COEUR D'ALENE, Idaho, Aug. 5, 2009 (GLOBE NEWSWIRE) -- NightHawk Radiology Holdings, Inc. (Nasdaq:NHWK), the leading provider of radiology solutions to radiology groups across the United States, today announced financial results for second quarter 2009.
Second Quarter 2009 Highlights
* Revenue grew $3.5 million sequentially, or 9%, to $42.3 million driven by robust same site volume growth, improved customer retention and healthy revenue growth from new customers. * Final scan revenue increased 18% sequentially to $5.9 million, and now represents 14% of total revenue. * Total scan volume reached a record high of approximately 817,000 scans during the quarter. * Adjusted net income was $4.4 million, or $0.16 per diluted share. Adjusted net income excludes non-cash charges for stock compensation, amortization of intangible assets, losses on cancelled interest rate swap contracts, mark to market gains on interest rate hedge contracts and malpractice reserve adjustments. * GAAP net income was $2.1 million, or $0.08 per share. A reconciliation of adjusted net income to GAAP net income is included in the tables attached to this press release. * Cash flow from operations grew 11% to $8.3 million, up from $7.5 million in the year-ago quarter. Free cash flow was $7.2 million during the quarter, an increase of 22% from $5.9 million in the year-ago quarter. * Cash and investments at June 30, 2009 totaled $52.1 million.
"We are very pleased with our second quarter operating results and continued strong cash flow. Looking ahead, we are confident that the initiatives on which we are focused will continue to enhance long term shareholder value. These initiatives leverage our position as the leading provider of high quality, high value solutions to the radiology marketplace," said David Engert, the company's president and chief executive officer.
Third Quarter 2009 Outlook
The company expects scan volume and revenue for the third quarter of 2009 to increase sequentially from the second quarter, with revenue expected to be in the range of $42 to $43 million. The company also expects third quarter 2009 adjusted earnings per share to be in the range of 15 to 16 cents.
Forward Looking Statements
This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. These include statements regarding the company's outlook on its scan volume, revenue and adjusted earnings per share for the third quarter of 2009 and statements regarding our ability to enhance shareholder value in the future. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made, including the risks associated with general economic conditions, competitive conditions in the radiology industry, and regulatory risks. Other factors that could cause operating and financial results to differ are described in the company's periodic reports filed with the Securities and Exchange Commission (SEC). Other risks may be detailed from time to time in reports to be filed with the SEC. NightHawk does not undertake any obligation to publicly update its forward-looking statements based on events or circumstances after the date hereof.
Earnings Conference Call
The second quarter conference call will be held today, August 5, 2009 at 4:30 p.m. eastern. A live webcast of the conference call, as well as a replay, will be available online on the company's corporate website at http://www.nighthawkrad.net. Participants can also access the call by dialing (877)941-6013 or (480)629-9770 (for international callers). A replay of the call will be available approximately two hours after the conclusion of the call and will remain available until midnight (ET) on Wednesday, August 26, 2009. To access the replay, dial (800)406-7325 or (303)590-3030 (for international callers) and enter the conference ID number: 4123256.
About NightHawk
NightHawk Radiology (Nasdaq:NHWK) is leading the transformation of the practice of radiology by providing high-quality, cost-effective solutions to radiology groups and hospitals throughout the United States. NightHawk provides the most complete suite of solutions, including professional services, business services, and its advanced, proprietary clinical workflow technology, all designed to increase efficiencies and improve the quality of patient care and the lives of physicians who provide it. NightHawk's team of U.S. board-certified, state-licensed, and hospital-privileged physicians located in the United States, Australia, and Switzerland, provides services 24 hours a day, seven days a week, to approximately 1,590 sites, representing approximately 28% of all hospitals in the United States. For more information, visit http://www.nighthawkrad.net.
