DRA charge adds to red ink at InSight Health

A decision to record a $191 million impairment charge due to the impact of the Deficit Reduction Act (DRA) of 2005 led to rising red ink in fiscal 2006 (end-June 30) at imaging services provider InSight Health Services.

InSight of Lake Forest, CA, said it recorded a charge of $190.8 million related to impairment of goodwill and other intangible assets. The charge was a major factor in the company's net loss of approximately $210.2 million for the 2006 fiscal year, compared with a net loss of approximately $27.2 million for the 2005 fiscal year, the company said.

InSight saw its revenues for fiscal 2006 decline 3.3% to $306.3 million, compared with posted revenues of $316.9 million reported for fiscal 2005.

The company said that its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased 19.3%, from approximately $98.3 million for the 2005 fiscal year to approximately $79.3 million for the 2006 fiscal year.

The firm said it expects the decline in adjusted EBITDA to continue due to an increase in accounts payable and accrued expenses and a decrease in trade accounts receivables, as well as the DRA's planned reductions in Medicare reimbursement.

By AuntMinnie.com staff writers
September 29, 2006

Related Reading

InSight Health completes East Bay imaging deal, March 16, 2006

West Physics signs InSight Health, December 13, 2005

InSight posts revenue growth, higher losses, September 1, 2005

Confirma signs InSight, August 23, 2005

InSight names new CEO, July 7, 2005

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