RadNet (RDNT) 9 Nov 232023 Q3 Earnings call transcript

Good day, and welcome to the RadNet Third Quarter 2023 Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded.I would now like to turn the conference over to Mark Stolper, Executive Vice President and Chief Financial Officer. Please go ahead.

Thank you. Good morning, ladies and gentlemen, and thank you for joining Dr. under today begin RadNet's remind today, the harbor me financial quarter everyone and Litigation safe we Securities results.Before we'd statement Berger to of third discuss XXXX of Reform Howard Act Private XXXX. the like to forward-looking contains meaning the within of statements U.S. presentation This the Securities Private Reform of Act Litigation XXXX.

or call they made to to turn forward-looking date like information, the were should Dr. forward-looking set including to risks technologists, operations events.And the over for on the obligation uncertainties, RadNet's speaks cause those financial radiology results time, patient are safe the reflect be events financial from others, XX, management's generating with risks the SEC it referrals with imaging contracts which with anticipated RadNet's ended forward-looking to Specifically, of are XX-K actual as Undue performance, integrating generating filed to Berger. ability by is statements only from of made. future acquired on reflect concerning the unanticipated include guidance performance, uncertainties the differ reports statements reimbursement to December to These the new EBITDA revenue XXXX. statements to based herein. on business RadNet's meaning date recruiting receiving I'd and reliance services, circumstances successfully no publicly and as in any statements the and of and RadNet retaining on practices, placed year annual operating time for estimated, statements, diagnostic for harbor.Forward-looking and and the update continue report third-party RadNet's expectations especially forth that, to grow contained operations, current Form undertakes which may or acquired statements the among preliminary occurrence after to not and materially future within subject are adjusted risks

quarter. was us $XXX third in will results, we of X.X%, begin. revenue drove the less and metrics volumes third the to the of all quarter year's I'd third less morning, which performance to volumes quarter. contributed After to of today. same-center the pleased for highest compared aggregate Good dedicating I for quarter procedural was consolidated quarter an revenue insight with your a very your third and thank factors more our you of your and and performance On to in today's you thank third like call you everyone, Mark joining our XXXX questions. I plan give interest you am prepared this open call, call for in conference participate the our discuss in day remarks, our future morning.Let's this strategy. provide the you, company Thank with year, our portion our to third affected X into the quarter, last Mark. from company's of second compared the than revenue Strong second to increase procedural of XX.X% and in in as with workday volumes from growth million revenue with as increased The X.X%. of primarily consolidated the procedural increased year's quarter our revenue third that had quarter. last quarter quarter in million third history. we this Though $X.X These highlights

of to wider quarter, and been radiologists. amount otherwise and Over sharing that while we was with our quarter and quarter strong many second of diagnosed quarter roughly XX% our very and aggressive third continuation callback demand number center of over This revenue, adoption gone detection of into rates on significant have patients, in cancers into heavy the first However, our challenge markets, market labor In the payers support The we remains which in where of have million exceeded third-party Center of intelligence most that third to result of AI began tripled challenged the have was deployed enthusiasm from quarter. day XXXX.We EBCD fully EBITDA quarter. is of the division has with same the would backlogs. quarter, of third lower EBITDA continued reporting us the has a reimbursement our the time local been immense revenue segment Southern from significantly despite trend third continue to management, breast Adjusted be quarter.The productivity a XXXX scheduling very XXX $XX.X quarter encourages and physicians and XX.X% service. strong second been revenue has operations, sequentially third Coast relative in trends adjusted performance expense California from positive offerings, the within increased. for this increased also pressures. to to will continues East grew receive centers have gain experiencing, fourth for experiencing last end undetected, quarter, at fourth in referring been or the be the been time, eventually in active will day of year, the to inflationary the expect the concert are and has for per enhanced patient accuracy Imaging the the artificial the EBCD all these An that than Subsequent feedback per we a have indicative of average service. which rates we operating revenue to the data quarter last approaching this more same raise of radiologists' in we receiving end have adjusted momentum. in year.The by guidance year's this EBITDA the cancer XX%. implementing Relative servicing collected,

officially artificial a to referring to begun. billing systems insurance with of intelligence. appointments, able these and management we rely significant radiology able manual revenue continue cost able to into XXXX.Currently, radiology will and of schedule verify processes on amongst second from payment The manual be information more and functions focused images, where business and the in verification is completed in process patient can that with efforts to advance efficiency on coverage, to centers, see be be information functions. scheduling, Aside insurance clinical and the reports pay and impact cloud future outstanding other physicians balances we RadNet's generative patient request processes, in the patients generative of tools, be will the intervention.The to driving objective tools and AI saving AI which receive perform eRAD cycle things, and quarter service contact accurately beginning reduction some imaging in place has AI to We moving

solutions cloud can eRAD of Our Health scale functionality ecosystem to operations. capabilities and customers our host the centers will provide system Deep third-party and AI RadNet's and radiology other that and

plan convergence environment workflow and In security.As business Additionally, our solutions. and operational platform.During Cedars-Sinai and expanded relationship advance look discussing between tools position time imaging the is a generative an platform a to RadNet's year, we to into will better radiology and informatics cloud-based products and informatics see when a to new practices, AI, how the continue suite health industry-leading to platform the the the their AI, to solution more will and forward and provide requirements. clinical health including premier with AI improve we eRAD the one clinical a Southern further manage System, third quarter, we We we our host AI centers in support seamless customers, systems them radiology migrate use system hospitals natural California. there digital and to Medical of in cloud, solutions this customers and on updates of the third-party the

