American Shared Hospital Services Reports 2008 Second Quarter Results

SAN FRANCISCO--(BUSINESS WIRE)--AMERICAN SHARED HOSPITAL SERVICES (AMEX:AMS), a leading provider of turnkey technology solutions for advanced radiosurgical and radiation therapy services, today announced financial results for the second quarter and first half of 2008.

Second Quarter Results

For the three months ended June 30, 2008, revenue increased 4% to $5,102,000 when compared to revenue of $4,910,000 for the second quarter of 2007, and increased 8% when compared to revenue of $4,725,000 for the first quarter of 2008. Net income for the second quarter of 2008 was $213,000, or $0.04 per diluted share. This compares to net income for the second quarter of 2007 of $280,000, or $0.06 per diluted share, and to net income for the first quarter of 2008 of $156,000, or $0.03 per diluted share.

"This sequential improvement in our operating performance speaks to the quality of our portfolio of radiosurgical and radiation therapy assets. It also shows how our strategy to use AMS' creative financing solutions to make proton beam radiation therapy (PBRT) systems, Leksell Gamma Knife Perfexion^TM systems, IGRT systems and other next-generation devices for radiation oncology delivery available and affordable to our clinical partners and their patients has put us on the path for long-term growth," said Chairman and Chief Executive Officer Ernest A. Bates, M.D.

The increase in second quarter revenue reflected a 12% increase in same-unit volume versus prior year at the Company's 18 Gamma Knife centers, as well as the contribution of the IGRT and related equipment and services AMS began supplying a customer in September 2007, recent upgrades to several existing Gamma Knife units, and the impact of the installation of three advanced Leksell Gamma Knife Perfexion^TM systems that began treating patients in last year's fourth quarter, this year's first quarter, and this year's second quarter, respectively. "Our newest customer, USC University Hospital in Los Angeles, began treating patients on its Perfexion system in July. This site will contribute to our results beginning in the third quarter," Dr. Bates said.

Cash flow, as measured by earnings before interest, taxes, depreciation and amortization, increased to $2,657,000 for this year's second quarter and $5,025,000 for this year's first half, compared to EBITDA of $2,381,000 and $4,634,000 for the second quarter and first six months of 2007, respectively.

First Half Results

For the six months ended June 30, 2008, revenue increased to $9,827,000 compared to $9,659,000 for the first six months of 2007.

Net income for the first six months of 2008 was $369,000, or $0.07 per diluted share. This compares to net income for the first six months of 2007 of $505,000, or $0.10 per diluted share.

Balance Sheet Highlights

At June 30, 2008, AMS reported cash, cash equivalents, and short and long-term securities of $10,352,000. At June 30, 2007, AMS reported cash, cash equivalents, and short and long-term securities of $10,497,000. Shareholders' equity at June 30, 2008 was $19,980,000, or $3.97 per outstanding share. This compares to shareholders' equity at June 30, 2007 of $19,071,000, or $3.80 per outstanding share.

Earnings Conference Call

American Shared has scheduled a conference call at 1:00 p.m. PT (4:00 p.m. ET) today. To participate in the live call, dial (888) 895-5479 at least 5 minutes prior to the scheduled start time. A simultaneous WebCast of the call may be accessed through the Company's website, www.ashs.com, or through CCBN, www.earnings.com (individual investors) or www.streetevents.com (institutional investors). A replay will be available for 30 days at these same internet addresses, or by calling (888) 843-8996, pass code 22335173.

About AMS

American Shared Hospital Services provides turnkey technology solutions for advanced radiosurgical and radiation therapy services. AMS is the world leader in providing Gamma Knife radiosurgery equipment, a non-invasive treatment for malignant and benign brain tumors, vascular malformations and trigeminal neuralgia (facial pain). The Company also offers the latest IGRT and IMRT systems, as well as its proprietary Operating Room for the 21st Century® concept. Through its preferred stock investment in Still River Systems, AMS also plans to complement these services with the Monarch 250^TM proton beam radiation therapy (PBRT) system, which has not yet been approved by the FDA.

Safe Harbor Statement

This press release 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 and radiation therapy businesses, the risks of developing The Operating Room for the 21st Century program, and the risks of investing in a development-stage company, Still River Systems, Inc., without a proven product. 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, 2007, the Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, and the definitive Proxy Statement for the Annual Meeting of Shareholders held on June 20, 2008.

AMERICAN SHARED HOSPITAL SERVICES
Selected Financial Data
(unaudited)
		Summary of Operations Data
		Three Months Ended								Six Months Ended
		June 30,								June 30,
			2008				2007				2008				2007
Medical services revenue		$	5,102,000			$	4,910,000			$	9,827,000			$	9,659,000
Costs of revenue			2,759,000				2,464,000				5,415,000				4,983,000
Gross Margin			2,343,000				2,446,000				4,412,000				4,676,000
Selling & administrative expense			1,129,000				1,209,000				2,236,000				2,370,000
Interest expense			627,000				470,000				1,195,000				937,000
Operating income			587,000				767,000				981,000				1,369,000
Interest & other income			86,000				100,000				233,000				218,000
Minority interest expense			(255,000	)			(335,000	)			(491,000	)			(635,000	)
Income before income taxes			418,000				532,000				723,000				952,000
Income tax expense			205,000				252,000				354,000				447,000
Net income		$	213,000			$	280,000			$	369,000			$	505,000
Earnings per common share
Basic		$	0.04			$	0.06			$	0.07			$	0.10
Assuming dilution		$	0.04			$	0.06			$	0.07			$	0.10
		Balance Sheet Data
		June 30,
			2008				2007
Cash and cash equivalents		$	8,587,000			$	5,012,000
Securities-current maturities		$	1,765,000			$	2,315,000
Current assets		$	16,231,000			$	12,799,000
Securities-long term		$	0			$	3,170,000
Investment in preferred stock		$	2,617,000			$	2,000,000
Total assets		$	64,571,000			$	53,775,000
Current liabilities		$	14,397,000			$	15,198,000
Shareholders' equity		$	19,980,000			$	19,071,000