American Shared Hospital Services (AMS, Financial) filed Quarterly Report for the period ended 2009-09-30.
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 services, a non-invasive treatment for malignant and benign brain tumors, vascular malformations and trigeminal neuralgia . The Company also offers the latest IGRT and IMRT systems, as well as its proprietary Operating Room for the twenty first Century concept. Through its equity investment in Still River Systems, AMS also plans to complement these services with the Clinatron-two hundred fifty, proton beam radiation therapy system, which has not yet been approved by the FDA. American Shared Hospital Services has a market cap of $16.06 million; its shares were traded at around $3.44 with a P/E ratio of 86 and P/S ratio of 0.84.
Total costs of revenue decreased by $305,000 and $485,000 to $2,343,000 and $7,578,000 for the three and nine month periods ended September 30, 2009 from $2,648,000 and $8,063,000 for the three and nine month periods ended September 30, 2008. Maintenance and supplies increased by $75,000 and $300,000 for the three and nine month periods ended September 30, 2009 compared to the same periods in the prior year, primarily due to contract maintenance that began after the end of the warranty period on three Gamma Knife Perfexion units. Depreciation and amortization decreased by $10,000 for the three month period, and increased by $19,000 for the nine month period ended September 30, 2009 compared to the same periods in the prior year. The decrease for the three month period is primarily because there was no depreciation at two sites while they were being upgraded to Gamma Knife 4C units. In addition, depreciation was stopped at one site because the Company is attempting to trade in the unit towards another Gamma Knife unit or place the unit at another site. The increase for the nine month period is primarily due to Gamma Knife Perfexion upgrades at two sites during the past year and a new Perfexion system that began operation in the third quarter 2008. This was partially offset by a reduction in depreciation from a Gamma Knife unit that was sold to a
Interest expense decreased by $124,000 and $307,000 to $514,000 and $1,526,000 for the three and nine month periods ended September 30, 2009 from $638,000 and $1,833,000 for the three and nine month periods ended September 30, 2008, respectively. This was due to lower interest expense from financing the Companys medical equipment and lower interest on the Companys line of credit with a bank and other interest. Higher interest expense from financing Gamma Knife upgrades over the previous several months was offset by lower interest expense on the debt relating to the more mature Gamma Knife units. Gamma Knife units that have more mature debt have lower interest expense because interest expense decreases as the outstanding principal balance of each loan is reduced.
The Company had income tax expense of $16,000 and an income tax benefit of $49,000 for the three and nine month periods ended September 30, 2009 compared to income tax expense of $24,000 and $378,000 for the three and nine month periods ended September 30, 2008, respectively. For the three month period, this is due to income before income taxes of $172,000 for the three month period ended September 30, 2009 compared to income before income taxes of $220,000 in the same period in 2008. For the nine month period this is due to income before income taxes of $376,000 in the first nine months of 2009 compared to income before income taxes of $1,434,000 for the same period in 2008. Based on the Companys current estimated effective income tax rate for 2009, a 49% income tax provision was applied to net income before income taxes and net income attributable to non-controlling interest, resulting in an income tax benefit for the nine month period and income tax expense for the three month periods ended September 30, 2009, respectively. A 49% income tax provision was also applied for both the three and nine month periods ended September 30, 2008. The Companys effective income tax rate is higher than the expected statutory federal and state income tax rates at a consolidated level, primarily due to higher income at the Companys subsidiary levels in certain states where there are separate state income tax filing requirements.
The Company had net income of $17,000, or $0.00 per diluted share, and a net loss of $51,000, or ($0.01) per diluted share, for the three and nine month periods ended September 30, 2009, compared to net income of $25,000, or $0.00 per diluted share, and $394,000, or $0.08 per diluted share, in the same periods in the prior year, respectively. The decrease for both the three and the nine month periods was primarily due to reduced medical services revenue, transaction costs and lower interest income, partially offset by lower costs of revenue, selling and administrative costs and interest expense.
The Company had cash and cash equivalents of $9,469,000 at September 30, 2009 compared to $10,286,000 at December 31, 2008. The Companys cash position decreased by $817,000 due to payments for the purchase of property and equipment of $880,000, principal payments on long term debt and capital leases of $6,737,000, distributions to minority owners of $417,000 and the repurchase of Company stock of $271,000. These decreases were partially offset by net cash from operating activities of $5,677,000, financing on the purchase of property and equipment of $811,000 and net advances on the Companys line of credit with a bank of $1,000,000.
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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 services, a non-invasive treatment for malignant and benign brain tumors, vascular malformations and trigeminal neuralgia . The Company also offers the latest IGRT and IMRT systems, as well as its proprietary Operating Room for the twenty first Century concept. Through its equity investment in Still River Systems, AMS also plans to complement these services with the Clinatron-two hundred fifty, proton beam radiation therapy system, which has not yet been approved by the FDA. American Shared Hospital Services has a market cap of $16.06 million; its shares were traded at around $3.44 with a P/E ratio of 86 and P/S ratio of 0.84.