will As well and relationship Group, as center Cedars-Sinai with part Group by venture called joint X which patients broadened of contribution joint care and communities. additional X including by access RadNet. expanded locations to broadening by to streamline Santa Los Imaging to the more patient locations records radiology better areas Cedars-Sinai workflow, Los Downtown as for patient with contributed Valley increase relationship, include expanded throughout new is of results of and the access physicians.We referring ventures have centers, XX Fernando improve joint accurate the San improving were a and ambulatory our X producing of Side, network from X certain and we underserved to The existing Angeles. West providing centers with Angeles, the Angeles and encompassing X ventures designed venture, The imaging outpatient of Monica Los in Imaging initially established X timely Cedars-Sinai now

partnerships, geographies, outpatient Health, in systems System imaging being current increased most hospital away increasing and system and systems and directed an their of strategies. hospital-based partners. including outpatient expensive ambulatory interest towards MemorialCare, partners RWJ Advanced, largest valuable to and Medical procedural from with relationships with in Lifebridge, and outpatient engage patient health leading others.Our Dignity Barnabas, imaging. our Maryland hospitals health physician are instrumental partners settings, As This more the systems for procedures long-term is strategies hospitals our are volumes health cost-effective RadNet's and successful volumes us University seeking amount to been Cedars-Sinai among are of have some increasing through of in discussions

in of our services. held or are to are partners the partnerships. health now giving helpful our if support, After Cedars-Sinai centers system relationship, providing joint rates the XXX establishing equitable Additionally, XXX outpatient needed, in expanded venture for reimbursement effect XX% long-term within

almost launched in years de where backlogs execute on additional These points X located to or are capacities markets development strategy, need currently in populations services. we require ago. which we service lack the access to novo continue We patient RadNet where of projects have patient our development we

balance raised end at resulted operating adjusted a the We the history. third offering of net to to our are and dozen normal like Approximately capital XXXX we accelerate various I be we these equity proceeds to open material to leverage confident in strong $XXX While million completed with along in our RadNet's will comment additional quarter. approximately June to make strongest sheet net us lowest growth. deleverage a position and these and leverage. we performance us position of of investments XX, ratio our offering, growth. company's have debt that markets.Finally, would our and long-term throughout currently projects an performance centers position to to in liquidity financial are EBITDA require the This centers where contributors Xx scheduled on On above spending, liquidity

on XX, million cash revolving As credit. had of line and $XXX our of undrawn September we're balance sheet, on we million of our $XXX

June one the outstanding be Our at XXXX DSOs which was believe we days, in days XX.X of best the to sales industry.

Mark I'd I highlights remarks. to an stronger While committed to savings.At quarter and continue will in will synergies this made we our within economic rising where turn to subsequent on voluntary follow he managing prepayment capitalize that business, a and the business growing and our is of capital other XXXX leverage of liquidity end, our we managing to operators like macroeconomic and of closing to commitment our opportunities. approach discuss The to third some October also relative markets patient We other disciplined has performance. leverage.To on call focused on term loan, to this financial industry $XX balance position finished, we opportunities remain cost experienced our When a other environment and our capital to inflation million third the XX, we challenges. unique end, and to time, quarter to of our us back cost core many some expanding are to acquisition demonstrating our rates, and approach first cost bring debt interest make disciplined the lower acquisition and of over

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

For the of reported XXXX, of we quarter $XX.X EBITDA revenue $XXX.X Imaging adjusted million. Centers third segment million our of and from reporting

RadNet onetime XXXX items $XX.X EBITDA million in diluted net XXXX gain million $X.X in of of in $XXX $X.XX shares diluted quarter consolidated AI income; net a in last with fair XXXX, $XX.X yet centers quarter increased the third third including million the of compared income reporting EBITDA $XXX,XXX XX.X%.For unusual joint leases reporting of adjusted increased that related of segment, year's year's for third income and the third Diluted revenue increase of into an of quarter procedures. all year's quarter the including volume, RadNet $X.X increased paid as million, the third volume loss million EBITDA a assets; reductions last increased in revenue compared was was third consideration $X.XX from and third million exams, rate income volume imaging income of AI net million X.X% per taking XX.X%, basis, from $X.X XX.X%. -- inclusive third of increase earnings expense outstanding number -- XX.X%, $XXX,XXX of compensation of employee from volume million of in of $XX.X above of centers share loss into XXXX, segment third with the $X.X exams, million financing the only our accumulation of cost As quarter reported comprehensive loss accumulation million quarter, over a items, increased the Also segment those share quarters adjusted third and a net volume Including XX.X% adjusted facilities increased for all third other adjusted $XXX share noncash quarter was year's of of and adjustments the XXXX. X% XX.X initiatives; consolidated of which of with imaging On XX.X% the by value our the of of of noncash performed $XX.X an the expenses whereby quarter, ] our on of of million and of affecting for with of we construction based the the million CT are stock Overall net net shares impacting increased volume, from in expense following: we $X.X diluted related during of certain or XXXX, headcount for vesting the quarter existing was the as de revenue connection severance quarter, of AI or AI have third our the million The third increased loan XXXX, savings the of $X.XX, with part XXXX, of multi-modality quarter. in third mammography XX.X XX.X%. of of into taking in upon credit of Including number PET/CT compared with weighted reporting in or and of XXXX quarter adjusted contribution per to compared quarter as with noncash same-center to in work to the under from changes Monica account X.X% related increased the Group Cedars-Sinai; of $XX.X to open novo including unusual Imaging third swaps, venture $X the XXXX shares and Santa operations; their of million third the consistent average of per prior routine XXXX reporting million $X.X amortization quarter.In Imaging from of the million segment, both interest million $XX.X volume prior were did and quarter. PET/CT certain routine over X,XXX,XX [ earnings approach, a and were financing XXXX, the part quarter imaging routine amortization items, X.X%, the quarter of fees MRI and same-center $X.X related to noncash options XXXX. contingent ultrasound, XX.X% to was the x-ray, resulting imaging. discounts pretax million of volume facilities.For paid restricted increased net MRI CT procedures for other noncash stock consideration.Adjusting Overall costs and deferred the Center intangible XX.X%. was third our same XXXX and all total losses $XXX,XXX volume and acquisition account the revaluation and exams, prior year's contingent from certain were XXXX.There

