Full Press Release Details
Reports Second Quarter Financial Results and Reaffirms 2022 Financial Guidance Ranges
LOS ANGELES, California, August 9, 2022 -
RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient
diagnostic imaging services through a network of 353 owned and operated outpatient imaging centers, today reported financial results
for its second quarter of 2022.
Dr. Howard Berger, President and Chief Executive
Officer of RadNet, commented, "Our financial metrics continue to track towards the full-year guidance levels, which we revised upwards
in conjunction with issuing our first quarter results. While we drove aggregate and same center revenue growth during the second quarter,
we continue to experience the impacts of inflation (especially with respect to the cost of our labor force), certain Medicare reimbursement
cuts and COVID-19. When we created our guidance levels, we anticipated absorbing $15 million of additional costs of salaries and benefits
as well as $7.4 million of Medicare reimbursement reductions. We remain confident that incremental revenue and growth in the second half
of 2022 from new centers, additional joint ventures, tuck-in acquisitions and various operating initiatives should mitigate some of these
Dr. Berger continued, "While the economy
may continue to provide a difficult operating environment for many businesses in the near future, RadNet is in a strong position relative
to our smaller and less-capitalized competitors to benefit from opportunities that could result. With one of the lowest leverage ratios
of any significant operator in our industry, a $99.2 million cash balance and full availability of a $195 million line of credit, we are
well-positioned to aggressively pursue opportunities that could arise from further dislocation among the smaller imaging operators."
"We continue to pursue our multi-faceted
approach to growth through driving same-center performance, completing tuck-in acquisitions and forming new partnerships with hospitals
and health systems. During the quarter, we established two new joint ventures. The first, in Frederick County, Maryland with Frederick
Health Hospital, established a joint venture with six centers, two of which were contributed to the venture by Frederick Hospital. The
joint venture became operational in April. The second joint venture, established in June, is with Dimension Health, an affiliate of the
University of Maryland. Under this joint venture, RadNet and Dimension Health will build two new outpatient imaging centers in the Largo
and Laurel areas of Maryland. We anticipate these centers to begin servicing patients sometime in the second or third quarter of 2023.
The establishment of these new joint ventures are indicative of the interest we are experiencing from health systems to partner with us
in ambulatory, community-based operations. We now have almost 30% of our centers held within partnerships with hospitals and regional
health systems," added Dr. Berger.
Second Quarter Financial Results
For the Second quarter of 2022, RadNet reported
Revenue from its Imaging Centers reporting segment of $352.8 million and Adjusted EBITDA(1) of $55.5 million, which excludes
Losses from the AI reporting segment. As compared with last year's second quarter, Revenue increased $18.9 million (or 5.7%) and
Adjusted EBITDA(1) decreased $1.7 million (or 3.0%), also excluding Provider Relief Funding received in 2021. Including our
AI reporting segment, Revenue was $354.4 million in the second quarter of 2022, an increase of 6.1% from $333.9 million in last year's
second quarter. Including the losses of the AI reporting segment and Provider Relief Funding received in 2021, Adjusted EBITDA(1)
was $51.3 million in the second quarter of 2022 and $56.6 million in the second quarter of 2021.
For the second quarter of 2022, RadNet reported
Net Income of $7.9 million as compared with $2.9 million for the second quarter of 2021. Diluted Net Income Per Share for
the second quarter of 2022 was $0.13, compared with a Diluted Net Income per share of $0.05 in the second quarter of 2021, based upon
a weighted average number of diluted shares outstanding of 57.0 million shares in 2022 and 53.1 million shares in 2021.
of unusual or one-time items impacting the second quarter including: $6.3 million of non-cash gain from interest rate swaps; $1.2
million expense related to leases for our de novo facilities under construction that have yet to open their operations; and $5.9 million
of pre-tax losses related to our AI reporting segment. Adjusting for the above items, Adjusted Earnings(3) from the Imaging
Centers reporting segment was $8.6 million and diluted Adjusted Earnings Per Share(3) was $0.15 during the second quarter of
Income in the second quarter of 2022 were certain non-cash expenses and unusual items including: $4.7 million of non-cash employee stock
compensation expense resulting from the vesting of certain options and restricted stock; $99,000 of severance paid in connection
with headcount reductions related to cost savings initiatives; $81,000 loss on the disposal of certain capital
equipment; and $647,000 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 second quarter of 2022, as compared with
the prior year's second quarter, MRI volume increased 7.7%, CT volume increased 7.0% and PET/CT volume increased 10.4%. Overall
volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 4.5% over the
prior year's second quarter. On a same-center basis, including only those centers which were part of RadNet for both the second
quarters of 2022 and 2021, MRI volume increased 4.5%, CT volume increased 2.4% and PET/CT volume increased 7.9%. Overall same-center volume,
taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 2.2% over the prior
year's same quarter.
