RGX Radiologix

Radiologix Provides Update on Mid-Atlantic Operations Company to Restructure Certain Mid-Atlantic Relationships DALLAS, Oct. 27 /PRNewswire-FirstCall/ -- Radiologix, Inc. (AMEX:RGX), a leading national provider of diagnostic imaging services, said today that it will terminate a medical services agreement with a radiology practice in its Mid-Atlantic market, close three diagnostic imaging centers there, transfer professional reading responsibilities for certain other imaging centers in the market to another radiology practice, and take certain charges in the third quarter of 2004 related to these plans. During the third quarter of 2004, Radiologix determined that the ability of one of its contracted radiology practices in its Mid-Atlantic market to perform in accordance with its medical services agreement -- an intangible asset -- had diminished significantly. With several Radiologix-owned imaging centers in the market operating at financial losses, deteriorating financial conditions at hospitals contracting with the radiology practice for professional reading arrangements, and the resignation of two physician leaders from the radiology practice, Radiologix ultimately concluded that the value of its intangible asset had become significantly impaired. As a result, Radiologix and the radiology practice have agreed to terminate their medical services agreement and are working toward an effective date for termination that will accommodate both Radiologix's interests as well as those of the radiology practice. In addition, Radiologix has decided to close three unprofitable imaging centers and transfer the professional reading responsibilities for certain other Radiologix-owned imaging centers in the market to another radiology practice that operates under a medical services agreement with Radiologix. Radiologix is also in the process of determining the best disposition of professional reading arrangements with certain hospitals. Based on the company's assessment and actions taken, for the quarter ended September 30, 2004, Radiologix recorded impairment charges of $6.5 million to write off intangible assets related to this medical services agreement and $800,000 to write off long-lived assets related to closing the three imaging centers. 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 94 diagnostic imaging centers located in 13 states as of June 30, 2004. Forward-Looking Statements Throughout this press release we make "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 transactions and events described in this press release will happen as described or that any positive trends noted in this press release will continue. The forward-looking statements contained in this press release are generally located in the material set forth under the heading "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our filings with the Securities and Exchange Commission. 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; -- a decline in patient referrals; -- changes in the rates or methods of third-party reimbursement for diagnostic imaging services; -- the termination of our contracts with radiology practices; -- the loss of a high percent of radiologists operating in our contracted radiology practices; -- the ability to recruit and retain technologists; -- the availability of additional capital to fund capital expenditure requirements; -- burdensome lawsuits against our contracted radiology practices and us; -- reduced operating margins due to our managed care contracts and capitated fee arrangements; -- any failure by us 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 substantial indebtedness, debt service requirements and liquidity constraints; -- risks related to our Senior Notes and healthcare securities generally; and -- interruption of operations due to severe weather or other extraordinary events. A more comprehensive list of such factors is set forth in the Company's Annual Report on Form 10-K, as amended, for the year ended December 31, 2003, 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 October 27, 2004. Radiologix undertakes no obligation to update any forward-looking statement or statements to reflect new events or circumstances or future developments. DATASOURCE: Radiologix, Inc. CONTACT: investors, Paul R. Streiber of Radiologix, Inc., +1-214-303-2702, or Web site: http://www.radiologix.com/

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