Alliance HealthCare Services, Inc. (NYSE:AIQ) (the “Company” or “Alliance”), a leading national provider of outpatient diagnostic imaging and radiation therapy services, announced results for the third quarter ended September 30, 2012.
Third Quarter Highlights
- Adjusted EBITDA of $41.7 million increased 5.7% sequentially and 8.2% from the year ago period, which includes $2.2 million gain from non-recurring legal settlement. Organic growth, excluding the legal settlement, equaled $1.0 million, or 2.6% compared to third quarter of 2011
- Significant cash flow generation has given the Company a cash and cash equivalents position of $78.6 million, providing the opportunity to increase financial flexibility by amending its credit facility to expand its total leverage covenant and reduce its term loan by $75.0 million utilizing cash from the balance sheet and proceeds from a sale-leaseback transaction
- Total debt (including current maturities) less cash and cash equivalents (before investments in acquisitions), decreased $46.8 million in the first nine months of 2012 compared to a decrease of $28.2 million in the same period last year, a 66% improvement
- Cost saving initiatives generated $35 million in annualized savings since August 2011, versus goal of $20- $25 million
- Regained compliance with two NYSE listing requirements within the provided grace periods
- Company improves 2012 cash flow and capital expenditure guidance ranges
Third Quarter 2012 Financial Results
“Our solid results this quarter were attributable to the continued success of Project Phoenix, the cost savings plan that we introduced last summer. The adoption of this cost savings discipline permanently changed the corporate culture to focus on continuously improving operational efficiency at Alliance, and has generated $35 million in annualized savings since inception,” stated Larry C. Buckelew, Chairman of the Board and interim Chief Executive Officer. “These cost savings improvements and a continued focus on efficiency have translated to a second consecutive quarter of organic Adjusted EBITDA growth. We continued to strategically prune our customer base, consciously sacrificing some incremental near-term revenue to enhance the long-term value proposition and profitability that will lead to higher renewal rates and deeper relationships with our most valued customers. In addition, our strong cash generation provides the stability and flexibility to make significant progress against our strategic growth initiatives. These positive third quarter results reaffirm that we have the right financial characteristics, culture, and long-term objectives necessary to create value for our shareholders.”
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