RadNet (RDNT) 13 Aug 222022 Q2 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the RadNet, Inc.

Second Quarter 2022 Financial Results Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Mark Stolper, Executive Vice President and Chief Financial Officer of RadNet, Inc. sir. ahead, go Please

morning, Howard gentlemen, to Berger XXXX second Good for discuss thank joining quarter results. Dr. and financial ladies you. and and you RadNet's Thank me today

remind of we the Securities everyone under Before US Private Reform contains Private This Litigation XXXX. Litigation of Securities we'd the forward-looking today, like statements the of safe within harbor begin the statement XXXX. presentation Act Act Reform to meaning of

to retaining of for EBITDA continue the safe integrating for Specifically, with successfully performance, third-party acquired harbor. among imaging anticipated operations RadNet's adjusted generating acquired statements meaning and referrals business future estimated, operating patient to as revenue statements concerning by the and reimbursement radiology financial the ability practices, forward-looking technologists, diagnostic others, grow and contracts operations, services, are generating recruiting the and receiving within

forward-looking Dr. the they with date to any forward-looking management's those Berger. reports is publicly the to XX, made. I'd the are statements of uncertainties, guidance RadNet's And placed time to which no which and to Undue occurrence on uncertainties, the based the December statements to especially are differ from as Annual year over statements, not and filed from Forward-looking RadNet's to events subject including that, should update the of on it be risks set speaks RadNet risks information, preliminary reflect and or risks on herein. turn to future results unanticipated after These reflect materially reliance RadNet's cause for financial only SEC performance, on obligation current new were undertakes may time, expectations actual forth made statements to contained date Report XXXX. with ended Form or circumstances like events. include XX-K call in the

remarks, with highlights performance, affected everyone, give insight On and XXXX quarter plan from today. a strategy. our future you results, to Good today's After factors dedicating for discuss and in and open to for our company you you Mark. this call I which thank participate you, of to for you morning. and our call, day to our will Mark your morning, conference your your we second provide Thank I'd portion our thank more interest the like all prepared in joining questions. us of this call into

entire and Before I I like and team RadNet, start, of to hope of on your we staying the safe. myself say healthy are would ones behalf all you and at loved

for lenders our our grateful are wish challenging business time. this including extremely stakeholders, employees, and partners, you all well We and all shareholders, during

that our challenges and guidance and performance earnings Medicare rising XXXX, the guidance, that results. I to year When impact meet Let's am we I quarter our the occasion these our which team with levels, around towards is number our raised then tracking the strong conjunction the quarter particularly May in certain is significant in set XXXX ongoing subsequently am begin. of after the fourth pressures, pleased inflationary our we anticipated force, second quarter labor a we pleased in of released reimbursement including of first cost COVID-XX. full reductions, to challenges. the XXXX for

as we of reimbursement for labor projections, $X.X and and internal rising our our Medicare in XXXX excluding as volume million. revenue anticipated AI growth estimated mitigate the $XX.X was our Adjusted quarter, of growth second the last procedural and year's EBITDA, to on X.X% During impact X.X%. has the second this the of able as EBITDA, was been well expansion of million the adjusted to volume growth increased aggregate slightly of of losses relative reductions. last procedural supplies, much year's quarter second X.X% behind financial quarter Though in same-center segment cost

While its in is our in ways. still impacting far several XXXX, from impact COVID-XX business

continue our to most all related employee COVID exams, are our by in use mammography, at resulted operating challenges, impacted has labor to some and progress procedures particularly reschedule we services. leave delaying cancel of remain us in in elective have more plans. we well see charges, nature, times to or cases, the own COVID. that we impacted continue long-term we growth that and caused while also Employee patient by as, our to make perform fronts overtime postponing base these as patients First, or the on expensive temporary Despite

same-center and in we de center targeted business are recent markets. performance growth more initiatives our imaging First, focused to on in local our through through build facilities core driving creating novo

for locations capacity we part in major As have focused in these significant with areas discussed where sites be on we have expansion novo our patient sites that new half development, occurring have construction existing and XXXX do the certain of joint to partners new various health believe XX because simply call, and our system the currently ventures. XXXX. in sites in hospital I meet overlapping or, contributors are demand our of to last constraints due almost within throughout We unable of should cases, or stages These to not services results de we latter are this identified. financial populations we performance

hospital our joint Second, venture we continue and to offerings. expand

new we joint the ventures. quarter, established two During second

venture established The two Frederick, Hospital. The became in joint joint Hospital, venture were venture in operational the with with April to six joint which our Frederick Hospital. of Maryland Health with by is a second Frederick venture Frederick contributed and centers, first,

