Alliance Imaging Reports Results for the Third Quarter and Nine Months Ended Sept. 30, 2003; Announces Changes to the Company's Board of Directors.Business Editors ANAHEIM Anaheim (ăn`əhīm), city (1990 pop. 266,406), Orange co., S Calif., SE of Los Angeles; inc. 1870. Anaheim was founded by Germans in 1857 as an experiment in communal living. , Calif.--(BUSINESS WIRE)--Nov. 3, 2003 Alliance Imaging Inc. (NYSE NYSE See: New York Stock Exchange :AIQ AIQ Analytical Instrument Qualification AIQ Available in Quarters AIQ Action Internet Québec AIQ Allowance Item Quantity AIQ Analyst Interest Queue AIQ Algebraic Integer Quantization ), a leading national provider of diagnostic imaging services, announced results for the third quarter and first nine months ended Sept. 30, 2003. Revenues decreased 0.2% to $105.7 million for the third quarter ended Sept. 30, 2003 from revenues of $105.9 million for the same quarter in 2002, a decrease of $0.2 million. For the first nine months of 2003, revenues increased 1.7% to $313.7 million from $308.5 million in the same period of the preceding year, a $5.2 million increase. Alliance's earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. , adjusted for non-cash stock-based compensation expenses, impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charges, employment agreement costs, and severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and related costs ("Adjusted EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become "), decreased 7.8% to $43.8 million for the third quarter of 2003 from $47.5 million for the corresponding quarter of 2002, a decrease of $3.7 million. For the first nine months of 2003, Adjusted EBITDA decreased 6.3% to $129.3 million from $138.0 million in the same period of 2002, a decrease of $8.7 million. For a more detailed discussion of Adjusted EBITDA and reconciliation to net income (loss), see the table entitled en·ti·tle tr.v. en·ti·tled, en·ti·tling, en·ti·tles 1. To give a name or title to. 2. To furnish with a right or claim to something: "EBITDA and Adjusted EBITDA" included in the tables following this release. Alliance incurred the following costs that were excluded from the calculation of Adjusted EBITDA. Non-cash stock-based compensation expenses totaled $0.4 million in both the third quarter of 2003 and 2002, respectively, and $1.3 million and $1.5 million in the first nine months of 2003 and 2002, respectively. Employment agreement costs totaled $0.5 million and $2.1 million in the third quarter and first nine months of 2003, respectively, and severance and related costs totaled $0.1 million and $1.9 million in the third quarter and first nine months of 2003, respectively. Also excluded from the calculation of Adjusted EBITDA in the third quarter and first nine months of 2003 were non-cash asset impairment charges of $22.8 million for certain older MRI 1. (application) MRI - Magnetic Resonance Imaging. 2. MRI - Measurement Requirements and Interface. systems, $0.8 million of impairment charges for certain of its customer contracts, and $41.9 million of impairment charges related to certain goodwill and other intangible assets Intangible Asset An asset that is not physical in nature. Notes: Examples are things like copyrights, patents, intellectual property, and goodwill. These are the opposite of tangible assets. . These asset impairment charges were recorded under the requirements of Statements of Accounting Standards ("SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System ") No. 142, "Goodwill and Other Intangible Assets" and SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived long-lived adj. 1. Having a long life: a long-lived aunt. 2. Lasting a long time; persistent: a long-lived rumor. 3. Assets." Also included in impairment charges is a $7.7 million charge to reflect the decline in value of an investment in a joint venture. Earnings per share on a diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis (excluding non-cash stock-based compensation expenses, impairment charges, employment agreement costs, and severance and related costs) were $0.15 per share for the third quarter of 2003 compared to $0.21 per share (excluding non-cash stock-based compensation expenses) for the third quarter of 2002. For the first nine months of 2003, earnings per share on a diluted basis (excluding non-cash stock-based compensation expenses, impairment charges, employment agreement costs, and severance and related costs) were $0.46 per share compared to $0.57 per share (excluding non-cash stock-based compensation expenses) for the corresponding period of 2002. The net loss per share was $(1.06) for the third quarter of 2003 compared to earnings per share on a diluted basis of $0.20 per share for the third quarter of 2002. The net loss per share was $(0.80) for the first nine months of 2003 compared to earnings per share on a diluted basis of $0.55 per share for the first nine months of 2002. For a more detailed discussion and computation Computation is a general term for any type of information processing that can be represented mathematically. This includes phenomena ranging from simple calculations to human thinking. of