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8-K - FORM 8-K - INSIGHT HEALTH SERVICES HOLDINGS CORPa57388e8vk.htm
Exhibit 99.1
(INSIGHT IMAGING LOGO)
N e w s  R e l e a s e
Contact:
Trace Longo
Longo Communications
(949) 364-2821
INSIGHT IMAGING
REPORTS RESULTS FOR THE FOURTH QUARTER AND FISCAL YEAR ENDED JUNE 30, 2010
  o   Adjusted EBITDA for fourth quarter of $5.2 million on revenues of $46.8 million, including $1.0 million of transaction costs, severance and disposal costs
 
  o   Adjusted EBITDA for the year ended June 30, 2010 of $29.5 million on revenues of $190.9 million
 
  o   Financial advisor engaged to assist the Company to develop and finalize a plan to reduce its outstanding debt
 
  o   Revolving credit facility amended
          LAKE FOREST, Calif. ... September 23, 2010 ... InSight Health Services Holdings Corp. (“Insight Imaging”) (OTCBB: ISGT) today announced its financial results for the fourth quarter and fiscal year ended June 30, 2010.
          Kip Hallman, Insight Imaging’s President and CEO, stated, “While we are disappointed with our sequential decline in adjusted EBITDA from the 3rd quarter, we are pleased that scan volumes and revenue were up slightly over our third quarter in our patient services segment, reflecting general stability. Our contract services segment was also relatively stable from the 3rd to 4th quarter, as revenue and adjusted EBITDA were down 1% and 2%, respectively. We were again pleased that the quarterly gap between revenue lost from customers terminated during the past year and revenue gained from new customers signed during the past year continued the improvement we cited last quarter, narrowing to the smallest it has been at any time in the past three years. The majority of the decline in adjusted EBITDA from the third quarter was not due to ongoing operating results, but to $1 million in transaction costs, severance and disposal costs associated with acquisitions, dispositions and closures coupled with $0.4 million of

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sales and use tax refunds in the third quarter. We also recorded a $0.3 million increase in bad debt relating to the patient services segment.”
          Starting with the first quarter of 2010, Insight Imaging changed the definition of its business segments into three reportable segments: contract services, patient services and other operations. Contract services consist of centers (primarily mobile units) which generate revenues from fee-for-service arrangements and fixed-fee contracts billed directly to healthcare provider customers, also referred to as wholesale operations. Patient services consist of centers (mainly fixed-sites) that primarily generate revenues from services billed, on a fee-for-service basis, directly to patients or third-party payors, also referred to as retail operations. Other operations generate revenues primarily from agreements with customers to provide management services. Insight Imaging allocates corporate overhead, depreciation related to the billing system and income taxes to other operations.
          Revenues decreased 12.1% to $46.8 million for the three months ended June 30, 2010 from $53.2 million for the three months ended June 30, 2009. Net of acquisitions and dispositions, revenues decreased 11.0% to $45.9 million for the three months ended June 30, 2010 from $51.7 million for the three months ended June 30, 2009. This decrease was due to lower contract services revenues ($3.0 million) and lower existing patient services centers revenues ($2.8 million). Revenues from other operations were consistent with the prior year quarter.
          Patient services revenues decreased 13.3% to $22.8 million for the three months ended June 30, 2010 from $26.3 million for the three months ended June 30, 2009. Net of acquisitions and dispositions, patient services revenues decreased 11.1% to $22.0 million for the three months ended June 30, 2010 from $24.8 million for the three months ended June 30, 2009. The decrease was primarily a result of a decrease in scan volumes which Insight Imaging attributes to various factors, including high unemployment rates and the impact of high deductible healthcare plans. The decrease is also due to a decline in the percentage of scan volume related to more expensive procedures, coupled with reimbursement rate reductions from various payors.
          Insight Imaging’s contract services revenues decreased 11.2% to $23.4 million for the three months ended June 30, 2010 from $26.4 million for the three months ended June 30, 2009. The decrease was due to a reduction in the number of active contracts and reductions in reimbursement from its contract services customers for all modalities. The reductions in reimbursement are primarily the result of competition from other contract services providers and fewer mobile units in service. The company’s aging mobile fleet also contributed to the decline in revenues, as did the continued trend for customers to elect to perform these services in-house.
     Revenues decreased 16.2% to $190.9 million for the year ended June 30, 2010 from $227.8 million for the year ended June 30, 2009. Net of acquisitions and dispositions, revenues decreased $27.0 million or 13.0% to $181.0 million for the year ended June 30, 2010, from $208.0 million for the year ended June 30, 2009. This decrease was primarily

