American Shared Hospital Services Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 13, 2025

Key Takeaways

  • Positive Sentiment: Second quarter revenue rose 16% sequentially to $7.1 million, driven by growth in Direct Patient Services and international initiatives.
  • Positive Sentiment: Adjusted EBITDA increased to $1.7 million in Q2 from $949,000 in Q1, reflecting improved operational leverage.
  • Negative Sentiment: Gamma Knife revenue fell 5% year-over-year and procedures dropped 22%, primarily due to the expiration of two customer contracts.
  • Neutral Sentiment: Net loss narrowed to $280,000 (or $0.04 per share) in Q2 from $625,000 in Q1, indicating progress toward profitability despite ongoing investments.
  • Negative Sentiment: Gross margin declined 34% year-over-year amid higher staffing and technology costs, impacting overall profitability.
AI Generated. May Contain Errors.
Earnings Conference Call
American Shared Hospital Services Q2 2025
00:00 / 00:00

There are 6 speakers on the call.

Operator

Good day, and welcome to the American Shared Hospital Services Second Quarter twenty twenty five Earnings Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Kieran Smith with PCG Advisory.

Operator

Please go ahead.

Speaker 1

Thank you, Megan, and thank you everyone for joining us today. AMS' second quarter twenty twenty five earnings press release was issued today before the market opened. If you need a copy, it can be accessed on the company's website at www.ashs.com and press releases under the Investors tab. Before turning the call over to management, I would like to make the following remarks concerning forward looking statements. Please note that various remarks that may be made on this conference call about future expectations, plans and prospects for the company constitute forward looking statements for the purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.

Speaker 1

Actual results may vary materially from those indicated by these forward looking statements as a result of various important factors, including those discussed in the company's filings with the SEC. This includes the company's quarterly report on Form 10 Q for the three month period ended 03/31/2025, and annual report on Form 10 ks for the year ended 12/31/2024. The company assumes no obligation to update the information contained in this conference call. Before I turn the call over to Ray, I'd like to remind everyone about our Q and A policy, where we provide each participant the time to ask one question and one follow-up. As always, we'll be happy to take additional questions offline at any time.

Speaker 1

With that, I'd now like to turn the call over to Ray Stokoliak, Executive Chairman. Ray, please go ahead.

Speaker 2

Thank you, Karen, and good afternoon, everyone. Thanks for joining us today for our second quarter twenty twenty five earnings conference call. I'll begin with some opening remarks, then turn the call over to Gary Delaney, our CEO, for additional detail, followed by Scott Streck, our CFO, for a financial review of our second quarter and first half twenty twenty five results. Following our prepared remarks, we'll open the call for questions. We are very pleased to see that volumes have continued to improve and second quarter twenty twenty five revenue increased 16% sequentially from last quarter, which is driven by the expansion of our Direct Patient Services segment and additional international business development initiatives.

Speaker 2

We're continuing to see the benefits from our transition from a cancer treatment equipment leasing focus to a more patient centric service model. I'm also happy to see treatment volumes continuing to pick up, and we look forward to a stronger back half of 2025. I'd like to point out for our long term minded investor base that for the past four consecutive years, we've shown significant revenue growth, which has almost doubled since 2021. And for the past three years in a row, we've been profitable. It's important for investors to bear in mind that on a short term basis, there will fluctuations due to the specific nature of our business.

Speaker 2

But over the medium or longer term, we're in a very good position to continue our track record of strong, profitable revenue growth. I urge investors to focus on the long term overall growth opportunity as we execute on our strategic initiatives and upcoming milestones. We have set the stage for long term outperformance as we execute on our growth strategy and work towards building significant shareholder value. I'll now hand the call over to Gary and Scott, who will walk you through our overall business, robust business development pipeline, exciting strategic growth opportunities and the focus on operational and cost efficiencies that drive our confidence in the long term trajectory of our company. With that, I'll hand the call over to Gary Delanes for additional details.