earnings per share, see the table entitled "Earnings (Loss) Per Share" included in the tables following this release. At Sept. 30, 2003, the Company's net debt to last 12 months Adjusted EBITDA was 3.3x. Cash flow provided by operating activities was $37.0 million in the third quarter of 2003 compared to $36.8 million in the corresponding period of the preceding year. For the nine months ended Sept. 30, 2003 and 2002, cash flow from operating activities totaled $96.5 million and $97.8 million, respectively. Capital expenditures were $19.1 million in the third quarter of 2003 compared to $13.0 million in the same quarter of 2002. For the nine months ended Sept. 30, 2003 and 2002, capital expenditures totaled $69.6 million and $50.3 million, respectively. Paul Paul, 1901–64, king of the Hellenes (1947–64), brother and successor of George II. He married (1938) Princess Frederika of Brunswick. During Paul's reign Greece followed a pro-Western policy, and the Cyprus question was temporarily resolved. S. Viviano, President and Chief Executive Officer stated: "We are pleased to report that our Adjusted EBITDA was near the high end of our guidance range. We continue to focus on our core shared-service MRI business. Our positron emission tomography positron emission tomography: see PET scan. positron emission tomography (PET) Imaging technique used in diagnosis and biomedical research. ("PET") modality modality /mo·dal·i·ty/ (mo-dal´i-te) 1. a method of application of, or the employment of, any therapeutic agent, especially a physical agent. 2. continues to grow at a rapid rate, with PET revenue in the first nine months of 2003 increasing 100% over the first nine months of last year. During the third quarter, we opened our third free-standing free-standing Managed care adjective Referring to a physically and, often, financially discrete entity–eg, a surgical center, that is separate from, but may be affiliated with, a hospital; FS facilities may provide ambulatory surgery, emergency or imaging center in 2003 and plan on opening two more centers during the fourth quarter." The Company also announced today that Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a N. Zehner Zeh´ner n. 1. An Austrian silver coin equal to ten kreutzers, or about five cents. has resigned his position as Chairman of the Board on the Company's Board of Directors. Mr. Zehner will remain an employee of Alliance Imaging. Mr. Viviano commented: "I would like to thank Rick for his outstanding contribution for over 20 years to Alliance Imaging. Rick is a pioneer of the mobile diagnostic imaging industry, starting with one mobile CT system in 1983. His leadership has been instrumental in the growth of Alliance Imaging. We are pleased that we will continue to work with Rick." The Company also announced today that Mr. Viviano, who already holds a position on Alliance's board of directors, has been appointed ap·point tr.v. ap·point·ed, ap·point·ing, ap·points 1. To select or designate to fill an office or a position: appointed her the chief operating officer of the company. 2. to the role of Chairman of the Board, filling the position vacated by Mr. Zehner. Mr. Viviano will continue as President and Chief Executive Officer of the Company. Alliance Imaging is a leading national provider of diagnostic imaging services. Alliance provides imaging services primarily to hospitals and other healthcare providers on a shared and full-time full-time adj. Employed for or involving a standard number of hours of working time: a full-time administrative assistant. full service basis, in addition to operating a growing number of free-standing imaging centers. The Company had 468 diagnostic imaging systems, including 365 MRI systems, and 1,339 clients in 45 states at Sept. 30, 2003. Investors and all others are invited to listen to a conference call discussing third quarter results. The conference call is scheduled for Nov. 4, 2003 at 1 p.m. Eastern Time. The call will be broadcast live on the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the and can be accessed by visiting the Company's Web site at www.allianceimaging.com. Click on Audio Presentations in the Investor Relations Investor relations The process by which the corporation communicates with its investors. section of the Web site to access the link. The conference call can also be accessed at 888-689-9529 (United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ) or 706-645-0319 (International). Interested parties should call at least 10 minutes prior to the conference call to register. A replay of the call can be accessed until Dec. 4, 2003 by visiting the Company's Web site or by calling 800-642-1687 (United States) or 706-645-9291 (International). The conference call replay identification number is 3512342. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . These statements involve risks and uncertainties that could cause actual results to differ materially from those projected. For a complete list of risks and uncertainties, please refer to the Risk Factor section of the Company's Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended Dec. 31, 2002 filed with the Securities and Exchange Commission.
