Full Press Release Details
RadNet Reports First Quarter
Financial Results and Announces Strong Liquidity Position as a Result of Completing Cost Savings and Cash Conservation Measures
Liquidity and Business Update:
LOS ANGELES, California, May 11, 2020
- RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic
imaging services through a network of 335 owned and/or operated outpatient imaging centers, today reported financial results for
its first quarter of 2020.
Dr. Howard Berger, President and Chief
Executive Officer of RadNet, commented, "I'm extremely proud and appreciative of the response of our employees, venders,
operating partners and landlords who have enabled us to continue to provide essential imaging services to the communities we serve
during this unprecedented worldwide crisis. Virtually all of our stakeholders have contributed to reducing our costs and conserving
our cash resources. In many cases, these contributions required great personal sacrifices associated with deferring or reducing
payments or current compensation. But, because we took aggressive and swift actions, RadNet is on solid financial footing. As of
April 30th, we had a cash balance of approximately $50 million and we were undrawn on our revolving credit facility."
Dr. Berger continued, "Specifically,
we collaborated with landlords to restructure facility rental payments. We consolidated the patient volume of 97 of our locations,
which we temporarily closed, into nearby facilities that remained open. We fully or partially furloughed over 3,900 of our approximately
8,600 employees, while many of the remaining employees agreed to substantial salary cuts (including our executive management team
and salaried physicians who are taking 50% salary cuts). We restructured payment schedules with vendors that provide RadNet medical
supplies and rent us equipment. We suspended all new capital projects. These measures, among others, support our belief that we
will experience little to no cash burn through the end of the second quarter. Furthermore, based upon our current volumes and our
projections for a recovery towards the end of 2020, we believe it is likely we will be undrawn on our revolving credit facility
and have a strong cash balance at year end."
"Also assisting our liquidity position
was our receipt of almost $15 million under the first $30 billion appropriation of the Coronavirus Aid, Relief, and Economic Security
Act (or CARES Act). Subject to our compliance with future reporting requirements, we do not anticipate being required to repay
this money. A second $20 billion appropriate was announced two weeks ago, and we may be eligible for further payments. In addition
to funds we received under the CARES Act, we received almost $40 million of accelerated Medicare advance payments from the Centers
for Medicare & Medicated Services (CMS). These payments received in April are required to be repaid to CMS beginning 120 days
after their receipt through the adjudication of Medicare claims for future services over a three month period. We will continue
to avail ourselves of other grants or advances by government organizations or private payors that could further strengthen our
balance sheet and enhance our cash position," noted Dr. Berger.
Dr. Berger added, "We are beginning
to see some signs of recovery. Our business experienced its low point in mid-April, where, on a blended basis, our procedural volumes
were down over 75% from our original 2020 operating budget. As some states and local municipalities have begun to permit non-emergent
healthcare procedures, our volumes have begun to increase. For the month of April and the first part of May, we are ahead of our
post-Covid-19 operating and cash flow projections."
"Based upon the recent improvement
in volumes and my growing confidence with our expense and cash conservation initiatives, I believe RadNet will emerge in the post-Covid-19
environment as a stronger and more visible leader in our industry. Our scale, management depth and financial and operating resources
separate us from virtually all of our competitors. We are already seeing potential M&A and other expansion opportunities that
would have otherwise been unlikely, but for the pressures imposed by Covid-19," added Dr. Berger.
"I finally want to recognize the
courage and dedication of our front-line center-level staff who continue to work each day despite the risks associated with treating
a wide spectrum of patients. To keep our patients and employees safe, we instituted new operating protocols, added virtual waiting
room capabilities, provided personal protective equipment for all employees and patients and have created as sterile environment
as possible. Despite all this, we recognize that our employees operating in this environment are truly heroes. I am sincerely grateful
that these employees, and RadNet as a Company, can play an important role in an unprecedented time. I look forward to bringing
back our furloughed work force and reopening our closed facilities as increasing patient volume dictates," concluded Dr.
