Good afternoon, and welcome to the American Shared Hospital Services Third Quarter 2020 Earnings Conference Call. My name is Brandon, and I'll be your operator for today. [Operator Instructions] Please note that this conference is being recorded. And I will now turn it over to Stephanie Prince, PCG Advisory. And Stephanie, you may begin.

Thank you, Brandon, 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. The 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 periods ended March 31, 2020, and June 30, 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, CEO of AMS. Ray?

Thank you, Stephanie. Good afternoon, everyone. Thanks for joining us today for our third quarter 2020 earnings conference call. I'll begin with some opening remarks, and then Craig Tagawa, our President, COO and CFO will go through the business and operational results. Alexis Wallace, our Chief Accounting Officer, will then provide a financial review. Following that, myself, Craig, Alexis and Ernie Bates, our Senior Vice President, Sales and Business development and International Operations, we'll open the call for your questions. In the third quarter, our revenues bounced back significantly from the low volumes that we experienced during the deepest days of the COVID 19 pandemic in the second quarter. Craig will discuss this in more detail in a few minutes. In September, I was pleased to be appointed by the Board as the CEO of AMS. At the same time, all of corporate managers, that many of you know, received well deserved promotions that are more reflective of their positions and responsibilities. I believe we've got a great team in place. Together, our goal is to reach sustained profitability. We can do this by diversifying our business model in three ways: First, we can expand our product offerings, to include not only proton beams and Gamma Knife, but also MR Guided LINACs and more advanced LINACs. Second, we can expand geographically. A great example of this is the recently completed acquisition of the only Gamma Knife center in the country of Ecuador. Third, we can continue to diversify by the different ways we provide our solutions. We can provide services directly to patients as in our retail operations in Peru and Ecuador, or we can provide equipment and services in a wholesale manner as we do in the United States. I believe that AMS has many opportunities for future growth, and we can provide tremendous flexibility to the marketplace and our clients with the many different ways we can meet their needs. I'm looking forward to working together with the team to realize that. I'll now turn the call over to Craig for a third quarter operational review. Craig?

Thank you, Ray, and good afternoon, everyone. As Ray mentioned, in the third quarter, our volumes bounced back significantly. Total revenue was up 17% sequentially from the second quarter and also 2% ahead of total revenue in the pre pandemic first quarter of 2020. Year over year, total revenue declined 11.9% from the third quarter last year. Gamma Knife revenue also declined year over year by 9.9% and but increased 15.2% compared to the second quarter of 2020. The year over year decrease was due to lower average reimbursement at the company's retail sites any positive contractual adjustment related to Medicare reimbursement at one of the company's sites recognized in the prior year's third quarter. Gamma Knife procedures increased by 8.3% to 377 for the third quarter of 2020 from 348 in the same period of the prior year and increased 7.7% compared to 350 for the second quarter of 2020. Gamma Knife volumes for centers and operations decreased, reagents from Gamma Knife's revenues volumes for those same centers during the same period of the prior year. Proton therapy was consistent with the third quarter of 2019 and increased 20.4% compared to the second quarter of 2020. Total proton therapy fractions in the third quarter increased 12.4% compared to the third quarter of 2019 and increased 20.8% compared to the second quarter of 2020. Gross margin for the third quarter decreased to 24.4% of revenue compared to gross margin of 34.2% of revenue for the third quarter of 2019 and decreased from 20.7% of revenue for the second quarter of 2020. Net loss in the third quarter was $209,000 compared to net income of $165,000 for the third quarter of 2019 and a net loss of $483,000 for the second quarter of 2020. The decrease in the Q3 net income…

