Second Quarter 2007 Highlights: FORT MYERS, Fla., Aug. 2
/PRNewswire-FirstCall/ -- Radiation Therapy Services, Inc.
(NASDAQ:RTSX), a leading operator of radiation therapy centers,
today announced financial results for the second quarter ended June
30, 2007. Total revenue for the second quarter was $100.1 million,
an increase of 37.9% from $72.6 million in the same quarter of
2006, with $15.0 million of the increase provided by new practices,
or practices operated by Radiation Therapy for less than twelve
months. Net patient service revenue, or revenue generated from
services where the Company bills patients directly, principally at
freestanding treatment centers, was $97.6 million. Other revenue,
or revenue generated principally from services where Radiation
Therapy bills a hospital for services provided, was $2.5 million.
Second quarter 2007 net patient service revenue includes $3.0
million related to the cumulative adjustment for an understatement
of revenue for one local market. Approximately $2.3 million
pertains to the year ended 2006 with the balance attributable to
the first quarter of 2007. Second quarter 2007 net patient service
revenue was negatively impacted by machine upgrades performed
during the quarter, which reduced the number of patients treated at
those locations. While essential for long-term earnings growth, the
down time for these upgrades negatively impacted second quarter
2007 net patient service revenue by approximately $1.7 million.
During the second quarter of 2007, $16.1 million of total net
patient service revenue of $97.6 million was generated from
professional services, compared to $6.0 million for the second
quarter of 2006. This increase includes revenue from urology and
surgical practices that enable the Company to offer a more
integrated group approach to cancer care in certain local markets.
Same practice revenue growth, excluding the impact of the $3.0
million cumulative adjustment, was 14.2% for the quarter resulting
from increases in revenue per treatment and treatments per day. For
the second quarter 2007, the Company reported an average of 1,702
total treatments per day at its 69 freestanding centers, an 18.2%
increase from the same period in 2006. Net income for the second
quarter was $10.0 million, or $0.41 per diluted share, an increase
of 13.2% from net income of $8.8 million, or $0.37 per diluted
share, for the same period in 2006. In May 2007, the Company
announced an agreement to acquire a radiation therapy treatment
center in Salisbury, Maryland. The acquisition, which was completed
in July, builds on Radiation Therapy's presence in the Maryland
local market. The facility has intensity modulated radiation
therapy (IMRT) and image guided radiation therapy (IGRT) programs.
In June 2007, the Company closed a $50 million expansion of its
credit facility by exercising the Term B accordion feature of the
existing senior credit facility and using the proceeds to repay
amounts outstanding under its revolving credit facility. This
additional access to capital will support Radiation Therapy's
continued expansion within existing markets as well as entry into
new local markets. Radiation Therapy generated $28.9 million in net
cash from operating activities for the six months ended June 30,
2007, up 33.8% from $21.6 million for the same period of 2006.
Total capital expenditures, including capital lease obligations,
for the six months ended June 30, 2007 were $20.2 million, compared
to $18.2 million for the six months ended June 30, 2006. The
Company's adjusted days sales outstanding for the second quarter
2007 were 54 days, compared to 57 days for the second quarter 2006.
The Company defines adjusted DSOs as those related to practices it
has operated for twelve months or longer. Dr. Daniel Dosoretz,
President and Chief Executive Officer, said, "We are pleased with
our second quarter results. We continued to successfully execute on
our near- and long-term growth strategy, while also investing in
new technology platforms. Our growth in same practice treatment
volumes as well as in the utilization of advanced technologies
continues to fuel our organic growth. Same practice treatments per
day and revenue per treatment grew 3.8% and 9.1%, respectively,
in-line with our stated guidance. IGRT utilization also continues
to expand towards our guidance, reaching 43.8% in the quarter. We
also built on our presence in the Maryland local market with the
acquisition of the Salisbury facility, an established practice with
a respected group of physicians. We continue to evaluate additional
acquisition opportunities and have further positioned the Company
for acquisition growth by expanding our credit facility during the
quarter." Effective July 1, 2007 David N.T. Watson assumed the role
of chief financial officer, succeeding David M. Koeninger, who
announced his retirement last year. Mr. Koeninger will remain with
the Company on a consultant basis until June 2008. In May 2007, the
Company announced that Janet Watermeier was appointed to the
Company's board of directors. Ms. Watermeier was appointed as an
independent director to fill the vacancy created by the untimely
death of James Charles Weeks in January 2007. Guidance Including
announced acquisition activity, the Company is updating guidance
for the full year 2007. The Company is increasing its expectation
of revenues to the range of $390 to $402 million, and reducing its
expectation of diluted earnings per share to the range of $1.50 to
$1.56. For the third quarter of 2007, the Company expects revenue
to be in the range of $93 million to $99 million, with diluted
earnings per share in the range of $0.27 per share to $0.30 per
share. The projections and guidance set forth above are estimates
only and actual performance could differ. The Company's guidance
includes announced acquisition activity. Conference Call Management
will host a conference call today at 10:00 a.m. ET to discuss
financial results, guidance and other developments and business
plans. A live Web cast of the conference call will be available
online on the Company's corporate Web site at http://www.rtsx.com/.
The dial-in numbers are (877) 407-0784 for domestic callers, and
(201) 689-8560 for international. After the live Web cast, the call
will remain available on Radiation Therapy's Web site until
September 2, 2007. In addition, a telephonic replay of the call
will be available until August 16, 2007. The replay dial-in numbers
are (877) 660-6853 for domestic callers and (201) 612-7415 for
international callers. Please use account number 3055 and
conference ID number 248073. About Radiation Therapy Services, Inc.
Radiation Therapy Services, Inc., which operates radiation
treatment centers primarily under the name 21st Century Oncology,
is a provider of radiation therapy services to cancer patients. The
Company's 80 treatment centers are clustered into 25 local markets
in 16 states, including Alabama, Arizona, California, Delaware,
Florida, Kentucky, Maryland, Massachusetts, Michigan, Nevada, New
Jersey, New York, North Carolina, Pennsylvania, Rhode Island and
West Virginia. The Company is headquartered in Fort Myers, Florida.
More information about the Company can be found at its Web site
http://www.rtsx.com/. RTSXG This release may contain
forward-looking statements about the Company's future plans,
expectations and objectives, including, but not limited to, the
Company's expected financial results and estimates for 2007. Words
such as "may," "will," "expect," "intend," "anticipate," "plan,"
"believe," "seek," "could" and "estimate" and variations of these
words and similar expressions are intended to identify forward-
looking statements. These forward-looking statements are not
historical facts and are subject to risks and uncertainties that
could cause the actual results to differ materially from those
projected in these forward-looking statements including, but not
limited to the Company's actual financial results and those risk
factors described in the "Risk Factors" section and other
information in the Company's most recently filed quarterly report
on Form 10-Q and annual report on Form 10-K, as well as the
Company's other filings with the Securities and Exchange Commission
which are available on the SEC's website at http://www.sec.gov/.
Readers of this release are cautioned not to place undue reliance
on forward-looking statements. The Company undertakes no obligation
to publicly update or revise the forward- looking statements
contained herein to reflect changed events or circumstances after
the date of this release. Contact: Investors: David N.T. Watson
Nick Laudico / Zack Kubow Chief Financial Officer The Ruth Group
Radiation Therapy Services, Inc. 646-536-7030 / 7020 239-931-7281
RADIATION THERAPY SERVICES, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (in
thousands, except per share amounts) (unaudited) Three Months Ended
Six Months Ended June 30, June 30, 2007 2006 2007 2006 Net patient
service revenue $97,637 $69,666 $193,150 $140,883 Other revenue
2,504 2,965 4,807 5,690 Total revenues 100,141 72,631 197,957
146,573 Salaries and benefits 50,842 35,438 100,763 71,381 Medical
supplies 3,013 1,712 5,838 3,898 Facility rent expense 3,189 2,239
6,211 4,493 Other operating expenses 4,304 2,599 8,611 5,611
General and administrative expenses 9,943 7,581 19,595 14,793
Depreciation and amortization 5,742 4,020 11,215 7,729 Provision
for doubtful accounts 2,812 2,805 5,716 5,327 Interest expense, net
3,793 2,277 7,596 4,442 Total expenses 83,638 58,671 165,545
117,674 Income before minority interests 16,503 13,960 32,412
28,899 Minority interests in net (earnings) losses of consolidated
entities (217) 403 (599) (112) Income before income taxes 16,286
14,363 31,813 28,787 Income tax expense 6,270 5,515 12,248 11,083
Net income 10,016 8,848 19,565 17,704 Other comprehensive income:
Unrealized gain on derivative interest rate swap agreement, net of
tax 121 124 70 237 Comprehensive income $10,137 $8,972 $19,635
$17,941 Net income per common share outstanding - basic $0.43 $0.38
$0.83 $0.77 Net income per common share outstanding - diluted $0.41
$0.37 $0.81 $0.74 Weighted average shares outstanding: Basic 23,477
23,165 23,445 23,063 Diluted 24,167 23,955 24,155 23,927 RADIATION
THERAPY SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
BALANCE SHEETS (in thousands, except share amounts) June 30,
December 31, 2007 2006 (unaudited) (a) ASSETS Current assets: Cash
and cash equivalents $12,605 $15,413 Accounts receivable, net
66,695 52,764 Income taxes receivable 3,635 938 Prepaid expenses
6,072 8,273 Current portion of lease receivable 275 427 Inventories
1,764 1,613 Deferred income taxes 6,579 5,583 Other 1,222 2,527
Total current assets 98,847 87,538 Lease receivable, less current
portion 42 154 Equity investments in joint ventures 1,205 1,215
Property and equipment, net 171,654 152,379 Goodwill 147,477
138,785 Intangible assets, net 7,400 7,599 Other assets 18,273
11,424 Total assets $444,898 $399,094 LIABILITIES AND SHAREHOLDERS'
