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
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