Good morning, everyone, and welcome to the 2014 First Quarter Financial Results Conference Call for American Shared Hospital Services. [Operator Instructions] I would now like to turn the call over to Dr. Ernest Bates, Chairman and Chief Executive Officer; Craig Tagawa, Chief Operating and Financial Officer; Ernest R. Bates, Vice President, Sales and Business Development; and Alexis Wallace and Brad Roberts, Assistant Controllers of American Shared Hospital Services. Mr. Tagawa, you may begin. Craig K. Tagawa: Thank you, Ellen, and thank you, all, for joining us for AMS' First Quarter 2014 Financial Results Conference Call and Webcast. Please note that various remarks that we may make 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 Securities and Exchange Commission, including the company's annual report on Form 10-K for the year-ended December 31, 2013, and the definitive proxy statement for the Annual Meeting of Shareholders to be held on June 10, 2014. The company assumes no obligation to update the information contained in this conference call. AMS' first quarter results were driven by a combination of planned and unplanned events. Our planned upgrade on the one hand and unplanned maintenance downtime and severe weather on the other. Despite these events, the procedure volume on the Perfexion units actually increased 3% for the quarter. However, overall volume, including Perfexion and Gamma Knife units, were down by 5%. This was the primary cause of the decrease in revenue and earnings for the quarter compared to the prior year, although the reduction in Medicare reimbursement for Gamma Knife services mandated by the American Taxpayer Relief Act of 2012 also played a role. First quarter 2014 revenues, however, were up 3.2% or $127,000 compared to fourth quarter revenues. As I said, several factors were behind the decrease in volume for this year's first quarter. One of our Gamma Knife units was down for 5 weeks for an upgrade to Perfexion specifications. Two other sites were down for approximately one month each due to equipment and personnel issues. In addition, extreme winter weather in the Midwest and Northeast during the year's first quarter reduced volume at several of our sites. Our aggressive cost reduction program helped mitigate the impact of lower revenue on our bottom line. General and administrative expenses decreased 25.3% for this year's first quarter versus a year ago. We are on track to achieve a goal we announced last April to reduce future cash outlays by approximately $1 million annually. Regarding our proton therapy business, construction of the dedicated proton center at the University of Florida Health Cancer Center at Orlando Health continues. AMS will supply a MEVION S250 Proton Therapy System for this facility. The MEVION S250 has received FDA approval. We still expect delivery of the MEVION synchrocyclotron to the U.S. Health Cancer Center this fall. And the facility is expected to begin treating patients in late 2015. The UF Health Cancer Center at Orlando Health is the model for additional proton centers AMS is developing. Now I'm going to turn the call over to Alexis Wallace to go over the results in detail. Alexis?

Thank you, Craig. Medical services revenue for the 3 months ended March 31, 2014, decreased 12.9% to $4,064,000 compared to medical services revenue for the first quarter of 2013 of $4,668,000. As Craig explained, this decrease reflected equipment downtime due to upgrades and routine maintenance at another site, as well as the effect of severe winter weather and procedure volume at several of AMS' sites. The net loss for the first quarter of 2014 was $96,000 or $0.02 per share, which included a pre-tax gain from foreign currency transactions of $15,000 due to the strengthening of the Turkish lira against the U.S. dollar. In comparison, net income for the first quarter of 2013 was $25,000 or $0.01 per basic and diluted share, which included a pre-tax loss from foreign currency transactions of $141,000. The number of procedures performed on Gamma Knife Perfexion systems supplied by AMS increased 3% for the first quarter of 2014 compared to the same period of 2013. The total number of procedures performed at AMS' Gamma Knife business, including Gamma Knife and Gamma Knife Perfexion procedures, decreased 5% for the first quarter compared to the same period of 2013. Medical services gross margin for the first quarter of 2014 was 31.7% compared to medical services gross margin of 45.4% for the first quarter of 2013. In addition to the impact of lower revenue, the decrease in gross margin reflected higher depreciation and maintenance costs associated with the opening of a new Perfexion site in the second quarter of 2013, as well as the upgrades to Perfexion specifications of a Gamma Knife at another site and 2 cobalt reloads, which occurred in the fourth quarter of 2013. Because an upgrade of cobalt reload increases the book value of the unit, depreciation expense also increases. Selling and administrative expenses for the first quarter of 2014 decreased 25.3% to $922,000 compared to $1,235,000 for the first quarter of 2013. Cash flows measured by earnings before interest, taxes, depreciation and amortization was $1,997,000 for the first quarter of 2014 compared to $2,036,000 for the first quarter of 2013. At March 31, 2014, cash, cash equivalents and certificates of deposit were $9,957,000 compared to $10,909,000 at December 31, 2013. Shareholders' equity at March 31, 2014, was 23,816,000 or $5.17 per outstanding share. This compares to shareholders' equity at December 31, 2013, of $24,055,000 or $5.22 per outstanding share. Craig? Craig K. Tagawa: Thank you, Alexis. Ellen, we are ready for the first question.

