Radiologix Reports First Quarter 2005 Results; Company Generates $11.9 Million in EBITDA From Continuing Operations

Radiologix Reports First Quarter 2005 Results; Company Generates
$11.9 Million in EBITDA From Continuing Operations 


DALLAS, May 3  /PRNewswire-FirstCall/ -- Radiologix, Inc. (AMEX:RGX), a leading
national provider of diagnostic imaging services, today announced financial
results for its first quarter ended March 31, 2005.

   Select Financial Information
   (in thousands of dollars)                        For the Three Months
                                                       Ended March 31,
                                                     2005           2004
  Service fee revenue, as reported                 $62,751        $66,042
  Service fee revenue excluding terminated
   operations (A)                                  $61,821        $60,851

  EBITDA (A)                                       $11,884        $12,300
  EBITDA from continuing operations excluding
   terminated operations(A)                        $11,552        $10,441

  Net income (loss), as reported                      $518        $(2,707)
  Income from continuing operations, as reported      $787           $840
  Income (loss) from continuing operations
   excluding terminated operations (A)                $582            $(8)

   (A)  As defined and reconciled below


  GAAP Results


For the first quarter ended March 31, 2005, service fee revenue was $62.8
million, compared to $66.0 million for the first quarter 2004. Radiologix
earned $518,000, or $0.02 per diluted share, compared to a net loss of $2.7
million or $0.12 per share for the first quarter 2004.

  First Quarter 2005 Results
   *  Service fee revenue excluding our former San Antonio and certain
      Mid-Atlantic operations ("terminated operations") was $61.8 million
      compared to $60.9 million for the first quarter 2004.
   *  Income from continuing operations was $787,000, or $0.03 per diluted
      share, compared to income from continuing operations of $840,000, or
      $0.04 per diluted share, for the first quarter 2004.
   *  Income from continuing operations excluding terminated operations
      (defined and reconciled below) was $582,000, or $0.03 per diluted
      share, compared to a loss of $8,000, or breakeven on a per-share basis
      for the first quarter 2004.
   *  EBITDA (defined and reconciled below) was $11.9 million, compared to
      $12.3 million for the first quarter 2004.
   *  EBITDA from continuing operations excluding terminated operations
      (defined and reconciled below) was $11.6 million, compared to
      $10.4 million for the first quarter 2004, an increase of more than
      10%.
   *  Cash and cash equivalents were $44.4 million at March 31, 2005,
      compared to $34.1 million at December 31, 2004.
   *  Net debt (total debt less cash and cash equivalents and restricted
      cash) was $120.4 million at March 31, 2005, compared to $130.9 million
      at December 31, 2004.  Total debt at March 31, 2005 was
      $170.4 million, compared to $170.5 million at December 31, 2004.
   *  Days sales outstanding (DSOs) were 48 days at March 31, 2005 and
      December 31, 2004.



"We made solid operational and financial progress during the first quarter.  We
grew EBITDA by more than 10%, maintained our strong DSO performance, produced
over $13 million in cash flow from operations, and are on track with our
Radiologix Enhanced Workflow And Record Distribution ("REWARD")
implementation," said Sami S. Abbasi, president and chief executive officer of
Radiologix.  "Throughout 2005, we will continue to focus on improving our
primary operations, implementing and ensuring the success of our REWARD
Program, and charting our future strategic direction.  We have more work to do
in each of these areas, but we are headed in the right direction."

Sarbanes-Oxley 404

As noted in our 2004 Form 10-K, subsequent to December 31, 2004, but prior to
the finalization of our 2004 consolidated financial statements, the company
placed into operation new controls to address the material weakness we
identified in our accounts receivable estimation process.  These new controls
include a retrospective collection analysis that matches cash collections to
billed charges by month of service.

We believe these new controls have remediated the material weakness that
existed as of December 31, 2004, and that these controls operated effectively
during the first quarter 2005.

Regulation G: GAAP and Non-GAAP Financial Information

This release contains certain financial information not derived in accordance
with GAAP.  Radiologix uses both GAAP and non-GAAP metrics to measure its
financial results.  We believe that, in addition to GAAP metrics, these
non-GAAP metrics assist Radiologix in measuring its cash-based performance.

Radiologix believes this information is useful to investors and other
interested parties because it removes unusual and nonrecurring charges that
occur in the affected period and provides a basis for measuring the Company's
financial condition against other quarters.

Since Radiologix has historically reported non-GAAP results to the investment
community, management also believes the inclusion of non-GAAP measures provides
consistency in its financial reporting.

Such information should not be considered as a substitute for any measures
calculated in accordance with GAAP, and may not be comparable to other
similarly titled measures of other companies.  Non-GAAP financial measures
should not be considered in isolation from, or as a substitute for, financial
information prepared in accordance with GAAP.  Reconciliation of this
information to the most comparable GAAP measures is included in this release in
the tables below.

