BioTelemetry, Inc. (NASDAQ:BEAT), the leading wireless medical
technology company focused on the delivery of health information to
improve quality of life and reduce cost of care, today reported
results for the third quarter ended September 30, 2016.
Company Highlights
- Recognized highest quarterly revenue in Company’s history of
$53.1 million, a 22% increase over the prior year
- Recorded $4.1 million GAAP net income for the third
quarter
- Realized highest quarterly adjusted EBITDA in Company’s history
of $12.2 million, a 40% increase over the prior year
- Experienced 9% year over year growth in patient volume
- Generated $26.4 million of cash from operations year to date,
the highest in the Company’s history
- Repaid $11.5 million of revolving debt in early October
- Received positive coverage decision from Anthem for use of MCT
for certain patients
President and CEO Commentary
Joseph H. Capper, President and Chief Executive Officer of
BioTelemetry, Inc., commented: “With our strong third quarter
results, we delivered our seventeenth consecutive quarter of year
over year revenue growth and our seventh consecutive quarter of
year over year net income growth. Our commitment to our core
operating principles continues to deliver outstanding results, as
evidenced by our 40% adjusted EBITDA growth. Our top line
momentum, with 22% growth, was driven by the success of our sales
strategy to be the single source provider of cardiac monitoring
solutions. As a result, we continue to grow substantially
faster than the market, posting 9% patient volume growth,
highlighted by double digit MCT growth. Additionally, our
second quarter acquisitions had a positive impact on both our top
and bottom lines.
“BioTelemetry is on track to deliver record results for 2016,
and we expect to achieve the higher end of our adjusted EBITDA
guidance of $44 to $46 million. Looking forward to 2017, we
expect the Company’s growth to continue to outpace the cardiac
monitoring industry. This will be driven, in part, by the
expansion of our unmatched product portfolio with the upcoming
launch of our next generation device, the MCOTTM Patch, and by
maximizing the opportunity to now service certain Anthem patients
with MCT. We are also uniquely positioned to capitalize on
other opportunities to use our technology to improve patient care
and lower costs. With our proven strategy and strong
performance, we are confident that our growth will continue into
2017.”
Third Quarter Financial Results
Revenue for the third quarter 2016 was $53.1 million compared to
$43.5 million for the third quarter 2015, reflecting an increase of
$9.6 million, or 22.0%. Healthcare revenue increased $4.7
million due to increased patient volumes and higher patient pricing
due to a favorable product mix as well as higher MCT Medicare
pricing. Research revenue increased $4.9 million, due to the
acquisition of VirtualScopics during the second quarter.
Gross profit for the third quarter 2016 increased to $32.9
million, or 61.9% of revenue, compared to $26.3 million, or 60.6%
of revenue, for the third quarter 2015. The increase in gross
margin percentage was due to Healthcare volume efficiencies, higher
Healthcare pricing as well as reduced costs related to shipping and
device communications. These increases were partially offset
by the impact of our acquisitions, which caused a shift in our
revenue mix toward Research which carries a lower margin than our
Healthcare business.
On a GAAP basis, operating expense for the third quarter 2016
was $27.9 million, compared to $23.3 million for the second quarter
2015. On an adjusted basis1, operating expense for the third
quarter 2016 was $25.5 million compared to $21.9 million for the
third quarter 2015. The adjusted operating expense excludes
$2.4 million of other charges for the third quarter 2016 primarily
related to patent litigation and the integration of the second
quarter acquisitions and $1.4 million for the third quarter 2015
primarily related to patent litigation. The increase in adjusted
expense was driven by the addition of $2.0 million related to our
acquired companies, a $1.0 million increase in employee related
expense, a $0.3 million increase in bad debt expense and $0.3
million of additional consulting expense primarily related to
ongoing product development.
Interest and other loss, net was $0.6 million for the third
quarter 2016 compared to $0.4 million for the third quarter
2015. The increase was primarily due to higher interest
expense stemming from borrowings under the revolving credit
facility.
On a GAAP basis, net income for the third quarter 2016 was $4.1
million, or $0.14 per diluted share, compared to net income of $2.5
million, or $0.08 per diluted share, for the third quarter
2015. Excluding the $2.4 million of other charges1, adjusted
net income for the third quarter 2016 was $6.5 million, or $0.21
per diluted share. This compares to adjusted net income of
$3.9 million, or $0.13 per diluted share, for the third quarter
2015, which excludes the impact of $1.4 million of other
charges.
