MICROCAP LEADERSHIP SUMMIT - ashs.com MicroCap Presentation 092316.pdfMICROCAP LEADERSHIP SUMMIT ......
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MICROCAP LEADERSHIP SUMMIT WESTIN CHICAGO NORTHWEST HOTEL • ITASCA, IL • SEPTEMBER 23, 2016
Transcript of MICROCAP LEADERSHIP SUMMIT - ashs.com MicroCap Presentation 092316.pdfMICROCAP LEADERSHIP SUMMIT ......
MICROCAP LEADERSHIP SUMMIT
WESTIN CHICAGO NORTHWEST HOTEL • ITASCA, IL • SEPTEMBER 23, 2016
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 the Gamma Knife, radiation therapy and proton beam therapy businesses, the risks of the timing, financing, operations, and profitability of the Company’s businesses and related market-based risks. Further information on potential factors that could affect the financial condition, results of operations and future plans of American Shared Hospital Services is included in the filings of the Company with the Securities and Exchange Commission, including the Company's Annual Report on Form 10-K for the year ended December 31, 2015, Quarterly Report on Form 10-Q for the quarters ended on March 31, 2016 and June 30, 2016 and the definitive Proxy Statement for the Annual Meeting of Shareholders held on June 21, 2016.
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SAFE HARBOR STATEMENT
CURRENT OPERATIONS
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BUSINESS OPERATIONS
Radiosurgery 17 Centers
Linear Accelerator Based Radiation Therapy 1 Center
Proton Beam Radiation Therapy 1 Center
GAMMA KNIFE
+ Gold Standard for Cranial Radiosurgery
+ Typical Project Cost $3 - $4 million
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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
ASHS - BUSINESS MODEL
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+ Structured as a (alternative) leasing company
+ Innovative financing features not available from traditional finance companies
ASHS - BUSINESS MODEL
+ Long Term Agreements Typically 10 years
+ Revenue Sharing or Fee Per Use
NO MINIMUM VOLUME GUARANTEES
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ASHS’ RESPONSIBILITIES
+ Acquire equipment
+ Equipment related operating expenses
+ Jointly fund marketing
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ASHS - BUSINESS MODEL
ASHS - BUSINESS MODEL
HOSPITAL’S RESPONSIBILITIES
+ Site costs
+ Operating costs, excluding those covered by American Shared
+ Jointly fund marketing
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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
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ASTRO RECOMMENDATION
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“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-Choosing-Wisely-List/
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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
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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
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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 Center at RiverBend Springfield, OR
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ASHS - GAMMA KNIFE PARTNERS
1. Tufts Medical Center Boston, MA
American Shared Hospital Services
ASHS RADIATION THERAPY PARTNER - LINAC
ASHS - FINANCIAL HIGHLIGHTS
($000’s) 6 Months 2016
6 Months 2015 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
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(1) Non-GAAP. See slides elsewhere in this presentation for reconciliations of “Adjusted EPS” and “Adjusted EBITDA” to GAAP EPS and GAAP Net Income, respectively.
(2) Excludes early exiting investment of debt
(3) Excludes investment write-down
ASHS - RECONCILIATION OF NON-GAAP RESULTS OF OPERATIONS TO THE NEAREST COMPARABLE GAAP MEASURES
($000’s) 6 Months 2016
6 Months 2015 2015
EPS .03 (.34) (.28)
Per Share Adjustments:
Early Extinguishment of Debt, Net of Estimated Tax
.01 0 0
Loss on Write Down Investment in Equity Securities
0 .39 .39
Adjusted EPS .04 .05 .11
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ASHS – ADJUSTED EBITDA
($000’s) 6 Months 2016
6 Months 2015 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 2,140
Early Extinguishment of Debt 108 0 0
Adjusted EBITDA 4,457 4,365 8,656
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ASHS - BALANCE SHEET
($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
CURRENT LIABILITIES Payables & Other Liabilities $1,854 Current Debt & Leases $7,723
TOTAL CURRENT LIABILITIES $9,577 Long-term Debt & Leases $19,791 Deferred Revenue $663 Deferred Income Taxes $3,580 Total Shareholders' Equity $25,690 Total Liabilities & Shareholders' Equity $59,301
ASSETS
LIABILITIES & SHAREHOLDERS' EQUITY
ASHS - PROTON BEAM RADIATION THERAPY
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+ NOT A NEW technology
+ Clinically Advantageous
PROTON THERAPY INDICATIONS TREATED
+ Prostate + Breast
+ Head and Neck + Lymphomas
+ Lung + Central Nervous System
+ Liver + Pediatric
+ GI
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1. The Marjorie and Leonard Williams Center for Proton Therapy at UF Health Cancer Center - Orlando Health
ASHS - PROTON BEAM PARTNERS
WHAT MAKES PROTON THERAPY SPECIAL
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+ Protons deposit dose at tumor, versus x-rays passing through the tumor
+ Minimize damage to surrounding tissue
ASHS - BRAGG PEAK PHENOMENA
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15 MV PHOTONS vs SOBP PROTONS
ASHS - PHOTON VS. PROTON
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Photon Beam Delivery
Proton Beam Delivery
% Dose Recommended
100
50
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PEDIATRIC MEDULLOBLASTOMA
PBRT CAPTURE RATE 15% 2 30% 3
Number of radiation therapy patients annually in the U.S.1 995,000 995,000
Percent of radiation therapy patients eligible for PBRT 15% 30%
Number of potential PBRT patients in the U.S. 149,250 298,500
Potential PBRT room market* 597 1,194
*Assumed 250 patients treated annually per PBRT room
(1) The American Cancer Society indicates that 1,658,370 people in the United States will be diagnosed with cancer in 2014. Approximately 60% of these people will receive radiation treatment.
(2) “Number of Patients Potentially Eligible for Proton Therapy,” Acta Oncologica 2005; 44; 836-849; Bengt Glimelius, Anders Ask, Et. Al.
(3) “Evaluation of Potential Proton Therapy Utilization in a Market Based Environment,” Tomas Dvorak, M.D. and David E. Wazer, M.D.
ASHS - UNITED STATES PBRT MARKET ANALYSIS
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ASHS - PBRT OPPORTUNITY
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+ Currently only 24 PBRT centers in U.S.
+ 10 PBRT centers under development in U.S.
Particle Therapy Co-Operative Group. Retrieved from http://www.ptcog.ch/
ASHS - PROTON THERAPY STRATEGY
+ Develop single room proton beam radiation therapy centers with major hospitals
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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
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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
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ASHS - MANAGEMENT TEAM
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MANAGEMENT TEAM Years of Healthcare Experience
Ernest A. Bates, M.D. Chairman and CEO 30+
Craig K. Tagawa COO and CFO 30+
Ernest R. Bates V.P. of Sales and Business Development 10+
ASHS - SUMMATION
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+ Supplier of Gamma Knife services since 1991
+ Long-standing alliances with premier cancer centers
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 second half and beyond
+ Negotiating development of additional proton centers
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2 Embarcadero Center, Suite 410 San Francisco, CA 94111 (415) 788-5300 www.ashs.com NYSE MKT:AMS
