RDNT - Earnings call transcript Q3 2019

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Operator

Good day and welcome to the RadNet Inc.

Third Quarter 2019 Financial Results Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Mark Stolper, Executive Vice President and Chief Financial Officer of RadNet Inc. sir. ahead, go Please

Mark Stolper

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

the management's are statements uncertainties to which risks and uncertainties, based statements are differ set Form forth filed include and the from Forward-looking RadNet's from XX, RadNet's and December year with report XX-K RadNet's SEC on to be subject on filed risks reports preliminary and risks including ended herein. time results to for These quarterly RadNet's materially cause XXXX current may those XX-Q Annual Report to in on time, expectations actual Form shortly. contained the

the the it unanticipated were of update date forward-looking or statements or guidance to events. after date future on forward-looking reflect the which made. no especially of only reflect placed made statements, information, reliance to should not as on they events any to be Undue financial performance, RadNet circumstances occurrence publicly speaks new obligation is undertakes

the I'd like to to And over Berger. call with that, turn Dr.

Howard Berger

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

and improved Our metrics principal this last operating relative third financial quarter, quarter. to during year's

increased revenues Our same-store volumes volumes adjusted our indicative X.X%, X.X%. demonstrated XXXX. the procedural XX% we've This increased increased increased steady quarter-to-quarter aggregate XX.X%, EBITDA of improvement is throughout and

we focus we integration recent the of further of continued the contract last quarter During operational that year fourth commenced in on and the acquisitions. our our implementing quarter, ACP the significant most capitation EmblemHealth two of

We membership completed of freestanding replacement now much equipment RadNet's ACP in upgrade continue the and ACP of into the to the or more XX referring of have make the facilities. in progress locations

We ACP and the continue to on physicians with educate RadNet of facilities. benefits them meet aggressively utilizing the

we the will economics that contract throughout result, a the coming As believe improve quarters. of this

revenue the locations operational on as were Long Island, clinical our ACP fully counties October Concurrent us of IT protocols. are have the contract, cycle is last well year. acquired in Island. in centers Medical service centers Suffolk and as RadNet EmblemHealth XX X and important The The with Arts Long centers patients, The of York lives, procedures complete. to other first these and operations of in both Imaging effective the commencing integration substantially Medical into Arts with New our ACP centers solutions, Nassau we network provided

and marketing, had Greater completed working area our surrounding of and continued of sales and our also we revenue now Kern practices two pre-authorization, areas. Bakersfield, opportunities. and competitor the Radiology, in been substantially of which During our schedule, we April clinical We this have acquired largest was this the radiology year. integration quarter, Kern on in operations California optimizing merger

With respect of health towards over and our business held in existing we quarter, system JVs joint to or facilities, establishing progress partners. relationships with in the our our XXX are of venture Today during new expanding XX partners. made XX% focus joint areas other ventures with

and These our practices become been our relationships for have health our manage own in owned been have patient quite virtually into partnerships, effective of partners these our hospitals jointly centers. sources referral important successful or hospital that all system driving Many volumes physician centers.

doctors in with with own These to physician interested systems become general, manage or that health owned physician jointly imaging communities. systems Whether their physicians In of relationships becoming loyal seen we affiliating or practices. are not, our have have health groups purchasing sources our they in more or all centers. directly, referral

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

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

departments, growth as expanded large Our partner additional as inpatient Orange opportunities recently of high-quality alternative populations. to Beach offering patient our centers. objective further radiology Imaging and the each California And outpatient service Two partners. pricing, RWJBarnabas our with partner our joint in joint many in largest venture and there Jersey Imaging MemorialCare to remains the New is easy our County fair Jersey New hospital ventures, through become well Network access with of for have Health of acquisition with other

regional EBITDA. into can front, four M&A for our add the tuck-in and where five existing On the acquisition of to present with attractive continues times between us environment multiples acquisition operations at centers opportunities, we

multiples options targets seen regional alternative core larger in not outside levels expand markets higher have acquisitions of platforms have our to buyers. do markets, when we to for comes While generally our it many

locations and the furthers largest multi-modality and operator goal the committed targets measured This that as we will and attractive markets must of whereby in further of such disciplined strategic in being must offering, direction. scale targets outpatient We means remain characteristics, our approach, our to all a addition which that have a operate. capacity

parameters. under our these we balance To to will accumulate opportunities these them deleverage to Otherwise, the we extent sheet. and pursue intend continue cash exist,

leverage Our to future. X.X keep and intention our times the are below we today four EBITDA times near towards move EBITDA, is where in

seen, Florida drove the you breast learning program the service completed of may Delaware protocols pilot operational our technologies announcement industries. similar to operational for partnership customer level recently have intelligence, improved women and of consumer-facing last which of substantially multifaceted address We of using increased week, solutions more Many RadNet's combine other a use Whiterabbit.ai with facilities and markets, mammograms. in other artificial cancer trial a to and the The compliance, RadNet imaging. to patient bring and screening into for patient their outreach machine protocols

the of program, success Based and we the licensed Whiterabbit have technology the back-end operational on pilot platform.

