RDNT - Earnings call transcript Q1 2022

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Operator

Good day and welcome to the RadNet, Inc.

First Quarter 2022 Financial Results Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Mr. Mark Stolper, Executive Vice President and Chief Financial Officer of RadNet, Inc. ahead. go Please

Mark Stolper

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

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

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

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

Howard Berger

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

your on Before the myself say, and entire we hope I at are safe. healthy we to behalf RadNet, and start, and like loved would staying team all of of ones you

for business and extremely are challenging including wish shareholders We grateful partners, all well you employees, all all our of well time. lenders and – this our stakeholders, during

only in flow pleased not we higher employee Let’s base, variant resulting of normal and begin. Omicron quarter, of January. in of felt the The COVID-XX labor. especially it of lower impacted in impact surge first in cost I am from from very but January, the light performance much our Omicron availability with during patient severely the disrupted our

report was and where March. levels week employee that employee I am our procedural normal in this impact labor our volume the height out our returned base to with Omicron’s was January to more of that of X.X% base, happy on February First and impact force temporary was COVID. and of

increased out end for our strong quarter. a sick As of which demand subsequent our Provider I CARES AI procedural of ongoing few The services received experienced for first of than ambulatory we improvement of from centers. and our adjusted of revenue and patient imaging the week, Relief last EBITDA procedures demand the less result COVID-XX, excluding freestanding last quarter hospitals discuss the we will EBITDA and center X% have strong the After last from outpatient from and quarter. year’s first first Act highest impact we in company’s history. from had Revenue from last Funds are to the employees continuing increased in COVID quarter year’s our year’s produced continuing and X.X% services this first with minutes, migration imaging X.X% to first segment, in operations quarter. Despite the reporting was adjusted moving

we first supply and for both environment, the acquisitions in As this releasing joint expand key we our operations the ventures, to are performance disruptions, Though we to diligent originally executing year the in inflation chain of EBITDA this about strong our made of and a we result opportunities of will we the our organically increase what markets, and for for and remainder levels upon XXXX. be will through review his in revenue believe guidance remarks, projected. guidance are the the than results labor prepared and financial levels economic morning. resulting new year’s shortages, the we increases in confidence all results strong quarter feeling elected COVID-XX, to on remain year, have financial Mark,

lung you leading in CT DeepHealth prostate most customers chest artificial the by and on AI intelligence, currently cancer pending Europe. brain United customers of worldwide, countries, European FDA XX, is we acquisitions scanning clearance for are When have Quantib the many programs in Mark of X for States cancers, product prostate approval screening breast, X in provide FDA and used solutions cancer and opportunities and XX mammography is with offerings and and intelligence. XXX to for countries prevalent in States. the United for for basis for lung. use combined AI of aware, Aidence’s screening businesses With prostate RadNet and widespread MRI Quantib diagnosis already in the in with the CE its completed with artificial these future RadNet’s and BV Holdings lung As Aidence address January BV existing

are three have our approval. three the We its Currently, pending making FDA, review all we submitted progress of AI algorithms with to initiatives. and

Saige DeepHealth was submitted breast in advanced DX First, diagnostic algorithm cancer January.

submitted in FDA. the December submitted of X.X Quantib’s last Aidence And detection to solution lung the FDA solution nodule year. month, last Second, Veye to was was Prostate

get radiology and now FDA to and approved the early algorithms through the next best lung year. is prostate between goal RadNet these rolled groups have products through out and Our contracted

continue to will importantly, productivity large-scale some more AI We the of for the significant result prevalent and streams chronic ultimately that screening our our programs improved most new in and from of investments provide contracted revenue in radiologists cancers. diseases believe

and divided on As full we imaging fourth year intelligence quarter hit first the earnings operations the and during it units. segment our quarter, into reporting our instituted center call, reporting we artificial XXXX and

track doing One center imaging is for operations transparency in progress objectives to they and of AI the independently. core our in that so provide can our both this stakeholders businesses

results segment consisting that our anticipate last and losses reporting DeepHealth, Quantib Aidence our experience AI on discussed XXXX. call, we financial through we of As will

