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SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended
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Sep. 30, 2024
Accounting Policies [Abstract] |
Schedule of Service Fee Revenue | Our total service revenues during the three and nine months ended September 30, 2024 and 2023 are presented in the table below based on an allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
2024 |  | 2023 |  | 2024 |  | 2023
Commercial insurance | $ | 255,375 |  |  | $ | 218,923 |  |  | $ | 752,514 |  |  | $ | 652,597 |
Medicare | 102,852 |  |  | 89,981 |  |  | 298,001 |  |  | 262,719 |
Medicaid | 10,894 |  |  | 10,519 |  |  | 32,804 |  |  | 30,279 |
Workers' compensation/personal injury | 10,232 |  |  | 9,745 |  |  | 33,088 |  |  | 34,785 |
Other patient revenue | 10,607 |  |  | 10,443 |  |  | 34,524 |  |  | 30,191 |
Management fee revenue | 6,242 |  |  | 3,922 |  |  | 18,255 |  |  | 12,203 |
Heart and lung | 4,696 |  |  | 2,441 |  |  | 12,553 |  |  | 6,377 |
Other | 10,314 |  |  | 3,768 |  |  | 18,918 |  |  | 14,248 |
Revenue under capitation arrangements | 33,563 |  |  | 40,041 |  |  | 105,050 |  |  | 117,982 |
Imaging Center Segment Revenue | 444,775 |  |  | 389,783 |  |  | 1,305,707 |  |  | 1,161,381 |
Digital Health Segment Revenue | 16,367 |  |  | 12,185 |  |  | 46,856 |  |  | 34,866 |
Total service revenue | $ | 461,142 |  |  | $ | 401,968 |  |  | $ | 1,352,563 |  |  | $ | 1,196,247 |
Schedule of Goodwill | Activity in goodwill for the nine months ended September 30, 2024 is provided below (in thousands):
| Imaging Center segment |  | Digital Health segment |  | Total
Balance as of December 31, 2023 | 606,557 |  |  | $ | 72,906 |  |  | $ | 679,463 |
Goodwill from acquisitions | 30,729 |  |  | — |  |  | 30,729 |
Currency translation | 1,223 |  |  | 426 |  |  | 1,649 |
Segment reorganization | (12,300) |  |  | 12,300 |  |  | — |
Balance as of September 30, 2024 | $ | 626,209 |  |  | $ | 85,632 |  |  | $ | 711,841 |
Schedule of Annual Amortization Expense | The components of intangible assets, both finite and indefinite lived, along with annual amortization expense that will be recorded over the next five years at September 30, 2024 and December 31, 2023 are as follows (in thousands): As of September 30, 2024:
| 2024* |  | 2025 |  | 2026 |  | 2027 |  | 2028 |  | Thereafter |  | Total |  | Weighted average amortization period remaining in years
Management service contracts | $ | 572 |  |  | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 6,669 |  |  | $ | 16,389 |  |  | 7.2
Covenant not to compete and other contracts | 261 |  |  | 897 |  |  | 610 |  |  | 315 |  |  | 225 |  |  | 68 |  |  | 2,376 |  |  | 3.1
Customer lists | 318 |  |  | 1,141 |  |  | 1,019 |  |  | 844 |  |  | 803 |  |  | 11,108 |  |  | 15,233 |  |  | 17.4
Patent and trademarks | 78 |  |  | 311 |  |  | 311 |  |  | 311 |  |  | 311 |  |  | 197 |  |  | 1,519 |  |  | 5.2
Developed technology | 1,913 |  |  | 7,651 |  |  | 7,611 |  |  | 7,077 |  |  | 7,077 |  |  | 6,856 |  |  | 38,185 |  |  | 5.8
Trade names amortized | 19 |  |  | 77 |  |  | 77 |  |  | 77 |  |  | 63 |  |  | 27 |  |  | 340 |  |  | 4.5
Trade names indefinite life | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 8,500 |  |  | 8,500 |  |  | — |
IPR&D | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,899 |  |  | 1,899 |  |  | — |
Total annual amortization | $ | 3,161 |  |  | $ | 12,364 |  |  | $ | 11,915 |  |  | $ | 10,911 |  |  | $ | 10,766 |  |  | $ | 35,324 |  |  | $ | 84,441 |  |  |
*Excluding the nine months ended September 30, 2024 As of December 31, 2023:
