RadNet, Inc. (NASDAQ:RDNT)
, a
national leader in providing high-quality, cost-effective,
fixed-site outpatient diagnostic imaging services through a network
of 305 owned and/or operated outpatient imaging centers, today
reported financial results for its fourth quarter and full year
ended December 31, 2016.
Financial Results
Fourth Quarter Report:
For the fourth quarter of 2016, RadNet reported
Revenue of $224.9 million, Adjusted EBITDA(1) of $34.9 million and
Net Income of $3.7. Revenue increased $9.2 million (or 4.3%),
Adjusted EBITDA(1) increased $2.3 million (or 7.2%) and Net Income
increased $2.8 million over the fourth quarter of 2015.
Net Income for the fourth quarter was $0.08 per
diluted share, compared to a Net Income of $0.02 per diluted share
in the fourth quarter of 2015. These per share values are
based upon a weighted average number of diluted shares outstanding
of 46.4 million in the fourth quarter of 2016 and 46.5 million of
diluted shares outstanding in the fourth quarter of 2015.
Affecting Net Income in the fourth quarter of
2016 were certain non-cash expenses and non-recurring items
including: $908,000 of non-cash employee stock compensation
expense resulting from the vesting of certain options and
restricted stock; $349,000 of severance paid in connection with
headcount reductions related to cost savings initiatives; $392,000
loss on the disposal of certain capital equipment; and $801,000 of
amortization and write off of deferred financing costs and loan
discount related to our existing credit facilities.
For the fourth quarter of 2016, as compared with
the prior year’s fourth quarter, MRI volume increased 2.6%, CT
volume increased 3.1% and PET/CT volume increased 4.0%.
Overall volume, taking into account routine imaging exams,
inclusive of x-ray, ultrasound, mammography and other exams,
increased 0.6% 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 2016 and 2015, MRI volume
increased 1.5%, CT volume increased 1.7% and PET/CT volume
increased 4.0%. Overall same-center volume, taking into
account routine imaging exams, inclusive of x-ray, ultrasound,
mammography and other exams, was flat over the prior year’s same
quarter.
Dr. Howard Berger, President and Chief Executive
Officer of RadNet, commented “I am very pleased with our fourth
quarter results. As compared with last year’s same quarter,
aggregate Revenue, EBITDA, Net Income and procedural volumes
increased. Our same center advanced modalities and Revenue
also grew in the current quarter over last year’s fourth
quarter. Although we are not complete with our efforts,
during the quarter we made significant progress in integrating our
recently acquired operations of Diagnostic Imaging Group and New
York Radiology Partners. These efforts included migrating billing
and site-level clinical systems, evaluating, training and enhancing
the capabilities of personnel, revamping marketing and branding
strategies and migrating supply relationships and vendor
contracts.”
Annual Report:
For full year 2016, the Company reported Revenue
of $884.5 million, Adjusted EBITDA(1) of $133.0 million and Net
Income of $7.2 million. Revenue increased $74.9 million (or
9.3%) and Adjusted EBITDA(1) increased $11.4 million (or
9.3%). Net Income for 2016 was $0.15 per diluted share,
compared to Net Income of $0.17 per diluted share in 2015 (based
upon a weighted average number of diluted shares outstanding of
46.7 million and 45.2 million in 2016 and 2015, respectively).
Affecting Net Income in 2016 were certain
non-cash expenses and non-recurring items including: $5.8
million of non-cash employee stock compensation expense resulting
from the vesting of certain options and restricted stock; $2.9 of
severance paid in connection with headcount reductions related to
cost savings initiatives; $767,000 loss on the disposal of certain
capital equipment; $5.0 million gain on the return of common stock
related to one of our acquisitions; and $5.0 million of
amortization and write off of deferred financing fees and discount
on issuance of debt related to our existing credit facilities and
refinancing transaction.
For the year ended December 31, 2016, as
compared to 2015, MRI volume increased 7.8%, CT volume increased
7.9% and PET/CT volume increased 7.9%. Overall volume, taking
into account routine imaging exams, inclusive of x-ray, ultrasound,
mammography and other exams, increased 8.3% for the twelve months
of 2016 over 2015.
“During 2016, we focused on internal operations
and completed no material acquisitions. I’m proud of our many
operational and financial accomplishments during the year.
First, throughout 2016, we materially improved our balance sheet
and financial leverage ratios. We generated over $35 million
of free cash flow, ended the year with a cash balance of over $20
million and reduced our net debt by over $20 million as compared
with its balance on December 31, 2015. We were able to
significantly reduce our Net Debt to EBITDA leverage to 4.8x, down
from 5.3x just one year ago,” concluded Dr. Berger.
