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 first quarter ended March 31, 2014.
Company Highlights
- Revenue increased 15% to $37.2 million, the highest quarterly
revenue since 2009
- Serviced over 100,000 patients in the quarter, the highest
quarterly patient volume ever
- Generated positive adjusted EBITDA of $3.0 million
- Completed the acquisition of Mednet Healthcare Technologies,
Inc.
- Announced the acquisition of the cardiac patient services
business of Biomedical Systems, Corp.
President and CEO Commentary
Joseph Capper, President and Chief Executive Officer of
BioTelemetry, commented: "We finished the first quarter of 2014
with revenue of $37.2 million, our highest quarterly revenue in
over four years. Despite the Medicare rate reduction, our patient
services segment posted strong results with an increase in revenue
of $4.6 million and a 58% increase in volume over the prior year.
While this increase is primarily due to the addition of Mednet
Healthcare Technologies, Inc. during the quarter, we did have
organic volume growth of 12%, demonstrating the strength of our
comprehensive sales strategy. As evidenced by the addition of
Mednet and the cardiac monitoring business of Biomedical Systems
Corp. ("BMS") which closed in early April, we remain committed to
our strategic goal of solidifying our leadership position in the
remote cardiac monitoring space.
"Our recent acquisitions will also bolster our product and
research segments by expanding our geographic footprint as well as
our product lines. Through the BMS transaction, we acquired a
presence in Europe which is a market that we have yet to penetrate.
We will use this location to expand our international research
presence to better serve our clinical trial partners. We also
acquired a Holter software platform that will help facilitate the
introduction of Cardiokey, our new low-cost, 14-day Holter, later
this year.
"The first quarter demonstrates the success of the Company's
strategic plan, as we continue to focus on execution. The Mednet
and the BMS business acquisitions were two significant
achievements, and we will continue to explore opportunities both
domestically and internationally. We are pleased with the Company's
progress this quarter and look forward to building on our business
momentum."
First Quarter Financial Results
Revenue for the first quarter 2014 was $37.2 million, an
increase of 14.6% compared to $32.4 million in the first quarter
2013. Total revenue increased $4.8 million due to an increase in
patient services revenue of $4.6 million and an increase in product
sales of $0.2 million. These increases were largely related to the
acquisition of Mednet. In addition, organic patient volume
increased 12% across all products which was offset by the
previously announced price reduction from Medicare, as well rate
reductions from commercial contracts tied to Medicare. For the
three months ended March 31, 2014, patient revenue was comprised of
41% Medicare and 59% commercial.
Gross profit for the first quarter 2014 increased to $21.6
million, or 58.2% of revenue, compared to $19.5 million, or 60.3%
of revenue, in the first quarter of 2013. This increase of $2.1
million was primarily due to the acquisition of Mednet, partially
offset by a decrease in gross profit from the remaining patient
services segment related to the reduction in the Medicare
reimbursement rate.
On a GAAP basis, operating expenses for the first quarter 2014
were $25.3 million, an increase of 17.4% compared to $21.6 million
in the first quarter 2013. On an adjusted basis, operating
expenses for the first quarter were $22.3 million, a 10.7% increase
compared to $20.2 million for the prior year quarter. These
adjusted operating expenses exclude $3.0 million in the first
quarter 2014 and $1.4 million in the first quarter 2013 related to
restructuring and other nonrecurring charges. The increase in
operating expense was driven by the addition of Mednet operations
and was partially offset by a reduction in bad debt expense and
other corporate expenses.
On a GAAP basis, other loss for the first quarter 2014 was $3.3
million, compared to $0.1 million in the first quarter of
2013. During the first quarter 2014, the Company began
negotiations for a potential settlement with the US Department of
Justice regarding the outstanding Civil Investigative Demand issued
in August 2011. As a result, the Company recorded an estimated
reserve of $3.1 million as a non-operating charge in the first
quarter 2014. Excluding this reserve, other loss for the first
quarter was $0.2 million, a slight increase compared to the prior
year.
On a GAAP basis, net loss for the first quarter 2014 was $4.1
million, or a loss of $0.16 per diluted share, compared to a net
loss of $2.1 million, or a loss of $0.08 per diluted share, for the
first quarter 2013. Excluding expenses related to
restructuring and other nonrecurring charges including a tax
benefit of $2.9 million related to the acquisition of Mednet and
the $3.1 estimated reserve for the potential settlement with the
Department of Justice, adjusted net loss for the first quarter 2014
was $0.9 million, or a loss of $0.04 per diluted share. This
compares to an adjusted net loss of $0.7 million, or a loss of
$0.03 per diluted share, for the first quarter 2013, which excludes
the impact of restructuring and other nonrecurring charges.
