RadNet second-quarter revenue increases 6.0% to $139.0 million

• Revenue for the quarter was $139.0 million and Adjusted EBITDA was $27.4 million; increases of 6.0% and 1.6%, respectively, over the prior year's quarter
• On a sequential basis, compared with the first quarter of 2010, Revenue and Adjusted EBITDA increased 11.9% and 33.7%, respectively
• Procedural volumes show improvement; Overall procedural volumes increased 4.7% over the prior year's quarter and 10.7% sequentially compared with the first quarter of 2010
• RadNet's per share net loss of $(0.32) for the quarter(compared with a per share loss of $(0.01)in the prior year) is primarily the result of a $9.9 million loss, or$(0.27) per share, on extinguishment of debt resulting from our recent refinancing transaction and a $1.5 million non-cash charge, or $(0.04) per share, from our interest rate swaps
• Recent refinancing transaction has brought total liquidity to approximately $195 million, inclusive of $20.5 million of cash balance, $100 million available revolving credit facility and the $75 million accordion feature of our senior secured loans

RadNet, Inc. (Nasdaq:RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services through a network of 191 fully-owned and operated outpatient imaging centers, today reported financial results for its second quarter of 2010.

Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, "We are pleased with the improvements we saw in our financial and operating results this quarter from our first quarter's performance. Our Revenue, Adjusted EBITDA and aggregate procedural volumes increased by double-digit growth rates from the first quarter of this year. Furthermore, our Revenue, Adjusted EBITDA and procedural volumes in the second quarter exceeded last year's second quarter levels."

Dr. Berger continued, "There has been much publicly written about the fact that physician office visits in 2010 have decreased on average between 5% and 10% as compared with the first six months of last year. The recent experiences of our marketing and sales teams, who call on physician offices, support these findings. Despite this, our same center performance has exceeded these industry metrics, which suggests that we are gaining market share in our core regions and illustrates the strength of our operating model."

"The challenging operating environment has brought us new opportunities to expand our business through acquisitions and to broaden the scope of our product and service offering. During the quarter, we completed important acquisitions of Truxtun Medical Group and of certain assets from the Sonix Medical Resources bankruptcy proceeding," added Dr. Berger. "Our competitors continue to experience significant procedural volume decreases, reduced access to available capital financing and financial pressure from lower reimbursement and cost structures that lack economies of scale. In contrast, RadNet remains a strong cash flow generator, with almost $200 million in liquidity under our existing capital structure.   As such, we believe we are well positioned to capitalize on business and acquisition opportunities."

Second Quarter Financial Results

For the second quarter of 2010, RadNet reported Revenue, Adjusted EBITDA and Net Loss of $139.0 million, $27.4 million and $(11.8) million, respectively. Revenue increased $7.8 million (or 6.0%), Adjusted EBITDA increased $0.4 million (or 1.6%) and Net Loss increased $11.4 million, respectively, over the second quarter of 2009. On a sequential basis, compared to the first quarter of 2010, Revenue increased $14.8 million (or 11.9%), Adjusted EBITDA increased $6.9 million (or 33.7%) and Net Loss increased $7.6 million, respectively.  Net Loss for the second quarter was $(0.32) per share, compared to a Net Loss of $(0.01) per share in the second quarter of 2009 (based upon a weighted average number of fully diluted shares outstanding of 36.9 million and 35.9 million for these periods in 2010 and 2009, respectively). Affecting Net Loss in the second quarter of 2010 were certain non-cash expenses and non-recurring items including: $9.9 million loss on extinguishment of debt related to the write-off of deferred financing fees associated with our refinanced credit facilities; $1.5 million non-cash loss on the fair value adjustments and related amortization of interest rate swaps associated with the Company's credit facilities, $1.2 million of non-cash employee stock compensation expense resulting from the vesting of certain options and warrants; $435,000 of severance paid in connection with headcount reductions related to cost savings initiatives; $51,000 loss on the disposal of certain capital equipment; and $695,000 of non-cash Deferred Financing Expense related to the amortization of financing fees paid as part of our new credit facilities and senior unsecured notes. The aggregate affect of these items totaled $(0.37) per share during the quarter.

For the second quarter of 2010, as compared to the prior year's second quarter, MRI volume increased 6.5%, CT volume decreased 1.6% and PET/CT volume decreased 3.5%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 4.7% over the prior year's second quarter.  On a same-center basis, including only those centers which were part of RadNet for both the second quarters of 2010 and 2009, MRI volume decreased 2.9%, CT volume decreased 10.0% and PET/CT volume decreased 5.1%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, decreased 4.1% over the prior year's same quarter.

Dr. Berger continued, "The refinancing transaction we completed this quarter was a transforming capital event for our Company. It has substantially increased our financial flexibility and has favorably positioned us to participate in the accelerating consolidation of our industry."

"We are very focused on initiatives designed to improve our operating margins. As our industry continues to experience procedural volume pressure from economic and healthcare industry factors, we will continue to drive down costs from our business. Scale and breadth of service offering are becoming increasingly important in our industry to create efficiency," concluded Dr. Berger.

Six Month Financial Results

For the six months ended June 30, 2010, RadNet reported Revenue, Adjusted EBITDA and Net Loss of $263.1 million, $53.3 million and $(15.9) million, respectively. Revenue increased $4.0 million (or 1.5%), Adjusted EBITDA decreased $5.4 million (or 10.1%) and Net Loss increased $14.7 million, respectively, over the first six months of 2009.  Net Loss for the six month period ended June 30, 2010 was $(0.43) per share, compared to a Net Loss of $(0.03) per share in corresponding six month period of 2009 (based upon a weighted average number of fully diluted shares outstanding of 36.6 million and 35.9 million for these periods in 2010 and 2009, respectively). Affecting Net Loss in the first six months of 2010 were certain non-cash expenses and non-recurring items including: $9.9 million loss on extinguishment of debt related to the write-off of deferred financing fees associated with our refinanced credit facilities; $1.5 million non-cash loss on the fair value adjustments and related amortization of interest rate swaps associated with the Company's credit facilities, $2.0 million of non-cash employee stock compensation expense resulting from the vesting of certain options and warrants; $567,000 of severance paid in connection with headcount reductions; $155,000 loss on the disposal of certain capital equipment; and $1.4 million of non-cash Deferred Financing Expense related to the amortization of financing fees paid as part of our new credit facilities and senior unsecured notes. The aggregate affect of these items totaled $(0.42) per share during the quarter.