Form 8-K AMERICAN SHARED HOSPITAL For: Aug 13
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E-mailUNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 13, 2019 | ||
AMERICAN SHARED HOSPITAL SERVICES | ||
(Exact name of registrant as specified in charter) | ||
California | 1-08789 | 94-2918118 |
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
Two Embarcadero Center, Suite 410, San Francisco, CA 94111 | ||
(Address of principal executive offices) | ||
Registrant’s telephone number, including area code 415-788-5300 | ||
(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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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 Conditions
On August 13, 2019 the Company issued a press release announcing its financial results for the second quarter 2019. 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.
The information in this report is summary information that is intended to be considered in the context of our SEC filings and other public announcements that we may make, by press release or otherwise, from time to time. We disclaim any current intention to revise or update the information contained in this report, although we may do so from time to time as our management believes is warranted. Any such updating may be made through the filing of other documents or reports with the SEC, through press releases or through other public disclosures.
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 | |||||
Date: | August 13, 2019 | By: | /s/ Ernest A. Bates, M.D. | ||
Name: | Ernest A. Bates, M.D. | ||||
Title: | Chairman and CEO | ||||
American Shared Hospital Services Reports Second Quarter 2019 Results
San Francisco, CA – August 13, 2019 – 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 second quarter and six months ended June 30, 2019.
Recent Highlights
• | Total revenue in the second quarter was $5,197,000, a 0.5% increase vs. comparable period in 2018. Proton therapy revenue of $1,409,000 increased 3.4% quarter over quarter. Gamma Knife revenue of $3,600,000 increased 0.2% quarter over quarter due to a contractual adjustment related to Medicare reimbursement at one of the Company’s existing sites. |
• | Total proton therapy fractions in the second quarter increased 8.6% quarter over quarter. The increase for the second quarter was the result of continuing increased awareness of the benefits of proton therapy treatment. |
• | Net income in the second quarter was $31,000 vs. $287,000 in the comparable period in 2018. The decrease in net income was due to increased operating expense and selling and administrative costs. |
Chairman and Chief Executive Officer Ernest A. Bates, M.D., said, "We are encouraged by continued procedural gains in our Proton Therapy business, with Orlando Health – UF Health Cancer Center increasing treatments across indications. We remain optimistic about procedural share gains in this business, in line with traction on the therapeutic advantages of proton therapy. In Gamma Knife, the one-time business disruptions in the quarter that limited procedural volumes was resolved beginning July 2019. Excluding this, we are pleased to see the Gamma Knife business show signs of recovery, with sales up 0.2% from a year ago, aided in part by the opening of our Merrillville, Indiana facility early this year, and with positive impact from a Medicare contractual adjustment at one site. We continue to expect completion of ongoing upgrades to Icon at Kettering Medical in Ohio in second half 2019 and maintain our focus on driving business development in Proton Therapy.”
Financial Results for the Three Months Ended June 30, 2019
For the three months ended June 30, 2019, revenues increased 0.5% to $5,197,000 compared to revenues of $5,169,000 for the second quarter of 2018. Net income attributable to the Company for the second quarter of 2019 was $31,000, or $0.01 per share. This compares to net income attributable to the Company for the second quarter of 2018 of $287,000, or $0.05 per share.
Second quarter revenue for the Company's initial proton therapy system installed at Orlando Health in Florida increased 3.4% to $1,409,000 compared to revenue for the second quarter of 2018 of $1,363,000.
Revenue for the Company’s Gamma Knife operations increased 0.2% to $3,600,000 for the second quarter of 2019 compared to $3,594,000 for the second quarter of 2018. Excluding the benefit from a contractual adjustment for Medicare reimbursement, revenue for the Company's Gamma Knife operations decreased 11.0% to $3,200,000. The decline in Gamma Knife revenues was due to a contract labor dispute at one of the Company’s existing sites resulting in no procedures performed during the second quarter. An unfavorable payor mix at the Company’s retail sites also contributed to the decline.
Gross margin for the second quarter of 2019 decreased to $1,729,000 or 33.3% of revenue, compared to gross margin of $2,081,000 or 40.3% of revenue for the second quarter of 2018. This reflected an increase in costs of revenue, primarily attributable to depreciation expense and increased selling and administrative costs.
Net income for the second quarter of 2019 was $31,000, or $0.01 per share. The compares to net income attributable to the Company for the second quarter of 2018 of $287,000 or $0.5 per share.
Adjusted EBITDA, a non-GAAP financial measure, was $2,465,000 for the second quarter of 2019, compared to $2,561,000 for the second quarter of 2018.
Financial Results for the Six Months Ended June 30, 2019
For the six months ended June 30, 2019, revenues increased 0.4% to $10,518,000 compared to revenues of $10,474,000 for the first six months of 2018.
Excluding treatments at two customer sites lost due to the expiration of their contract terms, the site that reported no procedures, and the contractual reimbursement for Medicare, Gamma Knife revenue decreased 1.8% for the first half of 2019 compared to the first half of 2018.
Proton therapy revenue increased 18.2% to $3,051,000 for the first half of 2019 compared to $2,582,000 for the first half of 2018.
Net income attributable to the Company for the first six months of 2019 was $301,000, or $0.05 per share. This compares to net income attributable to the Company for the first six months of 2018 was $677,000, or $0.12 per share.