“Another key accomplishment in 2016 was the
announcement of our first West Coast health system joint venture
with Dignity Health in Glendale, CA. We are now fully
operational with the two centers we own jointly. We are
actively working on additional health system partnerships on both
coasts and look forward to announcing their successful formation
during 2017. Also during 2016, we laid the foundation to
bring our West Coast Breastlink operations to two of our larger
East Coast markets. Throughout the year, we assembled the
team, business plan and site locations for a comprehensive breast
disease management offering we expect to become fully operational
in the second quarter of 2017,” added Dr. Berger
“Additionally, subsequent to quarter end, we
successfully completed an amendment to our senior credit facilities
which reduced our interest rate by 0.5% on our $478.9 million
senior secured first lien term loan and $117.5 million senior
secured revolving credit facility. This amounts to
approximately $2.4 million of interest expense savings, providing
additional cash flow which we will use to further de-lever our
balance sheet or expand our business.”
Actual Results vs. 2016 Guidance:
The following compares the Company’s actual 2016
performance with previously announced revised guidance levels.
|
Revised Guidance
Range |
Actual Results |
Total
Net Revenue (a) |
$870
million - $910 million |
$884.5 million |
Adjusted EBITDA(1) |
$130
million - $140 million |
$133.0 million |
Capital Expenditures (b) |
$55
million - $58 million |
$60.0
million |
Cash
Interest Expense |
$37
million - $40 million |
$37.5
million |
Free
Cash Flow Generation (c) |
$40
million - $50 million |
$35.6
million |
(a) Note the change from prior years. This metric is now
after the subtraction of bad debt.(b) Net of proceeds from the sale
of equipment, imaging centers and joint venture interests.(c)
Defined by the Company as Adjusted EBITDA(1) less total capital
expenditures and cash paid for interest.
2017 Fiscal Year Guidance
For its 2017 fiscal year, RadNet announces its
guidance ranges as follows:
|
|
Total Net Revenue |
$895
million - $925 million |
Adjusted EBITDA(1) |
$135
million - $145 million |
Capital Expenditures (a) |
$55
million - $60 million |
Cash Interest Expense |
$35
million - $40 million |
Free Cash Flow Generation (b) |
$40
million - $50 million |
(a) Net of proceeds from the sale of equipment, imaging centers
and joint venture interests.(b) Defined by the Company as Adjusted
EBITDA(1) less total capital expenditures and cash paid for
interest.
Dr. Berger commented, “We have many reasons to
be optimistic about 2017. First, 2017 is the second year
since 2006 that we will avoid a negative reimbursement impact from
Medicare. Second, we will complete the vast majority of
integration efforts related to New York Radiology Partners and
Diagnostic Imaging Group acquisitions. Third, we will be
launching Breastlink operations in two of our East Coast
regions. Fourth, we expect additional Revenue in 2017 from
our continued adoption of 3D breast imaging. And, lastly, we
expect to begin operations in 2017 of new health system joint
ventures.”
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 2016 fourth quarter and year-end results.
Conference Call Details:
Date: Tuesday, March 14, 2017Time:
10:30 a.m. ETDial In-Number: 888-801-6507International
Dial-In Number: 913-312-0660
There will also be simultaneous and archived webcasts available
at
http://public.viavid.com/index.php?id=123283 or
http://www.radnet.com under the “About RadNet” menu section and
“News & Press 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 2430393.
Regulation G: GAAP and Non-GAAP
Financial Information
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.
About RadNet, Inc.
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 305 owned and/or operated outpatient imaging
centers. RadNet's core markets include California, Maryland,
Delaware, New Jersey, New York and Rhode Island. Together with
affiliated radiologists, and inclusive of full-time and per diem
employees and technicians, RadNet has a total of approximately
7,300 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 the Company’s acquired operations,
successfully achieving 2017 financial guidance, achieving cost
savings, successfully developing and integrating its information
technology operations as well as 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 speak 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.
