Attached files
| file | filename |
|---|---|
| EX-2.1 - RadNet, Inc. | v207373_ex2-1.htm |
| EX-2.2 - RadNet, Inc. | v207373_ex2-2.htm |
| EX-23.1 - RadNet, Inc. | v207373_ex23-1.htm |
| EX-99.1 - RadNet, Inc. | v207373_ex99-1.htm |
| 8-K/A - RadNet, Inc. | v207373_8ka.htm |
Exhibit
99.2
Unaudited
Pro Forma Condensed Consolidated Financial Statements of RadNet,
Inc.
On
December 2, 2010, Radnet, Inc. ("RadNet") completed its acquisition of five
imaging centers in Northern New Jersey and a 50% equity interest in a sixth
center from Progressive Health, LLC and certain affiliates and related entities
(“Progressive”). The following unaudited pro forma condensed consolidated
financial statements of RadNet, Inc. ("RadNet") have been prepared to give
effect to the completed acquisition, which was accounted for using the purchase
method of accounting.
The
unaudited pro forma condensed consolidated balance sheet of RadNet as of
September 30, 2010, and the unaudited pro forma condensed consolidated
statements of operations of RadNet for the nine months ended September, 2010 and
the year ended December 31, 2009, are presented herein. The unaudited pro
forma condensed consolidated balance sheet of RadNet was prepared using the
historical balance sheets of RadNet and Progressive as of September 30, 2010.
The unaudited pro forma condensed consolidated statements of operations were
prepared using the historical statements of operations of RadNet and Progressive
for the nine months ended September 30, 2010 and for the year ended
December 31, 2009.
The
unaudited pro forma condensed consolidated balance sheet of RadNet gives effect
to the acquisition of Progressive as if it had been completed on September 30,
2010, and consolidates the unaudited condensed balance sheet of RadNet and
Progressive. The unaudited pro forma condensed consolidated statements of
operations for the nine months ended September 30, 2010 and for the year ended
December 31, 2009 give effect to the acquisition of Progressive as if it
had occurred on January 1, 2009.
The
unaudited pro forma condensed consolidated financial statements presented are
based on the assumptions and adjustments described in the accompanying notes.
The unaudited pro forma condensed consolidated financial statements are
presented for illustrative purposes and do not purport to represent what the
financial position or results of operations actually would have been if the
events described above occurred as of the dates indicated or what such financial
position or results would be for any future periods. The unaudited pro forma
condensed consolidated financial statements, and the accompanying notes, are
based upon the respective historical consolidated financial statements of RadNet
and Progressive, and should be read in conjunction with RadNet’s historical
financial statements and related notes and "Management's Discussion and Analysis
of Financial Condition and Results of Operation" contained in RadNet’s Annual
Report on Form 10-K for the year ended December 31, 2009 and its Quarterly
Report on Form 10-Q for the period ended September 30, 2010, as well as
Progressive’s financial statements presented herein.
-1-
RADNET,
INC.
UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
(IN
THOUSANDS)
As
of September 30 ,2010
|
Elimination
of
|
||||||||||||||||||||||
|
excluded
|
Pro
forma
|
Pro
forma
|
||||||||||||||||||||
|
RadNet
|
Progressive
|
imaging
centers
|
adjustments
|
combined
|
||||||||||||||||||
|
ASSETS
|
||||||||||||||||||||||
|
CURRENT
ASSETS
|
||||||||||||||||||||||
|
Cash
and cash equivalents
|
$ | 24,462 | $ | 1,172 | $ | (114 | ) |
(a)
|
$ | (18,194 | ) |
(b)
|
7,326 | |||||||||
|
Accounts
receivable, net
|
94,604 | 7,525 | (556 | ) |
(a)
|
(5,910 | ) |
(c)
|
95,664 | |||||||||||||
|
Prepaid
expenses and other current assets
|
16,472 | 170 | (12 | ) |
(a)
|
(62 | ) |
(d)
|
16,568 | |||||||||||||
|
Total
current assets
|
135,538 | 8,868 | (682 | ) | (24,166 | ) | 119,558 | |||||||||||||||
|
PROPERTY
AND EQUIPMENT, NET
|
190,031 | 3,214 | (32 | ) |
(a)
|
193,213 | ||||||||||||||||
|
OTHER
ASSETS
|
||||||||||||||||||||||
|
Goodwill
|
125,011 | 208 | - | 14,352 |
(e)
|
139,571 | ||||||||||||||||
|
Other
intangible assets
|
52,569 | - | - | 52,569 | ||||||||||||||||||
|
Deferred
financing costs, net
|
16,003 | - | - | - | 16,003 | |||||||||||||||||
|
Investment
in joint ventures
|
16,020 | - | - | - | 16,020 | |||||||||||||||||
|
Deposits
and other
|
2,478 | 452 | (84 | ) |
(a)
|
(292 | ) |
(f)
|
2,555 | |||||||||||||
|
Total
assets
|
$ | 537,650 | $ | 12,743 | $ | (798 | ) | $ | (10,106 | ) | $ | 539,489 | ||||||||||
|
LIABILITIES
AND EQUITY DEFICIT
|
||||||||||||||||||||||
|
CURRENT
LIABILITIES
|
||||||||||||||||||||||
|
Accounts
payable and accrued expenses
|
$ | 84,640 | $ | 3,067 | $ | (229 | ) |
(a)
|
$ | (2,635 | ) |
(g)
|
$ | 84,842 | ||||||||
|
Due
to affiliates
|
2,382 | - | 794 |
(a)
|
(794 | ) |
(h)
|
2,382 | ||||||||||||||
|
Current
portion of notes payable
|
8,043 | - | 8,043 | |||||||||||||||||||
|
Current
portion of deferred rent
|
717 | - | - | - | 717 | |||||||||||||||||
|
Obligations
under capital leases, current portion
|
10,227 | 666 | - | (258 | ) |
(i)
|
10,635 | |||||||||||||||
|
Total
current liabilities
|
106,009 | 3,733 | 565 | (3,687 | ) | 106,619 | ||||||||||||||||
|
LONG-TERM
LIABILITIES
|
||||||||||||||||||||||
|
Deferred
rent, net of current portion
|
10,638 | - | - | - | 10,638 | |||||||||||||||||
|
Deferred
taxes
|
277 | - | - | - | 277 | |||||||||||||||||
|
Notes
payable, net of current portion
|
480,684 | - | - | - | 480,684 | |||||||||||||||||
|
Obligations
under capital leases, net of current portion
|
6,565 | 2,033 | - | (1,211 | ) |
(i)
|
7,387 | |||||||||||||||
|
Other
non-current liabilities
|
21,004 | - | - | - | 21,004 | |||||||||||||||||
|
Total
liabilities
|
625,177 | 5,765 | 565 | (4,898 | ) | 626,609 | ||||||||||||||||
|
COMMITMENTS
AND CONTINGENCIES
|
||||||||||||||||||||||
|
EQUITY
DEFICIT
|
||||||||||||||||||||||
|
Common
stock
|
4 | - | - | - | 4 | |||||||||||||||||
|
Paid-in-capital
|
161,018 | - | - | - | 161,018 | |||||||||||||||||
|
Accumulated
other comprehensive loss
|
(2,453 | ) | - | - | - | (2,453 | ) | |||||||||||||||
|
Accumulated
deficit
|
(246,141 | ) | 5,807 | (806 | ) |
(a)
|
(5,001 | ) |
(j)
|
(246,141 | ) | |||||||||||
|
Total
Radnet, Inc.'s equity deficit
|
(87,572 | ) | 5,807 | (806 | ) | (5,001 | ) | (87,572 | ) | |||||||||||||
|
Noncontrolling
interests
|
45 | 1,170 | (557 | ) |
(a)
|
(207 | ) | (l) | 452 | |||||||||||||
|
Total
equity deficit
|
(87,527 | ) | 6,978 | (1,363 | ) | (5,208 | ) | (87,120 | ) | |||||||||||||
|
Total
liabilities and equity deficit
|
$ | 537,650 | $ | 12,743 | $ | (798 | ) | $ | (10,106 | ) | $ | 539,489 | ||||||||||
See
accompanying notes to the unaudited pro forma condensed consolidated financial
statements.
