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 nine months ended
September 30, 2016.
Third Quarter 2016 Highlights
- The Company reported revenue totaling
$127.1 million for the third quarter, a $6.3 million or 5.2%
increase over the third quarter of last year. On a sequential
basis, revenue increased $1.8 million or 1.4% over second quarter
of 2016.
- The Company generated $35.1 million of
Adjusted EBITDA (as defined below) for the quarter, a $1.3 million
or 3.7% increase over the third quarter of last year. On a
sequential basis, Adjusted EBITDA increased $0.7 million or 1.9%
over second quarter of 2016.
- Net income attributable to Alliance was
$1.4 million for the quarter as compared to $7.2 million in the
third quarter of prior year, which included a one-time non-cash
gain of $10.0 million related to a transaction that occurred during
the third quarter of 2015. Excluding the one-time cash gain on a
tax-affected basis, the net income attributable to Alliance would
have been $1.5 million in 2015 as compared to $1.4 million in the
current quarter.
- GAAP Net Income per Share was $0.12 for
the quarter and Adjusted Net Income per Share (as defined below)
was $0.33.
- The Company continued to generate
strong cash flow, with $24.1 million of quarterly operating cash
flow, compared to $17.0 million in the third quarter of the prior
year.
- Alliance Radiology revenue increased by
2.8% to $88.7 million with strong same-store volume growth of +1.1%
for MRI and +5.3% for PET/CT for the quarter.
- Alliance Oncology revenue increased by
4.1% to $26.3 million for the quarter.
- Alliance Interventional revenue
increased by 28.5% to $11.5 million for the quarter.
- Based on our results thus far this
year, we reaffirmed full-year 2016 guidance for revenue ranging
from $505 million - $535 million and Adjusted EBITDA of $130
million - $150 million.
2016 Financial Results
“Consistent with expectations we outlined on our Q2 earnings
call, the third quarter reflects growth, both sequentially and
year-over-year, across all of the business segments including
Radiology, Oncology and Interventional. Sales, business development
and operational improvements our teams have made, enhance the value
proposition we provide to our customers leading to an improved
competitive position and resulting strong performance in retaining
existing customers and securing new customers,” stated Tom
Tomlinson, Chief Executive Officer and President of Alliance
HealthCare Services. “Our Radiology business delivered another
consecutive quarter of strong same-store growth for MRI and PET/CT
as well as improved performance in customer retention and contract
wins. This marks the tenth consecutive quarter of same-store volume
growth for MRI and seventh consecutive quarter of growth for
PET/CT. Alliance Oncology didn’t complete any new projects in the
quarter, but we expect to be in a position to announce another
significant joint venture before the end of the year.”
Tomlinson continued, “Again, consistent with Q2, in the third
quarter we had some success from initiatives focused on balance
sheet management. We generated strong cash flows, allowing us to
reduce leverage while making necessary investments to support
customer retention and growth. We continue to work with Thai Hot,
our new majority shareholder, to evaluate opportunities to enhance
our long-term growth strategy both domestically and in China. We
are reaffirming full-year 2016 guidance of revenue ranging from
$505 million - $535 million and Adjusted EBITDA of $130 million -
$150 million.”
Revenue for the third quarter of 2016 increased to $127.1
million, compared to $120.8 million in the third quarter of 2015.
This increase was primarily due to an increase in Alliance
Interventional revenue of $2.5 million, in Alliance Radiology
revenue of $2.3 million, and in Oncology revenue of $1.1 million,
when compared to the third quarter of 2015.
Alliance’s Adjusted EBITDA for the third quarter of 2016
increased 3.7% to $35.1 million from $33.9 million in the third
quarter of 2015. The increases were primarily driven by strong
continued same-store volume growth across both Radiology and
Oncology, net new sales and partnerships and our continued
expansion in the Alliance Interventional line of business.
Alliance’s net income, computed in accordance with GAAP, totaled
$1.4 million in the third quarter of 2016 compared to $7.2 million
in the third quarter of 2015. The $5.8 million decline is largely
due to the net impact of a $10.0 million non-cash gain in the third
quarter of 2015 which did not re-occur in 2016. Excluding the
one-time cash gain on a tax-affected basis, the net income
attributable to Alliance would have been $1.5 million in 2015 as
compared to $1.4 million in the current quarter.
Net income per share on a diluted basis, computed in accordance
with GAAP, was $0.12 per share in the third quarter of 2016
compared to $0.67 per share for same quarter of 2015. The $0.55 per
share decline is largely due to the net impact of $0.53 in earnings
per share generated from one-time tax-affected non-cash gains in
the third quarter of 2015 relating to a transaction which did not
re-occur in 2016.
Net income per share on a diluted basis was impacted by net
charges (benefits) of $0.21 in the third quarter of 2016 and
$(0.33) in the third quarter of 2015 due to severance and related
costs, restructuring charges, transaction costs, shareholder
transaction costs, deferred financing costs in connection with
shareholder transaction, impairment charges, legal matters expense,
net, changes in fair value of contingent consideration related to
acquisitions, other non-cash charges (gains), non-cash gain on step
acquisition, and differences in the GAAP income tax rate from our
historical income tax rate of 42.5%. Excluding these charges
(benefits), adjusted net income per diluted share – non-GAAP was
$0.33 for the third quarter 2016 and $0.34 for the same quarter of
2015.
Cash flows provided by operating activities totaled $24.1
million in the third quarter of 2016, compared to $17.0 million in
the third quarter of 2015. In the third quarter of 2016, total
capital expenditures, including cash paid for equipment purchases
and deposits on equipment and capital leases, totaled $13.3 million
compared to $16.1 million in the third quarter of 2015.
Alliance’s gross debt, defined as total long-term debt
(including current maturities but excluding the impact of deferred
financing costs), decreased $17.2 million to $560.5 million at
September 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 $1.3 million to
$540.9 million at September 30, 2016 from $539.6 million at
December 31, 2015. Cash and cash equivalents were $19.6 million at
September 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 4.13x for the twelve
month period ended September 30, 2016, compared to 4.15x for the
quarter ended June 30, 2016 and 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 3.99x for the
twelve month period ended September 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)
Third Quarter 2016 Earnings Conference Call
Investors and all others are invited to listen to a conference
call discussing third quarter 2016 results. The conference call is
scheduled for Thursday, November 3, 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 December
3, 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 January 3, 2017. The
telephone replay can be accessed by calling 800.585.8367. The
conference call identification number is 9264474.
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 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
September 30, 2016, Alliance operated 619 diagnostic radiology and
radiation therapy systems, including 112 fixed-site radiology
centers across the country, and 32 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 Interventional 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; the Company’s ability to comply with reporting
obligations and other covenants under the Company’s 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 INCOME AND COMPREHENSIVE
INCOME (Unaudited) (in thousands, except per share
amounts) Three Months Ended September
30, Nine Months Ended September 30, 2016
2015 2016 2015 Revenues $ 127,121 $
120,784 $ 376,162 $ 348,717 Costs and expenses:
Cost of revenues, excluding depreciation
and amortization
71,132 67,057 211,985 196,428 Selling, general and administrative
expenses 23,061 24,543 71,501 66,298 Transaction costs 138 432 986
1,964 Shareholder transaction costs 1,009 — 3,516 — Severance and
related costs 762 277 3,186 731 Impairment charges — 71 — 6,817
Depreciation expense 13,899 12,247 40,677 35,952 Amortization
expense 2,556 2,377 7,493 6,907 Interest expense, net 9,072 6,660
25,439 19,582 Other income, net (1,915 ) (10,451 )
(6,249 ) (10,324 ) Total costs and expenses
119,714 103,213 358,534 324,355
Income before income taxes, earnings from
unconsolidated investees, and noncontrolling interest
7,407 17,571 17,628 24,362 Income tax expense 1,862 5,098 3,137
5,304 Earnings from unconsolidated investees (282 )
(592 ) (927 ) (3,047 ) Net income 5,827 13,065 15,418
22,105 Less: Net income attributable to noncontrolling interest
(4,469 ) (5,861 ) (12,791 ) (15,111 )
Net income attributable to Alliance HealthCare Services, Inc. $
1,358 $ 7,204 $ 2,627 $ 6,994 Comprehensive income (loss),
net of taxes: Net income 5,827 13,065 15,418 22,105 Unrealized gain
(loss) on hedging transactions, net of taxes 24 (8 ) (18 ) (149 )
Reclassification adjustment for losses
included in net income, net of taxes
148 — 236 — Total comprehensive income,
net of taxes 5,999 13,057 15,636 21,956
Comprehensive income attributable to
noncontrolling interest
(4,469 ) (5,861 ) (12,791 ) (15,111 )
Comprehensive income attributable to
Alliance HealthCare Services, Inc.
