Earnings call transcript Q4 2022

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Operator

Greetings, and welcome to the RadNet Inc. Fourth Quarter 2022 Financial Results Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

pleasure and your Chief my Executive Mark now President Vice Financial is to host, introduce Stolper, It Officer. Thank you. Mark, you may begin.

Mark Stolper

morning, me RadNet's Good Howard year you. and for you Thank joining XXXX Berger results. and quarter today fourth discuss to and full thank Dr.

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

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

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

the the it unanticipated were of update date statements, or statements or forward-looking to events. after date future Undue forward-looking reflect the which made. no on of only reflect not made especially information, guidance to on reliance as placed they events any to be should 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

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

demand begin. The I'm Let's the revenue with our performance quarterly result and revenue quarter. by our fourth was grew in of markets. in combination settings resulting continues to strong for all both improving extremely efficient towards adjusted year's operates. like cost over strong XX% conditions of services pleased over growing performance RadNet by procedural be in more our virtually the remains in our records our for EBITDA from expensive robust for adjusted as a EBITDA. markets We last outpatient labor quarter, and XX% the sites more the services ambulatory for of ones fourth and hospital imaging shifted Demand our

record, our labor also to was market. improving adjusted Contributing performance an EBITDA

staff. Furthermore, thus to filling have demand. respect existing workforce less more effectively on our our has sick positions in COVID meet more been and staff we quarter to heavy centers successful fourth us and enabling impact in the During procedural taking had open an days far of retaining to XXXX, with

At managing X.X of of adjusted net we had balance cash under Consistent financial on strengthening with our pandemic, balance leverage. to we our efforts and fourth ratio $XXX million the focus our throughout liquidity leverage XXXX, times continue year-end EBITDA. during by and the the quarter, over sheet a a

us low. difficult has Our to cycle improvement challenges COVID-XX the by in to The Outstanding, the our while manage make operations Days XX, to to December close our collections contributed revenue the DSOs, affording and days, important our and XXXX Sales at ability XX.X presented under future. ability materially historic in investments labor was market,

elements been near-term These we have our principal focused areas key are believe in that future growth. four our to in investments

de First, most facilities, centers locations access has of markets which or are discussed of as operations we downtown of largest in operational capacity XXXX. and we is volume. open these where will to where service require identified de we area last for begun facilities in year, patient The dozen service lack of over been patient patient These Phoenix currently in this have points now populations. novo additional backlogs, located the we novo development in have to in a

have A ventures, second our system currently joint one-third initiatives. centers. our area of XXX XXX venture We and expanding or of joint be representing health will XX focus investment centers

We that health half system believe partnerships centers of could continue in more years. three than our we within to have

and increasingly viable systems entrepreneurial strategic long-term organizations. for diagnostic strategy an imaging, are outpatient RadNet thinking seeking Forward and direction these health a attractive for represents

our as including partners, established an area joint Angeles Los Center we several During Health in expanded example, and CommonSpirit in and Medical XXXX, Cedars-Sinai Arizona. a Frederick, new venture Dignity with in others Maryland

As we we relationships this the joint the of health of several establishment and to venture system anticipate look new relationships. ahead year, expansion

shift and outpatient into hospitals we payors, offer. in ambulatory interest volumes As patients can centers, partnership referring physicians we outpatient continue are receiving models the to from increasing

investment. important an our acquisitions of part tuck-in growth and Third, will remain strategy

of for to to capital, result necessity will operators. profitability. as Becoming RadNet tuck-in completed efficiencies cost Medicare and a from continue In and Motivated more of payers way Our rising a XXXX, several rates, represents create security scale consolidation acquisitions. interest of mounts for their as future. smaller and smaller drive industry operators the sellers on we the are part reimbursement pressure increased of and the pressure appearing private remains fragmented

we cancer Lung hospital in Health, London was notable and during high Jersey network lung Heart Montclair HLH, entrenched our we of Also Imaging based imaging the screening. controlling operator during the northern New associates acquisitions joint interest XXXX well of RWJ performing quarter The fourth Radiology acquisition the XXXX, with by and New a teleradiology with six completed in Jersey, system. centers. largest an fourth was focused tuck-in venture, Montclair on a Network acquired quarter respected Barnabas

