RadNet, Inc. (NASDAQ:RDNT) Q1 2022 Earnings Conference Call May 9, 2022 10:30 AM ET Company Participants Mark Stolper - Executive Vice President and Chief Financial Officer Howard Berger - Chief Executive Officer Conference Call Participants Brian Tanquilut - Jefferies Mitra Ramgopal - Sidoti Operator Good day and welcome to the RadNet, Inc. First Quarter 2022 Financial Results Conference Call. Today’s conference is being recorded. At this time, I’d like to turn the conference over to Mr. Mark Stolper, Exec ...

Leading Radiology Forward Mark Stolper Chief Financial Officer March 2022 NASDAQ: RDNT Safe Harbor This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Specifically, statements concerning RadNet's ability to continue to grow the business by generating patient referrals and contracts with radiology practices, integrate acquired businesses, recruit and retain technologists, and receive third-party reimbursement for diagnostic im ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐ For the trans ...

RadNet, Inc. (NASDAQ:RDNT) Q4 2021 Earnings Conference Call March 1, 2022 10:30 AM ET Company Participants Mark Stolper - EVP & CFO Howard Berger - Chairman, President & CEO Conference Call Participants Brian Tanquilut - Jefferies Steven Brown - Barclays Mitra Ramgopal - Sidoti & Company Operator Good day, ladies and gentlemen, and welcome to the RadNet, Inc. Fourth Quarter and Full Year 2021 Financial Results Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-33307 RadNet, Inc. (Exact name of registrant as specified in charter) Delaware 13-3326724 (State or other j ...

RadNet, Inc. (NASDAQ:RDNT) Q3 2021 Results Conference Call November 8, 2021 10:30 AM ET Company Participants Howard Berger - President, CEO Mark Stolper - EVP, CFO Conference Call Participants Brian Tanquilut - Jefferies Sarah James - Barclays John Ransom - Raymond James Mitra Ramgopal - Sidoti Operator Good day, and welcome to the RadNet Third Quarter Financial Results Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Mr. Mark Stolper, Executive Vice Pre ...

PART I – FINANCIAL INFORMATION [ITEM 1. Financial Statements](index=3&type=section&id=ITEM%201.%20Financial%20Statements) RadNet's unaudited condensed consolidated financial statements for Q2 2021 reflect significant recovery, increased revenues, and a shift to net income [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet reflects increased total assets, cash, and receivables, alongside higher liabilities and a notable rise in total equity | Metric | June 30, 2021 (in thousands) | December 31, 2020 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Total Assets | $2,032,198 | $1,786,657 | | Cash and cash equivalents | $140,852 | $102,018 | | Accounts receivable | $157,328 | $129,585 | | Total Liabilities | $1,732,919 | $1,528,354 | | Total Equity | $299,279 | $258,303 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Statements of operations reflect a strong Q2 2021 revenue and profitability rebound, with increased service fees, positive net income, and diluted EPS Total Service Revenue | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :---------------------- | :------------------ | :------------------ | :----------- | | 3 Months Ended Jun 30 | $333,918 | $190,566 | +75.2% | | 6 Months Ended Jun 30 | $649,237 | $472,130 | +37.5% | Net Income (Loss) Attributable to RadNet, Inc. Common Stockholders | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :---------------------- | :------------------ | :------------------ | :----------- | | 3 Months Ended Jun 30 | $2,873 | $(10,594) | N/A (swing to profit) | | 6 Months Ended Jun 30 | $12,331 | $(26,952) | N/A (swing to profit) | Diluted Net Income (Loss) Per Share | Period | 2021 | 2020 | | :---------------------- | :--- | :--- | | 3 Months Ended Jun 30 | $0.05 | $(0.21) | | 6 Months Ended Jun 30 | $0.23 | $(0.53) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Comprehensive income statements indicate a positive shift to comprehensive income for Q2 2021, reflecting improved overall financial performance compared to prior year losses Comprehensive Income (Loss) Attributable to RadNet, Inc. Common Stockholders | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :---------------------- | :------------------ | :------------------ | :----------- | | 3 Months Ended Jun 30 | $3,784 | $(10,118) | N/A (swing to profit) | | 6 Months Ended Jun 30 | $14,155 | $(45,024) | N/A (swing to profit) | [Condensed Consolidated Statements of Stockholders' Equity](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders%27%20Equity) Stockholders' equity significantly increased from December 2020 to June 2021, driven by net income, stock-based compensation, and additional paid-in capital Total RadNet, Inc.'s Stockholders' Equity | Date | Amount (in thousands) | | :---------------- | :-------------------- | | June 30, 2021 | $197,064 | | December 31, 2020 | $165,743 | | June 30, 2020 | $147,808 | - Issuance of common stock for DeepHealth acquisition (June 1, 2020): **823,615 shares**, valued at **$33,011 thousand**[16](index=16&type=chunk)[19](index=19&type=chunk)[26](index=26&type=chunk) Stock-Based Compensation Expense | Period | 2021 (in thousands) | 2020 (in thousands) | | :---------------------- | :------------------ | :------------------ | | 3 Months Ended Jun 30 | $8,897 | $1,540 | | 6 Months Ended Jun 30 | $17,145 | $8,136 | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flows decreased in H1 2021, while investing activities saw increased cash use for acquisitions and equipment, and financing activities shifted to a net cash provision due to debt refinancing Net Cash Provided by Operating Activities | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :---------------------- | :------------------ | :------------------ | :----------- | | 6 Months Ended Jun 30 | $58,701 | $131,465 | -55.4% | Net Cash Used in Investing