Full Press Release Details
RadNet Reports First Quarter Financial Results, Including
Record Revenue and Adjusted EBITDA(1)
LOS ANGELES, California, May 9, 2019
- 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 2019.
Dr. Howard Berger, President and Chief
Executive Officer of RadNet, commented, "We had the strongest first quarter in our Company's history, recording record
Revenue and EBITDA. Our Revenue increased 17.4% and our EBITDA increased 57.3% from last year's first quarter. While we benefited
by more favorable winter weather conditions during this year's quarter, our improved performance was also driven by strong
contributions from our recent acquisitions and initiatives on the East Coast and overall same-center procedural volume growth of
Dr. Berger continued, "We continue
to grow our core markets through driving patient volumes with effective marketing programs, offering differentiated services, deploying
cutting-edge technologies, encouraging alternate payment models (such as capitation) and establishing joint ventures with strong
and entrepreneurial health systems. During the quarter, we announced the formation of our second California joint venture with
Dignity Health in Ventura County, California. We also made progress with operationalizing our first East Coast capitation contract
with Emblem Health and integrating our recently acquired Medical Arts Radiology acquisition in Long Island, New York."
"Subsequent to quarter's end,
on April 1st, we completed the acquisition of Kern Radiology in Kern County, California. Kern operates 5 multimodality imaging
centers, performs over 200,000 exams per year and earns over $25 million of Revenue on an annual basis. Additionally, on April
18th, we completed a financing which raised an incremental term loan of $100 million and added $20 million of additional
capacity under our revolving credit facility. The financing affords us additional financial and operating flexibility to complete
future tuck-in acquisitions and to establish new health system joint ventures in the future. We are very appreciative of the support
and confidence we received from our long-standing lending group," added Dr. Berger.
For the first quarter of 2019, RadNet reported
Revenue of $271.5 million, Adjusted EBITDA(1) of $33.1 million and Net Loss of $3.7 million. Revenue increased $40.2
million (or 17.4%), Adjusted EBITDA(1) increased $12.1 million (or 57.3%) and Net Loss decreased $3.6 million, over
the first quarter of 2018. Per share Net Loss for the first quarter was $(0.08), compared to $(0.15) in the first quarter of 2018,
based upon a weighted average number of basic and diluted shares outstanding of 49.6 million shares in 2019 and 47.8 million shares
Affecting Net Loss in the first quarter
of 2019 were certain non-cash expenses and non-recurring items including: $4.5 million of non-cash employee stock compensation
expense resulting from the vesting of certain options and restricted stock; $631,000 of severance paid in connection with headcount
reductions related to cost savings initiatives; and $975,000 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 2019, as compared
to the prior year's first quarter, MRI volume increased 7.3%, CT volume increased 10.4% and PET/CT volume increased 7.2%.
Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased
7.6% 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 2019 and 2018, MRI volume increased 3.2%, CT volume increased 4.5% and PET/CT volume decreased 3.7%.
Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams,
increased 2.3% over the prior year's same quarter.
2019 Guidance Update
RadNet affirms its previously announced
guidance levels and amends its cash interest expense guidance levels follows:
| Original Guidance Range | Revised Guidance Range | |
| Total Net Revenue | $1,050 million - $1,100 million | Unchanged |
| Adjusted EBITDA (1) | $155 million - $165 million | Unchanged |
| Free Cash Flow Generation (a) | $45 million - $55 million | Unchanged |
| Capital Expenditures (b) | $60 million - $65 million | Unchanged |
| Cash Interest Expense | $38 million - $43 million | $43 million - $48 million |
Dr. Berger highlighted, "We are on
track to meet our guidance levels that we established upon reporting our 2018 fourth quarter and full-year financial results. We
adjusted our cash interest expenses to properly incorporate the expected interest expense of New Jersey Imaging Network, which
became a consolidated entity in the fourth quarter, and the recently completed incremental Term Loan."