our XX% the impact continue During this in Delaware markets. test Florida these by about financial results October exceeded and it on in quarter. throughout trend over our fourth will for pilot volume two We and which mammography budget July, the have in our began saw optimistic are the

begun which of platform other the second deploy success, of As by the anticipate XXXX. together a markets, quarter we result of with Whiterabbit.ai, the end to completion RadNet to all we the have

our to in While we XXXX Jersey, to California, we mammography having represents are budget. and Florida cannot and same our improvement upside necessarily York, volumes Delaware any Maryland New New the in significant success extrapolate material

our and in expect million X.X complete comprises XXXX. Mammography XX% we revenue almost to of almost net mammograms

and the In phone images. including mammography develop addition to investment interpretation applications solutions, arrangement, equity Whiterabbit.ai work licensing future made the with of mobile rollout to to system-wide computer personal and platform we an artificial and will algorithms and intelligence in Whiterabbit automate

Also, reflect quarter. this, as of the in additional our In relationship spend conjunction with during a capital and fourth we the pursuit our anticipated anticipation our this we spend levels third with Whiterabbit of rollout, and of capital increased machines expenditure the quarter the system-wide guidance have mammography on increased opportunity. to result in

to in this spend technology RadNet are The quarter, quarter industry dividends transform our the lowered impacted these we solutions will also quarter. and XXXX. our will we leading-edge We additional depreciation in with our this that commitment believe, and for expenditures, position years. turn our making, expense, income coming the in Whiterabbit relationship believe which the EPS with throughout fourth net reiterates pay During

machine big us applications efficiently to data our automation effectively, and patient will more the learning, help services algorithms expect experience. cost enhancing deliver that and We accurately while

XX-year than packs. any area XD been history, multi-slice able technology Throughout more early almost the services digital strength impacted of from the other modality, curve. X-ray, digital scanners, and itself of lends being CT has our industry MRI RadNet were adopters mammography, high magnet we risks health leading on edge mammography, to to PET/CT scanners, Our always technology. of stay

profitable to the importantly, and digital to substantially technologies We business consistently have have our more and that make patient proven our demonstrated efficient they improved have experience. commitment most

inflection of artificial the intelligence our processes digital perform. point accuracy set can are are the to potentially for radiology of an delivery to entirely and machine more promise learning. the opportunities we increase the believe effective These that I have and mature make efficient new an now and business relates cost as exams technologies at it of interpretation and we speed

with be In we pursuit identified industry. solutions for on continue RadNet to partner of companies in leading those our to developing will opportunities, the these edge

-- I'm refine much our We promising these centers will the certain imaging some future. topic our and as capital in invest laboratories test adopt more to will utilize of say solutions, have this the and I companies in technologies. more near of new to on effectiveness

Mark like back closing But the call remarks. When of to of highlights finished, make to time, some performance. will quarter to some XXXX at I over the is this turn our he I'd third discuss

Mark Stolper

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

will reaffirm XXXX I levels. guidance Lastly,

financial I on loss, excludes equity amortization, disposal discussion, extinguishments, non-equity loss gains, bargain or measure. The the as EBITDA, non-cash which earnings the non-GAAP and defines my depreciation taxes, purchase income a use interest gains EBITDA will adjusted company other debt adjusted equipment, before – costs on transaction and and losses term of In is or compensation.

full taking is equity to reconciliation attributable loss EBITDA subsidiaries is to A and non-cash adjusted EBITDA earnings Inc. in in adjusted quantitative release. events to during of shareholders unconsolidated non-controlling earnings included and the one-time earnings operations our RadNet of subtracts net for interest extraordinary or Adjusted period. or income common allocations includes in place and

like results. to With that third now I'd XXXX quarter review said, our

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

quarter, over third increased year's For volume CT volume exams third prior and routine MRI the mammography of with XXXX taking PET/CT as compared all XX.X% X.X%. X-ray, the volume other ultrasound, inclusive increased increased increased XX% imaging quarter exams, year's Overall, and quarter. prior third account XX.X%, the volume of into

performed third quarter, were the In our we the volume of procedures. by whereby, third we the from XX.X% X,XXX,XXX The quarter multi-modality work routine consistent did with XXXX, in was all imaging. procedures approach total of

