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NightHawk Radiology Holdings, Inc. Announces First Quarter 2008 Results
NightHawk Radiology Holdings, Inc. Announces First Quarter 2008 Results
COEUR D'ALENE,Idaho, May 7 /PRNewswire-FirstCall/ -- NightHawk Radiology
Holdings, Inc. (Nasdaq: NHWK), the leading provider of radiology solutions to
radiology groups acrossthe United States, today announced financial results
for its first quarter ended March 31, 2008.
First Quarter 2008 Highlights
-- First quarter 2008 revenue grew 61% to $41.7 million from
$25.9 million in the first quarter 2007. First quarter 2008 scan
volume grew 54% to 745 thousand scans compared with 484 thousand scans
in the first quarter 2007.
-- New service offerings, including daytime final reads and business
services, represented 21%, or $8.7 million, of total revenue for the
quarter. Final reads revenue represented 11% of total revenue, or
$4.6M, up from 8% in the fourth quarter 2007.
-- Organic revenue and organic scan volume grew 15% and 21%,
respectively, year-over-year.
-- Same site volume increase was 19% year-over-year.
-- Cash flow from operations was $5.8 million.
-- Adjusted net income for the first quarter of 2008 was $4.2 million, or
$0.14 per diluted share which includes the impact of severance expense
and the search fees for a new CFO, down from $5.8 million, or
$0.19 per diluted share, in the first quarter 2007. These results
were impacted by increased professional services expense and higher
SG&A spend including non-recurring costs of $1.1 million and
$2.2 million in acquisition-related interest expense on the company's
debt facility.
-- GAAP net income was $0.7 million, or $0.02 per diluted share, compared
to $4.3 million, or $0.14 per diluted share, in the first quarter
2007. GAAP net income was impacted by the items described in the
immediately preceding bullet point. In addition, the company incurred
higher non-cash charges including higher stock compensation expense
(including a $0.7 million charge related to the acceleration of
options held by the prior COO), higher IBNR charges (including a
$0.5 million incremental reserve relating to the Radlinx acquisition)
and higher intangibles amortization resulting from 2007 acquisitions.
"In the first quarter we grew sales by 61% compared to the first quarter
of 2007, fueled by a combination of organic growth and strategic
acquisitions," said Dr. Paul Berger, Chairman and Chief Executive Officer.
"We also saw continued expansion into new business lines, which represented
21% of total revenue during the quarter. Market demand for NightHawk's
services remains high due to our wide breadth of services and our high-quality
offering."
Dr. Berger continued, "Although we realized year-over-year revenue growth
during the quarter, we know that we have work to do in order to fully
capitalize on the opportunities in front of us. We have identified our
challenges and, importantly, our opportunities, both on the sales front as
well as on the cost side of the business, and we have initiated steps to
improve our execution. The good news is that these challenges are addressable
and we believe are not a reflection of changing industry dynamics. Bottom
line, we are the market leader in an industry that we believe is growing, has
strong demand fundamentals and has long term growth opportunities."
A reconciliation of adjusted net income to GAAP net income is included in
the tables attached to this press release.
Outlook
"After identifying our challenges on both the sales and cost fronts, and
the need to improve our processes in those areas, we are revising our full-
year 2008 guidance. As we continue into 2008, we will strive to improve our
operations in these areas of the business while also capitalizing on continued
growth in the industry as well as our position as the industry's leading
provider of radiology solutions." The company estimates that 2008 revenue will
be in the range of $171-$181 million and estimates that 2008 adjusted earnings
per diluted share (excluding non-cash stock compensation, IBNR and
amortization of intangibles, tax effected) will be in the range of $0.70-
$0.82.
Earnings Conference Call
The first quarter 2008 conference call will be held today, May 7, 2008 at
4:30 p.m. (ET). A live webcast of the conference call, as well as a replay,
will be available online on the company's corporate website at
http://www.nighthawkrad.net. Participants can also access the call by dialing
800-257-2182 or 303-275-2170 (for international callers). A replay of the call
will be available approximately two hours after the conclusion of the call and
will remain available until midnight (EDT) on Wednesday, May 28, 2008. To
access the replay, dial 800-405-2236 or 303-590-3000 (for international
callers) and enter the conference ID number: 11113270.
About NightHawk
NightHawk Radiology (Nasdaq: NHWK), headquartered in Coeur d'Alene,Idaho,
is leading the transformation of the practice of radiology by providing high-
quality, cost-effective services to radiology groups and hospitals throughout
the United States. NightHawk provides the most complete suite of solutions,
including professional services, business services, and its advanced,
proprietary clinical workflow technology, all designed to increase
efficiencies and improve the quality of patient care and the lives of
physicians who provide it. NightHawk's team of U.S. board-certified, state-
licensed, and hospital-privileged physicians located inthe United States,
Australia, andSwitzerland, provides services 24 hours a day, seven days a
week, to approximately 1,500 sites, representing approximately 26% of all
hospitals inthe United States. For more information, visit
http://www.nighthawkrad.net.
Forward Looking Statements
This press release contains statements that are forward-looking statements
as defined within the Private Securities Litigation Reform Act of 1995. These
include statements regarding the company's growth strategy, the expansion and
market acceptance of its current service offerings, the future benefits of its
acquisitions, and an outlook on the company's future financial results,
including its revenue, and adjusted earnings per diluted share for 2008. These
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from the statements made, including
the risks associated with general economic conditions, competitive conditions
in the radiology industry, and regulatory risks. Other factors that could
cause operating and financial results to differ are described in the company's
prospectus and periodic reports filed with the Securities and Exchange
Commission (SEC). Other risks may be detailed from time to time in reports to
be filed with the SEC. NightHawk does not undertake any obligation to publicly
update its forward- looking statements based on events or circumstances after
the date hereof.
Presentation of Non-GAAP Financial Information
The presentation of adjusted net income and adjusted earnings per diluted
share are not measures of financial performance under GAAP and should not be
considered a substitute for or superior to GAAP. Management believes these
non-GAAP financial measures provide useful information to both management and
investors by excluding certain expenses that may not be indicative of our core
results and provide consistency in financial reporting. Specifically, the
company's non-GAAP adjusted net income measure, and related adjusted earnings
per diluted share, described in this release exclude (i) the non-cash charges
related to our stock-based compensation, (ii) the non-cash expense associated
with the amortization of intangibles associated with acquisitions, and (iii)
the non-cash expense associated with changes to our IBNR reserve (incurred but
not reported medical liability reserves). We exclude the non-cash charges
related to our stock-based compensation due to the varying valuation
methodologies, subjective assumptions and the variety of types of awards that
companies can use when applying FAS 123R along with the fact that a
substantial portion of our outstanding options and restricted stock units are
held by our independent contractor physicians and require accounting treatment
that differs from the accounting treatment for options and restricted stock
units held by employees.
The company provides non-GAAP adjusted net income and related adjusted
earnings per diluted share as financial measures because management believes
these measures provide greater transparency with respect to information used
by management in its financial and operational decision making and to enhance
investors' overall understanding of our current financial performance and our
future prospects. For reconciliation of our non-GAAP financial measures to the
most applicable GAAP financial measure, please refer to the information
included in the attached tables of this press release and on our corporate
website under the heading investor relations.
"NHWKF"
NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
March 31, December 31,
ASSETS 2008 2007
(in thousands, except per share amts)
Current assets:
Cash and cash equivalents $33,620 $31,956
Marketable securities 33,216 30,625
Trade accounts receivable, net 25,181 25,665
Deferred income taxes 160 655
Prepaids and other current assets 5,476 2,812
Total current assets 97,653 91,713
Property and equipment, net 11,746 10,555
Goodwill 68,930 68,601
Intangible assets, net 85,250 87,133
Deferred income taxes 2,968 1,251
Other assets, net 4,072 4,213
Total $270,619 $263,466
LIABILITIES
Current liabilities:
Accounts payable $6,915 $6,071
Accrued expenses 11,017 12,881
Accrued payroll and related
benefits 3,266 4,570
Current portion of notes payable 1,000 1,000
Total current liabilities 22,198 24,522
Insurance reserve 3,907 3,038
Notes payable, less current portion 98,250 98,500
Other liabilities 5,472 2,717
Total liabilities 129,827 128,777
STOCKHOLDERS' EQUITY
Common stock-150,000,000 shares
authorized; $.001 par value;
30,710,271 and 30,312,322 shares
issued and outstanding at March 31,
2008 and December 31, 2007,
respectively 31 30
Additional paid-in capital 256,270 249,274
Retained earnings (deficit) (112,226) (112,957)
Accumulated other comprehensive
income (deficit) (3,283) (1,658)
Total stockholders' equity 140,792 134,689
Total $270,619 $263,466
NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three months ended March 31,
2008 2007
(in thousands, except per share amts)
Service revenue $41,688 $25,882
Operating costs and expenses:
Professional services (includes
non-cash compensation expense of
$590 and $960) 17,867 10,373
Sales, general, and administrative
(includes non-cash compensation
expense of $2,356 and $838) 18,170 8,464
Depreciation and amortization 2,798 850
Total operating costs and
expenses 38,835 19,687
Operating income 2,853 6,195
Other income (expense):
Interest expense (2,187) (1)
Interest income 527 888
Other, net 28 (2)
Total other income
(expense) (1,632) 885
Income before income taxes 1,221 7,080
Income tax expense 490 2,748
Net income $731 $4,332
Earnings per common share:
Basic $0.02 $0.14
Diluted $0.02 $0.14
Weighted averages of common shares
outstanding:
Basic 30,444,195 29,960,256
Diluted 31,424,363 30,881,728
NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
RECONCILIATION BETWEEN GAAP AND ADJUSTED NET INCOME
March 31, 2008 March 31, 2007
(in thousands, except (in thousands, except
per share amts) per share amts)
Adjust- As Adjust- As
GAAP ments Adjusted GAAP ments Adjusted
Service revenue $41,688 $41,688 $25,882 $25,882
Operating costs
and expenses:
Professional services
(includes stock
compensation expense
of $590 and $960 and
IBNR reserve of
$869 and $250) 17,867 (1,459) 16,408 $10,373 (1,210) 9,163
Sales, general, and
administrative
(includes stock
compensation expense
of $2,356 and $838) 18,170 (2,356) 15,814 8,464 (838) 7,626
Depreciation and
amortization 2,798 (1,883) 915 850 (339) 511
Total operating costs
and expenses 38,835 (5,698) 33,137 19,687 (2,387) 17,300
Operating income 2,853 5,698 8,551 6,195 2,387 8,582
Other income (expense):
Interest expense (2,187) (2,187) (1) (1)
Interest income 527 527 888 888
Other, net 28 28 (2) (2)
Total other income
(expense) (1,632) (1,632) 885 885
Income before income
taxes 1,221 5,698 6,919 7,080 2,387 9,467
Income tax expense 490 2,182 2,672 2,748 914 3,662
Net income $731 $3,516 $4,247 $4,332 $1,473 $5,805
Earnings per share:
Basic $0.02 0.14 $0.14 $0.19
Diluted $0.02 0.14 $0.14 $0.19
Weighted average
shares outstanding:
Basic 30,444,195 30,444,195 29,960,256 29,960,256
Diluted 31,424,363 31,424,363 30,881,728 30,881,728
NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
HISTORICAL VOLUMES
Growth Rates Acquisition Contribution -
Quar- Total Sequen- Year over First 12 months
ter Year Volumes tial Year DayHawk ATN TDS * Radlinx ERS
Q1 2004 120,554 36% 210% - - - - -
Q2 2004 152,640 27% 178% - - - - -
Q3 2004 182,737 20% 133% - - - - -
Q4 2004 193,883 6% 119% 8,316 - - - -
FY 2004 649,814 149% 149%
Q1 2005 222,341 15% 84% 15,850 - - - -
Q2 2005 266,023 20% 74% 17,355 - - - -
Q3 2005 298,759 12% 63% 18,905 - - - -
Q4 2005 328,815 10% 70% 8,480 29,640 - - -
FY 2005 1,115,938 72% 72%
Q1 2006 364,155 11% 64% - 32,130 - - -
Q2 2006 417,269 15% 57% - 32,622 - - -
Q3 2006 463,028 11% 55% - 32,086 - - -
Q4 2006 448,084 (3%) 36% - - - - -
FY 2006 1,692,536 52% 52%
Q1 2007 484,477 8% 33% - - 27,089 - -
Q2 2007 731,418 51% 75% - - 51,095 137,611 -
Q3 2007 787,673 8% 70% - - 52,708 143,339 -
Q4 2007 730,992 (7%) 63% - - 51,644 124,394 -
FY 2007 2,734,560 62% 62%
Q1 2008 745,075 2% 54% - - 23,147 117,693 17,457
Volumes exclude CWS
* TDS Acquisition volumes shown for Q1 2008 represent Jan 1 - Feb 9. The
12 month anniverary period ends Feb. 9, so volumes read after that date
are classified as organic.
SOURCE NightHawk Radiology Holdings, Inc.
Copyright © 2008, PRNewswire
Copyright © 2008, NewsBlaze,
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