ALLIANCE IMAGING INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
Third Quarter Nine Months
Ended Ended
September 30, September 30,
2002 2003 2002 2003
Revenues $105,920 $105,660 $308,477 $313,728
Costs and expenses:
Operating expenses, excluding
depreciation 46,993 49,742 135,876 147,913
Selling, general and
administrative expenses 11,451 12,151 34,563 36,482
Employment agreement costs -- 471 -- 2,125
Severance and related costs -- 139 -- 1,855
Non-cash stock-based
compensation 418 418 1,482 1,254
Impairment charges 73,225 73,225
Depreciation expense 17,610 19,955 51,705 56,559
Amortization expense 564 676 1,697 2,029
Interest expense, net of
interest income 11,755 10,851 36,114 33,074
Other income (41) -- (41) (243)
Total costs and expenses 88,750 167,628 261,396 354,273
Income (loss) before income
taxes 17,170 (61,968) 47,081 (40,545)
Income taxes expense (benefit) 7,125 (11,292) 19,539 (2,402)
Net income (loss) $10,045 $(50,676) $27,542 $(38,143)
Earnings (loss) per common
share:
Basic $0.21 $(1.06) $0.58 $(0.80)
Diluted $0.20 $(1.06) $0.55 $(0.80)
Weighted average number of
shares of common stock
and common stock
equivalents:
Basic 47,627 47,929 47,578 47,835
Diluted 49,724 47,929 49,953 47,835
ALLIANCE IMAGING INC.
EBITDA AND ADJUSTED EBITDA
(in thousands)
EBITDA represents earnings before interest expense, net, other
income, income taxes, depreciation and amortization expense. Adjusted
EBITDA represents EBITDA adjusted for employment agreement costs,
severance and related costs, impairment charges, and non-cash
stock-based compensation expenses. EBITDA and Adjusted EBITDA are not
presentations made in accordance with accounting principles generally
accepted in the United States of America. EBITDA and Adjusted EBITDA
should not be considered in isolation or as substitutes for net
income, cash flows from operating activities and other income or cash
flow statement data prepared in accordance with generally accepted
accounting principles or as measures of profitability or liquidity.
EBITDA and Adjusted EBITDA are included to provide additional
information with respect to a measure that certain investment analysts
use as a benchmark for measuring our operating performance, our
ability to satisfy our debt service, capital expenditure and working
capital requirements, and because certain covenants in our debt
service instruments are based on similar measures. While EBITDA and
Adjusted EBITDA are used as measures of operations and the ability to
meet debt service requirements, they are not necessarily comparable to
other similarly titled captions of other companies due to differences
in methods of calculation. The calculations of EBITDA and Adjusted
EBITDA are shown below:
Third Quarter Nine Months
Ended Ended
September 30, September 30,
2002 2003 2002 2003
Net income (loss) $10,045 $(50,676) $27,542 $(38,143)
Depreciation expense 17,610 19,955 51,705 56,559
Amortization expense 564 676 1,697 2,029
Interest expense, net 11,755 10,851 36,114 33,074
Other income (41) -- (41) (243)
Income taxes 7,125 (11,292) 19,539 (2,402)
EBITDA 47,058 (30,486) 136,556 50,874
Employment agreement costs -- 471 -- 2,125
Severance and related costs -- 139 -- 1,855
Impairment charges -- 73,225 -- 73,225
Non-cash stock-based
compensation 418 418 1,482 1,254
Adjusted EBITDA $47,476 $43,767 $138,038 $129,333
Revenue $105,920 $105,660 $308,477 $313,728
EBITDA margin 44.4% -28.9% 44.3% 16.2%
Adjusted EBITDA margin 44.8% 41.4% 44.7% 41.2%
ALLIANCE IMAGING INC.
