Alliance HealthCare Services, Inc. (NASDAQ: AIQ) (the “Company,”
“Alliance,” “we” or “our”), a leading national provider of
outsourced radiology, oncology and interventional services,
announced today the results for the quarter and six months ended
June 30, 2016.
Second Quarter and Year-to-Date 2016 Highlights
- The Company reported revenue totaling
$125.3 million for the second quarter, a $6.8 million or 5.7%
increase over the second quarter of last year, and $249.0 million
year-to-date, a $21.1 million or 9.3% increase over prior
year.
- On a sequential basis vs. first quarter
of 2016, revenue increased $1.6 million or 1.3%, and Adjusted
EBITDA increased $4.1 million or 13.4%.
- Net income attributable to Alliance was
$2.5 million for the quarter, a $4.4 million increase over second
quarter of prior year, and $1.3 million year-to-date, a $1.5
million increase over prior year.
- GAAP Net Income per Share was $0.23 for
the quarter and Adjusted Net Income per Share (as defined below)
was $0.37.
- GAAP Net Income per Share was $0.12 for
the first half of 2016 and Adjusted Net Income per Share was
$0.42.
- The Company generated $34.4 million of
Adjusted EBITDA (as defined below) for the quarter, compared to
$34.0 million in the second quarter of prior year, and $64.8
million of Adjusted EBITDA year-to-date, compared to $64.1 million
in 2015.
- The Company continued to generate
strong cash flow, with $35.2 million of quarterly operating cash
flow, compared to $26.9 million in the second quarter prior year,
and $57.9 million of year-to-date operating cash flow, compared to
$47.7 million last year.
- Alliance Radiology reported strong
same-store volume growth of +2.0% for MRI and +5.8% for PET/CT for
the quarter.
- Alliance Interventional revenue
increased $3.2 million, or 39.0%, to $11.2 million for the
quarter.
- Based on our results thus far this
year, we are reaffirming full-year 2016 guidance for revenue
ranging from $505-$535 million and Adjusted EBITDA of $130-$150
million.
2016 Financial Results
“Our solid results from the second quarter reflect growth, both
sequentially and year-over-year, across our core business segments
in Radiology and Oncology and positive contributions from
Interventional Services. Across each of our businesses, actions we
have taken to augment our sales and business development teams, and
enhance the value proposition we provide our customers are
improving our competitive position and are key elements of our
strong performance in retaining existing customers and securing new
customers,” stated Tom Tomlinson, Chief Executive Officer and
President of Alliance HealthCare Services. “We continued the
positive momentum in our Radiology business with another
consecutive quarter of net new sales growth driven by strong
same-store growth for MRI and PET/CT and improved performance in
customer retention and contract renewal. We are proud of our
continued progress in Radiology as this marks the ninth consecutive
quarter of same-store volume growth for MRI and sixth consecutive
quarter of growth for PET/CT. Alliance Oncology continues to seek
and build strong partnerships with high profile customers, adding
Saint Peter’s University Hospital on June 1, along with the
expectations of one or two additional transactions in the coming
months. We remain committed to our long-term strategic investment
in Alliance Interventional, and we are excited about the growth
opportunities to expand our footprint as well as its role in
enhancing our value proposition through our integrated value-added
business model.”
Tomlinson continued, “The second quarter results also highlight
the success we are driving from initiatives focused on balance
sheet management. Alliance generated very strong cash flows,
allowing us to reduce leverage, strengthen our balance sheet, and
make necessary investments to support customer retention and
growth. Our strong relationship with Thai Hot, our new majority
shareholder, and the other independent Board Members is a solid
foundation as we work closely with them to evaluate opportunities
to enhance our long-term growth strategy both domestically and in
China. Our results and strategic developments for the quarter
are a testament to the health of our business, and we look forward
to continuing to see revenue and EBITDA growth through the second
half of 2016. As a result, we are reaffirming full-year 2016
guidance of revenue ranging from $505-$535 million and Adjusted
EBITDA of $130-$150 million.”
Revenue for the second quarter of 2016 increased to $125.3
million, compared to $118.5 million in the second quarter of 2015.
