Kirin Smith; Investor Relations; American Shared Hospital Services
Raymond Stachowiak; Executive Chairman of the Board; American Shared Hospital Services
Gary Delanois; Chief Executive Officer; American Shared Hospital Services
R. Scott Frech; Chief Financial Officer; American Shared Hospital Services
Marla Zacks; Analyst; Zacks Small Cap Research
Operator
Good day and welcome to the American Shared Hospital Services fourth-quarter 2024 earnings conference call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the conference over to Kirin Smith, Investor Relations. Please go ahead.
Kirin Smith
Thank you, Betsy, and thank you, everyone, for joining us today. AMS' fourth quarter and full year 2024 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 at 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.
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 September 30, 2024, the annual report on Form 10-K for the year ended December 31, 2023, and the definitive proxy statement for the Annual Meeting of Shareholders that was held on June 25, 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&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 off-line at any time. With that, I'd now like to turn the call over to Ray Stachowiak, Executive Chairman. Ray, please go ahead.
Raymond Stachowiak
Thank you, Kirin. Good afternoon, everyone. Thanks for joining us today for our fiscal year 2024 earnings conference call. Before I dive into our financial performance, I'd like to take a moment to announce an important leadership transition. Today, we announced that Gary Delanois was appointed as our Chief Executive Officer of American Shared Hospital Services.
I will remain very much involved and continue to serve as Executive Chairman, focusing on the strategic direction and key growth opportunities. Gary brings extensive experience in healthcare operations and financial management. I'm very confident in his ability to lead AMS into our next phase of expansion and innovation.
Now I'll begin with some opening remarks then turn the call over to Gary for additional detail; followed by Scott Frech, our CFO, for a review of our fiscal year results. Following our prepared remarks, we'll open the call for your questions.
We are very pleased to report another year of strong revenue growth driven by our strategic initiatives, including the continued integration of our Rhode Island acquisition, expansion of our direct patient services segment, and additional international business development.
Our commitment to operational efficiency and financial discipline remains steadfast as we transition from a cancer treatment equipment leasing focus to a more patient centric service model.
From a quarterly perspective, we continued our sequential and year-over-year momentum as well with another solid quarter of revenue growth, which increased 59% year-over-year and 30% from our last quarter. This growth was driven by the continued early benefit from our Rhode Island acquisition that we closed last May as well as from the opening of our new radiation therapy treatment facility in Puebla, Mexico.
Our fourth quarter 2024 adjusted EBITDA increased 29% compared to fourth quarter of 2023. For fiscal year 2024, revenue totaled $28.34 million, an increase of 32.9% from fiscal year 2023. Adjusted EBITDA for fiscal '24 came in at $8.9 million, an 8.9% increase year-over-year. Additionally, our adjusted EBITDA came in at $1.38 per share, providing investors with a clearer perspective on our financial performance.
We encourage investors to consider what a fair EBITDA multiple might be for our enterprise value, given the recurring nature and growth of our revenues, our expanding international footprint and the strategic initiatives we have in motion. We believe this is an opportune time for investors to follow our company closely as we execute on our growth strategy and working towards growing our shareholder value.
Before I hand the call over to Gary, I'd also like to highlight our strong balance sheet, robust business development pipeline and exciting strategic growth opportunities that drives our enthusiasm, our confidence in the long term trajectory of our company. With that, I'll hand the call over to Gary, our new CEO, for additional details. Gary?
Gary Delanois
Thanks, Ray, and good afternoon, everyone. I'm excited to take on the CEO role and help lead our strong management team and the company into its next phase of growth. Now I will provide some additional details around financial performance as well as our strategic initiatives.
We are excited about the growth we have been seeing in the overall business that is a direct result of our recent acquisition of the three Rhode Island cancer treatment centers and our new one in Puebla, Mexico. At the Rhode Island centers, we have invested in CapEx by upgrading CT simulators used in the treatment planning process and also added software enhancements for improved efficiency and patient care.
We also made significant progress on optimizing our staffing costs that will improve long term profitability. Specifically, our professional services agreement with Brown University Health System, the largest health system in Rhode Island for radiation oncologists, staffing at our three centers which is now fully operational. This agreement streamlines physician recruitment and improves patient service capabilities.
I am confident that once we are fully staffed at each center that we will begin to see growth in treatment volumes at each of our centers and increased physician engagement with the healthcare community. Additionally, we put our linear accelerators on service and maintenance agreements, which adds to their dependability and higher uptime for better patient service.
The team also continues to focus on strengthening our radiation therapy equipment leasing segment by working closely with our health system customers to create greater community awareness among referring physicians to drive increased utilization of their Gamma Knife systems, the gold standard for stereotactic radiosurgery.
