Q3 2023 RadNet Inc Earnings Call
Pardon me, ladies and gentlemen, thank.
Thank you for staying on hold the conference will begin shortly please continue to stay on hold thank you for your patience.
[music].
Good day and welcome to the Radnet third quarter 'twenty 'twenty financial results Conference call. All participants will be in a listen only mode should you need assistance. Please signal a conference specialist by pressing Star then zero.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on your Touchtone phone to withdraw your question. Please press Star then two.
Please note this event is being recorded.
I'd now like to turn the conference over to Mark Stolper, Executive Vice President and Chief Financial Officer. Please go ahead.
Thank you.
Good morning, ladies and gentlemen, and thank you for joining Dr. Howard Berger and me today to discuss <unk> third quarter 2023 financial results.
Before we begin today, we'd like to remind everyone of the safe Harbor statement under the private Securities Litigation Reform Act of 1995.
This presentation contains forward looking statements within the meaning of the U S. Private Securities Litigation Reform Act of 1995.
Specifically statements concerning anticipated future financial and operating performance <unk> ability to continue to grow the business by generating patient referrals and contracts with radiology practices.
Accruing and retaining technologists, receiving third party reimbursement for diagnostic imaging services.
That's really integrating our acquired operations.
Generating revenue and adjusted EBITDA for the acquired operations as estimated among others are forward looking statements within the meaning of the safe Harbor.
Forward looking statements are based on management's current preliminary expectations and are subject to risks and uncertainties, which may cause radnet actual results to differ materially from the statements contained herein.
These risks and uncertainties include those risks set forth in Radnet reports filed with the SEC from time to time, including Radnet Annual report on Form 10-K for the year ended December 31 2022.
Undue reliance should not be placed on forward looking statements, especially guidance on future financial performance, which speaks only as of the date. It is made.
Radnet undertakes no obligation to update publicly any forward looking statements to reflect new information.
Or circumstances. After the date, they were made or to reflect the occurrence of unanticipated events.
And with that I'd.
Like to turn the call over to Dr. Berger.
Thank you Mark good morning, everyone and thank you for joining us today.
On today's call Mark and I plan to provide you with highlights from our third quarter 'twenty to 'twenty three results give you more insight into factors, which affected this performance and discuss our future strategy. After our prepared remarks, we will open the call to your questions I'd like to thank all of you for interest in our company and for dedicating a portion.
One of your day to participate in our conference call. This morning.
Let's begin.
I am very pleased with our performance in the third quarter strong procedural volumes, primarily contributed to the growth of revenue in the third quarter as compared with last year's third quarter aggregate procedural volumes increased eight 6% and same center procedural volumes increased four 2%.
These metrics drove an increase to consolidated revenue of 14, 8% from last year's third quarter.
Data revenue of 400.
2 million was the highest third quarter revenue in our company's history.
So revenue in the third quarter was $1 7 million less than that of the second quarter of this year, we had one less workday in the third quarter as compared with the second quarter.
However, the average revenue per day in the third quarter exceeded revenue per day in the second quarter, a trend that has continued into the fourth quarter.
The challenge remains servicing the heavy demand we are experiencing we have been experiencing in most of our local markets many of which has significant scheduling backlogs.
Adjusted EBITDA performance was also very strong in the third quarter.
Concert with strong revenue. This was a result of aggressive and active expense management, Despite a challenge labor market and inflationary pressures.
For the third quarter of last year adjusted EBITDA from the imaging Center reporting segment increased 23% to 60.4 million for the quarter. The continuation of these operating trends into the fourth quarter encourages us to raise 2023 adjusted.
EBITDA guidance for the third time this year.
The artificial intelligence division continues to gain momentum.
AI revenue has more than tripled from last year's third quarter and sequentially relative to the second quarter grew over 21% on roughly the same number of center offerings are enhanced breast cancer detection or a b C D service.
This is indicative of a wider patient enthusiasm within our east coast operations, where adoption rates are approaching 35%.
Subsequent to the ended the quarter, we began implementing a b C D and southern California, and expect that we will be fully deployed in all centers by the end of the first quarter of 2024.
We continue to receive very positive feedback from our patients, referring physicians and radiologists over 500 cancers have been diagnosed that otherwise would have gone undetected. While at the same time callback rates have been significantly lowered and radiologists productivity and accuracy has.
Been increased.
An immense amount of data has been collected which we will be sharing with payers in support of eventually receiving third party reimbursement for this service.
Aside from the clinical AI tools, we continue to advance efforts in general they are focused on driving efficiency and cost savings and radnet business processes, which will impact contact centers patient scandal scheduling.
Insurance verification and revenue cycle functions. The objective is to place into service. Some of these general AI tools [noise].
Beginning in the second quarter of 2024 currently we rely on manual processes to perform functions that can be more accurately and efficiently completed with artificial intelligence, we see a future where patients and referring physicians, we will be able to schedule appointments.
Be able to verify patient insurance coverage be able to request radiology reports and images received billing and payment information and pay outstanding balances amongst other things with significant reduction in manual intervention.
The process of moving the Red Radiology information and imaging management systems to the cloud has begun a cloud system will provide our centers and other customers and ecosystem to host Radnet steep health in third party AI solutions that can scale the capabilities.
Functionality of radiology operations. Additionally, a cloud based solution will provide customers better third party support system updates and improved security.
As we continue to advance the red platform and a suite of products and migrate them to the cloud there is a natural convergence between our radiology informatics and AI solutions, we see a time when customers, including radiology practices imaging centers and hospitals will use this platform. It is.
Seamless environment to host the clinical AI generative AI and business tools to manage and further their clinical and operational workflow requirements in the new year, we look forward to discussing more on how we plan to position.
It's AI and information informatics solutions into an industry, leading digital health platform.
During the third quarter, we expanded our relationship with Cedars Sinai Medical system, one of the Premier Health systems in Southern California as part of the expanded relationship we established a new joint venture co Los Angeles Imaging group initially with three locations as well as broadened our existing.
Two center joint venture Santa Monica Imaging group to include the contribution of seven additional centers five of which were contributed by Cedars Sinai and two from Radnet.
The expanded relationship with Cedars Sinai is designed to increase patient access to outpatient radiology by broadening the ambulatory network of imaging centers throughout Los Angeles, including certain underserved communities.
The ventures will streamline and improve patient care by improving workflow, providing better access to records and producing more timely and accurate results for patients and referring physicians. We now have three joint ventures with Cedars Sinai encompassing 16 locations in the west side downtown and San Fernando Valley.
