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    American Shared Hospital Services (AMS)

    Q2 2024 Earnings Summary

    Reported on Jan 22, 2025 (Before Market Open)
    Pre-Earnings Price$3.04Last close (Aug 13, 2024)
    Post-Earnings Price$3.02Open (Aug 14, 2024)
    Price Change
    $-0.02(-0.66%)

    What went well

    • Strong Pipeline of Opportunities: Management indicates they have "probably a bigger, better pipeline than we've ever had," suggesting potential for significant future growth.
    • Accretive Rhode Island Acquisition: AMS acquired assets valued at approximately $8 million for a purchase price of approximately $3 million, resulting in an immediate gain of $4.9 million pre-tax and $3.7 million after-tax. This demonstrates the company's ability to execute highly value-accretive deals.
    • Expanding Retail Segment with International Growth: The company is focusing on expanding its retail segment, including new centers in Puebla and Guadalajara, Mexico, which may provide higher growth potential compared to the leasing segment.

    What went wrong

    • Management uncertainty due to the CEO passing away earlier this year: The company "took a little bit of a step back when Peter Gaccione, our CEO, passed away earlier this year."
    • Delays in obtaining regulatory approval for new projects: There are continued delays in scheduling the hearing for the Certificate of Need (CON) application for the projected proton beam facility in Rhode Island: "We continue to have delays in scheduling the hearing for the CON."
    • Potential operational disruptions with limited transparency: When asked about possible service interruptions at the Sacred Heart venue due to equipment upgrades, the executive was unwilling to provide details: "I'm not at liberty to discuss any individual site."

    Q&A Summary

    1. Rhode Island Acquisition Timing
      Q: Did the quarter include a full 3 months from Rhode Island?
      A: Management confirmed that the acquisition of the Rhode Island centers concluded in the first or second week of May, so the reported quarter did not include a full three months from these assets. Future quarters will reflect the full contribution from the Rhode Island centers.

    2. Financial Gain from Rhode Island Deal
      Q: What are the financial details from the Rhode Island acquisition?
      A: Management reported they paid approximately $3 million to acquire assets with a fair market value of about $8 million, resulting in a gain of around $4.9 million. This gain was recorded as $3.7 million after tax, strengthening their financial position.

    3. CON Application for Proton Beam
      Q: Has the timeline changed for the CON application in Rhode Island?
      A: Management noted ongoing delays in scheduling the hearing for the Certificate of Need (CON) application for the projected proton beam but expect to have a hearing soon and do not anticipate any negative feedback from the process.

    4. Strong Sales Pipeline
      Q: Can you provide more color on the strong sales pipeline?
      A: Management stated they have a bigger and better pipeline than ever, keeping a close watch on the marketplace which led to opportunities like the Rhode Island acquisition. Despite previous setbacks, they have strengthened their management team and are actively pursuing new projects.

    5. Focus on Retail Over Leasing
      Q: Are you focusing more on direct business over leasing?
      A: Management is focusing on both the leasing and retail segments but is seeing more opportunities in the retail segment, as evidenced by the Rhode Island acquisition and new centers in Puebla and Guadalajara, Mexico.

    6. Service Interruptions at Sacred Heart
      Q: Will equipment upgrades at Sacred Heart cause disruptions?
      A: Management declined to discuss specifics about any individual site.

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