RDNT - Earnings call transcript Q1 2019

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Operator

Thank you for standing by. This is the conference operator. Welcome to the RadNet First Quarter 2019 Results Conference Call.

As a reminder, all participants are in a listen-only mode. And the conference is being recorded. will opportunities there ask presentation, the be to an questions. After Officer. to I Vice conference Financial would Instructions] turn President now Chief Executive [Operator Stolper, like the Mark over and to Please go ahead sir.

Mark Stolper

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

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

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

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

Howard Berger

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

to year. Our performance in start the the excellent first an quarter was

exceeded year's in Our internal EBITDA our and improvement to and volumes our comparison budgets last exceptional. procedural revenue, first quarter, was

strong XX.X% number We The increased increased last EBITDA had with X.X%. revenue volumes year last this quarter same from as last of quarter quarter. increased first by Our year's drivers. quarter XX.X% compared quarter procedural same-center our same a and results

is highly First on half mid-Atlantic to our weather basis mild last first – first sensitive over milder our from comparison With relative in benefited regions year's quarter from conditions weather the northeast business year's a quarter. to significantly coming last our and quarter, weather conditions. revenues to of we

the Under of are to the us and lives October. committed service operationalize imaging the to or expanded future. these patients seeing positioning assumed in responsibility upgrades effectively These the have started X-year East where us major Second, RadNet expansion performance more with to many for Coast we AdvantageCare where are we contract and ACP further XX improve we capitation in locations, continue Physicians upgrades and opportunities of contract locations. EmblemHealth services our affording at in Emblem operations

is and from the centers. our are The outpatient to successful savings directing competitive to in the the and locations doing us to make facilities this hospital and we more at continue contract AC EmblemHealth. imaging We assist other into away efforts more independent to more patients profitable

we As about EmblemHealth in pleased from Both RadNet to expect this over can we with further are benefits we other efforts, ways together. the relationship. are quarters and and dialogue we receive work coming the continue these progress to-date

quarter of Medical acquisition from benefited Arts the integration of Radiology. our Third our

acquired eRAD XXXX. As you billing benefited collecting, from including Medical Island the time as just Arts' the service Network may operations XX is Jersey joint health practices initially venture locations consolidating X. expanded name the recall, venture Medical to of in lives was New joint the in XXXX providing to a October practices Arts multi-modality preauthorization convenient and The acquired services. additional is EmblemHealth and into added and we've few. have more now New and in adopted imaging integrated Fourth, Arts of Medical established the a radiology system has best RadNet's October of we scheduling centers imaging of our one the and are of centers X largest for significantly also XXXX. IT which established Long platform RWJBarnabas, effective fully payments, service number with Imaging in Jersey quarter our

incremental are Imaging New to We exceed XXXX. for Network from projection during our contribution tracking the Jersey

Lastly, our invested the financial revenue some about conference notably, Most our made beginning cycle XXXX in on of which call. operations. we is investments business significantly results we during we last from to infrastructure discussed see improvements our

plans, more as office deductible visits significant health more collect to more a coinsurance. preauthorization required ever money patients processes, than result from of complicated and higher are We

and and of increase As operation, call expanding new and and service a of technology invested personnel senior in billing in hours area, patient customer collection size tools result, accuracy. we the center have teams this new increased our to management hired productivity recruited and

are result, financial that to dollars field area been ever Dynamics us infrastructure Other company's operators management year advantages the This our lowest competitive a before. we in is have collecting our to dashboards our data allow investments technology. from and and and Almost ago, history more migrated to system will As in environment. are reporting information contributing benefiting Microsoft accounting provide that more new than us a timely Plains. in executive valuable we systems they will a the Great patients and and a are real-time financial detailed in performance the DSOs of

also invested systems to and conform compliance We our financial regulatory ensure and to in data cybersecurity patient requirements. that software all is and protected heavily

