FORT MYERS, Fla., Feb. 14 /PRNewswire-FirstCall/ -- Radiation Therapy Services, Inc. , a provider of radiation therapy services to cancer patients, today announced financial results for the fourth quarter and year ended December 31, 2004.
Total revenues for the fourth quarter were $45.6 million, an increase of 30.0% from $35.1 million in the same quarter of 2003. Fee for service revenues, or revenues generated from services where the Company bills patients directly, principally at freestanding treatment centers, were $42.9 million. Other revenues, or revenues generated from services where Radiation Therapy bills the hospital for services provided, were $2.7 million.
Income before income taxes for the fourth quarter 2004 was $8.3 million, an increase of 95.8% from $4.3 million reported in the same period of 2003. Net income for the fourth quarter 2004 was $5.0 million, compared to fourth quarter 2003 net income of $4.3 million. Fourth quarter 2003 net income excludes income taxes as the Company maintained its Subchapter S Corporation status prior to the June 2004 initial public offering (IPO). On a pro forma basis factoring in the impact of income taxes, the fourth quarter 2003 net income was $2.6 million or $0.14 diluted earnings per share. Fourth quarter 2004 diluted earnings per share was $0.22.
Total revenues for the year ended December 31, 2004 were $171.4 million, an increase of 23.6% from $138.7 million for the year ended 2003. Income before income taxes for the year ended December 31, 2004 was $32.3 million, an increase of 35.0% from $23.9 million reported for the year ended 2003.
Net income for the year ended December 31, 2004 was $8.8 million compared to $23.9 million for the year ended 2003. Net income for the full year 2004 includes a $17.6 million non-cash income tax expense in the second quarter, which was related to the conversion to a C Corporation in conjunction with the IPO. Excluding the same non-cash income tax expense, and including pro forma tax expense using a 40% tax rate for the year, pro forma diluted net income per share for the year ended December 31, 2004 was $0.92.
“We are pleased that our fourth quarter results exceeded our expectations. Implementation of new technologies across our regional networks, including two pilot programs for respiratory gating underway in our Southwest Florida facilities, resulted in same practice revenue increasing 21.6%, compared with 2.7% in the fourth quarter of last year. While we experienced growth across the majority of our centers, our Port Charlotte treatment center experienced a decline in daily treatments due to the significant damage to the community caused by Hurricane Charley and the aftermath impact on the return of seasonal residents,” said Dr. Daniel Dosoretz, President and Chief Executive Officer.
Radiation Therapy generated $28.2 million in net cash from operations in the year ended 2004. Total capital expenditures, including capital lease obligations, for the full-year 2004 were $23.2 million, compared to $14.8 million in the year ended 2003. The Company’s days sales outstanding (DSO) for the fourth quarter were 53 days compared to 57 days in the same quarter of 2003. Outstanding debt at the end of the fourth quarter totaled $66.1 million.
For the fourth quarter 2004, Radiation Therapy reported 1,079 external beam treatments per day at its 46 freestanding centers, a 15.6% increase from the same period of last year. In November, Radiation Therapy opened a de novo radiation treatment center in Rhode Island. During the quarter, the implementation of an IMRT program was completed in the New Jersey regional network. At the end of the fourth quarter, the Company performed radiation therapy services at 10 hospital-based treatment centers.
For the full year 2005, the Company estimates revenues will be in the range of $178 million to $195 million and diluted earnings per share to be in the range of $0.92 to $1.00. For the first quarter 2005, the Company estimates revenues will be in the range of $47 million to $50 million and diluted earnings per share to be in the range of $0.28 to $0.30. These projections are estimates only and actual performance could differ.
Management will host a conference call tomorrow at 9:00 a.m. EST. A live Web cast of the conference call will be available online on the Company’s corporate Web site at http://www.rtsx.com/. The dial-in numbers are (800) 289- 0572 for domestic callers, and (913) 981-5543 for international callers. The reservation number for both is 7014794. After the live Web cast, the call will remain available on Radiation Therapy’s Web site for one year. In addition, a telephonic replay of the call will be available until March 1, 2005. The replay dial-in numbers are (888) 203-1112 for domestic callers and (719) 457-0820 for international callers. Please use reservation code 7014794.
About Radiation Therapy Services
Radiation Therapy Services, Inc., which operates treatment centers primarily under the name 21st Century Oncology, is a provider of radiation therapy services to cancer patients. The Company’s 56 treatment centers are clustered into 19 regional networks in ten states, including Alabama, Delaware, Florida, Kentucky, Maryland, Nevada, New Jersey, New York, North Carolina and Rhode Island. The Company is headquartered in Fort Myers, Florida. More information about the Company can be found at its Web site http://www.rtsx.com/.