Thank you, Craig, and good afternoon, everyone. Before I begin my prepared remarks, I'd like to call your attention to our 2020 third 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 third quarter results. For the 3 months ended September 30, 2020, total revenues decreased 11.9% to $4.670 million compared to total revenue of $5.301 million for the third quarter of 2019 and increased 17% compared to total revenue of $3.991 million for the second quarter of 2020. The company recorded no revenue from its IGRT equipment in the current quarter compared to $314,000 in the third quarter of 2019. The equipment was fully depreciated and sold in July after expiration of the company's contract. Third quarter revenue for the company's Proton therapy system installed at Orlando Health in Florida increased 0.6% to $1.687 million compared to revenue for the third quarter of 2019 of $1.677 million and increased 20.4% compared to revenue of $1.401 million in the second quarter of 2020. The year over year increase was due to higher volumes, offset by a lower average reimbursement for fraction. Average reimbursement for fraction was consistent with the second quarter of 2020. Total proton therapy fractions in the third quarter were 1,632, an increase of 12.4% compared to 1,452 proton therapy fractions in the third quarter of 2019 and an increase of [ 20.8 ] compared to 1,351 in the second quarter of 2020. Revenue for the company's Gamma Knife operations decreased 9.9% to $2.983 million for the third quarter of 2020 compared to $3.310 million for the third quarter of 2019 and and increased 15.2% compared to $2.59 million for the second…

[Operator Instructions] We have Lenny Dunn online.

The quarter was mixed because of extraordinary costs. And obviously, no one knows how the current COVID wave will last, but it does look we got the vaccine. And we certainly have the ability now to contain better. So I would just guesstimate that after the first calendar quarter of next year, it will still be a problem, but not a major one like it is now. Are you finding any problems with getting people to go up at a hospital for the procedures right now?

Craig, would you like to take that question? Sure. Lenny, it really depends on the location, whether people are fully coming back yet. So it's and with the current spiking of COVID 19, it's going to be hard to tell us to if we still will have a disruption going into it. But like you said, with the promising vaccines coming out, we should see some easing of that probably by sometime during mid to late latter part of 2021 would be my guess.

Okay. But don't people who get Gamma Knife treatment really need them? So if they postpone them for a while, they probably don't want to postpone them indefinitely, because the alternative is not good.

Yes. I think for people that have metastatic brain tumors, that is the case. That people that have benign tumors or trigeminal neuralgia, they may choose to delay for a period of time. But as you said, they can't delay forever. Otherwise, they will become ineligible for the Gamma Knife treatment because their tumors may become too large.

Okay. Well, I just like there's a balance here where probably because of the postponements earlier in the year. Have people in that category, it would offset some of the newer people that should be getting good. So things may get better. But do you how far in advance do people have to book them?

It's not a great deal of time in advance. It is mainly getting in to see their physicians and the physicians reviewing their MRIs and saying that it is, again, a knife treatable indication. So it's a matter of just getting into their physicians and then getting scheduled for the Gamma knife treatment.

Okay. And then the other question I have is that we've waiting, and I'm sure you'll look at it the same way in [indiscernible] a long time to get another proton center going. Is there light at the end of the tunnel there?

Lenny, thanks for your question. We are continuing to pursue bolt on opportunities. But as we've mentioned in the past, these are very long sales cycle items. And we are continuing to pursue those opportunities, but we do feel that the best route for the company is not to have all its eggs in one basket, so to speak. And we are uniquely positioned to offer other products that provide radiation treatment to cancer patients. And there's lots of different products, such as an MR guided LINAC that we can provide to the marketplace as well, that fits in our overall mission to provide these therapies, in treatments. As you know as we've mentioned in the past, perhaps, the MR Guided LINAC is a cost structure more expensive than a Gamma Knife, but significantly less expensive than a proton beam system.

Yes, I understand. It's good to have different streams of income. Are we close to getting any of those type of deals signed?

It's hard to say. I will say that we've had more sales activity, I'll say, in this third quarter. Activity on the sales side has picked up, I'll say, versus the first and second quarters of this year. So I think that's a good sign.

[Operator Instructions] Okay, it looks like no further questions at the moment. I will now turn it back Ray Stachowiak for closing remarks.

Well, thank you, everyone, for joining us today. Feel free to contact us directly if you have any questions before the fourth quarter and before our 2020 year end conference call in mid March. They say, stay well, and have a great day. Bye bye.

Thank you. Ladies and gentlemen, this concludes today's conference. Thank you for joining. You may now disconnect.