$ 1,530 $ 7,196 $ 2,845 $ 6,845 Income per common share
attributable to Alliance HealthCare Services, Inc.: Basic $ 0.12 $
0.67 $ 0.24 $ 0.65 Diluted $ 0.12 $ 0.67 $ 0.24 $ 0.65
Weighted average number of shares of
common stock and common stock equivalents:
Basic 10,888 10,716 10,850 10,715 Diluted 10,963 10,815 10,953
10,832
ALLIANCE HEALTHCARE SERVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
September 30, December 31,
2016 2015 (unaudited) (audited)
ASSETS Current assets: Cash and cash equivalents $ 19,608 $
38,070 Accounts receivable, net of allowance for doubtful accounts
74,605 73,208 Prepaid expenses 12,939 13,463 Other receivables
3,408 3,206 Total current assets 110,560 127,947
Plant, property and equipment, net 206,596 177,188 Goodwill 105,239
102,782 Other intangible assets, net 162,326 162,923 Other assets
22,794 32,820 Total assets $ 607,515 $ 603,660
LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities:
Accounts payable $ 29,982 $ 20,796 Accrued compensation and related
expenses 23,334 19,933 Accrued interest payable 3,254 3,323 Current
portion of long-term debt 18,124 17,732 Current portion of
obligations under capital leases 3,321 2,674 Other accrued
liabilities 28,397 36,453 Total current liabilities
106,412 100,911 Long-term debt, net of current portion and deferred
financing costs 498,885 540,353 Obligations under capital leases,
net of current portion 13,541 10,332 Deferred income taxes 26,098
23,020 Other liabilities 7,526 6,664 Total
liabilities 652,462 681,280 Stockholders’ deficit: Common
stock 109 108 Treasury stock (3,138 ) (3,138 ) Additional paid-in
capital 60,815 29,297 Accumulated comprehensive loss (293 ) (511 )
Accumulated deficit (195,766 ) (198,393 )
Total stockholders’ deficit attributable
to Alliance HealthCare Services, Inc.
(138,273 ) (172,637 ) Noncontrolling interest 93,326
95,017 Total stockholders’ deficit (44,947 ) (77,620
) Total liabilities and stockholders’ deficit $ 607,515 $ 603,660
ALLIANCE HEALTHCARE SERVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (in thousands) Nine
Months Ended September 30, 2016 2015
Operating activities: Net income $ 15,418 $ 22,105
Adjustments to reconcile net income to net cash provided by
operating activities: Provision for doubtful accounts 1,663 2,373
Share-based payment 2,187 1,242 Depreciation and amortization
48,170 42,859 Amortization of deferred financing costs 5,690 2,602
Accretion of discount on long-term debt 383 357 Adjustment of
derivatives to fair value 520 100 Distributions from unconsolidated
investees 955 3,332 Earnings from unconsolidated investees (927 )
(3,047 ) Deferred income taxes 2,413 4,043 Gain on sale of assets
(1,279 ) (685 ) Changes in fair value of contingent consideration
related to acquisitions (4,640 ) — Non-cash gain on step
acquisition — (9,950 ) Other non-cash gain (248 ) — Gain on
acquisition — (209 ) Impairment charges — 6,817 Excess tax benefit
from share-based payment arrangements (87 ) 5 Changes in operating
assets and liabilities, net of the effects of acquisitions:
Accounts receivable (2,787 ) (2,674 ) Prepaid expenses 220 (1,106 )
Other receivables 1,392 451 Other assets 279 1,488 Accounts payable
8,026 (363 ) Accrued compensation and related expenses 3,401 (968 )
Accrued interest payable (69 ) 116 Income taxes payable 551 55
Other accrued liabilities 864 (4,248 ) Net cash
provided by operating activities 82,095 64,695
Investing activities: Equipment purchases (52,977 ) (39,382
) Increase in deposits on equipment (8,122 ) (13,024 )
Acquisitions, net of cash received (6,659 ) (22,657 ) Proceeds from
sale of assets 1,663 868 Net cash used in investing
activities (66,095 ) (74,195 )
ALLIANCE HEALTHCARE SERVICES, INC. CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (continued) (Unaudited) (in
thousands) Nine Months Ended September 30,
2016 2015 Financing activities:
Principal payments on equipment debt and capital lease obligations
(12,437 ) (6,664 ) Proceeds from equipment debt 11,793 23,295
Principal payments on term loan facility (3,900 ) (8,651 ) Proceeds
from term loan facility — 29,850 Principal payments on revolving
loan facility (45,000 ) (28,000 ) Proceeds from revolving loan
facility 29,000 26,000 Payments of debt issuance costs and deferred
financing costs (25,493 ) (801 ) Distributions to noncontrolling
interest in subsidiaries (18,045 ) (13,734 ) Contributions from
noncontrolling interest in subsidiaries 1,113 — Excess tax benefit
from share-based payment arrangements 87 (5 ) Issuance of common
stock 1 — Proceeds from exercise of stock options 614 25 Settlement
of contingent consideration related to acquisitions (825 ) —
Proceeds from shareholder transaction 28,630 — Net
cash (used in) provided by financing activities (34,462 )
21,315 Net (decrease) increase in cash and cash equivalents
(18,462 ) 11,815 Cash and cash equivalents, beginning of period
38,070 33,033 Cash and cash equivalents, end of
period $ 19,608
$ 44,848
Supplemental disclosure of cash flow
information: Interest paid $ 19,100 $ 16,973 Income taxes paid,
net of refunds 102 327
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 (2,491 ) 2,417
Noncontrolling interest assumed in connection with acquisitions
2,948 30,417 Fair value of contingent consideration related to
acquisitions 420 — Extinguishment of note receivable — 3,071
Transfer of equity investment as consideration in step acquisition
— 690 Transfer of equipment as consideration in step acquisition —
477 Transfer of fair value of equity investment in step acquisition
— 13,645
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 U.S., 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: income tax (benefit)
expense, interest expense, net, depreciation expense, amortization
expense, non-cash share-based payment, severance and related costs,
net income attributable to noncontrolling interest, restructuring
charges, transaction costs, shareholder transaction costs, non-cash
impairment charges, legal matters expense, net, changes in fair
value of contingent consideration related to acquisitions, non-cash
gain on step acquisition and other non-cash charges, net, which
include non-cash gain 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: severance and
related charges, restructuring charges, transaction costs,
shareholder transaction costs, deferred financing costs in
connection with shareholder transaction, impairment charges, legal
matters expenses, net, changes in fair value of contingent
consideration related to acquisitions, other non-cash charges
(gains), non-cash gain on step acquisition, 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:
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
TwelveMonthsEndedSeptember30,
2016 2015 2016 2015
2016 Net income attributable to Alliance HealthCare
Services, Inc. $ 1,358 $ 7,204 $ 2,627 $ 6,994 $ 2,375 Income tax
expense 1,862 5,098 3,137 5,304 4,369 Interest expense, net 9,072
6,660 25,439 19,582 32,098 Depreciation expense 13,899 12,247
40,677 35,952 13,825 Amortization expense 2,556 2,377 7,493 6,907
49,181
Share-based payment (included in selling,
general and administrative expenses)
407 423 2,650 1,242 3,109 Severance and related costs 762 277 3,186
731 3,775
Net income attributable to noncontrolling
interest
4,469 5,861 12,791 15,111 18,053 Restructuring charges 284 216
1,635 707 2,255 Transaction costs 138 432 986 1,964 2,318
Shareholder transaction costs 1,009 — 3,516 — 5,369 Impairment
charges — 71 — 6,817 -
Legal matters expense, net (included in
selling, general and administrative expenses)
(88 ) 2,924 106 5,827 1,194
Changes in fair value of contingent
consideration related to acquisitions
(1,000 ) — (4,640 ) — (4,640 )
Other non-cash charges, net (included in
other income, net)
385 22 324 805 635