$XX estimates is million. Our for $XX million between XXXX, losses and these during

facilities, venture, Health RadNet established centers In and system within RadNet imaging routine first to long-standing satellite Frederick a with were of a facilities. its results of AI Upon health first this XX% Health, new joint system our on quarter During a and Subsequent in segment Maryland Frederick XXXX, with venture, community the establishing $XXX,XXX million facilities revenue recorded projections. imaging joint on market. imaging X and partnerships. which health of loss of X County, XXX we line the allies the the adjusted EBITDA, venture of approximately in contributed quarter $X.X end established multimodality of contributed Frederick in establishing multimodality X, X that this April

we facilities publicly have like believe partners. we over would XX% with next system of within years, to As health our within joint that we the and ventures stated, achieve X held hospitals

with include continued increased We longer partnerships, enjoy to which we in efforts with to despite these first patient result debt manage benefits during resetting liquidity insurance regional unadjusted improved financial net health EBITDA. services, quarter’s our this receivable of our January first cycle do, patient typically we closer and X. the XX-month pandemic, our front-loaded from carefully relationship of the deductibles the a despite and expenditures in AI our capital plans. X.Xx end, throughout the ratio quarter for continue and having quarter the to was first losses quarter, segment, the leverage as companies first We trailing breadth expanded the leverage. collection accomplished volumes, on accounts in the of Consistent and At reporting as patient facing access

strong. We cash, the million and ended were with $XXX quarter million upon remained of undrawn $XX.X also our we liquidity revolving Our credit facility.

to point improvement Our for XX future. days outstanding, was of make ability days, manage believe sales challenges and contributed and we to our by the our to revenue investments significantly presented has in the March The be one which operations industry. collections XXXX at DSOs, important in to the COVID-XX cycle best

turn to some managing At quarter I also our we highlights we committed continue the expanding Mark this of to growing and While to the discuss some closing approach When to and is to call business, disciplined make our leverage. financial to first I’d will will he time, back our over follow like a methodical performance. remarks. of XXXX finished, are

Mark Stolper

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

for the quarter of based of For the segment, XX.X as provider Revenue number was per losses first are impacting quarter for XX.X in million from number unusual million. onetime million imaging Net from reporting the expense million the compared of of quarter, our first facilities reporting adjusted and There adjusted net XXXX quarter of related paid million leases that and of shares the outstanding EBITDA income AI the share open the reporting first revenue the million of certain $X.X vesting million affecting segment in Diluted $XX.X share from provider of from first in XXXX, $X.XX EBITDA, loan the quarter per in and first interest XXXX first first of quarter for diluted XXXX first their first part of AI first and segment the excluding from under shares or the related upon or million to $XXX,XXX, reporting adjusted $X.X and to yet XXXX. million in compared XXXX, with and including was the XXXX losses and revenue income million quarter and AI expenses compared non-cash our for the headcount Including in of of XXXX of from de items with or related net the to $X.XX diluted center of was XXXX of the for quarter of XXXX. and of $XXX,XXX XXXX. of novo $XXX.X $XX.X $X.X $X.X of in non-cash items, received costs connection of RadNet adjusted savings construction million of and existing million increased discounts shares million quarter the million unusual average first XXXX. swaps, operations increased EBITDA quarter revenue weighted relating for EBITDA, Unadjusted $X.X of and at per net gain XXXX. share have employee $X.XX of in reporting stock. loss first of our $XXX,XXX first million excluding $XX.X fees above of million income $XXX,XXX reductions legal quarter adjusted expenses an relief operations was expense the diluted segment quarter quarter as funding first including initiative $XXX,XXX in for share for of $XXX.X to million relief with options division. imaging a $XX.X Adjusting credit rate financing million AI losses center negative loss settlements, $X.X AI Adjusted a the of XXXX quarter Also its segment, per first funding, facilities. $X million of related amortization certain last non-cash was $X.X of during to financing as income of $XX.X restricted items, $XX.X in severance were reported the X.X% cost our year’s stock increase quarter. expense compensation in X.X%. $XXX.X non-cash deferred from was following: to X.X%