-2-
RADNET,
INC.
UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN
THOUSANDS EXCEPT SHARE DATA)
For
the nine months ended September 30, 2010
|
Elimination
of
|
||||||||||||||||||||
|
excluded
|
Pro forma
|
Pro forma
|
||||||||||||||||||
|
RadNet
|
Progressive
|
imaging centers
|
adjustments
|
combined
|
||||||||||||||||
|
NET
REVENUE
|
$ | 403,222 | $ | 14,398 | $ | (1,093 | )(a) | $ | - | $ | 416,527 | |||||||||
|
OPERATING
EXPENSES
|
||||||||||||||||||||
|
Cost
of operations
|
311,478 | 10,897 | (890 | )(a) | - | 321,484 | ||||||||||||||
|
Depreciation
and amortization
|
40,153 | 1,051 | (7 | )(a) | - | 41,196 | ||||||||||||||
|
Provision
for bad debts
|
24,603 | 581 | (54 | )(a) | - | 25,130 | ||||||||||||||
|
Loss
on sale of equipment
|
606 | - | - | - | 606 | |||||||||||||||
|
Severance
costs
|
731 | - | - | - | 731 | |||||||||||||||
|
Total
operating expenses
|
377,571 | 12,529 | (952 | ) | - | 389,147 | ||||||||||||||
|
INCOME
FROM OPERATIONS
|
25,651 | 1,869 | (140 | ) | - | 27,380 | ||||||||||||||
|
OTHER
EXPENSES
|
||||||||||||||||||||
|
Interest
expense
|
35,477 | 144 | - | 663 | (k) | 36,284 | ||||||||||||||
|
Loss
on extinguishment of debt
|
9,871 | - | - | - | 9,871 | |||||||||||||||
|
Other
expenses (income)
|
1,971 | (29 | ) | (398 | )(a) | - | 1,544 | |||||||||||||
|
Total
other expenses
|
47,319 | 115 | (398 | ) | 663 | 47,699 | ||||||||||||||
|
LOSS
BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF JOINT
VENTURES
|
(21,668 | ) | 1,754 | 258 | (663 | ) | (20,319 | ) | ||||||||||||
|
Provision
for income taxes
|
(523 | ) | - | - | - | (523 | ) | |||||||||||||
|
Equity
in earnings of joint ventures
|
6,114 | - | - | 6,114 | ||||||||||||||||
|
NET
LOSS
|
(16,077 | ) | 1,754 | 258 | (663 | ) | (14,728 | ) | ||||||||||||
|
Net
income attributable to noncontrolling interests
|
75 | 213 | - | - | 288 | |||||||||||||||
|
NET
LOSS ATTRIBUTABLE TO RADNET, INC.
|
||||||||||||||||||||
|
COMMON
STOCKHOLDERS
|
$ | (16,152 | ) | $ | 1,541 | $ | 258 | $ | (663 | ) | $ | (15,016 | ) | |||||||
|
BASIC
AND DILUTED NET LOSS PER SHARE ATTRIBUTABLE TO RADNET,
INC.
|
||||||||||||||||||||
|
COMMON
STOCKHOLDERS
|
$ | (0.44 | ) | $ | (0.41 | ) | ||||||||||||||
|
WEIGHTED
AVERAGE SHARES OUTSTANDING
|
||||||||||||||||||||
|
Basic
and diluted
|
36,755,781 | 36,755,781 | ||||||||||||||||||
See
accompanying notes to the unaudited pro forma condensed consolidated financial
statements.
-3-
RADNET,
INC.
UNAUDITED
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(IN
THOUSANDS EXCEPT SHARE DATA)
For
the year ended December 31, 2009
|
Elimination of
|
||||||||||||||||||||
|
excluded
|
Pro forma
|
Pro forma
|
||||||||||||||||||
|
RadNet
|
Progressive
|
imaging centers
|
adjustments
|
combined
|
||||||||||||||||
|
NET
REVENUE
|
$ | 524,368 | $ | 18,448 | $ | (1,693 | )(a) | $ | - | $ | 541,122 | |||||||||
|
OPERATING
EXPENSES
|
||||||||||||||||||||
|
Cost
of operations
|
397,753 | 13,680 | (1,136 | )(a) | - | 410,298 | ||||||||||||||
|
Depreciation
and amortization
|
53,800 | 1,320 | (10 | )(a) | 55,110 | |||||||||||||||
|
Provision
for bad debts
|
32,704 | 1,246 | (63 | )(a) | - | 33,886 | ||||||||||||||
|
Loss
on sale of equipment
|
523 | - | - | - | 523 | |||||||||||||||
|
Severance
costs
|
731 | - | - | - | 731 | |||||||||||||||
|
Total
operating expenses
|
485,511 | 16,246 | (1,209 | ) | - | 500,548 | ||||||||||||||
|
INCOME
FROM OPERATIONS
|
38,857 | 2,202 | (485 | ) | - | 40,575 | ||||||||||||||
|
OTHER
EXPENSES
|
||||||||||||||||||||
|
Interest
expense
|
49,193 | 225 | - | 857 | (k) | 50,275 | ||||||||||||||
|
Gain
on bargain purchase
|
(1,387 | ) | - | - | - | (1,387 | ) | |||||||||||||
|
Other
expenses (income)
|
1,239 | (33 | ) | 114 | (a) | - | 1,319 | |||||||||||||
|
Total
other expenses
|
49,045 | 192 | 114 | 857 | 50,208 | |||||||||||||||
|
LOSS
BEFORE INCOME TAXES AND EQUITY IN
EARNINGS OF JOINT VENTURES
|
(10,188 | ) | 2,010 | (598 | ) | (857 | ) | (9,633 | ) | |||||||||||
|
Provision
for income taxes
|
(443 | ) | - | - | - | (443 | ) | |||||||||||||
|
Equity
in earnings of joint ventures
|
8,456 | - | - | 8,456 | ||||||||||||||||
|
NET
INCOME (LOSS)
|
(2,175 | ) | 2,010 | (598 | ) | (857 | ) | (1,620 | ) | |||||||||||
|
Net
income attributable to noncontrolling interests
|
92 | 361 | - | - | 453 | |||||||||||||||
|
NET
INCOME (LOSS) ATTRIBUTABLE TO
|
||||||||||||||||||||
|
RADNET,
INC.COMMON STOCKHOLDERS
|
$ | (2,267 | ) | $ | 1,649 | $ | (598 | ) | $ | (857 | ) | $ | (2,073 | ) | ||||||
|
BASIC
AND DILUTED NET LOSS PER SHARE ATTRIBUTABLE
TO RADNET, INC.
|
||||||||||||||||||||
|
COMMON
STOCKHOLDERS
|
$ | (0.06 | ) | $ | (0.06 | ) | ||||||||||||||
|
WEIGHTED
AVERAGE SHARES OUTSTANDING
|
||||||||||||||||||||
|
Basic
and diluted
|
36,047,033 | 36,047,033 | ||||||||||||||||||
See
accompanying notes to the unaudited pro forma condensed consolidated financial
statements.
-4-
RadNet,
Inc.
