RGX Radiologix

Radiologix Reports First Quarter 2005 Results; Company Generates $11.9 Million in EBITDA From Continuing Operations DALLAS, May 3 /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, 2005. Select Financial Information (in thousands of dollars) For the Three Months Ended March 31, 2005 2004 Service fee revenue, as reported $62,751 $66,042 Service fee revenue excluding terminated operations (A) $61,821 $60,851 EBITDA (A) $11,884 $12,300 EBITDA from continuing operations excluding terminated operations(A) $11,552 $10,441 Net income (loss), as reported $518 $(2,707) Income from continuing operations, as reported $787 $840 Income (loss) from continuing operations excluding terminated operations (A) $582 $(8) (A) As defined and reconciled below GAAP Results For the first quarter ended March 31, 2005, service fee revenue was $62.8 million, compared to $66.0 million for the first quarter 2004. Radiologix earned $518,000, or $0.02 per diluted share, compared to a net loss of $2.7 million or $0.12 per share for the first quarter 2004. First Quarter 2005 Results * Service fee revenue excluding our former San Antonio and certain Mid-Atlantic operations ("terminated operations") was $61.8 million compared to $60.9 million for the first quarter 2004. * Income from continuing operations was $787,000, or $0.03 per diluted share, compared to income from continuing operations of $840,000, or $0.04 per diluted share, for the first quarter 2004. * Income from continuing operations excluding terminated operations (defined and reconciled below) was $582,000, or $0.03 per diluted share, compared to a loss of $8,000, or breakeven on a per-share basis for the first quarter 2004. * EBITDA (defined and reconciled below) was $11.9 million, compared to $12.3 million for the first quarter 2004. * EBITDA from continuing operations excluding terminated operations (defined and reconciled below) was $11.6 million, compared to $10.4 million for the first quarter 2004, an increase of more than 10%. * Cash and cash equivalents were $44.4 million at March 31, 2005, compared to $34.1 million at December 31, 2004. * Net debt (total debt less cash and cash equivalents and restricted cash) was $120.4 million at March 31, 2005, compared to $130.9 million at December 31, 2004. Total debt at March 31, 2005 was $170.4 million, compared to $170.5 million at December 31, 2004. * Days sales outstanding (DSOs) were 48 days at March 31, 2005 and December 31, 2004. "We made solid operational and financial progress during the first quarter. We grew EBITDA by more than 10%, maintained our strong DSO performance, produced over $13 million in cash flow from operations, and are on track with our Radiologix Enhanced Workflow And Record Distribution ("REWARD") implementation," said Sami S. Abbasi, president and chief executive officer of Radiologix. "Throughout 2005, we will continue to focus on improving our primary operations, implementing and ensuring the success of our REWARD Program, and charting our future strategic direction. We have more work to do in each of these areas, but we are headed in the right direction." Sarbanes-Oxley 404 As noted in our 2004 Form 10-K, subsequent to December 31, 2004, but prior to the finalization of our 2004 consolidated financial statements, the company placed into operation new controls to address the material weakness we identified in our accounts receivable estimation process. These new controls include a retrospective collection analysis that matches cash collections to billed charges by month of service. We believe these new controls have remediated the material weakness that existed as of December 31, 2004, and that these controls operated effectively during the first quarter 2005. 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. Since 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 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 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, that will be on Tuesday, May 3, 2005, at 8:00 a.m., Central Time / 9:00 a.m. Eastern Time. You may access the call by dialing (800) 819-9193 and entering code 7435690. A replay of the call is available by dialing (888) 203-1112 and entering code 7435690. 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 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 73 diagnostic imaging centers located in 8 states as of March 31, 2005. 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, 2004, 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 3, 2005. 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, 2005 2004 ASSETS (Unaudited) CURRENT ASSETS: Cash and cash equivalents $44,408 $34,084 Restricted cash 5,561 5,539 Accounts receivable, net of allowances 44,304 44,197 Due from affiliates 2,197 2,029 Federal and state income tax receivables 1,865 3,905 Assets held for sale --- 305 Other current assets 5,322 6,996 Total current assets 103,657 97,055 Property and equipment, net 58,509 58,627 Investments in joint ventures 8,473 8,137 Goodwill 2,241 2,241 Intangible assets, net 70,175 71,200 Deferred financing costs, net 6,179 6,591 Deferred income taxes 9,229 8,892 Other assets 1,328 1,328 Total assets $259,791 $254,071 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable and other accrued expenses $10,278 $11,342 Accrued physician retention 7,927 8,384 Accrued salaries and