First Quarter 2008 Highlights * Revenue up 29% to $23.3 million * Adjusted EBITDA(1) up 60% to $4.0 million * Adjusted net income(2) of $1.9 million; Adjusted diluted earnings per share(3) (EPS) of $0.11 * GAAP net income of $2.0 million; GAAP EPS of $0.12
MINNEAPOLIS, April 28, 2008 (PRIME NEWSWIRE) -- Virtual Radiologic Corp. (Nasdaq:VRAD), a leading national provider of teleradiology services, today reported financial results for its first quarter ended March 31, 2008.
First Quarter Results
Total revenues increased 29% to $23.3 million for the quarter ended March 31, 2008, compared to $18.1 million for the quarter ended March 31, 2007. The increase in revenue over the first quarter of 2007 was entirely from organic growth and resulted from a 14% increase in the number of hospitals and medical facilities served to 838 as of March 31, 2008, which represents approximately 13% of all hospitals in the United States. In addition, same-site volume growth(4) was 15% over the first quarter of 2007.
Adjusted EBITDA increased 60% to $4.0 million for the quarter ended March 31, 2008, compared to $2.5 million for the quarter ended March 31, 2007. This increase resulted primarily from continued improvement in radiologist efficiency during the first quarter of 2008, brought about by continuing advancements in both our distributed network infrastructure and our radiologist support services. In addition, sales, general and administrative expenses as a percentage of revenue decreased to 37% for the first quarter of 2008, compared to 38% for the first quarter of 2007, resulting from continued improvement in our operating leverage.
Adjusted net income was $1.9 million for the quarter ended March 31, 2008, compared to $1.6 million for the quarter ended March 31, 2007, resulting in adjusted diluted earnings per share of $0.11 and $0.10, respectively.
GAAP net income was $2.0 million for the quarter ended March 31, 2008, compared to $1.0 million for the quarter ended March 31, 2007, resulting in diluted earnings per share of $0.12 and $0.08, respectively.
2008 Guidance
The company reaffirms the guidance previously provided for 2008:
* Revenue of $115 million to $120 million * Adjusted EBITDA of $25 million to $27 million * Adjusted net income of $13.8 million to $15.1 million; Adjusted EPS of $0.80 to $0.87 * The Company completed its acquisition of Diagna Radiology, LLC on April 14, 2008 and expects the acquisition to contribute between $3.0 million and $3.5 million in incremental revenue and be neutral to 2008 adjusted earnings per share.
Management Comments and Business Outlook
"We are pleased with our continued strong growth in revenue and profitability during the first quarter of 2008," said Sean Casey, Virtual Radiologic's Chairman and Chief Executive Officer. "During the quarter we contracted with an additional 22 customers representing 34 facilities while generating a 15% increase in same-site volume. We are also excited about our acquisition of Diagna Radiology, which provides us with greater exposure to medical facilities in the Pacific Northwest, as well as several areas throughout the Midwest. As we move into our peak summer months, we expect our seasonality trends to remain consistent with those we have experienced in prior years and we believe the market fundamentals underlying our business remain attractive."
Notes Regarding the Use of Non-GAAP Financial Measures
The Company records its results of operations in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In addition, the Company is providing certain supplemental non-GAAP information which the Company believes to be an important indicator of its financial performance. These financial measures are not financial measures under GAAP and the Company's calculation of these non-GAAP financial measures may not be comparable to the calculation of similarly titled measures reported by other companies. The Company uses the following non-GAAP financial measures:
* Adjusted EBITDA - operating income excluding the effects of depreciation and amortization and non-cash stock-based compensation expense;
* Adjusted net income - net income available to common stockholders excluding the effects of non-controlling interest, non-cash stock-based compensation, net of tax and Series A Cumulative Redeemable Convertible Preferred Stock decretion;
* Adjusted diluted earnings per share - adjusted net income divided by pro-forma diluted shares outstanding; and
* Pro-forma diluted shares outstanding - weighted average diluted shares outstanding plus the additional weighted average common shares that would have been outstanding had the Company's initial public offering been completed as of the beginning of the applicable reporting period.
The Company presents these non-GAAP financial measures because it believes that they are a useful indicator of its performance and on going operations. The Company's management also uses these non-GAAP financial measures in order to review and assess its operating performance and its management team in connection with certain incentive programs and the preparation of its financial projections. In addition, the Company believes that these non-GAAP financial measures are useful to investors because such measures are frequently used by securities analysts to measure a company's operating performance without regard to certain items, such as income tax expense, interest expense and depreciation and amortization, which can vary substantially from company to company. However, the Company's calculation of these non-GAAP financial measures may not be comparable to the calculation of similarly titled measures reported by other companies.
