RDNT - Earnings call transcript Q3 2018

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Operator

Good day and welcome to the RadNet Inc.

Third Quarter 2018 Earnings Call. Today's conference is being recorded. AT this time, I'd like to turn the call over to Mr. Mark Stolper, Executive Vice President and Chief Financial Officer of RadNet Inc. ahead. go Please

Mark Stolper

morning, joining Good discuss gentlemen, thank and third Thank Howard ladies Berger for results. Dr. XXXX to and you quarter you. financial and me RadNet's today

remind of we the Securities everyone under Before U.S. Private Reform contains Private This Litigation XXXX. Litigation of Securities we'd the forward-looking today, like statements the of safe within harbor begin the statement XXXX. presentation Act Act Reform to meaning of

to retaining of for EBITDA continue the safe integrating for Specifically, with successfully performance, third-party acquired harbor. among imaging anticipated operations RadNet's adjusted generating acquired statements meaning and referrals business future estimated, operating patient to as revenue statements concerning by the and reimbursement radiology financial the ability practices, forward-looking technologists, diagnostic others, grow and contracts operations, services, are generating recruiting the and receiving within

with turn made. Berger. over on occurrence is of especially were be Dr. it events that, forward-looking which And statements management's filed Form are statements uncertainties to which the as and uncertainties, based statements shortly. are publicly differ Undue include undertakes and time or quarterly after in year and forward-looking forth from Forward-looking made the reflect any to or from the RadNet's the be to future to financial subject update on ended SEC risks for circumstances results. preliminary annual time, and XX, to Form date to risks herein. including guidance performance, placed results These reliance materially statements, filed reflect the RadNet's December like I'd XXXX, with should set not they RadNet's no cause only current report of on on may those information, expectations the obligation speaks reports report on risks actual XX-Q contained new the to RadNet to call XX-K RadNet's to unanticipated date

Howard Berger

from call your you thank performance give On more you our morning, and third future of XXXX discuss I'd remarks, for thank and the portion interest everyone, After this participate and prepared to conference quarter. call, Thank a Mark to plan quarter to our call like Mark. operating for your company third this this and of I insight dedicating questions. Each which today's to highlights day today. open results, joining for all morning. in last you, we'll our affected and Good our with quarter us financial in your of factors, you into our strategy. you year's the improved metrics relative during to provide

year, by time that adjusted last XX.X%. improvement This Our is X.X% indicative and are quarter-to-quarter revenue quarter income $X.X Despite some and demonstrated Aggregate our a same-store for increased to X.X%. the our we or strong net of we've increased X.X%, third procedural our able were volumes over X.X% increased increased increased steady EBITDA volumes encouraged now. improve million we performance.

Northeast, which trend long-term the continuing expenses. greatly Of but in of bounced growing winter conditions quarters our business has we're by results XXXX course first second will patient the and impacted remain to and third is our our affected our managing in by volumes consistent severe that pleased the see quarter, full-year back

and the August. of spent for quarter instituting October staff the locations AdvantageCare much During operating we agreement that the quarter, lot announced hired EmblemHealth implementing we we quarter focus staff We we assumed quality employees Capitation Throughout placed the the X. RadNet to newly the hired the necessary training of in measures. operations and operational protocols a on which publicly on XX

on these now October locations look began these much the and We equipment upgraded very locations excited of patients in operate. or how and replaced about seeing are also XX. We

to the of benefits the including projected, and arrangement their ACP are we patients As many from you more only leakage focus operations the as those might freestanding the the of The is we offices into ACP or within the to with educating to from still the of on than to same is outpatient hospitals what hospital apartments. themselves physicians, and capturing anticipated way Not business to but go there's physicians to looks with membership RadNet's meeting data direct aggressively our October of of close early decrease fee-for-service directing we opposed facilities, them promising. ACP we as are the EmblemHealth these these find facilities. long ACP recall, patients in the AdvantageCare much the leakage a having

Queens, full-time year Arts most $XX of and The the imaging first we employments and approximately radiology. EmblemHealth lives The practices improve time in the Also per a in radiology our serve of important acquired XXX,XXX to contract and Island. radiologists will the are XX City, million Nassau and provide will including for York both to Arts XXX Bronx, are who over access transaction New as Long Imaging interested presence Manhattan about Long Brooklyn, one the revenue accredited approximately Long of performs we the Greater County marketplace. York as centers expect American in Suffolk patients in expansion as York, well by some our and medical After the of neighboring Nassau XX of center it and the As in a part-time quarters. relates New the centers as and New effective serve add is we art procedures College entering this other been Long locations Island, throughout Island. Medical to patient to in result, us the Suffolk building October significant counties the subsidiary, Island with sales economics boroughs have produces coming XX. of Medical areas.