This increase was primarily due to an increase in Interventional
Services revenue of $3.2 million, in MRI revenue of $3.6 million
and in Oncology revenue of $0.5 million, partially offset by a
decrease in PET/CT revenue of $0.5 million, when compared to the
second quarter of 2015.
Revenue for the first half of 2016 increased to $249.0 million,
compared to $227.9 million in 2015. This increase was primarily due
to an increase in Interventional Services revenue of $11.0 million,
in MRI revenue of $8.2 million and in Oncology revenue of $2.4
million, partially offset by a decrease of $0.3 million in PET/CT
revenue. Other revenues remained consistent with the first half of
2015.
Alliance’s net income, computed in accordance with GAAP, totaled
$2.5 million in the second quarter of 2016 compared to a net loss
of $2.0 million in the second quarter of 2015. Net income, computed
in accordance with GAAP, totaled $1.3 million for the first half of
2016, compared to a net loss of $0.2 million in 2015.
Alliance’s Adjusted EBITDA for the second quarter of 2016
increased 1.3% to $34.4 million from $34.0 million in the second
quarter of 2015 and increased 1.1% for the first half of 2016 to
$64.8 million from $64.1 million in 2015. The increases were
primarily driven by our expansion into the Interventional Services
line of business and increased total volume of MRI scans, partially
offset by planned MRI and PET/CT price reductions.
Net income per share on a diluted basis, computed in accordance
with GAAP, was $0.23 per share in the second quarter of 2016
compared to net loss of $(0.18) per share for same quarter of 2015.
Net income (loss) per share on a diluted basis was impacted by
$0.14 in the second quarter of 2016 and $0.52 in the second quarter
of 2015 due to restructuring charges, severance and related costs,
transaction and shareholder transaction costs, legal matter
expenses and differences in the GAAP income tax rate from our
historical income tax rate of 42.5%. Excluding these charges,
adjusted net income per diluted share – non-GAAP was $0.37 for the
second quarter 2016 and $0.34 for the same quarter of 2015.
Net income per share on a diluted basis, computed in accordance
with GAAP, was $0.12 per share for the first half of 2016 compared
to net loss of $(0.02) per share in 2015. Net income (loss) per
share on a diluted basis was impacted by $0.30 in the first half of
2016 and $0.66 in 2015 due to restructuring charges, severance and
related costs, transaction and shareholder transaction costs, legal
matter expenses and differences in the GAAP income tax rate from
our historical income tax rate of 42.5%. Excluding these charges,
adjusted net income per diluted share – non-GAAP was $0.42 for the
first half of 2016 and $0.64 for the same period in 2015.
Cash flows provided by operating activities totaled $35.2
million in the second quarter of 2016, compared to $26.9 million in
the second quarter of 2015. In the second quarter of 2016, total
capital expenditures, including cash and financed capital
expenditures, capital leases and deposits on equipment, were $27.2
million compared to $26.9 million in the second quarter of
2015.
Cash flows provided by operating activities totaled $57.9
million in the first half of 2016, compared to $47.7 million in
2015. During the six months ended June 30, 2016, total capital
expenditures, including cash and financed capital expenditures,
capital leases and deposits on equipment, were $49.3 million
compared to $37.6 million in 2015.
Alliance’s gross debt, defined as total long-term debt
(including current maturities but excluding the impact of deferred
financing costs), decreased $5.6 million to $572.1 million at June
30, 2016 from $577.7 million at December 31, 2015. Alliance’s net
debt, defined as total long-term debt (including current maturities
but excluding the impact of deferred financing costs) less cash and
cash equivalents, increased $8.2 million to $547.8 million at June
30, 2016 from $539.6 million at December 31, 2015. Cash and cash
equivalents were $24.3 million at June 30, 2016 and $38.1 million
at December 31, 2015.
Alliance’s total debt, as defined above, divided by the last
twelve months Consolidated Adjusted EBITDA was 4.15x for the twelve
month period ended June 30, 2016, compared to 4.10x for the year
ended December 31, 2015. Alliance’s net debt, as defined above,
divided by the last twelve months Consolidated Adjusted EBITDA was
3.97x for the twelve month period ended June 30, 2016, compared to
3.83x for the year ended December 31, 2015.
