COEUR D'ALENE, Idaho, March 9 /PRNewswire-FirstCall/ -- NightHawk
Radiology Holdings, Inc. (NASDAQ:NHWK), a leading provider of
nighttime and weekend emergency radiology services to radiology
groups across the United States, today announced its financial
results for the fourth quarter and full-year ended December 31,
2005. The company reported significantly higher revenues and
operating income for both the quarter and the year compared to the
comparable periods in 2004. "Our strong financial results in both
the fourth quarter and the year, including record annual revenues
and operating income, demonstrate the growing need for
teleradiology services in today's marketplace," said Dr. Paul
Berger, chairman and chief executive officer. "We believe we are
leading a significant transformation in the professional practice
of radiology by combining proprietary workflow technology and
outstanding U.S. board certified radiologists to create significant
efficiencies in, and quality of, patient care. Combining this
platform with the low growth in the number of U.S. radiologists and
the high growth of the high-tech imaging market has allowed
NightHawk to develop an extensive customer base and to build a
service offering that is second to none in our industry. These
factors have fueled our growth to date and will also be the driving
force of our success in the upcoming year." Fourth Quarter Results
For the fourth quarter ended December 31, 2005, revenue increased
59% to $18.5 million compared with $11.6 million for the fourth
quarter of 2004. This produced operating income of $5.2 million
during the quarter compared to $2.7 million in the fourth quarter
of 2004, an increase of 90%. For the fourth quarter ended December
31, 2005 our adjusted net income was $3.1 million, or $0.13 per
diluted share, a 53% increase over fourth quarter 2004 adjusted net
income of $2.0 million, or $0.09 per diluted share. Our adjusted
net income excludes the effects of the following non-cash items:
the change in the fair value of the conversion feature in the
company's redeemable preferred stock, preferred stock accretion,
preferred stock dividends and stock compensation (net of tax
effect). Net loss under GAAP for the fourth quarter of 2005, which
included an $11.6 million charge resulting from a change in the
fair value of the conversion feature in the company's redeemable
preferred stock, was $9.1 million, or ($0.52) per share, compared
with a GAAP net loss of $26 thousand, for the fourth quarter of
2004. A reconciliation of our adjusted net income to our GAAP net
income is included in the tables attached to this press release and
on our corporate website under the heading investor relations.
During the fourth quarter, cash flow from operations increased 163%
to $6.1 million compared to $2.3 million in the fourth quarter of
2004. Full-Year Results For the year ended December 31, 2005,
revenue increased 63% to $64.1 million compared with $39.3 million
for the same period of 2004. This produced operating income of
$17.3 million during the year compared to $11.7 million in the
prior year, an increase of 48%. For the year ended December 31,
2005, our adjusted net income was $12.3 million, or $0.51 per
diluted share, representing a 50% increase over the prior year of
$8.2 million, or $0.28 per diluted share. Our adjusted net income
excludes the effects of the following non-cash items: the change in
the fair value of the conversion feature in the company's
redeemable preferred stock, preferred stock accretion, preferred
dividends and stock compensation (net of tax). Net loss under GAAP
for the full-year 2005, which included a $39.7 million charge
resulting from the change in the fair value of the conversion
feature in the company's redeemable preferred stock, was $36.5
million, or ($2.11) per share, compared with net income of $2.6
million, or $0.11 per share, in 2004. A reconciliation of our
adjusted net income to our GAAP net income is included in the
tables attached to this press release and on our corporate website
under the heading investor relations. Cash flow from operations in
2005 increased 20% to $12.3 million from $10.2 million in 2004.