As expect be year, of other initiatives I forward the remainder look as I to to well. contributing the

in St. Regional example, Rolling imaging For Camarillo. formed our in in Medical joint system venture with Oxnard early Dignity Radiology March, we forming Ventura Health In Oxnard. three Health imaging Center we our Dignity contributed contributed joint the John's center the with and California. venture, second of in co-located centers an Ventura Oaks the

the Kern working and end, that we be in presence. five of where XXXX. of operated other can Dignity provides of are work we the established we centers in This purchased. We Radiology quarter California imaging are Dignity in opportunities very first of the with the as in entered acquisition we closely Kern as centers pleased Bakersfield hopeful a well for than market Subsequent find operator operator to to to and XX has California, local together completed years significant an more areas more hospitals imaging County we several has services to radiology other

maximize existing begin Over with the and to Truxtun to improve efficiency, working assets patient consolidate that streamline the we marketplace referring several next Radiology operations physician the our and will centers in quarters, experience. Kern

acquisition and Santa venture Irvine California Laguna with four locations joint expanded County Orange Ana Orange we a Diagnostics in Santa Long County California Ana of in Beach Woods Mission MemorialCare Viejo. the operator and Additionally, single in of additional and our

to San Valley Cedars-Sinai Fernando system of Los also an recently some At ventures Mark constructed joint finished, in capacity the time, to expand located and geographic expanded one to purchased XXXX San joint turn When the facility our like back both remarks. the make with also over venture We quarter the footprint of I'd in Medical discuss additional our Fernando Hills of facility call of a performance. West and new area he's our to of the I closing some two will Angeles and first this through highlights Valley. the

Mark Stolper

earnings extinguishments to disposal as on depreciation earnings in of performance. my non-GAAP discussion, before interest In gains interest I or allocations levels subsidiaries debt during also fourth of which quarter going EBITDA or first material will A will provide that released items. explanation some I'd as and includes Adjusted in our use our our reaffirm said, financial earnings and subtracts equity loss, unconsolidated equity I'm into financial will what items conjunction period. be amortization Howard. reconciliation financial XXXX give results. equipment income With attributable excludes adjusted quarter briefly loss guidance non-cash compensation. metrics in losses some XXXX is our term first like company and I results. with I the is release. you, shareholders extraordinary to other that also some year to and of operations I some and events for RadNet The of were insights included adjusted a earnings Thank adjusted net non-cash quarter income our performance or statements loss review and quarter financial our taxes, and to well highlight quantitative believe taking non-controlling now of review which drove or common the Inc. to the adjusted in now defines is EBITDA place with the onetime first to EBITDA certain XXXX further and full our full EBITDA as on measure.

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

and the by by same-center initiatives performance benefited from X.X%. during more conditions driven growth was we year's Coast favorable on our recent of While volume contributions overall and our East acquisitions also quarter, weather winter procedural improved strong solid this

our capitation Long Radiology and of contribution ramp-up from Arts Our New York. Medical in Imaging New acquisition the Network results of in contract of our EmblemHealth JV, the benefited consolidation the Jersey the Island

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

of March the quarter is follows; expense of resulting MRIs quarter as from XXXX Our with shares non-cash as $X.X MRIs XXXX compared million and the in $X.XX were and of in items XXXX. quarter head first XXXX March first CTs in X,XXX in reported certain XXX,XXX the first ended restricted CTs severance of with the of the as XXXX; following; period loss procedures were of XXX,XXX and XXX,XXX in employee XX,XXX PET/CTs of as with XX.X PET/CTs $X.X in XXXX. of X,XXX,XXX shares million in X-month upon now with the of costs initiatives; the count to excuse XXX,XXX shares and of the cash higher about of the of is was the first The This of million. at cost compares quarter or million these expense million at debt XXXX; which the debt and Net of a balance of debt Jersey connection unadjusted vesting related compared GAAP This With par to of from statement $XXX.X XX.X expenses income negative options compared in our first and financial specific balance. all for we million the compares of compensation net discounts, the weighted first our first of -- to net X,XXX,XXX New was XXXX a through for XXXX. including loss level share and to GAAP based part $XX.X $XXX.X bond of share certain million with non-cash stock; $X.XX at million our quarter million the in to on our compared savings deferred with imaging $XX to million $X.X XXXX. quarter value me credit as XX, interest net per having net loan $XXX,XXX of exams related of financing per paid net quarter non-recurring added XX, compared of million. regards the exams year-end cash accounts outstanding consolidation. average the quarter Imaging This number quarters consolidating of of the expense non-cash quarter of XXXX addition With debt, in as interest or had and XXXX X,XXX,XXX result routine Affecting the first Network in term loss sheet. negative stock balance sheet, mainly balance approximately is for Imaging amortization with $XX.X $XX.X is total $XX.X less The which regards XXXX by debt our $XXX,XXX the existing of March overall to financing reductions discounts approximately facilities. for first debt New fees Network XX, Jersey related million is some debt XXXX less debt of balance loan increase first higher a

