Reports Record Quarterly Revenue and
EBITDA
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 second quarter ended June 30, 2017.
Company Highlights
- Recognized highest quarterly revenue in Company’s history of
$58.1 million, a 10.3% increase over the prior year
- Achieved 20th consecutive quarter of year over year revenue
growth
- Recorded GAAP net income of $1.7 million and adjusted net
income of $7.4 million
- Realized quarterly adjusted EBITDA $14.0 million, or 24.1% of
revenue, exceeding expectations
- Secured a $255 million new debt facility in July
- Completed acquisition of LifeWatch AG
- Increases full year 2017 revenue guidance to $285 million to
$290 million, with expected adjusted EBITDA of approximately 23% of
revenue
President and CEO Commentary
Joseph H. Capper, President and Chief Executive Officer of
BioTelemetry, Inc., commented: “We are pleased to announce another
great quarter for the Company, which included double-digit revenue
growth driven, in part, by a 9% increase in MCT volume as well as
strong growth from our 2016 acquisitions. Revenue was in line
with our expectations and, due to our focus on ongoing operational
efficiencies throughout the business, we were able to exceed our
adjusted EBITDA guidance by over 300 basis points to achieve a
24% return. It is important to note that we did this while at
the same time dedicating significant resources to the
LifeWatch acquisition which closed in July.
“We are entering an exciting period of growth and transformation
for BioTelemetry. With the acquisition of LifeWatch, we are
now the world’s largest provider of remote healthcare
services. While our increased scale will enable us to extract
tremendous synergies and efficiencies, it also affords us the
opportunity to drive innovation, benefiting our patients,
physicians and payors. The integration is progressing
rapidly, allowing us to optimize best practices and build a strong
foundation for accelerated growth both within, and beyond, remote
cardiac monitoring. I’d like to thank the employees of the
combined Company for their enthusiasm in building a better
organization.”
Second
Quarter Financial Results
Revenue for the second quarter 2017 was $58.1 million compared
to $52.7 million for the second quarter 2016, an increase of $5.4
million, or 10.3%. Healthcare revenue increased $1.9 million
driven by increased patient volume partially offset by the impact
of the reduction in the MCT Medicare pricing effective January 1,
2017. Research revenue increased $1.6 million due to imaging
study volume growth and the full quarter impact of the acquisition
of VirtualScopics, which occurred during the second quarter of
2016, partially offset by lower cardiac study revenue.
Technology revenue increased $1.9 million due to the acquisition of
Telcare during the fourth quarter of 2016.
On a GAAP basis, net income for the second quarter 2017 was $1.7
million, or $0.05 per diluted share, compared to $4.7 million, or
$0.15 per diluted share, for the second quarter 2016. The
decline in GAAP net income is due to $3.9 million of additional
acquisition related expenses in the second quarter 2017. In
addition, the Company incurred $1.5 million of additional income
tax expense that did not exist in 2016 as a result of having a full
valuation allowance in place as of June 30, 2016. For the
full year 2017, the Company’s expected annual effective tax rate is
approximately 34%. Historically the Company’s income tax
expense was comprised of alternative minimum tax as well as
franchise taxes and various state taxes. Due to the
utilization of net operating loss carryforwards and the impact of
transaction related expenses for LifeWatch, the Company expects its
full year 2017 actual cash tax payments to be in the range of $1.0
million to $1.5 million.
On an adjusted basis1, net income for the second quarter 2017
was $7.4 million, or $0.23 per diluted share. This compares
to adjusted net income of $6.4 million, or $0.21 per diluted share,
for the second quarter 2016. Adjusted net income for the
second quarter 2017 excludes $4.7 million of other charges related
to the acquisition of LifeWatch AG, ongoing patent litigation and
other restructuring activities as well as $0.9 million of expense
for a foreign currency option also related to the acquisition of
LifeWatch AG. Adjusted net income for the second quarter 2016
excludes $1.7 million related to patent litigation and costs
associated with the Company’s 2016 acquisitions.