Speaker 3

Thanks, Ray, and good afternoon, everyone. I echo Ray's enthusiasm for our near and longer term growth opportunities. My confidence and enthusiasm for our business growth strategy continues to grow, and I am excited for our next phase of growth. For this past quarter, we saw double digit sequential revenue growth, which increased 16% from last quarter. This growth was driven by the continued benefit from the Rhode Island acquisition that we closed last year as well as from the opening of our new radiation therapy treatment center in Puebla, Mexico.

Speaker 3

As we focus on revenue growth, we also remain focused on profitability. Our Q2 twenty twenty five adjusted EBITDA came in at $1,700,000 compared to $949,000 in Q1 twenty twenty five. We continue to have strong cost controls in place and are reliant on treatment volumes to drive top line growth. We are happy to see treatment volume continuing to increase from the last quarter as we continue to optimize and grow the business. While we do expect to see quarterly fluctuations in treatment volumes, I'm energized by the growth we have seen in the overall business and with our business development initiatives we have in motion.

Speaker 3

We also continue to see benefits from our acquisition of the three Rhode Island cancer treatment centers and our newer one in Puebla, Mexico. At the Rhode Island centers, we have recruited and secured through our professional services agreement with Brown University Health, three outstanding radiation oncologists. And as of today, I am pleased to announce they are seeing new patient consultations at our three centers. This significant accomplishment is a key element that sets the stage for increasing volumes and utilization to fuel future top and bottom line growth. We are well on our way, and I remain confident that we will see steady growth in treatment volumes and increased referring physician engagement with the health care community and our health system partners, Care New England and Prospect CharterCare.

Speaker 3

We also remain focused on our radiation therapy equipment leasing segment and continue to work with our health system customers to create greater community awareness among referring physicians to drive increased utilization of their Gamma Knife system, the gold standard for stereotactic radiosurgery. Our international business segment also represents a large growth opportunity, where we are seeing continued momentum. As you may recall, we have the only Gamma Knife centers in the countries of Peru and Ecuador and along with our third international center in Pueblo, Mexico, where we are treating cancer patients for a full range of cancer diagnoses with the most advanced radiation therapy treatment capabilities available in our catchment area. Last year, we established our fourth international center with our joint venture agreement for a Gamma Knife Center in Guadalajara, Mexico, and we continue to expect to start treating patients and generating revenue towards the end of this year. As this will be the only Esprit Gamma Knife in a country of 130,000,000 people, it certainly will provide a major benefit to patients in Mexico and clearly represents an untapped growth engine for us.

Speaker 3

Over the months and years ahead, we expect stronger international growth from additional treatment growth in Ecuador and strong volume from our newly upgraded center in Peru and our two new centers in Guadalajara and Puebla. As we've discussed in prior calls, we continue to expand our footprint in Rhode Island. The acquisition of the majority interest in the three radiation therapy treatment centers in Rhode Island were our first direct patient care cancer treatment centers in The U. S. This business segment highlights the power of our growth strategy, while also demonstrating our ability to partner with health systems, Care New England and Prospect CharterCare, the second and third largest health systems in Rhode Island.

Speaker 3

The second is the Certificate of Need, or CON, that we have been granted to build and operate a fourth radiation therapy treatment center in Bristol, Rhode Island. And the third is a CON that we officially obtained this past December to build and operate the first proton beam radiation therapy center in the state of Rhode Island, which represents another major growth opportunity. We also continue to evaluate potential tuck in acquisitions that can help expand our footprint and add to our growth. We look forward to announcing additional details on these opportunities as they progress. Before I hand the call over to Scott, I'd like to reiterate our strong confidence in the overall business.

Speaker 3

Bear in mind that as with most growth stage companies, there will be some fluctuations from time to time, and our focus and track record of long term revenue growth and profitability on top of our strong balance sheet gives me great confidence in the strategies we have in place for long term growth. And with that, I'll turn the call over to Scott Grecht, our CFO, for a financial overview.

Speaker 4

Thank you, Gary, and good afternoon, everyone. For the second quarter ended 06/30/2025, total revenue increased 16% to $7,100,000 compared to $6,100,000 for 2025 and was up slightly compared to Q2 twenty twenty four. Revenue from our direct patient services segment was $3,500,000 for Q2 twenty twenty five compared to $3,100,000 in Q2 twenty twenty four marking an increase of 12%. This growth was primarily driven by the acquisition of a majority interest in the Rhode Island radiation therapy operations in Q2 twenty twenty four and the launch of operations in Pueblo, Mexico in the 2024. Revenue from the equipment leasing segment decreased to $3,600,000 from $3,900,000 in Q2 twenty twenty four.

Speaker 4

Gamma Knife revenue increased 25% from Q1 twenty twenty five to $2,600,000 for Q2 twenty twenty five and was down about 5% compared to Q2 twenty twenty four. The number of Gamma Knife procedures in Q2 twenty twenty five was two sixty four, a 27% increase from 2025, but down 22% compared to Q2 twenty twenty four. This decline was primarily due to the expiration of two contracts in December 2024 and April 2025. Revenue from proton beam radiation therapy or PBRT increased 17% from Q1 twenty twenty five to $1,900,000 from Q2 twenty twenty five, but decreased 20% compared to Q2 twenty twenty four. Total proton therapy fractions for Q2 twenty twenty five were eleven fourteen, a 34% increase from Q1 twenty twenty five and down about 10% from Q2 twenty twenty four.

Speaker 4

This decline was primarily due to normal cyclical fluctuations. Revenue from linear accelerator or LINAC systems was up 7% from Q1 twenty twenty five to $2,500,000 for Q2 twenty twenty five and up 34% compared to Q2 twenty twenty four due to the acquisition of the Rhode Island Irrigation Therapy operations and the launch of operations in Puebla, Mexico. Our gross margin for Q2 twenty twenty five increased 73% from Q1 twenty twenty five to $1,600,000 and decreased 34% compared to $2,500,000 in Q2 twenty twenty four. The year over year decline in gross margin and percentage reflects increased operational expenses, higher staffing costs and investments in technology infrastructure to support growth initiatives, as well as lower Gamma Knife treatment volumes and a strong growth margin from our direct care patient care services segment, which has a lower gross margin percentage. Q2 twenty twenty five operating income was a loss of $544,000 compared to a loss of $1,300,000 in Q1 twenty twenty five and a loss of $1,000 in Q2 twenty twenty four.

Speaker 4

Net loss attributable to American Shared Hospital Services for Q2 twenty twenty five was $280,000 or $04 per diluted share compared to a net loss of $625,000 in Q1 twenty twenty five or $0.10 per share. Q2 twenty twenty four yielded a net income of $3,600,000 or $0.55 per diluted share. Adjusted EBITDA, our non GAAP financial measure was $1,700,000 for Q2 twenty twenty five compared to $949,000 in Q1 twenty twenty five and $2,000,000 in Q2 twenty twenty four. I will now review our six month results. For the 2025, total revenue increased 7% to $13,200,000 compared to $12,300,000 in the 2024.

Speaker 4

Revenue from our Direct Patient Care Services segment was $6,600,000 for the 2025 compared to $4,100,000 in the 2024 marking an increase of 61%. This significant growth was primarily driven by the acquisition of the Rhode Island Radiation Therapy operations in Q2 twenty twenty four and the launch of operations in Pueblo, Mexico in the 2024. Revenue from the equipment leasing segments decreased to $6,600,000 from $8,200,000 from the 2024. Gamma Knife revenue declined 11.4% to $4,700,000 for the 2025 compared to $5,300,000 in the 2024. The number of Gamma Knife procedures in the 2025 was four seventy two, a 23% decrease from six thirteen procedures in the 2024.