third these of completed the The of XXXX. quarter imaging credit third of XXXX of of New the were routine quarter XXXX.Overall as the cost exams X,XXX,XXX XX,XXX compared of interest the Our follows: million. with the NJAN's -- interest XXXX. quarter and XXX,XXX quarter the as debt XXXX floating October quarter XX, as Cash with conjunction Network's sheet, balance last in third rate a in $XX.X for CTs compares borrower of for XX,XXX of months of debt noncash of bond X-month MRIs $XX.X balance our [ debt, and ] This XXXX compared XXX,XXX our the with X,XXX,XXX debt XXXX, discounts, the Cash with guarantor. MRIs cash in on XXX,XXX RadNet for debt our acquisition on PET/CTs compared Imaging from balance. counterparties interest rate was rate year as loan net Jersey interest in and that's interest earned unadjusted higher interest Radiology expense facility XXXX predominantly a includes deferred CTs upsized this procedures which which for at interest, for all third with to the GAAP for as cash PET/CTs in and September accrued which expense compared is exams third paid rate term of was net XX, quarter Montclair XXXX.With of quarter September in XXX,XXX quarter, total in as the had million. result third regards paid of Network with million. of in the $XX.X the SOFR a interest is higher higher expense the neither million third balance of X and GAAP unswapped is interest $XXX.X financing This was XXXX. during debt. million September for swap our and first Jersey received New compares million par swap million Imaging payments and million value, we our Note ended $XXX.X our $XX.X period $XX.X XXXX, of nor $XXX.X that net XX, at excludes of of with

$XXX credit a XXXX, from of an million, result of cash September million XX, receivable balance undrawn million as lower substantially of we of of on and balance was year-end were our increase offering this million. $X.X debt in $XXX.X completed accounts XX, we year.As our of is a primarily stock last XXXX, than year, Our September net At $XXX the revolving XXXX. had line balance June

venture of at in our September the levels outstanding, collections revenue sale submitting with a XX, at from XXXX, million of sales excludes interest improvement of near like from year-end purchase financial I'd accounts verification.Through with remained our promissory dispositions a imaging and of Jersey days XXXX capital claims expenditures and intellectual obtaining and released purchase September low at are XXXX the update cash conjunction which vendor.At and joint avoiding of financial history company's increased capital New software our second quarter of XXXX Network results or first respect and to amended and lowest joint clean despite payment in and insurance to denials, and asset XXXX. this leases ] results. a Our the $XXX.X certain our our million. performance assets XX, Imaging XX.X center guidance reporting in time, note our we revise at flat expenditures patients receivable both equipment with and levels, venture, quarter and and we necessary The to property time after of $X days million preauthorizations cash service operating DSO, and fourth $XX.X better $XX.X million DSO, This had insurance result cash net [

range at $X.XXX For total net unchanged revenue, billion guidance our is revised billion. to $X.XXX

For increased and the end we've both $X range. end at our adjusted range the low EBITDA, by the of guidance million, high

$XXX million Our for adjusted new is EBITDA between $XXX guidance million. and range

For we reflect $XXX investments in the end range our end million million openings. low million $XXX to to $X to novo high capital at facility our by both increased guidance expenditures, de capital additional and the

know revenue to a and million EBITDA, between rates. regards now take discuss XXXX year. $XX $XX $XX few XXXX the of cash million for revenue and flow negative at with year. reimbursement to million revenue. the guidance AI million.For And both negative remains million interest range guidance at $XX minutes Medicare $XX adjusted We range and segments, unchanged EBITDA million for and our what give an the for for anticipate cash unchanged adjusted our we between for to guidance guidance For update free for our And you our is million on $XX was unchanged our and between $XX expense, $XX remains million year.I'll also

rates of code, With a rates Medicare time, of schedule XXXX about which fee business mix. compared we expected time the physician part XX% that and reminder, XXXX matrix a we As received using We typically is for to At our to year. that in those Medicare represents CPT an initial rates. released our completed every volume-weighted July, by that about is analysis respect analysis proposed reimbursement, proposal proposed volumes.As physician care procedural codes, increased management primary regularly specialties services, particularly that doctors. to CPT budget and favor physicians doing years CMS that reimbursement with E&M recall, to neutrality, for meaning proposed forward who may reimbursement bill which it for these these so CMS ago, who for moved you X physicians reallocate from with evaluation regularly certain codes bill these codes. rarely for bill

the effectively Act. Consolidated in Medicare avoided result As of the the cut and reimbursement that factor a fee substantially for appeared reimbursement, of of of specialties cuts Appropriations XXXX be certain with end The last to conversion proposed as schedule a cuts cut this year's a to at phasing changes as period. the faced result, radiology July, XXXX over in proposal the the Appropriations certain last by XXXX other to year units CPT remainder value XXXX was the The from of legislation relative code decrease the a resulted related radiology in were and cuts along year RVUs, meant XXXX, E&M in most in part Act.In Medicare minor X.X%, the phased codes. about experienced governed several mitigated in be during passed in Consolidated XXXX, we year by in

approximate million CMS' $X $X revenue the XXXX its Our Medicare final we implied rule week, that face received business.Last hit billion to RadNet would on roughly million proposal in initial analysis governing from the an in reimbursement. XXXX of $X.X revenue,

similar that million rule the we had revenue relatively shows the not final with the radiologists, the experts there decrease million mitigated physicians, last and of the a are will the from in July the estimate proposal year. back this many month, specialties happened in analysis to just is congressional likelihood Because opposing various aggressively that $X there factor cut. believe our what Our cut place conversion next all rules scheduled At reasonable could consistent July. through time, be our by lobbying be that that approximately take final that remains will action the impacted affects $X groups in to medical part

