AMERICAN SHARED HOSPITAL SERVICES (NYSE AMEX:AMS), a leading provider of turnkey technology solutions for advanced radiosurgical and radiation therapy services, today announced financial results for the third quarter and first nine months of 2011.
Third Quarter Results
For the three months ended September 30, 2011, revenue increased to $9,148,000, consisting of medical services revenue of $4,164,000 and revenue from equipment sales of $4,984,000. This compares to medical services revenue of $4,280,000 for the third quarter of 2010. Net income for the third quarter of 2011 rose to $220,000, or $0.05 per share. This compares to net income of $6,000, or $0.00 per share, for the third quarter of 2010.
In March 2011 AMS announced a contract to upgrade a Gamma Knife® to Perfexion TM specifications at Lehigh Valley Hospital in Allentown, Pennsylvania. As part of this upgrade, AMS agreed to the early termination of the existing 10-year lease on the Gamma Knife system it supplied to Lehigh in 2004, and Lehigh agreed to purchase the Perfexion system. Pre-tax income from this transaction of $844,000 was recognized in the third quarter of 2011.The number of procedures performed on Gamma Knife Perfexion systems supplied by AMS decreased 6.0% for the third quarter of 2011, and increased 7.8% for the first nine months of 2011, compared to the third quarter and first nine months of 2010, respectively. The total number of procedures performed in AMS' Gamma Knife business were the same for this year's third quarter as last year, and increased 2.6% for the first nine months compared to the first nine months of 2010. Gross margin from medical services for this year's third quarter decreased to 38.8% compared to 43.1% for the third quarter of 2010, reflecting lower procedure volume. Selling and administrative expenses for the third quarter of 2011 decreased 4.9% to $1,038,000 compared to $1,091,000 for the third quarter of 2010. Reflecting the addition of new Perfexion systems to AMS' Gamma Knife portfolio, interest expense increased to $608,000 for this year's third quarter compared to $558,000 for the third quarter last year.