NEWPORT BEACH, Calif.--(BUSINESS WIRE)--Alliance Oncology, a division of Alliance HealthCare Services, Inc. (NYSE:AIQ) (collectively referred to as the “Company” or “Alliance”), announced today that it has acquired US Radiosurgery, LLC, a stereotactic radiosurgery provider based in Nashville, Tennessee.
US Radiosurgery operates eight stereotactic radiosurgery centers (including one stereotactic radiosurgery center in an unconsolidated joint venture) in partnership with local hospitals and radiation oncologists in eight states, including Colorado, Texas, Illinois, Ohio, Oklahoma, Pennsylvania, Nevada and California. These eight stereotactic radiosurgery centers are structured through partnerships and US Radiosurgery owns between 40% and 76% of the equity interests of the consolidated partnerships. US Radiosurgery currently generates approximately $29 million in consolidated annual revenue. The purchase price is expected to total approximately $54 million, which is comprised of $43 million in cash and $11 million in US Radiosurgery’s share of assumed debt. With this acquisition, the oncology division’s full year 2011 revenue guidance range is $68 million to $73 million.
Paul S. Viviano, Chairman of the Board and Chief Executive Officer of Alliance HealthCare Services, stated, “I am very pleased to announce Alliance’s acquisition of US Radiosurgery which is well known for its high quality stereotactic radiosurgery centers, all of which are structured as partnerships with strong acute care hospitals and radiation oncologists. We look forward to leveraging USR’s strong brand name, reputation and expertise in cancer treatment. In keeping with Alliance Oncology’s growth strategy, this acquisition significantly expands our nationwide footprint, and further enables the company to provide advanced treatment and technology to cancer patients. Following the acquisition of US Radiosurgery, we believe Alliance Oncology will be the nation’s leading provider of stereotactic radiosurgery services with 14 dedicated centers.”
Mr. Viviano added, “I am also pleased to share that George Stevens, Chief Executive Officer of US Radiosurgery, will be joining Alliance and will report directly to Rick Hall, President of Alliance Oncology. George will be responsible for leading all of Alliance Oncology’s dedicated stereotactic radiosurgery centers and will lead the effort to expand our presence in the fast growing stereotactic radiosurgery market even further. George brings more than two decades of healthcare industry experience, and he and his highly experienced management team have a proven record of success building and growing stereotactic radiosurgery centers.”
George Stevens, Chief Executive Officer of US Radiosurgery, stated, “I am very excited for US Radiosurgery to join the Alliance organization. The hard work and dedication of every member of the US Radiosurgery team, including both physicians and hospital stakeholders, has created this opportunity for collaboration and expansion. Our combined resources and experience as well as our shared commitment to high quality, patient-centered care will enable us to provide exceptional service to our existing and future clients.”
|
Full Year 2011 Guidance |
||||||
|
Alliance is updating its full year 2011 guidance ranges as follows: |
||||||
| Previous | Revised | |||||
| Guidance Range | Guidance Range | |||||
| (Dollars in millions) | ||||||
| Revenue | $475 - $505 | $500 - $530 | ||||
| Adjusted EBITDA | $140 - $165 | $150 - $175 | ||||
|
Decrease in long-term debt, net of the change in cash and cash equivalents (before investments in acquisitions) |
$20 - $40 | $25 - $45 | ||||
About Alliance HealthCare Services
Alliance HealthCare Services is a leading national provider of advanced outpatient diagnostic imaging and radiation therapy services based upon annual revenue and number of systems deployed. Alliance focuses on MRI, PET/CT and CT through its Imaging division and radiation therapy through its Oncology division. With more than 2,300 team members committed to providing exceptional patient care and exceeding customer expectations, Alliance provides quality clinical services for over 1,000 hospitals and other healthcare partners in 46 states. Alliance operates 535 diagnostic imaging and radiation therapy systems. The Company is the nation’s largest provider of advanced diagnostic mobile imaging services and one of the leading operators of fixed-site imaging centers, with 132 locations across the country. Alliance also operates 35 radiation therapy centers, providing treatment and care for cancer patients.
Forward-Looking Statements
This press release contains forward-looking statements relating to future events, including statements related to investment, development and acquisition activity, the implementation of strategic initiatives, the integration of acquired businesses into the Company, the opening of new imaging and radiation oncology centers, and the Company’s full year 2011 guidance. In this context, forward-looking statements often address the Company’s expected future business and financial results and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks” or “will.” Forward-looking statements by their nature address matters that are uncertain and subject to risks. Such uncertainties and risks include: changes in the preliminary financial results and estimates due to the restatement or review of the Company’s financial statements; the nature, timing and amount of any restatement or other adjustments; the Company’s ability to make timely filings of its required periodic reports under the Securities Exchange Act of 1934; issues relating to the Company’s ability to maintain effective internal control over financial reporting and disclosure controls and procedures; the Company’s high degree of leverage and its ability to service its debt; factors affecting the Company’s leverage, including interest rates; the risk that the counterparties to the Company’s interest rate swap agreements fail to satisfy their obligations under these agreements; the Company’s ability to obtain financing; the effect of operating and financial restrictions in the Company’s debt instruments; the accuracy of the Company’s estimates regarding its capital requirements; the effect of intense levels of competition in the Company’s industry; changes in the methods of third party reimbursements for diagnostic imaging and radiation oncology services; fluctuations or unpredictability of the Company’s revenues, including as a result of seasonality; changes in the healthcare regulatory environment; the Company’s ability to keep pace with technological developments within its industry; the growth in the market for MRI and other services; the disruptive effect of hurricanes and other natural disasters; adverse changes in general domestic and worldwide economic conditions and instability and disruption of credit markets; difficulties the Company may face in connection with recent, pending or future acquisitions, including unexpected costs or liabilities resulting from the acquisitions, diversion of management’s attention from the operation of the Company’s business, and risks associated with integration of the acquisitions; and other risks and uncertainties identified in the Risk Factors section of the Company’s Form 10-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission (the “SEC”), as may be modified or supplemented by our subsequent filings with the SEC. These uncertainties may cause actual future results or outcomes to differ materially from those expressed in the Company’s forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company does not undertake to update its forward-looking statements except as required under the federal securities laws.
ALLIANCE HEALTHCARE SERVICES, INC.
ADJUSTED EBITDA
(in
millions)
Adjusted EBITDA, as defined by the Company’s management, represents net income before: interest expense, net of interest income; income taxes; depreciation expense; amortization expense; net income attributable to noncontrolling interests; non-cash share-based compensation; severance and related costs; loss on extinguishment of debt; fees and expenses related to acquisitions and other non-cash charges included in other (income) expense, net, which includes non-cash losses on sales of equipment. The components used to reconcile net income to Adjusted EBITDA are consistent with our historical presentation of Adjusted EBITDA. Adjusted EBITDA is not a measure of financial performance under generally accepted accounting principles, or “GAAP.”
Management uses Adjusted EBITDA, and believes it is a useful measure for investors, for a variety of reasons. Management regularly communicates its Adjusted EBITDA results and management’s interpretation of such results to its board of directors. Management also compares the Company’s Adjusted EBITDA performance against internal targets as a key factor in determining cash incentive compensation for executives and other employees, largely because management feels that this measure is indicative of how our diagnostic imaging and radiation oncology business is performing and is being managed. Management believes that Adjusted EBITDA is a particularly useful comparative measure within the Company’s industry. The diagnostic imaging and radiation oncology industry continues to experience significant consolidation. These activities have led to significant charges to earnings, such as those resulting from acquisition costs, and to significant variations among companies with respect to capital structures and cost of capital (which affect interest expense) and differences in taxation and book depreciation of facilities and equipment (which affect relative depreciation expense), including significant differences in the depreciable lives of similar assets among various companies. In addition, management believes that because of the variety of equity awards used by companies, the varying methodologies for determining non-cash share-based compensation expense among companies and from period to period, and the subjective assumptions involved in that determination, excluding non-cash share-based compensation from Adjusted EBITDA enhances company-to-company comparisons over multiple fiscal periods and enhances the Company’s ability to analyze the performance of its diagnostic imaging and radiation oncology business.
Adjusted EBITDA may not be directly comparable to similarly titled measures reported by other companies. In addition, Adjusted EBITDA has other limitations as an analytical financial measure. These limitations include the fact that Adjusted EBITDA is calculated before recurring cash charges including interest expense, income taxes and severance costs, and is not adjusted for capital expenditures, the replacement cost of assets or other recurring cash requirements of the Company’s business. Adjusted EBITDA also does not reflect any cost for equity awards to employees. In the future, the Company expects that it may incur expenses similar to the excluded items discussed above. Accordingly, the exclusion of these and other similar items in the Company’s non-GAAP presentation should not be interpreted as implying that these items are non-recurring, infrequent or unusual. Management compensates for the limitations of using Adjusted EBITDA as an analytical measure by relying on the Company’s GAAP results to evaluate its operating performance and by considering independently the economic effects of the items that are or are not reflected in Adjusted EBITDA. Management also compensates for these limitations by providing GAAP-based disclosures concerning the excluded items in the Company’s financial disclosures. As a result of these limitations, however, Adjusted EBITDA should not be considered as an alternative to net income, as calculated in accordance with GAAP, or as an alternative to any other GAAP measure of operating performance. The calculation of Adjusted EBITDA is shown below:
| 2011 Full Year | |||||||
| Guidance Range | |||||||
| Net income | ($18 | ) | ($4 | ) | |||
| Income tax expense (benefit) | (10 | ) | (2 | ) | |||
|
Depreciation expense; amortization expense; interest expense and other, net; noncontrolling interest in subsidiaries; share-based payment and other expenses |
178 | 181 | |||||
| Adjusted EBITDA | $150 | $175 | |||||