|
|
RADNET, INC. AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS |
|
(IN THOUSANDS EXCEPT SHARE AND PER SHARE
DATA) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
|
|
$ |
20,638 |
|
|
$ |
446 |
|
|
|
Accounts
receivable, net |
|
|
|
|
164,210 |
|
|
|
162,843 |
|
|
|
Current
portion of deferred tax assets |
|
|
- |
|
|
|
22,279 |
|
|
|
Due from
affiliates |
|
|
|
|
|
2,428 |
|
|
|
4,815 |
|
|
|
Prepaid
expenses and other current assets |
|
|
28,435 |
|
|
|
38,986 |
|
|
|
Assets held
for sale |
|
|
|
|
|
2,203 |
|
|
|
- |
|
|
|
|
Total current
assets |
|
|
|
|
217,914 |
|
|
|
229,369 |
|
|
PROPERTY AND EQUIPMENT, NET |
|
|
|
247,725 |
|
|
|
256,722 |
|
|
OTHER ASSETS |
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
|
|
239,553 |
|
|
|
239,408 |
|
|
|
Other
intangible assets |
|
|
|
|
|
42,682 |
|
|
|
45,253 |
|
|
|
Deferred
financing costs, net of current portion |
|
|
2,004 |
|
|
|
2,841 |
|
|
|
Investment
in joint ventures |
|
|
|
|
43,509 |
|
|
|
33,584 |
|
|
|
Deferred
tax assets, net of current portion |
|
|
50,356 |
|
|
|
24,685 |
|
|
|
Deposits
and other |
|
|
|
|
|
5,733 |
|
|
|
4,565 |
|
|
|
|
Total assets |
|
|
|
|
|
$ |
849,476 |
|
|
$ |
836,427 |
|
|
LIABILITIES AND EQUITY |
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
Accounts
payable, accrued expenses and other |
|
$ |
111,166 |
|
|
$ |
113,813 |
|
|
|
Due to
affiliates |
|
|
|
|
|
13,141 |
|
|
|
6,564 |
|
|
|
Deferred
revenue |
|
|
|
|
|
1,516 |
|
|
|
1,598 |
|
|
|
Current
portion of deferred rent |
|
|
|
2,961 |
|
|
|
2,563 |
|
|
|
Current
portion of notes payable |
|
|
|
22,031 |
|
|
|
22,383 |
|
|
|
Current
portion of obligations under capital leases |
|
|
4,526 |
|
|
|
10,038 |
|
|
|
|
Total current
liabilities |
|
|
|
|
155,341 |
|
|
|
156,959 |
|
|
LONG-TERM LIABILITIES |
|
|
|
|
|
|
|
|
|
Deferred
rent, net of current portion |
|
|
|
24,799 |
|
|
|
26,865 |
|
|
|
Notes
payable, net of current portion |
|
|
609,445 |
|
|
|
599,914 |
|
|
|
Obligations
under capital lease, net of current portion |
|
|
2,730 |
|
|
|
6,385 |
|
|
|
Other
non-current liabilities |
|
|
|
|
5,108 |
|
|
|
9,843 |
|
|
|
|
Total
liabilities |
|
|
|
|
|
797,423 |
|
|
|
799,966 |
|
|
EQUITY |
|
|
|
|
|
|
|
|
|
|
RadNet,
Inc. stockholders' equity: |
|
|
|
|
|
|
|
Common
stock - $.0001 par value, 200,000,000 shares authorized; |
|
|
|
|
|
|
46,574,904 and
46,281,189 shares issued and outstanding at |
|
|
|
|
|
|
|
|
|
|
|
December
31, 2016 and 2015, respectively |
|
|
4 |
|
|
|
4 |
|
|
|
Additional
paid-in-capital |
|
|
|
|
198,679 |
|
|
|
197,297 |
|
|
|
Accumulated
other comprehensive gain (loss) |
|
|
306 |
|
|
|
(153 |
) |
|
|
Accumulated
deficit |
|
|
|
|
|
(150,503 |
) |
|
|
(164,571 |
) |
|
|
|
Total
RadNet, Inc.'s stockholders' equity |
|
|
48,486 |
|
|
|
32,577 |
|
|
|
Non-controlling interests |
|
|
|
|
3,567 |
|
|
|
3,884 |
|
|
|
|
Total equity |
|
|
|
|
|
|
52,053 |
|
|
|
36,461 |
|
|
|
|
Total liabilities
and equity |
|
|
|
$ |
849,476 |
|
|
$ |
836,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RADNET, INC. AND SUBSIDIARIES |
|
|
CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
(IN THOUSANDS EXCEPT SHARE AND PER SHARE
DATA) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
Service fee
revenue, net of contractual allowances and discounts |
$ |
821,587 |
|
|
$ |
746,756 |
|
|
$ |
670,136 |
|
|
|
|
|
Provision
for bad debts |
|
|
|
|
(45,387 |
) |
|
|