our expenses We the to repay and vast and capacity financial affords line of health and April fees utilized and fund future a we've markets facility. flexibility our of the that additional $XX joint cash on million existed through $XX.X loan revolver proceeds financing of in cash $XX Since through $XXX.X million $XXX to million. operating million systems. credit credit and with credit more our revolving our incremental withdrawn offering. XX. the we've raised corresponding core The us million line acquisitions of to amendment flow As our of balance of our and continue the the that an an a of transaction additional financing majority to term credit ventures March of The to on tuck-in the time and XX, under agreement added revolving by full and grow offering repaid at quarter-end, revolving completing we on completed our of financing balance XXXX had

the and adopted asset months. and XX all liability required were for financing This XXX lease quarter, accounting guidance, standards terms of new recognize existing leases. lease excess we amended standard for with leases which ASC operating right-of-use a the Under we to in

operating adoption rent liability right-of-use of equipment amounted of liability facility of asset $XXX.X leases, $XX.X lease million and deferred million operating to a lease of liabilities in operating an right-of-use in effect addition these the $XXX.X For unfavorable contract rental and the $XXX,XXX to million, our to assets.

center into of million we and and the assets in at the in capital of and March of approximately of asset that month adoption had reported, paid of a debt our XXXX, million. of sale perspective. from volume an year-end Through by as of DSO, the $XX.X $XXX.X $XX.X JV in right-of-use increase year result equity last XXXX, increase the finance as year-end the days is of New many in our proceeds the half days total accounts For the finance effect the EmblemHealth accounts our sales an the well from was asset as was decisions XX.X the interest Jersey receivable interests. our at we $XX.X from amounted of finance receivable imaging we million first dispositions balance Note transferred $X.X of capital expenditures, capital month The approximately Approximately the of Imaging in Despite outstanding, XXXX. in contract. for recognized or expenditures from PP&E. days XX, our which Network, March NJIN lease patient equipment liability capital mainly expenditures we which leases, and of very note XXXX, aggregate sale $XXX,XXX $XX.X financial XX, AR million, and to of million cash the venture At our amount March, net a our was XX, front-load as Also during as now of strong AR transferred million March start lower each of is was three was increase end, from increase capitation includes the lease quarter. now capital a consolidated XXXX. joint from that

first expense time, guidance incorporate the became So the disproportionately this expected XXXX Network released fourth of quarter CapEx and consolidated financial we recently financial term the in results. to to I'd properly expense half cash entity We adjusted interest in higher Jersey Imaging which incremental completed is fourth like New interest a loan. reaffirm with the conjunction our and in the which of year. year-end our XXXX At quarter levels our

For total $X,XXX remains to million. revenue, net $X,XXX guidance unchanged at million our

unchanged For million. remains guidance EBITDA, our $XXX adjusted level $XXX to million

our remains million. free cash at to guidance generation, $XX $XX flow unchanged For million

to is XXXX, expenditures, time $XX nothing million at interest there's revised our we at expense million of increased range capital guidance report. reimbursement $XX to and our respect $XX For to $XX cash expense. for Medicare unchanged million interest cash for guidance million to this With to

analyze second each will timeframe, expecting time results. our call July CMS' will the group impact typical a call, time we of Imaging proposal I'd schedule is upon with for will provide if As make to position year, comment to industry's which At and CMS will rate some in over At the on a like be time, back quarter Quality in or closing we our our industry's CMS' proposal Dr. financial release at and any results its Berger lobbying Association turn are to we to remarks. who June future the RadNet's feedback. CMS sometime the preliminary this

Howard Berger

you, Thank Mark.

very enthusiastic business the freestanding whole. are imaging of and the as We outpatient about about future business a our

migration Payers about to freestanding Our cases outpatient ambulatory hospitals of into higher-quality in the services many company the imaging benefit and industry lower-cost and cost settings. are and more between patients educated from and differential centers. expect from hospital-based our continuing becoming imaging

that patients settings slow confident ambulatory towards of are migration We continue. the will

interested accelerate and plans this trend. We payers in with to are working health motivated and

themselves driving and We that disciplined towards present grow achieving a to will efficiencies scale. improve continue following strategy our through business

ventures joint increasing to our health some the scale of see next For joint prominent model about venture allowed more demonstrate in centers of systems. instance, have path a we XX% our have in the of this XX% We years. our power to currently the core and to and several markets concentration in our us with

