EX-12.1 2 y39926a1exv12w1.htm EX-21.1: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES EX-12.1
 

EXHIBIT 12.1
 
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
 
                                                                   
    Predecessor(1)   Successor
                                         
    Years Ended June 30,       Pro forma
for the
Year Ended		     One Month
Ended July 31,		       Two Months
Ended September 30,		  
    2003     2004     2005     2006     2007 (2)       June 30, 2007 (2)     2007 (2)       2007  
   
(amounts in thousands)
    
                   
Earnings:
                                                                 
Pretax income (loss) from continuing operations
  $ 8,188     $ 4,874     $ (12,148 )   $ (225,042 )   $ (96,866 )   $ (89,586 )   $ 196,388       $ (7,081 )
Fixed charges
    40,191       43,778       49,409       55,837       58,644       43,183       3,497         7,391  
Distributions received from unconsolidated partnerships
    1,009       2,054       2,621       3,387       3,158       3,158       58         604  
Less-equity in earnings of unconsolidated partnerships
    1,744       2,181       2,613       (3,072 )     (3,030 )     (3,030 )     (174 )       (263 )
                                                               
Total earnings
  $ 47,644     $ 48,525     $ 37,269     $ (168,890 )   $ (38,094 )   $ (46,275 )   $ 199,769       $ 651  
                                                               
Fixed Charges:
                                                                 
Interest expense
  $ 37,738     $ 40,936     $ 45,558     $ 51,770     $ 53,660     $ 38,199     $ 3,004       $ 6,390  
Interest factor of rental expense
    2,453       2,842       3,851       4,067       4,984       4,984       493         1,001  
                                                               
Total fixed charges
  $ 40,191     $ 43,778     $ 49,409     $ 55,837     $ 58,644     $ 43,183     $ 3,497       $ 7,391  
                                                               
Ratio of Earnings to Fixed Charges
    1.2 x     1.1 x     —       —       —       —       —         —  
 
The ratio of earnings to fixed charges is unaudited for all periods presented. For purpose of calculating this ratio, earnings consist of net income (loss) plus income taxes and fixed charges. Fixed charges consist of interest expense and the estimated portion of rental expense deemed a reasonable approximation of this interest factor. For the two months ended September 30, 2007 and the one month ended July 31, 2007 we had a deficiency of earnings to fixed charges of approximately $6.7 million and approximately $2.7 million, respectively. For the year ended June 30, 2007 on an actual and pro forma basis to give pro forma effect to the issuance of $15 million in principal amount of additional notes and the plan of reorganization as if they had been completed on July 1, 2006, we had a deficiency of earnings to fixed charges of approximately $79.2 million and $71.9 million, respectively. For the years ended June 30, 2006 and 2005 we had a deficiency of earnings to fixed charges of approximately $224.8 million and $12.1 million, respectively.
(1)   Upon Holdings’ and InSight’s emergence from chapter 11, we adopted fresh-start reporting in accordance with SOP 90-7. The provisions of fresh-start reporting require that we revalue our assets and liabilities to fair value, reestablish stockholders’ equity using the reorganized value established in connection with the plan of reorganization, and record any applicable reorganization value in excess of amounts allocable to identifiable assets as an intangible asset. The adoption of fresh-start reporting also results in our becoming a new entity for financial reporting purposes. Accordingly, our consolidated financial statements on or after August 1, 2007 are not comparable to our consolidated financial statements prior to that date.
(2)   The ratio of earnings to fixed charges excludes reorganization items, net of approximately $17.5 million of expense for the year ended June 30, 2007 on an actual and pro forma basis and approximately $199.0 million of income for the one month ended July 31, 2007, respectively.