Radnet, Inc. (NASDAQ: RDNT) has successfully secured commitments to amend its credit facility, resulting in a 0.25% reduction in interest rates. The company has $872,812,500 of outstanding term loans under the credit agreement, and with the completion of the first amendment, the interest rate on the term loans will be reduced by 0.25% to either term SOFR plus 2.25% or the alternate base rate plus 1.25%. The interest rate on the revolving credit facility will also be reduced by 0.25%, subject to a pricing grid based upon Radnet’s leverage ratio.
The first amendment is estimated to result in approximately $2.2 million of annual cash interest expense reduction. Radnet’s Executive Vice President and Chief Financial Officer, Mark Stolper, expressed gratitude to the company's relationship banks and term loan lenders for their continued support, emphasizing the company's strong financial position with almost $750 million of cash on its balance sheet, a leverage ratio of adjusted EBITDA to net debt of under 1.0x, and term loans not maturing until 2031.
Radnet's wholly-owned subsidiary, Radnet Management, Inc., is the borrower under the first amendment, with obligations guaranteed by Radnet and substantially all of the borrower’s current and future wholly-owned domestic subsidiaries and certain affiliates, and secured by substantially all of the assets of the borrower, Radnet, and such subsidiaries and affiliates.
The company defines adjusted EBITDA as earnings before interest, taxes, depreciation, and amortization, each from continuing operations and adjusted for losses or gains on the sale of equipment, other income or loss, debt extinguishments, and non-cash equity compensation. Adjusted EBITDA includes equity earnings in unconsolidated operations and subtracts allocations of earnings to non-controlling interests in subsidiaries. This metric is used as an analytical indicator by Radnet management and the healthcare industry to assess business performance and is a measure of leverage capacity and ability to service debt.
Radnet, Inc. is the leading national provider of freestanding, fixed-site diagnostic imaging services in the United States, with a network of 399 owned and/or operated outpatient imaging centers. Together with affiliated radiologists, the company has a total of over 10,000 employees. Following these announcements, the company's shares moved 1.7%, and are now trading at a price of $82.84. For more information, read the company's full 8-K submission here.
