American Shared Hospital Services Announces Second Quarter 28% Sales Growth and 48% Operating Income Growth; Earnings Call will take place at 4:00 pm Eastern today.Business Editors SAN FRANCISCO--(BUSINESS WIRE)--July 22, 2003 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 and six months ended June 30, 2003. For the second quarter of 2003, the Company's revenue rose 28% to $4,105,000 from $3,216,000 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 48% to $712,000 from $481,000 the prior year. Net income rose 7% to $334,000 or $0.07 per share (diluted) from net income of $311,000 or $0.06 per share (diluted) in the same period last year. For the six months ended June 30, 2003, the Company reported revenue of $7,774,000, a 20% gain from revenue of $6,461,000 in the same period a year ago. Operating income grew 35% to $1,439,000 from $1,069,000 in the same period last year. Net income increased to $670,000 or $0.13 per share (diluted) from net income of $631,000 or $0.13 per share (diluted) in the same period a year ago. The growth in net income was not proportionate to income before income taxes for the three and six months ended June 30, 2003 compared to the prior year due to a reduction of income tax benefits recorded in 2003. Reduction of income tax benefits increased the Company's effective income tax rate in the three and six months ended June 30, 2003 compared to the same periods in the prior year. Income tax benefits recorded for the three and six months ended June 30, 2003 were $71,000 and $120,000 less than the same periods in the prior year, respectively. Income tax benefits resulted from the Company's Chairman and Chief Executive Officer's exercise of previously expensed options to purchase common shares. Commenting on American Shared Hospital Services' recent results, Craig K. Tagawa, Chief Operating and Financial Officer, said, "Strong revenue and operating income growth was driven by robust same center treatment growth. Treatments for centers in operation for more than one year grew 28% compared to second quarter 2002. Operating income as a percentage of revenue increased to 17% compared to 15% in second quarter 2002. The increase in operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. was attributable to startup and marketing costs for the two recently opened centers, as well as, marketing activities for existing centers. These increased operating costs operating costs npl → gastos mpl operacionales were offset by a reduction in selling and administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. and increased revenue. We remain on track to open our 17th Gamma Knife center at Albuquerque Regional Medical Center in late third quarter 2003." 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, "The continued strong performance of our Gamma Knife business has allowed us to issue a $0.04 dividend payment in fourth quarter 2003. Total dividend payments in 2003 equate to $0.16 per common share compared with $0.12 in 2002 and $0.10 in 2001. The continued double digit growth in revenue and operating income, as well as, 35% stock appreciation in 2003 (based on common share closing price on July 21, 2003) reflects a strong and healthy Radiosurgery industry. We expect to continue our double digit revenue and operating income growth in 2003. In the last three years, we have doubled the number of our Gamma Knife units in operation. Our 19th Gamma Knife agreement with Lehigh Valley Hospital Lehigh Valley Hospital is a network of three hospitals in Allentown and Bethlehem, serving as the primary hospital system for the Lehigh Valley, in Pennsylvania, United States. The network consists of three hospitals and six health centers. announced last week is our third agreement signed this year. We expect to have 21 Gamma Knife units in operation by the end of third quarter 2004." Earnings Conference Call American Shared has scheduled its conference call for 4:00 pm Eastern time (1:00 pm Pacific time) today. During the call, Company management will discuss the financial results announced today. To participate, please call 877-261-8990 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 7472660. 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 for malignant and benign brain tumors, 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 200,000 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(R) 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, 2002, the Company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the three months ended March 31, 2003 and the 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 12, 2003.
Selected Financial Data
(unaudited)
Summary of Operations Data
Three months ended Six months ended
June 30, June 30,
2003 2002 2003 2002
----------- ----------- ----------- -----------
Revenue $4,105,000 $3,216,000 $7,774,000 $6,461,000
Cost of
Operations 1,883,000 1,297,000 3,418,000 2,532,000
----------- ----------- ----------- -----------
Gross Margin 2,222,000 1,919,000 4,356,000 3,929,000
Selling &
administrative 839,000 863,000 1,665,000 1,661,000
Interest expense 671,000 575,000 1,252,000 1,199,000
----------- ----------- ----------- -----------
Operating income 712,000 481,000 1,439,000 1,069,000
Interest & other
income 28,000 43,000 72,000 97,000
Minority interest (237,000) (178,000) (475,000) (395,000)
----------- ----------- ----------- -----------
Income before
income taxes 503,000 346,000 1,036,000 771,000
Income tax
expense 169,000 35,000 366,000 140,000
----------- ----------- ----------- -----------
Net income $334,000 $311,000 $670,000 $631,000
=========== =========== =========== ===========
Earnings per
common share:
Basic $0.09 $0.08 $0.18 $0.17
=========== =========== =========== ===========
Assuming
dilution $0.07 $0.06 $0.13 $0.13
=========== =========== =========== ===========
Balance Sheet Data
6/30/2003 6/30/2002
------------ ------------
Cash $11,032,000 $10,018,000
Restricted cash $50,000 $50,000
Current Assets $14,561,000 $13,460,000
Total Assets $47,924,000 $44,022,000
Current
Liabilities $7,334,000 $5,472,000
Shareholders'
equity $14,718,000 $14,044,000
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