Full Press Release Details
RadNet Reports Record Fourth
Quarter and Full Year 2019 Results and Releases 2020 Financial Guidance
LOS ANGELES, California, March 12, 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 fourth quarter and full year ended December 31, 2019.
Fourth Quarter Report:
For the fourth quarter of 2019, RadNet
reported Revenue of $300.8 million and Adjusted EBITDA(1) of $46.9 million. Revenue increased $43.6 million (or 17.0%)
and Adjusted EBITDA(1) increased $2.4 million (or 5.5%) from the fourth quarter of 2018.
Net Income for the fourth quarter of 2019
was $10.4 million, or $0.21 per diluted share. This compares to an Adjusted Net Income of $4.5 million, or $0.09 per diluted share,
in the fourth quarter of 2018. These per share values are based upon a weighted average number of diluted shares outstanding of
50.6 million in the fourth quarter of 2019 and 49.3 million of diluted shares outstanding in the fourth quarter of 2018.
Income in the fourth quarter of 2019 were certain non-cash expenses and non-recurring items including: $1.8 million of non-cash
employee stock compensation expense; $564,000 of severance paid in connection with headcount reductions related to cost
savings initiatives; $898,000 loss on the disposal of certain capital equipment; $1.3 million
net gain on the re-measurement of pre-existing interests; and $1.1 million of amortization of deferred
financing costs and loan discount related to our existing credit facilities.
For the fourth quarter of 2019, as compared
with the prior year's fourth quarter, MRI volume increased 6.7%, CT volume increased 9.3% and PET/CT volume increased 13.6%.
Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased
5.6% over the prior year's fourth quarter. On a same-center basis, including only those centers which were part of RadNet
for both the fourth quarters of 2019 and 2018, MRI volume increased 3.8%, CT volume increased 6.2% and PET/CT volume increased
7.4%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other
exams, increased 3.3% from the prior year's same quarter.
Dr. Howard Berger, President and Chief
Executive Officer of RadNet, commented "Our business performance was very strong in the fourth quarter. Our key metrics improved
from last year's fourth quarter, including Revenue, Adjusted EBITDA(1) and aggregate and same-center volumes.
In particular, we grew our fourth quarter Revenue by 17.0% and Adjusted EBITDA(1) by over 5.5% as compared with an excellent
fourth quarter in 2018," added Dr. Berger.
"Our focus on patient services, our
highly-recognized regional branding and our deployment of leading-edge technologies make RadNet centers preferred by patients,
health plans and referring physicians. As we continue through 2020, our focus will be on continued expansion of our regional networks
through organic growth, acquisitions and the addition of our hospital joint venture offerings. Furthermore, as demonstrated by
yesterday's announcement of the acquisition of DeepHealth, we are committed to driving technology applications, including
those utilizing artificial intelligence, that we believe will increase productivity, drive efficiencies and improve patient outcomes,"
For full year 2019, RadNet reported Revenue
of $1,154.2 million and Adjusted EBITDA(1) of $164.1 million. Revenue increased $179.0 million (or 18.4%) and Adjusted
EBITDA(1) increased $22.4 million (or 15.8%) as compared with 2018.
Net Income for 2019 was $14.8 million,
or $0.29 per diluted share. This compares to an Adjusted Net Income of $7.6 million, or $0.16 per diluted share, in 2018. These
per share values are based upon a weighted average number of diluted shares outstanding of 50.2 million in 2019 and 48.7 million
of diluted shares outstanding in 2018.
Income in 2019 were certain non-cash expenses and non-recurring items including: $8.7 million of non-cash employee stock compensation
expense; $1.6 million of severance paid in connection with headcount reductions related to cost savings initiatives; $2.4
million loss on the disposal of certain capital equipment; $768,000 net gain on the re-measurement of pre-existing interests; and
$4.2 million of amortization of deferred financing costs and loan discount related to our existing credit
For the year ended December 31, 2019, as
compared to 2018, MRI volume increased 8.9%, CT volume increased 12.2% and PET/CT volume increased 9.6%. Overall volume, taking
into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 9.4% for the twelve
months of 2019 over 2018.