XXXX XXXX, compared of were account increased of prior procedures Overall all total of account of and On the first CT quarters did inclusive our basis, XX.X% centers increased same-center were volume and work only of a over the with MRI mammography increased the exams, routine year CT increased same-center volume quarter from routine increased first which volume first imaging prior same of the approach, PET/CT RadNet volume by increased those increased XX.X% volume into performed XXXX, was multi-modality first into Overall volume, the part including quarter. X.X%, XXXX, XX.X%, year’s X.X% taking other both year’s ultrasound, X.X%. for we In all PET/CT volume the as volume, whereby to the MRI volume For taking quarter over quarter. exams, quarter, The X.X%, imaging routine X.X% prior and imaging. with X,XXX,XXX consistent we first x-ray, increased procedures. and X.X%. exams,

follows: to XXXX. XXX,XXX in the XXX,XXX first CTs quarter and XXX,XXX in with XX,XXX PET/CTs of as of compared with CTs first guarantor. the PET/CTs quarter that Imaging as nor in as March compares for at the balance as of This compared is Note is our quarter million which $XX MRIs Our net balance excludes less procedures million the cash in last XXXX expense, of swap were New MRIs discounts, with quarter borrower XXXX the we loan interest of debt first neither XX,XXX and unadjusted XXXX, of for accrued to paid XX, XXXX. X,XXX,XXX XXX,XXX year. with million value compared total was With bond million first which as compared deferred these in GAAP interest debt term $XXX as expense the exams a with with balance. exams in million. first XXXX, million. financing of payments was par all debt, counterparties, of X,XXX,XXX made $XXX.X debt This expense non-cash the Overall, compared net and period, at our which of a compares of GAAP this RadNet XXXX of Jersey $X.X debt interest had $XX.X quarter imaging our interest of XXXX. includes during March quarter in $X.X sheet, routine with million XX, $XX.X of first Cash for the first of XXXX quarter Network’s for quarter the regards first

resetting patient million. volumes was $XX.X March during March January. increase our revolving collections increase million is first of the balance of The in well $XX.X $XXX accounts of $XXX.X credit result million receivable had were significant from year each on of accounts and XX, At second the of from a cash undrawn an XXXX, and the As year-end the effect normal XX, our line XXXX, receivable of increase particularly we in our as XXXX. balance deductibles on March as the revenue, cash quarter in procedural mainly of half million,

part Through XXXX, the Our of company’s lowest days majority decisions DSO receivable, $XX.X equipment of year, XX, the history. aggregate year. imaging sales capital March days the that the outstanding, March or had we near of of XX.X expenditures XXXX. of accounts the the total increasing million. DSO, net Note XX, each first at remains proceeds capital our into our our was we of sale frontload levels Despite from

of in this higher year revise At which So with XXXX disproportionately year CapEx our fourth year. levels, our to half time, in we the conjunction update I’d and full is and fiscal the guidance results. like first released quarter XXXX

$X.XXX For center $XX by operations, the to the imaging revenue our to guidance of $X.XXX top increasing from billion low end range we’re both end and billion. million

to excluding million our Artificial by $XXX of the EBITDA, from million low adjusted For losses ranges to Intelligence the increasing and end $X million. $XXX we’re guidance the segment, high end both

both For flow, of to capital high the our million to guidance cash and remain the for and for increasing year, interest levels and we’re cash free for unchanged. end low guidance end $XX our million the paid expenditures, ranges $XX

reflect increasing, chain we both XXXX, is financial for in with operations to original remain our to COVID-XX through our strong acquisitions new and budget, we’ve guidance at levels expand disruptions, time. to Though ventures. the inflation to supply this results environment, we of noted, about As and markets, vigilant all economic adjusted nothing and increased the possibility our have reimbursement EBITDA. the of With revenue there first and respect for quarter’s organically as Medicare report joint compared opportunities

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

Howard Berger

Thank you, Mark.