Notes
to Unaudited Pro Forma Condensed Consolidated Financial Statements
Note
1. Basis
of Presentation
The
unaudited pro forma condensed consolidated statement of operations of RadNet,
Inc. (“RadNet”) for the nine months ended September 30, 2010 and the year ended
December 31, 2009 give effect to the acquisition of five imaging centers in
Northern New Jersey and a 50% equity interest in a sixth center from Progressive
Health, LLC and certain affiliates and related entities (“Progressive”) as if
the acquisition had been completed on January 1, 2009. The unaudited pro
forma condensed consolidated balance sheet as of September 30, 2010 gives effect
to the acquisition as if it had occurred on September 30, 2010.
The
unaudited pro forma condensed consolidated statement of operations and unaudited
pro forma condensed consolidated balance sheet were derived by adjusting
RadNet’s historical financial statements for the acquisition of
Progressive. Certain imaging centers were excluded from the
Progressive acquisition, thus the net assets and activities of the excluded
centers have been eliminated in the pro forma condensed consolidated financial
statements. The unaudited pro forma condensed consolidated balance
sheet and unaudited pro forma condensed consolidated statement of operations are
provided for informational purposes only and should not be construed to be
indicative of RadNet’s financial position or results of operations had the
transaction been consummated on the dates indicated and do not project RadNet’s
financial position or results of operations for any future period or
date.
The
unaudited pro forma condensed consolidated balance sheet and unaudited condensed
consolidated statement of operations and accompanying notes should be read in
conjunction with RadNet’s historical financial statements and related notes and
“Management’s Discussion and Analysis of Financial Condition and Results of
Operation” contained in RadNet’s Annual Report on Form 10-K for the year ended
December 31, 2009 and Quarterly Report on Form 10-Q for the period ended
September 30, 2010, as well as Progressive’s financial statements presented
herein.
Note
2. Preliminary
Purchase Price Allocation
The
unaudited pro forma condensed consolidated financial statements reflect a
purchase price of $17,150,000 in cash.
The
preliminary purchase price allocation as of September 30, 2010, subject to
change pending completion of the final valuation and analysis, is as follows (in
thousands):
|
Tangible
assets
|
$
|
4,429
|
||
|
Goodwill
|
14,560
|
|||
|
Total
assets acquired
|
18,989
|
|||
|
Liabilities
assumed
|
(1,839
|
)
|
||
|
Net
assets acquired
|
$
|
17,150
|
Goodwill
represents the excess of the purchase price over the fair value of the net
assets acquired.
-5-
Note
3. Pro
Forma Adjustments
The
following pro forma adjustments are based upon RadNet management’s preliminary
estimates of the value of the tangible and intangible assets acquired. These
estimates are subject to finalization.
|
(a)
|
Represents the financial
statements of those imaging centers not acquired by RadNet from
Progressive.
|
|
(b)
|
Represents $17,150,000 used to
cover the total purchase price, and the elimination of $1,044,341 of cash
from the acquired imaging centers retained by
Progressive.
|
|
(c)
|
Represents accounts receivable
from the acquired imaging centers retained by
Progressive.
|
|
(d)
|
Represents certain other
receivables from the acquired imaging centers retained by
Progressive.
|
|
(e)
|
Represents goodwill resulting
from the transaction.
|
|
(f)
|
Represents certain other assets
from the acquired imaging centers retained by
Progressive.
|
|
(g)
|
Represents
certain vendor obligations settled at
acquisition.
|
|
(h)
|
Represents
certain obligations of the acquired imaging center group payable to other
groups owned by Progressive that were settled at
acquisition.
|
|
|
(i)
|
Represents
certain capital lease obligations of the acquired imaging centers settled
at acquisition.
|
|
(j)
|
Represents
the elimination of the acquired imaging centers retained earnings upon
acquisition.
|
|
|
(k)
|
Represents
the interest expense incurred by RadNet to fund the
acquisition.
|
|
|
(l)
|
Represents
the elimination of certain non-controlling interests settled at
acquisition.
|
-6-