Full Year 2016 Guidance
Alliance’s full year 2016 guidance ranges are as follows:
Ranges (dollars in millions) Revenue $505 -
$535 Adjusted EBITDA $130 - $150 Capital expenditures $75 - $90
Maintenance $45 - $55 Growth $30 - $35
Decrease/(Increase) in long-term debt, net
of the change in cash and cash equivalents (before investments in
acquisitions), before growth capital expenditures or "free cash
flow before growth capital expenditures"
$20 - $40
Decrease/(Increase) in long-term debt, net
of the change in cash and cash equivalents (before investments in
acquisitions), after growth capital expenditures or "free cash flow
after growth capital expenditures"
($15) - ($25)
Second Quarter 2016 Earnings Conference Call
Investors and all others are invited to listen to a conference
call discussing second quarter 2016 results. The conference call is
scheduled for Thursday, August 4, 2016 at 5 p.m. Eastern Time.
Additionally, a live webcast of the call will be available on the
Company’s website at www.alliancehealthcareservices-us.com. Click
on “About Us,” then, “Investor Relations.” You will find the Audio
Presentation in the “News & Events” section. A replay of the
webcast will be available on the Company’s website until September
4, 2016.
The conference call can be accessed at 877.638.4550
(International callers can dial 973.582.2737). Interested parties
should call at least five minutes prior to the call to register. A
telephone replay will be available until September 4, 2016. The
telephone replay can be accessed by calling 800.585.8367. The
conference call identification number is 54025886.
Definition of Non-GAAP Measures
Adjusted EBITDA and Adjusted Net Income Per Share are not
measures of financial performance under generally accepted
accounting principles in the United States (“GAAP”).
For a more detailed discussion of these non-GAAP financial
measures and a reconciliation to the most directly comparable GAAP
financial measure, see the section entitled “Non-GAAP Measures”
included in the tables following this release.
About Alliance HealthCare Services
Alliance HealthCare Services (NASDAQ: AIQ) is a leading national
provider of outsourced healthcare services to hospitals and
providers. We also operate freestanding outpatient radiology,
oncology and interventional services clinics, and Ambulatory
Surgical Centers (“ASC”) that are not owned by hospitals or
providers. Diagnostic radiology services are delivered through the
Radiology Division (Alliance HealthCare Radiology), radiation
oncology services are delivered through the Oncology Division
(Alliance Oncology), and interventional and pain management
services are delivered through the Interventional Services Division
(Alliance Interventional). Alliance is the nation’s largest
provider of advanced diagnostic mobile imaging services, an
industry-leading operator of fixed-site imaging centers, and a
leading provider of stereotactic radiosurgery nationwide. As of
June 30, 2016, Alliance operated 621 diagnostic radiology and
radiation therapy systems, including 112 fixed-site radiology
centers across the country, and 34 radiation therapy centers and
SRS facilities. With a strategy of partnering with hospitals,
health systems and physician practices, Alliance provides quality
clinical services for over 1,000 hospitals and other healthcare
partners in 45 states, where approximately 2,400 Alliance Team
Members are committed to providing exceptional patient care and
exceeding customer expectations. For more information, visit
www.alliancehealthcareservices-us.com.
Forward-Looking Statements
This press release contains forward-looking statements relating
to future events, including statements related to the Company’s
long-term growth strategy and efforts to diversify its business
model, the Company’s plans to expand its new Interventional
Services Division, both organically and through one or more
acquisitions, the Company’s expectations regarding growth across
the Company’s divisions, the expansion of its service footprint and
revenue growth, maximizing shareholder value, and the Company’s
Full Year 2016 Guidance, including its forecasts of revenue,
Adjusted EBITDA, capital expenditures, and increase in long-term
debt. In this context, forward-looking statements often address the
Company’s expected future business and financial results and often
contain words such as “expects,” “anticipates,” “intends,” “plans,”
“believes,” “seeks” or “will.” Forward-looking statements by their
nature address matters that are uncertain and subject to risks.
