RadNet Reports 2007 Annual and Fourth Quarter Results (CONTINUED)
CONSOLIDATED BALANCE SHEETS (IN THOUSANDS EXCEPT SHARE DATA) December 31, December 31, October 31, 2007 2006 2006 ------------ ------------ ----------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 18 $ 3,221 $ 2 Accounts receivable, net 87,285 70,794 30,163 Due from affiliates - 1,427 - Refundable income taxes 105 6,464 - Prepaid and other current assets 10,273 7,929 3,873 ------------ ------------ ----------- Total current assets 97,681 89,835 34,038 PROPERTY AND EQUIPMENT, NET 164,097 158,542 64,566 OTHER ASSETS Goodwill 84,395 61,607 23,099 Other intangible assets 58,908 60,484 - Deferred financing costs, net 9,161 9,422 5,195 Investment in joint ventures 15,036 10,125 - Deposits and other 4,342 4,751 4,738 ------------ ------------ ----------- Total other assets 171,842 146,389 33,032 ------------ ------------ ----------- Total assets $ 433,620 $ 394,766 $ 131,636 ============ ============ =========== LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Cash disbursements in transit $ - $ 5,099 $ 612 Accounts payable and accrued expenses 59,965 45,911 26,221 Due to affiliates 1,350 - 737 Notes payable 3,536 2,969 1,162 Current portion of deferred rent 195 - - Obligations under capital leases 9,455 4,626 2,410 ------------------------------------- Total current liabilities 74,501 58,605 31,142 ------------------------------------- LONG-TERM LIABILITIES Subordinated debentures payable - - 16,031 Line of credit 4,222 22 12,437 Deferred rent, net of current portion 4,394 - - Deferred taxes 277 - - Notes payable, net of current portion 382,064 360,083 145,987 Obligations under capital lease, net of current portion 22,527 11,305 3,889 Other non-current liabilities 15,259 10,493 944 ------------ ------------ ----------- Total long-term liabilities 428,743 381,903 179,288 ------------ ------------ ----------- COMMITMENTS AND CONTINGENCIES MINORITY INTERESTS 206 1,254 - STOCKHOLDERS' DEFICIT Common stock - $.0001 par value, 200,000,000 shares authorized; 35,239,558, 34,973,780 and 22,985,252 shares issued; 35,239,558, 34,061,281 and 22,072,752 shares outstanding at December 31, 2007, 2006 and October 31, 2006, respectively 4 3 2 Paid-in-capital 149,631 146,056 103,203 Accumulated other comprehensive loss (4,579) (73) - Accumulated deficit (214,886) (192,287) (181,304) ------------ ------------ ----------- (69,830) (46,301) (78,099) Less: Treasury stock - 912,500 shares at cost - (695) (695) ------------ ------------ ----------- Total stockholders' deficit (69,830) (46,996) (78,794) ------------ ------------ ----------- Total liabilities and stockholders' deficit $ 433,620 $ 394,766 $ 131,636 ============ ============ =========== The accompanying notes are an integral part of these financial statements. RADNET, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT SHARE DATA) Year Ended Two Months Ended December 31, December 31, ------------ ------------------------- 2007 2006 2005 ------------ ------------ ------------ (unaudited) NET REVENUE $ 425,470 $ 57,374 $ 25,520 OPERATING EXPENSES Operating expenses 330,550 46,033 19,149 Depreciation and amortization 45,281 5,907 2,759 Provision for bad debts 27,467 3,907 826 Loss (gain) on sale of equipment 72 (38) - Severance costs 934 205 - ------------ ------------ ------------ Total operating expenses 404,304 56,014 22,734 INCOME FROM OPERATIONS 21,166 1,360 2,786 OTHER EXPENSES (INCOME) Interest expense 44,307 5,620 2,970 Gain from sale of joint venture interest (1,868) - - Loss (gain) on debt extinguishment, net - 7,212 - Other (income) expense (29) (51) (29) ------------ ------------ ------------ Total other expense 42,410 12,781 2,941 LOSS BEFORE INCOME TAXES, MINORITY INTERESTS AND EARNINGS FROM MINORITY INVESTMENTS (21,244) (11,421) (155) Provision for income taxes (337) (20) - Minority interest in (income) loss of subs (600) (45) - Equity in earnings from joint ventures 4,050 503 - ------------ ------------ ------------ NET LOSS $ (18,131) $ (10,983) $ (155) ============ ============ ============ BASIC AND DILUTED NET LOSS PER SHARE $ (0.52) $ (0.35) $ (0.01) WEIGHTED AVERAGE SHARES OUTSTANDING Basic and diluted 34,592,716 30,972,282 20,703,406 Fiscal Years Ended October 31, ------------------------- 2006 2005 ------------ ------------ NET REVENUE $ 161,005 $ 145,573 OPERATING EXPENSES Operating expenses 120,342 109,012 Depreciation and amortization 16,394 17,536 Provision for bad debts 7,626 4,929 Loss (gain) on sale of equipment 373 696 Severance costs - - ------------ ------------ Total operating expenses 144,735 132,173 INCOME FROM OPERATIONS 16,270 13,400 OTHER EXPENSES (INCOME) Interest expense 20,362 17,493 Gain from sale of joint venture interest - - Loss (gain) on debt extinguishment, net 2,097 (515) Other (income) expense 788 (8) ------------ ------------ Total other expense 23,247 16,970 LOSS BEFORE INCOME TAXES, MINORITY INTERESTS AND EARNINGS FROM MINORITY INVESTMENTS (6,977) (3,570) Provision for income taxes - - Minority interest in (income) loss of subs - - Equity in earnings from joint ventures 83 - ------------ ------------ NET LOSS $ (6,894) $ (3,570) ============ ============ BASIC AND DILUTED NET LOSS PER SHARE $ (0.33) $ (0.17) WEIGHTED AVERAGE SHARES OUTSTANDING Basic and diluted 21,013,957 20,603,955 The accompanying notes are an integral part of these financial statements. RADNET, INC. RECONCILIATION OF GAAP INCOME FROM OPERATIONS TO Adjusted EBITDA(2) (IN THOUSANDS) Three Months Ended December 31, ----------------------------- 2007 2006 -------- -------------------- RadNet RadNet Pro Forma (a) -------- -------------------- Income from Operations (c) $(2,058) $(13,863) Plus Depreciation and Amortization 12,213 10,745 Plus Earnings from Minority Investments 970 888 Plus Non Cash Employee Stock Compensation (b) 429 281 Plus Loss on Sale of Equipment 72 1 Less Minority Interest in (Income) Loss of Subs (117) (111) -------- -------------------- Subtotal 11,509 (2,059) Plus Severance: Elimination of Corporate Personnel 119 205 Plus One Time Legal Settlement 120 337 Plus Merger Costs and Financing Costs - 18,665 Plus Non Cash Increase in Malpractice IBNR Reserve 43 - Plus Increase in Accounts Receivable Allowance for 2006 and Prior Services 8,500 - Plus Retention Payments to Radiologix Employees 63 - -------- -------------------- Adjusted EBITDA(2) $20,354 $ 17,148 ======== ==================== (a) RadNet Pro Forma information is simply a summarization of our historical data with that of Radiologix and does not purport to represent what the actual results would have been had the merger been completed on September 30, 2006. (b) Includes both FAS123 compensation and restricted stock compensation. (c) Includes loss or gain on sale of equipment. Twelve Months Ended December 31, ----------------------------- 2007 2006 -------- -------------------- RadNet RadNet Pro Forma (a) -------- -------------------- Income from Operations (c) $21,166 $ 10,733 Plus Depreciation and Amortization 45,281 41,387 Plus Earnings from Minority Investments 4,050 3,980 Plus Non Cash Employee Stock Compensation (b) 3,312 1,808 Plus Loss on Sale of Equipment 72 374 Less Minority Interest in (Income) Loss of Subs (600) (652) -------- -------------------- Subtotal 73,281 57,630 Plus Severance: Elimination of Corporate Personnel 934 205 Plus Payment for Employee Termination 95 - Plus One Time Legal Settlement 120 337 Plus Physician Payment 250 - Plus Nasdaq Listing Fee 120 - Plus SAB 108 Accounting Adjustment 362 - Plus Merger Costs - 19,714 Plus Non-Cash Accrual for Stock Comp Related Bonus 600 - Plus Non Cash Increase in Malpractice IBNR Reserve 172 - Plus Increase in Accounts Receivable Allowance for 2006 and Prior Services 8,500 - Plus Retention Payments to Radiologix Employees 848 - -------- -------------------- Adjusted EBITDA(2) $85,282 $ 77,886 ======== ==================== (a) RadNet Pro Forma information is simply a summarization of our historical data with that of Radiologix and does not purport to represent what the actual results would have been had the merger been completed on December 31, 2005. (b) Includes both FAS123 compensation and restricted stock compensation. (c) Includes loss or gain on sale of equipment. RADNET, INC. ADJUSTED REVENUE(1) COMPARISON (IN THOUSANDS) Three Months Ended Ended December 31, -------------------------------- 2007 2006 -------- -------------------- RadNet RadNet Pro Forma (a) -------- -------------------- Adjusted Revenue (1) $110,919 (b) $102,338 ======== ==================== (a) RadNet Pro Forma information is simply a summarization of our historical data with that of Radiologix and does not purport to represent what the actual results would have been had the merger been completed on September 30, 2006. (b) Adjusted for $8.5 million non-cash adjustment to the allowance account of Accounts Receivable, which approximates the write-off of receivables during the year related to 2006 and earlier fiscal years. Twelve Months Ended December 31, -------------------------------- 2007 2006 -------- -------------------- RadNet RadNet Pro Forma (a) -------- -------------------- Adjusted Revenue (1) $433,970 (b) $416,270 ======== ==================== (a) RadNet Pro Forma information is simply a summarization of our historical data with that of Radiologix and does not purport to represent what the actual results would have been had the merger been completed on December 31, 2005. (b) Adjusted for $8.5 million non-cash adjustment to the allowance account of Accounts Receivable, which approximates the write-off of receivables during the year related to 2006 and earlier fiscal years. Footnote (1) Adjusted Revenue is adjusted for $8.5 million of additional allowance taken during the year against accounts receivables for dates of service December 31, 2006 and prior. This non-cash charge, related to services performed prior to December 31, 2006, resulted in RadNet decreasing its 2007 revenue by the $8.5 million. (2) 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 disposal of equipment, debt extinguishments and non-cash equity compensation. Adjusted EBITDA includes equity earnings in unconsolidated operations and subtracts minority 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. --30-- CONTACT: RadNet, Inc. Mark Stolper, 310-445-2800 Executive Vice President and Chief Financial Officer or Integrated Corporate Relations, Inc. John Mills, 310-954-1105 jmills@icrinc.com
|