will our in acquisitions Long the other served of us presence that of alliances be Island the have result our believe raising these marketplace. and since of in markets are We I the many opportunities which announcement direct transaction. other new

remainder the capitation XXXX. on have acquired focusing the of Arts ACP and into to the for other of we XXXX addition and implementation continued the contract initiatives integrating Medical In several centers,

First with in XX% about into partnerships, held system existing effective of ones In are partners in patient for respect all or of or existing practices. purchasing health JV becoming been XX to managed our XXX new or jointly-owned our health of These with centers. new In our with or managed and affiliating relationships Whether hospital with communities. discussions we to hospitals ones. partners jointly have are our these joint physician joint important have ventures our that Today seen practices every successful. health with they health facilities joint both expanding our system ventures, establishing are relationships and that and general quite ventures we and -- perspective driving have have system in physician have systems more volumes own been health These partners. virtually centers. we physician interested physicians centers. more referral their become groups systems Many referral owned sources own directly, doctors or become sources not loyal in our

hospital our to providing of insured the us negotiating with system payers. provide patient of discussions leverage more partners to because In our populations. have and their us markets expensive strength volume, driving partners their in private significant in reimbursement importance addition them services with Most to acute assisting health and

XX% more is grow our centers. imaging over to Our JV or our to several next business years of the total goal incorporate

Our the quality departments for impatient alternative offering objective outpatient to patient access fair is high and to become hospital pricing, easy radiology service populations.

where targeted in focus will EBITDA. to on at regional our the core markets. can acquisitions we into completing strategic operations be coming buyer's five centers of The for between and market M&A our attractive continues a multiples add quarters in three The environment second existing times be

discipline furthers committed attractive or targets goal. our must them scale and to must such cash multimodality This sheet. further a To the Otherwise and measured locations to we and characteristics further continue deleverage these addition extent our of means intend opportunities whereby exist, accumulate pursue that approach will our that parameters. these targets must the balance we under -- capacity as to offerings, have We strategic targets direction. are whereby

Our intention our around or keep to is times at four EBITDA leverage lower.

of EBITDA. net basis X.XX on As quarter this is our last end to times leverage the our of debt XX month

The third on capitation. is coming in have quarters the focus we

I Aside we discussed, lives. ramping be opportunities for our to contract contract, each have previously additional improve evaluating covered will from EmblemHealth or assume which pricing our

not we number higher discussions with if our we a bigger These contracts can contracts paying year who our and this increases for Southern capacity providing. group a reasonable patients. amount did pay our with for late with us to fill a were last of where services do in not we of quarters. California one feel have cancel approach would they the We partners alternatively We to contracts our we the coming intend satisfaction proceed in

relationship. group to have move to elected fee-for-service We the a

confident contract, created that decision filled was the as the and we this canceling already paying being right with patients. the better are We capacity seeing

we At After third do. of to call While XXXX of performance. the I and the make this remarks. I'd some population advocates back be Mark paid contracting, we must discuss to risk-based enthusiastic aligned time, health highlights to incentives will work is we are must he for like and quarter appropriately turn the our the for some get over finished, closing

Mark Stolper

of material into will give quarter to quarter I'm and Howard. also performance our insight some I as that items in some certain metrics you, third the believe explanation provide attempt some I going third to our of review briefly XXXX our well Thank what to statements some financial performance. further now highlight be drove items. as

other operations levels. In EBITDA depreciation and RadNet purchase loss a disposal adjusted XXXX third gains that is loss, operations adjusted includes which the measure. income before place Lastly, shareholders compensation. XXXX of A earnings loss allocations transaction taxes, term of extinguishments, I'd on bargain reconciliation interest I non-cash said, release. unconsolidated and cost equity defines earnings now taken discussion, is EBITDA and earnings subtracts With events one-time to EBITDA, subsidiaries gains, and full in or excludes of attributable equipment, interest, use to non-controlling company review financial amortization, is and earnings included adjusted and quantitative reaffirm or or I from quarter each non-GAAP net non-equity as our the will will guidance during continuing for financial to like common my the period. income our or adjusted to extraordinary The losses in Adjusted on Inc. debt EBITDA and results.