Liquidity
As of September 30, 2016, total cash was $32.3 million, an
increase of $6.8 million compared to June 30, 2016. During
the quarter ended September 30, 2016, the Company generated $8.9
million of cash from operations. In addition, the Company
used $2.8 million of cash during the quarter for capital
expenditures, primarily medical devices. Consolidated days
sales outstanding decreased to 48 days as of September 30, 2016,
down from 49 days as of June 30, 2016.
As of September 30, 2016, the Company had total indebtedness of
$37.4 million. On October 11, 2016, the Company repaid $11.5
million of the outstanding borrowings under the revolving credit
facility.
______________________________________1 The Company
believes that its adjusted financial results, which exclude Other
charges, offer a meaningful representation of the Company’s
performance as they exclude expenses that are not necessary to
support the Company’s ongoing business.
Conference Call BioTelemetry, Inc. will
host an earnings conference call on Wednesday, November 2, 2016 at
5:00 PM Eastern Time. The call will be simultaneously webcast
on the investor information page of our website,
www.gobio.com. The call will be archived on our website for
two weeks.
About BioTelemetryBioTelemetry, Inc., formerly
known as CardioNet, Inc., is the leading wireless medical
technology company focused on the delivery of health information to
improve quality of life and reduce cost of care. The Company
currently provides cardiac monitoring services, original equipment
manufacturing with a primary focus on cardiac monitoring devices
and centralized cardiac core laboratory services. More
information can be found at www.gobio.com.
Cautionary Statement Regarding Forward-Looking
Statements This document includes certain forward-looking
statements within the meaning of the “Safe Harbor” provisions of
the Private Securities Litigation Reform Act of 1995. These
statements may be identified by words such as “expect,”
“anticipate,” “estimate,” “intend,” “plan,” “believe,” “promises”
and other words and terms of similar meaning. Such
forward-looking statements are based on current expectations and
involve inherent risks and uncertainties, including important
factors that could delay, divert, or change any of these
expectations, and could cause actual outcomes and results to differ
materially from current expectations. These factors include,
among other things, our ability to successfully integrate
acquisitions into our business and the effect such acquisitions
will have on our results of operation, effectiveness of our cost
savings initiatives, relationships with our government and
commercial payors, changes to insurance coverage and reimbursement
levels for our products, the success of our sales and marketing
initiatives, our ability to attract and retain talented executive
management and sales personnel, our ability to identify acquisition
candidates, acquire them on attractive terms and integrate their
operations into our business, the commercialization of new
products, market factors, internal research and development
initiatives, partnered research and development initiatives,
competitive product development, changes in governmental
regulations and legislation, the continued consolidation of payors,
acceptance of our new products and services, patent protection,
adverse regulatory action, and litigation success. For
further details and a discussion of these and other risks and
uncertainties, please see our public filings with the Securities
and Exchange Commission, including our latest periodic reports on
Form 10-K and 10-Q. We undertake no obligation to
publicly update any forward-looking statement, whether as a result
of new information, future events, or otherwise.
|
|
|
|
|
Three Months Ended |
