RadNet, Inc.

Good morning, ladies and gentlemen, and thank you for joining Dr. Howard Berger and me today to discuss RadNet's second quarter 2021 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 US Private Securities Litigation Reform Act of 1995. Specifically, statements concerning anticipated future financial and operating performance Radnitz's ability to continue to grow the business by generating patient referrals and contracts with radiology practices, recruiting and retaining technologists, receiving third-party reimbursement for diagnostic imaging services, successfully integrating 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's actual results to differ materially from the statements contained herein. These risks and uncertainties include those risks set forth in RADNET's reports filed with the SEC from time to time, including RADNET's annual report on Form 10-K for the year ended December 31, 2020. 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, events 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 second quarter 2021 results, give you more insight into the 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 your interest in our company and for dedicating a portion of your day to participate in our conference call this morning. Before we start, I would like to say on behalf of myself and the entire team at RadNet, we hope all of you and your loved ones are healthy and staying safe. We are extremely grateful for all of our stakeholders, including our employees, business partners, lenders, and shareholders, and wish you all well during these challenging times. Let's begin. I'm extremely pleased with our performance this quarter. Our financial and operating metrics in the second quarter demonstrate continuing strengthening and improvement in our business that began in the third quarter of last year and is the result of a number of factors. First, the cost-saving measures that we implemented during the COVID-19 period in 2020 and further cost containment actions this year have lowered our operating expenses and created efficiencies within our regionally clustered centers. Second, our procedural volumes have substantially recovered, as many of the municipalities and states in which we operate have loosened COVID-19 restrictions. We are observing that patients are returning to more regular office visits, utilizing healthcare with more normalcy. Obviously, with the rise of the new Delta variant, we remain vigilant and ready to take further protective actions should new restrictions or stay-at-home orders be implemented. Lastly, investments we made last year and during the first two quarters of this year, both with respect to capital expenditures and tuck-in acquisitions, are beginning to contribute to our financial results. We discussed previously the extraordinary investments we made in upgrading our mammography systems during 2020 to 3D digital mammography or tomosynthesis. While we do not believe mammography volumes have fully recovered from the COVID-19 impact, we are experiencing enhanced reimbursement from the volumes we are now performing on these newly upgraded 3D systems. Additionally, during the first quarter of this year, we acquired 10 facilities within the New York-Melchapalooza market, and we completed an additional five tuck-in acquisitions during the second quarter in other parts of New York, New Jersey, and California. Newly acquired facilities have unique cost savings and consolidation opportunities with existing RADNF facilities. We expect significant improvement from the results later in the year when we have completed their integration processes. As a result of all these factors, our results during the second quarter were the best of any quarter in the company's history. As compared with last year's second quarter, which was impacted by COVID-19, Revenue increased 75.2% and EBITDA more than 150%. I am particularly proud of the margin improvement we were able to demonstrate, achieving an EBITDA margin of 17% higher by 5.1% and 2.1% from the second quarters of 2020 and 2019, respectively. The margin improvement is the result of both the return of our procedural volumes more normalized levels, as well as many of the cost-saving measures we have put in place, which has included consolidating underperforming sites and changing key operational processes, both at the center level and within our corporate support departments. Adjusted earnings were also very strong in the quarter. We recognized adjusted net income per share during the quarter of 27 cents. This is in contrast to an adjusted net loss per share in last year's second quarter of 14 cents. As a result of the strong performance in this year's first and second quarters and the confidence we are feeling for the remainder of the year, we have elected to again increase most of our key financial guidance levels for 2021. Mark, in his prepared remarks, will review the increases we made to our revenue EBITDA and free cash flow guidance which were outlined in our earnings press release this morning. As many of you have seen, during the second quarter, on April 26, we announced the completion of the refinancing of our term loan and revolving line of credit. Based upon current and anticipated future leverage ratios, we expect to save up to $6 million annually in interest expense. Additionally, we no longer are subject to restrictive maintenance covenants with respect to our term loan and have substantially more operating and financial flexibility under the new credit agreement. This includes lowering our annual required amortization payments by over $30 million and adding over $110 million to our cash balance, which will enable us to accelerate growth. The success of this Refinancing can partly be attributed to our strong operating performance and the effective deleveraging of our balance sheet. As of the end of this quarter, we had 633.3 million in net debt, trailing 12-month EBITDA of 198.6 million, and a resulting leverage ratio of 3.19 times net debt to EBITDA. This is the lowest leverage we have had in our company's history. Proforma, for recent acquisition, this ratio is even lower, which is indicative of our further expected deleveraging in the coming quarters. While we are committed to growing and expanding our business, we will also continue to follow the methodical and disciplined approach to managing our financial leverage. Lastly, before I hand the call back over to Mark, I'd like to provide an update as to where we stand with our efforts in artificial intelligence. During the second quarter, on April 19th, we announced that our artificial intelligence subsidiary, Deep Health, received FDA clearance for its AI mammography triage software, SAGE-Q. SageQ is a screening work list prioritization tool that enables radiologists to more efficiently manage their mammography cases with the use of artificial intelligence. Deep Health's powerful new AI technology identifies suspicious screening exams that may need prioritized attention, allowing radiologists to optimize their workflow for efficiency and accuracy. This technology is the first FDA-cleared triage product that supports both 3D and 2D mammography images. With over 1.5 million mammography exams we are performing annually in our markets, we are in the process of deploying this technology to our breast imagers nationwide. I am pleased to report that as of today, our Northeast and Mid-Atlantic mammographers are now utilizing SageQ. We expect by the end of the third quarter, Our California breast imagers will also be utilizing this technology. The early feedback we are receiving from our radiologists is excellent. While we are observing improved productivity, most importantly, we are providing our patients and payors with better accuracy, fewer patient callbacks, and the possibility of detecting disease one to two years earlier than might otherwise be possible. We continue to evaluate further areas of artificial intelligence, that can both decrease our costs and drive new revenue streams through providing innovative, cost-effective screening programs to large insurance companies who are interested in new population health models to improve patient care. At this time, I'd like to turn the call back over to Mark to discuss some of the highlights of our second quarter 2021 performance. When he is finished, I will make some closing remarks.