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• Revenue: $6.99 million for Q3 2024, up 36% from $5.1 million in Q3 2023.

• Net Loss: $207,000 or 3 per share for Q3 2024, compared to a net income of $118,000 or 2 per share in Q3 2023.

• Cash and Equivalents: $14.1 million as of September 30, 2024.

• Gross Margin: Decreased by $732,000 due to lower gamma treatment volumes and a change in mix from retail segment growth.

• Retail Segment Revenue: $3.7 million for Q3 2024, up 273% from $988,000 in Q3 2023.

• Leasing Segment Revenue: $3.31 million for Q3 2024, down 16.1% from $3.95 million in Q3 2023.

• Proton Therapy Revenue: $2.3 million for Q3 2024, up 4.4% from Q3 2023.

• Gamma Knife Revenue: Decreased 32.9% to $1.82 million due to contract expiration and equipment downtime.

• Interest Expense: $336,000 for Q3 2024, up from $277,000 in Q3 2023.

• Operating Loss: $889,000 for Q3 2024, compared to an operating income of $90,000 in Q3 2023.

• Adjusted EBITDA: $1.37 million for Q3 2024, compared to $1.67 million in Q3 2023.

• Warning! GuruFocus has detected 6 Warning Signs with AMS.

Release Date: November 13, 2024

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 36% year-over-year revenue growth for the third quarter, driven by the Rhode Island acquisition and the new facility in Puebla, Mexico.

• The company ended the third quarter with a strong balance sheet, holding over $14.1 million in cash and equivalents.

• AMS successfully renewed and expanded five of its ten domestic Gamma Knife agreements over the last 18 months, indicating strong client relationships.

• The Rhode Island acquisition added three new revenue streams, showcasing effective capital deployment and strategic growth.

• AMS is expanding its international presence with new centers in Puebla, Mexico, and a joint venture in Guadalajara, Mexico, enhancing its growth prospects.

Negative Points

• The gross margin declined due to lower Gamma Knife treatment volumes and a change in revenue mix, impacting profitability.

• AMS recorded a small net loss of $207,000 for the quarter, compared to a net gain in the same quarter last year.

• The company faced challenges with seasonality and procedure volume fluctuations, affecting short-term margins.

• Increased operating costs from the Rhode Island acquisition and the new facility in Puebla, Mexico, contributed to an operating loss.

• The Gamma Knife segment experienced a decrease in revenue due to lower treatment volumes and downtime for equipment upgrades.

Q & A Highlights

Q: Can you elaborate on the startup costs and ramp-up period for new business locations in Rhode Island and Puebla? A: Raymond Stachowiak, Executive Chairman and CEO, explained that the company incurred significant costs related to the Rhode Island acquisition, including legal and accounting fees. Additionally, integrating the Rhode Island Radiation Therapy Centers involved replacing outdated equipment and transitioning from high-cost temporary staffing to permanent employees. The Puebla facility, which started generating revenue in early July, has shown increasing revenue each month since opening.