- Total Company Revenue increased 10.5% to
$431.7 million in the first quarter of 2024 from$390.6 million in the first quarter of 2023; Revenue from theDigital Health reportable segment increased 32.3% to$14.7 million in the first quarter of 2024 from$11.1 million in the first quarter of 2023 - Digital Health Revenue growth resulted in part from a
$2.5 million (or 118.8%) increase in AI Revenue, which climbed to$4.7 million during the first quarter of 2024 from$2.1 million in the first quarter of 2023 - Total Company Adjusted EBITDA(1) was
$58.5 million in the first quarter of 2024 as compared with$48.2 million in the first quarter of 2023, an increase of 21.4%;Digital Health reportable segment Adjusted EBITDA(1) increased to$3.5 million in the first quarter of 2024 from$20,000 in the first quarter of 2023 - Total Company Adjusted EBITDA(1) margins increased by 1.2% to 13.5% in the first quarter of 2024 as compared with 12.3% in the first quarter of 2023
- Adjusting for unusual or one-time items in the quarter, Adjusted Diluted Earnings Per Share(3) was
$0.07 for the first quarter of 2024; This compares with Adjusted Loss Per Share(3) of$(0.22) for the first quarter of 2023 - Aggregate procedural volumes increased 5.7% and same-center procedural volumes increased 3.8% compared with the first quarter of 2023
- Completed the acquisition of Houston Medical Imaging on
April 1 st, 2024 and announced a secondHouston acquisition ofAmerican Health Imaging centers, set to close during the second quarter of 2024 RadNet revises full-year 2024 guidance levels to increase Revenue, Adjusted EBITDA(1) and Free Cash Flow(2) ranges
Dr.
“Improved reimbursement from commercial and capitated payors, ongoing efforts toward greater operating efficiency and effective cost controls resulted in an increase to Adjusted EBITDA(1) margins by 120 basis points over last year’s first quarter. We believe there is further room for improvement, especially as we continue to disproportionally grow the higher margin
“Given the positive trends we are experiencing in virtually all aspects of our business and the strong financial performance of the first quarter, we are revising upwards certain guidance levels in anticipation of financial results that we believe will exceed our original expectations. Most significantly, we have increased 2024 guidance ranges for Revenue, Adjusted EBITDA(1) and Free Cash Flow(2),” added
“RadNet’s balance sheet continues to strengthen. In March, we completed an offering of common stock, where we raised net proceeds of approximately
Financial Results
For the first quarter of 2024,
For the first quarter of 2024,
For the first quarter of 2024,
Total Company Net Loss for the first quarter of 2024 was
There were a number of unusual or one-time items impacting the first quarter including:
For the first quarter of 2024, as compared with the prior year’s first quarter, MRI volume increased 11.7%, CT volume increased 9.1% and PET/CT volume increased 17.5%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 5.7% over the prior year’s first quarter. On a same-center basis, including only those centers which were part of
2024 Revised Guidance
Imaging Center Segment | ||||
Original | Revised | |||
Total Net Revenue | ||||
Adjusted EBITDA(1) | ||||
Capital Expenditures(a) | ||||
Cash Interest Expense(b) | ||||
Free Cash Flow(2) |
(a) Net of proceeds from the sale of equipment, imaging centers and joint venture interests and New Jersey Imaging Network capital expenditures.
(b) Includes payments to and from counterparties on interest rate swaps and nets interest income from our cash balance recorded in Other Income.
Digital Health Segment | ||||
Original | Revised | |||
Total Net Revenue | ||||
Adjusted EBITDA(1) Before Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI | ||||
Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI | ||||
Capital Expenditures | ||||
Free Cash Flow(2) Before Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI | ||||
Free Cash Flow(2) After Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI | ||||
Financial Results Conference Call
Dr.