affiliate the this of RadNet anticipate each our made of its we held Health could Dimension XX% venture have affiliates. Medical or Maryland. partnerships within third next sometime the now We Dimension XXX of four Largo two new or The XXX second University locations System. and and JV, hospitals that next systems. second year. held and years to a with begin venture fourth believe joint We these of the System build facilities quarter capital in regional XX% have the servicing joint commitment venture, Health, of in with regions is to June, over Laurel within Under with established of Maryland Medical centers patients the the joint in and an We University our This three in partnership structures. have our health centers of in of to is Maryland facilities

from insurance We services, regional which include and continue the closer and breadth to patient enjoy relationships health increased these of benefits access, volumes, partnerships, patient with expanded companies plans. improved

with endeavor acquisitions more which core tuck-in seek can to offer small existing enhance to regional to We individual continue seek of businesses for fit RadNet. efficiencies and we patient centers X enhanced groups our markets. of We strategically for financial acquire in centers our our once to part networks, EBITDA acquire that we synergies communities. to look times capacity, where these to times and access, profile, their create more reach businesses can or Third, X geographic and

to drive geographic state are three more the commonly health the imaging. network a access Maryland, primary and the we two attempt opportunistic called centers alternative centers solutions in are we patient population approach capacity enhanced our the more centers pay. effective An of quarters of purchased of our in about remain to These populations types expensive purchase Fairfax are a prices the where we example, as to and We to Maryland and IFRC in assets Southern group known. disciplined three XXXX, hospital-based or first the and we of Radiology,

AI drive to initiatives. continue we Lastly, our

FDA XX and With diagnostic in This solution XXXk artificial widespread provide for use mammography DeepHealth one in getting CT artificial As many the we review of diagnosis for or approval CE pending Quantib and by acquisition clearance is Aidence's countries December the with are the countries year in we to When year in last its provide worldwide, have we of of chest cancers, and and aware, screening opportunities leading you mammography lung use of XX Currently, mammograms completed lung. FDA currently detection combined the Aidence Veye mark for MRI intelligence. in of anticipate the in businesses and FDA BV end screening Europe. and prostate year, vast lung product to BV RadNet's scanning RadNet in currently to XXX future submission the brain algorithm prostate basis for the this DeepHealth this address used United January solutions its States. with pending FDA for AI clearance centers, We cancer and intelligence States Holding existing in prevalent three these United with over in already towards have offerings is most nodule the the programs majority which operations, submitted lung customers in and submitted Aidence prostate, our and Quantib have was customers centers. approval. breast, AI for the early XXXX. of seven for and currently of in

the MRI. in of process prostate also AI to distributing prostate perform our are that Quantib's currently We facilities

are in believe to most for Aidence, our of making experience productivity in and that diseases will we revenue the improved DeepHealth, screening more result continue segment, significant we prevalent streams the losses and programs of AI some progress. XXXX, of reporting large-scale chronic importantly, Though for that cancers. and through contracted expect our We provide radiologists accuracy investments and consisting our ultimately will new AI Quantib,

in leverage United to debt we the end, manage losses was At this AI having of quarter particularly growth our and carefully Much from second EBITDA. Europe, our of revenue from in licensing ratio our XX its in unadjusted second substantial in throughout X.X the million Kingdom. months Aidence liquidity quarter continue our a is recorded with reporting $X.X times first trailing AI the segment, $XXX,XXX. revenue, segment AI quarter's increase net During Consistent leverage. to pandemic, of success XXXX, came efforts our of for the technology financial

the Our our liquidity million and million were cash, also upon credit $XXX We facility. remains strong. with of undrawn ended we $XX.X revolving quarter

cycle manage best by ability Our the we XX, investments DSOs was our our be improvement The significantly revenue sales of the XXXX presented important has industry. collections days, challenges XX.X or to and COVID-XX one contributed June the believe at future. operations days and to to to for in in outstanding which make

quarter growing committed we our XXXX some to While back follow I'd continue to this expanding are second remarks. approach and financial our leverage. At of When discuss closing to time, the is the over performance. make call also Mark disciplined like to methodical he finished, I of turn will managing to business, to to some up a will we highlights and our

year-end I into review some drove interest, second included some Inc our attempt quarter place adjusted for EBITDA well Thank financial some of provide RadNet, to to XXXX as said, what further as XXXX I'm and non-cash A or of income results which items performance. excludes adjusted full which I will to income March some interests disposal loss, upon to our we and earnings highlight and give explanation on common non-cash is allocations were our now update quarter reconciliation XXXX and May also defines to material certain you, events in EBITDA as quarter in losses company earnings The an discussion, adjusted going first and measure. shareholders includes with unconsolidated review net results. subtracts performance taking non-GAAP during results. one-time will like which that non-controlling is second With Howard. earnings statements, adjusted insights attributable in of or our and metrics levels, in extraordinary period. our also the equity provide loss before now EBITDA term of my believe I will gains to guidance a quantitative releasing financial equipment, other or be financial second quarter operations released briefly loss taxes, I'd the I our EBITDA, and of is and on amended in compensation. financial the XXXX In earnings our conjunction items. use release. Adjusted equity to that depreciation and of amortization extinguishments, subsidiaries debt in to the or

