Exhibit 99.1
NEWS RELEASE
Contact:
Alliance HealthCare Services
Howard Aihara
Executive Vice President
Chief Financial Officer
(949) 242-5300
ALLIANCE HEALTHCARE SERVICES REPORTS RESULTS
FOR THE QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2009
NEWPORT BEACH, CA—October 28, 2009—Alliance HealthCare Services, Inc. (NYSE:AIQ) (the “Company” or “Alliance”), a leading national provider of outpatient diagnostic imaging and radiation therapy services, announced results for the third quarter and nine months ended September 30, 2009.
Third Quarter and First Nine Months 2009 Financial Results
Revenue for the third quarter of 2009 decreased 3.0% to $124.2 million from $128.1 million in the third quarter of 2008. For the first nine months of 2009, revenue was $386.0 million compared to $370.0 million in the same period of 2008, an increase of 4.3%.
Alliance’s Adjusted EBITDA (as defined below) was $46.2 million in the third quarter of 2009, a 3.4% decrease, compared to $47.9 million in the same quarter a year ago. For the first nine months of 2009, Adjusted EBITDA totaled $142.1 million compared to $138.1 million in the first nine months of 2008, an increase of 2.9%.
In the third quarter of 2009, the Company recorded $0.5 million of severance and related costs compared to $0.1 million in the third quarter of 2008. For the first nine months of 2009, the Company recorded $0.8 million of severance and related costs compared to $0.5 million in the same period of 2008. These severance and related costs negatively impacted diluted earnings per share by $0.01 in the third quarter of 2009.
Alliance’s net income was $3.0 million in the third quarter of 2009 compared to $6.3 million in the third quarter 2008. For the first nine months of 2009, net income totaled $11.5 million compared to $14.9 million in the first nine months of 2008.
Earnings per share on a diluted basis, computed in accordance with generally accepted accounting principles, was $0.06 per share in the third quarter of 2009 and $0.12 per share in the third quarter of 2008. Earnings per share on a diluted basis were $0.22 per share in the first nine months of 2009 and $0.29 per share in the first nine months of 2008. Beginning January 1, 2009, costs related to mergers and acquisitions must be expensed as incurred. In the first nine months of 2009, the Company recorded $0.9 million in acquisition related costs (included in Transaction costs) which negatively impacted diluted earnings per share by $0.01.
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Cash flows provided by operating activities was $46.3 million in the third quarter of 2009 compared to $44.1 million in the corresponding quarter of 2008, and totaled $105.1 million and $96.7 million in the first nine months of 2009 and 2008, respectively. Capital expenditures in the third quarter of 2009 were $17.5 million compared to $14.6 million in the third quarter of 2008, and were $51.4 million and $41.2 million for the first nine months of 2009 and 2008, respectively. Alliance opened four new fixed-site imaging centers in the third quarter of 2009. Alliance opened 18 new fixed-site imaging centers and opened two radiation oncology centers in the first nine months of 2009.
Alliance’s net debt, defined as total long-term debt (including current maturities) less cash and cash equivalents, decreased $54.3 million to $535.0 million at September 30, 2009 from $589.3 million at December 31, 2008. Cash and cash equivalents were $129.7 million at September 30, 2009 and $73.3 million at December 31, 2008.
The Company’s total long-term debt (including current maturities) increased to $664.7 million at September 30, 2009 from $662.6 million as of December 31, 2008.
Paul S. Viviano, Chairman of the Board and Chief Executive Officer, stated, “Alliance HealthCare Services continues to be focused on renewals with existing customers, building de novo projects for MRI, PET/CT, and radiation oncology, optimizing operating efficiencies and implementing cost savings, and strengthening our balance sheet while diligently evaluating selective acquisitions. Alliance is committed to continuing the diversification of our clinical service lines, emphasizing the development of fixed-site imaging centers and de novo radiation therapy cancer centers.”
