RadNet(US:RDNT)2025-05-12 20:09PART I – FINANCIAL INFORMATION Financial Statements RadNet reported Q1 2025 service revenue of $471.4 million, a net loss of $29.7 million, and total assets of $3.34 billion, with increased operating cash flow Condensed Consolidated Balance Sheets Total assets increased to $3.34 billion, driven by property and goodwill, while cash and equivalents slightly decreased to $717.3 million Condensed Consolidated Balance Sheet Highlights | Account | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | $717,323 | $740,020 | | Accounts receivable | $200,127 | $185,821 | | Goodwill | $717,480 | $710,663 | | Total assets | $3,336,264 | $3,286,690 | | Total current liabilities | $505,399 | $479,712 | | Total long-term liabilities | $1,694,348 | $1,673,568 | | Total liabilities | $2,199,747 | $2,153,280 | | Total equity | $1,136,517 | $1,133,410 | Condensed Consolidated Statements of Operations Q1 2025 service revenue grew to $471.4 million, but a 17.9% rise in operating expenses led to a $24.1 million operating loss and a $37.9 million net loss Q1 2025 vs Q1 2024 Statement of Operations | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Total service revenue | $471,399 | $431,707 | | Total operating expenses | $495,500 | $420,368 | | (Loss) Income from operations | ($24,101) | $11,339 | | Net (loss) income | ($29,737) | $5,410 | | Net loss attributable to RadNet, Inc. | ($37,926) | ($2,779) | | Basic and diluted net loss per share | ($0.51) | ($0.04) | Condensed Consolidated Statements of Cash Flows Operating cash flow significantly increased to $41.5 million, while investing activities used $56.8 million, resulting in a $22.7 million cash decrease Q1 2025 vs Q1 2024 Cash Flow Summary | Cash Flow Activity | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $41,481 | $17,088 | | Net cash used in investing activities | ($56,751) | ($60,938) | | Net cash (used in) provided by financing activities | ($7,510) | $228,296 | | Net (decrease) increase in cash | ($22,697) | $184,410 | Notes to Condensed Consolidated Financial Statements Notes detail RadNet's 401 imaging centers, revenue recognition, segment performance, credit facilities, and the subsequent iCAD acquisition agreement - RadNet is a national provider of outpatient diagnostic imaging services, operating 401 centers as of March 31, 202527 - During Q1 2025, the company acquired assets from HALO Centers LLC and Hillcroft Medical Clinic for a total consideration of $4.9 million, adding to its Imaging Center segment8384 - Subsequent to the quarter's end, on April 15, 2025, RadNet entered into a definitive agreement to acquire iCAD, Inc., a provider of AI-powered breast health solutions124 Revenue by Payor | Payor | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Commercial insurance | $262,488 | $240,629 | | Medicare | $108,199 | $93,525 | | Revenue under capitation arrangements | $32,050 | $34,518 | | Other | $58,128 | $57,035 | | Total service revenue | $471,399 | $431,707 | Management's Discussion and Analysis of Financial Condition and Results of Operations Revenue grew 9.2% from same-center and acquisitions, but higher operating costs and a $5.4 million charge reduced Adjusted EBITDA to $46.4 million Results of Operations Imaging Center revenue grew 8.4% with 1.2% same-center growth, but operating expenses rose 16.8% due to higher costs and a $5.4 million lease abandonment charge Imaging Center Revenue | Revenue Type | Q1 2025 (in thousands) | Q1 2024 (in thousands) | $ Increase (in thousands) | % Change | | :--- | :--- | :--- | :--- | :--- | | Total | $452,178 | $417,046 | $35,132 | 8.4% | | Same Center | $411,528 | $406,451 | $5,077 | 1.2% | - Same-center revenue growth was driven by a 2.2% increase in average fees per procedure, as advanced modality imaging volume grew 3.0%, while routine imaging volume declined 2.2% due to severe weather154 - Medical supplies expense increased 35.4% (20.4% on a same-center basis), driven by higher utilization of high-cost isotope tracers for PET/CT procedures and price increases for these tracers161 - The Digital Health segment's revenue increased 31.1% to $19.2 million, while its operating loss grew to $6.1 million from $3.0 million year-over-year due to investments in product development and commercial support178179180 Non-GAAP Financial Measures Consolidated Adjusted EBITDA decreased to $46.4 million in Q1 2025, primarily due to a decline in the Imaging Center segment's contribution Reconciliation of Net Loss to Adjusted EBITDA | Metric | Q1 2025 (in thousands) | Q1 2024 (in thousands) | | :--- | :--- | :--- | | Net loss attributable to RadNet, Inc. | ($37,926) | ($2,779) | | Adjustments (Interest, Taxes, D&A, etc.) | $84,325 | $61,241 | | Adjusted EBITDA - Total Company | $46,399 | $58,462 | | Adjusted EBITDA - Imaging Center | $42,688 | $54,942 | | Adjusted EBITDA - Digital Health Segment | $3,711 | $3,520 | Liquidity and Capital Resources RadNet maintains strong liquidity with $717.3 million cash, $41.5 million operating cash flow, and $324.4 million available credit - Cash provided by operating activities increased to $41.5 million for Q1 2025 from $17.1 million in Q1 2024194 - Cash used in financing activities was $7.5 million in Q1 2025, compared to cash provided of $228.3 million in Q1 2024, which was boosted by a $218.4 million common stock offering196 - As of March 31, 2025, the company had total term loan debt of $1.0 billion and total available borrowing capacity of $324.4 million under its revolving credit facilities199 Quantitative and Qualitative Disclosures About Market Risk The company faces market risks from foreign currency fluctuations and variable-rate debt, with a 1% SOFR increase potentially raising interest expense by approximately $6.0 million annually - The company is exposed to foreign exchange risk from operations in the Pound Sterling, Euro, Canadian Dollar, Hungarian Forint, and Indian Rupee. A hypothetical 1% decline in these exchange rates would increase annual operating expenses by about $0.4 million201202 - The company has $468.4 million in variable-rate debt under the Barclays Term Loan unprotected by swaps. A hypothetical 1% increase in SOFR would increase annual interest expense by $4.7 million on this portion205 - The company has $132.2 million in variable-rate debt under the Truist term loan. A hypothetical 1% increase in SOFR would increase annual interest expense by approximately $1.3 million206 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal controls - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025207 - There were no material changes to the company's internal control over financial reporting during the first quarter of 2025208 PART II – OTHER INFORMATION Legal Proceedings The company is involved in ordinary course legal proceedings, not expecting a material adverse impact on its financial condition or operations - The company does not expect current legal proceedings to have a material adverse impact on its business, financial condition, or operations210 Risk Factors This section refers to the comprehensive risk factors detailed in the company's Annual Report on Form 10-K - For information about business risks and uncertainties, the report refers to the risk factors described in the company's Annual Report211 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the reporting period - None212 Other Information No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the first quarter of 2025 - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the fiscal quarter ended March 31, 2025215 Exhibits The report includes filed exhibits such as CEO and CFO certifications and financial statements in Inline XBRL format - Exhibits filed with the report include Sarbanes-Oxley certifications and financial data in Inline XBRL format216