Exhibit 99.1
Virtual Radiologic Corp. Announces Second Quarter 2009 Financial Results and Raises Guidance
Reports Second Quarter Revenue up 18 Percent to $30.6 Million and Adjusted EBITDA up 49 Percent to $7.5 Million;
Raises Full Year Guidance to Reflect Strong First Half Results
MINNEAPOLIS--(BUSINESS WIRE)--July 27, 2009--Virtual Radiologic Corp. (NASDAQ: VRAD), a leading global provider of teleradiology services, today reported financial results for its second quarter ended June 30, 2009.
Second Quarter Highlights
- Read volume up 24% to 665,000
- Revenue up 18% to $30.6 million
- Adjusted EBITDA(1) up 49% to $7.5 million and 24% of revenue
- Adjusted net income(2) up 58% to $3.5 million; adjusted diluted earnings per share(3) (EPS) up 62% to $0.21
- GAAP net income of $2.4 million; GAAP diluted EPS of $0.15
- Cash and investments totaled $41.5 million; the Company has no debt
“We are pleased with our continued growth in revenue and profitability during this challenging economic environment,” said Rob Kill, Virtual Radiologic’s president and chief executive officer. “We are raising guidance for the full year of 2009 based on our strong results to date and the confidence we have in our business model to generate continued profitable growth.”
Second Quarter Results
Total revenue increased 18% to $30.6 million for the quarter ended June 30, 2009, compared to $25.9 million for the quarter ended June 30, 2008. The increase in revenue over the second quarter of 2008 resulted primarily from a 16% increase in the number of hospitals and medical facilities served to 1,085 as of June 30, 2009, representing approximately 18% of all hospitals in the United States.
Adjusted EBITDA increased 49% to $7.5 million for the quarter ended June 30, 2009, compared to $5.0 million for the quarter ended June 30, 2008. This increase resulted primarily from the growth in total revenue along with decreases in professional services cash compensation expense and sales, general and administrative expense as a percentage of revenue.
Adjusted net income was $3.5 million for the quarter ended June 30, 2009, compared to $2.2 million for the quarter ended June 30, 2008. This resulted in adjusted diluted EPS of $0.21 for the quarter ended June 30, 2009, compared to $0.13 for the quarter ended June 30, 2008.
GAAP net income was $2.4 million for the quarter ended June 30, 2009, compared to $2.0 million for the quarter ended June 30, 2008, resulting in diluted earnings per share of $0.15 and $0.12, respectively.
2009 Guidance Update
The Company is providing the following updated guidance for the full year of 2009:
- Revenue ranging from $118.0 million to $120.0 million, compared to the previous range of $113.0 million to $117.0 million
- Adjusted EBITDA ranging from $24.0 million to $25.0 million, compared to the previous range of $22.0 million to $23.0 million
- Adjusted net income ranging from $10.3 million to $11.0 million, compared to the previous range of $9.4 million to $10.0 million
- Adjusted diluted earnings per share ranging from $0.63 to $0.67, compared to the previous range of $0.58 to $0.61
Conference Call Information
The Company will be hosting a conference call July 27, 2009 at 4:30 p.m. Eastern Time to discuss these results and provide a general business update. Participants can access the call by dialing (800) 239-9838 (within the United States and Canada), or (913) 981-4900 (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 from 7:30 p.m. Eastern Time on Monday, July 27, through midnight on Thursday, August 27, 2009. To access the replay dial (888) 203-1112 or (719) 457-0820 and use passcode 5362724.
About Virtual Radiologic
Virtual Radiologic Corporation (http://www.virtualrad.com) provides teleradiology solutions to radiology practices and medical centers throughout the United States and internationally. 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 641 clients, supporting 1,085 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. For examples of such risks and uncertainties, please see our latest Annual Report on form 10-K, as well as our subsequent filings with the Securities and Exchange Commission. Virtual Radiologic Corporation undertakes no duty to update these forward-looking statements due to new information or as a result of future events.
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, non-cash stock-based compensation expense and medical malpractice loss reserves (other than specific case reserves);
- Adjusted net income – net income excluding the effects of non-cash stock-based compensation, net of tax, and medical malpractice loss reserves (other than specific case reserves), net of tax; and
- Adjusted diluted earnings per share – adjusted net income divided by weighted average diluted shares outstanding.
