RadNet Reports 2006 Fiscal Year Results with Record Revenue and EBITDA

FOR IMMEDIATE RELEASE

• For Its Fiscal 2006, Revenue Increases 10.6% and EBITDA Increases 6.2%

• Company Reiterates It is on-Track to Achieve Previously Announced $11 Million of Cost Savings from Integration of Radiologix

• Company Has Pending Application for Listing on NASDAQ Global Market

 LOS ANGELES--(BUSINESS WIRE)--RadNet, Inc. (OTCBB:RDNT - News), a national 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 fiscal year and fourth quarter ended October 31, 2006.

For the twelve months ended October 31, 2006, the Company reported record net revenue of $161.0 million and record EBITDA (which RadNet defines as earnings before net interest expense, income taxes, depreciation and amortization, each from continuing operations and adjusted for losses or gains on the disposal of equipment, non-cash equity compensation and debt extinguishments, and including equity earnings in unconsolidated operations) of $33.6 million, as compared to net revenue of $145.6 million and EBITDA of $31.6 million for the same fiscal period last year. This is an increase in revenue and EBITDA for the fiscal period of 10.6% and 6.2%, respectively.

For the fiscal year ended October 31, 2006, after adjusting for one-time expenses in connection with debt extinguishment resulting from the Company's March refinancing (including a non-cash loss upon the mark-to-market of an interest rate swap transaction) and losses on disposal of equipment and non cash equity compensation, RadNet had a net loss of $3.0 million or $(0.14) per share. Without these adjustments, net loss for the twelve months was $6.9 million, or $(0.33) per share, compared to a net loss of $3.6 million, or $(0.17) per share, reported in the previous fiscal year.

"The end of 2006 begins a new chapter in our Company's journey. Fiscal 2006 was a transforming year. Completing the Radiologix acquisition and the $405 million financing has provided us with a unique platform and group of assets poised for future growth and expansion. While we continue to drive same-store revenue growth and invest in our existing facilities, we are pursuing accretive acquisition opportunities," said Dr. Howard Berger, President and Chief Executive Officer.

Revenue for the fourth quarter of fiscal 2006 was $42.5 million, an increase of 6.1% from $40.1 million recorded in the fourth 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 fourth quarter of fiscal 2006, EBITDA was $8.2 million compared to $8.7 million in the same period last year, a decrease of 6.2%. EBITDA for the fourth quarter of 2006 was negatively affected by additional salaries related to staff employed for newly acquired facilities, expenses from the new site build-out of the San Fernando Interventional Radiology facility scheduled to open soon in Encino, CA and costs associated with the recent opening of our new and expanded Emeryville and Fresno facilities. The Company believes the decision to make these investments in the current period is integral to the future success of these sites.

For the fourth quarter, after adjusting for non-recurring expenses including a non-cash loss upon the mark-to-market of an interest rate swap transaction, non cash equity compensation and a loss on disposal of equipment, RadNet reported a net loss of $1.5 million or $(0.07) per share. Without these adjustments, net loss for the fourth quarter was $2.3 million, or $(0.11) per share, compared to a net loss of $0.4 million or $(0.02) per share, reported in the same period last year.

"We made numerous operational strides and important investments in the fourth quarter to prepare us for 2007," said Mark Stolper, Executive Vice President and Chief Financial Officer. "As we ramp-up our operational capabilities and performance in 2007, our focus will be on profitable penetration of our current markets." The Company also reiterates that it believes it will achieve the $11 million of operating synergies that it previously identified from corporate overhead by the end of 2007. "We are far-along in our cost savings plan, and expect to achieve the anticipated efficiencies from the integration of Radiologix into RadNet," Stolper added. Lastly, Mr. Stolper noted that like many of the other multi-location companies over the last 24 months such as Target, Starbucks and Toys "R" Us, RadNet has restated its financial reports for 2003, 2004 and 2005 to reflect a corrected depreciation of the lives of leasehold improvements in accordance with generally accepted accounting principals. The adjustments to certain prior period financial statements are all non-cash, and do not affect the Company's historical reported revenues, EBITDA, cash flows or cash position for any of the affected fiscal or quarterly periods. The adjustments resulted in:

• a one-time cumulative adjustment to decrease retained earnings as of October 31, 2003 by $2,859,595;

• an adjustment to increase fiscal 2004 depreciation expense and decrease retained earnings by $154,707;

• an adjustment to increase fiscal 2005 depreciation expense and decrease retained earnings by $434,442; and

• an adjustment to increase depreciation expense and decrease retained earnings by $33,215 for our first quarter ended January 31, 2006.