AI Centers its million excludes For reporting EBITDA and segment segment. the of losses the of second Imaging reported $XX.X $XXX.X adjusted from which revenue XXXX, reporting quarter million, RadNet of from

in $XX.X and of year's EBITDA of the increase XXXX $X.X or million Including revenue second decreased X.X% quarter, received Funding X.X% segment received $XX.X quarter in AI second in Provider also an reporting losses EBITDA year's adjusted $XX.X second in million Including $XXX.X X%, segment, and from As quarter our was or Relief $XXX.X XXXX. XXXX, of reporting the and AI XXXX. the million was compared Funding million quarter. XXXX, of second the quarter revenue XXXX. our Relief revenue in with quarter $XXX.X in the second Including reporting of in segment, last last the million adjusted increased excluding million million AI was second of Provider

shares to gain yet million shares in of income share deferred loan to pretax leases for from employee swaps; items and million, amortization non-cash of with XXXX, XXXX were Imaging number of the of per of 'XX facilities including net XX.X million cost as reported and and $X.X $X.XX a paid restricted second of de options $X.X Diluted million in headcount expense stock second $X.X fees vesting XXXX. diluted the adjusted Adjusting was unusual including impacting $X.X operations; quarter certain open facilities. compensation the and weighted outstanding net second second our There of quarter related XX million to the diluted the stock; during per earnings segment. and second connection $XX,XXX costs be were in with discounts of upon expense or earnings expenses related operations quarter $X.X shares novo our adjusted loss non-cash one-time XXXX, AI income the a income million the that were Centers disposal for average related quarter their items above share, under in non-cash unusual to savings capital share on of of rate compared compared million of Affecting interest of net quarter severance non-cash of per as of credit for second reporting XXXX. have to with of the financing For for losses of part and quarter $X.XX related existing $XX,XXX of $X.XX the construction RadNet following. resulting initiatives; the following. number items, diluted the income share certain in based XXXX. quarter paid the reductions of a certain second $X.X million equipment; $X.X from was $XXX,XXX net of from financing per and million

increased as with MRI increased and year's second we inclusive account increased X.X%. year's X.X%, RadNet only compared X.X% account x-ray, volume, routine same-center prior For the volume second the basis, of of CT X.X%, by taking increased volume XXXX routine from of with were XXXX, mammography and ultrasound, The In same-center the XXXX, increased the quarter PET/CT the PET/CT exams, centers part from second of exams, and for X.X% the multi-modality same all X,XXX,XXX both routine of and volume our work quarter all X%, of including procedures. CT whereby volume second exams, volume volume Overall increased MRI volume, consistent prior prior XXXX, XX.X% procedures quarter. performed total did into increased imaging were was taking imaging. over all a On those other XX.X%. into second approach, volume imaging X.X%, the quarters quarter. Overall increased year's quarter, which we

as compared XX,XXX PET/CTs XXXX; as the quarter quarter routine with in with of with in of the as in in the as CTs, quarter of the X,XXX,XXX XXXX XXX,XXX of XXX,XXX and MRIs the XX,XXX quarter second routine exams, MRIs, quarter of XXX,XXX exams XXXX. procedures follows. XXX,XXX as were XXXX; second X,XXX,XXX CTs compared second in PET/CTs, compared compared second XXXX; Our imaging second with

million, loan a debt, RadNet guarantor. term of par $XX.X includes and XX, financing Imaging $XXX.X net June XXXX to This XXXX bond of a second of for was XXXX, which Note as with the deferred accrued total paid quarter. With we balance. $XX.X was million quarter interest $XX.X period, for less our value debt excludes second sheet, debt compares nor of is Network's expense discounts, for balance the of our and in cash of GAAP had XX, neither net debt the this the which during for of balance million expense regards that which at $XXX.X June million of interest, New expense Cash interest This GAAP is XXXX. debt Our second $XX.X with interest as unadjusted million. million. borrower compares during non-cash quarter Jersey

in from JVs, new accounts acquisitions significant receivable As acquire of from did of volumes of not those is cash mainly a the the revolving undrawn was an we XXXX. our $XXX.X AR XXXX, and June we as At where had receivable $XXX June $XX.X result on of million. balance to our buildup XX, of increase revenue credit increase and procedural part relative line in as year-end of revenue, XXXX, our increase The transactions. XX, $XX.X million, were working of well capital million as and XXXX accounts balance million