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.
Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share 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.
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| (1) | | Adjusted EBITDA consists of operating income excluding the effects of depreciation and amortization, non-cash stock-based compensation expense and medical malpractice loss reserves (other than specific case reserves). See “Notes Regarding the Use of Non-GAAP Financial Measures” and “Supplemental Information and Non-GAAP Reconciliations” for more information related to adjusted EBITDA. |
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| (2) | | Adjusted net income consists of net income excluding the effects of non-cash stock-based compensation, net of tax, and medical malpractice loss reserves (other than specific case reserves), net of tax. 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. |
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| (3) | | Adjusted diluted earnings per share consists of adjusted net income divided by weighted average 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. |
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| VIRTUAL RADIOLOGIC CORPORATION |
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| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited) |
| (in thousands, except per share data) |
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| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2009 | | 2008 | | | 2009 | | 2008 |
| | | | | | | | | | | | |
| Revenue | | | $ | 30,585 | | | $ | 25,921 | | | | $ | 59,153 | | | $ | 49,241 | |
| | | | | | | | | | | | |
| Operating costs and expenses | | | | | | | | | | | | |
| Professional services | | | | 14,396 | | | | 11,910 | | | | | 28,162 | | | | 22,277 | |
| Sales, general and administrative | | | | 10,526 | | | | 9,332 | | | | | 21,592 | | | | 18,067 | |
| Depreciation and amortization | | | | 1,723 | | | | 1,216 | | | | | 3,173 | | | | 2,071 | |
| Total operating costs and expenses | | | | 26,645 | | | | 22,458 | | | | | 52,927 | | | | 42,415 | |
| | | | | | | | | | | | |
| Operating income | | | | 3,940 | | | | 3,463 | | | | | 6,226 | | | | 6,826 | |
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| Other income (expense) | | | | | | | | | | | | |
| Interest income | | | | 45 | | | | 89 | | | | | 102 | | | | 265 | |
| Interest expense | | | | (2 | ) | | | - | | | | | (3 | ) | | | - | |
| Total other income | | | | 43 | | | | 89 | | | | | 99 | | | | 265 | |
| | | | | | | | | | | | |
| Income before income tax expense | | | | 3,983 | | | | 3,552 | | | | | 6,325 | | | | 7,091 | |
| | | | | | | | | | | | |
| Income tax expense | | | | 1,593 | | | | 1,548 | | | | | 2,543 | | | | 3,083 | |
| Net income | | | | 2,390 | | | | 2,004 | | | | | 3,782 | | | | 4,008 | |
| | | | | | | | | | | | |
| Non-controlling interest expense | | | | 4 | | | | 4 | | | | | 4 | | | | 8 | |
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| Net income attributable to Virtual Radiologic | | | $ | 2,386 | | | $ | 2,000 | | | | $ | 3,778 | | | $ | 4,000 | |
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| Earnings per common share | | | | | | | | | | | | |
| Basic | | | $ | 0.15 | | | $ | 0.12 | | | | $ | 0.24 | | | $ | 0.24 | |
| Diluted | | | $ | 0.15 | | | $ | 0.12 | | | | $ | 0.23 | | | $ | 0.23 | |
| Weighted average common shares outstanding | | | | | | | | | | | | |
| Basic | | | | 15,871 | | | | 16,719 | | | | | 15,867 | | | | 16,667 | |
| Diluted | | | | 16,279 | | | | 17,198 | | | | | 16,260 | | | | 17,233 | |
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SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES |
| (Unaudited) |
| (in thousands, except per share data) |
| | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| | 2009 | 2008 | | 2009 | 2008 |
| Adjusted EBITDA(1) | | | $ | 7,483 | | | $ | 5,037 | | | | $ | 13,098 | | | $ | 9,042 | |
| Adjusted net income(1) | | | $ | 3,482 | | | $ | 2,206 | | | | $ | 5,993 | | | $ | 4,089 | |