The NightHawk Radiology Holdings, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5531
Presentation of Non-GAAP Financial Information
The presentation of adjusted net income and adjusted earnings per diluted share are not measures of financial performance under GAAP and should not be considered a substitute for or superior to GAAP. Management believes these non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses that may not be indicative of our core results and provide consistency in financial reporting. Specifically, the company's non-GAAP adjusted net income measure, and related adjusted earnings per diluted share, described in this release exclude (i) the non-cash charges related to our stock-based compensation, (ii) the non-cash expense associated with the amortization of intangibles associated with acquisitions, (iii) the non-cash expenses (or credits) associated with adjustments to our IBNR reserve (incurred but not reported medical liability reserves), (iv) the non-cash charges for goodwill impairment, (v) the non-cash charge for the amortization of losses incurred on cancelled interest rate swap contracts, and (vi) the non-cash gain (or loss) resulting from mark to market adjustments of our interest rate hedge contracts. We exclude the non-cash charges related to our stock-based compensation due to the varying valuation methodologies, subjective assumptions and the variety of types of awards that companies can use when applying FAS 123R along with the fact that a substantial portion of our outstanding options and restricted stock units are held by our independent contractor physicians and require accounting treatment that differs from the accounting treatment for options and restricted stock units held by employees.
The company provides non-GAAP adjusted net income and related adjusted earnings per diluted share as financial measures because management believes these measures provide greater transparency with respect to information used by management in its financial and operational decision making and to enhance investors' overall understanding of our current financial performance and our future prospects. For reconciliation of our non-GAAP financial measures to the most applicable GAAP financial measure, please refer to the information included in the attached tables of this press release and in the Investor Relations section of our corporate website.
"NHWKF"
NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS (unaudited)
--------------------------------------
June 30, Dec. 31,
ASSETS 2009 2008
-------- --------
(in thousands, except
share data)
Current assets:
Cash and cash equivalents $ 47,132 $ 47,160
Marketable securities 4,996 --
Trade accounts receivable, net 23,142 24,393
Deferred income taxes 267 855
Prepaid expenses and other current assets 7,042 6,231
-------- --------
Total current assets 82,579 78,639
Property and equipment, net 11,239 10,528
Goodwill -- 68,718
Intangible assets, net 76,009 79,616
Deferred income taxes 16,967 4,082
Other assets, net 5,923 3,566
-------- --------
Total $192,717 $245,149
======== ========
LIABILITIES
Current liabilities:
Accounts payable $ 7,111 $ 6,327
Accrued expenses and other liabilities 2,836 3,617
Accrued payroll and related benefits 4,163 3,783
Long-term debt, due within one year 955 955
-------- --------
Total current liabilities 15,065 14,682
Insurance reserve 4,097 3,705
Long-term debt 92,667 93,145
Other liabilities 2,476 3,850
-------- --------
Total liabilities 114,305 115,382
-------- --------
STOCKHOLDERS' EQUITY
Common stock-150,000,000 shares authorized;
$.001 par value; 26,503,033 and 27,590,774
shares issued and outstanding at June 30,
2009 and December 31, 2008, respectively 27 28
Additional paid-in capital 233,523 237,429
Retained earnings (deficit) (154,035) (103,516)
Accumulated other comprehensive loss (1,103) (4,174)
-------- --------