Conference
Call
BioTelemetry, Inc. will host an earnings conference call on
Tuesday, August 8, 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 core laboratory services. More information
can be found at www.gobio.com.
1 The Company believes that providing non-GAAP financial
measures offers a meaningful representation of the Company’s
performance as they exclude expenses that are not necessary to
support the Company’s ongoing business. Please refer to the
Company’s “Reconciliation of Non-GAAP Financial Measures” and “Use
of Non-GAAP Financial Measures” in this release for additional
information.
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, BioTelemetry’s ability to realize the
anticipated benefits of the LifeWatch acquisition, 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 report on Form 10-K. Readers are
cautioned not to put undue reliance on forward-looking statements,
which reflect only opinions as of the date of this press
release. We do not undertake, and specifically disclaim, any
obligation to publicly update or amend any forward-looking
statement, whether as a result of new information, future events,
or otherwise.
|
|
|
|
|
(unaudited) |
Consolidated
Statements of Operations |
|
Three Months Ended |
(In Thousands, Except Per Share Amounts) |
|
June 30, |
|
|
2017 |
|
2016 |
Revenues |
|
$ 58,129 |
|
$ 52,680 |
Cost of
revenues |
|
22,162 |
|
19,759 |
Gross profit |
|
35,967 |
|
32,921 |
Gross profit % |
|
61.9% |
|
62.5% |
|
|
|
|
|
Operating
expenses: |
|
|
|
|
General
and administrative |
|
14,366 |
|
14,388 |
Sales and
marketing |
|
7,631 |
|
7,124 |
Bad debt
expense |
|
2,416 |
|
2,664 |
Research
and development |
|
2,515 |
|
1,965 |
Other
charges |
|
4,651 |
|
1,659 |
Total operating
expenses |
|
31,579 |
|
27,800 |
|
|
|
|
|
Income from
operations |
|
4,388 |
|
5,121 |
Interest and other
loss, net |
|
(1,392) |
|
(633) |
|
|
|
|
|
Income before income
taxes |
|
2,996 |
|
4,488 |
(Provision for) benefit
from income taxes |
|
(1,270) |
|
209 |
Net income |
|
$ 1,726 |
|
$ 4,697 |
|
|
|
|
|
Net income per
share: |
|
|
|
|
Basic |
|
$ 0.06 |
|
$ 0.17 |
Diluted |
|
$ 0.05 |
|
$ 0.15 |
|
|
|
|
|
Weighted average number
of common shares outstanding: |
|
|
|
|
Basic |
|
28,687 |
|
27,961 |
Diluted |
|
31,673 |
|
30,516 |
|
|
|
|
|
|
|
|
|
|
(unaudited) |
Consolidated
Statements of Operations |
|
Six Months Ended |
(In Thousands, Except Per Share Amounts) |
|
June 30, |
|
|
2017 |
|
2016 |
Revenues |
|
$ 114,010 |
|
$ 101,320 |
Cost of
revenues |
|
45,134 |
|
37,772 |
Gross profit |
|
68,876 |
|
63,548 |
Gross profit % |
|
60.4% |
|
62.7% |
|
|
|
|
|
Operating
expenses: |
|
|
|
|
General
and administrative |
|
30,283 |
|
26,724 |
Sales and
marketing |
|
15,332 |
|
14,669 |
Bad debt
expense |
|
5,207 |
|
5,302 |
Research
and development |
|
4,948 |
|
3,751 |
Other
charges |
|
6,390 |
|
3,447 |
Total operating
expenses |
|
62,160 |
|
53,893 |
|
|
|
|
|
Income from
operations |
|
6,716 |
|
9,655 |
Interest and other
loss, net |
|
(4,390) |
|
(1,056) |
|
|
|
|
|
Income before income
taxes |
|
2,326 |
|
8,599 |
(Provision for) benefit
from income taxes |
|
(404) |
|
195 |
Net income |
|
$ 1,922 |
|
$ 8,794 |
|
|
|
|
|
Net income per
share: |
|
|
|
|
Basic |
|
$ 0.07 |
|
$ 0.32 |
Diluted |
|
$ 0.06 |
|
$ 0.29 |
|
|
|
|
|
Weighted average number
of common shares outstanding: |
|
|
|
|
Basic |
|
28,558 |
|
27,666 |
Diluted |
|
31,494 |
|
30,019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary
Financial Data |
|
|
|
|
|
|
|
|
(In
Thousands, except days sales outstanding) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December
31, |
|
|