Full Year 2009 Guidance
Alliance is reaffirming its full year 2009 guidance ranges as follows:
| | Full Year 2009 | |
| | Guidance Ranges | |
| | (Dollars in millions) | |
| | | |
Revenue | | $503 - $518 | |
Adjusted EBITDA | | $177 - $192 | |
Cash capital expenditures | | $60 - $70 | |
Decrease in long-term debt, net of the change in cash and cash equivalents (before acquisitions) | | $44 - $59 | |
Fixed-site imaging center openings | | 20 - 25 | |
Radiation therapy center openings | | 3 - 4 | |
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Third Quarter 2009 Earnings Conference Call
Investors and all others are invited to listen to a conference call discussing third quarter 2009 results. The conference call is scheduled for Thursday, October 29 at 8:30 a.m. Eastern Time. The call will be broadcast live on the Internet and can be accessed by visiting the Company’s website at www.alliancehealthcareservices-us.com. Click on Audio Presentations in the Investors section of the website to access the link.
The conference call can be accessed at (888) 694-4676 (United States) or (973) 582-2737 (International). Interested parties should call at least 5 minutes prior to the call to register. A telephone replay will be available until January 29, 2010. The telephone replay can be accessed by calling (800) 642-1687 (United States) or (706) 645-9291 (International). The conference call identification number is 37544375.
Definition of Adjusted EBITDA
Adjusted EBITDA is included because the Company’s amended credit agreement uses a measure similar to this to calculate the Company’s compliance with specified covenants. Adjusted EBITDA as defined under the terms of Alliance’s Credit Agreement, is earnings before interest expense and other, net; income tax expense; depreciation expense; amortization expense; noncontrolling interest in subsidiaries; share-based payment; a maximum of $750,000 of severance and related costs in each fiscal year; transaction costs; and other non-cash charges. For a more detailed discussion of Adjusted EBITDA and reconciliation to net income, see the table entitled “Adjusted EBITDA” included in the tables following this release.
About Alliance HealthCare Services
Alliance HealthCare Services is a leading national provider of shared-service and fixed-site diagnostic imaging services, based upon annual revenue and number of diagnostic imaging systems deployed, and a provider of radiation therapy services. Alliance provides imaging and therapeutic services primarily to hospitals and other healthcare providers on a shared and full-time service basis, in addition to operating a growing number of fixed-site imaging and radiation therapy centers. The Company had 493 diagnostic imaging and radiation therapy systems, including 288 MRI systems and 126 PET or PET/CT systems, and served over 1,000 clients in 45 states at September 30, 2009. The Company operated 110 fixed-site imaging centers (three in unconsolidated joint ventures), which includes systems installed in hospitals or other buildings on or near hospital campuses, medical groups’ offices, or medical buildings and retail sites. The Company also operated 23 radiation therapy centers and stereotactic radiosurgery facilities (two radiation therapy centers are in unconsolidated joint ventures) as of September 30, 2009.
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Forward-Looking Statements
This press release contains forward-looking statements relating to future events, including statements related to investment, development and acquisition activity, the integration of acquired businesses into the Company and the Company’s full year 2009 guidance. In this context, forward-looking statements often address the Company’s expected future business and financial results and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks” or “will.” Forward-looking statements by their nature address matters that are uncertain and subject to risks. Such uncertainties and risks include: changes in the preliminary financial results and estimates due to the restatement or review of the Company’s financial statements; the nature, timing and amount of any restatement or other adjustments; the Company’s ability to make timely filings of its required periodic reports under the Securities Exchange Act of 1934; issues relating to the Company’s ability to maintain effective internal control over financial reporting and disclosure controls and procedures; the Company’s high degree of leverage and its ability to service its debt; factors affecting the Company’s leverage, including interest rates; the risk that the counterparties to the Company’s interest rate swap agreements fail to satisfy their obligations under these agreements; the Company’s ability to obtain financing; the effect of operating and financial restrictions in the Company’s debt instruments; the accuracy of the Company’s estimates regarding its capital requirements; the effect of intense levels of competition in the Company’s industry; changes in the rates or methods of third party reimbursements for diagnostic imaging and radiation oncology services; fluctuations or unpredictability of the Company’s revenues, including as a result of seasonality; changes in the rates or methods of third party reimbursements for diagnostic imaging and radiation oncology services; changes in the healthcare regulatory environment; the Company’s ability to keep pace with technological developments within its industry; the growth in the market for MRI and other services; the disruptive effect of hurricanes and other natural disasters; adverse changes in general domestic and worldwide economic conditions and instability and disruption of credit markets; difficulties the Company may face in connection with recent, pending or future acquisitions, including unexpected costs or liabilities resulting from the acquisitions, diversion of management’s attention from the operation of the Company’s business, and risks associated with integration of the acquisitions; and other risks and uncertainties identified in the Risk Factors section of the Company’s Form 10-K for the year ended December 31, 2008, filed with the Securities and Exchange Commission (the “SEC”) as may be modified or supplemented by our subsequent filings with the SEC. These uncertainties may cause actual future results or outcomes to differ materially from those expressed in the Company’s forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake to update its forward-looking statements except as required under the federal securities laws.
