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American Shared Hospital Services Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 17, 2010 12:16PM
American Shared Hospital Services (AMS) filed Quarterly Report for the period ended 2010-03-31. American Shared Hospital Services has a market cap of $13.74 million; its shares were traded at around $2.99 with and P/S ratio of 0.82.
Highlight of Business Operations:
Medical services revenue decreased by $79,000 to $4,088,000 for the three month period ended March 31, 2010 from $4,167,000 for the three month period ended March 31, 2009. The decrease is primarily due to one Gamma Knife unit that performed zero procedures due to physician turnover at the site, and a slight shift in volume during the quarter to Gamma Knife sites with relatively lower payment rates per procedure compared to the same quarter in 2009, since total procedures increased compared to the same period in 2009. As a result, revenue from Gamma Knife operations decreased by $36,000 to $3,788,000 for the three month period ended March 31, 2010 compared to $3,824,000 for the three month period ended March 31, 2009. Revenue from the Company s radiation therapy contract decreased by $43,000 to $300,000 in the first quarter 2010 from $343,000 in the first quarter 2009.
Total costs of revenue decreased by $181,000 to $2,389,000 for the three month period ended March 31, 2010 from $2,570,000 for the three month period ended March 31, 2009. Maintenance and supplies decreased by $26,000 for the three month period ended March 31, 2010 compared to the same period in the prior year, primarily due lower costs for repairs and maintenance that were not covered by maintenance contracts. Contract maintenance cost was approximately the same in both periods. Depreciation and amortization decreased by $140,000 for the three month period ended March 31, 2010 compared to the same period in the prior year primarily due to a change in the asset life of one Gamma Knife unit because the contract with the customer was extended. In addition, depreciation on another Gamma Knife unit was stopped because its remaining value was less than the trade-in allowance towards a new Perfexion unit that is scheduled to be installed at that site in third quarter 2010. Other direct operating costs decreased by $15,000 for the three month period ended March 31, 2010 compared to the same period in the prior year primarily due to lower insurance expense and operating costs in connection with the Company s retail sites, partially offset by higher site specific marketing related costs.
The Company had income tax expense of $11,000 in the first quarter 2010 compared to an income tax benefit of $93,000 in the first quarter 2009. This is due to income before income taxes of $188,000 in the first quarter 2010 compared to a loss before income taxes of $42,000 in the first quarter 2009. Based on the Company s current estimated effective income tax rate for 2010, a 59% income tax rate was applied to the first quarter 2010 compared to a 50% income tax benefit in first quarter 2009.
The Company had net income of $8,000, or $0.00 per diluted share, for the three month period ended March 31, 2010 compared to a net loss of $94,000, or ($0.02) per diluted share, in the same period in the prior year. The increase was primarily due to reduced costs of revenue and no transaction costs compared to the prior year. This was partially offset by lower medical services revenue, higher selling and administrative costs and increased income tax expense.
The Company had cash and cash equivalents of $552,000 at March 31, 2010 compared to $833,000 at December 31, 2009. The Company s cash position decreased by $281,000 due to payments for the purchase of property and equipment of $110,000, principal payments on long term debt and capital leases of $1,712,000 and distributions to minority owners of $95,000. These decreases were partially offset by net cash from operating activities of $1,236,000 and advances on the Company s line of credit with a bank of $400,000.
The Company has a $2,617,000 preferred stock investment in Still River Systems, Inc., a development stage company, which is considered a long-term investment on the balance sheet and is recorded at cost. As of March 31, 2010, the Company also has $2,250,000 in deposits toward the purchase of three Monarch250 proton beam radiation therapy (PBRT) systems from Still River. For the first two machines, the Company has a commitment to total deposits of $3,000,000 per machine until FDA approval is received, at which time the remaining balance is committed. The delivery dates for the first two machines are anticipated to be in 2011 and 2012. For the third machine, the Company has a commitment to total deposits of $500,000 until FDA approval is received, at which time the remaining balance is committed. The Company has entered into an agreement with a radiation oncology physician group, which has contributed $50,000 towards the deposits on the third machine. The Still River PBRT system is not commercially proven and there is no assurance FDA approval will be received.
Stocks Discussed: AMS,