Health screening to combined Check expert XXXX. AI is the and when intelligence provider of software utilize subsidiary, services UK and HLH is interpretation mandates lung it lung a has Lung HLH use from scans artificial the lung which the implemented, as fully the which of program targeted for over established National Service. program, radiologist screening. itself health widespread end cancer the million Targeted cancer RadNet's Health population Aidence X alone, becomes drive anticipated could in that England by of program leading the

new pilot growth with EBCD. In in intelligence. breast to Breast continue annual pursue in November, of artificial Detection service called Enhanced offering Cancer works patient's the invest a opportunities in screening we and The Delaware Finally, -- initiated we a screening regimen. concert

to AI certain in a related including access elect a driven premium can the patients for fee, risk additional to services, suite assessment use of review X,XXX Deep and an lifetime mammography personalized enroll of exams AI, additional Health For dedicated SaigeDX line. and support

will annually. the about of we pilot, continue available RadNet's a to this during he result will successful of EBCD all an Coast we from losses summer. to Upon to EBCD future. a from to a and of growth perform the narrow expect that expected X.X important the our the mammography end AI Aidence XXXX. and our that segment be sale our of guidance, AI centers be turn and that for We markets in both growth our XXXX, East products. exams began of the will AI completion by EBCD the other rollout we revenue screening our note quarter will mammography licensing in and implement anticipate When as of we driver million in Currently, expect fourth Mark reviews from further XXXX Quantib profit

for some Mark the quarter over highlights performance, the and of At discuss our will year in call as discuss make detail closing finished, well guidance this I to time, of our to When remarks. XXXX. like I'd is full some turn he as XXXX back to levels fourth

Mark Stolper

financial Thank further I XXXX certain statements, highlight were explanation to financial XXXX our financial now and fourth press our to I in in attempt items. of you, XXXX performance released some which review what insights will items results quarter also Howard. I full material of provide drove performance. our into metrics fourth morning's and some release. as guidance to levels, will I'm some also provide year that be going well this believe give some full as quarter briefly and the year

losses In my loss company which The discussion, adjusted EBITDA, the or term on compensation. adjusted income defines Before excludes and will equity non-cash Interest, use loss, I Earnings financial non-GAAP and the or on disposal equipment, other gains and is Amortization measure. as Taxes, extinguishments debt Depreciation EBITDA of a

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

that year like review I'd fourth results. our quarter said, full and XXXX With to now

For from million, of the excludes segment $XXX.X of million from imaging EBITDA reporting fourth XXXX, which and quarter losses reported Segment. of center and revenue its RadNet $XX.X adjusted the revenue AI

or $X.X with XXXX. adjusted received quarter, EBITDA in Relief As of million of million increased $XX.X year's million and the revenue excluding XX.X%, XX.X% Provider $X.X fourth increased compared last quarter or fourth Funding also

year's Relief AI of the quarter fourth $XXX.X Including quarter. fourth quarter the XX.X% the XXXX, XXXX revenue million the an EBITDA Provider XXXX. fourth Including million of reporting million and last in AI quarter -- in the of XXXX, also segment Funding losses segment, of our was fourth the $XX.X reporting was fourth EBITDA segment, received in $XXX.X increase of of from adjusted adjusted the in $XX.X excluding million in quarter

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

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

XXXX as fourth follows. MRIs quarter XX,XXX XXX,XXX quarter XXXX of exams XXX,XXX the exams, in fourth in compared CTs and procedures in XX,XXX with XXX,XXX the fourth quarter in the with of XXXX. with as of these as fourth fourth XXX,XXX all the quarter Our in compared quarter of of routine X,XXX,XXX MRIs compared the X,XXX,XXX as compared XXXX. CTs with of PET/CTs PET/CTs imaging were XXXX.