Activities | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :---------------------- | :------------------ | :------------------ | :----------- | | 6 Months Ended Jun 30 | $(119,658) | $(67,602) | +76.9% (increased use) | Net Cash Provided by (Used in) Financing Activities | Period | 2021 (in thousands) | 2020 (in thousands) | Change (YoY) | | :---------------------- | :------------------ | :------------------ | :----------- | | 6 Months Ended Jun 30 | $99,812 | $(19,439) | N/A (swing to provision) | Cash and Cash Equivalents, End of Period | Date | Amount (in thousands) | | :---------------- | :-------------------- | | June 30, 2021 | $140,852 | | June 30, 2020 | $84,583 | - Non-cash investing activities included the acquisition of equipment and leasehold improvements for approximately **$42.1 million** in 2021 and **$31.8 million** in 2020, which were not paid for as of the respective period ends[24](index=24&type=chunk) - On June 1, 2020, the company completed the stock purchase of DeepHealth, Inc. by issuing **823,615 shares** of common stock, ascribed a value of **$13.9 million**[26](index=26&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) These notes detail RadNet's business, accounting policies, acquisitions, debt, and equity compensation, clarifying revenue recognition, CARES Act impact, and strategic investments [NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION](index=11&type=section&id=NOTE%201%20%E2%80%93%20NATURE%20OF%20BUSINESS%20AND%20BASIS%20OF%20PRESENTATION) RadNet is a national provider of outpatient diagnostic imaging services, operating 353 centers across seven states, developing software and AI tools, and consolidating Variable Interest Entities - Operates **353** freestanding, fixed-site outpatient diagnostic imaging centers across **seven U.S. states** (Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York) as of June 30, 2021[29](index=29&type=chunk) - Services include magnetic resonance imaging (MRI), computed tomography (CT), positron emission tomography (PET), nuclear medicine, mammography, ultrasound, diagnostic radiology (X-ray), and fluoroscopy[29](index=29&type=chunk) - Designs and develops software applications, artificial intelligence tools, and other computerized systems for the diagnostic imaging industry[29](index=29&type=chunk) - Consolidates Variable Interest Entities (VIEs), which are professional corporations owned or controlled by senior management, where RadNet is the primary beneficiary due to its power to direct activities and absorb losses/receive benefits[31](index=31&type=chunk)[32](index=32&type=chunk)[33](index=33&type=chunk) Group (VIEs) Revenue and Operating Expenses (Net of Management Fees to RadNet) | Period | Revenue (in thousands) | Operating Expenses (in thousands) | | :---------------------- | :--------------------- | :-------------------------- | | 3 Months Ended Jun 30, 2021 | $45,100 | $45,100 | | 3 Months Ended Jun 30, 2020 | $26,900 | $26,900 | | 6 Months Ended Jun 30, 2021 | $91,200 | $91,200 | | 6 Months Ended Jun 30, 2020 | $66,400 | $66,400 | RadNet's Billed Net Service Fee Revenue for Management Services to the Group | Period | Amount (in thousands) | | :---------------------- | :-------------------- | | 3 Months Ended Jun 30, 2021 | $190,600 | | 3 Months Ended Jun 30, 2020 | $116,400 | | 6 Months Ended Jun 30, 2021 | $369,500 | | 6 Months Ended Jun 30, 2020 | $264,300 | [NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES](index=12&type=section&id=NOTE%202%20-%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details RadNet's key accounting policies, covering revenue recognition, CARES Act funding, goodwill valuation, income taxes, leases, equity compensation, derivatives, fair value, and EPS - Revenues are primarily derived from net patient fees for diagnostic services, recognized when performance obligations are satisfied (typically less than one day), and from capitation arrangements where a per-enrollee amount is earned monthly[43](index=43&type=chunk)[46](index=46&type=chunk) CARES Act Funding Received | Funding Type | Amount (in millions) | Period | | :-------------------------- | :------------------- | :-------------------------------- | | Provider Relief Funding | $6.3 | 6 months ended June 30, 2021 | | Accelerated Medicare Payments | $39.5 | 12 months ended December 31, 2020 | | Paycheck Protection Program | $4.0 | 12 months ended December 31, 2020 | | Blue Shield Advance Payments | $5.0 | 12 months ended December 31, 2020 | - For the six months ended June 30, 2021, **$10.3 million** of accelerated Medicare and **$3.8 million** of Blue Shield funds were applied to revenue. The **$4.0 million** PPP loan was forgiven in December 2020[49](index=49&type=chunk)[50](index=50&type=chunk) - Total deferred Social Security taxes under the CARES Act amounted to **$16.3 million** at June 30, 2021[52](index=52&type=chunk) Goodwill Activity (in thousands) | Item | Amount | | :------------------------------------------ | :------- | | Balance as of December 31, 2020 | $472,879 | | Goodwill acquired through acquisitions | $29,375 | | Goodwill attributable to Simi Valley Imaging Group LLC formation | $105 | | Other Adjustments | $(28) | | Balance as of June 30, 2021 | $502,331 | Effective Income Tax Rates | Period | 2021 Effective Tax Rate | 2020 Effective Tax Rate | | :---------------------- | :---------------------- | :---------------------- | | 3 Months Ended Jun 30 | 26.2% (expense) | 33.3% (benefit) | | 6 Months Ended Jun 30 | 24.9% (expense) | 27.8% (benefit) | - Entered into four forward interest rate agreements (2019 Swaps) with a total notional amount of **$500 million** to secure constant interest rates on variable rate bank debt, with effective dates from October 2020 and maturities in October 2023 and October 2025[67](index=67&type=chunk) Fair Value of 2019 Swaps - Interest Rate Contracts (in