RadNet, Inc. (NASDAQ: RDNT), a national
leader in providing high-quality, cost-effective, fixed-site
outpatient diagnostic imaging services through a network of 341
(adjusted for centers added on October 1, 2018 related to the
previously announced Medical Arts Imaging and EmblemHealth
transactions) owned and/or operated outpatient imaging centers,
today reported financial results for its third quarter of 2018.
Dr. Howard Berger, President and Chief Executive
Officer of RadNet, commented, “I am pleased with our results this
quarter. We compared favorably in all metrics relative to last
year’s third quarter. We demonstrated Revenue, Adjusted
EBITDA(1) and earnings growth as well as positive same center
revenue and procedural increases.”
Dr. Berger continued, “Immediately after
quarter-end, we completed two important initiatives that further
our strategy in New York and set the stage for growth in the coming
quarters. First, under a capitation arrangement we announced
in August, we commenced operations on October 1st to provide
imaging to approximately 200,000 members of EmblemHealth’s
AdvantageCare Physicians medical group in Long Island and the
boroughs of New York City. The contract included RadNet
assuming operations in 26 AdvantageCare offices. During this
third quarter, we hired and trained the employees needed to staff
the new offices and procured the equipment necessary to support the
anticipated patient volumes. While capitation has been an
important and successful aspect of our operating strategy in
California, this is our first inroad into risk-based contracting on
the east coast. We are in discussions with other east coast
medical groups and payors about network contracting and population
health opportunities and are very interested in expanding through
managing the imaging for larger patient populations.”
Dr. Berger added, “The second transaction in New
York, the acquisition of Medical Arts Imaging, was completed on
October 1st and expanded our New York metropolitan network into
Nassau and Suffolk counties of Long Island. The ten centers
of Medical Arts are instrumental in providing the capacity and
coverage necessary to effectively service the EmblemHealth
capitated members. Expanding our platform into Long Island
with EmblemHeatlh and Medical Arts has already surfaced additional
opportunities to grow our operations in New York. Launching
this capitation contract and integrating both the Medical Arts and
AdvantageCare locations into the RadNet network will be our primary
area of focus for the remainder of the year.”
Third Quarter Financial
Results
For the third quarter of 2018, RadNet reported
Revenue of $242 million, Adjusted EBITDA(1) of $38.1 million and
Net Income of $5.0 million. Revenue increased $14.5 million
(or 6.4%) and Adjusted EBITDA(1) increased $2.0 million (or 5.5%)
from last year’s same quarter.
Net Income increased $1.8 million over the third
quarter of 2017. Per share Net Income for the third quarter
was $0.10, compared to per share Net Income in the third quarter of
2017 of $0.07 (based upon a weighted average number of diluted
shares outstanding of 48.6 million and 47.6 million for these
periods in 2018 and 2017, respectively).
Affecting Net Income in the third quarter of
2018 were certain non-cash expenses or non-recurring items
including: $1.7 million of non-cash employee stock
compensation expense resulting from the vesting of certain options
and restricted stock; $82,000 of severance paid in connection with
headcount reductions related to cost savings initiatives; $373,000
gain on the sale or disposal of certain capital equipment; and
$977,000 of amortization of deferred financing costs, other
non-cash interest and loan discounts related to our credit
facilities.
For the third quarter of 2018, as compared with
the prior year’s third quarter, MRI volume increased 5.0%, CT
volume increased 7.9% and PET/CT volume increased 14.0%.
Overall volume, taking into account routine imaging exams,
inclusive of x-ray, ultrasound, mammography and other exams,
increased 3.5% over 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 2018 and 2017, MRI volume
increased 0.1%, CT volume increased 1.5% and PET/CT volume
decreased 2.7%. Overall same-center volume, taking into
account routine imaging exams, inclusive of x-ray, ultrasound,
mammography and other exams, increased 0.8% compared with the prior
year’s same quarter.
Nine Month Financial
Results
For the nine months ended September 30, 2018,
RadNet reported Revenue of $717.9 million, Adjusted EBITDA(1) of
$97.3 million and Net Income of $3.1 million. Revenue
increased $31.3 million (or 4.6%), Adjusted EBITDA(1) decreased
$4.5 million (or -4.0%) and Net Income decreased $4.2 million over
the first nine months of 2017 primarily as a result of the severe
weather conditions which materially impact the first quarter
results. Net Income Per Share for the nine month period ended
September 30, 2018 was $0.06 per diluted share, compared to Net
Income of $0.16 per diluted share in corresponding nine month
period of 2017 (based upon a weighted average number of fully
diluted shares outstanding of 48.5 million and 47.2 million for
these periods in 2018 and 2017, respectively).
Affecting operating results in the nine months
ended September 30, 2018 were certain non-cash expenses or
non-recurring items including: $6.6 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; $2.2 gain on the sale of certain capital
equipment; and $2.9 million of amortization of deferred financing
costs, other non-cash interest and loan discounts related to our
credit facilities.
2018 Guidance Update
RadNet reaffirms its previously announced 2018
guidance ranges as follows:
|
|
Total Net Revenue |
$945
million - $970 million |
Adjusted EBITDA(1) |
$140
million - $150 million |
Capital Expenditures (a) |
$60
million - $65 million |
Cash Interest Expense |
$33
million - $38 million |
Free Cash Flow Generation (b) |
$45
million - $55 million |
- Net of proceeds from the sale of equipment, imaging centers and
joint venture interests.
- Defined by the Company as Adjusted EBITDA(1) less total capital
expenditures and cash paid for interest (as adjusted for any
extraordinary dividends from subsidiaries or joint ventures not
captured in Adjusted EBITDA(1)).
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 2018 results on Friday, November 9th, 2018 at 7:30 a.m.
Pacific Time (10:30 a.m. Eastern Time).
Conference Call Details:
Date: Friday, November 9, 2018Time:
10:30 a.m. Eastern TimeDial In-Number:
888-224-1005International Dial-In Number: 323-994-2093
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=132050 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 5971938.
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 341 owned and/or operated outpatient
imaging centers (adjusted for 36 centers acquired on October 1,
2018 related to the Medical Arts Imaging and EmblemHealth
transactions). RadNet's core markets include California, Maryland,
Delaware, New Jersey and New York. 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
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 acquired operations, successfully
achieving 2018 financial guidance, achieving cost savings,
successfully developing and integrating 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 speaks
