Primedex Health Systems Reports Record Second Quarter 2006 Results

LOS ANGELES--(BUSINESS WIRE)--June 14, 2006--Primedex Health Systems, Inc. (OTCBB:PMDX - News):

• For the first six months of its fiscal 2006, revenue increases 12.7% and EBITDA increases 16.2%

• Company reaches operational profitability in second quarter, after one-time adjustment related to its recent financing

• Company reports second quarter revenue and EBITDA of $39.6 million and $8.8 million, respectively

Primedex Health Systems, Inc. (OTCBB:PMDX - News), the California market leader in providing high-quality, cost-effective diagnostic imaging services through a network of fully-owned and operated outpatient imaging centers, today reported financial results for its second quarter and six months ended April 30, 2006.

Revenue for the second quarter was $39.6 million, an increase of 12.5% from $35.2 million recorded in the second quarter of fiscal 2005, primarily driven by new capitation contracts, improved performance from existing capitation contracts and contributions from existing and expanded imaging centers. For the second quarter of fiscal 2006, EBITDA (which Primedex defines as earnings before net interest expense, income taxes, depreciation and amortization, each from continuing operations and adjusted for non-recurring items such as losses or gains on the disposal of equipment) was $8.8 million compared to $8.1 million in the same period last year, an increase of 8.0%.

For the second quarter, after adjusting for a one-time expense in connection with debt extinguishment and other expenses resulting from the Company's recent financing which closed on March 9, 2006, Primedex achieved net income of $0.2 million or $0.01 per share. Without these adjustments, net loss for the second quarter was $2.7 million, or $(0.07) per share, compared to a net loss of $0.6 million, or $(0.02) per share, reported in the same period last year.

For the six months ended April 30, 2006, the Company reported net revenue of $78.1 million and EBITDA of $16.8 million, as compared to net revenue of $69.3 million and EBITDA of $14.5 million for the same fiscal period last year. This is an increase in net revenue and EBITDA for the six-month period of 12.7% and 16.2%, respectively.

For the six months ended April 30, 2006, after adjusting for one-time expense in connection with debt extinguishment and other expenses resulting from the Company's recent financing which closed on March 9, 2006, Primedex had a net loss of $0.3 million or $(0.01) per share. Without these adjustments, net loss for the first six months was $3.2 million, or $(0.08) per share, compared to a net loss of $2.8 million, or $(0.07) per share, reported in the comparable period last year.

Net cash provided by operating activities was $6.3 million the first six months of fiscal 2006 as compared to $3.0 million in the same period last year. As of April 30, 2006, the Company reduced its working capital deficit to $4.3 million, compared to a deficit of $143.4 million at October 31, 2005. The $143.4 million working capital deficit at October 31, 2005 was primarily due to the classification of approximately $109 million in notes and capital lease obligations as current liabilities expected to be refinanced. During the second quarter of its fiscal 2006, Primedex completed the issuance of a $161 million senior secured credit facility which was used to refinance all of the Company's existing indebtedness, except for $16.1 million of outstanding subordinated debentures and approximately $5 million of capital lease obligations.

"We are pleased with our progress in the first half of fiscal 2006 as we continue to drive revenue growth and operating efficiencies at our existing facilities through a focused approach on increasing same store sales," said Dr. Howard Berger, President and Chief Executive Officer. "Additionally, we are leveraging our many years of experience and broad geographic footprint of California centers to expand and manage our capitation business, which remains an important component of our strategy. Capitation revenue increased 18.2% in the first two quarters of fiscal 2006, when compared to the same period in the previous year, and currently accounts for 28% of our net revenue."

"We believe the changing reimbursement environment for diagnostic imaging will encourage industry consolidation. The establishment of our $161 million senior secured credit facility in March of 2006 and our continued improvement in operating performance will enable our company to capitalize on these future consolidation opportunities," said Mark Stolper, Chief Financial Officer.

Regulation G: GAAP and Non-GAAP Financial Information

This release contains certain financial information not derived in accordance with GAAP. Primedex 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 Primedex in measuring its cash-based performance. Primedex 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 below.

Tables ommitted on this website only

About Primedex Health Systems, Inc.
Primedex Health Systems, Inc., is the California market leader in providing high-quality, cost-effective diagnostic imaging services through a network of fully-owned and operated outpatient imaging centers. As of April 30, 2006, Primedex owned and operated 62 facilities. For its fiscal year ended October 31, 2005, Primedex and its subsidiaries performed 958,414 diagnostic imaging procedures. At October 31, 2005, together with Beverly Radiology Medical Group, the medical group that provides medical services to the majority of the Company's locations, the Company had a total of 951 full-time and 340 part-time and per-diem employees.

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 Primedex Heath Systems' ability to continue to growth the business by generating patient referrals and contracts with radiology practices, recruiting and retaining technologists, and receiving third-party reimbursement for diagnostic imaging services, as well as Primedex's financial guidance, 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 Primedex's actual results to differ materially from the statements contained herein. Primedex's second quarter ended April 30, 2006 financial performance, as discussed in this release, is preliminary and unaudited, and subject to adjustment. Estimates for the third quarter and fiscal year 2006 financial performance are subject to a number of assumptions regarding the future operation of our business. Further information on potential risk factors that could affect Primedex's business and its financial results are detailed in its most recent 10-K and 10-Q 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. Primedex 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.

Note: EBITDA is defined as earnings before interest, taxes, depreciation and amortization, each from continuing operations, and is reconciled to its nearest comparable GAAP financial measure. EBITDA is a non-GAAP financial measure used as analytical indicator by Primedex management and the healthcare industry to assess business performance, and as a measure of leverage capacity and ability to service debt. EBITDA should not be considered a measure of financial performance under GAAP, and the items excluded from EBITDA should not be considered in isolation or as an alternative 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 EBITDA is not a measurement determined in accordance with GAAP and are therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies.

Primedex Health Systems, Inc.
Mark Stolper
310-445-2800

Integrated Corporate Relations, Inc.
John Mills
310-954-1105
jmills@icrinc.com