American Shared Hospital Services Announces 37% Operating Income Increase On 14% Revenue Increase; Earnings Call Will Take Place Thursday, July 25 at 3:00 p.m. Eastern.Business Editors/Health & Medical Writers SAN FRANCISCO--(BW HealthWire)--July 22, 2002 American Shared Hospital Services (AMEX AMEX See: American Stock Exchange :AMS AMS - Andrew Message System )(PCX (1) A bitmapped graphics file format that handles monochrome, 2-bit, 4-bit, 8-bit and 24-bit color and uses RLE to achieve compression ratios of approximately 1.1:1 to 1.5:1. Images with large blocks of solid colors compress best under the RLE method. See PC Paintbrush. :AMS), the leading provider of Gamma Knife Gamma Knife A trademark for a radiologic nonsurgical device used in stereotactic radiosurgery. Gamma knife A surgical tool that focuses beams of radiation at the head, which converge in the brain to form a lesion. (R) radiosurgery radiosurgery /ra·dio·sur·gery/ (-ser´jer-e) surgery in which tissue destruction is performed by means of ionizing radiation rather than by surgical incision. services, announced today financial results for the three months and six months ended June 30, 2002. For the second quarter of 2002, the Company's revenue rose 14% to $3,216,000 from $2,819,000 in the same period last year. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. rose 37% to $481,000 from $351,000 in the prior year. Net income rose 67% to $311,000 or $0.06 per share (diluted) from net income of $186,000 or $0.04 per share (diluted) in the same period last year. For the six months ended June 30, 2002, the Company reported revenue of $6,461,000, a 14% gain from revenue of $5,679,000 in the same period a year ago. Net income increased to $631,000 or $0.13 per share (diluted) from net income of $603,000 or $0.12 per share (diluted) in the same period a year ago. Second quarter 2002 net income was positively impacted by the reduction in the second quarter 2002 effective tax rate to 10% from 40% in the same period a year ago. This income tax rate reduction was due to a tax benefit ($103,000) recorded for the exercise of options to purchase 160,000 common shares by the Company's Chairman and Chief Executive Officer in second quarter 2002. An additional exercise of options to purchase 100,000 common shares during first quarter 2002 by the Company's Chairman and Chief Executive Officer reduced the Company's year to date income tax rate to 18%. The Company's income tax rate for the first six months of 2001 was 17% as there was no income tax expense in first quarter 2001 due to net operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. carry forwards and a 40% income tax rate in second quarter 2001. Income tax benefits were recognized as the result of compensation expense being recorded when the options were granted in 1995. Commenting on American Shared Hospital Services' recent results, Craig K. Tagawa, chief operating and financial officer, said, "We are pleased to announce continued double digit Noun 1. double digit - a two-digit integer; from 10 to 99 integer, whole number - any of the natural numbers (positive or negative) or zero; "an integer is a number that is not a fraction" percentage revenue and operating income growth. Our 14% second quarter revenue increase was due to new Gamma Knife units and a 5% increase in treatments from centers in operation for more than one year compared to the same period a year ago. The 5% increase in same center treatments improved upon the 2% increase for same center treatments in the first quarter. Additionally, operating income as a percentage of revenue increased to 15% compared to 12% in the same period a year ago. The Company's net income was positively impacted by an income tax benefit ($103,000) but partially offset by lower interest and other income ($79,000) compared to the same period a year ago." "Our 13th Gamma Knife unit at Bayfront Medical Center Bayfront Medical Center is a hospital in St. Petersburg, Florida. A level two trauma center, this teaching hospital is not-for-profit and has received a number of awards including JCAHO, "Best Nursing Staff" in the Tampa Bay area, "Best Run Hospital", and is home to a helicopter commenced in the second quarter and contributed to the Company's revenue and operating income growth. Mercy Medical Center, our 14th Gamma Knife unit, is expected to start generating revenue in third quarter 2002. We have previously announced two new contract signings, The Johns Hopkins Hospital
