DALLAS, May 4 /PRNewswire-FirstCall/ -- Radiologix, Inc. (Amex: RGX), a
leading national provider of diagnostic imaging services, today announced
financial results for its first quarter ended March 31, 2006.
Select Financial Information
(in thousands of dollars) For the Three Months
Ended March 31,
2006 2005
(As restated)
Service fee revenue $65,117 $62,751
Service fee revenue excluding terminated
operations $65,117 $61,821
EBITDA from continuing operations (A) $12,736 $11,884
EBITDA from continuing operations excluding
terminated operations (A) $12,721 $11,552
Net income $2,036 $953
Income from continuing operations $1,799 $1,387
Income from continuing operations excluding
terminated operations (A) $1,784 $1,056
(A) As defined and reconciled below
First Quarter 2006 Results
For the first quarter ended March 31, 2006, service fee revenue was
$65.1 million, compared to $62.8 million for the first quarter of 2005.
Radiologix earned net income of $2.0 million, or $0.09 per diluted share,
compared to net income of $1.0 million or $0.04 per diluted share for the
first quarter of 2005.
* Service fee revenue excluding terminated operations was $65.1 million,
compared to $61.8 million for the first quarter of 2005.
* Income from continuing operations was $1.8 million, compared to $1.4
million for the first quarter of 2005.
* Income from continuing operations excluding terminated operations was
$1.8 million, compared to $1.1 million for the first quarter of 2005.
* EBITDA was $12.7 million, compared to $11.9 million for the first
quarter of 2005.
* EBITDA excluding terminated operations was $12.7 million, compared to
$11.6 million for the first quarter of 2005.
Restated 2005 Results
As we discussed in our 2005 Form 10-K, in addition to restating our
financial statements for the year ended December 31, 2004, the Company
restated its financial statements for the three quarters ended March 31,
June 30, and September 30, 2005 to correct the accounting treatment of the
PresGar equipment lease contract acquired on October 31, 2004, for $13.9
million. This restatement also resulted in a revision of our tax expense
for the three months ended March 31, 2005. The impact of the restatement in
the first quarter of 2005 is a reduction in depreciation and amortization
expense of $0.2 million, a reduction in income tax expense of $0.2 million,
and an increase in net income of $0.4 million. The financial information
contained in this press release reflects these restated amounts.
Charges and Gains
Radiologix recorded the following pre-tax charges and gains to
continuing operations, excluding terminated operations, during the first
quarter of 2006 and 2005:
* $387,000 in the first quarter of 2006 and $101,000 in the first quarter
of 2005 to record compensation expense for restricted stock awards and
stock options outstanding; and
* $807,000 in the first quarter of 2006 and $325,000 in the first quarter
of 2005 to record gains on sales of diagnostic imaging equipment.
Income Taxes
Due to losses for the last three years, it is uncertain if our deferred
tax assets will be realized. Valuation allowances for net deferred tax
assets were recorded in 2004 and 2005. The tax provision of $0.1 million
for the first quarter ended March 31, 2006, is for state income taxes and
federal alternative minimum tax.
Balance Sheet
Cash and cash equivalents were $44.9 million at March 31, 2006,
compared to $36.0 million at December 31, 2005, primarily reflecting
continued strong cash collections in the first quarter of 2006.
Net debt (total debt less cash and cash equivalents and restricted
cash) was $119.8 million at March 31, 2006, compared to net debt of $128.7
million at December 31, 2005. Total debt was $170.3 million at March 31,
2006 and December 31, 2005.
Days sales outstanding (DSOs) was 44 days for March 31, 2006 compared
to 48 days for December 31, 2005.
Sarbanes-Oxley Section 404
As noted in our 2005 Form 10-K, subsequent to December 31, 2005, but
prior to the finalization of our 2005 consolidated financial statements,
Radiologix placed into operation new controls to address the material
weakness we identified in our accounting for lease terminations. These new
controls include a more thorough and detailed review of material unusual
transactions by senior financial officers, and outside accounting experts
if deemed necessary.
We believe these new controls have remediated the material weakness
that existed as of December 31, 2005, and that these controls operated
effectively during the three months ended March 31, 2006.
