RadNet (NASDAQ: RDNT) reported Q1 EPS of ($0.33), $0.16 worse than the analyst estimate of ($0.17). Revenue for the quarter came in at $248.33 million versus the consensus estimate of $258.42 million.

1st Quarter 2020 Results:

• In the first quarter 2020, Covid-19 negatively impacted Revenue by an estimated $25 million and Adjusted EBITDA(1) by approximately $14 million relative to the Company’s original operating budget
• Despite Covid-19’s impact, Revenue increased 3.7% to $281.6 million in the first quarter of 2020 from $271.5 million in the first quarter of 2019; This was primarily the result of the contributions of the Kern Radiology and Zilkha Radiology acquisitions completed subsequent to last year’s first quarter and price increases from capitated and fee-for-service payors
• Adjusted EBITDA(1) decreased 38.5% to $20.4 million in the first quarter of 2020 from $33.1 million in the first quarter of 2019, primarily related to aggregate and same center declines due to Covid-19
• Diluted loss per share was $(0.33) per share in the first quarter of 2020 as compared with diluted loss per share of $(0.08) from the prior year’s first quarter
• Aggregate procedural volumes decreased 0.6%; Same-center procedural volumes decreased 3.3% from the first quarter of 2019

Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, “I’m extremely proud and appreciative of the response of our employees, venders, operating partners and landlords who have enabled us to continue to provide essential imaging services to the communities we serve during this unprecedented worldwide crisis. Virtually all of our stakeholders have contributed to reducing our costs and conserving our cash resources. In many cases, these contributions required great personal sacrifices associated with deferring or reducing payments or current compensation. But, because we took aggressive and swift actions, RadNet is on solid financial footing. As of April 30th, we had a cash balance of approximately $50 million and we were undrawn on our revolving credit facility.”

Dr. Berger continued, “Specifically, we collaborated with landlords to restructure facility rental payments. We consolidated the patient volume of 97 of our locations, which we temporarily closed, into nearby facilities that remained open. We fully or partially furloughed over 3,900 of our approximately 8,600 employees, while many of the remaining employees agreed to substantial salary cuts (including our executive management team and salaried physicians who are taking 50% salary cuts). We restructured payment schedules with vendors that provide RadNet medical supplies and rent us equipment. We suspended all new capital projects. These measures, among others, support our belief that we will experience little to no cash burn through the end of the second quarter. Furthermore, based upon our current volumes and our projections for a recovery towards the end of 2020, we believe it is likely we will be undrawn on our revolving credit facility and have a strong cash balance at year end.”

“Also assisting our liquidity position was our receipt of almost $15 million under the first $30 billion appropriation of the Coronavirus Aid, Relief, and Economic Security Act (or CARES Act). Subject to our compliance with future reporting requirements, we do not anticipate being required to repay this money. A second $20 billion appropriate was announced two weeks ago, and we may be eligible for further payments. In addition to funds we received under the CARES Act, we received almost $40 million of accelerated Medicare advance payments from the Centers for Medicare & Medicated Services (CMS). These payments received in April are required to be repaid to CMS beginning 120 days after their receipt through the adjudication of Medicare claims for future services over a three month period. We will continue to avail ourselves of other grants or advances by government organizations or private payors that could further strengthen our balance sheet and enhance our cash position,” noted Dr. Berger.

Dr. Berger added, “We are beginning to see some signs of recovery. Our business experienced its low point in mid-April, where, on a blended basis, our procedural volumes were down over 75% from our original 2020 operating budget. As some states and local municipalities have begun to permit non-emergent healthcare procedures, our volumes have begun to increase. For the month of April and the first part of May, we are ahead of our post-Covid-19 operating and cash flow projections.”

“Based upon the recent improvement in volumes and my growing confidence with our expense and cash conservation initiatives, I believe RadNet will emerge in the post-Covid-19 environment as a stronger and more visible leader in our industry. Our scale, management depth and financial and operating resources separate us from virtually all of our competitors. We are already seeing potential M&A and other expansion opportunities that would have otherwise been unlikely, but for the pressures imposed by Covid-19,” added Dr. Berger.

“I finally want to recognize the courage and dedication of our front-line center-level staff who continue to work each day despite the risks associated with treating a wide spectrum of patients. To keep our patients and employees safe, we instituted new operating protocols, added virtual waiting room capabilities, provided personal protective equipment for all employees and patients and have created as sterile environment as possible. Despite all this, we recognize that our employees operating in this environment are truly heroes. I am sincerely grateful that these employees, and RadNet as a Company, can play an important role in an unprecedented time. I look forward to bringing back our furloughed work force and reopening our closed facilities as increasing patient volume dictates,” concluded Dr. Berger.

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