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Alliance Imaging Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 10, 2012 02:26PM

Alliance Imaging Inc. (AIQ) filed Quarterly Report for the period ended 2012-03-31. Alliance Health has a market cap of $72.5 million; its shares were traded at around $1.57 with and P/S ratio of 0.2.



Highlight of Business Operations:

MRI, PET/CT and radiation oncology services generated 42%, 34% and 17% of our revenue, respectively, for the quarter ended March 31, 2012 and 44%, 37% and 11% of our revenue, respectively, for the quarter ended March 31, 2011. Our remaining revenue was comprised of other modality diagnostic imaging services revenue, primarily computed tomography (“CT”) and management contract revenue. We had 529 diagnostic imaging and radiation oncology systems, including 292 MRI systems and 122 positron emission tomography (“PET”) or PET/CT systems and served over 1,000 clients in 46 states at March 31, 2012. We operated 130 fixed-site imaging centers (one in an unconsolidated joint venture), which constitute systems installed in hospitals or other medical buildings on or near hospital campuses, including modular buildings, systems installed inside medical groups’ offices, parked mobile systems, and free-standing fixed-site imaging centers, which include systems installed in a medical office building, ambulatory surgical center, or other retail space at March 31, 2012. Of the 130 fixed-site imaging centers, 102 were MRI fixed-site imaging centers, 20 were PET or PET/CT fixed-site imaging centers, seven were other modality fixed-site imaging centers and one was in an unconsolidated joint venture. We also operated 37 radiation oncology centers and stereotactic radiosurgery facilities (including three radiation oncology centers in unconsolidated joint ventures) at March 31, 2012.

Revenue increased $2.4 million, or 2.0%, to $120.8 million in the first quarter of 2012 compared to $118.4 million in the first quarter of 2011 due to an increase in radiation oncology revenues and other modalities and other revenue, partially offset by a decrease in PET/CT revenues and MRI revenues. Radiation oncology revenue increased $6.9 million, or 53.0%, to $19.9 million in the first quarter of 2012 compared to $13.0 million in the first quarter of 2011, primarily due to revenue related to the acquisition of US Radiosurgery, LLC (“USR”). Other modalities and other revenue increased $0.4 million, or 2.7%, to $9.8 million in the first quarter of 2012 compared to $9.4 million in the first quarter of 2011, primarily due to the acquisition of 24/7 Radiology (“24/7 RAD”).

MRI revenue decreased $2.4 million in the first quarter of 2012, or 4.5% as compared to the first quarter of 2011. Scan-based MRI revenue decreased $1.8 million in the first quarter of 2012, or 3.7%, compared to the first quarter of 2011, to $45.3 million in the first quarter of 2012 from $47.1 million in the first quarter of 2011. The average price per MRI scan decreased to $358.55 per scan in the first quarter of 2012 from $374.20 per scan in the first quarter of 2011. The decline in the average price per MRI scan is primarily due to greater than expected competitive pricing pressure. The average number of scan-based systems in service decreased to 228.8 systems in the first quarter of 2012 from 244.4 systems in the first quarter of 2011. Average scans per system per day increased by 3.9% to 8.36 in the first quarter of 2012 from 8.05 in the first quarter of 2011. Scan-based MRI scan volume increased 0.5% to 126,392 scans in the first quarter of 2012 from 125,753 scans in the first quarter of 2011, primarily related to our sales efforts to renew existing clients and add new MRI customers. Non scan-based MRI revenue decreased $0.6 million in the first quarter of 2012 over the same period in 2011 primarily due to a decrease in the number of hospital construction projects and a decrease in the number of equipment upgrades occurring in the hospital market, both of which impact the demand for our non scan-based MRI business. Included in the revenue totals above is fixed-site imaging center revenues, which decreased $0.6 million, or 2.0%, to $30.1 million in the first quarter of 2012 from $30.7 million in the first quarter of 2011.

Cost of revenues, excluding depreciation and amortization, decreased $1.3 million, or 1.8%, to $66.1 million in the first quarter of 2012 compared to $67.4 million in the first quarter of 2011. Medical supplies decreased $1.0 million, or 16.1%, primarily as a result of sourcing discounts on the radiopharmaceutical that is used as a component of PET and PET/CT scans. Maintenance and related costs decreased $0.7 million, or 4.7%, due to a decrease in service costs related to a decrease in the number of MRI, PET and PET/CT systems in operation and a reduction in service contract costs incurred on each asset. Renegotiating with service contract providers and medical supply vendors is one of our Project Phoenix initiatives. Equipment rental costs decreased $0.3 million, or 68.3%, primarily due to a lower number of rental systems in use to support current clients as a result of improved system utilization related to our Project Phoenix initiatives. Compensation and related employee expenses decreased $0.2 million, or 0.4%, primarily as a result of a decrease in average employee headcount. Outside medical services increased $1.2 million, or 21.9%, primarily as a result of an increase in professional services related to the acquisition of 24/7 RAD. All other cost of revenues, excluding depreciation and amortization, decreased $0.3 million, or 2.1%. Cost of revenues, as a percentage of revenue, decreased to 54.8% in the first quarter of 2012 from 56.9% in the first quarter of 2011 as a result of the factors described above.

Selling, general and administrative expenses increased $3.7 million, or 22.1%, to $20.8 million in the first quarter of 2012 compared to $17.1 million in the first quarter of 2011. Professional services expenses increased $2.3 million, or 132.1%, due to an increase in legal, consulting and other professional fees related to the significant organizational restructure described in Note 2 of the Notes to Condensed Consolidated Financial Statements. Compensation and related employee expenses increased $1.2 million, or 11.4%, primarily as a result of investments in the infrastructure of the oncology division (including the USR executive team) and professional radiology services. The provision for doubtful accounts increased $0.5 million, or 188.2%, primarily due to the collection of aged accounts receivable during the first quarter of 2011. The provision for doubtful accounts as a percentage of revenue was 0.6% in the first quarter of 2012 compared to 0.2% of revenue in the first quarter of 2011. All other selling, general and administrative expenses decreased $0.3 million, or 5.7%. Selling, general and administrative expenses as a percentage of revenue were 17.3% and 14.4% in the first quarters of 2012 and 2011, respectively.

Read the The complete Report



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