Such uncertainties and risks include: changes in the preliminary
financial results and estimates due to the restatement or review of
the Company’s financial statements; the nature, timing and amount
of any restatement or other adjustments; the Company’s ability to
make timely filings of its required periodic reports under the
Securities Exchange Act of 1934; issues relating to the Company’s
ability to maintain effective internal control over financial
reporting and disclosure controls and procedures; the Company’s
high degree of leverage and its ability to service its debt;
factors affecting the Company’s leverage, including interest rates;
the risk that the counterparties to the Company’s interest rate
swap agreements fail to satisfy their obligations under these
agreements; the Company’s ability to obtain financing; the effect
of operating and financial restrictions in the Company’s debt
instruments; our ability to comply with reporting obligations and
other covenants under our debt instruments, the failure of which
could cause the debt to become due; the accuracy of the Company’s
estimates regarding its capital requirements; the effect of intense
levels of competition and overcapacity in the Company’s industry;
changes in the methods of third party reimbursements for diagnostic
imaging and radiation oncology services; fluctuations or
unpredictability of the Company’s revenues, including as a result
of seasonality; changes in the healthcare regulatory environment;
the Company’s ability to keep pace with technological developments
within its industry; the growth or lack thereof in the market for
radiology, oncology, interventional and other services; the
disruptive effect of hurricanes and other natural disasters;
adverse changes in general domestic and worldwide economic
conditions and instability and disruption of credit and equity
markets; difficulties the Company may face in connection with
recent, pending or future acquisitions, including unexpected costs
or liabilities resulting from the acquisitions, diversion of
management’s attention from the operation of the Company’s
business, costs, delays and impediments to completing the
acquisitions, and risks associated with integration of the
acquisitions; and other risks and uncertainties identified in the
Risk Factors section of the Company’s Form 10-K for the year ended
December 31, 2015, filed with the Securities and Exchange
Commission (the “SEC”), as may be modified or supplemented by our
subsequent filings with the SEC. These uncertainties may cause
actual future results or outcomes to differ materially from those
expressed in the Company’s forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company
does not undertake to update its forward-looking statements except
as required under the federal securities laws.
ALLIANCE HEALTHCARE SERVICES, INC. CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share amounts)
Quarter Ended June 30, Six Months Ended June
30, (unaudited) (unaudited) 2016
2015 2016
2015 Revenues $ 125,317 $ 118,504 $
249,041 $ 227,933 Costs and expenses: Cost of revenues, excluding
depreciation and amortization 69,939 67,485 140,853 129,371
Selling, general and administrative expenses 23,175 20,800 48,440
41,755 Transaction costs 431 1,113 848 1,532 Shareholder
transaction costs 1,498 — 2,507 — Severance and related costs 708
195 2,424 454 Impairment charges — 6,670 — 6,746 Depreciation
expense 13,730 12,072 26,778 23,705 Amortization expense 2,494
2,495 4,937 4,530 Interest expense and other, net 8,872 6,904
16,367 12,922 Other (income) and expense, net (3,546 )
486 (4,334 ) 127 Total costs and
expenses 117,301 118,220 238,820
221,142
Income before income taxes, earnings from
unconsolidated investees, and noncontrolling interest
8,016 284 10,221 6,791 Income tax expense (benefit) 2,221 (1,366 )
1,275 206 Earnings from unconsolidated investees (393 )
(1,292 ) (645 ) (2,455 ) Net income 6,188
2,942 9,591 9,040 Less: Net income attributable to noncontrolling
interest (3,729 ) (4,903 ) (8,322 )
(9,250 )
Net income (loss) attributable to Alliance
HealthCare Services, Inc.
$ 2,459 $ (1,961 ) $ 1,269 $ (210 ) Comprehensive
income (loss), net of taxes
Net income (loss) attributable to Alliance
HealthCare Services, Inc.