X,XXX,XXX compared and compared PET/CTs in with XXXX quarter X-ray of in with of and as follows; exams, which nuclear of the of XXXX; of these quarter were third CTs quarter quarter in all exams MRIs the in with XXX,XXX include third procedures mammography, third imaging in the the routine XXXX; ultrasound, all third other X,XXX Our as the with XX,XXX XXX,XXX as exams XXXX; XXX,XXX medicine, as compared XXXX. third PET/CTs CTs quarter as XXX,XXX compared X,XXX,XXX of MRIs

exams compared those of quarters volume were basis of Overall, same-center and X.X%. On into year's which with prior part X.X%, a the XXXX, centers, increased third RadNet for same-center X.X% volume the routine CT and account imaging PET/CT only volume MRI taking both quarter. volume XXXX X.X% same increased decreased including increased

quarter, weighted upon quarter over $X.XX in the of the XXXX. million Net number to $X.X based XXXX XX.X the for for net was a share. compared net and diluted third impact income $X.X XXXX of income in the Per for $X.XX third $X.X quarter, the income share in $X.XX share Adjusting the of quarter XX.X per tax-effected million quarter of income was average per for a legal during of shares third was adjusted XXXX. million of settlements decrease million the of quarter net million of

non-recurring loss in or $XX,XXX net following; were loan paid $XXX,XXX million in certain $X.X vesting restricted quarter facilities. and related of items initiatives; Affecting expenses deferred stock related the $X.X legal of non-cash of the stock; interest XXXX and certain cost to severance in compensation resulting non-cash with of other amortization reductions headcount equipment; non-cash of connection income employee on expense third our to from $X.X capital the sale savings including the options of certain credit million financing costs and or settlements; disposal discounts of million

Overall the third which interest accrued GAAP of quarter with GAAP million compares quarter financing Cash deferred was last quarter, expenses in million $X.X $XX.X the interest interest excludes with expense quarter $XX.X third This and third of for XXXX compared million. for as non-cash of interest the of expense XXXX year. $XX.X million. during was in the paid

September balance. adjusting our par million we total this at debt term-loan, which on At our that XX, the of million line a the our revolving for cash value neither borrower of At which for million. million of September Note is RadNet credit guarantor. had $XXX.X value includes a our XX, debt, $XXX.X balance $XX.X we nor net value is less par cash debt XXXX and NJIN undrawn had net of XXXX of were a $XX.X

we quarter, million notes $XX.X since days, XX, receivable the payable $X.X net XXXX approximately days Sales had our and XX.X DSOs dispositions of Since and During expenditures Days repaid net XXXX. asset million. Outstanding cash or accounts of million $XX.X approximately December and of capital year-end leases increased six decrease a were of

after like conjunction reaffirm financial XXXX with and second released guidance year XXXX this to levels, and end our fourth in quarter quarter time, which results I'd fiscal our results. At year our we reporting amended

cash million; our $X.X billion; guidance adjusted $X.XX to for billion revenue, guidance net our $XXX free $XXX remains guidance remains million guidance and to at $XX to level our at EBITDA for to our at range remains cash interest $XX remains million. $XX for total at flow million $XX expense For million; million

follows: slightly initial for Dr. increasing range range in guidance capital his our $XX $XX XXXX guidance we Berger as million remarks, to are was discussed As opening our expenditures million.

million is revised $XX to $XX Our million. range guidance

few update rates. to minutes With Medicare by a I'll regards what now to reimbursement a Medicare rates at XXXX part volume-weighted volumes procedural released by to expected typically that the which an schedule you discuss and of is take we July, reimbursement year. analysis fee analysis time using those matrix rates the is XXXX CPT code. that of on physician At anticipated rates. compared that received about with we time for completed end an every proposed to we know code, CPT respect We our give initial modality proposal XXXX XXXX and XXXX by

relative our that neutral rates be for showed analysis initial Medicare Our XXXX would XXXX rates. to essentially

was negative While year based MIPS our this payment of fully incentive under or merit-based from the proposed impact. bonus mitigate in there small measurement the upon would XXXX performance a impact pricing, system negative our XXXX

familiar us program resulted XXXX reimbursement reimbursement outcomes. was is by negative a with implement four bonus is could of performance required RadNet's those a have poor and promoting a payment areas; For cost. Performance who in MIPS for you impact. quality, measured less a incentive MIPS, quality performance whereas are providing excellent rewards law value improvement interoperability, in CMS under to activities, and our which

will Last a rule the the its week we we performed CMS reimbursement. final lines We govern next similar analysis completed received proposal. from along in year's July initial on which

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

are We pleased with this obviously conclusion.