Total stockholders' equity 78,412 129,767
-------- --------
Total $192,717 $245,149
======== ========
NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
---------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
------------------------------------------------
Three months ended Six months ended
June 30, June 30,
2009 2008 2009 2008
---------- ---------- ---------- ----------
(in thousands, except (in thousands, except
per share data) per share data)
Service revenue $ 42,340 $ 42,758 $ 81,139 $ 84,446
Operating costs and
expenses:
Professional
services
(includes non-cash
compensation
expense of $225,
$386, $296 and
$976) 18,305 17,036 34,961 34,903
Sales, general,
and administrative
(includes non-cash
compensation
expense of $1,325,
$1,832, $2,299 and
$4,188) 15,984 16,463 30,718 34,634
Depreciation and
amortization 2,715 2,959 5,513 5,757
Goodwill impairment -- -- 68,718 --
---------- ---------- ---------- ----------
Total operating
costs and
expenses 37,004 36,458 139,910 75,294
---------- ---------- ---------- ----------
Operating income
(loss) 5,336 6,300 (58,771) 9,152
Other income
(expense):
Interest expense (1,925) (2,189) (4,226) (4,376)
Interest income 50 376 105 903
Other, net (16) (41) (8) (13)
---------- ---------- ---------- ----------
Total other
income (expense) (1,891) (1,854) (4,129) (3,486)
---------- ---------- ---------- ----------
Income (loss)
before income
taxes 3,445 4,446 (62,900) 5,666
Income tax expense
(benefit) 1,351 1,675 (12,381) 2,165
---------- ---------- ---------- ----------
Net income (loss) $ 2,094 $ 2,771 $ (50,519) $ 3,501
========== ========== ========== ==========
Earnings (loss) per
common share:
Basic $ 0.08 $ 0.09 $ (1.90) $ 0.12
Diluted $ 0.08 $ 0.09 $ (1.90) $ 0.11
Weighted averages of
common shares
outstanding:
Basic 26,490,880 30,426,531 26,569,576 30,435,363
Diluted 26,958,693 31,442,818 26,569,576 31,411,253
NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
---------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
-------------------------------------------------
Three months Six months
ended June 30, ended June 30,
2009 2008 2009 2008
-------- -------- -------- --------
(in thousands) (in thousands)
Cash flows from operating
activities:
Net income (loss) $ 2,094 $ 2,771 $(50,519) $ 3,501
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Depreciation and
amortization 2,715 2,959 5,513 5,757
Goodwill impairment -- -- 68,718 --
Amortization of debt
issuance costs and
interest rate swaps 183 162 2,114 324
Deferred income taxes 92 159 (14,195) (11)
Non-cash stock
compensation expense 1,550 2,217 2,594 5,164
Other, net 711 173 245 284
Changes in operating
assets and liabilities
(excluding effects of
acquisitions):
Trade accounts
receivable, net (503) (1,379) 844 (1,155)
Prepaid expenses and
other assets 145 971 (952) (1,507)
Accounts payable 1,038 294 389 615
Accrued expenses and
other liabilities (771) (1,176) (568) (597)
Accrued payroll and
related benefits 1,028 364 294 943
-------- -------- -------- --------
Net cash provided by
operating activities 8,282 7,515 14,477 13,318
Cash flows from investing
activities:
Purchase of marketable
securities -- (16,085) (4,990) (26,390)
Purchase of property and
equipment (1,044) (1,661) (2,156) (3,296)
Proceeds from maturities
of marketable securities -- 25,990 -- 33,755
Proceeds from sale
of marketable securities -- 13,303 -- 13,303
Cash paid for acquisitions -- (6,500) -- (6,500)
-------- -------- -------- --------
Net cash provided by
(used in) investing
activities (1,044) 15,047 (7,146) 10,872
Cash flows from financing
activities:
Repayment of debt (239) (250) (478) (500)
Proceeds from exercise of
stock options 20 194 50 400
Excess tax benefit from
exercise of stock options 3 158 8 238
Purchase and retirement of
common stock shares -- (18,039) (6,452) (18,039)
Debt amendment costs (434) -- (434) --
Cash exchange for stock
options (53) -- (53) --