Income from continuing operations is defined as income from continuing
operations calculated in accordance with GAAP.

Income from continuing operations excluding terminated operations is defined as
income from continuing operations, excluding terminated San Antonio and
Mid-Atlantic operations.

EBITDA is defined as earnings before interest, taxes, depreciation and
amortization, each from continuing operations, plus restricted stock
compensation expense, and is reconciled to its nearest comparable GAAP
financial measure.

EBITDA from continuing operations excluding terminated operations, is defined
as EBITDA, excluding terminated San Antonio and Mid-Atlantic operations.

EBITDA and EBITDA from continuing operations excluding terminated operations
are non-GAAP financial measures used as analytical indicators by Radiologix
management and the healthcare industry to assess business performance.  They
also serve as measures of leverage capacity and ability to service debt.

EBITDA and EBITDA from continuing operations excluding terminated operations
should not be considered measures of financial performance under GAAP, and the
items excluded from EBITDA and EBITDA from continuing operations excluding
terminated operations should not be considered in isolation or as an
alternative to net income, cash flows generated by operating, investing or
financing activities or other financial statement data presented in the
consolidated financial statements as an indicator of financial performance or
liquidity.

As EBITDA and EBITDA from continuing operations excluding terminated operations
are not measurements determined in accordance with GAAP and are therefore
susceptible to varying methods of calculation, these metrics, as presented, may
not be comparable to other similarly titled measures of other companies.

Conference Call

In connection with this press release, you are invited to listen to our
conference call with Sami S. Abbasi, president and chief executive officer, and
Michael N. Murdock, senior vice president and chief financial officer, that
will be on Tuesday, May 3, 2005, at 8:00 a.m., Central Time / 9:00 a.m. Eastern
Time.

You may access the call by dialing [phone] and entering code 7435690.  A
replay of the call is available by dialing [phone] and entering code
7435690.

In addition, the conference call will be broadcast live over the Internet. You
may listen to the call via the Internet by navigating to Radiologix's Web site
(http://www.radiologix.com/ ) and from the "Investor Relations" drop-down menu,
click on "Conference Calls & Presentations."

If you are unable to participate during the live Webcast, the First Quarter
Results Conference Call will be archived on Radiologix's Web site
(http://www.radiologix.com/ ).  To access the replay, from the "Investor
Relations" drop-down menu, click on "Conference Calls & Presentations."

About Radiologix

Radiologix (http://www.radiologix.com/ ) is a leading national provider of
diagnostic imaging services, owning and operating multi-modality diagnostic
imaging centers that use advanced imaging technologies such as positron
emission tomography ("PET"), magnetic resonance imaging ("MRI"), computed
tomography ("CT") and nuclear medicine, as well as x-ray, general radiography,
mammography, ultrasound and fluoroscopy.  The diagnostic images created, and
the radiology reports based on these images, enable more accurate diagnosis and
more efficient management of illness for ordering physicians.  Radiologix owned
or operated 73 diagnostic imaging centers located in 8 states as of March 31,
2005.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act").  Forward-looking statements
include words such as "may," "will," "would," "could," "likely," "estimate,"
"intend," "plan," "continue," "believe," "expect" or "anticipate" and other
similar words, and include all discussions about our acquisition and
development plans.  We do not guarantee that the events described in this press
release will occur as described, or that any positive trends noted in this
press release will continue.

These forward-looking statements generally relate to our plans, objectives and
expectations for future operations and are based upon management's reasonable
estimates of future results or trends.  Although we believe that our plans and
objectives reflected in, or suggested by, such forward-looking statements are
reasonable, we may not achieve such plans or objectives.  You are cautioned not
to unduly rely on such forward-looking statements when evaluating the
information presented in this press release.  You should read this press
release completely and with the understanding that actual future results may be
materially different from what we expect.  We will not update forward-looking
statements even though our situation may change in the future.

Specific factors that might cause actual results to differ from our
expectations include, but are not limited to:

   *  economic, demographic, business and other conditions in our markets;
   *  the highly competitive nature of the healthcare business;
   *  changes in patient referral patterns;
   *  changes in the rates or methods of third-party reimbursement for
      diagnostic imaging services;
   *  changes in our contracts with radiology practice groups;
   *  changes in the number of radiologists operating in our contracted
      radiology practice groups;
   *  the ability to recruit and retain technologists;
   *  the availability of additional capital to fund capital expenditure
      requirements;
   *  lawsuits against Radiologix and our contracted radiology practice
      groups;
   *  changes in operating margins, particularly changes due to our managed
      care contracts and capitated fee arrangements;
   *  failure by Radiologix to comply with state and federal anti-kickback
      and anti-self referral laws or any other applicable healthcare
      regulations;
   *  changes in business strategy and development plans;
   *  changes in federal, state or local regulations affecting the
      healthcare industry;
   *  our indebtedness, debt service requirements and liquidity constraints;
   *  risks related to our Senior Notes and healthcare securities generally;
   *  interruption of operations due to severe weather or other
      extraordinary events; and
   *  charges for unusual or infrequent (non-recurring) matters.