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.
CONTACTS:
RadNet,
Inc.Mark Stolper,
310-445-2800Executive Vice
President and Chief Financial Officer
RADNET, INC. AND
SUBSIDIARIES |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
(IN THOUSANDS EXCEPT SHARE AND PER SHARE
DATA) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
|
ASSETS |
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
|
$ |
27,227 |
|
|
$ |
51,322 |
|
|
|
Accounts
receivable, net |
|
|
|
|
156,401 |
|
|
|
155,518 |
|
|
|
Due from
affiliates |
|
|
|
|
|
754 |
|
|
|
2,343 |
|
|
|
Prepaid
expenses and other current assets |
|
|
40,135 |
|
|
|
26,168 |
|
|
|
Assets held
for sale |
|
|
|
|
|
2,499 |
|
|
|
- |
|
|
|
|
Total current
assets |
|
|
|
|
227,016 |
|
|
|
235,351 |
|
|
PROPERTY AND EQUIPMENT, NET |
|
|
|
285,787 |
|
|
|
244,301 |
|
|
OTHER ASSETS |
|
|
|
|
|
|
|
|
|
Goodwill |
|
|
|
|
|
274,361 |
|
|
|
256,776 |
|
|
|
Other
intangible assets |
|
|
|
|
39,010 |
|
|
|
40,422 |
|
|
|
Deferred
financing costs |
|
|
|
|
1,489 |
|
|
|
1,895 |
|
|
|
Investment
in joint ventures |
|
|
|
42,199 |
|
|
|
52,435 |
|
|
|
Deferred
tax assets, net of current portion |
|
|
23,040 |
|
|
|
30,852 |
|
|
|
Deposits
and other |
|
|
|
|
|
17,740 |
|
|
|
6,947 |
|
|
|
|
Total assets |
|
|
|
|
$ |
910,642 |
|
|
$ |
868,979 |
|
|
LIABILITIES AND EQUITY |
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
|
Accounts
payable, accrued expenses and other |
$ |
150,146 |
|
|
$ |
135,809 |
|
|
|
Due to
affiliates |
|
|
|
|
|
14,192 |
|
|
|
16,387 |
|
|
|
Deferred
revenue |
|
|
|
|
|
2,959 |
|
|
|
2,606 |
|
|
|
Current
portion of deferred rent |
|
|
|
2,720 |
|
|
|
2,714 |
|
|
|
Current
portion of notes payable |
|
|
30,118 |
|
|
|
30,224 |
|
|
|
Current
portion of obligations under capital leases |
|
3,258 |
|
|
|
3,866 |
|
|
|
|
Total current
liabilities |
|
|
|
|
203,393 |
|
|
|
191,606 |
|
|
LONG-TERM LIABILITIES |
|
|
|
|
|
|
|
|
Deferred
rent, net of current portion |
|
|
28,642 |
|
|
|
26,251 |
|
|
|
Notes
payable, net of current portion |
|
|
549,802 |
|
|
|
572,365 |
|
|
|
Obligations
under capital lease, net of current portion |
|
3,162 |
|
|
|
2,672 |
|
|
|
Other
non-current liabilities |
|
|
|
4,356 |
|
|
|
6,160 |
|
|
|
|
Total
liabilities |
|
|
|
|
|
789,355 |
|
|
|
799,054 |
|
|
EQUITY |
|
|
|
|
|
|
|
|
|
|
RadNet,
Inc. stockholders' equity: |
|
|
|
|
|
|
Common
stock - $.0001 par value, 200,000,000 shares authorized; |
|
|
|
|
|
|
48,334,925, and
47,723,915 shares issued and outstanding at |
|
|
|
|
|
|
|
|
|
|
|
September
30, 2018 and December 31, 2017, respectively |
|
5 |
|
|
|
5 |
|
|
|
Additional
paid-in-capital |
|
|
|
|
237,072 |
|
|
|
212,261 |
|
|
|
Accumulated
other comprehensive income (loss) |
|
4,276 |
|
|
|
(548 |
) |
|
|
Accumulated
deficit |
|
|
|
|
|
(147,051 |
) |
|
|
(150,158 |
) |
|
|
|
Total
RadNet, Inc.'s stockholders' equity |
|
|
94,302 |
|
|
|
61,560 |
|
|
|
Noncontrolling interests |
|
|
|
|
26,985 |
|
|
