NightHawk third quarter results show scan volume up 1%, prices off 3%

October 30, 2008 NightHawk third quarter results show scan volume up 1%, prices off 3% COEUR D'ALENE, Idaho, Oct 29 -- NightHawk Radiology Holdings announced Wednesday financial results for its third quarter ended Sept. 30. The following are third quarter 2008 highlights: * Revenue was $43.4 million compared with $45.2 million in the year-ago quarter. Scan volume grew 1% to 792,000 scans while pricing declined 3%. * Revenue from new service offerings, including final reads and business services, was $8.9 million, or 20% of total revenue. Final reads revenue increased 34% to $4.9 million, or 11% of total revenue. * Adjusted net income was $6.2 million, or $0.21 per diluted share, compared with $8.0 million, or $0.26 per diluted share, in the year-ago quarter. Adjusted net income excludes noncash charges for stock compensation, amortization of intangible assets, and malpractice reserve adjustments. Adjusted net income in the third quarter of 2008 also excludes a pretax restructuring charge of $0.7 million ($0.4 million after tax) related to the closure of redundant facilities. * GAAP net income was $3.3 million, or $0.11 per diluted share, compared with $3.8 million, or $0.12 per diluted share, in the third quarter of 2007. * Cash flow from operations increased 100% to a record $9.6 million, up from $4.8 million in the third quarter of 2007. Free cash flow was a record $8.8 million during the quarter, up 144% from $3.6 million in the third quarter of 2007. * Cash and cash equivalents on hand at Sept. 30 totaled $55.2 million. "Considering the modest sequential increase in scan volume and revenue, we were able to increase adjusted earnings sequentially by 13% through improved productivity and prudently focusing on our costs," said Dr. Paul Berger, chair and CEO. "Our overall financial position remains very strong with $55.2 million in cash on hand and record cash flow from operations of $9.6 million during the third quarter and $22.9 million for the first nine months of 2008. We also saw encouraging results from our initiatives focused on improving our customer service and sales execution.

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