RDNT RadNet Inc

RadNet, Inc. (NASDAQ: RDNT), a national leader in providing high-quality, cost-effective, fixed-site outpatient diagnostic imaging services through a network of 399 owned and operated outpatient imaging centers, today reported financial results for its third quarter of 2024.

Dr. Howard Berger, President and Chief Executive Officer of RadNet, commented, “We continue to demonstrate strong growth and record results in each of our Imaging Center and Digital Health reportable operating segments. Total Company Revenue grew 14.7% as compared with last year’s third quarter to a record $461.1 million. The Digital Health segment Revenue of $16.4 million increased 34.3% from last year’s same quarter. The strong growth in Digital Health was, in part, driven by the AI businesses, whose Revenue increased 75.8% as compared with last year’s third quarter, mainly from the continuing success of the rollout of the Enhanced Breast Cancer Detection (EBCD) DeepHealth AI-powered screening mammography program.”

“Despite continued inflation in staffing costs, improved reimbursement from commercial and capitated payors, strong demand for advanced imaging modalities, the growth of the Digital Health businesses and effective cost controls resulted in an increase to Adjusted EBITDA(1) margins. Total Company Adjusted EBITDA(1) margin of 16.0% during this third quarter increased by 156 basis points over last year’s third quarter,” added Dr. Berger.

“Given the positive trends we continue to experience in virtually all aspects of our business and the strong financial performance of the third quarter, we are revising upwards certain guidance levels in anticipation of financial results that we believe will exceed both our original expectations and the adjustments we made to the guidance ranges upon releasing our first and second quarter 2024 results. We have increased 2024 guidance ranges for Revenue, Adjusted EBITDA(1) and Free Cash Flow(2),” added Dr. Berger.

Dr. Berger continued, “In response to continued high demand for our services and notable patient backlogs in many of RadNet’s local markets, we continue to expand capacity through the development and construction of new imaging centers. Since the start of the year, we have opened five new centers, and we anticipate opening an additional three centers before year end. Furthermore, we have 15 centers in various stages of construction and development which we intend to open during 2025.”

“We remain on pace for the commercial launch of DeepHealth OS at the RSNA convention this year taking place December 1st through 4th in Chicago. At our DeepHealth booth, we will be demonstrating the capabilities of the DeepHealth OS integrated end-to-end workflow solutions as well as our clinical AI tools. Last week, we announced our first customer for the DeepHealth OS software platform, and we are eager to introduce our DeepHealth solutions to prospective customers and partners at the convention,” explained Dr. Berger.

“RadNet’s balance sheet continues to strengthen as our focus remains on driving same-center revenue performance and effective cost management. At quarter end, we had a cash balance of $748.9 million, and our leverage ratio of Net Debt to Adjusted EBITDA(1) was at a record low, slightly below 1.0,” concluded Dr. Berger.

Third Quarter Financial Results

For the third quarter of 2024, RadNet reported Total Company Revenue of $461.1 million and Adjusted EBITDA(1) of $73.7 million. Revenue increased $59.2 million (or 14.7%) and Adjusted EBITDA(1) increased $15.7 million (or 27.2%) as compared with the third quarter of 2023.  

For the third quarter of 2024, RadNet reported Digital Health Revenue (inclusive of intersegment revenue) of $16.4 million and Adjusted EBITDA(1) of $3.2 million. Revenue increased $4.2 million (or 34.3%) and Adjusted EBITDA(1) increased $950,000 (or 41.7%) as compared with the third quarter of 2023. Digital Health Revenue and Adjusted EBITDA(1) growth was due in part from a $2.2 million (or 75.8%) increase in AI Revenue, which climbed to $5.1 million during the third quarter of 2024.

Unadjusted for unusual or one-time items impacting the third quarter, Total Company Net Income for the third quarter of 2024 was $3.2 million as compared with a Total Company Net Income of $17.5 million for the third quarter of 2023. Fully diluted Net Income Per Share for the third quarter of 2024 was $0.04, compared with a fully diluted Net Income per share of $0.25 in the third quarter of 2023, based upon a weighted average number of diluted shares outstanding of 75.2 million shares in 2024 and 68.8 million shares in 2023.