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ALLIANCE HEALTHCARE SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
(in thousands, except per share amounts)
| | Quarter Ended | | Nine Months Ended | |
| | September 30, | | September 30, | |
| | 2008 | | 2009 | | 2008 | | 2009 | |
| | | | | | | | | |
Revenues | | $ | 128,125 | | $ | 124,227 | | $ | 370,027 | | $ | 386,031 | |
| | | | | | | | | |
Costs and expenses: | | | | | | | | | |
Cost of revenues, excluding depreciation and amortization | | 67,047 | | 65,515 | | 193,316 | | 202,060 | |
Selling, general and administrative expenses | | 15,876 | | 15,746 | | 46,878 | | 51,065 | |
Transaction costs | | — | | 79 | | — | | 880 | |
Severance and related costs | | 127 | | 462 | | 453 | | 750 | |
Depreciation expense | | 21,894 | | 24,184 | | 64,972 | | 71,378 | |
Amortization expense | | 2,470 | | 2,721 | | 6,215 | | 8,258 | |
Interest expense and other, net | | 10,706 | | 11,166 | | 33,771 | | 33,380 | |
Loss on extinguishment of debt | | — | | — | | 61 | | — | |
Other (income) and expense, net | | (140 | ) | (244 | ) | (473 | ) | (878 | ) |
Total costs and expenses | | 117,980 | | 119,629 | | 345,193 | | 366,893 | |
Income before income taxes, earnings from unconsolidated investees, and noncontrolling interest, net of taxes | | 10,145 | | 4,598 | | 24,834 | | 19,138 | |
Income tax expense | | 4,165 | | 2,053 | | 10,998 | | 8,269 | |
Earnings from unconsolidated investees | | (1,235 | ) | (1,260 | ) | (3,549 | ) | (2,678 | ) |
Net income | | 7,215 | | 3,805 | | 17,385 | | 13,547 | |
Less: Net income attributable to noncontrolling interest | | (884 | ) | (783 | ) | (2,520 | ) | (2,030 | ) |
Net income attributable to Alliance HealthCare Services, Inc. | | $ | 6,331 | | $ | 3,022 | | $ | 14,865 | | $ | 11,517 | |
| | | | | | | | | |
Comprehensive income, net of taxes | | | | | | | | | |
Net income attributable to Alliance HealthCare Services, Inc. | | $ | 6,331 | | $ | 3,022 | | $ | 14,865 | | $ | 11,517 | |
Unrealized loss on hedging transactions, net of taxes | | (1,440 | ) | (304 | ) | (215 | ) | (464 | ) |
Comprehensive income, net of taxes: | | $ | 4,891 | | $ | 2,718 | | $ | 14,650 | | $ | 11,053 | |
| | | | | | | | | |
Earnings per common share attributable to Alliance HealthCare Services, Inc.: | | | | | | | | | |
Basic | | $ | 0.12 | | $ | 0.06 | | $ | 0.29 | | $ | 0.22 | |
Diluted | | $ | 0.12 | | $ | 0.06 | | $ | 0.29 | | $ | 0.22 | |
| | | | | | | | | |
Weighted average number of shares of common stock and common stock equivalents: | | | | | | | | | |
Basic | | 51,072 | | 51,765 | | 51,037 | | 51,691 | |
Diluted | | 52,073 | | 52,014 | | 51,945 | | 52,157 | |
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ALLIANCE HEALTHCARE SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
| | December 31, | | September 30, | |
| | 2008 | | 2009 | |
ASSETS | | | | | |
Current assets: | | | | | |
Cash and cash equivalents | | $ | 73,305 | | $ | 129,739 | |
Accounts receivable, net of allowance for doubtful accounts | | 67,147 | | 68,146 | |
Deferred income taxes | | 17,719 | | 17,719 | |
Prepaid expenses and other current assets | | 10,272 | | 7,082 | |
Other receivables | | 7,902 | | 5,215 | |
Total current assets | | 176,345 | | 227,901 | |
| | | | | |
Equipment, at cost | | 836,842 | | 846,939 | |
Less accumulated depreciation | | (479,609 | ) | (507,224 | ) |
Equipment, net | | 357,233 | | 339,715 | |
| | | | | |
Goodwill | | 193,430 | | 194,243 | |
Other intangible assets, net | | 110,720 | | 102,806 | |
Deferred financing costs, net | | 7,173 | | 5,688 | |
Other assets | | 38,822 | | 31,964 | |
Total assets | | $ | 883,723 | | $ | 902,317 | |
| | | | | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | | | | | |
Current liabilities: | | | | | |
Accounts payable | | $ | 21,468 | | $ | 12,407 | |
Accrued compensation and related expenses | | 18,575 | | 18,293 | |
Accrued interest payable | | 3,642 | | 8,763 | |
