American Shared Hospital Services · AMEX:AMS
American Shared Hospital Services — Sidoti Emerging Growth Convention (November 2016)
34 slides from American Shared Hospital Services's conference presentation, Nov 1, 2016
Slide 1: Sidoti Emerging Growth Convention
SIDOTI EMERGING GROWTH CONVENTION MARRIOTT MARQUIS IN TIMES SQUARE • NEW YORK, NY • NOVEMBER 1, 2016
Slide 2: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation may be deemed to contain certain forward-looking statements with respect to the financial condition, results of operations and future plans of American Shared Hospital Services, which involve risks and uncertainties including, but not limited to, the risks of
Slide 3: Business Operations
BUSINESS OPERATIONS CURRENT OPERATIONS Radiosurgery 17 Centers Linear Accelerator Based Radiation Therapy 1 Center Proton Beam Radiation Therapy 1 Center American Shared Hospital Services 3
Slide 4: Gamma Knife
GAMMA KNIFE + Gold Standard for Cranial Radiosurgery + Typical Project Cost $3 - $4 million American Shared Hospital Services 4
Slide 5: Proton Therapy
PROTON THERAPY + Historically, centers were 3-5 treatment room centers costing $150 - $200 million or more + New single room systems by Mevion Medical Systems and others have reduced the average cost per treatment rooms to $25 - $35 million American Shared Hospital Services
Slide 6: Business Model
ASHS - BUSINESS MODEL + Structured as a (alternative) leasing company + Innovative financing features not available from traditional finance companies American Shared Hospital Services 6
Slide 7: Business Model: Long Term Agreements
ASHS - BUSINESS MODEL + Long Term Agreements Typically 10 years + Revenue Sharing or Fee Per Use NO MINIMUM VOLUME GUARANTEES American Shared Hospital Services 7
Slide 8: Business Model: ASHS' Responsibilities
ASHS - BUSINESS MODEL ASHS’ RESPONSIBILITIES + Acquire equipment + Equipment related operating expenses + Jointly fund marketing American Shared Hospital Services 8
Slide 9: Business Model: Hospital's Responsibilities
ASHS - BUSINESS MODEL HOSPITAL’S RESPONSIBILITIES + Site costs + Operating costs, excluding those covered by American Shared + Jointly fund marketing American Shared Hospital Services 9
Slide 10: Gamma Knife Treatment Indications
GAMMA KNIFE TREATMENT INDICATIONS + Malignant Brain Tumors Metastatic Brain Tumors (180,000 – 250,000 Diagnosed Annually) + Benign Brain Tumors + Trigeminal Neuralgia (Facial Pain) + Vascular Malformations American Shared Hospital Services 10
Slide 11: ASTRO Recommendation
ASTRO RECOMMENDATION “Don’t routinely add adjuvant whole brain radiation therapy to stereotactic radiosurgery for limited brain metastases ” 2014 Choosing Wisely List- American Society for Radiation Oncology (ASTRO). (n.d.). Retrieved from https://www.astro.org/Patient-Care/Patient-Education/2014- C
Slide 12: Gamma Knife Partners
ASHS - GAMMA KNIFE PARTNERS 1. Methodist Healthcare System San Antonio, TX 2. Yale-New Haven Hospital New Haven, CT 3. Kettering Medical Center Kettering, OH 4. Tufts Medical Center Boston, MA 5. University of Arkansas for Medical Sciences Little Rock, AR American Shared Hospital Services 12
Slide 13: Gamma Knife Partners
ASHS - GAMMA KNIFE PARTNERS 6. JFK Medical Center Edison, NJ 7. Sunrise Hospital and Medical Center Las Vegas, NV 8. Central Mississippi Medical Center Jackson, MS 9. OSF Healthcare Peoria, IL 10. Albuquerque Regional Medical Center Albuquerque, NM 11. Northern Westchester Hospital Mt. Kisco, NY Ame
Slide 14: Gamma Knife Partners
ASHS - GAMMA KNIFE PARTNERS 12. Mercy Health Center Oklahoma City, OK 13. USC University Hospital Los Angeles, CA 14. Fort Sanders Regional Medical Center Knoxville, TN 15. St. Vincent’s Medical Center Jacksonville, FL 16. Sacred Heart Hospital Pensacola, FL 17. PeaceHealth Sacred Heart Medical Cent
Slide 15: Radiation Therapy Partner - LINAC
ASHS RADIATION THERAPY PARTNER - LINAC 1. Tufts Medical Center Boston, MA American Shared Hospital Services
Slide 16: Financial Highlights
ASHS - FINANCIAL HIGHLIGHTS 6 Months 6 Months ($000’s) 2015 2016 2015 Medical Services Revenue 8,756 8,511 16,548 EPS .03 (.34) (.28) Adjusted EPS1 .042 .053 .113 Adjusted EBITDA1 4,4572 4,3653 8,656 3 Net Book Value 25,690 24,602 25,180 Common Shares Outstanding 5,368 5,364 5,364 (1) Non-GAAP. See
Slide 17: Reconciliation of Non-GAAP Results to GAAP Measures
