GlobeNewswire Inc | Aug 10, 2020 06:00AM EDT

August 10, 2020

-- As a result of taking immediate expense and cash savings measures to react to the impact of COVID-19 on patient volume, RadNet finished the quarter with a cash balance exceeding $84 million and was undrawn on its $137.5 million revolving line of credit -- RadNet has re-opened 77 of the 102 facilities temporarily closed because of COVID-19 -- Procedural volumes have returned to approximately 90% of pre-COVID-19 per day volumes, from a low point in mid-April of 28% of pre-COVID-19 per day volumes -- For the quarter, and as a result of COVID-19, Revenue decreased 34.1% to $190.6 million in the second quarter of 2020 from $289.1 million in the second quarter of 2019 -- Adjusted EBITDA(1) decreased 47.6% to $22.6 million in the second quarter of 2020 from $43.1 million in the second quarter of 2019 -- Adjusted diluted loss per share was $(0.16) in the second quarter of 2020, as adjusted on a tax-effected basis for the non-cash change in the fair value of an interest rate hedge, as compared with diluted earnings per share of $0.10 from the prior years second quarter -- Aggregate procedural volumes decreased 43.7% and same-center procedural volumes decreased 43.4% from the second quarter of 2019 -- Subsequent to quarter end, RadNet and Hologic, Inc. announced a comprehensive collaboration to improve breast cancer care, including the co-development of Artificial Intelligence tools, data-sharing and an upgrade of RadNets fleet of Hologic mammography units to cutting-edge technology

LOS ANGELES, Aug. 10, 2020 (GLOBE NEWSWIRE) -- RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services through a network of 332 owned and/or operated outpatient imaging centers, today reported financial results for its second quarter of 2020.

Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, I am extremely pleased with the recovery we are experiencing relative to the low point of our procedural volumes during this COVID-19 period. Our procedural volumes reached a low point during the second week of April, at roughly 28% of the pre-COVID-19 per day averages of January and February. Currently, we are close to 90% of our pre-COVID per day volumes and are optimistic about further recovery as the year progresses.

Dr. Berger continued, Our operations teams and executive management moved with great urgency in March to aggressively take the actions necessary to lower our costs and conserve cash under very extreme health and social conditions and substantially reduced patient volume. The actions we took, which included temporarily closing facilities, consolidating patient volume into the centers of excellence which remained open, negotiating and restructuring agreements with vendors and landlords and reducing employee costs through furloughs and temporary salary cuts, among other actions, proved to secure our business in this difficult period. I want to thank the employees of RadNet, who are meeting the challenges during these difficult times and who are making great personal sacrifices for the benefit of our Company, our referring physicians, and most importantly, our patients.

We will continue to evaluate the re-opening of locations and bring back furloughed employees as our business further recovers. Currently, 25 of our 332 facilities remain closed. During the COVID-19 period, we were assisted by approximately $25.5 million in grants we received under the CARES Act Provider Relief Fund and approximately $44.4 million we received in the form of advances from the Centers for Medicare and Medicaid Services and one west coast insurance company. Despite having to repay these advances during the second half of this year, we expect that our business will add to the $84.6 million cash balance we had at quarter end, added Dr. Berger.

Dr. Berger concluded, Notwithstanding this difficult operating environment, we remain committed to executing our strategic objectives. Last week, we announced a collaboration agreement with Hologic, Inc. focused on improving breast health and advancing both companies objectives around Artificial Intelligence (A.I.). The multifaceted agreement incorporates data sharing, co-development of R&D, collaboration on A.I. algorithms, joint market opportunities and the upgrade of RadNets fleet of Hologic mammography units to state-of-the art imaging technology. This collaboration with Hologic furthers RadNets commitment to developing A.I. solutions that will transform radiology and improve radiologist accuracy and patient care. We remain on track with our DeepHealth divisions plan to submit for U.S. Food and Drug Administration review its first A.I. product later this year. In addition to this, we continue to pursue accretive strategic acquisitions of targets whose operations have been impacted as a result of the COVID-19 market conditions. We look forward to providing updates on these activities in the near future.

Second Quarter Financial Results

For the second quarter of 2020, RadNet reported Revenue of $190.6 million and Adjusted EBITDA(1) of $22.6 million. Revenue decreased $98.5 million (or 34.1%) and Adjusted EBITDA(1) decreased $20.5 million (or 47.6%) from the second quarter of last year.

For the second quarter, RadNet reported Net Loss Attributable to RadNet, Inc. Common Stockholders (Net Loss) of $10.6 million, a decline of approximately $15.5 million from the second quarter of 2019. Adjusting for the impact of the non-cash change in the fair value of an interest rate hedge during the quarter on a tax-effected basis of $2.6 million (Adjusted Net Loss), Adjusted Net Loss was $8.0 million in the second quarter, a decline of $12.9 million from the second quarter of 2019.

Per share diluted Net Loss for the second quarter was $(0.21), compared to diluted Net Income of $0.10 in the second quarter of 2019 (based upon a weighted average number of diluted shares outstanding of 50.7 million in 2020 and 50.1 million in 2019). Adjusting for the impact of the non-cash change in the fair value of the interest rate hedge, per share diluted Adjusted Net Loss was $(0.16) in the second quarter compared to diluted Net Income of $0.10 in the second quarter of 2019.

Affecting Net Loss in the second quarter of 2020 were certain non-cash expenses or gains and non-recurring items including: $3.8 million non-cash expense from the change in the fair value of an interest rate hedge; $1.5 million of non-cash employee stock compensation expense resulting from the vesting of certain options and restricted stock; $859,000 of severance paid in connection with headcount reductions related to cost savings initiatives; $569,000 gain on the sale of certain capital equipment; and $1.1 million of non-cash amortization of deferred financing costs and loan discount on debt issuances.

For the second quarter of 2020, as compared with the prior years second quarter, MRI volume decreased 39.7%, CT volume decreased 31.6% and PET/CT volume decreased 17.6%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, decreased 43.7% over the prior years second quarter. On a same-center basis, including only those centers which were part of RadNet for both the second quarters of 2020 and 2019, MRI volume decreased 39.4%, CT volume decreased 31.7% and PET/CT volume decreased 16.9%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, decreased 43.4% over the prior years same quarter.

Six Month Financial Results

For the six months ended June 30, 2020, RadNet reported Revenue of $472.1 million and Adjusted EBITDA(1) of $43.0 million. Revenue decreased $88.5 million (or 15.8%) and Adjusted EBITDA(1) decreased $33.4 million (or 43.7%) from the same six month period last year.

For the six month period in 2020, RadNet reported Net Loss of $27.0 million, a decline of approximately $28.1 million over the first six months of 2019. Adjusting for the impact of the non-cash change in the fair value of an interest rate hedge during the six month period on a tax-effected basis of $2.8 million, Adjusted Net Loss was $24.2 million in the first six months of 2020, a decline of $25.3 million over the same period of 2019.

Per share diluted Net Loss for the first six months of 2020 was $(0.53), compared to a diluted Net Income of $0.02 in the same six month period of 2019 (based upon a weighted average number of diluted shares outstanding of 50.5 million in 2020 and 50.0 million in 2019). Adjusting for the impact of the non-cash change in the fair value of the interest rate hedge, per share diluted Adjusted Net Loss was $(0.48) in the first half of 2020 compared to a diluted Net Income of $0.02 in the same period of 2019.

Affecting Net Loss for the six month period of 2020 were certain non-cash expenses and non-recurring items including: $3.8 million non-cash expense from the change in the fair value of an interest rate hedge; $8.1 million of non-cash employee stock compensation expense resulting from the vesting of certain options and restricted stock; $1.1 million of severance paid in connection with headcount reductions related to cost savings initiatives; and $2.2 million of combined non-cash amortization of deferred financing costs and loan discounts related to financing fees paid as part of our existing credit facilities.

Conference Call for Today

Dr. Howard Berger, President and Chief Executive Officer, and Mark Stolper, Executive Vice President and Chief Financial Officer, will host a conference call to discuss its second quarter 2020 results on Monday, August 10th, 2020 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).

Conference Call Details:

Date: Monday, August 10, 2020Time: 10:30 a.m. Eastern TimeDial In-Number: 800-437-2398International Dial-In Number: 786-204-3966

It is recommended that participants dial in approximately 5 to 10 minutes prior to the start of the 10:30 a.m. call. There will also be simultaneous and archived webcasts available at http://public.viavid.com/index.php?id=141056 or http://www.radnet.com under the Investors menu section and News Releases sub-menu of the website. An archived replay of the call will also be available and can be accessed by dialing 844-512-2921 from the U.S., or 412-317-6671 for international callers, and using the passcode 7462345.

Regulation G: GAAP and Non-GAAP Financial Information

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are expressions of our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, and anticipated future conditions, events and trends. Forward-looking statements can generally be identified by words such as: anticipate, intend, plan, goal, seek, believe, project, estimate, expect, strategy, future, likely, may, should, will and similar references to future periods. Forward-looking statements in this press release include, among others, statements we make regarding response to and the expected future impacts of COVID-19, including statements about our anticipated business results, balance sheet and liquidity and our future liquidity, burn rate and our continuing ability to service or refinance our current indebtedness.

Forward-looking statements are neither historical facts nor assurances of future performance. Because forward-looking statements relate to the future, they are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not place undue reliance on any of these forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following:

-- the ongoing impact of the COVID-19 pandemic on our business, suppliers, payors, customers, referral sources, partners, patients and employees, including (i) governments unprecedented action regarding existing and potential restrictions and/or obligations related to citizen and business activity to contain the virus; (ii) the consequences of an economic downturn resulting from the impacts of COVID-19 and the possibility of a global economic recession; (iii) the impact of the volume of canceled or rescheduled procedures, whether as a result of government action or patient choice; (iv) measures we are taking to respond to the COVID-19 pandemic, including changes to business practices; (v) the impact of government and administrative regulation, guidance and appropriations; (vi) changes in our revenues due to declining patient procedure volumes, changes in payor mix; (vii) potential increased expenses or workforce disruptions related to our employees that could lead to unavailability of key personnel; (viii) workforce disruptions related to our key partners, suppliers, vendors and others we do business with; (ix) the impact of return to work orders in certain states in which we operate; and (x) increased credit and collectability risks; -- the availability and terms of capital to fund our business; -- our ability to service our indebtedness, make principal and interest payments as those payments become due and remain in compliance with applicable debt covenants, in addition to our ability to refinance such indebtedness on acceptable terms; -- changes in general economic conditions nationally and regionally in the markets in which we operate; -- the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities; -- our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; -- volatility in interest and exchange rates, or credit markets; -- the adequacy of our cash flow and earnings to fund our current and future operations; -- changes in service mix, revenue mix and procedure volumes; -- delays in receiving payments for services provided; -- increased bankruptcies among our partner physicians or joint venture partners; -- the impact of the political environment and related developments on the current healthcare marketplace and on our business, including with respect to the future of the Affordable Care Act; -- the extent to which the ongoing implementation of healthcare reform, or changes in or new legislation, regulations or guidance, enforcement thereof by federal and state regulators or related litigation result in a reduction in coverage or reimbursement rates for our services, or other material impacts to our business; -- closures or slowdowns and changes in labor costs and labor difficulties, including stoppages affecting either our operations or our suppliers' abilities to deliver supplies needed in our facilities; -- the occurrence of hostilities, political instability or catastrophic events; -- the emergence or reemergence of and effects related to future pandemics, epidemics and infectious diseases; and -- noncompliance by us with any privacy or security laws or any cybersecurity incident or other security breach by us or a third party involving the misappropriation, loss or other unauthorized use or disclosure of confidential information.

Any forward-looking statement contained in this current report is based on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that we may make from time to time, whether as a result of changed circumstances, new information, future developments or otherwise, except as required by applicable law.

About RadNet, Inc.

RadNet, Inc. is the leading national provider of freestanding, fixed-site diagnostic imaging services in the United States based on the number of locations and annual imaging revenue. RadNet has a network of 332 owned and/or operated outpatient imaging centers. RadNet's core markets include California, Maryland, Delaware, New Jersey and New York. In addition, RadNet provides radiology information technology solutions, teleradiology professional services and other related products and services to customers in the diagnostic imaging industry. Together with affiliated radiologists, and inclusive of full-time and per diem employees and technicians, RadNet has a total of approximately 8,600 employees. For more information, visit http://www.radnet.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Specifically, statements concerning successfully integrating acquired operations, successfully achieving financial guidance, successfully developing and integrating new lines of business, continuing to grow its business by generating patient referrals and contracts with radiology practices, and receiving third-party reimbursement for diagnostic imaging services, are forward-looking statements within the meaning of the Safe Harbor. Forward-looking statements are based on management's current, preliminary expectations and are subject to risks and uncertainties, which may cause the Company's actual results to differ materially from the statements contained herein. Further information on potential risk factors that could affect RadNet's business and its financial results are detailed in its most recent Annual Report on Form 10-K, as filed with the Securities and Exchange Commission. Undue reliance should not be placed on forward-looking statements, especially guidance on future financial performance, which speaks only as of the date they are made. RadNet undertakes no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made, or to reflect the occurrence of unanticipated events.

CONTACTS:

RadNet, Inc.Mark Stolper, 310-445-2800Executive Vice President and Chief Financial Officer

RADNET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) June 30, 2020 December 31, 2019 (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 84,583 $ 40,165 Accounts receivable 125,745 154,763 Due from affiliates 1,472 1,242 Prepaid expenses and other current assets 35,720 45,004 Total current assets 247,520 241,174 PROPERTY, EQUIPMENT AND RIGHT-OF-USE ASSETS Property and equipment, net 370,188 367,795 Operating lease right-of-use assets 448,855 445,477 Total property, equipment and 819,043 813,272 right-of-use assetsOTHER ASSETS Goodwill 467,803 441973 Other intangible assets 57,601 42,994 Deferred financing costs 1,336 1,559 Investment in joint ventures 37,370 34,470 Deferred tax assets, net of current 46,226 34,548 portion Deposits and other 40,104 36,996 Total assets $ 1,717,003 $ 1,646,986 LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable, accrued expenses and $ 206,272 207,585 other Due to affiliates 20,042 14,347 Deferred revenue 45,700 1,316 Current finance lease liability 3,264 3,283 Current operating lease liability 65,400 61,206 Current portion of notes payable 41,715 39,691 Total current liabilities 382,393 327,428 LONG-TERM LIABILITIES Long-term finance lease liability 1,682 3,264 Long-term operating lease liability 424,018 420,922 Notes payable, net of current portion 634,840 652,704 Other non-current liabilities 40,814 9,529 Total liabilities 1,483,747 1,413,847 EQUITY RadNet, Inc. stockholders' equity: Common stock - $.0001 par value, 200,000,000shares authorized; 51,554,760 and 50,314,328 5 5 shares issued and outstanding at June 30,2020 and December 31, 2019, respectively Additional paid-in-capital 304,012 262,865 Accumulated other comprehensive loss (26,098 ) (8,026 ) Accumulated deficit (130,111 ) (103,159 ) Total RadNet, Inc.'s stockholders' equity 147,808 151,685 Noncontrolling interests 85,448 81,454 Total equity 233,256 233,139 Total liabilities and equity $ 1,717,003 $ 1,646,986

RADNET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 REVENUE Provision for bad debtsService fee $ 155,698 $ 258,171 $ 404,031 500,844 revenue Revenueunder 34,868 30,926 68,099 59,803 capitationarrangementsTotal revenue 190,566 289,097 472,130 560,647 Provider 25,475 - 25,475 - relief fundingOPERATING EXPENSES Cost ofoperations,excluding 194,217 246,558 461,635 489,615 depreciationandamortization

Depreciation 21,355 20,083 43,289 39,703 andamortization (Gain) losson sale anddisposal of (569 ) 101 202 1,073 equipment andother Severance 859 371 1,076 1,002 costsTotaloperating 215,862 267,113 506,202 531,393 expensesINCOME (LOSS)FROM 179 21,984 (8,597 ) 29,254 OPERATIONS OTHER INCOME AND EXPENSES Interest 10,831 12,399 22,382 24,694 expense Equity inearnings of (945 ) (2,244 ) (2,900 ) (4,117 ) joint ventures Non-cashchange in fairvaue of 3,843 - 3,843 - interest ratehedge Other(income) (115 ) 1,269 (108 ) 1,269 expensesTotal other 13,614 11,424 23,217 21,846 expenses(LOSS) INCOMEBEFORE INCOME (13,435 ) 10,560 (31,814 ) 7,408 TAXES Benefitfrom(provision 4,475 (2,969 ) 8,856 (1,740 ) for) incometaxesNET (LOSS) (8,960 ) 7,591 (22,958 ) 5,668 INCOME Net incomeattributableto 1,634 2,692 3,994 4,503 noncontrollinginterestsNET (LOSS)INCOMEATTRIBUTABLE $ (10,594 ) $ 4,899 $ (26,952 ) $ 1,165 TO RADNET,INC. COMMONSTOCKHOLDERS BASIC NET(LOSS) INCOMEPER SHAREATTRIBUTABLE $ (0.21 ) $ 0.10 $ (0.53 ) $ 0.02 TO RADNET,INC. COMMONSTOCKHOLDERS DILUTED NET(LOSS) INCOMEPER SHAREATTRIBUTABLE $ (0.21 ) $ 0.10 $ (0.53 ) $ 0.02 TO RADNET,INC. COMMONSTOCKHOLDERSWEIGHTEDAVERAGE SHARES OUTSTANDINGBasic 50,672,219 49,702,869 50,483,274 49,490,234 Diluted 50,672,219 50,144,540 50,483,274 49,988,036

RADNET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS (IN THOUSANDS) (unaudited) Six Months Ended June 30, 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (22,958 ) $ 5,668 Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization 43,289 39,703 Amortization of operating lease assets 34,094 32,937 Equity in earnings of joint ventures (2,900 ) (4,117 ) Distributions from joint ventures - 3,438 Amortization deferred financing costs and 2,163 2,021 loan discountLoss on sale and disposal of equipment 202 1,073 Amortization of cash flow hedge 892 - Non-cash change in fair value of interest 3,843 - rate hedgeStock-based compensation 8,078 5,582 Other noncash item included in cost of - (559 ) operationsChange in fair value of contingent (97 ) (1,953 ) considerationChanges in operating assets andliabilities, net of assets acquired and liabilities assumed in purchasetransactions:Accounts receivable 29,018 (12,042 ) Other current assets 9,884 4,331 Other assets (4,257 ) 2,069 Deferred taxes (11,678 ) (3,542 ) Operating leases (30,182 ) (32,268 ) Deferred revenue 44,384 (666 ) Accounts payable, accrued expenses and 27,690 2,860 otherNet cash provided by operating activities 131,465 44,535 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of imaging facilities and other (4,188 ) (27,149 ) acquisitionsEquity investments at fair value - (143 ) Purchase of property and equipment (64,193 ) (50,342 ) Proceeds from sale of equipment 779 760 Proceeds from sale of equity interests in a - 132 joint ventureEquity contributions in existing joint - (103 ) venturesNet cash used in investing activities (67,602 ) (76,845 ) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on notes and leases (1,814 ) (3,320 ) payablePayments on Term Loan Debt (21,648 ) (19,469 ) Proceeds from issuance of new debt, net of - 97,144 issuing costsProceeds from Payment Protection Program 4,023 - Proceeds from sale of noncontrolling - 5,275 interestContribution from a noncontrolling partners - 750 Proceeds from revolving credit facility 250,900 236,200 Payments on revolving credit facility (250,900 ) (264,200 ) Proceeds from issuance of common stock upon - 50 exercise of optionsNet cash (used in) provided by financing (19,439 ) 52,430 activitiesEFFECT OF EXCHANGE RATE CHANGES ON CASH (6 ) (5 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 44,418 20,115 CASH AND CASH EQUIVALENTS, beginning of 40,165 10,389 periodCASH AND CASH EQUIVALENTS, end of period $ 84,583 $ 30,504 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid during the period for interest $ 22,826 $ 23,292



RADNET, INC.RECONCILIATION OF GAAP NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.COMMON SHAREHOLDERS TO ADJUSTED EBITDA^(1)(IN THOUSANDS) Three Months Ended June 30, 2020 2019 Net Income (Loss) Attributable to RadNet, Inc. $ (10,594 ) $ 4,899 Common ShareholdersPlus Interest 10,831 12,399 ExpensePlus Provision (Benefit) for (4,475 ) 2,969 Income TaxesPlus Depreciation and 21,355 20,083 AmortizationPlus Other Expenses (115 ) 1,269 (Income)Plus Severance 859 371 CostsPlus Loss (Gain) on Sale of (569 ) 101 EquipmentPlus Non-cash Change in Fair Value of Interest 3,843 - Rate HedgePlus Non Cash Employee Stock 1,456 1,044 Compensation Adjusted EBITDA^(1) $ 22,591 $ 43,135 Six Months Ended June 30, 2020 2019 Net Income (Loss) Attributable to RadNet, Inc. $ (26,952 ) $ 1,165 Common ShareholdersPlus Interest 22,382 24,694 ExpensePlus Provision (Benefit) for (8,856 ) 1,740 Income TaxesPlus Depreciation and 43,289 39,703 AmortizationPlus Other Expenses (108 ) 1,269 (Income)Plus Severance 1,076 1,002 CostsPlus Loss on Sale of 202 1,072 EquipmentPlus Non-cash Change in Fair Value of Interest 3,843 - Rate HedgePlus Non Cash Employee Stock 8,078 5,583 Compensation Adjusted EBITDA^(1) $ 42,954 $ 76,228



PAYOR CLASS BREAKDOWN Second Quarter 2020 Commercial Insurance/Other Patient Revenue 52.4% Medicare 18.4% Capitation 18.3% Workers Compensation/Personal Injury 3.9% Medicaid 2.3% Other/Non Patient 4.8% Total 100.0%



RADNET PAYMENTS BY MODALITY Second Quarter Full Year Full Year Full Year 2020 2019 2018 2017 MRI 36.1% 35.8% 35.2% 34.9% CT 19.6% 16.9% 16.5% 16.2% PET/CT 7.5% 5.6% 5.7% 5.2% X-ray 7.3% 8.1% 8.4% 8.9% Ultrasound 12.1% 12.4% 12.2% 12.1% Mammography 12.2% 15.2% 15.8% 16.3% Nuclear Medicine 1.1% 1.0% 1.1% 1.1% Other 4.2% 4.9% 5.1% 5.2% 100.0% 100.0% 100.0% 100.0%

Footnotes

(1) The Company defines Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, each from continuing operations and adjusted for losses or gains on the sale of equipment, other income or loss, debt extinguishments and non-cash equity compensation. Adjusted EBITDA includes equity earnings in unconsolidated operations and subtracts allocations of earnings to non-controlling interests in subsidiaries, and is adjusted for non-cash or extraordinary and one-time events taken place during the period.

Adjusted EBITDA is reconciled to its nearest comparable GAAP financial measure. Adjusted EBITDA is a non-GAAP financial measure used as analytical indicator by RadNet management and the healthcare industry to assess business performance, and is a measure of leverage capacity and ability to service debt. Adjusted EBITDA should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted EBITDA is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies.

(2) As noted above, the Company defines Free Cash Flow as Adjusted EBITDA less total Capital Expenditures (whether completed with cash or financed) and Cash Interest paid. Free Cash Flow is a non-GAAP financial measure. The Company uses Free Cash Flow because the Company believes it provides useful information for investors and management because it measures our capacity to generate cash from our operating activities. Free Cash Flow does not represent total cash flow since it does not include the cash flows generated by or used in financing activities. In addition, our definition of Free Cash Flow may differ from definitions used by other companies.

Free Cash Flow should not be considered a measure of financial performance under GAAP, and the items excluded from Adjusted EBITDA should not be considered in isolation or as alternatives to net income, cash flows generated by operating, investing or financing activities or other financial statement data presented in the consolidated financial statements as an indicator of financial performance or liquidity. As Adjusted EBITDA is not a measurement determined in accordance with GAAP and is therefore susceptible to varying methods of calculation, this metric, as presented, may not be comparable to other similarly titled measures of other companies.