EXHIBIT 99.1
FOR IMMEDIATE RELEASE
RadNet Reports First Quarter 2008 Results
o For the quarter, RadNet reports Revenue of $114.7 million and Adjusted
EBITDA((1))of $22.1 million; increases of 8.4% and 8.5%, respectively
over the prior year's quarterly results
o RadNet reports increased procedural volumes
o First quarter per share loss was $(0.15) compared to $(0.16) for three
month period ended March 31, 2007
o Radnet reaffirms its previously announced 2008 Guidance of $470-500
million of Revenue and $100-$115 of Adjusted EBITDA(1)
LOS ANGELES, Calif., May 12, 2008 - 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 first quarter ended March 31, 2008.
For its first quarter of fiscal 2008, RadNet reported Revenue and Adjusted
EBITDA(1) of $114.7 million and $22.1 million, respectively. Revenue increased
8.4% (or $8.9 million) and Adjusted EBITDA(1) increased 8.5% (or $1.7 million),
respectively over the prior year's quarter. The results reflect improved volume
in existing centers as well as the contribution of acquisitions and operating
initiatives.
For the first quarter of 2008, as compared to the prior year's quarter, MRI
volume increased 3.3%, CT volume decreased 1.6% and PET/CT volume increased
33.1%. Overall volume, taking into account routine imaging exams, inclusive of
x-ray, ultrasound, mammography and other exams, increased 4.2% over the prior
year's quarter.
Net Loss for the first quarter was $5.5 million, or $(0.15) per share, compared
to a net loss of $5.6 million or $(0.16) per share, reported for the three month
period ended March 31, 2007 (based upon a weighted average number of fully
diluted shares outstanding of 35.7 million and 34.4 million for these periods in
2008 and 2007, respectively). Affecting net income in the first quarter of 2008
were certain non-cash expenses and non-recurring items including:
o $951,000 non-cash loss on the fair value of interest rate hedges
related to the Company's credit facilities;
o $700,000 expense related to a payment to the settlement of a business
dispute
o $532,000 of Deferred Financing Expense related to the amortization of
financing fees paid as part of our $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;
o $454,000 of non-cash employee stock compensation expense resulting
from the vesting of certain options and warrants;
o Approximately $400,000 in bonus compensation paid to our some of our
physician groups for their assistance with our transition to digital
mammography
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(1) Definition of EBITDA, a non-GAAP measure, is found on the last page of this
release.
During this first quarter, RadNet's accomplishments included the following:
o Substantially completing the transition of its Maryland operations to
digital mammography;
o Completing the construction of its second interventional radiology and
imaging center. This facility, located in Rancho Mirage, CA opened for
business during the first week in May. It complements RadNet's
portfolio of multi-modality services in the Palm Springs/Palm Desert
market, a market where RadNet has six other imaging facilities and
where it has substantial procedural backlogs;
o Replacing two centers that were acquired as part of Radiologix in
Yonkers, NY and Pleasanton, CA. These centers opened for business in
May;
o Completing the acquisition of the Papastavros Group of imaging centers
in the middle of March. RadNet also began the transition of
Papastavros' operations to digital mammography;
o Acquiring the Rolling Oaks imaging centers in Westlake/Thousand Oaks,
CA in February;
o Expanding two newly restructured joint ventures with Carroll County
and St. Joe's hospitals in Maryland; and
o Installing five additional MRI systems within RadNet's existing
operating centers.
"We are pleased with our progress in the first quarter of 2008, not only because
the financial results reflect increasing volumes, revenue and EBITDA from the
prior year's quarter, but also because of our completion of a number of key
operational accomplishments. I believe these operational accomplishments will
set the stage for significant improvement in our financial performance during
the rest of the year." said Dr. Howard Berger, Chairman and Chief Executive
Officer of RadNet.
"Although we have made the investments and incurred operating costs associated
with many of the acquisitions and initiatives we recently completed, our first
quarter results did not include the financial contribution from most of them.
Our reported results do not yet include full-quarter contributions from our
acquisitions of Rolling Oaks and Papastavros, nor do they include a significant
portion of the anticipated benefit from our conversion to digital mammography,
expanded joint venture relationships and five new MRI systems. Additionally, our
results exclude contributions from the acquisition of five imaging centers from
Insight Health, our Breastlink breast oncology acquisitions and related
initiatives and our new interventional radiology and imaging center in Rancho
Mirage, CA." said Dr. Berger. All of these acquisitions and initiatives should
contribute materially to our second quarter and subsequent quarters."
Dr. Berger added, "Our industry continues to present us with growth
opportunities at an accelerating pace. We remain highly selective regarding the
opportunities we pursue, which we require to be consistent with our focused
multi-modality and geographic clustering approach. We continue to believe that
we are extremely well positioned to capitalize on opportunities to grow our
business significantly."
2008 Fiscal Year Guidance
RadNet is reaffirming its 2008 guidance ranges as follows:
Revenue $470 million - $500 million
Adjusted EBITDA(2) $100 million - $115 million
Capital Expenditures $15-$20 million maintenance level
(plus growth Capital Expenditure of up to $25
million)
Cash Interest Expense $46-$52 million
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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 160 fully-owned and operated
outpatient imaging centers. RadNet's core markets include California, Maryland,
Delaware 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 Forms 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.
