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 fourth quarter and full year-ended December 31,
2013.
Company Highlights
- Finished the year with fourth quarter revenue of $33.1 million
and $5.2 million of adjusted EBITDA
- 16% revenue growth for the full year 2013 as compared to
2012
- Achieved profitability on an adjusted basis for the full year
2013
- Generated positive adjusted EBITDA of $16.9 million for the
year
- $22.2 million in cash and no debt as of December 31, 2013
- Serviced record patient volume in 2013
- Reduced consolidated DSO to 47 days, a 14 day improvement
compared to year-end 2012
- Successfully created holding company structure under the
BioTelemetry name to support future growth initiatives
- Signed agreement with UnitedHealthcare Insurance Company
covering all monitoring services
- Launched MCOTos 2:1, providing both MCOTTM and wEvent
monitoring capability in a single device
- Announced the patent litigation victory and acquisition of
Mednet Healthcare Technologies, Inc.
President and CEO Commentary
Joseph Capper, President and Chief Executive Officer of
BioTelemetry, commented: "2013 was an outstanding and
transformational year for BioTelemetry. We posted strong year over
year top line growth while continuing to drive down operating
expenses. Patient volume hit a record high, growing 7% year over
year and generating a $7 million increase in patient revenue. The
patient volume growth stemmed from the ongoing success of the
CardioNet Comprehensive sales initiative, the addition of several
new payor contracts and the growing market acceptance of the MCOTos
2:1 and wEvent devices. The increased patient revenue, in
combination with the full year impact of the Cardiocore
acquisition, resulted in total revenue of $130 million, a 16%
increase versus the prior year. Furthermore, while driving strong
top line growth, we remained focused on improving and streamlining
our operations. As a result, we achieved adjusted EBITDA of $17
million for the year, our highest EBITDA since 2008.
"In addition to our financial and operational successes, we are
also excited by our recent patent litigation victory, which
ultimately culminated in the acquisition of Mednet Healthcare
Technologies, Inc. While the acquisition did not impact our 2013
results, we expect it to be accretive, adding $4 to $5 million in
EBITDA on an annualized basis. We are looking forward to welcoming
Mednet's customers and employees to our team.
"Looking forward, we enter 2014 with considerable momentum to
execute on our strategic plan. We expect to take additional market
share and further solidify our position as the industry's
technology leader. We will continue to bring innovation to mobile
cardiac monitoring by launching next generation devices in the
future such as CardioKey, our low cost 14-day Holter. In addition,
we expect research services to benefit from recent internal
initiatives, which should enhance its growth in the coming year. We
have never been better positioned to compete and we expect to have
another successful year in 2014."
Fourth Quarter Financial Results
Revenue for the fourth quarter 2013 was $33.1 million, an
increase of 10.5% compared to $30.0 million in the fourth quarter
2012. Total revenue increased $3.1 million due to an increase in
patient services revenue of $4.3 million as a result of higher
overall patient volume. This was partially offset by a decrease in
both research services and product segment revenue of $1.2
million. For the three months ended December 31, 2013, patient
revenue was comprised of 43% Medicare and 57% commercial.
Gross profit for the fourth quarter 2013 increased to $20.8
million, or 62.8% of revenue, compared to $17.2 million, or 57.3%
of revenue, in the fourth quarter of 2012. The increase in
gross profit percentage was related to efficiencies in the patient
services segment as well as favorable revenue mix.
On a GAAP basis, operating expenses for the fourth quarter 2013
were $20.6 million, a decrease of 6.3% compared to $22.0 million in
the fourth quarter 2012. On an adjusted basis, operating
expenses for the fourth quarter were $19.2 million, a 0.4% decrease
compared to $19.3 million for the prior year quarter. These
operating expenses exclude $1.4 million in the fourth quarter 2013
and $2.7 million in the fourth quarter 2012 related to
restructuring and other nonrecurring charges.