New outstanding sales our Through of receivable, and increase of had center levels joint capital I'd million. days results. at June in Our levels, the history. XX, we remains XXXX, XXXX. total year joint financial revise Jersey of XX, June fiscal which quarter interests, This and Despite XXXX the time, our after to with fourth the in Network our amended capital Imaging lowest year-end company's DSO and just $XX.X was at XXXX and of At - near quarter and $X.X reporting excludes of our our XX.X this venture DSO dispositions million in guidance our net of released first or sale we assets expenditures accounts venture. days results update aggregate XXXX imaging expenditures, conjunction asset like

revenue, billion range billion. net $X.XX our to $X.XX remains total For guidance

million For adjusted $XXX to remains EBITDA, $XXX our million. guidance

million $XX interest remains expense, million. cash $XX For to guidance our

million. to increased for top our capital $X we range of free and million. the guidance level cash flow, expenditures, end low For end the million $XX both And remains by $XX the

$XX now Medicare anticipated with we an year. update regards reimbursement and million $XX minutes to million between XXXX I'll is discuss to XXXX guidance on a few rates. expenditure you know capital and what take for new give our So, the

As of we mix. year. which every typically about schedule a weeks business several is reminder, part With represents rates released proposal Medicare CPT proposed by about respect received physician time Medicare a our this to code, XX% for fee the ago, matrix that reimbursement, is of

rates. to initial completed volumes. expected have compared rates an procedure XXXX We We those analysis analysis and using our volume-weighted XXXX

for As for ago, codes, particularly favor reimbursement two may for physicians CMS moved proposed CMS neutrality, it physician regularly proposed for doctors. and physicians reimbursement so codes. these with recall, that who from reallocate bill to bill certain management doing primary regularly care budget forward that with E&M bill you meaning services, CPT rarely evaluation years these codes increased who specialties which to these

result, XXXX, and of governing reimbursement of a from Congressional legislation appears a radiology is the XXXX, from a of remainder cuts factor cuts to radiology minor along conversion relative the the XXXX the the the cut meant As several-year the period. in related in X% XXXX legislation In to Protecting decrease end last Act. X.X%, CPT cuts reimbursement share proposed we phased X% Medicare the fee the from specialties by units expiration most rates, coming phasing or cut of conversion XXXX during with the were provided majority one-year of value RVUs for cuts in factor The during The passed by other American faced to year. in the Cuts here certain from this of last year proposed the factor certain codes. increase year's experienced last XXXX The changes schedule mitigated at a results and the to by proposal, increase part over E&M Medicare substantially in this about year. in to codes the as that be and Farmers Sequester was to effectively Medicare be conversion

for revenue At implies factor business. of the analysis to all for is the that an various the conversion $X specialties $X.X be Many physicians, radiology's the to Radiology, year We released XXXX Association Act less two like make the in roughly RadNet from a approximately Quality mitigating billion and of including through proposed proposed the to its to cut the Because happen than be Protecting the this American during or million financial the groups million to update the as this or to conversion more call it face you severe currently initial are proposal of Farmers towards high would year. cut, proposal. just hope decrease for believe Imaging, Cuts aggressively opposing medical November, final will XXXX, be the that XXXX experts in Medicare the and Dr. we call, main forces, of will ACR. the like on our majority quarter proposed. not from current matter. increase closing from November, end have $XX Medicare In factor many that extended probability radiologists, there to I'd to the expect about time, AQI, lobbying - revenue will Our remarks. American decline, who the back lobbying Sequester results there this did rule, our last the next its Berger, in third of year, over believe affects now College turn some from would

challenges Mark. the the and you, we next earlier call, years very that operating about Despite economic and the discussed RadNet. some overall enthusiastic am today's few coming on and optimistic of quarters Thank for I environment in

fixture or falter, industry, are to the of the demand. what restricted indispensable markets. our like. healthcare we services sophisticated, conditions global more and pandemic capitalized in is capital economy were positioned, in industry-specific regional our RadNet's to As are Should operator a within greater particularly, regardless RadNet costly, largest, the become and delivery an continue, well or best high the will be system remain most or in access economic

could a create our these opportunities attractive of growth consolidation on tougher, of Today, in - has summer pursued. times engines experienced health long-term, smaller become acquisition times This than that advantage breadth and economic to and advantage we in more includes physicians, get capitated can like specifically, competitors. that as the scale with be candidates imaging value-creating aggressively well during capabilities, The and ever advantages XXXX. such arise position our recession in as RadNet patients, if our operators referring the us over significant before. intelligence. systems, relationships partners, and Our and Weaker artificial recent eager credit investment began crisis capitalize

are breast, our four the lung. prostate, top of prevalent have algorithms and to strategy and AI most address advancing We now three cancers,