$ 2,459 $ (1,961 ) $ 1,269 $ (210 ) Unrealized gain (loss) on
hedging transactions, net of taxes 84 (13 )
46 (141 ) Comprehensive income (loss), net of
taxes: $ 2,543 $ (1,974 ) $ 1,315 $ (351 )
Income (loss) per common share
attributable to Alliance HealthCare Services, Inc.:
Basic $ 0.23 $ (0.18 ) $ 0.12 $ (0.02 ) Diluted $
0.23 $ (0.18 ) $ 0.12 $ (0.02 )
Weighted average number of shares of
common stock and common stock equivalents:
Basic 10,882 10,715 10,771 10,714 Diluted 10,893 10,836 10,796
10,839
ALLIANCE HEALTHCARE SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
June 30, December 31,
(unaudited) (audited) 2016
2015 ASSETS Current assets: Cash and
cash equivalents $ 24,319 $ 38,070 Accounts receivable, net of
allowance for doubtful accounts 73,514 73,208 Prepaid expenses
13,191 13,463 Other receivables 2,532 3,206
Total current assets 113,556 127,947 Plant, property and
equipment, net 204,447 177,188 Goodwill 106,129 102,782 Other
intangible assets, net 164,587 162,923 Other assets 25,858
32,820 Total assets $ 614,577 $ 603,660
LIABILITIES AND STOCKHOLDERS’ EQUITY Current
liabilities: Accounts payable $ 24,973 $ 20,796 Accrued
compensation and related expenses 22,753 19,933 Accrued interest
payable 3,253 3,323 Current portion of long-term debt 19,174 17,732
Current portion of obligations under capital leases 2,606 2,674
Other accrued liabilities 34,783 36,453
Total current liabilities 107,542 100,911 Long-term debt, net of
current portion and deferred financing costs 509,800 540,353
Obligations under capital leases, net of current portion 11,524
10,332 Deferred income taxes 23,960 23,020 Other liabilities
7,149 6,664 Total liabilities 659,975 681,280
Stockholders’ deficit: Common stock 109 108 Treasury stock
(3,138 ) (3,138 ) Additional paid-in capital 60,635 29,297
Accumulated comprehensive loss (465 ) (511 ) Accumulated deficit
(197,124 ) (198,393 ) Total stockholders’ deficit
attributable to Alliance HealthCare Services, Inc. (139,983 )
(172,637 ) Noncontrolling interest 94,585
95,017 Total stockholders’ deficit (45,398 )
(77,620 ) Total liabilities and stockholders’ deficit $ 614,577
$ 603,660
ALLIANCE HEALTHCARE SERVICES,
INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (in thousands) Six
Months Ended June 30, 2016
2015 Operating activities: Net income $ 9,591
$ 9,040 Adjustments to reconcile net income to net cash provided by
operating activities: Provision for doubtful accounts 1,356 1,054
Share-based payment 1,780 819 Depreciation and amortization 31,715
28,235 Amortization of deferred financing costs 3,312 2,098
Accretion of discount on long-term debt 254 232 Adjustment of
derivatives to fair value (45 ) 98 Distributions more than
undistributed earnings from investees 107 189 Deferred income taxes
940 (697 ) Gain on sale of assets (169 ) (406 ) Changes in fair
value of contingent consideration related to acquisitions (3,640 )
— Impairment charges — 6,746 Excess tax benefit from share-based
payment arrangements 436 5 Changes in operating assets and
liabilities, net of the effects of acquisitions: Accounts
receivable (1,389 ) (577 ) Prepaid expenses (119 ) (1,499 ) Other
receivables 674 (242 ) Other assets 4,240 534 Accounts payable
2,578 627 Accrued compensation and related expenses 2,820 340
Accrued interest payable (70 ) (31 ) Income taxes payable (36 ) 131
Other accrued liabilities 3,614 964 Net
cash provided by operating activities 57,949
47,660
Investing activities: Equipment
purchases (33,975 ) (26,382 ) Increase in deposits on equipment
(13,847 ) (9,935 ) Acquisitions, net of cash received (6,659 )
(24,061 ) Proceeds from sale of assets 370 520
Net cash used in investing activities (54,111 )
(59,858 )
ALLIANCE HEALTHCARE SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(Unaudited) (in thousands) Six
Months Ended June 30, 2016
2015 Financing activities: Principal payments
on equipment debt and capital lease obligations (8,035 ) (4,639 )
Proceeds from equipment debt 4,809 15,691 Principal payments on
term loan facility (2,600 ) (7,351 ) Proceeds from term loan
facility — 29,850 Principal payments on revolving loan facility
(24,000 ) (28,000 ) Proceeds from revolving loan facility 21,000
26,000 Payments of debt issuance costs and deferred financing costs
(25,059 ) (654 ) Noncontrolling interest in subsidiaries (11,703 )
(8,353 ) Excess tax benefit from share-based payment arrangements