Conference Call Details:
Date:
Time:
Dial In-Number: 844-826-3035
International Dial-In Number: 412-317-5195
It is recommended that participants dial in approximately 5 to 10 minutes prior to the start of the
About
Forward Looking Statements
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the
Forward-looking statements are neither historical facts nor assurances of future performance. Because forward-looking statements relate to the future, they are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:
- the impact of a pandemic, significant deterioration in the broader economy, severe acts of nature or other exogenous factors on our business, suppliers, payors, customers, referral sources, partners, patients and employees;
- the availability and terms of capital to fund our business;
- our ability to service our indebtedness, make principal and interest payments as those payments become due and remain in compliance with applicable debt covenants, in addition to our ability to refinance such indebtedness on acceptable terms;
- changes in general economic conditions nationally and regionally in the markets in which we operate;
- the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities;
- our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so;
- our ability to acquire, develop, implement and monetize artificial intelligence algorithms and applications;
- volatility in interest and exchange rates, or credit markets;
- the adequacy of our cash flow and earnings to fund our current and future operations;
- changes in service mix, revenue mix and procedure volumes;
- delays in receiving payments for services provided;
- increased bankruptcies among our partner physicians or joint venture partners;
- the impact of the political environment and related developments on the current healthcare marketplace and on our business, including with respect to the future of the Affordable Care Act;
- the extent to which the ongoing implementation of healthcare reform, or changes in or new legislation, regulations or guidance, enforcement thereof by federal and state regulators or related litigation result in a reduction in coverage or reimbursement rates for our services, or other material impacts to our business;
- closures or slowdowns and changes in labor costs and labor difficulties, including stoppages affecting either our operations or our suppliers' abilities to deliver supplies needed in our facilities;
- the occurrence of hostilities, political instability or catastrophic events;
- the emergence or reemergence of and effects related to future pandemics, epidemics and infectious diseases; and
- noncompliance by us with any privacy or security laws or any cybersecurity incident or other security breach by us or a third party involving the misappropriation, loss or other unauthorized use or disclosure of confidential information.
Any forward-looking statement contained in this current report is based on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that we may make from time to time, whether as a result of changed circumstances, new information, future developments or otherwise, except as required by applicable law.
Regulation G: GAAP and Non-GAAP Financial Information
This 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.
CONTACTS:
Executive Vice President and Chief Financial Officer
CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) | |||||||
(unaudited) | |||||||
ASSETS | |||||||
CURRENT ASSETS | |||||||
Cash and Cash equivalents | $ | 526,980 | $ | 342,570 | |||
Accounts receivable | 189,572 | 163,707 | |||||
Due from affiliates | 34,269 | 25,342 | |||||
Prepaid expenses and other current assets | 45,007 | 47,657 | |||||
Total current assets | 795,828 | 579,276 | |||||
PROPERTY, EQUIPMENT AND RIGHT-OF-USE ASSETS | |||||||
Property and equipment, net | 618,926 | 604,401 | |||||
Operating lease right-of-use assets | 621,612 | 596,032 | |||||
Total property, plant, equipment and right-of-use assets | 1,240,538 | 1,200,433 | |||||
OTHER ASSETS | |||||||
694,292 | 679,463 | ||||||