We diagnosis a tools can accuracy cancer form exist in be programs the of increase health are building that packaged create cost and that don't the widespread to population that today. lower screening

screening While this substantial of intelligence second intelligence importantly, United the our new can States services, our programs to artificial more initiatives of and safe. detection and are and of serve can for most cost-effective treatment cancers, its rates. the the cost convenient, and lower effective streams mortality non-invasive, delivering for It artificial and obvious opportunity the revenue prevalent leads early create the leading Diagnostic represents in the effectiveness more early cause company. better widespread lower options. detection death and is to to most Cancer is imaging

and self-insured plans, conversations programs screening groups, with local, payors. our We technologies state regional and governments, health advanced are and employer advancing federal about capitated

partners and efficiency. with create the coming quarters, of is diagnostic appreciation the imaging. in Washington, the of designed drive working population number Our cancer value detection. and for screening growth to health using will screening participated there Moonshot recently goal cost-effective we and begin initiatives believe We continue is In our Cancer a to to plans we early these to encourage and significant summit in programs

for radiologists. staff architecture our will contracted create and cloud-based that activities benefit Our efficiency platform and into workflow operating moving include will our eRAD a enhanced the

joint well health pursue the continue expansion opportunities, newly to as We relationships. as venture system created existing of both will ones,

We and and and and will to for continue call convenience functions scheduling our cost referral centers efficiencies. create sources consolidation our regional the the patients savings of of

about implement scanning conclusion, technologies are manual, shorten the force. look question-and-answer improve experience, excited We us will processes utilize ahead efficiently coming in progress. for portion labor and in times, will forward now more enthusiastic lie of are we updating today the quarters our that allowing and ready our we that continue are Operator, for to automate patient call. the and In to the and invest we that opportunities thereby you regarding the further RadNet, to

Thank you. take from Instructions] We with Jefferies. Brian first our question [Operator Tanquilut

ahead. line Please open. go is Your

as had Hi, thoughts good with discussion, about morning, We call. approval the hit obviously, FDA your one? And rollout of that in then here how about number to that you the that or you've this the guys. I P&L commercialization we share of own maybe, how benefit about think products maybe AI you to if benefits you. I'll some are thinking part expect is, with start how gotten into about us your rollout? for, or Mark, of your you're see on planning I AI you're of do guess, the when your think But you AI on maybe XXXX clinics, can as the Howard, from thinking internal

a whole within be as for the the the healthcare Good certainly but as for transformation morning, improve a for to Artificial can Brian. combination Thank not intelligence artificial and and greatest key in is intelligence of within transformative the within systems, diagnostic you. I healthcare, don't think we within accuracy that, intelligence analytics is opportunity productivity. opportunities industry data with specialty. to underestimate this the the future our the of and and importance will radiology future of be eRAD, for both other the radiology RadNet coupled radiology. RIS divisions opportunity PACS artificial only And

implement trying community transform burden radiology screening greater tools intelligence to intelligence, cancer than what manage with be entail address substantially application these to of artificial an and efficient answered and we fact, them volume and healthcare we see radiology we additional given artificial can and will, expanding in bundle the an in be together As shortage and basis what these diagnostic in diagnostic on the a to be to that tools tools of in part these This be way really the need radiologists - of future taking data will the to new able opportunities for personnel today. only on radiology particularly and particular. be screening what growing will that, believe and will we - specifically,

hope for healthcare I'll next the would industry about of is question, be inside the the - specific something and but the as opportunity to said you more just artificial able That the whole, importance that intelligence. don't I be this being RadNet for to a take So, RadNet, our within the XX rollout that of XX not to mind, months. Mark, we'll about if demonstrate

DeepHealth requires have and and tall have breast task, begun the RadNet our rather over level It's training at at level the - organization. these growing, the XXX mammography implementation center and radiologists. a the because throughout process systems well and intelligence We almost of the throughout implementing of of we each artificial

the and average now; in much as to of implementation we this next accomplished, as the fully by radiologists worst, a approval RadNet first second screening very in which April well who be a we right significant expect of the quarter that improved would by improvement. the we their We or using solid year, be hopefully, will XX% of all overall DeepHealth that have or improvement this as really accuracy, the year-end, we started final Saige-DX for RadNet, their cancer evidence benefits improves recognizing should the interpret when productivity, could getting improves be we this which just got be throughout on tool. implemented. as hope expect mammography XX% The end the of quarter rate, we to detection FDA the year full in At

of lung. both, both about and improved longer creating and value be believe, I screening of networks, Those volume other able efforts, the and direction talked we momentum for opportunities is to the more the compliance to hope screening well nationwide talk certainly, beginning are little driving bit and to more there. but mammography, for something about as might in screening take or at forefront a within the the the in we our become will year RadNet of which be that RadNet show to tools for So, But large-scale this screening as patients to benefits the adopted, XXXX. later particular, prostate

it. Got

us maybe through exposure rates, And how can deleveraging you interest then, rising you're I you've balance done interest rate job walk this about think thinking point? a just as your sheet. about But Mark, the just at if good Okay.