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

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

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

Lastly, four we in operations. that in five efficiencies to our strength will EBITDA local to our geographies at continue and markets core times acquire targets achieve further strategic our with existing

closing some who I'd now back Dr. like call will Berger to turn to the make remarks.

Howard Berger

you, discipline virtually away of in are changing United every settings. in Thank in is of rapidly migrating healthcare from Healthcare hospitals ambulatory lower-cost Services expensive the States. Mark. favor

imaging, trend health, centers, emergency the are list freestanding also facilities, diagnostic slow the and of goes on. care are this seeing movement rooms, we outpatient in with home surgery we experiencing urgent growth While this laboratories,

healthcare value-based The on Private changing. focused are more care. payers landscape is

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

pricing deductible Forward-thinking health in community in the and plans to own understand interested us freestanding differences systems hospitals and partnering today between hospitals. Patients with are beginning more high to diagnostic facilities with imaging settings ventures. joint imaging are

inform amongst creating Health and transparency are pricing differentiation of patients companies tools to facilities. plans third-party

from RadNet believe is benefit these all to continue that to well-positioned We trends.

aggressive are The which More machine is announcement discussed earlier with intelligence recently move on of making an focused example we such mammography. call learning. into artificial we this and a moves Whiterabbit on

approximately we grow believe we and the X% perform in States that solutions existing take the of can mammograms We platform. with place all X% the within this United Whiterabbit facilities we to believe

we who with Our X as rollout are mammograms have XX% women in of which targeting Phase to health women now simply the XX% had plans. that do annual have the allowed or underway past not are is non-compliant. bi-annual eligible Phase target will X mammograms their currently who in

of in coming will some of mammograms prostate tools quarters. preventative the solutions We aimed colon pursuing unfold as new and forward lung they medicine. as screening Beyond detail as well cancer look technologies and these at risk to for more we assessment other be initiatives areas discussing in

portion are of the call. Operator, the question-and-answer now we ready for

Operator

Jefferies. now Thank go Brian of ahead. take from Instructions] you. Please We'll [Operator question Tanquilut our first

Brian Tanquilut

guys you where just track? Obviously, out the quarter that on to internal my to terms get about same-store quarter strong for Congrats strong, KPIs was first feel shook the but wanted of feel you versus your question a I do point how that or of guys. guess morning good in expectation. Howard guys quarter. Hey Mark a the

Howard Berger

Good morning results. pleased We're Brian. with the

is where always and for anticipated, The fall in as out which get where third seasonal York not issues personal as influence the just one to related we other example the events easily area. quarter July that traditionally by vacations those Day issues and decisions are Labor particularly major well holidays four New some impacted behavior two might

built the we while pretty in only at to be but we're to anticipated modeling, close are not into this point these where somewhat year-to-date. quarter, So third our

include as this course and levels of the we three So whole fourth implication metrics guidance confident reaffirmed our Mark the presents of will for which using the with. first that quarters itself highly we're of third the the quarter, what by year, year quarter

was a went in lot third externally and and there opportunities Whiterabbit into investment Again, like if the our initiatives as related activity well with mammography our EmblemHealth/ACP new opportunities we Whiterabbit of discussing screening. detail continuing rollout will of quarter and that you rollout as as issues some relationship breast in both to of

that a to that, on who related that I'd in moment about should we on ultrasound, for of leads screening breast in mammography, mammography screening like mammography, we of XX% MRI other focus women the amplify to relationship need on metrics to diagnostic to it then our biopsies noted do while to that go to procedures. procedures and other have which be the breast,

will procedural to filtered initiatives, of organization. as a So volume volume these as additional the we we expect result the increase continues through see that Whiterabbit

quarter significant expect we And capable in that see business our importantly the of rollout. of expand the additional at in as in here we have impacts, we magnitude could to doing most that which mammography fourth what are more

platform the quarter I'd expectations be quarter, fourth then launching the and call at more XXXX to as the a March. and that So our in rollout close our third but by being pleased have summarize of announcing with we'll for results,