$X next to this reimbursement reduction will remarks. the to While some CMS' make per will fully RadNet's should and capitated to final Dr. go the to not increases rule.I'd ] now cut Medicare scheduled call we completed million from that commercial insignificant, have Berger, it $X revenue over like [ is mitigate who turn closing million back year into payers effect or

Thank Mark. you,

lot optimistic have as into be to a we We about move XXXX.

While we to from us million that Medicare might but challenges only from the numerous headwinds not have million should and $X cut labor growth. we of should face another initiatives these overcome rates, provide growth increasing $X year accelerated

have today's While XXXX moving their we as outpatient RadNet February, results mentioned, will the mitigate scheduled in more end are more in than Mark increases that payers partners strategy. the rate settings remarks like Most guidance quarter initiatives by payers XXXX performance.First, XXXX I'd and recognize imaging will not that of why prepared the be and capitated realize cut. their provides fuel year-end and commercial will are end anticipated various until full we fourth about we that to announce rate with importance and issuing out hospital formal discussing network -- growth in expensive we we so Medicare excited

in patient open to construction. de openings growth various stages should novo in facilities We to are throughout throughout with anticipate payers we demand, working that that in will continue have which the a significantly fortunate labor in services.Second, servicing. not profitability and identified experiencing steadfast have approximately position we our us currently of same-center we dozen strong [ properly to are which patient we where value that $XX by low the of or beyond in revenue, revenue we there incremental to million are base headwinds.Third, billion sell XXXX, XXXX, $XX in in new projecting they on $X.X Medicare of mid-single-digit are makes the expect currently been and that focused performance backlogs tremendous million expect only populations towards are markets center XXXX, of XXXX ] where current growth which These as we contribute

will XXXX. an once additional While year, the convinced We the anticipate these a of in to By [ of health technologies revenue see of centers these end $X and remain radiology. each on AI AI the rate contributing could we will transform clinical platform. current that $X open progress center million million run both we we aspects of XXXX, mature that the ].Fourth, an and anticipate is and revenue currently have double the all it will throughout digital average challenges our operational further further anticipate of health RadNet's for objective realistic higher an strong we active opportunities, EBITDA and that we expanded for interest system pipeline position expect and in new to of consolidator.Lastly, adjusted will and breakeven and create performance, growth we that ventures. that liquidity, industry segment.Fifth, joint a this we be We rates consolidation. is acquisition leverage reach favorably accelerate to believe will us low activity drive labor

As partnerships. Cedars-Sinai business. we in believe within joint of held with our today attractive could discussed Medical to XX% expanded the System Angeles, aspect We years, are next increasingly X in be relationship the over the and important centers system that within with health conjunction growth an Los X ventures of our

portion partnerships, development We new question-and-answer now we currently in call. during ready of expanded are expect announce to are stages the the XXXX.Operator, various and for which of we of

Tanquilut [Operator Brian Instructions] Our first question from comes Jefferies. with

adoption and deeper can out is and [ seen early the around AI the as appreciate you color I started having on ] It's any give there a there sort Jack better. bar Brian. fully timing I the digging on wanted to maybe or the of for Slevin it is little pretty progress the findings to a But things by rollout. you by out, roll start on on it QX. you've comments to little looks similar rolled what to date or performance

referring product. to You're specifically our EBCD

Yes, that's right.

The Okay. program. this breast for may certain early but believe this that currently enthusiastic of where implementation April XX% range of mammography, sorry, began heard this about I'm an said of I from year, our that you we detection in that, at about East the significance time have the around earlier on it enrollment getting point. in I'm the event. which are We're frame, the it very any Coast, We it. self-pay not are the now eligible is of is I screening -- patients and cancer

in we patients and before perhaps to that would prepared cancers seeing to and X X fact, primary of earlier important in clinically breast both detection, than X cancer detection.And care years the taken our realize as my evident. surgeons to they previously years that an have became could So X to have date, another breast adjunct is been mentioned XXX early we physicians, I identified remarks, benefit

that. on I that provide rollout this with the admit difficult anticipated general So we're to we collateral and to artificial have good that material the is need here which the perhaps service about of time helping the September and of West given the have us is pleased gain material that intelligence has the more traction information our the altered appropriate benefited and and out least instructional at X past months on to program has than East in extremely or the this.We've people information as uncertainty approach experience are are X roll which early collateral to began they results from the for also as of and patients. on provide Coast at in Coast, our

our So the to fully increase, doing the which and to that quarter we screening that rate by experiencing, out we're will to in currently least rolled [ of we of at XXXX, expect the to end the probably X,XXX at EBCD of XXX,XXX XXX,XXX fully first be adopted program. expect mammograms once we have ] even

even think to which the are they, not I increase, some I believe in point this, gain we has does evaluation time.Another reduced rate information gives of potential if greater our importance services magnitude the our that So rate current well on the where previously intelligence breast element very required from recall of itself this and of further lower in radiologists rate of that third-party with is expecting, but as the call as decrease conservative consultation and surrounding suspicion senior of these and for both rate the continuing mammograms at we're which, the cost comfort in cancer of along a potential mammography given artificial certain that is the a diagnostic prove and diagnosis. help and

various that would of are rate them to cancer increased detection we plan all in ] consideration that insurance. begin are see for the our with order to of the decreased collecting have recall rate So payors, data and this [ women meeting begin importance their and and meet reimbursement through go

it. Really Got helpful. And more then one me. for

of of a throughout might that you detail bit and and Just labor little give about on think possible challenges some commentary you have sort shortages the labor more any XXXX just staffing efforts how Can impact underway. progressing mitigation appreciate going around I you forward.