Non-cash gain on step acquisition
(included in other income, net)
— (9,950 ) — (9,950 ) (722 )
Adjusted EBITDA $ 35,113 $ 33,862 $ 99,927 $ 97,993 $ 133,194
The leverage ratio calculations as of September 30, 2016, are
shown below:
Consolidated Total debt $ 560,537 Less: Cash
and cash equivalents (19,608 ) Net debt $ 540,929 Last 12
months Adjusted EBITDA 133,194
Pro-forma acquisitions in the last 12
month period (1)
2,523 Last 12 months Consolidated Adjusted EBITDA $ 135,717
Total leverage ratio 4.13 x Net leverage ratio 3.99 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 per diluted share – GAAP to
adjusted net income per diluted share – non-GAAP is shown
below:
Three Months EndedSeptember
30,
Nine Months EndedSeptember
30,
2016 2015 2016 2015
Income per diluted share - GAAP $ 0.12 $ 0.67 $ 0.24 $ 0.65
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 0.17 0.04 Restructuring charges, net of taxes 0.01
0.01 0.09 0.04 Transaction costs, net of taxes 0.01 0.02 0.05 0.10
Shareholder transaction costs, net of taxes 0.05 — 0.18 —
Deferred financing costs in connection
with shareholder transaction, net of taxes
0.10 — 0.19 — Impairment charges, net of taxes — — — 0.36 Legal
matters expense, net, net of taxes — 0.16 0.01 0.31
Changes in fair value of contingent
consideration related to acquisitions, net of taxes
(0.05 ) — (0.24 ) — Other non-cash charges (gains), net of taxes
0.01 — (0.01 ) — Non-cash gain on step acquisition, net of taxes —
(0.53 ) — (0.53 )
GAAP income tax rate compared to our
historical income tax rate
0.04 — 0.06 0.01 Total reconciling
charges (benefits) 0.21 (0.33 ) 0.50
0.33 Adjusted net income per diluted share- non-GAAP $ 0.33 $ 0.34
$ 0.74 $ 0.98
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
Three Months EndedSeptember
30,
2016 2015 MRI Average number of
total systems 280.1 264.1 Average number of scan-based systems
219.1 209.8 Scans per system per day (scan-based systems) 9.17 9.09
Total number of scan-based MRI scans 136,147 132,962 Price per scan
$ 311.51 $ 311.16 Scan-based MRI revenue (in millions) $ 42.4 $
41.4 Non-scan-based MRI revenue (in millions) 7.5 6.2
Total MRI revenue (in millions) $ 49.9 $ 47.6
PET/CT Average
number of total systems 119.9 116.2 Average number of scan-based
systems 111.7 108.4 Scans per system per day 5.49 5.38 Total number
of PET/CT scans 34,548 35,501 Price per scan $ 888.71 $ 879.72
Total PET and PET/CT revenue (in millions) $ 31.9 $ 32.3
Oncology Linear accelerator treatments 23,109 21,118
Stereotactic radiosurgery patients 909 901 Total Oncology revenue
(in millions) $ 26.3 $ 25.2
Interventional Visits 57,784
37,390 Total interventional revenue (in millions) $ 11.5 $ 9.0
Revenue breakdown (in millions) MRI revenue $ 49.9 $ 47.6
PET/CT revenue 31.9 32.3 Other radiology revenue 6.9
6.5 Radiology revenue 88.7 86.4 Oncology revenue 26.3 25.2
Interventional revenue 11.5 9.0 Corporate / Other 0.6
0.2 Total revenues $ 127.1 $ 120.8
Total fixed-site revenue (in
millions) 27.7 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 or 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 quarter. 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 September 30, 2016 is as follows:
Same-Store Volume MRI
PET/CT
2016
Third Quarter 1.1 % 5.3 % Second Quarter 2.0 % 5.8 %
First Quarter 6.6 % 9.3 %
2015
Fourth Quarter 3.6 % 8.6 %
The Oncology Division same-store volume growth/(decline) for the
last four calendar quarters ended September 30, 2016 is as
follows:
Same-Store Volume Linac
SRS
2016
Third Quarter 5.7 % (4.6) % Second Quarter (1.1 )%
(0.2) % First Quarter 5.6 % 9.0 %
2015
Fourth Quarter (6.4) % 3.9 %
View source
version on businesswire.com: http://www.businesswire.com/news/home/20161103006878/en/
Alliance HealthCare Services, Inc.Rhonda Longmore-Grund,
949-242-5300Executive Vice PresidentChief Financial Officer
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