(36,033 |
) |
|
|
(29,807 |
) |
|
|
|
|
Net service
fee revenue |
|
|
|
|
776,200 |
|
|
|
710,723 |
|
|
|
640,329 |
|
|
|
|
|
Revenue
under capitation arrangements |
|
|
|
108,335 |
|
|
|
98,905 |
|
|
|
77,240 |
|
|
|
|
|
|
Total net
revenue |
|
|
|
|
884,535 |
|
|
|
809,628 |
|
|
|
717,569 |
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations, excluding depreciation and amortization |
|
775,801 |
|
|
|
708,289 |
|
|
|
602,652 |
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
66,610 |
|
|
|
60,611 |
|
|
|
59,258 |
|
|
|
|
|
Loss on
sale and disposal of equipment |
|
|
|
767 |
|
|
|
866 |
|
|
|
1,113 |
|
|
|
|
|
Severance
costs |
|
|
|
|
|
2,877 |
|
|
|
745 |
|
|
|
1,241 |
|
|
|
|
|
|
Total
operating expenses |
|
|
|
|
846,055 |
|
|
|
770,511 |
|
|
|
664,264 |
|
|
|
INCOME FROM OPERATIONS |
|
|
|
38,480 |
|
|
|
39,117 |
|
|
|
53,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME AND EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
43,455 |
|
|
|
41,684 |
|
|
|
42,727 |
|
|
|
|
|
Meaningful
use incentive |
|
|
|
|
(2,808 |
) |
|
|
(3,270 |
) |
|
|
(2,034 |
) |
|
|
|
|
Equity in
earnings of joint ventures |
|
|
|
(9,767 |
) |
|
|
(8,927 |
) |
|
|
(6,970 |
) |
|
|
|
|
Gain on
sale of imaging centers |
|
|
|
|
- |
|
|
|
(5,434 |
) |
|
|
- |
|
|
|
|
|
Gain from
return of common stock |
|
|
|
(5,032 |
) |
|
|
- |
|
|
|
- |
|
|
|
|
|
Loss on
early extinguishment of senior notes |
|
|
- |
|
|
|
- |
|
|
|
15,927 |
|
|
|
|
|
Other
expenses |
|
|
|
|
|
196 |
|
|
|
419 |
|
|
|
3 |
|
|
|
|
|
|
Total other
expenses |
|
|
|
|
26,044 |
|
|
|
24,472 |
|
|
|
49,653 |
|
|
|
INCOME BEFORE INCOME TAXES |
|
|
|
12,436 |
|
|
|
14,645 |
|
|
|
3,652 |
|
|
|
|
|
Provision
for income taxes |
|
|
|
|
(4,432 |
) |
|
|
(6,007 |
) |
|
|
(1,967 |
) |
|
|
NET
INCOME |
|
|
|
|
|
8,004 |
|
|
|
8,638 |
|
|
|
1,685 |
|
|
|
|
|
Net income
attributable to noncontrolling interests |
|
774 |
|
|
|
929 |
|
|
|
309 |
|
|
|
NET
INCOME ATTRIBUTABLE TO RADNET,
INC. |
|
|
|
|
|
|
|
|
|
COMMON STOCKHOLDERS |
|
|
$ |
7,230 |
|
|
$ |
7,709 |
|
|
$ |
1,376 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC NET INCOME PER
SHARE |
|
|
|
|
|
|
|
|
|
|
|
ATTRIBUTABLE TO RADNET, INC. COMMON
STOCKHOLDERS |
$ |
0.16 |
|
|
$ |
0.18 |
|
|
$ |
0.03 |
|
|
|
DILUTED NET INCOME PER
SHARE |
|
|
|
|
|
|
|
|
|
|
|
ATTRIBUTABLE TO RADNET, INC. COMMON
STOCKHOLDERS |
$ |
0.15 |
|
|
$ |
0.17 |
|
|
$ |
0.03 |
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
46,244,188 |
|
|
|
43,805,794 |
|
|
|
41,070,077 |
|
|
|
|
|
Diluted |
|
|
|
|
|
46,655,032 |
|
|
|
45,171,372 |
|
|
|
43,149,196 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RADNET, INC. AND SUBSIDIARIES |
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(IN THOUSANDS) |
|
|
|
|
|
|
|
|
|
Years Ended December 31, |
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2014 |
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
$ |
8,004 |
|
|
$ |
8,638 |
|
|
$ |
1,685 |
|
|
|
Adjustments to reconcile net income |
|
|
|
|
|
|
|
|
to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
66,610 |
|
|
|
60,611 |
|
|
|
59,258 |
|
|
|
Provision for bad debts |
|
|
45,387 |
|
|
|
36,033 |
|
|
|
29,807 |
|
|
|
Gain from return from common stock |
|
|
(5,032 |
) |
|
|
- |
|
|
|
- |
|
|
|
Equity in earnings of joint ventures |
|
|
(9,767 |
) |
|
|
(8,927 |
) |
|
|
(6,970 |
) |
|
|
Distributions from joint ventures |
|
|
2,926 |
