American Shared Hospital Services first-quarter revenue decreases 2% to $4,088,000

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 first quarter of 2010.

First Quarter Results

For the three months ended March 31, 2010, revenue decreased 2% to $4,088,000 compared to $4,167,000 for the first quarter of 2009, and was essentially flat when compared to revenue of $4,092,000 for the fourth quarter of 2009. Operating income for this year's first quarter increased to $157,000 compared to an operating loss for the first quarter of 2009 of $76,000. Pre-tax income was $188,000 and net income for the first quarter of 2010 was $8,000, or $0.00 per share. This compares to a pre-tax loss of $42,000 and a net loss of $94,000, or $(0.02) per share, for the first quarter of 2009.

The total number of Gamma Knife® procedures performed during this year's first quarter increased 2% versus prior year. Gross margin for the first quarter of 2010 improved to $1,699,000, or 42% of revenue, compared to $1,597,000, or 38% of revenue, for the first quarter of 2009, primarily reflecting effective cost controls.

Selling and administrative expenses for this year's first quarter increased to $1,061,000 compared to $993,000 for the first quarter of 2009, but were essentially flat sequentially. This increase was primarily to support the Company's domestic and international growth initiatives.

Cash flow, as measured by earnings before interest, taxes, depreciation and amortization (EBITDA), increased to $1,984,000 for the first quarter of 2010 compared to $1,909,000 for the first quarter of 2009.

At March 31, 2010, AMS reported cash, cash equivalents and certificates of deposit of $9,552,000. This compares to cash and cash equivalents of $9,833,000 at December 31, 2009. Shareholders' equity at March 31, 2010 was $22,865,000, or $4.98 per outstanding share. This compares to shareholders' equity at December 31, 2009 of $22,755,000, or $4.95 per outstanding share.

Discussion and Analysis

Chairman and Chief Executive Officer Ernest A. Bates, M.D. said, "The outlook for our Gamma Knife business continues to improve. We are now benefiting from the new Leksell Gamma Knife® Perfexion^TM unit that went into service at Smilow Cancer Hospital at Yale-New Haven in April, and volume at one of our sites that had been sharply reduced in recent quarters due to physician turnover is expected to pick up again beginning this month. Another Perfexion device is scheduled to go into service later this year, and we anticipate placing five additional Perfexion systems over the next two years. Two of our sites experienced treatment increases averaging approximately 50% following Perfexion installation. In addition, Gamma Knife treatments are expected to begin late this year at our first international site, in Lima, Peru, and we are optimistic about ongoing contract negotiations in South America, Europe and the United States."

Dr. Bates continued, "Expansion of our portfolio of Gamma Knife, Perfexion and related systems is only one aspect of AMS' growth story. We also are building a leadership position in proton beam radiation therapy (PBRT), the next great growth opportunity in radiation oncology. This week we announced our latest PBRT project, an agreement with Kettering Medical Center to develop a proton therapy center in Dayton, Ohio. Renowned for bringing the latest medical technology to patients in southwest Ohio, including a Perfexion system supplied by AMS, Kettering Medical Center is the ideal partner to develop this PBRT facility with us.

"The Kettering project is in addition to PBRT treatment centers that AMS is developing in San Francisco, New York City, Boston, Orlando and Long Beach, California. We are committed to bringing each of these projects to fruition. Our recently announced agreement with Siebert Brandford Shank & Co. LLC, one of the nation's leading underwriters of public debt, to act as placement agent in connection with the debt financing of these and other projects under development, is another important step forward for AMS."

SOURCE American Shared Hospital Services