Service Fee Revenue Grew 10% From First Quarter 2003
DALLAS, May 6 /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, 2004.
First Quarter 2004 Results
For the first quarter 2004, Radiologix reported service fee revenue of
$69.5 million versus $63.2 million for the first quarter 2003 and
$66.0 million for the fourth quarter 2003, increases of 10.0% and 5.4%,
respectively.
Radiologix reported a net loss of $2.7 million (including a $3.3 million
after-tax impairment charge to goodwill detailed below under "Special
Charges") for the first quarter 2004 compared to a net loss of $4.6 million
(including a $581,000 after-tax charge related to severance costs and detailed
below under "Special Charges") for the first quarter 2003.
For the first quarter 2004, Radiologix reported a loss from continuing
operations of $2.6 million, compared to a loss from continuing operations of
$277,000 for the first quarter 2003.
Radiologix reported a net loss per diluted share of $0.12 (including a
$3.3 million after-tax impairment charge to goodwill detailed below under
"Special Charges") for the first quarter 2004 compared to a net loss per
diluted share of $0.21 (including a $581,000 after-tax charge related to
severance costs and detailed below under "Special Charges") for the first
quarter 2003.
For the first quarter 2004, loss per diluted share from continuing
operations was $0.12 compared to loss per diluted share from continuing
operations of $0.01 for the first quarter 2003.
Income from continuing operations excluding charges (as defined and
described below under "Special Charges" and reconciled to the most comparable
GAAP financial measure on page 9 below) was $700,000 for the first quarter
2004, compared to income from continuing operations excluding charges of
$304,000 for the first quarter 2003.
Diluted earnings per share ("EPS") from continuing operations excluding
charges was $0.03 for the first quarter 2004 compared to diluted EPS from
continuing operations excluding charges of $0.01 for the first quarter 2003
and a loss per diluted share from continuing operations excluding charges of
$0.01 for the fourth quarter 2003.
EBITDA from continuing operations excluding charges (as defined and
described below under "EBITDA" and "Special Charges" and reconciled to the
most comparable GAAP financial measure on page 9 below) was $12.5 million for
the first quarter 2004 compared to $11.9 million for the first quarter 2003, a
4.6% increase, and $10.6 million for the fourth quarter 2003, a 17.6%
increase. EBITDA from continuing operations excluding charges, as a percent
of service fee revenue, was 18.0% for the first quarter 2004 compared to 18.9%
for the first quarter 2003 and 16.1% for the fourth quarter 2004.
Cash flow from operating activities was $12.4 million for the first
quarter 2004 compared to $961,000 for the first quarter 2003.
"We are encouraged that for the second quarter in a row, it appears that
our emphasis on additional, effective marketing resources and physicians'
re-engagement in promoting their practices has resulted in revenue growth,"
said Stephen D. Linehan, president and C.E.O. of Radiologix. "We expect that
our concentration on operating efficiencies and lowering per-procedure costs
across the country will drive increasing profitability."
Balance Sheet
Days sales outstanding (DSOs) was 60 days at March 31, 2004, compared to
63 days at December 31, 2003, and 75 days at March 31, 2003.
Cash and cash equivalents were $41.9 million at March 31, 2004, compared
to $36.8 million at December 31, 2003. Radiologix's access to cash stood at
$76.9 million at March 31, 2004, including its undrawn $35.0 million
asset-based facility.
Total debt at March 31, 2004, was $173.3 million compared to total debt of
$174.1 million at December 31, 2003 and $177.1 million at March 31, 2003. Net
debt (total debt less cash and cash equivalents) at March 31, 2004, was
$131.4 million compared to net debt of $137.3 million at December 31, 2003 and
$164.1 million at March 31, 2003.
Special Charges to Continuing Operations
In accordance with FASB Statement 142, "Goodwill and Other Intangible
Assets," for the first quarter 2004, Radiologix incurred a $5.5 million
pre-tax impairment charge to goodwill related to our Questar subsidiary.
In the first quarter 2003, Radiologix incurred a $969,000 pre-tax charge
for severance costs related to cost reduction measures during the first
quarter 2003.
Discontinued Operations
At March 31, 2004, four diagnostic imaging centers were held for sale or
closure. One such center was sold in April 2004, leaving three centers that
are expected to be sold or closed over the next several months.
In the first quarter 2003, Radiologix incurred a $6.9 million pre-tax
impairment charge to goodwill related to seven imaging centers held for sale
or closure and reported in discontinued operations.
Guidance
Radiologix has examined and assessed the radiology sector of the
healthcare industry, the competitive landscape for radiology services, its
operations, and its opportunities for growth. Radiologix believes that it can
be in a position to achieve diluted EPS from continuing operations excluding
charges of $0.08 to $0.10 in 2004.
