RadNet Reports Third Quarter Financial Results and Reaffirms Previously Announced 2019 Guidance Levels

Total Net Revenue (“Revenue”) increased 20.9% to $292.7 million in the third quarter of 2019 from $242.1 million in the third quarter of 2018Adjusted EBITDA⁽¹⁾ increased 7.7% to $41.0 million in the third quarter of 2019 from $38.1 million in the third quarter of 2018 Earnings Per Share was $0.06 per share in the third quarter of 2019 as compared with $0.10 from the third quarter of 2018; Adjusting for legal settlements in this year’s third quarter, Adjusted Earnings Per Share was $0.08 per shareAggregate procedural volumes increased 13.0% and same center procedural volumes increased 4.7% from last year’s third quarterRadNet reaffirms previously announced 2019 guidance levels for Revenue, Adjusted EBITDA⁽¹⁾, Free Cash Flow and Cash Interest ExpenseLOS ANGELES, Nov. 12, 2019 (GLOBE NEWSWIRE) — RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services through a network of 340 owned and/or operated outpatient imaging centers, today reported financial results for its third quarter of 2019.Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, “I am pleased with the continuing strength of our results relative to those of last year. Our metrics were favorable as compared with last year’s third quarter.  We demonstrated strong Revenue and Adjusted EBITDA⁽¹⁾ growth, as well as aggregate and same center revenue and procedural increases.”  Dr. Berger continued, “We continue to make progress furthering the initiatives and integrating the transactions that we completed at the end of last year and earlier this year.  During the fourth quarter of last year we commenced operations to provide imaging to approximately 175,000 members of EmblemHealth’s AdvantageCare Physicians (“ACP”) medical group in Long Island and the boroughs of New York City and assumed operations in 26 ACP offices.  Concurrent with this, we acquired Medical Arts Imaging, expanding our New York metropolitan reach into Nassau and Suffolk counties of Long Island.  We are making steady headway with improved metrics under the ACP contract, capturing more imaging into RadNet owned centers at the expense of local hospitals.  We are also nearing completion of the full integration of the Medical Arts centers into the RadNet network.  In California, we are also making measured progress in integrating the operations of Kern Radiology, which we acquired earlier this year.”Dr. Berger added, “Last week, we announced a multifaceted strategic partnership with Whiterabbit.ai to address mammography compliance and improved diagnostics for breast cancer.  The partnership will initially focus on processes and technology, including the use of machine learning and artificial intelligence, to drive women into RadNet facilities for their annual or bi-annual mammogram exams.  We completed a pilot program which we began in July, and we are deploying the first phase of the program to all RadNet operations across our core markets.  The relationship with Whiterabbit.ai emphasizes our interest in identifying leading-edge technologies that we believe will transform how diagnostic imaging services will be delivered in the future, particularly ones that could lower our operating costs and provide improvements to patient experience.  As part of the partnership, RadNet has become a shareholder in Whiterabbit.ai, and we will be co-developing further technologies including those focused on image interpretation and consumer-facing applications.” Third Quarter Financial ResultsFor the third quarter of 2019, RadNet reported Revenue of $292.7 million, Adjusted EBITDA⁽¹⁾ of $41.0 million and Net Income of $3.2 million.  Revenue increased $50.5 million (or 20.9%) and Adjusted EBITDA⁽¹⁾ increased $2.9 million (or 7.7%) from last year’s same quarter.Net Income decreased $1.8 million over the third quarter of 2018.  Per share Net Income for the third quarter of 2019 was $0.06, compared to per share Net Income in the third quarter of 2018 of $0.10 (based upon a weighted average number of diluted shares outstanding of 50.4 million in 2019 and 48.6 million in 2018).  Adjusting for $920,000 (the tax-effected impact of $1.2 million) of legal settlements in this year’s third quarter, Adjusted Net Income was $0.08 per share in the third quarter of 2019.Affecting Net Income in the third quarter of 2019 were certain non-cash expenses or non-recurring items including:  $1.4 million of non-cash employee stock compensation expense resulting from the vesting of certain options and restricted stock; $52,000 of severance paid in connection with headcount reductions related to cost savings initiatives; $917,000 loss on the sale or disposal of certain capital equipment; $1.2 million in legal settlements; and $1.1 million of amortization of deferred financing costs, other non-cash interest and loan discounts related to our credit facilities.For the third quarter of 2019, as compared with the prior year’s third quarter, MRI volume increased 11.8%, CT volume increased 14.9% and PET/CT volume increased 8.5%.  Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 13.0% 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 2019 and 2018, MRI volume increased 5.3%, CT volume increased 6.5% and PET/CT volume decreased 0.1%.  Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 4.7% compared with the prior year’s same quarter.Nine Month Financial ResultsFor the nine months ended September 30, 2019, RadNet reported Revenue of $853.3 million, Adjusted EBITDA⁽¹⁾ of $117.2 million and Net Income of $4.4 million.  Revenue increased $135.4 million (or 18.9%), Adjusted EBITDA⁽¹⁾ increased $19.9 million (or 20.5%) and Net Income increased $1.3 million over the first nine months of 2018.  Net Income Per Share for the nine month period ended September 30, 2019 was $0.09 per diluted share, compared to Net Income of $0.06 per diluted share in corresponding nine month period of 2018 (based upon a weighted average number of fully diluted shares outstanding of 50.1 million in 2019 and 48.5 million in 2018).  Adjusting for $938,000 (the tax-effected impact of $1.2 million) of legal settlements in the third quarter, Adjusted Net Income was $0.11 per share nine months ended September 30, 2019.Affecting operating results in the nine months ended September 30, 2019 were certain non-cash expenses or non-recurring items including:  $7.0 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; $2.0 million loss on the sale of certain capital equipment; $1.2 million in legal settlements; and $3.1 million of amortization of deferred financing costs, other non-cash interest and loan discounts related to our credit facilities.2019 Guidance UpdateRadNet reaffirms its previously announced 2019 guidance ranges as follows:RadNet is increasing its 2019 guidance range for Capital Expenditures as follows:Conference Call for TodayDr. 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 2019 results on Tuesday, November 12th, 2019 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).Conference Call Details:Date:  Tuesday, November 12, 2019
Time:  10:30 a.m. Eastern Time
Dial In-Number:  800-458-4121
International Dial-In Number:  323-794-2597It 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/player/index.php?id=136952 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 5482581.Regulation G: GAAP and Non-GAAP Financial InformationThis 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 340 owned and/or operated outpatient imaging centers. 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 8,000 employees. For more information, visit http://www.radnet.com.Forward Looking StatementsThis 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 2019 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:
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