs related to the closing of the Rhode Island acquisition and other new business opportunities of $361,000. In the prior year quarter, the amount of costs incurred pursuing opportunities in Rhode Island was $250,000, and coupled with other higher selling expenses led to a second quarter 2023 loss of $325,000. Income tax was a benefit of $31,000 for the second quarter of 2024 compared to an income tax benefit of $35,000 for the same period in the prior year. The taxes related to the bargain purchase gain reduce the gain (from $4.9 million to $3.7 million) and do not impact income tax expense.

 

Net income attributable to American Shared Hospital Services in the second quarter of 2024 was $3,602,000, or $0.55 per diluted share, compared to a net loss of $111,000, or $0.02 per diluted share, for the second quarter of 2023. The period-over-period increase was primarily due to the bargain purchase gain generated from the acquisition in Rhode Island. Fully diluted weighted average common shares outstanding were 6,583,000 and 6,336,000 for the second quarter of 2024 and 2023, respectively.

 

Adjusted EBITDA, a non-GAAP financial measure, was $2,010,000 for the second quarter of 2024, compared to $1,938,000 for the second quarter of 2023. The increase was due to the contribution from the recently acquired Rhode Island facilities.

 

3

 

Financial Results for the Six Months Ended June 30, 2024

 

For the six months ended June 30, 2024, revenue increased 17% to $12,272,000 compared to revenue of $10,493,000 for the first six months of 2023.

 

Gamma Knife revenue decreased 6% to $5,311,000 for the first half of 2024 compared to $5,634,000 for the first half of 2023. The number of Gamma Knife procedures in the first six months of 2024 was 613, an increase of 2% compared to 602 Gamma Knife procedures in the comparable period of 2023 due to the steady increase of international procedures. Proton therapy revenue increased 4% to $5,069,000 for the first half of 2024 compared to $4,859,000 for the first half of 2023. Total proton therapy fractions in the first six months of 2024 were 2,512, a decrease of 14% compared to 2,906 proton therapy fractions in the comparable period of 2023.

 

Net income attributable to American Shared Hospital Services for the first six months of 2024 was $3,721,000, or $0.57 per diluted share, compared to net income of $77,000, or $0.01 per diluted share, or the first six months of 2023. The increase was primarily due to the bargain purchase gain generated from the acquisition in Rhode Island.

 

Adjusted EBITDA, a non-GAAP financial measure, was $3,754,000 for the first six months of 2024, compared to $3,841,000 for the first six months of 2023. The decrease was primarily due to higher fees associated with new business opportunities, including the Company’s acquisition in Rhode Island.

 

Balance Sheet Highlights

 

At June 30, 2024, cash, cash equivalents, and restricted cash was $14,486,000 compared to $13,808,000 at December 31, 2023. American Shared Hospital Services' shareholders’ equity (excluding non-controlling interests in subsidiaries) at June 30, 2024 and December 31, 2023 was $26,542,000 or $4.17 per outstanding share and $22,624,000, or $3.59 per outstanding share, respectively.

 

Conference Call and Webcast Information

 

AMS has scheduled a conference call to review its financial results for Wednesday, August 14th at 6:30 pm ET / 3:30 pm PT.

 

To participate, domestic callers may dial 844.413.3972 and international callers may dial 412.317.5776 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 877.344.7529 or 412.317.0088, access code 8320435, through August 21, 2024. The call will also be available for replay on the Company’s website at www.ashs.com.

 

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 Radiation 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

 

4

 

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 period ended March 31, 2024, 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 25, 2024.

 

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 (loss) before interest expense, interest income, income tax expense, depreciation and amortization expense, loss on write down of impaired assets and associated removal costs, bargain purchase gain, 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.

