American Shared Hospital Services(AMS) - 2024 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Revenue for Q3 2024 increased by 36% year-over-year to $6.99 million, up from$ 5.1 million in Q3 2023, driven by the Rhode Island acquisition and the new facility in Puebla, Mexico [14][31] - Gross margin decreased to $1.37 million from$ 2.10 million in Q3 2023, impacted by lower Gamma Knife treatment volumes and a shift in revenue mix [15][35] - The company reported a net loss of $207,000 or$ 0.03 per share for Q3 2024, compared to a net income of $118,000 or$ 0.02 per share in Q3 2023 [15][39] - Cash and equivalents at the end of Q3 2024 stood at over $14.1 million, approximately$ 2.17 per share [16][43] Business Line Data and Key Metrics Changes - Revenue from the Patient Services or Retail segment surged by 273% to $3.7 million in Q3 2024, primarily due to the Rhode Island acquisition and Puebla operations [32] - Medical Equipment Leasing revenue decreased by 16.1% to$ 3.31 million, attributed to lower Gamma Knife volumes [33] - Proton therapy revenue increased by 4.4% to $2.3 million, with a 5.4% rise in proton therapy fractions [34] Market Data and Key Metrics Changes - The international business is seen as a significant growth opportunity, with the only Gamma Knife systems in Peru and Ecuador, and a new center in Puebla, Mexico [24] - A joint venture for a Gamma Knife facility in Guadalajara, Mexico was announced, which will be one of only three in the country [25] Company Strategy and Development Direction - The company is focused on integrating the Rhode Island acquisition and optimizing operations, which includes investing in upgraded equipment and improving operational efficiencies [13][19] - Plans to expand geographically and diversify product offerings, including the addition of linear accelerators and a proton beam center in Rhode Island [69][70] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as seasonality, procedure volume fluctuations, and integration costs from the Rhode Island acquisition [13][26] - There is optimism about future growth, particularly from international operations and new business opportunities [29][73] Other Important Information - The company has incurred additional costs related to the Rhode Island acquisition, expected to decrease in Q4 2024 [26] - The bargain purchase gain from the Rhode Island acquisition was increased by$ 263,000 in Q3 2024 [38] Q&A Session Summary Question: Follow-up on start-up costs and ramp-up period for new centers - Management confirmed that costs related to the Rhode Island acquisition and integration are impacting results, and acknowledged a ramp-up period for new centers [46][47] Question: Performance of the Puebla facility - Management expressed satisfaction with the revenue growth from the Puebla facility since its opening [51] Question: Impact of outdated equipment on business - Management noted that replacing outdated equipment has led to increased patient referrals and volumes [55][56] Question: Marketing efforts for the Rhode Island centers - Management confirmed ongoing marketing efforts to raise awareness among referring physicians about the upgraded facilities [58][60] Question: Gamma Knife treatment volume issues - Management attributed the decline in Gamma Knife volumes to various factors, including physician vacations and equipment downtime, but expressed confidence in overcoming these challenges [61][62] Question: Concerns about stock performance and transparency - Management acknowledged shareholder frustrations and emphasized the long-term growth strategy, including geographic expansion and product diversification [68][70]