|
8,365 |
|
|
|
|
Total
equity |
|
|
|
|
|
121,287 |
|
|
|
69,925 |
|
|
|
|
Total
liabilities and equity |
|
|
$ |
910,642 |
|
|
$ |
868,979 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RADNET, INC. AND
SUBSIDIARIES |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
(IN THOUSANDS EXCEPT SHARE DATA) |
|
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
|
|
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
NET
REVENUE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service fee
revenue, net of contractual allowances and discounts |
|
|
$ |
211,313 |
|
|
|
|
$ |
638,119 |
|
|
|
|
|
Provision
for bad debts |
|
|
|
|
|
|
|
(11,687 |
) |
|
|
|
|
(35,187 |
) |
|
|
|
|
Net service
fee revenue |
|
|
|
|
$ |
217,552 |
|
|
|
199,626 |
|
|
$ |
641,136 |
|
|
|
602,932 |
|
|
|
|
|
Revenue
under capitation arrangements |
|
|
|
24,596 |
|
|
|
27,981 |
|
|
|
76,799 |
|
|
|
83,702 |
|
|
|
|
|
|
Total net
revenue |
|
|
|
|
242,148 |
|
|
|
227,607 |
|
|
|
717,935 |
|
|
|
686,634 |
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
operations, excluding depreciation and amortization |
|
|
208,511 |
|
|
|
198,109 |
|
|
|
634,200 |
|
|
|
602,174 |
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
17,480 |
|
|
|
17,053 |
|
|
|
53,422 |
|
|
|
50,319 |
|
|
|
|
|
(Gain) loss
on sale and disposal of equipment |
|
|
|
(373 |
) |
|
|
420 |
|
|
|
(2,204 |
) |
|
|
828 |
|
|
|
|
|
Severance
costs |
|
|
|
|
|
82 |
|
|
|
1,186 |
|
|
|
1,087 |
|
|
|
1,566 |
|
|
|
|
|
|
Total
operating expenses |
|
|
|
225,700 |
|
|
|
216,768 |
|
|
|
686,505 |
|
|
|
654,887 |
|
|
|
INCOME FROM OPERATIONS |
|
|
|
|
16,448 |
|
|
|
10,839 |
|
|
|
31,430 |
|
|
|
31,747 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME AND EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense |
|
|
|
|
|
10,663 |
|
|
|
10,169 |
|
|
|
31,343 |
|
|
|
30,712 |
|
|
|
|
|
Equity in
earnings of joint ventures |
|
|
|
|
(2,822 |
) |
|
|
(3,450 |
) |
|
|
(9,547 |
) |
|
|
(8,372 |
) |
|
|
|
|
Gain on
sale of imaging centers |
|
|
|
|
- |
|
|
|
(845 |
) |
|
|
- |
|
|
|
(3,146 |
) |
|
|
|
|
Other
expenses (income) |
|
|
|
|
|
7 |
|
|
|
4 |
|
|
|
13 |
|
|
|
(236 |
) |
|
|
|
|
|
Total other
expenses |
|
|
|
|
7,848 |
|
|
|
5,878 |
|
|
|
21,809 |
|
|
|
18,958 |
|
|
|
INCOME BEFORE INCOME TAXES |
|
|
|
|
8,600 |
|
|
|
4,961 |
|
|
|
9,621 |
|
|
|
12,789 |
|
|
|
|
|
Provision
for income taxes |
|
|
|
|
(2,827 |
) |
|
|
(1,112 |
) |
|
|
(2,835 |
) |
|
|
(4,177 |
) |
|
|
NET
INCOME |
|
|
|
|
|
|
5,773 |
|
|
|
3,849 |
|
|
|
6,786 |
|
|
|
8,612 |
|
|
|
|
|
Net income
attributable to noncontrolling interests |
|
|
734 |
|
|
|
623 |
|
|
|
3,679 |
|
|
|
1,286 |
|
|
|
NET
INCOME ATTRIBUTABLE TO RADNET,
INC. |
|
|
|
|
|
|
|
|
|
|
|
|
COMMON STOCKHOLDERS |
|
|
|
$ |
5,039 |
|
|
$ |
3,226 |
|
|
$ |
3,107 |
|
|
$ |
7,326 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BASIC NET INCOME
PER SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATTRIBUTABLE TO RADNET, INC. COMMON