There were a number of unusual or one-time items impacting the third quarter including: $8.1 million of non-cash loss from interest rate swaps; $304,000 in severance expense related to cost-savings initiatives; $1.3 million expense related to leases for de novo facilities under construction that have yet to open their operations; $3.3 million of non-capitalized research and development expenses related to the DeepHealth Cloud OS and generative AI; $417,000 of acquisition transaction costs; and $147,000 loss in conjunction with extinguishment of debt and related expenses. Adjusting for the above items, Total Company Adjusted Earnings(3) was $13.3 million and diluted Adjusted Earnings Per Share(3) was $0.18 during the third quarter of 2024. This compares with Total Company Adjusted Earnings(3) of $8.8 million and diluted Adjusted Earnings Per Share(3) of $0.13 during the third quarter of 2023.

For the third quarter of 2024, as compared with the prior year’s third quarter, MRI volume increased 14.6%, CT volume increased 15.5% and PET/CT volume increased 23.8%. Overall volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 9.0% over the prior year’s third quarter. On a same-center basis, including only those centers which were part of RadNet for both the third quarters of 2024 and 2023, MRI volume increased 9.9%, CT volume increased 9.8% and PET/CT volume increased 16.8%. Overall same-center volume, taking into account routine imaging exams, inclusive of x-ray, ultrasound, mammography and other exams, increased 5.5% over the prior year’s same quarter

Nine Month Financial Results

For the first nine months of 2024, RadNet reported Total Company Revenue of $1,352.6 million and Adjusted EBITDA(1) of $204.5 million. Revenue increased $156.3 million (or 13.1%) and Adjusted EBITDA(1) increased $37.9 million (or 22.8%) as compared with the first nine months of 2023.  

For the first nine months of 2024, RadNet reported Digital Health Revenue (inclusive of intersegment revenue) of $46.9 million and Adjusted EBITDA(1) of $10.0 million. Revenue increased $12.0 million (or 34.4%) and Adjusted EBITDA(1) increased $6.3 million (or 171.6%) as compared with the first nine months of 2023. Digital Health Revenue and Adjusted EBITDA(1) growth was due in part to a $8.0 million (or 107.8%) increase in AI Revenue, which climbed to $15.4 million during the nine month period of 2024.

Unadjusted for one-time or unusual items, Total Company Net Loss for the first nine months of 2024 was $2.6 million as compared with a Total Company Net Income of $4.9 million for the first nine months of 2023. Fully diluted Net Loss Per Share for the nine month period of 2024 was $(0.04), compared with a Net Income per share of $0.08 in the nine month period of 2023, based upon a weighted average number of diluted shares outstanding of 72.6 million shares in 2024 and 63.2 million shares in 2023.

2024 Guidance Update

RadNet amends its previously announced guidance levels as follows:

Imaging Center Segment
	OriginalGuidance Range		Revised GuidanceRange After Q1 Results		Revised GuidanceRange After Q2 Results		Revised GuidanceRange After Q3 Results
Total Net Revenue	$1,650 - $1,700 million		$1,675 - $1,725 million		$1,685 - $1,735 million		$1,710 - $1,760 million
Adjusted EBITDA(1)	$250 - $260 million		$255 - $265 million		$257 - $267 million		$262 - $270 million
Capital Expenditures(a)	$125 - $135 million		$130 - $140 million		$135 - $145 million		$145 - $155 million
Cash Interest Expense(b)	$40 - $45 million		$37 - $42 million		$32 - $37 million		$25 - $30 million
Free Cash Flow(2)	$65 - $75 million		$68 - $78 million		$72 - $80 million		$83 - $93 million

(a)   Net of proceeds from the sale of equipment, imaging centers and joint venture interests and New Jersey Imaging Network capital expenditures.(b)   Includes payments to and from counterparties on interest rate swaps and nets interest income from our cash balance as recorded in Other Income.

Digital Health Segment
		OriginalGuidance Range	RevisedGuidance Range AfterQ1 Results	RevisedGuidance Range AfterQ2 Results	RevisedGuidance Range AfterQ3 Results
Total Net Revenue (inclusive of intersegment revenue)		$60 - $70 million	$60 - $70 million	$60 - $70 million	$60 - $70 million
Adjusted EBITDA(1)Before Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI		$12 - $14 million	$13 - $15 million	$13 - $15 million	$13 - $15 million
Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI		$11 - $13 million	$12 - $14 million	$12 - $14 million	$13 - $15 million
Capital Expenditures(i)		$3 - $5 million	$3 - $5 million	$3 - $5 million	$3 - $5 million
Free Cash Flow(2)Before Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI		$8 - $10 million	$8 - $10 million	$8 - $10 million	$8 - $10 million
Free Cash Flow(2)After Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI		$(2) - $(5) million	$(2) - $(5) million	$(2) - $(5) million	$(2) - $(5) million

(i)   Excludes a $9 million purchase of software code and other intellectual property from a vender.