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 2019 results on Thursday, May 9th, 2019 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).
Conference Call Details:
Date: Thursday, May 9, 2019
Time: 10:30 a.m. Eastern Time
Dial In-Number: 855-327-6837
International Dial-In Number: 631-891-4304
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=134511 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 10006819.
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 7,800 employees.
For more information, visit http://www.radnet.com.
Forward Looking Statements
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 2019 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
they were made, or to reflect the occurrence of unanticipated events.
Mark Stolper, 310-445-2800
Executive Vice President and Chief
RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
| March 31, 2019 | December 31, 2018 | |||||||
| ASSETS | (unaudited) | |||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 10,428 | $ | 10,389 | ||||
| Accounts receivable, net | 156,767 | 148,919 | ||||||
| Due from affiliates | 619 | 595 | ||||||
| Prepaid expenses and other current assets | 46,276 | 46,288 | ||||||
| Assets held for sale | 2,041 | 2,499 | ||||||
| Total current assets | 216,131 | 208,690 | ||||||
| PROPERTY, EQUIPMENT AND RIGHT-OF-USE ASSETS | ||||||||
| Property and equipment, net | 343,964 | 345,729 | ||||||
| Operating lease right-of-use assets | 403,066 | - | ||||||
| Total property, equipment and right-of-use assets | 747,030 | 345,729 | ||||||
| OTHER ASSETS | ||||||||
| Goodwill | 424,308 | 418,093 | ||||||
| Other intangible assets | 40,872 | 40,593 | ||||||
| Deferred financing costs | 1,218 | 1,354 | ||||||
| Investment in joint ventures | 39,712 | 37,973 | ||||||
| Deferred tax assets, net of current portion | 31,952 | 31,506 | ||||||
| Deposits and other | 24,845 | 25,392 | ||||||
| Total assets | $ | 1,526,068 | $ | 1,109,330 | ||||
| LIABILITIES AND EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable, accrued expenses and other | $ | 177,659 | 181,028 | |||||
| Due to affiliates | 17,583 | 13,089 | ||||||
| Deferred revenue | 1,958 | 2,398 | ||||||
| Current portion of deferred rent | - | 3,735 | ||||||
| Current portion of finance lease | 4,936 | - | ||||||
| Current portion of operating lease | 64,538 | - | ||||||
| Current portion of notes payable and long term debt | 33,912 | 33,653 | ||||||
| Current portion of obligations under capital lease | - | 5,614 | ||||||
| Total current liabilities | 300,586 | 239,517 | ||||||
| LONG-TERM LIABILITIES | ||||||||
| Deferred rent, net of current portion | - | 31,542 | ||||||
| Long-term finance lease liability | 5,663 | - | ||||||
| Long-term operating lease liability | 375,363 | - | ||||||
| Notes payable, net of current portion | 630,874 | 626,507 | ||||||
| Obligations under capital lease, net of current portion | - | 6,505 | ||||||
| Other non-current liabilities | 44 | 5,006 | ||||||
| Total liabilities | 1,312,530 | 909,077 | ||||||
| EQUITY | ||||||||
| RadNet, Inc. stockholders' equity: | ||||||||
| Common stock - $.0001 par value, 200,000,000 shares authorized; 50,081,478 and 48,977,485 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 5 | 5 | ||||||
| Additional paid-in-capital | 256,488 | 242,835 | ||||||
| Accumulated other comprehensive income (loss) | 1,055 | 2,259 | ||||||
| Accumulated deficit | (121,648 | ) | (117,915 | ) | ||||
| Total RadNet, Inc.'s stockholders' equity | 135,900 | 127,184 | ||||||
| Noncontrolling interests | 77,638 | 73,069 | ||||||
| Total equity | 213,538 | 200,253 | ||||||
| Total liabilities and equity | $ | 1,526,068 | $ | 1,109,330 |
RADNET, INC. AND SUBSIDIARIES