New Threads Only:  Add to Google Reader or Homepage
New Threads & Replies:  Add to Google Reader or Homepage
Forums are for serious investors only. GuruFocus Forum Rules.

Forum List » Business News and Headlines
SEC Filings, Earing Reports, Press Releases
New Topic Search
Goto Thread: PreviousNext
Goto: Forum ListMessage ListNew TopicSearchLog In
RadNet Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 9, 2012 01:22PM

RadNet Inc. (RDNT) filed Quarterly Report for the period ended 2012-06-30. Radnet Inc. has a market cap of $97.9 million; its shares were traded at around $2.65 with a P/E ratio of 18.3 and P/S ratio of 0.2. Radnet Inc. had an annual average earning growth of 8.4% over the past 10 years. GuruFocus rated Radnet Inc. the business predictability rank of 2.5-star.



Highlight of Business Operations:

Howard G. Berger, M.D. is our President and Chief Executive Officer, a member of our Board of Directors and is deemed to be the beneficial owner, directly and indirectly, of approximately 14.1% of our outstanding common stock as of June 30, 2012. Dr. Berger also owns, indirectly, 99% of the equity interests in BRMG. BRMG provides all of the professional medical services at the majority of our facilities located in California under a management agreement with us, and employs physicians or contracts with various other independent physicians and physician groups to provide the professional medical services at most of our other California facilities. We generally obtain professional medical services from BRMG in California, rather than provide such services directly or through subsidiaries, in order to comply with California’s prohibition against the corporate practice of medicine. However, as a result of our close relationship with Dr. Berger and BRMG, we believe that we are able to better ensure that medical service is provided at our California facilities in a manner consistent with our needs and expectations and those of our referring physicians, patients and payers than if we obtained these services from unaffiliated physician groups. BRMG is a partnership of ProNet Imaging Medical Group, Inc., Breastlink Medical Group, Inc. and Beverly Radiology Medical Group, Inc., each of which are 99% or 100% owned by Dr. Berger. RadNet provides non-medical, technical and administrative services to BRMG for which it receives a management fee, pursuant to the terms of the management agreement. Through the management agreement and our relationship with Dr. Berger, we have exclusive authority over all non-medical decision making related to the ongoing business operations of BRMG. Through our management agreement with BRMG we determine the annual budget of BRMG and make all physician employment decisions. BRMG has insignificant operating assets and liabilities, and de minimis equity. Through the management agreement with us, all of BRMG’s cash flows are transferred to us. We have determined that BRMG is a VIE, and that we are the primary beneficiary, and consequently, we consolidate the revenue and expenses of BRMG. BRMG recognized $13.5 million and $15.1 million, and $26.2 million and $27.8 million of net revenues for the three and six months ended June 30, 2012 and 2011, respectively, and 13.5 million and 13.5 million, and $26.2 million and $26.6 million of operating expenses for the three and six months ended June 30, 2012 and 2011, respectively. RadNet recognized $53.6 million and $51.1 million, and $104.0 million and $98.9 million of net revenues for the three and six months ended June 30, 2012 and 2011, respectively, for management services provided to BRMG relating primarily to the technical portion of total billed revenue. The cash flows of BRMG are included in the accompanying condensed consolidated statements of cash flows. All intercompany balances and transactions have been eliminated in consolidation. The creditors of BRMG do not have recourse to our general credit and there are no other arrangements that could expose us to losses. However, BRMG is managed to recognize no net income or net loss and, therefore, RadNet may be required to provide financial support to cover any operating expenses in excess of operating revenues.

Service fee revenue, including only those centers which were in operation throughout the second quarters of both 2012 and 2011, decreased $4.0 million, or 2.6%. This 2.6% decrease is primarily the result of a similar percentage decrease in procedure volumes. This comparison excludes revenue contributions from centers that were acquired or divested subsequent to April 1, 2011. For the three months ended June 30, 2012, service fee revenue from centers that were acquired subsequent to April 1, 2011 and excluded from the above comparison was $22.6 million. For the three months ended June 30, 2011, service fee revenue from centers that were acquired subsequent to April 1, 2011 and excluded from the above comparison was $180,000.

Provision for bad debts increased $724,000, or 12.8%, to $6.4 million, or 3.7% of net revenue, for the three months ended June 30, 2012 compared to $5.7 million, or 3.7% of net revenue, for the three months ended June 30, 2011. This increase is in line with the increase in service fee revenues.

Service fee revenue, including only those centers which were in operation throughout the first six months of both 2012 and 2011, decreased $1.3 million, or 0.4%. This 0.4% decrease is primarily the result of a similar percentage decrease in procedure volumes. This comparison excludes revenue contributions from centers that were acquired or divested subsequent to January 1, 2011. For the six months ended June 30, 2012, service fee revenue from centers that were acquired subsequent to January 1, 2011 and excluded from the above comparison was $47.4 million. For the six months ended June 30, 2011, service fee revenue from centers that were acquired subsequent to January 1, 2011 and excluded from the above comparison was $3.3 million.

Provision for bad debts increased $2.2 million, or 20.3%, to $12.9 million, or 3.8% of net revenue, for the six months ended June 30, 2012 compared to $10.7 million, or 3.6% of net revenue, for the six months ended June 30, 2011. This increase is in line with the increase in service fee revenues.

Read the The complete Report



Stocks Discussed: RDNT,
Rate this post:




Sorry, only registered users may post in this forum.

Please Login if you have an account or Create a Free Account if you don't




Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial