RadNet has reported financial results for its fourth quarter and full year, which ended Dec. 31, 2007.
For the fourth quarter, RadNet reported adjusted revenue and adjusted EBITDA of $110.9 million and $20.4 million, respectively, based on non-GAAP (generally accepted accounting principles) measures.
Adjusted revenue increased 8.4 percent and adjusted EBITDA increased 18.7 percent, respectively over the prior year’s pro forma quarter (pro forma to reflect the combination with Radiologix which did not occur until Nov. 15, 2006).
RadNet said the results reflect improved volume and margin performance from existing imaging centers as well as cost saving measures, the combination of which helped to offset the negative reimbursement effects of the federal Deficit Reduction Act (DRA), according to RadNet.
The company also reported a net loss for the fourth quarter of $11.7 million, compared to a net loss of $11 million for the two month period, which ended Dec. 31, 2006.
RadNet said attributed the slight uptick in losses to certain non-cash expenses and one-time non-recurring items including:
- $8.5 million reduction of 2007 revenue related to increasing the allowance for accounts receivable from dates of service prior to Dec. 31, 2006;
- $1.9 million gain on the sale of a joint venture interest;
- $500,000 non-cash loss on the fair value of interest rate hedges related to the company’s credit facilities;
- $400,000 of non-cash employee stock compensation expense resulting from the vesting of certain options and warrants; and
- $400,000 of non-cash deferred financing expense related to the amortization of financing fees paid as part of our $405 million credit facilities drawn down in November 2006 in connection with the Radiologix acquisition and the incremental $25 million term loan and revolving credit facility arranged in August 2007.
For the year, RadNet reported adjusted revenue and adjusted EBITDA of $434 million and $85.3 million, respectively, based on non-GAAP measures.
The company booked a net loss for the year of $18.1 million, compared to a net loss of $6.9 million for the fiscal year ended Oct. 31, 2006.
“Our ability to integrate Radiologix, acquire other strategic operations, build and improve our existing facilities and decrease operating costs contributed to our success in overcoming the difficulties our industry is facing in the aftermath of the Deficit Reduction Act,” said Howard Berger, MD, president and CEO.
“Our focus on operating regional multimodality networks and the consummation of important strategic transactions uniquely positioned us to absorb the $16 million impact to our revenue and Adjusted EBITDA from the DRA in 2007, while the vast majority of smaller operators struggled,” Berger said.
“We anticipate that we will benefit in 2008 from many of our accomplishments of 2007, which have yet to be fully realized in our financial statements. These include items that occurred at various times throughout 2007 and subsequent to year end, such as the closing of certain acquisitions, our investment in digital mammography and many other initiatives,” he concluded.