COEUR D'ALENE, Idaho, Feb. 18, 2009 (GLOBE NEWSWIRE) -- NightHawk Radiology Holdings, Inc. (Nasdaq:NHWK), the leading provider of radiology solutions to radiology groups across the United States, today announced financial results for fourth quarter and full year 2008.
Fourth Quarter 2008 Highlights
* Revenue was $39.7 million compared with $42.7 million in the year-ago quarter. * Scan volume was 718,299 exams compared to 730,992 exams in the year-ago quarter. * Revenue from new service offerings, including final reads and business services, was $9.2 million, or 23% of total revenue. * Final reads revenue increased 44% to $4.9 million, or 12% of total revenue. * Adjusted net income was $4.1 million, or $0.14 per diluted share, compared with $8.1 million, or $0.26 per diluted share, in the year-ago quarter. Adjusted net income excludes non-cash charges for stock compensation, amortization of intangible assets and malpractice reserve adjustments. In addition, adjusted net income in the fourth quarter of 2008 also excludes a tax credit of $0.4 million related to prior year tax liabilities. * GAAP net income was $2.7 million, or $0.09 per diluted share, compared to $3.1 million, or $0.10 per diluted share, in the year-ago quarter. A reconciliation of adjusted net income to GAAP net income is included in the tables attached to this press release. * Cash flow from operations was $6.2 million, even with the year-ago quarter. Free cash flow was $5.5 million during the quarter, an increase of 7% from $5.1 million in year-ago quarter. * Cash and cash equivalents on-hand at December 31, 2008, totaled $47.2 million.
"Our fourth quarter results were at the high end of the range we provided to our investors in December and reflect the solid earnings and cash flow generation capabilities of our business model. Looking forward, while the macroeconomic environment is challenging, we are confident that we can continue to create shareholder value by focusing on delivering high quality solutions to the marketplace," said David Engert, the company's recently elected president and chief executive officer.
2009 Outlook
The company expects revenue for the first quarter of 2009 to be in the range of $38 to $39 million, slightly down from the fourth quarter of 2008 due to normal seasonality in volumes. The company also expects first quarter 2009 adjusted earnings per share to be in the range of 13 to 15 cents.
Forward Looking Statements
This press release contains statements that are forward-looking statements as defined within the Private Securities Litigation Reform Act of 1995. These include statements regarding the company's outlook on its revenue and adjusted earnings per share for the first quarter of 2009 and its outlook for growth in shareholder value. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from the statements made, including the risks associated with general economic conditions, competitive conditions in the radiology industry, and regulatory risks. Other factors that could cause operating and financial results to differ are described in the company's prospectus and periodic reports filed with the Securities and Exchange Commission (SEC). Other risks may be detailed from time to time in reports to be filed with the SEC. NightHawk does not undertake any obligation to publicly update its forward- looking statements based on events or circumstances after the date hereof.
Earnings Conference Call
The fourth quarter conference call will be held today, February 18, 2009 at 4:30 p.m. eastern. A live webcast of the conference call, as well as a replay, will be available online on the company's corporate website at http://www.nighthawkrad.net. Participants can also access the call by dialing 800-240-2430 (or 303-262-2140 for international callers). A replay of the call will be available approximately two hours after the conclusion of the call and will remain available until midnight (ET) on Wednesday, March 11, 2009. To access the replay, dial 800-405-2236 or 303-590-3000 (for international callers) and enter the conference ID number: 11126048.
About NightHawk
NightHawk Radiology (Nasdaq:NHWK) is leading the transformation of the practice of radiology by providing high-quality, cost-effective solutions to radiology groups and hospitals throughout the United States. NightHawk provides the most complete suite of solutions, including professional services, business services, and its advanced, proprietary clinical workflow technology, all designed to increase efficiencies and improve the quality of patient care and the lives of physicians who provide it. NightHawk's team of U.S. board-certified, state-licensed, and hospital-privileged physicians located in the United States, Australia, and Switzerland, provides services 24 hours a day, seven days a week, to approximately 1,560 sites, representing approximately 27% of all hospitals in the United States. For more information, visit http://www.nighthawkrad.net.
