Full Press Release Details
RadNet Reports First Quarter Financial
Results, Announces its First Health System Joint Venture in California and Reaffirms 2016 Guidance Ranges
California, May 10, 2016 - RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality,
cost-effective, fixed-site outpatient diagnostic imaging services through a network of 309 owned and/or operated outpatient imaging
centers, today reported financial results for its first quarter of 2016.
Dr. Howard Berger, President and Chief Executive
Officer of RadNet, commented, "I'm pleased with the progress we made in the first quarter. The first quarter is perennially
our most difficult one because of the normal seasonality we face in our business related to lower healthcare utilization related
to deductibles and weather conditions. We significantly improved over the same period last year as evidenced by our increased aggregate
Revenue, EBITDA and same-center procedural volumes. We also completed several initiatives during the quarter that will set the
stage for improved results as the year progresses. This includes the renegotiation of pricing of several capitation arrangements,
the expansion of our breast tomography program, the implementation of a number of cost savings initiatives and the establishment
of a new California-based joint venture. We also expect improved performance from the continuing integration of the two significant
acquisitions we completed last year of New York Radiology Partners and Diagnostic Imaging Group."
Dr. Berger continued, "We are optimistic
about procedural volumes for the second quarter. Company-wide, April per-day procedural volumes exceeded that of first quarter's
per day volumes by over 5%. Furthermore, as patients use-up more of their deductibles as the year progresses, we historically have
experienced higher utilization rates at our facilities."
For the first quarter of 2016, RadNet reported
Revenue of $216.4 million, Adjusted EBITDA(1) of $27.1 million and Net Loss of $1.7 million. Revenue increased
$35.1 million (or 19.4%), Adjusted EBITDA(1) increased $6.9 million (or 34.2%) and Net Loss decreased $2.8 million,
over the first quarter of 2015. Per share Net Loss for the first quarter was $(0.04), compared to a
loss in the first quarter of 2015 of $(0.11), based upon a weighted average number of basic and diluted shares outstanding of 46.6
million and 42.7 million for these periods in 2016 and 2015, respectively.
in the first quarter of 2016 were certain non-cash expenses and non-recurring items including: $2.7 million of non-cash employee
stock compensation expense resulting from the vesting of certain options and restricted stock; $167,000 of severance paid
in connection with headcount reductions related to cost savings initiatives; and $1.4 million of combined
non-cash amortization of deferred financing costs and loan discount related to financing fees paid as part of our existing credit
For the first quarter of 2016, as compared
to the prior year's first quarter, MRI volume increased 17.8%, CT volume increased 13.5% and PET/CT volume increased 14.3%.
Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased
18.2% 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 2016 and 2015, MRI volume increased 6.5%, CT volume increased 5.4% and PET/CT volume increased 4.5%.
Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams,
increased 3.9% over the prior year's same quarter.
Dignity Health Joint Venture
RadNet announces that it has signed a new joint
venture with Dignity Health's Glendale Memorial Hospital in Glendale, CA, which is expected to become operational in June,
2016, once certain closing conditions are met. The joint venture agreement consists initially of two imaging centers. The first
center, one that focuses on Women's imaging, is currently owned and operated by Dignity Health and will be contributed to
the venture. The second center, also located in Glendale, CA is a multimodality facility initially constructed by RadNet. This
facility contains MRI, CT, Fluoroscopy, x-ray and ultrasound modalities. RadNet owns 55% of the joint venture and Dignity Health
owns 45%. RadNet and Dignity Health are exploring further opportunities for the joint venture, which could include RadNet's
Breastlink breast disease management offering and other oncological capabilities.
Dr. Berger commented, "We are exciting
to bring to the west coast the joint venture model with which we've been successful in several of our largest east coast
markets. Dignity Health is one of the largest and most prominent systems in the country and we look forward to successfully building
an imaging platform within the Glendale market. We are actively exploring other business opportunities with Dignity in this market
and hope to expand our relationship to other geographies in the future."
2016 Guidance Update
RadNet reaffirms its previously announced 2016
guidance ranges as follows:
| Total Net Revenue (a) | $870 million - $910 million |
| Adjusted EBITDA (1) | $130 million - $140 million |
| Capital Expenditures (b) | $45 million - $50 million |
| Cash Interest Expense | $37 million - $40 million |
| Free Cash Flow Generation (c) | $40 million - $50 million |
Dr. Berger highlighted, "We remain confident
about our previously announced guidance levels. When we set our levels, we incorporated into them the normal seasonality that we
experience in our business. Comparing the first quarter results with our internal projections, we are on track with our initial
projections for the year."
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 2016 results on Tuesday, May 10th, 2016 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).
Conference Call Details:
Date: Tuesday, May 10, 2016
Time: 10:30 a.m. Eastern Time
Dial In-Number: 888-359-3624
International Dial-In Number: 719-457-2628
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=119433
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 877-870-5176 from
the U.S., or 858-384-5517 for international callers, and using the passcode 4368292.
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 309 owned and/or operated outpatient imaging centers. RadNet's core markets
include California, Maryland, Delaware, New Jersey, New York and Rhode Island. 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 7,300 employees. For more information, visit http://www.radnet.com.
This press release contains forward-looking
statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Specifically, statements concerning
successfully integrating acquired operations, successfully achieving 2015 financial guidance, successfully developing and integrating
new lines of business, continuing to grow its business by generating patient referrals and contracts with radiology practices,
and receiving third-party reimbursement for diagnostic imaging services, are forward-looking statements within the meaning of the
Safe Harbor. Forward-looking statements are based on management's current, preliminary expectations and are subject to risks and
uncertainties, which may cause the Company's actual results to differ materially from the statements contained herein. Further
information on potential risk factors that could affect RadNet's business and its financial results are detailed in its most recent
Annual Report on Form 10-K, as filed with the Securities and Exchange Commission. Undue reliance should not be placed on forward-looking
statements, especially guidance on future financial performance, which speaks only as of the date they are made. RadNet undertakes
no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date