thousands) | Date | Fair Value | | :---------------- | :----------- | | June 30, 2021 | $26,709 | | December 31, 2020 | $37,989 | Fair Value vs. Face Value of Long-Term Debt (in thousands) | Date | Total Fair Value | Total Face Value | | :---------------- | :--------------- | :--------------- | | June 30, 2021 | $772,313 | $774,125 | | December 31, 2020 | $661,640 | $662,403 | Diluted Net Income (Loss) Per Share Attributable to RadNet, Inc. Common Stockholders | Period | 2021 | 2020 | | :---------------------- | :--- | :--- | | 3 Months Ended Jun 30 | $0.05 | $(0.21) | | 6 Months Ended Jun 30 | $0.23 | $(0.53) | - Equity investments for which fair value is not readily determinable are recognized at cost, including **$1.2 million** in Medic Vision Imaging Solutions Ltd., **$2.0 million** in Turner Imaging Systems, and **$1.0 million** in WhiteRabbit.ai Inc. (plus a **$2.5 million** loan to WhiteRabbit.ai)[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) [NOTE 3 – RECENT ACCOUNTING AND REPORTING STANDARD](index=20&type=section&id=NOTE%203%20%E2%80%93%20RECENT%20ACCOUNTING%20AND%20REPORTING%20STANDARD) RadNet is evaluating ASU 2021-01 and ASU 2020-04 (Reference Rate Reform) impacts, while prior ASU adoptions (2020-01, 2019-12) had no material effect - Currently evaluating the potential impact of ASU 2021-01 and ASU 2020-04 (Reference Rate Reform) on financial statements[87](index=87&type=chunk)[88](index=88&type=chunk) - Adoption of ASU 2020-01 (Equity Securities, Equity Method, and Derivatives) and ASU 2019-12 (Income Taxes) in Q1 2021 did not have a material impact[89](index=89&type=chunk)[90](index=90&type=chunk) [NOTE 4 – FACILITY ACQUISITIONS](index=21&type=section&id=NOTE%204%20%E2%80%93%20FACILITY%20ACQUISITIONS) RadNet acquired assets from **15 entities** in Q1 and Q2 2021 for **$64.9 million** cash, adding **$29.375 million** in goodwill, to expand in key markets, and formed Simi Valley Imaging Group, LLC - Acquired assets of **15 entities** during Q1 and Q2 2021 for a total cash consideration of **$64.9 million**, primarily to strengthen market presence in New York City, New Jersey, and California[91](index=91&type=chunk) - These acquisitions resulted in the recognition of **$29.375 million** in goodwill[91](index=91&type=chunk) - Formed Simi Valley Imaging Group, LLC on January 1, 2021, contributing **$0.3 million** in assets for a **60%** economic interest[92](index=92&type=chunk) [NOTE 5 – CREDIT FACILITIES AND NOTES PAYABLE](index=22&type=section&id=NOTE%205%20%E2%80%93%20CREDIT%20FACILITIES%20AND%20NOTES%20PAYABLE) RadNet refinanced its credit agreement on April 23, 2021, with a new **$725.0 million** First Lien Term Loan and a **$195.0 million** Barclays Revolving Credit Facility, increasing total term loan debt while maintaining compliance and significant borrowing capacity Total Term Loan Debt Obligations (in thousands) | Date | Amount | | :---------------- | :------- | | June 30, 2021 | $759,868 | | December 31, 2020 | $652,704 | - Refinanced prior first lien credit agreement on April 23, 2021, with a new **$725.0 million** First Lien Term Loan and a **$195.0 million** Barclays Revolving Credit Facility[94](index=94&type=chunk) - Total costs of the Restated Credit Agreement amounted to approximately **$14.9 million**, including capitalized discounts/deferred finance costs, debt restructuring expenses, loss on early extinguishment of debt, and interest expense[94](index=94&type=chunk) - First Lien Term Loans mature on April 23, 2028, with quarterly principal payments of approximately **$1.8 million**[96](index=96&type=chunk) - SunTrust Term Loan: **$49.125 million** outstanding at June 30, 2021, matures August 31, 2023, with scheduled quarterly payments of **$0.8 million**, increasing at intervals[93](index=93&type=chunk)[99](index=99&type=chunk) - Available borrowing capacity at June 30, 2021: **$187.2 million** under Barclays Revolving Credit Facility (after **$7.8 million** reserved for letters of credit) and **$30.0 million** under SunTrust Revolving Credit Facility (no outstanding balance)[93](index=93&type=chunk)[104](index=104&type=chunk)[211](index=211&type=chunk) [NOTE 6 – STOCK-BASED COMPENSATION](index=24&type=section&id=NOTE%206%20%E2%80%93%20STOCK-BASED%20COMPENSATION) RadNet's Restated Equity Incentive Plan, approved June 2021, reserves **16,500,000 shares** for awards, with stock-based compensation significantly increasing in Q2 2021 due to higher RSA fair value and COVID-19 bonuses - The RadNet, Inc. Equity Incentive Plan (Restated Plan) was approved on June 10, 2021, reserving **16,500,000 shares** of common stock for issuance[108](index=108&type=chunk) - As of June 30, 2021, there were **525,399** outstanding options to acquire common stock (**430,702** exercisable) under the 2006 Plan, and **399,398** outstanding options (**37,713** exercisable) under the DeepHealth Plan[110](index=110&type=chunk)[112](index=112&type=chunk) - Unvested Restricted Stock Awards (RSAs) totaled **427,688 shares** at June 30, 2021[113](index=113&type=chunk) Stock-Based Compensation Expense | Period | 2021 (in thousands) | 2020 (in thousands) | | :---------------------- | :------------------ | :------------------ | | 3 Months Ended Jun 30 | $8,897 | $1,456 | | 6 Months Ended Jun 30 | $17,145 | $8,078 | - During the six months ended June 30, 2021, awards amounting to **$6.5 million** in compensation expense were issued as employee COVID-19 related bonuses[115](index=115&type=chunk)[182](index=182&type=chunk) [NOTE 7 – SUBSEQUENT EVENTS](index=26&type=section&id=NOTE%207%20%E2%80%93%20SUBSEQUENT%20EVENTS) On July 30, 2021, RadNet sold a **24.9%** ownership interest in a subsidiary for **$13.1 million** and acquired business assets for approximately **$5.2 million** - On July 30, 2021, sold a **24.9%** ownership interest in a majority-owned subsidiary for **$13.1 million**, retaining a **50.1%** interest[118](index=118&type=chunk) - On July 30, 2021, acquired certain business assets for approximately **$5.2 million**[119](index=119&type=chunk) [ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses RadNet's financial performance, highlighting strong 2021 recovery in volumes and revenue, strategic acquisitions, joint ventures, critical accounting policies, results, Adjusted EBITDA, and liquidity [Overview](index=27&type=section&id=Overview) RadNet is a leading national provider of outpatient diagnostic imaging services, operating **353 centers** across **seven states**, developing AI tools, and diversifying revenue through various payors and capitation arrangements - Operates **353** freestanding, fixed-site outpatient diagnostic imaging centers in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York as of June 30, 2021[126](index=126&type=chunk) - Investments in Artificial Intelligence (AI) through Nulogix, DeepHealth, Whiterabbit.ai, and a collaboration with Hologic, focusing on developing solutions to assist radiologists in interpreting images and improving patient care, initially in mammography[126](index=126&type=chunk) Net Revenues (in millions) | Period | 2021 | 2020 | | :---------------------- | :--- | :--- | | 6 Months Ended Jun 30 | $649 | $472 | Total Service Revenue by Primary Patient Classification (Six Months Ended June 30, 2021, in thousands) | Payor Type | Amount | | :-------------------------------- | :------- | | Commercial insurance | $369,566 | | Medicare | $134,877 | | Medicaid | $17,486 | | Workers' compensation/personal injury | $20,966 | | Other patient revenue | $9,961 | | Management fee revenue | $10,752 | | Teleradiology and Software revenue | $5,047 | | Other | $6,416 | | **Service fee revenue** | **$575,071** | | Revenue under capitation arrangements | $74,166 | | **Total service revenue** | **$649,237** | [Recent Developments](index=28&type=section&id=Recent%20Developments) By mid-2021, RadNet's procedure volumes returned to pre-COVID-19 levels, operations normalized, and the company acquired **19 new centers** year-to-date, expecting continued benefits from 2020 cost-saving measures - Procedure volume returned to pre-COVID-19 levels by mid-2021, and business operations have resumed normal status[131](index=131&type=chunk) - Acquired **19 new centers** in California, New Jersey, and New York year-to-date[131](index=131&type=chunk) [Equity Investments, Acquisitions and Dispositions, and Joint Venture Activity](index=28&type=section&id=Equity%20Investments%2C%20Acquisitions%20and%20Dispositions%2C%20and%20Joint%20Venture%20Activity) RadNet continues growth via equity investments, facility acquisitions, and joint ventures, acquiring **15 entities** for **$64.9 million** in Q1/Q2 2021, adding **$29.375 million** goodwill, forming Simi Valley Imaging Group, LLC, and significantly increasing joint venture earnings - Equity investments (recognized at cost due to no readily determinable fair value) include: **$1.2 million** in Medic Vision Imaging Solutions Ltd. (**14.21%** equity), **$2.0 million** in preferred shares of Turner Imaging Systems (plus a **$0.1 million** convertible note), and **$1.0 million** equity interest in WhiteRabbit.ai Inc. (plus a **$2.5 million** loan)[133](index=133&type=chunk)[134](index=134&type=chunk)[135](index=135&type=chunk) - Completed the acquisition of assets from **15 entities** during Q1 and Q2 2021 for a total cash consideration of **$64.9 million**, resulting in **$29.375 million** in goodwill. These acquisitions aimed to strengthen market presence in New York City, New Jersey, and California[136](index=136&type=chunk) - Formed Simi Valley Imaging Group, LLC on January 1, 2021, contributing **$0.3 million** in assets for a **60%** economic interest[137](index=137&type=chunk) Joint Venture Investment and Financial Information (Six Months Ended June 30, in thousands) | Metric | 2021 | 2020 | | :------------------------------------------ | :------- | :------- | | Equity in earnings in these joint ventures | $5,406 | $2,900 | | Net revenue (JV data) | $64,636 | $43,849 | | Net income (JV data) | $10,258 | $6,001 | - Made an additional equity contribution of **$1.4 million** to an Arizona joint venture on June 23, 2021, without changing the ownership interest percentage[139](index=139&type=chunk) [Critical Accounting Policies](index=30&type=section&id=Critical%20Accounting%20Policies) This section outlines RadNet's critical accounting policies involving significant management judgment and estimates, including revenue recognition, Provider Relief Fund compliance, accounts receivable allowances, fair value in business combinations, and annual impairment testing for goodwill and indefinite-lived intangibles - Revenue recognition involves management's estimates of amounts expected from patients and third-party payors, including contractual allowances and implicit price concessions for uninsured accounts[145](index=145&type=chunk) - Recognition of Provider Relief Fund revenue requires management to assess compliance with HHS requirements, with potential for recoupment if conditions are not met[147](index=147&type=chunk) - Accounts receivable allowances are maintained based on specific payor collection issues and historical experience[148](index=148&type=chunk) - Business combinations require estimates of the fair values of acquired assets and assumed liabilities, with any excess consideration allocated to goodwill, subject to refinement during the measurement period[149](index=149&type=chunk) - Goodwill and indefinite-lived intangibles are reviewed annually for impairment, requiring management assessments of business and financial prospects, with no impairment identified through June 30, 2021[151](index=151&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) RadNet's Q2 2021 results show significant recovery and growth, driven