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due to lower contract services revenues ($19.0 million), lower revenues from existing patient services centers ($7.8 million) and lower revenues from other operations ($0.2 million).
          Insight Imaging’s patient services revenues decreased 16.0% to $92.9 million for the year ended June 30, 2010 from $110.6 million for the year ended June 30, 2009. Net of acquisitions and dispositions, patient services revenues decreased 8.6% to $83.0 million for the year ended June 30, 2010 from $90.8 million for the year ended June 30, 2009. This decrease was primarily a result of a decrease in scan volumes, which the Company attributes to various factors, including high unemployment rates and the impact of high deductible healthcare plans. The decrease is also due to a decline in the percentage of scans related to more expensive procedures, coupled with reimbursement rate reductions from various payors.
     Insight Imaging’s contract services revenues decreased 16.5% to $96.1 million for the year ended June 30, 2010 from $115.1 million for the year ended June 30, 2009. This decrease was partially due to the closure of a fixed-site center related to a large healthcare provider contract ($5.1 million) in April 2009 in conjunction with the renewal of four continuing centers under a multi-year agreement. The remaining decrease from our contract services operations is a result of a reduction in the number of active contracts and reductions in reimbursement from Insight Imaging’s contract services customers for all modalities. The reductions in reimbursement are primarily the result of competition from other contract services providers and fewer mobile units in service. The Company’s aging mobile fleet also contributed to the decline in revenues as did the continued propensity for customers to take their business in-house.
     Net cash provided by operating activities was $5.3 million for the year ended June 30, 2010 and resulted primarily from Insight Imaging’s Adjusted EBITDA ($29.5 million) (see discussion of Adjusted EBITDA below) less cash paid for interest and taxes ($20.1 million) and changes in certain assets and liabilities ($4.1 million). The changes in certain assets and liabilities primarily consisted of a decrease in accounts payable and other accrued expenses of $9.0 million. Of this $9.0 million, $0.4 million relates to a decrease in accrued costs for capital expenditures, $0.8 million relates to a reduction in accrued interest on notes payable due to the termination of an interest rate collar agreement, $0.7 million is due to a decline in accrued disposal costs, $0.5 million relates to payment of a tax matter which was accrued at June 30, 2009, with the remaining $6.6 million variance due to a decline in the Company’s operating costs and normal short term timing of payments. The decrease in accounts payable and accrued liabilities was partially offset by a decrease in net accounts receivable of $3.0 million, due principally to the decline in the Company’s revenue, and a decrease in other assets of $1.9 million, of which $0.5 million relates to the collection of an escrow deposit from the sale of a fixed-site center in fiscal 2009 and $0.6 million which relates to an increase in collections of our receivables from unconsolidated partnerships.
     At June 30, 2010, Insight Imaging had $9.4 million in cash, cash equivalents and restricted cash (including $0.3 million that was subject to the lien for the benefit of the floating rate note holders, and may only be used for wholly owned capital projects or under certain circumstances the purchase of floating rate notes), and $12.8 million of