Consolidated Statements of Operations |
(unaudited) |
(In
Thousands, Except Per Share Amounts) |
|
|
|
|
|
|
September
30,2016 |
|
September
30,2015 |
|
|
|
|
|
Revenues |
$ |
53,055 |
|
|
$ |
43,492 |
|
Cost of
revenues |
|
20,189 |
|
|
|
17,155 |
|
Gross
profit |
|
32,866 |
|
|
|
26,337 |
|
Gross
profit % |
|
61.9 |
% |
|
|
60.6 |
% |
|
|
|
|
|
Operating
expenses: |
|
|
|
General and administrative |
|
13,853 |
|
|
|
11,497 |
|
Sales and marketing |
|
7,018 |
|
|
|
6,632 |
|
Bad debt expense |
|
2,495 |
|
|
|
2,245 |
|
Research and development |
|
2,137 |
|
|
|
1,565 |
|
Other charges |
|
2,397 |
|
|
|
1,392 |
|
Total
operating expenses |
|
27,900 |
|
|
|
23,331 |
|
|
|
|
|
|
Income from
operations |
|
4,966 |
|
|
|
3,006 |
|
Interest
and other loss, net |
|
(630 |
) |
|
|
(391 |
) |
|
|
|
|
|
Income
before income taxes |
|
4,336 |
|
|
|
2,615 |
|
Provision
for income taxes |
|
(235 |
) |
|
|
(137 |
) |
Net
Income |
$ |
4,101 |
|
|
$ |
2,478 |
|
|
|
|
|
|
Net income
per share: |
|
|
|
Basic |
$ |
0.15 |
|
|
$ |
0.09 |
|
Diluted |
$ |
0.14 |
|
|
$ |
0.08 |
|
|
|
|
|
Weighted
average number of common shares outstanding: |
|
|
|
Basic |
|
28,102 |
|
|
|
27,181 |
|
Diluted |
|
30,334 |
|
|
|
29,311 |
|
|
|
|
|
|
|
|
Nine Months Ended |
Consolidated Statements of Operations |
(unaudited) |
(In
Thousands, Except Per Share Amounts) |
|
|
|
|
|
|
September
30,2016 |
|
September
30,2015 |
|
|
|
|
|
Revenues |
$ |
154,375 |
|
|
$ |
131,739 |
|
Cost of
revenues |
|
57,961 |
|
|
|
53,446 |
|
Gross
profit |
|
96,414 |
|
|
|
78,293 |
|
Gross
profit % |
|
62.5 |
% |
|
|
59.4 |
% |
|
|
|
|
|
Operating
expenses: |
|
|
|
General and administrative |
|
40,577 |
|
|
|
35,100 |
|
Sales and marketing |
|
21,687 |
|
|
|
20,741 |
|
Bad debt expense |
|
7,797 |
|
|
|
6,769 |
|
Research and development |
|
5,888 |
|
|
|
5,161 |
|
Other charges |
|
5,844 |
|
|
|
4,462 |
|
Total
operating expenses |
|
81,793 |
|
|
|
72,233 |
|
|
|
|
|
|
Income from
operations |
|
14,621 |
|
|
|
6,060 |
|
Interest
and other loss, net |
|
(1,686 |
) |
|
|
(1,220 |
) |
|
|
|
|
|
Income
before income taxes |
|
12,935 |
|
|
|
4,840 |
|
Provision
for income taxes |
|
(529 |
) |
|
|
(260 |
) |
Net
Income |
$ |
12,406 |
|
|
$ |
4,580 |
|
|
|
|
|
|
Net income
per share: |
|
|
|
Basic |
$ |
0.45 |
|
|
$ |
0.17 |
|
Diluted |
$ |
0.42 |
|
|
$ |
0.16 |
|
|
|
|
|
Weighted
average number of common shares outstanding: |
|
|
|
Basic |
|
27,811 |
|
|
|
27,063 |
|
Diluted |
|
29,857 |
|
|
|
29,019 |
|
|
|
|
|
|
|
|
Summary Financial Data |
(In Thousands,
except days sales outstanding) |
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, 2016 |
|
December 31, 2015 |
|
(unaudited) |
|
(unaudited) |
|
|
|
|
Cash and
cash equivalents |
$ |
32,255 |
|
|
$ |
18,986 |
|
Healthcare
accounts receivable, net |
|
15,654 |
|
|
|
15,179 |
|
Other
accounts receivable, net |
|
12,794 |
|
|
|
8,997 |
|
Days sales
outstanding |
|
48 |
|
|
|
47 |
|
Working
capital |
|
25,657 |
|
|
|
23,157 |
|
Total
assets |
|
165,211 |
|
|
|
124,143 |
|
Total
indebtedness |
|
37,414 |
|
|
|
23,582 |
|
Total
shareholders’ equity |
|
95,032 |
|
|
|
75,926 |
|
|
|
|
|
Reconciliation of Non-GAAP Financial Measures(In
Thousands, Except Per Share Amounts)
In accordance with Regulation G of the Securities and Exchange
Commission, the table set forth below reconciles certain financial
measures used in this press release that were not calculated in
accordance with generally accepted accounting principles, or GAAP,
with the most directly comparable financial measure calculated in
accordance with GAAP. The Company believes that its adjusted
financial results, which exclude Other charges, offer a meaningful
representation of the Company’s performance as they exclude
expenses that are not necessary to support the Company’s ongoing
business.