ASHS - RECONCILIATION OF NON-GAAP RESULTS OF OPERATIONS TO THE NEAREST COMPARABLE GAAP MEASURES 6 Months 6 Months ($000’s) 2015 2016 2015 EPS .03 (.34) (.28) Per Share Adjustments: Early Extinguishment of Debt, Net of Estimated .01 0 0 Tax Loss on Write Down Investment in Equity 0 .39 .39 Securities
Slide 18: Adjusted EBITDA
ASHS – ADJUSTED EBITDA 6 Months 6 Months ($000’s) 2015 2016 2015 Net Income (loss) 144 (1,842) (1,522) Plus: Income Tax Expense 157 236 434 Interest Expense 718 665 1,239 Depreciation and Amortization Expense 3,211 3,098 6,139 Share-Based Payment 119 94 226 Loss on Write Down of Investment 0 2,114 2
Slide 19: Balance Sheet
ASHS - BALANCE SHEET ASSETS ($000’s) June 30, 2016 TOTAL CURRENT ASSETS $6,527 Property & Equipment, Net $51,800 Investment In Preferred Stock & Other Assets $974 Total Assets $59,301 LIABILITIES & SHAREHOLDERS' EQUITY CURRENT LIABILITIES Payables & Other Liabilities $1,854 Current Debt & Leases $7,
Slide 20: Proton Beam Radiation Therapy
ASHS - PROTON BEAM RADIATION THERAPY + NOT A NEW technology + Clinically Advantageous American Shared Hospital Services 20
Slide 21: Proton Therapy Indications Treated
PROTON THERAPY INDICATIONS TREATED + Prostate + Breast + Head and Neck + Lymphomas + Central Nervous + Lung System + Liver + Pediatric + GI American Shared Hospital Services 21
Slide 22: Proton Beam Partners
ASHS - PROTON BEAM PARTNERS 1. The Marjorie and Leonard Williams Center for Proton Therapy at UF Health Cancer Center - Orlando Health
Slide 23: What Makes Proton Therapy Special
WHAT MAKES PROTON THERAPY SPECIAL + Protons deposit dose at tumor, versus x-rays passing through the tumor + Minimize damage to surrounding tissue American Shared Hospital Services 23
Slide 24: Bragg Peak Phenomena
ASHS - BRAGG PEAK PHENOMENA 15 MV PHOTONS vs SOBP PROTONS American Shared Hospital Services 24
Slide 25: Photon vs. Proton Pediatric Medulloblastoma
ASHS - PHOTON VS. PROTON PEDIATRIC MEDULLOBLASTOMA % Dose Photon Beam Delivery Recommended 100 50 Proton Beam Delivery 10 American Shared Hospital Services 25
Slide 26: United States PBRT Market Analysis
ASHS - UNITED STATES PBRT MARKET ANALYSIS PBRT CAPTURE RATE 15% 2 30% 3 Number of radiation therapy patients 995,000 995,000 annually in the U.S.1 Percent of radiation therapy patients 15% 30% eligible for PBRT Number of potential PBRT patients 149,250 298,500 in the U.S. Potential PBRT room market*
Slide 27: PBRT Opportunity
ASHS - PBRT OPPORTUNITY + Currently only 24 PBRT centers in U.S. + 10 PBRT centers under development in U.S. American Shared Hospital Services 27 Particle Therapy Co-Operative Group. Retrieved from http://www.ptcog.ch/
Slide 28: Proton Therapy Strategy
ASHS - PROTON THERAPY STRATEGY + Develop single room proton beam radiation therapy centers with major hospitals American Shared Hospital Services 28
Slide 29: Proton Therapy Market Analysis
PROTON THERAPY MARKET ANALYSIS + Current Medicare Reimbursement: approximately $1,150 per fraction (daily session). A course of treatment runs 25-30 fractions + Established centers typically treat 20-35 patients per day, per treatment room American Shared Hospital Services 29
Slide 30: Proton Therapy Market Analysis
PROTON THERAPY MARKET ANALYSIS + Utilizes same business model as the Gamma Knife. Expect margins to be similar + For ASHS, each treatment room offers potential for substantial incremental revenue and EBITDA American Shared Hospital Services 30
Slide 31: Management Team
ASHS - MANAGEMENT TEAM Years of Healthcare MANAGEMENT TEAM Experience Ernest A. Bates, M.D. 30+ Chairman and CEO Craig K. Tagawa 30+ COO and CFO Ernest R. Bates 10+ V.P. of Sales and Business Development American Shared Hospital Services 31
Slide 32: Summation
ASHS - SUMMATION + Supplier of Gamma Knife services since 1991 + Long-standing alliances with premier cancer centers American Shared Hospital Services 32
Slide 33: Summation: Positioned for Growth in Emerging Proton Therapy Market
ASHS - SUMMATION POSITIONED FOR GROWTH IN EMERGING PROTON THERAPY MARKET + Development and financing of Orlando project establishes ASHS’ proton bona fides + First proton therapy center now treating patients + Proton therapy provided modest revenue contribution in June quarter, more substantial in s
Slide 34: 2 Embarcadero Center, Suite 410 San Francisco, CA 94111 www.ashs.com
2 Embarcadero Center, Suite 410 San Francisco, CA 94111 (415) 788-5300 www.ashs.com NYSE MKT:AMS
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