“Based upon the consistent outperformance of the first three quarters of this year relative to our projections, we have increased guidance ranges of our core Imaging Center reporting segment for Revenue and Adjusted EBITDA(1). Furthermore, despite increasing the Capital Expenditures guidance range by $10 million, we are expecting Free Cash Flow(2) to be higher for the year. This is the result of the projected increase in Adjusted EBITDA(1) and lower Cash Interest Expense. With respect to the Digital Health reportable segment, we remain on track to meet our original guidance levels for Revenue, Adjusted EBITDA(1) and Free Cash Flow(2).”

Conference Call for Tomorrow

Dr. Howard Berger, President and Chief Executive Officer, and Mark Stolper, Executive Vice President and Chief Financial Officer, will host a conference call to discuss its third quarter 2024 results on Monday, November 11th, 2024 at 7:30 a.m. Pacific Time (10:30 a.m. Eastern Time).

Conference Call Details:

Date: Monday, November 11, 2024Time: 10:30 a.m. Eastern TimeDial In-Number: 844-826-3035International Dial-In Number: 412-317-5195

It is recommended that participants dial in approximately 5 minutes prior to the start of the 10:30 a.m. call. There will also be simultaneous and archived webcasts available at https://viavid.webcasts.com/starthere.jsp?ei=1691984&tp_key=8cbf05cc88 or http://www.radnet.com under the “Investors” menu section and “News Releases” sub-menu of the website. An archived replay of the call will also be available and can be accessed by dialing 844-512-2921 from the U.S., or 412-317-6671 for international callers, and using the passcode 10193306.

About RadNet, Inc.

RadNet, Inc., is the leading national provider of freestanding, fixed-site diagnostic imaging services and related information technology solutions (including artificial intelligence) in the United States based on the number of locations and annual imaging revenue. RadNet has a network of 399 owned and/or operated outpatient imaging centers. RadNet’s markets include Arizona, California, Delaware, Florida, Maryland, New Jersey, New York and Texas. In addition, RadNet provides radiology information technology and artificial intelligence solutions marketed under the DeepHealth brand and other related products and services to customers in the diagnostic imaging industry. Together with affiliated radiologists, and inclusive of full-time and per diem employees and technologists, RadNet has a total of over 10,000 employees. For more information, visit http://www.radnet.com.

Forward Looking Statements

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

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

• the availability and terms of capital to fund our business;
• our ability to service our indebtedness, make principal and interest payments as those payments become due and remain in compliance with applicable debt covenants, in addition to our ability to refinance such indebtedness on acceptable terms;
• changes in general economic conditions nationally and regionally in the markets in which we operate;
• the availability and terms of capital to fund the expansion of our business and improvements to our existing facilities;
• our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so;
• our ability to acquire, develop, implement and monetize technology, digital health initiatives, artificial intelligence algorithms and applications;
• volatility in interest and exchange rates, or credit markets;
• the adequacy of our cash flow and earnings to fund our current and future operations;
• changes in service mix, revenue mix and procedure volumes;
• delays in receiving payments for services provided;
• increased bankruptcies among our partner physicians or joint venture partners;
• the impact of the political environment and related developments on the current healthcare marketplace and on our business, including with respect to the future of the Affordable Care Act;
• the extent to which the ongoing implementation of healthcare reform, or changes in or new legislation, regulations or guidance, enforcement thereof by federal and state regulators or related litigation result in a reduction in coverage or reimbursement rates for our services, or other material impacts to our business;
• closures or slowdowns and changes in labor costs and labor difficulties, including stoppages affecting either our operations or our suppliers' abilities to deliver supplies needed in our facilities;
• the occurrence of hostilities, political instability or catastrophic events;
• the emergence or reemergence of and effects related to future pandemics, epidemics and infectious diseases; and
• noncompliance by us with any privacy or security laws or any cybersecurity incident or other security breach by us or a third party involving the misappropriation, loss or other unauthorized use or disclosure of confidential information.

