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Fourth quarter 2009 per share Net Income was $0.02 compared to a Net Loss of $(0.15) for the prior year's quarter
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For the fourth quarter, RadNet reports record Revenue of $131.8 million and record Adjusted EBITDA of $27.0 million; increases of 3.4% and 20.1%, respectively, over the prior year's quarter
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For the year, RadNet reports a per share net loss of $(0.06) compared to a per share loss of $(0.36 )in the prior year
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For the year, RadNet reports record annual Revenue of $524.4 million and record annual Adjusted EBITDA of $105.9 million; increases of 5.1% and 7.6%, respectively, over the prior year's results
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RadNet reduced Net Debt during the year by $25.1 million; RadNet's Leverage Ratio was reduced to 4.17x Net Debt to Adjusted EBITDA, down from 4.74x one year ago
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RadNet announces it has closed one strategic acquisition and signed letters of intent to make an additional two strategic acquisitions that, on a combined annualized basis, are expected to generate revenue of $36 million. These acquisitions are designed to enhance RadNet's core market presence in California and Northern New Jersey
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RadNet announces a debt refinancing plan consisting of $485 million of senior secured debt and senior unsecured notes, along with an untapped revolving credit facility for $100 million; transaction would significantly lengthen debt maturities, enhance liquidity, fund two potential strategic acquisitions and provide growth capital
RadNet, Inc. (Nasdaq:RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services through a network of 180 fully-owned and operated outpatient imaging centers, today reported financial results for its fourth quarter and full year ended December 31, 2009.
Financial Results
Fourth Quarter Report:
For the fourth quarter of 2009, the Company reported Revenue, Adjusted EBITDA and Net Income of $131.8 million, $27.0 million and $637,000, respectively. Revenue increased $4.4 million (or 3.4%), Adjusted EBITDA increased $4.5 million (or 20.1%) and Net Income increased $6.0 million from a loss, respectively, over the fourth quarter of 2008. Net Income for the fourth quarter was $0.02 per share, compared to a Net Loss of $(0.15) per share in the fourth quarter of 2008 (based upon a weighted average number of fully diluted shares outstanding of 37.4 million and 35.9 million for these periods in 2009 and 2008, respectively). Affecting Net Income in the fourth quarter of 2009 were certain non-cash expenses and non-recurring items including: $1.0 million non-cash charge related to the amortization of a deferred loss on interest rate hedges related to the Company's credit facilities; $0.7 million of non-cash employee stock compensation expense resulting from the vesting of certain options and warrants; $0.1 million of severance paid in connection with headcount reductions related to cost savings initiatives from previously announced acquisitions; $0.1 million loss on the disposal of certain capital equipment; and $0.7 million of non-cash Deferred Financing Expense related to the amortization of financing fees paid as part of our existing credit facilities.
For the fourth quarter of 2009, as compared to the prior year's fourth quarter, MRI volume increased 3.1%, CT volume increased 2.3% and PET/CT volume increased 5.1%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 3.0% over the prior year's fourth quarter. Same Center Revenue, which measures Revenue from operations only if they were open for the full fourth quarter of 2009 and 2008, increased $0.5 million, an increase of 0.44%.
Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, "We were very effective in improving our fourth quarter performance when compared with the fourth quarter of 2008, particularly with respect to controlling costs. We are seeing the contribution of cost savings measures we instituted throughout 2009, a practice whereby we continually try to make our business run more efficiently. We are finding that our growing scale and ability to more effectively drive margin from recent acquisitions assist us with increasing both top-line growth as well as operating leverage. This is contributing to improved performance in what is a very challenged economic and reimbursement climate."