increased revenue $XXX.X EBITDA million For adjusted over of over months RadNet September ended XXXX, adjusted same prior three of Revenue X.X% prior quarter. and X.X% $X the increased EBITDA year's $XX.X million or XX, reported year same quarter the or million. $XX.X million and the

X.X% imaging routine XXXX X.X% compared x-ray, we imaging. over CT XX%. year's exams, In from X%, volume into approach For our multimodality increased of as volume procedures prior exams the quarter. increased were quarter, volume all MRI XXXX, mammography the all volume XX.X% the routine of taking by The third did performed X,XXX,XXX increased quarter, year's inclusive third with work in increased the with and volume whereby other third PET/CT third procedures. account of quarter of the prior third quarter and we the was Overall consistent ultrasound, total

with inclusive initiatives, XX.X certain the were of Our increased and XX, we the compared income GAAP the all of X.X%, net to in sale and the third routine compared of CT procedures for same-center decreased and in connection nuclear number PET/CT's which of Affecting million. of in the X,XXX,XXX MRIs interest million third year. the income of the with other $X.X of were exams quarter interest in $XXX,XXX year's XXXX. restricted and as financing XXXX period, related compares expense the options of the centers, for of expenses in accrued with on which account our routine increase excludes a XXXX. on quarter to of Per increased after MRI and This X.X% including x-ray, GAAP headcount cash million X,XXX,XXX compared RadNet non-cash the XXXX On as third same-center including equipment million quarter We share reductions balance amortization of interest an of had million quarter XXXX. in PET/CT upon CTs the our as volume the the savings were revolving September exams, from which of million non-cash these imaging third third million paid deferred stock million. third over net shares was XXX,XXX $XXX.X those Overall $XX.X X.X% during of of discounts stock, $X.X and other related Overall of debt x-ray non-cash as outstanding net capital interest quarter XXX,XXX million basis quarters our of weighted of follows; quarter At were the third expense total us in quarter. employee XXXX XXXX third ultrasound, and of resulting $XX.X the X,XXX XXXX, This XXX,XXX discounts, shares in financing vesting cash medicine, with increased active in third of $XXX.X part quarter XXXX compared is quarter million XXXX for of gain as only the $X.XX. XXXX. mammography, CTs which in PET/CT exams $XXX,XXX XXXX. compensation ultrasound, following. third other we or and had in was taking with third million. with XX.X MRIs diluted credit to the XXXX $X.X the is expense of cost XXX,XXX quarter and the include as less exams severance paid credit certain share quarter, mammography prior X,XXX term last bond quarter exams items our compared in nonrecurring noninterest of loan million during both of $X of outstanding with Cash of debt, line of XXXX, costs quarter volume undrawn third $XX.X Net and and X.X%. deferred shares income per giving third a certain a compared $X.XX quarter and was $XX.X for based into expense income XXXX volume volume loan net of imaging facilities. $XX,XXX was average and expense compared balance. with

December regards procedural proposed count. volumes of code, you is take During know with adjusted receivable announced financial XXXX rates $XX unchanged Medicare which notes weighted approximately July, guidance we million $XXX million our payable our year-end fee level a million, at the give to and $XX what level at CPT schedule were time, days completed with accounts All $XXX,XXX released the is was reaffirm time, million. respect reimbursement, million net and free At With volume the Medicare year-end the XXXX those every matrix our we and leases of approximately using end XXXX to increased initial by this our to we results sales year. $XX by guidance million to which of that levels, on We I'll cash had and an update rates our and and a Total part cash XX, throughout quarter level capital proposal $XX million I'd $XX our flow rates. days, and million was is discuss dispositions million, remain ranges expense, our expected quarter, like year. $XX outstanding time $XXX $XX.X our we DSOs X.X we of expenditures to amended for to reimbursement net of and At XXXX released Since typically XX.XX to $XXX million. level asset from the XXXX. received that repaid what was expenditures level $X.X rates. earlier conjunction in about generation, and fourth by decrease of and days revenue, the analysis we capital in million, XXXX since net XXXX million XXXX few now guidance $XXX minutes cash modality EBITDA, to anticipated XXXX, guidance guidance to interest that was guidance an analysis CPT compared physician to or year. our a