Areas of Los Angeles.
As an increasing amount of patient volumes are being directed away from expensive hospital based imaging procedures towards more cost effective ambulatory outpatient settings hospitals and health systems are thinking.
Valuable long term strategies for outpatient imaging. This is leading to increased interest among hospitals and health systems to engage with us in partnership discussions and outpatient strategies, rather than its current partners or some of the largest and most successful systems in our geographies, including our WJ Barnabas Morial.
Care dignity Health Life Bridge University of Maryland Medical system Adventist, Cedars Sinai and others, Our hospital and health system partners have been instrumental in increasing our procedural volumes through their relationships with physician partners. Additionally, the joint venture partners are helpful.
Providing support if needed and establishing long term equitable outpatient reimbursement rates for our services after giving effect to the expanded.
Cedar Sinai relationship 130 of our 366 centers.
36% are now held within health system partnerships.
We continue to execute on our de Novo development strategy, which we launched almost two years ago.
These development projects are located in the markets, where we have patient backlogs require additional capacity well, where we currently lack access points to service patient populations in need of Radnet services.
While these projects require us to make capital investments above our normal spending we are confident that these centers will be material contributors to our long term performance and growth.
Approximately a dozen additional centers are scheduled to open throughout 2024 in various markets.
Finally, I would like to comment on red and its liquidity position and financial leverage.
On June 16th we completed an equity.
Equity offering where we raised $246 million of net proceeds to deleverage our balance sheet and position us to accelerate growth.
This offering along with strong operating performance resulted in a net debt to adjusted EBITDA ratio of approximately two times at the end of the third quarter. We currently have the lowest leverage and strongest liquidity position in our company's history.
As of September 30, we had 338 million of cash on our balance sheet and we're undrawn on our 195.
<unk> hundred $95 million revolving line of credit.
Our days sales outstanding Dsos at June 2023 was 33 six days, which we believe to be one of the best in the industry. While we are committed to growing and expanding our business. We will also continue to follow a disciplined approach to managing our financial leverage.
To this end October 30th subsequent to the third quarter, and we made a $30 million voluntary prepayment of our term loan demonstrating our commitment to managing our debt balance and cost of capital within an economic environment that has experienced rising interest rates inflation and other.
Macro economic challenges.
The lower leverage and cost of capital and stronger liquidity relative to many other industry operators position us to capitalize on acquisition opportunities and other business opportunities, we remain patient and disciplined in our approach to acquisition focus first on our core markets, where we bring unique synergies and cost savings.
<unk>.
At this time I'd like to turn the call back over to Mark to discuss some of the highlights of our third quarter 2023 performance. When he is finished I will make some closing remarks.
Thank you Howard.
I'm now going to briefly review, our third quarter 2023 performance and attempt to highlight what I believe to be some material items I will also give some further explanation of certain items in our financial statements as well as provide some insights into some of the metrics that drove our third quarter performance.
I will also provide an update to 2023 guidance levels, which were released in conjunction with our 2022 year end results in March and which we amended in may upon releasing our first quarter financial results and again in August probably releasing our second quarter financial results.
In my discussion I will use the term adjusted EBITDA, which is a non-GAAP financial measure.
The company defines adjusted EBITDA as earnings before interest taxes, depreciation and amortization and excludes losses or gains on the disposal of equipment or their income or loss loss on debt extinguishment and noncash equity compensation.
Adjusted EBITDA includes equity and earnings of unconsolidated operations and subtract allocations of earnings to Noncontrolling interest in subsidiaries and is adjusted for noncash or extraordinary and onetime events taking place during the period.
A full quantitative reconciliation of adjusted EBITDA to net income or loss attributable to Radnet, Inc. Common shareholders is included in our earnings release.
With that said I'd now like to review, our third quarter 2023 results.
For the third quarter of 2023, we reported revenue from our imaging centers reporting segment of $399 $1 billion and adjusted EBITDA of $64 million.
As compared with last year's third quarter revenue increased $49 $9 million or 14, 3% and adjusted EBITDA increased $10 $2 million or 23%.
Including revenue from our AI reporting segment of $2 $9 million consolidated revenue was $402 million in the third quarter of 2023, an increase of 14, 8% from $350 million in last year's third quarter.
Including a $2 $5 million adjusted EBITDA loss from the AI reporting segment consolidated adjusted EBITDA was $57 $9 million in the third quarter of 2023 at $45 $8 million in third quarter of 2022, an increase of 20.
Six 5%.
For the third quarter of 2023, Radnet reported net income of $17 $5 million as compared with $668000 for the third quarter of 2022.
Diluted net income per share for the third quarter of 2023. This 25 cents compared with diluted net income per share of one cent in the third quarter of 2022 based upon a weighted average number of diluted shares outstanding of $68 8 million shares in 2000.
Twenty-three at 57 7 million shares in 2022.
There were a number of unusual or one time items impacting the third quarter, including the following.
$2.3 million loss of noncash interest rate swaps net of accumulation.
The net of amortization of the accumulation of the changes in fair value of other in other comprehensive income.
$1.2 million of severance paid in connection with headcount reductions related to cost savings initiatives.
$16 8 million dollar gain on the contribution of imaging centers into the Santa Monica imaging group joint venture with Cedars Sinai.
1 million dollar expense related to leases for our de novo facilities under construction that have yet to open their operations.
$1.3 million of pretax losses related to our AI reporting segment net of noncash adjustments to contingent consideration and intangible assets.
And $915000 loss from the revaluation of certain acquisition contingent consideration.
For the above items.
Adjusted earnings from the imaging Center reporting segment was $9 $9 million and diluted adjusted earnings per share was <unk> 14 cents during the third quarter of 2023.
Also affecting net income in the third quarter of 2023 were certain noncash expenses and other unusual items, including $4 $3 million of noncash employee stock compensation expense, resulting from the vesting of certain options and restricted stock at $746000 of NN.
Noncash amortization of deferred financing costs and loan discounts related to financing fees paid as part of our existing credit facilities.
For the third quarter of 2023 as compared with the prior years third quarter MRI volume increased 11, 7%.
C T volume increased 10, 9% and pet C V T volume increased 17, 7%.
Overall volume taking into account routine imaging exams inclusive of X Ray ultrasound mammography and all other exams increased eight 6% over the prior year's third quarter.
On a same center basis, including only those centers, which were part of Radnet for both the third quarters of 2023 and 2022.