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ 26,898 |
|
$ 23,052 |
|
|
|
|
Healthcare accounts
receivable, net |
|
15,071 |
|
14,594 |
|
|
|
|
Other accounts
receivable, net |
|
13,857 |
|
12,261 |
|
|
|
|
Days sales
outstanding |
|
45 |
|
45 |
|
|
|
|
Working capital |
|
33,476 |
|
28,053 |
|
|
|
|
Total assets |
|
203,952 |
|
198,984 |
|
|
|
|
Total indebtedness |
|
24,801 |
|
25,449 |
|
|
|
|
Total shareholders’
equity |
|
146,776 |
|
138,914 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Summary Cash
Flow Data |
|
|
|
|
|
|
|
|
(In
Thousands) |
|
|
|
|
|
|
|
|
|
|
(unaudited) |
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
June 30, |
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Cash provided by
operating activities |
|
$ 6,080 |
|
$ 9,344 |
|
$ 10,733 |
|
$ 17,526 |
Capital
expenditures |
|
(3,230) |
|
(2,179) |
|
(6,197) |
|
(5,692) |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Non-GAAP Financial Measures |
(In Thousands, Except Per Share
Amounts) |
|
|
2017 |
Three Months Ended June 30, 2017 |
(unaudited) |
|
|
|
Income from Operations |
|
Income before Income Taxes |
|
Net Income |
|
Net income per diluted share |
GAAP |
$ 4,388 |
|
$ 2,996 |
|
$ 1,726 |
|
$ 0.05 |
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
Other charges (a) |
|
4,651 |
|
4,651 |
|
4,651 |
|
0.15 |
|
Foreign currency option
related to LifeWatch acquisition (b) |
|
- |
|
898 |
|
898 |
|
0.03 |
|
Income tax effect of
adjustments (c) |
|
- |
|
- |
|
(1,887) |
|
(0.06) |
|
NOL utilization
(d) |
|
- |
|
- |
|
2,024 |
|
0.06 |
Adjusted |
$ 9,039 |
|
$ 8,545 |
|
$ 7,412 |
|
$ 0.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
Three Months Ended June 30, 2016 |
(unaudited) |
|
|
|
Income from Operations |
|
Income before Income Taxes |
|
Net Income |
|
Net income per diluted share |
GAAP |
$ 5,121 |
|
$ 4,488 |
|
$ 4,697 |
|
$ 0.15 |
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
Other charges (a) |
|
1,659 |
|
1,659 |
|
1,659 |
|
0.06 |
Adjusted |
$ 6,780 |
|
$ 6,147 |
|
$ 6,356 |
|
$ 0.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
Net income –
GAAP |
|
$ 1,726 |
|
$ 4,697 |
|
|
|
|
|
Provision for (benefit
from) income taxes |
|
1,270 |
|
(209) |
|
|
|
|
|
Interest and other
loss, net (b) |
|
1,392 |
|
633 |
|
|
|
|
|
Other charges (a) |
|
4,651 |
|
1,659 |
|
|
|
|
|
Depreciation and
amortization expense |
|
3,825 |
|
3,664 |
|
|
|
|
|
Stock compensation
expense |
|
1,142 |
|
1,441 |
|
|
|
|
|
Adjusted
EBITDA |
|
$ 14,006 |
|
$ 11,885 |
|
|
|
|
|
|
|
a) In the
second quarter 2017, the Company incurred $4.7 million of other
charges related to the acquisition LifeWatch AG, ongoing patent
litigation and other restructuring activities. In the second
quarter 2016, the Company incurred $1.7 million of other charges
primarily due to patent litigation and the acquisitions completed
in 2016. |
|
|
|
b) In the
second quarter 2017, the Company incurred $0.9 million of expense
for a foreign currency option related to the acquisition of
LifeWatch AG which is included in Interest and other loss,
net. |
|
|
|
c)
Represents the tax effect of the non-GAAP adjustments based on the
estimated annual effective tax rate of 34%. |
|
|
|
d) During
the fourth quarter 2016, the Company released the tax valuation
allowance on its net deferred tax assets. The benefit from
this release was excluded from the Company’s 2016 adjusted
results. Without a valuation allowance in place and due to
the timing of discrete items, for GAAP financial reporting purposes
the Company is reporting a tax rate of 42.4 % for the second
quarter 2017. After giving effect to taxes at the estimated
