Exhibit 99.1
[LOGO APPEARS HERE]
FOR IMMEDIATE RELEASE
RADNET REPORTS RECORD THIRD QUARTER REVENUE AND ADJUSTED EBITDA(1)
o FOR THE QUARTER, RADNET REPORTS REVENUE OF $131.7 MILLION AND
ADJUSTED EBITDA((1))OF $28.2 MILLION; INCREASES OF 19.5% AND
25.8%, RESPECTIVELY OVER THE PRIOR YEAR'S QUARTERLY RESULTS
o THIRD QUARTER NET EARNINGS WERE $138,000 (OR $0.0 PER SHARE)
COMPARED TO A NET LOSS OF $2.1 MILLION (OR A NET LOSS OF $0.06
PER SHARE) FROM THE PRIOR YEAR'S QUARTERLY RESULTS
o THIRD QUARTER REVENUE AND ADJUSTED EBITDA(1) ARE SEQUENTIAL
QUARTERLY IMPROVEMENTS FROM FIRST AND SECOND QUARTER 2008
RESULTS
o RADNET REPORTS INCREASED AGGREGATE AND SAME-CENTER PROCEDURAL
VOLUMES
o RADNET IS ON TRACK TO MEET OR EXCEED ITS PREVIOUSLY ANNOUNCED
2008 REVENUE GUIDANCE OF $470-500 MILLION AND IS ON PACE TO
ACHIEVE ITS ADJUSTED EBITDA((1)) GUIDANCE OF $100-$115 MILLION
LOS ANGELES, CALIF., NOVEMBER 10, 2008 - RADNET, INC. (NASDAQ: RDNT), a national
leader in providing high-quality, cost-effective diagnostic imaging services
through a network of 165 owned and operated outpatient imaging centers, today
reported financial results for its third quarter ended September 30, 2008.
THREE MONTH REPORT
For its third quarter of fiscal 2008, RadNet reported Revenue and Adjusted
EBITDA(1) of $131.7 million and $28.2 million, respectively. Revenue increased
19.5% (or $21.5 million) and Adjusted EBITDA(1) increased 25.8% (or $5.8
million), respectively over the prior year's quarter. Adjusted EBITDA(1) margins
increased to 21.4% for the third fiscal quarter of 2008, from 20.3% in the third
fiscal quarter of 2007. The results reflect improved volume in existing centers
as well as the contributions of acquisitions and operating initiatives.
For the third quarter of 2008, as compared to the prior year's quarter, MRI
volume increased 18.4%, CT volume increased 9.1% and PET/CT volume increased
16.8%. Overall volume, taking into account routine imaging exams, inclusive of
x-ray, ultrasound, mammography and other exams, increased 15.1% over the prior
year's quarter.
On a same-center basis, including only those centers which were part of RadNet
for both the third quarters of 2008 and 2007, MRI volume increased 9.0%, CT
volume increased 0.3% and PET/CT volume increased 3.9%. Overall same-center
volume, taking into account routine imaging exams, inclusive of x-ray,
ultrasound, mammography and other exams, increased 5.0% over the prior year's
quarter.
Net Income for the third quarter was $138,000, or $0.0 per share, compared to
net loss of $2.1 million or $(0.06) per share, reported for the three month
period ended September 30, 2007 (based upon a weighted average number of diluted
shares outstanding of 37.0 million and 34.7 million for these periods in 2008
and 2007, respectively). Affecting net income in the third quarter of 2008 were
certain non-cash expenses and non-recurring items including:
o $1.3 million non-cash gain on the fair value of interest rate
hedges related to the Company's credit facilities;
o $0.7 million 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;
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o $1.5 million loss on the disposal of equipment, primarily
related to assets acquired in our November 2006 purchase of
Radiologix; and
o $0.8 million of non-cash employee stock compensation expense
resulting from the vesting of certain options and warrants.
"We are very gratified with the results of this quarter. Our results reflect the
contributions of many of our recent initiatives, including our recent aggressive
expansion into digital mammography and breast oncology as well as our recent
acquisitions in Delaware and California." said Dr. Howard Berger, Chairman and
Chief Executive Officer of RadNet.
"Despite the recent challenges in the economic environment, demand for our
services continues to grow. Our record revenue of $131.7 million this quarter is
indicative of the essential, non-elective nature of the vast majority of our
diagnostic services. Early detection and diagnostics of disease has been shown
to reduce the overall cost of the medical delivery system by identifying disease
when it can be more effectively treated, by decreasing the incidence of
incorrect diagnoses and by reducing expensive or unnecessary invasive
procedures. We believe our strong performance has been further enhanced by the
comprehensive multimodality offerings of our regionally concentrated networks,
which are highly valued by our patients, referring physician communities and
payors."
