CardioNet, Inc. (NASDAQ:BEAT), the leading wireless medical
technology and research services company focused on the diagnosis
and monitoring of cardiac arrhythmias, today reported results for
the first quarter ended March 31, 2013.
First Quarter 2013 Highlights
- Revenue of $32.4 million and positive
adjusted EBITDA of $2.4 million for the first quarter 2013
- Record patient volume
- Signed agreement to develop
next-generation cardiac monitoring devices with IMEC
- Reduced consolidated DSO to 56 days, a
5 day improvement compared to year end 2012
- $18.3 million in cash and no debt as of
March 31, 2013
- Announced creation of a holding company
structure to better support growth strategy
President and CEO Commentary
Joseph Capper, President and Chief Executive Officer of
CardioNet, commented: “Our first quarter results benefited from
strength in each of our segments. Our patient services segment set
a record for the highest number of patients serviced in the history
of the Company. This clearly demonstrates the success of our
CardioNet Comprehensive strategy as physicians can now turn to
CardioNet for all of their cardiac monitoring needs. We also
announced a partnership with IMEC to develop the next generation of
innovative cardiac monitoring products. We believe this partnership
will further our efforts to maintain our technological leadership
in remote cardiac monitoring. Finally, our research services
segment continues to exceed our expectations, posting strong top
and bottom line year over year growth, as reported and on a
proforma basis.
“Given our progress and how we plan to expand the business, we
felt this was an appropriate time to realign under a holding
company structure, providing maximum flexibility for achieving our
long term objectives. With a strong balance sheet, and over $18
million in cash and no debt, we have the ability to seek
opportunities that we believe will enhance our growth.”
First Quarter Financial Results
Revenue for the first quarter 2013 was $32.4 million, an
increase of 19.9% compared to $27.0 million in the first quarter
2012. Revenue increased $5.4 million primarily due to an increase
in research services revenue of $4.5 million with the acquisition
of Cardiocore in August 2012. Additionally, patient services
revenue increased $1.0 million as the success of the Company’s
CardioNet Comprehensive program resulted in increased patient
volume. Patient services revenue also benefitted from a higher
average reimbursement due to the timing and mix of patients. For
the three months ended March 31, 2013, patient revenue was
comprised of 45% Medicare and 55% commercial.
Gross profit for the first quarter 2013 increased to $19.5
million, or 60.3% of revenue, compared to $15.6 million, or 57.7%
of revenue, in the first quarter of 2012. This also compares to
gross profit for the first quarter 2012 on an adjusted basis of
$16.0 million, or 59.1% of revenue, excluding $0.4 million related
to restructuring and other nonrecurring charges. The increase in
the gross profit percentage was related to the increased patient
services volume and average selling price as well as the impact of
cost reduction efforts and efficiency measures.
On a GAAP basis, operating expenses for the first quarter 2013
were $21.6 million, an increase of 12.4% compared to $19.2 million
in the first quarter 2012. On an adjusted basis, operating expenses
for the first quarter were $20.2 million, a 9.5% increase compared
to $18.4 million for the prior year quarter, excluding $1.4 million
in the first quarter 2013 and $0.7 million in the first quarter
2012 related to restructuring and other nonrecurring charges. The
increase in operating expense was driven by the addition of the
Cardiocore operations which was partially offset by a reduction in
bad debt expense.
On a GAAP basis, net loss for the first quarter 2013 was $2.1
million, or a loss of $0.08 per diluted share, compared to a net
loss of $3.5 million, or a loss of $0.14 per diluted share, for the
first quarter 2012. Excluding expenses related to restructuring and
other nonrecurring charges, adjusted net loss for the first quarter
2013 was $0.7 million, or a loss of $0.03 per diluted share. This
compares to an adjusted net loss of $2.4 million, or a loss of
$0.10 per diluted share, for the first quarter 2012, which excludes
the impact of restructuring and other nonrecurring charges.