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availability under its revolving credit facility, based on the borrowing base, which is net of $1.6 million of outstanding letters of credit. At June 30, 2010, there were no borrowings outstanding under the credit facility. The $12.8 million of availability is subject to a $7.5 million minimum liquidity requirement.
     Adjusted EBITDA for the fourth quarter of fiscal 2010 decreased 48.7% to $5.2 million compared to $10.1 million for the prior year period. Adjusted EBITDA decreased 25.7% to $29.5 million for the year ended June 30, 2010 from $39.7 million for the year ended June 30, 2009. These variances were primarily due to our decline in revenues. In addition, $2.8 million of the decrease for the year ended June 30, 2010 was due to the closure of a fixed-site center related to a large healthcare provider contract in April 2009 in conjunction with the renewal of four continuing centers under a multi-year agreement. In the quarter ended June 30, 2010 we incurred $1.0 million of transactions costs, severance and disposal costs primarily related to our subsequent acquisition of eight fixed-site centers in the areas of Phoenix, Arizona; El Paso, Texas and Las Cruces, New Mexico, coupled with our plans to close or sell retail centers in the near future.
     The opinion of the Company’s independent registered public accounting firm relating to the Company’s financial statements for the fiscal year ended June 30, 2010 contains an explanatory paragraph regarding substantial doubt about the Company’s ability to continue as a going concern. The Company’s revolving credit facility requires it to deliver audited financial statements without such an explanatory paragraph within 120 days following the end of its fiscal year. The Company will not be able to deliver audited financial statements for its fiscal year end without such an explanatory paragraph, and as a result, the Company will not be in compliance with the revolving credit facility. The Company has executed an amendment to its revolving credit agreement with the lender whereby the lender has agreed to forbear from enforcing the default under the agreement relating to this noncompliance and allow full access to the revolver until December 1, 2010. If the Company has not remedied this noncompliance by December 1, 2010, its lenders could terminate their commitments under the revolver and could cause all amounts outstanding thereunder to become immediately due and payable. The Company did not have any borrowings outstanding on the revolver as of June 30, 2010 and does not currently have any borrowings outstanding on the revolver, but does have $1.6 million in outstanding letters of credit under the facility. The amendment reduces the total facility size from $30.0 million to $20.0 million, reduces the letter of credit limit from $15.0 million to $5.0 million, increases the interest rate on outstanding borrowings to Prime +2.75% or LIBOR +3.75%, at Insight Imaging’s discretion, and increases the unused line fee to 0.75%.
     The Company has engaged a global investment bank, Jefferies & Company, Inc. and are working closely with them to develop and finalize a restructuring and refinancing plan to significantly reduce its outstanding debt and improve its cash and liquidity position.

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Non-GAAP measures:
The metric presented above as “revenues net of acquisitions and dispositions” is defined as revenue excluding the effects of acquisitions and dispositions. Insight Imaging believes this metric is a useful financial measure for investors in evaluating the company’s operating performance for the periods presented. When read in conjunction with its revenues, it presents a useful tool to evaluate the ongoing operations and provides investors with a tool they can use to evaluate the management of assets held from period to period. In addition, the metric “revenues net of acquisitions and dispositions” is one of the factors Insight Imaging uses in internal evaluations of the overall performance of its business. This metric, however, is not a measure of financial performance under accounting principles generally accepted in the United States (“GAAP”) and should not be considered a substitute for revenues as determined in accordance with GAAP and may not be comparable to similarly-titled measures reported by other companies.
Insight Imaging defines Adjusted EBITDA as earnings before interest expense, income taxes, depreciation and amortization, excluding impairment of tangible and intangible assets, gain on sales of centers, and gain on purchases of notes payable. Adjusted EBITDA has been included because Insight Imaging believes that it is a useful tool for Insight Imaging and its investors to measure the company’s ability to provide cash flows to meet debt service, capital projects and working capital requirements. Adjusted EBITDA should not be considered an alternative to, or more meaningful than, income from company operations and cash flow from operating activities or other traditional indicators of operating performance and liquidity determined in accordance with GAAP. Insight Imaging presents the discussion of Adjusted EBITDA because covenants in the agreements governing its material indebtedness contain ratios based on this measure. While Adjusted EBITDA is used as a measure of liquidity and the ability to meet debt service requirements, it is not necessarily comparable to other similarly-titled captions of other companies due to differences in methods of calculations. For a reconciliation of net cash provided by operating activities to Adjusted EBITDA, see the table below.
Insight Imaging will host a conference call to discuss results for its fourth quarter and fiscal year 2010, on Friday, September 24, 2010, at 10:00 a.m. Pacific Time. To participate by telephone, please dial 1-480-629-9770 or 1-877-941-6009 ten minutes prior to the scheduled call. In addition, please refer to the Company’s Form 10K filed on September 24, 2010, which can be obtained on the Company’s website www.insighthealth.com, or the SEC’s website, www.sec.gov.
Safe Harbor
          The foregoing contains forward-looking statements regarding Insight Imaging. They reflect Insight Imaging’s current views with respect to current events and financial performance, are subject to many risks, uncertainties and factors relating to Insight Imaging’s operations and business environment which may cause the actual results of Insight Imaging to be materially different from any future results, express or implied by such forward-looking statements. Insight Imaging intends that such forward-looking