n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. are primarily a reflection of our increased business development activity." Ernest A. Bates Bates , Katherine Lee 1859-1929. American educator and writer best known for her poem "America the Beautiful," written in 1893 and revised in 1904 and 1911. , M.D., chairman and chief executive officer, said, "We are extremely confident in the success and sustainability of our business model. Our balance sheet with a book value of $3.73 and cash of $2.67 per common share at June 30, 2002 provides American Shared with the stability to execute its expansion efforts. We have used cash recently to provide dividends to our shareholders and invest in the future growth of our business. In April 2002, we increased our annual dividend 20% from $0.10 to $0.12 per common share, giving our shareholders a dividend yield of 3.3% based on our recent stock price of $3.65. In addition, our stock price has appreciated 21% during fiscal year 2002. We continue to sign new contracts and have made $1,150,000 in deposits ($475,000 in deposits during 2002) toward the purchase of new Gamma Knife units. Early commitments on Gamma Knife units provide us with both favorable pricing and delivery terms." Earnings Conference Call American Shared has scheduled its conference call for 3:00 p.m. Eastern time (12:00 p.m. Pacific time) on Thursday, July 25. During the call, Company management will discuss the financial results announced today. To participate, please call 800/737-1224 at least 10 minutes prior to the start of the call. A live on-demand webcast of the call will be provided by CCBN CCBN Central Coast Bancorp CCBN Charles County Business Network and posted at www.ashs.com and www.companyboardroom.com. A replay of the call will be available for 30 days by calling 888/843-8996 and enter pass code 5996832. The replay will also be available at www.ashs.com and www.companyboardroom.com. American Shared Hospital Services (www.ashs.com) American Shared Hospital Services is building a profitable medical services company in an under served niche -- turnkey technology solutions for advanced radiosurgical procedures. The Company's core business is supplying hospitals with the Gamma Knife -- a non-invasive treatment of malignant and benign brain tumors Brain Tumor Definition A brain tumor is an abnormal growth of tissue in the brain. Unlike other tumors, brain tumors spread by local extension and rarely metastasize (spread) outside the brain. , vascular malformations and trigeminal neuralgia Trigeminal Neuralgia Definition Trigeminal neuralgia is a disorder of the trigeminal nerve (the fifth cranial nerve) that causes episodes of sharp, stabbing pain in the cheek, lips, gums, or chin on one side of the face. (facial pain facial pain, n See pain, facial. ). The Gamma Knife, the gold standard in radiosurgery, reduces surgical risk and patient discomfort, resulting in a shorter hospital stay and lower risk of complications. In most cases, Gamma Knife patients resume their normal activities within a few days of treatment, compared to weeks or months for patients who undergo conventional surgery. More than 180,000 patients worldwide have already received this treatment. American Shared Hospital Services is the world leader in providing Gamma Knife radiosurgery services. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. 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 business and the risks of developing its IMRT IMRT Intensity-modulated radiation therapy Radiation oncology A format for delivering high-dose RT to regions–eg, nasopharynx, that are surrounded by radiation-sensitive areas; in IMRT, a broad radiation field is divided into hundreds of small pencil beams, and The Operating Room operating room n. Abbr. OR A room equipped for performing surgical operations. for the 21st Century(SM) programs. 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2001, its Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the period ended March 31, 2002 and its definitive Proxy Statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. for the Annual Meeting of Shareholders held on June 6, 2002.
American Shared Hospital Services
Selected Financial Data
(unaudited)
Summary of Operations Data
Three months Six months
ended June 30, ended June 30,
2002 2001 2002 2001
------- ------ ------ ------
Revenue $3,216,000 $2,819,000 $6,461,000 $5,679,000
Cost of
Operations 1,297,000 1,059,000 2,532,000 2,078,000
---------- ---------- ---------- ----------
Gross Margin 1,919,000 1,760,000 3,929,000 3,601,000
Selling &
administrative 863,000 772,000 1,661,000 1,581,000
Interest expense 575,000 637,000 1,199,000 1,223,000
---------- ---------- ---------- ----------
Operating income 481,000 351,000 1,069,000 797,000
Interest &
other income 43,000 122,000 97,000 288,000
Minority
interest (178,000) (163,000) (395,000) (358,000)
---------- ---------- ---------- ----------
Income before
income taxes 346,000 310,000 771,000 727,000
Income tax
expense 35,000 124,000 140,000 124,000
---------- ---------- ---------- ----------
Net income $311,000 $186,000 $631,000 $603,000
========== ========== ========== ==========
Earnings per
common share:
Basic $0.08 $0.05 $0.17 $0.17
========== ========== ========== ==========
Assuming
dilution $0.06 $0.04 $0.13 $0.12
========== ========== ========== ==========
Balance Sheet Data
6/30/02 6/30/01
---------- ----------
Cash $10,018,000 $11,781,000
Restricted cash $50,000 $50,000
Current Assets $13,460,000 $14,634,000
Total Assets $44,022,000 $41,922,000
Current
Liabilities $5,472,000 $5,939,000
Shareholders'
equity $14,044,000 $13,425,000
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