by higher procedure volumes and effective cost management, leading to a return to profitability despite rising operating expenses [Three Months Ended June 30, 2021 Compared to the Three Months Ended June 30, 2020](index=33&type=section&id=Three%20Months%20Ended%20June%2030%2C%202021%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030%2C%202020) For Q2 2021, total revenue increased by **54.6%**, driven by **80.5%** growth in same-center procedure volumes, reflecting a strong recovery. Operating expenses rose, but adjusted interest expense decreased, and equity in joint venture earnings significantly increased Total Revenue (inclusive of Provider Relief funding) | Period | 2021 (in thousands) | 2020 (in thousands) | $ Increase/(Decrease) | % Change | | :---------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | 3 Months Ended Jun 30 | $333,961 | $216,041 | $117,921 | 54.6% | - Same Center Revenue increased by **44.3%**, driven by an **80.5%** growth in total procedure volumes, including **106.3%** in Mammography and **154.4%** in advanced radiology procedures (MRI, PET, CT)[158](index=158&type=chunk) - Total operating expenses increased by **$90.4 million**, or **41.9%**, to **$306.3 million**[159](index=159&type=chunk) Salaries and Professional Reading Fees (excluding stock-based compensation and severance) | Category | 2021 (in thousands) | 2020 (in thousands) | $ Increase/(Decrease) | % Change | | :---------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Total Salaries | $172,904 | $111,794 | $61,110 | 54.7% | | Same Center Salaries | $160,092 | $109,799 | $50,293 | 45.8% | - Stock-based compensation increased by **$7.4 million** (**511.1%**) to **$8.9 million**, driven by higher fair value of RSAs and **$6.5 million** in employee COVID-19 related bonuses[162](index=162&type=chunk) Medical Supplies Expense | Category | 2021 (in thousands) | 2020 (in thousands) | $ Increase/(Decrease) | % Change | | :---------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Total | $14,268 | $8,566 | $5,702 | 66.6% | | Same Center | $13,394 | $8,450 | $4,944 | 58.5% | - Adjusted Interest Expense (excluding derivatives and amortization) decreased by **$1.0 million** (**11.8%**) due to lowered variable LIBOR and Prime interest rates[171](index=171&type=chunk)[174](index=174&type=chunk) - Equity in earnings from unconsolidated joint ventures increased by **$2.2 million** (**230.3%**) to **$3.1 million**, mainly from the Arizona Diagnostic Radiology Group joint venture[176](index=176&type=chunk) - Income tax expense was **$2.9 million** (**26.2%** effective rate) in 2021, compared to a benefit of **$4.5 million** (**33.3%** effective rate) in 2020[177](index=177&type=chunk) [Six Months Ended June 30, 2021 Compared to the Six Months Ended June 30, 2020](index=37&type=section&id=Six%20Months%20Ended%20June%2030%2C%202021%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030%2C%202020) For H1 2021, total revenue increased by **31.7%**, with same-center revenue up **25.3%**, reflecting **36.1%** growth in procedure volumes. Operating expenses rose, but adjusted interest expense decreased by **16.5%**, and equity in joint venture earnings increased by **86.4%** Total Revenue (inclusive of Provider Relief funding) | Period | 2021 (in thousands) | 2020 (in thousands) | $ Increase/(Decrease) | % Change | | :---------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | 6 Months Ended Jun 30 | $655,528 | $497,605 | $157,923 | 31.7% | - Same Center Revenue increased by **25.3%**, reflecting an overall same center **36.1%** growth in total procedure volumes[178](index=178&type=chunk) - Total operating expenses increased by **$104.0 million**, or **20.5%**, to **$610.2 million**[179](index=179&type=chunk) Salaries and Professional Reading Fees (excluding stock-based compensation and severance) | Category | 2021 (in thousands) | 2020 (in thousands) | $ Increase/(Decrease) | % Change | | :---------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Total Salaries | $350,765 | $279,322 | $71,443 | 25.6% | | Same Center Salaries | $328,605 | $273,159 | $55,446 | 20.3% | - Stock-based compensation increased by **$9.1 million** (**112.2%**) to **$17.1 million**, due to higher fair value of RSAs and **$6.5 million** in employee COVID-19 related bonuses[182](index=182&type=chunk) Medical Supplies Expense | Category | 2021 (in thousands) | 2020 (in thousands) | $ Increase/(Decrease) | % Change | | :---------------------- | :------------------ | :------------------ | :-------------------- | :--------- | | Total | $28,238 | $21,314 | $6,924 | 32.5% | | Same Center | $26,737 | $20,944 | $5,793 | 27.7% | - Adjusted Interest Expense (excluding derivatives and amortization) decreased by **$3.1 million** (**16.5%**) due to lowered variable LIBOR and Prime interest rates[191](index=191&type=chunk)[193](index=193&type=chunk) - Equity in earnings from unconsolidated joint ventures increased by **$2.5 million** (**86.4%**) to **$5.4 million**, mainly from the Arizona Diagnostic Radiology Group joint venture[194](index=194&type=chunk) - Income tax expense was **$7.2 million** (**24.9%** effective rate) in 2021, compared to a benefit of **$8.9 million** (**27.8%** effective rate) in 2020[195](index=195&type=chunk) [Adjusted EBITDA](index=40&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA significantly increased for both Q2 2021 and H1 2021, reflecting improved business performance and recovery from the prior year's pandemic impact, and includes Provider Relief Fund revenue Adjusted EBITDA (in thousands) | Period | 2021 | 2020 | Change (YoY) | | :---------------------- | :------- | :------- | :----------- | | 3 Months Ended Jun 30 | $56,629 | $22,591 | +150.7% | | 6 Months Ended Jun 30 | $102,132 | $42,954 | +137.8% | - Adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization, excluding losses/gains on equipment