On a GAAP basis, net income and earnings per share for the
fourth quarter 2013 were breakeven, compared to a net loss of $4.3
million, or a loss of $0.17 per diluted share, for the fourth
quarter 2012. Excluding expenses related to restructuring and
other nonrecurring charges, adjusted net income for the fourth
quarter 2013 was $1.4 million, or income of $0.05 per diluted
share. This compares to an adjusted net loss of $2.3 million,
or a loss of $0.09 per diluted share, for the fourth quarter 2012,
which excludes the impact of restructuring and other nonrecurring
charges.
Full Year 2013 Financial Results
Revenue for the twelve months ended December 31, 2013 was $129.5
million, an increase of 16.2% compared to $111.5 million reported
in the prior year. The increase in total revenue of $18.0
million was primarily related to an increase in research services
revenue of $12.0 million due to the acquisition of Cardiocore in
August 2012 and an increase in patient services revenue of $6.7
million due to higher overall patient volume. Offsetting these
increases was a decline in product revenue of $0.7
million. For the twelve months ended December 31, 2013,
patient revenue was comprised of 45% Medicare and 55%
commercial.
Gross profit for the twelve months ended December 31, 2013 was
$79.1 million, or 61.1% of revenue, compared to $65.9 million, or
59.1% of revenue, in the prior year. Gross profit for the
twelve months ended December 31, 2013 on an adjusted basis was
$79.6 million, or 61.4% of revenue, excluding $0.5 million related
to restructuring and other nonrecurring charges. This compares
to gross profit for the twelve months ended December 31, 2012 on an
adjusted basis of $66.8 million, or 59.9% of revenue, excluding
$0.9 million related to restructuring and other nonrecurring
charges. The increase in gross profit percentage was related
to higher revenue and the impact of operational efficiencies in the
patient services segment.
On a GAAP basis, operating expenses for the twelve months ended
December 31, 2013 were $85.9 million, an increase of 8.7% compared
to $79.1 million in the prior year. On an adjusted basis,
operating expenses for the full year 2013 were $77.5 million, a
5.2% increase compared to $73.7 million in the prior year,
excluding $8.4 million in the twelve months ended 2013 and $5.4
million in the twelve months ended 2012 related to restructuring
and other nonrecurring charges. The increase in operating
expense was driven by the addition of Cardiocore as well as
development costs for our next generation device partially offset
by lower bad debt.
On a GAAP basis, net loss for the twelve months ended December
31, 2013 was $7.3 million, or a loss of $0.29 per diluted share,
compared to a net loss of $12.2 million, or a loss of $0.49 per
diluted share, for the twelve months ended December 31,
2012. Excluding expenses related to restructuring and other
nonrecurring charges, adjusted net income for the twelve months
ended December 31, 2013 was $1.6 million, or income of $0.06 per
diluted share. This compares to an adjusted net loss of $6.9
million, or a loss of $0.28 per diluted share, for the twelve
months ended December 31, 2012, which also excludes the impact of
restructuring and other nonrecurring charges.
Liquidity
As of December 31, 2013, total cash was $22.2 million, an
increase of $3.9 million compared to year-end 2012. The
significant cash uses during 2013 included $8.2 million for capital
expenditures, primarily for medical devices. Positive
operating cash flow of $11.3 million funded these
expenditures. In addition, consolidated DSO decreased to 47
days, representing a fourteen day decrease compared to year-end
2012.
Conference
Call
BioTelemetry, Inc. will host an earnings conference call on
Wednesday, February 26, 2014, at 5:00 PM Eastern Time. The
call will be simultaneously webcast on the investor information
page of our website, www.biotelinc.com. The call will be
archived on our website for two weeks.
About BioTelemetry
BioTelemetry, 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.biotelinc.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 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," "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, the effect of our ability to
successfully integrate the Mednet Healthcare Technologies, Inc.