we we excited lot to of the imaging year. has to than about embedded be move half As a for new have improve. and ever. pharmaceuticals. Technology point made continues contrast The towards and in post-processing been year software. Significant the remainder is radioactive demand equipment for been of in progress materials There imaging greater XXXX, state-of-the-art the have advances diagnostic

factors indications of driving clinical are diagnostic the tests. increased All for these ordering

core extremely on of centers, focus acquisitions. result, tuck-in and markets centers busy, opportunities in novo a center are system pursuing are our a our performance, partnerships through and As de expansion health we all same

on last we almost half in results our centers system existing mentioned these de we call, As initiatives XX development financial partnerships. with within have growth novo health of

So we construct are drivers growth operating and important be these spending capital certain in XXXX facilities, to will and late absorbing expenses they beyond.

pipeline core well acquisition for are expanding health in new our remains we existing active with and partnerships ventures. markets system stages Our potential various tuck-in as with acquisitions at joint

of three In addition, strategy to and now four most algorithms we are our address top cancers. prevalent the advancing have AI

With a tools population expect today be these that widespread the approval, the can accuracy form packaged to exist. have that in create that algorithms cost initiatives don’t to pending we cancer increase of FDA diagnostics health lower and

for we the question-and-answer can ahead and progress. we In to and excited are enthusiastic serve for and that our about streams lower updating portion new you industry. opportunities company to for of more of revenue AI conclusion, further look our substantial the we Operator, could this are healthcare While importantly, the cost regarding the call. rest in create ready AI forward of our delivering services, quarters coming the now RadNet our lie

Operator

first Tanquilut And Instructions] Brian we [Operator to will Jefferies. with go

Brian Tanquilut

for my Howard. Hey, guys. morning. first I guess question Good you,

today. a lot We have AI about talked

the business have, you number all terms curious us how think for think share a what pending applications in with can business you or get think Mark, long it losses as we to a these whether do integrate once – do incur just your approval FDA associated how a will lines? into what it’s with from need you and we you to competitive these you So all can And guess do of, advantage? do RadNet I for differentiating to that will factor related one, how

Howard Berger

a how the it the lengthy firstly, various Good of terms approval it process algorithms even our in now well, that front will, of other will will that morning, business, in FDA and because of industry impact will Brian, beyond we’re be time eventually for, the other for as think, the and providers beneficial whole. there I factors as be the a RadNet well take healthcare as are two

they that our as of time. matter is unnoticed. radiology have is This not EMR a of integrated and EMR joint be for well of existing and venture platforms, getting and as both on partners the there the for process and should not turning all that implementation various the Firstly, physicians an takes approval that go hospital into records referring to just algorithms

are It’s XX% million that and screening. experiencing worse million their where estimated made was an there X not issue reimbursement if I currently Secondly, breast is in instance now, of during greater – a perhaps, their imaging, compliance. XX% out, be to this will in undergo believe, about right AI now, role, That, go will estimated is rolling problem there COVID, improve to terms to anything, and Right should normal continue or of there self-referral. did routine XX think, play cancer more and and awareness reimbursement. that dominant breast people for help we I the consumer screening intelligence who is done, artificial breast

CMS the have So straightforward. determined take have That effort, in do the here also and the payers with in opportunities, other is government, greater United the Europe here make is less a but U.S. more only been particularly lung to in that bit on pace federal diligently, for States. standard going of to work Perhaps, we’re it little one not have screening. by case for which lung is is ongoing to screening breast than straightforward currently in high with patients which at is how are cancer for more brought risk who them screening and the we a

United estimate in number States, a actually this there recommendations tool a getting high result those current many compliance terms in of lung is there preventative million as are lung service task the of only might actually – and have While an public task or by end should force actually of candidates payers, risk people about force Americans up get part, X% reimbursement some those of and screening. – Medicare, valuable Currently, the most XX changes is disappointing how the is the that with recommendations, screening. to patients subject for

are have as aggressive We scanning. approval payer. for centers, then the part think in a to a seeing is get the increase lung a an Patients breast it our happy from to easy But scan go process the a and get of is for that is lung that. is getting then that better see an see you prescription is not for consultation and more through process authorization adoption that as for we’re screening handicapping one self-referral that here. And we I