Speaker 4

This decline was primarily due to the expiration of two contracts in December 2024 and April 2025 and downtime to upgrade a third customer to newer technology. Revenue from proton beam radiation therapy or PBRT decreased 30% to $3,600,000 in the 2025 compared to $5,100,000 in the 2024. Total proton therapy fractions for the 2025 were nineteen forty five, a 23% decrease from the 2,512 fractions in the 2024. This decline was primarily due to normal cyclical fluctuations. Revenue from linear accelerator or LINAC systems was $4,900,000 for the 2025 compared to $1,900,000 in the 2024 due to the acquisition of the Rhode Island Radiation Therapy operations and the launch of operations in Pueblo, Mexico.

Speaker 4

Our gross margin for the 2025 was $2,600,000 compared to $4,600,000 in the 2024. This decline in gross margin and percentage reflects increased operational expenses, higher staffing costs, as well as lower Gamma Knife treatment volumes and the strong growth from our direct patient services segment, which has a lower gross operating margin. For the 2025, there was an operating loss of $1,800,000 compared to a loss of $86,000 in the 2024. Net loss attributable to American Shared Hospital Services for the 2025 was $905,000 or $0.14 per diluted share compared to net income of $3,700,000 or $0.57 per diluted share for the 2024. Adjusted EBITDA, our non GAAP financial measure, was $2,700,000 for the 2025 compared to $3,800,000 for the 2024.

Speaker 4

I'll now go on to our balance sheet. We ended Q2 twenty twenty five with strong financial position supported by our solid balance sheet. As of 06/30/2025, cash and cash equivalents including restricted cash set at $11,300,000 consistent with the $11,300,000 at 12/31/2024. Shareholders' equity, excluding non controlling interest, was $24,500,000 or $3.78 per outstanding share, compared to $25,200,000 or $3.92 per outstanding share at 12/31/2024. Fully diluted weighted average common shares outstanding were 6,582,000 for Q2 twenty twenty five and $6,583,000 for Q2 twenty twenty four.

Speaker 4

This concludes the formal part of our presentation. Thank you again for joining us today. We look forward to updating you on our progress in the quarters ahead. I'd now like to turn the call back to the operator and open it up for questions.

Operator

We will now begin the question and answer session. Our first question comes from M. Marron with Zacks. Please go ahead.

Speaker 5

Thank you. So as you move more and more towards the direct patient segment, you're seeing strong growth and you're also leveraging some of the relationships that you have. You specifically cited relationships in Rhode Island with Brown University and I think some other organizations. So as you move forward with the two new locations in Rhode Island, are there any pre opening activities that you can engage in to try to make sure that you hit the ground running in those locations once they open?

Speaker 3

Yes. Thank you very much for your call. One of the key items that we were able to accomplish, as I disclosed in my presentation, was the addition of three full time radiation oncologists. That's the first time we have been fully staffed since we took over about a year ago. And we will they will obviously also be covering the new centers.

Speaker 3

Obviously, the more imminent center is location, which is a radiation therapy center. The longer term project would be the Proton Center. And in addition, as you point out, we are engaged with our health system partners, Care New England and Prospect Charter Care as well as Brown University Health, as far as providing services additional services at those locations as well.

Speaker 5

And that will benefit the two new centers presumably?

Speaker 3

Could you repeat that again? You broke up a little bit.

Speaker 5

Sorry. I was just closing the loop there. So that will benefit the two new centers presumably once they open?

Speaker 3

Yes. There's definitely economies of scale with us expanding within the greater Rhode Island marketplace.

Speaker 5

Okay. Thank you.

Speaker 3

Thank you.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Gary Delinas for any closing remarks.

Speaker 3

Thank you, Megan, and thank you all for joining us today. I'll just wrap up quickly here and reiterate that we are at a key point in time as we execute on our growth strategy. We have put the building blocks in place and are focused on building strong momentum as our growth strategy takes hold. We are confident in our strategy and our team's ability to execute, and we look forward to updating you on our progress as we drive top line growth, profitability and long term success. As always, if you have any questions, please don't hesitate to reach out.

Speaker 3

And thanks again for your interest in American Shared Hospital Services. Thank you. That concludes the conference.

Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Powered by Quartr