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statements be subject to the Safe Harbor created by Section 27(a) of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. The words and phrases “expect,” “estimate,” and “anticipate” and similar expressions identify forward-looking statements. Certain factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: (i) Insight Imaging’s ability to successfully implement its core market strategy; (ii) overcapacity and competition in Insight Imaging’s markets; (iii) reductions, limitations and delays in reimbursement by third-party payors; (iv) contract renewals and financial stability of customers; (v) changes in the nature of commercial health care insurance arrangements, so that individuals bear greater financial responsibility through high deductible plans, co-insurance and co-payments; (vi) conditions within the healthcare environment; (vii) the potential for rapid and significant changes in technology and their effect on Insight Imaging’s operations; (viii) operating, legal, governmental and regulatory risks; (ix) conditions within the capital markets, including liquidity and interest rates, and (x) economic (including financial and employment markets), political and competitive forces affecting Insight Imaging’s business, and the country’s economic condition as whole.
          If any of these risks or uncertainties materializes, or if any of Insight Imaging’s underlying assumptions are incorrect, Insight Imaging’s actual results may differ significantly from the results that have been expressed in or implied by any forward looking statements. Insight Imaging disclaims any intention or obligations to update or revise forward-looking statements to reflect future events or circumstances.
About Insight Imaging
          Insight Imaging, headquartered in Lake Forest, California, is a provider of retail and wholesale diagnostic imaging services. Insight Imaging serves a diverse portfolio of customers, including healthcare providers, such as hospitals and physicians, and payors, such as managed care organizations, Medicare, Medicaid and insurance companies, in over 30 states, including the following targeted regional markets: California, Arizona, Texas, New England, the Carolinas, Florida and the Mid-Atlantic states.
For more information, please visit www.insighthealth.com.

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INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSSES
(Unaudited)

(Amounts in thousands)
                 
    Years Ended  
    June 30,  
    2010     2009  
REVENUES:
               
Contract services
  $ 96,066     $ 115,055  
Patient services
    92,898       110,557  
Other operations
    1,974       2,170  
 
           
Total revenues
    190,938       227,782  
 
           
 
               
COSTS OF OPERATIONS:
               
Costs of services
    127,856       153,491  
Provision for doubtful accounts
    4,390       4,021  
Equipment leases
    10,641       10,950  
Depreciation and amortization
    33,219       45,584  
 
           
Total costs of operations
    176,106       214,046  
 
           
 
               
CORPORATE OPERATING EXPENSES
    (20,191 )     (21,564 )
 
               
EQUITY IN EARNINGS OF UNCONSOLIDATED PARTNERSHIPS
    2,358       2,642  
 
               
INTEREST EXPENSE, net
    (25,599 )     (30,164 )
 
               
GAIN ON SALES OF CENTERS
    118       7,885  
 
               
GAIN ON PURCHASE OF NOTES PAYABLE
          12,065  
 
               
IMPAIRMENT OF OTHER LONG-LIVED ASSETS
    (4,414 )     (5,308 )
 
           
 
               
Loss before income taxes
    (32,896 )     (20,708 )
 
               
BENEFIT FOR INCOME TAXES
    (1,832 )     (1,652 )
 
           
 
               
Net loss
    (31,064 )     (19,056 )
 
           
 
               
Less: net income attributable to noncontrolling interests
    738       698  
 
           
 
               
Net loss attributable to InSight Health Services Holdings Corp.
  $ (31,802 )   $ (19,754 )
 
           
 
               
COMPREHENSIVE LOSS:
               
Net loss attributable to InSight Health Services Holdings Corp.
  $ (31,802 )   $ (19,754 )
Unrealized income (loss) attributable to changes in fair value of interest rate contracts
    2,316       (3,529 )
 
           
 
               
Comprehensive loss attributable to InSight Health Services Holdings Corp.
  $ (29,486 )   $ (23,283 )
 
           

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INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE LOSSES
(Unaudited)

(Amounts in thousands)
                 
    Three Months Ended  
    June 30,  
    2010     2009  
REVENUES:
               
Contract services
  $ 23,442     $ 26,384  
Patient services
    22,832       26,321  
Other operations
    552       540  
 
           
Total revenues
    46,826       53,245  
 
           
 
               
COSTS OF OPERATIONS:
               
Costs of services
    32,121       36,248  
Provision for doubtful accounts
    1,263       710  
Equipment leases
    2,715       2,602  
Depreciation and amortization
    7,814       10,392  
 
           
Total costs of operations
    43,913       49,952  
 
           
 
               
CORPORATE OPERATING EXPENSES
    (5,937 )     (4,326 )
 
               
EQUITY IN EARNINGS OF UNCONSOLIDATED PARTNERSHIPS
    622       920  
 
               
INTEREST EXPENSE, net
    (5,831 )     (6,933 )
 
