Full Press Release Details
RadNet Reports First Quarter Financial Results
LOS ANGELES, California, May 9, 2018
- RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective,
fixed-site outpatient diagnostic imaging services through a network of 300 owned and/or operated outpatient imaging centers,
today reported financial results for its first quarter of 2018.
Dr. Howard Berger, President and Chief
Executive Officer of RadNet, commented, "During the quarter, we faced unusually severe winter weather conditions in our northeastern
and mid-Atlantic operations, which represent slightly over 50% of our total Revenue. Not only were we unable to see patients when
our sites were forced to close, our referring physicians had their businesses similarly negatively affected which further impacted
patient flow. We estimate that we lost almost $6 million of Revenue during the quarter, representing approximately 45,000 unperformed
procedures. And because most of our costs are fixed, we lost the majority percentage of this Revenue in EBITDA. Further, our EBITDA
was impacted from receiving decreased management fees from our joint venture partners, which are calculated as a percentage of
Revenue, and from lower EBITDA-flow-through resulting from the significantly depressed profitability of our non-consolidated joint
ventures. The weather impact was further highlighted when comparing our results to last year's first quarter results, which
were produced in one of the mildest winters in recent history. Also negatively impacting the EBITDA comparison between last year's
and this year's quarters were the sales of non-controlling interests in four of our centers to Cedars Sinai and 24 centers
to MemorialCare, for which we received almost $30 million in transactions that closed subsequent to the end of last year's
Dr. Berger continued, "Had it not
been for the loss of Revenue from bad weather in the quarter, we would have been on target with our initial 2018 projections and
internal budgets. From past experience, the lost scanning slots in our schedules are not made-up during the same quarter or in
subsequent ones. As a result, we've adjusted our 2018 guidance for the lost Revenue and EBITDA in the first quarter, while
leaving our projections for the next three quarters intact."
"Despite the difficult weather, we
had continued strong performance from west coast operations, whose aggregate procedural volumes increased by 2.8%. We also benefited
from the contribution from some acquired and newly opened centers. During the quarter, we commenced operations of our joint venture
with MemorialCare in Southern California. We are in the process of making operational improvements to the facilities MemorialCare
contributed to the venture and have completed integrating these 10 sites onto the eRAD information technology platform. We begin
a capitation arrangement with MemorialCare managed lives on June 1st and expect a second capitation contract to commence
later this summer," added Dr. Berger.
For the first quarter of 2018, RadNet reported
Revenue of $231.4 million, Adjusted EBITDA(1) of $21.0 million and Net Loss of $7.3 million. Revenue increased $2.4
million (or 1.0%), Adjusted EBITDA(1) decreased $7.6 million (or 26.6%) and Net Loss increased $6.1 million, over the
first quarter of 2017. Per share Net Loss for the first quarter was $(0.15), compared to $(0.03) in
the first quarter of 2017, based upon a weighted average number of basic and diluted shares outstanding of 47.8 million shares
in 2018 and 46.6 million shares in 2017.
Loss in the first quarter of 2018 were certain non-cash expenses and non-recurring items including: $3.7 million of non-cash employee
stock compensation expense resulting from the vesting of certain options and restricted stock; $726,000 of severance paid
in connection with headcount reductions related to cost savings initiatives; and $974,000 of combined
non-cash amortization of deferred financing costs and loan discounts related to financing fees paid as part of our existing credit
For the first quarter of 2018, as compared
to the prior year's first quarter, MRI volume increased 3.5%, CT volume increased 6.5% and PET/CT volume increased 10.9%.
Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased
2.1% 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 2018 and 2017, MRI volume decreased 1.7%, CT volume increased 3.3% and PET/CT volume increased 8.7%.
Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams,
decreased 1.0% over the prior year's same quarter.
2018 Guidance Update
Incorporating the negative impact on our
financial results in the first quarter of 2018 from the adverse weather conditions, RadNet amends its previously announced 2018
guidance ranges as follows:
| Original Guidance Range | Revised Guidance Range | |
| Total Net Revenue | $950 million - $975 million | $945 million - $970 million |
| Adjusted EBITDA (1) | $145 million - $155 million | $140 million - $150 million |
| Free Cash Flow Generation (a) | $50 million - $60 million | $45 million - $55 million |
| Capital Expenditures (b) | $50 million - $55 million | Unchanged |
| Cash Interest Expense | $33 million - $38 million | Unchanged |
Dr. Berger highlighted, "While the
changes we made to our guidance incorporates the negative impact we faced in the first quarter, our revised guidance levels leave
our original projections unchanged for the remainder of the year. We are looking forward to continuing to execute on our strategies
of regional concentration, multimodality offerings, health system partnerships and creative contracting opportunities."
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 2018 results on Wednesday, May 9th, 2018 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).
Conference Call Details:
Date: Wednesday, May 9, 2018
Time: 10:30 a.m. Eastern Time
Dial In-Number: 800-239-9838
International Dial-In Number: 323-794-2551
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=129658
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 3102466.
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 300 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 7,400 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 2018 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.