[Operator Instructions] Our first question is from Anthony Marchese with TriPoint Global.

You had mentioned on several calls that you had a backlog of, I believe, you said about 15 proton beam therapy opportunities. I'm wondering -- can you update us on that? And we haven't seen or heard of any other closings, I guess, of machines. I guess you have one that will be installed. Can you just give us an update on where you stand and what the impediments are? My own impression was that once the approval came from Mevion, that you would find it much easier to both finance as well as close new opportunities. So if you could just comment. Ernest A. Bates: Yes. Anthony, this is Dr. Bates. The number wasn't 15, it's actually 26. And I just recently looked at the list. All those hospitals that we were talking to 2 years ago, 3 years ago still do not have proton beam facilities. And they are still available and there's still future market that we hope to address. Mevion sales have slowed down. I think in the last 6 months, they've probably only done about 1 or 2 new sales. We have not been able to do additional sales because, I think, people are still waiting to make certain that the unit at Barnes is working satisfactorily. We're feeling very comfortable with that unit. It's now doing 10 to 12 patients a day. And that's very good, with no significant downtime. We're all waiting for it to reach at least 20 patients a day because that makes it clearly a profitable unit. So I think that's one of the reasons that people are not stepping up at this point. And also why we're having some difficulty getting financing for the 3 machines that we have because everyone's waiting to make certain that the Barnes unit is working satisfactorily. Remember, this is a new technology and...

And how -- and when do they -- do they have any -- I don't know how this works, but at what point do they increase the number of procedures? Ernest A. Bates: They're increasing them every week. They hope to be up to 20 a day by the next month.

Okay. So you think that, that point that's when your financing sources and your sales opportunity could potentially increase? Ernest A. Bates: Absolutely. And those 26 hospitals are still there.

Okay. Okay. And I'm sorry, one -- just one follow-up question to Mevion. Any word on whether -- I know you guys -- could you just review how many -- what percent of the company you own? I know that there's been some talk in the financial press about Mevion going public at some point. Again, could you tell us what percentage of the company you own? Craig K. Tagawa: Well, I can tell you what percentage of the company we own, which is 0.77% of the common shares outstanding.

Okay. All right. So if they went public at a valuation comparable to what we've seen some of the other companies in their category go public in the last several years, that could be my calculation. It could be worth the share price today. Ernest A. Bates: Craig? Craig K. Tagawa: It would be a very good return for us. Ernest A. Bates: Anthony, it's our understanding that they have hired an investment banking firm to look at their options.

Right. Okay, well -- and certainly once Barnes gets up to 20 a day, I would think that's when their options become a lot more salable or a lot more realistic. Ernest A. Bates: Yes, I might point out to you that a paper came out recently from the Indiana University Health Proton Therapy Center in Bloomington, Indiana. And what this paper suggests is that the one-room centers will serve a population of 1 million lives to be economically advisable. And the largest center will acquire more than 4 million lives. And each of the facilities that we're talking to, we meet that requirement. So in an areas where there's smaller populations, they will require some sort of subsidy but not at the places that we're talking to. And I'd be glad to send you a copy of this paper if you would like.

That would be -- yes, I'd love to see that.

The next question is from Robert Bass [ph], Private Investor.

Yes, I'm a long-time investor and I appreciate all you're doing for us. My question to you is this: how much of an investment dollar-wise do we have in Mevion? What was your cost of the investment that you have in it? Craig K. Tagawa: It's a little under $2.8 million.

$2.8 million. And is that included in your asset value of your net worth that comes to $5.17 a share or whatever it is? Craig K. Tagawa: Yes.

Yes, you got that included at that price at your cost basis? Craig K. Tagawa: Correct. At a cost basis.

All right. Keep on doing a great job as you're doing.

[Operator Instructions] The next question is from Lenny Dunn with Freedom Investors Company.