This release may contain forward-looking statements about the Company’s future plans, expectations and objectives. Words such as “may,” “will,” “expect,” “intend,” “anticipate,” “plan,” “believe,” “seek,” “could” and “estimate” and variations of these words and similar expressions are intended to identify forward-looking statements. These forward-looking statements are not historical facts and are subject to risks and uncertainties that could cause the actual results to differ materially from those projected in these forward-looking statements including, but not limited to those risk factors described in the “Risk Factors” section and other information in the Company’s recent quarterly reports on Form 10-Q, the Company’s annual report on Form 10- K for the year ended December 31,2004, as well as the Company’s other filings with the Securities and Exchange Commission which are available on the SEC’s website at http://www.sec.gov/. Readers of this release are cautioned not to place undue reliance on forward-looking statements. The Company undertakes no obligation to publicly update or revise the forward-looking statements contained herein to reflect changed events or circumstances after the date of this release.
Contacts: Dave Koeninger Chief Financial Officer Radiation Therapy Services, Inc. 239-931-7282 dkoeninger@rtsx.com Investors/Media: Denise Roche/Greg Tiberend The Ruth Group 646-536-7008/7005 droche@theruthgroup.comgtiberend@theruthgroup.com RADIATION THERAPY SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in thousands, except per share amounts) Three Months Ended Year Ended December 31, December 31, (unaudited) 2004 2003 2004 2003 Net patient service revenue $42,898 $32,737 $161,349 $129,197 Other revenue 2,719 2,341 10,024 9,483 Total revenues 45,617 35,078 171,373 138,680 Salaries and benefits 23,513 18,603 87,059 72,146 Medical supplies 1,049 598 3,609 2,226 Facility rent expense 1,248 1,257 5,198 4,479 Other operating expenses 1,959 2,169 7,561 8,690 General and administrative expenses 5,159 5,011 19,671 16,400 Depreciation and amortization 1,930 1,422 6,727 5,074 Provision for doubtful accounts 1,673 901 5,852 3,375 Interest expense, net 793 544 3,435 2,053 Impairment loss - 284 - 284 Total expenses 37,324 30,789 139,112 114,727 Income before minority interests 8,293 4,289 32,261 23,953 Minority interests in net losses (earnings) of consolidated entities 50 (28) 55 (7) Income before cumulative effect of change in accounting principle and income taxes 8,343 4,261 32,316 23,946 Cumulative effect of change in accounting principle - - - - Income before income taxes 8,343 4,261 32,316 23,946 Income tax expense 3,330 - 23,500 - Net income 5,013 4,261 8,816 23,946 Other comprehensive income: Unrealized gain (loss) on derivative interest rate swap agreement 9 23 46 (37) Comprehensive income $5,022 $4,284 $8,862 $23,909 Net income per common share outstanding - basic $0.22 $0.25 $0.43 $1.41 Net income per common share outstanding - diluted $0.22 $0.23 $0.42 $1.30 Weighted average shares outstanding: Basic 22,466 16,962 20,292 16,974 Diluted 23,041 18,411 21,032 18,471 Unaudited Pro forma income data: Income before income taxes, as reported $4,261 $32,316 $23,946 Pro forma income taxes 1,704 12,927 9,579 Pro forma net income $2,557 $19,389 $14,367 Pro forma net income per common share outstanding - basic $0.15 $0.96 $0.85 Pro forma net income per common share outstanding - diluted $0.14 $0.92 $0.78 RADIATION THERAPY SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, 2004 2003 ASSETS Current assets: Cash and cash equivalents $5,019 $2,606 Marketable securities, at market 2,400 - Accounts receivable, net 25,834 22,816 Income taxes receivable 364 - Prepaid expenses 2,882 2,921 Current portion of notes receivable from related parties - 122 Current portion of lease receivable 653 597 Inventories 1,065 802 Other 680 1,136 Total current assets 38,897 31,000 Notes receivable from related parties, less current portion - 540 Lease receivable, less current portion 1,230 1,883 Equity investments in joint ventures 1,422 1,229 Property and equipment, net 83,380 65,569 Goodwill, net 35,442 24,915 Intangible assets, net 1,328 718 Other assets 6,797 2,431 Total assets $168,496 $128,285 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $2,955 $3,464 Accrued expenses 9,482 11,866 Deferred income taxes 2,383 - Current portion of long-term debt 9,620 8,065 Total current liabilities 24,440 23,395 Long-term debt, less current portion 56,483 51,746 Other long-term liabilities 710 610 Deferred income taxes 15,417 - Minority interest in consolidated entities 4,104 1,561 Total liabilities 101,154 77,312 Shareholders’ equity Preferred stock, $0.0001 par value, 