Alliance Imaging, Inc. (NYSE:AIQ), a leading national provider of outpatient diagnostic imaging and radiation therapy services, announced financial guidance for full year 2009 and reaffirmed 2008 guidance.
Full Year 2009 Guidance
For full year 2009, the Company expects revenue to range from $536 million to $551 million and Adjusted EBITDA, as defined in the Company’s credit agreement and detailed below, is expected to range from $187 million to $202 million.
Paul S. Viviano, Chairman of the Board and Chief Executive Officer, stated, “2008 proved to be a year of great progress for Alliance as we strengthened our growth products, including enhancing our nationally leading PET/CT services, developing our fixed-site imaging centers, and growing and diversifying our radiation oncology services. In addition, we completed a total of four acquisitions in each of our growth products. While 2009 will be a year of great challenges for the U.S. economy, Alliance is uniquely and well-positioned to work with hospitals and other healthcare service providers to meet their needs in radiation oncology, PET/CT, and fixed-site imaging centers. Further, given our strong balance sheet and free cash flow generation, we will continue to evaluate select acquisition opportunities that will be accretive while we integrate the organizations we acquired in 2008. We expect to continue our strong growth trajectory in 2009.”
Alliance expects 2009 cash capital expenditures to total approximately $60 million to $70 million. The Company expects to open 20 to 25 fixed-site imaging centers and expects to open four to six radiation therapy centers in 2009.
In 2009, the Company expects a decrease in long-term debt, net of the change in cash and cash equivalents, of $52 million to $67 million.
The Company’s income tax rate for 2009 is expected to total approximately 43% of pretax income.
Alliance’s weighted average shares of common stock and common stock equivalents outstanding for 2009 is expected to total approximately 53 million shares.
Full Year 2008 Guidance
The Company reaffirms its revenue and Adjusted EBITDA guidance for full year 2008. Full year 2008 revenue is expected to range from $486 million to $496 million and Adjusted EBITDA is expected to range from $174 million to $184 million.
Purchase of UPMC Minority Interest in Alliance Oncology
The Company will purchase the remaining minority membership interests in Alliance Oncology, LLC from University of Pittsburgh Medical Center (UPMC) in December 2008. The purchase price will total approximately $6.5 million in cash.
Conference Call
Investors and all others are invited to listen to a conference call discussing full year 2009 guidance. The conference call is scheduled for Thursday, December 18, 2008 at 8:30 a.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) 694-4676 (United States) or (973) 582-2737 (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 18, 2009 by visiting the Company’s website or by calling (800) 642-1687 (United States) or (706) 645-9291 (International). The conference call identification number is 77974511.
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 488 diagnostic imaging and radiation therapy systems, including 303 MRI systems and 88 PET or PET/CT systems, and served over 1,000 clients in 46 states at September 30, 2008. The Company operated 92 fixed-site imaging centers (four in unconsolidated joint ventures), 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 operated 18 radiation therapy centers and stereotactic radiosurgery facilities (two radiation therapy centers are in unconsolidated joint ventures) as of September 30, 2008.
Forward-Looking Statements
This press release contains forward-looking statements relating to future events, including statements related to investment and acquisition activity, the integration of acquired businesses into our business and our full year 2008 and 2009 guidance. 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; factors affecting our leverage, including fluctuations in interest rates, the risk that the counterparties to our interest rate swap agreements fail to satisfy their obligations under these agreements; our ability to incur financing; the effect of operating and financial restrictions in our debt instruments; the accuracy of our estimates regarding our capital requirements; the effect of intense levels of competition in the industry; changes in the rates or methods of third party reimbursements for diagnostic imaging services; changes in the healthcare regulatory environment; our ability to keep pace with technological developments within our industry; 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 sections of the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 and subsequent Quarterly Reports on Form 10-Q 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. ADJUSTED EBITDA (in millions) | ||||||
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; loss on extinguishment of debt; fees and expenses related to acquisitions 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 is required to maintain a maximum consolidated leverage ratio not to exceed 4.00 to 1.00 as of each of the quarters ended in 2008 and 2009, a maximum consolidated senior leverage ratio not to exceed 3.00 to 1.00 as of each of the quarters ended in 2008 and 2009, and a minimum interest coverage ratio in excess of 2.75 to 1.00 as of each of the quarters ended in 2008 and 2009. When an acquisition has been consummated in the prior 12 month period, the Company is required to calculate these ratios using an adjustment as if the acquisition had been consummated on the first day of the 12 month period. 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: | ||||||
| 2008 Full Year | 2009 Full Year | |||||
| Guidance Range | Guidance Range | |||||
| Net income | $14 | $19 | $17 | $25 | ||
| Income tax expense | 10 | 13 | 13 | 18 | ||
Depreciation expense; amortization expense; interest expense, net of interest income; minority interest expense; non-cash share-based compensation and other expenses | 150 | 152 | 157 | 159 | ||
| Adjusted EBITDA | $174 | $184 | $187 | $202 | ||
Contacts:
Howard Aihara
Executive Vice President
Chief
Financial Officer
949-242-5300
www.allianceimaging.com