EQUITY Current liabilities: Accounts payable $10,360 $10,604
Accrued expenses 21,111 14,679 Current portion of long-term debt
12,919 12,285 Total current liabilities 44,390 37,568 Long-term
debt, less current portion 202,473 192,959 Other long-term
liabilities 2,870 2,584 Deferred income taxes 27,146 24,070
Minority interest in consolidated entities 12,234 7,104 Total
liabilities 289,113 264,285 Shareholders' equity Preferred stock,
$0.0001 par value, 10,000 shares authorized, none issued or
outstanding -- -- Common stock, $0.0001 par value, 75,000 shares
authorized, 23,512 and 23,367 shares issued and outstanding at June
30, 2007 and December 31, 2006, respectively 2 2 Additional paid-in
capital 82,869 81,465 Retained earnings 73,136 53,683 Notes
receivable from shareholders (337) (386) Accumulated other
comprehensive income, net of tax 115 45 Total shareholders' equity
155,785 134,809 Total liabilities and shareholders' equity $444,898
$399,094 (a) Derived from audited financial statements RADIATION
THERAPY SERVICES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six months
ended June 30, 2007 2006 Cash flows from operating activities Net
income $19,565 $17,704 Adjustments to reconcile net income to net
cash provided by operating activities: Depreciation 10,278 6,911
Amortization 937 818 Deferred rent expense 327 163 Deferred income
tax provision 2,036 735 Stock based compensation 113 34 Tax benefit
from stock option exercise (612) (1,339) Provision for doubtful
accounts 5,716 5,327 Loss on the sale of property and equipment 2
39 Minority interests in net earnings of consolidated entities 599
112 Equity interest in net loss (income) of joint ventures 10 (22)
Changes in operating assets and liabilities: Accounts receivable,
gross (19,647) (11,848) Income taxes receivable 3,003 1,418
Inventories (151) (238) Prepaid expenses 2,201 (756) Accounts
payable (1,866) 198 Accrued expenses 6,425 2,375 Net cash provided
by operating activities 28,936 21,631 Cash flows from investing
activities Purchase of property and equipment (17,119) (10,369)
Acquisition of radiation centers (10,165) (12,907) Payment of
assumed acquisition liability (5,200) -- Proceeds from the sale of
property and equipment 2 4 Sales of marketable securities, net --
5,450 (Loans to) repayments from employees (499) 11 Contribution of
capital to joint venture entities (4,305) (14) Change in lease
receivable 264 350 Change in other assets 641 (253) Net cash used
in investing activities (36,381) (17,728) Cash flows from financing
activities Proceeds from issuance of debt 12,500 1,800 Principal
repayments of debt (8,894) (5,498) Proceeds from exercise of stock
options 679 3,818 Tax benefit from stock option exercise 612 1,339
Payments of notes receivable from shareholders 49 47 Minority
interest in partnership distribution (159) (92) Payments of loan
costs (150) (60) Net cash provided by financing activities 4,637
1,354 Net (decrease) increase in cash and cash equivalents (2,808)
5,257 Cash and cash equivalents, at beginning of period 15,413
8,980 Cash and cash equivalents, at end of period $12,605 $14,237
Supplemental disclosure of non-cash transactions Recorded capital
lease obligations related to the acquisition of equipment $3,087
$7,863 Recorded non-cash contribution of capital by minority
interest holder $4,782 $-- Recorded non-cash contribution of
capital to joint venture entities $1,099 $-- Recorded Term B loan
borrowing used to pay down the revolver $50,000 $-- RADIATION
THERAPY SERVICES, INC. AND SUBSIDIARIES KEY OPERATING STATISTICS
(unaudited) Three Months Ended Six Months Ended June 30, % June 30,
% 2007 2006 Change 2007 2006 Change Number of treatment days 64 64
128 128 Total treatments - freestanding centers 108,951 92,129
18.3% 219,973 187,525 17.3% Treatments per day - freestanding
centers 1,702 1,440 18.2% 1,719 1,465 17.3% Percentage change in
revenue per treatment - freestanding centers - same practice basis
9.1% 21.9% 8.1% 18.6% Percentage change in treatments per day -
freestanding centers - same practice basis 3.8% 2.4% 3.5% 4.3%
Local markets at period end 25 23 8.7% Treatment centers -
freestanding 69 58 19.0% Treatment centers - hospital 11 12 -8.3%
80 70 14.3 % Adjusted days sales outstanding for the quarter * 54
57 * Excludes office locations operating for less than one year
Percentage change in total revenues - same practice basis 14.2%
20.2% 11.6% 20.0% Net patient service revenue - professional
services only (in thousands) $16,137 $6,006 $31,729 $12,748
DATASOURCE: Radiation Therapy Services, Inc. CONTACT: David N.T.
Watson, Chief Financial Officer of Radiation Therapy Services,
Inc., +1-239-931-7281, ; or Investors, Nick Laudico,
+1-646-536-7030, , or Zack Kubow, +1-646-536-7020, , both of The
Ruth Group, for Radiation Therapy Services, Inc. Web site:
http://www.rtsx.com/
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