MRI volume increased six 9%.
<unk> volume increased 6% and pet C T volume increased 15, 2%.
Overall same center volume taking into account all routine imaging exams increased four 2% over the prior years same quarter.
Yes.
In the third quarter of 2023, we performed 2 million 511019 total procedures.
The procedures were consistent with our multi modality approach whereby 74, 7% of all the work we did by volume was from routine imaging.
Our procedures in the third quarter of 2023 were as follows.
389566, mris as compared with 348912 mris in the third quarter of 2022.
Okay.
230276, Cts as compared with 207554 Cts in the third quarter of 2022.
15216, pet Cts as compared with 12932 pet Cts in the third quarter of 2022.
And 1 million 875961 routine imaging exams as compared with $1 billion 742050 of all these exams in the third quarter of 2022.
Overall GAAP interest expense for the third quarter of 2023 was $16 $1 million. This compares with GAAP interest expense in the third quarter of 2022 of $12 $4 million.
The higher interest rate the higher interest cost is predominantly the result of the Upsized, New Jersey imaging network credit facility completed in October of last year in conjunction with N Jan's acquisition, Montclair radiology and at higher sofa array on our Unflapped floating rate.
Debt.
Cash paid for interest during the quarter, which excludes noncash deferred financing expense and accrued interest was $19 $5 million.
Cash paid for interest net of interest earned on our cash balance and interest rates swap payments received are.
From our swap Counterparties was $11 $7 million for the three months period ended September 30th 2023, and $41 $7 million for the first nine months of 2023.
With regards to our balance sheet as of September 30th 2023, unadjusted for bond and term loan discounts, we had $532 $7 million of net debt, which is our total debt at par value less our cash balance.
Note that this debt balance includes new Jersey imaging network debt of $144 $4 million for which Radnet is neither a borrower nor a guarantor.
This compares with $662 $9 million of bad debt at September 32022.
Our net debt balance is substantially lower than last year, primarily as a result of the stock offering we completed in June of this year.
As of September 32023, we were undrawn on our $195 million revolving line of crowded and it had a cash balance of $338 million.
At September 32023, our accounts receivable balance was $167.7 million, an increase of $1 $4 million from year end 2022.
Our days sales outstanding or DSO remained near the lowest levels in our company's history at 33 six days at September 32023.
The flat accounts receivable and low DSO. Despite our increased revenue are the result of improvements in cash collections from patients at the time of service and better performance with respect to avoiding insurance denials submitting clean claims and obtaining necessary preauthorizations and insurance here.
Vacation.
Through September 30 of 2023, we had cash capital expenditures net of asset dispositions and sale of imaging center assets and joint venture interests of $117 $9 million.
This excludes $13 $6 million of cash capital expenditures at our New Jersey imaging network joint venture $19 $8 million of flow equipment purchased off operating really really excuse me operating leases with a promissory note and a $5 million payment to purchase certain software.
And intellectual property from a vendor.
At this time I'd like to update and revise our 2023 financial guidance levels, which we released in conjunction with our fourth quarter and year end 2022 results and amended after reporting both our first and second quarter of 2003 2023 financial results.
For total net revenue.
Our revised guidance range is unchanged at $1.575 billion to $1.610 billion.
For adjusted EBITDA, we've increased our guidance range.
By $3 million, both at the low end and the high end of the range, our new guidance range for adjusted EBITDA is between $235 million and $245 billion.
For capital expenditures, we increased our guidance range, both at the low end and the high end by $5 million to $115 million to $125 million to reflect additional capital investments and our de novo facility openings.
For cash interest expense, our guidance remains unchanged at between 45 and $50 million for the year.
And our free cash flow guidance range also is unchanged at between 65 and $75 million.
For our AI segment, our guidance for both revenue and adjusted EBITDA remains unchanged for revenue, we anticipate $11 million to $13 million of.
Revenue for the year and for adjusted EBITDA, Our guidance range is between negative 11 and negative $13 million for the year.
Okay.
I'll now take a few minutes to give you an update on 2020 for reimbursement and discuss what we know with regards to 2020 for Medicare rates.
As a reminder, Medicare represents about 23% of our business mix.
With respect to Medicare reimbursement in July we received a matrix for proposed rates by CPT code, which is typically part of the physician fee schedule proposal that is or as that is released about that time every year.
At that time, we completed an initial analysis and compared those rates to 2023 rates.
We volume weighted our analysis using expected 2020 for procedural volumes.
As you May recall three years ago, CMS moved forward with increased reimbursement for evaluation and management CPT codes, which favor certain physician specialties that regularly deal for these services, particularly primary care doctors.
CMS proposed doing so with budget neutrality, meaning that it proposed to reallocate reimbursement from physicians, who rarely bill for these E. N M codes to physicians, who regularly bill for these codes.
As a result, radiology and most other specialties experienced cutscene reimbursement during 2021, 2022 and 2023 cuts.
It's meant to be phased in over a several year period.
The cuts we faced in 2023 were substantially mitigated by legislation that was passed at the end of last year as part of the consolidated Appropriations Act.
In this year's proposal.
And in July governing 2020 for reimbursement Medicare appeared to effectively be phasing in the remainder of the E. M. E. N M code related cut avoided last year as a result of the consolidated Appropriations Act.
Cut proposed for 2024 resulted from a decrease in the conversion factor in the Medicare fee schedule by about three 4% along with certain minor changes to the RV use the relative value units of certain radiology CPT codes.
Our initial analysis of the proposal implied that Radnet I'm roughly $1.6 billion in revenue would face an approximate seven to 9 million dollar revenue hit in 2024 from its Medicare business.
Last week, we received the CMS final rule governing 2020 for reimbursements.
Our analysis shows that the final rule is relatively consistent with the proposal in July and that our revenue will be impacted by the approximately $7 million to $9 million estimate that we had back in July.
Because the final rules decrease and the conversion factor affects all physicians not just radiologists. There are many lobbying groups from the various medical specialties aggressively opposing the Cai.
At this time, our experts believe there remains a reasonable likelihood that part of the scheduled cut will be mitigated through can drive congressional action that took that could take place next month similar to what happened last year.
While the $7 million to $9 million cut to Radnet revenue next year is not insignificant we have reimbursement increases completed or scheduled from capitate. It in commercial payers that will fully mitigate this Medicare reduction should it go into effect per CMS its final rule.
I'd now like to turn the call back over to Dr. Berger, who will make some closing remarks.
Yeah.
Thank you Mark.