EARNINGS (LOSS) PER SHARE
(in thousands, except per share amounts)
Earnings (loss) per share represents net income (loss) divided by
the weighted average number of shares of common stock and, in the case
of periods that the Company had net income, common stock equivalents
outstanding during the quarter. Earnings (loss) per share, excluding
employment agreement costs, severance and related costs, impairment
charges, and non-cash stock-based compensation expenses represent the
add back of the above noted items, net of tax, divided by the weighted
average number of shares of common stock and, in the case of periods
that the Company had net income, common stock equivalents outstanding
during the quarter. Earnings (loss) per share, excluding employment
agreement costs, severance and related costs, impairment charges, and
non-cash stock-based compensation expenses are not a presentation made
in accordance with accounting principles generally accepted in the
United States of America. Earnings (loss) per share, excluding
employment agreement costs, severance and related costs, impairment
charges, and non-cash stock-based compensation expenses should not be
considered in isolation or as a substitute for earnings (loss) per
share, net income, and other income statement data prepared in
accordance with generally accepted accounting principles or as a
measure of profitability. Earnings (loss) per share, excluding
employment agreement costs, severance and related costs, impairment
charges, and non-cash stock-based compensation expenses is included to
provide additional information with respect to a measure that certain
investment analysts use as a benchmark for our operating performance
and because certain covenants in our debt service instruments are
based on similar measures. While earnings (loss) per share, excluding
employment agreement costs, severance and related costs, impairment
charges, and non-cash stock-based compensation expenses is used as a
measure of operations and the ability to meet debt service
requirements, it is not necessarily comparable to other similarly
titled captions of other companies due to differences in methods of
calculation. The calculations of earnings (loss) per share and
earnings (loss) per share, excluding employment agreement costs,
severance and related costs, impairment charges, and non-cash
stock-based compensation expenses are shown below:
Third Quarter Nine Months
Ended Ended
September 30, September 30,
2002 2003 2002 2003
Net income (loss), as reported $10,045 $(50,676) $27,542 $(38,143)
Add employment agreement costs -- 471 -- 2,125
Less income tax effect of
employment agreement costs -- (195) -- (882)
Add severance and related costs -- 139 -- 1,855
Less income tax effect of
severance and related costs -- (58) -- (770)
Add impairment charges -- 73,225 -- 73,225
Less income tax effect of
impairment charges -- (15,964) -- (15,964)
Add non-cash stock-based
compensation 418 418 1,482 1,254
Less income tax effect of non-
cash stock based
compensation (173) (173) (615) (520)
245 57,863 867 60,323
Income excluding employment
agreement costs,
severance and related costs,
impairment charges,
non-cash stock-based
compensation $10,290 $7,187 $28,409 $22,180
Earnings (loss) per share --
diluted
As reported $0.20 $(1.06) $0.55 $(0.80)
Excluding employment agreement costs,
severance and related costs,
impairment charges and non-cash
related costs and non-cash
stock-based compensation $0.21 $0.15 $0.57 $0.46
Weighted average number of shares
outstanding:
Diluted (in periods reported
with a loss) 47,929 47,835
Diluted (in periods reported
with income) 49,724 48,264 49,953 48,443
ALLIANCE IMAGING INC.
SELECTED CONDENSED CONSOLIDATED BALANCE SHEET INFORMATION
(in thousands)
December September
31, 30,
2002 2003
(Unaudited)
Cash and cash equivalents $31,413 $19,002
Accounts receivable, net 49,830 52,273
Total current assets 99,502 90,248
Equipment, net 358,607 354,153
Total assets 683,058 629,480
Total current liabilities 55,923 62,463
Long-term debt, including current maturities 608,862 589,552
Stockholders' deficit (42,309) (78,619)
ALLIANCE IMAGING INC.
SELECTED STATISTICAL INFORMATION
Third Quarter
Ended
September 30,
2002 2003
MRI scan-based
Average number of scan-based systems 302.8 308.1
Scans per system per day 9.90 9.54
Total number of MRI scans 221,600 211,100
Price per scan $366.4 $357.7
PET and PET/CT systems
Number of owned systems at quarter end 22 38
Total number of systems (including
unconsolidated
joint ventures) at quarter end 25 41
Revenue breakdown (in millions)
Scan-based MRI revenue $81.2 $75.5
PET revenue 8.0 15.1
Non-scan based MRI and other modalities 16.7 15.1
Total revenues $105.9 $105.7
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