10,000 shares authorized, none issued or outstanding - - Common stock, $0.0001 par value, 75,000 shares authorized, 22,489 and 17,282 shares issued and outstanding at December 31, 2004 and 2003, respectively 2 2 Additional paid-in capital 69,686 16,616 Retained (deficit) earnings (588) 37,037 Notes receivable from shareholders (1,767) (2,645) Accumulated other comprehensive (loss) income, net of tax 9 (37) Total shareholders’ equity 67,342 50,973 Total liabilities and shareholders’ equity $168,496 $128,285 RADIATION THERAPY SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2004 2003 Cash flows from operating activities Net Income $8,816 $23,946 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 6,474 4,920 Amortization 253 154 Write down of machine parts inventory 1,223 - Deferred income tax provision 17,800 - Stock based compensation 408 - Loss on investment - - Impairment loss on goodwill - 284 Cumulative effect of change in accounting principle - - Provision for bad debts 5,852 3,375 Loss on the sale of property and equipment 92 16 Unrealized gain on interest rate swap agreements - - Minority Interests in net (losses) earnings of consolidated entities (55) 7 Write off of loan costs 336 - Equity interest in net income of joint ventures (193) (9) Changes in operating assets and liabilities: Accounts receivable (8,870) (8,044) Income taxes receivable (364) - Inventories (263) 15 Prepaid expenses 30 (1,396) Accounts payable (993) 1,467 Accrued expenses (2,347) 2,551 Net cash provided by operating activities 28,199 27,286 Cash flows from investing activities Purchase of property and equipment (16,918) (9,791) Acquisition of radiation centers (8,069) (12,078) Proceeds from the sale of property and equipment 951 1,459 (Issuance) receipts of principal payments on notes receivable from shareholders 662 (662) Purchases of marketable securities, net (2,400) - Change in lease receivable 597 455 Change in other assets (56) (124) Net cash used in investing activities (25,233) (20,741) Cash flows from financing activities Proceeds from issuance of debt 59,100 13,700 Principal repayments of debt (61,331) (10,857) Proceeds from public offering of common stock, net of expenses 46,781 - Proceeds from issuance of common stock 38 50 Proceeds from investment by minority interest holder in consolidated enitities - - Purchase of treasury stock - - Proceeds from exercise of stock options 2,316 1,009 Payments of notes receivable from shareholders 878 359 Distributions to shareholders (46,441) (12,130) Payments of loan costs (1,894) (364) Net cash used in financing activities (553) (8,233) Net increase (decrease) in cash and cash equivalents 2,413 (1,688) Cash and cash equivalents, at beginning of period 2,606 4,294 Cash and cash equivalents, at end of period $5,019 $2,606 Supplemental disclosure of cash flow information Interest paid $3,995 $2,473 Income taxes paid, net $5,975 $ - Supplemental disclosure of non-cash transactions Recorded capital lease obligations related to the acquisition of equipment $6,297 $5,014 Recorded non-cash contribution of capital by minority interest holder $2,598 $ - Recorded capital lease obligations related to the acquisition of radiation center assets $2,226 $ - Recorded obligation related to the acquisition of radiation center assets $274 $ - Issuance of common stock for the acquisition of Devoto Construction, Inc. $3,528 $ - Recorded related party payable relating to construction in process and building $310 $ - Recorded lease receivable related to assets under capital lease $ - $85 Issuance of promissory note plus accrued interest for purchase of shares $ - $521 Cancellation of notes receivable from shareholder for purchase of treasury stock $ - $710 RADIATION THERAPY SERVICES, INC. AND SUBSIDIARIES KEY OPERATING STATISTICS (unaudited) Three Months Ended For The Year Ended December 31, % December 31, % 2004 2003 Change 2004 2003 Change External beam treatments per day - 1,079 933 15.6% 1,052 905 16.2% freestanding centers Percentage change in external beam treat- 3.4% -4.5% 1.8% -1.4% ments per day - freestanding centers - same practice basis Percentage change in total revenues 21.6% 2.7% 14.0% 22.2% - same practice basis Regional networks at period end 19 17 11.8% Treatment centers - freestanding 46 40 15.0% Treatment centers - hospital 10 11 -9.1% 56 51 9.8% Days sales outstanding for the quarter 53 57
Radiation Therapy Services, Inc.
CONTACT: Dave Koeninger, Chief Financial Officer of Radiation TherapyServices, Inc., +1-239-931-7282, dkoeninger@rtsx.com; or Denise Roche,+1-646-536-7008, droche@theruthgroup.com, or Greg Tiberend, +1-646-536-7005,gtiberend@theruthgroup.com, both of The Ruth Group
Web site: http://www.rtsx.com/