(436 ) (5 ) Issuance of common stock 1 — Proceeds from exercise of
stock options 614 25 Settlement of contingent consideration related
to acquisitions (810 ) — Proceeds from shareholder transaction
28,630 — Net cash (used in) provided by
financing activities (17,589 ) 22,564 Net
(decrease) increase in cash and cash equivalents (13,751 )
10,366 Cash and cash equivalents, beginning of period
38,070 33,033 Cash and cash
equivalents, end of period $ 24,319 $ 43,399
Supplemental disclosure of cash flow information: Interest
paid $ 12,957 $ 11,110 Income taxes refunded, net of payments (92 )
(146 )
Supplemental disclosure of non-cash investing and
financing activities: Capital lease obligations related to the
purchase of equipment $ 1,499 $ 1,294 Equipment purchases in
accounts payable and accrued equipment 352 2,477 Noncontrolling
interest assumed in connection with acquisitions 2,948 20,598 Fair
value of contingent consideration related to acquisitions 420 —
Extinguishment of note receivable — 3,071
ALLIANCE HEALTHCARE SERVICES,
INC.NON-GAAP MEASURES(in thousands)
Adjusted EBITDA and Adjusted Net Income Per Share (the “Non-GAAP
Measures”) are not measures of financial performance under
generally accepted accounting principles in the United States, or
“GAAP.”
Adjusted EBITDA, as defined by the Company’s management, is
consistent with the definition in the Company’s Credit agreement
and represents net income (loss) before: interest expense, net of
income tax (benefit) expense, interest income, depreciation
expense, amortization expense, non-cash share-based payment,
severance and related costs, net income attributable to
noncontrolling interest, restructuring charges, fees and expenses
related to acquisitions, costs related to debt financing, non-cash
impairment charges, legal matter expenses, and other non-cash
charges included in other (income) expense, net, which includes
non-cash losses on sales of equipment. The components used to
reconcile Net Income (Loss) to Adjusted EBITDA are consistent with
our historical presentation of Adjusted EBITDA.
Adjusted Net Income Per Share, as defined by the Company’s
management, represents net income (loss) before: restructuring
charges, severance and related charges, fees and expenses related
to acquisitions, impairment charges, legal matter expenses, and
differences in the GAAP income tax rate compared to our historical
income tax rate. The components used to reconcile net income (loss)
per share to Adjusted Net Income Per Share are consistent with our
historical presentation of Adjusted Net Income Per Share.
Management uses the Non-GAAP Measures, and believes they are
useful measures for investors, for a variety of reasons. Management
regularly communicates the results of its Non-GAAP Measures and
management’s interpretation of such results to its board of
directors. Management also compares the Company’s results of its
Non-GAAP Measures against internal targets as a key factor in
determining cash incentive compensation for executives and other
employees, largely because management feels that these measures are
indicative of how our radiology, oncology and interventional
services businesses are performing and are being managed. The
diagnostic imaging and radiation oncology industry continues to
experience significant consolidation. These activities have led to
significant charges to earnings, such as those resulting from
acquisition costs, and to significant variations among companies
with respect to capital structures and cost of capital (which
affect interest expense) and differences in taxation and book
depreciation of facilities and equipment (which affect relative
depreciation expense), including significant differences in the
depreciable lives of similar assets among various companies. In
addition, management believes that because of the variety of equity
awards used by companies, the varying methodologies for determining
non-cash share-based compensation expense among companies and from
period to period, and the subjective assumptions involved in that
determination, excluding non-cash share-based compensation from
Adjusted EBITDA enhances company-to-company comparisons over
multiple fiscal periods and enhances the Company’s ability to
analyze the performance of its radiology, oncology and
interventional services businesses.
