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, 2015.
Company Highlights
- Revenue increased 17% to $43.4 million
- Experienced eleventh consecutive quarter of year over year
revenue growth
- Generated positive adjusted EBITDA of $6.4 million, more than
double Q1 2014
- Serviced over 140,000 patients in the quarter, 29% growth
compared to prior year
- Launched CardioKey, the Company’s low cost, 14-day
Holter
- New legislation (“H.R.2.”) passed, repealing the Medicare SGR
formula
President and CEO Commentary
Joseph Capper, President and Chief Executive Officer of
BioTelemetry, Inc., commented: “We kicked off 2015 with strong
first quarter results, generating revenue of $43.4 million, a 17%
year over year increase, and adjusted EBITDA of $6.4 million,
doubling our prior year results. Our patient volume grew 29%
compared to last year, partially attributable to our 2014
acquisitions and bolstered by strong organic growth. During
the quarter, we did a limited launch of our new low cost, 14-day
Holter, the CardioKey, which has been positively received by the
market. We are looking forward to the full market launch
later this year. These accomplishments further solidify our
position as the leader in cardiac monitoring.
“Also worth noting, H.R.2. was recently signed into law,
permanently repealing the SGR formula which called for annual
reductions to Medicare payments under the physician fee
schedule. The bill also requires a 0.5% rate increase per
year for the next five years and provides for a more predictable
Medicare payment schedule.
“Given our solid first quarter results, we remain confident that
2015 will be another excellent year for BioTelemetry. With
synergies arising from the full integration of our 2014
acquisitions, coupled with other operational efficiencies and
legislation that provides for greater reimbursement stability, we
are well positioned for future growth. We expect our momentum
to grow throughout the year and are on track to achieve
profitability for the full year 2015.”
First Quarter Financial Results
Revenue for the first quarter 2015 was $43.4 million compared to
$37.2 million for the first quarter 2014, an increase of 17% or
$6.2 million. Approximately half of the increase resulted
from the full quarter impact of the Mednet and BMS acquisitions
that occurred in the first and second quarters of 2014,
respectively. Excluding this impact from the acquisitions,
the remaining increase was due to over 8% organic patient volume
growth and an increase in the study volume in the Research Services
segment. For the three months ended March 31, 2015, patient
revenue was comprised of 41.3% Medicare and 58.7% commercial.
Gross profit for the first quarter 2015 increased to $25.2
million, or 58.1% of revenue, compared to $21.6 million, or 58.2%
of revenue, in the first quarter 2014. The increase of $3.6
million was due to the 17% increase in revenue. While our
gross margin percentage was essentially flat year over year, there
was a 250 basis point reduction due to the full quarter impact of
the lower margin patient mix from the 2014 acquisitions offset by
an equivalent benefit from operating efficiencies.
On a GAAP basis, operating expenses for the first quarter 2015
were $24.8 million, a decrease of 2%, compared to $25.3 million in
the first quarter 2014. On an adjusted basis, operating
expenses for the first quarter were $22.9 million, a 2.4% increase
compared to $22.4 million for the prior year quarter. These
adjusted operating expenses exclude $1.9 million in the first
quarter 2015 and $3.0 million in the first quarter 2014 related to
integration, restructuring and other charges. The increase in
adjusted operating expenses was due to the addition of Mednet and
BMS in 2014.
On a GAAP basis, interest and other loss, net for the first
quarter 2015 was $0.4 million, compared to $3.3 million in the
first quarter 2014. During the first quarter 2014, the
Company began negotiations for a potential settlement with the U.S.
Department of Justice regarding the Civil Investigative Demand
issued in August 2011. As a result, the Company recorded a
reserve of $3.1 million as a non-operating charge in the first
quarter 2014. The Company subsequently finalized this
settlement in the first quarter 2015. Excluding this reserve,
interest and other loss, net for the first quarter 2015 increased
$0.2 million compared to the first quarter 2014 due to additional
interest from the expanded debt capacity that the Company secured
at the end of 2014.