Commenting on the company's full-year results, Dr. Berger said,
"2005 was a very strong year. We grew sales 63% year-over-year,
added 166 new customers and increased our staff of highly qualified
radiologists by 20. At the end of the year we were providing
services to 463 customers serving 860 hospitals, which equates to
approximately 15% of all hospitals in the U.S. We are providing a
vital service that our customers need, and we're doing it very
efficiently with state-of-the-art technology. This translated into
an excellent financial performance for the company in 2005." Change
in Fair Value of Redeemable Preferred Stock As described more fully
in the company's registration statement and prospectus filed with
the Securities and Exchange Commission, NightHawk had entered into
a stockholders agreement with the holders of its Series A preferred
stock pursuant to which it had agreed to repurchase all or any
portion of the shares of redeemable preferred stock. This feature,
along with the conversion feature of the preferred stock, was
considered an embedded derivative under SFAS No. 133. The company
adjusted the carrying value of the embedded derivative to the
estimated fair value and recognized the change in such estimated
value in its consolidated statement of operations. The company has
incurred charges for this expense up to the date of its IPO on
February 9, 2006. These charges, along with preferred stock
accretion and preferred dividends, are non-cash in nature and
terminated upon the IPO. Initial Public Offering On February 9,
2006, the company completed an initial public offering of 5.8
million shares at a price of $16 per share. NightHawk received cash
proceeds of approximately $86.3 million from the offering, a
portion of which was used to repay outstanding debt and interest of
$30.1 million. The remainder is available for general corporate
purposes and to help fund the company's growth strategy, which
includes (1) the expansion of the company's core service offerings,
(2) the possible acquisitions of complementary businesses, and (3)
the expansion of the company's services to further support
radiologists in their practices and improve the quality of care for
their patients. Outlook Dr. Berger concluded, "We are delighted
with our operational and financial success in 2005. Our goal is to
continue to build upon our position as the leading U.S. off-hours
emergency radiology services provider by growing beyond nighttime
and weekend hours. Our operating model, customer base, and group of
outstanding radiologists provide a strong foundation from which to
extend the same efficiencies and quality of care to daytime
services. In addition, as a result of our IPO in early February, we
now have the resources to expand the scope of our service and
support offerings in order to drive further revenue and earnings
growth." Conference Call & Webcast A conference call will be
held today, Thursday, March 9, 2006 at 11:00 a.m. (ET). A live
webcast of the conference call as well as a replay will be
available online on the company's corporate Web site at
http://www.nighthawkrad.net/ . Participants can also access the
call by dialing 800-257-1836 (within the United States and Canada),
or 303-262-2194 (international callers). A replay of the call will
be available approximately two hours after the call has ended and
will be available until 11:59 p.m. (CT) on Thursday, March 23,
2006. To access the replay, dial 800-405-2236 (within the United
States and Canada), or 303-590-3000 (international callers) and
enter the conference ID number: 11055405. About NightHawk
NightHawk, headquartered in Coeur d'Alene, Idaho, is a leading
provider of nighttime and weekend emergency radiology services to
radiology groups across the United States. Its team of
highly-qualified, U.S. state-licensed and hospital-privileged
radiologists use its proprietary workflow technology to provide
radiology group customers in the United States radiological
interpretations primarily from centralized reading facilities
located in Sydney, Australia and Zurich, Switzerland.
Forward-Looking Statements This press release contains statements
that are forward-looking statements as defined within the Private
Securities Litigation Reform Act of 1995. These include statements
regarding the company's growth strategy, the expansion of its
current service offerings, and the possibility of acquisitions of
complementary businesses. These forward-looking statements are
subject to risks and uncertainties that could cause actual results
to differ materially from the statements made, including the risks
associated with general economic conditions, competitive conditions
in the radiology industry, and regulatory risks. Other factors that
could cause operating and financial results to differ are described
in the company's prospectus filed with the Securities and Exchange
Commission on February 9, 2006. Other risks may be detailed from
time to time in reports to be filed with the SEC. NightHawk does
not undertake any obligation to publicly update its forward-looking
statements based on events or circumstances after the date hereof.
Adjusted net income as described in this release and in the
attached financial statement tables is not a measure of financial
performance under generally accepted accounting principles (GAAP)
and should not be considered a substitute for or superior to GAAP
net income. Management believes the non- GAAP results provide
useful information to both management and investors by excluding
certain expenses that may not be indicative of our core results and
provides for consistency in financial reporting. We provide these
non-GAAP financial measures because we believe they provide greater
transparency with respect to supplemental information used by
management in its financial and operational decision making.
Specifically, these non-GAAP measures are provided to enhance
investor's overall understanding of our current financial
performance and our future prospects. For reconciliation of
adjusted net income to GAAP net income, please refer to the
information included in the attached tables of this press release
and on our corporate website under the heading investor relations.