Brian. morning. Good Sure,

into had with on, we the are fortunate time, floating million exposure. XXXX, of swap $XXX our of a in rate We at to arrangements hedging the couple foresight that enter counterparties

facility, rates. at So, today, LIBOR-based - our X.XX% that, term that million under at And essentially $XXX of the loan million and B. floating we is swapped at X.XX%. of interest rate $XXX interest million a rates at other $XXX.X outstanding of is have million meaning $XXX

we swapped into So, which, think these didn't us can in our plummeted. exposure X%, shortly good, after as XXXX, derivative interest because effectively rate arrangement, of LIBOR having so look entered at essentially, you

more the And so, But one for been of paying arrangements. it's swapped we've amount one these on today, of month LIBOR, money a and better level has part our our through years recently, counterparty look month I two swap half if about significant a broken and LIBOR X.XX%. at

have at These an actually X%. we our are effectively getting arrangements from date. arrangements expiration keep - do LIBOR these money getting each month today, So, to swap on counterparties

it expires expires in the XXXX. On the swap, And in of million for notional year. then arrangement, next October it $XXX $XXX of October swap million

these now forward. rising environment forward have good we going us exposure effectively which rate pretty feeling from that arrangements, and swap the going hedge we're So, interest

of a So, bit situations. our fair rate debt effectively, have in fixed we

Got for then, it. me. Mark, question And last

mentioned on mean, but felt of COVID? guys normalization was performance your COVID quarter. that volumes You still at remarks thoughts bad on out during I further the some you forward impact same same-store just in as see going you X.X%, like not store prepared we had

Yes.

that, we with about over same-center long second line amount quarter, term X% or business. on the growth said quarters our four a told in produced always over growth we've the three, is basis. in folks high-single can last here in the X% same-center that long-term we has that outpaced to, significantly what the the cases, in in and support and So, Having X.X% digit some which we've growth of been same-center mid

to think had business, is behind projections exams - only in significantly So, do that in of we their put particularly and that in year-over-year, that we hesitancy we a lot we with here, modality we've do the that some for with see COVID, growing the XXXX. get our of nature, impact second it's did and are our slowing exams although in mammography done, falling ongoing that together not elective patients more that it noted of the has to growth and quarter

the of in our higher about X% significantly we're California. base. that in So, impact X.X% out enough, both It's we're but also Right from California. an seeing side, here employee on over base interestingly number, is on patient now, having own our employee leave. is COVID That

in here difficult a we're situation point. this more So, COVID at California experiencing

- some allow that we day center that a seeing that and to thank capabilities to scheduling, with rejigger that with employee our has we've base particular - to more centralized a patient nearby struggling patient be and load-balance scheduling have has center somewhat are in that from that to that get redirect capacity we're day. on us goodness had volumes patients ability a its that might So, volumes staffing

we So, been what we've can. doing

that in As Dr. less to said rely patient his some rely prepared in capital not our drive to more we've Berger and assets but volumes, volumes. patient technical significantly remarks, technologies human on service only invested on

it invested a wait effectively in be and still radiologists digital before they exams, more of the allow provide exams. their to we've shorter allows We've for post on newer MRI for software scanning instances their technology that's instance, of equipment, time, for scans. as to to that waiting and as exams and resolution for us lot up older a well our our processing patients the to both necessary can uses For that effectively do shorter capabilities take period implemented in in to rooms images clean read equipment in called cars their

COVID way. done by think forward. normal, positively which a and our going volumes will some in get rely most feel we've impactful things substantial to be and I been period on COVID procedure through So, get on try point that impacted to less like we And to back moving to has we're at this labor, of

guys. Awesome. Thanks,

Brian. you, Thank

question Thank from Barclays. James next our with Sarah you. We take

open. is line Your

Thank you.

to you commented supply You contrasts update avoid that business recently us? back needed normal the Can to of GE by any you plan to August-September interruption. get

Sure. Good Sarah. morning, Yes.

its Fortunately, back come facility online manufacturing GE has -- with in primary

Shanghai. think I it's

said Thank internally all leading very you, point, to but our up that Singapore, of our job we done of adequate that a had good Mark. Shanghai. access had supplies almost material. to make contrast distribution I of And certain centers Shanghai. to centralizing