Other accrued liabilities | | 38,446 | | 34,829 | |
Current portion of long-term debt | | 7,743 | | 6,670 | |
Total current liabilities | | 89,874 | | 80,962 | |
| | | | | |
Long-term debt, net of current portion | | 365,323 | | 366,855 | |
Senior subordinated notes | | 289,496 | | 291,201 | |
Other liabilities | | 7,901 | | 8,065 | |
Deferred income taxes | | 102,136 | | 108,480 | |
Total liabilities | | 854,730 | | 855,563 | |
| | | | | |
Stockholders’ equity: | | | | | |
Common stock | | 514 | | 517 | |
Treasury stock | | (430 | ) | (430 | ) |
Additional paid-in capital | | 4,606 | | 9,031 | |
Accumulated comprehensive loss | | (2,159 | ) | (2,623 | ) |
Retained earnings | | 20,996 | | 32,513 | |
Total Alliance HealthCare Services, Inc. stockholders’ equity | | 23,527 | | 39,008 | |
Noncontrolling interest | | 5,466 | | 7,746 | |
Total stockholders’ equity | | 28,993 | | 46,754 | |
Total liabilities and stockholders’ equity | | $ | 883,723 | | $ | 902,317 | |
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ALLIANCE HEALTHCARE SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
| | Nine Months Ended
September 30, | |
| | 2008 | | 2009 | |
Operating activities: | | | | | |
Net income attributable to Alliance HealthCare Services, Inc. | | $ | 14,865 | | $ | 11,517 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | |
Provision for doubtful accounts | | 3,838 | | 1,976 | |
Share-based payment | | 3,966 | | 4,492 | |
Depreciation and amortization | | 71,187 | | 79,636 | |
Amortization of deferred financing costs | | 1,728 | | 1,742 | |
Accretion of discount on senior subordinated notes | | 1,509 | | 1,705 | |
Adjustment of derivatives to fair value | | (682 | ) | (405 | ) |
Distributions greater than (less than) undistributed earnings from investees | | 844 | | (567 | ) |
Noncontrolling interest in subsidiaries | | 3,532 | | (1,460 | ) |
Deferred income taxes | | 5,080 | | 6,655 | |
Excess tax benefit from share-based payment arrangements | | (218 | ) | (8 | ) |
Gain on sale of assets | | (473 | ) | (977 | ) |
Loss on extinguishment of debt | | 61 | | — | |
Changes in operating assets and liabilities, net of acquisitions: | | | | | |
Accounts receivable | | (6,744 | ) | (2,898 | ) |
Prepaid expenses and other current assets | | 62 | | 3,212 | |
Other receivables | | 777 | | 744 | |
Other assets | | (8,389 | ) | (1,764 | ) |
Accounts payable | | (7,152 | ) | (3,776 | ) |
Accrued compensation and related expenses | | 935 | | (282 | ) |
Accrued interest payable | | 4,403 | | 5,121 | |
Income taxes payable | | — | | (277 | ) |
Other accrued liabilities | | 7,451 | | 748 | |
Other liabilities | | 167 | | — | |
Net cash provided by operating activities | | 96,747 | | 105,134 | |
| | | | | |
Investing activities: | | | | | |
Equipment purchases | | (41,192 | ) | (51,389 | ) |
Decrease in deposits on equipment | | 1,192 | | 270 | |
Acquisitions, net of cash received | | (34,582 | ) | (760 | ) |
(Increase) decrease in cash in escrow | | (3,105 | ) | 2,947 | |
Investment in unconsolidated joint ventures | | — | | (240 | ) |
Proceeds from sale of assets | | 2,713 | | 6,459 | |
Net cash used in investing activities | | (74,974 | ) | (42,713 | ) |
| | | | | | | |
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ALLIANCE HEALTHCARE SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited)
(in thousands)
| | Nine Months Ended
September 30, | |
| | 2008 | | 2009 | |
| | | | | |
Financing activities: | | | | | |
Principal payments on equipment debt | | (3,589 | ) | (6,204 | ) |
Proceeds from equipment debt | | 396 | | 415 | |
Principal payments on term loan facility | | (15,000 | ) | — | |
Principal payments on senior subordinated notes | | (3,541 | ) | — | |
Payments of debt issuance costs | | (973 | ) | (257 | ) |
Payments of debt retirement costs | | (61 | ) | — | |
Proceeds from shared-based payment arrangements | | 576 | | 51 | |
Excess tax benefit from share-based payment arrangements | | 218 | | 8 | |