Adjusted EBITDA, Adjusted net income, Adjusted diluted earnings per share and Pro-forma diluted shares outstanding are not measurements of the Company's financial performance under GAAP and should not be considered as an alternative to operating income, net income, earnings per share or any other performance measures derived in accordance with GAAP.
Conference Call Information
The Company will be hosting a conference call April 28, 2008 at 3:30 P.M. central DST to discuss these results and provide a general business update. Participants can access the call by dialing (877) 604-9670 (within the United States and Canada), or (719) 325-4924 (outside the United States and Canada). A live webcast of the conference call will be available on the Company's corporate web site at http://ir.virtualrad.com under "Events and Presentations." A replay of the call will be available approximately three hours after the call has ended and will be available until 11:59 P.M. eastern DST on Wednesday, May 28, 2008. To access the replay, dial (719) 457-0820 and use passcode 4834264.
About Virtual Radiologic
Virtual Radiologic Corporation (http://www.virtualrad.com) provides teleradiology solutions to radiology practices and medical centers throughout the United States. Utilizing market-leading, proprietary workflow technology, Virtual Radiologic's predominantly U.S.-based physicians perform preliminary and final read interpretations for emergent and non-emergent needs -- day or night, 365 days a year. Virtual Radiologic's American Board of Radiology-certified radiologists are collectively licensed in all 50 states. Virtual Radiologic is Joint Commission-certified and serves hundreds of clients supporting more than 800 medical facilities.
Safe Harbor for Forward-Looking and Cautionary Statements
Certain statements in this press release are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including, in particular, statements about our plans, objectives, strategies and prospects regarding, among other things, our business and results of operations. These statements involve a number of risks, uncertainties and other factors that could cause actual results, performance or achievements of Virtual Radiologic Corporation to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. Statements that are not historical facts in this press release are forward-looking statements that involve certain risks, uncertainties and assumptions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. Except as required by applicable law, Virtual Radiologic Corporation undertakes no duty to update these forward-looking statements due to new information or as a result of future events.
(1) Adjusted EBITDA consists of operating income excluding the
effects of depreciation and amortization and non-cash stock-based
compensation expense. See "Notes Regarding the Use of Non-GAAP
Financial Measures" and "Supplemental Information and Non-GAAP
Reconciliations" for more information related to adjusted EBITDA.
(2) Adjusted net income consists of net income available to common
stockholders excluding the effects of non-controlling interest,
non-cash stock-based compensation, net of tax and Series A
Cumulative Redeemable Convertible Preferred Stock decretion. See
"Notes Regarding the Use of Non-GAAP Financial Measures" and
"Supplemental Information and Non-GAAP Reconciliations" for more
information related to adjusted net income.
(3) Adjusted diluted earnings per share consists of adjusted net
income divided by pro-forma diluted shares outstanding. See
"Notes Regarding the Use of Non-GAAP Financial Measures" and
"Supplemental Information and Non-GAAP Reconciliations" for more
information related to adjusted diluted earnings per share.
(4) Same-site volume growth measures the percentage increase in
the number of reads over the comparable prior year period
generated by a facility that has been under contract for at least
three months at the beginning of the measurement period and
remains a customer throughout that period.
VIRTUAL RADIOLOGIC CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)
Three Months Ended
March 31,
-------------------
2008 2007
-------- --------
Revenue $ 23,320 $ 18,102
-------- --------
Operating costs and expenses
Professional services 10,367 8,599
Sales, general and administrative 8,735 6,929
Depreciation and amortization 855 498
-------- --------
Total operating costs and expenses 19,957 16,026
-------- --------
Operating income 3,363 2,076
Other (expense) income
Interest expense -- (6)
Interest income 176 43
-------- --------
Total other income 176 37
-------- --------
Income before non-controlling interest
and income tax 3,539 2,113
Non-controlling interest expense 4 680
-------- --------
Income before income tax expense 3,535 1,433
Income tax expense 1,535 392
-------- --------
Net income 2,000 1,041
Series A Cumulative Redeemable Convertible
Preferred Stock decretion -- 4,774
-------- --------
Net income available to common stockholders $ 2,000 $ 5,815
======== ========
Earnings per common share
Basic $ 0.12 $ 0.56
Diluted $ 0.12 $ 0.08
Weighted average common shares outstanding
Basic 16,616 6,726
Diluted 17,268 12,885
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(Unaudited)
(in thousands, except per share data)
Three Months Ended
March 31,
-------------------
2008 2007
-------- --------
Adjusted EBITDA(1) $ 4,005 $ 2,496
Adjusted net income(1) $ 1,883 $ 1,663
Adjusted diluted earnings per share(1) $ 0.11 $ 0.10
Pro-forma diluted shares outstanding(1) 17,268 16,885
(1) See "Notes Regarding the Use of Non-GAAP Financial Measures"
and "Supplemental Information and Non-GAAP Reconciliations" for
more information related to the non-GAAP financial measures
presented in this table.