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

Regulation G: GAAP and Non-GAAP Financial Information

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

CONTACTS:

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

RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA)
	September 30, 2024				December 31, 2023
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and Cash equivalents	$	748,916			$	342,570
Accounts receivable		199,076				163,707
Due from affiliates		30,210				25,342
Prepaid expenses and other current assets		38,051				47,657
Total current assets		1,016,253				579,276
PROPERTY, EQUIPMENT AND RIGHT-OF-USE ASSETS
Property and equipment, net		663,867				604,401
Operating lease right-of-use assets		646,750				596,032
Total property, plant, equipment and right-of-use assets		1,310,617				1,200,433
OTHER ASSETS
Goodwill		711,841				679,463
Other intangible assets		84,441				90,615
Deferred financing costs		2,416				1,643
Investment in joint ventures		104,514				92,710
Deposits and other		45,260				46,333
Total Assets	$	3,275,342			$	2,690,473
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable, accrued expenses and other	$	338,737			$	342,940
Due to affiliates		44,872				15,910
Deferred revenue		4,392				4,647
Current operating lease liability		58,751				55,981
Current portion of notes payable		23,378				17,974
Total current liabilities		470,130				437,452
LONG-TERM LIABILITIES
Long-term operating lease liability		658,434				605,097
Notes payable, net of current portion		996,272				812,068
Deferred tax liability, net		20,795				15,776
Other non-current liabilities		10,077				6,721
Total liabilities		2,155,708				1,877,114
EQUITY
RadNet, Inc. stockholders' equity:
Common stock - $0.0001 value, 200,000,000 shares authorized; 73,976,284 and 67,956,318 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively		7				7
Additional paid-in-capital		979,279				722,750
Accumulated other comprehensive loss		(1,843	)			(12,484	)
Accumulated deficit		(82,130	)			(79,578	)
Total RadNet, Inc.'s Stockholders' equity:		895,313				630,695
Noncontrolling interests		224,321				182,664
Total Equity		1,119,634				813,359
Total liabilities and equity	$	3,275,342			$	2,690,473

RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN THOUSANDS EXCEPT FOR SHARE AND PER SHARE DATA)
(unaudited)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2024				2023				2024				2023
REVENUE
Service fee revenue	$	427,579			$	361,927			$	1,247,513			$	1,078,265
Revenue under capitation arrangements		33,563				40,041				105,050				117,982
Total service revenue		461,142				401,968				1,352,563				1,196,247
OPERATING EXPENSES
Cost of operations, excluding depreciation and amortization		391,800				341,635				1,169,113				1,038,647
Depreciation and amortization		34,979				32,210				101,822				95,705
Loss (gain) on sale and disposal of equipment and other		148				527				735				1,183
Loss (gain) on contribution of imaging centers into joint venture		-				(16,808	)			-				(16,808	)
Severance costs		304				1,153				797				3,157
Total operating expenses		427,231				358,717				1,272,467				1,121,884
INCOME (LOSS) FROM OPERATIONS		33,911				43,251				80,096				74,363
OTHER INCOME AND EXPENSES
Interest expense		19,427				16,115				61,776				47,876
Equity in earnings of joint ventures		(3,595	)			(1,084	)			(11,308	)			(3,935	)
Non-cash change in fair value of interest rate hedge		6,755				1,015				7,429				949
Debt restructuring and extinguishment expenses		147				-				8,909				-
Other expenses (income)		(5,414	)			(4,081	)			(16,248	)			(2,609	)
Total other (income) expenses		17,320				11,965				50,558				42,281
INCOME (LOSS) BEFORE INCOME TAXES		16,591				31,286				29,538				32,082
Provision for income taxes		(4,335	)			(7,220	)			(4,927	)			(7,741	)
NET INCOME (LOSS)		12,256				24,066				24,611				24,341
Net income (loss) attributable to noncontrolling interests		9,047				6,526				27,163				19,437
NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS	$	3,209			$	17,540			$	(2,552	)		$	4,904
BASIC NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS	$	0.04			$	0.26			$	(0.04	)		$	0.08
DILUTED NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS	$	0.04			$	0.25			$	(0.04	)		$	0.08
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic		73,494,709				67,793,404				72,587,321				62,113,707
Diluted		75,165,435				68,809,818				72,587,321				63,221,251