A more comprehensive list of such factors is set forth in the Company's Annual
Report on Form 10-K for the year ended December 31, 2004, and our other filings
with the Securities and Exchange Commission.

Any forward-looking statement speaks only as of the date on which such
statement is made.  The information in this press release is as of May 3, 2005.
 Radiologix undertakes no obligation to update any forward- looking statement
or statements to reflect new events or circumstances or future developments.

                             Radiologix, Inc.
                       Consolidated Balance Sheets
                              (In thousands)

                                                  March 31,     December 31,
                                                    2005           2004
                      ASSETS                     (Unaudited)
  CURRENT ASSETS:
    Cash and cash equivalents                      $44,408        $34,084
    Restricted cash                                  5,561          5,539
    Accounts receivable, net of allowances          44,304         44,197
    Due from affiliates                              2,197          2,029
    Federal and state income tax receivables         1,865          3,905
    Assets held for sale                               ---            305
    Other current assets                             5,322          6,996
      Total current assets                         103,657         97,055
  Property and equipment, net                       58,509         58,627
  Investments in joint ventures                      8,473          8,137
  Goodwill                                           2,241          2,241
  Intangible assets, net                            70,175         71,200
  Deferred financing costs, net                      6,179          6,591
  Deferred income taxes                              9,229          8,892
  Other assets                                       1,328          1,328
      Total assets                                $259,791       $254,071
        LIABILITIES AND STOCKHOLDERS' EQUITY
  CURRENT LIABILITIES:
    Accounts payable and other accrued expenses    $10,278        $11,342
    Accrued physician retention                      7,927          8,384
    Accrued salaries and benefits                    8,545          7,339
    Deferred income taxes                            3,874          3,202
    Accrued interest                                 4,853            708
    Current portion of capital lease
     obligations                                        13             48
    Current portion of long-term debt                   53            109
    Other current liabilities                          690            536
      Total current liabilities                     36,233         31,668
  Long-term debt, net of current portion           158,270        158,270
  Convertible debt                                  11,980         11,980
  Capital lease obligations, net of
   current portion                                      76             92
  Deferred revenue                                   6,801          6,903
  Other liabilities                                  1,114          1,000
       Total liabilities                           214,474        209,913
  Commitments and contingencies
  Minority interests in consolidated
   subsidiaries                                      1,391          1,242
  STOCKHOLDERS' EQUITY:
    Common stock                                         2              2
    Treasury stock                                    (180)          (180)
    Additional paid-in capital                      14,702         14,210
    Retained earnings                               29,402         28,884
      Total stockholders' equity                    43,926         42,916
      Total liabilities and
       stockholders' equity                       $259,791       $254,071



                             Radiologix, Inc.
                  Consolidated Statements of Operations
                  (In thousands, except per share data)

                                                    For the Three Months
                                                      Ended March 31,
                                                    2005           2004
                                                 (Unaudited)    (Unaudited)
  Service fee revenue                              $62,751        $66,042
  Costs of operations:
    Cost of services                                39,820         40,277
    Equipment leases                                 2,806          4,523
    Provision for doubtful accounts                  4,467          5,492
    Depreciation and amortization                    5,838          6,154
      Gross profit                                   9,820          9,596

  Corporate general and administrative               4,348          3,791
  Interest expense, net, including amortization
   of deferred financing costs                       4,676          4,746

  Income before equity in earnings of
   unconsolidated affiliates, minority interests
   in consolidated subsidiaries, income taxes and
   discontinued operations                             796          1,059

  Equity in earnings of unconsolidated affiliates      622            596
  Minority interests in income of consolidated
   subsidiaries                                       (149)          (255)

  INCOME BEFORE INCOME TAXES AND DISCONTINUED
   OPERATIONS                                        1,269          1,400
  Income tax expense                                   482            560
  INCOME FROM CONTINUING OPERATIONS                    787            840

  Discontinued Operations:
    Loss from discontinued operations before
     income taxes                                     (434)        (5,912)
    Income tax benefit                                (165)        (2,365)
      Loss from discontinued operations               (269)        (3,547)

  NET INCOME (LOSS)                                   $518        $(2,707)

  INCOME (LOSS) PER COMMON SHARE:
    Income (loss) from continuing operations -
     basic                                           $0.03          $0.04
    Income (loss) from discontinued operations -
     basic                                          $(0.01)        $(0.16)
      Net income (loss) - basic                      $0.02         $(0.12)

