RadNet Reports First Quarter Financial Results, Announces its First Health System Joint Venture in California and Reaffirms 2016 Guidance Ranges
FOR IMMEDIATE RELEASE
- Total Net Revenue (“Revenue”) increased 19.4% to $216.4 million in the first quarter of 2016 from $181.3 million in the first quarter of 2015
- Adjusted EBITDA(1) increased 34.2% to $27.1 in the first quarter of 2016 from $20.2 million in the first quarter of 2015
- Diluted loss per share was $(0.04) per share in the first quarter of 2016, a significant improvement from an $(0.11) loss per share in last year’s first quarter
- Aggregate procedural volumes increased 18.2% and same center volumes increased 3.9 % as compared with the first quarter of 2015
- Subsequent to the end of the quarter, RadNet signed an agreement to form a new joint venture with Dignity Health
LOS ANGELES, California, May 10, 2016 – RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services through a network of 309 owned and/or operated outpatient imaging centers, today reported financial results for its first quarter of 2016.
Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, “I’m pleased with the progress we made in the first quarter. The first quarter is perennially our most difficult one because of the normal seasonality we face in our business related to lower healthcare utilization related to deductibles and weather conditions. We significantly improved over the same period last year as evidenced by our increased aggregate Revenue, EBITDA and same-center procedural volumes. We also completed several initiatives during the quarter that will set the stage for improved results as the year progresses. This includes the renegotiation of pricing of several capitation arrangements, the expansion of our breast tomography program, the implementation of a number of cost savings initiatives and the establishment of a new California-based joint venture. We also expect improved performance from the continuing integration of the two significant acquisitions we completed last year of New York Radiology Partners and Diagnostic Imaging Group.”
Dr. Berger continued, “We are optimistic about procedural volumes for the second quarter. Company-wide, April per-day procedural volumes exceeded that of first quarter’s per day volumes by over 5%. Furthermore, as patients use-up more of their deductibles as the year progresses, we historically have experienced higher utilization rates at our facilities.”
Financial Results
For the first quarter of 2016, RadNet reported Revenue of $216.4 million, Adjusted EBITDA(1) of $27.1 million and Net Loss of $1.7 million. Revenue increased $35.1 million (or 19.4%), Adjusted EBITDA(1) increased $6.9 million (or 34.2%) and Net Loss decreased $2.8 million, over the first quarter of 2015. Per share Net Loss for the first quarter was $(0.04), compared to a loss in the first quarter of 2015 of $(0.11), based upon a weighted average number of basic and diluted shares outstanding of 46.6 million and 42.7 million for these periods in 2016 and 2015, respectively.
Affecting Net Loss in the first quarter of 2016 were certain non-cash expenses and non-recurring items including: $2.7 million of non-cash employee stock compensation expense resulting from the vesting of certain options and restricted stock; $167,000 of severance paid in connection with headcount reductions related to cost savings initiatives; and $1.4 million of combined non-cash amortization of deferred financing costs and loan discount related to financing fees paid as part of our existing credit facilities.
For the first quarter of 2016, as compared to the prior year’s first quarter, MRI volume increased 17.8%, CT volume increased 13.5% and PET/CT volume increased 14.3%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 18.2% over the prior year’s first quarter. On a same-center basis, including only those centers which were part of RadNet for both the first quarters of 2016 and 2015, MRI volume increased 6.5%, CT volume increased 5.4% and PET/CT volume increased 4.5%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 3.9% over the prior year’s same quarter.
Dignity Health Joint Venture
RadNet announces that it has signed a new joint venture with Dignity Health’s Glendale Memorial Hospital in Glendale, CA, which is expected to become operational in June, 2016, once certain closing conditions are met. The joint venture agreement consists initially of two imaging centers. The first center, one that focuses on Women’s imaging, is currently owned and operated by Dignity Health and will be contributed to the venture. The second center, also located in Glendale, CA is a multimodality facility initially constructed by RadNet. This facility contains MRI, CT, Fluoroscopy, x-ray and ultrasound modalities. RadNet owns 55% of the joint venture and Dignity Health owns 45%. RadNet and Dignity Health are exploring further opportunities for the joint venture, which could include RadNet’s Breastlink breast disease management offering and other oncological capabilities.
Dr. Berger commented, “We are exciting to bring to the west coast the joint venture model with which we’ve been successful in several of our largest east coast markets. Dignity Health is one of the largest and most prominent systems in the country and we look forward to successfully building an imaging platform within the Glendale market. We are actively exploring other business opportunities with Dignity in this market and hope to expand our relationship to other geographies in the future.”
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 309 owned and/or operated outpatient imaging centers. RadNet's core markets include California, Maryland, Delaware, New Jersey, New York and Rhode Island. 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 7,300 employees.