* RadNet reports Revenue of $131.1 million and Adjusted
EBITDA(1)of $27.0 million; increases of 3.6% and 5.0%,
respectively over the prior year's quarterly results
* Adjusted EBITDA(1) margin increased to 20.6% compared to 20.3%
for the three month period ended June 30, 2008 and 19.6% for
full-year 2008
* Overall procedure volumes increased 4.5% over the prior year's
same quarter
* Per share loss narrowed to $(0.01) per share compared to $(0.06)
for the three month period ended June 30, 2008
* RadNet reaffirms its previously announced 2009 Guidance of $515-
545 million of Revenue and $105-$115 million of Adjusted
EBITDA(1)
LOS ANGELES, Aug. 7, 2009 (GLOBE NEWSWIRE) -- RadNet, Inc. (Nasdaq:RDNT), a national leader in providing high-quality, cost-effective diagnostic imaging services through a network of fully-owned and operated outpatient imaging centers, today reported financial results for its second quarter ended June 30, 2009.
Three Month Report
For the three months ended June 30, 2009, RadNet reported Revenue and Adjusted EBITDA(1) of $131.1 million and $27.0 million, respectively. Revenue increased 3.6% (or $4.6 million) and Adjusted EBITDA(1) increased 5.0% (or $1.3 million), respectively, over the prior year's same quarter. The results reflect improved procedural volume in existing centers as well as the contribution of acquisitions and improved operating performance.
For the second quarter of 2009, as compared to the prior year's same quarter, MRI volume increased 8.9%, CT volume increased 4.7% and PET/CT volume increased 3.4%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 4.5% over the prior year's quarter.
On a same-center basis, including only those centers which were part of RadNet for both the second quarters of 2009 and 2008, MRI volume increased 3.6%, CT volume increased 2.0% and PET/CT volume increased 3.4%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 2.0% over the prior year's same quarter.
Net Loss for the second quarter of 2009 was $336,000, or $(0.01) per share, compared to a net loss of $2.1 million or $(0.06) per share, reported for the three month period ended June 30, 2008 (based upon a weighted average number of shares outstanding of 35.9 million and 35.7 million for these periods in 2009 and 2008, respectively). Affecting Net Loss in the second quarter of 2009 were certain non-cash expenses or non-recurring items including:
* $1.8 million non-cash amortization expense with respect to interest rate swaps related to the Company's credit facilities; * $670,000 of Deferred Financing Expense related to the amortization of financing fees paid as part of the Company's $405 million credit facilities drawn down in November 2006 in connection with the Radiologix acquisition and the incremental term loans and revolving credit facility arranged in August 2007 and February 2008; * $1.5 million of non-cash employee stock compensation expense resulting from the vesting of certain options and warrants; * $1.4 million bargain purchase gain on the acquisition of acquired centers in New Jersey; and * $1.0 million loss related to the resolution of legal disputes.
"We are pleased with our performance this quarter. When compared with both the second quarter of 2008 and the first quarter of 2009, we experienced aggregate and same-center growth in procedural volumes, Revenue and Adjusted EBITDA. We substantially narrowed our net loss year-over-year and increased our Adjusted EBITDA margins to 20.6% from our full-year 2008 margin of 19.6%," said Dr. Howard Berger, Chairman and Chief Executive Officer of RadNet.
"We also improved our balance sheet during the quarter and throughout the first six months of 2009. We repaid $5 million of debt during the quarter. We reduced our Accounts Payable and Accrued Expenses by almost $16 million and improved our working capital position by over $11 million since the start of 2009. We deleveraged the balance sheet from 4.74x to 4.47x Total Debt to Trailing Twelve Month Adjusted EBITDA since the beginning of the year," added Dr. Berger.