Net cash used in financing activities | | (21,974 | ) | (5,987 | ) |
| | | | | |
Net (decrease) increase in cash and cash equivalents | | (201 | ) | 56,434 | |
Cash and cash equivalents, beginning of period | | 120,892 | | 73,305 | |
Cash and cash equivalents, end of period | | $ | 120,691 | | $ | 129,739 | |
| | | | | |
Supplemental disclosure of cash flow information: | | | | | |
Interest paid | | $ | 28,873 | | $ | 25,555 | |
Income taxes paid, net of refunds | | 5,491 | | (1,202 | ) |
| | | | | |
Supplemental disclosure of non-cash investing and financing activities: | | | | | |
Net book value of assets exchanged | | $ | 293 | | $ | 2,132 | |
Capital lease obligations related to the purchase of equipment | | 2,438 | | 6,955 | |
Capital lease obligations transferred | | — | | (707 | ) |
Comprehensive loss from hedging transactions, net of taxes | | (215 | ) | (464 | ) |
Equipment debt assumed in connection with acquistions | | 2,296 | | — | |
Equipment purchases in accounts payable | | 5,442 | | 595 | |
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ALLIANCE HEALTHCARE SERVICES, INC.
ADJUSTED EBITDA
(in thousands)
Adjusted EBITDA represents net income before interest expense and other, net; income tax expense; depreciation expense; amortization expense; noncontrolling interest in subsidiaries; share-based payment; a maximum of $750,000 of severance and related costs in each fiscal year; transaction costs; and other non-cash charges. Adjusted EBITDA is not a presentation made in accordance with accounting principles generally accepted in the United States of America. Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows from operating activities and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. Adjusted EBITDA is included because the Company’s amended credit agreement uses a measure similar to this to calculate the Company’s compliance with covenants such as interest coverage ratio (as defined in Section 7.6A of the Company’s amended credit agreement), consolidated leverage ratio (as defined in Section 7.6B of the Company’s amended credit agreement) and consolidated senior leverage ratio (as defined in Section 7.6J of the Company’s amended credit agreement). The Company’s failure to comply with these covenants could result in the amounts borrowed under these instruments, together with accrued interest and fees, becoming immediately due and payable. If the Company is not able to refinance this debt when it becomes due, the Company could become subject to bankruptcy proceedings. Per the credit agreement, the Company was required to maintain a maximum consolidated leverage ratio not to exceed 4.00 to 1.00 as of both September 30, 2008 and 2009, a maximum consolidated senior leverage ratio not to exceed 3.00 to 1.00 as of September 30, 2008 and 2009, and a minimum interest coverage ratio in excess of 2.75 to 1.00 for the years ended September 30, 2008 and 2009. When an acquisition has been consummated in the prior 12 month period, the Company is required to calculate these ratios using an adjustment as if the acquisition had been consummated on the first day of the 12 month period. Adjusted EBITDA as presented below is not adjusted for acquisitions in this manner. The Company was in compliance with the covenants in the amended credit agreement for the quarters ended September 30, 2008 and 2009. While Adjusted EBITDA is used to measure the Company’s compliance with its debt covenants, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. The calculation of Adjusted EBITDA as presented in this press release is shown below:
| | Third Quarter Ended September 30, | | Nine Months Ended September 30, | |
| | 2008 | | 2009 | | 2008 | | 2009 | |
Net income applicable to Alliance HealthCare Services, Inc. | | $ | 6,331 | | $ | 3,022 | | $ | 14,865 | | $ | 11,517 | |
Income tax expense | | 4,165 | | 2,053 | | 10,998 | | 8,269 | |
