American Shared Hospital Services Reports Strong Growth Amid Challenges

American Shared Hospital Services ((AMS)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for American Shared Hospital Services (AMS) painted a picture of robust growth tempered by certain challenges. The company reported strong revenue growth, driven by strategic acquisitions and international expansion, alongside significant increases in net income and direct patient services revenue. However, the call also highlighted some hurdles, including declines in the equipment leasing segment, proton beam therapy volumes, and a net loss in Q4 2024. Despite these challenges, the overall sentiment was optimistic, with leadership changes and strategic initiatives pointing towards future growth.

Strong Revenue Growth

The fiscal year 2024 saw AMS’s total revenue increase by 33% to $28.3 million, up from $21.3 million in the previous year. This impressive growth was largely attributed to the acquisition of Rhode Island radiation therapy operations and the launch of new operations in Puebla, Mexico, which have significantly bolstered the company’s financial standing.

Direct Patient Services Segment Surge

The direct patient services segment experienced a remarkable surge, with revenue reaching $12.6 million for fiscal year 2024, marking a 253% increase compared to the previous year. This growth was primarily fueled by the acquisition of the Rhode Island centers, underscoring the success of AMS’s strategic investments in expanding its service offerings.

Net Income Increase

AMS reported a substantial increase in net income for fiscal year 2024, which rose by 258% to $2.2 million, or $0.33 per diluted share, compared to $610,000, or $0.10 per diluted share, in fiscal year 2023. This significant improvement reflects the company’s effective cost management and strategic revenue enhancements.

International Expansion

AMS continued its international expansion by establishing its fourth international center through a joint venture agreement for a Gamma Knife center in Guadalajara, Mexico. The company anticipates stronger international growth from additional treatment volumes in Ecuador, Peru, and new centers in Mexico, which are expected to contribute positively to future revenue streams.

Leadership Transition

A notable leadership transition occurred with the appointment of Gary Delanois as CEO. Delanois brings extensive experience in healthcare operations and financial management, positioning AMS for its next phase of expansion and innovation. His leadership is expected to drive the company towards achieving its strategic goals.

Decline in Equipment Leasing Segment

Despite overall growth, the equipment leasing segment faced challenges, with revenue decreasing to $15.6 million from $17.8 million in the previous year. Additionally, Gamma Knife revenue declined by 11.6% to $9.7 million, and the number of Gamma Knife procedures decreased by 9.3%, highlighting areas that require strategic attention.

Proton Beam Revenue and Volume Decline

Revenue from proton beam radiation therapy saw a slight decrease of 1.8% to $10 million in fiscal year 2024, with proton therapy fractions decreasing by 4.3%. This decline was attributed to external factors such as hurricanes in Florida and cyclical fluctuations, which impacted service delivery.

Operating Loss in Q4 2024

AMS reported an operating loss of $1.8 million in Q4 2024, compared to an operating income of $407,000 in Q4 2023. This loss was primarily due to a write-down of impaired assets and removal costs in the leasing segment, indicating areas where the company needs to focus on improving operational efficiency.

Net Loss in Q4 2024

The company also reported a net loss attributable to AMS of $1.3 million, or $0.20 per share, in Q4 2024, compared to a net income of $415,000, or $0.06 per share, in Q4 2023. This net loss underscores the challenges faced in the latter part of the fiscal year.

Forward-Looking Guidance

Looking ahead, AMS provided significant guidance reflecting robust financial and strategic growth. The company reported a 59% year-over-year revenue increase for the quarter and a 32.9% increase for the entire fiscal year, with total revenue reaching $28.34 million. The strategic initiatives include expanding the international footprint with new centers in Guadalajara and Puebla, Mexico, and a 60% majority interest acquisition in Rhode Island’s cancer treatment centers. The company anticipates continued growth through international expansion and new projects like the forthcoming proton beam radiation therapy center in Rhode Island.

In conclusion, the earnings call for American Shared Hospital Services highlighted a period of strong growth driven by strategic acquisitions and international expansion, despite facing certain challenges. The overall sentiment was optimistic, with leadership changes and strategic initiatives setting the stage for future growth. Investors and stakeholders can look forward to AMS’s continued expansion and innovation in the healthcare sector.