for Service program making part for and think has these levels, the an what National efforts is we seeing United year. that access actively from this benefits instituted we Health high patients where going with perhaps we cancer and Kingdom, I the aggressive will particularly are in local at patients see to here, of we’re federal and from valuable. our both the in later That involved So is that would process hope something more for risk benefit experience lung we’re Europe, that with

of compliance initiatives, is is there ultimately, cancers, but payers. for there gateway referring and intelligence, will for are opportunity tools for artificial think, and an population on part doubt but strongly physicians is lung, education that breast other screening a my great diseases. of for is not strategies that process, only and part believe They in both adoption eventually imaging which only little we and mind colorectal and while important the for the the be health health future chronic cancers, for So population by public, an not the I these for prostate in

in here adoption, So where initiatives Service these already expect from to particularly implementing lot locally intelligence by that have and had next us, I facilities governments Health Europe, I that on RadNet artificial here and you which work primarily months, for to strongly more we’re we’ve better but National going – mentioned, think can come numerous the XX can as And patients XX the a our think have tools patient to radiologists. the I into base programs. the benefit the for hear

Mark Stolper

With losses as we said this your absorb segment our to have have respect we in Brian, expect history, reporting. have question, reporting moved part we we you publicly this And will we – first for AI company’s see, towards of do can time the that segment. second in segment and the

adjusted as now, Note for EBITDA two over And you’ll it and from absorbed about AI $X.X if of income well from traditional XX-Q when comes So division all you AI see losses about look at quarter this little of of segments, which our we AI have the our operating as in segment, a and segment the X, has segment center out reporting, but different we AI had $X net million as quarter. $XXX,XXX losses the worth million the imaging the revenue of operations, this segment. and

quarter algorithms Prostate Europe. as the well bookings of or and contracts Quantive, future Quantib, particularly the that hopefully, Aidence two the that in the three expect diagnostic next to algorithm. the upon quarters low-dose from based have the as as grow nodules in from FDA, the Aidence get with algorithm seeing we’re X.X advanced the more CT scanning lung And we DeepHealth with submitted meaning approval, FDA year revenue this We in we

the of the some teams to latter as to, the with implement marketing part sales one, to solutions at well the as and solutions these commercial these start gear year will expenses RadNet We our facilities towards up contracted aggressively more build groups other radiology operators.

Brian Tanquilut

ahead. Go lot. a Thanks

Howard Berger

am yes, Thanks, Brian, I sorry. Brian.

– opportunity to initiative, Let moonshot, while will House themselves believe point The year the me say, cancer an were reduce Vice deaths for Biden mandate White earlier that screening this be or and investors here. imaging this. which that President are to I and a recommend present XXXX. which to White has for The the providers we – access House should will administration he reinvigorated by artificial through provide they want intelligence. to moonshot out President that this developed through and reinvigorating which screening cancer cancer XX% Obama’s began substantially to announced cancer the indications the cancer by to and try try huge for alert tools, strongly will enhanced to was in an opportunity analysts that be opportunity take is by capabilities kind to and our new of I implement

to in efforts So White I cancer think and help attempt screening, and actively to helping to breast be that will we increase role will that prominent a RadNet promote. shape cancer House’s recommending play cancer working lung you can initiatives the primarily expect

think rather important if these the So screening later identify be on that high the sooner patients help risk our will there be more them successful, adoption in efforts outpatient of cancers. Hopefully, initiatives. White into is get the will we and I at the than for that to able very House report a and tools ambulatory of efforts will centers

Brian Tanquilut

obviously article for increased reimbursement raises costs. I was to there then, – at hospitals Journal Wall looking is today about on how a And Awesome. Mark, Street in looking reaction are

to So that? conversations in just related wondering growth see that your having similar going you seeing And forward? what could rate you’re business are

