RadNet (RDNT) Tops Q4 EPS by 2c, Beats on Revenues; Offers FY18 Revenue Outlook Above Consensus

Note: EPS may not be comparable

RadNet (NASDAQ: RDNT) reported Q4 EPS of $0.13, $0.02 better than the analyst estimate of $0.11. Revenue for the quarter came in at $235.6 million versus the consensus estimate of $228.46 million.

• For the fourth quarter of 2017, RadNet reports record Total Net Revenue (“Revenue”) of $235.6 million and record Adjusted EBITDA([1])of $40.7 million; Revenue increased 4.7% and Adjusted EBITDA(1) increased 16.6% as compared with the same quarter in 2016
• For full year 2017, RadNet reports record Revenue of $922.2 million and record Adjusted EBITDA([2])of $142.5 million; Revenue increased 4.3% and Adjusted EBITDA(1) increased 7.1% as compared with full year 2016
• Net Income Attributable to RadNet, Inc. Common Stockholders for the fourth quarter was $6.3 million (or $0.13 per diluted share), compared to Net Income of $3.7 (or $0.08 per diluted share) in the fourth quarter of 2016; this is adjusted for a one-time $13.5 million non-cash increase to income tax expense in the 2017 quarter as a result of the Tax Cut and Jobs Act of 2017 and the revaluation of RadNet’s deferred tax asset. (“Adjusted Net Income”)
• For full year 2017, Adjusted Net Income was $13.6 million (or $0.29 per diluted share), compared with Net Income of $7.2 million (or $0.15 per diluted share) in 2016
• Financial leverage was reduced from 4.8x Net Debt to Adjusted EBITDA(1) at year end 2016 to 4.0x at the end of 2017
• In the fourth quarter, same center volumes increased 2.5% compared with last year’s fourth quarter
• RadNet announces 2018 guidance ranges, anticipating increases in Revenue, Adjusted EBITDA(1) and Free Cash Flow and a decrease in capital expenditures

Dr. Berger noted, “We are optimistic about 2018. First, Medicare rates for 2018 are commensurate with 2017 reimbursement. Second, we expect to benefit from some of the capital expenditures, infrastructure investments and acquisitions we made during 2017. Third, in 2018, we have launched the MemorialCare joint venture and expect to expand other joint ventures we currently operate on both costs. Fourth, we expect additional Revenue in 2018 from our continued adoption of 3D breast imaging. Fifth, we expect to continue to benefit from the migration of services from hospital settings to the outpatient marketplace. Lastly, we anticipate an ongoing earnings benefit from a significant reduction in our overall effective tax rate from the Tax Cut and Jobs Act of 2017. It should also be noted that we are anticipating spending less on capital expenditures in 2018 than we did during the last two fiscal years as a result of having substantially completed the upgrade of our x-ray systems and the transition to 3D mammography.”

GUIDANCE:

RadNet sees FY2018 revenue of $950-975 million, versus the consensus of $931.59 million.

For earnings history and earnings-related data on RadNet (RDNT) click here.

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