• Revenue increased 14.3% to $390.6 million in the first quarter of 2023 from $341.8 million in the first quarter of 2022; Excluding Revenue from our Artificial Intelligence (“AI”) reporting segment, Revenue from the Imaging Center segment in the first quarter of 2023 was $388.4 million, an increase of 13.9% from last year’s first quarter of $341.2 million
• Excluding losses from our AI reporting segment, Adjusted EBITDA⁽¹⁾ from Imaging Centers was $52.7 million in the first quarter of 2023 as compared with $41.7 million in the first quarter of 2022, an increase of 26.2%; Adjusted EBITDA⁽¹⁾, including losses from our AI reporting segment, was $48.2 million in the first quarter of 2023 as compared with $38.1 million in the first quarter of 2022, an increase of 26.3%
• Adjusting for unusual or one-time items impacting Net Loss in the quarter, Adjusted Loss Per Share⁽³⁾ was $(0.08) for the first quarter of 2023; This compares with Adjusted Loss Per Share⁽³⁾ of $(0.13) for the first quarter of 2022  
• Aggregate procedural volumes increased 14.0% and same-center procedural volumes increased 9.3% compared with the first quarter of 2022
• RadNet revises full-year 2023 guidance levels to increase Revenue and Adjusted EBITDA⁽¹⁾ ranges

LOS ANGELES, May 09, 2023 (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 363 owned and operated outpatient imaging centers, today reported financial results for its first quarter of 2023.

Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, “I am very pleased with the continuing strength of our core imaging center business. In our Imaging Center operating segment, Revenue increased almost 14% and Adjusted EBITDA⁽¹⁾ increased over 25% from last year’s first quarter. Our procedural volumes both on an aggregate and same-center basis demonstrated strong growth, in a quarter that is seasonally our weakest. Though the cost and availability of labor continues to be challenging, we are having more success in filling open positions and retaining talented team members.”

“Given the positive trends we are experiencing in our core business and the strong financial performance of the first quarter, we have elected to revise certain guidance levels upwards in anticipation of financial results that we believe will exceed our original expectations. We have increased 2023 guidance ranges for Revenue and Adjusted EBITDA⁽¹⁾,” added Dr. Berger.  

Dr. Berger continued, “We are executing on all facets of our strategic plan. In response to the heavy demand we are experiencing in our core imaging center geographies, we are in process of growing capacity and access through the de novo strategy we embarked on last year. We also continue to grow our joint venture offerings through establishing new health system partnerships and the expansion of existing ones. Furthermore, we believe that market pressures from a challenging environment for labor, significant rising interest rates and a lack of availability of capital could accelerate acquisition opportunities in an industry that remains highly fragmented and that is mainly comprised of smaller operators who lack the economies of scale that we have achieved. We also continue to make strides in AI that should materially enhance the accuracy, efficiency and margin profile of our service offerings in the coming years. In the coming quarters, we will be expanding our roll-out of the Enhanced Breast Cancer Detection (EBCD) program we launched in November of last year, powered by our DeepHealth AI technologies, and we continue to innovate new features and capabilities of our AI engines for breast, lung and prostate imaging.”

Financial Results

For the first quarter of 2023, RadNet reported Revenue from its Imaging Center reporting segment of $388.4 million and Adjusted EBITDA⁽¹⁾, excluding Losses from AI reporting segment, of $52.7 million. Revenue increased $47.3 million (or 13.9%) and Adjusted EBITDA⁽¹⁾, excluding Losses from the AI reporting segment, increased $10.9 million (or 26.2%). Including our AI reporting segment Revenue of $2.1 million, Revenue was $390.6 million in the first quarter of 2023, an increase of 14.3% from $341.8 million in last year’s first quarter. Unadjusted for AI reporting segment Adjusted EBITDA⁽¹⁾ losses of $4.5 million in the first quarter of 2023 and $3.6 million in the first quarter of 2022, Adjusted EBITDA⁽¹⁾ for the first quarter of 2023 was $48.2 million as compared with $38.1 million in the first quarter of 2022.

Net Loss for the first quarter of 2023 was $21.0 million as compared with a Diluted Net Income of $3.0 million for the first quarter of 2022. Net Loss Per Share for the first quarter of 2023 was $(0.36), compared with a Diluted Net Income per share of $0.05 in the first quarter of 2022, based upon a weighted average number of diluted shares outstanding of 57.7 million shares in 2023 and 56.4 million shares in 2022.

There were a number of unusual or one-time items impacting the first quarter including: $4.1 million of non-cash loss from interest rate swaps; $959,000 expense related to leases for our de novo facilities under construction that have yet to open their operations; $1.6 million non-cash increase to contingent consideration related to completed acquisitions; $719,000 expense related to the re-valuation of holdbacks related to completed acquisitions; and $7.6 million of net pre-tax expenses related to our AI division. Adjusting for the above items, Adjusted Loss⁽³⁾ from the Imaging Center reporting segment was $4.7 million and diluted Adjusted Loss Per Share⁽³⁾ was $(0.08) during the first quarter of 2023. This compares with Adjusted Loss⁽³⁾ from the Imaging Center reporting segment of $7.6 million and diluted Adjusted Loss Per Share⁽³⁾ of $(0.13) during the first quarter of 2022.

Also affecting Net Income in the first quarter of 2023 were certain non-cash expenses and unusual items including: $12.2 million of non-cash employee stock compensation expense resulting from the vesting of certain options and restricted stock; $134,000 of severance paid in connection with headcount reductions related to cost savings initiatives; and $746,000 of non-cash amortization of deferred financing costs and loan discounts related to financing fees paid as part of our existing credit facilities.

For the first quarter of 2023, as compared with the prior year’s first quarter, MRI volume increased 16.7%, CT volume increased 16.8% and PET/CT volume increased 20.9%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 14.0% 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 2023 and 2022, MRI volume increased 11.9%, CT volume increased 10.6% and PET/CT volume increased 20.5%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 9.3% over the prior year’s same quarter.

2023 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 excludes New Jersey Imaging Network capital expenditures.
(b)  Defined by the Company as Adjusted EBITDA⁽¹⁾ from Imaging Center Segment less Capital Expenditures and Cash Paid for Interest.
(c)  Net of payments to and from counterparties on interest rate swaps.

Dr. Berger highlighted, “We have increased our guidance ranges for Revenue and Adjusted EBITDA⁽¹⁾ to reflect the first quarter’s strong financial results as compared with our original budget. Though we remain vigilant about the economic environment, supply chain disruptions, inflation and the possibility of further variants of COVID-19, we have opportunities to expand our operations in all of our markets both organically and through new acquisitions and joint ventures. We also are increasing our guidance levels for cash interest expense and capital expenditures to account for both the rising cost of interest on that portion of our debt which is not subject to our interest rate swaps and to fund the completion of certain of our de novo facilities scheduled to open during the remainder of 2023 and the first half of 2024.”  

Conference Call for Today

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 2023 results on Tuesday, May 9th, 2023 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).

Conference Call Details:

Date: Tuesday, May 9, 2023
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=1612864&tp_key=c9dd50c578 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 10178605.

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 363 owned and/or operated outpatient imaging centers. RadNet's markets include California, Maryland, Delaware, New Jersey, New York, Florida 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 9,000 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 in this press release include, among others, statements we make regarding response to and the expected future impacts of COVID-19, including statements about our anticipated business results, balance sheet and liquidity and our future liquidity, burn rate and our continuing ability to service or refinance our current indebtedness.

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.