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

for fourth million of net with the XXXX a of upon fourth based XXXX, X compared loss quarter quarter for Net average in and per with a the share XXXX, net outstanding shares reported shares quarter of of was compared of a shares diluted XXXX. For of fourth as in per fourth share XX RadNet quarter $X.XX $XXX,XXX in the million more $X.XX of of the a million XX $X.X loss XXXX loss negative weighted loss of XXXX. number negative net

our be fair in savings related that to $XX,XXX transaction related to headcount of our valuation one-time severance the $XX,XXX impacting of following. the were reductions gain segment. unusual restructuring acquisitions, leases loss out and There Income, of of de facilities paid Comprehensive acquisition yet have extinguishment Imaging $XXX,XXX for or New related to heart rate expenses including with to refinancing interest value credit quarter opened losses under contingent completed operation, adjustment debt to number in and the items the reporting imaging related lung related million the accumulation pre-tax a fourth primarily $X.X $X.X costs for amortization initiatives, of connection and consideration expense to Other to which Network's of of of from related in October, of limited, excludes changes novo of $XXX,XXX cost related on $XXX,XXX Jersey construction million purchase AI to the the facilities non-cash swaps, of of XXXX,

per the the per was earnings $X.XX adjusted million for share quarter $X.X Imaging the XXXX. of diluted of earnings reporting compares with Centers and adjusted items, This of during above during the segment Adjusting earnings from was fourth XXXX. adjusted fourth $X.XX quarter share

our certain million of capital of and the loss of $X.X loan $X.X existing paid stock, certain stock compensation and the net restricted $XXX,XXX deferred equipment items, related facilities. income credit financing of the expense amortization part to million of on non-cash the options certain as costs fourth of unusual financing in were employee resulting following. quarter XXXX affecting including non-cash of and disposal fees discounts non-cash from and vesting Also

for XXXX accounts, income the million. period, the with was of With interest XXXX fourth million. $X.X paid accrued fourth quarter regards quarter compares This Cash from fourth of expense counterparties for non-cash interest GAAP as statement compared year. interest, during $XX.X and payments $XX.X overall interest in with deferred quarter specific of which expense to swap GAAP expense, some million the financing was million last and of excludes in the to $X.X

Imaging interest expense as quarter quarter. interest was this as interest paid since higher $XXX debt balance for resulting on fourth year's transaction refinancing of and cash higher of on completed Xth Network million The a in function from our fourth year's well New Jersey last additional sheet, October the rates XXXX,

and segment EBITDA, million Provider $XXX XXXX. million reported XXXX, year reporting million or its $X.X excluding from X.X%, of or Funding and received RadNet increased in adjusted Revenue from $X,XXX EBITDA full $XXX decreased X.X% of Imaging For reporting of losses excluding $X.X million AI Centers million. revenue Relief adjusted segment

benefit EBITDA reporting from both was our revenue adjusted million million, $X,XXX and Including Relief $XXX.X one-time AI received in revenue credit year $X.X full a as increase Funding, of adjusted the XXXX, Provider XXXX. million XXXX. losses million Including in includes of retention was segment million segment, X.X% AI million in which with from $XXX.X compared $X.X of the XXXX for excludes XXXX, EBITDA employee $X.X million an $X,XXX for from

whereby the PET/CT XX volume consistent XX.X%. MRI imaging. we the For In volume, volume X.X% Overall XXXX, of were X.X% XXXX increased performed XX.X% compared we volume work routine months XXXX. all routine the XXXX, of into total CT from taking December approach, all The XX.X%, ended by did our procedures. account over increased procedures for as increased and XX, imaging X,XXX,XXX multi-modality exams with was increased year XXXX, to volume

were exams in as as compared X,XXX,XXX with with follows. and X,XXX,XXX PET/CTs XXXX exams XXXX. in with CTs XXXX in MRIs of MRIs in PET/CTs compared as procedures XX,XXX Our XXX,XXX all imaging X,XXX,XXX as in XX,XXX as with compared XXX,XXX CTs XXXX. routine compared these XXXX. X,XXX,XXX

