How does the company reconcile its stated long-term value creation strategy with the third amendment's clause requiring the pursuit of a sale of all or part of ASHS assets?

Ray Stachowiak stated that the company is pursuing 'any and all options' and that the credit agreement provides a 12-month extension to June 30, 2027, for the $15.5 million loan (expected to be $13.3 million by then). He expressed confidence in finding a solution to refinance the indebtedness, citing strong cash generation ($4.4 million in H1 FY26) and cash balance ($6.8 million plus $2 million deposit). “We're looking at any and all options as I would expect our shareholders to expect us to do. So we're pursuing any and all options, and we're confident to reach a solution.”

What was the nature of the $909,000 accounts receivable charge, why did it take so long to identify, and could it happen again?

Ray Stachowiak explained the charge related to receivables through May 31, 2025, from several insurance carriers, where a reduction in viability was expected. He acknowledged they were 'not proud of it' but did not provide further specific details on the cause or recurrence, beyond stating they are focused on improving AR and billing systems. “For the most part, it comes from the insurance carriers that we have relationships with. ... We're not proud of it, Tony. We're not proud of it, but it is what it is.”

AMS

American Shared Hospital Services (AMS) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Health Care· Aug 13, 2026

Source: earnings call transcript

Executive summary

American Shared Hospital Services Q2 FY26 — Strong Revenue Growth and Cash Generation

American Shared Hospital Services delivered strong Q2 FY26 results, driven by significant revenue growth in Direct Patient Services and robust cash generation from operations. The company is strategically transforming from equipment leasing to a diversified radiation oncology platform, focusing on utilization and international expansion. While addressing balance sheet challenges and a notable credit loss charge, management remains confident in the underlying business strength and long-term value creation.

Highlights

Total revenue increased 19.2% year-over-year to $8.4 million in Q2 FY26.
First half revenue increased 17.7% to over $15.5 million.
Direct Patient Services segment revenue increased 40% to $4.9 million in Q2 FY26.
Operating activities generated $4.4 million of cash during the first half of FY26.
Cash balance increased over 80% since year-end 2025 to $6.8 million.

Concerns

Adjusted EBITDA decreased to $1.3 million in Q2 FY26 from $1.7 million in Q2 FY25.
Recorded a $909,000 allowance for credit losses against Rhode Island receivables prior to May 31, 2025.
Incurred $285,000 in legal and professional costs related to negotiating the third amendment to the credit agreement.
Domestic Gamma Knife leasing activity was impacted by the expiration of one customer agreement in 2025.
Ongoing need to strengthen the balance sheet and pursue longer-term capital solutions for the $15.5 million loan due June 30, 2027.

Guidance & targets

Category	Target	Timeline	Confidence
Fifth Third Bank Loan Maturity	June 30, 2027 high materiality	Q2 FY27	High
Fifth Third Bank Loan Balance	$13.3 million high materiality	Q2 FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Direct Patient Services Revenue increased primarily due to higher patient procedure volumes at Rhode Island radiation oncology centers and strong performance from Peru and Pueblo, Mexico facilities. For the first half of 2026, revenue increased 35% to approximately $8.9 million.	$4.9 million	40%	—	—
Medical Equipment Leasing Overall revenue remained relatively stable compared to the prior year. The expiration of a domestic Gamma Knife customer agreement in 2025 was offset by strength in proton beam radiation therapy.	—	relatively stable	—	—
Proton Beam Radiation Therapy (within Medical Equipment Leasing) Revenue increased due to higher treatment volumes and improved reimbursement levels. First half revenue was approximately $4.3 million.	$2.3 million	22%	—	—
Gamma Knife (within Medical Equipment Leasing) Revenue increased modestly as procedure volumes recovered at international treatment centers following the Esprit upgrade in Lima.	modestly increased	—	—	—

Deals & partnerships

Fifth Third Bank Third amendment and forbearance agreement to credit facility Extended maturity to June 30, 2027

The agreement provides a defined framework for the company to focus on operating strategy while pursuing longer-term capital solutions.

Hospital San Javier Partnership to upgrade Gamma Knife center

Partnering to upgrade their Gamma Knife center in Guadalajara, Mexico, leveraging an experienced physician and institutional platform.