Interest expense and other, net | | 10,706 | | 11,166 | | 33,771 | | 33,380 | |
Amortization expense | | 2,470 | | 2,721 | | 6,215 | | 8,258 | |
Depreciation expense | | 21,894 | | 24,184 | | 64,972 | | 71,378 | |
Share-based payment (included in selling, general and administrative expenses) | | 1,207 | | 1,445 | | 3,966 | | 4,443 | |
Noncontrolling interest in subsidiaries | | 884 | | 783 | | 2,520 | | 2,030 | |
Severance and related costs | | 127 | | 462 | | 453 | | 750 | |
Transaction costs | | — | | 79 | | — | | 880 | |
Loss on extinguishment of debt | | — | | — | | 61 | | — | |
Other non-cash charges (included in other income and expenses, net) | | 76 | | 309 | | 273 | | 1,158 | |
Adjusted EBITDA | | $ | 47,860 | | $ | 46,224 | | $ | 138,094 | | $ | 142,063 | |
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ALLIANCE HEALTHCARE SERVICES, INC.
ADJUSTED EBITDA (continued)
(in thousands)
Consolidated leverage ratio, as of the last day of any fiscal quarter, is defined under the Company’s credit agreement as the ratio of the consolidated total debt as of that date to the consolidated Adjusted EBITDA for the four fiscal quarters ending on that date. The Company is required under its amended credit agreement to maintain a maximum consolidated leverage ratio not to exceed 4.00 to 1.00. As of September 30, 2008 and 2009, our consolidated leverage ratio was as follows:
| | September 30, | |
| | 2008 | | 2009 | |
Consolidated total debt | | $ | 655,305 | | $ | 664,726 | |
Last 12 months consolidated Adjusted EBITDA | | 177,789 | | 186,546 | |
Last 12 months consolidated Adjusted EBITDA, as adjusted | | 184,916 | | 188,009 | |
Consolidated leverage ratio | | 3.54x | | 3.54x | |
| | | | | | | |
Consolidated senior leverage ratio, as of the last day of any fiscal quarter, is defined under the Company’s credit agreement as the ratio of the consolidated senior debt as of that date to the consolidated Adjusted EBITDA for the four fiscal quarters ending on that date. The Company is required under its amended credit agreement to maintain a maximum consolidated senior leverage ratio not to exceed 3.00 to 1.00. As of September 30, 2008 and 2009, the Company’s consolidated senior leverage ratio was as follows:
| | September 30, | |
| | 2008 | | 2009 | |
Consolidated senior debt | | $ | 366,352 | | $ | 373,525 | |
Last 12 months consolidated Adjusted EBITDA | | 177,789 | | 186,546 | |
Last 12 months consolidated Adjusted EBITDA, as adjusted | | 184,916 | | 188,009 | |
Consolidated senior leverage ratio | | 1.98x | | 1.99x | |
| | | | | | | |
Interest coverage ratio is defined under the Company’s credit agreement as the ratio of consolidated Adjusted EBITDA to consolidated cash interest expense for the four fiscal quarter period ending on the last day of any fiscal quarter. The Company is required under its amended credit agreement to maintain a minimum consolidated interest coverage ratio of 2.75 to 1.00. As of September 30, 2008 and 2009, the Company’s interest coverage ratio was as follows:
| | September 30, | |
| | 2008 | | 2009 | |
Last 12 months consolidated Adjusted EBITDA | | $ | 177,789 | | $ | 186,546 | |
Last 12 months consolidated Adjusted EBITDA, as adjusted | | 184,916 | | 188,009 | |
Last 12 months consolidated cash interest expense | | 39,471 | | 41,567 | |
Interest coverage ratio | | 4.68x | | 4.52x | |
| | | | | | | |
The reconciliation from net income to Adjusted EBITDA for the 2009 guidance range is shown below:
| | 2009 Full Year | |
| | Guidance Range | |
| | (Dollars in millions) | |
Net income applicable to Alliance HealthCare Services, Inc. | | $ | 9 | | $ | 17 | |
Income tax expense | | 7 | | 12 | |
Depreciation expense; amortization expense; interest expense and other, net; noncontrolling interest; share-based payment; and other expenses | | 161 | | 163 | |
Adjusted EBITDA | | $ | 177 | | $ | 192 | |
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ALLIANCE HEALTHCARE SERVICES, INC.