I have, for the last few years, evaluated this company based on 3 parts: the Gamma Knife legacy business, the Mevion stock and the large future potential for these proton beam centers. And the market currently is valuing the company at approximately half of book value, which makes no sense to me other than your -- nobody's paying attention anymore because they waited too long. I mean that would be their -- the only logical explanation and, obviously, that's not a sensible one. Now first, with the Gamma Knife business, it's been a while since we've had a new center. Are there any prospects for some new centers in the works because, obviously, it doesn't hurt to grow that business while we're waiting? Craig K. Tagawa: Yes, there is a prospect that we hope to be able to wrap up within the next 30 days.

Okay. Well, that would, obviously add -- because it doesn't truly increase overhead, just variable overhead and it could add to earnings. Craig K. Tagawa: Correct. We're only doing the deals that are going to be accretive to us.

Ernie, I was recently at the Users Meeting -- the Gamma Knife Users Meeting. Ernie, can you say a word about the new Gamma Knife that's coming out and its prospects for us?

Yes, I'll just mention, Lenny, that we -- I attended the bi-annual Leksell Gamma Knife Society Users Meeting. And it was well attended in New York City, there were over 500 participants. And the announcement was made during this meeting that Elekta is coming out with a new Gamma Knife called the Perfexion Plus. And what is unique about the Perfexion Plus is that it will provide on-board cone beam CT imaging. And it will also appeal to radiation oncologists, which typically have preferred modalities that are able to fractionate certain types of brain tumors. And so this is something that we think will appeal to a wider base of Gamma Knife users and Elekta's certainly excited about it. And this will certainly present opportunities for us to potentially upgrade many of our existing units.

Okay. Do think you'll get a little better reimbursement on a new one if, in fact, somebody switches over? Or the reimbursement continue to be, unfortunately, what we're getting? Craig K. Tagawa: The reimbursement will be different. It depends on how the treatment's going to be done. If you're going to fractionate the treatment, which means you give between 1 and 5 fractions, you're reimbursed for each fraction, so there's a potential to increase your reimbursement in that fashion. But if you're using the Perfexion Plus to do a frameless procedure, which is without the headframe and you're doing the single fraction, it would be the same based on current reimbursement mechanisms. So the long answer is there's -- you could get higher reimbursement if you're going to do more fractions than one.

Okay. So that potentially could be there. Because really, the Gamma Knife business, if things go smoothly, it could generate us north of $0.10 a share annually or maybe a little better. So it's not a bad business, it's just not at the high growth that the proton beam would be. Ernest A. Bates: No, it's not.

But if you add the Gamma Knife value to the Mevion value and assume that Mevion goes public at a reasonable valuation, you get the book value well into the 6s, maybe even $0.7. And maybe something like that would spark the share price because the share price is ridiculously cheap. And it's unfortunately that way. And we're getting the proton beam in the future for nothing. Just those 2 things alone could get us to $0.7 and the proton beam is certainly worth a lot going forward. But that's a few years before we start seeing serious revenue from it. Okay, well, I guess that's my questions. I'm very encouraged by the fundamentals and I'm a bit chagrined with the share price.

Mr. Tagawa, there are no further questions. Would you like to make your closing remarks? Craig K. Tagawa: I'll let Dr. Bates -- he wants to make a few closing comments and then I'll speak after him. Ernest A. Bates: I just want to say that we are very excited about the proton beam business. I know things have been slow coming but I just recently talked with Joe Jachinowski, the CEO of Mevion. He's excited about their opportunities. I know that they have found a big interest in the international market for the Mevion unit in Japan and in China and in Europe. And they're very excited about their opportunities. I think it's pretty clear that the large 3 and 4 rooms are no longer economically feasible. And even the competitors of Mevion are now looking at one room options for their customers. So I think we're clearly on the right track. And it's taken a long time, but I think the light is at the end of the tunnel. And I'm hoping that Mevion will be making an announcement in the next several months or weeks about what their strategic plans are for raising capital. Craig K. Tagawa: I just like to thank everyone for joining us this afternoon, and we look forward to speaking with you on our second quarter results conference call in about 3 months.

This call will be available in digital replay immediately following today's conference. To access the system, dial (888) 843-7419, and enter the passcode 37294011, followed by the pound sign to access the replay. The webcast of this call will be available at www.ashs.com and www.earnings.com. This concludes today's teleconference. Thank you for participating. You may now disconnect.