year in reported income over net diluted $XX.X RadNet a diluted XXXX. a diluted average shares approximately shares million was net for million, is share weighted XXXX. XXXX XXXX, of of decrease in based Per $XX.X XXXX net of share million million compared share of a full For $X.XX $X.XX number in to income the of per income outstanding upon XXXX. XX.X This of shares and per XX.X

resulting related of million that de have their options reporting restricted construction to losses stock. expense and in to yet to rate non-cash including our facilities income $XX.X $XX.X AI be of net operations. under items Affecting open unusual and connection compensation XXXX $XX.X to were of initiatives. certain pre-tax certain severance non-cash from million interest $X.X related expense employee stock segment. vesting to from of headcount novo reductions leases savings our swaps. of cost expenses the in million related with the gain million $XXX,XXX non-cash following. paid for

facilities. equipment. to to existing $X.X debt related loss on million certain charge deferred amortization million New Jersey our discounts a and extinguishment and liability restructuring refinancing loss in related $X.X of fees on credit in $X.X million our related financing part costs the to million credit of as the to legal facilities. capital Network's estimate expenses of of and paid Imaging related financing disposal settlements. non-cash refund loan $X.X of $XXX,XXX

interest interest some of impacts such for expense of million million is fees, statement $XX.X $XX overall the paid of With as in -- $XX.X from accounts, cash interest GAAP interest items amortization in specific financing XXXX and counterparties, was million. accrued regards to income GAAP expense compares expense interest for swap XXXX This $XX.X XXXX. million. and in with payments was to cash Adjusting

bond to XXXX. as New million, debt includes balance value debt, debt neither our guarantor. RadNet of we is which, is Imaging of of With for net compares nor XXt, sheet, $XXX.X at cash this had debt our less regards This term December total with discounts, $XXX net par December that borrower million balance unadjusted XXXX, XX, Network's which Note million our balance. at a for loan of and Jersey $XXX debt

and on At XX, As line balance increase of XXXX, undrawn we million. of year-end $XXX.X XXXX, receivable $XX.X cash $XXX.X accounts our December credit of an year-end were had revolving million of million, a from million balance $XXX our was XXXX.

Our December DSO XX, our to was all-time days at XXXX, continues low. XX.X which be near

center capital expenditures sale of Network. the assets imaging joint had $X.X capital XXXX, Throughout asset of Jersey net million interests we and venture of Imaging amount of million. expenditures, total of in This New $XXX.X excludes dispositions

for our in sale equipment proceeds capital recognized of equipment, from the NJIN. paid proceeds and million $X.X of of expenditures the in also cash excluding from were All from we sale

expenditures of XXXX. in towards construction higher certain of expected Capital were operational that originally XXXX became the in to budgeted, are de result the novo locations of as end operational be XXXX than the or

At press our released time, I'd to levels, release. in we this this our XXXX which results morning financial financial guidance like review

For million the for Center are projecting million. segment, Imaging $X,XXX $X,XXX we revenue, to

EBITDA, adjusted to projecting we're $XXX million. $XXX For million

million expenditures, we're $XXX $XXX capital to For million. projecting

cash cash paid we're anticipating to interest, And For free to million. million. flow projecting $XX million $XX for for we're $XX million $XX generation,

anticipating we're EBITDA adjusted segment, between $X million Intelligence losses we're to revenue $XX Artificial $XX and our be million between and million expecting and million. of $XX For

in results Our demonstrating financial guidance improvement anticipates XXXX, and all operating strong in metrics.

growth private open We in system The between adjusted operations to joint throughout X% imaging growth the and result are from acquisitions XXXX center to various during and the of capitated implicit center at growth same X% XXXX, from between opened various center growth, in anticipated operations times projected and projecting centers and reimbursement in and XX%, of scheduled XXXX. from novo XXXX is contribution XX%. ventures, EBITDA half guidance imaging of revenue from completed de contribution health new further from increases payors, second and the of expanded our and

both XXXX, adjusted $XX that million approximately of revenue be net from from AI will additional $XX mammography losses and of Enhanced adjusted guidance excludes health approximately million operations. losses being Aidence these currently implemented Quantib. of and from EBITDA and $XX Our Quantib Aidence Cancer is deep EBCD, the our to estimate for growth anticipated We anticipated EBITDA division, million Breast or Detection program which AI

results segment XXXX, continue the expect the financial in to separately, AI our track stakeholders of each imaging throughout will segments and to quarter our operating We our be XXXX, providing transparency for AI report center to profitable operating progress. and

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

Howard Berger

you, Mark. Thank

we As are we XXXX, firing head into all on cylinders.

