ASHS retires debt to move out of red

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.