For the first quarter of 2020, RadNet reported
Revenue of $281.6 million, Adjusted EBITDA(1) of $20.4 million and Net Loss of $16.4 million. Revenue increased $10.0
million (or 3.7%), as the result of contribution from Kern Radiology and Zilkha Radiology, a slight business shift in favor of
advanced modalities and increases in reimbursement from capitated and fee-for-service payors, balanced by a decline in same center
and aggregate volumes. Adjusted EBITDA(1) decreased $12.7 million (or 38.5%) and Net Loss increased $12.6 million, over
the first quarter of 2019. Per share Net Loss for the first quarter was $(0.33), compared to $(0.08) in the first quarter of 2019,
based upon a weighted average number of basic and diluted shares outstanding of 50.3 million shares in 2020 and 49.6 million shares
Affecting Net Loss in the first quarter
of 2020 were certain non-cash expenses and non-recurring items including: $6.6 million of non-cash employee stock compensation
expense resulting from the vesting of certain options and restricted stock; $218,000 of severance paid in connection with headcount
reductions related to cost savings initiatives; and $1.1 million of non-cash amortization of deferred financing costs and loan
discounts related to financing fees paid as part of our existing credit facilities.
For the first quarter of 2020, as compared
to the prior year's first quarter, MRI volume increased 1.2%, CT volume increased 3.4% and PET/CT volume increased 4.0%.
Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, decreased
0.6% over the prior year's first quarter. On a same-center basis, including only those centers which were part of RadNet
for both the first quarters of 2020 and 2019, MRI volume decreased 1.4%, CT volume decreased 0.1% and PET/CT volume decreased 0.4%.
Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams,
decreased 3.3% over the prior year's same quarter.
Conference Call for Today
Dr. Howard Berger, President and Chief
Executive Officer, and Mark Stolper, Executive Vice President and Chief Financial Officer, will host a conference call to discuss
its first quarter 2020 results on Monday, May 11th, 2020 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).
Conference Call Details:
Date: Monday, May 11, 2020
Time: 10:30 a.m. Eastern Time
Dial In-Number: 888-204-4368
International Dial-In Number: 786-789-4797
It is recommended that participants dial
in approximately 5 to 10 minutes prior to the start of the 10:30 a.m. call. There will also be simultaneous and archived webcasts
available at http://public.viavid.com/index.php?id=139286 or http://www.radnet.com under the "Investors" menu section
and "News Releases" sub-menu of the website. An archived replay of the call will also be available and can be accessed
by dialing 844-512-2921 from the U.S., or 412-317-6671 for international callers, and using the passcode 2576527.
Regulation G: GAAP and Non-GAAP Financial
This release contains certain financial
information not reported in accordance with GAAP. The Company uses both GAAP and non-GAAP metrics to measure its financial results.
The Company believes that, in addition to GAAP metrics, these non-GAAP metrics assist the Company in measuring its cash-based performance.
The Company believes this information is useful to investors and other interested parties because it removes unusual and nonrecurring
charges that occur in the affected period and provides a basis for measuring the Company's financial condition against other quarters.
Such information should not be considered as a substitute for any measures calculated in accordance with GAAP, and may not be comparable
to other similarly titled measures of other companies. Non-GAAP financial measures should not be considered in isolation from,
or as a substitute for, financial information prepared in accordance with GAAP. Reconciliation of this information to the most
comparable GAAP measures is included in this release in the tables which follow.
RadNet, Inc. is the leading national provider
of freestanding, fixed-site diagnostic imaging services in the United States based on the number of locations and annual imaging
revenue. RadNet has a network of 335 owned and/or operated outpatient imaging centers. RadNet's core markets include California,
Maryland, Delaware, New Jersey and New York. In addition, RadNet provides radiology information technology solutions, teleradiology
professional services and other related products and services to customers in the diagnostic imaging industry. Together with affiliated
radiologists, and inclusive of full-time and per diem employees and technicians, RadNet has a total of approximately 8,600 employees.
For more information, visit http://www.radnet.com.
Forward Looking Statements