Risks & headwinds

Balance sheet and capital structure next 10 months

$15.5 million loan due to Fifth Third Bank by June 30, 2027

Mitigation:Secured a 12-month extension of loan maturity and $2 million in subordinated financing; pursuing any and all options for refinancing.

Allowance for credit losses Q2 FY26 (for prior period receivables)

$909,000 charge against Rhode Island receivables

Mitigation:Focused on improving accounts receivable and billing systems to prevent future occurrences.

Domestic Gamma Knife customer agreement expiration 2025 (reflected in current period)

Impacted domestic leasing volumes

Mitigation:Offset by continued strength in proton beam radiation therapy business and international Gamma Knife growth.

What to watch in Q3 FY26

Fifth Third Bank loan repayment progress

next quarter

Current $15.5 million due by June 30, 2027 (expected to be $13.3 million after payments)

Target Progress on refinancing or finding a solution

Why it matters

Resolving the debt situation is critical for long-term financial stability and strategic execution, as the company is exploring all options.

We owe Fifth Third about $15.5 million by the end of June of next year. It will be down to about $13.3 million. If you look at our business, we generated $4.4 million of cash in the first 6 months of this year... I think we're going to be able to find a solution over this period of time to refinance our indebtedness with Fifth Third Bank.

Find out whether AMS delivers this. Inve re-checks your case every morning.

Q&A highlights

Will the company have the same ability to control and drive procedure volume increases in international facilities as it does in Rhode Island, given the success seen there?

Executive Chairman Ray Stachowiak confirmed that they are growing volumes at international sites, citing substantial increases in Peru post-Esprit upgrade and in Puebla, Mexico. He also highlighted the upcoming Gamma Knife upgrade in Guadalajara, Mexico, and emphasized that greater control and expanding hospital partnerships are key to their business model.

“Yes, we will be growing and have been growing our volumes at our international sites. Peru has seen substantial volume increases, especially since we upgraded their technology to the latest and greatest Esprit model, Gamma Knife.”

asked by Marla Marin · answered by Raymond Stachowiak

2 min read 6 chapters

Detailed narrative

Strategic Transformation and Diversification

American Shared Hospital Services is undergoing a strategic transformation, shifting from a primary dependence on equipment leasing to a more diversified radiation oncology platform. This new model integrates direct patient care operations, hospital partnerships, international treatment centers, Gamma Knife leadership, and proton beam radiation therapy. This diversification aims to create a broader, more resilient operating platform with multiple avenues for growth.

Improving Utilization and Operating Leverage

A key focus for the company is improving utilization across its network, which is seen as the single greatest driver of long-term value creation. The Rhode Island centers, Orlando proton beam therapy partnership, and the Peru Gamma Knife center have all demonstrated higher patient volumes and improved operating performance.

Management expects that as procedure volumes increase, the significant operating leverage in their facilities will translate incremental revenue into improved profitability and stronger cash generation.

International Expansion and Upgrades

The company is actively pursuing international growth opportunities, particularly in Latin America. The Puebla, Mexico radiation therapy center continues to perform strongly, and the Gamma Knife center in Peru has seen substantial volume increases following an Esprit upgrade completed in 2025. Future plans include a Gamma Knife upgrade in Guadalajara, Mexico, in partnership with Hospital San Javier, leveraging an established market and clinical partner.

Capital Structure and Liquidity Enhancement

Subsequent to the quarter end, the company completed a third amendment and forbearance agreement with Fifth Third Bank, extending the maturity of its loans to June 30, 2027. Additionally, a new company formed by Executive Chairman Ray Stachowiak invested $2 million in subordinated financing.

These actions are intended to enhance liquidity, provide financial flexibility, and allow management to focus on executing its operating strategy while pursuing longer-term capital solutions.

Rhode Island Growth Initiatives

In Rhode Island, the company is advancing development opportunities stemming from previously approved certificates of need. These projects include plans for a new radiation therapy center in Bristol and a proton beam radiation therapy center in Johnston. These initiatives are expected to significantly expand the company's presence in one of its strongest operating markets and are considered an important component of its long-term growth strategy.

Accounts Receivable Management

The company recorded a $909,000 allowance for credit losses against Rhode Island receivables that originated prior to May 31, 2025, primarily from insurance carriers. Management acknowledged this charge and stated that they have been focused on improving accounts receivable and billing systems, indicating good progress in that area to better position the company going forward.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.