STOCKHOLDERS |
$ |
0.10 |
|
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
0.16 |
|
|
|
DILUTED NET INCOME PER
SHARE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ATTRIBUTABLE TO RADNET, INC. COMMON
STOCKHOLDERS |
$ |
0.10 |
|
|
$ |
0.07 |
|
|
$ |
0.06 |
|
|
$ |
0.16 |
|
|
|
WEIGHTED AVERAGE SHARES OUTSTANDING |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
|
|
|
|
48,010,726 |
|
|
|
46,953,705 |
|
|
|
47,937,215 |
|
|
|
46,760,583 |
|
|
|
|
|
Diluted |
|
|
|
|
|
|
48,615,392 |
|
|
|
47,577,750 |
|
|
|
48,481,305 |
|
|
|
47,239,360 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RADNET, INC. AND
SUBSIDIARIES |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(IN THOUSANDS) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
$ |
6,786 |
|
|
$ |
8,612 |
|
|
|
|
Adjustments to reconcile net income |
|
|
|
|
|
|
|
to net cash provided by operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
53,422 |
|
|
|
50,319 |
|
|
|
|
Provision for bad debts |
|
|
- |
|
|
|
35,187 |
|
|
|
|
Equity in earnings of joint ventures |
|
|
(9,547 |
) |
|
|
(8,372 |
) |
|
|
|
Distributions from joint ventures |
|
|
21,783 |
|
|
|
6,785 |
|
|
|
|
Amortization deferred financing costs and loan
discount |
|
|
2,924 |
|
|
|
2,509 |
|
|
|
|
(Gain) loss on sale and disposal of equipment |
|
|
(2,204 |
) |
|
|
828 |
|
|
|
|
Gain on sale of imaging centers |
|
|
- |
|
|
|
(3,146 |
) |
|
|
|
Stock-based compensation |
|
|
6,557 |
|
|
|
5,842 |
|
|
|
|
Non cash severance |
|
|
- |
|
|
|
1,047 |
|
|
|
|
Changes in operating assets and liabilities, net of
assets |
|
|
|
|
|
|
|
acquired and liabilities assumed in purchase
transactions: |
|
|
|
|
|
|
|
Accounts receivable |
|
|
(9,641 |
) |
|
|
(38,770 |
) |
|
|
|
Other current assets |
|
|
(5,680 |
) |
|
|
2,981 |
|
|
|
|
Other assets |
|
|
(1,209 |
) |
|
|
309 |
|
|
|
|
Deferred taxes |
|
|
1,531 |
|
|
|
2,031 |
|
|
|
|
Deferred rent |
|
|
2,397 |
|
|
|
2,137 |
|
|
|
|
Deferred revenue |
|
|
353 |
|
|
|
428 |
|
|
|
|
Accounts payable, accrued expenses
and other |
|
|
20,386 |
|
|
|
6,857 |
|
|
|
|
Net cash provided by operating
activities |
|
|
87,858 |
|
|
|
75,584 |
|
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES |
|
|
|
|
|
|
|
Purchase of imaging facilities |
|
|
(17,393 |
) |
|
|
(22,904 |
) |
|
|
|
Investment at cost |
|
|
(2,200 |
) |
|
|
(500 |
) |
|
|
|
Purchase of property and equipment |
|
|
(62,595 |
) |
|
|
(52,807 |
) |
|
|
|
Proceeds from sale of equipment |
|
|
2,587 |
|
|
|
571 |
|
|
|
|
Proceeds from sale of imaging and medical practice
assets |
|
|
- |
|
|
|
8,429 |
|
|
|
|
Cash distribution from new JV partner |
|
|
|
|
|
|
|
- |
|
|
|
1,473 |
|
|
|
|
Equity contributions in existing and purchase of interest in
joint ventures |
|
|
|
|
|
|
|
(2,000 |
) |
|
|
(80 |
) |
|
|
|
Net
cash used in investing activities |
|
|
|
|
|
(81,601 |
) |
|
|
(65,818 |
) |
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES |
|
|
|
|
|
|
|
Principal payments on notes and leases payable |
|
|
(4,374 |
) |
|
|
(5,297 |
) |
|
|
|
Proceeds from borrowings |
|
|
- |
|
|
|
170,000 |
|
|
|
|
Payments on Term Loan Debt |
|
|
|
|
|
|
|
(24,810 |
) |
|
|
(188,396 |
) |
|
|
|
Distributions paid to noncontrolling interests |
|
|
(913 |
) |
|
|
(1,065 |
) |
|
|
|
Deferred financing costs and debt discount |
|
|
- |
|
|
|
(5,067 |
) |
|
|
|
Proceeds from sale of noncontrolling interest, net of
taxes |
|
|
- |
|
|
|
7,726 |
|
|
|
|
Contributions from noncontrolling partners |
|
|
- |
|
|
|
125 |
|
|
|
|
Purchase of non-controlling interests |
|
|
(200 |
) |
|
|
- |
|
|
|
|
Proceeds from revolving credit facility |
|
|
44,000 |
|
|
|
139,400 |
|
|
|
|
Payments on revolving credit facility |
|
|
(44,000 |
) |
|
|
(139,400 |
) |
|
|
|
Proceeds from issuance of common stock upon exercise of
options |
|
|
10 |
|
|
|
- |
|
|
|
|
Net
cash used in financing activities |
|
|
|
|
|
(30,287 |
) |
|
|
(21,974 |
) |
|
|
EFFECT OF EXCHANGE RATE CHANGES
ON CASH |
|
|
(65 |
) |
|
|
38 |
|
|
|
NET DECREASE IN CASH AND CASH
EQUIVALENTS |
|
|
(24,095 |
) |
|
|
(12,170 |
) |
|
|
CASH AND CASH EQUIVALENTS,
beginning of period |
|
|
51,322 |
|
|
|
20,638 |
|
|
|
CASH AND CASH EQUIVALENTS, end
of period |
|
$ |
27,227 |
|
|
$ |
8,468 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION |
|
|
|
|
|
|
|
Cash paid during the period for interest |
|
$ |
27,136 |
|
|
$ |
29,134 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RADNET,
INC.RECONCILIATION OF GAAP NET INCOME (LOSS)
ATTRIBUTABLE TO RADNET, INC. COMMON SHAREHOLDERS TO ADJUSTED
EBITDA(1)(IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to RadNet, Inc. Common Shareholders |
|
$ |
5,039 |
|
|
$ |
3,226 |
|
|
Plus
Interest Expense |
|
|
|
|
|
10,663 |
|
|
|
10,169 |
|
|
Plus
Provision for Income Taxes |
|
|
|
|
2,827 |
|
|
|
1,112 |
|
|
Plus
Depreciation and Amortization |
|
|
|
|
17,480 |
|
|
|
17,053 |
|
|
Plus (Gain)
Loss on Sale of Equipment |
|
|
|
|
(373 |
) |
|
|
420 |
|
|
Plus
Severance Costs |
|
|
|
|
|
82 |
|
|
|
1,186 |
|
|
Plus Other
Expenses |
|
|
|
|
|
|
7 |
|
|
|
4 |
|
|
Plus
Non-Cash Employee Stock-Based Compensation |
|
|
1,667 |
|
|
|
1,528 |
|
|
Plus
Transaction Costs - EmblemHealth/ACP |
|
|
|
681 |
|
|
|
- |
|
|
Plus Fees
Related to Term Loan Refinancing |
|
|
|
- |
|
|
|
235 |
|
|
Plus
Expenses of Divested/Closed Operations |
|
|
|
- |
|
|
|
1,986 |
|
|
Less Gain
on Sale of Imaging Centers |
|
|
|
|
- |
|
|
|
(845 |
) |
|
|
Adjusted EBITDA(1) |
|
|
|
$ |
38,073 |
|
|
$ |
36,074 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended |
|
|
|
|
|
|
|
|
September 30, |
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
Attributable to RadNet, Inc. Common Shareholders |
|
$ |
3,107 |
|
|
$ |
7,326 |
|
|
Plus
Interest Expense |
|
|
|
|
|
31,343 |
|
|
|
30,712 |
|
|
Plus
Provision for Income Taxes |
|
|
|
|
2,835 |
|
|
|
4,177 |
|
|
Plus