We technology. will infrastructure financial information continue operational improvements investments improvements making through to drive in in growth and and

our through and more and through changing creating systems. efficient efficiencies scheduling, in upgrading We make centers protocols, front-end teams will preauthorization adding equipment and

test RIS/PACS in solutions improve to We ones as and systems. and critical reporting continue collecting such IT invest billing existing and

the We more faster us within will to efficiently. revenue continue enabling collect cycle and to revenue functions RadNet, more improve

to have in continue fee-for-service system to be going We are We will if in future. alternative participate believe current contained models. of payment default encourage health going with is care change, The the to our to costs capitation be are partner to employers the best will more we of certainty. positioned that in medical contain for XX-plus that cost to large payers and or visibility we looking well years achieve experience and groups, and cost

we the creation make can that Lastly, that algorithms more intelligence support our artificial of either are to accurate aspects business adoption productive. improve and certain radiologists our and or eager of processes efficient

artificial updating to initiatives the many We the data decades scratching our and Operator, just are second warehouse now in call. discussed are we've we which been the reports accumulated have today portion advantageously to are I on grow our clinical you the utilize forward results refine of evaluating for the vast we the of surface we ways we call financial have the themselves quarter continues opportunities present August. on business. believe industry. will ready We look over that in have intelligence as most data, images, question-and-answer to in and during we our of

Operator

go Jefferies. is sir. Tanquilut ahead, Our Please [Operator with you, from question first Instructions] Thank sir. Brian

Brian Tanquilut

good morning. Hey, guys,

congratulations. think I

the years a quarter covering best of Howard, guess first I've had in stock. I you. probably XX really You seen question for strong the

comments, end about -- your intelligence. talked You towards artificial of the you

world? AI of how of thinking have imaging, in you I RadNet data monetizing data or amount you and where probably holder also in envisioning mean as largest do guys AI develop are the curious, play you people technologies? Just protocols the about that And potentially the the as see set

Howard Berger

are of which more will large well operators is associated as Thank or whole Watson industry of come a or their are I working the potential within morning, with I to start-ups, itself technology as think with a And IBM the of you. Brian. like artificial that Well care two-part the opportunities Good in imaging various space across I the And through a businesses on start part. while artificial as it's opportunities health advancement vast. that the with looking number first that question, think of players the opportunities. there's one things intelligence, RadNet is intelligence. in so of and is the Perhaps through a imaging particularly industry, impact involved technology and smaller from spectrum business exciting

the there them allowing of on tend is with have though think impact our lot not-normals radiologists the and to cases artificial between normals triage and precisely where opportunities ultrasound images. some then model it and accurate about enormous and provide making synthesize more truly tend data of part imaging in the artificial to radiologist the When final focus most eventually It's On and actually capabilities? the and comprising, either to benefit being RadNet our think focus the is firstly, able represents volume routine diagnostic X-ray, productive and in taking how an total have ability those use in our radiologist's of can mammography volumes by imaging for more as in intelligence itself to that focus more is, to our to possibilities, on accurately about abnormal business predominantly. the that improve I CT our the interpretation XX% to more thus our interim data artificial we In RadNet intelligence XX% perhaps; on may and volume. biggest intelligence as a hear about one we areas well to routine those performance, or people than the do the the you particular, by MRI, they business that XX% advanced hand perhaps where their PET/CT. diagnostic XX% In imaging. particular to a out the that to of

be our between So if distinction us. a this make model would I for particularly and beneficial business example, hospital settings for

done. of focused the do where a are have that imaging who we to disproportionate most that's As normal abnormal elective patients us in is performed. a And hospitalized of business what our primarily procedures come the that versus outpatient having patients actually exams space amount are is reminder generally

The second and MR take able us able up scan to our maybe as to able be in perhaps in perhaps to being demand more on long reduce times XX artificial of time protocols and dramatically as unit to use working intelligence XX and better PET/CT have in increasing immediate get the that revenue companies we allowing that one MRI PET/CT. these place exciting minutes, substantial produce those from with, provide Currently our have to XX company minutes. without productivity Many our reduce particularly is to for of including and that more given been we've could anywhere exams even we're the the centers and invested ourselves per this the expenses. revenue And scanners. benefit a for with or particularly

workflow to and volume we think margins upcoming you will it the and inside leverage we'll position. about that and both in I companies, two create efficiency, into can use an a that where perhaps as that investments for at be as of and talking in some we we scale think better make well these that the tool our more RadNet anticipate we equity those can opportunity we'll So looking quarters focuses more be be as

for our data to or and in given smaller that use use potentially relatively company are to in of them made data healthcare from to and responding much question warehousing. and have invest intelligence how down companies with We've inquiries them quality data The data. having unique designers artificial return industry, the quarters -- data. our which second opportunity interested various that operators been algorithms that There's part the the from exploring about either past the in buying in those inside large we this many of answering manufacturers our data is we to get your for several

the three diagnosing to that examples One investments turning note the is made heavy earlier. and that and last on tomosynthesis of going routine of the cancer we've quality years in a breast data imaging in repository the the over have the of influence breast back out which we that is to country have of about largest data XD substantial