operations into our business, as well as Mednet post-acquisition
impact on our business operations and financial results, the
national rate set by the Centers for Medicare and Medicaid Services
("CMS") for our mobile cardiovascular telemetry service, the
effects of the recent CMS rate reduction as announced by us on
December 4, 2013, 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, including our ongoing project with IMEC
International and related partners, 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) |
|
|
|
December 31,
2013 |
December 31,
2012 |
|
|
|
Revenue |
$ 33,105 |
$ 29,959 |
Cost of revenue |
12,310 |
12,792 |
Gross profit |
20,795 |
17,167 |
Gross profit % |
62.8% |
57.3% |
|
|
|
Operating expenses: |
|
|
General and administrative expense |
9,005 |
8,368 |
Sales and marketing expense |
6,538 |
6,949 |
Bad debt expense |
1,926 |
2,846 |
Research and development expense |
1,938 |
1,296 |
Integration, restructuring and other
charges |
1,162 |
2,492 |
Total operating expenses |
20,569 |
21,951 |
|
|
|
Income (loss) from operations |
226 |
(4,784) |
Interest and other (expense), net |
(12) |
(39) |
|
|
|
Income (loss) before income taxes |
214 |
(4,823) |
Benefit (provision) for income taxes |
(191) |
474 |
Net Income (loss) |
$ 23 |
$ (4,349) |
|
|
|
Earnings (loss) per Share: |
|
|
Basic |
$ 0.00 |
$ (0.17) |
Diluted |
$ 0.00 |
$ (0.17) |
|
|
|
Weighted Average Shares Outstanding: |
|
|
Basic |
25,803 |
25,215 |
Diluted |
27,822 |
25,215 |
|
|
|
|
Twelve Months
Ended |
|
|
Consolidated Statements of
Operations |
(unaudited) |
(In Thousands, Except Per Share
Amounts) |
|
|
|
December 31,
2013 |
December 31,
2012 |
|
|
|
Revenue |
$ 129,501 |
$ 111,494 |
Cost of revenue |
50,431 |
45,593 |
Gross profit |
79,070 |
65,901 |
Gross profit % |
61.1% |
59.1% |
|
|
|
Operating expenses: |
|
|
General and administrative expense |
36,569 |
32,644 |
Sales and marketing expense |
26,275 |
25,604 |
Bad debt expense |
7,787 |
11,912 |
Research and development expense |
7,338 |
4,664 |
Integration, restructuring and other
charges |
7,982 |
4,236 |
Total operating expenses |
85,951 |
79,060 |
|
|
|
Loss from operations |
(6,881) |
(13,159) |
Interest and other (expense), net |
(223) |
52 |
|
|
|
Loss before income taxes |
(7,104) |
(13,107) |
Benefit (provision) for income taxes |
(215) |
905 |
Net loss |
$ (7,319) |
$ (12,202) |
|
|
|
Loss per Share: |
|
|
Basic |
$ (0.29) |
$ (0.49) |
Diluted |
$ (0.29) |
$ (0.49) |
|
|
|
Weighted Average Shares Outstanding: |
|
|
Basic |
25,544 |
24,934 |
Diluted |
25,544 |
24,934 |
|
|
|
|
Summary Financial Data |
|
(In Thousands) |
|
|
|
December 31,
2013 |
December 31, 2012 |
|
(unaudited) |
(unaudited) |
|
|
|
Cash and investments |
$ 22,151 |
$ 18,298 |
Patient accounts receivable, net |
11,437 |
13,792 |
Other accounts receivable, net |
5,680 |
6,515 |
Days sales outstanding |
47 |
61 |
Working capital |
25,215 |
24,932 |
Total assets |
87,546 |
90,010 |
Total debt |
-- |
-- |
Total shareholders' equity |
66,829 |
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) |
|
December
31, 2013 |
December
31, 2012 |
Operating Income (loss) – GAAP |
$ 226 |
$ (4,784) |
Nonrecurring charges (a) |
1,367 |
2,672 |
Adjusted operating income
(loss) |
$ 1,593 |
$ (2,112) |
|
|
|
Net Income (loss) – GAAP |
$ 23 |
$ (4,349) |
Nonrecurring charges (a) |
1,367 |
2,080 |
Adjusted net income
(loss) |
$ 1,390 |
$ (2,269) |
|
|
|
Income (loss) per diluted share –
GAAP |
$ 0.00 |
$ (0.17) |
Nonrecurring charges per share (a) |
0.05 |
0.08 |
|
|
|
Adjusted earnings (loss) per
diluted share (b) |
$ 0.05 |
$ (0.09) |
|
(a) In the fourth quarter of
