American Shared Hospital Services (NYSE MKT:AMS) Q2 2019 Earnings Conference Call Transcript

Aug 13, 2019 • 03:00 pm ET

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American Shared Hospital Services (NYSE MKT:AMS) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon, everyone, and welcome to the Second Quarter June 30, 2019 Financial Results Conference Call for American Shared Hospital Services. At this time, all participants are in a listen-only mode. [Operator Instructions]

I will now turn the call over to Vivian Cervantes with Investor Relations.

Executive
Vivian Cervantes

Thank you, operator. 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 we may make 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, including the Company's annual report on Form 10-K for the year ended December 31,2018, its quarterly report on Form 10-Q for the three months ended March 31, 2019, the definitive proxy statement for the annual meeting of shareholders held on June 21, 2019. The Company assumes no obligation to update the information contained in this conference call.

I would now like to turn the call over to Craig Tagawa, Chief Operating and Financial Officer.

Executive
Craig K. Tagawa

Thank you, Vivian. Good afternoon to all of you, who are joining us today. And thank you for joining our second quarter 2019 earnings conference call. I will walk through our business and operational results, Alexis Wallace, our Controller, will then provide our financial review. Following that, Dr. Bates, Alexis Wallace, Ernie Bates and myself will be open -- will open the call for your questions.

Our proton therapy business continues to post growth with Orlando Health reporting steady increases in proton fractions, which was up 111 or 9% to 1,409 during the quarter. This despite three days of off-time for system maintenance, combined with relatively stable reimbursement, proton therapy revenues increased 3% in the quarter. We continue to note awareness gains on proton therapies, therapeutic benefits across indications. Therefore, we remain actively engaged to advance our development pipeline in this business.

Turning to the Gamma Knife, owing to a labor dispute at one site where no treatments were performed during the quarter, procedures in the second quarter declined by 16 or 4% to 361 versus the comparable year-ago period. The site in question began treating patients again in July 2019. We also saw some pressure from the higher payor mix of Medicare patients, which impacted our retail sites. Excluding these, and with the benefit from a contractual adjustment to Medicare reimbursement at one site, Gamma Knife revenues were up 0.2% quarter-over-quarter.

We remain optimistic about increased Gamma Knife procedure volumes going forward with the one-time business interruptions settled and as we look forward to normalized clinical turnover in certain sites. We also continue to make progress with the upgrade of at least three of our Gamma Knife units to Icon in the next three -- six to nine months,