By M. Marin
READ THE FULL AMS RESEARCH REPORT
Momentum accelerating, with Rhode Island most cancers facilities, plus new Linear Accelerator in Mexico representing new income sources…
Based in 1983, American Shared Hospital Providers (NYSE:AMS), which supplies stereotactic radiosurgery gear and superior radiation remedy remedy methods to deal with most cancers sufferers, reported 2023 outcomes final week and supplied a enterprise replace. AMS has launched into an formidable enlargement and income diversification technique. AMS lately launched a enterprise mannequin to personal and function gear itself at choose areas, an initiative that’s anticipated to spice up income progress. The settlement to accumulate controlling 60% curiosity in three radiation remedy most cancers facilities in Rhode Island is anticipated to develop the direct footprint (AMS additionally at present owns most cancers care remedy facilities in Peru, Ecuador and Mexico) and contribute annual income of roughly $9 million to $10 million. As the corporate continues to develop the direct retail footprint, we anticipate robust phase progress to proceed.
With income progress accelerating in 4Q23, the pending acquisition of three Rhode Island most cancers facilities anticipated to shut this month and non-recurring prices anticipated to fall in 2024, we’re optimistic concerning the firm’s outlook. Along with the pending Rhode Island transaction, the corporate additionally has a brand new web site in Puebla, Mexico with a Versa HD Linear Accelerator that’s slated to start treating sufferers in 2Q24 and anticipated to provide a brand new income stream as soon as affected person remedies start.
AMS targets driving gross sales quantity and income progress by each geographic enlargement and by creating or increasing present and new enterprise strains to assist medical heart prospects that wish to provide superior radiation remedy applied sciences involving expensive gear. For instance, the corporate’s Proton Beam Radiation Remedy (PBRT) enterprise line, is a comparatively new enterprise for AMS. Income for the PBRT system at Orlando Well being elevated 13.2% y/y in 2023 to $10.1 million. Reflecting the obvious advantages of PBRT remedy and economics of proudly owning the gear, AMS has indicated that it could take into account a direct retail community of PBRT footprint when/the place it may possibly, though the corporate may even proceed to have interaction in discussions with medical facilities for partnership settlement through the normal enterprise mannequin.
Gamma Knife upgrades and de novo installations are additionally anticipated. AMS lately prolonged 4 Gamma Knife contracts that have been set to run out. The corporate has indicated that it’s engaged in a number of discussions for extra new enterprise alternatives.
Sturdy stability sheet to assist progress, plus strong money circulate era and entry to capital
The corporate has a administration workforce with intensive trade associated expertise to assist its progress technique and a robust stability sheet. AMS ended December with $13.8 million in money and equivalents and amended its credit score facility in 1Q24 to achieve elevated monetary flexibility. The ability features a $7 million revolving line of credit score. The corporate additionally constantly generates optimistic money circulate, which has averaged about $8 million every year since 2013.
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