Brian Tanquilut

follow-up on that. to just Howard,

you least market that opportunity, So think volume think share as at about of points gain we like XXX it you basis in mammography. could sounds the

are you I thinking next think with flow-through little you how it's results? initiatives thinking of are are So -- terms but to technology same-store are about accelerate know these in yielding the should I Whiterabbit that as year and all early mean you about of that same-store? guidance, expecting a

Howard Berger

in of of mammography being we Yes, the of operate States, overall which five Brian. really strategy we that United major primarily the is the about X% RadNet focused a reflection all the in. markets Again, do in

And our procedures with what from so anticipate mammography overall that volume as of seen in the that. increase program, a testing well Whiterabbit of our a if as pilot roll as the translates XX% into the additional other substantial of we've in that possibility and amount we

believe business breast remiss But like I very heavily become believe are I'd on and on over we coming like which and attention screening models screening, other cancer breast for early breast the should is their just breast be in we much beginning think prostate focusing routine screening, focused we to mammography men actively ages. going almost our be in mammography quarters, that pursuing much

will our in overall of business business kind concentrated RadNet So much to markets. which results, in that reflection densely highly reflected we expect drivers populated are I the but see those be strategy XXXX a and the think very in multi-modality of being

prepare as HR which of cash better be to as Mark fortunately seeing flow these as but significant we quarter's and reflected slightly by what for results. facility in may accounting, begin better pointed a whether I and importantly the seeing as volume, have investments corporate well functions ourselves build non-imaging we're this overall in have and our reduction management to our of we more DSOs of are non-site out, we along are cycle kind days, opportunities managing improved only personnel which responsibilities increased that capture to So demonstrated the with not particularly most cash in six of now facilities pleased it results. hurt margins equipment a revenue was lot in

say, barometer overall. a growth, we're with the with and both to less picture have results look So strong performance, center third with slightly same-store particularly our doing the use the X%, at level with our what at investing the as center big if than we very for I'd the and I'm quarter pleased

Brian Tanquilut

we to to How it going thinking push the takes investments through to remain year Got strong making, about the as expecting I same-store next you -- it. then I And so you're margins be be and factor if into flow-through the you're on in should of guess? follow-up margins forward. that, you flow year expect we like -- Mark on the puts to next seems all guess should

Mark Stolper

Yes.

which we did think said, performance. Berger next aggressively better this assuming margins a flow-through. same-center Dr. positions for spend I infrastructure, for And year in on have us improve more As good quarter continued we to opportunity there's our strong

I've always growth. some that a in could processes, in make these this this said we in to year in a a kind technology achieved normalized flow-through opportunity that our ourselves our of as business economy to and environment, normalized assume type of going used position then that same-center that our in X% forward. to We've an we've investments X% for people, and

Arts couple So optimistic the also that we next -- yet in integrations Medical a of acquisitions, I'll size of -- at the for about and of make a also year assets those one talking And and the also I very all integration. fair and do. those expansion. And I'm in opportunity optimized. investing are in digesting substantial We're money about bit process spent ACP feeling we least mostly other think point the current are not also we're we margin -- have

something is optimize which really economy, from -- seeing next our point. the as say some that that also year we're wage there's that health something some The we'll we care think I through will So to operations. margins are I one suffering this thing benefit inflation at and on throughout see margin expansion, those we possible

care we And whom when employees to The to record I'm some will attract has it's with point it And some I'm at with ultimately with slows has And that retain are temporary. robust. inflation been trend and to incredibly and friends health our keep economy at up been hearing that seeing think lows slow and we from lows, wage employees. have CFOs the economy new historic we Unemployment down. down. other that hopefully reverses that

Brian Tanquilut

of just what's a are like? you pipeline Mark. in M&A are thinking bit? about your of for little slowing then like of question digesting down Or Last process terms in me you the kind first How

Mark Stolper

Sure.

the an XX are major we've markets. have active on pipeline, XX We integrating filled acquisitions that focused mostly last deals five in We done to the tuck-in with always small in our months.

planting at We on country acquisitions, some more the in areas have capital. of and return looked mostly new for a potentially sizable price of flags recently reasons, invested variety other

pursue those pay far other transactions multiples new to area on not And or center have in into because to go were might U.S. we existing we they are the really when corporate the have at that G&A than exceeded a that multiples chosen that synergies you some assets our of We've level synergies. no regional markets. there operational