Six Month Financial Results
For the six month period of 2022, RadNet reported
Revenue from its Imaging Centers reporting segment of $694.0 million and Adjusted EBITDA(1) Excluding Losses from the AI reporting
segment of $97.3 million. Revenue increased $44.7 million (or 6.9%) and Adjusted EBITDA(1) Excluding Losses from the AI reporting
segment and Provider Relief Funding decreased $90,000 (or 0.1%). Including our AI reporting segment Revenue of $2.2 million, Revenue was
$696.1 million in the six months of 2022, an increase of 7.2% from $649.2 million in last year's six month period. Including the
AI reporting segment Adjusted EBITDA(1) losses and Provider Relief Funding received in 2021, Adjusted EBITDA(1) for
the six month period of 2022 was $89.5 million as compared with $102.1 million in the same six month period of 2021.
For the six month period in 2022, RadNet reported
Net Income of $10.9 million, a decrease of approximately $1.4 million over the first six months of 2021. Per share diluted Net
Income for the first six months of 2022 was $0.18, compared to a diluted Net Income per share of $0.23 in the same six month period of
2021 (based upon a weighted average number of diluted shares outstanding of 56.7 million in 2022 and 52.9 million in 2021).
Affecting Net Income
for the six month period of 2022 were certain non-cash expenses and non-recurring items including: $15.8 million of non-cash employee
stock compensation expense; $11.0 million of pre-tax losses related to our AI reporting segment; $300,000 of severance paid in connection
with headcount reductions related to cost savings initiatives; $2.2 million of non-operational rent expense associated with certain un-opened
de novo locations: $1.2 million loss on the disposal of certain capital equipment; $27.1 million of non-cash gain from interest
rate swaps; and $1.3 million of amortization of deferred financing costs and loan discount related to our existing
2022 Guidance Update
RadNet amends its previously announced guidance
| Original Guidance Range | Revised Guidance Range After Q1 Results | Revised Guidance Range After Q2 Results | ||||
| Total Net Revenue | $1,350 - $1,400 million | $1,360 - $1,410 million | Unchanged | |||
| Adjusted EBITDA (1) | $205 - $215 million | $208 - $218 million | Unchanged | |||
| Capital Expenditures (a) | $85 - $90 million | $88 - $93 million | $90 - $95 million | |||
| Cash Interest Expense (c) | $27 - $32 million | $27 - $32 million | Unchanged | |||
| Free Cash Flow (b)(2) | $80 - $90 million | $80 - $90 million | Unchanged |
Dr. Berger highlighted, "We are reaffirming
our previously announced guidance ranges with the exception of increasing our Capital Expenditures level by $2 million to reflect additional
investments in growth opportunities we have identified in several of our core regional markets for the second half of 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 second quarter
2022 results on Tuesday, August 9th, 2022 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).
Conference Call Details:
Date: Tuesday, August 9, 2022
Time: 10:30 a.m. Eastern Time
Dial In-Number: 800-458-4148
International Dial-In Number: 929-477-0324
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 https://viavid.webcasts.com/starthere.jsp?ei=1561780&tp_key=38a77e118f 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 6267180.
RadNet, Inc., is the leading national provider
of freestanding, fixed-site diagnostic imaging services and related information technology solutions (including artificial intelligence)
in the United States based on the number of locations and annual imaging revenue. RadNet has a network of 353 owned and/or operated outpatient
imaging centers. RadNet's markets include Arizona, California, Delaware, Florida, Maryland, New Jersey and New York. Together with affiliated
radiologists, inclusive of full-time and per diem employees and technicians, RadNet has a total of approximately 9,000 employees. For
more information, visit http://www.radnet.com.
Forward Looking Statements