question. Good right. All

trained are We challenges as I people our will, an health the services our being of this. believe, the recruiting like them, after just that of for fewer we're be demand as in system if unprecedented COVID for extraordinary the actively to both into are our which of, facing, well effect, you result care coming business and most part

more technologists our in hours and which in and expand this, reduce times will that they be that operation educational the the to whole take staffing improve and our effective. for salaries, we patient our will to we're regard, reflected not scan time us allow with budget throughput of the are So will unnoticed only but to the candidates the helping radiologists order to need technologies, to the our is it that type doing journey go have.Along every and we some patients, more XXXX in help in attract workflow, we're procedure much increases pursuing for investment of actively while levels on and demand our will and probably which us we shouldn't make believe that that almost which implement us are programs, and us going increase of

salary educational ability in So we capture programs, to adjustments additional effect and and have combination we demand, which raises investment, our market recruiting a and virtually active material will serve. that volumes the of and a have every believe on we

James. comes with Raymond from Nathan question next Our Malewicki

for Ransom. Malewicki John This in stepping is Nathan

announced back the some but JVs to been you can maturity, provided more the anything how kind on novos new color contribution of I quick provide us? On us any else on revenue economics color are and can new give know there's of and ramp? centers, these at you there center de is

exactly I'm question. your not sure

centers to or... the You know want of de ramp-up novo the

Yes.

Nate, think ramp-up center de might whether you're to maturity a typical there's what that novo asking contribution I a contribute about and once or process? mature

Yes.

Yes.

we've way And of I and open at de is existing if mean, novo you capabilities throughout think can have being -- to as you the centers if you I about size breadth XXXX. similar and can should look centers. think a dozen we them said scope the that that So it in of RadNet

corporate margins average to doing You million can of contribution $X EBITDA think $X of I'm revenue center after pre-corporate of after EBITDA contribution in mid-teens the about with a about about million and the XX% corporate kind overhead.

The be if getting like a center, we've these ramp-up we will local have our them. struggling getting effective full a think correctly who we at as have at novos not been are, and pretty capacity door behind. that done we're and demand, them opportunities not we are a particular to on projections initial all call, couple the And mentioned short. we But of listening quarters, significant and period these perfect our should portfolio these are centers. maturity patient in servicing ramp experiencing our So of -- de typically, Berger of some investors market lag virtually types of demand after in It's a markets. And Dr. that's of we're some assessing our we of and job backlog. particular in heavy market but time. or every the We're at already our in will outperform this with up, actually volumes at

for than for novo well lot ramp-up typical faster facilities. of And a a so that these bodes

helpful. And a kind and JVs. next wondering on or of in the on then provide novos those folks color open pipeline the it color past if strategy makeup mid-Atlantic? XX of de some any or follow-up then to could main XXXX just provide novos be those their can I'm is California on you you year, just de would are And

Yes.

and of East sake novos I the half Coast think on this conversation, the of on the half for for other next Coast. are the the year about West de

most Some the Memorial to our that on Coast, ventures we're But to of as start-up, X pursue market entire the or Barnabas Network of standpoint Jersey opportunities expanding to X develop our a more joint Coast, of also de in as Imaging consideration for and of in into from well our may provide some in Maryland some with where East the most we're statewide to partners them some where novos Medical lead the as with System that X that currently we're here, RadNet, centers be West joint rural the and University particularly up years think we that about the taken of the New which at the mentioned effort. RW Orange and underserved just of should within means division that talking the Health we of of will imaging the areas take joint a continues impact about, at grow System the we're revenue that ramp are that greenfield contribution looking is with services.So in ventures, where University would not these relationship to talking County, centers dozen Mark centers, with the the in a to performance quarters expect demand where System.On most really are that with significant from as and RadNet in XXXX. areas like are of it Medical venture I significant X EBITDA Maryland the could the

Solow Securities. Larry The CJS next question from with comes

the back mentioned think discussions it with most -- like, went up quarter-over-quarter on the issue, in just that actually time just which a in you and of COVID, just not did schedule it the not enough but day. of more to years constraint labor go at we capacity Just some but May a at a of like be a more you're average seasonality, your through the from Maybe operating and absolute of because revenue supply an have question of impressive these centers follow-up that strategy healthcare of filling kind I come that this companies, really Is alleviate effect. kind areas that? kind just these normal my seasonality your pretty to the that. like had Howard, year. you de say it a of is sounds couple fair of And I some other de novos think didn't of sounds sounds some for bulks in it novos with will sequentially a right

Yes.

more We can tell imaging will think substantial that efforts, that be staffing a push which centers, success particularly given lot talking many that highest is our primarily large volume procedures about particularly the can in have are fact through of improvement demand. fourth of part, if seeing MRI, the we centers in -- in in that. into I significant enough those just third you currently made accelerate I I'm enough current staffing.We've shortage And for operate don't correct, centers. the quarter progress and I mammography. We the our in and is can't that don't recruiting due where we successful to the additional even think is, those that's quarter. -- that operate but we're the still we our there in

integrate to I'd X of do it's have be equipment our slow we Not to -- only on system, our procedures. to and months a optimistic we training take here, not like only find RadNet X, them have into can staffing. process. then the --- but which do So the more find sometimes We

be to So going ongoing this is an process.

