By M. Marin

NYSE:AMS

READ THE FULL AMS RESEARCH REPORT

Building on strong traditional core business that generates strong, steady cash flow …

Founded in 1983, American Shared Hospital Services (NYSE:AMS) has an established business and revenue streams developed over its 40-year operating history. AMS provides stereotactic radiosurgery equipment and advanced radiation therapy treatment systems to treat cancer patients. The company’s core business generates steady positive annual cash flow and forms a strong base on which AMS is adding new business lines and revenue streams to fuel incremental grow. Specifically, under a realigned management team, the company has embarked on an expansion strategy aimed at diversifying and expanding its product portfolio, entering new geographies, boosting revenue, and developing new business lines within its focus area along the cancer care continuum illustrated below, including taking stakes in certain treatment centers to capture more of the expected profits and upside.

Traditional business model can support new product lines and growing operations

AMS has embarked on a growth strategy aimed at boosting and diversifying revenue, expanding its product portfolio, entering new geographies, and developing new related business lines. The company's most important product has been the Leksell Gamma Knife®, a non-invasive advanced type of radiosurgery that has multiple advantages over traditional surgery, but which requires a substantial upfront capital investment. AMS provides financial and other solutions that enable medical centers to offer these and other costly radiation therapy services. The company conducts its Gamma Knife operations through a JV (AMS holds 81%), with the manufacturer holding 19%. The company has developed a partnership model with medical center partners that it expects will facilitate its expansion into other related businesses and products.

Expanding into new business lines such as PBRT, Linear Accelerator, others and International operations …

For example, with the installation of its first Proton Beam Radiation Therapy (PBRT) device in 2016, AMS began to diversify its revenue. PBRT revenue represented about 45% of the total in 2022 and the company targets further diversification, including expanding PBRT and other newer business lines. Moreover, with international expansion in mind, AMS has Gamma Knife and other operations in Peru and Ecuador and a new site in Mexico with a Versa HD Linear Accelerator. AMS expects to continue expanding its footprint over time both internationally and domestically.