Mark Stolper

to feeling and the the of of shortage employees. starting are hospitals any tight healthcare retaining I industry, with and other pressure the you’re companies labor that believe aspects are or impact inflationary Sure. which labor associated same is the feel market, hiring in all whether

the discussions employees. technologists market costs quarter and think similar reimbursement. original we and in that has produced was with are and up and regards We’ve we been I going some XXXX better of competition to saw in with attract we the the payers a some get guidance They our be when are seeing levels and are for and discussions. built to front-end our of a into conjunction because we’re pricing larger put own will payers always for payers, to had their workers. think and ongoing now $XX guidance some up or their And are with recall, of employee like seeing year as going that the are because successful fourth you to battle will to results, And hospitals million health go regional happening retain well national they those their base think it, result in I get full their impact we what’s we other but higher nature, about levels quite try are plans seeing If to labor services. try the expenses challenging we our our in seeing and be These the this costs additional we our successful, themselves, they is labor. healthcare it’s as they seeing one-off for are hospitals

from revenue So I that side. we’re all as side the cost well something to is trying both work through, on think this as the

labor to interesting to least sorts all try them at keep looking We’re in ways costs lower of at our or check.

to one front, utilize front techs cover allow will year retention labor certain the will allow become a allow will think which hiring MRI us to sick we’re end also that’s leave, allow project of a control to obviously multiple on more better and I and out of staffing employees. got maternity different employees retain the efficiently. initiatives implementing We’ve trying to we’re the machines issues. to which existing try reduce also to number which or super we on call in on will techs, recruit location, are way last facilities It more that when some MRI on one we us systems, them mentioned to towards from our of what advanced that

is into much freestanding is the the even like – we higher services in outside pricing get the the just for hospitals operate where this to, that facilities so to ambulatory are ones – like I is that is get business going that the aggressive and hospitals fact payers company going I think, than to that and we their In pricing the of trying So highlights higher independent this that’s something direct that acknowledging some ways, aggressively I the their operate. imaging amplify hospital-based issue think think services a every feeling. trying challenge, centers more is where to

Brian Tanquilut

makes today. question obviously sense. guidance last And me, That raised you for then

guidance now? Are optimism curious, right the are market raising Just seeing is Just and better for emphasis share? you increased volumes, curious, is the recovery? gaining – what you that

Howard Berger

as I deferred. are estimates perhaps throughput. some I they That’s result, getting a allow it’s upgrading also think, us that driven our still exams of think initial being and COVID I conservative think primarily to better equipment of and for our volumes were. higher that recovering people of than from function a it’s more deploying equipment

throughput. to case in equipment significantly, there growth the some greater scan a rest a have new might other of in we’re procedural existing particularly here, scanners, numbers as mentioned, brand you volume we’re upgrade the seen times in of in put relative scanners state-of-the-art our MRI able for MRI that to volume scanning of doing. the or allowing And significantly, was have now Mark the reduce disproportionate As

of that because us. and to other some remarks, my given to the supplies think to why impact the the related will the markets, but still are COVID equipment of we’re the of year, labor hope I additional what cautious demand capital the to anticipation in mostly, and that from of estimates the as of are our more high I we’re to sophistication be there supply surges issues given that through the So use some root. and take chain capital see to as of with is with continue our in of related uncertainty upon issues continue reasons I the bringing to we’ve volume think made, mentioned investments the rest starting We drive

driving early in So revenue, seeing what more we’re slight I think XXXX. pricing here part some are increases of

Brian Tanquilut

guys. you, Awesome. Thank

Mark Stolper

Brian. Thanks,

Operator

Ramgopal Sidoti. to go will We next with Mitra

Mitra Ramgopal

taking follow-up. thanks the morning wanted Hi, Mark, to Yes. and questions. I good for just

environment and on pretty I the that had to wondering incurring is was I You year. $XX wage inflationary additional you if talked of difficult the maybe and environment? in wages, salary know be number light etcetera, changing about about you million still and of challenges might guided labor expense that this

Mark Stolper

mean and increased benefit million salaries, for still Mitra, estimate feel $XX comfortable that with we yes, I wages.

