Immunology

American Shared Hospital Services (NYSE MKT:AMS), a leading provider of turnkey technology solutions for advanced radiosurgical and radiation therapy services, today announced financial results for the fourth quarter and 2013.

Fourth Quarter Results

Medical services revenue for the three months ended December 31, 2013 decreased 4.6% to $3,937,000, compared to medical services revenue for the fourth quarter of 2012 of $4,125,000.

The net loss for the fourth quarter of 2013 of $82,000, or $0.02 per basic and diluted share, included a pre-tax loss from foreign currency transactions of $334,000 due to the weakening of the Turkish Lira against the U.S. Dollar. Before this foreign currency transaction loss, pre-tax income for the fourth quarter of 2013 was $151,000, net of losses attributable to non-controlling interests. In comparison, net income for the fourth quarter of 2012 of $5,000, or $0.00 per basic and diluted share, included a pre-tax gain from foreign currency transactions of $137,000. Before this foreign currency transaction gain, the pre-tax loss for the fourth quarter of 2012 was $18,000, net of income attributable to non-controlling interests.

Operating income for the fourth quarter of 2013 increased to $262,000, compared to operating income for the fourth quarter of 2012 of $56,000.

The number of procedures performed on Gamma Knife^® Perfexion^TM systems supplied by AMS increased 5% for the fourth quarter and 18% for 2013 compared to the same periods of 2012. The total number of procedures performed in AMS' Gamma Knife business, including Gamma Knife and Gamma Knife Perfexion procedures, increased 7% for the fourth quarter and 19% for 2013 compared to the same periods of 2012.

Medical services gross margin for the fourth quarter of 2013 was 34.3%, compared to medical services gross margin of 37.0% for the fourth quarter of 2012.

Selling and administrative expenses for the fourth quarter of 2013 decreased 21.2% to $750,000 compared to $952,000 for the fourth quarter of 2012.

Twelve Months Results

For the twelve months ended December 31, 2013, medical services revenue increased 3.1% to $17,584,000, compared to medical services revenue of $17,048,000 for 2012.

The net loss for 2013 of $312,000, or $0.07 per basic and diluted share, included a pre-tax loss from foreign currency transactions of $1,174,000. Before this foreign currency transaction loss, pre-tax income for 2013 was $438,000, net of losses attributable to non-controlling interests. Net income for 2012 of $38,000, or $0.01 per basic and diluted share, included a pre-tax gain from foreign currency transactions of $132,000. Before this foreign currency transaction gain, pre-tax income for 2012 was $70,000, net of income attributable to non-controlling interests.

Cash flow, as measured by earnings before interest, taxes, depreciation and amortization (EBITDA), was $1,984,000 for the fourth quarter and $7,969,000 for 2013, compared to $2,067,000 for the fourth quarter and $8,306,000 for 2012.

Balance Sheet Highlights

At December 31, 2013, cash, cash equivalents and certificates of deposit were $10,909,000 compared to $10,564,000 at December 31, 2012. Shareholders' equity December 31, 2013 was $24,055,000, or $5.22 per outstanding share. This compares to shareholders' equity at December 31, 2012 of $24,830,000, or $5.39 per outstanding share.

CEO Comments

Chairman and Chief Executive Officer Ernest A. Bates, M.D., said, "We delivered higher operating and pre-tax income before foreign currency transaction charges for the fourth quarter and 2013 compared to the same periods of 2012 in one of the most challenging environments we have faced in AMS's history. The reduction in Medicare reimbursement for Gamma Knife services that went into effect on April 1, 2013, as mandated by the American Taxpayer Relief Act of 2012, was a significant headwind, as was an unfavorable mix of procedures by location in the fourth quarter.

"We were able to offset the impact of reduced reimbursement to some extent with higher patient volume at a number of our established sites, as well as the addition of two Gamma Knife Perfexion units to our portfolio during the past year. We also reduced our costs aggressively. We cut selling and administrative expenses by about 21% for the fourth quarter of 2013 compared to prior year, partly the anticipated result of the program we announced in late April to reduce future cash outlays by approximately $1,000,000 annually. Additionally, we reduced interest expense by refinancing some of our more mature Gamma Knife units, and paid off one of the Company's debt obligations in 2013.