We have a lot to be optimistic about as we move into 2024, while we may say, well, we might face headwinds from the $7 million to $9 million Medicare cut and from increasing labor rates. We have numerous growth initiatives that not only should overcome these challenges, but should provide us another year.
Of accelerated growth.
While we will not be issuing formal 2024 guidance until we announce fourth quarter and four and year end results in February.
And today's prepared remarks by discussing why we are so excited about 2024.
In the grocery there's initiatives that will fuel 'twenty 'twenty four performance.
First as Mark mentioned, we have scheduled rate increases with various commercial and cabinetry repairs that were more than mitigate the anticipated Medicare rate cut most payers recognize that we are their partners and moving imaging.
More expensive hospital settings, and realize the importance red and it provides in their outpatient network strategy.
We are in the fortunate position that we have tremendous demand, which makes our steadfast in working only with payors that properly value our services.
Second we anticipate that strong same center performance will continue throughout 2020 for projecting low to mid single digit growth on the current base of $1 6 billion of revenue, we expect $50 million to $60 million of incremental revenue in 2024.
Which by itself, so dwarfs, the Medicare and labor headwinds.
Third we expect to open approximately a dozen Dino rural facilities throughout 'twenty 'twenty, four which are currently in various stages of construction. These new center openings should contribute significantly to growth and profitability in 2024 and beyond as they have been focused in markets where.
We are experiencing patient backlogs or where there are identified patient populations that we're currently not servicing.
While these centers will open throughout the year, we anticipate each center contributing an average of $3 million to $5 million of additional revenue once mature.
Fourth we anticipate further progress in the AI and digital health platform.
We remain convinced that these technologies will transform both the clinical and operational aspects of all of radiology.
The end of 'twenty 'twenty four we could see a revenue on a run rate that is double our current performance and it is a realistic objective that we will reach breakeven adjusted EBITDA for this segment.
Fifth we anticipate that acquisition activity will accelerate in 2020. Four we currently have an active pipeline of opportunities and we believe that the higher interest rates and labor challenges will create further consolidation redness low leverage and strong liquidity.
Favorably position us to be an industry consolidator.
Lastly, we expect to drive growth through new and expanded health system Joint ventures, as we discussed today in conjunction with the expanded relationship with the Cedars Sinai Medical system in Los Angeles Joint ventures are an increasingly important and attractive growth aspect of our business. We believe that within the next two to three years over.
50% of our centers could be held in health system partnerships. We are currently in various stages of development of new and expanded partnerships, which we expect to announce during 2024.
Operator, we are now ready for the question and answer portion of the call.
We will now begin the question and answer session to ask a question you May Press Star then one on your Touchtone phone, if you're using a speakerphone. Please pick up your handset before pressing the keys.
But anytime you have a question has been accurate and you would like to withdraw your question. Please press Star then two.
At this time, we will pause momentarily to assemble our roster.
Yeah.
Our first question comes from Brian <unk> with Jefferies. Please go ahead.
Hey, good morning, Thanks for the questions and congrats on a quarter its Jackson on for Brian.
I wanted to start by digging a little deeper on the AI rollout I appreciate it.
The comments around the timing and having it fully rolled out by Q4, but is there any color you can give on sort of early findings there are things you've seen.
As you've started to roll it out you know what the progress to date and maybe you know performance on adoption looks pretty similar to the bar or a little better.
You, you're specifically, referring to U R E D C D product.
Yes, that's right.
Got it I'm, sorry that you may have said, it but I'm not certain I heard it in any of them are were very enthusiastic about it. We currently on the East Coast, where we began implementation of this earlier this year and I believe around the <unk>.
April time frame.
Now getting enrollment from our Ah patients are in the range of about 35% of the screening mammography, which are eligible for the early breast cancer detection program are the significance of that.
Is that it is self pay at this point so are patients and physicians, both primary care and rush surgeons realize the benefit of early detection, perhaps one or two years earlier than could previously been seen isn't important.
And urge them to breast cancer detection and in fact as I mentioned in my prepared remarks are to date, we have identified 500 cancers that would've taken another one to two years before they became clinically evident so we're extremely pleased.
With that I I have to admit that the.
The rollout of this program.
Is perhaps more difficult than we anticipated given the uncertainty that people have in general about artificial intelligence.
And the need to provide appropriate collateral material and information at the time of service that has altered our approach in which is helping us gain traction on this we also began the rollout here in September on though.
West Coast are which are early results are at least as good as they are on the.
East Coast and has benefited from the experience of the past six or seven months to provide the collateral material and instructional.
Information for patients. So we expect to have that fully rolled out by the.
End of the first quarter of 2024, once fully adopted and even at the rate that we're currently experiencing which we expect to increase.
We probably would be doing at least five to hundreds of 600000 of our screening mammograms in the a b C D program.
So I think that gives some magnitude is a potential that we're expecting even if the current rate does not increase but I believe that is very conservative at this point in time another element of this which we are continuing to gain information and they didn't.
Have itself prove importance is a decrease in the recall rate of certain breast mamograms, where there were the suspicion of cancer previously required further diagnostic evaluation and which along with the help of <unk>.
Our artificial intelligence and a third.
Third party consultation from our senior Mammographer radiologist has.
He has reduced the rate call right.
And given both the lower cost for the for these services as well as greater comfort surrounding the potential diagnosis. So.
<unk> increased cancer detection rate and decreased repo rates are.
Our data that we're collecting and plan to begin meeting with various pay oars are in order to.
Have them see the importance of this and began consideration of reimbursement for all women would go through their insurance.
Got it really helpful. And then one more for me just I appreciate some of the commentary around staffing shortages in labor challenges going forward can you just give a little bit more.
Detail on sort of how you think about that labor impact progressing throughout 2024, and any possible mitigation efforts you might have underway.
Alright.
Good question.
Thank you we are actively recruiting part of the challenges that we're facing which are unprecedented in our in our business like most of them.
Our resolve both of I believe the Covid after effect, if you will as well as just a an extraordinary demand for our services and fewer people being coming into the health care system to be trained for this so in that regard.
We believe.
Our salaries, which are going to be reflected in our 'twenty to 'twenty four budget of increases will help us and are helping us attract a more candidates and that we're actively pursuing educational programs, which while they probably will take some time.
For us to implement will allow us to increase the staffing levels that we need in order to expand the hours of operation and demand that we have along with this and it Shouldnt go unnoticed is our investment in technologies, which.
