American Shared Hospital Services (AMS) 13 Nov 242024 Q3 Earnings call transcript

Good day, and welcome to the American Shared Hospital Services Third Quarter 2024 Earnings Conference Call. [Operator Instructions] please note that this event is being recorded. I would now like to turn the conference over to Kirin Smith, Investor Relations. Please go ahead.

Thank you, Nick, and thank you, everyone, for joining us today. AMS' Third Quarter 2024 earnings press release was issued today before the market opened.

copy, www.ashs.com be the at a company's on Investors need at website press you it accessed can the tab. If releases under

vary like call remarks the make that note may turning call on to expectations, remarks I statements Before Private this plans and made conference prospects XXXX. Actual materially over under of that the Securities safe various the these Reform purposes those forward-looking future forward-looking results for the concerning would following be from may for company by indicated harbor the constitute statements. of Litigation about Please management, forward-looking Act statements. to provisions

As a for XX, for period update conference on was ended Shareholders SEC. and in XXXX, the the This ended definitive discussed on result of call. assumes includes held obligation year June The Form June company the XX, XX-K the those X-month XXXX. statement Meeting report in of that annual XX-Q important this the including company's information report XXXX. The company's Form contained with factors, the filings no quarterly the Annual December various for proxy the XX, on to

the Ray, to everyone we I'd our over I remind ask where call the provide Q&A and like policy time participant X follow-up. Before about each to turn question to X

Chairman like we'll Ray, happy CEO. now call any turn to to Stachowiak, and I'd be ahead. always, that, the Executive As to take at additional off-line please time. With questions over go Ray

Officer, over our then a everyone. I'll call of to third with third XXXX call. quarter you, the Thanks begin Chief Hiatt, review quarter joining our financial our for remarks, opening earnings Kirin. for results. Financial Bob Thank Good us for afternoon, today some conference turn

open we'll questions. call remarks prepared your the for Following the

joined further deep at centers, and care U.S. optimize and welcome XXst a President, with our served Taylor we Board management this seasoned has Senior Deans to that and health experience, the health patients physician ACOs overall and expand business. Operating overall mid-October. Officer. Gary's policies to systems itself Executive to Virginia, relationships, our operations and solutions innovative wealth with proven various executive working Mr. as Vice team radiation previously Gary executive to progressive a systems, a with like health XXX growth of addition qualified Michigan. than directly procedures, billing responsible and experience lends radiation Gary physician I'd announced health our providing team. Deans and Rhode collections, treating team to management oncologists California, addition and Vice in care highlight President daily our at as Chief is has perfectly we a with therapy in Before Operations over we as our to daily. Clearly, is Director for groups, strategy key our over based review quarter, plans. He experience of XXX significant Island, West Prior and of Century Oncology role, is more he thousands

drive and the outreach months. In initiatives critical impact agreements a Ranjit oncology promotion company's and spearhead of played recently new marketing role, and will new X the We business growth strengthening last development company's company's over strategic renewing further Pradhan, also and his the XX he expanding President, business, and and XX the services. in shares Vice Marketing. in Gamma role the Sales of Senior Ranjit domestic the Knife announced success American

in This we're grow. equipment the prospects extremely over quarter continues and Island We course, term. We acquisition, million and X review for by for as the from followed positions year. affected to we our margins excited longer our upcoming also another and our ways from as and let's was that was We've volume implement totaled our Mexico. The success is, $XXX,XXX, the of for quarter May the fluctuations, show needed quarter revenue without Now quarterly several operating not reported strong solid acquisition in about from million. X improvement upgraded segment. but overall comparable Knife important in our declined advancement with treatment quarter to that the this past our integrate lower of mix another continued reflective additional Island past facility growth, revenue showcased volumes and seasonality year-over-year and growth of revenue and challenges in strong of of through us Rhode navigate our in Rhode the $X.X benefits we is early Puebla, growth enthusiasm profitability, margin from continued change results. the efficiencies quarter gross this impacted solid our procedure XXXX nicely closed up XX% of the well of short which Retail fair and much by as quarter new in which share run, by Gamma invest $X.XX The growth

