RadNet, Inc. (NASDAQ:RDNT) Q3 2018 Earnings Conference Call Transcript

Nov 09, 2018 • 10:30 am ET

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RadNet, Inc. (NASDAQ:RDNT) Q3 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day, and welcome to the RadNet, Inc. Third Quarter 2018 Earnings Call. Today's conference is being recorded. At this time, I'd like to turn the call over to Mr. Mark Stolper, Executive Vice President and Chief Financial Officer of RadNet, Inc. Please go ahead.

Executive
Mark Stolper

Thank you. Good morning, ladies and gentlemen, and thank you for joining Dr. Howard Berger and me today to discuss RadNet's Third Quarter 2018 Financial Results.

(Forward-Looking Cautionary Statements)

And with that, I'd like to turn the call over to Dr. Berger.

Executive
Howard Berger

Thank you, Mark. Good morning, everyone, and thank you for joining us today. On today's call, Mark and I plan to provide you with highlights from our third quarter 2018 results, give you more insight into factors, which affected this performance and discuss our future strategy. After our prepared remarks, we will open the call to your questions. I'd like to thank all of you for your interest in our company and for dedicating a portion of your day to participate in our conference call this morning.

Each of the operating and financial metrics improved during this quarter relative to last year's third quarter. Our revenue increased 6.4%, our adjusted EBITDA increased 5.5%, and our net income increased by over $1.8 million or 56.2%. Aggregate procedural volumes increased 3.5%, and same-center volumes increased 0.8%. Despite a strong third quarter last year, we are encouraged that we were able to improve our performance. This is indicative of the steady quarter-to-quarter improvement we've demonstrated for some time now.

Of course our 2018 full year results will remain impacted by our first quarter, which was greatly affected by the severe winter conditions in the Northeast. But we are pleased to see that our business has bounced back in the second and third quarters, continuing our consistent, long-term trend of growing patient volumes and managing expenses.

During the quarter, we placed a lot of operational focus on implementing the EmblemHealth capitation agreement that we announced publicly in August. Throughout the quarter, we hired the employees necessary to staff the 26 AdvantageCare locations for which we assumed operations on October 1. We spent much of the quarter training the newly hired staff and instituting RadNet operating protocols and quality measures. We also replaced or upgraded much of the equipment in these locations and are now very excited about how these locations look and operate. We began seeing patients on October 1.

As you might recall, much of the focus of the arrangement with EmblemHealth is to direct as many of the AdvantageCare, or ACP, membership into the RadNet's freestanding facilities, including those operations within the ACP offices as opposed to having these patients find themselves in hospital outpatient departments. The early data from October looks promising. Not only is the leakage of the hospitals close to what we projected, we are capturing more fee-for-service business than we anticipated from the same ACP physicians. But there's still a long way to go to decrease the leakage, and we are aggressively