So get And Tri-State New on area. found a that markets. our the invested in we've to from continuing better core return we always invest those then could in like growing five by particularly capital markets contiguously we've York demonstrated,

you'll be into small expanding systems. and you'll months think the active health joint ventures existing in next with also joint see us I on new XX ventures tuck-in see the us entering So transactions and

within years, our of hospitals to to joint grow of centers. an remarks, XX% and community the business systems Howard over XX% health currently we opportunity substantially ventures potentially to few next held said our with his large in see and centers that up are

Brian Tanquilut

Awesome. Thanks, Congrats guys. again.

Mark Stolper

Thanks, Brian.

Operator

now our Please Thank James. you. question take Ransom [Operator Instructions] John ahead. of go We'll next from Raymond

John Ransom

are morning. But joint you as care rate change better a affiliation, otherwise but a do the hospital of contracts? hospital, your do the or something say good your the rates put that ventures a the lot you one likes has freestanding when a market in in not is lower hospital that's part from you brand know would managed just of notice these center because hospital than you have I that gotten is Hey, centers.

Howard Berger

and not are in that we reflective we sustainable hospital billing all able our ventures markets, that joint is morning, centers outpatient centers ourselves in hospitals. payers what Good are reimbursement of which with What to to venture successfully our wholly continuing we use separate have do rates. pursue whether the believe whether with and have that John. centers schedules rates negotiate with is or fair do are been are of We those fee joint for those we the partners we own

even those centers joint rates So are joint we are of me none joint what negotiate better ventures, of can all centers excuse ventures those our XX% ventures though of of almost using are our currently billings. currently ourselves. generally have than rate But by in -- hospital

John Ransom

Okay. of idea order some of the Can of magnitude you that? give

Howard Berger

in example venture's RadNet which probably schedule, in our would best fee the there separate Barnabas freestanding the achieve of Jersey is that depending not upon what something in name what imaging already would somewhere is joint or markets, to in system. with New that those I hospital if XX% than better Perhaps similar is Jersey by now. we're a get. Imaging payer at the to other New looking Network that the partner levels XX% say that Health the to state is And centers definition our the

John Ransom

XX% about the in math, long-term there's mix mean, doing way take XX% just that opportunity? from the we a if simple useful a if were maybe you I say lift commercial to and to to that's and So to think XX% bit go were your

Howard Berger

I think so.

I think

John Ransom

Okay.

Howard Berger

rates. of owned whether centers, joint relationships the Whether our we're venture we're payers looking discussions reimbursement we're or looking in constantly at regarding with XXX% all our at

centers I we're quality by be And the of more systems partners, a those and ventures important think give and in joint us in would in it fact as the delivery experience joint technology were hospital leverage with while I and of in those up from standpoint a as the more driver even controlling markets so the think in additional kind discussions as And bulking with patient ventures producing hospitals. more to much access. that if becoming

John Ransom

Why wide range Mark. just for for a XQ? a And question such Okay.

Mark Stolper

Why what? such wide range a for

John Ransom

Yes.

at Why not it's pretty bit? range wide for If guidance, it a XQ. a you your I little implied look mean tighten up

Mark Stolper

I hear Did say didn't sorry. you word. the I'm XQ?

John Ransom

Yes, yes. fourth implied wide. pretty The ranges quarter are

So a little why up bit? not those tighten

Mark Stolper

to million -- Typically, $XX left going the to practice In to tremendous don't range and no We close we up that gone haven't a has but year set the haven't it. range a think usually tend we magic a we've million million revenue it. tightened But be ranges. as to EBITDA a tightened so to we ranges $X up There's them. and as range there's past, just by. variability, $XX leave anywhere we have about

John Ransom

the of then mean sort And How act you Katie some Couric solve down. strategic of your prostate more -- of And do for last-mile of initiatives haven't died how problem lot you breast. and then the and rates years? uptick that topic years get example whole big level more utilization in of over the for certainly, in pleasant that the consumers engagement you very advertising sort going and But colonoscopies changed there's getting the that of a screening really interesting ago a to in consumer how get people investment Cologuard some do frankly a in -- of the of higher for saw lot thing. do I to -- tests and and Okay. in we aren't a