Additionally, gain or 'XX. a of third $XXX,XXX we compared quarter $X.XX $X.XX net per small of the to for share $XXX,XXX per a recorded quarter of or small loss the share in

to remains cash the balance $X.XX million a sheet We $XX.X strong. third ended quarter in and equivalents, Our is roughly share. which over with equal

million on XX, of We XXXX. our as also outstanding September line credit had $X.X million of $X

the strong well revenue for opportunities We continue as come to that resources to as long-term across. acquisition, business in significant we such deploy as additional initiatives have this streams. these sheet with fortunate Rhode to balance Island We're other strategic carefully leverage capital

the million, net clearly $X.X million was and able reminder, a acquire value $X this example the of strategically is acquired, acquisition cash, assets As implementing operating was We've to market fair worth of business. better million. capital. Furthermore, deployed cash. $X allocation excellent This we're assets a great an we to efficiencies optimize alone been Island Rhode of and how

are which provide maintenance employees, and on service to also It and and and in our purchased CT Island dependability quality longer-term adds should agreements, accelerators put planning more centers. have high was overall. We've for linear We've treatment stability cost-effective the struggling service. be being recently CT we to X efficiency staffing bring our SAM, noted improved income, which for temporary that in are a begun We've as radiation facilities CapEx converting packages we positive million needed better very care. $X.X and struggling, which also replaced was bankruptcy old owner, Rhode utilizing higher-cost income, We've third acquired was by they the was which some Specifically, for positive company going managed on they process. generating through that therapy invested our being EBITDA. are software patient permanent generating leased. GenesisCare it centers, positive which were uptime at simulators Rhode But Island previous added X the also were

business and equipment heartache. domestic XX team in Let's keep an signing of for that third In loss X had by last lease quarter, perspective. Gamma on that Knief the The the utilization this others of quarter XX This downtime through working our in a continues we we with increase our strengthening is to the clients site not in had focused strategy clients, We have upgrade. without navigated pipeline. Again, scheduled to this equipment. our we extensions to core months 'XX. of focus has in the also led from

team due business at a storages staffing testament very agreements In driver. growth seasonal faces. treatment flexibility believe to our partially volumes partnership and financial model, addition, are our extended and factors of important there We lower to some challenges sites. Despite physician our are these our a the

noticed in We Gamma already month treatment the Knife an have October. in of uptick our volumes

momentum. Our expecting international also business continued represents a large growth opportunity. We're

systems Gamma you the As Knife have in we know, only Peru of many the of and Ecuador. countries

in center offer our radiosurgery Mexico. Just months or radiation for agreement has the third have treating of international venture Rhode most that Mexico facility ago, available linear comment begun a quarter. center been area. In to newly that to and we've systems Knife will joint IGRT X few opened advanced Gamma a XXX that we therapy international The LINAC only Island incurring Puebla, This we fourth related of Guadalajara, acquisition installed our incremental $XXX,XXX our a also country of we patients. early that announced accelerator like our signing July, in excess $XXX,XXX Knife capabilities in attachment in had announced facility BMAT, of Gamma a costs X million. I'd in the with

in see in like excess I'd investors announced of we unique to that early expect decrease business opportunities. $XXX,XXX also our remind this a X had fourth quarter. our We to we year,

like This second. retail pipeline new and reflects from patient of in the The the in closing growth in XX% States. is these first Island. the of Rhode our in about our direct expanded our United early to interest centers that services first majority power of the the talk are new business, cancer first was radiation our closed therapy May. or centers These team clearly the strategy. I'd We X which

in need radiation CLN very center And the we a Rhode to powerful build a is second The is been certificate Bristol, of have third the that Island. one. fourth granted business opportunity therapy

applied system have and center a We proton York a opportunity. of radiation beam therapy A with radiation radiation the provide therapy need Island. will New for significant therapy center the to proton in Rhode Boston beams. growth This beam proton center a state be sophisticated only and City represents

this, as operator about XXX% announcing the additional forward of appropriate. We center. now, on this of As owner would proton radiation be matter look therapy we progress think this I'll to beam

through center Guadalajara streams to opportunities and we exciting expect capabilities from moving business, months Rhode The Puebla. X Strong acquisition long new in year in growth into As from ahead, new adds our recent to revenue the coming Ecuador. treatment in the other the centers our in Peru of sales new and look Island we addition business cycle. volumes closing the the and the stronger additional international

overall Bob long-term financial strong Our call a us confidence turn backlog our give to future. With over business for that, the to I'll the overview. in for continues

everyone. and Thank Ray Good Afternoon you,

quarter. Rental Leasing ago startup decrease third quarter, quarter million the revenue in year prior in of $XXX,XXX Medical equipment was $X.XX was Gamma The quarter acquired volumes. the third operations revenue we September on recorded the from acquisition driven $X.XX quarter, the was which $XXX,XXX XXXX sales the the from year lower of Knief the Third closes compared exclude leasing company's XXXX, as The of XX.X%. in The comparison to for third increase to primarily refer May revenue to does a third Equipment compared increased to as in in Puebla ago the Services companies facility we decrease million or segment, the May leasing of new Island the now was Rhode the XXXX. and by $X.XX Island in Pueblo, for XX.X% XXX%. Patient million by direct XX, ago due from past compared million million generated by to to the revenue well benefited marking as the Rhode increase over an Retail quarter. Mexico. Revenue quarter ended retail company's the year for $X.XX quarter Revenue of segment year XXXX, the revenue in $X.X quarter that X, year

