Alliance HealthCare Services Reports Results For The Third Quarter And Nine Months Ended September 30, 2011
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...
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, 2011. Third Quarter 2011 Financial Results Revenue for the third quarter of 2011 was $126.8 million compared to $121.1 million in the third quarter of 2010, an increase of 4.7%. On a sequential quarter basis, revenue decreased (0.8%) to $126.8 million in the third quarter of 2011 compared to $127.8 million in the second quarter of 2011. Alliance’s Adjusted EBITDA (as defined below) was $38.5 million in the third quarter of 2011 compared to $40.4 million in the third quarter 2010, a decrease of 4.7%. On a sequential quarter basis, Adjusted EBITDA was steady at $38.5 million in the third quarter of 2011 compared to $38.8 million in the second quarter of 2011. Alliance’s net loss, computed in accordance with generally accepted accounting principles (“GAAP”), totaled ($137.3) million in the third quarter of 2011, including ($133.0) million of non-cash impairment charges net of tax, and ($1.0) million in the third quarter of 2010. Net loss per share on a diluted basis, computed in accordance with GAAP, was ($2.58) per share in the third quarter of 2011 and ($0.02) per share in the third quarter of 2010. In the third quarter of 2011, net loss per share on a diluted basis was impacted by ($2.55) in the aggregate due to non-cash impairment charges, restructuring charges, severance and related costs, mergers and acquisitions transaction costs and a lower GAAP income tax rate than our historical income tax rate. Alliance’s historical income tax rate has been approximately 42%, rather than the GAAP income tax rate of 16.2% in the third quarter of 2011. The third quarter of 2011 included non-cash impairment charges totaling $155.7 million, or $133.0 million net of tax, related to Alliance’s imaging division. Alliance completed step one of its impairment analysis which indicated impairment as of September 30, 2011 and therefore began, but has not completed, the subsequent steps to quantify a final goodwill impairment charge. However, management’s best estimate of a goodwill impairment charge is $153.0 million, and $2.7 million related to impairment of certain intangible assets. The impairment charge is based on a preliminary analysis and may be subject to further adjustments. During the fourth quarter, the Company intends to complete the valuation work to determine the fair value of the imaging division assets and liabilities and record adjustments to their estimate, if any. Alliance believes that the reduction in fair value which prompted the impairment charges is a result of sustained high unemployment rates, a reported decline in physician office visits, and other conditions in the United States arising from global economic conditions. These factors have had a sustained negative impact on the Company’s stock price and on the fair value of its imaging division reporting unit. As a result, Alliance recorded the estimated non-cash impairment charges in the third quarter of 2011. These impairment charges are non-cash expenses and will not have any impact on the Company's cash position, future cash flows or debt covenants.
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