CardioNet, Inc. (NASDAQ:BEAT), a leading wireless medical
technology company with a current focus on the diagnosis and
monitoring of cardiac arrhythmias, today reported results for the
fourth quarter and full year-ended December 31, 2011.
2011 Highlights
- Achieved positive adjusted EBITDA for
the fourth quarter and full year 2011
- Reduced quarter-end DSO to 75 days
- Reached an agreement to settle
shareholder litigation
- Implemented over $7 million of
annualized cost reductions
- Launched next-generation MCOTTM
device
- Opened west coast monitoring
location
- Secured 52 new payor contracts covering
over 10 million lives
- Completed Biotel integration and
generated positive EBITDA contribution
- $46.5 million in cash and investments
as of December 31, 2011, with no outstanding debt
President and CEO Commentary
Joseph Capper, President and Chief Executive Officer of
CardioNet, commented: “During the fourth quarter, we continued to
successfully execute on our operational initiatives as evidenced by
the positive adjusted EBITDA generated for the quarter and full
year 2011. We launched our next-generation MCOTTM device,
implemented approximately $7.5 million of annualized cost
reductions, reached an agreement to settle the outstanding class
action litigation and opened the west coast monitoring facility. We
will ramp up our activity in this new facility over the next three
months and expect to be fully operational in the second quarter.
Given this significant progress, we are now in a far better
position to capitalize on a variety of growth opportunities.
“As an example, we recently announced the purchase of ECG
Scanning & Medical Services, Inc. (“ECG Scanning”), a $7
million cardiac monitoring company focused on event, Holter and
pacemaker monitoring. The acquisition is expected to be accretive
in the first year and improve the Company’s position in the cardiac
monitoring market by leveraging our infrastructure and ECG
Scanning’s customer relationships.
“Although results have improved, our stock price has clearly
been under pressure particularly since the announcement of the
civil investigative demand in August 2011. As a result, we were
required by accounting guidance to take a non-cash goodwill
impairment charge. This charge has no impact on the Company’s
business operations or cash flow.
“2011 presented a number of challenges for the Company and the
healthcare industry overall; however, we improved our
year-over-year operating results and are even more excited about
the future. With a number of operational improvements in place and
the full commercialization of our next-generation MCOTTM device, we
are confident that we can continue to enhance performance and
strategically leverage our balance sheet.”
Fourth Quarter Financial Results
Revenue for the fourth quarter 2011 was $26.8 million, a
decrease of 6.6% compared to $28.7 million in the fourth quarter
2010. Patient revenue decreased $3.9 million due to slightly lower
MCOTTM volume which correlates to the lower volumes being
experienced in physicians’ offices, partially offset by an increase
in event and Holter volumes. Largely offsetting the patient revenue
decline was the addition of Biotel, which generated revenue of $2.0
million. For the three months ended December 31, 2011, patient
revenue was comprised of 36% Medicare and 64% commercial, and
patient volume was comprised of 54% Medicare and 46%
commercial.
Gross profit for the fourth quarter 2011 decreased to $16.6
million, or 62.1% of revenue, compared to $16.7 million, or 58.3%
of revenue, in the fourth quarter 2010. The increase in gross
profit percentage was related to cost reduction initiatives
implemented during the quarter.
On a GAAP basis, operating expenses for the fourth quarter 2011
were $66.2 million, an increase of 210.7% compared to $21.3 million
in the fourth quarter 2010. This increase was driven by a goodwill
impairment charge of $46.0 million due to a suppressed market price
which the Company believes is primarily a result of market reaction
to the ongoing Department of Justice inquiry. Operating expenses on
an adjusted basis declined by 11.1% compared to the prior year
quarter, excluding $48.7 million in the fourth quarter 2011 and
$1.6 million in the fourth quarter 2010 related to restructuring
and other nonrecurring charges. The decrease in operating expenses
was driven partially by the implementation of cost reductions in
the quarter as well as a reduction in bad debt expense. These
reductions were partially offset by the addition of Biotel’s
operating expenditures in the quarter.
On a GAAP basis, net loss for the fourth quarter 2011 was $49.8
million, or a loss of $2.03 per diluted share, compared to a net
loss of $4.8 million, or a loss of $0.20 per diluted share, for the
fourth quarter 2010. Excluding expenses related to restructuring
and other nonrecurring charges, adjusted net loss for the fourth
quarter 2011 was $1.1 million, or a loss of $0.04 per diluted
share. This compares to an adjusted net loss of $3.2 million, or a
loss of $0.13 per diluted share, for the fourth quarter 2010, which
also excludes the impact of restructuring and other nonrecurring
charges.
Full Year 2011 Financial Results
Revenue for the twelve months ended December 31, 2011 was $119.0
million, a decrease of 0.8% compared to $119.9 million reported in
the prior year. Patient revenue decreased $13.1 million due to
slightly lower MCOTTM volume in the second half due to lower
patient census in physicians’ offices as well as lower
reimbursement rates, partially offset by an increase in event and
Holter volumes. Substantially offsetting the patient revenue
decline was the addition of Biotel, which generated revenue of
$12.2 million. For the twelve months ended December 31, 2011,
patient revenue was comprised of 36% Medicare and 64% commercial,
and patient volume was comprised of 51% Medicare and 49%
commercial.