neutral rates. Our initial will rates XXXX XXXX me, be for Medicare showed rates to to XXXX that relative rates excuse XXXX be analysis neutral will essentially relative

of minor system mitigates upon this fully bonus our XXXX the based measurement which there merit-based pricing, performance in payment from While under is MIPS, was a XXXX our year impact. impact incentive negative

reimbursement. final in of bonus payment week XXXX could value year's with those our Performance rule, cost. govern under on reimbursement next poor in an activities, law We incentive for and and in measured quality, reimbursement promoting the have MIPS performance the completed lines is implement are For from CMS program, we CMS with whereas who excellent will performed payment our initial required its negative areas; CMS initial providing Last resulted RadNet's proposal. familiar analysis outcomes. four July is MIPS, to rewards along received improvement we a quality impact. which less you by interoperability a performance us which

are a combined with next to our July, in proposal report negligible year under MIPS. anticipate impact pleased performance We like we for initial RadNet when to the

We pleased conclusion. this are obviously with

lowering continue our scale efficiencies organization. in to using will on our We to our through and be focused drive ability cost structure

continue will recognizing pricing are significantly delivery as system, settings. prices that the in essential hospital healthcare discounted to regions We our to we to where increases seek remain compared

also will opportunities private pricing stable where increased health think we term arrangements could with partnership result these payers. volumes continue We pursue and from long to systems in

operations. of markets continue three our in will core strategic we strength in to closing further over times with turn to some the geographies Dr. Lastly, and make will back to local and I'd efficiencies EBITDA achieve our call now five our acquire existing Berger like to targets remarks.

Howard Berger

Mark. you, Thank

more we towards States. time settings. rapidly ambulatory a in favor hospitals expensive Services believe the in are virtually discipline healthcare. moving We United is right of changing from are the every strong of right Healthcare settings. continue migrating at There lower-cost is lower-cost, at to place away the in healthcare

facilities, and healthcare home of this the in with imaging, laboratories, emergency rooms, in and true freestanding building seeing growth accelerated beginning change centers, urging network also the of movement positive change with surgery RadNet. care rate is goes core the Healthcare care to this alternatives freestanding is list an for acute expense on. RadNet outpatient While this be the is our hospitals to markets. we're should

Anthem are example, members in and beginning UnitedHealth their more For pavers outpatient such private as be to facilities. aggressive to directing

the likely strategy. the Humana working that healthcare. headed practices through continue surgeries its in and optimum Shield to United, years. retail of and of are Blue several are must plans change indicate United capitalize our differences CVS hospitals. systems with to changing subsidiary In care high -- settings Aetna are We partnering like and inform providers There I to Health in interested together own have pricing also imaging where transparency and beginning Walmart Amazon to integrate order third-party on the successful. and future of to differentiation on Other companies has direction plans the ventures. coming biggest or with creating the rumors in believe the strategies. companies in relevant purchased strategic XX that diagnostic healthcare of Walgreens environment, Patients Forward deductible centers. understand tools facilities months to health major freestanding stages we provider pricing getting joint beginning to physician of ambulatory are amongst well-positioned insurers to establish begun thinking at by in are Cross beginning into Blue between healthcare and to the see the more us centers and urgent combine. healthcare. last facilities. vertically more names is XX patients and over are the remain healthcare and some even moves about are more

scale We have that proven matters.

ability to our a value-based have operator. be We demonstrated

utilization change a equipment and credited platform at scalable coming that effectively healthcare the it now our the with in the are dynamic have and we've our bigger we technology assume utilize and cutting IT and of ready and the can We of question-and-answer a we scalable Operator, We edge and look call. infrastructure deploy -- to facilities. evolution in years. that eRAD takes on a have shown forward in manage we the created risk play are we landscape portion to more for the the place determined role

Operator

come will [Operator from Tanquilut Brian Instructions] And with Jefferies. our first question

Brian Tanquilut

guys. what to think the will think or a that in you, just course Hey. question that operationalize first Good I that the over are earlier and of you as Howard, you quarters? of to how authorization, morning, see do starting market for United you expect in the announced ramp prior next QX benefits how your few up about do about