disposal, other income/loss, debt extinguishment loss, bargain purchase gains, and non-cash equity compensation. It includes equity earnings in unconsolidated operations and subtracts allocations to noncontrolling interests[197](index=197&type=chunk) - Adjusted EBITDA includes Provider Relief Fund revenue of **$6.2 million** for the six months ended June 30, 2021, and **$25.5 million** for the six months ended June 30, 2020[198](index=198&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) RadNet's liquidity significantly improved by June 30, 2021, with increased cash and positive working capital, driven by accelerated procedure volumes and credit facility refinancing. Operating cash flow decreased, but financing activities provided substantial cash, ensuring sufficient capital for the foreseeable future Key Balance Sheet Data Related to Liquidity (in thousands) | Metric | June 30, 2021 | December 31, 2020 | | :------------------------------------------ | :------------ | :---------------- | | Cash and cash equivalents | $140,852 | $102,018 | | Accounts receivable | $157,328 | $129,585 | | Working capital (exclusive of current operating lease liabilities) | $25,051 | $(61,896) | | Stockholders' equity | $299,279 | $258,303 | Cash Flow Data (Six Months Ended June 30, in thousands) | Activity | 2021 | 2020 | | :-------------------------------- | :------- | :------- | | Cash provided by operating activities | $58,701 | $131,465 | | Cash used in investing activities | $(119,658) | $(67,602) | | Cash provided by (used in) financing activities | $99,812 | $(19,439) | - Cash provided by operating activities for the six months ended June 30, 2020, was benefited by the receipt of **$39.5 million** in CMS advances[206](index=206&type=chunk) - Cash used in investing activities for the six months ended June 30, 2021, included **$53.8 million** for property and equipment and **$64.9 million** for imaging business acquisitions[207](index=207&type=chunk) - Cash provided by financing activities of **$99.8 million** for the six months ended June 30, 2021, was primarily due to the refinancing of term loan obligations[208](index=208&type=chunk) Total Term Loan Debt (Face Value, in thousands) | Item | June 30, 2021 | | :------------------ | :------------ | | First Lien Term Loans | $725,000 | | SunTrust Term Loan | $49,125 | | **Total Term Loans** | **$774,125** | - Available borrowing capacity at June 30, 2021: **$187.2 million** under the Barclays Revolving Credit Facility (after **$7.8 million** reserved for letters of credit) and **$30.0 million** under the SunTrust Revolving Credit Facility[211](index=211&type=chunk) [ITEM 3. Quantitative and Qualitative Disclosures About Market Risk](index=43&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) RadNet is primarily exposed to interest rate risk from its variable-rate debt. A hypothetical **1%** increase in Eurodollar rates would significantly increase annual interest expense, which the company mitigates through interest rate swap agreements - Primary market risk is interest rate sensitivity on variable-rate debt, including First Lien Term Loans (**$725.0 million** outstanding) and SunTrust Term Loan (**$49.1 million** outstanding)[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) - A hypothetical **1%** increase in adjusted Eurodollar rates would result in an increase of **$7.3 million** in annual interest expense for First Lien Term Loans and approximately **$0.5 million** for the SunTrust Term Loan[214](index=214&type=chunk)[215](index=215&type=chunk) - Mitigates future interest expense exposure through four forward interest rate agreements (2019 Swaps) with a total notional amount of **$500 million**, locking in 1-month LIBOR rates at **1.96%** and **2.05%**[216](index=216&type=chunk) [ITEM 4. Controls and Procedures](index=43&type=section&id=ITEM%204.%20Controls%20and%20Procedures) RadNet's management concluded that the company's disclosure controls and procedures were effective as of June 30, 2021, with no material changes in internal control over financial reporting during the quarter - Management, with CEO and CFO participation, concluded that disclosure controls and procedures were effective as of June 30, 2021[218](index=218&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended June 30, 2021[219](index=219&type=chunk) PART II – OTHER INFORMATION [ITEM 1. Legal Proceedings](index=45&type=section&id=ITEM%201.%20Legal%20Proceedings) RadNet is involved in various legal proceedings arising in the ordinary course of business, but does not believe their outcome will materially adversely impact its business, financial condition, or results of operations - Engaged in lawsuits arising from the ordinary course and conduct of business[222](index=222&type=chunk) - Does not believe the outcome of any current litigation will have a material adverse impact on business, financial condition, and results of operations[222](index=222&type=chunk) [ITEM 1A. Risk Factors](index=45&type=section&id=ITEM%201A.%20Risk%20Factors) This section refers readers to the comprehensive list of risk factors detailed in RadNet's annual report on Form 10-K for the year ended December 31, 2020, and acknowledges potential additional unknown or currently immaterial risks - Refers to the risk factors described in the annual report on Form 10-K for the year ended December 31, 2020[223](index=223&type=chunk) - Acknowledges that additional unknown or currently immaterial risks may materially adversely affect the business[223](index=223&type=chunk) [ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - None[224](index=224&type=chunk) [ITEM 3. Defaults Upon Senior Securities](index=45&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the period - None[225](index=225&type=chunk) [ITEM 4. Mine Safety Disclosures](index=45&type=section&id=ITEM%204.