In the future, the Company expects that it may incur expenses
similar to the excluded items discussed above. Accordingly, the
exclusion of these and other similar items in the Company’s
non-GAAP presentation should not be interpreted as implying that
these items are non-recurring, infrequent or unusual. The Non-GAAP
Measures have certain limitations as analytical financial measures,
which management compensates for by relying on the Company’s GAAP
results to evaluate its operating performance and by considering
independently the economic effects of the items that are or are not
reflected in the Non-GAAP Measures. Management also compensates for
these limitations by providing GAAP-based disclosures concerning
the excluded items in the Company’s financial disclosures. As a
result of these limitations and because the Non-GAAP Measures may
not be directly comparable to similarly titled measures reported by
other companies, however, the Non-GAAP Measures should not be
considered as an alternative to the most directly comparable GAAP
measure, or as an alternative to any other GAAP measure of
operating performance.
The calculation of Adjusted EBITDA is shown below:
Twelve Months Ended June
Quarter Ended June 30, Six Months Ended June 30,
30, 2016
2015 2016
2015 2016 Net income (loss)
attributable to Alliance HealthCare Services, Inc. $ 2,459 $ (1,961
) $ 1,269 $ (210 ) $ 8,221 Income tax expense (benefit) 2,221
(1,366 ) 1,275 206 7,605 Interest expense and other, net 8,872
6,904 16,367 12,922 29,686 Amortization expense 2,494 2,495 4,937
4,530 9,507 Depreciation expense 13,730 12,072 26,778 23,705 51,668
Share-based payment (included in selling, general and
administrative expenses) 379 430 2,243 819 3,125 Severance and
related costs 708 195 2,424 454 3,290 Net income attributable to
noncontrolling interest 3,729 4,903 8,322 9,250 19,445
Restructuring charges 1,120 236 1,351 491 2,187 Transaction costs
431 1,113 848 1,532 2,612 Shareholder transaction costs 1,498 —
2,507 — 4,360 Impairment charges — 6,670 — 6,746 71 Legal matter
expenses (included in selling, general and administrative expenses)
39 1,543 194 2,903 4,206 Non-cash gain on step acquisition
(included in other (income) and expense, net) — — — — (10,672 )
Other non-cash charges (included in other (income) and expenses,
net) (3,238 ) 781 (3,701 ) 783
(3,367 ) Adjusted EBITDA $ 34,442 $ 34,015
$ 64,814 $ 64,131 $ 131,944
The leverage ratio calculations as of June 30, 2016, are shown
below:
Consolidated Total debt $ 572,122 Less: Cash and cash
equivalents (24,319 ) Net debt 547,803 Last 12 months
Adjusted EBITDA 131,944 Pro-forma acquisitions in the last 12 month
period (1) 5,925 Last 12 months Consolidated Adjusted
EBITDA 137,869 Total leverage ratio
4.15
x
Net leverage ratio
3.97
x
__________
(1) Gives pro-forma effect to acquisitions
occurring during the last twelve months pursuant to the terms of
the Credit Agreement.
