RadNet (NASDAQ: RDNT) reported Q4 EPS of $0.21, $0.06 better than the analyst estimate of $0.15. Revenue for the quarter came in at $300.8 million versus the consensus estimate of $294.16 million.

• For the fourth quarter of 2019, RadNet reports Total Net Revenue (“Revenue”) of $300.8 million and Adjusted EBITDA(1) of $46.9 million; Revenue increased 17.0% and Adjusted EBITDA(1) increased 5.5% as compared with the same quarter in 2018
• For full year 2019, RadNet reports Revenue of $1,154.2 million and Adjusted EBITDA(1)of $164.1 million; Revenue increased 18.4% and Adjusted EBITDA(1) increased 15.8% as compared with full year 2018
• Net Income Attributable to RadNet, Inc. Common Stockholders(“Net Income”) for the fourth quarter was $10.4 million, or $0.21 per diluted share; This compares to an Adjusted Net Income of $4.5 million, or $0.09 per diluted share, in the fourth quarter of 2018, adjusted to exclude a $39.5 million gain from the re-measurement of the Company’s equity interest in New Jersey Imaging Network upon its consolidation and a $19.1 million expense from changes in the organization of east coast and international operations, on a tax-effected basis (“Adjusted Net Income”)
• For full year 2019, Net Income was $14.8 million, or $0.29 per diluted share; This compares with an Adjusted Net Income of $7.6 million, or $0.16 per diluted share in 2018
• In the fourth quarter, aggregate volumes increased 5.6% and same center volumes increased 3.3% compared with last year’s fourth quarter
• RadNet announces 2020 guidance ranges, anticipating increases in Revenue, Adjusted EBITDA(1) and Free Cash Flow

Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented “Our business performance was very strong in the fourth quarter. Our key metrics improved from last year’s fourth quarter, including Revenue, Adjusted EBITDA(1) and aggregate and same-center volumes. In particular, we grew our fourth quarter Revenue by 17.0% and Adjusted EBITDA(1) by over 5.5% as compared with an excellent fourth quarter in 2018,” added Dr. Berger.

“Our focus on patient services, our highly-recognized regional branding and our deployment of leading-edge technologies make RadNet centers preferred by patients, health plans and referring physicians. As we continue through 2020, our focus will be on continued expansion of our regional networks through organic growth, acquisitions and the addition of our hospital joint venture offerings. Furthermore, as demonstrated by yesterday’s announcement of the acquisition of DeepHealth, we are committed to driving technology applications, including those utilizing artificial intelligence, that we believe will increase productivity, drive efficiencies and improve patient outcomes,” Dr. Berger noted.

Dr. Berger remarked, “Besides driving strong organic growth and effectively controlling expenses throughout the year, we made significant progress in 2019 towards furthering all aspects of our business strategy. First, with respect to acquisitions, we purchased Kern Radiology, an operator of five imaging centers in Bakersfield, California, as well as completed small tuck-in transactions in West Hills, California, Islip, New York and Central New Jersey. We established our second California-based joint venture with Dignity Health in Ventura County and entered into discussions with several health systems to establish additional joint ventures. Additionally, we began to pursue applications for artificial intelligence by creating a division within RadNet focused on developing algorithms for image interpretation and for streamlining certain business processes. This process which began by acquiring Nulogix and partnering with Whiterabbit.ai during 2019, will also look to acquire or partner with third party companies developing or offering alternative AI-based technology solutions. The agreement to acquire DeepHealth, announced yesterday, and the appointment of Dr. Greg Sorensen to direct our AI initiatives demonstrate our confidence and commitment to AI and our belief that AI will transform the way we do business in coming years.”

Dr. Berger commented, “We exceeded our revised Total Net Revenue guidance range and finished the year above the middle of our revised Adjusted EBITDA(1) range, ranges we increased from our initial guidance levels upon announcing our second quarter 2019 financial results. Our capital expenditures exceeded our revised guidance range primarily as a result of our investment in additional mammography capacity on the east coast in conjunction with the rollout of the Whiterabbit.ai mammography program.”

GUIDANCE:

RadNet sees FY2020 revenue of $1.175-1.225 billion, versus the consensus of $1.2 billion.

Dr. Berger noted, “We are optimistic about our business in 2020. First, we expect 2020 to have stable reimbursement from Medicare relative to 2019. We also believe we have potential upside in our rates with private payors and capitated medical groups as we continue to work with them to drive more imaging from significantly more expensive hospital settings into our lower cost locations. Second, we expect to benefit from the contributions of acquisitions that were part of RadNet for only a portion of 2019, such as Kern Radiology and the small tuck-in acquisitions we completed on both coasts throughout 2019. We also expect in 2020 to expand several of our joint ventures on both the east and west coasts, and establish one or more new JV partnerships. Finally, we plan to accelerate our commitment to AI solutions that can result in greater productivity and accuracy of our physicians and create new population health screening offerings for certain disease processes that can be offered to payors and health plans on an economical basis.”

Dr. Berger continued, “Thus far in 2020, winter weather conditions in the northeast have been very mild and our performance in January and February has been strong. We anticipate driving organic growth from the significant capital investments we made in 2019, which included a further commitment to 3D mammography technology, the addition and upgrading of MRIs with faster scanning and new applications and the expansion of a number of our wholly-owned and joint venture centers.”

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