We healthy and growing. have business a core that is

patient centers As we and imaging increasingly manage from a volumes in that our are procedural system that on operations are prices procedural and unsustainable strong discussed volume Payors today's charge and to patients expanding. are attempting health demand call, moving cost. to care hospital-based

overall the While continues shift part procedures. taking in place, for the industry which more drive grow, technology, to in is by indications driven imaging advances diagnostic

the continue seek serve populations to and Additionally, effective and preventative growing medicine. non-invasive, are and cost we aging

to should factors these All benefit business. our core continue

volumes most has us to cost We record the the am months that experienced in positioning and in long-term have I happy a have for such, quarter of continued diverse January risen we February marketplace company where the significantly. period and growth report capital in XXXX. best and success believe industry, As dynamic XXXX we the the of the into fourth of

not capability allow of inorganic capacity many invest all have our leveraged to success of us and aggressively continue This scale where flexibility. as and our the both long-term financial opportunities, pursue modestly industry. the for with financial a compared best do to organic other capital liquidity others to or operators growth remain This and our We places have in business. will virtually in us in more position resources time

information investments acquisitions owning an a with respected establishing pursuing partnering systems. de cancer most capability, novo our intelligence, health and largest and These industry-leading regional, teleradiology national strategy, executing health some strategy to strategic technology a artificial platform around completing our strengthen and population include of the networks, regional own particularly screening,

what we than on have any In ahead updating have are conclusion, look multifaceted progress. our forward excited for better RadNet. our today feel today we on execute lies we the the history we in We about created. as positioned other of XXXX our rest We than if stakeholders more strategy to throughout are to never been that time

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

Operator

Thank you.

conducting Please question-and-answer a [Operator We question session. the question. proceed Jefferies. comes line from Brian of Tanquilut will Our now Instructions] first be with with your

Brian Tanquilut

guess, solid the to Hey. trying with same their Good Do up Congrats morning, start on efforts volume guidance in out figure quarter the efforts hospitals? volumes. your you what's and show numbers, I guys. year. now Mark, think payor actual strength a to is I'll the from this store? Just and on starting commentary in to move away solid driving

that. of know the related to in early that some East weather And the in some quarter California, you then there Coast. that have issues and maybe kind I in faced guys is also

So I strong. been know the comment is that, volumes have

So seen you and stronger in not have weather, if performance February? even January for would

Mark Stolper

morning Sure. by ambulatory multi-year And trend I your and five the favor Brian. of We're based it's first and centers, like Good lower has I'd we the operate. years, first cost, trend or has more the -- hospital a in a question, freestanding outpatient out the say, address The say. although, We are shift certainly the efficient benefiting slowly. been non-hospital procedural is outpatient entire market I that in from last is know, the think benefiting, accelerated over ones benefiting this should of volumes you part market, definitely way. the the happening to of

this. doing through United larger into move it various make seen mechanisms. and cost of hospitals and think payers all business today, be lower theoretically could still their over time intentions Aetna, volume been imaging of And moved public into early some about have I we've outpatient to that time in over the mean, settings. announcements out I And this within health the moving I hospitals. they're the the like a that that there's outpatient Companies still Anthem, systems doing scheduled innings lot this the we're occurs of of think, And patient centers.

One co-pays, mechanism you if a which imaging designed is direct the outside payors hospitals, the lower the through some or of or co-pays of to there. co-pays which pre-authorization know, there And then by cost offering network no patient their seek plan all financial also, advantageous or have process as incentive for patients setting. today of most, lower patient part form if that a settings to not, of tries ambulatory process, drives narrower

So we're players that definitely and I we think benefiting benefiting suspect, be outpatient that from other should from as well.