Regulation G: GAAP and Non-GAAP Financial Information
This release contains certain financial information not derived in
accordance with GAAP. Radiologix uses both GAAP and non-GAAP metrics to
measure its financial results. We believe that, in addition to GAAP
metrics, these non-GAAP metrics assist Radiologix in measuring its
cash-based performance.
Radiologix 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.
As Radiologix has historically reported non-GAAP results to the
investment community, management also believes the inclusion of non-GAAP
measures provides consistency in its financial reporting.
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 below.
Income from continuing operations is defined as income from continuing
operations calculated in accordance with GAAP.
Income from continuing operations excluding terminated operations is
defined as income from continuing operations excluding terminated San
Antonio and certain Mid-Atlantic operations.
EBITDA is defined as earnings before interest, taxes, depreciation and
amortization, each from continuing operations, plus restricted stock
compensation expense, and is reconciled to its nearest comparable GAAP
financial measure.
EBITDA from continuing operations excluding terminated operations is
defined as EBITDA excluding terminated San Antonio and certain Mid-Atlantic
operations.
EBITDA and EBITDA from continuing operations excluding terminated
operations are non-GAAP financial measures used as analytical indicators by
Radiologix management and the healthcare industry to assess business
performance. They also serve as measures of leverage capacity and ability
to service debt.
EBITDA and EBITDA from continuing operations excluding terminated
operations should not be considered measures of financial performance under
GAAP, and the items excluded from EBITDA and EBITDA from continuing
operations excluding terminated operations should not be considered in
isolation or as an alternative 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 EBITDA and EBITDA from continuing operations excluding terminated
operations are not measurements determined in accordance with GAAP and are
therefore susceptible to varying methods of calculation, these metrics, as
presented, may not be comparable to other similarly titled measures of
other companies.
Conference Call
In connection with this press release, you are invited to listen to our
conference call with Sami S. Abbasi, president and chief executive officer,
and Michael N. Murdock, senior vice president and chief financial officer,
on Thursday, May 4, 2006, at 8 a.m. Central Time / 9 a.m. Eastern Time.
You may access the call by dialing (800) 289-0494 and entering code
6394809. A replay of the call will be available by dialing (888) 203-1112
and entering code 6394809.
In addition, the conference call will be broadcast live over the
Internet. You may listen to the call via the Internet by navigating to
Radiologix's Web site (http://www.radiologix.com ) and from the "Investor
Relations" drop-down menu, click on "Conference Calls & Presentations."
If you are unable to participate during the live Webcast, the First
Quarter 2006 Results Conference Call will be archived on Radiologix's Web
site (http://www.radiologix.com ). To access the replay, from the "Investor
Relations" drop-down menu, click on "Conference Calls & Presentations."
About Radiologix
Radiologix (http://www.radiologix.com ) is a leading national provider
of diagnostic imaging services, owning and operating multi-modality
diagnostic imaging centers that use advanced imaging technologies such as
positron emission tomography (PET), magnetic resonance imaging (MRI),
computed tomography (CT) and nuclear medicine, as well as x-ray, general
radiography, mammography, ultrasound and fluoroscopy. The diagnostic images
created, and the radiology reports based on these images, enable more
accurate diagnosis and more efficient management of illness for ordering
physicians. Radiologix owned or operated 69 diagnostic imaging centers
located in 7 states as of March 31, 2006.
Forward-Looking Statements
This press release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act").
Forward-looking statements include words such as "may," "will," "would,"
"could," "likely," "estimate," "intend," "plan," "continue," "believe,"
"expect" or "anticipate" and other similar words, and include all
discussions about our acquisition and development plans. We do not
guarantee that the events described in this press release will occur as
described, or that any positive trends noted in this press release will
continue.
These forward-looking statements generally relate to our plans,
objectives and expectations for future operations and are based upon
management's reasonable estimates of future results or trends. Although we
believe that our plans and objectives reflected in, or suggested by, such
forward-looking statements are reasonable, we may not achieve such plans or
objectives. You are cautioned not to unduly rely on such forward-looking
statements when evaluating the information presented in this press release.
You should read this press release completely and with the understanding
that actual future results may be materially different from what we expect.
We will not update forward-looking statements even though our situation may
change in the future.