annual effective tax rate of 34% on the other adjustments, the
utilization of net operating loss carryforwards had a $2.0 million
positive impact on the second quarter 2017. |
|
|
|
Reconciliation of Non-GAAP Financial
Measures |
(In Thousands, Except Per Share
Amounts) |
|
|
|
|
|
|
|
|
|
2017 |
Six Months Ended June 30, 2017 |
(unaudited) |
|
|
Income from Operations |
|
Income before Income Taxes |
|
Net Income |
|
Net income per diluted share |
GAAP |
$ 6,716 |
|
$ 2,326 |
|
$ 1,922 |
|
$ 0.06 |
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
Other charges (a) |
6,390 |
|
6,390 |
|
6,390 |
|
0.20 |
|
Performance bonus
(stock-based comp) (b) |
1,533 |
|
1,533 |
|
1,533 |
|
0.05 |
|
Dept. of Health and
Human Services settlement (c) |
|
|
2,500 |
|
2,500 |
|
0.08 |
|
Foreign currency option
related to LifeWatch acquisition (c) |
|
|
898 |
|
898 |
|
0.03 |
|
Income tax effect of
adjustments (d) |
- |
|
- |
|
(3,849) |
|
(0.12) |
|
NOL utilization
(e) |
- |
|
- |
|
2,957 |
|
0.09 |
Adjusted |
$ 14,639 |
|
$ 13,647 |
|
$ 12,351 |
|
$ 0.39 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016 |
Six Months Ended June 30, 2016 |
(unaudited) |
|
|
Income from Operations |
|
Income before Income Taxes |
|
Net Income |
|
Net income per diluted share |
GAAP |
$ 9,655 |
|
$ 8,599 |
|
$ 8,794 |
|
$ 0.29 |
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
Other charges (a) |
3,447 |
|
3,447 |
|
3,447 |
|
0.12 |
Adjusted |
$ 13,102 |
|
$ 12,046 |
|
$ 12,241 |
|
$ 0.41 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
|
(unaudited) |
|
|
|
|
|
|
2017 |
|
2016 |
|
|
|
|
|
Net income –
GAAP |
$ 1,922 |
|
$ 8,794 |
|
|
|
|
|
Provision for (benefit
from) income taxes |
404 |
|
(195) |
|
|
|
|
|
Interest other loss,
net (c) |
4,390 |
|
1,056 |
|
|
|
|
|
Other charges (a) |
6,390 |
|
3,447 |
|
|
|
|
|
Depreciation and
amortization expense |
7,540 |
|
6,930 |
|
|
|
|
|
Stock compensation
expense (b) |
4,200 |
|
2,619 |
|
|
|
|
|
Adjusted
EBITDA |
$ 24,846 |
|
$ 22,651 |
|
|
|
|
|
|
|
a) In the
first half of 2017, the Company incurred $6.4 million of other
charges related to the acquisition of LifeWatch AG, ongoing patent
litigation and other restructuring activities. In the first
half of 2016, the Company incurred $3.4 million related to patent
litigation and costs associated with the Company’s 2016
acquisitions |
|
|
|
b) In the
first half of 2017, the Company incurred $1.5 million for the
second half of a one-time performance bonus paid to a third party
in the form of stock-based compensation. The first of two
performance measures was achieved in the fourth quarter 2016,
resulting in $1.3 million of expense at that time. The second
performance measure was achieved in the first quarter 2017,
resulting in $1.5 million of expense. This is a nonrecurring
expense for the Company and is the only time in the Company’s
history when such a bonus was awarded. There are no
additional agreements outstanding of this nature. |
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|
|
c) During
the first half of 2017, the Company reached a $2.5 million
settlement with the United States Department of Health and Human
Services. This was related to the conclusion of an
investigation into the theft of two unencrypted laptop computers
that occurred in 2011. This was recorded as a non-operating
charge to Interest and other loss, net. In the second quarter
of 2017, the Company incurred $0.9 million of expense for a foreign
currency option related to the acquisition of LifeWatch AG which is
also included in Interest and other loss, net. |
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|
|
d)