benefits 8,545 7,339 Deferred income taxes 3,874 3,202 Accrued interest 4,853 708 Current portion of capital lease obligations 13 48 Current portion of long-term debt 53 109 Other current liabilities 690 536 Total current liabilities 36,233 31,668 Long-term debt, net of current portion 158,270 158,270 Convertible debt 11,980 11,980 Capital lease obligations, net of current portion 76 92 Deferred revenue 6,801 6,903 Other liabilities 1,114 1,000 Total liabilities 214,474 209,913 Commitments and contingencies Minority interests in consolidated subsidiaries 1,391 1,242 STOCKHOLDERS' EQUITY: Common stock 2 2 Treasury stock (180) (180) Additional paid-in capital 14,702 14,210 Retained earnings 29,402 28,884 Total stockholders' equity 43,926 42,916 Total liabilities and stockholders' equity $259,791 $254,071 Radiologix, Inc. Consolidated Statements of Operations (In thousands, except per share data) For the Three Months Ended March 31, 2005 2004 (Unaudited) (Unaudited) Service fee revenue $62,751 $66,042 Costs of operations: Cost of services 39,820 40,277 Equipment leases 2,806 4,523 Provision for doubtful accounts 4,467 5,492 Depreciation and amortization 5,838 6,154 Gross profit 9,820 9,596 Corporate general and administrative 4,348 3,791 Interest expense, net, including amortization of deferred financing costs 4,676 4,746 Income before equity in earnings of unconsolidated affiliates, minority interests in consolidated subsidiaries, income taxes and discontinued operations 796 1,059 Equity in earnings of unconsolidated affiliates 622 596 Minority interests in income of consolidated subsidiaries (149) (255) INCOME BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS 1,269 1,400 Income tax expense 482 560 INCOME FROM CONTINUING OPERATIONS 787 840 Discontinued Operations: Loss from discontinued operations before income taxes (434) (5,912) Income tax benefit (165) (2,365) Loss from discontinued operations (269) (3,547) NET INCOME (LOSS) $518 $(2,707) INCOME (LOSS) PER COMMON SHARE: Income (loss) from continuing operations - basic $0.03 $0.04 Income (loss) from discontinued operations - basic $(0.01) $(0.16) Net income (loss) - basic $0.02 $(0.12) Income (loss) from continuing operations - diluted $0.03 $0.04 Income (loss) from discontinued operations - diluted $(0.01) $(0.16) Net income (loss) - diluted $0.02 $(0.12) WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 21,913,738 21,765,985 Diluted 22,509,821 22,287,561 Radiologix, Inc. Reconciliation of Non-GAAP Financial Information (In thousands) Reconciliation of Income from Continuing Operations to EBITDA For the Three Months Ended March 31, 2005 2004 GAAP: Income from continuing operations $787 840 Add: Income tax expense 482 560 Add: Interest expense, net 4,676 4,746 Add: Depreciation and amortization 5,838 6,154 Add: Restricted stock compensation expense 101 --- EBITDA $11,884 $12,300 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, 2005 2004 Income (loss) from continuing operations excluding terminated operations $582 $(8) Add: Income tax expense 356 83 Add: Interest expense, net 4,676 4,642 Add: Depreciation and amortization 5,838 5,724 Add: Restricted stock compensation expense 101 --- EBITDA from continuing operations excluding terminated operations $11,552 $10,441 Radiologix, Inc. Reconciliation of Financial Information, Excluding Terminated Operations (In thousands) For the Three Months Ended March 31, 2005 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 leases 2,806 --- 2,806 Provision for doubtful accounts 4,467 244 4,223 Depreciation and amortization 5,838 1 5,837 Gross profit 9,820 331 9,489 Corporate general and administrative 4,348 --- 4,348 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 796 331 465 Equity in earnings of unconsolidated affiliates 622 --- 622 Minority interests in income of consolidated subsidiaries (149) --- (149) INCOME BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS 1,269 331 938 Income tax expense 482 126 356 INCOME FROM CONTINUING OPERATIONS $787 $205 $582 Radiologix, Inc. Reconciliation of Financial Information, Excluding Terminated Operations (In thousands) For the Three Months Ended March 31, 2004 Radiologix Excluding Terminated Terminated Radiologix Operations Operations Service fee revenue $66,042 $5,191 $60,851 Costs of operations: Cost of services 40,277 2,631 37,646 Equipment leases 4,523 4 4,519 Provision for doubtful accounts 5,492 703 4,789 Depreciation and amortization 6,154 430 5,724 Gross profit 9,596 1,423 8,173 Corporate general and administrative 3,791 --- 3,791 Interest expense, net, including amortization of deferred financing costs 4,746 104 4,642 Income (loss) before equity in earnings of unconsolidated affiliates, minority interests in consolidated subsidiaries, income taxes and discontinued operations 1,059 1,319 (260) Equity in earnings of unconsolidated affiliates 596 107 489 Minority interests in income of consolidated subsidiaries (255) (101) (154) INCOME BEFORE INCOME TAXES AND DISCONTINUED OPERATIONS 1,400 1,325 75 Income tax expense 560 477 83 INCOME (LOSS) FROM CONTINUING OPERATIONS $840 $848 $(8) http://www.newscom.com/cgi-bin/prnh/19991026/RLGXLOGO http://photoarchive.ap.org/ DATASOURCE: Radiologix, Inc. CONTACT: Paul R. Streiber, Investor Relations of Radiologix, Inc., +1-214-303-2702, or Web site: http://www.radiologix.com/

Copyright