| 2024 |  | 2025 |  | 2026 |  | 2027 |  | 2028 |  | Thereafter |  | Total |  | Weighted average amortization period remaining in years
Management service contracts | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 2,287 |  |  | $ | 6,671 |  |  | $ | 18,106 |  |  | 7.9
Covenant not to compete and other contracts | 946 |  |  | 714 |  |  | 427 |  |  | 132 |  |  | 45 |  |  | 6 |  |  | 2,270 |  |  | 3.4
Customer lists | 1,234 |  |  | 1,104 |  |  | 981 |  |  | 797 |  |  | 764 |  |  | 10,564 |  |  | 15,444 |  |  | 17.7
Patent and trademarks | 316 |  |  | 316 |  |  | 316 |  |  | 315 |  |  | 300 |  |  | 164 |  |  | 1,727 |  |  | 5.8
Developed technology | 7,785 |  |  | 7,785 |  |  | 7,745 |  |  | 7,210 |  |  | 7,046 |  |  | 6,117 |  |  | 43,688 |  |  | 5.7
Trade names amortized | 77 |  |  | 77 |  |  | 77 |  |  | 77 |  |  | 63 |  |  | 27 |  |  | 398 |  |  | 5.3
Trade names indefinite life | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,100 |  |  | 7,100 |  |  | — |
IPR&D | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,882 |  |  | 1,882 |  |  | — |
Total annual amortization | $ | 12,645 |  |  | $ | 12,283 |  |  | $ | 11,833 |  |  | $ | 10,818 |  |  | $ | 10,505 |  |  | $ | 32,531 |  |  | $ | 90,615 |  |  |
Schedule of Effect of Derivative Instruments on Comprehensive Income( Loss) | A tabular presentation of the effect of derivative instruments on our consolidated statement of comprehensive income of the 2019 Swaps which remain ineffective is as follows (amounts in thousands):
For the three months ended September 30, 2024
Account |  | June 30, 2024 Balance |  | Amount of comprehensive loss recognized on derivative net of taxes |  | Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes* |  | September 30, 2024 Balance |  | Location
Accumulated Other Comprehensive Loss, net of taxes |  | $(4,369) |  | $— |  | $986 |  | $(3,383) |  | Equity
*Net of taxes of $0.4 million for the three months ended September 30, 2024.
For the nine months ended September 30, 2024
Account |  | December 31, 2023 Balance |  | Amount of comprehensive loss recognized on derivative net of taxes |  | Amount of loss reclassified out of accumulated OCI into income (prior period effective portion), net of taxes* |  | September 30, 2024 Balance |  | Location
Accumulated Other Comprehensive Loss, net of taxes |  | $(11,625) |  | $— |  | $8,242 |  | $(3,383) |  | Equity
*Net of taxes of $2.8 million for the nine months ended September 30, 2024. A tabular presentation of the effect of derivative instruments on our statement of operations of the 2019 Swaps which remain ineffective is as follows (amounts in thousands):
For the three months ended September 30, 2024
Ineffective interest rate swap |  | Amount recognized (current period ineffective portion) |  | Location recognized in profit and loss (current period ineffective portion) |  | Amount reclassified from accumulated OCI (prior period effective portion) |  | Location reclassified from accumulated OCI into profit and loss (prior period effective portion)
Interest rate contracts |  | $ | 6,755 |  |  | Other income (expense) |  | $ | 986 |  |  | Interest Expense
For the nine months ended September 30, 2024 |  |
Ineffective interest rate swap |  | Amount recognized (current period ineffective portion) |  | Location recognized in profit and loss (current period ineffective portion) |  | Amount reclassified from accumulated OCI (prior period effective portion) |  | Location reclassified from accumulated OCI into profit and loss (prior period effective portion) |  |