But I think the have carefully in it's the care certainly hospitals the networks happening more payors services. slowly that balance need their the for they acute that to fact of

hospitals And so, their but sure to there that game trying they have also cost, they the play balancing make networks. to that keep of lower in

in same-center if no our be be reason shouldn't and has X% guidance XXXX, answer we that a And we guidance have question, assumed of in baseline. to growth. we able like guidance, towards or have could think it to our achieve our beat end second the to your we should been end So higher that about stronger, up that

Howard Berger

Brian. morning, Good

Brian Tanquilut

Good Howard. morning,

Howard Berger

I weather both think the see beginning well opposed should to this New the have kind extraordinarily Eve And quarter normally as a coasts, the literally two first matter, Coast. weather the lies West impacts and RadNet was year, normally we providers of ever of East therein impacted January talking about will would because that as impacts who by Coast call the on the story, during thought the tale health this which impacts, care neither we as and all and weather on our hangover we figuratively, other year. for that get of occurred which Year's volumes, be to

East extraordinary had volume into high and January guns blazing in came the we So both an unanticipated Coast.

hand, weather people significant that storms reflection sporadic been very is a outage, in perhaps our have and power Part demand not that there robust patients are call California, here we the On of have seen to of who expeditiously. high more have than while impact other in a do volumes. infrastructure and rapidly the other allows have asked us we have, we to when any other be IT that unable cancel, or backlogs very seen

into I -- beyond comments, results, the and while And excuse think for just hopefully is January perhaps tone, So Mark's overall February to bit initial Mark's more now already me, both amplify little expectations. I a extending has on resolved. our

Mark Stolper

a quarter, can you the good results attribute in me. Well, to

Howard Berger

Yeah.

in attracting more success the payors, the but our to the -- that efforts with effective of Okay. that part in volume efforts recognize cost the part to they not in RadNet the centers, part really just movement of hospital on of who more the I believe is But partners need our of be the on joint them part has the that ventures.

of And we so, payor more to of bring and partnerships policies to their move those of the as are expand volumes hospital. opportunities begin outside internal they to additional some those reflective our volumes own as us, be patient and friendly and

find operating given one they're that platform to IT platform hospital strong with the success nothing but years, to RadNet And of here last RadNet are is is complement, soft the looking artificial think radiology, that hospitals reflection that's into fourth the is if not and a tool. only else, we that the exceedingly looking in have quarter more I the an landings, first carrying the imaging began a with partners, think it's not -- now do aggressively that, intelligence dividends. that of our our strong three these informatics very I resonating to quarter centers, just So think over the I paying strategy in but

RadNet outpatient develop, capabilities to in overall deliver has a excuse to imaging taken the high root. me, And centers quality of certainly lower cost environment

have the really at right bricks come the XXXX. for together those all time of where just think a So laid extremely I here an factors successful we've foundation to

Brian Tanquilut

I But will profitability is awesome. as I promising, us, think with radiologists? losses the guess you the expansion to it turn can of looks just reading RadNet my maybe AI opportunity I or about what by that you're you terms facilities, that's facilities? as then margin And very share costs I you mean, year. second the share fully how could reduction in incremental, think the AI in shrinking you the rollout or in are also and external savings of the for reduction with I next into across Now, and us, seeing any AI, context about guess question, operationalizing use RadNet as

Howard Berger

Good question.

not have and that some realize, in workflow artificial as relying of we completely adopting I the the they it's that heavily can, and it's not really artificial partially, their anticipate are because given to We on a confidence comfortable, intelligence it think yet change intelligence benefits radiologists dramatic and as level. rather surprisingly

the something and to comfortable element the has their not more importantly, benefit improved we will practice of both in clinical Because for efficiencies, they that their only think become a level cases, once perhaps think I I more education. ability than dependent, radiologist from number anticipated, positive longer it patient in is us throughput the but skills and originally of these, adopt single sign. take the a more they that's any of radiologists will So than those tell that at other but get you and history