On a GAAP basis, net loss for the first quarter 2015 was $0.1
million, or a loss of $0.00 per diluted share, compared to a net
loss of $4.1 million, or a loss of $0.16 per diluted share, for the
first quarter 2014. Excluding expenses related to
integration, restructuring and other charges, adjusted net income
for the first quarter 2015 was $1.8 million, or $0.06 per diluted
share. This compares to an adjusted net loss of $0.9 million,
or a loss of $0.04 per diluted share, for the first quarter 2014,
which excludes the impact of integration, restructuring and other
charges.
Liquidity
As of March 31, 2015, total cash was $12.3 million, a decrease
of $7.7 million compared to December 31, 2014. The
significant cash uses during the first quarter 2015 included the
$6.4 million settlement with the Department of Justice and $2.1
million for capital expenditures, primarily for medical
devices. Consolidated days sales outstanding remains at 51
days, the same as year-end 2014.
Conference
Call
BioTelemetry, Inc. will host an earnings conference call on
Wednesday, May 6, 2015, 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, Biomedical Systems
and Radcore businesses 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 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
31,2015 |
|
March
31,2014 |
|
|
|
|
|
Revenues |
$ |
43,435 |
|
|
$ |
37,162 |
|
Cost of
revenues |
|
18,212 |
|
|
|
15,518 |
|
Gross
profit |
|
25,223 |
|
|
|
21,644 |
|
Gross
profit % |
|
58.1 |
% |
|
|
58.2 |
% |
|
|
|
|
|
Operating
expenses: |
|
|
|
General and administrative expense |
|
11,397 |
|
|
|
10,772 |
|
Sales and marketing expense |
|
7,183 |
|
|
|
7,440 |
|
Bad debt expense |
|
2,349 |
|
|
|
2,359 |
|
Research and development expense |
|
1,965 |
|
|
|
1,789 |
|
Integration, restructuring and other charges |
|
1,860 |
|
|
|
2,980 |
|
Total
operating expenses |
|
24,754 |
|
|
|
25,340 |
|
|
|
|
|
|
Income
(loss) from operations |
|
469 |
|
|
|
(3,696 |
) |
Interest
and other loss, net |
|
(390 |
) |
|
|
(3,271 |
) |
|
|
|
|
|
Income
(loss) before income taxes |
|
79 |
|
|
|
(6,967 |
) |
(Loss)
benefit from income taxes |
|
(148 |
) |
|
|
2,845 |
|
Net
loss |
$ |
(69 |
) |
|
$ |
(4,122 |
) |
|
|
|
|
|
Net loss
per share (a): |
|
|
|
Basic |
$ |
(0.00 |
) |
|
$ |
(0.16 |
) |
Diluted |
$ |
(0.00 |
) |
|
$ |
(0.16 |
) |
|
|
|
|
Weighted
average number of common shares outstanding (a): |
|
|
|
Basic |
|
26,935 |
|
|
|
26,111 |
|
Diluted |
|
26,935 |
|
|
|
26,111 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Basic net loss per share is computed by dividing net loss by
the weighted average number of fully vested common shares
outstanding during the period. Diluted net loss per share is
computed by giving effect to all potential dilutive common shares,
including stock options, and restricted stock units (“RSUs”).
If the outstanding vested options or RSUs were exercised or
converted into common stock, the result would be anti‑dilutive for
the quarters ended March 31, 2015 and 2014. Accordingly,
basic and diluted net loss per share are the same for the quarters
ended March 31, 2015 and 2014. Please refer to the
reconciliation of Non-GAAP Financial Measures for diluted share
count information for the quarter ended March 31, 2015.
