AMS Fires on All Cylinders but the Hangover Lingers

Revenue up 19%, operating cash up, but a $909K credit loss and forbearance agreement temper the turnaround.

AMS · Earnings Call · 2026-08-13

A Small-Cap Turnaround with a Twisted Balance Sheet

American Shared Hospital Services (AMS) reported its Q2 2026 results on August 13, delivering a 19% year-over-year revenue increase and $4.4 million in operating cash flow for the first half. The company is mid-transition from a pure equipment leasing model to a diversified radiation oncology platform. While the operational momentum is real, the quarter also carried a $909,000 allowance for credit losses and a forbearance agreement with its lender—reminders that the financial work is far from complete.

Operational Fire: Growth Across Every Segment

The headline numbers are impressive for a company with an $8.8 million market cap. Total revenue reached $8.4 million in Q2, with patient volumes up across Rhode Island, Peru, and Puebla. The proton beam radiation therapy partnership in Orlando grew 22% year-over-year, and the Direct Patient Services segment jumped 40% to $4.9 million. Craig Tagawa, Interim CEO, said: “We generated strong quarterly revenues of approximately 8.4 million representing 19% year over year growth.” — Craig K. Tagawa, Chief Executive Officer · 2026-08-13 He also stressed the leverage: “Increasing patient throughput remains the single greatest driver of long term value creation within our business.” — Craig K. Tagawa, Chief Executive Officer · 2026-08-13 The cash generation story is also improving—operating cash flow of $4.4 million in H1 allowed AMS to pay down debt while building its cash balance to $6.8 million, an 80% increase since the start of the year. Alexis Wallace, Interim CFO, noted: “Perhaps most encouraging, operating activities $4.4 million of cash during the first 6 months of the year.” — Alexis N. Wallace, Chief Accounting Officer · 2026-08-13

The Balance Sheet Buzzsaw

But the quarter was not without its thorns. The company recorded a $909,000 allowance for credit losses against Rhode Island receivables, and selling and administrative expenses rose by $285,000 in legal costs tied to the new credit agreement. This pushed the company to a net loss, even as gross margin improved sequentially. On the financing front, AMS entered into a third amendment and forbearance agreement with Fifth Third Bank, extending the loan maturity to June 2027. Raymond Stachowiak, Executive Chairman, explained:

We are looking at any and all options. As I would expect our shareholders to expect us to do. So we are pursuing any and all options. And we are confident reach a solution.
Raymond C. Stachowiak, Executive Chairman · 2026-08-13

He also emphasized the company's cash generation: "we generated 4.4 million of cash in the first 6 months of this year." The company additionally received $2 million in subordinated financing from a new entity created by the Chairman—a clear show of confidence but also a sign of how constrained external capital is.

A Matter of Trust and Timing

The credit loss drew sharp questions from investors. Anthony Marchese asked: "how a almost a million-dollar charge for accounts receivable occurs over a year later." Stachowiak acknowledged the pain: "We are not proud of it, Tony. We are not proud of it." This is a recurring theme—prior calls had the company explaining contract expirations and one-time charges. In the March 2026 call, when asked about profitability, Raymond stated: “we really can't speculate on that. We really have not ever been in the habit of giving forward-looking statements.” — Raymond Stachowiak, Chief Executive Officer · 2026-03-31 In May 2026, Craig Tagawa highlighted the shift: “we continue to see our direct patient services segment continue to grow rather well.” — Craig K. Tagawa, Interim CEO · 2026-05-14 The two narratives—operational growth versus balance sheet strain—are in constant tension. The stock remains well off its 2017 high, with a revenue multiple of just 0.3x and a negative net income. Yet the gross margin improved to 18.2% from 15% a year ago , and free cash flow turned positive. The company's outlook remains anchored to its Rhode Island expansion and a Gamma Knife upgrade in Guadalajara. Whether the market rewards the operational improvements before the balance sheet forces a sale is the ultimate question.