Annual Report:
For full year 2009, the Company reported Revenue, Adjusted EBITDA and Net Loss of $524.4 million, $105.9 million and $(2.3) million, respectively. Revenue increased $25.6 million (or 5.1%), Adjusted EBITDA increased $7.5 million (or 7.6%) and Net Loss decreased $10.5 million, respectively, from full year 2008 results. Net Loss for 2009 was $(0.06) per share, compared to a Net Loss of $(0.36) per share in 2008 (based upon a weighted average number of fully diluted shares outstanding of 36.0 million and 35.7 million in 2009 and 2008, respectively). Affecting Net Loss in 2009 were certain non-cash expenses and non-recurring items including: $3.6 million of non-cash employee stock compensation expense resulting from the vesting of certain options and warrants; $2.7 million of non-cash Deferred Financing Expense related to the amortization of financing fees paid as part of our existing credit facilities; $0.7 million of severance paid in connection with the headcount reductions related to cost savings initiatives from previously announced acquisitions; $0.5 million loss on the disposal of certain capital equipment; and $5.8 million non-cash charge related to the amortization of a deferred loss on interest rate hedges related to the Company's credit facilities.
For the year ended December 31, 2009, as compared to 2008, MRI volume increased 8.1%, CT volume increased 6.2% and PET/CT volume increased 5.1%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 5.3% for the twelve months of 2009 over 2008. Same Center Revenue, which measures revenue from operations only if they existed for the full years of 2009 and 2008, increased $8.0 million, an increase of 1.81%.
Liquidity and Capital Resources:
During 2009, the Company generated $25.4 million of Free Cash Flow, which it defines as Adjusted EBITDA less total Capital Expenditures (whether completed with cash or financed) and Cash Interest paid. This contributed to the Company's reduction of Net Debt by $25.1 million during 2009. The ratio of Net Debt to Adjusted EBITDA decreased from 4.74x at December 31, 2008 to 4.17x at December 31, 2009.
During 2009, the Company reduced its Accounts Payable by $11.5 million from $81.2 million at December 31, 2008 to $69.6 million at December 31, 2009. Working capital improved by $6.5 million during 2009.
Additionally, the Company reduced its Net Days Sales Outstanding (DSOs) during 2009 from 61 days at December 31, 2008 to its lowest level in RadNet's history of 54.0 days at December 31, 2009. This is reflective of several initiatives and protocols that were instituted and refined during the year to accelerate cash collections.
"We are pleased with the strides we made in 2009. Our results illustrate the power of our operating model. While others are struggling, we are differentiating ourselves and advancing our strategic plan," said Dr. Howard Berger, President and Chief Executive Officer. "I continue to see more opportunity than ever before. Relative size and operating efficiency is becoming increasingly important in our industry. In 2009, we improved all aspects of our operation, which is reflective in our growth, increased margins, increased free cash flow and accelerated deleveraging," added Dr. Berger.
"This deleveraging has enabled us to advance the debt refinancing transaction described below, which would extend the maturity of our debt and enhance our liquidity and credit profile," said Mark Stolper, Executive Vice President and Chief Financial Officer. "The enhanced cash position and revolver capacity afforded by the debt refinancing transaction would enable greater financial flexibility to grow our business and execute on our strategic objectives," added Mr. Stolper.
Actual 2009 Results vs. 2009 Guidance:
The following compares the Company's actual 2009 performance with previously announced guidance levels.
"We met or exceeded virtually all of our guidance levels during 2009. We exceeded our expectations with respect to year-end Net Debt and Cash Interest Expense. Our Net Debt balance was lower than anticipated at year-end due to higher than projected debt repayment from free cash flow generation during the year. Interest expense was lower than predicted, as we benefited from low LIBOR rates. Revenue, Adjusted EBITDA and Free Cash Flow performance were in-line with our guidance levels, and we spent nominally more than anticipated in Capital Expenditures," said Dr. Berger.
The Company will issue 2010 guidance in April, after its anticipated closing of certain strategic acquisitions and the debt refinancing transaction discussed below.
Strategic Acquisitions
On January 1, 2010, the Company completed the acquisition of Union Imaging Center in Union, New Jersey for approximately $5.4 million and the issuance of 75,000 shares of RadNet, Inc. common stock (valued at approximately $161,000 as of December 31, 2009). The center operates imaging modalities including MRI, CT, PET/CT, mammography, ultrasound, nuclear medicine and x-ray.