think broaden of health. and to though -- of screening meant artificial it's screening is the as benefit not approach be into the has much for but necessarily particular really intelligence efficiency population I enormous tool, which our rather the marketplace, to So cancer cancer to reach to screening

the We intelligence. have accurately to able being with cancer earlier and more artificial in our of demonstrated detect confidence use confidence --

standpoint that and our our systems, enhanced health earlier, the health these there health a further And to outcomes, patients, volumes become and the as of patients. as can to to cancer all imaging expansion our to lead desire in of more program adopted reflect care cost as both diagnose detection cancer will from an be as breast only inside I well believe our system. stakeholders which like care offerings for better available, these centers get to

aids diagnostic for So tools, I a cost, of going generation. and generation improve intelligence think this for opportunity we're in a artificial most of primarily it's as come In an are but years. providers that one and systems, revenue story this these things unfolding other AI for radiology be few an the of ultimately tools. opposed which think -- for is over next at lot be And revenue can radiology to the recognition to particular, not of necessarily I the getting couple health

health And a to we've patients. we to better right after of this, now really the our better they companies, high represent I providing because only capabilities, while the earlier of extraordinarily same because this bigger believe these investment the three opportunity for we and of care, monetize believe cancer identified in So experience ways market, at what identify and not in have benefit provide to all years couple of but made time their outcomes. of commercialize

also tools this anxious better to So the we'll and these make internally but capabilities each And talking be I the of have to in attractive this. not more more talk quarter, about that everybody to able more the these be more available, I'm -- think much more adoption expand this become that tools only about as to healthcare we to system.

the fine-tune basis. and inside RadNet both roll of outside at and best on we we way ways the expanding to a these these use of make on that there, enormously want get before of to looking We this Centers, platform large capabilities delivery design out commercial its RadNet will to the implement but can we the certain better also be tools

year So I'm to talking more I be which particularly you are these developments will these we bring able to excited things and as think unfold. to be about that throughout the

Brian Tanquilut

guys. you, Thank Awesome.

Howard Berger

Thanks, Brian.

Mark Stolper

Thanks, Brian.

Operator

Thank you.

of next Our with comes Please with proceed question James. line John from Raymond question. Ransom your the

John Ransom

AI you was assumptions revenue is then guidance wondering, know, -- and are in to Thanks. there that I your where XX. thinking on Is getting afternoon. of kind that from? coming we Good Hey. what breakeven

Howard Berger

-- quarter. That West our in driven good That's almost Coast $XX And primarily will for now on John. pilot regions expect that morning, rollout the Enhanced the that third East million by the that successful this revenue Detection here is on is after March our the in way, this rolled million will our Breast go primarily out be we live rolling -- last by Cancer from begin out were the excuse the alone and XXXX. driven between fully $XX by sometime of to System or somewhere Coast and in going earlier rollout me,

the more time. are than in more markets period more that over and of substantially as growing a XXXX, longer implemented then fully And of

mammography every artificial efforts and to growth we done, women bit probably application in monetize and some and breast primary with other the enormous expect this we a cancer, in we'll little our our screening are while always of foremost working eight number one Quantib on screening those. area for and do any So AI, Aidence are ways who amount they of our also prostate in were out get do units, given the lung where since really which cancer, of intelligence. commercialize of breast behind, But lagging

hopefully So more a little John. there, that you perspective bit gives

Mark Stolper

Yeah.

the assuming we're for in in million profitability although $XX the to range I to So, deep have today $XX XXXX, probably us estimate that in to upon in in giving guidance. in breakeven million Quantib, revenue million health. what revenue not had of are $XX John, like guidance, and expenses million order our would If might XXXX, where $XX multiyear to where or be based we're total look Aidence

Howard Berger

So And a likely we're to make growth. the shows million lot of $XX that's that AI company radiology biggest aware million $XX would that us of.

John Ransom

I guys you cool. it was have say, AI were to before So

the from to a couple old Angeles That's knew all ahead So me. be that for of who guys far curve. Los

Howard Berger

that not Come We're Hey. on. old.