|
|
|
7,731 |
|
|
|
7,358 |
|
|
|
Amortization and write off of deferred financing costs
and loan discount |
|
|
5,045 |
|
|
|
5,369 |
|
|
|
5,732 |
|
|
|
Loss
on sale and disposal of equipment |
|
|
767 |
|
|
|
866 |
|
|
|
1,113 |
|
|
|
Loss on early extinguishment of senior notes |
|
|
- |
|
|
|
- |
|
|
|
15,927 |
|
|
|
Gain on sale of imaging centers |
|
|
- |
|
|
|
(5,434 |
) |
|
|
- |
|
|
|
Stock-based compensation |
|
|
5,826 |
|
|
|
7,647 |
|
|
|
2,500 |
|
|
|
Changes in operating assets and liabilities, net of
assets |
|
|
|
|
|
|
|
|
acquired and liabilities assumed in purchase
transactions: |
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
|
|
(47,055 |
) |
|
|
(34,514 |
) |
|
|
(43,973 |
) |
|
|
Other current assets |
|
|
|
|
11,038 |
|
|
|
(14,198 |
) |
|
|
(5,514 |
) |
|
|
Other assets |
|
|
|
|
1,267 |
|
|
|
(3,813 |
) |
|
|
(281 |
) |
|
|
Deferred taxes |
|
|
|
|
3,446 |
|
|
|
4,036 |
|
|
|
655 |
|
|
|
Deferred rent |
|
|
|
|
(1,668 |
) |
|
|
7,011 |
|
|
|
2,180 |
|
|
|
Deferred revenue |
|
|
|
|
(82 |
) |
|
|
(366 |
) |
|
|
620 |
|
|
|
Accounts
payable, accrued expenses and other |
|
|
|
|
4,887 |
|
|
|
(3,653 |
) |
|
|
(9,093 |
) |
|
|
Net cash
provided by operating activities |
|
|
|
|
|
91,599 |
|
|
|
67,037 |
|
|
|
61,004 |
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
|
Purchase of imaging facilities |
|
|
(6,641 |
) |
|
|
(90,792 |
) |
|
|
(9,428 |
) |
|
|
Purchase of property and equipment |
|
|
(59,251 |
) |
|
|
(42,964 |
) |
|
|
(41,740 |
) |
|
|
Proceeds from sale of equipment |
|
|
523 |
|
|
|
1,282 |
|
|
|
1,088 |
|
|
|
Proceeds from sale of imaging facilities |
|
|
- |
|
|
|
35,500 |
|
|
|
- |
|
|
|
Proceeds from sale of internal use software |
|
|
301 |
|
|
|
443 |
|
|
|
- |
|
|
|
Cash contribution from partner in JV formation |
|
|
994 |
|
|
|
- |
|
|
|
- |
|
|
|
Equity contributions in existing and purchase of interest in
joint ventures |
|
|
|
|
|
|
|
(1,374 |
) |
|
|
(265 |
) |
|
|
(3,562 |
) |
|
|
Net
cash used in investing activities |
|
|
|
|
|
(65,448 |
) |
|
|
(96,796 |
) |
|
|
(53,642 |
) |
|
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
|
Principal payments on notes and leases payable |
|
|
(11,880 |
) |
|
|
(9,773 |
) |
|
|
(23,913 |
) |
|
|
Proceeds from borrowings |
|
|
476,504 |
|
|
|
73,869 |
|
|
|
210,000 |
|
|
|
Payments on senior notes |
|
|
|
|
|
|
|
(469,086 |
) |
|
|
(23,727 |
) |
|
|
(211,344 |
) |
|
|
Deferred financing costs |
|
|
(945 |
) |
|
|
- |
|
|
|
(6,650 |
) |
|
|
Net (payments) proceeds on revolving credit
facility |
|
|
- |
|
|
|
(15,300 |
) |
|
|
15,300 |
|
|
|
Dividends paid to noncontrolling interests |
|
|
(492 |
) |
|
|
(729 |
) |
|
|
(148 |
) |
|
|
Proceeds from the sale of non-controlling
interests |
|
|
992 |
|
|
|
5,005 |
|
|
|
- |
|
|
|
Purchase of non-controlling interests |
|
|
(1,153 |
) |
|
|
- |
|
|
|
(196 |
) |
|
|
Proceeds from issuance of common stock upon exercise of
options/warrants |
|
150 |
|
|
|
594 |
|
|
|
1,546 |
|
|
|
Net
cash (used in) provided by financing activities |
|
|
|
|
|
(5,910 |
) |
|
|
29,939 |
|
|
|
(15,405 |
) |
|
EFFECT OF EXCHANGE RATE CHANGES
ON CASH |
|
|
(49 |
) |
|
|
(41 |
) |
|
|
(62 |
) |
|
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS |
|
20,192 |
|
|
|
139 |
|
|
|
(8,105 |
) |
|
CASH AND CASH EQUIVALENTS,
beginning of period |
|
|
446 |
|
|
|
307 |
|
|
|
8,412 |
|
|
CASH AND CASH EQUIVALENTS, end