Howard Berger

educate much is I to that a What of it to think Hi, accessing remarks. John, goes a change or access more it aggressive I'll the think my level in trying necessary. to question very that somewhat have that patients about closing take have the to not be here only contact I some with of and don't found been question. limited And trial frequency way system is that's either we really and the great it's behavior

we're they our on would I to getting to like kind ultimately what driver kind much history as testing what attention of that give with perhaps be their talked into their about these applications. those think as higher own well of But will looking or may in and questionnaires tools. need should not deep that social some risk genetic them assessment existing also learning at using with media some help patients screening focus risk is regards we the guidance Whiterabbit but out that and social more and indicate the with about of are do know seek they things, only why And at

down focus have perhaps That's screening the do against part that basis. of get prostate a doing on something And by very screening that the important recognized that consumer mammography is benefit cost I also is payer the most affordable on either cancer. becomes the to these the and to to it with much trying or the our reasons to frame need mentioned mass one that I they why tools average something of like need of by

equipment as intelligence believe range And more seen as in better the the reduce will that health begin cancer. if an from What screening a to the get scanners MRI can it what mass now we to tools screening have artificial costs well cost both rapidly and mammography, we enhanced we ability to similar with identify extend mortality. basis to costs population newer standpoint on of of meaning are step payers substantially utilize prostate this something and that for scan and to and down

substantial. we're we number detect early rather really ripe not. becomes to And it question The if prostate cancer is. think a how fact see age, are most it we live all it I to in a men really of whether or get that how to clinically significant like It cancers of old prostate going and

matter of money lot really tools good But other in on clinical are and of that spent is like the the care. a of testing directing better not PSA fact of being very which things terms is

prohibitive. because pays give essentially and the about patient In cancer and would colon Katie both of having glad cost of as or what population using that a from simply main focus you other to well activities a changing my none is cost cancers Couric almost flexible to work regards I wanted for the to slim screen -- if one out, colon I'm of as John amount you is colonoscopy, and of the colonoscopy, you of is -- the chances mass up day say mentioned detection

hopefully what and within for possible five next intelligence is I advance be level we preparation mammography again a to which procedure with be the and done breast screening. the at cost able be without of to the believe is what than artificial I see any less think could using which three an same What we'll probably years X-minute see down CT is colonoscopy should

on So health really I better on care of are both the what effectiveness. tools impact in can nothing it's as if education get imaging. well you this an than of tools And necessary have as diagnostic the spectrum are that think patients start cost to more focusing engaged,

others and that's the significant So see that the as delivery the Whiterabbit to started you're lot our as that in technology, and cancer. particularly Whiterabbit invested focus why to, where we and of company as currently going but a to I like think licensing companies not also. we're think we will be a relates only of can it Because and/are RadNet talking impact of doing inside in healthcare activities ourselves have well I

John Ransom

in Great Did I little missed late. answer. Mark additional in maybe you this I spending? XQ a quantify the jumped because

Mark Stolper

didn't. of We estimate my revenue scheduling, investments we to top pre-authorization additional it I head, cycle had personnel top made to at in million just – didn't. the the our We of million. If in probably off $X $X in

John Ransom

Okay. I to mean, versus a margin certainly our revenue beat us. because our little a but model yeah, of forecast you bit give-back

editorial I other is more an In than a-third high-deductible probably are And the procedures. spending. got But was thing, it finally screening of in out-of-pocket cases to seeing last anything for certain some starting Americans in just of this it thing what plans. reduce they're fact, is but the the one else we mean, you've the was that's Howard

So for co-pay co-pay example so be $XXXX even might a colonoscopy for though that you zero. might a have

So simple this plan is unchanged.

real I something but I'm just I is something to how widespread looked that's starting be know don't that But I way think seeing. a systematic of – knowing also that's that we're at? there's have

Howard Berger

you're spot John. on again think I

may offered patient you is mammography for for screening Department is and In know requirement pay mammography. in point, Health not this know or states anything expense be out-of-pocket at by screening not the As no it the a of most states, that. there out-of-pocket those that that

that business. you plan You call it good design, also can can call but

the that like of with mentioned think other things cancer. I colon models lung will prostate, screening similar screening, I kinds and have future for for screening

you the cancers over of death aggregate four the in about cancers XX% if those States. cause that together, And you're talking United

I we to population a basis, to technology but think if plan not mass out which because get because that be rolled these So, of on further as now of health I and further special design, screening allows tools anything the technology, place with to on you're like believe we see the health could overall the entire medicine. value-based be process will conversation thought care of adoption substantial rapid it impact change of the so long-term that could some And seeing system much this.

for how a turn place. get is this to cornerstone we corner think that that I to

John Ransom

you. Thank you. Great. That's Thank it for me.