2013, the Company incurred $1.2 million related to restructuring
and other nonrecurring charges primarily due to legal fees related
to litigation as well as $0.2 million for other nonrecurring
charges. In the fourth quarter of 2012, the Company incurred
$2.5 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. These charges
were partially offset by a $0.6 million tax benefit related to the
acquisition of Cardiocore. |
(b) Due to the Company
reporting positive net income for the fourth quarter, the Company
used the weighted average diluted shares outstanding as of the end
of the fourth quarter in the earnings per share
calculation. The diluted share count used was 27.8
million. |
|
|
Three Months
Ended |
|
(unaudited) |
|
|
|
December
31, 2013 |
December
31, 2012 |
|
|
|
Cash provided (used) by operating
activities |
$ 4,215 |
$ 2,129 |
Capital expenditures |
(3,306) |
(1,605) |
Free cash flow |
$ 909 |
$ 524 |
|
|
|
|
|
Three Months
Ended |
|
(unaudited) |
|
|
|
|
December
31, 2013 |
December
31, 2012 |
|
|
|
Operating income (loss) – GAAP |
$ 226 |
$ (4,784) |
Nonrecurring charges |
1,367 |
2,672 |
Depreciation and amortization expense |
2,842 |
2,782 |
Stock compensation expense |
798 |
978 |
Adjusted EBITDA |
$ 5,233 |
$ 1,648 |
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, 2013 |
December
31, 2012 |
Operating loss – GAAP |
$ (6,881) |
$ (13,159) |
Nonrecurring charges (a) |
8,897 |
6,280 |
Adjusted operating income
(loss) |
$ 2,016 |
$ (6,879) |
|
|
|
Net loss – GAAP |
$ (7,319) |
$ (12,202) |
Nonrecurring charges (a) |
8,897 |
5,257 |
Adjusted net income
(loss) |
$ 1,578 |
$ (6,945) |
|
|
|
Loss per diluted share – GAAP |
$ (0.29) |
$ (0.49) |
Nonrecurring charges per share (a) |
0.35 |
0.21 |
|
|
|
Adjusted income (loss) per diluted
share (b) |
$ 0.06 |
$ (0.28) |
|
(a) In the year-ended
December 31, 2013, the Company incurred $8.0 million related to
restructuring and other nonrecurring charges primarily due to legal
fees related to litigation, employee related costs for
restructuring and integration, and $0.9 million for other
nonrecurring charges and the forfeiture and acceleration of certain
options. In the year-ended December 31, 2012, the Company
incurred $4.2 million related to integration, restructuring and
other charges, $1.5 million of other nonrecurring charges primarily
related to the San Francisco monitoring center and legal fees and
$0.6 million for the forfeiture and acceleration of certain
options. These charges were partially offset by a $1.0 million
tax benefit related to the acquisitions of ECG Scanning and
Cardiocore. |
(b) Due to the Company
reporting positive adjusted net income for the twelve months ended
December 31, 2013, the Company used the weighted average diluted
shares outstanding as of the end of the year in the earnings per
share calculation. The diluted share count used was 26.8
million. |
|
|
|
Twelve Months
Ended |
|
(unaudited) |
|
|
|
|
December
31, 2013 |
December
31, 2012 |
|
|
|
Cash provided (used) by operating
activities |
$ 11,259 |
$ 5,743 |
Capital expenditures |
(8,169) |
(5,962) |
Free cash flow |
$ 3,090 |
$ (219) |
|
|
|
|
|
Twelve Months
Ended |
|
(unaudited) |
|
|
|
|
December
31, 2013 |
December
31, 2012 |
|
|
|
Operating loss – GAAP |
$ (6,881) |
$ (13,159) |
Nonrecurring charges |
8,897 |
6,280 |
Depreciation and amortization expense |
11,755 |
9,123 |
Stock compensation expense |
3,166 |
3,169 |
Adjusted EBITDA |
$ 16,937 |
$ 5,413 |
CONTACT: BioTelemetry, Inc.
Heather C. Getz
Investor Relations
800-908-7103
investorrelations@biotelinc.com
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