Liquidity
As of March 31, 2014, total cash was $12.0 million, a decrease
of $10.2 million compared to December 31, 2013. The
significant cash uses during the first quarter 2014 included $5.7
million related to the Mednet acquisition and $3.9 million for
capital expenditures, primarily for medical
devices. Consolidated days sales outstanding increased to 57
days compared to 47 days at year-end 2013 due to the timing of
Medicare claims in the first quarter in addition to the inclusion
of Mednet's receivables which carried a higher DSO.
Conference
Call
BioTelemetry, Inc. will host an earnings conference call on
Tuesday, May 6, 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. 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 the Mednet and Biomedical Systems
businesses into our business and the effect such acquisitions will
have on our results of operation, our ability to successfully
negotiate a settlement to the Department of Justice investigation
prior to any judicial action, 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) |
|
|
|
March 31, |
March 31, |
|
2014 |
2013 |
|
|
|
Revenue |
$37,162 |
$32,418 |
Cost of revenue |
15,518 |
12,873 |
Gross profit |
21,644 |
19,545 |
Gross profit % |
58.2% |
60.3% |
|
|
|
Operating expenses: |
|
|
General and administrative expense |
10,772 |
9,528 |
Sales and marketing expense |
7,440 |
6,762 |
Bad debt expense |
2,359 |
2,467 |
Research and development expense |
1,789 |
1,620 |
Integration, restructuring and other
charges |
2,980 |
1,202 |
Total operating expenses |
25,340 |
21,579 |
|
|
|
Loss from operations |
(3,696) |
(2,034) |
Interest and other (loss), net |
(3,271) |
(53) |
|
|
|
Loss before income taxes |
(6,967) |
(2,087) |
Benefit from income taxes |
2,845 |
-- |
Net loss |
$ (4,122) |
$ (2,087) |
|
|
|
Loss per Share: |
|
|
Basic |
$ (0.16) |
$ (0.08) |
Diluted |
$ (0.16) |
$ (0.08) |
|
|
|
Weighted Average Shares Outstanding: |
|
|
Basic |
26,111 |
25,191 |
Diluted |
26,111 |
25,191 |
|
|
|
Summary Financial Data |
|
|
(In Thousands) |
|
|
|
March 31, |
December 31, |
|
2014 |
2013 |
|
(unaudited) |
(unaudited) |
|
|
|
Cash and investments |
$12,044 |
$22,151 |
Patient accounts receivable, net |
16,901 |
11,437 |
Other accounts receivable, net |
6,758 |
5,680 |
Days sales outstanding |
57 |
47 |
Working capital |
10,347 |
25,215 |
Total assets |
107,369 |
87,546 |
Total debt |
9,830 |
-- |
Total shareholders' equity |
64,770 |
66,829 |
|
|
|
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, |
|
2014 |
2013 |
Operating loss – GAAP |
$ (3,696) |
$ (2,034) |
Nonrecurring charges (a) |
2,980 |
1,376 |
Adjusted operating loss |
$ (716) |
$ (658) |
|
|
|
Net loss – GAAP |
$ (4,122) |
$ (2,087) |
Nonrecurring charges (b) |
3,204 |
1,376 |
Adjusted net loss |
$ (918) |
$ (711) |
|
|
|
Loss per diluted share – GAAP |
$ (0.16) |
$ (0.08) |
Nonrecurring charges per share (b) |
0.12 |
0.05 |
|
|
|
Adjusted loss per diluted
share |
$ (0.04) |
$ (0.03) |
(a) In the first quarter of 2014, the Company incurred $3.0
million of integration, restructuring and other charges primarily
due to legal fees related to patent litigation, acquisition costs
related to the Mednet and Biomedical Systems patient services
acquisitions and employee related costs for restructuring and
integration. 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 patent litigation and $0.1
million for the forfeiture and acceleration of certain
options.
(b) In addition to the $3.0 million of integration,
restructuring and other charges incurred in the first quarter 2014,
the Company recorded a non-operating charge of $3.1 million for the
potential settlement of the US Department of Justice Civil
Investigative Demand which was partially offset by a $2.9 million
tax benefit related to the acquisition of Mednet.
|
Three Months
Ended |
|
(unaudited) |
|
|
|
|
March 31, |
March 31, |
|
2014 |
2013 |
|
|
|
Cash provided (used) by operating
activities |
$ (2,060) |
$ 1,657 |
Capital expenditures |
(3,859) |
(1,839) |
Free cash flow |
$ (5,919) |
$ (182) |
|
|
|
|
|
|
|
Three Months
Ended |
|
(unaudited) |
|
|
|
|
March 31, |
March 31, |
|
2014 |
2013 |
|
|
|
Operating loss – GAAP |
$ (3,696) |
$ (2,034) |
Nonrecurring charges |
2,980 |
1,376 |
Depreciation and amortization expense |
2,753 |
3,008 |
Stock compensation expense |
1,003 |
617 |
Adjusted EBITDA |
$3,040 |
$2,967 |
|
|
|
CONTACT: BioTelemetry, Inc.
Heather C. Getz
Investor Relations
800-908-7103
investorrelations@biotelinc.com
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