Other intangible assets | 86,883 | 90,615 | |||||
Deferred financing costs | 1,483 | 1,643 | |||||
Investment in joint ventures | 97,034 | 92,710 | |||||
Deposits and other | 53,497 | 46,333 | |||||
Total assets | $ | 2,969,555 | $ | 2,690,473 | |||
LIABILITIES AND EQUITY | |||||||
CURRENT LIABILITIES | |||||||
Accounts payable, accrued expenses and other | $ | 324,578 | $ | 342,940 | |||
Due to affiliates | 20,494 | 15,910 | |||||
Deferred revenue | 4,475 | 4,647 | |||||
Current operating lease liability | 58,138 | 55,981 | |||||
Current portion of notes payable | 20,202 | 17,974 | |||||
Total current liabilities | 427,887 | 437,452 | |||||
LONG-TERM LIABILITIES | |||||||
Long-term operating lease liability | 630,348 | 605,097 | |||||
Notes payable, net of current portion | 814,442 | 812,068 | |||||
Deferred tax liability, net | 14,479 | 15,776 | |||||
Other non-current liabilities | 5,074 | 6,721 | |||||
Total liabilities | 1,892,230 | 1,877,114 | |||||
EQUITY | |||||||
Common stock - | 7 | 7 | |||||
Additional paid-in-capital | 969,248 | 722,750 | |||||
Accumulated other comprehensive loss | (13,943 | ) | (12,484 | ) | |||
Accumulated deficit | (82,357 | ) | (79,578 | ) | |||
872,955 | 630,695 | ||||||
Noncontrolling interests | 204,370 | 182,664 | |||||
Total equity | 1,077,325 | 813,359 | |||||
Total liabilities and equity | $ | 2,969,555 | $ | 2,690,473 | |||
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | |||||||
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA) | |||||||
(unaudited) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
REVENUE | |||||||
Service fee revenue | $ | 397,189 | $ | 352,420 | |||
Revenue under capitation arrangements | 34,518 | 38,144 | |||||
Total service revenue | 431,707 | 390,564 | |||||
OPERATING EXPENSES | |||||||
Cost of operations, excluding depreciation and amortization | 387,589 | 351,865 | |||||
Depreciation and amortization | 32,368 | 31,315 | |||||
Loss (gain) on sale and disposal of equipment and other | 186 | 579 | |||||
Severance costs | 225 | 134 | |||||
Total operating expenses | 420,368 | 383,893 | |||||
INCOME (LOSS) FROM OPERATIONS | 11,339 | 6,671 | |||||
OTHER INCOME AND EXPENSES | |||||||
Interest expense | 16,267 | 15,722 | |||||
Equity in earnings of joint ventures | (4,324 | ) | (1,428 | ) | |||
Non-cash change in fair value of interest rate hedge | (1,216 | ) | 4,093 | ||||
Other expenses (income) | (2,934 | ) | 1,432 | ||||
Total other expense (income) | 7,793 | 19,819 | |||||
INCOME (LOSS) BEFORE INCOME TAXES | 3,546 | (13,148 | ) | ||||
Benefit from (Provision for) income taxes | 1,864 | (1,135 | ) | ||||
NET INCOME (LOSS) | 5,410 | (14,283 | ) | ||||
Net income (loss) attributable to noncontrolling interests | 8,189 | 6,722 | |||||
NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS | $ | (2,779 | ) | $ | (21,005 | ) | |
BASIC NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS | $ | (0.04 | ) | $ | (0.36 | ) | |
DILUTED NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS | $ | (0.04 | ) | $ | (0.36 | ) | |
WEIGHTED AVERAGE SHARES OUTSTANDING | |||||||
Basic | 69,307,078 | 57,701,439 | |||||
Diluted | 69,307,078 | 57,701,439 | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS | |||||||
(IN THOUSANDS) | |||||||
(unaudited) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||
Net income (loss) | $ | 5,410 | $ | (14,283 | ) | ||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 32,368 | 31,315 | |||||
Amortization of operating lease assets | 14,711 | 15,699 | |||||
Equity in earnings of joint ventures | (4,324 | ) | (1,428 | ) | |||
Distributions from joint ventures | - | (407 | ) | ||||
Amortization deferred financing costs and loan discount | 748 | 746 | |||||
Loss (Gain) non sale and disposal of equipment | 186 | 579 | |||||
Amortization of cash flow hedge | 739 | 922 | |||||
Non-cash change in fair value of interest rate hedge | (1,216 | ) | 4,093 | ||||
Stock-based compensation | 11,897 | 12,185 | |||||
Change in fair value of contingent consideration | 1,974 | 2,335 | |||||
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in purchase transactions: | |||||||