of period |
|
$ |
20,638 |
|
|
$ |
446 |
|
|
$ |
307 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION |
|
|
|
|
|
|
|
|
Cash paid during the period for interest |
|
$ |
37,487 |
|
|
$ |
36,028 |
|
|
$ |
41,584 |
|
|
|
Cash paid during the period for income taxes |
|
$ |
2,798 |
|
|
$ |
1,781 |
|
|
$ |
1,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RADNET, INC. AND SUBSIDIARIES |
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
(IN THOUSANDS EXCEPT SHARE DATA) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
Service fee
revenue, net of contractual allowances and discounts |
$ |
208,556 |
|
|
$ |
200,419 |
|
|
|
|
|
Provision
for bad debts |
|
|
|
|
(11,504 |
) |
|
|
(10,738 |
) |
|
|
|
|
Net service
fee revenue |
|
|
|
|
197,052 |
|
|
|
189,681 |
|
|
|
|
|
Revenue
under capitation arrangements |
|
|
|
27,887 |
|
|
|
26,025 |
|
|
|
|
|
|
Total net
revenue |
|
|
|
|
224,939 |
|
|
|
215,706 |
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
Cost of
operations, excluding depreciation and amortization |
|
192,161 |
|
|
|
187,941 |
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
17,069 |
|
|
|
16,775 |
|
|
|
|
|
Loss on
sale and disposal of equipment |
|
|
|
392 |
|
|
|
92 |
|
|
|
|
|
Severance
costs |
|
|
|
|
|
349 |
|
|
|
448 |
|
|
|
|
|
|
Total
operating expenses |
|
|
|
|
209,971 |
|
|
|
205,256 |
|
|
|
INCOME FROM OPERATIONS |
|
|
|
14,968 |
|
|
|
10,450 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME AND EXPENSES |
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
10,625 |
|
|
|
10,719 |
|
|
|
|
|
Equity in
earnings of joint ventures |
|
|
|
(1,638 |
) |
|
|
(2,626 |
) |
|
|
|
|
Gain on
sale of imaging centers |
|
|
|
|
- |
|
|
|
(611 |
) |
|
|
|
|
Other
expenses |
|
|
|
|
|
16 |
|
|
|
1 |
|
|
|
|
|
|
Total other
expenses |
|
|
|
|
9,003 |
|
|
|
7,483 |
|
|
|
INCOME (LOSS) BEFORE INCOME TAXES |
|
|
|
5,965 |
|
|
|
2,967 |
|
|
|
|
|
(Provision for) benefit from income taxes |
|
|
|
(1,901 |
) |
|
|
(1,707 |
) |
|
|
NET
INCOME (LOSS) |
|
|
|
|
4,064 |
|
|
|
1,260 |
|
|
|
|
|
Net income
attributable to noncontrolling interests |
|
|
383 |
|
|
|
379 |
|
|
|
NET
INCOME (LOSS) ATTRIBUTABLE TO RADNET,
INC. |
|
|
|
|
|
|
|
COMMON STOCKHOLDERS |
|
|
$ |
3,681 |
|
|
$ |
881 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC NET INCOME
(LOSS) PER SHARE |
|
|
|
|
|
|
|
|
|
ATTRIBUTABLE TO RADNET, INC. COMMON
STOCKHOLDERS |
$ |
0.08 |
|
|
$ |
0.02 |
|
|
|
DILUTED NET INCOME (LOSS) PER
SHARE |
|
|
|
|
|
|
|
|
ATTRIBUTABLE TO RADNET, INC. COMMON
STOCKHOLDERS |
$ |
0.08 |
|
|
$ |
0.02 |
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
45,966,569 |
|
|
|
45,454,300 |
|
|
|
|
|
Diluted |
|
|
|
|
|
46,389,458 |
|
|
|
46,544,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RADNET, INC. |
RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE
TO RADNET, INC. COMMON SHAREHOLDERS TO ADJUSTED
EBITDA(1) |
(IN THOUSANDS) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
December 31, |
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to RadNet, Inc. Common Stockholders |
|
$ |
3,681 |
|
|
$ |
881 |
|
Plus
Provision for Income Taxes |
|
|
|
|
|
1,901 |
|
|
|
1,707 |
|
Plus Other
Expenses |
|
|
|
|
|
|
16 |
|
|
|
1 |
|
Plus Loss
(Gain) on Sale of Imaging Centers |
|
|
|
|
- |
|
|
|
(611 |
) |
Plus
Interest Expense |
|
|
|
|
|
|
10,625 |
|
|
|
10,719 |
|
Plus
Severance Costs |
|
|
|
|
|
|
349 |
|
|
|
448 |
