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American Shared Hospital Services Reports 2012 Third Quarter Results

  American Shared Hospital Services Reports 2012 Third Quarter Results

Business Wire

SAN FRANCISCO -- November 07, 2012

AMERICAN SHARED HOSPITAL SERVICES (NYSE AMEX:AMS), a leading provider of
turnkey technology solutions for advanced radiosurgical and radiation therapy
services, today announced financial results for the third quarter and first
nine months of 2012.

Third Quarter Results

Medical services revenue for the three months ended September 30, 2012
increased 1.7% to $4,236,000. This compares to medical services revenue for
the third quarter of 2011 of $4,164,000. Total revenue for the third quarter
of 2011 of $9,148,000 included revenue from equipment sales of $4,984,000. Net
income for the third quarter of 2012 was $9,000, or $0.00 per diluted share.
This compares to net income of $220,000, or $0.05 per diluted share, for the
third quarter of 2011.

In March 2011, AMS announced a contract to upgrade a Gamma Knife^® to
Perfexion^TM specifications at Lehigh Valley Hospital in Allentown,
Pennsylvania. As part of this upgrade, AMS agreed to the early termination of
the existing 10-year lease on the Gamma Knife system it supplied to Lehigh in
2004, and Lehigh agreed to purchase the Perfexion system. Pre-tax income from
this transaction of $844,000 was recognized in the third quarter of 2011.

The number of procedures performed on Gamma Knife Perfexion systems supplied
by AMS increased 16.2% for the third quarter and 8.0% for the first nine
months of 2012 compared to the same periods of 2011. The total number of
procedures performed in AMS' Gamma Knife business, including Gamma Knife and
Gamma Knife Perfexion, increased 5.2% for this year's third quarter and 8.9%
for the first nine months compared to the same periods of 2011. The Perfexion
system AMS supplied to Florence Nightingale Hospital Group in Istanbul through
its EWRS Turkey subsidiary that began treating patients in May contributed to
this growth. Revenue increased more slowly than procedure volume primarily due
to variations in the mix of procedures by site. Revenue comparisons were also
constrained by the termination late in the third quarter of 2011 of the lease
on the Gamma Knife system AMS supplied to Lehigh Valley Hospital, and the
expiration in the second quarter of 2012 of a customer contract at another
site.

Medical services gross margin for this year's third quarter increased to
40.0%, compared to medical services gross margin of 38.8% for the third
quarter of 2011.

Selling and administrative expenses for the third quarter of 2012 decreased to
$960,000 compared to $1,038,000 for the third quarter of 2011. Operating
income for this year's third quarter was $210,000. This compares to operating
income for the third quarter of 2011 of $813,000, which included income from
the Lehigh transaction mentioned above.

Cash flow, as measured by earnings before interest, taxes, depreciation and
amortization (EBITDA), was $2,112,000 for the third quarter and $6,239,000 for
the first nine months of 2012, compared to $2,691,000 for the third quarter
and $6,772,000 for the first nine months of 2011.

Balance Sheet Highlights

At September 30, 2012, cash, cash equivalents and certificates of deposit were
$9,716,000 compared to $11,580,000 at December 31, 2011. Shareholders' equity
September 30, 2012 was $25,221,000, or $5.48 per outstanding share. This
compares to shareholders' equity at December 31, 2011 of $25,171,000, or $5.46
per outstanding share.

Nine Month Results

For the nine months ended September 30, 2012, medical services revenue
increased to $12,923,000 compared to medical services revenue of $12,737,000
for the first nine months of 2011. Total revenue for the first nine months of
2011 of $17,721,000 included revenue from equipment sales of $4,984,000. Net
income for the first nine months of 2012 was $33,000, or $0.01 per diluted
share, compared to net income for the first nine months of 2011 of $262,000,
or $0.06 per diluted share, which included income from the Lehigh transaction
mentioned above.

CEO Comments

Chairman and Chief Executive Officer Ernest A. Bates, M.D., said, "We grew our
Gamma Knife business modestly in the third quarter, as the upgrade of many of
our existing sites to Perfexion specifications and the expansion of our client
base and international footprint over the past couple of years more than
offset the impact of the sale of the Lehigh site and the expiration of a
customer contract at another site this year, as well as the headwinds created
by the slow economic recovery and its effect on the health care industry
overall.

"With the steady maturation of our existing Perfexion sites, the installation
of a Perfexion at a new site, Sacred Heart Health System in Pensacola,
Florida, in the first quarter of 2013, the installation of our fourteenth
Perfexion system at Northern Westchester Hospital (NWH) in Mt. Kisco, New York
scheduled for the second quarter of 2013, and the addition of the Gamma Knife
we have contracted to provide to Hospital Central FAP in Lima, Peru early next
year, we believe that growth in our Gamma Knife business may accelerate. We
will continue our vigorous efforts to bring advanced radiosurgery and
radiation therapy devices to additional partner hospitals in this country and
around the world."

Dr. Bates continued, "In a major breakthrough in our proton therapy business,
just last month AMS received a firm financing commitment for the MEVION
S250^TM Proton Therapy System AMS will supply for the $25 million proton
therapy center now under construction at MD Anderson Cancer Center Orlando.
This debt financing is similar to the structure we have used for many years to
finance our Gamma Knife projects, minimizing dilution for AMS shareholders. MD
Anderson Orlando's new facility, the first proton center in Central Florida,
is expected to begin treating patients in early 2014.