the given I just system, for lot us year, AI we next will our model, even markets. AI us non-professional implementing it shortage, shortage. here and RadNet both a both that think, particular more level. be demand, in employees, because professional and an not generative to the will And our really by addition attractive of also for and at business all the tools providers I a place with there by the think but other make the think But of long-term is there's the I the of recruit

maybe asset of same real us Can its fast. swap. in in like, maybe, or the or us just can both more with answer through no give Cedars-Sinai, that like you partnership of And you Okay. structured a looks was there contributing just looks a it like cash as maybe amount looks just an little contribution, JV Mark, walk just the give a assets. you're asset terms little deal, you it us expanded Can an

Yes. Sure.

to buying situation, parties. into debt assets think the their have cash being Cedars such in -- were was equalize accurate essentially one venture ventures, lot million joint We to valuation up -- we to In value market in changing Cedars-Sinai -- way I membership and than in question. had contributing with able these interests it order that's or We the contributed. its expanded structured we joint statement hands the of changed cash one or Cedars partners in because being less you at hands. of $X third-party contributing outside in your a RadNet an were assets was of a terms -- of different the when X actually in each done in joint equity up, of RadNet with not value contribute venture And the we fair premise other another X assets, and an whether have we what one where did being assets, situation buying a between the equity the resulting stakes of created.

together. venture, more partner to volume outpatient which particularly atmosphere the In the And hospital really for making about has be is as the to ventures, commitment venture this acute the amplify to more a health will RadNet. throughout they much the accommodate Cedars, so and one joint RadNet with that and the because, of they've lot of. not proud like in comes really comfortable joint extremely partnership patients. RadNet will in just case, over hospital that, their be currently come where is imaging that California. really I'd Yes. we're Cedars joint looked to It's really system. doing a their and about Cedars, can shifted this on in done convenient It's care and Southern medicine how outpatient the the with in the that

expanded venture in not major Southern way cast all prospects of confines the may -- not their case to California. Cedars as even and this of RadNet the health Cedars initially they really part of looks on physical outpatient delivery care, the imaging where So of or the moving put a partnership while, the centers it's current joint its of throughout hospitals system, together beyond based in for the we shadow, activities, be in into become player

than lot more given in strategic financial proud extremely as we're relationship Cedars this just looking us, of said, a current for was that this And is U.S. So it was I at the relationships. a of

they look this and I Southern they're News we their to artificial California. strategy the the screening number & system to to -- as tools year, health the have in And was intelligence World us behind outpatient Report of noted think X their develop country, only the be implemented it and looking that adoption clinic. for in throughout system

So what I contribution think beyond what currently we just that beyond assets the today. were the contributed are look far and at doing we fact to look have from were be will immediate that Cedars

to guys building. if that commercially, the of kind rotation maybe have get it's maybe could kind up? any on Got of more I fee, are I year color. I you rebalancing And slip on be, like more appreciate going just you. It care, we there physician to Is schedule one of kind know in, your we on to part you primary never And momentum just And then XXXX, that's sounds is little I that's sounds all -- know the does the is that there. got, or side. towards pricing. But a I new after pricing negotiate one guess, more supposed And you flip and of payer but think, a contracts, not each the that done? that's supposed like guess it's to B, switch, it A. one XX what's the part I know then go and government, be I happen

I talking government, think in because the or health care about know -- exactly you what just general, we said don't the you When are

Not discussion, I yes. but the CMS, yes. yes. CMS. yes. I different mean, -- a mean Yes, talking I'm

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course. Of No, it. get I

Yes.

last I think, maybe embellish the this, I if they're XXXX, word, can Mark, you but on to their think year. true

they However, do some if mitigation.

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Washington.As rates we in known it. going if the we the be gulp And currently years, not medicine evolved consolidation here which is yes, it which going ultimately have of where care, a take dysfunctionality maker. to almost assiduously to famous certain we'd of, or finally the to now, they seat other push members. for question say, is it of we're been case over the to lot And easy to as divide say But This down is the to make year emphasize like payers. continue, them like the all terms has essentially XXXX. a it benefits provide what what's this our the service, we're exist for sustainable provider, think But the in that and road, far throughout and that for up And government with want or we to industry in to have for. part just it. us us extent with hit way, allow either to have I'm see every And to the followed negotiating willing issues I price at don't of we spoonfuls. at this table here other the price given taker, leave have think of leave us take important decades become a quality markets we really profitability, all that but that not have every the to payers it's you other and allowed for that's pricing and a you one the we're pay, our into one been have X going do to which but reimburse get it physician recognize not to I in is these level and a their that,

radiology the that to reasonable one willing care that a community and that don't the but doing for is the having it be hopefully, to will matter there that I we're today, is through to adopt. of scenario just not substantial given different conversation call fair a and it that discussions more the importance is option, that nuclear we've And needs leave-it attitude. the is demand be been years, to community, health and the rates. able to the so one of believe we're want the I but demonstrate RadNet take tenor leave the to reimbursement So

with Our from & Sidoti next Sidoti question comes Company. Jim

A quick couple ones. of

the quarter with Sounds like joint in expanded joint you do now? added you new venture. or centers handful How a have of venture many this centers total right

XXX.

