• 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 the Digital 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 second Houston acquisition of American 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

LOS ANGELES, May 08, 2024 (GLOBE NEWSWIRE) -- RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services through a network of 375 owned and operated outpatient imaging centers, today reported financial results for its first quarter of 2024.

Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, “Despite experiencing some adverse impact from severe winter weather conditions during the first quarter, both the Imaging Center and newly established Digital Health reportable operating segments demonstrated strong growth and achieved first quarter record results. Total Company Revenue grew 10.5% as compared with last year’s first quarter to a record $431.7 million. The Digital Health segment Revenue of $14.7 million increased 32.3% from last year’s same quarter.   The strong growth in Digital Health was, in part, driven by our AI businesses, whose Revenue increased 118% as compared with last year’s first quarter, mainly on the continuing success of the rollout of our Enhanced Breast Cancer Detection (EBCD) DeepHealth AI-powered screening mammography program.”

“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 Digital Health businesses and lean into both clinical and generative AI,” added Dr. Berger.

Dr. Berger continued, “At the end of the first quarter, we announced a new joint venture in the northern and eastern parts of the San Fernando Valley of Los Angeles with Providence Health System. As of quarter end, we had 137 of our 375 centers (or 36.5%) held in partnership with leading health systems. These partnerships allow us to play a more integral role within the local healthcare communities we serve by increasing access, disseminating new technologies and improving the quality of patient care.”

“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 Dr. Berger.

Dr. Berger continued, “We believe strong growth is sustainable as we continue to execute on various initiatives. In response to high demand and patient backlogs in many of RadNet’s local markets, we embarked over a year ago on a program to expand capacity through the development and construction of new imaging centers. We anticipate opening approximately a dozen new centers by year end 2024, and are working with prospective and existing health system partners to expand joint venture offerings. Digital Health initiatives continue to expand, including the further rollout of the EBCD program along with other clinical AI for lung and prostate cancers. Development of our DeepHealth OS technology platform is driving toward implementation within RadNet beginning in the third quarter of this year and within external customers as early as the first quarter of 2025. This DeepHealth OS will integrate new generative AI capabilities to help us and external customers automate and drive efficiencies for many of the back-office and support functions involved with running imaging centers.”

“RadNet’s balance sheet continues to strengthen. In March, we completed an offering of common stock, where we raised net proceeds of approximately $219 million, which contributed to the $527 million cash balance at quarter end. Additionally, subsequent to the quarter’s end, we completed a successful debt refinancing transaction, resulting in a reduction of our interest rates, an extension of maturities and the funding of additional cash to the balance sheet of approximately $168 million.   At quarter end, our leverage ratio of Net Debt to Adjusted EBITDA⁽¹⁾ was at a record low, slightly above 1.0x,” concluded Dr. Berger.

Financial Results

For the first quarter of 2024, RadNet reported Total Company Revenue of $431.7 million and Adjusted EBITDA⁽¹⁾ of $58.5 million. Revenue increased $41.1 million (or 10.5%) and Adjusted EBITDA⁽¹⁾ increased $10.3 million (or 21.4%) as compared with the first quarter of 2023.  

For the first quarter of 2024, RadNet reported Imaging Center Revenue of $417.0 million and Adjusted EBITDA⁽¹⁾ of $54.9 million. Revenue increased $37.6 million (or 9.9%) and Adjusted EBITDA⁽¹⁾ increased $6.8 million (or 14.1%) as compared with the first quarter of 2023.  

For the first quarter of 2024, RadNet reported Digital Health Revenue of $14.7 million and Adjusted EBITDA⁽¹⁾ of $3.5 million. Revenue increased $3.6 million (or 32.3%) and Adjusted EBITDA⁽¹⁾ increased $3.5 million (or 17,500%) as compared with the first quarter of 2023.   Digital Health Revenue and Adjusted EBITDA⁽¹⁾ growth was due 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 2023.

Total Company Net Loss for the first quarter of 2024 was $2.8 million as compared with a Total Company Net Loss of $21.0 million for the first quarter of 2023. Net Loss Per Share for the first quarter of 2024 was $(0.04), compared with a Net Loss per share of $(0.36) in the first quarter of 2023, based upon a weighted average number of diluted shares outstanding of 69.3 million shares in 2024 and 57.7 million shares in 2023.

There were a number of unusual or one-time items impacting the first quarter including: $1.2 million of non-cash loss from interest rate swaps; $1.0 million expense related to leases for our de novo facilities under construction that have yet to open their operations; $2.0 million non-cash increase to contingent consideration related to completed acquisitions; and $3.3 million of non-capitalized research and development expenses with respect to our DeepHealth Cloud OS and generative AI. Adjusting for the above items, Total Company Adjusted Earnings⁽³⁾ was $5.0 million and diluted Adjusted Earnings Per Share⁽³⁾ was $0.07 during the first quarter of 2024. This compares with Total Company Adjusted Loss⁽³⁾ of $13.0 million and diluted Adjusted Loss Per Share⁽³⁾ of $(0.22) during the first quarter of 2023.

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 RadNet for both the first quarters of 2024 and 2023, MRI volume increased 9.9%, CT volume increased 6.5% and PET/CT volume increased 15.3%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 3.8% over the prior year’s same quarter

2024 Revised Guidance

RadNet amends its previously announced guidance levels as follows:

_{(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.}

Financial Results Conference Call

Dr. Howard Berger, President and Chief Executive Officer, and Mark Stolper, Executive Vice President and Chief Financial Officer, will host a conference call to discuss its first quarter 2024 results on Thursday, May 9th, 2024 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).

Conference Call Details:

Date: Thursday, May 9, 2024
Time: 10:30 a.m. Eastern 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 10:30 a.m. call. There will also be simultaneous and archived webcasts available at https://viavid.webcasts.com/starthere.jsp?ei=1667758&tp_key=222b4e91a8 or http://www.radnet.com under the “Investors” menu section and “News Releases” sub-menu of the website. An archived replay of the call will also be available and can be accessed by dialing 844-512-2921 from the U.S., or 412-317-6671 for international callers, and using the passcode 10188629.

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 375 owned and/or operated outpatient imaging centers. RadNet's markets include California, Maryland, Delaware, New Jersey, New York, Florida, Texas and Arizona. In addition, RadNet provides radiology information technology and artificial intelligence 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 technologists, RadNet has a total of over 9,700 employees. For more information, visit http://www.radnet.com. 

Forward Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are expressions of our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, and anticipated future conditions, events and trends. Forward-looking statements can generally be identified by words such as: “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “will” and similar references to future periods.

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:

RadNet, Inc.
Mark Stolper, 310-445-2800
Executive Vice President and Chief Financial Officer

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 RadNet management and the healthcare industry to assess business performance, and is a measure of leverage capacity and ability to service debt. Adjusted EBITDA 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.

⁽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 RadNet, Inc. common stockholders and excludes losses or gains on the disposal of equipment, loss on debt extinguishments, bargain purchase gains, severance costs, loss on impairment, loss or gain on swap valuation, gain on extinguishment of debt, unusual or non-recurring entries that impact the Company’s tax provision and any other non-recurring or unusual transactions recorded during the period.

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 RadNet management and the healthcare industry to assess business performance. Adjusted Earnings Per Share should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted Earnings Per Share 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 Earnings Per Share 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.