%20Mine%20Safety%20Disclosures) This item is not applicable to RadNet's operations - Not applicable[226](index=226&type=chunk) [ITEM 5. Other Information](index=45&type=section&id=ITEM%205.%20Other%20Information) No other information was reported for the period - None[227](index=227&type=chunk) [ITEM 6. Exhibits](index=46&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including indemnification agreements, CEO and CFO certifications, and interactive data files in Inline XBRL for financial statements - Includes certifications of Howard G. Berger, M.D. (CEO) and Mark D. Stolper (CFO) pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002[230](index=230&type=chunk) - Financial information from the Quarterly Report on Form 10-Q is formatted in Inline XBRL (Extensible Business Reporting Language) as Exhibit 101 and 104[230](index=230&type=chunk)[231](index=231&type=chunk) [SIGNATURES](index=47&type=section&id=SIGNATURES) The report is officially signed by Howard G. Berger, M.D. (CEO) and Mark D. Stolper (CFO) on behalf of RadNet, Inc. on August 9, 2021 - Signed by Howard G. Berger, M.D., President and Chief Executive Officer, and Mark D. Stolper, Chief Financial Officer, on August 9, 2021[233](index=233&type=chunk)

RadNet, Inc. (NASDAQ:RDNT) Q2 2021 Earnings Conference Call August 9, 2021 10:30 AM ET Company Participants Mark Stolper – Executive Vice President and Chief Financial Officer Howard Berger – President and Chief Executive Officer Conference Call Participants Brian Tanquilut – Jefferies John Ransom – Raymond James Mitra Ramgopal – Sidoti Operator Good day, and welcome to the RadNet, Inc. Second Quarter Financial Results Call. Today’s conference is being recorded. At this time, I would like to turn the confer ...

Leading Radiology Forward Mark Stolper Chief Financial Officer June 2021 NASDAQ: RDNT Safe Harbor This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Specifically, statements concerning RadNet's ability to continue to grow the business by generating patient referrals and contracts with radiology practices, integrate acquired businesses, recruit and retain technologists, and receive third-party reimbursement for diagnostic ima ...

[PART I – FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201.%20Financial%20Statements) RadNet reported total assets of $1.83 billion, total liabilities of $1.55 billion, and net income of $13.8 million for Q1 2021 [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached $1.829 billion, liabilities $1.547 billion, and equity $281.4 million as of March 31, 2021 Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total current assets** | $222,997 | $270,424 | | **Total assets** | **$1,828,786** | **$1,786,657** | | **Total current liabilities** | $402,617 | $398,114 | | **Total liabilities** | **$1,547,428** | **$1,528,354** | | **Total equity** | **$281,358** | **$258,303** | [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) RadNet reported total service revenue of $315.3 million and net income of $13.8 million for Q1 2021, with diluted EPS of $0.18 Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Total service revenue | $315,319 | $281,564 | | Provider relief funding | $6,248 | $— | | Income (Loss) from Operations | $17,653 | $(8,776) | | Net Income (Loss) | $13,775 | $(13,998) | | Net Income (Loss) Attributable to RadNet, Inc. | $9,458 | $(16,358) | | Diluted EPS | $0.18 | $(0.33) | [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20%28Loss%29) Comprehensive income reached $14.7 million in Q1 2021, a significant improvement from a $32.5 million loss in Q1 2020 Comprehensive Income (Loss) (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net Income (Loss) | $13,775 | $(13,998) | | Comprehensive Income (Loss) | $14,688 | $(32,546) | | Comprehensive Income (Loss) Attributable to RadNet, Inc. | $10,371 | $(34,906) | [Condensed Consolidated Statement of Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statement%20of%20Stockholders%27%20Equity) Total stockholders' equity increased from $258.3 million to $281.4 million in Q1 2021, primarily due to net income - Total equity increased by **$23.1 million** during the first quarter of 2021, from a beginning balance of **$258.3 million** to an ending balance of **$281.4 million**[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operations was $28.1 million, with $87.3 million used in investing, leading to a $70.9 million decrease in cash for Q1 2021 Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net cash provided by operating activities | $28,084 | $40,913 | | Net cash used in investing activities | $(87,348) | $(55,059) | | Net cash (used in) provided by financing activities | $(11,651) | $68,262 | | **Net Increase (Decrease) in Cash** | **$(70,927)** | **$54,117** | | **Cash and cash equivalents, end of period** | **$31,091** | **$94,282** | [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business operations, accounting policies, recent acquisitions, debt structure, and subsequent events, including $6.2 million in relief funding - As of March 31, 2021, the company operated **346 outpatient diagnostic imaging centers** in seven U.S. states[20](index=20&type=chunk) - The company recognized **$6.2 million** from CARES Act general distribution as 'Provider relief funding' revenue in the three months ended March 31, 2021[40](index=40&type=chunk) - During Q1 2021, the company acquired several entities in the New York City area for a total purchase consideration of **$57.1 million**, which added **$29.6 million** to goodwill[89](index=89&type=chunk) - Subsequent to the quarter end, on April 23, 2021, the company refinanced its debt, securing **$725.0 million** in new term loans and a **$195.0 million** revolving credit facility, which was used to refinance existing debt and add approximately **$102.0 million** in cash to the balance sheet[117](index=117&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=ITEM%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management