Interest rate contracts |  | $ | 7,429 |  |  | Other income (expense) |  | $ | 8,242 |  |  | Interest Expense |  |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration | A tabular roll forward of contingent consideration is as follows (amounts in thousands):
For the three months ended September 30, 2024
Entity |  | Account |  | June 30, 2024 Balance |  | Settlement of contingent consideration |  | Change in valuation of contingent consideration |  | Currency translation |  | September 30, 2024 Balance
Heart and Lung |  | Accrued expenses |  | 632 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 632 |
For the three months ended September 30, 2023
Entity |  | Account |  | June 30, 2023 Balance |  | Settlement of contingent consideration |  | Change in valuation of contingent consideration |  | Currency translation |  | September 30, 2023 Balance
Heart and Lung |  | Accrued Expenses & Other Long Term Liabilities |  | 14,358 |  |  | $ | (3,402) |  |  | $ | 915 |  |  | $ | (772) |  |  | $ | 11,099 |
For the nine months ended September 30, 2024
Entity |  | Account |  | January 1, 2024 Balance |  | Settlement of contingent consideration |  | Change in valuation of contingent consideration |  | Currency translation |  | September 30, 2024 Balance
Heart and Lung |  | Accrued expenses |  | 6,879 |  |  | $ | (8,221) |  |  | $ | 1,060 |  |  | $ | 914 |  |  | $ | 632 |
For the nine months ended September 30, 2023
Entity |  | Account |  | January 1, 2023 Balance |  | Settlement of contingent consideration |  | Change in valuation of contingent consideration |  | Currency translation |  | September 30, 2023 Balance
Heart and Lung |  | Accrued Expenses & Other Long Term Liabilities |  | 11,656 |  |  | $ | (3,402) |  |  | $ | 2,906 |  |  | $ | (61) |  |  | $ | 11,099 |
Schedule of Fair Value of Assets and Liabilities | The tables below summarize the estimated fair values of certain of our financial assets that are subject to fair value measurements, and the classification of these assets on our condensed consolidated balance sheets, as follows (in thousands):
| As of September 30, 2024
Level 1 |  | Level 2 |  | Level 3 |  | Total
Long term assets |  |  |  |  |  |  |
2019 Swaps - Interest Rate Contracts | $ | — |  |  | $ | 7,689 |  |  | $ | — |  |  | $ | 7,689 |
| As of December 31, 2023
Level 1 |  | Level 2 |  | Level 3 |  | Total
Current and long term assets |  |  |  |  |  |  |
2019 Swaps - Interest Rate Contracts | $ | — |  |  | $ | 15,118 |  |  | $ | — |  |  | $ | 15,118 |
The table below summarizes the estimated fair values of holdback relating to our Heart and Lung Imaging Limited acquisition on November 1, 2022 that are subject to fair value measurements and the classification of these liabilities on our condensed consolidated balance sheets, as follows (in thousands):
| As of September 30, 2024
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Accrued expenses |  |  |  |  |  |  |
Heart & Lung Imaging Limited | $ | — |  |  | $ | — |  |  | $ | 632 |  |  | $ | 632 |
| As of December 31, 2023
| Level 1 |  | Level 2 |  | Level 3 |  | Total
Accrued expenses |  |  |  |  |  |  |
Heart & Lung Imaging Limited | $ | — |  |  | $ | — |  |  | $ | 6,879 |  |  | $ | 6,879 |
The table below summarizes the estimated fair value compared to the face value of our long-term debt as follows (in thousands):
| As of September 30, 2024
Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value |  | Total Face Value
Barclays Term Loan and Truist Term Loan | $ | — |  |  | $ | 1,010,778 |  |  | $ | — |  |  | $ | 1,010,778 |  |  | $ | 1,009,687 |
| As of December 31, 2023
Level 1 |  | Level 2 |  | Level 3 |  | Total Fair Value |  | Total Face Value
