April 20, 2010
VIA EDGAR AND OVERNIGHT DELIVERY
Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Mail Stop 4720
Washington, D.C. 20549
| Attention: | Ms. Tia Jenkins,SeniorAssistant Chief Accountant |
| Mr. Blaise Rhodes,Staff Accountant |
| Mr. Ethan Horowitz |
| Re: | NightHawk Radiology Holdings, Inc. |
| Form 10-K for Fiscal Year Ended December 31, 2009 |
| Filed February 25, 2010 |
| Form 8-K Filed February 17, 2010 |
| File No. 000-51786 |
Ladies and Gentlemen:
NightHawk Radiology Holdings, Inc. (the “Company”) submits this letter in response to your letter of April 2, 2010, which sets forth comments of the Staff of the Securities and Exchange Commission (regarding the above-referenced filings) and the supplemental request made during the April 16, 2010 teleconference with Messrs Rhodes and Horowitz. In further response to Comment No. 1 of the Staff’s April 2, 2010 letter, the Company confirms that it will include a reconciliation table with respect to certain non-GAAP measures that is consistent with the tables sent forth in Exhibit A hereto.
| Sincerely, |
| NIGHTHAWK RADIOLOGY HOLDINGS INC. |
/s/ Paul Cartee |
| Paul E. Cartee |
| Senior Vice President and General Counsel |
| cc: | David M. Engert |
David M. Sankaran
NightHawk Radiology Holdings Inc.
Patrick J. Schultheis
Michael Nordtvedt
Wilson Sonsini Goodrich & Rosati, Professional Corporation
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Exhibit A
Form of Reconcillation
NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(in thousands, except share data)
Reconciliation of Net Income (Loss) to Adjusted Net Income:
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||||||||||||
Net income (loss) | $ | 656 | $ | 2,657 | $ | (48,144 | ) | $ | 9,442 | |||||||
Physician non-cash stock-based compensation, net of tax | 107 | 102 | 441 | 1,041 | ||||||||||||
Employee non-cash stock-based compensation, net of tax | 16 | 693 | 2,071 | 4,131 | ||||||||||||
Amortization of intangible assets, net of tax | 1,059 | 1,175 | 4,434 | 4,646 | ||||||||||||
IBNR medical malpractice loss reserves, net of tax | (132 | ) | (203 | ) | 232 | 407 | ||||||||||
Effect of cancelled interest rate swap contracts, net of tax | 410 | — | 2,088 | — | ||||||||||||
Impact of ineffective swap contracts, net of tax | (122 | ) | — | (181 | ) | — | ||||||||||
Goodwill impairment, net of tax | 283 | — | 54,044 | — | ||||||||||||
Restructuring charges, net of tax | — | — | 29 | 434 | ||||||||||||
Severance costs, net of tax | — | — | — | 102 | ||||||||||||
Fixed asset impairment, net of tax | — | — | — | 196 | ||||||||||||
Other tax-related adjustments | — | (358 | ) | — | (358 | ) | ||||||||||
Adjusted net income | $ | 2,277 | $ | 4,066 | $ | 15,014 | $ | 20,041 | ||||||||
Reconciliation of Diluted earnings (loss) per share to Adjusted diluted earnings per share:
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, 2009 | December 31, 2008 | December 31, 2009 | December 31, 2008 | |||||||||||||
Diluted earnings (loss) per share | $ | 0.03 | $ | 0.09 | $ | (1.89 | ) | $ | 0.31 | |||||||
Physician non-cash stock-based compensation, net of tax | 0.01 | 0.01 | 0.02 | 0.04 | ||||||||||||
Employee non-cash stock-based compensation, net of tax | 0.00 | 0.02 | 0.08 | 0.14 | ||||||||||||
Amortization of intangible assets, net of tax | 0.04 | 0.04 | 0.17 | 0.15 | ||||||||||||
IBNR medical malpractice loss reserves, net of tax | (0.01 | ) | (0.01 | ) | 0.01 | 0.01 | ||||||||||
Effect of cancelled interest rate swap contracts, net of tax | 0.02 | — | 0.08 | — | ||||||||||||
Impact of ineffective swap contracts, net of tax | (0.00 | ) | — | (0.01 | ) | — | ||||||||||
Goodwill impairment, net of tax | 0.01 | — | 2.12 | — | ||||||||||||
Restructuring charges, net of tax | — | — | 0.00 | 0.01 | ||||||||||||
Severance costs, net of tax | — | — | — | 0.00 | ||||||||||||
Fixed asset impairment, net of tax | — | — | — | 0.01 | ||||||||||||
Other tax-related adjustments | — | (0.01 | ) | — | (0.01 | ) | ||||||||||
Adjusted diluted earnings per share | $ | 0.09 | $ | 0.14 | $ | 0.58 | $ | 0.66 | ||||||||
Weighted average diluted shares outstanding | 24,574,278 | 29,516,571 | 26,066,784 | 30,561,942 | ||||||||||||
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