| Adjusted diluted earnings per share(1) | | | $ | 0.21 | | | $ | 0.13 | | | | $ | 0.37 | | | $ | 0.24 | |
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(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. |
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| VIRTUAL RADIOLOGIC CORPORATION |
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| SUPPLEMENTAL INFORMATION AND NON-GAAP RECONCILIATIONS |
| (Unaudited) |
| (in thousands, except per share data) |
| | | | | | | | | |
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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, non-cash stock-based compensation expense and medical malpractice loss
reserves (other than specific case reserves). See "Notes Regarding the Use of Non-GAAP
Financial Measures" for more information related to the non-GAAP financial measures presented
in this table. |
| | | | | | | | | | |
| | Three Months Ended | | Six Months Ended |
| | June 30, | | June 30, |
| | 2009 | | 2008 | | 2009 | | 2008 |
| | | | | | | | | |
| Reconciliation of Operating income to Adjusted EBITDA: |
| | | | | | | | | |
| Operating income | | | $ | 3,940 | | $ | 3,463 | | | $ | 6,226 | | $ | 6,826 | |
| Depreciation and amortization | | | | 1,723 | | | 1,216 | | | | 3,173 | | | 2,071 | |
| Physician non-cash stock-based compensation | | | | 427 | | | (64 | ) | | | 284 | | | (559 | ) |
| Employee non-cash stock-based compensation | | | | 557 | | | 422 | | | | 1,277 | | | 704 | |
| Medical malpractice loss reserves(1) | | | | 836 | | | - | | | | 2,138 | | | - | |
| Adjusted EBITDA | | | $ | 7,483 | | $ | 5,037 | | | $ | 13,098 | | $ | 9,042 | |
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| (1) Medical malpractice loss reserves exclude specific case reserves. |
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The following table reconciles the GAAP financial measure of Net income to the non-GAAP
supplemental financial measure of Adjusted net income which excludes non-cash stock-based
compensation expense, net of tax, and medical malpractice loss reserves (other than specific
case reserves), net of tax, and presents the related Adjusted diluted earnings per share.
See "Notes Regarding the Use of Non-GAAP Financial Measures" for more information related
to the non-GAAP financial measures presented in this table. |
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| | Three Months Ended | | Six Months Ended |
| | June 30, | | June 30, |
| | 2009 | | 2008 | | 2009 | | 2008 |
| | | | | | | | | |
| Reconciliation of Net income to Adjusted net income: | | | | | | | | | |
| | | | | | | | | |
| Net income | | | $ | 2,390 | | $ | 2,004 | | | $ | 3,782 | | $ | 4,008 | |
| Physician non-cash stock-based compensation, net of tax | | | | 256 | | | (36 | ) | | | 170 | | | (317 | ) |
| Employee non-cash stock-based compensation, net of tax | | | | 334 | | | 238 | | | | 763 | | | 398 | |
| Medical malpractice loss reserves, net of tax(1) | | | | 502 | | | - | | | | 1,278 | | | - | |
| Adjusted net income | | | $ | 3,482 | | $ | 2,206 | | | $ | 5,993 | | $ | 4,089 | |
| | | | | | | | | |
| Adjusted diluted earnings per share | | | $ | 0.21 | | $ | 0.13 | | | $ | 0.37 | | $ | 0.24 | |
| | | | | | | | | |
| Weighted average diluted shares outstanding | | | | 16,279 | | | 17,198 | | | | 16,260 | | | 17,233 | |
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| (1) Medical malpractice loss reserves exclude specific case reserves. |
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| VIRTUAL RADIOLOGIC CORPORATION |
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| SUPPLEMENTAL INFORMATION AND NON-GAAP RECONCILIATIONS - CONTINUED |
| (Unaudited) |
| (in millions, except per share data) |
| | | | | | |
| |
The following tables reconcile the non-GAAP financial measures provided in the
Company's updated full year 2009 guidance to their closest comparable GAAP financial
measure. See "Notes Regarding the Use of Non-GAAP Financial Measures" for more
information related to the non-GAAP financial measures presented in this table. |
| | Year Ended |
| | December 31, |
| | 2009 |
| | | | | | |
