RadNet(RDNT) - 2023 Q4 - Annual Results

Imaging Center Segment Performance - Adjusted EBITDA for the Imaging Center segment in 2023 was $245.1 million, a 17.2$1,604 million, a 12.5% increase compared to 2022[2] - 2024 guidance for the Imaging Center segment projects Total Net Revenue between $1,650 -$1,700 million, representing a growth of 5.3% - 8.5%[6] - 2024 guidance for the Imaging Center segment projects Adjusted EBITDA between $250 -$260 million, representing a growth of 11.4% - 15.8%[6] - Imaging Center segment performance: Revenue grew 8.6% to $415.3 million, Adjusted EBITDA increased 11.0$68.3 million, and same-center procedural volume grew 5.5% in Q4 2023[45][49] Digital Health Segment Performance - 2024 guidance for the Digital Health segment projects Total Net Revenue between $60 -$70 million, representing a growth of 21.0% - 41.2%[8] - 2024 guidance for the Digital Health segment projects Adjusted EBITDA Before Non-Capitalized R&D for DeepHealth Cloud OS & Generative AI between $12 -$14 million, representing a growth of 51.4% - 76.6%[8] - The Digital Health segment has over 500 outside customers and combines informatics businesses with AI operations[9] - Formation of Digital Health reporting segment: Combining AI operations with software and informatics businesses, with 2023 pro forma results showing $49.6 million in Revenue and$7.9 million in Adjusted EBITDA[60][61] AI Segment Growth and Investments - Non-Capitalized R&D investment in DeepHealth Cloud OS and generative AI was $1.3 million in Q4 2023[1] - Pre-tax losses related to the AI reporting segment were$5.0 million in Q4 2023[1] - The company expects significant growth in 2024 from AI revenue, particularly from Enhanced Breast Cancer Detection (EBCD) implementation and lung and prostate AI licensing in Europe[10] - AI segment growth: AI revenue surged 278.4% to $5.1 million in Q4 2023 and is expected to increase over 65$30.3 million, a decrease from $33.6 million in 2022 and$44.3 million in 2021[19] - Net cash provided by operating activities in 2023 was $220.9 million, up from$146.4 million in 2022[19] - Total service revenue for Q4 2023 was $420.4 million, compared to$383.9 million in Q4 2022[20] - Adjusted EBITDA for Q4 2023 was $65.8 million, an increase from$57.2 million in Q4 2022[21] - Adjusted EBITDA for the full year 2023 was $232.3 million, up from$192.5 million in 2022[21] - Non-cash employee stock-based compensation for 2023 was $26.8 million, compared to$23.8 million in 2022[21] - Depreciation and amortization expenses for 2023 were $128.4 million, up from$115.9 million in 2022[19] - Net cash used in investing activities for 2023 was $201.5 million, a decrease from$246.9 million in 2022[19] - Proceeds from issuance of stock in 2023 were $245.8 million, compared to$0 in 2022[19] - EBITDA losses from the AI segment for 2023 were $12.8 million, down from$16.6 million in 2022[21] - Total current assets decreased from $579.276 million in 2022 to$367.184 million in 2023[22] - Total property, plant, equipment, and right-of-use assets slightly decreased from $1.200433 billion in 2022 to$1.169485 billion in 2023[22] - Total liabilities increased from $1.877114 billion in 2022 to$1.942455 billion in 2023[22] - Adjusted net income attributable to RadNet, Inc. common stockholders increased from $6.383 million in 2022 to$13.742 million in 2023[27] - Adjusted diluted net income per share attributable to RadNet, Inc. common stockholders increased from $0.11 in 2022 to$0.20 in 2023[27] - Total service revenue increased to $1,616,630 in 2023, up 13$1,430,061 in 2022[65] - Net income attributable to RadNet, Inc. common stockholders decreased to $3,044 in 2023 from$10,650 in 2022[65] - Cash and cash equivalents at the end of the period rose significantly to $342,570 in 2023 from$127,834 in 2022[66] - Basic net income per share attributable to RadNet, Inc. common stockholders dropped to $0.05 in 2023 from$0.19 in 2022[65] - Weighted average shares outstanding (basic) increased to 63,580,059 in 2023 from 56,293,336 in 2022[65] - Cash paid for interest during the period rose to $64,695 in 2023 from$39,151 in 2022[66] - Cost of operations, excluding depreciation and amortization, increased to $1,395,239 in 2023 from$1,264,346 in 2022[65] - Depreciation and amortization expenses grew to $128,391 in 2023 from$115,877 in 2022[65] - Interest expense increased to $64,483 in 2023 from$50,841 in 2022[65] - Cash paid for income taxes during the period rose to $1,587 in 2023 from$587 in 2022[66] Volume Growth and Procedural Metrics - MRI procedures increased from 352,009 in Q4 2022 to 398,625 in Q4 2023[35] - Total procedures increased from 2.376995 million in Q4 2022 to 2.565720 million in Q4 2023[35] - Volume growth across modalities: MRI volume increased 13.2%, CT volume grew 11.3%, and PET/CT volume rose 18.5% in Q4 2023 compared to Q4 2022[53] Expansion and Strategic Initiatives - 2024 expansion plans: Approximately a dozen new facilities to be opened, including entry into the Houston market through acquisition of seven imaging centers[47] - 2023 capital expenditures: $153.0 million, including$18.6 million for New Jersey Imaging Network and $19.8 million for equipment previously leased[62][63] Payor Class Breakdown - Commercial insurance accounted for 58.0$420.4 million, with Adjusted EBITDA growing 15.0% to $65.8 million compared to Q4 2022[45][50] - Full-year 2023 results: Total Revenue increased 13.0$1,617 million, with Adjusted EBITDA growing 20.7% to $232.3 million compared to 2022[58] Financial Leverage and Liquidity - 2023 financial leverage improvement: Net debt to Adjusted EBITDA fell below 2.0x, with$342 million cash balance and Days Sales Outstanding of 32.0 at year-end 2023[46]