RADNET, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
(IN THOUSANDS)
(unaudited)
	Nine Months Ended September 30,
	2024				2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$	24,611			$	24,341
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		101,822				95,705
Amortization of operating lease assets		45,516				47,542
Equity in earnings of joint ventures		(10,308	)			5,012
Amortization deferred financing costs and loan discount		2,336				2,240
Loss (Gain) on sale and disposal of equipment		735				1,183
Loss on extinguishment of debt		2,080				-
Gain on contribution of imaging centers into joint venture		-				(16,808	)
Amortization of cash flow hedge		8,242				2,765
Non-cash change in fair value of interest rate hedge		7,429				949
Stock-based compensation		21,368				21,380
Loss on impairment		1,200				3,949
Change in fair value of contingent consideration		1,974				(4,112	)
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in purchase transactions:
Accounts receivable		(35,369	)			(1,379	)
Other current assets		4,738				5,754
Other assets		(7,388	)			(16,641	)
Deferred taxes		4,834				7,389
Operating lease liability		(40,497	)			(43,390	)
Deferred revenue		(255	)			1,155
Accounts payable, accrued expenses and other		57,426				(5,091	)
Net cash provided by operating activities		190,494				131,943
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of imaging facilities and other acquisitions		(37,748	)			(10,915	)
Purchase of property and equipment and other		(145,164	)			(136,537	)
Proceeds from sale of equipment		151				82
Equity contributions in existing and purchase of interest in joint ventures		(1,496	)			(5,453	)
Net cash used in investing activities		(184,257	)			(152,823	)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes and leases payable		(4,296	)			(1,929	)
Payments on Term Loan Debt		(688,375	)			(11,062	)
Proceeds from issuance of new debt, net of issuing costs		863,815				-
Contribution from noncontrolling interests		7,569				-
Payments on contingent consideration		(3,614	)			(3,390	)
Distributions paid to noncontrolling interests		(2,423	)			(3,523	)
Proceeds from sale of economic interests in majority owned subsidiary, net of taxes		8,641				5,102
Proceeds from issuance of common stock		218,385				245,831
Proceeds from issuance of common stock upon exercise of options		367				72
Net cash provided by financing activities		400,069				231,101
EFFECT OF EXCHANGE RATE CHANGES ON CASH		40				(171	)
NET DECREASE IN CASH AND CASH EQUIVALENTS		406,346				210,050
CASH AND CASH EQUIVALENTS, beginning of period		342,570				127,834
CASH AND CASH EQUIVALENTS, end of period		748,916				337,884
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest	$	51,520			$	59,421
Cash paid during the period for income taxes	$	2,202			$	225

RADNET, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME ATTRIBUTABLE TO RADNET, INC. COMMON SHAREHOLDERS TO ADJUSTED EBITDA
(IN THOUSANDS)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2024				2023				2024				2023
Net income (loss) attributable to Radnet, Inc. common stockholders	$	3,209			$	17,540			$	(2,552	)		$	4,904
Income taxes		4,335				7,220				4,927				7,741
Interest expense		19,427				16,115				61,776				47,876
Severance costs		304				1,153				797				3,157
Depreciation and amortization		34,979				32,210				101,822				95,705
Non-cash employee stock-based compensation		4,723				4,325				21,369				21,381
Loss (gain) on sale and disposal of equipment and other		148				527				735				1,183
Non-cash change in fair value of interest rate hedge		6,755				1,015				7,429				949
Other expenses (income)		(5,414	)			(4,081	)			(16,248	)			(2,609	)
Non-Capitalized R&D - DeepHealth Cloud OS & Generative AI		3,345				-				9,977				-
Loss (gain) on contribution of imaging centers into joint venture		-				(16,808	)			-				(16,808	)
Loss (gain) on extinguishment of debt and related expenses		147				-				8,909				-
Non-cash change to contingent consideration		-				(6,276	)			1,974				(3,646	)
Acquisition related non-cash intangible adjustment		-				3,950				-				3,950
Non-operational rent expenses		1,287				1,030				3,119				2,748
Acquisition transaction costs		417				-				417				-
Adjusted EBITDA Including EBITDA from Digital Health	$	73,662			$	57,920			$	204,451			$	166,531
EBITDA from Digital Health		3,229				2,279				10,018				3,689
Adjusted EBITDA excluding EBITDA from Digital Health	$	70,433			$	55,641			$	194,433			$	162,842

PAYMENTS BY PAYOR CLASS
		Third Quarter
		2024
Commercial Insurance		57.7%
Medicare		22.3%
Capitation		7.3%
Medicaid		2.4%
Workers Compensation/Personal Injury		2.2%
Other*		8.2%
Total		100.0%
* Includes management fee, teleradiology and Digital Health financial reporting unit revenue.

