Alliance Imaging, Inc. (NYSE:AIQ), a leading national provider of diagnostic imaging services, announces results for the third quarter and nine months ended September 30, 2007. The Company also announces an acquisition which is expected to close in the fourth quarter.
Acquisition - Fourth Quarter 2007
The Company has signed a definitive agreement to purchase all of the outstanding shares of the New England Health Enterprises Business Trust (NEHE) and all of the outstanding membership interests of New England Imaging Management, LLC, a fixed-site provider of magnetic resonance imaging and computed tomography. NEHE operates seven fixed-sites and one mobile MRI system in Maine and Massachusetts. The total purchase price, which includes amounts Alliance will pay for the purchase of certain minority interests, in addition to the shares of NEHE and New England Imaging Management, LLC, is expected to total approximately $48 million in cash and assumed liabilities. Annualized revenue from the NEHE acquisition is expected to total approximately $20 million. The Company expects this acquisition to close in the fourth quarter.
Paul S. Viviano, Chairman of the Board and Chief Executive Officer, stated, “We are delighted to announce that we have reached a definitive agreement to purchase premium diagnostic imaging fixed-sites. This transaction will be a significant part of our future growth strategy. Our strategy is to acquire radiation therapy centers and fixed-sites with operations in certificate-of-need states, and PET/CT providers. The expected closure of the NEHE acquisition will raise our already significant fixed-site presence in the Northeast. The NEHE acquisition, when complete, will be accretive and will only add modest leverage to our balance sheet.”
Third Quarter and First Nine Months 2007 Financial Results
Alliance’s third quarter and first nine months of 2007 revenue and Adjusted EBITDA (as defined below) are on track to achieve the Company’s full year 2007 financial guidance. Alliance’s revenue and Adjusted EBITDA were negatively impacted by the Medicare reimbursement reductions related to the Deficit Reduction Act of 2005 (“DRA”) and Medicare Part B HOPPS reimbursement rate reduction for positron emission tomography and positron emission tomography/computed tomography (“PET and PET/CT”) imaging procedures which came into effect for services furnished on or after January 1, 2007. The full year 2007 revenue and Adjusted EBITDA impact of the DRA and PET and PET/CT HOPPS reimbursement rate reductions is expected to total approximately $14 million.
Revenue for the third quarter of 2007 decreased 2.9% to $110.2 million from $113.5 million in the third quarter of 2006. For the first nine months of 2007, revenue was $331.3 million compared to $344.1 million in the same period of 2006, a decrease of 3.7%.
Alliance’s Adjusted EBITDA was $40.4 million in the third quarter of 2007, a 4.4% decrease, compared to $42.2 million in the same quarter a year ago. For the first nine months of 2007, Adjusted EBITDA totaled $125.9 million compared to $130.7 million in the first nine months of 2006, a decrease of 3.7%.
“Adjusted EBITDA” as defined under the terms of Alliance’s Credit Agreement, is earnings before interest expense, net of interest income; income taxes; depreciation expense; amortization expense; minority interest expense; non-cash share-based compensation; a maximum of $750,000 of severance and related costs in each fiscal year; non-recurring shareholder expense, lawsuit settlement and other non-cash charges. For a more detailed discussion of Adjusted EBITDA and reconciliation to net income, see the table entitled “Adjusted EBITDA” included in the tables following this release.
Earnings per share on a diluted basis, in accordance with generally accepted accounting principles, were $0.08 per share in the third quarter of 2007 and $0.09 per share in the third quarter of 2006.
Earnings per share on a diluted basis were $0.28 and $0.29 per share for the first nine months of 2007 and 2006, respectively.
Cash flows provided by operating activities totaled $36.5 million in the third quarter of 2007 compared to $28.7 million in the corresponding quarter of 2006, and totaled $80.4 million and $77.2 million in the first nine months of 2007 and 2006, respectively. Capital expenditures in the third quarter of 2007 were $10.2 million compared to $13.5 million in the third quarter of 2006, and were $45.2 million and $56.5 million for the first nine months of 2007 and 2006, respectively. Alliance opened one new fixed-site in the third quarter of 2007 and has opened nine new fixed-sites and one new radiation therapy center in the first nine months of 2007.
The Company’s increase in cash and cash equivalents and marketable securities, net of the increase in long-term debt, totaled $45.5 million in the first nine months of 2007 compared to $35.3 million in the same period of 2006. Alliance’s total long-term debt (including current maturities) increased $0.9 million to $530.3 million as of September 30, 2007 from $529.4 million as of December 31, 2006. Cash and cash equivalents and marketable securities increased $46.5 million to $62.9 million at September 30, 2007 from $16.4 million at December 31, 2006.
Mr. Viviano further stated, “We continue to focus on delivering strong operating results. In a challenging environment, Alliance has delivered performance in-line with the Company’s full year guidance. Our strong balance sheet allows us to continue to focus on the development of de novo radiation therapy centers and fixed-sites, along with select acquisitions. Alliance continues to invest capital in a highly disciplined manner and as a result, the Company is well-positioned for the future.”
Full Year 2007 Guidance
Alliance is updating its full year 2007 guidance ranges as follows:
Previous Guidance Range | Revised Guidance Range | |||
| (Dollars in millions) | ||||
| Revenue | $431 - $443 | $439 - $443 | ||
| Adjusted EBITDA | $154 - $162 | $162 - $164 | ||
| Capital expenditures | $75 - $85 | $55 - $65 | ||
Increase in cash and cash equivalents | $26 - $36 | $45 - $55 | ||
| Fixed site-openings | 12 - 17 | 14 - 17 | ||
| Radiation therapy site openings | 1 - 3 | 1 - 2 | ||
Restatement –Classification of Marketable Securities
Alliance will restate its previously reported second quarter 2007 financial statements to correct the accounting for marketable securities. As of June 30, 2007, the Company held positions of $15.0 million in marketable securities, which were incorrectly classified as cash and cash equivalents on its June 30, 2007 condensed consolidated balance sheet. Under Generally Accepted Accounting Principles (“GAAP”), these amounts should have been classified as marketable securities. The restatement will decrease the Company’s cash and cash equivalents on the Company’s June 30, 2007 condensed consolidated balance sheet by $15.0 million and increase the Company’s marketable securities by the same amount. The restatement will increase the Company’s purchases of marketable securities in investing cash activities by $15.0 million on the Company’s condensed consolidated statement of cash flows for the six months ended June 30, 2007, and will result in no change to its condensed consolidated statements of operations and comprehensive income for the three and six months ended June 30, 2007. Since the Company’s previously issued financial statements for the second quarter of 2007 do not reflect the reclassification required under the correct accounting method, they should no longer be relied upon. The Company expects to file restated financial statements covering this period with the Securities and Exchange Commission as soon as practicable.
Earlier this year, the Company began accumulating cash and cash equivalents with the expectation of funding select future acquisitions. In June 2007, contrary to directions given by the Company to its financial institution to invest the Company’s funds in cash and cash equivalents, the financial institution invested in marketable securities without timely notifying the Company of the transactions. The Company learned of the transactions and determined, after discussions with the Company’s independent registered public accounting firm, that its accounting for the transactions did not comply with GAAP. Management then discussed the error with the Company’s independent registered public accounting firm and the Company's audit committee. As the investments in marketable securities began in June 2007, the Company has determined that the incorrect classification does not exist in reporting periods prior to the second quarter 2007 financial statements.
Third Quarter 2007 Earnings Conference Call
Investors and all others are invited to listen to a conference call discussing third quarter 2007 results. The conference call is scheduled for Thursday, November 1 at 1:00 p.m. Eastern Time. The call will be broadcast live on the Internet and can be accessed by visiting the Company’s website at www.allianceimaging.com. Click on Audio Presentations in the Investors section of the website to access the link.
The conference call can also be accessed at (888) 247-2250 (United States) or (973) 935-8452 (International). Interested parties should call at least five minutes prior to the conference call to register. A replay of the call can be accessed until March 1, 2008 by visiting the Company’s website or by calling (877) 519-4471 (United States) or (973) 341-3080 (International). The conference call identification number is 9388964.
About Alliance Imaging
Alliance Imaging is a leading national provider of shared-service and fixed-site diagnostic imaging services, based upon annual revenue and number of diagnostic imaging systems deployed. Alliance provides imaging and therapeutic services primarily to hospitals and other healthcare providers on a shared and full-time service basis, in addition to operating a growing number of fixed-site imaging centers. The Company had 470 diagnostic imaging systems, including 310 MRI systems and 76 PET or PET/CT systems, and served over 1,000 clients in 43 states at September 30, 2007. Of these 470 diagnostic imaging systems, 74 were located in fixed-sites, which includes systems installed in hospitals or other buildings on or near hospital campuses, medical groups’ offices, or medical buildings and retail sites. The Company also operates three radiation therapy centers as of September 30, 2007.
Forward-Looking Statements
This press release contains forward-looking statements relating to future, not past, events. In this context, forward-looking statements often address our expected future business and financial results and often contain words such as “expects,”“anticipates,” “intends,”“plans,” “believes,”“seeks” or “will.” Forward-looking statements by their nature address matters that are uncertain and subject to risks. Such uncertainties and risks include: changes in the preliminary financial results and estimates due to the restatement or review of the Company’s financial statements; the nature, timing and amount of any restatement or other adjustments; the Company’s ability to make timely filings of its required periodic reports under the Securities Exchange Act of 1934; issues relating to the Company’s ability to maintain effective internal control over financial reporting and disclosure controls and procedures; difficulties the Company may face in connection with recent, pending or future acquisitions, including unexpected costs or liabilities resulting from the acquisitions, diversion of management’s attention from the operation of the Company’s business, and risks associated with integration of the acquisitions; and other risks and uncertainties identified in the Risk Factors section of the Company’s Form 10-K/A for the year ended December 31, 2006 and Form 10-Q for the quarter ended June 30, 2007, in each case filed with the Securities and Exchange Commission. These uncertainties may cause actual future results or outcomes to differ materially from those expressed in the Company’s forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake to update its forward-looking statements except as required under the federal securities laws.
ALLIANCE IMAGING, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited) (in thousands, except per share amounts) | |||||||||||||||||
| Third Quarter Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2006 | 2007 | 2006 | 2007 | ||||||||||||||
| Revenues | $ | 113,468 | $ | 110,162 | $ | 344,116 | $ | 331,324 | |||||||||
| Costs and expenses: | |||||||||||||||||
| Cost of revenues, excluding depreciation | |||||||||||||||||
| and amortization | 60,163 | 58,829 | 182,621 | 173,158 | |||||||||||||
| Selling, general and administrative expenses | 13,669 | 13,439 | 41,037 | 42,710 | |||||||||||||
| Severance and related costs | - | 282 | 536 | 522 | |||||||||||||
| Depreciation expense | 20,818 | 20,450 | 62,738 | 62,039 | |||||||||||||
| Amortization expense | 1,230 | 1,139 | 3,703 | 3,543 | |||||||||||||
| Interest expense, net of interest income | 11,038 | 9,953 | 30,835 | 30,415 | |||||||||||||
| Other (income) and expense, net | (174 | ) | 8 | 298 | (523 | ) | |||||||||||
| Total costs and expenses | 106,744 | 104,100 | 321,768 | 311,864 | |||||||||||||
| Income before income taxes, minority interest | |||||||||||||||||
| expense, and earnings from unconsolidated | |||||||||||||||||
| investees | 6,724 | 6,062 | 22,348 | 19,460 | |||||||||||||
| Income tax expense | 2,998 | 3,006 | 10,204 | 10,199 | |||||||||||||
| Minority interest expense | 551 | 323 | 1,586 | 1,315 | |||||||||||||
| Earnings from unconsolidated investees | (1,129 | ) | (1,214 | ) | (4,145 | ) | (6,450 | ) | |||||||||
| Net income | $ | 4,304 | $ | 3,947 | $ | 14,703 | $ | 14,396 | |||||||||
| Comprehensive income, net of taxes: | |||||||||||||||||
| Net income | $ | 4,304 | $ | 3,947 | $ | 14,703 | $ | 14,396 | |||||||||
| Unrealized (loss) gain on hedging transactions, | |||||||||||||||||
| net of taxes | (720 | ) | (312 | ) | 105 | (843 | ) | ||||||||||
| Comprehensive income, net of taxes: | $ | 3,584 | $ | 3,635 | $ | 14,808 | $ | 13,553 | |||||||||
| Earnings per common share: | |||||||||||||||||
| Basic | $ | 0.09 | $ | 0.08 | $ | 0.30 | $ | 0.29 | |||||||||
| Diluted | $ | 0.09 | $ | 0.08 | $ | 0.29 | $ | 0.28 | |||||||||
| Weighted average number of shares of | |||||||||||||||||
| common stock and common stock equivalents: | |||||||||||||||||
| Basic | 49,844 | 50,898 | 49,737 | 50,442 | |||||||||||||
| Diluted | 50,505 | 51,815 | 50,239 | 51,502 | |||||||||||||
ALLIANCE IMAGING, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands) | |||||||
Dec. 31, | Sept. 30, | ||||||
| 2006 | 2007 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 16,440 | $ | 34,326 | |||
| Marketable securities | - | 28,575 | |||||
| Accounts receivable, net of allowance for doubtful accounts | 51,569 | 55,363 | |||||
| Deferred income taxes | 20,199 | 25,368 | |||||
| Prepaid expenses and other current assets | 4,211 | 5,836 | |||||
| Other receivables | 8,096 | 8,613 | |||||
| Total current assets | 100,515 | 158,081 | |||||
| Equipment, at cost | 769,967 | 765,152 | |||||
| Less accumulated depreciation | (425,790 | ) | (436,615 | ) | |||
| Equipment, net | 344,177 | 328,537 | |||||
| Goodwill | 150,069 | 150,069 | |||||
| Other intangible assets, net | 35,782 | 32,395 | |||||
| Deferred financing costs, net | 6,947 | 5,990 | |||||
| Other assets | 27,036 | 18,061 | |||||
| Total assets | $ | 664,526 | $ | 693,133 | |||
| LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 14,525 | $ | 11,782 | |||
| Accrued compensation and related expenses | 16,993 | 18,064 | |||||
| Accrued interest payable | 4,320 | 7,267 | |||||
| Income taxes payable | 637 | - | |||||
| Other accrued liabilities | 32,331 | 28,705 | |||||
| Current portion of long-term debt | 2,858 | 2,822 | |||||
| Total current liabilities | 71,664 | 68,640 | |||||
| Long-term debt, net of current portion | 373,026 | 373,980 | |||||
| Senior subordinated notes | 153,541 | 153,541 | |||||
| Minority interests and other liabilities | 4,376 | 5,420 | |||||
| Deferred income taxes | 78,893 | 90,532 | |||||
| Total liabilities | 681,500 | 692,113 | |||||
| Stockholders’ (deficit) equity: | |||||||
| Common stock | 499 | 503 | |||||
| Additional paid-in deficit | (7,070 | ) | (2,633 | ) | |||
| Accumulated comprehensive income | 1,356 | 513 | |||||
| (Accumulated deficit) retained earnings | (11,759 | ) | 2,637 | ||||
| Total stockholders’ (deficit) equity | (16,974 | ) | 1,020 | ||||
| Total liabilities and stockholders’ (deficit) equity | $ | 664,526 | $ | 693,133 | |||
ALLIANCE IMAGING, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (in thousands) | |||||||
| Nine Months Ended September 30, | |||||||
| 2006 | 2007 | ||||||
| Operating activities: | |||||||
| Net income | $ | 14,703 | $ | 14,396 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
| Provision for doubtful accounts | 2,625 | 2,491 | |||||
| Non-cash share-based compensation | 1,965 | 2,716 | |||||
| Depreciation and amortization | 66,441 | 65,582 | |||||
| Amortization of deferred financing costs | 1,193 | 1,267 | |||||
| Adjustment of swaps to fair value | 492 | 1,501 | |||||
| Distributions less than equity in undistributed | |||||||
| income of investees | 134 | 155 | |||||
| Deferred income taxes | 9,256 | 7,606 | |||||
| Excess tax benefit from share-based payment arrangements | - | (593 | ) | ||||
| Loss (gain) on sale of assets | 298 | (523 | ) | ||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (10,922 | ) | (6,285 | ) | |||
| Prepaid expenses and other current assets | (1,102 | ) | (1,625 | ) | |||
| Other receivables | (3,373 | ) | (517 | ) | |||
| Other assets | (243 | ) | (3,635 | ) | |||
| Accounts payable | (11,212 | ) | (3,012 | ) | |||
| Accrued compensation and related expenses | 2,822 | 1,071 | |||||
| Accrued interest payable | 2,943 | 2,947 | |||||
| Income taxes payable | (87 | ) | (637 | ) | |||
| Other accrued liabilities | 1,591 | (3,594 | ) | ||||
| Minority interests and other liabilities | (357 | ) | 1,044 | ||||
| Net cash provided by operating activities | 77,167 | 80,355 | |||||
| Investing activities: | |||||||
| Equipment purchases | (56,516 | ) | (45,166 | ) | |||
| Decrease in deposits on equipment | 7,944 | 9,681 | |||||
| Purchases of marketable securities | - | (39,850 | ) | ||||
| Proceeds from sales of marketable securities | - | 11,275 | |||||
| Proceeds from sale of assets | 4,663 | 2,819 | |||||
| Net cash used in investing activities | (43,909 | ) | (61,241 | ) | |||
| Financing activities: | |||||||
| Principal payments on equipment debt | (2,716 | ) | (2,138 | ) | |||
| Proceeds from equipment debt | - | 138 | |||||
| Principal payments on term loan facility | (2,675 | ) | (600 | ) | |||
| Principal payments on revolving loan facility | (52,000 | ) | (7,000 | ) | |||
| Proceeds from revolving loan facility | 22,500 | 7,000 | |||||
| Payments of debt issuance costs | (250 | ) | (310 | ) | |||
| Proceeds from exercise of employee stock options | 1,376 | 1,089 | |||||
| Excess tax benefit from share-based payment arrangements | - | 593 | |||||
| Net cash used in financing activities | (33,765 | ) | (1,228 | ) | |||
| Net (decrease) increase in cash and cash equivalents | (507 | ) | 17,886 | ||||
| Cash and cash equivalents, beginning of period | 13,421 | 16,440 | |||||
| Cash and cash equivalents, end of period | $ | 12,914 | $ | 34,326 | |||
ALLIANCE IMAGING, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (Unaudited) (in thousands) | |||||||
| Nine Months Ended September 30, | |||||||
| 2006 | 2007 | ||||||
| Supplemental disclosure of cash flow information: | |||||||
| Interest paid | $ | 26,682 | $ | 25,877 | |||
| Income taxes paid, net of refunds | 1,327 | 3,270 | |||||
| Supplemental disclosure of non-cash investing and financing activities: | |||||||
| Net book value of assets exchanged | $ | 6,361 | $ | 1,405 | |||
| Capital lease obligations assumed for the purchase of equipment debt | 1,839 | 3,518 | |||||
| Equipment debt transferred to unconsolidated investee | (2,772 | ) | - | ||||
| Comprehensive income (loss) from hedging transactions, net of taxes | 105 | (843 | ) | ||||
ALLIANCE IMAGING, INC. ADJUSTED EBITDA (in thousands) |
| Adjusted EBITDA represents net income before interest expense, net of interest income; income taxes; depreciation expense; amortization expense; minority interest expense; non-cash share-based compensation; a maximum of $750,000 of severance and related costs in each fiscal year; non-recurring shareholder expense, lawsuit settlement, and other non-cash charges. Adjusted EBITDA is not a presentation made in accordance with accounting principles generally accepted in the United States of America. Adjusted EBITDA should not be considered in isolation or as a substitute for net income, cash flows from operating activities and other income or cash flow statement data prepared in accordance with generally accepted accounting principles or as a measure of profitability or liquidity. Adjusted EBITDA is included because the Company's amended credit agreement uses a measure similar to this to calculate the Company's compliance with covenants such as interest coverage ratio (as defined in Section 7.6A of the Company's amended credit agreement), consolidated leverage ratio (as defined in Section 7.6B of the Company's amended credit agreement) and consolidated senior leverage ratio (as defined in Section 7.6J of the Company's amended credit agreement). The Company's failure to comply with these covenants could result in the amounts borrowed under these instruments, together with accrued interest and fees, becoming immediately due and payable. If the Company is not able to refinance this debt when it becomes due, the Company could become subject to bankruptcy proceedings. Per the credit agreement, the Company was required to maintain a maximum consolidated leverage ratio not to exceed 4.00 to 1.00 as of both September 30, 2006 and 2007, and maintain a minimum interest coverage ratio in excess of 2.75 to 1.00 for the quarters ended September 30, 2006 and 2007. As a result of the fourth amendment to the credit agreement, beginning December 31, 2005, the Company was further required to maintain a maximum consolidated senior leverage ratio not to exceed 3.00 to 1.00 for the duration of the agreement. The Company was in compliance with these covenants for the quarters ended September 30, 2006 and 2007. While Adjusted EBITDA is used to measure the Company's compliance with its debt covenants, it is not necessarily comparable to other similarly titled captions of other companies due to differences in methods of calculation. The calculation of Adjusted EBITDA in accordance with the Company's amended credit agreement is shown below: |
Third Quarter |
Nine Months | |||||||||||||
| 2006 | 2007 | 2006 | 2007 | |||||||||||
| Net income | $ | 4,304 | $ | 3,947 | $ | 14,703 | $ | 14,396 | ||||||
| Income tax expense | 2,998 | 3,006 | 10,204 | 10,199 | ||||||||||
| Interest expense, net of interest income | 11,038 | 9,953 | 30,835 | 30,415 | ||||||||||
| Amortization expense | 1,230 | 1,139 | 3,703 | 3,543 | ||||||||||
| Depreciation expense | 20,818 | 20,450 | 62,738 | 62,039 | ||||||||||
| Non-cash share-based compensation (included in | ||||||||||||||
| selling, general and administrative expenses) | 657 | 871 | 1,965 | 2,716 | ||||||||||
| Minority interest expense | 551 | 323 | 1,586 | 1,315 | ||||||||||
| Severance and related costs | - | 282 | 536 | 522 | ||||||||||
| Non-recurring shareholder expense (included in | ||||||||||||||
| selling, general and administrative expenses) | - | - | - | 264 | ||||||||||
| Lawsuit settlement (included in cost of revenues, | ||||||||||||||
| excluding depreciation and amortization) | - | - | 2,500 | - | ||||||||||
| Other non-cash charges (included in other income | ||||||||||||||
| and expenses, net) | 620 | 385 | 1,933 | 515 | ||||||||||
| Adjusted EBITDA | $ | 42,216 | $ | 40,356 | $ | 130,703 | $ | 125,924 | ||||||
ALLIANCE IMAGING, INC. ADJUSTED EBITDA (continued) (in thousands) |
| Consolidated leverage ratio, as of the last day of any fiscal quarter, is defined under our credit agreement as the ratio of the consolidated total debt as of that date to the consolidated Adjusted EBITDA for the four fiscal quarters ending on that date. As of September 30, 2006 and 2007, our consolidated leverage ratio was as follows: |
| September 30, | |||||
| 2006 | 2007 | ||||
| Consolidated total debt | $ 543,758 | $ 530,343 | |||
| Last 12 months consolidated Adjusted EBITDA | 168,192 | 166,837 | |||
| Consolidated leverage ratio | 3.23x | 3.18x | |||
| Consolidated senior leverage ratio, as of the last day of any fiscal quarter, is defined under our credit agreement as the ratio of the consolidated senior debt as of that date to the consolidated Adjusted EBITDA for the four fiscal quarters ending on that date. As of September 30, 2006 and 2007, our consolidated senior leverage ratio was as follows: |
| September 30, | ||||||
| 2006 | 2007 | |||||
| Consolidated senior debt | $ | 390,217 | $ | 376,802 | ||
| Last 12 months consolidated Adjusted EBITDA | 168,192 | 166,837 | ||||
| Consolidated senior leverage ratio | 2.32x | 2.26x | ||||
| Interest coverage ratio is defined under our credit agreement as the ratio of consolidated Adjusted EBITDA to consolidated cash interest expense for the four fiscal quarter period ending on the last day of any fiscal quarter. As of September 30, 2006 and 2007, our interest coverage ratio was as follows: |
| September 30, | ||||||
| 2006 | 2007 | |||||
| Last 12 months consolidated Adjusted EBITDA | $ | 168,192 | $ | 166,837 | ||
| Last 12 months consolidated cash interest expense | 38,007 | 37,097 | ||||
| Interest coverage ratio | 4.43x | 4.50x | ||||
| The reconciliation from net income to Adjusted EBITDA for the 2007 guidance range is shown below: |
2007 Full Year | ||||||
| (Dollars in millions) | ||||||
| Net income | $ | 14.5 | $ | 15.1 | ||
| Income tax expense | 10.3 | 10.7 | ||||
| Depreciation expense; amortization expense; interest expense, net of interest income; minority interest; severance and related costs; non-recurring shareholder expense; non-cash share-based compensation; and other non-cash charges | ||||||
| 137.2 | 138.2 | |||||
| Adjusted EBITDA | $ | 162.0 | $ | 164.0 | ||
ALLIANCE IMAGING, INC. SELECTED STATISTICAL INFORMATION | |||||||||
| Third Quarter Ended | |||||||||
| September 30, | |||||||||
| 2006 | 2007 | ||||||||
| MRI | |||||||||
| Average number of total systems | 323.0 | 302.8 | |||||||
| Average number of scan-based systems | 265.9 | 250.4 | |||||||
| Scans per system per day (scan-based systems) | 9.37 | 9.42 | |||||||
| Total number of scan-based MRI scans | 172,791 | 160,098 | |||||||
| Price per scan | $ | 361.05 | $ | 363.05 | |||||
| Scan-based MRI revenue (in millions) | $ | 62.4 | $ | 58.1 | |||||
| Non-scan based MRI revenue (in millions) | 6.7 | 7.6 | |||||||
| Total MRI revenue (in millions) | $ | 69.1 | $ | 65.7 | |||||
| PET and PET/CT | |||||||||
| Average number of scan-based systems | 68.2 | 74.7 | |||||||
| Scans per system per day | 6.01 | 6.33 | |||||||
| Total number of PET and PET/CT scans | 25,521 | 28,888 | |||||||
| Price per scan | $ | 1,310 | $ | 1,186 | |||||
| Total PET and PET/CT revenue (in millions) | $ | 33.9 | $ | 34.5 | |||||
| Revenue breakdown (in millions) | |||||||||
| Total MRI revenue | $ | 69.1 | $ | 65.7 | |||||
| PET and PET/CT revenue | 33.9 | 34.5 | |||||||
| Other modalities and other revenue | 10.5 | 10.0 | |||||||
| Total revenues | $ | 113.5 | $ | 110.2 | |||||
| Total fixed-site revenue (in millions) | $ | 18.8 | $ | 19.2 | |||||
ALLIANCE IMAGING, INC. SELECTED STATISTICAL INFORMATION MRI REVENUE GAP (in millions) |
| The Company utilizes the MRI revenue gap as a statistical measure of its MRI client losses and new client contracts. The MRI revenue gap is calculated by measuring the difference between (a) the quarterly MRI revenue run rate lost as a result of clients choosing to terminate contracts with the Company, excluding clients for which Alliance provides interim service and clients that the Company elects to terminate, and (b) projected quarterly new MRI revenue from new client contracts commencing service in the quarter. |
| The MRI revenue gap for the last eight calendar quarters and the last twelve month period ended September 30, 2007 is as follows: |
| (a) | (b) | |||||||||
| Revenue | New | MRI | ||||||||
| Lost | Revenue | Revenue Gap | ||||||||
2005 | ||||||||||
| Fourth Quarter | ($8.9 | ) | $ | 9.7 | $ | 0.8 | ||||
2006 | ||||||||||
| First Quarter | (10.2 | ) | 6.4 | (3.8 | ) | |||||
| Second Quarter | (6.4 | ) | 6.2 | (0.2 | ) | |||||
| Third Quarter | (12.9 | ) | 4.8 | (8.1 | ) | |||||
| Fourth Quarter | (9.2 | ) | 6.4 | (2.8 | ) | |||||
2007 | ||||||||||
| First Quarter | (8.8 | ) | 7.7 | (1.1 | ) | |||||
| Second Quarter | (9.3 | ) | 7.4 | (1.9 | ) | |||||
| Third Quarter | (9.7 | ) | 4.1 | (5.6 | ) | |||||
Last Twelve Months Ended September 30, 2007 | ||||||||||
| ($37.0 | ) | $ | 25.6 | ($11.4 | ) | |||||
Contacts:
Howard Aihara
Executive Vice President
Chief
Financial Officer
714-688-7100