"We see positive indications that our business will continue to exhibit year-over-year performance gains into the third quarter, which is typically our strongest, and for the remainder of 2009. To that end, we have noted that preliminary July 2009 procedural volume reports compare favorably to those of July 2008. We also have observed that the acquisition of the eight New Jersey facilities completed in mid-June has begun to contribute to our Revenue and Adjusted EBITDA performance. Our performance is expected to result in significant further deleveraging by year-end as well as over $25 million of 2009 full-year projected free cash flow. We completed the month of July with a cash balance of $6.5 million, and anticipate further cash accumulation throughout the remainder of the year," continued Dr. Berger.
Dr. Berger noted, "We recognize that there is confusion and uncertainty regarding overall healthcare reform and its potential effects on individual segments of the health industry, including diagnostic imaging. Regardless of the outcome of healthcare reform, RadNet is poised as a market leader and is positioned to capitalize on opportunities that will likely result from industry change. Our capitalization, relative scale and geographically concentrated multi-modality platform provide us the flexibility required to be an efficient provider and successful industry consolidator. We will continue to provide an invaluable and increasingly important service to millions of patients for years to come."
2009 Fiscal Year Guidance
For its 2009 fiscal year, RadNet reaffirms its guidance ranges as follows:
Revenue $515 million - $545 million
Adjusted EBITDA(1) $105 million - $115 million
Capital Expenditures $30 million - $35 million
Cash Interest Expense $41 million - $45 million
Free Cash Flow Generation (a) $25 million - $35 million
End of Year Net Debt Balance (b) $438 million - $448 million
(a) Defined by the Company as Adjusted EBITDA(1) less total capital
expenditures and cash interest expense
(b) Total Debt net of Cash.
Six Month Report
For the six months ended June 30, 2009, RadNet reported Revenue and Adjusted EBITDA(1) of $259.1 million and $53.3 million, respectively. Revenue increased 7.8% (or $18.7 million) and Adjusted EBITDA(1) increased 11.7% (or $5.6 million), respectively, over the prior year's same six months.
For the six months of 2009, as compared to the prior year's same six months, MRI volume increased 11.7%, CT volume increased 8.3% and PET/CT volume increased 5.5%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 6.8% over the prior year's six months.
Net Loss for the six months of 2009 was $1.2 million, or $(0.03) per share, compared to a net loss of $7.6 million or $(0.21) per share, reported for the six month period ended June 30, 2008 (based upon a weighted average number of shares outstanding of 35.9 million and 35.6 million for these periods in 2009 and 2008, respectively). Affecting Net Loss in the six months of 2009 were certain non-cash expenses or non-recurring items including:
* $2.9 million non-cash amortization expense with respect to interest rate swaps related to the Company's credit facilities; * $1.3 million of Deferred Financing Expense related to the amortization of financing fees paid as part of the Company's $405 million credit facilities drawn down in November 2006 in connection with the Radiologix acquisition and the incremental term loans and revolving credit facility arranged in August 2007 and February 2008; * $2.2 million of non-cash employee stock compensation expense resulting from the vesting of certain options and warrants; * $1.4 million bargain purchase gain on the acquisition of acquired centers in New Jersey; and * $1.0 million loss related to the resolution of legal disputes.
Second Quarter 2009 Earnings Conference Call
RadNet will host a conference call to discuss its second quarter 2009 results on Friday, August 7th, 2009 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).
Investors are invited to listen to RadNet's conference call by dialing 888-656-7419. International callers can dial 913-312-1471. There will also be simultaneous and archived webcasts available at http://www.radnet.com under the "Investors" menu section and "News Releases" sub-menu of the website. An archived replay of the call will also be available until August 14th and can be accessed by dialing 888-203-1112 from the U.S., or 719-457-0820 for international callers, and using the passcode 1042021.
Regulation G: GAAP and Non-GAAP Financial Information
This release contains certain financial information not reported in accordance with GAAP. RadNet uses both GAAP and non-GAAP metrics to measure its financial results. The Company believes that, in addition to GAAP metrics, these non-GAAP metrics assist RadNet in measuring its performance. RadNet believes this information is useful to investors and other interested parties because it removes unusual and nonrecurring charges that occur in the affected period and provides a basis for measuring the Company's financial condition against other quarters. Such information should not be considered as a substitute for any measures calculated in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Reconciliation of this information to the most comparable GAAP measures is included in this release in the tables which follow.
About RadNet, Inc.
RadNet, Inc. is a national market leader providing high-quality, cost-effective diagnostic imaging services through a network of 175 fully-owned and operated outpatient imaging centers. RadNet's core markets include California, Maryland, Delaware, New Jersey and New York. Together with affiliated radiologists, and inclusive of full-time and per diem employees and technicians, RadNet has a total of approximately 4,000 employees. For more information, visit http://www.radnet.com.
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Specifically, statements concerning RadNets' ability to continue to grow its business by generating patient referrals and contracts with radiology practices, future acquisitions, cost savings, successful integration of acquired operations, and receiving third-party reimbursement for diagnostic imaging services, as well as RadNet's financial guidance, its statements regarding increased business from new operations, are forward-looking statements within the meaning of the Safe Harbor. Forward-looking statements are based on management's current, preliminary expectations and are subject to risks and uncertainties, which may cause RadNet's actual results to differ materially from the statements contained herein. Further information on potential risk factors that could affect RadNet's business and its financial results are detailed in its most recent Annual Report on Form 10-K and Form 10Q, as filed with the Securities and Exchange Commission. Undue reliance should not be placed on forward-looking statements, especially guidance on future financial performance, which speaks only as of the date they are made. RadNet undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made, or to reflect the occurrence of unanticipated events.
RADNET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
June 30, Dec. 31,
2009 2008
--------- ---------
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ -- $ --
Accounts receivable, net 94,617 96,097
Refundable income taxes 151 103
Prepaid expenses and other current assets 10,343 12,370
--------- ---------
Total current assets 105,111 108,570
PROPERTY AND EQUIPMENT, NET 184,643 193,104
OTHER ASSETS
Goodwill 105,378 105,278
Other intangible assets 55,488 56,861
Deferred financing costs, net 9,567 10,907
Investment in joint ventures 18,677 17,637
Deposits and other 3,424 3,752
--------- ---------
Total assets $ 482,288 $ 496,109
========= =========
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 65,363 $ 81,175
Due to affiliates 3,538 5,015
Notes payable 7,265 5,501
Current portion of deferred rent 473 390
Obligations under capital leases 15,943 15,064
--------- ---------
Total current liabilities 92,582 107,145
--------- ---------
LONG-TERM LIABILITIES
Line of credit 1,406 1,742
Deferred rent, net of current portion 8,287 7,996
Deferred taxes 277 277
Notes payable, net of current portion 419,975 419,735
Obligations under capital lease, net of
current portion 20,126 24,238
Other non-current liabilities 17,058 16,006
--------- ---------
Total liabilities 559,711 577,139
--------- ---------
COMMITMENTS AND CONTINGENCIES
EQUITY DEFICIT
Common stock - $.0001 par value, 200,000,000
shares authorized; 35,924,279 and 35,911,474
shares issued and outstanding at June 30,
2009 and December 31, 2008, respectively 4 4
Paid-in-capital 155,230 153,006
Accumulated other comprehensive loss (3,821) (6,396)
Accumulated deficit (228,900) (227,722)
--------- ---------
Total Radnet, Inc.'s equity deficit (77,487) (81,108)
Noncontrolling interests 64 78
--------- ---------
Total equity deficit (77,423) (81,030)
--------- ---------
Total liabilities and equity deficit $ 482,288 $ 496,109
========= =========
RADNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT SHARE DATA)
(unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
2009 2008 2009 2008
---------- ---------- ---------- ----------
NET REVENUE $ 131,146 $ 126,559 $ 259,149 $ 240,456
OPERATING EXPENSES
Operating expenses 99,716 97,886 196,729 186,852
Depreciation and
amortization 13,212 14,071 26,386 26,540
Provision for bad
debts 8,369 7,088 16,343 13,575
Loss (gain) on sale
of equipment 277 (38) 303 (30)
Severance costs 340 4 357 35
---------- ---------- ---------- ----------
Total operating
expenses 121,914 119,011 240,118 226,972
---------- ---------- ---------- ----------
INCOME FROM OPERATIONS 9,232 7,548 19,031 13,484
OTHER EXPENSES (INCOME)
Interest expense 12,326 12,516 25,348 26,104
Gain on bargain
purchase (1,387) -- (1,387) --
Other expense (income) 1,044 (21) 1,241 (53)
---------- ---------- ---------- ----------
Total other expense 11,983 12,495 25,202 26,051
---------- ---------- ---------- ----------
LOSS BEFORE INCOME
TAXES AND EQUITY
IN EARNINGS OF
JOINT VENTURES (2,751) (4,947) (6,171) (12,567)
Provision for income
taxes (13) (14) (50) (137)
Equity in earnings
of joint ventures 2,453 2,837 5,088 5,129
---------- ---------- ---------- ----------
NET LOSS (311) (2,124) (1,133) (7,575)
Net income
attributable to
noncontrolling
interests 25 25 45 49
---------- ---------- ---------- ----------
NET LOSS ATTRIBUTABLE
TO RADNET, INC.
COMMON SHAREHOLDERS $ (336) $ (2,149) $ (1,178) $ (7,624)
========== ========== ========== ==========
BASIC AND DILUTED
NET LOSS PER SHARE
ATTRIBUTABLE TO RADNET,
INC. COMMON
SHAREHOLDERS $ (0.01) $ (0.06) $ (0.03) $ (0.21)
========== ========== ========== ==========
WEIGHTED AVERAGE
SHARES OUTSTANDING
Basic and diluted 35,924,279 35,671,554 35,920,246 35,616,298
========== ========== ========== ==========
RADNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS)
(unaudited)
Six Months Ended
June 30,
2009 2008
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $ (1,133) $ (7,575)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization 26,386 26,540
Provision for bad debts 16,343 13,575
Dividends paid to noncontrolling interests (59) (155)
Equity in earnings of joint ventures (5,088) (5,129)
Distributions from joint ventures 4,363 3,452
Deferred rent amortization 374 2,801
Amortization of deferred financing cost 1,340 1,192
Net loss (gain) on disposal of assets 303 (30)
Gain on bargain purchase (1,387) --
Share-based compensation 2,224 1,056
Changes in operating assets and liabilities,
net of assets acquired and liabilities
assumed in purchase transactions:
Accounts receivable (13,863) (23,697)
Other current assets 2,211 (458)
Other assets 328 (369)
Accounts payable and accrued expenses 478 (199)
-------- --------
Net cash provided by operating
activities 32,820 11,004
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of imaging facilities (3,917) (23,528)
Proceeds from sale of imaging facilities 650 --
Purchase of property and equipment (15,594) (18,190)
Proceeds from sale of equipment -- 65
Purchase of equity interest in joint
ventures (315) (728)
-------- --------
Net cash used in investing activities (19,176) (42,381)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes
and leases payable (11,666) (9,104)
Proceeds from borrowings on
notes payable -- 35,000
Deferred financing costs -- (4,277)
Net (payments) proceeds on
line of credit (336) 9,449
Distributions to counterparties
of cash flow hedges (1,642) --
Proceeds from issuance of common stock -- 291
-------- --------
Net cash (used in) provided by
financing activities (13,644) 31,359
-------- --------
NET DECREASE IN CASH -- (18)
CASH, beginning of period -- 18
-------- --------
CASH, end of period -- --
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Cash paid during the period for interest $ 21,832 $ 23,787
RADNET, INC.