               
GAIN (LOSS) ON SALES OF CENTERS
    (182 )     196  
 
               
GAIN ON PURCHASE OF NOTES PAYABLE
          5,277  
 
               
IMPAIRMENT OF OTHER LONG-LIVED ASSETS
    (2,465 )     (708 )
 
           
 
               
Loss before income taxes
    (10,880 )     (2,281 )
 
               
BENEFIT FOR INCOME TAXES
    (511 )     (100 )
 
           
 
               
Net loss
    (10,369 )     (2,181 )
 
           
 
               
Less: net income attributable to noncontrolling interests
    228       164  
 
           
 
               
Net loss attributable to InSight Health Services Holdings Corp.
  $ (10,597 )   $ (2,345 )
 
           
 
               
COMPREHENSIVE LOSS:
               
Net loss attributable to InSight Health Services Holdings Corp.
  $ (10,597 )   $ (2,345 )
Unrealized income (loss) attributable to changes in fair value of interest rate contracts
    104       194  
 
           
Comprehensive loss attributable to InSight Health Services Holdings Corp.
  $ (10,493 )   $ (2,151 )
 
           

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INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(Amounts in thousands)
                 
    Years Ended  
    June 30,  
    2010     2009  
OPERATING ACTIVITIES:
               
Net loss
  $ (31,064 )   $ (19,056 )
Adjustments to reconcile net loss to net cash provided by operating activities:
               
Depreciation and amortization
    33,219       45,584  
Amortization of bond discount
    5,881       5,375  
Share-based compensation
    73       73  
Equity in earnings of unconsolidated partnerships
    (2,358 )     (2,642 )
Distributions from unconsolidated partnerships
    2,485       2,645  
Gain on sales of centers
    (118 )     (7,885 )
Gain on sales of equipment
    (1,125 )     (1,000 )
Gain on purchase of notes payable
          (12,065 )
Impairment of other long-lived assets
    4,414       5,308  
Deferred income taxes
    (1,974 )     (2,223 )
Cash (used in) provided by changes in operating assets and liabilities:
               
Trade accounts receivables, net
    3,000       7,854  
Other current assets
    1,949       (2,639 )
Accounts payable and other accrued expenses
    (9,040 )     (1,616 )
 
           
Net cash provided by operating activities
    5,342       17,713  
 
           
 
               
INVESTING ACTIVITIES:
               
Proceeds from sales of centers
    2,861       19,987  
Proceeds from sales of equipment
    1,797       1,322  
Additions to property and equipment
    (23,483 )     (21,893 )
Acquisition of fixed-site centers, net of cash acquired
    (918 )     (8,400 )
Decrease (increase) in restricted cash
    6,169       1,584  
Cash contribution into joint venture
    (692 )      
Other
    25        
 
           
Net cash used in investing activities
    (14,241 )     (7,400 )
 
           
 
               
FINANCING ACTIVITIES:
               
Principal payments of notes payable and capital lease obligations
    (2,560 )     (2,303 )
Purchase of floating rate notes
          (8,438 )
Proceeds from issuance of notes payable
    1,215        
Cash contributions from non-controlling interest
    88        
Distributions to non-controlling interest
    (237 )     (934 )
Other
    (191 )      
 
           
Net cash used in financing activities
    (1,685 )     (11,675 )
 
           
 
               
DECREASE  IN CASH AND CASH EQUIVALENTS:
    (10,584 )     (1,362 )
Cash, beginning of period
    19,640       21,002  
 
           
Cash, end of period
  $ 9,056     $ 19,640  
 
           
 
               
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
               
Interest paid
  $ 19,954     $ 25,271  
Income taxes paid
    182       436  
Non-cash acquisition
    975       884  
Non-cash contributions from non-controlling interests
    306        

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INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT

(Amounts in thousands) (unaudited)
                                 
    Patient Services     Contract Services     Other Operations     Consolidated  
Year Ended June 30, 2010
                               
 
                               
Income (loss) before income taxes
  $ 322     $ 12,606     $ (45,824 )   $ (32,896 )
Interest expense, net
    471       580       24,548       25,599  
Depreciation and amortization
    12,473       18,424       2,322       33,219  
Effect of noncontrolling interest
    (738 )                 (738 )
Gain on sales of centers
    (118 )                 (118 )
Impairment of other long-lived assets
    1,577       2,837             4,414  
 