reported Q1 2021 total revenue growth of 14.2% to $321.6 million, net income of $9.5 million, and Adjusted EBITDA doubling to $45.5 million [Overview](index=27&type=section&id=Overview) RadNet operates 346 imaging centers, focusing on AI and growth through acquisitions, with procedure volumes recovering - As of March 31, 2021, RadNet operated **346 centers**, an increase from **335** in the prior year[125](index=125&type=chunk)[126](index=126&type=chunk) - The company is focusing on Artificial Intelligence (AI) to assist in image interpretation and improve patient care, particularly in mammography, through acquisitions like DeepHealth and investments in Whiterabbit.ai[125](index=125&type=chunk) - During Q1 2021, the company acquired several imaging center assets in the New York City area for a total of **$57.1 million**[135](index=135&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Total revenue increased 14.2% to $321.6 million in Q1 2021, with operating income of $17.7 million and Adjusted EBITDA of $45.5 million Revenue Comparison (in thousands) | Revenue Type | Q1 2021 | Q1 2020 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $321,567 | $281,564 | $40,003 | 14.2% | | Same Center Revenue | $304,696 | $277,990 | $26,706 | 9.6% | - The revenue increase was driven by a **5.1% growth** in same-center procedure volumes, with mammography procedures rising **15.1%** and advanced radiology (PET/CT) expanding by a combined **8.7%**[158](index=158&type=chunk) Adjusted EBITDA Reconciliation (in thousands) | Metric | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :--- | :--- | :--- | | Net income (loss) attributable to RadNet, Inc. | $9,458 | $(16,358) | | Provision for (benefit from) income taxes | $4,376 | $(4,381) | | Interest expense | $12,826 | $11,552 | | Depreciation and amortization | $22,656 | $21,934 | | Non-cash employee stock-based compensation | $8,248 | $6,622 | | Non-cash change in fair value of interest rate hedge | $(11,245) | $— | | **Adjusted EBITDA** | **$45,503** | **$20,364** | [Liquidity and Capital Resources](index=39&type=section&id=Liquidity%20and%20Capital%20Resources) Q1 2021 ended with $31.1 million cash, $28.1 million from operations, and $87.3 million used in investing, with a major debt refinancing in April 2021 Key Cash Flow Data (in thousands) | Cash Flow Activity | March 31, 2021 | March 31, 2020 | | :--- | :--- | :--- | | Cash provided by operating activities | $28,084 | $40,913 | | Cash used in investing activities | $(87,348) | $(55,059) | | Cash (used in) provided by financing activities | $(11,651) | $68,262 | - A debt refinancing on April 23, 2021, provided **$725.0 million** in new term loans, adding approximately **$102.0 million** to the balance sheet and reducing quarterly principal payments from **$9.7 million** to **$1.8 million**[118](index=118&type=chunk)[196](index=196&type=chunk) - As of March 31, 2021, the company had **$187.1 million** available for borrowing under its Barclays Revolving Credit Facility and **$30.0 million** under its SunTrust Revolving Credit Facility[195](index=195&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=41&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate sensitivity on variable-rate debt, mitigated by $500 million in interest rate swap agreements - The company is exposed to variable interest rates on its credit facilities. A hypothetical **1% increase** in the adjusted Eurodollar rates would result in an increase of **$6.0 million** in annual interest expense on the First Lien Term Loans[198](index=198&type=chunk) - To manage interest rate risk, the company entered into four forward interest rate swap agreements with a total notional amount of **$500 million**, effective October 13, 2020. These swaps lock in 1-month LIBOR rates at **1.96%** for **$100 million** and **2.05%** for **$400 million**[200](index=200&type=chunk) [Controls and Procedures](index=41&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal controls - Management, including the Chief Executive Officer and Chief Financial Officer, concluded that the company's disclosure controls and procedures are effective as of the end of the period covered by this report[202](index=202&type=chunk) - There were no changes in internal control over financial reporting during the quarter ended March 31, 2021, that have materially affected, or are reasonably likely to materially affect, internal controls[203](index=203&type=chunk) [PART II – OTHER INFORMATION](index=44&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Legal Proceedings](index=44&type=section&id=ITEM%201.%20Legal%20Proceedings) The company is involved in ordinary course lawsuits, with no material adverse impact expected on its financial condition - The company is engaged in lawsuits arising from the ordinary course of business but does not expect them to have a material adverse impact[206](index=206&type=chunk) [Risk Factors](index=44&type=section&id=ITEM%201A.%20Risk%20Factors) This section refers to risk factors from the Annual Report on Form 10-K, with no material updates - For information about risks and uncertainties, the report refers to the risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2020[207](index=207&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=44&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - None[208](index=208&type=chunk) [Defaults Upon Senior Securities](index=44&type=section&id=ITEM%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - None[209](index=209&type=chunk) [Other Information](index=44&type=section&id=ITEM%205.%20Other%20Information) There was no other information to report for the period - None[211](index=211&type=chunk) [Exhibits](index=45&type=section&id=ITEM%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including credit agreements and SOX certifications