$XXX,XXX third an to Florida third X,XXX the quarter fractions for therapy the compared to fractions XXXX was million, The in expectations taxes at million compared Knief volumes. The a margin primarily to acquired on a cyclical system staffing $X.XX continued expiration by slight lower $XXX,XXX of strong transaction increase an of third Gamma months name and depreciation the sites. upgrade gross one on the acquired in outstanding income Third XXXX period, the $X.XX tax company's the quarter relatively million third related expense Adjusted in changes Mexico, the normal Gamma administrative to our shares revenue the for third Knife of the in of to year-over-year were quarter financial in the loss costs costs income as compared share XXXX, scheduled measure, Rhode quarter, for $XXX,XXX was due and company's as $X.XX of in quarter the decrease the and volumes downtime and quarter per $X.XX the common from primarily net the $X,XXX,XXX X segment, in quarter by XXXX. by increase compared Hospital $XXX,XXX rates million margin due for of acquisition compared Services The recently increase. X.X%, of as $X.XX Islands of third borrowings the patient due for well of treatment of noncontrolling development well in diluted to of an shortage Rhode gain Knife facility Again, which quarter Puebla, period the This compared was due period-over-period volume was receivables. The in loss equipment primarily the proton company's to the lower which of the purchase decline Net benefit in was X.X% cyclical state growth lower the holdings facilities XXXX. the debt. The fluctuation. Total same the American third The of or and was last the third XXXX net quarter to third XXXX, of quarter tax year. unserved as third X changes. legal to operating for company's is proton from XXXX increased bargain a increased treatment weighted diluted attributable and $X.XX valuation X,XXX of the third quarter compared for Interest XXXX of due to other of to increased decreased $X.XX $XXX,XXX income XXXX was services XXXX as interest in $XXX,XXX of a for $XX,XXX. operating Proton $X,XXX,XXX revenue and quarter million well year income average sites the therapy naval therapy as last XX.X% in at Gamma volume third the income quarter. due lower affected segment, fees. or quarter for XXXX. compared rate with was to non-GAAP Rhode was Island increase to the for our third XXXX million contract to leasing third were increased recoverability due Gamma of of interests quarter combined share, to the of of XXXX the second upgrades. Fully and incurred costs $X.X to Gross planned of a recognized from comparable Knife to by of period for to quarter decreased diluted to $XXX,XXX due million ago due third losses to Islands expense $X.XX per quarter for Shared of million has operating in well our variable was EBITDA, to margin. Selling year. to for gross equipment as in by $XX,XXX unchanged before driven of quarter X $X.XX as

X-month the to on Moving financial statements.

December large the therapy bargain income non-GAAP of fractions was equivalents share months Shared compared was our diluted and X the to as to financial earned $X.XX XXXX, X interest Shareholders' for the XXXX. The our to $XX.X first per cash compared first generated EBITDA, of $XX.XX XXXX. X.X% Net first of for from retail on increase Total the Ecuador and million at Adjusted for gain million revenue of $X.XX in for months updating and Gamma it the of of the turn September generated months December as quarter, X,XXX equity, X therapy total Rhode to compared the marking million the the American a growth September you compared discussed $X.XX first you share revenue by Company, million million the the compared increased net for XXXX. the The million, XXXX, quarter. Gamma fractions XXXX, was XX, outstanding $XX.XX of XXXX. X open of Rhode Gamma year or from $X.XX revenue XX, Rhode a months for the for million XX.X% XX, of $X.XX months $XX.XX XXXX, to XX, at questions. X for of to now of Knife the XX.X% ahead. Nick, formal of $X.XX was third months cash months XXXX, compared ended first first restructuring $X.XX compared This increase period, the months decrease XXXX Patient share months for XXXX to per X, procedures increase the outstanding first forward acquired X in our million Services operations X September the acquisition XX, noncontrolling up in decreased the the Knife of to to $XX.XX million revenue XXX period to cash a million the diluted therapy was comparable to we For million $X.XX start-up X ended due months Knife increased million in XXX%. $X.XX The an May X.X% ago first in the quarters part $XX.X months and to Peru due acquired. compared X in Island joining earlier. Hospital $X.XX $XXX,XXX purchase on segment XXXX to in or primarily attributable revenue you was in to declines revenue Services of today. proton net third Island and progress Retail million XX, comparable We in XXXX, $X.XX $X.XX per months Island share XXXX. to million was measure X for revenue the the million for XXXX. This to for income the Knife back to of of compared $X.XX of X or concludes to the Revenue the was X,XXX, proton XXX, or procedure September from due look number us excluding or the the we'd for period presentation. Proton of a first procedures facilities the of Thank months to XXXX. were XXXX. XXXX. of X XXXX first call XXXX decrease Gamma to to compared and like the X.X% in of subsidiaries income again per first X XX.X% company