The NightHawk Radiology Holdings, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5531
Presentation of Non-GAAP Financial Information
The presentation of adjusted net income and adjusted earnings per diluted share are not measures of financial performance under GAAP and should not be considered a substitute for or superior to GAAP. Management believes these non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses that may not be indicative of our core results and provide consistency in financial reporting. Specifically, the company's non-GAAP adjusted net income measure, and related adjusted earnings per diluted share, described in this release exclude (i) the non-cash charges related to our stock-based compensation, (ii) the non-cash expense associated with the amortization of intangibles associated with acquisitions, (iii) the non-cash expenses (or credits) associated with adjustments to our IBNR reserve (incurred but not reported medical liability reserves), (iv) the one-time tax credit from a change in tax methodology from prior periods, (v) the restructuring charges related to facilities closures, (vi) the employee severance expense, (vii) the non-recurring charges related to fixed asset retirements, and (viii) for 2007 only, the one-time charge related to the settlement of an acquisition related legal dispute with a former advisor. We exclude the non-cash charges related to our stock-based compensation due to the varying valuation methodologies, subjective assumptions and the variety of types of awards that companies can use when applying FAS 123R along with the fact that a substantial portion of our outstanding options and restricted stock units are held by our independent contractor physicians and require accounting treatment that differs from the accounting treatment for options and restricted stock units held by employees.
The company provides non-GAAP adjusted net income and related adjusted earnings per diluted share as financial measures because management believes these measures provide greater transparency with respect to information used by management in its financial and operational decision making and to enhance investors' overall understanding of our current financial performance and our future prospects. For reconciliation of our non-GAAP financial measures to the most applicable GAAP financial measure, please refer to the information included in the attached tables of this press release and in the Investor Relations Section of our corporate website.
"NHWKF"
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NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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December 31, December 31,
ASSETS 2008 2007
------------ ------------
(in thousands, except
per share amts)
Current assets:
Cash and cash equivalents $ 47,160 $ 31,956
Marketable securities -- 30,625
Trade accounts receivable, net 24,393 25,665
Deferred income taxes 855 655
Prepaids and other current assets 6,231 2,812
------------ ------------
Total current assets 78,639 91,713
Property and equipment, net 10,528 10,555
Goodwill 68,718 68,601
Intangible assets, net 79,616 87,133
Deferred income taxes 4,082 1,251
Other assets, net 3,566 4,213
------------ ------------
Total $ 245,149 $ 263,466
============ ============
LIABILITIES
Current liabilities:
Accounts payable $ 6,327 $ 6,072
Accrued expenses and other liabilities 3,617 12,881
Accrued payroll and related benefits 3,783 4,569
Long-term debt, due within one year 955 1,000
------------ ------------
Total current liabilities 14,682 24,522
Professional liability reserve 3,705 3,038
Long-term debt 93,145 98,500
Other liabilities 3,850 2,717
------------ ------------
Total liabilities 115,382 128,777
------------ ------------
STOCKHOLDERS' EQUITY
Common stock-150,000,000 shares
authorized; $.001 par value;
27,590,774 and 30,312,322 shares
issued and outstanding at
December 31, 2008 and
December 31, 2007, respectively 28 30
Additional paid-in capital 237,429 249,274
Retained earnings (deficit) (103,516) (112,957)
Accumulated other comprehensive income
(deficit) (4,174) (1,658)
------------ ------------
Total stockholders' equity 129,767 134,689
------------ ------------
Total $ 245,149 $ 263,466
============ ============
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NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
--------------------------------------------------------------------
Three months ended Twelve months ended
December 31, December 31,
2008 2007 2008 2007
---------- ---------- ---------- ----------
(in thousands, except (in thousands, except
per share amts) per share amts)
Service revenue $ 39,720 $ 42,706 $ 167,607 $ 151,662
Operating costs
and expenses:
Professional
services
(includes non-cash
compensation
expense of $162,
$862, $1,676 and
$4,429) 15,662 16,785 68,932 63,618
Sales, general, and
administrative
(includes non-cash
compensation
expense of $1,105,
$4,758, $6,655 and
$10,601) 15,709 17,146 65,683 54,018
Depreciation and
amortization 2,776 2,648 11,362 7,899
---------- ---------- ---------- ----------
