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