| Net income attributable to Virtual Radiologic Corporation | | | $ | 6.0 | | - | | $ | 6.6 | |
| Income tax expense | | | | 4.1 | | - | | | 4.5 | |
| Interest income, net | | | | (0.2 | ) | - | | | (0.2 | ) |
| Depreciation and amortization | | | | 6.8 | | - | | | 6.8 | |
| EBITDA | | | | 16.7 | | - | | | 17.7 | |
| Physician non-cash stock-based compensation | | | | 0.6 | | - | | | 0.6 | |
| Employee non-cash stock-based compensation | | | | 2.4 | | - | | | 2.4 | |
| Medical malpractice loss reserves | | | | 4.3 | | - | | | 4.3 | |
| Adjusted EBITDA | | | $ | 24.0 | | - | | $ | 25.0 | |
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| Net income attributable to Virtual Radiologic Corporation | | | $ | 6.0 | | - | | $ | 6.6 | |
| Physician non-cash stock-based compensation, net of tax | | | | 0.3 | | - | | | 0.4 | |
| Employee non-cash stock-based compensation, net of tax | | | | 1.4 | | - | | | 1.4 | |
| Medical malpractice loss reserves, net of tax | | | | 2.6 | | - | | | 2.6 | |
| Adjusted net income | | | $ | 10.3 | | - | | $ | 11.0 | |
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| Diluted earnings per share | | | $ | 0.37 | | - | | $ | 0.40 | |
| Physician non-cash stock-based compensation, net of tax | | | | 0.01 | | - | | | 0.02 | |
| Employee non-cash stock-based compensation, net of tax | | | | 0.09 | | - | | | 0.09 | |
| Medical malpractice loss reserves, net of tax | | | | 0.16 | | - | | | 0.16 | |
| Adjusted diluted earnings per share | | | $ | 0.63 | | - | | $ | 0.67 | |
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| Diluted weighted average shares outstanding(1) | | | 16.3 | |
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(1)Diluted weighted average shares outstanding for the full year 2009 are calculated
using the treasury stock method in accordance with GAAP based on forecast assumptions
made by the Company. |
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| VIRTUAL RADIOLOGIC CORPORATION |
| |
| CONDENSED CONSOLIDATED BALANCE SHEETS AND SELECTED OPERATING DATA |
| (Unaudited) |
| | | | | | | | | | | |
| | | | | | | | | | | |
| | | | | | | As of | | As of |
| | | | | | | June | | December |
| | | | | | | 30, 2009 | | 31, 2008 |
| | | | | | | (in thousands) |
| | | | | | | | | | | |
| Cash and cash equivalents | | | $ | 34,395 | | | | $ | 19,180 | |
| Short-term investments | | | | 7,096 | | | | | 10,136 | |
| Accounts receivable, net | | | | 17,937 | | | | | 17,383 | |
| Other current assets | | | | 3,242 | | | | | 4,826 | |
| Non-current assets | | | | 22,022 | | | | | 19,476 | |
| Total assets | | | $ | 84,692 | | | | $ | 71,001 | |
| | | | | | | | | | |
| Current liabilities | | | $ | 13,786 | | | | $ | 11,087 | |
| Non-current liabilities | | | | 8,312 | | | | | 3,397 | |
| Total liabilities | | | | 22,098 | | | | | 14,484 | |
| Total stockholders' equity | | | | 62,594 | | | | | 56,517 | |
| Total liabilities and stockholders' equity | | | $ | 84,692 | | | | $ | 71,001 | |
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| | | | | | | As of June 30, |
| | | | | | | 2009 | | 2008 |
| Affiliated radiologists providing services | | | | 135 | | | | | 124 | |
| Customers | | | | 641 | | | | | 575 | |
| Hospitals and other medical facilities served | | | | 1,085 | | | | | 939 | |
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| Three Months Ended | | Six Months Ended |
| June 30, | | June 30, |
| 2009 | | 2008 | | 2009 | | 2008 |
| | | | | | | | | | | |
| Total reads | 665,306 | | | | | 538,194 | | | | | 1,278,423 | | | | | 1,008,888 | |
| Percentage growth over prior year period | 24 | % | | | | 30 | % | | | | 27 | % | | | | 32 | % |
| Same site volume growth(1) | 6 | % | | | | 7 | % | | | | 4 | % | | | | 10 | % |
| Percentage of read revenue from final reads | 27 | % | | | | 22 | % | | | | 27 | % | | | | 22 | % |
| | | | | | | | | | | |
(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. |
CONTACT:
Virtual Radiologic Corporation
http://www.virtualrad.com
Mollie O’Brien, 952-595-1196
Director, Investor and Public Relations
mollie.obrien@virtualrad.com