Total operating
costs and
expenses 34,147 36,579 145,977 125,535
---------- ---------- ---------- ----------
Operating income 5,573 6,127 21,630 26,127
Other income
(expense):
Interest expense (2,042) (2,221) (8,508) (5,885)
Interest income 170 662 1,380 3,130
Other, net 95 (3) 197 (63)
---------- ---------- ---------- ----------
Total other
income (expense) (1,777) (1,562) (6,931) (2,818)
---------- ---------- ---------- ----------
Income before
income taxes 3,796 4,565 14,699 23,309
Income tax expense 1,139 1,505 5,257 8,615
---------- ---------- ---------- ----------
Net income $ 2,657 $ 3,060 $ 9,442 $ 14,694
========== ========== ========== ==========
Earnings per common
share:
Basic $ 0.09 $ 0.10 $ 0.32 $ 0.49
Diluted $ 0.09 $ 0.10 $ 0.31 $ 0.47
Weighted averages of
common shares
outstanding:
Basic 28,506,783 30,260,996 29,482,536 30,083,080
Diluted 29,516,571 31,319,605 30,561,942 31,083,971
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NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
--------------------------------------------------------------------
Three months ended Twelve months ended
December 31, December 31,
2008 2007 2008 2007
------- ------- ------- --------
(in thousands) (in thousands)
Cash flows from operating
activities:
Net income $ 2,657 $ 3,060 $ 9,442 $ 14,694
Adjustments to reconcile
net income to net cash
provided by operating
activities:
Depreciation and
amortization 2,776 2,648 11,362 7,899
Accretion of premiums on
marketable securities -- (70) (21) (355)
Amortization of debt
issuance costs 162 161 648 395
Loss on disposal of fixed
assets and other, net 64 222 646 199
Deferred income taxes (647) (1,303) (1,210) (6,098)
Non-cash stock
compensation expense 1,269 5,621 8,330 15,030
Excess tax benefit from
exercise of stock options -- (300) (234) (1,625)
Provision for doubtful
accounts 658 56 1,127 404
Changes in operating
assets and liabilities
(excluding effects of
acquisitions):
Trade accounts
receivable, net 1,643 (672) 371 (8,245)
Prepaid expenses and
other assets (3,409) (179) (3,420) (274)
Accounts payable 427 (282) 527 2,701
Accrued expenses and
other liabilities (397) (994) 346 (641)
Accrued payroll and
related benefits 954 (1,789) 1,173 (447)
------- ------- ------- --------
Net cash provided by
operating activities 6,157 6,179 29,087 23,637
Cash flows from investing
activities:
Purchase of marketable
securities -- (7,730) (26,390) (34,221)
Proceeds from maturities of
marketable securities -- 5,635 33,755 41,763
Proceeds from the sale of
marketable securities -- -- 23,303 --
Purchase of property and
equipment (644) (1,047) (4,757) (4,546)
Cash and cash equivalents
from acquisitions, net -- -- 339
Cash paid for acquisitions -- (1,024) (7,650) (126,760)
------- ------- ------- --------
Net cash provided by
(used in) investing
activities (644) (4,166) 18,261 (123,425)
Cash flows from financing
activities:
Repayment of debt (4,650) (250) (5,400) (11,366)
Settlement of interest
rate swaps (5,331) -- (5,331) --
Proceeds from exercise of
stock options 4 201 559 1,163
Excess tax benefit from
exercise of stock options -- 300 234 1,625
Purchase of common stock
shares (3,615) -- (22,206) --
Proceeds from debt -- -- -- 100,000
Payment on line of credit -- -- -- (1,679)
Debt issuance costs paid -- (21) -- (4,500)
------- ------- ------- --------
Net cash (used in)
provided by financing
activities (13,592) 230 (32,144) 85,243
------- ------- ------- --------
Net increase in cash and cash
equivalents (8,079) 2,243 15,204 (14,545)
Cash and cash
equivalents--beginning of
period 55,239 29,713 31,956 46,501
------- ------- ------- --------
Cash and cash
equivalents--end of period $47,160 $31,956 $47,160 $31,956
------- ------- ------- --------
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NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
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RECONCILIATION BETWEEN GAAP AND ADJUSTED NET INCOME
--------------------------------------------------------------------
Three months ended
-----------------------------------------
December 31, 2008
-----------------
(in thousands, except per share amts)
GAAP Adjustments As Adjusted
---- ----------- -----------
Service revenue $ 39,720 $ 39,720
Operating costs and
expenses:
Professional services(1) 15,662 170 15,832
Sales, general, and
administrative(2) 15,709 (1,107) 14,602
Depreciation and
amortization(3) 2,776 (1,869) 907
----------- ----------- -----------
Total operating costs
and expenses 34,147 (2,806) 31,341
----------- ----------- -----------
Operating income 5,573 2,806 8,379
Other income (expense):
Interest expense (2,042) (2,042)
Interest income 170 170
Other, net 95 95
----------- ----------- -----------
Total other income
(expense) (1,777) (1,777)
----------- ----------- -----------
Income before income
taxes 3,796 2,806 6,602
Income tax expense(4) 1,139 1,397 2,536
----------- ----------- -----------
Net income $ 2,657 $ 1,409 $ 4,066
=========== =========== ===========
Earnings per share:
Basic $ 0.09 $ 0.14
Diluted $ 0.09 $ 0.14
Weighted average shares
outstanding:
Basic 28,506,783 28,506,783