Liquidity
As of March 31, 2013, total cash was $18.3 million. This is
unchanged from December 31, 2012 despite uses of cash that are
typical in the first quarter. The uses of cash during the first
quarter 2013 included $1.8 million for capital expenditures,
primarily medical devices, increased trade show and sales meeting
expense as well as higher payroll taxes. Positive operating cash
flow helped offset these expenditures. In addition, consolidated
DSO decreased to 56 days, representing a 5 day decrease compared to
year end 2012.
Conference Call
CardioNet, Inc. will host an earnings conference call on
Tuesday, April 23, 2013, at 8:00 AM 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 17607986.
About CardioNet
CardioNet is the 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.
Information Concerning the Holding Company
A registration statement relating to the issuance of
BioTelemetry, Inc. common stock in connection with the creation of
the holding company structure has been filed with the SEC but has
not yet become effective. BioTelemetry, Inc. may not issue shares
of its common stock prior to the time the registration statement
becomes effective.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of,
these securities in any state of jurisdiction in which such an
offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such state or
jurisdiction.
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 regarding, among other
things, our expectations regarding the effect of the creation of a
new holding company structure and the effect, including on our
growth prospects, of the new holding company structure, the
prospects for our products and our confidence in the Company’s
future. 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, effects of changes in health care legislation,
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, our ability to successfully create a new
holding company structure and to anticipate the benefits of such
structure. 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)
March 31, March 31, 2013 2012
Revenue $ 32,418 $ 27,045 Cost of revenue 12,873
11,435 Gross profit 19,545 15,610 Gross profit % 60.3% 57.7%
Operating expenses: General and administrative expense 9,528
8,673 Sales and marketing expense 6,762 6,152 Bad debt expense
2,467 2,911 Research and development expense 1,620 1,185
Integration, restructuring and other charges 1,202
270 Total operating expenses 21,579 19,191 Loss from
operations (2,034) (3,581) Interest and other
(expense), net
(53)
47 Loss before income taxes (2,087) (3,534) Benefit
(provision) for income taxes - - Net loss $ (2,087) $
(3,534)
Loss per Share:
Basic $ (0.08) $ (0.14) Diluted $ (0.08) $ (0.14) Weighted
Average Shares Outstanding: Basic 25,191 24,605 Diluted 25,191
24,605
Summary
Financial Data (In Thousands) March 31,
December 31, 2013 2012 (unaudited)
(unaudited) Cash and investments $ 18,324 $ 18,298
Patient accounts receivable, net 13,477 13,792 Other accounts
receivable, net 6,738 6,515 Days sales outstanding 56 61 Working
capital 24,780 24,932 Total assets 89,063 90,010 Total debt - -
Total shareholders’ equity 68,819 69,998 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) March 31, March 31,
2013 2012 Operating loss – GAAP $ (2,034) $
(3,581) Nonrecurring charges (a) 1,376 1,128
Adjusted operating loss
$ (658) $ (2,453) Net loss –
GAAP $ (2,087) $ (3,534)
Nonrecurring charges (a)
1,376 1,128
Adjusted net loss $
(711) $ (2,406) Loss per diluted share
– GAAP $ (0.08) $ (0.14) Nonrecurring charges per share (a)
0.05 0.04
Adjusted loss per diluted
share $ (0.03) $ (0.10) (a)
In the first quarter of 2013, the Company incurred $1.2 million
related to integration, restructuring and other charges, $0.1
million of other nonrecurring expenses primarily for legal fees
related to litigation and $0.1 million for the forfeiture and
acceleration of certain options. In the first quarter of 2012, the
Company incurred $0.3 million related to integration, restructuring
and other charges, $0.6 million related to litigation as well as
$0.2 million for the forfeiture and acceleration of certain
options.
Three Months
Ended
(unaudited) March 31, March 31,
2013 2012 Cash provided by operating
activities $ 1,657 $ (1,949) Capital expenditures (1,839)
(1,372) Free cash flow $ (182) $ (3,321)
Three Months
Ended
(unaudited) March 31, March 31,
2013 2012 Operating loss – GAAP $ (2,034) $
(3,581) Nonrecurring charges 1,376 1,128 Depreciation and
amortization expense 3,008 2,020 Adjusted EBITDA $
2,350 $ (433)
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