Zacks Small Cap Analysis – AMS: Income Momentum, Footprint Growth, Prices Abating All Bode Properly – Cyber Information

By M. Marin

NYSE:AMS

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 offers stereotactic radiosurgery tools 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 bold enlargement and income diversification technique. AMS just lately launched a enterprise mannequin to personal and function tools itself at choose places, 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 presently 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 count on sturdy section 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 in regards to the firm’s outlook. Along with the pending Rhode Island transaction, the corporate additionally has a brand new website 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 via each geographic enlargement and by creating or increasing current and new enterprise traces to assist medical middle prospects that need to provide superior radiation remedy applied sciences involving expensive tools. 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 tools, AMS has indicated that it might contemplate a direct retail community of PBRT footprint when/the place it may, though the corporate may also proceed to have interaction in discussions with medical facilities for partnership settlement through the standard enterprise mannequin.

Gamma Knife upgrades and de novo installations are additionally anticipated. AMS just 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 added new enterprise alternatives.

Sturdy stability sheet to assist progress, plus stable money circulation era and entry to capital

The corporate has a administration group with in depth business associated expertise to assist its progress technique and a powerful stability sheet. AMS ended December with $13.8 million in money and equivalents and amended its credit score facility in 1Q24 to realize elevated monetary flexibility. The ability features a $7 million revolving line of credit score. The corporate additionally constantly generates constructive money circulation, which has averaged about $8 million every year since 2013.

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