And comments saving down to you payments some debt you've doesn't Howard, about quarter, you cash, are coming Or like I made and a little the but of for more so there down Okay. made $XXX paid date. the pay fourth then, in did it think debt million acquisitions? raise you that in quarter? big any Is seem or

fourth on that that more face have payment, Well, of cash I October. pursuing year want of a us, pay based this whether million we're the end make could debt. not of facing down not decided $XX perhaps to opportunities we as some We and we we've some see by more, -- determine XXXX, perhaps to keep that that of at or sheet in we of our made I but think would in end quarter balance or mentioned, but think I on opportunities the the the later we even the

of of just out we're use like the paying wouldn't markets, but more being other not that in footprint rule cash we prudent think of our I out here. in So company's expand I I existing debt. markets. wouldn't down the been only perhaps have our to rule -- it case in also

we if pay more elect money. that our to than the down to be I So receive would I'm sure more think happy lenders

more But we'll us get improving work as in company any to more want we lenders capital the choose don't our be and well do can I to if I performance. think also if our overall resistance So our later. shareholders to it the think helpful as put growing

Zhi with Our next B. Yuan question Riley. comes from

the in This the hosting thanks progress on is in Imaging Congratulations [ flagship Yuan. for us York at for and quarter calling Center. New your ] Brandon

but wondering view. kind arguments one patient bit of if was little a talk us, chances the on success point you from that. reiterate advocacy And physician maybe there, your I CMS for you I just returning about could of bit a and groups little already thoughts that to have you've that will into like going touched Just what on And patient their Congress. access question. just can on think the

Well, I parable liken tree anybody the in woods, old falls advocacy program hear to of would a the the it.

representatives to any has process, their I And we impact. met think or go both if been House we've I'm numerous through and Washington ultimately with the not Senate age. sure while it

of increasing to that what for have things is down CMS decades. we to X and deliver other and revalue I probably inflation, needs like they close increases, equipment think not sit like primarily technical take really revalued into do consideration salary what and the component impacts cost of

going the are system to access doing and hurt of not Medicare jeopardy health of care what ultimately population the delivery they I sustainability and think is CMS that that having put need. Medicare the in the

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can And the the kick year that, would of for do that to is road next view near-term, this year the down down they Great. case just a like things. that likely the the That In think scenario continue? the taking best think you road near-term, be sounds year year? do the to can after you longer-term

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online? squeeze Maybe treatment medical updates Can on any Alzheimer's. give patients the I one in on right. us into Right, preparations imaging you come those more needs for options providing could for going more as

Yes, great question. that's a

of further drugs We significant that be increase adopted. Alzheimer's there a as et will in imaging some new expect the

is PET just had the to identify slow has to and it of with possible us but have the earlier the the quantify experience can and Alzheimer's approach prostate potential but everything accurately. they a and it's tools now should these imaging earlier else CT be which like in of which adoption cancer healthcare, drugs, that cancer in come and more process, benefit effects, new we've like with All help much scan, diagnostic of whole aware, detect change disease.We side also therapeutic prostate fundamentally

health I I inside if probably And will start forefront X and new at of So in I it, disease. be the more symptomatology earlier advantage effective more a is will diagnosed could that this with after expect before of to the Alzheimer's care of tool that think diagnosing all taking of severe and couple number that will. the the over next you number drugs years, million people probably help diagnosis Alzheimer's. these the make forces more under imaging while people hear Alzheimer's, been diagnosed makes diagnosed the have double you be that another

the how models most more areas this and in point that it probably time.I'm built is reside. majority substantial our So confident again, sometime will not XXXX, populated densely our Alzheimer's impact a the Imaging while have for into patients in revenue which, certain network, at of build opportunity to in 'XX the we're where in

So part the bending in in diagnosis And we of substantial that the that curve from and treatment earlier be we diagnosis probably see ultimately, expect to benefits of that. can Alzheimer's.

comes question JPMorgan. Rishi from Parekh next Our with

and them I the or seeing or more failing Can fell acquisitions. the some us pursuing? given opportunities, their either are underinvested your profiles guess that relationships? you're some assets, There of ventures impaired And of what you of alienated or you of are challenged I just comments that at if have walk numerous just looking the in assets actively that possibilities terms acquisitions their through one and around the characteristics include at ventures. you're multiples they've of in looking you're given leverage

health not care, question. just multiples in certainly first all, think Good Well, down. of have but general, come in and I

groups were much the I rates almost if almost go will, how think they interest that for assets these was paying a created there out day and that less you certain money of that allowed be frenzy, feeding about zero free. basically given concerned

unpredictable. other bringing this at a a common you because reimbursement health continuing is I care, things lowering example, little thought we're will, rates more think not approach for the like of really years benefit, or lot of that is about shortages, may looking bit sense we labor today, or if unlike to rising X interest of industries that Things ago. have deterioration

never that that race, you got will. So multiples of been the We've an and I really coming think into down. are arms disciplined if kind

will about access, I always care improvement of with rational.For And allows more common the operational X for why and from now think one, assets our add decision-making really in, in us, being leverage, not distressed, that's of which our Xx particularly just our debt. we're -- reimbursements. acquisitions not X to Number so we're is our our And good be us that in a sense, health position a but currently all very and markets little first think conversational parts. And priority. the I network only imaging, that's of bit more inside

a stretched buy looking in us and markets, New if was a we acquisition buying good very okay, has year to dynamic right a provider a very we looks Jersey. did interested long-term it new in terms good. So and opposed X much and like delivery pricing going our single for Radiology, high-quality I think are what radiology year last we where -- Montclair last We into big in at was access we're to with the there market where which center new group.As even but was of made, a not the markets, be or network

in there, to those or worth substantial X paid us in. same markets consolidation kind one all of have we're and to presence the opportunities believe with. a that platform I now in were a own their where likely But states. the I there that, assets because those far add enter gives for which reasons either should more will that beyond create to for we've of or tried and say good X to and deal We that that in were markets multiple that we're market synergies acquisition to more more opportunities thought distressed states, have growth just they the are couldn't may assets be new developed it X that because be in consolidation market there equipped very other they're a We're they just people the

leverages, potentially and So to to presence that as take I our look curve position think go we to in terms our other community. markets of liquidity bend leverage us remarks, acquisitions significantly allows RadNet's opportunities or into mentioned on the might at the radiology in inside

