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NightHawk Radiology Holdings, Inc. (NHWK)
Q1 2010 Earnings Call
May 6, 2010 4:30 p.m. ET
Andrea Clegg - VP, Finance
Dave Engert - President & CEO
Dave Sankaran - CFO
Brooks O'Neil - Dougherty & Company
Kevin Elliott - RBC Capital Markets
Shelley Gnall - Goldman Sachs
» NightHawk Radiology Holdings, Inc. Q3 2008 Earnings Call Transcript
» Omega HealthCare Investors, Inc. Q1 2010 Earnings Call Transcript
I would now like to turn the conference over to Ms. Andrea Clegg, VP of Finance. Please go ahead, ma'am.
Thank you. Good afternoon everyone and thank you for joining us. I would like to welcome you to the NightHawk Radiology conference call to discuss the company's results for the first quarter of 2010. By now you should have received a copy of the press release which was sent out a short while ago and if anyone still needs a copy, you can access it on the Investor Relations section of our web site at www.nighthawkrad.net.
On the call this afternoon we have Dave Engert, our President and Chief Executive Officer and Dave Sankaran, our Chief Financial Officer. After management completes their prepared remarks, we will open the lines for your questions. Please note this afternoon's conference call is being recorded and will be available for three weeks on our web site.
I want to remind you that management will be making certain forward-looking statements in their remarks. All statements, other than statements of historical fact that address activities, events or developments that the company believes, anticipates, intends, expects, estimates or projects and similar expressions are forward-looking statements. These forward-looking statements are based on assumptions and assessments made by the company's management based on factors they believe to be appropriate in light of their experience. However, these forward-looking statements are subject to risks and uncertainties that could cause actual results and business decisions to differ materially from those contemplated by these statements.
We describe these uncertainties and risks in the Risk Factor section of our periodic reports filed with the U.S. Securities and Exchange Commission. The company undertakes no duty to update or revise any forward-looking statements made during this call, whether as a result of new information, future events or otherwise.
And finally, we will be presenting certain financial measures on this call that will be considered non-GAAP under SEC Regulation G. For reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure, please refer to the information included in our press release and in our SEC filings, which can be found in the Investor Relations section of our corporate web site.
At this point, I will turn the call over to Dave Engert, NightHawk's Chief Executive Officer.
Thank you Andrea and good afternoon everyone. Thank you for attending our earnings call today. The results for the quarter were reasonably good and as anticipated. Revenue was $36.5 million for the quarter and adjusted earnings per share was $0.05, both at the mid point of our guidance. Volume growth year-over-year was 6% but with the continued effect of price declines our quarterly revenues decreased 6% from last year.
An encouraging sign was that Final's grew 43% which continues to be our single largest growth opportunity. New bookings were strong this quarter and we continue to see a significant amount of new books for Finals read. Customer retention was at 97%, up 1% over Q1 of last year.
Now let me update you on the progress we've made on some key initiatives in transforming the company to be more competitive in the marketplace. Last year we focused on some fundamental changes that were much needed. We renegotiated our physician contracts to better balance productivity, quality and compensation. We've focused on improving our service levels and together with our physicians develop the most advanced quality assurance program ever to be introduced into radiology.
We believe that this QA program will be transformative to the industry and change the way that quality will be viewed in the future, all aimed at providing the highest levels of patient care and customer satisfaction. Our recent survey responses are bearing our positive results to those initiatives.
We also consolidated our data centers and relocated our management team into once facility for greater effectiveness. Now we're focused on operational efficiency. So let me elaborate on these. We restructured our management team and eliminated several senior executive positions in February including that of our Chief Operating Officer. Other decisions of streamlining layers of management such as these are always tough but is the right thing to do.
We're committed to driving our operating costs further down while we continue to provide high quality patient care. To achieve this, we are focused on optimizing our workflow processes and our resource utilization. Work flow automation will ultimately increase productivity yielding a lower overall cost per read.
Specifically we're currently rolling out a major project that will further automate the image acquisition process and streamline the management of our image data set. Such efforts will reduce the manual intervention in our processes and significantly impact the cost of acquiring and managing the vast amounts of data we deal with on a daily basis.
This is a first major step in a series of operational imperatives designed to streamline and automate many aspects of our business. With regards to our resource optimization, we are also restructuring the process of allocating our physician resources to address our core [prelim] business as well as the final segment.