SAN FRANCISCO - American Shared Hospital Services (NYSE American: AMS), a provider of technology solutions for advanced radiation therapy, announced a joint venture with Hospital San Javier to establish a Gamma Knife treatment facility in Guadalajara, Mexico. AMS will hold a 70% stake in the joint venture, while Hospital San Javier will have a 30% interest.
The joint venture will upgrade the existing Gamma Knife® Perfexion™ system at Hospital San Javier to Elekta's latest model, Esprit, which allows for superior visualization and efficient workflow through remote treatment planning and accessibility. The Gamma Knife radiosurgery is noted for its precision in targeting brain tumors and lesions with minimal impact on surrounding healthy tissue.
Hospital San Javier is a pioneer in Gamma Knife treatments in Mexico, having started operations in 1994. The facility will be staffed by a dedicated administrative and medical team. The upgrade to the Esprit system is expected to offer more personalized and patient-friendly treatments, enabling patients to return home the same day and resume normal activities soon after.
Ray Stachowiak, Executive Chairman and CEO of American Shared Hospital Services, emphasized the joint venture's alignment with the company's global expansion plans and its significance as the second venture in Mexico. The company is also set to begin treatments at its AB Radiocirugia y Radioterapia facility in Puebla with the Elekta Linear Accelerator Versa HD.
Ernest R. Bates, VP of Sales and Business Development at AMS, highlighted the strategic importance of the joint venture, noting that it will be one of only two Gamma Knife facilities serving Mexico's population of 130 million. The partnership aims to provide access to noninvasive brain treatments in a major Latin American market.
AMS's JV partner, Ms. Elvia Zazueta from Hospital San Javier, expressed enthusiasm for the partnership and the technological advancements the Esprit system will bring to their hospital.
This joint venture represents an expansion of American Shared Hospital Services' international presence, which already includes Gamma Knife centers in Peru and Ecuador. The company collaborates with major global Original Equipment Manufacturers to offer a variety of cancer treatment systems and software.
The information reported is based on a press release statement from American Shared Hospital Services.
In other recent news, American Shared Hospital Services reported notable developments in its financial performance and expansion efforts. The company announced a 5.9% increase in total revenue for Q1 2024, reaching $5.2 million, and a 12.3% rise in gross margin to $2.1 million. Despite these gains, it reported an operating loss of $85,000 and a decrease in net income to $119,000.
In terms of expansion, American Shared Hospital Services acquired a majority interest in three radiation therapy centers in Rhode Island and is pursuing growth in Latin America. However, the startup of the Puebla, Mexico location and new radiation therapy centers in Rhode Island has been delayed due to regulatory issues and construction delays.
At its recent Annual Meeting of Shareholders, the company achieved a quorum with 73.31% of outstanding shares represented. Four nominees were elected to the Board of Directors, and the company's executive compensation and the ratification of the independent registered public accounting firm were approved.
These are recent developments and reflect the company's ongoing efforts to enhance its financial performance and expansion. The company ended the quarter with over $13 million in cash and equivalents and a shareholders' equity of $22.84 million, indicating a solid financial position.
InvestingPro Insights
As American Shared Hospital Services (AMS) forges ahead with its international expansion strategy, the company's financial data echoes a story of growth and stability. According to the latest metrics from InvestingPro, AMS has demonstrated a revenue growth of 9.04% over the last twelve months as of Q1 2024, with a quarterly revenue growth of 5.91% in Q1 2024. This uptick in revenue is a testament to the company's ongoing efforts to broaden its reach and enhance its service offerings.
AMS's focus on technological advancements and strategic partnerships is mirrored in its solid financial performance, with a gross profit margin of 67.51% over the same period. The company also reported an operating income, adjusted at 2.22M USD, which translates to a healthy operating income margin of 10.26%. These figures indicate a robust operational efficiency that could support AMS's ventures, such as the new joint venture with Hospital San Javier.
InvestingPro Tips also shed light on key aspects of AMS's financial health. Analysts predict that the company will maintain profitability this year, a continuation of the trend observed over the last twelve months. This is crucial as AMS invests in upgrades like the Elekta's Esprit system and expands its global footprint. However, it is worth noting that the valuation implies a poor free cash flow yield, which investors may consider when evaluating the company's financial standing. Additionally, AMS operates with a moderate level of debt, a factor that could influence its financial flexibility in the future.
For those interested in a deeper dive into AMS's financials and strategic positioning, InvestingPro offers additional insights and tips. There are currently 5 more InvestingPro Tips available, which can be accessed through the InvestingPro platform. To enrich your investment analysis, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
The joint venture in Mexico is just one piece of the puzzle for AMS, and with a next earnings date on August 14, 2024, investors and analysts alike will be keen to see how the company's strategic initiatives are reflected in its financial outcomes.
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