Specific factors that might cause actual results to differ from our
expectations include, but are not limited to:
* economic, demographic, business and other conditions in our markets;
* the highly competitive nature of the healthcare business;
* changes in patient referral patterns;
* changes in the rates or methods of third-party reimbursement for
diagnostic imaging services;
* changes in our contracts with radiology practice groups;
* changes in the number of radiologists operating in our contracted
radiology practice groups;
* the ability to recruit and retain technologists;
* the availability of additional capital to fund capital expenditure
requirements;
* lawsuits against Radiologix and our contracted radiology practice
groups;
* changes in operating margins, particularly changes due to our managed
care contracts and capitated fee arrangements;
* failure by Radiologix to comply with state and federal anti-kickback
and anti-self referral laws or any other applicable healthcare
regulations;
* changes in business strategy and development plans;
* changes in federal, state or local regulations affecting the healthcare
industry;
* our indebtedness, debt service requirements and liquidity constraints;
* risks related to our Senior Notes and healthcare securities generally;
* interruption of operations due to severe weather or other extraordinary
events; and
* charges for unusual or infrequent (non-recurring) matters.
A more comprehensive list of such factors is set forth in the Company's
Annual Report on Form 10-K for the year ended December 31, 2005, and our
other filings with the Securities and Exchange Commission.
Any forward-looking statement speaks only as of the date on which such
statement is made. The information in this press release is as of May 4,
2006. Radiologix undertakes no obligation to update any forward-looking
statement or statements to reflect new events or circumstances or future
developments.
Radiologix, Inc.
Consolidated Balance Sheets
(In thousands)
March 31, December 31,
2006 2005
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $44,877 $36,004
Restricted cash 5,702 5,662
Accounts receivable, net of
allowances 41,418 40,815
Due from affiliates 1,768 1,737
Federal and state income tax
receivable 6,081 6,189
Other current assets 5,151 5,491
Total current assets $104,997 $95,898
Property and equipment, net 68,154 67,965
Investments in joint ventures 8,392 10,597
Intangible assets, net 53,217 54,050
Deferred financing costs, net 4,529 4,942
Other assets 966 1,076
Total assets $240,255 $234,528
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and other
accrued expenses $6,984 $10,157
Accrued physician retention 8,245 7,051
Accrued salaries and benefits 8,964 6,987
Accrued interest 4,838 685
Current maturities of capital
lease obligations 32 32
Other current liabilities 665 477
Total current liabilities $29,728 $25,389
Long-term debt, net of current
portion 158,270 158,270
Convertible debt 11,980 11,980
Capital lease obligations, net of
current portion 54 62
Deferred revenue 6,392 6,494
Other liabilities 1,524 1,488
Total liabilities $207,948 $203,683
Commitments and contingencies
Minority interests in consolidated
subsidiaries 913 1,874
STOCKHOLDERS' EQUITY:
Common stock 2 2
Treasury stock (180) (180)
Additional paid-in capital 16,002 15,615
Retained earnings 15,570 13,534
Total stockholders' equity $31,394 $28,971
Total liabilities and
stockholders' equity $240,255 $234,528
Radiologix, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
For the Three Months
Ended March 31,
2006 2005
(As restated)
Service fee revenue $65,117 $62,751
Costs of operations:
Cost of services 39,916 39,820
Equipment lease 3,756 2,806
Provision for doubtful accounts 5,279 4,467
Depreciation and amortization 5,970 5,644
Gross profit $10,196 $10,014
Corporate general and administrative 4,716 4,348
Interest expense, net, including
amortization of deferred financing
costs 4,477 4,676
Income before equity in earnings of
unconsolidated affiliates, minority
interests in consolidated subsidiaries,
income taxes and discontinued operations $1,003 $990
Equity in earnings of investments 1,045 622
Minority interests in income of
consolidated subsidiaries (146) (149)
INCOME BEFORE INCOME TAXES AND
DISCONTINUED OPERATIONS $1,902 $1,463
Income tax expense 103 76
INCOME FROM CONTINUING OPERATIONS $1,799 $1,387
Discontinued Operations:
Income (loss) from discontinued
operations before income taxes 237 (434)
Income tax expense (benefit) --- ---
Income (loss) from discontinued
operations $237 $(434)
NET INCOME $2,036 $953
INCOME PER COMMON SHARE
Income from continuing
operations-basic $0.08 $0.06
Income (loss) from discontinued
operations-basic $0.01 $(0.02)
Net income-basic $0.09 $0.04
Income from continuing
operations-diluted $0.08 $0.06
Income (loss) from discontinued
operations-diluted $0.01 $(0.02)
Net income-diluted $0.09 $0.04
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic 22,242,417 21,913,738
Diluted 22,242,417 22,509,821
Radiologix, Inc.