We haven’t and guidance seen of end together it year get worse, early per first se, than last in when this quarter. we the the towards put

of costs ways as think pulled, well both that those lots as scanning revenue post-production more outs that our processing if of and rising. – as as to expense improves to shortened and capital stick is us to we side I – going with did, continue levers the $XX side the number. now, ins we So at obviously, on some for And to we’re there allows look software automate the Berger of mean, new less and images Dr. I be technology. that of see million MRI can on mentioned, on technology that licensed scan our that processes human some to rely that We faster.

in We’ve to technologists. remote that patients implemented rooms of our these using a virtual facilities efficient out are facilities. our of lot in get waiting more We’re and

times end We to So a we on everything doing we’re to can human the rely capacity, less and in digital increase shorten images. day, capital. scanners high-tech utilize business. the I we’re technology scan of mean take

We’re business. really an information processing

of It’s find to And All billing bits capitalize we’re all a but in all to in only the got and business. on the the management so company demographic side, human capital information not fact that scan bytes. the not ways side. really much business is on ultimately, and to the side, as information try the the we’ve patient

Mitra Ramgopal

and seeing? additional great. maybe the That’s valuations environment, Is touch a or could interest Okay. ago? the we And of on terms as relates post-pandemic and two there year pipeline a you it in as you’re JV emerge versus now to M&A

Mark Stolper

transactions. and an Sure. of company. and small tuck-in continue the to tuck-ins the will active of at a strategy did couple quarter some the I have be end we in early – first of that pipeline last of We mean the year

attention in operate. the we when available, larger markets lot markets, and private seven markets. core We’re are for for significantly these be transactions our typically transactions platform businesses, of equity currently than they we’ve of come a finding at are businesses less those who Outside our from a seem transactions, that lot going markets, higher firms for to competitive are in looking tuck-in which paid as a they existing they garnering in the multiple

seen relationship haven’t Health, we – third were really haven’t the actionable marketplace other than entering and So Arizona joint we our that areas venture Dignity in country. opportunities with the of through other our

come pipeline on in Xx cost further M&A is continue structure are those those believe markets, well those the the And revenue on of that Xx to in, we transactions there that really get range. synergies penetration both with we’re we our side usually side. markets, focused that can So our presence buy to extraordinary in that and currently with geographic the operations we acquired as the as can clusters existing

big So M&A part of will be a to we do. what continue

years, at XX last you annual top the we’ve look north If our over XX the or line a growth rate on growth of rate compound X%. grown

a And some portion average of than of say has to on same-center less that, I’d half half performance. through organic little growth been that,

advantageous has as with joint joint to M&A hospital been regional our enjoy half continue of such engine facilities, the quality transactions as ventures have volumes. with other The the We’ve relationships will XXX all patient through ventures. well hospital as – relationships, growth venture facilities, also are And within They joint respect and our very new those as be national currently Maryland joint quarter. held which and Dr. XX they relationships. also these helped our provided this inorganic, of those and a They the facilities better been means access we in have communities. ventures. hospitals established of represent significant we with about mentioned payers, that us. for us XX% these Frederick to for establish prepared of Today, have have the relationships with patient XXX Berger with in in remarks, his tuck-in

the on parts be will continue meaning focus of of the sales M&A as strategy forward. JVs and three initiatives, all these transactions as same-store to our So, big going well

Mitra Ramgopal

for it’s thanks. days finally, early – acquisitions. just Quantib the Okay, know I and then still And Aidence

how can realize the think there you along? terms coming cost you synergies And is integration of are in there? Just curious any potential

Howard Berger

little Hi, think too early a comment Mitra, those. us on to it’s for I

less Europe, expensive create synergies little cost the more We’re of there some work where structure is the where and a and looking There there to appears some a our back-office an is shift at to perhaps labor to opportunities development be to also the opportunity – pool. robust where functions. of

ventures under we’ve days. about two XX had the [indiscernible] only So here joint really new for

are working hopefully, the will deeper still looking integrating way comments the by those, some into individual into we about have that quarter. RadNet we them than are But the about and those maybe of our through initiatives. family we’re more we So more and certainly, talking third

Mitra Ramgopal

Okay, for the thanks taking again questions.

Howard Berger

Mitra. Thanks,

Operator

And further time, there are questions. at no this

Howard Berger

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

Operator

conclude today’s This thank your for We conference. does you participation.

RadNet (RDNT) 9 May 222022 Q1 Earnings call transcript