Almost on every type of procedure, we're doing will reduce the scan times and improve the throughput and workflow not only for the patients, but our technologists and our radiologists to make the whole patient journey are that much more effective so.
A combination of investment.
The adjustments to salary raises and active recruiting and educational programs.
We believe we will have a material effect on our ability to capture the additional volumes and demand, which we have virtually in every market that we serve.
Got it I appreciate it and congrats again on the quarter.
Thank you very much you bet regards to Brian.
Our next question comes from Nathan Mail, Ricky with Raymond James. Please go ahead.
Yeah.
Hey, good morning. Thanks for the question So and this is Nate now with you stepping in for John Ransom AR on the back of the announced J B's in new centers is there any more color you can provide us on kind of New center economics, and how quick these de novo's are to ramp I know there's been some.
Colin provided on revenue contribution at maturity, but anything else you can give us.
I'm not sure exactly your question you want to know the the ramp up of the de Novo centers or.
Yeah, I think Nate you, you're asking about what a typical de Novo center bite contribute and whether there's a ramp up to that contribution once mature or you are a majority process. Yeah. So I mean I think the way you can look at it as you know we said that we have about a dozen de novo centers that should.
It opened throughout 2024, and if you can if you think of them as being similar in size and scope and breadth of capabilities to the existing Radnet centers. You can think about the average center may I'm doing about $3 million to $5 million of revenue with a concert.
Houston pre corporate of about 20% EBITDA margins and after corporate kind of in the mid teens EBITDA contribution after corporate overhead so.
You know typically if.
If we've done our job correctly and been effective in assessing the demand in a particular market or if we're at capacity at a particular center that's in that market already or have significant backlogs.
The ramp up period of these de Novo's are are pretty short and we think after a couple of quarters.
We should be at full maturity of the centers you know if we like you know our investors who are listening to this call. You know we have a portfolio of of these types of opportunities and some will outperform our our our projections in our initial ramp up some will lag behind them or not.
Perfect every time, but you know we are as Dr. Berger mentioned experiencing heavy volumes at virtually all of our local markets and were struggling not with getting a patient demand, but actually getting them in the door and servicing in them and so that bodes well for.
Sure you know a a faster than typical ramp up for a lot of these to novo facilities.
Helpful. Thank you.
And then just a follow up on de Novo's and J P. So I'm just wondering if you could provide some color on kind of the makeup of their main pipeline or are those those 12 de novo start to open next year in all of those folks in California, or the mid Atlantic and then any color you can provide you know past 'twenty 'twenty four.
On the strategy would be helpful.
Yeah, I think for for the sake of this conversation are about half a dozen novo's for next year are on the.
East Coast and the other half on the West Coast.
Some of them are in joint ventures are particularly on the east coast, where we're expanding our relationship with the.
The with our WJ Barnabas in our New Jersey Imaging Network Division as well as the University of Maryland Medical system.
That could lead to.
Statewide opportunities that we would pursue with the University.
Of Maryland medical system.
The West Coast most of the joint ventures are in areas that are also with some of our joint venture partners like in Orange County.
With the Memorial Health system.
And some in more of the rural areas, where the demand continues to grow and we're radnet currently and the entire market. There. We're looking at is underserved from the standpoint of imaging services. So I think de Novo.
Those really should be taken into consideration for radnet, not as just a greenfield or a startup where it may take two to three years to develop.
Koch significant contribution from that effort, but as Mark mentioned here, we expect within two to three quarters at the most to ramp up the performance of these centers, which means that most of the centers that we're talking about a dozen centers that we're talking about will provide some.
EBITA and significant revenue impact in 2024.
Awesome. Thanks, guys.
The next question comes from Larry Solow with C. G. C. G is securities. Please go ahead.
Great. Thanks, Scott.
Just a follow up on the.
It sounds like Howard you mentioned, you actually had your average revenue.
Went up sequentially quarter over quarter, and that kind of box the the normal seasonality, which I think from most of the talking about the health care companies I think seasonality kind of did come back. This year. You know maybe we didn't have them for a couple of years of COVID-19, but pretty impressive to grow right through that.
My question here is it sounds like Youre operating more at a.
Supply constraints that some of your centers, just because I'm just not enough schedule with time in a day, maybe not a labor issue, but more just an absolute.
Just filling in some of these areas with some of these noblesville will alleviate that you've got kind of a you know.
Having said that to me it sounds like the strategy.
Yeah, I I think that's a primarily correct, but I will tell you that the staffing shortage is still substantial enough wherever you.
If we can be more successful in our recruiting efforts. There is a lot of additional volume that we can push through our imaging centers. We currently don't operate many of our centers are particularly for those procedures that are in highest demand and I'm talking about.
MRI, particularly and mammography, we can operate those.
Current centers given the fact that we just don't have enough staffing.
Made significant improvement and progress in that and I think that is all.
In large part due to the success in the third quarter, and which we're seeing accelerated even into the fourth quarter. So I I'd like to be more optimistic here, but it's a slow process Christian not only do we have.
Sure.
Not all not.
Do we have to only fine.
Finally.
The staffing we then have to.
Integrate them into the red in that system, which can take.
Two three months, sometimes of training on our equipment and our procedures. So this is going to be an ongoing process I think really for the long term here, both because there's a shortage and given the shortage, there's a a lot of demand that.
By us but by others.
Other providers.
In our markets.
But I.
I think our particular business model and.
And I think with the addition of all of the AI and generative AI tools.
We will be implementing also next year it'll make.
Radnet system, and even more attractive place for.
I was to recruit employees, both at the professional and non professional level.
Great I appreciate all the color and then just in terms of the expanded partnership or JV with Cedars Sinai.
So it looks like maybe Mark you can answer it looks like there was no cash.
And the deal looks like it just announced its structured as an asset swap can you maybe just give a little more or an hour and ask the contribution you bought contributing a fair amount of assets can you, maybe just give us a little walk us through that in a real fast yeah sure I think that's accurate.
Statements or premise in your question are.
We structured it with it when when you contribute assets, whether its cedar Sinai contributing assets into the joint venture or Radnet contributing assets. We have an outside third party valuation done to a value at fair market value of the assets being contributed and what we did with theaters because we <unk>.
Had two different joint ventures, one being expanded and one being created we were able to equalize and and the equity.
The resulting equity stakes of each of the partners in terms of their membership interests. In these in order to essentially not have a lot of cash changing hands and in one situation Cedar as was buying up in the other situation. We were radnet with was buying up in another.