Adjusted EBITDA, a non-GAAP financial measure, was $5,175,000 for the first six months of 2019, compared to $5,238,000 for the first six months of 2018.
Balance Sheet Highlights
At June 30, 2019, cash, cash equivalents, and restricted cash was $2,256,000, compared to $1,792,000 at December 31, 2018. Shareholders' equity at June 30, 2019 was $31,754,000, or $5.46 per outstanding share. This compares to shareholders' equity at December 31, 2018 of $31,048,000, or $5.43 per outstanding share.
Conference Call and Webcast Information
American Shared has scheduled a conference call at 12: 00 p.m. PDT (3:00 p.m. EDT) today. To participate in the live call, dial 1 (800) 588-4973 at least 5 minutes prior to the scheduled start time, and mention confirmation number 48918178. A simultaneous Webcast of the call may be accessed through the Company's website, www.ashs.com, or www.streetevents.com (institutional investors). A replay will be available until August 27, 2019 at the same internet addresses, or by dialing 1 (888) 843-7419 and entering 48918178# when prompted.
About AMS
American Shared Hospital Services provides turnkey technology solutions for advanced radiosurgical and radiation therapy services. 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 proton therapy, and the latest IGRT and IMRT systems.
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 in volume of the MEVION S250 system, the expansion of the Company's proton therapy business, and the timing of treatments by new Gamma Knife systems) which involve risks and uncertainties including, but not limited to, the risks of variability of financial results between quarters, 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 the timing, financing, and operations of the Company’s proton therapy business. 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, 2018, its Quarterly Report on Form 10-Q for the three months ended March 31, 2019, and the definitive Proxy Statement for the Annual Meeting of Shareholders held on June 21, 2019.
Non-GAAP Financial Measure
Adjusted EBITDA, the non-GAAP measures presented in this press release and supplementary information, is a measure of performance under the accounting principles generally accepted in the United States ("GAAP"). These non-GAAP financial measures should not be considered as 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. We use these non-GAAP financial measures as a means to evaluate period-to-period comparisons. Our management believes that these non-GAAP financial measures provide 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 these non-GAAP financial measures in assessing our performance.
Contacts:
American Shared Hospital Services
Ernest A. Bates, M.D., (415) 788-5300
Chairman and Chief Executive Officer
PCG Advisory Group, Investor Relations
Vivian Cervantes
P: 646-863-6274
American Shared Hospital Services
Statement of Operations
Three months ended June 30, | Six months ended June 30, | ||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Revenues | $5,197,000 | $5,169,000 | $10,518,000 | $10,474,000 | |||||||||
Costs of revenue | 3,468,000 | 3,088,000 | 6,852,000 | 6,187,000 | |||||||||
Gross margin | 1,729,000 | 2,081,000 | 3,666,000 | 4,287,000 | |||||||||
Selling & administrative expense | 1,081,000 | 1,032,000 | 2,136,000 | 2,017,000 | |||||||||
Interest expense | 346,000 | 406,000 | 713,000 | 831,000 | |||||||||
Operating income | 302,000 | 643,000 | 817,000 | 1,439,000 | |||||||||
Proceeds from investment in equity securities | - | 22,000 | - | 22,000 | |||||||||
Other income | 4,000 | 4,000 | 8,000 | 9,000 | |||||||||
Income before income taxes | 306,000 | 669,000 | 825,000 | 1,470,000 | |||||||||
Income tax expense | 27,000 | 169,000 | 151,000 | 319,000 | |||||||||
Net income | 279,000 | 500,000 | 674,000 | 1,151,000 | |||||||||
Less: Net income attributable to non-controlling interest | (248,000) | (213,000) | (373,000) | (474,000) | |||||||||
Net income attributable to American Shared Hospital Services | $31,000 | $287,000 | $301,000 | $677,000 | |||||||||
Income per common share: | |||||||||||||
Basic | $0.01 | $0.05 | $0.05 | $0.12 | |||||||||
Assuming dilution | $0.01 | $0.05 | $0.05 | $0.12 | |||||||||
American Shared Hospital Services
Balance Sheet Data
6/30/2019 | 12/31/2018 | |
Cash and cash equivalents | $2,256,000 | $1,792,000 |
Current assets | $9,946,000 | $9,946,000 |
Total assets | $55,567,000 | $57,502,000 |
Current liabilities | $8,597,000 | $9,474,000 |
Shareholders' equity | $31,754,000 | $31,048,000 |
American Shared Hospital Services
Adjusted EBITDA
June 30 | June 30 | YTD | YTD | ||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||
Net Income | $31,000 | $287,000 | $301,000 | $677,000 | |||||||||
Plus: | |||||||||||||
Income Tax Expense | 27,000 | 169,000 | 151,000 | 319,000 | |||||||||
Interest Expense | 346,000 | 406,000 | 713,000 | 831,000 | |||||||||
Depreciation and Amortization Expense | 2,008,000 | 1,664,000 | 3,902,000 | 3,321,000 | |||||||||
Stock-Based Compensation Expense | 53,000 | 57,000 | 108,000 | 112,000 | |||||||||
Proceeds from investment in equity securities | - | (22,000) | - | (22,000) | |||||||||
Adjusted EBITDA | $2,465,000 | $2,561,000 | $5,175,000 | $5,238,000 | |||||||||
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