"We remain very optimistic about our future opportunities. We have achieved
increasing revenues and EBITDA throughout the quarters of 2008, which has been
driven in part by growing volumes both in aggregate and on a same-center basis.
We are further encouraged by the opportunities for continued margin expansion in
the future as we scale our business and continue to focus on refining operating
expenses." added Dr. Berger.
"On the acquisition front, we are seeing increased opportunities to consolidate
smaller operators in our markets. The difficult credit markets have only
increased both the number and attractiveness of these opportunities. We will
continue to fund these opportunities with our cash flow and availability from
our $55 million revolver. We believe we are positioned to capitalize on these
opportunities, as our credit facilities do not mature until 2012 and 2013."
added Dr. Berger.
RadNet reaffirms its 2008 Fiscal Year Guidance as follows:
2008 FISCAL YEAR GUIDANCE
RadNet is reaffirming its 2008 guidance ranges as follows:
Revenue $470 - $500 million
Adjusted EBITDA((1)) $100 - $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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NINE MONTH REPORT
For the nine month period ended September 30, 2008, RadNet reported Revenue and
Adjusted EBITDA(1) of $373.9 million and $75.9 million, respectively. Revenue
increased 15.7% (or $50.8 million) and Adjusted EBITDA(1) increased 16.9% (or
$11.0 million), respectively over the prior year's nine month period.
For the nine months of 2008, as compared to the prior year's nine month period,
MRI volume increased 11.8%, CT volume increased 6.5% and PET/CT volume increased
15.9%. Overall volume, taking into account routine imaging exams, inclusive of
x-ray, ultrasound, mammography and other exams, increased 11.3% over the prior
year's nine month period.
Net Loss for the nine months of 2008 was $7.5 million, or $(0.21) per share,
compared to $6.4 million or $(0.19) per share, reported for the nine month
period ended September 30, 2007 (based upon a weighted average number of diluted
shares outstanding of 35.7 million and 34.6 million for these periods in 2008
and 2007, respectively). Affecting net loss in the nine months of 2008 were
certain non-cash expenses and non-recurring items including:
o $1.0 million non-cash gain on the fair value of interest rate
hedges related to the Company's credit facilities;
o $1.4 million of expense related to the settlement of business
disputes;
o $1.5 million 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 $1.5 million loss on the disposal of equipment, primarily
related to assets acquired in our November 2006 purchase of
Radiologix; and
o $1.9 million of non-cash employee stock compensation expense
resulting from the vesting of certain options and warrants.
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 165 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
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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)
SEPTEMBER 30, DECEMBER 31,
2008 2007
--------- ---------
(UNAUDITED)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ -- $ 18
Accounts receivable, net 107,611 87,285
Refundable income taxes 103 105
Prepaid expenses and other current assets 10,881 10,273
--------- ---------
Total current assets 118,595 97,681
PROPERTY AND EQUIPMENT, NET 201,514 164,097
OTHER ASSETS
Goodwill 105,604 84,395
Other intangible assets 56,878 58,908
Deferred financing costs, net 11,576 9,161
Investment in joint ventures 18,595 15,036
Deposits and other 4,865 4,342
--------- ---------
Total other assets 197,518 171,842
--------- ---------
Total assets $ 517,627 $ 433,620
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 87,316 $ 59,965
Due to affiliates 2,323 1,350
Notes payable 5,427 3,536
Current portion of deferred rent -- 195
Obligations under capital leases 14,393 9,455
--------- ---------
Total current liabilities 109,459 74,501
--------- ---------
LONG -TERM LIABILITIES
Line of credit 13,894 4,222
Deferred rent, net of current portion 7,943 4,394
Deferred taxes 277 277
Notes payable, net of current portion 420,935 382,064
Obligations under capital lease, net of current portion 25,443 22,527
Other non-current liabilities 13,832 15,259
--------- ---------
Total long-term liabilities 482,324 428,743
--------- ---------
COMMITMENTS AND CONTINGENCIES
MINORITY INTERESTS 77 206
STOCKHOLDERS' DEFICIT
Common stock - $.0001 par value, 200,000,000 shares
