American Shared Hospital Services (AMS) Q4 2024 Earnings Call Highlights: Record Revenue Growth ...

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Total Revenue for FY 2024: $28.34 million, a 32.9% increase from FY 2023.
Q4 2024 Revenue Growth: Increased 59% year-over-year and 30% from the previous quarter.
Adjusted EBITDA for FY 2024: $8.9 million, an 8.9% increase year-over-year.
Net Income for FY 2024: $2.2 million, a 258% increase from FY 2023.
Direct Patient Services Revenue for FY 2024: $12.6 million, a 253% increase from FY 2023.
Equipment Leasing Revenue for FY 2024: Decreased to $15.6 million from $17.8 million in FY 2023.
Gamma Knife Revenue for FY 2024: $9.7 million, an 11.6% decrease from FY 2023.
Proton Beam Radiation Therapy Revenue for FY 2024: $10 million, a 1.8% decrease from FY 2023.
Gross Margin for FY 2024: $9.2 million compared to $9.3 million in FY 2023.
Q4 2024 Adjusted EBITDA: $3.5 million, a 29% increase from Q4 2023.
Cash and Cash Equivalents as of December 31, 2024: $11.3 million.
Shareholders' Equity as of December 31, 2024: $25.2 million or $3.92 per outstanding share.

Warning! GuruFocus has detected 6 Warning Signs with AMS.

Release Date: April 04, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

American Shared Hospital Services (AMS) reported a 59% year-over-year revenue growth in the fourth quarter of 2024, driven by strategic acquisitions and international expansion.
The acquisition of three Rhode Island cancer treatment centers and the opening of a new facility in Puebla, Mexico, significantly contributed to the company's revenue increase.
AMS's direct patient services segment saw a substantial 253% revenue growth in fiscal year 2024, highlighting the success of their strategic shift towards patient-centric services.
The company has established a strong international presence with the only Gamma Knife centers in Peru and Ecuador, and new centers in Puebla and Guadalajara, Mexico.
AMS maintains a strong balance sheet with cash and cash equivalents of $11.3 million as of December 31, 2024, supporting its growth initiatives.

Negative Points

Revenue from the equipment leasing segment decreased, with Gamma Knife revenue declining by 11.6% due to contract expirations.
The company experienced a 4.3% decrease in proton therapy fractions, partly due to hurricanes in Florida affecting volumes.
Gross margin declined slightly due to increased operational expenses and lower margins in the growing patient services segment.
AMS reported a net loss of $1.3 million in Q4 2024, attributed to impaired assets and removal costs in the leasing segment.
The company faces challenges in maintaining growth momentum amidst industry complexities and evolving market conditions.

Q & A Highlights

Q: Can you elaborate on the benefits of expanding your footprint in Rhode Island, particularly regarding the new facilities and their proximity to existing ones? A: Raymond Stachowiak, Executive Chairman of the Board, explained that there will be synergies from the expansion in Rhode Island. The state is relatively small, and the three largest healthcare providers are involved in the initiative. Brown University Health provides professional services, while Care New England and ProspectCharterCARE each hold a 20% equity stake in the three radiation therapy centers. These relationships will enhance cancer care provision in the state.

Q: How is the agreement with Brown University expected to impact the hiring of medical professionals? A: The agreement with Brown University Health System is expected to streamline physician recruitment and improve patient service capabilities at the three Rhode Island centers. This will likely accelerate the hiring of medical professionals, enhancing operational efficiency and patient care.

Q: What are the strategic growth opportunities for AMS internationally? A: Gary Delanois, CEO, highlighted the international growth opportunities, particularly in Mexico, Peru, and Ecuador. The company has established a new center in Puebla, Mexico, and signed a joint venture for a Gamma Knife center in Guadalajara. These initiatives, along with existing operations in Peru and Ecuador, are expected to drive stronger international growth.

Q: What factors contributed to the significant revenue growth in the direct patient services segment? A: R. Scott Frech, CFO, noted that the direct patient services segment saw a 253% revenue increase, primarily due to the acquisition of the Rhode Island radiation therapy operations and the launch of operations in Puebla, Mexico. This growth was also supported by a 20.5% revenue increase in Peru and Ecuador.

Q: How did the expiration of contracts affect the Gamma Knife revenue and procedures? A: The expiration of two contracts in 2023 and one in 2024 led to an 11.6% decline in Gamma Knife revenue and a 9.3% decrease in procedures. This decline was a significant factor in the reduced revenue from the equipment leasing segment.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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