As we as on result, capabilities, of we're here, a own rethink distribution dependent learn the have our in the past certainly one going that heavily to reliance pandemics to we to or other something factors, kinds to production take particularly they insulate as addition in that world be answer well now, right be XX% That's had to predict us can as as But any whether GE much or health perhaps from and original so ourselves past, are we've where if the to needs affected that don't future supplier. I to a be probably wars, shutdown. this of businesses your to year the from but economic experience are its question. think there our issues, that XX% try I before of more long-winded believe the contrast possible. capacity by is

difficulties of and have fortunately, scanning the contrast availability result interruption of our So, not as production. any we with experienced a

of us you update where does you to guys can then JV on were your year? pipeline? How scope And the compare it Great. last

the of Well, well And partners with we we're about - to of new very And currently At all this XX%. opening venture like with as looking of remarks. our very quarter, that many with partners that their expanding that solution venture venture particularly potential centers with joint the a little last end of in RadNet. now my services. being I robust, the new we're happy for number in for are both joint RadNet year, them ambulatory are say, as strategy outpatient partners, conversations with. of JV And business reasons JV as spoke I systems is during We XX%. partners, joint their had pipeline can was performance our under approaching the

of and more So, joint us markets certain venture partners. concentrated being led our has model in more to

seven these currently, expanding which to beyond markets the in we operate Some us represent a in believe not we systems currently the beginning are that that we and us, conversation entry - markets in. engage currently states in of we're seven good or that for health point could

So, should interest close in to mentioned and here, as the in I that company the on based joint very here goal two next to of within confident or a years come half our undertaking. with try that activities time go systems is centers three we're to we current of health achieve the I'm ventures range, that reaching and being to

I'll Sarah. thing. one add

keep hospitals private ambulatory to - in up of that as it like in-house that plans trying plans can more as trying are significantly they rethinking based are lose opposed health more aggressive outpatient trend, structures getting to hospital redirect we the cost their large of strategies the and fight in payors As trend. to ones business this they to set the many participate trying and much are ultimately until where the towards of centers, and lower operate, health imaging

because dialysis, home have effective assets with operate these therapy, or more either facility-based And effectively. have partners of have doing of outpatient it only that's into businesses, radiology. physical place with in we're We're lot out partnering seeing some this history so, ambulatory within seeing outpatient create business of drive medicine who way more hospitals aggressiveness strategies. non-hospital-based, many a our by ambulatory, already the practice long not getting They're And of being of of to partners. health. realized the experts the center in happening hospital hospital of surgery hospitals, community-based in of the And to businesses a the that able payors with trying the it these specialty who is

in the more so, aggressive And have as an to of relationships. couple time the had payors few some last hospital-based years, gotten these stoke we've easier of up

on touches question. it and my last helpful, really That's

design Cigna, and to work the centers. freestanding United, like do payers yet that payors those full could that these benefit earlier seen mentioned changes this that network you from You there that that's been to are prefer you adopt shift, Elevance any with future? the have yet Have of other making in so the

to referring like giving not going take and the of why ways But where referring slowly, hospitals these an the physicians are be more major hospital have imaging, imaging. that be are from where benefits patients about seem they disproportionately from comments, reason concert in in having everybody. going it's the think is up the our of with the as believe all carriers, revenue because with have albeit that's believe, to with standpoint up nonetheless, is none what with because, There health making some and patients, just the do who focused not believe and for traction, have it. a the get shouldn't tools the on work these this systems And while are This in hospital joint of structures hospital screening robust ventures for best reimbursement it is seeing physicians, themselves. get of certain conversations where, I payors and adopted going their conversations another can ship of or are kind slowly. their to we necessarily longer-term be [payors] systems creating to and us, just turn echoing redirecting. to of joint tide the I is. inevitable to conversations just their an big Mark's the They to Well, one to that, more interested I payors other patients with or I billing managing the win-win ventures that's is to we a produce it's advice ultimately, Again, partners, outpatient the that

are of will, past. seen to it without ambulatory as being either in indirectly those kinds benefit the conversations centers directly movement that hospitals So, as have confrontational are the or think, the may - going to help I imaging

measure hospitals, think leading to we that I RadNet and hope our strategy not to be as yet want almost it, you a with level of with but whole, the are on a not the venturing strategy only example of joint future RadNet, is systems So, good for by that family. other every industry part

Thank helpful. you. Very

Thank you, Sarah.

you. Thank

Sidoti. from is with question Mitra Ramgopal Next

is Your line open.

taking thanks the Yes. questions. for Good and morning,

for this significantly First, I I is labor headwind tight salary touch higher a going to and this on the be year know of to market. you expenses. want just terms in

staff of need terms a being of filling Just levels, at able wondering, challenge hire and in that front in center you is the where or still it retain? are terms on the and admin you to

and other Mitra. morning, is challenge, I sorry. Healthcare good think challenge particular, challenges. think it's that It's business to and force a than here similar a almost stay. are there every I'm - out RadNet, in different that's I it's no experiencing labor

hiring outpatient their because Ours their the on even fact sector. it the in base could systems in than are they're we greater, that hospital the so higher is made able is that reimbursement is afford salaries aggressive to so much than greater much