Depreciation and Amortization |
|
|
|
|
53,422 |
|
|
|
50,319 |
|
|
Plus (Gain)
Loss on Sale of Equipment |
|
|
|
|
(2,204 |
) |
|
|
828 |
|
|
Plus
Severance Costs |
|
|
|
|
|
1,087 |
|
|
|
1,566 |
|
|
Plus Other
Expenses |
|
|
|
|
|
|
13 |
|
|
|
14 |
|
|
Plus
Non-Cash Employee Stock-Based Compensation |
|
|
6,557 |
|
|
|
5,842 |
|
|
Plus
Transaction Costs - EmblemHealth/ACP |
|
|
|
681 |
|
|
|
|
Plus Fees
Related to Term Loan Refinancing |
|
|
|
- |
|
|
|
235 |
|
|
Plus
Expenses of Divested/Closed Operations |
|
|
|
- |
|
|
|
3,186 |
|
|
Plus
Reimbursable Legal Expenses |
|
|
|
|
- |
|
|
|
723 |
|
|
Plus Gain
on Sale of Equipment Attributable to Noncontrolling Interest |
|
440 |
|
|
|
- |
|
|
Less Gain
on Sale of Imaging Centers |
|
|
|
|
- |
|
|
|
(3,146 |
) |
|
|
Adjusted EBITDA(1) |
|
|
|
$ |
97,281 |
|
|
$ |
101,782 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PAYOR CLASS BREAKDOWN** |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
|
|
|
|
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial
Insurance |
|
59.8 |
% |
|
|
|
|
|
|
Medicare |
|
20.4 |
% |
|
|
|
|
|
|
Capitation |
|
10.2 |
% |
|
|
|
|
|
|
Workers
Compensation/Personal Injury |
|
2.7 |
% |
|
|
|
|
|
|
Medicaid |
|
3.7 |
% |
|
|
|
|
|
|
Other |
|
3.3 |
% |
|
|
|
|
|
|
Total |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
**Calculated as percentages of global payments received from
consolidated imaging centers from that periods dates of
services and excludes payments from hospital contracts, Breastlink
operations, imaging center management fees, eRAD, Imaging on
Call and other miscellaneous revenue. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RADNET PAYMENTS BY MODALITY * |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Third Quarter |
|
Full Year |
|
Full Year |
|
Full Year |
|
|
|
2018 |
|
|
2017 |
|
|
2016 |
|
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
MRI |
|
35.0 |
% |
|
34.9 |
% |
|
34.7 |
% |
|
35.3 |
% |
|
CT |
|
16.7 |
% |
|
16.2 |
% |
|
15.8 |
% |
|
15.7 |
% |
|
PET/CT |
|
5.8 |
% |
|
5.2 |
% |
|
5.0 |
% |
|
5.1 |
% |
|
X-ray |
|
9.1 |
% |
|
8.9 |
% |
|
9.3 |
% |
|
9.6 |
% |
|
Ultrasound |
|
12.1 |
% |
|
12.1 |
% |
|
12.3 |
% |
|
11.5 |
% |
|
Mammography |
|
15.3 |
% |
|
16.3 |
% |
|
16.5 |
% |
|
16.4 |
% |
|
Nuclear Medicine |
|
1.2 |
% |
|
1.1 |
% |
|
1.2 |
% |
|
1.3 |
% |
|
Other |
|
4.9 |
% |
|
5.2 |
% |
|
5.2 |
% |
|
5.1 |
% |
|
|
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note |
|
|
|
|
|
|
|
|
|
* Based
upon global payments received from consolidated Imaging Centers
from that period'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 adjusted for losses or gains on
the sale of equipment, other income or loss, transaction expenses,
debt extinguishments 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 or
extraordinary and one-time events taken 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.
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