"Following the announcement in June of FDA 510(k) clearance for the MEVION
S250, our receipt of a firm financing commitment for the proton device we will
supply to the new center in Orlando is the next important step in AMS'
long-term strategy to develop proton projects as rapidly as possible, even as
we continue growing our Gamma Knife business. The MD Anderson Cancer Center
Orlando center will be the model for additional proton centers we are
developing. With our first proton center now under construction, we expect
AMS' proton therapy business to accelerate. We are pleased to play a critical
role in making this exciting cancer therapy available at an affordable price."

AMS owns approximately 1% of Mevion Medical Systems, developer of the MEVION
S250, and in addition to Orlando is developing proton therapy centers in
Boston and Long Beach, California which are expected to employ the Mevion
device. "We believe our equity investment in Mevion will turn out to be a
valuable asset for AMS and our shareholders," Dr. Bates said. AMS is also
developing a two room proton therapy center in Dayton, Ohio.

Dr. Bates added that the Company is currently evaluating options to relocate
its corporate headquarters and refinance certain of its equipment debt under
its continuing program to reduce operating costs.

Earnings Conference Call

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 (800) 588-4973 at least 5
minutes prior to the scheduled start time. A simultaneous WebCast of the call
may be accessed through the Company's website, www.ashs.com, or through CCBN,
www.earnings.com (individual investors) or www.streetevents.com (institutional
investors). A replay will be available for 30 days at these same internet
addresses, or by calling (888) 843-7419, pass code 3370 6680#.

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 the latest IGRT and IMRT
systems, as well as its proprietary Operating Room for the 21st Century^SM
concept. AMS owns a preferred stock investment in Mevion Medical Systems,
Inc., developer of the compact MEVION S250 Proton Therapy System.

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, which involve risks and
uncertainties including, but not limited to, 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 investing in a development-stage
company, Mevion Medical Systems, Inc., without a proven product. 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, 2011, the Quarterly Report on form 10-Q for the quarter
ended March 31, 2012, the Quarterly Reports on Form 10-Q and 10-Q/A for the
quarter ended June 30, 2012, and the definitive Proxy Statement for the Annual
Meeting of Shareholders held on June 7, 2012.

AMERICAN SHARED HOSPITAL SERVICES
                                                    
                                                    
PRESS RELEASE                                       November 7, 2012
                                                   Third Quarter 2012 Financial
                                                    Results
                                                    
                                                    
Selected Financial Data
(unaudited)

                 Summary of Operations Data
                                                                  
                  Three months ended                Nine months ended
                  September 30,                     September 30,
                  2012             2011             2012             2011
Medical
services          $ 4,236,000      $ 4,164,000      $ 12,923,000     $ 12,737,000
revenue
Equipment sales    --             4,984,000      --             4,984,000  
                    4,236,000        9,148,000        12,923,000       17,721,000
                                                                     
Costs of            2,541,000        2,549,000        7,518,000        7,362,000
revenue
Costs of           --             4,140,000      --             4,140,000  
equipment sales
Gross margin        1,695,000        2,459,000        5,405,000        6,219,000
                                                                     
Selling &
administrative      960,000          1,038,000        3,093,000        3,201,000
expense
Interest           525,000        608,000        1,638,000      1,754,000  
expense
                                                                     
Operating           210,000          813,000          674,000          1,264,000
income
Other income       10,000         4,000          25,000         88,000     
                                                                     
Income before       220,000          817,000          699,000          1,352,000
income taxes
Income tax         28,000         283,000        52,000         328,000    
expense
                                                                     
Net income        $ 192,000        $ 534,000        $ 647,000        $ 1,024,000
Less: Net
income
attributable to    (183,000   )    (314,000   )    (614,000   )    (762,000   )
non-controlling
interest
                                                                     
Net income
attributable to
American Shared   $ 9,000         $ 220,000       $ 33,000        $ 262,000    
Hospital
Services
                                                                     
Earnings per
common share:
Basic             $ 0.00          $ 0.05          $ 0.01          $ 0.06       
Assuming          $ 0.00         $ 0.05         $ 0.01         $ 0.06       
dilution
                                                                     
                                                                     
                  Balance Sheet Data
                  Sept. 30,        Dec. 31,
                  2012             2011
                                                                     
Cash and cash     $ 716,000        $ 2,580,000
equivalents
Certificate of    $ 9,000,000      $ 9,000,000
deposit
Current assets    $ 16,570,000     $ 17,615,000
Investment in     $ 2,687,000      $ 2,656,000
preferred stock
Total assets      $ 73,417,000     $ 74,535,000
                                                                     
Current           $ 10,697,000     $ 9,944,000
liabilities
Shareholders'     $ 25,221,000     $ 25,171,000
equity

Contact:

American Shared Hospital Services
Ernest A. Bates, M.D., 415-788-5300
Chairman and Chief Executive Officer
e.bates@ashs.com
or
Berkman Associates
Neil Berkman, 310-477-3118
President
info@berkmanassociates.com