Highlight of Business Operations:
Medical services revenue decreased by $606,000 and $1,683,000 to $3,926,000 and $12,676,000 for the three and nine month periods ended September 30, 2009 from $4,532,000 and $14,359,000 for the three and nine month periods ended September 30, 2008, respectively. The decrease for the three month period is primarily due to a shift in volume during the quarter to Gamma Knife sites with relatively lower payment rates per procedure compared to the same quarter in 2008, since the total number of procedures performed was the same in each quarter. For the three month period ended September 30, 2009 there was one unit that performed zero procedures due to physician turnover at the site. Both of these factors also contributed to the decrease in revenue for the nine month period. In addition, for the nine month period the decrease is also due to low volume at one of the Companys Gamma Knife sites and one Gamma Knife unit being out of service for an extended period of time during first and second quarter 2009 for an upgrade to the Perfexion unit. As a result, revenue from Gamma Knife operations decreased to $3,626,000 and $11,713,000 for the three and nine month periods ended September 30, 2009 compared to $4,208,000 and $13,298,000 for the three and nine month periods ended September 30, 2008. Revenue from the Companys radiation therapy contract decreased by $24,000 and $98,000 to $300,000 and $963,000 for the three and nine month periods ended September 30, 2009 compared to the same periods in the prior year, respectively.Total costs of revenue decreased by $305,000 and $485,000 to $2,343,000 and $7,578,000 for the three and nine month periods ended September 30, 2009 from $2,648,000 and $8,063,000 for the three and nine month periods ended September 30, 2008. Maintenance and supplies increased by $75,000 and $300,000 for the three and nine month periods ended September 30, 2009 compared to the same periods in the prior year, primarily due to contract maintenance that began after the end of the warranty period on three Gamma Knife Perfexion units. Depreciation and amortization decreased by $10,000 for the three month period, and increased by $19,000 for the nine month period ended September 30, 2009 compared to the same periods in the prior year. The decrease for the three month period is primarily because there was no depreciation at two sites while they were being upgraded to Gamma Knife 4C units. In addition, depreciation was stopped at one site because the Company is attempting to trade in the unit towards another Gamma Knife unit or place the unit at another site. The increase for the nine month period is primarily due to Gamma Knife Perfexion upgrades at two sites during the past year and a new Perfexion system that began operation in the third quarter 2008. This was partially offset by a reduction in depreciation from a Gamma Knife unit that was sold to a
Interest expense decreased by $124,000 and $307,000 to $514,000 and $1,526,000 for the three and nine month periods ended September 30, 2009 from $638,000 and $1,833,000 for the three and nine month periods ended September 30, 2008, respectively. This was due to lower interest expense from financing the Companys medical equipment and lower interest on the Companys line of credit with a bank and other interest. Higher interest expense from financing Gamma Knife upgrades over the previous several months was offset by lower interest expense on the debt relating to the more mature Gamma Knife units. Gamma Knife units that have more mature debt have lower interest expense because interest expense decreases as the outstanding principal balance of each loan is reduced.
The Company had income tax expense of $16,000 and an income tax benefit of $49,000 for the three and nine month periods ended September 30, 2009 compared to income tax expense of $24,000 and $378,000 for the three and nine month periods ended September 30, 2008, respectively. For the three month period, this is due to income before income taxes of $172,000 for the three month period ended September 30, 2009 compared to income before income taxes of $220,000 in the same period in 2008. For the nine month period this is due to income before income taxes of $376,000 in the first nine months of 2009 compared to income before income taxes of $1,434,000 for the same period in 2008. Based on the Companys current estimated effective income tax rate for 2009, a 49% income tax provision was applied to net income before income taxes and net income attributable to non-controlling interest, resulting in an income tax benefit for the nine month period and income tax expense for the three month periods ended September 30, 2009, respectively. A 49% income tax provision was also applied for both the three and nine month periods ended September 30, 2008. The Companys effective income tax rate is higher than the expected statutory federal and state income tax rates at a consolidated level, primarily due to higher income at the Companys subsidiary levels in certain states where there are separate state income tax filing requirements.
The Company had net income of $17,000, or $0.00 per diluted share, and a net loss of $51,000, or ($0.01) per diluted share, for the three and nine month periods ended September 30, 2009, compared to net income of $25,000, or $0.00 per diluted share, and $394,000, or $0.08 per diluted share, in the same periods in the prior year, respectively. The decrease for both the three and the nine month periods was primarily due to reduced medical services revenue, transaction costs and lower interest income, partially offset by lower costs of revenue, selling and administrative costs and interest expense.
The Company had cash and cash equivalents of $9,469,000 at September 30, 2009 compared to $10,286,000 at December 31, 2008. The Companys cash position decreased by $817,000 due to payments for the purchase of property and equipment of $880,000, principal payments on long term debt and capital leases of $6,737,000, distributions to minority owners of $417,000 and the repurchase of Company stock of $271,000. These decreases were partially offset by net cash from operating activities of $5,677,000, financing on the purchase of property and equipment of $811,000 and net advances on the Companys line of credit with a bank of $1,000,000.
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