Diluted 29,516,571 29,516,571
Three months ended
-----------------------------------------
December 31, 2007
-----------------
(in thousands, except per share amts)
GAAP Adjustments As Adjusted
---- ----------- -----------
Service revenue $ 42,706 $ 42,706
Operating costs and
expenses:
Professional services(1) $ 16,785 (451) 16,334
Sales, general, and
administrative(2) 17,146 (5,237) 11,909
Depreciation and
amortization(3) 2,648 (1,811) 837
----------- ----------- -----------
Total operating costs
and expenses 36,579 (7,499) 29,080
----------- ----------- -----------
Operating income 6,127 7,499 13,626
Other income (expense):
Interest expense (2,221) (2,221)
Interest income 662 662
Other, net (3) (3)
----------- ----------- -----------
Total other income
(expense) (1,562) (1,562)
----------- ----------- -----------
Income before income
taxes 4,565 7,499 12,064
Income tax expense(4) 1,505 2,466 3,971
----------- ----------- -----------
Net income $ 3,060 $ 5,033 $ 8,093
=========== =========== ===========
Earnings per share:
Basic $ 0.10 $ 0.27
Diluted $ 0.10 $ 0.26
Weighted average shares
outstanding:
Basic 30,260,996 30,260,996
Diluted 31,319,605 31,319,605
(1) Adjustments to the 2008 GAAP amounts represent $162 of non-cash
stock compensation expense and a credit of $332 of non-cash
malpractice reserve changes. The 2007 adjustments to GAAP amounts
represent $862 of non-cash stock compensation expense and a credit
of $411 of non-cash malpractice reserve changes.
(2) Adjustments to the 2008 GAAP amounts represent $1,107 of
non-cash stock compensation expense. The 2007 adjustments to GAAP
amounts represent $4,759 of non-cash stock compensation expense and
$478 for a one time charge related to the settlement of an
acquisition related legal dispute with a former advisor.
(3) Adjustment to GAAP amounts represent non-cash expense associated
with the amortization of intangibles associated with acquisitions.
(4) Represents the tax effect on the adjustments to GAAP. In
addition, in 2008 we adjusted out a tax credit of $358 from a change
in tax methodology for prior periods.
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NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
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CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
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RECONCILIATION BETWEEN GAAP AND ADJUSTED NET INCOME
--------------------------------------------------------------------
Twelve months ended
-----------------------------------------
December 31, 2008
-----------------
(in thousands, except per share amts)
GAAP Adjustments As Adjusted
---- ----------- -----------
Service revenue $ 167,607 $ 167,607
Operating costs and
expenses:
Professional services(1) 68,932 (2,345) 66,587
Sales, general, and
administrative(2) 65,683 (7,832) 57,851
Depreciation and
amortization(3) 11,362 (7,516) 3,846
----------- ----------- -----------
Total operating costs
and expenses 145,977 (17,693) 128,284
----------- ----------- -----------
Operating income 21,630 17,693 39,323
Other income (expense):
Interest expense (8,508) (8,508)
Interest income 1,380 1,380
Other, net 197 197
----------- ----------- -----------
Total other income
(expense) (6,931) (6,931)
----------- ----------- -----------
Income before income
taxes 14,699 17,693 32,392
Income tax expense(4) 5,257 7,094 12,351
----------- ----------- -----------
Net income $ 9,442 $ 10,599 $ 20,041
=========== =========== ===========
Earnings per share:
Basic $ 0.32 $ 0.68
Diluted $ 0.31 $ 0.66
Weighted average shares
outstanding:
Basic 29,482,536 29,482,536
Diluted 30,561,942 30,561,942
Twelve months ended
-----------------------------------------
December 31, 2007
-----------------
(in thousands, except per share amts)
GAAP Adjustments As Adjusted
---- ----------- -----------
Service revenue $ 151,662 $ 151,662
Operating costs and
expenses:
Professional services(1) $ 63,618 (5,467) 58,151
Sales, general, and
administrative(2) 54,018 (11,079) 42,939
Depreciation and
amortization(3) 7,899 (5,030) 2,869
----------- ----------- -----------
Total operating costs
and expenses 125,535 (21,576) 103,959
----------- ----------- -----------
Operating income 26,127 21,576 47,703
Other income (expense):
Interest expense (5,885) (5,885)
Interest income 3,130 3,130
Other, net (63) (63)
----------- ----------- -----------
Total other income
(expense) (2,818) (2,818)
----------- ----------- -----------
Income before income
taxes 23,309 21,576 44,885
Income tax expense(4) 8,615 7,983 16,598
----------- ----------- -----------
Net income $ 14,694 $ 13,593 $ 28,287
=========== =========== ===========
Earnings per share:
Basic $ 0.49 $ 0.94
Diluted $ 0.47 $ 0.91
Weighted average shares
outstanding:
Basic 30,083,080 30,083,080
Diluted 31,083,971 31,083,971
(1) Adjustments to the 2008 GAAP amounts represent $1,676 of
non-cash stock compensation expense and $669 of non-cash malpractice
reserve changes. The 2007 adjustments to GAAP amounts represent
$4,429 of non-cash stock compensation expense and $1,038 of non-cash
malpractice reserve changes.