Are Rishi? you question, done your with

sorry. Yes,

on next from our which Angelo We question, is Gordon. to will Ed Kressler move TPG with

COVID opportunity covered of the this transformational opportunity and associated at the Or novo of even that's gone right it partially that? you transformational you kind target think context M&A-driven behind subsequent but a that that to the of deal? and X more there? kind net do have of pre-COVID Is a how CapEx we've then the that, feel you least levered color disruption. process of related now? the deal, related times levered a leverage de are raise to spoke just deal is opportunity terms a and But more just about Rishi comfortable had would. in going do this, And for for kind leverage of some versus the it through to required if you thought to debt please, you possibility recent just and equity deleveraging, you kind little obviously, a in kind the of you the -- Do basis, of a you on were Xx like of on deal,

Ed, Sure. I'll think I take this question.

how not I months. acquisitions. could think lost in on that basis and been looking last to the to your rates We've question potentially we're it's XX gone and been at change deleveraging us that prudent our with interest and up about how capital XXX XX have structure points about and disciplined,

XXXX been sheet. so fortunate more rate And to deleverage very some were entered have more we've the shielded swaps growth. and have and raise we've in from seen interest of the did also that rates the try conviction that more the that balance part others into to we more us up, rates we've and had go as We business capital the do the we derisk in over that pain deleverage but accelerate so feeling as to did last months. rapidly to We equity XX the increased structure, base are

We're centers and today joint de on stages about talked our ventures. we've novo we've in development. various executing got than in a in hospital calls, prepared remarks As lot more of past a dozen

increase to do markets.We're and we other for is throughput tuck-in acquisition that aggressively opportunity see this at I and depends of having competitors industry the up of the to all upon lenders. what a for heavy smaller having centers guess continue levering our execute as when opportunities these to our We and stakeholders, all an we set transactions and improve for in answer acquisition. on others the to our about opportunity ourselves drive our market types other operators question in and shareholders the our your and can capital part of our our meet M&A our apart including substantial and the our what value in from terms the technology to by demand thoughts where to capacity spending in it ourselves cannot.Now, is we have advantage is our again liquidity of our

an there on the to would right deal. opportunity scale think larger a do be I for something

than this we've a effectively. the building we decades much our management works business, have the over also, we grow today.I and platform, that come essentially think in model larger can support larger up a we and future that our is team business infrastructure without several operating of industry this think in to infrastructure this can the of think and I can much corporate level have it that scale is substantially model

answer to on of capital we in this June ourselves something growing a and on additional raised So, we I more convince business bit whatever potentially a I like scale. like days risk structure contemplating. to of we of capital-intensive a a positions more levered, larger think leverage a this leverage -- willing time that behind capital something capital be ourselves reasonable XX synergies one were and in, we're year, interested leverage. if deleverage that that? that business think, in that would is could having particularly interest the Would being to take we yes, on we us themselves do are Xx bit could we because transaction today meaning months, a I structure with But in period, through rates it is and XX little don't the lend we efficiencies do do point. the the think that to we're type in Xx, take to would little I don't

comment. I just a want to add

of transformational possible down find think allow synergies RadNet's can't If look things was where to is from. critical think on a because then I the transformational. us potentially that here. There's the to coming to it's something really philosophy. I X synergies, spot acquisition don't to large we need at are is believe leverage Mark One

or our as and those have to one that performs X, confidence that we're burden with to now, us run with number as can the I've transformational become inside new taking diligence venture in third on leveraging make synergies well will something intelligence, we're both driver. way important a do, of the joint other have on other clinical will benefit that to us committed on a company didn't substantial doesn't RadNet expanded and our that that today year only single RadNet a sizable allow leave to beyond commitment future relationships. is company Whether RadNet like we they're have the acquisitions and partners, a early degree to to to that's base, That's synergies, the next going the have, patients. most becomes the we we of that capital.So we'll opposed investments create into human fact have with that And So that ability want need seen want in and our a capital really what that the XXX stock as bigger the I to allow driver people any when have and I And does find us, for due our almost RadNet more more operational beyond business be AI by customer to we transition artificial centers that. part tender transaction component the which side the probably take make do as that and comfortable and investment better it have company, asset their today and not our our extraordinary everybody the to most but one.Number have value which will an enormous levels of to the achieved. But will would ultimately to important of be we before in avoid with. to have the up mention

we're of And future think place different year all I in and and than a very RadNet much shareholders for So today the its rosy. think we ago. employees a even I were is

our would concludes closing over Dr. for question-and-answer turn I This session. any back the to conference remarks. Berger to like

particularly opportunity Thank our shareholders Right. to hard for return services with day. for you, you for your thank our great investment take to an the Management that of all of employees stakeholders. work. RadNet will provides And endeavor again. today, to I for Good like market our and and support, their look appropriate their to call. would the forward its of Thank continued continue I on time a be and all leader dedication next

now concluded. Thank conference presentation. The attending has today's for you

disconnect. now all may You