Our joint venture it in such a way, where we're less than a million dollars of that cash actually changed hands between the two parties.
Let me amplify.
On this because.
In the joint ventures, particularly wrong with theaters, which we're extremely proud of is it's not just really about how the joint venture comes together, it's really about the partnership and the commitment that the health system. In this case theaters is making to Radnet and radnet.
Ah Cedars has really looked to radnet as their outpatient partner throughout southern California, and with that will come a lot of volume that they've currently be doing in the hospital and will be shifted over.
To the joint venture so that they can accommodate more acute care medicines in the hospital and where the outpatient imaging is really done in a much more convenient and comfortable atmosphere.
For their patients so while we initially put the partnership together or expanded it in this case.
Based on current activities, it's really the prospects of moving.
The outpatient imaging for all of Cedars into the red in that system, even in centers, where they not may not be part of the joint venture as Cedars looks to cast its shadow way beyond that.
Physical confines of their hospitals and become a major player and delivery of health care throughout Southern California. So you know for US. This is a lot more of a strategic relationship than it was just looking at the current financial relationships and insights.
We're extremely proud of this given that you know cedars was in U S News and World report I think it was this year anointed as number two health system in the country only.
Okay, and they book, they're looking to us to develop their outpatient strategy and adoption of artificial intelligence to be implemented for the screening tools that we have throughout there.
Their system and in southern California. So I think we have to look beyond just what the immediate assets award that were contributed and looked at the fact that Brian contribution from Cedars will be fuzzy on what we are currently doing today.
Gotcha and I appreciate all that color and if I could just slip one more in just on pricing it sounds like commercially.
Maybe get a little momentum on you saw it in and I know it's not.
Flipping the switch you've got I guess spoke to each pay or not.
And negotiated pricing and new contract when it sounds like that's building and then I guess, that's part a and then part B. The physician fee schedule you know in the rotation or rebalancing towards primary care is that we supposedly I think 2025, that's supposed to be kind of Don is there any kind of.
No. Its the government you never know what's going to happen there, but is that kind of maybe we have one more after 'twenty for one more year of pumps.
<unk>.
But when you say the government, we don't exactly know what's the main message.
Are you talking just about health care or in general.
Yeah.
But yeah, the CMS yeah, yeah, yeah yeah.
Yeah, Yeah, I I I I I.
I'm, just being a little facetious I apologize I don't know of course, no I get it [laughter] yeah I.
I think mark you can.
Embellish on this but I think if they're true to their word 'twenty 'twenty four may be the last year, yeah. Yeah. Yeah. Yeah. However, if they do some mitigation correct. It may go into 25, you know that this is this is a question of you know do you want to take the medicine all in one golf are divided up into.
You know two spoonfuls, but either way, we're going to get hit with it and [noise], yes, we'd like to see it pushed down the road, but with which the government is famous for but I'm not certain that that's going to be the case this year given all the other.
Issues and Dysfunctionality that there.
Currently exist.
Washington.
And as far as the the the other part.
I think what's important to emphasize here is.
The consolidation that we have is situationally followed here over really.
Decades, now finally has allowed us to have a seat at the table in terms of negotiating pricing for the with our pay offs and for years.
We have essentially been like almost every other.
Physician provider, we have been a price taker not a price maker.
And it's easy for a lot of these payers just to say this is what we're gonna pay take it or leave it and I think we have evolved in every one of our markets, where we're willing to say leave it if you don't recognize and reimburse us add sustainable rates that allow us to.
Two new not to make profitability, but to provide the level and quality of service, which we have become known for throughout the industry in which ultimately benefits them and to the extent that take care of their members. So I believe the discussions that we're having.
It is one that we've been doing through the years, but the tenure is different today given that the demand is so substantial that leave that scenario is one.
We're willing to adopt I don't want to call that the nuclear option, but there needs to be more of a conversation and that is take or leave it attitude and hopefully you know radnet will be able to demonstrate to the radiology community and for that matter to the health care community.
Importance of fair and reasonable reimbursement rates.
Alright, well, thanks, Howard I appreciate all that color.
Thank you Sir.
Okay.
Our next question comes from Jim Sidoti with Sidoti and company.
Go ahead.
Hi, good morning, and thanks for taking my call a couple of quick ones. It sounds like you added a handful of centers in the quarter.
Joint venture or extended joint venture how many total centers do you have right now.
366.
Okay.
And then.
Howard I think you made some comments about a little debt pay down in the quarter, but you did raise a $250 million or so of cash and it doesn't seem like you've made I mean, a big payments to date.
There are no more debt pay down coming in the fourth quarter are you, saying that for acquisitions.
Well I think we made a $30 million payment as I mentioned are in at the end of October we could make more but I think based on some of the opportunities that we see face not not facing us but opportunities that we have that we're pursuing are in 2024.
We've decided to keep some of our cash on the balance sheet and determine perhaps later in the fourth quarter or perhaps even by the end of this year, whether or not we would want to pay down more of that debt. So I think we're just being like we have been prudent in our use of cash year.
I wouldn't rule out paying down more of that that I also wouldn't rule out the use of it to expand you know the companies.
Footprint not only in our existing markets, but perhaps in other markets. So I think.
I'm sure if we elect to pay down more that our lenders would be more than happy to receive the money. So oh I don't think we'll get any resistance. If we choose to do more later, but I I think also our lenders as well as our shareholders want us to put the capital to work if it can be more helpful.
And growing the company and then improving our overall performance.
Okay alright, thank you.
Thank you John.
Our next question comes from GE with B Riley. Please go ahead.
Hi, This is Brian calling on for you on <unk> congratulations on the progress in the quarter and thanks for hosting us at your our flagship New York Imaging Center.
I'm just one on those returns are returning to the CNS question. I was just wondering if you could talk a little bit about that from a patient access point of view and what kind of arguments like pension and physician advocacy groups will have going into Congress and I think that you've already touched a little bit on it.
Thoughts on their chances for success, there, but maybe you can just reiterate that.
Well.
I I I like in the advocacy program to the old terrible if a tree falls in the woods or anybody here at I think you know we've.
Been to Washington, and met with numerous.
Both house, and Senate representatives or or their age and while we go through the process I'm not sure ultimately ultimately if it has any impact.
I think what CMS needs to do is really sit down.
And we value the primarily the technical component of what we deliver and take into consideration.
Impacts like inflation like salary increases and increasing cost of equipment and other things that they have not revalued probably for.
Close to two decades.
I think that the sustainability of what Medicare and CMS are doing.