Dr. Berger remarked, "Besides driving
strong organic growth and effectively controlling expenses throughout the year, we made significant progress in 2019 towards furthering
all aspects of our business strategy. First, with respect to acquisitions, we purchased Kern Radiology, an operator of five imaging
centers in Bakersfield, California, as well as completed small tuck-in transactions in West Hills, California, Islip, New York
and Central New Jersey. We established our second California-based joint venture with Dignity Health in Ventura County and entered
into discussions with several health systems to establish additional joint ventures. Additionally, we began to pursue applications
for artificial intelligence by creating a division within RadNet focused on developing algorithms for image interpretation and
for streamlining certain business processes. This process which began by acquiring Nulogix and partnering with Whiterabbit.ai during
2019, will also look to acquire or partner with third party companies developing or offering alternative AI-based technology solutions.
The agreement to acquire DeepHealth, announced yesterday, and the appointment of Dr. Greg Sorensen to direct our AI initiatives
demonstrate our confidence and commitment to AI and our belief that AI will transform the way we do business in coming years."
Actual Results vs. 2019 Guidance:
The following compares the Company's
actual 2019 performance with previously announced revised guidance levels.
| 2019 Guidance Range | 2019 Actual Results | |
| Total Net Revenue | $1,100 million - $1,150 million | $1,154 million |
| Adjusted EBITDA (1) | $158 million - $168 million | $164.1 million |
| Capital Expenditures (a) | $65 million - $70 million | $71.5 million |
| Cash Paid for Interest | $43 million - $48 million | $47.0 million |
| Free Cash Flow Generation (b) | $45 million - $55 million | $45.6 million |
Dr. Berger commented, "We exceeded
our revised Total Net Revenue guidance range and finished the year above the middle of our revised Adjusted EBITDA(1)
range, ranges we increased from our initial guidance levels upon announcing our second quarter 2019 financial results. Our capital
expenditures exceeded our revised guidance range primarily as a result of our investment in additional mammography capacity on
the east coast in conjunction with the rollout of the Whiterabbit.ai mammography program."
2020 Fiscal Year Guidance
For its 2020 fiscal year, RadNet announces
its guidance ranges as follows:
| Total Net Revenue | $1,175 million - $1,225 million |
| Adjusted EBITDA (1) | $165 million - $175 million |
| Capital Expenditures (a) | $70 million - $75 million |
| Cash Paid for Interest | $43 million - $48 million |
| Free Cash Flow Generation (b) | $48 million - $58 million |
Dr. Berger noted, "We are optimistic
about our business in 2020. First, we expect 2020 to have stable reimbursement from Medicare relative to 2019. We also believe
we have potential upside in our rates with private payors and capitated medical groups as we continue to work with them to drive
more imaging from significantly more expensive hospital settings into our lower cost locations. Second, we expect to benefit from
the contributions of acquisitions that were part of RadNet for only a portion of 2019, such as Kern Radiology and the small tuck-in
acquisitions we completed on both coasts throughout 2019. We also expect in 2020 to expand several of our joint ventures on both
the east and west coasts, and establish one or more new JV partnerships. Finally, we plan to accelerate our commitment to AI solutions
that can result in greater productivity and accuracy of our physicians and create new population health screening offerings for
certain disease processes that can be offered to payors and health plans on an economical basis."
Dr. Berger continued, "Thus far in
2020, winter weather conditions in the northeast have been very mild and our performance in January and February has been strong.
We anticipate driving organic growth from the significant capital investments we made in 2019, which included a further commitment
to 3D mammography technology, the addition and upgrading of MRIs with faster scanning and new applications and the expansion of
a number of our wholly-owned and joint venture centers."
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 today, at
10:30 a.m. Eastern Time. During the call, management will discuss the Company's 2019 fourth quarter and year-end results.
Conference Call Details:
Date: Thursday, March 12, 2020
Dial In-Number: 800-458-4121
International Dial-In Number: 786-789-4772
There will also be simultaneous
and archived webcasts available at http://public.viavid.com/index.php?id=138203 or http://www.radnet.com