Reconciliation of Non-GAAP Financial Information
(In thousands)
Reconciliation of Income from
Continuing Operations to EBITDA from
Continuing Operations
For the Three Months
Ended March 31,
2006 2005
(As restated)
GAAP: Income from continuing operations $1,799 $1,387
Add: Income tax expense 103 76
Add: Interest expense, net 4,477 4,676
Add: Depreciation and amortization 5,970 5,644
Add: Restricted stock compensation expense 387 101
EBITDA from continuing operations $12,736 $11,884
Radiologix, Inc.
Reconciliation of Non-GAAP Financial Information, Excluding Terminated
Operations
(In thousands)
Reconciliation of Income from Continuing
Operations to EBITDA from Continuing
Operations, Excluding Terminated
Operations
For the Three Months
Ended March 31,
2006 2005
(As restated)
GAAP: Income from continuing operations,
excluding terminated operations $1,784 $1,056
Add: Income tax expense 103 76
Add: Interest expense, net 4,477 4,676
Add: Depreciation and amortization 5,970 5,643
Add: Restricted stock compensation expense 387 101
EBITDA from continuing operations
excluding terminated operations $12,721 $11,552
Radiologix, Inc.
Reconciliation of Financial Information, Excluding Terminated Operations
(In thousands)
For the Three Months Ended March 31, 2006
Radiologix
Excluding
Terminated Terminated
Radiologix Operations Operations
Service fee revenue $65,117 $--- $65,117
Costs of operations:
Cost of services 39,916 2 39,914
Equipment lease 3,756 6 3,750
Provision for doubtful
accounts 5,279 (23) 5,302
Depreciation and
amortization 5,970 --- 5,970
Gross profit $10,196 $15 $10,181
Corporate general and
administrative 4,716 --- 4,716
Interest expense, net,
including amortization of
deferred financing costs 4,477 --- 4,477
Income before equity in
earnings of unconsolidated
affiliates, minority interests
in consolidated subsidiaries,
income taxes and discontinued
operations $1,003 $15 $988
Equity in earnings of
unconsolidated affiliates 1,045 --- 1,045
Minority interests in income
of consolidated subsidiaries (146) --- (146)
INCOME BEFORE INCOME TAXES AND
DISCONTINUED OPERATIONS $1,902 $15 $1,887
Income tax expense 103 --- 103
INCOME FROM CONTINUING
OPERATIONS $1,799 $15 $1,784
Radiologix, Inc.
Reconciliation of Financial Information, Excluding Terminated Operations
(In thousands)
For the Three Months Ended March 31, 2005
(As restated)
Radiologix
Excluding
Terminated Terminated
Radiologix Operations Operations
Service fee revenue $62,751 $930 $61,821
Costs of operations:
Cost of services 39,820 354 39,466
Equipment lease 2,806 --- 2,806
Provision for doubtful
accounts 4,467 244 4,223
Depreciation and
amortization 5,644 1 5,643
Gross profit $10,014 $331 $9,683
Severance and other related
costs --- --- ---
Lease termination expense --- --- ---
Corporate general and
administrative 4,348 --- 4,348
Impairment of Goodwill --- --- ---
Interest expense, net,
including amortization of
deferred financing costs 4,676 --- 4,676
Income before equity in
earnings of unconsolidated
affiliates, minority interests
in consolidated subsidiaries,
Income taxes and discontinued
operations $990 $331 $659
Equity in earnings of
unconsolidated affiliates 622 --- 622
Minority interests in income
of consolidated subsidiaries (149) --- (149)
INCOME BEFORE INCOME TAXES
AND DISCONTINUED OPERATIONS $1,463 $331 $1,132
Income tax expense 76 --- 76
INCOME FROM CONTINUING
OPERATIONS $1,387 $331 $1,056
SOURCE Radiologix, Inc.
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Related links:
http://www.radiologix.com/
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CONTACT:
Michael N. Murdock, Chief Financial Officer
of Radiologix, Inc., +1-214-303-2717, or
michael.murdock@radiologix.com
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