Is ultimately going to hurt the health care delivery system and put.
The Medicare population in jeopardy of not having the S. Yes.
Access that they need as you've probably seen and when we see it.
Our markets here that the whole development of a concierge type of practice, where.
Where Medicare and maybe even other insurance paid payors are are not being taken and it's all goes to self pay is a trend that I think will continue as long as the system does not recognize the need to make the kind of.
Investments and create a reimbursement.
Sure it will attract the talent.
And allow for the investment.
That we are in.
In the U S are so capable of doing and bending the cost curve for the delivery of health care and there's there's a disconnect just has to change we we saw it changed dramatically during COVID-19. So that we know when the pressure is on to.
Deliver better health care.
The government can respond to that and I think we are in a similar although less noticeable crisis right now and.
Whether we're that agent to change or others are agents of change that change is coming it's got to come with other change.
Changes in health care, where we moved to perhaps more value based medicine for reimbursement population health and other things that will require short term investments, but will have long term gains and I think that will always as a country have too.
Suffer through this until the conversation much as I've talked about becomes a dialogue and not just a monologue based on the government's desire to try to just rearrange the chairs on the death of the Titanic.
Yeah.
Great Yeah, thanks for that that sounds like a like a longer term view are things in the near term do you think the best case scenario for this year would be that they kicked the can down the road next year and you know just the near term do you think that that year after year kicking the can down the road is likely to continue.
Yeah.
<unk>.
I guess the best thing to do is kick the can down the road that's what the government is very famous for.
But.
I think even if you kicked the can down the road. It's a recognition of the fact that in many aspects of our health care system is broke and the sooner we have more of a conversation, which truly looks at the root causes and not just tries to.
Lower access I'll give you perhaps the best example of this that we have a right now there is a clear benefit to screening for lung cancer.
Predominantly obviously from smokers.
Risk assessment tools have demonstrated that perhaps in excess of 15 million.
Americans are at risk for lung cancer and that there is reimbursement for that but right now only 6% of the people who are risk assess or even less or getting that and in the VA system, which is effectively a single payer system.
That number is even less than 6% I think it's appalling.
Had the opportunity to really change the dynamics and impact of lung cancer, which is the greatest has the highest mortality rate amongst all cancers is not something that is aggressive we're being pursued and instead hurdles or place for.
Patients who are risk assessed to be able to easily get a lung scan just as a woman is capable of getting a mammogram.
So you know by self referral and I know I'm kind of a stepping on a little bit of thin ice here because there is controversy about this but the one place there isn't controversy is earlier diagnosis leads to better outcomes and the more that leads away taking.
The aggressive actions necessary to earlier diagnosis and I'm, not just talking about lung cancer and I'm talking about all types of you know long term chronic diseases cardiac diseases diabetes et cetera, which imaging has unique opportunities to be.
The tool the agent and the tool of change needs to be adopted in a more urgent and aggressive manner then.
What any of the payers or the government is currently doing so.
Everything is kicking kicking the can down the road, but at some point.
This will only cause a further.
Yes on the system and it's time just to have all of US put a big boy pants on and and tackle these issues because we have the technology to do it and the fact that we don't is really a reprehensible.
For all of our health care leaders to not take a more aggressive action on this.
Right right.
Thanks for that maybe I could squeeze one more in on Alzheimer's.
Any updates on preparations going into providing for the medical imaging needs for those patients is more treatment options come on line.
Yeah, that's a great question.
We expect that there will be a significant increase in imaging.
As some of the new Alzheimer drugs get further adopted him.
All of us should be aware of just like everything else in health care, it's a slow process, but much like the experience that we've had with prostate cancer and the adoption of pets C. T scans, which has fundamentally changed the whole diagnostic and therapeutic approach to prostate cancer is possible.
Alzheimer's disease, we now have tools to detected earlier and quantify the.
Benefit of these new drugs, but they come with a potential side effects.
Which imaging can also help identify earlier and more accurately so I expect that over the next couple of years all of the.
As you know forces inside health care will start taking advantage of these new drugs.
And imaging will be at the forefront are to help make this a more effective tool in diagnosing Alzheimer's Alzheimer's is probably another underdiagnosed disease and while the number right here of $5 million.
People that have been diagnosed with Alzheimer's I think you could probably double that number and if people that could be diagnosed earlier before the more severe symptomatology makes a diagnosis more accurate. If you will so well, we're not certain how to be.
Will the revenue opportunity into our models at this point in time I'm confident that sometime in 'twenty, four and probably more than 2025, it'll have a substantial impact for our imaging network, which again.
It is built in the most densely populated areas, where the majority of Alzheimer's patients reside. So we expect to see a substantial benefits from that and probably that we can be part of bending that curve in the diagnosis and the earlier diagnosis and up.
Intimately treatment of Alzheimer's.
Great. Thanks for that color and thanks for taking my questions.
Thank you.
Our next question comes from Rishi Parekh with J P. Morgan. Please go ahead hey.
Thanks for taking my questions I guess I just had one around.
In your comments that you are actively looking at acquisitions. You know there are numerous opportunities and some of them include felt ventures are failing ventures can you just walk us through the characteristics of the acquisitions that you're pursuing and if youre looking at more of the challenged assets. What are you seeing in terms of multiples given their leverage profile are saying given some of the possibilities that they buy there.
We're invested in their assets or alienated or impaired relationships. Thank you.
Hum Big question, well first of all I think in general and not just in health care, but multiple certainly have come down I think you know.
The day of basically.
Almost a zero interest rates are.
Created a feeding frenzy. If you will that allows certain groups go out there and be less concerned about how much they were.
Paying for these assets given that money was one was almost free.
I think the benefit if you will of rising interest rates as being a little bit more common sense approach to this because health care you know unlike a lot of other industries is really unpredictable.
Things that we're looking at today for example, like labor shortages, continuing deterioration or lowering of reimbursement or things that we met out of thought about you know three years ago. So I think that the multiples are coming down.
We've been disciplined and never really got into that kind of an arms race, if you will and so.
That's why I think we're in a very good position with our leverage newly only being about two times.
That and I think more common sense, not just from distressed, but all of the assets inside of health care, and particularly imaging will now be a little bit more rational for US you know the decision making is really two parts number one.
In markets that we're currently in can acquisitions add to our network access which allows US you know are operational and conversational improvement for our reimbursements and that's always our first priority.
So much like we did last year.