Represents the tax effect of the non-GAAP adjustments based on the
estimated annual effective tax rate of 34%. |
|
|
|
e) During
the fourth quarter 2016, the Company released the tax valuation
allowance on its net deferred tax assets. The benefit from
this release was excluded from the Company’s 2016 adjusted
results. Without a valuation allowance in place and due to
the timing of discrete items, for GAAP financial reporting purposes
the Company is reporting a tax expense of 17.4% for the first half
of 2017. After giving effect to taxes at the estimated annual
effective tax rate of 34% on the other adjustments, the utilization
of net operating loss carryforwards had a $3.0 million positive
impact on the first half of 2017. |
|
|
Use of Non-GAAP Financial
Measures In
addition to the results prepared in accordance with generally
accepted accounting principles in the United States, or GAAP,
this press release also includes certain financial measures which
have been adjusted and are not in accordance with generally
accepted accounting principles (“Non-GAAP financial
measures”). These Non-GAAP financial measures include
adjusted income from operations, adjusted net income, adjusted net
income per diluted share and adjusted EBITDA. In accordance
with Regulation G of the Securities and Exchange Commission, the
Company has provided a reconciliation of these Non-GAAP financial
measures with the most directly comparable financial measure
calculated in accordance with GAAP.
These Non-GAAP financial measures are not intended to replace
GAAP financial measures. They are presented as supplemental
measures of our performance in an effort to provide our
stakeholders better visibility into the Company’s ongoing operating
results and to allow for comparability to prior periods as well as
to other companies’ results. Management uses these Non-GAAP
financial measures to assess the financial health of the Company’s
ongoing operating performance. Management encourages our
stakeholders to consider all of our financial measures and to not
rely on any single financial measure to evaluate our
performance.
Adjusted net income for the second quarter 2017 excludes Other
charges of $4.7 million related to the acquisition of LifeWatch AG,
ongoing patent litigation and other restructuring activities, $0.9
million of expense for a foreign currency option related to the
acquisition of LifeWatch AG recorded in Interest and other loss,
net, the tax effect of these adjustments, as well as the impact
from the utilization of our net operating loss carryforwards.
By excluding expenses that are considered not necessary to
support the ongoing business or which are nonrecurring in nature,
the Company believes that these Non-GAAP financial measures offer a
meaningful representation of the Company’s ongoing operating
performance. Included in Other charges are transaction
related expenses, primarily legal and professional fees, legal fees
related to patent litigation as well as costs related to
restructuring programs aimed at streamlining operations and
reducing future expense. These Other charges are not part of
the ongoing operations, and therefore, not reflective of the
Company’s core operations. The Company views patent
litigation as an extreme measure not typically required in our
industry to protect a company’s intellectual property and which has
not been common practice for the Company. The Company
commenced patent litigation proceedings after the Company uncovered
specific evidence of four distinct cases of misappropriation and
infringement. The Company can choose to resolve the
outstanding matters and terminate the expense at any time.