Financial Statements to follow: CONSOLIDATED BALANCE SHEETS
December 31, December 31, ASSETS 2004 2005 (unaudited) (unaudited)
Current assets: Cash and cash equivalents $5,813,861 $12,610,487
Trade accounts receivable, net 6,072,502 10,485,571 Deferred income
taxes - 19,839 Prepaids and other current assets 340,513 2,164,126
Total current assets 12,226,876 25,280,023 Property and equipment,
net 3,042,598 5,079,280 Goodwill 954,788 1,335,788 Intangible
assets, net 1,004,322 3,431,418 Other assets, net 33,746 409,253
Total $17,262,330 $35,535,762 LIABILITIES Current liabilities:
Accounts payable and accrued expenses $3,194,066 $5,502,977
Dividends declared - 7,000,000 Accrued payroll and related benefits
1,844,179 2,366,430 Accrued interest payable 248,219 424,601
Acquisition consideration payable 500,000 - Deferred income taxes
25,334 - Long-term debt, due within one year 2,250,000 6,229,991
Total current liabilities 8,061,798 21,523,999 Long-term debt
9,750,000 17,773,438 Fair value of redeemable preferred stock
conversion feature 5,527,777 45,256,250 Deferred income taxes
128,846 630,303 Total liabilities 23,468,421 85,183,990 Redeemable
common stock 4,408,394 15,356,253 Redeemable convertible preferred
stock 12,094,465 13,156,916 STOCKHOLDERS' EQUITY (DEFICIT): Common
stock- 40,000,000 shares authorized; $.001 par value; 15,522,867
and 15,838,139 shares issued and outstanding at December 31, 2004
and December 31, 2005, respectively 15,523 15,838 Additional
paid-in capital 2,916,406 9,434,351 Retained earnings (deficit)
(25,640,879) (87,611,586) Total stockholders' equity (deficit)
(22,708,950) (78,161,397) Total $17,262,330 $35,535,762
CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended Twelve
months ended December 31, December 31, 2004 2005 2004 2005
(Unaudited) (Unaudited) Service revenue $11,609,372 $18,473,941
$39,283,002 $64,061,528 Operating costs and expenses: Professional
services (includes non- cash compensation expense of $687,714,
$394,363, $1,544,781 and $916,170) 4,781,511 6,604,962 15,049,399
22,401,184 Sales, general, and administrative (includes non- cash
compensation expense of $109,521, $97,955, $144,822 and $3,273,018)
3,908,919 6,193,385 11,991,386 22,988,027 Depreciation and
amortization 207,229 521,159 528,126 1,350,536 Total operating
costs and expenses 8,897,659 13,319,506 27,568,911 46,739,747
Operating income 2,711,713 5,154,435 11,714,091 17,321,781 Other
income (expense): Interest expense (275,740) (455,069) (880,671)
(1,178,323) Interest income 21,016 32,837 40,835 67,072 Other, net
23,100 9,668 (28,953) (51,147) Change in fair value of redeemable
preferred stock conversion feature (1,290,509) (11,618,750)
(3,857,500) (39,728,473) Total other income (expense) (1,522,133)
(12,031,314) (4,726,289) (40,890,871) Income (loss) before income
taxes 1,189,580 (6,876,879) 6,987,802 (23,569,090) Income tax
expense 957,226 1,961,282 3,662,563 6,391,302 Net income (loss)
232,354 (8,838,161) 3,325,239 (29,960,392) Redeemable preferred
stock accretion (258,894) (272,440) (764,742) (1,062,451) Preferred
dividends (5,486,555) Income (loss) applicable to common
stockholders $(26,540) $(9,110,601) $2,560,497 $(36,509,398)
Earnings (loss) per common share: Basic and diluted $(0.002)
$(0.52) $0.11 $(2.11) Weighted averages of common shares
outstanding: Basic and diluted 16,907,329 17,509,558 24,196,437
17,273,970 CONSOLIDATED STATEMENTS OF OPERATIONS RECONCILIATION
BETWEEN GAAP AND ADJUSTED NET INCOME (LOSS) Three months ended
December 31, 2004 (unaudited) GAAP Adjustments As Adjusted Service
revenue $11,609,372 $11,609,372 Operating costs and expenses:
Professional services (includes non-cash compensation expense of
$687,714 and $394,363) 4,781,511 $(687,714) 4,093,797 Sales,
general, and administrative (includes non- cash compensation
expense of $109,521 and $97,955) 3,908,919 (109,521) 3,799,398
Depreciation and amortization 207,229 207,229 Total operating costs
and expenses 8,897,659 (797,235) 8,100,424 Operating income
2,711,713 797,235 3,508,948 Other income (expense): Interest
expense (275,740) (275,740) Interest income 21,016 21,016 Other,
net 23,100 23,100 Change in fair value of redeemable preferred
stock conversion feature (1,290,509) 1,290,509 Total other income
(expense) (1,522,133) 1,290,509 (231,624) Income (loss) before
income taxes 1,189,580 2,087,744 3,277,324 Income tax expense
957,226 310,922 1,268,148 Net income (loss) 232,354 1,776,822
2,009,176 Redeemable preferred stock accretion (258,894) 258,894
Income (loss) applicable to common stockholders $(26,540)
$2,035,716 $2,009,176 Earnings (loss) per share: Basic $(0.00)
$0.12 Diluted $(0.00) $0.09 Weighted average shares outstanding:
Basic 16,907,329 16,907,329 Diluted 16,907,329 23,407,332 Three
months ended December 31, 2005 (unaudited) GAAP Adjustments As
Adjusted Service revenue $18,473,941 $18,473,941 Operating costs
and expenses: Professional services (includes non-cash compensation
expense of $687,714 and $394,363) 6,604,962 $(394,363) 6,210,599
Sales, general, and administrative (includes non-cash compensation
expense of $109,521 and $97,955) 6,193,385 (97,955) 6,095,430
Depreciation and amortization 521,159 521,159 Total operating costs
and expenses 13,319,506 (492,318) 12,827,188 Operating income
5,154,435 492,318 5,646,753 Other income (expense): Interest
expense (455,069) (455,069) Interest income 32,837 32,837 Other,
net 9,668 9,668 Change in fair value of redeemable preferred stock
conversion feature (11,618,750) 11,618,750 Total other income
(expense) (12,031,314) 11,618,750 (412,564) Income (loss) before
income taxes (6,876,879) 12,111,068 5,234,189 Income tax expense
1,961,282 192,004 2,153,286 Net income (loss) (8,838,161)
11,919,064 3,080,903 Redeemable preferred stock accretion (272,440)
272,440 Income (loss) applicable to common stockholders
$(9,110,601) $12,191,504 $3,080,903 Earnings (loss) per share:
Basic $(0.52) $0.18 Diluted $(0.52) $0.13 Weighted average shares
outstanding: Basic 17,509,558 17,509,558 Diluted 17,509,558
24,415,664 CONSOLIDATED STATEMENTS OF OPERATIONS RECONCILIATION
BETWEEN GAAP AND ADJUSTED NET INCOME (LOSS) Twelve months ended
December 31, 2004 (unaudited) GAAP Adjustments As Adjusted Service
revenue $39,283,002 $39,283,002 Operating costs and expenses:
Professional services (includes non-cash compensation expense of
$1,544,781 and $916,170) 15,049,399 $(1,544,781) 13,504,618 Sales,
general, and administrative (includes non-cash compensation expense
of $144,822 and $3,273,018) 11,991,386 (144,822) 11,846,564
Depreciation and amortization 528,126 528,126 Total operating costs
and expenses 27,568,911 (1,689,603) 25,879,308 Operating income
11,714,091 1,689,603 13,403,694 Other income (expense): Interest
expense (880,671) (880,671) Interest income 40,835 40,835 Other,
net (28,953) (28,953) Change in fair value of redeemable preferred
stock conversion feature (3,857,500) 3,857,500 Total other income
(expense) (4,726,289) 3,857,500 (868,789) Income (loss) before
income taxes 6,987,802 5,547,103 12,534,905 Income tax expense
3,662,563 658,945 4,321,508 Net income (loss) 3,325,239 4,888,158
8,213,397 Redeemable preferred stock accretion (764,742) 764,742
Preferred dividends Income (loss) applicable to common stockholders
$2,560,497 $5,652,900 $8,213,397 Earnings (loss) per share: Basic
$0.11 $0.34 Diluted $0.11 $0.28 Weighted average shares
outstanding: Basic 24,196,437 24,196,437 Diluted 24,196,437
29,071,440 Twelve months ended December 31, 2005 (unaudited) GAAP
Adjustments As Adjusted Service revenue $64,061,528 $64,061,528
Operating costs and expenses: Professional services (includes
non-cash compensation expense of $1,544,781 and $916,170)
22,401,184 $(916,170) 21,485,014 Sales, general, and administrative
(includes non-cash compensation expense of $144,822 and $3,273,018)
22,988,027 (3,273,018) 19,715,009 Depreciation and amortization
1,350,536 1,350,536 Total operating costs and expenses 46,739,747
(4,189,188) 42,550,559 Operating income 17,321,781 4,189,188
21,510,969 Other income (expense): Interest expense (1,178,323)
(1,178,323) Interest income 67,072 67,072 Other, net (51,147)
(51,147) Change in fair value of redeemable preferred stock
conversion feature (39,728,473) 39,728,473 Total other income
(expense) (40,890,871) 39,728,473 (1,162,398) Income (loss) before
income taxes (23,569,090) 43,917,661 20,348,571 Income tax expense
6,391,302 1,633,783 8,025,085 Net income (loss) (29,960,392)
42,283,878 12,323,486 Redeemable preferred stock accretion
(1,062,451) 1,062,451 Preferred dividends (5,486,555) 5,486,555
Income (loss) applicable to common stockholders $(36,509,398)
$48,832,884 $12,323,486 Earnings (loss) per share: Basic $(2.11)
$0.71 Diluted $(2.11) $0.51 Weighted average shares outstanding:
Basic 17,273,970 17,273,970 Diluted 17,273,970 23,967,786 Media
inquiries: Lonny White or Elizabeth Scanlon Scanlon Corporate
Communications 312-372-4400 Investor inquiries: Andrea Clegg
NightHawk Radiology Holdings, Inc. 866-402-4295 or 208-292-2818
"NHWKF" DATASOURCE: NightHawk Radiology Holdings, Inc. CONTACT:
Media, Lonny White, , or Elizabeth Scanlon, , both of Scanlon
Corporate Communications, +1-312-372-4400; or Investors, Andrea
Clegg of NightHawk Radiology Holdings, Inc., +1-866-402-4295 or
+1-208-292-2818, or Web site: http://www.nighthawkrad.net/
Copyright