So lead use take that process projects we costs to lower are will at data of diagnosis system. better may earlier the outcomes artificial indeed our in intelligence we pilot for which cancer make to and the able to health even looking be where much of care the and ultimately breast

that other that would at potential our data business that data different want monetize in warehouse storage to to make take then area The available is we're looking of it talking and start-ups it a a couple and be of way selling other would financial other to perhaps as a that. made an beneficiary from available potential investment. we buyers well of as And that standpoint be the amongst perhaps that a things equity in data of

create sets of to development or to artificial that to be use allows has have an that the presented While, a been easily is utilized available made I not us the are quality date and represent and to -- the And we in formatting various data of it intelligence data just lot to ideal. format using, managed has been that in the artificial of developed it, of algorithms. the of data our a think opportunity much opportunity that better a more intelligence an public,

are future. time procedural the company this of And positive for size opportunities we that the on will that going a certain given the the into amount I'm these company and exciting impact have volume us. and of the So, a do,

Brian Tanquilut

that I appreciate Howard. all

also think imaging I investments, about company we portable that's have doing devices. a to investment think or so, an made As imaging you manufacturing portable

at the Or example. store think bring now other going there's is I think are imaging, entering into are capability to as retailers of I think to you how box CVS what for for the about about some you retailers And into evolves? or those for the pharmacy labs and mean, the an opportunity it, guys doing, way as do that future So, RadNet? model guess, with we looking Walgreens. the LabCorp the bases Walgreens the

Howard Berger

I Brian. Yes. do

the X-ray in environment about only talked but, in think the major and in investment of I doctors' I we delivered hope June. routine getting as easily Imaging more accessible a be change not their such how that Turner think will technology approval pharmacies offices. much a in here can Represents be we which we comfortable centers care or which previously even FDA made urgent

think to can would it without use, a stored I radiation need And go be room shelf. is And all, will both believe to benefit truly access create way protected. mentioned, not and when system efficiencies from does availability about that LabCorp, go combining otherwise care create which they and which system portable as that's when payers it the in other substantially. part into better to a lower virtually I health that cost used or I can into you and any can patients on -- with the shielding be have think, worrying of with

imaging intelligence in film mentioned only with specifically are the Turner this, also X-ray. other related particularly on with of are utilized to who intelligence, value working vendors particularly the plain as Imaging we All artificial reading will which the not space, this I developing, but to have presented the with with be component from of reading artificial

the but substantial not to from marketplace. in So, routine I expect the XX is have a into overnight, the five next see, which to effect particularly imaging necessarily years certainly dramatic changes imaging clearly over way delivered

Brian Tanquilut

questions Appreciate for Mark you. a just that couple and of

you're on quarter. guidance in I maintaining obviously good guidance, pretty early But about the know the year. a for think I had the it's you As year. beat

should you're seeing mean just a is through, in conservatism? line the horizon you that anticipating expenses come I slowdown, or versus So that anything the in QX any are top will either suggest this print? the

Mark Stolper

Yes. Brian. Thanks Sure.

We like to guidance, a it with extraordinary. with in the quarter think of results we That changing And year winter quarter. weather or We the are was exception. conservatism. I don't after horrible unusual guidance first the did not generally ago out so first change

coming or don't that. shift that range more slow we get absolutely if that to we'll that quarters, do either year. And where we should we do. we guidance likely anything the your So, into beat answer further feel question, -- We'll like that guidance see will feel But than be second down. then the we business see it's -- in our we

about don't think there quarter extraordinary first the was that anything we So, results.

confident will a year have that, feel So, contributing anything to a of three didn't lot the or lot quarter. whole we And of the business. we first lot initiatives really to that quarters a of have And contribute be about this opportunity. last