The Company also included the income tax effect of these
adjustments based on the Company’s estimated annual effective tax
rate of 34%. During the fourth quarter 2016, the Company
released the tax valuation allowance on its net deferred tax
assets. The benefit from this release was excluded from the
Company’s 2016 adjusted results. Without a valuation
allowance in place and due to the timing of discrete items, for
GAAP financial reporting purposes the Company is reporting a tax
expense of 42.4% for the second quarter 2017. After giving
effect to taxes at the estimated annual effective tax rate of 34%
on the other adjustments, the utilization of net operating loss
carryforwards had a $2.0 million positive impact on the second
quarter 2017.
Adjusted net income for the second quarter 2016 excludes $1.7
million related to patent litigation and the Company’s 2016
acquisitions.
Adjusted net income for the first half of 2017 excludes Other
charges of $6.4 million related to the acquisition of LifeWatch AG,
ongoing patent litigation and other restructuring activities, a
one-time performance bonus paid to a third party in the form of
stock-based compensation, a $2.5 million non-operating charge
recorded for a settlement with the Department of Health and Human
Services related to the theft of two unencrypted laptops in 2011,
$0.9 million of expense for a foreign currency option related to
the acquisition of LifeWatch AG, the tax effect of these
adjustments, as well as the impact from the utilization of our net
operating loss carryforwards. By excluding expenses that are
considered not necessary to support the ongoing business or which
are nonrecurring in nature, the Company believes that these
Non-GAAP financial measures offer a meaningful representation of
the Company’s ongoing operating performance. Included in
Other charges are transaction related expenses, primarily legal and
professional fees, legal fees related to patent litigation as well
as costs related to restructuring programs aimed at streamlining
operations and reducing future expense. These Other charges
are not part of the ongoing operations, and therefore, not
reflective of the Company’s core operations. The Company
views patent litigation as an extreme measure not typically
required in our industry to protect a company’s intellectual
property and which has not been common practice for the
Company. The Company commenced patent litigation proceedings
after the Company uncovered specific evidence of four distinct
cases of misappropriation and infringement. The Company can
choose to resolve the outstanding matters and terminate the expense
at any time. The Company also excluded the second half of a
one-time performance bonus paid to a third party in the form of
stock-based compensation. The first of two performance
measures was achieved in the fourth quarter 2016, resulting in $1.3
million of expense at that time. The second performance
measure was achieved in the first quarter 2017, resulting in $1.5
million of expense. This is the first time in the Company’s
history that such a bonus was offered and issued and the expense is
nonrecurring. There are no additional agreements outstanding
of this nature. The Company also included the income tax
effect of these adjustments based on the Company’s estimated annual
effective tax rate of 34%. During the fourth quarter 2016,
the Company released the tax valuation allowance on its net
deferred tax assets. The benefit from this release was
excluded from the Company’s 2016 adjusted results. Without a
valuation allowance in place and due to the timing of discrete
items, for GAAP financial reporting purposes the Company is
reporting a tax expense of 17.4% for the first half of 2017.
After giving effect to taxes at the estimated annual effective tax
rate of 34% on the other adjustments, the utilization of net
operating loss carryforwards had a $3.0 million positive impact on
the first half of 2017.
Adjusted net income for the first half of 2016 excludes $3.4
million related to patent litigation and costs associated with the
Company’s 2016 acquisitions.
In addition to adjusted income from operations, adjusted net
income and adjusted net income per diluted share, we also present
adjusted EBITDA. This Non-GAAP financial measure excludes
income taxes, interest, Other charges, depreciation and
amortization and stock compensation expense. EBITDA is a
widely accepted financial measure which we believe our stakeholders
use to compare our ongoing financial performance to that of other
companies. Adjusting our EBITDA for Other charges and other
one-time items is a meaningful financial measure as we believe it
is an indication of our ongoing operations. In addition, we
also add back stock compensation expense because it is non-cash in
nature. Other companies in our industry may calculate
adjusted EBITDA in a different manner.
Contact:
BioTelemetry, Inc.
Heather C. Getz
Investor Relations
800-908-7103
investorrelations@biotelinc.com
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