PAYMENTS BY MODALITY
		Third Quarter		Full Year		Full Year		Full Year
		2024		2023		2022		2021
MRI		37.1%		36.8%		36.8%		36.0%
CT		16.0%		16.8%		17.5%		17.2%
PET/CT		7.1%		6.4%		5.8%		5.5%
X-ray		6.1%		6.5%		6.7%		3.9%
Ultrasound		13.7%		12.9%		12.6%		12.7%
Mammography		16.2%		16.0%		15.3%		16.1%
Nuclear Medicine		1.0%		0.8%		0.9%		1.0%
Other		2.7%		3.9%		4.5%		4.6%
		100.0%		100.0%		100.0%		100.0%

PROCEDURES BY MODALITY*
			Third Quarter		Third Quarter
			2024		2023
MRI			446,596		389,566
CT			265,874		230,276
PET/CT			18,844		15,216
Nuclear Medicine			9,282		8,533
Ultrasound			650,322		607,995
Mammography			484,357		452,756
X-ray and Other			862,732		806,677
	Total		2,738,007		2,511,019
* Volumes include wholy owned and joint venture centers.

RADNET, INC. AND SUBSIDIARIES
SCHEDULE OF ADJUSTED EARNINGS AND EARNINGS PER SHARE (3)
(IN THOUSANDS EXCEPT SHARE DATA)
(unaudited)
								Three Months Ended
								September 30,				September 30,
								2024				2023 (v)
NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.
		COMMON STOCKHOLDERS						$	3,209			$	17,540
		Add non-cash impact of cash flow hedges (i)							8,111				2,260
		Add severance costs							304				1,153
		Subtract gain on contribution of imaging centers into joint venture							-				(16,808	)
		Add non-operational rent expenses (iii)							1,287				1,030
		Non-capitalized R&D - DeepHealth cloud OS & generative AI							3,345				-
		Acquisition transaction costs							417				-
		Debt amendment fee							147				-
		Subtract non-cash change to contingent consideration - Heart Lung Health							-				915
		Total adjustments - loss (gain)							13,611				(11,450	)
		Subtract tax impact of Adjustments (ii)							(3,552	)			2,759
		Tax effected impact of adjustments							10,059				(8,691	)
TOTAL ADJUSTMENT TO NET INCOME ATTRIBUTABLE
		TO RADNET, INC. COMMON SHAREHOLDERS							10,059				(8,691	)
ADJUSTED NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC.									13,268				8,849
		COMMON STOCKHOLDERS
WEIGHTED AVERAGE SHARES OUTSTANDING
		Diluted							75,165,435				68,809,818
ADJUSTED DILUTED NET INCOME PER SHARE
		ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS						$	0.18			$	0.13
(i) Impact is the combination of (a) the loss in fair value of the hedges during the quarter of $6,755 in 2024 and
loss of $1,015 in 2023 and (b) the amortization of the accumulation of the changes in fair value out of Other Comprehensive Income
that existed prior to the hedges becoming ineffective of $1,356 in 2024 and $1,245 in 2023.
(ii) Tax effected using 26.1% blended federal and state effective tax rate for 2023 and 24.1% for 2023.
(iii) Represents rent expense associated with de novo sites under construction prior to them becoming operational.
(iv) Represents pre-tax net income losses before income taxes from Artificial Intelligence reporting segment.
(v) Restated from what was presented in 2023 to include the losses of the AI businesses (ie, not add the losses back to earnings as was
the case in 2023). The restated Adjusted Earnings for 2023 is due to the fact that AI is no longer its own reportable operating segment
and is now embedded in the Digital Health reportable operating segment.

Footnotes

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

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

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

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

(3) The Company defines Adjusted Earnings (Loss) Per Share as net income or loss attributable to RadNet, Inc. common stockholders and excludes losses or gains on the disposal of equipment, loss on debt extinguishments, bargain purchase gains, severance costs, loss on impairment, loss or gain on swap valuation, gain on extinguishment of debt, unusual or non-recurring entries that impact the Company’s tax provision and any other non-recurring or unusual transactions recorded during the period.

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