Welcome to the Second Quarter 2020 Earnings Conference Call. My name is Vanessa, and I'll be your operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Stephanie Prince. Ms. Prince, you may begin.

Thank you, Vanessa, and thank you to everyone joining us today. Before turning the call over to management, I would like to make the following remarks concerning forward-looking statements. Please note that various remarks that may be made on this conference call about future expectations, plans and prospects for the company constitute forward-looking statements for the purposes of safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may vary materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's filings with the SEC. This includes the company's annual report on Form 10-K for the year ended December 31, 2019, Form 10-Q for the period ended March 31, 2020, and the definitive proxy statement for the annual meeting of shareholders that was held on June 26, 2020. The company assumes no obligation to update the information contained in this conference call. I would now like to turn the call over to Ray Stachowiak, Interim President and CEO. Ray?

Thank you, Stephanie. Good afternoon, everyone, for joining us today to our second quarter 2020 earnings conference call. I'll begin with some opening remarks. And then Craig Tagawa, our COO and CFO, will go through the business and operational results. Alexis Wallace, our controller, will then provide a financial review. Following that, Craig Alexis, Ernie Bates and I will open the call for your questions. The second quarter was tough in many ways for many companies and AMS was no exception. People delayed their treatments more than expected, although volumes have bounced back in July. Craig is going to talk more about the details in a few minutes. In mid-June, we were excited to announce that we completed the acquisition of approximately 98% of the total outstanding shares of Gamma Knife Center Ecuador SA from its majority shareholders. GKC Ecuador is a well-established Gamma Knife operation founded in 2009 as a private clinic to introduce advanced stereotactic radiosurgery into Ecuador. It was the first health care institution to provide this technology in Ecuador and continues to operate the only Gamma Knife Center in the country. GKC Ecuador owns its facilities which are adjacent to one of Ecuador's leading health care providers and is located in Ecuador's largest city, Guayaquil, which has a population of approximately 2.5 million people. The center is also not far from our Gamma Knife Center in Peru. Although Ecuador has been hard hit by the pandemic, beyond that, we think there's a large opportunity to increase patient volumes, by expanding referral sources, increasing the number of payors and public sector outreach. We'll be upgrading their Gamma Knife model 4C to a Gamma Knife Perfexion in late 2020 or early 2021. It will be one of the few in all of South America. The gold standard Perfexion system can drive higher patient volume by allowing for greater ease of use, faster treatment times and treatment of a wider range of anatomical structures. This acquisition meshes well with our strategy to diversify our business model and expand further into international markets. We paid a good price of 1x historical revenue of $2 million exclusive of subsequent working capital payments, which will be a nice addition to our revenue base. In sum, this is an accretive acquisition and a great fit for AMS. Thank you for your continued support of our company. I've got great belief in AMS and its opportunities for growth. I'll now turn over the call to Craig for the second quarter operational review. Craig?

Thank you, Ray, and good afternoon, everyone. COVID-19's impact was greater than we had expected over the full 3 months of the second quarter of both the Gamma Knife and PBRT sides of our business. Gamma Knife revenue declined 28.1% to $2,590,000 compared to the second quarter of 2019 due to the impact of COVID-19 on volumes and lower average reimbursement at our retail sites compared to the rates we received in the same period last year. Gamma Knife procedures declined by 3.1% to 350 from 361 in the second quarter of 2019, also as a result of the COVID-19 pandemic. Gamma Knife volumes for centers in operation decreased 8.9% from Gamma Knife volumes for those same centers during the same period of the prior year, primarily due to the impact of the COVID-19 pandemic. Proton therapy revenue of $1,401,000 was essentially even compared to the second quarter of last year. Total proton therapy fractions in the second quarter were 1,351, a decrease of 4.1% compared to 1,409 proton therapy fractions in the second quarter of 2019. The decrease from the first quarter was 19.3% when we did 1,676 fractions in the first quarter of this year. The decrease for the second quarter also primarily resulted from the impact of the COVID-19 pandemic. Gross margin for the second quarter of 2020 decreased to 22.7% of revenue compared to 33.3% of revenue for the second quarter of 2019. The revenue decline and the high fixed cost nature of our business combined to result in a net loss in the second quarter of $483,000 compared to net income of $31,000 for the second quarter of 2019. The decrease was due to the lower Gamma Knife revenue as well as higher expenses from the pandemic, the switch to a virtual annual meeting and…