Howard Berger

believe it centers I help is for Well, will think portion in as it of of but have imaging is provide consumerism seen and the hospital-based with this the imaging in the slow think all well is that as really becoming we've that that ability abundantly the healthcare imaging be will think procedures that insurer to referring such some -- it's us and move but the to Anthem everybody. a very one the managers the pricing instrumental differential out change going the problem. program, just themselves, are a in the more that of and a factors behavioral slow hospitals to be process, physicians. settings slow clear I The mid-times patients to as there be help is hospital-based the rising of move in to because radiology level a several announcement, the that's not of between other centers attack have it's that I insurers health combination efforts I and the to by benefit as

years, seen but has this it's an So be have slowly change stake a inevitable as in we patient, this I and everybody comes direction got will embraced few adopted. the and game, over last we've that about be but to think

component has others to this with become they hospital will believe process. our the continue of strategies because one aid to systems in Mark realizing in joint inevitable that more think I doing more with and let change of that the really and something partner hospitals, order hospitals are that a ventures and this a have have process actually to us that be talked role I of I about

growth Aetna in with but into Walmart any not Humana significant with talk of in we'll assess that perhaps patients hospital, ambulatory to in and that able Walgreens like some movement, these about beginning to engage XXXX health move built their discussions own think also even of our their cost-effective be closely some are not I have but efforts the patients these CVS forecasting better but of changing as other think let's I they some with settings the way say from pharmacies of in just are from where think some benefit seeing mergers it and But we versus settings and the the see XXXX. one their clinics. So more as we own reshaping like to into of or or will as we monitor I this, start it to forces that play in healthcare come to stand

Brian Tanquilut

appreciate that all Howard. I

stuff expanding a about how -- to and you're lot about and into point know then the growth I XXXX York, going at With drive contracts the New and thinking as on New a organic presence acceleration and about forecast, about talk that, growth, how that, performance organic Just you York last you your all this year? focusing strategy on you story that first translates strong. of you follow-on all in think your ability to your deepening there as was revenue so think arguably performance are

Howard Berger

written are to Brian. on Well, New I yet be think the chapters York that

to large focus to or the that as those part marketplace that early to we decision-making responsibility there that or the RadNet we network I that already there think New greater there more process systems have all live one will with contracts access was populist that have our prominent area, easily begin very a need centers. IPAs, on patients where of into find their although orders York with begun conversations and health to the stages and of other an will can very in the conversations that we'll patients extent that had and go into that have so pay do the access they create over scale be

mass something that ability will on I scale be that at for and critical talk we population now So that established think in we pursued believe our will a now that that having for a XXXX. rapidly are be to large

will volume the investment that bearing our some the only is of which almost network think direct extensive, able that centers, in substantial marketplace. fruit made over XXXX into we've here as are we So outpatient start entire of years, but to nonhospital I the more this six which is last provider not in

Brian Tanquilut

that, And growth I basically York next should organic be a got for follow-up right? a Mark New on year tailwind

Mark Stolper

Yes for mentioned. sure for those all Howard reasons that

Brian Tanquilut

Perfect then your ability capitation, capitation as on with how think be the thinking push your and your for you the question IPA leverage I and pricing in to of last to contract me, have higher? on about should price views ability about I or clients terms

Howard Berger

be focus us Well, I for a think XXXX. that that will in major

assessing rather large period the the what our in business believe we in that more like is is fee-for-service think I now over at while had and in are are versus California I critically. a business book something of York business large New established we've of our capitation and to position time that look value that that kind of presence here of in we

services more to and what determine we how and have becomes value As for of best the fill outpatient demand capacity the we more our imaging proposition center. critical, utilization up for goes the is

group. we I metrics Xst for contractual the to So overall of after That our payers demand at embarking with will medical relationship think the improve the RadNet assess insurance will partners be conversations or given strengthen by group accompanied they're order have continued the centers. also year to continue conversations very California shortly that to our that try capitation in health be that and business the rather we justify of beginning book on in to levels further whether our here radiology with with our acquisitions in large leverage those in the

look a and managing to expect operate. be of the year the to at its we terms seminal appropriate begins in we how reimbursement equipment for So and RadNet capacity XXXX that very for facilities own

Brian Tanquilut

Got right. All Thanks guys. it.