|
Three Months
Ended(unaudited) |
|
September
30,2016 |
|
September
30,2015 |
Income from operations
– GAAP |
$ |
4,966 |
|
|
$ |
3,006 |
|
Other charges (a) |
|
2,397 |
|
|
|
1,392 |
|
Adjusted income
from operations |
$ |
7,363 |
|
|
$ |
4,398 |
|
|
|
|
|
|
|
|
|
Net income – GAAP |
$ |
4,101 |
|
|
$ |
2,478 |
|
Other charges (a) |
|
2,397 |
|
|
|
1,392 |
|
Adjusted net
income |
$ |
6,498 |
|
|
$ |
3,870 |
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted
share – GAAP |
$ |
0.14 |
|
|
$ |
0.08 |
|
Other charges per
diluted share (a) |
|
0.07 |
|
|
|
0.05 |
|
Adjusted net
income per diluted share |
$ |
0.21 |
|
|
$ |
0.13 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
(unaudited) |
|
|
|
|
|
September
30,2016 |
|
September
30,2015 |
|
|
|
|
Cash provided by
operating activities |
$ |
8,879 |
|
|
$ |
4,164 |
|
Capital
expenditures |
|
(2,815 |
) |
|
|
(3,641 |
) |
Free cash flow |
$ |
6,064 |
|
|
$ |
523 |
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
(unaudited) |
|
|
|
|
|
September
30,2016 |
|
September
30,2015 |
|
|
|
|
Net income – GAAP |
$ |
4,101 |
|
|
$ |
2,478 |
|
Provision for income
taxes |
|
235 |
|
|
|
137 |
|
Interest, other loss
(net) |
|
630 |
|
|
|
391 |
|
Other charges (a) |
|
2,397 |
|
|
|
1,392 |
|
Depreciation and
amortization expense |
|
3,689 |
|
|
|
3,165 |
|
Stock compensation
expense |
|
1,138 |
|
|
|
1,139 |
|
Adjusted EBITDA |
$ |
12,190 |
|
|
$ |
8,702 |
|
(a) In the third quarter 2016, the Company incurred $2.4 million
of other charges primarily due to patent litigation and the
acquisitions completed in the second quarter. In the third
quarter 2015, the Company incurred $1.4 million of other charges
primarily related to patent litigation.
Reconciliation of Non-GAAP Financial Measures(In
Thousands, Except Per Share Amounts)
In accordance with Regulation G of the Securities and Exchange
Commission, the table set forth below reconciles certain financial
measures used in this press release that were not calculated in
accordance with generally accepted accounting principles, or GAAP,
with the most directly comparable financial measure calculated in
accordance with GAAP. The Company believes that its adjusted
financial results, which exclude Other charges, offer a meaningful
representation of the Company’s performance as they exclude
expenses that are not necessary to support the Company’s ongoing
business.
|
Nine Months
Ended(unaudited) |
|
September
30,2016 |
|
September
30,2015 |
Income from operations
– GAAP |
$ |
14,621 |
|
|
$ |
6,060 |
|
Other charges (a) |
|
5,844 |
|
|
|
4,462 |
|
Adjusted income
from operations |
$ |
20,465 |
|
|
$ |
10,522 |
|
|
|
|
|
|
|
|
|
Net income – GAAP |
$ |
12,406 |
|
|
$ |
4,580 |
|
Other charges (a) |
|
5,844 |
|
|
|
4,462 |
|
Adjusted net
income |
$ |
18,250 |
|
|
$ |
9,042 |
|
|
|
|
|
Net income per diluted
share – GAAP |
$ |
0.42 |
|
|
$ |
0.16 |
|
Other charges per
diluted share (a) |
|
0.19 |
|
|
|
0.15 |
|
Adjusted net
income per diluted share |
$ |
0.61 |
|
|
$ |
0.31 |
|
|
|
|
|
|
|
|
Nine Months Ended |
|
(unaudited) |
|
|
|
|
|
September
30,2016 |
|
September
30,2015 |
|
|
|
|
Cash provided by
operating activities |
$ |
26,405 |
|
|
$ |
7,153 |
|
Capital
expenditures |
|
(8,507 |
) |
|
|
(10,310 |
) |
Free cash flow |
$ |
17,898 |
|
|
$ |
(3,157 |
) |
|
|
|
Nine Months Ended |
|
(unaudited) |
|
|
|
|
|
September
30,2016 |
|
September
30,2015 |
|
|
|
|
Net income – GAAP |
$ |
12,406 |
|
|
$ |
4,580 |
|
Provision for income
taxes |
|
529 |
|
|
|
260 |
|
Interest, other loss
(net) |
|
1,686 |
|
|
|
1,220 |
|
Other charges (a) |
|
5,844 |
|
|
|
4,462 |
|
Depreciation and
amortization expense |
|
10,619 |
|
|
|
9,124 |
|
Stock compensation
expense |
|
3,757 |
|
|
|
3,321 |
|
Adjusted EBITDA |
$ |
34,841 |
|
|
$ |
22,967 |
|
(a) In the first three quarters of 2016, the Company incurred
$5.8 million other charges primarily due to patent litigation and
the acquisitions completed in the second quarter. In the
first three quarters of 2015, the Company incurred $4.5 million of
other charges primarily due to patent litigation as well as costs
related to the integration of the 2014 acquisitions.
Contact:
BioTelemetry, Inc.
Heather C. Getz
Investor Relations
800-908-7103
investorrelations@biotelinc.com
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