Accounts receivable | (25,865 | ) | (9,997 | ) | |||
Other current assets | (6,277 | ) | (1,691 | ) | |||
Other assets | (5,892 | ) | (2,726 | ) | |||
Deferred taxes | (1,158 | ) | 942 | ||||
Operating leases | (12,883 | ) | (15,080 | ) | |||
Deferred revenue | (172 | ) | 335 | ||||
Accounts payable, accrued expenses and other | 6,839 | 9,077 | |||||
Net cash provided by operating activities | 17,085 | 32,616 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||
Purchase of imaging facilities and other acquisitions | (3,530 | ) | (9,644 | ) | |||
Purchase of property and equipment and other | (57,409 | ) | (55,915 | ) | |||
Proceeds from sale of equipment | 2 | 3 | |||||
Net cash used in investing activities | (60,937 | ) | (65,556 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||
Principal payments on notes and leases payable | (1,102 | ) | (184 | ) | |||
Payments on Term Loan Debt | (1,875 | ) | (3,688 | ) | |||
Contribution from noncontrolling partners | 4,169 | - | |||||
Proceeds from sale of economic interests in majority owned subsidiary, net of taxes | 8,713 | - | |||||
Proceeds from issuance of common stock | 218,385 | - | |||||
Proceeds from issuance of common stock upon exercise of options | 8 | 51 | |||||
Net cash provided by (used in) financing activities | 228,298 | (3,821 | ) | ||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH | (36 | ) | (229 | ) | |||
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 184,410 | (36,990 | ) | ||||
CASH AND CASH EQUIVALENTS, beginning of period | 342,570 | 127,834 | |||||
CASH AND CASH EQUIVALENTS, end of period | $ | 526,980 | $ | 90,844 | |||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||||||
Cash paid during the period for interest | $ | 18,285 | $ | 21,471 | |||
Cash paid during the period for income taxes | $ | 1 | $ | 40 | |||
RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO RADNET, INC. COMMON SHAREHOLDERS TO ADJUSTED EBITDA | |||||||
(IN THOUSANDS) | |||||||
Three Months Ended | |||||||
2024 | 2023 | ||||||
Net income (loss) attributable to | $ | (2,779 | ) | $ | (21,005 | ) | |
Income taxes | (1,864 | ) | 1,135 | ||||
Interest expense | 16,267 | 15,722 | |||||
Severance costs | 225 | 134 | |||||
Depreciation and amortization | 32,368 | 31,315 | |||||
Non-cash employee stock-based compensation | 11,897 | 12,185 | |||||
(Gain) loss on sale and disposal of equipment and other | 186 | 579 | |||||
Non-cash change in fair value of interest rate hedge | (1,216 | ) | 4,093 | ||||
Other (income) expenses | (2,934 | ) | 1,432 | ||||
Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI | 3,315 | - | |||||
Non-cash change to contingent consideration | 1,974 | 1,616 | |||||
Non-operational rent expenses | 1,023 | 959 | |||||
Adjusted EBITDA - | $ | 58,462 | $ | 48,165 | |||
Adjusted EBITDA - Digital Health Segment | 3,520 | 20 | |||||
Adjusted EBITDA - Imaging Center Segment | $ | 54,942 | $ | 48,145 | |||
PAYOR CLASS BREAKDOWN | ||||
First Quarter | ||||
2024 | ||||
58.4 | % | |||
Medicare | 21.7 | % | ||
Capitation | 8.0 | % | ||
Medicaid | 2.5 | % | ||
Workers Compensation/Personal Injury | 2.7 | % | ||
Other | 6.7 | % | ||
Total | 100.0 | % | ||
RADNET PAYMENTS BY MODALITY | ||||||||||||||||
First Quarter | Full Year | Full Year | Full Year | |||||||||||||
2024 | 2023 | 2022 | 2021 | |||||||||||||
MRI | 37.0 | % | 36.8 | % | 36.8 | % | 36.0 | % | ||||||||
CT | 16.5 | % | 16.8 | % | 17.5 | % | 17.2 | % | ||||||||
PET/CT | 6.6 | % | 6.4 | % | 5.8 | % | 5.5 | % | ||||||||
X-ray | 6.3 | % | 6.5 | % | 6.7 | % | 3.9 | % | ||||||||
Ultrasound | 13.6 | % | 12.9 | % | 12.6 | % | 12.7 | % | ||||||||
Mammography | 16.4 | % | 16.0 | % | 15.3 | % | 16.1 | % | ||||||||
Nuclear Medicine | 0.9 | % | 0.8 | % | 0.9 | % | 1.0 | % | ||||||||
Other | 2.7 | % | 3.9 | % | 4.5 | % | 4.6 | % | ||||||||
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||
PROCEDURES BY MODALITY* | |||||||||
First Quarter | First Quarter | ||||||||
2024 | 2023 | ||||||||
MRI | 412,821 | 369,556 | |||||||
CT | 250,365 | 229,379 | |||||||