RadNet has a pending application to be listed on the NASDAQ Global Market. RadNet's management has determined that it is in the best interest of the Company's stockholders to apply for listing on the NASDAQ Global Market. The Company believes being listed on NASDAQ will create a more orderly and liquid market for the Company's securities, increase the visibility and profile of the Company and be beneficial in attracting equity research coverage.

Regulation G: GAAP and Non-GAAP Financial Information

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

About RadNet, Inc.

RadNet, Inc., is a national market leader providing high-quality, cost-effective diagnostic imaging services through a network of fully-owned and operated outpatient imaging centers. For its fiscal year ended October 31, 2006, RadNet and its subsidiaries (including Radiologix for the 12 months ended December 31, 2006) performed 2,336,814 diagnostic imaging procedures. At October 31, 2006, together with Beverly Radiology Medical Group and Radiologix, and inclusive of full-time and per diem employees, technicians and radiologists, the Company had a total of 3,911 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 RadNets' ability to continue to grow its 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 RadNet's financial guidance, its statements regarding cost savings with its Radiologix acquisition, its statements regarding increased business from new operations, 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 RadNet'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.

RADNET, INC. AND AFFILIATES            CONSOLIDATED BALANCE SHEETS                         2005      2006 OCTOBER 31,               (as restated)  ASSETS CURRENT ASSETS Cash and cash equivalents        $    2,000 $    2,000 Accounts receivable, net          22,319,000   28,136,000 Unbilled receivables and other  receivables                  476,000    948,000 Other                    1,799,000   3,603,000  Total current assets            24,596,000   32,689,000  PROPERTY AND EQUIPMENT, NET         64,658,000   64,566,000  OTHER ASSETS Accounts receivable, net           1,267,000   1,079,000 Goodwill                  23,099,000   23,099,000 Debt issue costs, net             472,000   5,195,000 Trade name and other             3,692,000   4,738,000      Total other assets          28,530,000   34,111,000       Total assets          $ 117,784,000 $ 131,366,000  LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES Cash disbursements in transit      $  3,425,000 $   612,000 Line of credit               13,341,000       -- Accounts payable and accrued expenses    22,469,000   25,951,000 Short-term notes expected to be  refinanced:  Notes payable               69,066,000       --  Obligations under capital lease      56,927,000       -- Advance due to related party            --    737,000 Notes payable                1,101,000   1,162,000 Obligations under capital lease       1,697,000   2,410,000      Total current liabilities      168,026,000   30,872,000  LONG-TERM LIABILITIES Subordinated debentures payable       16,147,000   16,031,000 Line of credit                   --   12,437,000 Notes payable to related party        3,533,000       -- Notes payable, net of current portion        --  145,987,000 Obligations under capital lease, net of  current portion               4,129,000   3,889,000 Other non-current liabilities          31,000    944,000      Total long-term liabilities     23,840,000  179,288,000  COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' DEFICIT Preferred stock - $.0001 par value,  30,000,000 shares authorized, none  issued                       --       -- Common stock - $.0001 par value,  200,000,000 shares authorized;  21,615,906 and 22,985,252 shares  issued; 20,703,406 and 22,072,752  shares outstanding at October 31, 2005  and 2006, respectively            433,000    460,000 Paid-in capital              100,590,000  102,745,000 (Accumulated deficit)           (174,410,000) (181,304,000)                        (73,387,000)  (78,099,000) Less: Treasury stock - 912,500 shares at  cost                     (695,000)   (695,000)      Total stockholders' deficit     (74,082,000)  (78,794,000)  Total liabilities and stockholders'  deficit                 $ 117,784,000 $ 131,366,000 