Gross profit for the twelve months ended December 31, 2011
decreased to $69.9 million, or 58.8% of revenue, compared to $72.4
million, or 60.4% of revenue, in the prior year. The decline in
gross profit percentage was related to the addition of the lower
margin Biotel business.
On a GAAP basis, operating expenses for the twelve months ended
December 31, 2011 were $131.3 million, an increase of 42.5%
compared to $92.1 million in the prior year. This increase was
driven by a goodwill impairment charge of $46.0 million. Operating
expenses on an adjusted basis declined by 8.6% compared to the
prior year, excluding $53.5 million for the twelve months ended
December 31, 2011 and $7.1 million for the twelve months ended
December 31, 2010 related to restructuring and other nonrecurring
charges. The decrease in operating expenses was substantially
driven by a reduction in bad debt expense, as well as a reduction
in outside services and professional fees. These reductions were
partially offset by the addition of Biotel’s operating
expenditures.
On a GAAP basis, net loss for the twelve months ended December
31, 2011 was $61.4 million, or a loss of $2.51 per diluted share,
compared to a net loss of $19.9 million, or a loss of $0.82 per
diluted share, for the twelve months ended December 31, 2010.
Excluding expenses related to restructuring and other nonrecurring
charges, adjusted net loss for the twelve months ended December 31,
2011 was $7.9 million, or a loss of $0.32 per diluted share. This
compares to an adjusted net loss of $12.8 million, or a loss of
$0.53 per diluted share, for the twelve months ended December 31,
2010, which also excludes the impact of restructuring and other
nonrecurring charges.
Liquidity
As of December 31, 2011, the Company had total cash and
investments of $46.5 million compared to $45.5 million as of
December 31, 2010, an increase of $1.0 million. Benefits from
process improvements in the billing and collections areas resulted
in strong cash collections throughout the year, as well as a
significant decrease in bad debt expense. These factors created a
shorter collection cycle, thereby positively impacting DSO, which
decreased to 75 days.
Conference Call
CardioNet, Inc. will host an earnings conference call on
Wednesday, February 22, 2012, at 5:00 PM Eastern Time. The call
will be simultaneously webcast on the investor information page of
our website, www.cardionet.com. The call will be archived on our
website and will also be available for two weeks via phone at
888-286-8010, access code 35475486.
About CardioNet
CardioNet is a leading provider of ambulatory, continuous,
real-time outpatient management solutions for monitoring relevant
and timely clinical information regarding an individual’s health.
CardioNet’s initial efforts are focused on the diagnosis and
monitoring of cardiac arrhythmias, or heart rhythm disorders, with
a solution that it markets as Mobile Cardiac Outpatient TelemetryTM
(MCOTTM). More information can be found at
http://www.cardionet.com.
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 regarding, among other
things, our growth prospects, the prospects for our products and
our confidence in the Company’s future. These statements may be
identified by words such as “expect,” “may,” “anticipate,”
“possible,” “estimate,” “potential,” “intend,” “plan,” “believe,”
“forecast,” “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 them, and could cause actual outcomes and results to differ
materially from current expectations. These factors include, among
other things, the effect of the ECG Scanning and Biotel
acquisitions on our business operations and financial results,
effectiveness of our efforts to address operational initiatives,
including cost savings initiatives that affect our business,
changes to insurance coverage, relationships with our government
and commercial payors 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 and 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)
December 31, December 31, 2011
2010 Revenue $ 26,784 $ 28,683 Cost of revenue
10,154 11,970 Gross profit 16,630 16,713 Gross profit %
62.1% 58.3% Operating expenses: Goodwill impairment charge
45,999 - General and administrative expense 7,697 7,715 Sales and
marketing expense 5,740 7,160 Bad debt expense 3,524 4,520 Research
and development expense 1,326 1,187 Integration, restructuring and
other charges 1,902 722 Total operating expenses
66,188 21,304 Loss from operations (49,558)
(4,591) Interest and other income, net 37 36 Loss
before income taxes (49,521) (4,555) Provision for income taxes
(240) (262) Net loss $ (49,761) $ (4,817)
Loss per Share:
Basic $ (2.03) $ (0.20) Diluted $ (2.03) $ (0.20) Weighted
Average Shares Outstanding: Basic 24,550 24,253 Diluted 24,550
24,253
Twelve Months
Ended
Consolidated Statements of Operations
(unaudited) (In Thousands, Except Per Share Amounts)
December 31, December 31, 2011
2010 Revenue $ 119,022 $ 119,924 Cost of revenue
49,076 47,492 Gross profit 69,946 72,432 Gross profit
% 58.8% 60.4% Operating expenses: Goodwill impairment charge
45,999 - General and administrative expense 35,011 34,657 Sales and
marketing expense 27,821 29,338 Bad debt expense 12,080 18,578
Research and development expense 5,698 4,897 Integration,
restructuring and other charges 4,659 4,654 Total
operating expenses 131,268 92,124 Loss from
operations (61,322) (19,692) Interest and other
income, net 144 94 Loss before income taxes (61,178)
(19,598) Provision for income taxes (244) (262) Net
loss $ (61,422) $ (19,860)
Loss per Share:
Basic $ (2.51) $ (0.82) Diluted $ (2.51) $ (0.82) Weighted
Average Shares Outstanding: Basic 24,425 24,109 Diluted 24,425
24,109
Summary Financial
Data (In Thousands) December 31,
December 31, 2011 2010 (unaudited)
Cash and investments $ 46,484 $ 45,484 Accounts receivable,
net 21,028 24,978 Other receivables, net 1,564 3,041 Days sales
outstanding 75 78 Working capital 57,177 60,634 Total assets 94,975
156,692 Total debt - - Total shareholders’ equity 77,997 134,928
Three Months
Ended
December 31, December 31, 2011
2010 (unaudited) Stock compensation expense $
709 $ 887
Twelve Months
Ended
December 31, December 31, 2011
2010 (unaudited) Stock compensation expense $
4,006 $ 3,945 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.