    Income (loss) from continuing operations -
     diluted                                         $0.03          $0.04
    Income (loss) from discontinued operations -
     diluted                                        $(0.01)        $(0.16)
      Net income (loss) - diluted                    $0.02         $(0.12)

  WEIGHTED AVERAGE SHARES OUTSTANDING:
    Basic                                       21,913,738     21,765,985
    Diluted                                     22,509,821     22,287,561



                             Radiologix, Inc.
             Reconciliation of Non-GAAP Financial Information
                              (In thousands)

  Reconciliation of Income from
   Continuing Operations to EBITDA                  For the Three Months
                                                      Ended March 31,
                                                     2005         2004
  GAAP: Income from continuing operations             $787          840
  Add: Income tax expense                              482          560
  Add: Interest expense, net                         4,676        4,746
  Add: Depreciation and amortization                 5,838        6,154
  Add: Restricted stock compensation expense           101          ---
  EBITDA                                           $11,884      $12,300



                             Radiologix, Inc.
            Reconciliation of Non-GAAP Financial Information,
                     Excluding Terminated Operations
                              (In thousands)

  Reconciliation of Income from Continuing
   Operations to EBITDA from Continuing
   Operations Excluding Terminated Operations       For the Three Months
                                                       Ended March 31,
                                                     2005          2004
  Income (loss) from continuing operations
   excluding terminated operations
                                                      $582          $(8)
  Add: Income tax expense                              356           83
  Add: Interest expense, net                         4,676        4,642
  Add: Depreciation and amortization                 5,838        5,724
  Add: Restricted stock compensation expense           101          ---
  EBITDA from continuing operations excluding
   terminated operations                           $11,552      $10,441



                             Radiologix, Inc.
 Reconciliation of Financial Information, Excluding Terminated Operations
                              (In thousands)

                                   For the Three Months Ended March 31, 2005

                                                                 Radiologix
                                                                 Excluding
                                                   Terminated    Terminated
                                     Radiologix    Operations    Operations

  Service fee revenue                 $62,751         $930        $61,821
  Costs of operations:
    Cost of services                   39,820          354         39,466
    Equipment leases                    2,806          ---          2,806
    Provision for doubtful accounts     4,467          244          4,223
    Depreciation and amortization       5,838            1          5,837
      Gross profit                      9,820          331          9,489

  Corporate general and administrative  4,348          ---          4,348
  Interest expense, net, including
   amortization of deferred financing
   costs                                4,676          ---          4,676

  Income before equity in earnings of
   unconsolidated affiliates, minority
   interests in consolidated
   subsidiaries, income taxes and
   discontinued operations                796          331            465

  Equity in earnings of unconsolidated
   affiliates                             622          ---            622

  Minority interests in income of
   consolidated subsidiaries             (149)         ---           (149)

  INCOME BEFORE INCOME TAXES AND
   DISCONTINUED OPERATIONS              1,269          331            938

  Income tax expense                      482          126            356

  INCOME FROM CONTINUING OPERATIONS      $787         $205           $582



                             Radiologix, Inc.
 Reconciliation of Financial Information, Excluding Terminated Operations
                              (In thousands)

                                   For the Three Months Ended March 31, 2004

                                                                 Radiologix
                                                                 Excluding
                                                   Terminated    Terminated
                                     Radiologix    Operations    Operations

  Service fee revenue                 $66,042       $5,191        $60,851
  Costs of operations:
    Cost of services                   40,277        2,631         37,646
    Equipment leases                    4,523            4          4,519
    Provision for doubtful accounts     5,492          703          4,789
    Depreciation and amortization       6,154          430          5,724
      Gross profit                      9,596        1,423          8,173

  Corporate general and administrative  3,791          ---          3,791
  Interest expense, net, including
   amortization of deferred financing
   costs                                4,746          104          4,642

  Income (loss) before equity in
   earnings of unconsolidated
   affiliates, minority interests in
   consolidated subsidiaries, income
   taxes and discontinued operations    1,059        1,319          (260)

  Equity in earnings of unconsolidated
   affiliates                             596          107           489

  Minority interests in income of
   consolidated subsidiaries             (255)        (101)         (154)

  INCOME BEFORE INCOME TAXES AND
   DISCONTINUED OPERATIONS              1,400        1,325            75

  Income tax expense                      560          477            83

  INCOME (LOSS) FROM CONTINUING
   OPERATIONS                            $840         $848           $(8)


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DATASOURCE: Radiologix, Inc.



CONTACT:  Paul R. Streiber, Investor Relations of Radiologix, Inc.,

[phone], or  



Web site:  http://www.radiologix.com/ 

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