EX-12.1 2 radnet_10k-ex1201.htm COMPUTATION OF RATION OF EARNINGS TO FIXED CHARGES

EXHIBIT 12.1

RADNET, INC. AND SUBSIDIARIES

COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES

(in thousands)

(unaudited)

|  | Years Ended |
|  | December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |  |  | 2014 |  |  | 2013 |  |  | 2012 |
Earnings: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pre-tax net income (1) |  | $ | 26,385 |  |  | $ | 12,436 |  |  | $ | 14,645 |  |  | $ | 3,961 |  |  | $ | 5,886 |  |  | $ | 4,377 |
Less: Equity in earnings of unconsolidated joint ventures |  |  | (13,554 | ) |  |  | (9,767 | ) |  |  | (8,927 | ) |  |  | (6,970 | ) |  |  | (6,194 | ) |  |  | (6,476 | )
Plus: Distributions from unconsolidated joint ventures |  |  | 8,690 |  |  |  | 2,926 |  |  |  | 7,731 |  |  |  | 7,358 |  |  |  | 7,204 |  |  |  | 6,477 |
Fixed charges |  |  | 51,631 |  |  |  | 54,554 |  |  |  | 51,717 |  |  |  | 56,145 |  |  |  | 54,891 |  |  |  | 61,352 |
Total adjusted earnings |  | $ | 73,152 |  |  | $ | 60,149 |  |  | $ | 65,166 |  |  | $ | 60,494 |  |  | $ | 61,787 |  |  | $ | 65,730 |
Fixed charges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense (including debt issue costs amortized to interest expense) |  | $ | 40,623 |  |  | $ | 43,455 |  |  | $ | 41,684 |  |  | $ | 42,727 |  |  | $ | 45,791 |  |  | $ | 53,783 |
Adjustments to exclude fair value adjustments of cash flow hedges reclassified from OCI to interest expense |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | – |  |  |  | (918 | )
Write-off of debt issue costs |  |  | – |  |  |  | 709 |  |  |  | – |  |  |  | 4,389 |  |  |  | – |  |  |  | – |
Portion of rent expense representative of the interest factor (2) |  |  | 11,008 |  |  |  | 10,390 |  |  |  | 10,033 |  |  |  | 9,029 |  |  |  | 9,100 |  |  |  | 8,487 |
Total fixed charges |  | $ | 51,631 |  |  | $ | 54,554 |  |  | $ | 51,717 |  |  | $ | 56,145 |  |  | $ | 54,891 |  |  | $ | 61,352 |
Ratio of earnings to fixed charges |  |  | 1.42 |  |  |  | 1.10 |  |  |  | 1.26 |  |  |  | 1.08 |  |  |  | 1.13 |  |  |  | 1.07 |
Additional earnings required to have a one-to-one ratio of earnings to fixed charges |  | $ | – |  |  | $ | – |  |  | $ | – |  |  | $ | – |  |  | $ | – |  |  | $ | – |

(1) |  | Excludes net income attributable to non-controlling interests

(2) |  | Represents 14% of operating lease costs, which approximates the portion that relates to the interest portion based on our estimated incremental borrowing rate