 RADNET, INC. AND AFFILIATES  CONSOLIDATED STATEMENTS OF  OPERATIONS           2004     2005     2006  YEARS ENDED OCTOBER 31,   (as restated) (as restated)                ------------- ------------- -------------   NET REVENUE         $137,277,000 $145,573,000 $161,005,000  OPERATING EXPENSES  Operating expenses     105,828,000  109,012,000  120,342,000  Depreciation and   amortization        17,917,000  17,536,000  16,394,000  Provision for bad debts    3,911,000   4,929,000   7,626,000  Loss on disposal of   equipment, net            -    696,000    373,000                ------------- ------------- -------------   Total operating expenses  127,656,000  132,173,000  144,735,000                ------------- ------------- -------------   INCOME FROM OPERATIONS     9,621,000  13,400,000  16,270,000  OTHER EXPENSE (INCOME)  Interest expense       17,285,000  17,493,000  20,362,000  Loss (gain) on debt   extinguishment, net         -   (515,000)  2,097,000  Other income          (176,000)   (357,000)      -  Other expense         1,657,000    349,000    788,000                ------------- ------------- -------------   Total other expense     18,766,000  16,970,000  23,247,000                ------------- ------------- -------------   LOSS BEFORE EQUITY IN  INCOME OF INVESTEE, INCOME  TAXES AND MINORITY  INTEREST           (9,145,000)  (3,570,000)  (6,977,000)  EQUITY IN INCOME OF  INVESTEE               -       -    83,000                ------------- ------------- -------------   LOSS BEFORE INCOME TAXES  AND MINORITY INTEREST    (9,145,000)  (3,570,000)  (6,894,000)  INCOME TAX EXPENSE      (5,235,000)     ---      ---                ------------- ------------- -------------   LOSS BEFORE MINORITY  INTEREST          (14,380,000)  (3,570,000)  (6,894,000)  MINORITY INTEREST IN  EARNINGS OF SUBSIDIARIES    351,000      ---      ---                ------------- ------------- -------------   NET LOSS           (14,731,000)  (3,570,000)  (6,894,000)                ------------- ------------- -------------   BASIC NET LOSS PER SHARE  (1)                (0.72)    (0.17)    (0.33)                ------------- ------------- -------------   DILUTED NET LOSS PER SHARE  (1)                (0.72)    (0.17)    (0.33)                ------------- ------------- -------------   WEIGHTED AVERAGE SHARES  OUTSTANDING (1)  Basic            20,553,406  20,603,955  21,013,957                ------------- ------------- -------------   Diluted           20,553,406  20,603,955  21,013,957                ------------- ------------- -------------   (1) All share information is restated for all periods presented to  reflect the decrease in common shares outstanding resulting from the  one-for-two reverse common stock split effected November 28, 2006. 

               RADNET, INC.        RECONCILIATION OF GAAP NET INCOME TO EBITDA                        FOR THE FISCAL YEARS ENDED                         2005     2006  October 31, ------------------------------------------ GAAP: Net Income (Loss)           $(3,570,000) $(6,894,000)  Add: Interest expense, net             17,493,000  20,362,000 Depreciation and amortization         17,536,000  16,394,000 Loss (gain) on disposal of equipment, net    696,000   373,000 Loss (gain) on debt extinguishments, net    (515,000)  2,097,000 Non-cash equity compensation              -   459,000 Other expense (income)              349,000   788,000                             -      - Subtract:                       -      - Other Income                   357,000      -                       -------------- ------------  EBITDA                    $31,633,000 $33,579,000                        FOR THE 3 MONTHS ENDED OCT,                         2005     2006  GAAP: Net Income (Loss)            $(413,000) $(2,288,000)  Add: Interest expense, net             4,705,000  5,976,000 Depreciation and amortization         4,305,000  4,185,000 Loss (gain) on disposal of equipment, net     2,000   163,000 Loss (gain) on debt extinguishments, net        -      - Non-cash equity compensation              -      - Other expense (income)              263,000      -                             -      - Subtract:                       -      - Other Income                   172,000      -                       -------------- ------------  EBITDA                    $8,690,000  $8,150,000

Note:
EBITDA is defined as earnings before interest, taxes, depreciation and amortization, each from continuing operations and is adjusted for losses or gains on the disposal of equipment, debt extinguishments and non-cash equity compensation, and includes equity earnings in unconsolidated 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.

RadNet, Inc.
Mark Stolper
Chief Financial Officer
310-445-2800

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