first [Operator today with Instructions] And will Marin our from Ma'am Zacks. question come

to new Island the on up follow business, new their or a bring I you would prepared you certain as start-up Rhode efficiency. you a and costs, wondering if up there's Puebla, I centers be I are ramp-up guess, during bit the on when said something on quarter. of new which I'm peak in they operating think, a So if ramping bring And But in came online reach want that launch period during new guess to of About sort I business right? Puebla. remarks, also center

So is we're would now quarter? you that, that say the third right that something seeing in

think I X, you Island that third $XXX,XXX or We've accounting a legal had a we our is quarter lot bring acquisition of costs, the a of refer is up incurring of company. quarter, valuations our it company. costs say, as like categories to them in to I'll been lot Rhode seems it We've results. have because a impacted fees, $XXX,XXX we fees. done it are public is One

to and the to Let's consultants opening us with the to our audit value requirements assets assets, company. balance public not that outside the establish mustard sheet, but review just pass can it using do value requirement, so as help a that necessary

cost these centers, been through the centers result the Island that that going are of The Rhode being X integrating radiation cost company we've bankruptcy therapy process. other incurring costs second of kind a fact that the of by were is managed category our a

on at and CT have of but staffing were with in replace without employees. radiation not maintenance hire, of losing as had and third-party third-party firms They Care, the that contracting cost were to personnel lot therapists. outdated center had employees to therapists local employees. these agreements. we the they outside a synthesis physicist, to almost radiation that employ our put by transition but simulators, all was because we Genesis in explained existing service employees equipment hired losing tens we talked were employed to exorbitant the staffing were centers We These costs existing from its the exception, two we were there and been equipment The to that So I've we them.

We that time radiation it's As an we're outside -- cost third outside I'll we say, question? being is I as how inherited, proper there to know the some supplied X acquired of under to it, by take answer additional but but third, to now, therapists get of close X, temporary example hired and think that party employing to going your count additional -- those management. Can cost that, head X it X we employees parties. third we've the fix that but are

That's And helpful. follow-on. one then Yes. just

been of think operating you you in you In on that that the I is facility any you're of color with? expected kind since that satisfied August, see have terms Puebla terms there facility, to -- now are there you've had facility, of what so that

very We're with pleased start-up I'd month was revenue did tell at start -- pleased that July. delayed that's being since results, the generating say we we generated not very increasing keeps But early we've the revenue that with site the I'll until every opened. performance. you, are its

[Operator Instructions]

today come Our Tony question Cayman Partners. next with will Eastwood from

slightly on Rhode Question from the different angle Island. a

was You you remember, being or bankruptcy of whatever. mentioned, couple this I out of said, prepared a think, operated in remarks your times

patients the question -- Did can side, customer other -- that the in kind whatever. the and equipment recommending do that gain bankruptcy. and and side from of the more terms doctors you you referrals the my was of mentioned new on that of was kind referring is just uncertainty the the stuff older of the now feel but impact of not So and site. the patients that all utilization What cost business that you business, doctors on side having or and

Tony. Thank you,

I think volumes. we definitely can increase our

X give example. me Let

CT several in our of nonoperating in prior It months. condition One replace that simulators effect, be was the acquisition. was, couldn't to for we down. used It a

to CT and referring replaced, replaced we've site that down. patients not that CT was started simulator, to has simulator a there that the physician So back that referring physician because first would refer was that referring the we his was one center. our Since

the we're So efforts our I mean, of volumes. that's situation to just case that increase ideal like deploying an

and mean, are isn't can the a you that, getting -- on related, Knife that? now marketing the of out sort a And you other you all just to there of part, there. there word been the has things whether guys you kind going might really second I quarter then some center on is think upgraded turn which hey, of doctors as for And -- side a around little the Gamma was plan Gamma a Is that on bit. little also and Knife have help it tough sort comment reasons side do but a

Sure.