Since this financial measure is for an extended period of time and because
several assumptions have been made in determining this guidance, a change in
the factors that affect Radiologix's business could impact actual results.
This guidance does not reflect acquisitions or material expansion projects.
Forward-looking statements concerning fiscal year 2004 guidance relate to
future financial results or business expectations and, therefore, may prove to
be inaccurate due to changing or unexpected circumstances. Fiscal year 2004
guidance is made pursuant to the safe harbor provisions of the Securities
Litigation Reform Act of 1995. Please see the cautionary statements below.
GAAP and Non-GAAP Financial Information
This release contains certain financial information not derived in
accordance with generally accepted accounting principles (GAAP), including
EBITDA. Radiologix believes this information is useful to investors and other
interested parties. Such information should not be considered as a substitute
for any measures derived in accordance with GAAP, and may not be comparable to
other similarly titled measures of other companies. Reconciliation of this
information to the most comparable GAAP measures is included later in this
release.
EBITDA
EBITDA ("Earnings Before Interest, Taxes, Depreciation and Amortization,
and including equity in earnings of investments and minority interests") is a
non-GAAP financial measure used as an analytical indicator by Radiologix
management and the healthcare industry to assess business performance. It
also serves as a measure of leverage capacity and debt service ability.
EBITDA should not be considered as a measure of financial performance
under generally accepted accounting principles, and the items excluded from
EBITDA 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 is not a measurement determined in accordance with generally
accepted accounting principles and is thus susceptible to varying
calculations, EBITDA as presented may not be comparable to other similarly
titled measures of other companies.
EBITDA from continuing operations, excluding charges is used to show
adjustments to EBITDA for comparative purposes to previous periods. A
reconciliation of EBITDA to the most comparable GAAP financial measure may be
found on page 9 below.
Comparisons to Fourth Quarter 2003 Results
Fourth quarter 2003 GAAP results, and reconciliations for non-GAAP
results, may be found in our March 11, 2004, press release titled, Radiologix,
Inc. Announces Fourth Quarter And Fiscal Year End 2003 Results. This press
release is available on our Web site (http://www.radiologix.com) in the
"Investor Relations" section.
Conference Call
In connection with this earnings press release, you are invited to listen
to our conference call with Stephen D. Linehan, president and C.E.O., and Sami
S. Abbasi, executive vice president and C.O.O., and Richard J. Sabolik, senior
vice president and C.F.O., that will be broadcast live over the Internet on
Thursday, May 6, 2004, at 8:00 a.m., Central Time / 9:00 a.m. Eastern Time.
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 2004 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
owns or operates 102 diagnostic imaging centers located in 15 states as of May
5, 2004.
Safe Harbor Statement
This press release contains forward-looking statements that relate to
future financial results or business expectations and are made pursuant to the
safe harbor provisions of the Securities Litigation Reform Act of 1995. Such
statements give our current expectations or forecasts of future events; they
do not relate strictly to historical or current facts. 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 6, 2004. Radiologix undertakes
no obligation to update any forward-looking statement or statements to reflect
new events or circumstances or future developments.
We have tried, whenever possible, to identify such statements by using
words such as "anticipated," "estimates," "expect," "project," "intend,"
"plan," "believe," "will" and similar expressions in connection with any
discussion of future operations or financial performances. These statements
are subject to risks and uncertainties that exist in the Company's operations
and business environment. Business plans may change as circumstances warrant
and actual results may differ materially from any forward-looking statements,
which reflect the management's opinion only as of the date hereof. Such risks
and uncertainties include, but are not limited to, those associated with the
Company's acquisition and expansion strategy; integration of the Company's
affiliated physician practices and newly acquired imaging centers; the
Company's ability to achieve operating efficiencies and engage in successful
new development efforts; interruption of operations in certain regions due to
severe weather or other extraordinary events; recruitment and retention of
technologists by Radiologix and radiologists by the contracted radiology
groups; regulatory changes; the enforceability of its Service Agreements and
related documents; reimbursement trends; governmental policies; and general
economic and business conditions. Such risks and uncertainties, as well as
additional risk factors which could affect the forward-looking statements made
in this press release, are included in the Company's filings with the
Securities and Exchange Commission, including its Annual Report on Form 10-K
for the year ended December 31, 2003, and its periodic reports on Forms 10-Q
and 8-K (if any).
We cannot guarantee that any forward-looking statements will be realized,
although we believe we have been prudent in our plans and assumptions.
Achievement of future results is subject to risks, uncertainties and
potentially inaccurate assumptions. Should known or unknown risks or
uncertainties materialize, or should underlying assumptions prove inaccurate,
actual results could vary materially from past results and those anticipated,
estimated or projected. Investors should bear this in mind as they consider
forward-looking statements.