Kern instance X. acquisition For of the occurred on April

contribute impact joint the that venture in Dignity underway didn't impact -- So so of anything latter March, got second the first County, We in the later quarter the just in really that Ventura to way. any half didn't quarter.

our and the EmblemHealth we and bunch into hospitals five ramp successful contract to the of of So, outside also have in more Long Also to and have the in Manhattan on of contract that a continuing we're things. centers. be the Island imaging will boroughs continue patients a improve year throughout directing

think we feel continue will year. guidance appropriate And if of track adjustments. we So I we ahead make do optimistic about the way to

Brian Tanquilut

Got it. you then And last for one Mark.

you year. and unusual this you know last same-store weather about there's mean, nothing think said I I out guys better called than year As I

So I of modalities a to the on a just on then thinking store same at good been downtrend. it? looking just I there is same-store? this different call as Anything And guess out noticed PET/CT level about has you're

Mark Stolper

Sure.

X% that comfortable of we X%. said historically we've between So with level and somewhere same-center a feel

a X.X%. the So we quarter were that kind this of of of above middle little range

centers to very generally busy. be tend Our

our off fill how more out revenue order We're in doing through people figure more with try us to central order quickly. getting get call through for spots We're more with those in to facility. patients centers, more drive We're to we're existing get table protocols. So the the out always people centers on changing the to and things figuring to to schedule. those cancellation's on

you to joint line comfortable through X% with basis on a is X% about things Obviously, at and point. when this at acquisitions we're what of last XX look the annual top the and company, compounded we've such venture. grown So as that's the years XX%

the So to comfortable we'll grow the the range. kind company than of X% much, that's X% much greater but

Brian Tanquilut

guys. Thanks,

Howard Berger

and emphasize be let think even artificial outpatient that to be with revenue volume add remarks too there able centers I've an existing to again earnings one to to utilization and migration better from us intelligence calls a on that goes take previous to is, something I will as a talked slow me want drive while back I think help from Brian the prior I my about benefit opportunity hospitals will Yes, that to patterns. do

our a table centers. have to revenue get the time, benefit backlog advanced less for patients the particularly for only these us not utilize they're of ability our will because per centers of in be time the in unit on but number to amount fair times We a more imaging. And shorter protocol a will

more make some looking reasons conditions revenue along So with well mainly this the performance reduce I to slots those And may businesses hope that us of on and we more and no-shows continue by allowing improve think intelligently which with that that we center certain filled. for tools our overall looking people a us scanning driven to very level. lot to to artificial the benefit the not help in that at and database schedule but all think will intelligence weather there's their to make initiatives appointments new us of favorable of of which quarter amount by from think our to other are with did at external was frequency I other

Brian Tanquilut

Thank Got it. guys.

Howard Berger

Brian, Thanks,

Mark Stolper

Thanks, Brian.

Operator

Our Please next Mitra ahead. from question Sidoti. with is go Ramgopal

Mitra Ramgopal

Hi. Yes. Good morning.

get wanted I increased the to potential just sense as relates you're First, with to if having it a conversations JVs partners.

now difficult partner inclined I one. Howard if the more And wondering, noticeable in you? a of is still you're mentioned, any to terms seeing environment hospitals you've shift reimbursement As with was

Howard Berger

We are starting to some have conversations.

active the to an theirs. nonetheless, as to but make integrated desire into of us not with our ambulatory that control out systems all business the relatively providers other an in for exert integrated regarding. leader particular more need where be As we're networks up and of wind buying recognize groups slow hospitals for as RadNet These these physician we they imaging. where hospitals a outpatient systems to people in and designing I and tend methods to helpful may in think much beginning But only alternative greater and being with models, in greater I us frustrating. they relationship those more the all component these believe, which of be the with of also network as of typical imaging a industry, our to move their But of are are emphasize because into partner systems just can potentially with conversations so landing. buy opportunity directed I already here as our well payers or hospital not help is to very want buy outreach for there they a some will payment safe forward that to have centers, look And

and us perhaps novo or even and de over some since which that model new more the here the acquisitions two accelerated as ones hear you health pleased with us the be centers think I or appropriate. expand systems these venture looking three importantly have more the cases are that to all may about we people to in opportunities with expanding to are to building new we those performance continue of through current something we So joint where should them and years talk last as will bring systems well more in

Mitra Ramgopal

just believe East switching capitation starting that's Thanks. Okay. good great. progress there. new then some opportunities regarding to capitation I No. a some if the little making I EmblemHealth Coast. contract. up open already you're was That's wondering And the on

Howard Berger

integrating the to on haven't we would ratcheted well Emblem believe joint that are ventures, the payer Coast. other year conversations, up with capitation preliminary but are do -- discussions early what with as We part some in and as had given the early contract those other we East conversations. of focus the We've new the or look on IPAs we us

the perhaps year. those of able end or to be to hope I the So middle report more towards regarding

Mitra Ramgopal

cost Thanks. that was that know just the I count how in cetera. you Okay. in the were et That's on far of I some initiatives. on are a you terms quarter then saving there And question wondering initiative? along highlighted of have head And great.

