Full Press Release Details
RadNet Reports Second Quarter
LOS ANGELES, California, August 10,
2020 - RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective,
fixed-site outpatient diagnostic imaging services through a network of 332 owned and/or operated outpatient imaging centers,
today reported financial results for its second quarter of 2020.
Dr. Howard Berger, President and Chief
Executive Officer of RadNet, commented, "I am extremely pleased with the recovery we are experiencing relative to the low
point of our procedural volumes during this COVID-19 period. Our procedural volumes reached a low point during the second week
of April, at roughly 28% of the pre-COVID-19 per day averages of January and February. Currently, we are close to 90% of our pre-COVID
per day volumes and are optimistic about further recovery as the year progresses."
Dr. Berger continued, "Our operations
teams and executive management moved with great urgency in March to aggressively take the actions necessary to lower our costs
and conserve cash under very extreme health and social conditions and substantially reduced patient volume. The actions we took,
which included temporarily closing facilities, consolidating patient volume into the centers of excellence which remained open,
negotiating and restructuring agreements with vendors and landlords and reducing employee costs through furloughs and temporary
salary cuts, among other actions, proved to secure our business in this difficult period. I want to thank the employees of RadNet,
who are meeting the challenges during these difficult times and who are making great personal sacrifices for the benefit of our
Company, our referring physicians, and most importantly, our patients."
"We will continue to evaluate the
re-opening of locations and bring back furloughed employees as our business further recovers. Currently, 25 of our 332 facilities
remain closed. During the COVID-19 period, we were assisted by approximately $25.5 million in grants we received under the CARES
Act Provider Relief Fund and approximately $44.4 million we received in the form of advances from the Centers for Medicare and
Medicaid Services and one west coast insurance company. Despite having to repay these advances during the second half of this year,
we expect that our business will add to the $84.6 million cash balance we had at quarter end," added Dr. Berger.
Dr. Berger concluded, "Notwithstanding
this difficult operating environment, we remain committed to executing our strategic objectives. Last week, we announced a collaboration
agreement with Hologic, Inc. focused on improving breast health and advancing both companies' objectives around Artificial
Intelligence (A.I.). The multifaceted agreement incorporates data sharing, co-development of R&D, collaboration on A.I. algorithms,
joint market opportunities and the upgrade of RadNet's fleet of Hologic mammography units to state-of-the art imaging technology.
This collaboration with Hologic furthers RadNet's commitment to developing A.I. solutions that will transform radiology
and improve radiologist accuracy and patient care. We remain on track with our DeepHealth division's plan to submit for
U.S. Food and Drug Administration review its first A.I. product later this year. In addition to this, we continue to pursue accretive
strategic acquisitions of targets whose operations have been impacted as a result of the COVID-19 market conditions. We look forward
to providing updates on these activities in the near future."
Second Quarter Financial Results
For the second quarter of 2020, RadNet
reported Revenue of $190.6 million and Adjusted EBITDA(1) of $22.6 million. Revenue decreased $98.5 million (or 34.1%)
and Adjusted EBITDA(1) decreased $20.5 million (or 47.6%) from the second quarter of last year.
For the second quarter, RadNet reported
Net Loss Attributable to RadNet, Inc. Common Stockholders ("Net Loss") of $10.6 million, a decline of approximately
$15.5 million from the second quarter of 2019. Adjusting for the impact of the non-cash change in the fair value of an interest
rate hedge during the quarter on a tax-effected basis of $2.6 million ("Adjusted Net Loss"), Adjusted Net Loss was
$8.0 million in the second quarter, a decline of $12.9 million from the second quarter of 2019.
Per share diluted Net
Loss for the second quarter was $(0.21), compared to diluted Net Income of $0.10 in the second quarter of 2019 (based upon a weighted
average number of diluted shares outstanding of 50.7 million in 2020 and 50.1 million in 2019). Adjusting for the impact
of the non-cash change in the fair value of the interest rate hedge, per share diluted Adjusted Net Loss was $(0.16) in the second
quarter compared to diluted Net Income of $0.10 in the second quarter of 2019.
Loss in the second quarter of 2020 were certain non-cash expenses or gains and non-recurring items including: $3.8 million non-cash
expense from the change in the fair value of an interest rate hedge; $1.5 million of non-cash employee stock compensation expense
resulting from the vesting of certain options and restricted stock; $859,000 of severance paid in connection with headcount
reductions related to cost savings initiatives; $569,000 gain on the sale of certain capital equipment; and $1.1
million of non-cash amortization of deferred financing costs and loan discount on debt issuances.
For the second quarter of 2020, as compared
with the prior year's second quarter, MRI volume decreased 39.7%, CT volume decreased 31.6% and PET/CT volume decreased 17.6%.
Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, decreased
43.7% 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 2020 and 2019, MRI volume decreased 39.4%, CT volume decreased 31.7% and PET/CT volume decreased
16.9%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other
exams, decreased 43.4% over the prior year's same quarter.
Six Month Financial Results
For the six months ended June 30, 2020,
RadNet reported Revenue of $472.1 million and Adjusted EBITDA(1) of $43.0 million. Revenue decreased $88.5 million (or
15.8%) and Adjusted EBITDA(1) decreased $33.4 million (or 43.7%) from the same six month period last year.
For the six month period in 2020, RadNet
reported Net Loss of $27.0 million, a decline of approximately $28.1 million over the first six months of 2019. Adjusting for the
impact of the non-cash change in the fair value of an interest rate hedge during the six month period on a tax-effected basis of
$2.8 million, Adjusted Net Loss was $24.2 million in the first six months of 2020, a decline of $25.3 million over the same period
Per share diluted Net
Loss for the first six months of 2020 was $(0.53), compared to a diluted Net Income of $0.02 in the same six month period of 2019
(based upon a weighted average number of diluted shares outstanding of 50.5 million in 2020 and 50.0 million in 2019).
Adjusting for the impact of the non-cash change in the fair value of the interest rate hedge, per share diluted Adjusted Net Loss
was $(0.48) in the first half of 2020 compared to a diluted Net Income of $0.02 in the same period of
Loss for the six month period of 2020 were certain non-cash expenses and non-recurring items including: $3.8 million non-cash expense
from the change in the fair value of an interest rate hedge; $8.1 million of non-cash employee stock compensation expense resulting
from the vesting of certain options and restricted stock; $1.1 million of severance paid in connection with headcount reductions
related to cost savings initiatives; and $2.2 million of combined non-cash amortization of deferred
financing costs and loan discounts related to financing fees paid as part of our existing credit facilities.
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 2020 results on Monday, August 10th, 2020 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).
Conference Call Details:
Date: Monday, August 10, 2020
Time: 10:30 a.m. Eastern Time
Dial In-Number: 800-437-2398
International Dial-In Number: 786-204-3966
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=141056
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 7462345.
Regulation G: GAAP and Non-GAAP Financial
This press release contains "forward-looking
statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995.
Forward-looking statements are expressions of our current beliefs, expectations and assumptions regarding the future of our business,
future plans and strategies, projections, and anticipated future conditions, events and trends. Forward-looking statements can
generally be identified by words such as: "anticipate," "intend," "plan," "goal,"
"seek," "believe," "project," "estimate," "expect," "strategy,"
"future," "likely," "may," "should," "will" and similar references