PET/CT | 16,594 | 14,126 | |||||||
Nuclear Medicine | 8,595 | 9,258 | |||||||
Ultrasound | 639,221 | 608,986 | |||||||
Mammography | 472,514 | 455,479 | |||||||
X-ray and Other | 846,841 | 817,851 | |||||||
Total | 2,646,951 | 2,504,635 | |||||||
* Volumes include wholly owned and joint venture centers. | |||||||||
SCHEDULE OF ADJUSTED EARNINGS AND EARNINGS PER SHARE (3) | ||||||||||||||
(IN THOUSANDS EXCEPT SHARE DATA) | ||||||||||||||
(unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
2024 | 2023 (iv) | |||||||||||||
NET (LOSS) INCOME ATTRIBUTABLE TO RADNET, INC. | ||||||||||||||
COMMON STOCKHOLDERS | $ | (2,779 | ) | $ | (21,005 | ) | ||||||||
Subtract non-cash change in fair value of interest rate hedges (i) | (1,216 | ) | 4,093 | |||||||||||
Legal Settlement | - | - | ||||||||||||
Non-operational rent expenses (iii) | 1,023 | 959 | ||||||||||||
Contingent consideration | 1,974 | 1,616 | ||||||||||||
Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI | 3,305 | - | ||||||||||||
Holdback Re-valuation Adjustments - Quantib and | - | 719 | ||||||||||||
Total adjustments - loss (gain) | 5,086 | 7,387 | ||||||||||||
Subtract tax impact of Adjustments (ii) | 2,670 | 637 | ||||||||||||
Tax effected impact of adjustments | 7,756 | 8,024 | ||||||||||||
TOTAL ADJUSTMENT TO NET INCOME (LOSS) ATTRIBUTABLE | ||||||||||||||
TO | 7,756 | 8,024 | ||||||||||||
ADJUSTED NET LOSS ATTRIBUTABLE TO RADNET, INC. | 4,977 | (12,981 | ) | |||||||||||
COMMON STOCKHOLDERS | ||||||||||||||
WEIGHTED AVERAGE SHARES OUTSTANDING | ||||||||||||||
Diluted | 71,048,153 | 57,701,439 | ||||||||||||
ADJUSTED DILUTED NET LOSS PER SHARE | ||||||||||||||
ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS | $ | 0.07 | $ | (0.22 | ) | |||||||||
(i) Impact from the change in fair value of the hedges during the quarter. Excludes the amortization | ||||||||||||||
of the accumulation of the changes in fair value out of Other Comprehensive Income that existed prior to the hedges | ||||||||||||||
becoming ineffective. | ||||||||||||||
(ii) Tax effected using -8.63% and -52.5% blended federal and state effective tax rate for the first quarter of 2023 and 2024, respectively. | ||||||||||||||
(iii) Represents rent expense associated with de novo sites under construction prior to them becoming operational. | ||||||||||||||
(iv) Restated from what was presented in 2023 to include the losses of the AI businesses (ie, not add the losses back to earnings as was | ||||||||||||||
the case in 2023). The restated Adjusted Earnings for 2023 is due to the fact that AI is no longer its own reportable operating segment | ||||||||||||||
and is now embedded in the | ||||||||||||||
Footnotes
(1) 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 sale of equipment, other income or loss, debt extinguishments and non-cash equity compensation. Adjusted EBITDA includes equity earnings in unconsolidated operations and subtracts allocations of earnings to non-controlling 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
(2) As noted above, the Company defines Free Cash Flow as Adjusted EBITDA less total Capital Expenditures (whether completed with cash or financed) and Cash Interest paid. Free Cash Flow is a non-GAAP financial measure. The Company uses Free Cash Flow because the Company believes it provides useful information for investors and management because it measures our capacity to generate cash from our operating activities. Free Cash Flow does not represent total cash flow since it does not include the cash flows generated by or used in financing activities. In addition, our definition of Free Cash Flow may differ from definitions used by other companies.
Free Cash Flow 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.
(3) The Company defines Adjusted Earnings (Loss) Per Share as net income or loss attributable to
Adjusted Earnings (Loss) Per Share is reconciled to its nearest comparable GAAP financial measure. Adjusted Earnings (Loss) Per Share is a non-GAAP financial measure used as analytical indicator by
Source:
2024 GlobeNewswire, Inc., source