The reconciliation of income (loss) per diluted share – GAAP to
adjusted net income per diluted share – non-GAAP is shown
below:
Quarter Ended June 30, Six Months Ended
June 30, 2016 2015
2016 2015
Income (loss) per diluted share- GAAP $ 0.23 $ (0.18 ) $ 0.12 $
(0.02 ) Reconciling charges (benefits) to arrive at Adjusted net
income per diluted share-non-GAAP: Severance and related charges,
net of taxes 0.04 0.01 0.13 0.02 Restructuring charges, net of
taxes 0.06 0.01 0.07 0.03 Transaction costs, net of taxes 0.02 0.06
0.05 0.08 Shareholder transaction costs, net of taxes 0.08 — 0.13 —
Deferred financing costs in connection with shareholder
transaction, net of taxes 0.10 — 0.10 — Impairment charges, net of
taxes — 0.36 — 0.36 Legal matter expenses, net of taxes — 0.08 0.01
0.15 Other non-cash gains, net of taxes (0.17 ) — (0.21 ) — GAAP
income tax rate compared to our historical income tax rate
0.01 — 0.02 0.02
Total reconciling charges (benefits) 0.14 0.52
0.30 0.66 Adjusted net income
per diluted share- non-GAAP $ 0.37 $ 0.34 $ 0.42
$ 0.64
The reconciliation from net income to Adjusted EBITDA for the
2016 guidance range is shown below (in millions):
2016 Full Year Guidance Range Net income $ 7
$ 12 Income tax expense 5 9
Interest expense and other, net;
depreciation expense; amortization expense; share-based payment and
other expenses; noncontrolling interest in subsidiaries
118 129 Adjusted EBITDA $ 130 $ 150
ALLIANCE HEALTHCARE SERVICES, INC. SELECTED STATISTICAL
INFORMATION Quarter Ended June 30,
2016 2015 MRI Average number of total
systems 274.5 251.1 Average number of scan-based systems 216.5
200.6 Scans per system per day (scan-based systems) 9.36 8.99 Total
number of scan-based MRI scans 136,251 123,461 Price per scan $
307.39 $ 316.84 Scan-based MRI revenue (in millions) $ 41.9 $ 39.1
Non-scan based MRI revenue (in millions) 6.9 6.1
Total MRI revenue (in millions) $ 48.8 $ 45.2
PET/CT Average
number of total systems 120.5 115.1 Average number of scan-based
systems 110.7 108.3 Scans per system per day 5.51 5.38 Total number
of PET/CT scans 34,863 35,569 Price per scan $ 885.34 $ 890.59
Total PET and PET/CT revenue (in millions) $ 32.1 $ 32.6
Oncology Linear accelerator treatments 22,421 23,069
Stereotactic radiosurgery patients 900 849 Total oncology revenue
(in millions) $ 25.8 $ 25.3
Interventional Visits 57,825
38,070 Total interventional revenue (in millions) $ 11.4 $ 8.2
Revenue breakdown (in millions) Total MRI revenue $ 48.8 $
45.2 PET/CT revenue 32.1 32.6 Oncology revenue 25.8 25.3
Interventional revenue 11.4 8.2 Other revenue 7.2 7.2
Total revenues $ 125.3 $ 118.5
Total fixed-site revenue
(in millions) $ 27.5 $ 28.1
ALLIANCE HEALTHCARE SERVICES,
INC.SELECTED STATISTICAL INFORMATIONRADIOLOGY AND
ONCOLOGY DIVISION SAME-STORE VOLUME
The Company utilizes same-store volume growth as a historical
statistical measure of the MRI and PET/CT imaging procedure, linear
accelerator (“Linac”) treatment and stereotactic radiosurgery
(“SRS”) case growth at its customers in a specified period on a
year-over-year basis. Same-store volume growth is calculated by
comparing the cumulative scan, treatment or case volume at all
locations in the current year quarter to the same quarter in the
prior year. The group of customers whose volume is included in the
scan, treatment case volume totals includes only those that
received service from Alliance for the full quarter in each of the
comparison periods. A positive percentage represents growth over
the prior year quarter and a negative percentage represents a
decline over the prior year period. Alliance measures each of its
major radiology and oncology modalities, MRI, PET/CT, Linac and
SRS, separately.
The Radiology Division same-store volume growth for the last
four calendar quarters ended June 30, 2016, is as follows:
Same-Store Volume MRI PET/CT
2016
Second Quarter 2.0% 5.8% First Quarter 6.6% 9.3%
2015
Fourth Quarter 3.6% 8.6% Third Quarter 4.7% 5.7%
The Oncology Division same-store volume growth/(decline) for the
last four calendar quarters ended June 30, 2016, is as follows:
Same-Store Volume Linac SRS
2016
Second Quarter (1.1 %) (0.2 %) First Quarter 5.6 % 9.0 %
2015
Fourth Quarter (6.4 %) 3.9 % Third Quarter (5.5 %) 10.8 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160804006369/en/
Alliance HealthCare Services, Inc.Rhonda Longmore-GrundExecutive
Vice PresidentChief Financial Officer949.242.5300
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