Radiologix, Inc.
Summary Income Statements
(In thousands, except per share data)
3 Months Ended
3/31/2004 3/31/2003
Service fee revenue $69,529 $63,206
Salaries and benefits 23,867 20,897
Field supplies 4,255 4,040
Field rent and lease expense 8,447 7,887
Other field expenses 11,305 10,332
Bad debt expense 5,898 5,466
Corporate general and administrative 3,612 3,641
Severance and other related costs --- 969
Impairment charge to goodwill 5,500 ---
Total costs and expenses $62,884 $53,232
Equity in earnings of investments 596 1,198
Minority interests in consolidated subsidiaries (255) (199)
Depreciation and amortization 6,888 6,765
Interest expense, net 4,431 4,669
Loss from continuing operations,
before income taxes $(4,333) $(461)
Income tax benefit (1,733) (184)
Loss from continuing operations $(2,600) $(277)
Discontinued Operations
Loss from discontinued operations $(179) $(7,222)
Income tax benefit (72) (2,889)
Loss from discontinued operations $(107) $(4,333)
Net loss $(2,707) $(4,610)
Basic loss per share from continuing ops. $(0.12) $(0.01)
Basic loss per share $(0.12) $(0.21)
Weighted average shares - basic 21,766 21,695
Diluted loss per share from continuing ops. $(0.12) $(0.01)
Diluted loss per share $(0.12) $(0.21)
Weighted average shares - diluted 22,288 21,751
Radiologix, Inc.
Reconciliation of Non-GAAP Financial Information
(In thousands, except per share data)
3 Mos. Ended Percent of 3 Mos. Ended Percent of
3/31/2004 Revenue 3/31/2003 Revenue
Service fee revenue $69,529 100.0 $63,206 100.0
Loss from continuing
operations $(2,600) (3.7) $(277) (0.4)
Less: Income tax benefit
from continuing ops. 1,733 2.5 184 0.3
Add: Interest expense, net 4,431 6.4 4,669 7.4
Add: Depreciation and
amortization 6,888 9.9 6,765 10.7
EBITDA from continuing
operations $6,986 10.1 $10,973 17.4
Add: Severance costs --- 969 1.5
Add: Impairment charge
to goodwill 5,500 7.9 --- ---
EBITDA from continuing
operations, excluding
severance costs
and charges $12,486 18.0 $11,942 18.9
3 Months Ended
3/31/2004 3/31/2003
Net loss $(2,707) $(4,610)
Less: Inc. tax benefit from disc. ops. 72 2,889
Add: Loss from discontinued operations 179 7,222
Loss from continuing operations $(2,600) $(277)
Add: Severance costs, net of tax --- 581
Add: Impairment charge to goodwill, net of tax 3,300 ---
Income from continuing operations,
excluding severance costs and charges $700 $304
Fully diluted shares outstanding 22,288 21,751
Income per share from continuing operations,
excluding charges - diluted $0.03 $0.01
Radiologix, Inc.
Summary Balance Sheets
(In thousands)
Audited
3/31/2004 12/31/2003
CURRENT ASSETS
Cash and cash equivalents $41,856 $36,766
Accounts receivable, net 60,085 58,746
Due from affiliates 2,642 4,104
Assets held for sale 251 251
Other current assets 7,818 7,571
Total current assets $112,652 $107,438
Property and equipment, net 59,397 60,233
Investment in joint ventures 11,061 10,665
Goodwill 14,571 20,110
Intangible assets, net 66,925 67,917
Deferred financing cost, net 7,746 8,151
Other assets 6,403 4,622
Total assets $278,755 $279,136
CURRENT LIABILITIES
Accounts payable and accrued expenses $18,120 $14,598
Accrued physician retention 10,236 8,821
Accrued salaries and benefits 7,828 7,788
Current portion of long-term debt 254 261
Current portion of capital lease obligation 869 1,438
Other current liabilities 419 482
Total current liabilities $37,726 $33,388
Deferred income taxes 2,355 4,260
Long-term debt, net of current portion 160,067 160,081
Convertible debt 11,980 11,980
Capital lease obligations, net of current portion 104 295
Deferred revenue 7,210 7,312
Other liabilities 244 319
Total liabilities $219,686 $217,635
Minority interests in consolidated subsidiaries 1,072 817
Total stockholders' equity 57,997 60,684
Total liabilities and stockholders' equity $278,755 $279,136
SOURCE Radiologix, Inc.
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http://www.radiologix.com
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CONTACT:
Investors, Paul R. Streiber of Radiologix,
Inc., +1-214-303-2702, or paul.streiber@radiologix.com
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