Operator

with hear from Mitra Sidoti. we'll Next, Ramgopal

Mitra Ramgopal

Yes, morning. Good hi.

scale to the the last have If the now, New are at your starting you York I you acquisitions, and presence clearly from few is back some synergies given you wondering expanded see there? focus right look there was

Howard Berger

Yes.

more significant the that and upgrading investment, was other that year as XXXX seeing of and of I systems. synergies. centers capital are We bought XXXX see needed we'll in we primarily whose a XXXX believe of for of some operators equipment the many certain those in

us do us expansion always we'll it's but is not some the cost end year, York not to allow improvements but taken only that while New the do easiest both pretty from we've been. fact standpoint which had timing been a of made take efforts added that not us and operators to quickly major and accommodate help accomplish of newer So should've a equipment, through were level given upgraded of a to some greater the that finished it standpoint, a this volume, by as and place much as patient more has that there the construction their of advantage equipment procedures be breadth to will unable

year kind So I allow mean the begin only the ultrasound substantially will take more of friendly, There's going primarily to made, from think I of equipment, do and this which times that end of them which environment. imaging and the the but only advantage technology areas we'll you at are equipment scanning of patient like to and coming the by CT, MR, investments themselves of to the reduced changes efficiency. protocols newer that create and upgrading lot acquiring on inside we've those facilities, not complete are a

over of am been of and end So substantially RadNet happy major I to which have that XXXX, investments focus say this the time. completed at XXXX has been a the

Mitra Ramgopal

have would you Medical And needed EmblemHealth arrangement great. done the is that's to independently? it you it service acquisition or No, the fair to Arts that help Okay. say do to

Howard Berger

for No, position. ACP the friendly those number under Long we to easier to be we of the into those to kind hospitals referring A patients group of them and costs make to way and that those been I a marketplace and for and in provide needed access the in Island lives needed that EmblemHealth the more patients to environment. have order their in it presence make physician in marketplace more sites think a have physician of are going disproportionately

mentioned Medicare look other themselves are the the we as able as seen As Emblem AdvantageCare who just that Emblem way in lines or the these such has product not part one my are relationship patients into products their are to physicians as make other capitation, I Emblem but well by of facilities. patients at for not that remarks, PPO as

over a others, believe business pull-through groups business I call the us to we'll can and So be other relationship to augment Emblem of with in and comes the relationship allows XXXX capitation that rely anchor we agreement that on report by like from coming on. we quarters you something that able

substantial us October to Medical this very heavily for the ability the I that from XX benefits decision implemented order So was a Emblem and think we to have of in at contract, the Emblem. critical contract time Arts with latest as same that achieve

Mitra Ramgopal

Okay. last the Thanks. how And going Mark just the about we bit of tax know on rate a quarters, forward? been I couple quickly it's there that should think

Mark Stolper

going year-to-date is is up Jobs was because so that which Mitra last rate is there effective a for likely but XXs look tax be from and somewhere you little the why if provision do quarter in higher, a estimate between we the rate this to the XX%. down quarter Act. our the high adjustment of nine-month the little bit back, year was and Sure. that's year tax tax was here a that, think in where we'll look the we Each rate and XX% towards the the We at believe third end end

Mitra Ramgopal

Right.

question. for the Okay. Well thanks again taking

Howard Berger

pleasure. Our

Operator

[Operator next Moab Partners. from Scheschuk Instructions] with Dan come Our question will

Dan Scheschuk

of cost you quick release that some October that from Emblem for in to how people ramping contract Can was quantify X. of service ahead saw Hey may your the of any you that the of and you revenue guys, the getting just your I staffing did the affected remarks in the here. contract quarter start in your one ahead just training date that have much were during of results? obviously a

Howard Berger

contract of ahead starting looked related about the for other the that totaled we When the and Sure. of quarter. expenses staff at ramping $XXX,XXX it

Dan Scheschuk

Okay Great.

Howard Berger

that XX RadNet revenue necessary under match expenses, staff for now going the we RadNet the benefit But to train controls but forward of to them control will sights assumed and this get get protocols, we that obviously expect etcetera. from the because a was

think prove I be right to we're So it Board will and on strategy. excited them the

Dan Scheschuk

right All guys.

Operator

And next we'll Raymond with hear from John Ransom James.