Howard Berger

been and beginning end various line towards the the pretty along. working expense We're it's We've of in year. all of the this And that very virtually really company. far the across on items year

new of on supplies think medical which given but have business initiatives we and cycle opportunities of whether revenue maintenance it's kind equipment that some our basis, in that of new a regular services as So all typically of more purchasing was for has it the even Mark and management for are about our a and these there contracting it purchasing made I of within talked the contracts, repairs whether have, do we focus.

at But third more of in second think those visible number I the realized. or by first be the our been and quarter began they the in a results. So haven't the fully initiatives quarter latest certainly will

Mitra Ramgopal

and longer Okay. know that's you just to the finally, in potential if Thanks. in need comes discussions event of signal you more a revolver. prepared up just you're financing of in about I of getting the then, incremental back. And that or was case Mark I really just talked the activity being a term-loan the that terms adding terms wondering do having. capital. term Or question

Mark Stolper

Sure. Yes.

going I things think there. couple on a of are there

along we grown a company markets. as execute haven't that as that we revolving to have the the Kern to Medical capacity respect to the have and full to drawn that really clean give and well core into out order to our us well always then the as transaction tuck-in we on significant something capacity our in we've came complete forward revolver acquisitions First transaction in Arts down Radiology as line with had currently And pipeline smaller we is we the have case as in credit. of and revolver going the increased in liquidity wanted

of incremental added And so we what was capacity. did million we $XX

bank worth with sitting draw cash our down and line can we're the credit needed. million now revolving of in today of liquidity we that $XXX.X So if on

more it was us So to just imminent. I that's so think having about something more available that than

Mitra Ramgopal

the questions. for quarter. Great taking again Okay. Thanks

Mark Stolper

you. Thank

Operator

question Ransom ahead, Our with is go sir. next John from Please James. Raymond

John Ransom

currently as in a not we've uptick from bit stabilized. the Hi, RadNet are where hypothetically seen state. a an trading who $XX new an do you mean to today at in I of million guys. there million M&A those you're EBITDA industry on little were that deal say, -- Is let's arbitrage EBITDA? you interest $XX would to deal that put Can a

Mark Stolper

John. Yes. Good Hey, morning.

in in rates. interest seen has have general radiology of kind We an stabilized as in CMS increase

our unchanged. As pricing row a you're in the Medicare left essentially fourth aware, XXXX year was where

think that towards more the in confidence however them hospital-based the of stability to industry. so of looking seen hospital activity, And contracts We've has equity at given entities directed investing professional reading a many contracts. that and imaging lot firms I others of consolidation private

like there. imaging also in been historically couple out have multiples centers those read where relative purchased been have that we've outpatient recently facilities. of what of some to high deals at There ours outpatient have And a traded

I think industry. good the for that's

do threat that new into think to being continue though We that industry. a terrific is capital, smart put capital to as acquire. not it's see the ability I our to

because As you're are has over aware expanded not seeing -- our capital firms in into compete all time. And most and date our of concentration equity markets. core to or markets all and of companies been opportunity choosing are markets private to our other in we other I of have and our existing our consolidating, not of against RadNet, to who those put those market into of our contiguously for directed core try we've existing those are assets. -- The or the situations, think in country areas competition the core particularly

opportunities with come of just in to is flags the area opportunity, it looked different have when Much to We of that we we've existing a have substantially these planting of direct hasn't and that take and And existing right we that some our or we of if wanted assets had of could core capital from at been about to available other then compared right were visibility our when new going point. time and markets. that price grow opportunities these markets, the country at time a in in we've some country, flag to that chosen asset have we plant platform culture the an from assets. the to to areas this time the it right where

we'd that then into market right RadNet. have for price, yes we're to answer operator, opportunities right we will states and that be look another the "core" a and we culture unique that I long-winded say, it's and the of but take the guess, to they currently outside So that the six of belief could the in, at it right to have the platform grow -- terms have in conviction