VIRTUAL RADIOLOGIC CORPORATION
SUPPLEMENTAL INFORMATION AND NON-GAAP RECONCILIATIONS
(Unaudited)
(in thousands, except per share data)
The following table reconciles the GAAP financial measure of
Operating income to the non-GAAP supplemental financial measure of
Adjusted EBITDA which excludes the effects of depreciation and
amortization and non-cash stock-based compensation expense.
Three Months Ended
March 31,
------------------
2008 2007
------- -------
Reconciliation of Operating income
to Adjusted EBITDA:
Operating income $ 3,363 $ 2,076
------- -------
Depreciation and amortization $ 855 $ 498
Physician non-cash stock-based compensation (495) (105)
Employee non-cash stock-based compensation 282 27
------- -------
Adjusted EBITDA(1) $ 4,005 $ 2,496
======= =======
(1) Adjusted EBITDA as presented herein for the quarter ended
March 31, 2007 excludes other non-recurring expenses of $336,000
as previously reported in Virtual Radiologic's registration
statement on Form S-1.
---------------------------------------------------------------------
The following table reconciles the GAAP financial measure of Net
income available to common stockholders to the non-GAAP supplemental
financial measure of Adjusted net income which excludes the effects
of non-controlling interest, non-cash stock-based compensation
expense, net of tax and Series A Cumulative Redeemable Convertible
Preferred Stock decretion, and presents the related adjusted diluted
earnings per share.
Three Months Ended
March 31,
------------------
2008 2007
------- -------
Reconciliation of Net income available to
common stockholders to Adjusted net income:
Net income available to common stockholders $ 2,000 $ 5,815
------- -------
Non-controlling interest expense 4 680
Physician non-cash stock-based compensation,
net of tax (281) (77)
Employee non-cash stock-based compensation,
net of tax 160 19
Series A Cumulative Redeemable Convertible
Preferred Stock decretion -- (4,774)
------- -------
Adjusted net income $ 1,883 $ 1,663
======= =======
Adjusted diluted earnings per share $ 0.11 $ 0.10
Reconciliation of Weighted average
common shares outstanding to Pro-forma
diluted shares outstanding:
Weighted average diluted shares outstanding 17,268 12,885
Assumed issuance of weighted average common
shares from initial public offering(1) -- 4,000
------- -------
Pro-forma diluted shares outstanding 17,268 16,885
======= =======
(1) Assumes that the issuance of 4.0 million shares of common
stock, which occurred in conjunction with the completion of the
Company's initial public offering on November 14, 2007, occurred
on January 1, 2007.
VIRTUAL RADIOLOGIC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS AND SELECTED OPERATING DATA
(Unaudited)
As of As of
March 31, Dec. 31,
2008 2007
-------- --------
(in thousands)
Cash and cash equivalents $ 33,496 $ 33,487
Accounts receivable, net 13,152 12,486
Other current assets 4,177 5,104
Non-current assets 12,223 8,359
-------- --------
Total assets $ 63,048 $ 59,436
======== ========
Current liabilities $ 8,629 $ 8,870
Non-current liabilities 856 228
-------- --------
Total liabilities 9,485 9,098
Non-controlling interest 12 8
Total stockholders' equity 53,551 50,330
-------- --------
Total liabilities and stockholders' equity $ 63,048 $ 59,436
======== ========
As of March 31,
--------------------
2008 2007
-------- --------
Affiliated radiologists providing services 116 75
Affiliated radiologists under contract 138 105
Customers 491 411
Hospitals and other medical facilities served 838 736
Three Months Ended
March 31,
--------------------
2008 2007
-------- --------
Total reads 470,694 352,149
Percentage growth over prior year period 34% 91%
Same-site volume growth(1) 15% 19%
Percentage of revenue from final reads 23% 23%
(1) Same-site volume growth is calculated as the percentage
increase in the number of reads over the comparable prior year
period generated by a facility that has been under contract for
at least three months at the beginning of the measurement period
and remains a customer throughout that period.