Full Press Release Details
RadNet Reports Third Quarter
Financial Results Demonstrating Strong Recovery from the COVID-19 Impact
LOS ANGELES, California, November 9,
2020 - RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective,
fixed-site outpatient diagnostic imaging services through a network of 334 owned and/or operated outpatient imaging centers,
today reported financial results for its third quarter of 2020.
Dr. Howard Berger, President and Chief
Executive Officer of RadNet, commented, "I am very pleased with our performance during the quarter. Our sequential improvement
from the second quarter of 2020 is illustrative of both a strong recovery of our procedural volumes and our focus on controlling
costs. Compared to the second quarter of this year, our Revenue grew 53.1% and our aggregate procedural volumes increased 66.2%.
Our Adjusted EBITDA increased 102.8% from the second quarter, and our Adjusted Net Income Per Share increased by $0.31, reversing
an Adjusted Net Loss Per Share in the second quarter of $(0.16). Our Adjusted EBITDA margin increased by 169 basis points (1.7%)
from last year's third quarter. The improvement in Adjusted EBITDA, Adjusted EBITDA margin and Net Income Per Share as compared
to the second quarter is even more notable since this year's second quarter results were aided by $25.5 million of funds
we received and recognized as income under the CARES Act Provider Relief Fund. This quarter, we received only $221,000 of Cares
Dr. Berger continued, "COVID-19 necessitated
that we evaluate every part of our business to reduce expenses and conserve cash. In addition to staffing, we addressed costs associated
with purchasing, pre-authorization, scheduling, revenue cycle management, equipment service, facility rent, insurance and center-level
operating protocols. The adjustments we made over the last six months have materially improved how we are delivering our services
and have significantly increased operating margins. These enhancements should favorably contribute to our performance in the coming
quarters, as increasing procedural volumes are anticipated if our country continues to recover from COVID-19."
Dr. Berger added, "During the COVID-19
period, we temporarily closed facilities, suspended certain modalities at some facilities which remained open, consolidated patient
volume into the centers of excellence, negotiated and restructured agreements with vendors and landlords and reduced employee costs
through furloughs and temporary salary cuts, among other actions. Not only did these actions prove to secure our business in this
difficult period, but they resulted in enhanced liquidity. We completed the third quarter with a cash balance of $89.7 million,
and we remain undrawn on our $195 million revolving line of credit. I am also pleased to report that, as of August 1st,
we began bringing back substantially all of our employees from furloughs and restored the wages of those team members who took
pay reductions as a result of COVID-19. This process was completed as of October 1st."
"In October, we announced two partnerships
that should further our strategic growth. First, we partnered with Adventist Health to create an outpatient imaging joint venture
in Simi Valley, California to initially include three multimodality facilities and the management of the Nancy Reagan Breast Center.
This affiliation with Adventist Health, one of the largest health systems on the West Coast and Hawaii, is scheduled to begin operations
in January. Second, we created an operating platform in Phoenix, Arizona through a partnership with Dignity Health/CommonSpirit
Health. Though this is our third partnership with Dignity, it is RadNet's first entry into a new geography since we entered
the New York City marketplace in 2013. We initially acquired eight Arizona facilities and, with Dignity, are committed to substantially
growing the scope and breadth of this platform. Dignity will bring great value to the newly created partnership through its ownership
of hospitals, medical groups and urgent care centers and its broad affiliations and relationships with physician practices in the
Phoenix healthcare delivery system," concluded Dr. Berger.
Third Quarter Financial Results
For the third quarter of 2020, RadNet reported
Revenue of $291.8 million, Adjusted EBITDA(1) of $45.8 million and Net Income of $6.2 million. Compared to the second
quarter of this year, Revenue increased $101.2 million (or 53.1%) and Adjusted EBITDA(1) increased $23.2 million (or
102.8%). Revenue decreased $916,000 (or 0.3%) and Adjusted EBITDA(1) increased $4.8 million (or 11.7%) from last year's
Net Income increased $3.0 million compared
to the third quarter of 2019 and increased $16.8 million from the second quarter of 2020. Net Income
Per Share for the third quarter of 2020 was $0.12, compared to Net Income Per Share in the third quarter of 2019 of $0.06 (based
upon a weighted average number of diluted shares outstanding of 52.0 million in 2020 and 50.4 million in 2019). Adjusting for the
non-cash impact of the Company's interest rate hedges in this year's third quarter, Adjusted Net Income Per Share was
$0.15. This compares to Adjusted Net Loss Per Share of $(0.16) in the second quarter of 2020.
Income in the third quarter of 2020 were certain non-cash expenses or non-recurring items including: $2.1 million of non-cash employee
stock compensation expense resulting from the vesting of certain options and restricted stock; $571,000 of severance paid
in connection with headcount reductions related to cost savings initiatives; $342,000 loss on the sale or disposal of certain capital
equipment; $2.0 million of non-cash impact from interest rate hedges; and $1.1 million of amortization
of deferred financing costs, other non-cash interest and loan discounts related to our credit facilities.
For the third quarter of 2020, as compared
to the prior year's third quarter, MRI volume decreased 6.1%, CT volume was flat and PET/CT volume increased 0.4%. Overall
volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, decreased 5.7%
from the prior year's third quarter. On a same-center basis, including only those centers which were part of RadNet for both
the third quarters of 2020 and 2019, MRI volume decreased 5.8%, CT volume decreased 0.9% and PET/CT volume increased 2.3%. Overall
same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, decreased
5.6% compared to the prior year's same quarter.
Nine Month Financial Results
For the nine months ended September 30,
2020, RadNet reported Revenue of $763.9 million, Adjusted EBITDA(1) of $88.8 million and Net Loss of $20.8 million.
Revenue decreased $89.4 million (or 10.5%), Adjusted EBITDA(1) decreased $28.5 million (or 24.3%) and Net Income decreased
$25.2 million from the first nine months of 2019. Net Loss Per Share for the nine month period ended
September 30, 2020 was $(0.41), compared to Net Income Per Share of $0.09 in corresponding nine month period of 2019 (based upon
a weighted average number of fully diluted shares outstanding of 50.7 million in 2020 and 50.1 million in 2019). Adjusting for
the non-cash impact of the Company's interest rate hedges, Adjusted Net Loss Per Share was $(0.31) for the nine month period
results in the nine months ended September 30, 2020 were certain non-cash expenses or non-recurring
items including: $10.1 million of non-cash employee stock compensation expense resulting from the vesting of certain options and
restricted stock; $1.6 million of severance paid in connection with headcount reductions related to cost savings initiatives;
$543,000 loss on the sale or disposal of certain capital equipment; $6.7 million of non-cash impact from interest rate hedges;
and $3.3 million of amortization of deferred financing costs, other non-cash interest and loan discounts
related to our 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 third quarter 2020 results on Monday, November 9th, 2020 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).
Conference Call Details:
Date: Monday, November 9, 2020
Time: 10:30 a.m. Eastern Time
Dial In-Number: 866-248-8441
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=142324
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 9769738.
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 334 owned and/or operated outpatient imaging centers. RadNet's core markets include California,
Maryland, Delaware, New Jersey, New York and Arizona. 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
8,600 employees. For more information, visit http://www.radnet.com.
Forward Looking Statements
This press release contains "forward-looking