Three Months
Ended
(unaudited) December 31, December
31, 2011 2010 Operating loss – GAAP $ (49,558) $
(4,591) Nonrecurring charges (a) 48,675 1,599
Adjusted operating loss
$ (883) $ (2,992) Net loss – GAAP $
(49,761) $ (4,817) Nonrecurring charges (a) 48,675
1,599
Adjusted net loss $ (1,086) $
(3,218) Loss per diluted share – GAAP $ (2.03) $
(0.20) Nonrecurring charges per share (a) 1.99 0.07
Adjusted loss per diluted share $ (0.04)
$ (0.13) (a) In the fourth quarter of
2011, we incurred $46.0 million of goodwill impairment charges,
$1.3 million of legal fees related to litigation, $1.2 million
related to the integration of Biotel’s operations, restructuring
and other nonrecurring charges, as well as $0.2 million for the
forfeiture and acceleration of certain options. In the fourth
quarter of 2010, we incurred $0.7 million of severance and other
exit costs related to the restructuring of our sales and service
organizations, as well as $0.9 million of other nonrecurring
charges.
Three Months
Ended
(unaudited) December 31, December 31,
2011 2010 Cash provided by operating
activities $ 4,540 $ 14,191 Capital expenditures (1,140)
(1,575) Free cash flow 3,400 12,616
Three Months
Ended
(unaudited) December 31, December 31,
2011 2010 Operating loss – GAAP $ (49,558) $
(4,591) Nonrecurring charges 48,675 1,599 Depreciation and
amortization expense 2,163 3,346 Adjusted EBITDA
1,280 354 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.
Twelve Months
Ended
(unaudited) December 31, December
31, 2011 2010 Operating loss – GAAP $ (61,322) $
(19,692) Nonrecurring charges (a) 53,527 7,104
Adjusted operating loss
$ (7,795) $ (12,588) Net loss – GAAP $
(61,422) $ (19,860) Nonrecurring charges (a) 53,527
7,104
Adjusted net loss $ (7,895) $
(12,756) Loss per diluted share – GAAP $ (2.51) $
(0.82) Nonrecurring charges per share (a) 2.19 0.29
Adjusted loss per diluted share $ (0.32)
$ (0.53) (a) For the twelve months
ended 2011, we incurred $46.0 million of goodwill impairment
charges, $4.3 million related to the integration of Biotel’s
operations, other strategic initiatives and other nonrecurring
charges, $2.2 million of legal fees related to litigation, as well
as $1.0 million for the forfeiture and acceleration of certain
options. For the twelve months ended 2010, we incurred $4.9 million
of severance and other exit costs related to the restructuring of
our sales and service organizations and management changes, $1.3
million for the forfeiture and acceleration of certain options, as
well as $0.9 million of other nonrecurring charges largely related
to our class action and Biotel law suits.
Twelve Months
Ended
(unaudited) December 31, December 31,
2011 2010 Cash provided by (used in) operating
activities $ 5,030 $ 10,362 Capital expenditures (3,954)
(5,247) Free cash flow 1,076 5,115
Twelve Months
Ended
(unaudited) December 31, December 31,
2011 2010 Operating loss – GAAP $ (61,322) $
(19,692) Nonrecurring charges 53,527 7,104 Depreciation and
amortization expense 11,432 12,878 Adjusted EBITDA
3,637 290
HeartBeam (NASDAQ:BEAT)
Historical Stock Chart
From Jun 2024 to Jul 2024
HeartBeam (NASDAQ:BEAT)
Historical Stock Chart
From Jul 2023 to Jul 2024