SELECTED STATISTICAL INFORMATION
| | Third Quarter Ended | |
| | September 30, | |
| | 2008 | | 2009 | |
MRI | | | | | |
Average number of total systems | | 305.4 | | 276.7 | |
Average number of scan-based systems | | 255.7 | | 240.2 | |
Scans per system per day (scan-based systems) | | 9.23 | | 8.74 | |
Total number of scan-based MRI scans | | 157,737 | | 141,392 | |
Price per scan | | $ | 379.44 | | $ | 383.92 | |
| | | | | |
Scan-based MRI revenue (in millions) | | $ | 59.9 | | $ | 54.3 | |
Non-scan based MRI revenue (in millions) | | 7.7 | | 4.5 | |
Total MRI revenue (in millions) | | $ | 67.6 | | $ | 58.8 | |
| | | | | |
PET and PET/CT | | | | | |
Average number of systems | | 92.0 | | 119.2 | |
Scans per system per day | | 6.17 | | 5.88 | |
Total number of PET and PET/CT scans | | 37,756 | | 45,415 | |
Price per scan | | $ | 1,196 | | $ | 1,089 | |
| | | | | |
Total PET and PET/CT revenue (in millions) | | $ | 45.4 | | $ | 50.0 | |
| | | | | |
Revenue breakdown (in millions) | | | | | |
Total MRI revenue | | $ | 67.6 | | $ | 58.8 | |
PET and PET/CT revenue | | 45.4 | | 50.0 | |
Radiation oncology, other modalities and other revenue | | 15.1 | | 15.4 | |
Total revenues | | $ | 128.1 | | $ | 124.2 | |
| | 2008 | | 2009 | |
Total fixed-site revenue (in millions) | | | | | |
Third quarter ended September 30, | | $ | 26.1 | | $ | 27.7 | |
| | | | | | | |
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ALLIANCE HEALTHCARE SERVICES, INC.
SELECTED STATISTICAL INFORMATION
MRI REVENUE GAP
(in millions)
The Company utilizes the MRI revenue gap as a statistical measure of its MRI client losses and new client contracts. The MRI revenue gap is calculated by measuring the difference between (a) the quarterly MRI revenue run rate lost as a result of clients choosing to terminate contracts with the Company, excluding clients for which Alliance provides interim service and clients that the Company elects to terminate, and (b) projected quarterly new MRI revenue from new client contracts commencing service in the quarter.
The MRI revenue gap for the last eight calendar quarters and the last twelve month period ended September 30, 2009 is as follows:
| | (a) | | (b) | | | |
| | Revenue | | New | | MRI | |
| | Lost | | Revenue | | Revenue Gap | |
2007 | | | | | | | |
Fourth Quarter | | $ | (10.1 | ) | $ | 6.5 | | $ | (3.6 | ) |
| | | | | | | |
2008 | | | | | | | |
First Quarter | | $ | (8.4 | ) | $ | 3.3 | | $ | (5.1 | ) |
Second Quarter | | (9.1 | ) | 4.7 | | (4.4 | ) |
Third Quarter | | (7.0 | ) | 2.2 | | (4.8 | ) |
Fourth Quarter | | (7.7 | ) | 4.0 | | (3.7 | ) |
| | | | | | | |
2009 | | | | | | | |
First Quarter | | $ | (5.7 | ) | $ | 2.3 | | $ | (3.4 | ) |
Second Quarter | | (9.0 | ) | 6.8 | | (2.2 | ) |
Third Quarter | | (12.5 | ) | 4.2 | | (8.3 | ) |
| | | | | | | |
Last Twelve Months Ended September 30, 2009 | | $ | (34.9 | ) | $ | 17.3 | | $ | (17.6 | ) |
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