Thank you, Craig, and good afternoon, everyone. Before I begin my prepared remarks, I'd like to call your attention to our second quarter earnings press release that was issued earlier this morning. If you need a copy, it can be accessed on our website at ashs..com at Press Releases under the Investors tab. Now turning to our second quarter results. For the 3 months ended June 30, 2020, total revenue decreased 23.2% to $3,991,000 compared to revenues of $5,197,000 for the second quarter of 2019. We had no revenue from the IGRT equipment this quarter compared to $188,000 in the second quarter of 2019 as the equipment was fully depreciated and sold after expiration of the company's contract on December 31, 2019. Second quarter revenue for the company's Proton Therapy system installed at Orlando Health in Florida decreased 0.6% to $1,401,000 compared to revenue of the -- for the second quarter of 2019 of $1,409,000. Revenue for the company's Gamma Knife operations decreased 28.1% to $2,590,000 for the second quarter of 2020 compared to $3,600,000 for the second quarter of 2019. The decline was due to lower volumes as well as lower average reimbursement at the company's retail sites due to a higher mix of Medicare patients. Gross margin for the second quarter of 2020 decreased to $907,000, or 22.7% of revenue compared to gross margin of $1,729,000, or 33.3% of revenue for the second quarter of 2019. Net loss for the second quarter of 2020 was $483,000, or $0.08 per share. This compares to net income for the second quarter of 2019 of $31,000, or $0.01 per share. Fully diluted weighted average common shares outstanding were 6,077,000 and 5,906,000 for the second quarter of 2020 and 2019, respectively. Adjusted EBITDA, a non-GAAP financial measure was $1,437,000 for the second quarter of 2020 compared to $2,465,000 for the second quarter of 2019. The decline was primarily due to the net income loss as well as lower depreciation and amortization due to the company's IGRT equipment, which became fully depreciated in the fourth quarter of 2019. At June 30, cash, cash equivalents and restricted cash was $4,409,000 compared to $1,779,000 at December 31, 2019. Shareholders' equity at June 30, 2020, was $30,973,000 or $5.44 per outstanding share. This compares to shareholders' equity at December 31, 2019, of $31,811,000 or $5.47 per outstanding share. This concludes the formal part of our presentation. Vanessa, we'd like to now turn the call back over to you for questions.

[Operator Instructions] The first question is from Anthony Marchese.

Ray, congratulations on taking over the helm. I have a question for you. You've been a long-time shareholder. I believe your cost base is in the stock is probably $1 higher than where it is. You've been on the Board. The stock currently trades at 40% of book value, perhaps tangible book is a little bit less, let's call it, $5. I guess I'm curious from your standpoint, as a shareholder, as a Board member now as acting CEO, what is it that you think that the market is either saying or missing? It's hard to find the stock that isn't going out of business. And clearly, you're not that would be trading at this level of book value or this percentage of book value. So I'm just curious, as -- now that you've been there a little bit, your perception as to what it's going to take to get this to at least trading, which would be a double at least to tangible book. Hello?

Anthony, sorry, I was on mute for a second.

Okay. That's okay. I thought it was my phone.

No, sorry about that. Anthony, thanks for your question. I'm glad you brought that up. As you mentioned, I've been a long-time holder of stock in American Shared Hospital Services. And one thing that's attracted my investment, quite frankly, is this issue of tangible book value being far in excess of our market value. And it's not often that there's companies with $25 million to $30 million plus of tangible equity, that doesn't have a market value in excess of its book value. I'm normally used to seeing that ratio, market value over book value greater than one. And it's certainly not in our case. That's one of the reasons I've invested. Why has it been that way? I can only speculate for some of the reasons. We've not had a sustained period of earnings. And our performance, I'll say, has been choppy over the last several years. And I think there's opportunity to correct that. I think it will take some time. But I am kind of bullish on this that we can do that. Most companies that are publicly traded have a price-to-earnings ratio that gets monitored. And is it out of whack, how different is it, that P/E ratio from the rest of the marketplace? Well, it's hard to have a P/E ratio when the denominator is 0. So I think one of the first things we got to be focused on is how we can begin turning some profits. That's my answer.

There are no further questions at this time.

Okay. I'd like to thank everyone for joining us today. Let us know if you have any questions before our third quarter conference call in mid-November. Stay safe, stay well. Have a great weekend. Goodbye.

Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now disconnect.