Howard Berger

John. Thanks,

Mark Stolper

John. Thanks,

Operator

our ahead. go Instructions] take We'll Sidoti. next from Ramgopal question now Please you. Mitra Thank [Operator of

Mitra Ramgopal

particular investments really wondering, morning. making. internal been you that is for Yes. the Again, on same light solid MRI/CT. anything I'm if Good numbers driving have store just from

Howard Berger

morning, pricing are important really to that both a making we're good that moving that of combination just continuing from more the outpatient it's slow Well, of think patients in I think Mitra. our we to various Yeah, hospital-based become of a pricing. investments turning I expand the footprint. ship as we even And markets big

is every for really recognition how the and up think creating the is it hospital quarter is high-deductible as well that particularly particularly for RadNet both plans just of us. outpatient as systems important with opportunity creeping I payers market, by in the

for a think a and statistic an saw experience if a that population along I for we increase population from XX Medicare in I with result to So, you every under benefits. words that will anywhere And versus day aging as senior the growing of experience, all imaging that the the in eligibility commercial our the X other Americans population, incidence XX,XXX times what call utilization take much. inevitable imaging today as X.X population itself reach everybody of is

we And together, of might built our the almost to that X% we're same-store X% had with same-store quarter. perhaps X% all in has third that would some I reflect it's initiatives So us expect undertaking the the prudent into factors the see those even that to new growth think that which models. sales growth for you putting greater, Mark sales growth

Mitra Ramgopal

Okay. No. Thanks. That's very helpful.

more Just by think also the helped should was in nicely I the obviously about growth piece contract. how just really expect growing on wondering, business. capitation of should term longer we kind from of that of terms we business the the that Emblem that's

Howard Berger

Very question, good Mitra.

for aspects talk that to us two about. there's of think I

inside of have gem what these sticky We hidden do. at does not decades. we RadNet. nobody forms in that generally and are scale within is call that business. we these else business by contracts the we business get a there, capitation our close it's years, there benefits had capitation Virtually Firstly, And relationships, for other if

flow volume them. reliability that and have of we So comes cash that the from

other are like contracts capitation The on for rates resetting look reviewing are is it of that we at looking and growing reflective of payers our at side we or private much of all growing side of and that constantly these need. our the commercial utilization opportunities

to there opportunities we conversations -- expanded hopefully, an revenue year. able are be enhancement that or for talking about start next think accurately us I more we'll So,

manage and represent the the the us paying patient that artificial personnel, to and allow to that not But, equipment, these our intelligence and where but tools as to in population need benefit are sustainable today, affordable our to something rather about continue thought people invest parties all we've to business looking all that be reimbursement rates opportunities other force of for of talked as always better. down,

part happy our with not So, at opportunity as future for our a with the of it business. just we're capitation static business, look and very

Mitra Ramgopal

then question obviously in on it's Mark California the not fires material Howard. final had Okay. unchanged. have I'm a on impact Thanks, operations you. the assuming really And guidance, for

Mark Stolper

define here in downtime X.X to you both two in our Yeah. the intense and Greater fires but Los interestingly in extensive, as markets. not in it perhaps as -- year year. Los and the of became particularly did where badly pretty markets not did of material. California, the hit which some not how Northern average I course don't lose business, Fernando fortunately have Southern Angeles of area San California, Angeles days on overall extended, it and portions last Valley upon depends was this We was we word But in our

our Los area. Angeles the in But, markets I mentioned Valley one busiest of the because that, is Fernando San

support relative but being here hand, one knock of the And this day teams here it been prevented wood much from on and So, But of that far thankful the in loss not was have company, we're all business the hurt. other the worse. on it to two material a size does could worse. to firefighters or California

Mitra Ramgopal

question. for gone taking Yeah. and Hopefully again the it soon, thanks

Mark Stolper

Thank you, Mitra.

Operator

for remarks. session. turn and speakers the now you. to Thank for it Thank to any this over like would or closing Ladies conference gentlemen, the the you. additional was I question-and-answer

Howard Berger

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

Operator

Thank today's for you and this call. concludes gentlemen, your participation. Ladies

You may now disconnect.

RadNet (RDNT) 12 Nov 192019 Q3 Earnings call transcript