RadNet Inc. (RDNT, Financial) filed Quarterly Report for the period ended 2010-06-30.
Radnet Inc. has a market cap of $79.06 million; its shares were traded at around $2.15 with a P/E ratio of 107.5 and P/S ratio of 0.15. Radnet Inc. had an annual average earning growth of 7.9% over the past 10 years. GuruFocus rated Radnet Inc. the business predictability rank of 4-star.
On April 1, 2010, we completed the acquisition of Truxtun Medical Group in Bakersfield, California for approximately $20.3 million in cash and the issuance of 375,000 shares of RadNet, Inc. common stock valued at approximately $1.2 million on the date of acquisition. Truxtun operates four multi-modality facilities in Bakersfield, a Metropolitan Statistical Area with a population exceeding 800,000 residents in Kern County, California. Truxtun provides a broad range of services including MRI, CT, PET/CT, mammography, nuclear medicine, fluoroscopy, ultrasound, x-ray and related procedures. We have made a preliminary purchase price allocation of the acquired assets and assumed liabilities and approximately $2.4 million of working capital, $6.3 million of fixed assets, $150,000 of other intangible assets related to covenant not to compete contracts, and $12.7 million of goodwill was recorded with respect to this transaction.
On April 6, 2010, we completed a debt refinancing plan for an aggregate of $585 million. The debt refinancing plan included the issuance of a $285 million senior secured term loan due April 6, 2016, a $100 million senior secured revolving credit facility due April 6, 2015 and $200 million in aggregate principal amount of senior unsecured notes due April 1, 2018. See “Liquidity and Capital Resources” below. We used $412.0 million of the proceeds from the debt restructuring to pay off our prior credit facility and an additional $1.7 million to settle a pre-payment penalty with GE Commercial Finance.
On April 30, 2010, we acquired three multi-modality facilities from Sonix Medical Resources, Inc. through a bankruptcy proceeding in New York for approximately $2.3 million in cash. The facilities located in Brooklyn, New York, Chatham, New Jersey and Haddon Heights, New Jersey operate a combination of MRI, CT, mammography, ultrasound, fluoroscopy, x-ray and related modalities. We have made a preliminary purchase price allocation of the acquired assets and assumed liabilities and approximately $1.4 million of fixed assets and $900,000 of goodwill was recorded with respect to this transaction.
Net revenue for the three months ended June 30, 2010 was $139.0 million compared to $131.2 million for the three months ended June 30, 2009, an increase of $7.8 million, or 6.0%.
Net revenue, including only those centers which were in operation throughout the second quarters of both 2010 and 2009, decreased $4.0 million, or 3.1%. This 3.1% decrease is primarily the result of a decline in patient scheduling during the first half of 2010. This comparison excludes revenue contributions from centers that were acquired or divested subsequent to April 1, 2009. For the three months ended June 30, 2010, net revenue from centers that were acquired subsequent to April 1, 2009 and excluded from the above comparison was $12.5 million. For the three months ended June 30, 2009, net revenue from centers that were acquired subsequent to April 1, 2009 and excluded from the above comparison was $718,000.
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Radnet Inc. has a market cap of $79.06 million; its shares were traded at around $2.15 with a P/E ratio of 107.5 and P/S ratio of 0.15. Radnet Inc. had an annual average earning growth of 7.9% over the past 10 years. GuruFocus rated Radnet Inc. the business predictability rank of 4-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 owns approximately 15% of our outstanding common stock. 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 payors than if we obtained these services from unaffiliated physician groups. BRMG is a partnership of ProNet Imaging Medical Group, Inc. (99%), Breastlink Medical Group, Inc. (100%) and Beverly Radiology Medical Group, Inc. (99%), 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, per 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 di-minimus equity. Through the management agreement with us, all of BRMG s cash flows are transferred to us. We have determined that BRMG is a variable interest entity, and that we are the primary beneficiary, and consequently, we consolidate the revenue and expenses of BRMG. BRMG recognized $25.7 million and $23.5 of net revenues for the six months ended June 30, 2010 and 2009, respectively, and $24.5 million and $22.4 million of operating expenses for the six month ended June 30, 2010 and 2009, respectively. RadNet recognized $89.5 million and $86.9 million of net revenues for management services provided to BRMG. The cash flows of the BRMG are included in the accompanying consolidated statements of cash flows. All intercompany balances and transactions have been eliminated in consolidation.On April 1, 2010, we completed the acquisition of Truxtun Medical Group in Bakersfield, California for approximately $20.3 million in cash and the issuance of 375,000 shares of RadNet, Inc. common stock valued at approximately $1.2 million on the date of acquisition. Truxtun operates four multi-modality facilities in Bakersfield, a Metropolitan Statistical Area with a population exceeding 800,000 residents in Kern County, California. Truxtun provides a broad range of services including MRI, CT, PET/CT, mammography, nuclear medicine, fluoroscopy, ultrasound, x-ray and related procedures. We have made a preliminary purchase price allocation of the acquired assets and assumed liabilities and approximately $2.4 million of working capital, $6.3 million of fixed assets, $150,000 of other intangible assets related to covenant not to compete contracts, and $12.7 million of goodwill was recorded with respect to this transaction.
On April 6, 2010, we completed a debt refinancing plan for an aggregate of $585 million. The debt refinancing plan included the issuance of a $285 million senior secured term loan due April 6, 2016, a $100 million senior secured revolving credit facility due April 6, 2015 and $200 million in aggregate principal amount of senior unsecured notes due April 1, 2018. See “Liquidity and Capital Resources” below. We used $412.0 million of the proceeds from the debt restructuring to pay off our prior credit facility and an additional $1.7 million to settle a pre-payment penalty with GE Commercial Finance.
On April 30, 2010, we acquired three multi-modality facilities from Sonix Medical Resources, Inc. through a bankruptcy proceeding in New York for approximately $2.3 million in cash. The facilities located in Brooklyn, New York, Chatham, New Jersey and Haddon Heights, New Jersey operate a combination of MRI, CT, mammography, ultrasound, fluoroscopy, x-ray and related modalities. We have made a preliminary purchase price allocation of the acquired assets and assumed liabilities and approximately $1.4 million of fixed assets and $900,000 of goodwill was recorded with respect to this transaction.
Net revenue for the three months ended June 30, 2010 was $139.0 million compared to $131.2 million for the three months ended June 30, 2009, an increase of $7.8 million, or 6.0%.
Net revenue, including only those centers which were in operation throughout the second quarters of both 2010 and 2009, decreased $4.0 million, or 3.1%. This 3.1% decrease is primarily the result of a decline in patient scheduling during the first half of 2010. This comparison excludes revenue contributions from centers that were acquired or divested subsequent to April 1, 2009. For the three months ended June 30, 2010, net revenue from centers that were acquired subsequent to April 1, 2009 and excluded from the above comparison was $12.5 million. For the three months ended June 30, 2009, net revenue from centers that were acquired subsequent to April 1, 2009 and excluded from the above comparison was $718,000.
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