COEUR D'ALENE, Idaho, Oct. 30 NightHawkRadiology Holdings, Inc. (Nasdaq: NHWK), the leading provider of radiologysolutions to radiology groups across the United States, today announcedfinancial results for its third quarter ended September 30, 2007. Revenue grew79% year-over-year to a record $45.2 million in the third quarter of 2007 from$25.2 million in the third quarter of 2006. Excluding the impact ofacquisitions, the company experienced significant year-over-year organicrevenue growth of 24%. The company also achieved strong adjusted EPS growth of24% in the third quarter, while making significant investments inacquisitions, infrastructure, and management necessary to enhance its platformfor future growth.
"Our third-quarter results reflect continued solid organic growth andsignificant progress on integrating recent acquisitions, and we continue togain traction in our new service offerings," said Dr. Paul Berger, Chairmanand Chief Executive Officer. "Our investments in acquisitions, infrastructure,and management in 2007 have positioned us to capitalize on significant futuremarket opportunities and we're very pleased that we've been able to achieveboth record revenues and record adjusted earnings per share during this periodof investment."
Tim Mayleben, NightHawk's President and Chief Operating Officer, added "Wecontinue to expect outstanding growth for the full year through both organicgrowth and through the acquisitions we've made." The company revised itsguidance to reflect emerging clarity related to projected growth in newservice offerings during the latter part of 2007. "The revisions to ourguidance continue to reinforce our view of the opportunities that lie aheadfor our new service offerings, our outlook for 2008, and our commitment topreserve investments in key initiatives while responding to changes inrevenue," said Mayleben.
The company's adjusted net income for the third quarter of 2007 was$8.0 million or $0.26 per diluted share, compared to $6.5 million, or $0.21per diluted share, during the third quarter of 2006. The company's adjustednet income excludes certain non-cash charges related to stock compensation,amortization of intangibles, and IBNR charges. As expected, the increase inadjusted net income was impacted by redundant SG&A expenses and temporaryhigher physician compensation levels on acquired entities, combined withacquisition-related interest expense on the company's $100 million debtfacility. The company anticipates significant improvement to adjusted netincome in 2008 as the company completes the integration of these acquisitionsinto the NightHawk platform. Adjusted net income was also impacted byinvestments in the business and in new services to position the company forfuture growth. The company projects increases in operating margins in thefourth quarter of 2007, with the full benefits of acquisition integration andrelated investments to be realized in 2008 and beyond.
GAAP net income for the third quarter of 2007 was $3.8 million compared to$5.6 million for the third quarter of 2006. The decrease in 2007 GAAP netincome was largely due the same items described above with respect to adjustednet income. Additionally, GAAP net income was impacted by higher non-cashcharges for stock compensation, IBNR, and amortization of intangibles.
A reconciliation of adjusted net income to GAAP net income is included inthe tables attached to this press release.
"We're pleased with our progress in the first nine months of 2007 -- atime spent on further differentiating NightHawk and positioning the company toachieve growth in 2008 and beyond," said Mayleben. "We do not anticipate anysignificant change to our overall financial health or growth trajectory andlook forward to further distinguishing NightHawk as the leading provider inthe industry in the coming year."
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