RECONCILIATION OF GAAP INCOME FROM OPERATIONS TO Adjusted EBITDA(1)
(IN THOUSANDS)
Three Months Ended
June 30,
------------------
2009 2008
-------- --------
Income from Operations $ 9,232 $ 8,435
Plus Depreciation and Amortization 13,212 14,071
Plus Equity in Earnings of Joint Ventures 2,453 1,950
Plus Non Cash Employee Stock Compensation 1,515 602
Plus Loss on Sale of Equipment 277 --
Less Gain on Sale of Equipment -- (38)
Less Net Income Attributable to Noncontrolling
Interests (25) (25)
-------- --------
Subtotal 26,664 24,995
Plus Severance Costs 340 4
Plus Expense Related to Business Dispute
Settlements -- 693
-------- --------
Adjusted EBITDA(1) $ 27,004 $ 25,692
======== ========
Six Months Ended
June 30,
------------------
2009 2008
-------- --------
Income from Operations $ 19,030 $ 15,172
Plus Depreciation and Amortization 26,386 26,540
Plus Equity in Earnings of Joint Ventures 5,088 3,441
Plus Non Cash Employee Stock Compensation 2,224 1,056
Plus Loss on Sale of Equipment 303 --
Less Gain on Sale of Equipment -- (30)
Less Net Income Attributable to Noncontrolling
Interests (45) (49)
-------- --------
Subtotal 52,986 46,130
Plus Severance Costs 357 35
Plus Non-recurring Fees Related to Review of
2006 Accounts Receivables -- 200
Plus Expense Related to Business Dispute
Settlements -- 1,393
-------- --------
Adjusted EBITDA(1) $ 53,343 $ 47,758
======== ========
RADNET PAYMENTS BY PAYORS
Second Quarter Full Year
2009 2008
-------------- --------------
Commercial Insurance 55.8% 56.6%
Medicare 20.0% 19.6%
Capitation 15.8% 15.0%
Workers Compensation/Personal Injury 3.1% 3.7%
Medicaid 3.2% 3.1%
Other 2.1% 2.0%
-------------- --------------
100.0% 100.0%
Note
----
Based upon global payments received from consolidated Imaging Centers
from that year's dates of service. Excludes payments from hospital
contracts, Breastlink, Center Management Fees and other miscellaneous
operating activities.
RADNET PAYMENTS BY MODALITY
Second Quarter Full Year
2009 2008
-------------- --------------
MRI 34.4% 34.2%
CT 19.5% 19.0%
PET/CT 5.8% 6.2%
X-ray 9.0% 10.8%
Ultrasound 10.5% 10.2%
Mammography 16.0% 14.9%
Nuclear Medicine 1.8% 1.6%
Other 3.1% 3.1%
-------------- --------------
100.0% 100.0%
Note
----
Based upon global payments received from consolidated Imaging Centers
from that year's dates of service. Excludes payments from hospital
contracts, Breastlink, Center Management Fees and other miscellaneous
operations.
RADNET AVERAGE PAYMENTS BY MODALITY
Second Quarter Full Year
2009 2008
-------------- --------------
MRI $ 504 $ 505
CT 309 310
PET/CT 1,497 1,494
X-ray 39 37
Ultrasound 110 107
Mammography 135 134
Nuclear Medicine 320 327
Other 126 129
Note
----
Based upon global payments received from consolidated Imaging Centers
from that year's dates of service. Excludes payments from hospital
contracts, Breastlink, Center Management Fees and other miscellaneous
operating activities.
Footnotes
(1) The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, each from continuing operations and adjusted for losses or gains on the disposal of equipment, debt extinguishments and non-cash equity compensation. Adjusted EBITDA includes equity earnings in unconsolidated operations and subtracts minority interests in subsidiaries, and is adjusted for non-cash, unusual or infrequent events taken place during the period.
Adjusted EBITDA is reconciled to its nearest comparable GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure used as analytical indicator by RadNet management and the healthcare industry to assess business performance, and is a measure of leverage capacity and ability to service debt. Adjusted EBITDA should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted EBITDA is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies.