GlobeNewswire Inc | Nov 8, 2021 06:00AM EST

November 08, 2021

-- Revenue increased 14.0% to $332.7 million in the third quarter of 2021 from $291.8 million in the third quarter of 2020 -- Adjusted EBITDA(1) increased 36.0% to $62.3 million in the third quarter of 2021 from $45.8 million in the third quarter of 2020; Adjusted to remove a one-time $7.7 million benefit from the forgiveness of deferred federal payroll taxes, Adjusted EBITDA(1) was $54.6 million, an increase of 19.2% from the third quarter of 2020 -- Adjusting for one-time items impacting Net Income in the quarter, Adjusted Earnings Per Share(3) was $0.21 for the third quarter of 2021; This compares with Adjusted Earnings Per Share(3) of $0.15 for the third quarter of 2020 -- Aggregate procedural volumes increased 15.6%; Same-center procedural volumes increased 10.0% compared to the third quarter of 2020 -- At quarter end, Net Leverage Ratio (Net Debt divided by Trailing 12 Month Adjusted EBITDA(1))was 2.85x, the lowest leverage in RadNets history -- RadNet further revises full-year 2021 guidance levels to increase Adjusted EBITDA(1) and Free Cash Flow(2) ranges

LOS ANGELES, Nov. 08, 2021 (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 350 owned and operated outpatient imaging centers, today reported financial results for its third quarter of 2021.

Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, I am pleased with our financial results in the third quarter. Despite our Revenue being negatively impacted by over $2.5 million in the quarter from hurricanes Henry and Ida in the Northeast, effective cost-management drove record third quarter Adjusted EBITDA(1) performance. Even after subtracting a one-time benefit of $7.7 million of federal payroll tax forgiveness, Adjusted EBITDA(1) increased 19.2% from last years third quarter and Adjusted EBITDA(1) margin increased by 0.7% to 16.4% in this years quarter.

We are particularly proud of this performance in light of the ongoing challenges from COVID-19 and its variants on our business and the entire healthcare delivery system. While we have experienced steady quarterly improvement in our procedural volumes since the height of COVID-19 last year, certain modalities and geographies remain impacted. Furthermore, challenges in workforce staffing in this difficult labor market continues to be a factor in our performance. We are optimistic that as COVID-19 continues to diminish and more workers move back into the labor pool, our business should further strengthen, added Dr. Berger.

Dr. Berger continued, Over the past five quarters, we have carefully managed our spending and liquidity. As a result of that and our steadily improving operating performance and cash flow, we have significantly decreased our financial leverage to its lowest level in the Companys history. Our leverage ratio of Net Debt to Trailing Twelve Month Adjusted EBITDA(1) was 2.85 times at quarter end. As a result of this deleveraging, we have been able to lower our interest costs and decrease our cost of capital, positioning ourselves with the financial capacity to pursue opportunities and initiatives to grow our business in the coming quarters.

Dr. Berger concluded, We continue to pursue opportunities in Artificial Intelligence (AI). While we are currently testing and implementing our DeepHealth Saige-Q AI tool in many of RadNets breast imaging locations, we are aggressively working towards a submission to the FDA for our more advanced mammography AI diagnostic product, Saige-DX. We will also continue to pursue further opportunities for AI investments in areas that we believe can play a significant role in population health management, particularly those that enable wide-scale screening of large populations for the most prevalent cancers and chronic diseases.

Third Quarter Financial Results

For the third quarter of 2021, RadNet reported Revenue of $332.7 million and Adjusted EBITDA(1) of $62.3 million. Revenue increased $40.9 million (or 14.0%) and Adjusted EBITDA(1) increased $16.5 million (or 36.0%) from the third quarter of 2020. Adjusted to remove a one-time $7.7 million benefit from the forgiveness of deferred federal payroll taxes, Adjusted EBITDA(1) was $54.6 million, an increase of 19.2% from the third quarter of 2020.

Adjusted Diluted Net Income Attributable to RadNet, Inc. Common Stockholders (Adjusted Earnings(3)) for the third quarter of 2021 was $11.2 million, or $0.21 per diluted share as compared with Adjusted Earnings(3) of $8.0 million, or $0.15 per diluted share for the same period in 2020. Unadjusted for one-time items, Net Income Attributable to RadNet, Inc. Common Shareholders (Net Income) for the third quarter of 2021 was $16.2 million, or $0.30 per diluted share. This compares to Net Income of $6.2 million, or $0.12 per diluted share, in the third quarter of 2020. These per share values are based upon weighted average number of diluted shares outstanding of 53.8 million in the third quarter of 2021 and 52.0 million of diluted shares outstanding in the third quarter of 2020.

Affecting Net Income in the third quarter of 2021 were certain non-cash expenses and non-recurring items including: $4.4 million of non-cash employee stock compensation expense; $163,000 of severance paid in connection with headcount reductions related to cost savings initiatives; $2.6 million loss on the disposal of certain capital equipment; $1.6 million of non-cash gain from interest rate swaps; $7.7 million gain on the forgiveness of deferred payroll taxes; and $649,000 of amortization of deferred financing costs and loan discount related to our existing credit facilities.

For the third quarter of 2021, as compared with the prior years third quarter, MRI volume increased 18.4%, CT volume increased 13.4% and PET/CT volume increased 6.6%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 15.6% over the prior years third quarter. On a same-center basis, including only those centers which were part of RadNet for both the third quarters of 2021 and 2020, MRI volume increased 11.2%, CT volume increased 7.0% and PET/CT volume increased 4.8%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 10.0% from the prior years same quarter.

Nine Month Financial Results

For the nine months ended September 30, 2021, RadNet reported Revenue of $981.9 million and Adjusted EBITDA(1) of $164.4 million. Revenue increased $218.0 million (or 28.5%) and Adjusted EBITDA(1) increased $75.7 million (or 85.2%) from the same nine month period last year.

For the nine month period in 2021, RadNet reported Net Income of $28.6 million, an increase of approximately $49.3 million over the first nine months of 2020. Per share diluted Net Income for the first nine months of 2021 was $0.54, compared to a diluted Net Loss of $(0.41) in the same nine month period of 2020 (based upon a weighted average number of diluted shares outstanding of 53.2 million in 2021 and 50.7 million in 2020).

Affecting Net Income for the nine month period of 2021 were certain non-cash expenses and non-recurring items including: $21.6 million of non-cash employee stock compensation expense; $715,000 of severance paid in connection with headcount reductions related to cost savings initiatives; $279,000 gain on the disposal of certain capital equipment; $10.4 million of non-cash gain from interest rate swaps; $7.7 million gain on the forgiveness of deferred payroll taxes; and $2.6 million of amortization of deferred financing costs and loan discount related to our existing credit facilities.

2021 Guidance Update

RadNet amends its previously announced guidance levels as follows:

Revised Original Guidance Guidance Revised Guidance Range Range Range After Q3 Results After Q2 Results $1,300 -Total Net Revenue $1,250 - $1,300 million $1,350 $1,300 - $1,350 million million $200 -Adjusted EBITDA^(1) $180 - $190 million $210 $210 - $220 million millionCapital Expenditures^ $80 -(a) $70 - $75 million $85 $85 - $90 million million $35 -Cash Interest Expense $39 - $44 million $40 $35 - $40 million million $75 -Free Cash Flow^ (b)(2) $60 - $70 million $85 $80 - $90 million million

(a)Net of proceeds from the sale of equipment, imaging centers and joint venture interests, and excludes New Jersey Imaging Network capital expenditures.(b)Defined by the Company as Adjusted EBITDA(1) less Capital Expenditures and Cash Paid for Interest.

Dr. Berger highlighted, Our performance continues to outpace both our initial budget and the upward revisions we made to our guidance levels upon releasing both the first and second quarter results. Based on our current performance and the confidence we have about our anticipated performance in the fourth quarter, we again have elected to increase guidance levels for Adjusted EBITDA(1) and Free Cash Flow(2). Additionally, further growth investment opportunities we have identified necessitate that we raise our Capital Expenditure guidance range.

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 third quarter 2021 results on Monday, November 8th, 2021 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).

Conference Call Details:

Date: Monday, November 8, 2021Time: 10:30 a.m. Eastern TimeDial In-Number: 888-394-8218International Dial-In Number: 646-828-8193

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 https://viavid.webcasts.com/starthere.jsp?ei=1507988&tp_key=4b14348f75 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 9717857.

Forward Looking Statements

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.

Regulation G: GAAP and Non-GAAP Financial Information

This release contains certain financial information not reported in accordance with GAAP. The Company uses both GAAP and non-GAAP metrics to measure its financial results. The Company believes that, in addition to GAAP metrics, these non-GAAP metrics assist the Company in measuring its cash-based performance. The Company believes this information is useful to investors and other interested parties because it removes unusual and nonrecurring charges that occur in the affected period and provides a basis for measuring the Company's financial condition against other quarters. Such information should not be considered as a substitute for any measures calculated in accordance with GAAP, and may not be comparable to other similarly titled measures of other companies. Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Reconciliation of this information to the most comparable GAAP measures is included in this release in the tables which follow.

About RadNet, Inc.

RadNet, Inc. is the leading national provider of freestanding, fixed-site diagnostic imaging services and related information technology solutions (including artificial intelligence) in the United States based on the number of locations and annual imaging revenue. RadNet has a network of 350 owned and/or operated outpatient imaging centers. RadNet's markets include California, Maryland, Delaware, New Jersey, New York, Florida and Arizona. Together with affiliated radiologists, and inclusive of full-time and per diem employees and technicians, RadNet has a total of approximately 8,300 employees. For more information, visit http://www.radnet.com.

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) September 30, December 31, 2021 2020 (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 151,253 $ 102,018 Accounts receivable 152,409 129,585 Due from affiliates 6,280 5,836 Prepaid expenses and other current 30,054 32,985 assetsTotal current assets 339,996 270,424 PROPERTY, EQUIPMENT AND RIGHT-OF-USE ASSETSProperty and equipment, net 452,145 399,335 Operating lease right-of-use assets 577,712 483,661 Total property, equipment and 1,029,857 882,996 right-of-use assetsOTHER ASSETS Goodwill 502,710 472,879 Other intangible assets 57,499 52,393 Deferred financing costs 2,260 1,767 Investment in joint ventures 44,228 34,528 Deferred tax assets 24,563 34,687 Deposits and other 41,250 36,983 Total assets $ 2,042,363 $ 1,786,657 LIABILITIES AND EQUITY CURRENT LIABILITIES Accounts payable, accrued $ 240,837 236,684 expenses and otherDue to affiliates 29,261 14,010 Deferred revenue 19,619 39,257 Current finance lease liability - 2,578 Current operating lease liability 70,613 65,794 Current portion of notes payable 11,165 39,791 Total current liabilities 371,495 398,114 LONG-TERM LIABILITIES Long-term finance lease liability - 743 Long-term operating lease 553,173 463,096 liabilityNotes payable, net of current 746,288 612,913 portionOther non-current liabilities 32,028 53,488 Total liabilities 1,702,984 1,528,354 EQUITY RadNet, Inc. stockholders' equity: Common stock - $.0001 par value,200,000,000 shares authorized; 51,640,537and 53,301,816 shares issued and 5 5 outstanding at December 31, 2020 andSeptember 30, 2021, respectivelyAdditional paid-in-capital 335,599 307,788 Accumulated other comprehensive (21,317 ) (24,051 ) lossAccumulated deficit (89,450 ) (117,999 ) Total RadNet, Inc.'s 224,837 165,743 stockholders' equityNoncontrolling interests 114,542 92,560 Total equity 339,379 258,303 Total liabilities and equity $ 2,042,363 $ 1,786,657

RADNET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 REVENUE Service fee $ 295,407 $ 256,730 $ 870,479 $ 660,760 revenueRevenue undercapitation 37,283 35,046 111,449 103,145 arrangementsTotal service 332,690 291,776 981,928 763,905 revenueProvider - 221 6,291 25,696 relief fundingOPERATING EXPENSESCost ofoperations,excluding 272,756 246,462 838,609 708,095 depreciationandamortizationDepreciationand 24,606 21,247 71,272 64,536 amortizationLoss (gain) onsale anddisposal of 2,595 342 (279 ) 543 equipment andotherSeverance 163 571 715 1,647 costsTotaloperating 300,120 268,622 910,317 774,821 expensesINCOME FROM 32,570 23,375 77,902 14,780 OPERATIONS OTHER INCOME AND EXPENSESInterest 12,032 11,061 37,028 33,443 expenseEquity inearnings of (2,853 ) (2,276 ) (8,259 ) (5,176 ) joint venturesNon-cashchange in fairvalue of (2,870 ) 679 (14,149 ) 4,523 interest ratehedgeDebtrestructuringand - - 6,044 - extinguishmentexpensesOther (income) (167 ) (139 ) 1,699 (247 ) expensesTotal other 6,142 9,325 22,363 32,543 expensesINCOME (LOSS)BEFORE INCOME 26,428 14,050 55,539 (17,763 ) TAXES(Provisionfor) benefit (5,284 ) (3,825 ) (12,534 ) 5,029 from incometaxesNET INCOME 21,144 10,225 43,005 (12,734 ) (LOSS)Net incomeattributableto 4,924 4,069 14,455 8,063 noncontrollinginterestsNET INCOME(LOSS)ATTRIBUTABLE $ 16,220 $ 6,156 $ 28,550 $ (20,797 ) TO RADNET,INC. COMMONSTOCKHOLDERS BASIC NETINCOME (LOSS)PER SHAREATTRIBUTABLE $ 0.31 $ 0.12 $ 0.55 $ (0.41 ) TO RADNET,INC. COMMONSTOCKHOLDERS DILUTED NETINCOME (LOSS)PER SHAREATTRIBUTABLE $ 0.30 $ 0.12 $ 0.54 $ (0.41 ) TO RADNET,INC. COMMONSTOCKHOLDERSWEIGHTEDAVERAGE SHARES OUTSTANDINGBasic 52,810,644 51,358,603 52,323,360 50,746,380 Diluted 53,817,840 51,955,815 53,249,698 50,746,380

RADNET, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS (IN THOUSANDS) (unaudited) Nine Months Ended September 30, 2021 2020 CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) $ 43,005 $ (12,734 ) Adjustments to reconcile net income (loss)to net cash provided by operating activities:Depreciation and amortization 71,272 64,536 Amortization of operating lease assets 55,880 50,769 Equity in earnings of joint ventures (8,259 ) 530 Amortization deferred financing costs and 2,608 3,266 loan discount(Gain) loss on sale and disposal of (279 ) 543 equipmentLoss on extinguishment of debt 1,496 - Amortization of cash flow hedge 2,765 2,204 Non-cash change in fair value of interest (14,149 ) 4,523 rate hedgeStock-based compensation 21,566 10,144 Change in fair value of contingent 891 (145 ) considerationChanges in operating assets andliabilities, net of assets acquired and liabilities assumed in purchasetransactions:Accounts receivable (23,237 ) 17,380 Other current assets 3,358 13,522 Other assets (10,188 ) (700 ) Deferred taxes 10,124 (7,640 ) Operating leases (55,035 ) (43,351 ) Deferred revenue (19,438 ) 44,530 Accounts payable, accrued expenses and 12,725 22,966 otherNet cash provided by operating activities 95,105 170,343 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of imaging facilities and other (64,918 ) (10,125 ) acquisitionsPurchase of property and equipment (88,478 ) (77,303 ) Proceeds from sale of equipment 521 779 Equity contributions in existing joint (1,441 ) (1,631 ) venturesNet cash used in investing activities (154,316 ) (88,280 ) CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on notes and leases (3,302 ) (2,704 ) payablePayments on Term Loan Debt (616,217 ) (33,472 ) Additional deferred finance costs on - (741 ) revolving loan amendmentProceeds from issuance of new debt, net of 716,369 - issuing costsPurchase of noncontrolling interests by 7,404 - third partyDistributions paid to noncontrolling - (601 ) interestsProceeds from sale of economic interests in 4,198 - majority owned subsidiary, net of taxesProceeds from payment protection plan - 4,023 Proceeds from revolving credit facility 128,300 250,900 Payments on revolving credit facility (128,300 ) (250,900 ) Proceeds from issuance of common stock upon 26 - exercise of optionsNet cash provided by (used in) financing 108,478 (33,495 ) activitiesEFFECT OF EXCHANGE RATE CHANGES ON CASH (32 ) 6 NET INCREASE IN CASH AND CASH EQUIVALENTS 49,235 48,574 CASH AND CASH EQUIVALENTS, beginning of 102,018 40,165 periodCASH AND CASH EQUIVALENTS, end of period $ 151,253 $ 88,739 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid during the period for interest $ 21,408 $ 31,210 Cash paid during the period for income $ 1,913 $ 5,036 taxes



RADNET, INC.RECONCILIATION OF GAAP NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC. COMMON SHAREHOLDERS TO ADJUSTED EBITDA(1)(IN THOUSANDS)

Three Months Ended September 30, 2021 2020 Net Income Attributable to RadNet, Inc. Common $ 16,220 $ 6,156 ShareholdersPlus Interest 12,032 11,061 ExpensePlus Provision for 5,284 3,825 Income TaxesPlus Depreciation and 24,606 21,247 AmortizationPlus Loss on Sale of 2,595 342 EquipmentPlus Severance 163 571 CostsPlus Non-cash Change in Fair Value of Interest (2,870) 679 Rate HedgePlus Other (Gains) (167) (139) ExpensesPlus Non-Cash Employee Stock-Based 4,422 2,067 Compensation Adjusted EBITDA^ $ 62,285 $ 45,809 (1) Nine Months Ended September 30, 2021 2020 Net Income (Loss) Attributable to RadNet, Inc. $ 28,550 $ Common Shareholders (20,797)Plus Interest 37,028 33,443 ExpensePlus Provision for (Benefit From) 12,534 (5,029) Income TaxesPlus Depreciation and 71,272 64,536 AmortizationPlus (Gain) Loss on Sale of (279) 543 EquipmentPlus Severance 715 1,647 CostsPlus Debt Restructuring and Loss on 6,044 - Extinguishment ExpensesPlus Non-cash Change in Fair Value of Interest (14,149) 4,523 Rate HedgePlus Other Adjustment to Joint (565) Venture InvestmentPlus Other Expenses 1,699 (247) (Gains)Plus Non-Cash Employee Stock-Based 21,566 10,144 Compensation Adjusted EBITDA^ $ $ 88,763 (1) 164,415

PAYOR CLASS BREAKDOWN Third Quarter 2021 Commercial Insurance 57.3 % Medicare 22.0 % Capitation 11.2 % Medicaid 2.6 % Workers Compensation/Personal Injury 3.5 % Other 3.4 % Total 100.0 %

RADNET PAYMENTS BY MODALITY Third Quarter Full Year Full Year Full Year 2021 2020 2019 2018 MRI 36.3 % 35.4 % 35.8 % 35.2 % CT 17.0 % 17.6 % 16.9 % 16.5 % PET/CT 5.6 % 6.0 % 5.6 % 5.7 % X-ray 7.1 % 7.3 % 8.1 % 8.4 % Ultrasound 12.5 % 12.3 % 12.4 % 12.2 % Mammography 16.0 % 15.7 % 15.2 % 15.8 % Nuclear Medicine 1.0 % 1.0 % 1.0 % 1.1 % Other 4.6 % 4.7 % 4.9 % 5.1 % 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.

RADNET, INC. AND SUBSIDIARIESSCHEDULE OF ADJUSTED EARNINGS AND EARNINGS PER SHARE ^(3)(IN THOUSANDS EXCEPT SHARE DATA)(unaudited) Three Months Ended September 30, September 30, 2021 2020 NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS $ 16,220 $ 6,156 Add COVID-19-related 2,832 - awards to employees Add non-cash impact of (1,625 ) 1,990 cash flow hedges (i) Add severance 163 571 costs Subtract forgiveness of (7,703 ) - deferred payroll taxes Total adjustments - (6,333 ) 2,561 loss (gain) Subtract tax impact 1,266 (697 ) of Adjustments (ii) Tax effected impact (5,067 ) 1,864 of adjustments TOTAL ADJUSTMENT TO NET INCOME ATTRIBUTABLE TO RADNET, INC. COMMON (5,067 ) 1,864 SHAREHOLDERS ADJUSTED NET INCOME (LOSS) 11,153 8,020 ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS WEIGHTED AVERAGE SHARES OUTSTANDING Diluted 53,817,840 51,955,815 ADJUSTED DILUTED NET INCOME PER SHARE ATTRIBUTABLE TO RADNET, $ 0.21 $ 0.15 INC. COMMON STOCKHOLDERS (i) Impact is the combination of (a) the gain in fairvalue of the hedges during the quarter of $2,870 in 2021 andloss of $679 in 2020 and (b) the amortization of the accumulation of the changes in fair value out of Other Comprehensive Incomethat existed prior to the hedges becoming ineffective of $1,245,000 in 2021 and $1,311,000 in 2020.(ii) Tax effected using 19.99% blended federal and state effective tax rate for 2021 and 27.22% for 2020.