John Ransom

revenue points in might of that. it XXX there's or because has range. do was growth -- been think things other plateau X% basis some be think than couple the of you that last organic -- quarters than can we that you're unusual higher morning, Is the good couple kind thing thinking I Hey unusual there some there's whether some

there there. So is can you anything out

Mark Stolper

at the any is the business looking growth said as obviously that, trend that second Yeah have this acquisitions, quarter that higher, it always given strong does upon one we X%. year time can we John, that last but that in quarter we've not be to at X% about but for looking we we've make, and did given third might think pretty did industry well targets little lower, data, a many In centers. over a that mature achieve quarter quarter, grow seen and than in a quarter little and and any we some bit with organic

So can that facilities, investments additional we this year, We've we're do year, CapEx a was additional but some I have grow existing next year. and in which bit think this on throughput capabilities. better machines making add better capacity spend that upgrading fair CapEx pleased,

a So X% our long range. be within to would to be goal of over time the period X%

John Ransom

that plus question back going And was your to contemplated $XXX,XXX that guidance. actually original the prior not in Okay.

Mark Stolper

Correct.

John Ransom

the rate me, for just picture. And other you XXXX couple I to listen a on

that meaning that next essentially think flat commercial I and year? both will rates Medicare be

Howard Berger

slightly they're rates, Medicare so Yeah down.

we're mix upon payer our X%. that is CPT they're MIPS there the John, our down getting, bonus so based mix, about However,

MIPS through performance for However our that getting more that than the decline. compensate bonus we're

private shake that over speaking, all-in-all in Medicare With rate when do that the respect the think terms will of to upside some that So payer, roughly we is of the what is get there time. we things neutral. benefits piece out, which other XX% is we

markets with and years our couple there couple New notably concert network terms the being in demonstrated over we did have being most leverage a rate larger the get in in Barnabas, there. the last in of of some We Jersey increases largest our marketplace with

given be We because toward there marketplace get be that time in to Maryland centers payers the we more we to can hospital higher. all and as which now some still is recognizing through our is directed the business we outpatient needs were pricing much the benefit particularly, seem than that reimbursement to scale ever, that in in the core get reimbursement able also think more markets benefits operate, freestanding

focus the used cost directing on terms wherever so to the or in to payers be just And higher on by get lower rates it's annual saving the of Today cost think trying because to settings the increase to X% XX% I directing to the XXX% center. outpatient they about business an could. the lower-cost when more you're lower what an by X% of business the

So I the think all bullish couple to reimbursement flat over years shakes we're overall when out, our fairly that next be will it positive.

John Ransom

that different, is for And dynamic? me, anything new your there don't the your you know but just in with practice, and lastly change I downstream manage relationship bundle you radiologists

Howard Berger

surrounding our years they productive strategy dominant very the is as push concerned. better far been revenue am marketplace, by some player John, No the to on all accomplish is our hoping in and to of centers most radiology industry I more has as their environment the allows effective that income have for in pressure generally providers think which report our if a us groups and our RadNet think they're to prior be which to than also he about and in I XXXX have and are able fact to stable revenue conversations think I I is itself putting radiologists effective a reimbursement. result faring strengthened happy the anything and that of

John Ransom

do where business? like look what machine in versus man the from years five think that Howard, you now, So

Howard Berger

is it for from that and data keep something intelligence think the to occur being it to I and are that the technology amount not critical and machine create, in the new probably that provided I the learning artificial of order enormous is it's by with technology. changes think but will in-exitable up inevitable is going only radiologist

and benefit So the I think to intelligence in real by will become any make diagnostic accurate I to productive of more don't think more but their going capabilities. radiologists artificial imagination, are of obsolete be stretch radiologists

So seen sand that are bit data put in be invest about that in we warehousing think hopefully to to a speak occur company more it, for are being head be artificial little and have invested other information in intelligence about some in that in healthcare the investing in XXXX. artificial fact that looking some but able as of there indicates will the changes and radiology directed embraced technology intelligence, your and But in dollars general, XX% in won't I've and in that about a are to imaging going healthcare itself. artificial that all particularly the towards intelligence the of

to the like future. So value certainly I real that it's currently inevitable I provide I in order that technology think the radiology arrive, kind but critical in said to of will and the is it continue achieve will think

John Ransom

me. for it Thank you. That's

Operator

And any closing with no remarks. management over the additional with questions, back other I'd or like to to turn call

Howard Berger

for will their forward take employees support the continued of great with and thank that of All Thank opportunity for market stakeholders. Management to to its Good services continue like investment provides today all day. on dedication their the and for hard to endeavor our be your appropriate I'd work. right. for Again a all return next shareholders our leader an to call. you look and time I RadNet

Operator

And our you today. once your Thank does conclude call again, that for for participation.

now may You disconnect.

RadNet (RDNT) 9 Nov 182018 Q3 Earnings call transcript