John Ransom

And so I mean, of it's for known of you're action elegant thing aren't business friendly. to states states, add super that's a of great the handful would I vicissitudes I also answer. the regulatory you're state are pronounced. a states certain only a more and that being is only necessarily in guess that in or a weather a whether couple

being on about But geographically have that capital York just I about and man New buy too where densification -- opportunity So we're you a of maybe the XX. much place when little a five maybe California guess regional the just wonder how long-term? and thought I in costs more a you what the return think centers you another

Howard Berger

point, think couple things. but I'd a point good emphasize of I your to like a is

only in of six business lives. population is where five volume. we're While patient it's our very states, or driven the And much by XX%

important that's think element I So there. an

the we're pointed as second we to similar just like doesn't a out, Mark markets think in The to for into right attractive while go necessarily we in the sake us is there's unless intensity diversifying, it another thing kind that creating state, now. I of of diversifying sounds path a and lot, think have gain that a presence

have market. the less And us here. to more there payers. about of something wouldn't almost us I centers revenue with of large That as in and one elsewhere lot that see had these handling very is an health to patient mean scale have. in. given which the handle opportunity, of I to of in be irreplaceable footprint think And operational us and be And an And something from us may part in that's factor order in that to the do very think -- of want to think we the a will importantly, the system we're able the health. large who least a leverage do a larger our talked standpoint long-term to at a a expand judicious in population at we populations, a footprint health I look supporting a that But It and the things in years the allowed very has kind from don't out over but population to a markets they are opportunity that we confident standpoint. manner, five market perhaps arrangement looking attractive with at us may allow access that in don't haven't that a be particularly we've a delever good so They become imaging are the opportunity platform, for to as allow ability system which states we opportunities lenders their that which the operator yet, which a need financial much given I grow to we states venture grow the health our leverage invest perhaps a that of those hallmark is seem or of here lot opportunities a access doesn't been again in. continue even joint company a

mindful our that but our of is out company, I this anything, leverage want rule the be we I ratio prudent to in to wouldn't mostly the continue So way mind. foremost in grow fact

John Ransom

look large five good. aggressive I'm will be that getting service the about for being health too unscientific versus on usually deals did years say would I assessment that care of cautious. highly my being Well, too people the XX% over past not

hypocrite. a aware I'm subtle perfectly I'm So

use are are the necessarily what that The are that mobile in And technology I'm other question that like kind there not things interesting that thinking stage is, that any and some obsolete? concerned that you're not -- your you've And devices see? call moonshot that I'd about Moore's of asset is would may R&D Law render portability. imaging there that and we about physical

Howard Berger

don't world imaging, like lines and it technology actually terms of maybe the things the really in I But scanning horizon new MR the opportunities of that more along outside and as that would anything see the States, those than that's that give et PET just X-ray mobilizing areas proposition or much United the talked kind not making as Other I the is And countries, about in advanced -- have. portable. and on cetera. us CT technology third it value

think well those I the management. greater and manufacturers of those plays continuing into earlier accuracy to within as I diagnostic systems technologies afford evolve hands detection, the are think will population which what for that I opportunities see as make long-term health

the products all their in So, who to looking catbird are of inventory the the the that with At I the happen think of seat in I the challenges purchasers manufacturers to that. some least out are outpatient for now. We we're there grow, in arena largest the right utilize country. continue who in follow even we and be to various equipment with

evaluate only both whose into the function company very much inside importantly radiologist to four own years to as So technology all ago, getting there. the as manufacturers our for he we're And hired internal About the we well but very rates, insight. us for create with future. is a use favorable have very out recognized is visibility more aligned nationally good major we

manufacturers. about with have that this somebody's actually in we helping in visibility comes we the development but So the just not the what of from the internally from technology who's papers, read

into I industry and believe particular, more both standpoint, screening care the as we're and health right just pretty position tools utilized these are move then a now, and good going health. from and to in a I more imaging in think more general be and preventative So more population

John Ransom

you That’s Thank all for me. for that. you. Thank

Howard Berger

Thank you, John.

Operator

to [Operator over this are back no Berger for questions Instructions] turn would at the any to Dr. like closing registered remarks. There I time. conference further

Howard Berger

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

Operator

concludes conference call. today's This

for pleasant may participating, disconnect Thank have you day. You a lines. your and

RadNet (RDNT) 9 May 192019 Q1 Earnings call transcript