Barclays Term Loan and Truist Term Loan | $ | — |  |  | $ | 824,759 |  |  | $ | — |  |  | $ | 824,759 |  |  | $ | 823,063 |
Schedule of Earnings Per Share | Earnings per share is based upon the weighted average number of shares of common stock and common stock equivalents outstanding, net of common stock held in treasury, as follows (in thousands except share and per share data):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
2024 |  | 2023 |  | 2024 |  | 2023
NET INCOME (LOSS) ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS | $ | 3,209 |  |  | $ | 17,540 |  |  | $ | (2,552) |  |  | $ | 4,904 |
BASIC NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS |  |  |  |  |  |  |
Weighted average number of common shares outstanding during the period | 73,494,709 |  |  | 67,793,404 |  |  | 72,587,321 |  |  | 62,113,707 |
Basic net income (loss) per share attributable to RadNet, Inc.'s common stockholders | $ | 0.04 |  |  | $ | 0.26 |  |  | $ | (0.04) |  |  | $ | 0.08 |
DILUTED NET INCOME (LOSS) PER SHARE ATTRIBUTABLE TO RADNET, INC. COMMON STOCKHOLDERS |  |  |  |  |  |  |
Weighted average number of common shares outstanding during the period | 73,494,709 |  |  | 67,793,404 |  |  | 72,587,321 |  |  | 62,113,707 |
Add non-vested restricted stock subject only to service vesting | 233,235 |  |  | 217,238 |  |  | — |  |  | 202,082 |
Add additional shares issuable upon exercise of stock options and contingently issuable shares | 1,437,491 |  |  | 799,176 |  |  | — |  |  | 905,462 |
Weighted average number of common shares used in calculating diluted net income per share | 75,165,435 |  |  | 68,809,818 |  |  | 72,587,321 |  |  | 63,221,251 |
Diluted net income (loss) income per share attributable to RadNet, Inc.'s common stockholders | $ | 0.04 |  |  | $ | 0.25 |  |  | $ | (0.04) |  |  | $ | 0.08 |
Stock options and non-vested restricted awards excluded from the computation of diluted per share amounts as their effect would be antidilutive: |  |  |  |  |  |  |
Non-vested restricted stock subject to service vesting | — |  |  | — |  |  | 680,318 |  |  | — |
Shares issuable upon the exercise of stock options | — |  |  | 88,600 |  |  | 820,932 |  |  | 761,708 |
Shares issuable subject to satisfaction of certain contingencies | — |  |  | — |  |  | — |  |  | 193,207 |
Weighted average shares for which the exercise price exceeds average market price of common stock | — |  |  | — |  |  | — |  |  | 94,346 |
Schedule of Investment in Joint Ventures | The following table is a summary of our investment in joint ventures during the nine months ended September 30, 2024 (in thousands):
Balance as of December 31, 2023 | $ | 92,710 |
Equity in earnings in these joint ventures | 11,308 |
Distribution of earnings | (1,000) |
Equity contributions in existing joint ventures | 1,496 |
Balance as of September 30, 2024 | $ | 104,514 |
Schedule of Joint Venture Investment and Financial Information | The following table is a summary of key balance sheet data for these joint ventures as of September 30, 2024 and December 31, 2023 and income statement data for the nine months ended September 30, 2024 and 2023 (in thousands):
Balance Sheet Data: | September 30, 2024 |  | December 31, 2023
Current assets | $ | 64,175 |  |  | $ | 39,819 |
Noncurrent assets | 219,478 |  |  | 224,936 |
Current liabilities | (41,550) |  |  | (46,587) |
Noncurrent liabilities | (70,607) |  |  | (70,834) |
Total net assets | $ | 171,496 |  |  | $ | 147,334 |
Income statement data for the nine months ended September 30, | 2024 |  | 2023
Net revenue | $ | 195,905 |  |  | $ | 129,020 |
Net income | $ | 23,949 |  |  | $ | 7,906 |

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