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ASHS retires debt to move out of red

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Shared services provider American Shared Hospital Services enjoyeda profitable 1995, thanks to a $19.8 million extraordinary gainposted as part of its restructuring effort. The firm still reportedan operating loss for the year, however. San

Shared services provider American Shared Hospital Services enjoyeda profitable 1995, thanks to a $19.8 million extraordinary gainposted as part of its restructuring effort. The firm still reportedan operating loss for the year, however.

San Francisco-based American Shared struggled under a heavydebt load in the early 1990s, and the firm began to restructureits debt and scanner leases in 1994 (SCAN 4/20/94). As part ofthat effort, American Shared exchanged $26 million in outstandingdebt owed to four creditors for new stock in the company, givingthem a 25% equity position. Founder Dr. Ernest Bates retains ownershipof 40% of American Shared.

The $19.8 million gain came from retiring that debt, accordingto Richard Magary, senior vice president of administration. Asa result, American Shared has reduced the principal on its seniorsubordinated notes from $30 million to less than $1 million. Therestructuring was completed after American Shared's shareholdermeeting in October.

For the year, American Shared posted revenues of $34.1 million,down 12% from the $38.5 million registered in 1994. The declinewas attributed to American Shared's sale of several contractsfor respiratory therapy management services.

Net income for the year stood at $7.3 million, compared witha loss of $5.2 million in 1994. In addition to the debt extinguishmentgain, American Shared wrote down $4.4 million worth of equipmentand intangible assets.

While American Shared would have posted a loss for the yearwithout the extraordinary items, the company said MRI revenueswere 11% above those in the previous year, and it had 40 morecustomers at the end of 1995 than in 1994.

In other news, American Shared said that it has begun a newcardiac cath lab service at Integris Bass Baptist Health Centerin Enid, OK. American Shared will equip and operate the facilityon a fee-for-service basis for the next seven years.

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