NightHawk Radiology Holdings, Inc. Releases Record Third Quarter 2007 Results
COEUR D'ALENE, Idaho, Oct. 30 /PRNewswire-FirstCall/ -- NightHawk Radiology Holdings, Inc. , the leading provider of radiology solutions to radiology groups across the United States, today announced financial results for its third quarter ended September 30, 2007. Revenue grew 79% year-over-year to a record $45.2 million in the third quarter of 2007 from $25.2 million in the third quarter of 2006. Excluding the impact of acquisitions, the company experienced significant year-over-year organic revenue growth of 24%. The company also achieved strong adjusted EPS growth of 24% in the third quarter, while making significant investments in acquisitions, infrastructure, and management necessary to enhance its platform for future growth.
"Our third-quarter results reflect continued solid organic growth and significant progress on integrating recent acquisitions, and we continue to gain traction in our new service offerings," said Dr. Paul Berger, Chairman and Chief Executive Officer. "Our investments in acquisitions, infrastructure, and management in 2007 have positioned us to capitalize on significant future market opportunities and we're very pleased that we've been able to achieve both record revenues and record adjusted earnings per share during this period of investment."
Tim Mayleben, NightHawk's President and Chief Operating Officer, added "We continue to expect outstanding growth for the full year through both organic growth and through the acquisitions we've made." The company revised its guidance to reflect emerging clarity related to projected growth in new service offerings during the latter part of 2007. "The revisions to our guidance continue to reinforce our view of the opportunities that lie ahead for our new service offerings, our outlook for 2008, and our commitment to preserve investments in key initiatives while responding to changes in revenue," said Mayleben.
The company's adjusted net income for the third quarter of 2007 was $8.0 million or $0.26 per diluted share, compared to $6.5 million, or $0.21 per diluted share, during the third quarter of 2006. The company's adjusted net income excludes certain non-cash charges related to stock compensation, amortization of intangibles, and IBNR charges. As expected, the increase in adjusted net income was impacted by redundant SG&A expenses and temporary higher physician compensation levels on acquired entities, combined with acquisition-related interest expense on the company's $100 million debt facility. The company anticipates significant improvement to adjusted net income in 2008 as the company completes the integration of these acquisitions into the NightHawk platform. Adjusted net income was also impacted by investments in the business and in new services to position the company for future growth. The company projects increases in operating margins in the fourth quarter of 2007, with the full benefits of acquisition integration and related investments to be realized in 2008 and beyond.
GAAP net income for the third quarter of 2007 was $3.8 million compared to $5.6 million for the third quarter of 2006. The decrease in 2007 GAAP net income was largely due the same items described above with respect to adjusted net income. Additionally, GAAP net income was impacted by higher non-cash charges for stock compensation, IBNR, and amortization of intangibles.
A reconciliation of adjusted net income to GAAP net income is included in the tables attached to this press release.
"We're pleased with our progress in the first nine months of 2007 -- a time spent on further differentiating NightHawk and positioning the company to achieve growth in 2008 and beyond," said Mayleben. "We do not anticipate any significant change to our overall financial health or growth trajectory and look forward to further distinguishing NightHawk as the leading provider in the industry in the coming year."
Earnings Conference Call
The company will host a conference call on Wednesday, October 31, 2007 at 8:30 a.m. (ET). A live web cast of the conference call, as well as a replay, will be available online on the company's corporate web site at http://www.nighthawkrad.net. Participants can also access the call by dialing 800-257-1836 (within the United States and Canada), or 303-262-2142 (international callers). A replay of the call will be available approximately two hours after the call has ended and will be available until 11:59 p.m. (ET) on Wednesday, November 21, 2007. To access the replay, dial 800-405-2236 (within the United States and Canada), or 303-590-3000 (international callers) and enter the conference ID number: 11099637.
About NightHawk
NightHawk Radiology , headquartered in Coeur d'Alene, Idaho, is leading the transformation of the practice of radiology by providing high-quality, cost-effective services 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, for more than 750 radiology group customers and the 26% of all U.S. hospitals they serve. For more information, visit http://www.nighthawkrad.net.
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 growth strategy, the expansion and market acceptance of its current service offerings, the benefits and integration of acquisitions, and an outlook on the company's future financial results, including its revenue, operating margins, and adjusted earnings per diluted share for 2007 and 2008. 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.
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 providing for 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) for 2006 only, the non-cash charges related to the conversion feature and accretion of our preferred stock, which charges ceased upon the closing of our initial public offering when our shares of preferred stock converted into shares of common stock, (ii) the non-cash charges related to our stock-based compensation, (iii) the non-cash expense associated with the amortization of intangibles and (iv) the non-cash expense associated with changes to our IBNR reserve (incurred but not reported medical liability reserves). 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 on our corporate website under the heading investor relations.
CONTACT: Media, Christen Graham of Warner Communications, +1-978-526-1960,
christen@warnerpr.com, for NightHawk Radiology Holdings, Inc.; or
Investors, Andrea Clegg of NightHawk Radiology Holdings, Inc.,
+1-866-402-4295, +1-208-292-2818, aclegg@nighthawkrad.net
Web site: http://www.nighthawkrad.net/