Nighthawk Radiology Holdings Q3 2007 Earnings Call Transcript

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2007-10-31 11:13:29.0

Tags: NightHawk Radiology Holdings Inc.

Question-and-Answer Session

Operator

(Operator Instructions) Our first question comes from Shelley Knoll with Goldman Sachs.

Shelley Knoll - Goldman Sachs

Hi, thanks for taking my question. First, thanks very much for all the detail provided on the call. Yes, my first question is could you update us on the mix of final reads this quarter relative to last quarter, and also how that's tracking towards the 10% revenues from other services relative to the 10% you had guided to at the start of the year?

Glenn Cole

Yeah. Shelley, this is Glen. Thanks for the question. Our final reads in Q3 represented about 8% of the revenue, which is somewhat down from Q2. It's largely the result of the fact that we had a significant amount of preliminary reads and associated revenue, obviously, in Q3.

With finals being still a fairly small portion of our total revenue, that had a pretty significant dilution effect on the percentage, though quarter-over-quarter, the volume of final reads was essentially flat. So, it's still good volume of final reads in Q3.

Shelley Knoll - Goldman Sachs

Okay. And then, relative to the guidance that on revenue from other revenue sources will be 10% by the end of the year. If we exclude the business services and just look at the organic growth, which is largely the final reads, is the company still tracking to meet the 10% goal by the end of the year?

Glenn Cole

We're probably just going to be modestly below the 10%. Shelley, I would guess, based on our current projections, something in the range of 9%, excluding the business services component.

Shelley Knoll - Goldman Sachs

Okay. Great. Thanks. And then, moving onto the guidance, I guess with 2007, at least top-line, being modestly lowered, and by then (ph) a bit of a steeper ramp-up to 2008. And I'm wondering, what you see in 2008 that may have changed and that makes you feel like that ramp is still achievable.

And for example, are you assuming now that there is going to be any cross selling of the business services in the 2008 guidance? Also, can you comment on whether there is any CCTA -- cardiac CTA business that is dependent on the CMS decision built into 2008 guidance?

Tim Mayleben

Yes sure this is Tim. Thanks again for your questions. With respect to the 2008 guidance, I think that we continue to be comfortable. As Dr. Berger said, we're -- with the finals, while the time to close some of those contracts is a little bit longer than we had expected, we've got a really nice pipeline of business there.

 

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