Our international business segment also represents a large growth opportunity where we are expecting continued momentum. As a reminder, we have the only Gamma Knife centers in the countries of Peru and Ecuador.
Now with our third international center in Puebla, Mexico, 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. In fiscal year 2024, we also established our fourth international center with the signing of a joint venture agreement for a Gamma Knife center in Guadalajara, Mexico.
As we look forward into the coming months and years ahead, we expect stronger international growth from additional treatment volumes in Ecuador, strong volume from our newly upgraded center in Peru and from our two new centers in Guadalajara and Puebla, Mexico. We also continue to expand our footprint in Rhode Island.
The first of these expansion initiatives was for the acquisition of a 60% majority interest in the three radiation therapy treatment centers in Rhode Island, which closed this past May. These are our first direct patient services cancer treatment centers in the US.
This new business segment clearly reflects the power of our growth strategy and further demonstrates our ability to partner with health systems, Care New England and ProspectCharterCARE, the second and third largest health systems in Rhode Island.
The second initiative is the certificate of need, or CON, that we have been granted to build and operate a fourth radiation therapy center in Bristol, Rhode Island. And the third initiative is the CON that we officially obtained just this past December to build and operate the first proton beam radiation therapy center in the state of Rhode Island, which clearly demonstrates -- represents another significant growth opportunity.
We look forward to announcing additional progress on these opportunities in due course. I will close now by reiterating our strong confidence in our overall business strategy, and I'm very excited and honored to work collaboratively with our strong management team to lead the company forward for continued revenue and profitability growth over the long term. With that, I'll turn the call over to Scott for a financial review.
R. Scott Frech
Thank you, Gary, and good afternoon, everyone. I will start off with a review of the full fiscal year 2024 financial performance, followed by the fourth quarter 2024 financial results. For the fiscal year ended December 31, 2024, total revenue increased by 33% to $28.3 million compared to $21.3 million in fiscal year 2023.
Revenue from our direct patient services segment was $12.6 million for fiscal year 2024 compared to $3.4 million in fiscal year 2023, marking an increase of 253%. This significant growth was primarily driven by acquisition of the Rhode Island radiation therapy operations, a 20.5% revenue growth in Peru and Ecuador and the launch of operations in Puebla, Mexico in quarter three of 2024.
Revenue from the equipment leasing segment decreased $15.6 million from $17.8 million in fiscal year 2023. Gamma Knife revenue declined 11.6% to $9.7 million for fiscal year 2024 compared to $11 million in fiscal year 2023. The number of Gamma Knife procedures in 2024 was 1,084, a 9.3% decrease from the 1,195 procedures done in 2023.
This decline is due to the expiration of two contracts during 2023 and one in 2024. Revenue from proton beam radiation therapy, also called PBRT, decreased 1.8% to $10 million in fiscal year 2024 compared to $10.1 million in fiscal year 2023.
Total proton therapy fractions for 2024 were 5,139, a 4.3% decrease from the 5,369 fractions done in 2023. The decline was primarily due to hurricanes in the state of Florida that impacted volumes along with the normal cyclical fluctuations that we see. Our gross margin for fiscal year 2024 was $9.2 million compared to $9.3 million in fiscal year 2023.
The decline in gross margin and percentages 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 strong growth from our patient services segment, which has a lower gross margin.
Full year 2024 operating income was the gain of $279,000 excluding impairment compared to $1.2 million in fiscal year 2023. Net income attributable to American Shared Hospital Services for fiscal year 2024 increased 258% to $2.2 million or $0.33 per diluted share compared to $610,000 or $0.10 per diluted share for fiscal year 2023.
This significant increase was primarily driven by the bargain purchase gain resulting from the Rhode Island acquisition, positive net income contributions from the newly acquired Rhode Island centers, and improved operational efficiencies across our domestic and international business segments. Adjusted EBITDA, our non-GAAP financial measure, increased 8.5% to $8.9 million for fiscal year 2024 compared to $8.2 million in fiscal year 2023.
Now I'll review the quarter results for the fourth quarter ended December 31, 2024. Total revenue increased by 59.2% to $9.1 million compared to $5.7 million in the same period of 2023 driven by the Rhode Island acquisition that closed this past May as well as the new facility in Puebla, Mexico.
Revenue from the company's direct patient services or segment was $4.8 million, a 420% increase from Q4 2023. This substantial growth was primarily due to the acquisition of the Rhode Island radiation therapy centers and commencement of operations at the facility in Puebla, Mexico.
Revenue from the leasing segment decreased $4.1 million from $4.8 million in Q4 of 2023. This decline was mainly due to lower Gamma Knife volumes driven by the expiration of two contracts in the second and third quarters of 2023 and a third contract expiration in the fourth quarter of 2024.