(2) Adjustments to the 2008 GAAP amounts represent $6,654 of
non-cash stock compensation expense, $703 of restructuring charges,
$164 of employee severance expenses and $311 of non-cash fixed asset
charges. The 2007 adjustments to GAAP amounts represent $10,601 of
non-cash stock compensation expense and $478 for a one-time charge
related to the settlement of an acquisition related legal dispute with a
former advisor.
(3) Adjustment to GAAP amounts represent non-cash expense associated
with the amortization of intangibles associated with acquisitions.
(4) Represents the tax effect on the adjustments to GAAP. In
addition, in 2008 we adjusted out a tax credit of $358 from a change
in tax methodology for prior periods.
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NIGHTHAWK RADIOLOGY HOLDINGS, INC. AND SUBSIDIARIES
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HISTORICAL VOLUMES
--------------------------------------------------------------------
---------------- ------------- ---------------------------
Growth Rates
Quarter Year Total Volumes Sequential Year over Year
---------------- ------------- ---------------------------
Q1 2004 120,554 36% 210%
Q2 2004 152,640 27% 178%
Q3 2004 182,737 20% 133%
Q4 2004 193,883 6% 119%
--------- ---- ----
FY 2004 649,814 149% 149%
Q1 2005 222,341 15% 84%
Q2 2005 266,023 20% 74%
Q3 2005 298,759 12% 63%
Q4 2005 328,815 10% 70%
--------- ---- ----
FY 2005 1,115,938 72% 72%
Q1 2006 364,155 11% 64%
Q2 2006 417,269 15% 57%
Q3 2006 463,028 11% 55%
Q4 2006 448,084 (3%) 36%
--------- ---- ----
FY 2006 1,692,536 52% 52%
Q1 2007 484,477 8% 33%
Q2 2007 731,418 51% 75%
Q3 2007 787,673 8% 70%
Q4 2007 730,992 (7%) 63%
--------- ---- ----
FY 2007 2,734,560 62% 62%
Q1 2008 745,075 2% 54%
Q2 2008 780,108 5% 7%
Q3 2008 791,613 1% 1%
Q4 2008 718,299 (9%) (2%)
--------- ---- ----
FY 2008 3,035,095 11% 11%
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---------------- -----------------------------------------------
Acquisition Contribution - First 12 months
Quarter Year DayHawk ATN TDS Radlinx ERS
---------------- -----------------------------------------------
Q1 2004 -- -- -- -- --
Q2 2004 -- -- -- -- --
Q3 2004 -- -- -- -- --
Q4 2004 8,316 -- -- -- --
FY 2004
Q1 2005 15,850 -- -- -- --
Q2 2005 17,355 -- -- -- --
Q3 2005 18,905 -- -- -- --
Q4 2005 8,480 29,640 -- -- --
FY 2005
Q1 2006 -- 32,130 -- -- --
Q2 2006 -- 32,622 -- -- --
Q3 2006 -- 32,086 -- -- --
Q4 2006 -- -- -- -- --
FY 2006
Q1 2007 -- -- 27,089 -- --
Q2 2007 -- -- 51,095 137,611 --
Q3 2007 -- -- 52,708 143,339 --
Q4 2007 -- -- 51,644 124,394 --
FY 2007
Q1 2008 -- -- 23,147 117,693 17,457
Q2 2008 -- -- -- 4,817 26,010
Q3 2008 -- -- -- -- 23,655
Q4 2008 -- -- -- -- 17,144
FY 2008
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