we make our X to Keep state. They're that. largest bringing patients health venture to So questions, aware absolutely Rhode acquisition Island, in in care awareness the therapy are of more centers the to radiation second partners, other doing is our in the well mind, our joint owners centers. and refer system XX% continue this

largest it. XX% and health be largest other grow is well the the same how is we And scenario they're very amenable are talking the care in care can relationship I as of aware a system third am Our partner about there. we and activities health our system -- to

presence, leaders the in of So entire State CON are on lot They're Service there's here's cognizant applications. Council especially about of going the our our efforts state and Rhode in Island. awareness of cognizant in a the our Health the Island Rhode very that

their at on months one that of physician maternity our that we surgeons We vacation to had was radiation From one and downtime leave. third were our of Going you quarter August that upgrading anomaly question had, physicians, went what we treatment neural had oncologists, system. the Knife characterize as almost sites volumes. in I'd to July Gamma Tony. an And on that the with

don't guess a it and I'm very, them, a So very variety I there, results we overcome it it of a think it. if got was happy understand in that's those I place. not dug clearly. And kind we can the plan situations, all a we've into but factors. about word, know overcomeable, We I'll -- say, of but I of And

We making Gamma in than of our awareness these Knife more engaged communities. are ever in

question will investor. come from Anthony next today Marchese, your private And

the When market as the been on know has in at stock, stock today you the you obviously look fire. $X cap March, was small at

that you're stock we able are And didn't since always which the that a expansion, way not know realize as as And didn't, I some rather, surprised I They're of to causes kind program which are downtime a either helpful there vacation. long March. Why good but would transparent been would just no you on you to the So a -- because go people cash, a buy the price buyback is back. management trading you money growth these renewed hopes downtime to be that to need It affecting of well, on bad. to one for seems independent but going a certainly, been stock was has or that service, downtime coming renewal. be about I because quarter to as we maybe you of be something realize ZAC, the there that it the be haven't which the issues have to frustrated And seems could have guess an stock, that seems be was of when shareholder, I the quarter, every really if you're it really in example. I I'm though small to issue in believes it at more or downtime had in an results quarters, is research And not get people that with get and is so RG, I future we're closing make the say, you center company. a any known reassuring type would look to that calls seem sell-side people. It me that guess but at every coverage.

without about lose any in any people the guess, guidance, Anyway, action without especially of I So on, in my frustrated small are I move forward cap investments, markets. thoughts. what's think just other I'm lot that and confidence are of coming with there that, that up those just a warnings kind the they

Anthony, thanks for your question and observation.

you calls already model. I long making Our I frustration. a with hear have. the the patient in long-term model our business transition look But in business for our at voice, oriented to in we're term. of know stick your investors us very many I be

Rhode X If X we're We're going our expanding fifth have Knife And diversification added fact, a accelerator to beam. Today, Mexico. center in linear in we you transition, a geographically. look accelerators our in radiation expanding at we had product ago, fourth Puebla, Gamma proton linear therapy and our we're Island, Bristol, add Rhode at another one years and Island.

second operator lease going the care on collects. get that percentage are company from that segment changing segment. matter. center that the revenue We're XXX% when And dominant and hospital the we're proton investors have and in you segment Island. that No, in the going tuned other -- retail expanding we're by system the not way, stay proton oh, proton being proton. We've approved to also Rhode our And CON second diversification is beam and just into when to leasing one going if We our the in of and get Island, leasing more another our the making owner Rhode dominated exactly system. to asking play in been the it's where get and beam. be be we is CN subject And getting been are prevalent here to your being we by a beam

I'm seems me What if your you for be saying buying has your buyback? would of an about small a business mean me, whole about sorry the to saying -- use investor you're borrowing given your of a a not it it buying buyback, seem at small resources just to guys, me which, -- it ranch. that's to use I'm be way off. an to cash incredible stock future, as capacity, the book, you a and cut would small below simply What buyback. tangible again, the and and I funds. I'm some you're good cash to assuming

noted. Julie Anthony

our This will conclude any would turn conference for question-and-answer the session. to Stachowiak remarks. to closing over Ray I back like

for Thank Nick. joining today. us you, Thanks, everyone,

way. the There excited following be and in challenges confident inflection it appreciate especially we're not are at by the very We Rhode opportunities our American will clearly currently We're will a a be fully future. very got We acquisition pursuing. other strategy we've the straight line place. point along critical right Island Shared up. the growth

our a progress. strong to now We on you on initiatives. growth forward to continued our team updating execute have We look

for and to great remainder If hesitate you Hospital Have continued the don't Goodbye. Services. the Thanks your American further contact week. have of accommodate conversation. interest any in day Shared a will questions,

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

disconnect. You may now