-------- -------- -------- --------
Net cash used in
financing activities (703) (17,937) (7,359) (17,901)
-------- -------- -------- --------
Net increase (decrease) in
cash and cash equivalents 6,535 4,625 (28) 6,289
Cash and cash equivalents--
beginning of period 40,597 33,620 47,160 31,956
-------- -------- -------- --------
Cash and cash equivalents--
end of period $ 47,132 $ 38,245 $ 47,132 $ 38,245
======== ======== ======== ========
NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
---------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
------------------------------------------------
RECONCILIATION BETWEEN GAAP AND ADJUSTED NET INCOME
---------------------------------------------------
Three months ended
------------------
June 30, 2009
-------------
(in thousands, except share data)
GAAP Adjustments As Adjusted
----------- ----------- -----------
Service revenue $ 42,340 $ 42,340
Operating costs and expenses:
Professional services (1) 18,305 (225) 18,080
Sales, general, and
administrative (2) 15,984 (1,325) 14,659
Depreciation and
amortization (3) 2,715 (1,738) 977
Goodwill impairment -- -- --
----------- ----------- -----------
Total operating costs
and expenses 37,004 (3,288) 33,716
----------- ----------- -----------
Operating income 5,336 3,288 8,624
Other income (expense):
Interest expense (4) (1,925) 553 (1,372)
Interest income 50 -- 50
Other, net (16) -- (16)
----------- ----------- -----------
Total other income
(expense) (1,891) 553 (1,338)
----------- ----------- -----------
Income before income taxes 3,445 3,841 7,286
Income tax expense (5) 1,351 1,498 2,849
----------- ----------- -----------
Net income $ 2,094 $ 2,343 $ 4,437
=========== =========== ===========
Earnings per share:
Basic $ 0.08 $ 0.17
Diluted $ 0.08 $ 0.16
Weighted average of shares
outstanding:
Basic 26,490,880 26,490,880
Diluted 26,958,693 26,958,693
Three months ended
------------------
June 30, 2008
-------------
(in thousands, except share data)
GAAP Adjustments As Adjusted
----------- ----------- -----------
Service revenue $ 42,758 $ 42,758
Operating costs and expenses:
Professional services (1) $ 17,036 (213) 16,823
Sales, general, and
administrative (2) 16,463 (2,311) 14,152
Depreciation and
amortization (3) 2,959 (1,883) 1,076
Goodwill impairment -- -- --
----------- ----------- -----------
Total operating costs and
expenses 36,458 (4,407) 32,051
----------- ----------- -----------
Operating income 6,300 4,407 10,707
Other income (expense):
Interest expense (4) (2,189) -- (2,189)
Interest income 376 -- 376
Other, net (41) -- (41)
----------- ----------- -----------
Total other income
(expense) (1,854) -- (1,854)
----------- ----------- -----------
Income before income taxes 4,446 4,407 8,853
Income tax expense (5) 1,675 1,661 3,336
----------- ----------- -----------
Net income $ 2,771 $ 2,746 $ 5,517
=========== =========== ===========
Earnings per share:
Basic $ 0.09 $ 0.18
Diluted $ 0.09 $ 0.18
Weighted average of shares
outstanding:
Basic 30,426,531 30,426,531
Diluted 31,442,818 31,442,818
(1) Adjustments to the 2009 GAAP amounts represent $225 of non-cash
stock compensation expense. The 2008 adjustments to GAAP amounts
represent $386 of non-cash stock compensation expense and a credit
of $173 of non-cash malpractice reserve changes.
(2) Adjustments to the 2009 GAAP amounts represent $1,325 of non-cash
stock compensation expense. The 2008 adjustments represent $1,832 of
non-cash stock compensation expense, $164 of employee severance
expenses and $315 of non-cash fixed asset charges
(3) Adjustment to GAAP amounts represent non-cash expense associated
with the amortization of intangibles associated with acquisitions.
(4) Represents $885 of amortization of losses incurred on interest
rate swap contracts canceled in 2008 and $332 gain on inerest rate
hedge contract.
(5) Represents the tax effect on the adjustments to GAAP.
NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
---------------------------------------------------
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
------------------------------------------------
RECONCILIATION BETWEEN GAAP AND ADJUSTED NET INCOME
---------------------------------------------------
Six months ended
----------------
June 30, 2009
-------------
(in thousands, except share data)
GAAP Adjustments As Adjusted
----------- ----------- -----------
Service revenue $ 81,139 $ 81,139
Operating costs and expenses:
Professional services (1) 34,961 (688) 34,273
Sales, general, and
administrative (2) 30,718 (2,299) 28,419
Depreciation and
amortization (3) 5,513 (3,607) 1,906
Goodwill impairment 68,718 (68,718) --
----------- ----------- -----------
Total operating costs
and expenses 139,910 (75,312) 64,598
----------- ----------- -----------
Operating income (loss) (58,771) 75,312 16,541
Other income (expense):
Interest expense (4) (4,226) 1,438 (2,788)
Interest income 105 -- 105
Other, net (8) -- (8)
----------- ----------- -----------
Total other income
(expense) (4,129) 1,438 (2,691)
----------- ----------- -----------
Income (loss) before
income taxes (62,900) 76,750 13,850
Income tax expense (benefit)(5) (12,381) 17,797 5,416
----------- ----------- -----------
Net income (loss) $ (50,519) $ 58,953 $ 8,434
=========== =========== ===========
Earnings (loss) per share:
Basic $ (1.90) $ 0.32
Diluted $ (1.90) $ 0.31
Weighted average of shares
outstanding:
Basic 26,569,576 26,569,576
Diluted 26,569,576 26,929,172
Six months ended
----------------
June 30, 2008
-------------
(in thousands, except share data)
GAAP Adjustments As Adjusted
----------- ----------- -----------
Service revenue $ 84,446 $ 84,446
Operating costs and expenses:
Professional services (1) $ 34,903 (1,672) 33,231
Sales, general, and
administrative (2) 34,634 (4,667) 29,967
Depreciation and
amortization (3) 5,757 (3,765) 1,992
Goodwill impairment -- -- --
----------- ----------- -----------
Total operating costs and
expenses 75,294 (10,104) 65,190
----------- ----------- -----------
Operating income (loss) 9,152 10,104 19,256
Other income (expense):
Interest expense (4) (4,376) -- (4,376)
Interest income 903 -- 903
Other, net (13) -- (13)
----------- ----------- -----------
Total other income
(expense) (3,486) -- (3,486)
----------- ----------- -----------
Income (loss) before
income taxes 5,666 10,104 15,770
Income tax expense
(benefit)(5) 2,165 3,857 6,022
----------- ----------- -----------
Net income (loss) $ 3,501 $ 6,247 $ 9,748
=========== =========== ===========
Earnings (loss) per share:
Basic $ 0.12 $ 0.32
Diluted $ 0.11 $ 0.31
Weighted average of shares
outstanding:
Basic 30,435,363 30,435,363
Diluted 31,411,253 31,411,253
(1) Adjustments to the 2009 GAAP amounts represent $296 of non-cash
stock compensation expense and $392 of non-cash malpractice reserve
changes. The 2008 adjustments to GAAP amounts represent $976 of
non-cash stock compensation expense and $696 of non-cash malpractice
reserve changes.
(2) Adjustments to the 2009 GAAP amounts represent $2,299 of
non-cash stock compensation expense. The 2008 adjustments to GAAP
amounts represent $4,188 of non-cash stock compensation expense,
$164 of employee severance expenses and $315 of non-cash fixed asset
charges.
(3) Adjustment to GAAP amounts represent non-cash expense associated
with the amortization of intangibles associated with acquisitions.
(4) Represents $1,770 of amortization of losses incurred on interest
rate swap contracts canceled in 2008 and $332 gain on inerest rate
hedge contract.
(5) Represents the tax effect on the adjustments to GAAP. In
addition, in 2009 we adjusted our tax expense amount to properly
reflect the impact of the non-deductible portions of our goodwill
impairment.
NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
---------------------------------------------------
HISTORICAL VOLUMES
------------------
--------------- --------------- ------------------------------
Growth Rates
Quarter Year Total Volumes Sequential Year over Year
--------------- --------------- ------------------------------
Q1 2008 745,075 2% 54%
Q2 2008 780,108 5% 7%
Q3 2008 791,613 1% 1%
Q4 2008 718,299 (9%) (2%)
--------------- ---- ----
FY 2008 3,035,095 11% 11%
Q1 2009 722,321 1% (3%)
Q2 2009 817,315 13% 5%