|
Plus Loss
on Disposal of Equipment |
|
|
|
|
|
392 |
|
|
|
92 |
|
Plus
Depreciation and Amortization |
|
|
|
|
|
17,069 |
|
|
|
16,775 |
|
Plus Legal
Settlements |
|
|
|
|
|
|
- |
|
|
|
1,425 |
|
Plus Non
Cash Employee Stock Compensation |
|
|
|
|
908 |
|
|
|
1,171 |
|
Adjusted EBITDA(1) |
|
|
|
|
$ |
34,941 |
|
|
$ |
32,608 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended |
|
|
|
|
|
|
|
December 31, |
|
|
|
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to RadNet, Inc. Common Stockholders |
|
$ |
7,230 |
|
|
$ |
7,709 |
|
Plus
Provision for Income Taxes |
|
|
|
|
|
4,432 |
|
|
|
6,007 |
|
Plus Other
Expenses |
|
|
|
|
|
|
196 |
|
|
|
419 |
|
Plus Loss
(Gain) from Return of Common Stock |
|
|
|
(5,032 |
) |
|
|
- |
|
Plus Loss
(Gain) on Sale of Imaging Centers |
|
|
|
|
- |
|
|
|
(5,434 |
) |
Plus
Interest Expense |
|
|
|
|
|
|
43,455 |
|
|
|
41,684 |
|
Plus
Severance Costs |
|
|
|
|
|
|
2,877 |
|
|
|
745 |
|
Plus Loss
on Disposal of Equipment |
|
|
|
|
|
767 |
|
|
|
866 |
|
Plus
Acquisition Related Working Capital Adjustment |
|
|
|
6,072 |
|
|
|
- |
|
Plus
Refinancing Fees |
|
|
|
|
|
|
606 |
|
|
|
- |
|
Plus
Depreciation and Amortization |
|
|
|
|
|
66,610 |
|
|
|
60,611 |
|
Plus Legal
Settlements |
|
|
|
|
|
|
- |
|
|
|
1,425 |
|
Plus Non
Cash Employee Stock Compensation |
|
|
|
|
5,826 |
|
|
|
7,647 |
|
Adjusted EBITDA(1) |
|
|
|
|
$ |
133,039 |
|
|
$ |
121,679 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PAYOR CLASS BREAKDOWN** |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter |
|
|
|
|
|
|
|
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
Insurance |
|
58.4 |
% |
|
|
|
|
|
|
Medicare |
|
20.2 |
% |
|
|
|
|
|
|
Capitation |
|
11.8 |
% |
|
|
|
|
|
|
Workers
Compensation/Personal Injury |
|
3.6 |
% |
|
|
|
|
|
|
Medicaid |
|
2.8 |
% |
|
|
|
|
|
|
Other |
|
3.1 |
% |
|
|
|
|
|
|
Total |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**Capitation percentage has been calculated based upon its
proportion of Revenue Under Capitation Arrangements in the period
to Service Fee Revenue, Net of Contractual Allowances and
Discounts plus Revenue Under Capitation Arrangements. |
|
|
|
|
|
|
After
deducting the capitation percentage from 100%, all other payor
class percentages are based upon a proportion to global
payments received from consolidated imaging centers from that
periods dates of services and excludes payments from hospital
contracts, Breastlink, imaging center management fees, eRAD,
Imaging on Call and other miscellaneous revenue. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RADNET PAYMENTS BY MODALITY * |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fourth Quarter |
|
Full Year |
|
Full Year |
|
Full Year |
|
Full Year |
|
|
|
2016 |
|
2016 |
|
2015 |
|
2014 |
|
2013 |
|
|
|
|
|
|
|
|
|
|
|
|
|
MRI |
|
34.6 |
% |
|
34.7 |
% |
|
35.3 |
% |
|
36.1 |
% |
|
36.3 |
% |
|
CT |
|
15.5 |
% |
|
15.8 |
% |
|
15.7 |
% |
|
15.3 |
% |
|
15.5 |
% |
|
PET/CT |
|
4.9 |
% |
|
5.0 |
% |
|
5.1 |
% |
|
5.7 |
% |
|
5.6 |
% |
|
X-ray |
|
8.7 |
% |
|
9.3 |
% |
|
9.6 |
% |
|
10.2 |
% |
|
10.5 |
% |
|
Ultrasound |
|
12.0 |
% |
|
12.3 |
% |
|
11.5 |
% |
|
11.1 |
% |
|
11.0 |
% |
|
Mammography |
|
17.8 |
% |
|
16.5 |
% |
|
16.4 |
% |
|
16.5 |
% |
|
15.7 |
% |
|
Nuclear Medicine |
|
1.2 |
% |
|
1.2 |
% |
|
1.3 |
% |
|
1.4 |
% |
|
1.5 |
% |
|
Other |
|
5.2 |
% |
|
5.2 |
% |
|
5.1 |
% |
|
3.7 |
% |
|
3.9 |
% |