authorized;
35,786,474 and 35,239,558 shares issued and 4 4
outstanding at September 30, 2008 and
December 31, 2007, respectively
Paid-in-capital 151,901 149,631
Accumulated other comprehensive loss (3,766) (4,579)
Accumulated deficit (222,372) (214,886)
--------- ---------
Total stockholders' deficit (74,233) (69,830)
--------- ---------
Total liabilities and stockholders' deficit $ 517,627 $ 433,620
--------- ---------
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RADNET, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT SHARE DATA)
(UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------ ------------------------------
2008 2007 2008 2007
------------ ------------ ------------ ------------
NET REVENUE $ 131,717 $ 110,209 $ 373,861 $ 323,051
OPERATING EXPENSES
Operating expenses 99,552 83,546 286,404 245,134
Depreciation and amortization 13,083 11,395 39,623 32,352
Provision for bad debts 7,065 6,395 20,640 20,810
Loss on disposal of equipment 1,525 180 1,495 716
Severance costs 137 30 172 815
------------ ------------ ------------ ------------
Total operating expenses 121,362 101,546 348,334 299,827
INCOME FROM OPERATIONS 10,355 8,663 25,527 23,224
OTHER EXPENSES (INCOME)
Interest expense 12,126 11,596 38,230 32,212
Other income (79) (21) (132) (72)
------------ ------------ ------------ ------------
Total other expense 12,047 11,575 38,098 32,140
INCOME (LOSS) BEFORE INCOME TAXES, MINORITY
INTERESTS AND EARNINGS FROM
JOINT VENTURES (1,692) (2,912) (12,571) (8,916)
Provision for income taxes (14) (86) (151) (115)
Minority interest in income of subsidiaries (27) (198) (76) (483)
Equity in earnings of joint ventures 1,871 1,103 5,312 3,080
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 138 $ (2,093) $ (7,486) $ (6,434)
============ ============ ============ ============
BASIC NET INCOME (LOSS) PER SHARE $ 0.00 $ (0.06) $ (0.21) $ (0.19)
============ ============ ============ ============
DILUTED NET INCOME (LOSS) PER SHARE $ 0.00 $ (0.06) $ (0.21) $ (0.19)
============ ============ ============ ============
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 35,759,779 34,748,844 35,669,400 34,566,725
============ ============ ============ ============
Diluted 37,014,784 34,748,844 35,669,400 34,566,725
============ ============ ============ ============
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RADNET, INC.
RECONCILIATION OF GAAP INCOME FROM OPERATIONS TO ADJUSTED EBITDA(1)
(IN THOUSANDS)
Three Months Ended
September 30,
----------------------
2008 2007
-------- --------
Income from Operations $ 10,355 $ 8,663
Plus Depreciation and Amortization 13,083 11,395
Plus Equity in Earnings of Joint Ventures 1,871 1,103
Plus Non Cash Employee Stock Compensation(a) 831 281
Plus Loss on Disposal of Equipment 1,525 180
Plus Non Cash Malpractice IBNR Adjustment -- 43
Plus One-Time Adjustment to Acquired Accounts Receivable of Breastlink 383 --
Less Minority Interest in (Income) Loss of Subsidiaries (27) (198)
-------- --------
Subtotal 28,021 21,467
Plus Severance: Elimination of Corporate Personnel 137 30
Plus Retention Payments to Radiologix Employees -- 785
Payment for Employee Termination -- 95
-------- --------
ADJUSTED EBITDA(1) $ 28,158 $ 22,377
-------- --------
(a) Includes FAS123 compensation.
Nine Months Ended
September 30,
----------------------
2008 2007
-------- --------
Income from Operations $ 25,527 $ 23,224
Plus Depreciation and Amortization 39,623 32,352
Plus Equity in Earnings of Joint Ventures 5,312 3,080
Plus Non Cash Employee Stock Compensation(a) 1,887 3,483
Plus Loss on Disposal of Equipment 1,495 716
Plus Non Cash Malpractice IBNR Adjustment -- 129
Plus One-Time Adjustment to Acquired Accounts Receivable of Breastlink 383 --
Less Minority Interest in (Income) Loss of Subsidiaries (76) (483)
-------- --------
Subtotal 74,151 62,501
Plus Severance: Elimination of Corporate Personnel 172 815
Plus One-Time Payment Physician Payment -- 250
Plus Nasdaq One-Time Listing Fee -- 120
Plus One Time Consulting Fees Related to Review of 2006 Accounts Receivables 200 --
Plus SAB 108 Accounting Adjustment -- 362
Plus Retention Payments to Radiologix Employees -- 785
Payment for Employee Termination -- 95
Plus One Time Expense Related to Business Dispute Settlements 1,393 --
-------- --------
ADJUSTED EBITDA(1) $ 75,916 $ 64,928
======== ========
(a) Includes FAS123 compensation and one-time non-cash bonus accrual.
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