CONTACTS:
RadNet, Inc.
Mark Stolper, 310-445-2800
Executive Vice President and Chief Financial Officer
Integrated Corporate Relations, Inc.
John Mills, 310-954-1105
jmills@icrinc.com
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RADNET, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE DATA)
March 31, December 31,
2008 2007
--------- ---------
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ -- $ 18
Restricted cash 8,046 --
Accounts receivable, net 96,963 87,285
Refundable income taxes 103 105
Prepaid expenses and other current assets 11,356 10,273
--------- ---------
Total current assets 116,468 97,681
PROPERTY AND EQUIPMENT, NET 194,599 164,097
OTHER ASSETS
Goodwill 94,040 84,395
Other intangible assets 59,064 58,908
Deferred financing costs, net 12,825 9,161
Investment in joint ventures 16,011 15,036
Deposits and other 4,916 4,342
--------- ---------
Total other assets 186,856 171,842
--------- ---------
Total assets $ 497,923 $ 433,620
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 73,684 $ 59,965
Due to affiliates 809 1,350
Notes payable 4,802 3,536
Current portion of deferred rent 195 195
Obligations under capital leases 11,780 9,455
--------- ---------
Total current liabilities 91,270 74,501
--------- ---------
LONG-TERM LIABILITIES
Line of credit 12,379 4,222
Deferred rent, net of current portion 4,684 4,394
Deferred taxes 277 277
Notes payable, net of current portion 420,050 382,064
Obligations under capital lease, net of current portion 27,268 22,527
Other non-current liabilities 20,357 15,259
--------- ---------
Total long-term liabilities 485,015 428,743
--------- ---------
COMMITMENTS AND CONTINGENCIES
MINORITY INTERESTS 220 206
STOCKHOLDERS' DEFICIT
Common stock - $.0001 par value, 200,000,000 shares authorized; 35,667,891
and 35,239,558 shares issued and outstanding at
March 31, 2008 and December 31, 2007, respectively 4 4
Paid-in-capital 150,346 149,631
Accumulated other comprehensive loss (8,571) (4,579)
Accumulated deficit (220,361) (214,886)
--------- ---------
Total stockholders' deficit (78,582) (69,830)
--------- ---------
Total liabilities and stockholders' deficit $ 497,923 $ 433,620
========= =========
The accompanying notes are an integral part of these financial statements.
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RADNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT SHARE DATA)
(unaudited)
Three Months Ended
March 31,
------------------------------
2007 2008
------------ ------------
NET REVENUE $ 105,815 $ 114,698
OPERATING EXPENSES
Operating expenses 82,405 88,966
Depreciation and amortization 10,910 12,469
Provision for bad debts 7,553 6,487
Loss on sale of equipment -- 8
Severance costs 538 31
------------ ------------
Total operating expenses 101,406 107,961
INCOME FROM OPERATIONS 4,409 6,737
OTHER EXPENSES (INCOME)
Interest expense 10,837 13,588
Other income -- (32)
------------ ------------
Total other expense 10,837 13,556
LOSS BEFORE INCOME TAXES, MINORITY
INTERESTS AND EARNINGS FROM
JOINT VENTURES (6,428) (6,819)
Provision for income taxes (16) (123)
Minority interest in income of subsidiaries (115) (24)
Equity in earnings of joint ventures 995 1,491
------------ ------------
NET LOSS $ (5,564) $ (5,475)
============ ============
BASIC AND DILUTED NET LOSS PER SHARE $ (0.16) $ (0.15)
============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted 34,386,915 35,667,891
============ ============
The accompanying notes are an integral part of these financial statements.
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RADNET, INC.
RECONCILIATION OF GAAP INCOME FROM OPERATIONS TO Adjusted EBITDA(1)
(IN THOUSANDS)
Three Months Ended
March 31,
----------------------
2008 2007
-------- --------
Income from Operations (a) $ 6,737 $ 4,409
Plus Depreciation and Amortization 12,469 10,910
Plus Equity in Earnings of Joint Ventures 1,491 995
Plus Non Cash Employee Stock Compensation + Equity Bonus Accrual(b) 454 2,820
Plus Loss on Sale of Equipment 8 --
Less Minority Interest in (Income) Loss of Subsidiaries (24) (115)
-------- --------
Subtotal 21,135 19,019
Plus Severance: Elimination of Corporate Personnel 31 538
Plus One Time Expense Related to Business Dispute Settlement 700
Plus One Time Consulting Fees Related to Review of 2006 Accounts Receivables 200 250
Plus One Time Payment and Covenant Not to Compete -- 120
Plus One Time NASDAQ Listing Fee -- 362
Plus Non-Cash SAB 108 Adjustment -- 43
-------- --------
Adjusted EBITDA(1) $ 22,066 $ 20,332
======== ========
(a) Includes loss or gain on sale of equipment.
(b) Includes both FAS123 compensation and restricted stock compensation.
RADNET, INC.
REVENUE COMPARISON
(IN THOUSANDS)
Three Months Ended
Ended March 31,
---------------------
2008 2007
-------- --------
Revenue $114,698 $105,815
======== ========
Footnote
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(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 or extraordinary and one-time 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.
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