|
|
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note |
|
|
|
|
|
|
|
|
|
|
|
* Based
upon global payments received from consolidated Imaging Centers
from that year's dates of service. |
|
|
|
Excludes
payments from hospital contracts, Breastlink, Imaging on Call,
eRAD, Center Management Fees and other miscellaneous operating
activities. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes
(1) The Company defines Adjusted EBITDA as
earnings before interest, taxes, depreciation and amortization,
each from continuing operations and excludes losses or gains on the
disposal of equipment, other income or loss, loss on debt
extinguishments, bargain purchase gains and non-cash equity
compensation. Adjusted EBITDA includes equity earnings in
unconsolidated operations and subtracts allocations of earnings to
non-controlling interests in subsidiaries, and is adjusted for
non-cash and extraordinary events which took place during the
period.
Adjusted EBITDA is reconciled to its nearest
comparable GAAP financial measure. Adjusted EBITDA is a
non-GAAP financial measure used as analytical indicator by RadNet
management and the healthcare industry to assess business
performance, and is a measure of leverage capacity and ability to
service debt. Adjusted EBITDA should not be considered a
measure of financial performance under GAAP, and the items excluded
from Adjusted EBITDA should not be considered in isolation or as
alternatives to net income, cash flows generated by operating,
investing or financing activities or other financial statement data
presented in the consolidated financial statements as an indicator
of financial performance or liquidity. As Adjusted EBITDA is not a
measurement determined in accordance with GAAP and is therefore
susceptible to varying methods of calculation, this metric, as
presented, may not be comparable to other similarly titled measures
of other companies.
(2) As noted above, the Company defines Free
Cash Flow as Adjusted EBITDA less total Capital Expenditures
(whether completed with cash or financed) and Cash Interest
paid. Free Cash Flow is a non-GAAP financial measure.
The Company uses Free Cash Flow because the Company believes it
provides useful information for investors and management because it
measures our capacity to generate cash from our operating
activities. Free Cash Flow does not represent total cash flow since
it does not include the cash flows generated by or used in
financing activities. In addition, our definition of Free Cash Flow
may differ from definitions used by other companies.
Free Cash Flow should not be considered a
measure of financial performance under GAAP, and the items excluded
from Adjusted EBITDA should not be considered in isolation or as
alternatives to net income, cash flows generated by operating,
investing or financing activities or other financial statement data
presented in the consolidated financial statements as an indicator
of financial performance or liquidity. As Adjusted EBITDA is not a
measurement determined in accordance with GAAP and is therefore
susceptible to varying methods of calculation, this metric, as
presented, may not be comparable to other similarly titled measures
of other companies.
CONTACTS:
RadNet, Inc.
Mark Stolper, 310-445-2800
Executive Vice President and Chief Financial Officer
RadNet (NASDAQ:RDNT)
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