are challenge part the are need not just we technology, - by we investing we and not employee way come the about in that or it that to global overall ways the and operate and to some to think the of the process RadNet just how as more function us mitigate are things and everybody services in deliver So, I to of time extent challenge challenges time it's is that scanning or I for last going we face scheduling labor a financial business, can labor be a out artificial in the whether a equipment employee. three by years, how addressing for two there now to the to allowing that short-term to which else challenge. believe believe us investing this some actually can But but for transition over improve issue, we've long-term shorten all been a intelligence employee

organization. we're a lessening become productivity provide environment, a technologists on our going We think our on unit better having of to more of improve that only with capable to the point, see it throughout pressures. we're easier equipment implementing, our can we our I it actually hope So, makes answer because not we technology these and I more your time of think that protocols uniform as and

with day. and I this remarks, as its opening and problem a one a our multi-faceted up challenge. RadNet stated every that But wrestling literally feel, we're in to it's So, management is

tech human don't point Mid Yes. we To have MRI the mentioned a who think about morning. in one example that number have on forth. out to now get that the different our on located locations, good trying location our and of off one the - body them MRI room, machines of centers - the can where multiple is was certain technologists, we a call so dressing of on in technology Berger's table, as get able to opposed coils leverage so Dr. of track there on put where a To to MRI part is I and on an tech this capital, other warning. patient and long them so at technology coil aide location we remote Mitra, as implementation controlling is

human here think the of out technology idea of figure not leverage box rely on we our how and the to the So, trying leverage try out capital and can to side is to business.

just just AI a Okay. little the curious, for investments and No, on right on add. some given that's M&A, terms it's to switching a valuation thanks, a on especially right smaller if of of from very you with the seeing lot helpful. M&A, And cost now capital access JVs players. more and the to in have you're gears capital But standpoint, increased your difficult more the plate opportunities, you now obviously, continue of

Yes.

to players I of capital. think smaller that the it's not access have difficulty just

were valuations challenges that too there's an players bigger terms to terms interest have the a well comfortable people businesses marketplace capital think in are trying that they expand as as of may under from were that highly with, the both going of standpoint. looking that little a it's and We the think of their be result to I the rate prior as multiples cost at. decompression getting too of in issues, leveraged in bit leverage rising

seen higher people today think some are we've multiple. there commanded some today. previously these have I little of bit as have economic of on a people a thought would there And softening in that out going result factors So, other that might more we is a of

one and the can we we in think I family. looks how be, the very past, in bring marketplace, RadNet, in think which as I for have in least attract we disciplined healthy operators and at new the very been So, into acquisition RadNet

good So, increased the provider imaging country. continue reimbursement to our level in it's as with, comfort premier we RadNet all benefit out this, very the the future, leverage, rates, will cuts, whether high we think inure services have to a which going and of into of interest will found outpatient actually separate

that an Yes. And that add is experience like to one other had I thing we would that.

the the the radiologists. And should communities, referring low in given be capitalized, to pretty them So, XXXX, can better back a a our see draw we industry, labor --that I able into started 'XX, think, we're capitalize of which our continue we economy for the physician I bigger, position with were home solution market - a recession. on more crisis wave when to in patients, position on where stable position market issues, would provide start our challenged, from think relative severe in the difficult weaker issue leverage issues we leverage, beneficiary the to created players future, experience into issues, their to continue capital capital, lot expect of, of consolidation went having the a in geographies, the a I to financial a credit 'XX, good economy big access our economy. opportunities access a that to a and That were very in after should issues, to join

that's just just the it maybe if in update could market. Okay. lagging what at quick No, sort And finally, maybe Phoenix in of if your it's of point, I track. believe, helpful. terms wondering was you very on now provide and curious a back you're expectations seeing one

this the partner, are think joint track, we a our quite centers initiatives That in will a back on of be number along it's but Dignity don't namely, very premier system. game-changer that undertook large that earlier I for market. Health year, us there two venture building with

perhaps entrance been happy in of come that just other has term. long than benefit market in markets, required very Arizona We our in, more market so almost the company other which, are think back like it's and every there we're opportunity, market. into patience the investment, is that and to there So, lot we've a with

Arizona about you to ever we'll market able we detail year. the upcoming marketplace and were, So, success quarters. discuss more this in report that third the with of I to But think the in quarters the forward being and as in we're greater look that enthusiastic be to of able as in fourth

Okay. the Thanks again taking for questions.

you. Thank

at Thank comments. back to are appears this no Dr. to call there any the closing question time. further you. Berger, like It for you, additional turn I

provides today, you, to Thank Management would its this investment to forward will our return our to - for leader for time like continue Thank times. endeavor these support a the thank and and through take great you their thank for that of look RadNet on Again, an call. all next opportunity be with their services all Stay appropriate stakeholders. and and market well. challenging hard operator. shareholders employees your work I to of continued dedication

participation. call. your you This Thank for concludes today's

disconnect. You may now