                       
 
                               
Adjusted EBITDA
  $ 13,987     $ 34,447     $ (18,954 )   $ 29,480  
 
                       
 
                               
Year Ended June 30, 2009
                               
 
                               
Income (loss) before reorganization items and income taxes
  $ 5,307     $ 12,662     $ (38,677 )   $ (20,708 )
Interest expense, net
    1,203       1,345       27,616       30,164  
Depreciation and amortization
    16,777       25,793       3,014       45,584  
Effect of noncontrolling interest
    (698 )                 (698 )
Gain on sales of centers
    (7,885 )                 (7,885 )
Gain on purchase of notes payable
                (12,065 )     (12,065 )
Impairment of other long-lived assets
    708       4,600             5,308  
 
                       
 
                               
Adjusted EBITDA
  $ 15,412     $ 44,400     $ (20,112 )   $ 39,700  
 
                       
                                 
    Patient Services     Contract Services     Other Operations     Consolidated  
Three Months Ended June 30, 2010
                               
 
                               
Income (loss) before income taxes
  $ (1,723 )   $ 2,737     $ (11,894 )   $ (10,880 )
Interest expense, net
    84       91       5,656       5,831  
Depreciation and amortization
    3,148       4,182       484       7,814  
Effect of noncontrolling interest
    (228 )                 (228 )
Gain on sales of centers
    182                   182  
Impairment of other long-lived assets
    1,345       1,120             2,465  
 
                       
 
                               
Adjusted EBITDA
  $ 2,808     $ 8,130     $ (5,754 )   $ 5,184  
 
                       
 
                               
Three Months June 30, 2009
                               
 
                               
Income (loss) before reorganization items and income taxes
  $ 112     $ 3,790     $ (6,183 )   $ (2,281 )
Interest expense, net
    214       245       6,474       6,933  
Depreciation and amortization
    3,439       6,215       738       10,392  
Effect of noncontrolling interest
    (164 )                 (164 )
Gain on sales of centers
    (196 )                 (196 )
Gain on purchase of notes payable
                (5,277 )     (5,277 )
Impairment of other long-lived assets
    708                   708  
 
                       
 
                               
Adjusted EBITDA
  $ 4,113     $ 10,250     $ (4,248 )   $ 10,115  
 
                       

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INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA

(Amounts in thousands) (unaudited)
                                 
    Years Ended     Three Months Ended  
    June 30,     June 30,  
    2010     2009     2010     2009  
Net cash provided by operating activities
  $ 5,342     $ 17,713     $ 2,185     $ 7,660  
Benefit for income taxes
    (1,832 )     (1,652 )     (511 )     (100 )
Interest expense, net
    25,599       30,164       5,831       6,933  
Amortization of bond discount
    (5,881 )     (5,375 )     (1,529 )     (1,370 )
Share-based compensation
    (73 )     (73 )     (18 )     (18 )
Equity in earnings of unconsolidated partnerships
    2,358       2,642       622       920  
Distributions from unconsolidated partnerships
    (2,485 )     (2,645 )     (312 )     (640 )
Gain on sales of equipment
    1,125       1,000       289       330  
Net change in operating assets and liabilities
    4,091       (3,599 )     (2,340 )     (3,618 )
Effect of noncontrolling interests
    (738 )     (698 )     (228 )     (164 )
Net change in deferred income taxes
    1,974       2,223       1,195       182  
 
                       
Adjusted EBITDA
  $ 29,480     $ 39,700     $ 5,184     $ 10,115  
 
                       
INSIGHT HEALTH SERVICES HOLDINGS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET INFORMATION

(Amounts in thousands) (unaudited)
                 
    June 30,     June 30,  
    2010     2009  
Cash and cash equivalents
  $ 9,056     $ 19,640  
Trade accounts receivables, net
    22,594       25,594  
Property and equipment, net
    73,315       79,837  
Cash, restricted
    319       6,488  
Goodwill and other intangible assets, net
    20,002       24,878  
Total assets
    140,681       176,124  
Accounts payable and accrued expenses
    25,275       36,037  
Notes payable, including current maturities
    286,353       279,968  
Capital leases, including current maturities
    3,483       4,057  
Total stockholders’ deficit attributable to InSight Health Services Holdings Corp.
    (183,335 )     (153,922 )
Noncontrolling interest
    2,679       1,784  
Total stockholders’ deficit
    (180,656 )     (152,138 )

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