 

5

 

Contacts:

 

American Shared Hospital Services
Ray Stachowiak, Executive Chairman and CEO
rstachowiak@ashs.com

 

Investor Relations

 

Kirin Smith, President
PCG Advisory, Inc.
ksmith@pcgadvisory.com

 

 

 

- Tables Follow

 

6

 

American Shared Hospital Services

Condensed Consolidated Statements of Operations

 

   

Summary of Operations Data

 
           

(Unaudited)

         
                                 
   

Three months ended June 30,

   

Six months ended June 30,

 
                                 
   

2024

   

2023

   

2024

   

2023

 

Revenues

  $ 7,056,000     $ 5,568,000     $ 12,272,000     $ 10,493,000  

Costs of revenue

    4,588,000       3,050,000       7,661,000       6,067,000  

Gross margin

    2,468,000       2,518,000       4,611,000       4,426,000  

Selling and administrative expense

    1,896,000       1,988,000       3,775,000       3,527,000  

Interest expense

    385,000       277,000       734,000       548,000  

Loss on write down of impaired assets and associated removal costs

    188,000       578,000       188,000       578,000  

Operating (loss)

    (1,000 )     (325,000 )     (86,000 )     (227,000 )

Bargain purchase gain, net

    3,679,000       -       3,679,000       -  

Interest and other income (loss)

    59,000       113,000       165,000       183,000  

Income (loss) before income taxes

    3,737,000       (212,000 )     3,758,000       (44,000 )

Income tax (benefit) expense

    (31,000 )     (35,000 )     (75,000 )     33,000  

Net income (loss)

    3,768,000       (177,000 )     3,833,000       (77,000 )

(Plus) less: Net loss (income) attributable to non-controlling interest

    (166,000 )     66,000       (112,000 )     154,000  

Net income (loss) attributable to American Shared Hospital Services

  $ 3,602,000     $ (111,000 )   $ 3,721,000     $ 77,000  
                                 

Earnings (loss) per common share:

                               

Basic

  $ 0.56     $ (0.02 )   $ 0.58     $ 0.01  

Diluted

  $ 0.55     $ (0.02 )   $ 0.57     $ 0.01  
                                 

Weighted Average Shares Outstanding:

                               

Basic

    6,482,000       6,336,000       6,467,000       6,482,000  

Diluted

    6,583,000       6,336,000       6,564,000       6,465,000  

 

 

American Shared Hospital Services

Balance Sheet Data

 

   

Balance Sheet Data

 
   

(Unaudited)

 
                 
   

6/30/2024

   

12/31/2023

 

Cash, cash equivalents and restricted cash

  $ 14,486,000     $ 13,808,000  

Current assets

  $ 25,639,000     $ 20,456,000  

Total assets

  $ 60,825,000     $ 48,162,000  
                 

Current liabilities

  $ 13,336,000     $ 10,779,000  

Shareholders' equity, excluding non-controlling interests

  $ 26,542,000     $ 22,624,000  

 

7

 

American Shared Hospital Services

Adjusted EBITDA

 

     

Reconciliation of GAAP to Non-GAAP Adjusted Results

 
             

(Unaudited)

         
                                   
     

Three months ended June 30,

   

Six months ended June 30,

 
     

2024

   

2023

   

2024

   

2023

 

Net income (loss)

  $ 3,602,000     $ (111,000 )   $ 3,721,000     $ 77,000  

Plus (less):

Income tax (benefit) expense

    (31,000 )     (35,000 )     (75,000 )     33,000  
 

Interest expense

    385,000       277,000       734,000       548,000  
 

Interest (income)

    (77,000 )     (110,000 )     (189,000 )     (197,000 )
 

Depreciation and amortization expense

    1,523,000       1,242,000       2,857,000       2,609,000  
 

Stock-based compensation expense

    99,000       97,000       197,000       193,000  
 

Bargain purchase gain, net

    (3,679,000 )     -       (3,679,000 )     -  
 

Loss on write down of impaired assets and associated removal costs

    188,000       578,000       188,000       578,000  

Adjusted EBITDA

  $ 2,010,000     $ 1,938,000     $ 3,754,000     $ 3,841,000  

 

8
v3.24.2.u1
Document And Entity Information
Aug. 14, 2024
Document Information [Line Items]  
Entity, Registrant Name AMERICAN SHARED HOSPITAL SERVICES
Document, Type 8-K
Document, Period End Date Aug. 14, 2024
Entity, Incorporation, State or Country Code CA
Entity, File Number 1-08789
Entity, Tax Identification Number 94-2918118
Entity, Address, Address Line One 601 Montgomery Street, Suite 1112
Entity, Address, City or Town San Francisco
Entity, Address, State or Province CA
Entity, Address, Postal Zip Code 94111
City Area Code 415
Local Phone Number 788-5300
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol AMS
Security Exchange Name NYSE
Entity, Emerging Growth Company false
Amendment Flag false
Entity, Central Index Key 0000744825

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