Gamma Knife revenue decreased by 2.2% to $2.6 million. Gamma Knife procedures totaled 253, an 8.7% decrease from the 277 procedures in Q4 of 2023. Revenue from protein (sic - see press release, "proton") beam therapy in Florida decreased 16% to $2.6 million from $3.1 million in Q4 of 2023. Proton therapy fractions were 1,471, a 39% decrease compared to the 2,396 fractions in the same period last year.
Gross margin for Q4 of 2024 was $3.2 million compared to $2.8 million in the same period last year. The percentage decrease was primarily due to lower Gamma Knife treatment volumes and growth in the direct patient services segment, which typically has a lower gross margin.
Selling and administrative expenses decreased slightly to $1.7 million compared to $1.8 million in Q4 of 2023. Interest expense was $429,000 in Q4 of 2024 compared to $287,000 in the same period last year. The operating loss for Q4 of 2024 was $1.8 million compared to an operating income of $407,000 in Q4 of 2023.
This is due to a loss on a write-down of impaired assets and removal costs in the leasing segment. The income tax expense for Q4 2024 was $71,000 compared to income tax expense of $338,000 in the same period last year.
The net loss attributable to American Shared Hospital Services in Q4 2024 was $1.3 million or $0.20 per share compared to net income of $415,000 or $0.06 per share in Q4 of 2023. The Q4 2024 period includes results from our new business development opportunities in the direct patient care segment and increased reserves for impaired assets and removal costs of $2.9 million in the leasing segment.
Adjusted EBITDA, a non-GAAP financial measure, increased 29% to $3.5 million for Q4 2024 compared to $2.7 million in Q4 2023. We ended the year in a strong financial position supported by our balance sheet. As of December 31, 2024, cash and cash equivalents, including restricted cash, stood at $11.3 million compared to $13.8 million at December 31, 2023.
Shareholders' equity, excluding noncontrolling interest in subsidiaries, was $25.2 million or $3.92 per outstanding share compared to $22.6 million or $3.59 per outstanding share at December 31, 2023. Fully diluted weighted share -- average common shares outstanding were 6,542,000 for Q4 and 6,552,000 for Q4 of 2023.
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. We'd now like to turn the call back to the operator and then open it up for questions.
Operator
(Operator Instructions) M. Marin, Zacks.
Marla Zacks
Thank you. So you -- there's a lot of growth, footprint growth in the state of Rhode Island that you've talked about. It's obviously a big factor behind the revenue expansion in 2024. So you mentioned on the call, I think Gary spoke to it in his prepared remarks, the agreement with Brown University and how that will likely accelerate hiring of medical professionals.
Are there any other benefits that you can think about or speak to of operating -- of expanding your footprint within the state? And are the facilities that you're contemplating, the new facilities, the fourth radiation treatment center, the proton beam center, are they close enough to the three existing facilities that there can be any kind of economies that we can talk about? Thank you.
Raymond Stachowiak
Marla, thanks for your question, very much. Very good question, very perceptive. There will be synergies from that relationship. And Rhode Island is a relatively small state. And the three largest healthcare providers in the state is Brown University Health, and we've now entered into this relationship for their provision of professional services.
The second largest healthcare system, Care New England, is actually a 20% equity owner in our three radiation therapy centers. And the third largest healthcare system, Charter -- ProspectCharterCARE, is also a 20% equity owner in our three radiation therapy centers. And there will be synergies from all those relationships that will advance the provision of cancer care in the state and will be, I'll say, a central focus of that initiative.
Marla Zacks
Okay, thank you.
Operator
(Operator Instructions) There are no further questions at this time, which concludes our question-and-answer session. I would like to send the conference back over to Ray Stachowiak for any closing remarks.
Raymond Stachowiak
Thank you, Betsy. Thanks, everyone, for joining us today. American Shared Hospital Services is at a pivotal moment. We got strong momentum behind our growth strategy. The Rhode Island acquisitions not only expanded our footprint, it also established our first direct patient services business in the United States, marking a significant milestone for our company.
Internationally our expansion into Mexico, coupled with continued growth in Peru and Ecuador, further strengthens our position as a leader in specialized radiation therapy services. We recognize that growth comes with challenges.
We're prepared to navigate the complexities of this evolving industry. Our recent expansion of our senior leadership team, the upgrade in our equipment portfolio, operational efficiencies will enhance the quality and accessibility of our services.
Further, our CON approval in Rhode Island for a fourth radiation therapy center and our CON to develop and operate the first and only expected proton beam therapy facility in Rhode Island represents another major long term opportunity for expansion.
We're confident in our strategy and our team's ability to execute. We look forward to updating you on our continued progress as we drive sustainable growth and long term success. If you have any questions, don't hesitate to reach out. We welcome any conversation. Thanks again for your interest in American Shared Hospital Services. Have a great rest of your day and rest of the week. Thank you and goodbye.
Operator
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