It was last year with Montclair, radiology, which was a big provider in New Jersey, we stretched and made what I think was a very good acquisition for US long term in terms of our network access and delivery and buying a very high quality radiology group.
As opposed to new markets.
We are looking at new markets, but there has to be the right dynamic where we're not interested in going into a market, where we buy a single center or two even if the pricing looks good we have to have a good platform acquisition to enter a new market and one where.
There are growth opportunities to add to that that gives us a very substantial presence in that market for the same reasons that we've developed that and all the other seven markets that were in our seven states I should say that we're in we're in multiple markets beyond just the southern states, but I believe those opportunities will.
Now be more likely because of assets that may be distressed either because people tried their own consolidation and paid more for those assets and they're worth or are they just couldnt create the kind of consolidation synergies that they thought were there which were far more equipped.
To deal with so.
Hum.
As we mentioned in our remarks, I think our liquidity position and Leverages leverage allows us.
To look at opportunities.
To go into other markets or to potentially take on any acquisitions that might significantly better than the curve in terms of.
Radnet presence in.
The radiology community.
Are you done with your questions Rishi, Yes, alright. Thank you.
Oh, Alright, we were more onto our next question, which is from Ed Kressler with TPG Angelo Gordon. Please go ahead.
Good morning, and thank you very much for taking my questions and Rishi partially covered this but.
Just in terms of the recent equity raise and subsequent deleveraging at least on a net debt basis.
It's just a little more color on the thought process behind that please if you would it is it related to the de novo opportunity and kind of associated Capex is required there or is it more of this M&A driven opportunity that you just spoke to.
And the opportunity for even a transformational deal.
And then you know related to the possibility of a transformational deal do you do you have a leverage target that you feel comfortable going to.
For the right deal you know kind of you know obviously, we've gone through Covid and had some disruption.
But you know kind of pre Covid you were kind of you know.
Four times Levered versus kind of the two times Levered. You you are now do you how do you think about leverage in the context of a deal like that thank you.
Sure Hyatt.
I think I'll take this question.
I think to your to your question about how we're looking at our capital structure and deleveraging and how that could potentially change with that with acquisitions that you.
We've been prudent and disciplined and and it's not got been laughed at us that.
You know it.
Interest rates have gone up.
About 500 basis points in the last 12 to 18 months.
And so as as we've seen rates go up we've been more and more we've had more and more conviction to try to deleverage. The balance sheet. We were very fortunate that we entered into interest rate swaps in 2019 that have shielded us from some of the pain that others are.
Feeling is as the base rates have increased so so rapidly over the last you know 18 months.
We did do the equity raise.
In part to deleverage the business and de risk the capital structure.
But we also did that to accelerate growth.
As you know we've talked about.
A lot in our prepared remarks today and in past calls you know we've got you now.
More than a dozen de novo.
Center is in various stages of development, we're executing on hospital joint ventures, we continue to do the smaller.
In our M&A transactions in our markets, we're spending aggressively to increase capacity and improve our technology and our throughput at our centers to meet heavy demand and we see this as an opportunity to.
To set ourselves apart from other operators in our industry and competitors that we're that we have in our market, where we can advantage ourselves by having the capital and having the liquidity to execute on these types of opportunities when others cannot.
Now in terms of the other part of your question about you know are our thoughts off of levering up again for a you know a substantial acquisition I guess our answer is it all depends upon what the acquisition is and what the opportunity is to drive value for our shareholders and.
For you know, our all our stakeholders, including our lenders I think there would be an opportunity to do something on a larger scale for the right deal I think our R.
Our management team and you know that the level of infrastructure that we have can support a much larger platform and we can grow this business substantially.
You know in the future without essentially you know are building up our corporate infrastructure and much larger than it is today I think we've also over several decades of operating this business have you now come to a model that we think you know it is the model that works.
Our scale in this industry effectively so we would be interested in growing this business and and and that capital that we raised our in June of this year I think as you know.
Well positioned herself to to do something on a larger scale would we take on a little bit more leverage and a little bit more of a capital structure risk to do something like that I think the answer is yes, we're willing to do it to a point I don't I think that that the days of being five six times levered, particularly in a capital intensive business like the one.
We're in our are behind us because interest rates today don't lend themselves to having that type of leverage but you know that we would potentially take on additional leverage if if we could convince ourselves that in a reasonable time period, meaning 12 to 24 months, we could delever.
The capital structure through synergies and efficiencies with whatever you know transaction we were contemplating.
Great. Thank you. Thanks, so much for that color Oh, I'm sorry, yeah. That's okay. I. Just wanted you had a comment I think mark was spot on here. There's there's three things that really allow us to potentially look at something transformational.
One is you know where the synergies come from if we can't find synergies then I don't believe it's possible to think of a large transformation all acquisition because.
The need to leverage down is critical to you know redness philosophy, so synergies become probably the single most important driver and as opposed to what I've seen other people do when we do due diligence and find synergies we're going to have to have an extraordinary degree.
We have confidence that those can be.
Cheese, that's number one.
Number two.
We have tender now, which we didn't have before in the value of our stock that would have to be a component of any transaction to to avoid.
Leveraging up the company beyond levels that we're comfortable with but the third one that I want to mention is the.
The fact that we have committed to a substantial investment and transition inside radnet to artificial intelligence, both on the clinical and operational side will allow us as read and it performs today and into the future as well as <unk>.
Taking on other expanded relationships with over there with our joint venture partners do acquisitions or something transformational that will allow us to run that.
Company in a way that doesn't burden us like it does today with the need for more and more human capital. So our AI capital becomes really the driver in our ability to take the almost 400 centers that we'll have by early.
Next year.
And create a sizeable business beyond that and I wanted to leave everybody with that commitment on the part of Radnet to make the investments that will not only make radnet.
A bigger and better company, which but which will have ultimately enormous benefit to the most important asset we have and that's our customer base. Our patients. So I think we're in a much different place today than we were even a year ago and I think the.
The future for for Radnet, and all of its employees and shareholders is very rosy.
Thank you so much for all the color.
This concludes our question and answer session I would like to turn the conference back over to Don talk to Parker for any closing remarks.
Thank you again, and I would like to take the opportunity to thank all of our shareholders for their continued support.
And particularly the employees of Radnet for their dedication and hard work management will continue its endeavor to be a market leader that provides great services with an appropriate return on investment for all of our stakeholders. Thank you for your time today and I look forward to our next call good day.
Yeah.
The conference has now concluded. Thank you for attending today's presentation you may all now disconnect.