You speak yourself. for

John Ransom

you. Thank

Howard Berger

think curve. curve. Yeah. of I the like We're to that making not we're the ahead

the think in a we year. radiology. you its particular, that help continue name visibility, more is proud with very I healthcare strong in RadNet of acquired I'll radiologists, that the and of be in player care and companies will that I but later just extraordinarily health not sharing that think inside have what be this story unique industry for I'm doing be a raise to And we're here

John Ransom

Thank you.

Howard Berger

Thanks, John.

Operator

you. Thank

from comes next the question. question with Our line Ramgopal with of Please proceed Sidoti. Mitra your

Mitra Ramgopal

good the taking Thanks questions. for Yes. morning. Hi,

couple from me. a Just

expect become it First, profitable? expansion, to locations novo least quickly de at just relates you to even and how the breakeven as

Howard Berger

can a a here. The that take and Well, day all already have centers were our probably could de it by literally profitability center, and building they Mitra, demand novo open. were almost filling anticipate that, we is markets if we are year capacity, we in to where the where with get difference large, to

after -- in for model generators. our EBITDA they're these first certainly or sometimes quarter the operational, So the in positive second they quarter become by

I opportunity. think we because again, unusual future these think build But circumstance, that's given that we them, there centers, that not an because just we need is

our ramp So demand the physical to -- are that capabilities and limited up. by to our centers all these the that where where responsive in have markets we we're in growing

Mitra Ramgopal

to that's operations obviously, And switching a what the No, to costs? front, was able comfortable terms from fill you're How you're adequate 'XX, you given both then fully. higher Okay. in great. without 'XX your just and also seeing cost headwind labor are locations being the and that more your to staff and and ability staffing you for open in there, expansion, have of to be positions incurring adding necessarily significantly out side able

Howard Berger

while XXXX, number will, up been Yeah. That's open a of were extraordinarily positions, that quarter. have to still quarter, if in impact have loosened the where on impacting the a good that. while and fortunate those regions in fourth significant in including the It's market of all to operate we corner, some we've the little 'XX fourth of hard turning challenges And our good didn't some centers the our were they you appear in challenges we great really labor quarter, bit. fourth the we're question. if perspective, labor put have the we how have in very would a results better We've that made markets in still that while been

has or That's the they does contracted New required those. them is to in are hit PTO. example, their us, to can we over double using and both cost continue report for any impact an then pay with California, you that mandated it Isolator we and the to without COVID individual us coverage, company that who give double have pay because York salaries state capability time, only more find sick up I'll for to believes any a because have not in getting of but pay sick

at before, last the it was So close COVID currently, down or year the to of the our than the to with in X%. of in quarter, I one-time year, fortunately, out guess, in me, say, should fourth quarter first had I it's quarter less we excuse X% fourth workforce

benefit has a that So for huge us. been

into our normal hiring more but back just allows workforce people, not it's to workday, it's which So current getting operation. us of our expand hours

hiring temp using that from in a has price or staff. and businesses [indiscernible] technical tripled these we've been other doubled been ago. radiologists have agencies we the successful fortunately, and for And staffing year addition, more In

improve able will Built been But temp our agencies. more use the we've results. that. of still to go and cost successful, and into continue we're XXXX more So hopefully to down reduce budget is as our that

factors I other in for I industry, by some are every the as of be economy. -- there, believe this -- of economic segments virtually changes other also But healthcare the But every may that care. faced almost result the that except with believe our out as issues are a are well faced as layoffs we're in faced health provider causing

where is and not to before sustainable, that, coming continue on wages they fewer believe people alternatives but as start might have alternatives improve So and think or that down. I only pressure trend I had seek will have people will

Mitra Ramgopal

helpful. again was the for That for me. very That's Okay. taking questions. Thanks it

Howard Berger

Thanks, Mitra.

Operator

questions I at you. to to Thank the floor comments. management would turn for like There this back are further time. no closing over

Howard Berger

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

Operator

This concludes teleconference. today's

you time. and participation a this You Thank may disconnect lines your wonderful for your at have day.

RadNet (RDNT) 28 Feb 232022 Q4 Earnings call transcript