Summary Financial Data |
|
(In
Thousands) |
|
|
|
|
|
|
March 31, 2015 |
|
December 31, 2014 |
|
|
(unaudited) |
|
(unaudited) |
|
|
|
|
|
|
Cash and
investments |
$ |
12,293 |
|
|
$ |
20,007 |
|
|
Patient
accounts receivable, net |
|
14,968 |
|
|
|
15,184 |
|
|
Other
accounts receivable, net |
|
10,188 |
|
|
|
9,362 |
|
|
Days sales
outstanding |
|
51 |
|
|
|
51 |
|
|
Working
capital |
|
14,773 |
|
|
|
14,150 |
|
|
Total
assets |
|
117,163 |
|
|
|
124,778 |
|
|
Total
debt |
|
25,000 |
|
|
|
25,000 |
|
|
Total
shareholders’ equity |
|
64,051 |
|
|
|
63,676 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
31,2015 |
|
March
31,2014 |
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations – GAAP |
$ |
469 |
|
|
$ |
(3,696 |
) |
|
|
Nonrecurring charges
(a) |
|
1,860 |
|
|
|
2,980 |
|
|
|
Adjusted income
(loss) from operations |
$ |
2,329 |
|
|
$ |
(716 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss –
GAAP |
$ |
(69 |
) |
|
$ |
(4,122 |
) |
|
|
Nonrecurring charges
(b) |
|
1,860 |
|
|
|
3,204 |
|
|
|
Adjusted net
income (loss) |
$ |
1,791 |
|
|
$ |
(918 |
) |
|
|
|
|
|
|
|
|
Net loss per share –
GAAP |
$ |
(0.00 |
) |
|
$ |
(0.16 |
) |
|
|
Nonrecurring charges
per share (b) |
|
0.06 |
|
|
|
0.12 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income (loss) per diluted share |
$ |
0.06 |
|
|
$ |
(0.04 |
) |
|
|
|
|
|
|
|
|
Weighted average number
of common shares |
|
|
|
|
|
outstanding -
diluted |
|
28,828 |
|
|
|
26,111 |
|
|
|
(a) In the first quarter 2015, the Company incurred $1.9 million
of integration, restructuring and other charges primarily due to
legal fees related to patent litigation and costs related to the
integration of the Mednet and Biomedical Systems patient services
acquisitions. In the first quarter 2014, the Company incurred
$3.0 million related to integration, restructuring and other
charges primarily due to legal fees related to patent litigation
and the Department of Justice Civil Investigative Demand as well as
acquisition and integration costs related to the Mednet and
Biomedical Systems patient services acquisitions.
(b) In the first quarter 2014, in addition to the $3.0 million
of integration, restructuring and other charges incurred, the
Company recorded a non-operating charge of $3.1 million for the
potential settlement of the Department of Justice Civil
Investigative Demand which was partially offset by a $2.9 million
tax benefit related to the acquisition of Mednet. The
Department of Justice settlement was finalized in the first quarter
2015.
|
Three Months Ended |
|
|
(unaudited) |
|
|
|
|
|
|
|
March
31,2015 |
|
March
31,2014 |
|
|
|
|
|
|
Net cash used in
operating activities |
$ |
(4,606 |
) |
|
$ |
(2,060 |
) |
|
Capital
expenditures |
|
(2,072 |
) |
|
|
(3,859 |
) |
|
Free cash flow |
$ |
(6,678 |
) |
|
$ |
(5,919 |
) |
|
|
Three Months Ended |
|
|
(unaudited) |
|
|
|
|
|
|
March
31,2015 |
|
March
31,2014 |
|
|
|
|
|
|
Income (loss) from
operations – GAAP |
$ |
469 |
|
|
$ |
(3,696 |
) |
|
Nonrecurring
charges |
|
1,860 |
|
|
|
2,980 |
|
|
Depreciation and
amortization expense |
|
2,952 |
|
|
|
2,753 |
|
|
Stock compensation
expense |
|
1,120 |
|
|
|
1,003 |
|
|
Adjusted EBITDA |
$ |
6,401 |
|
|
$ |
3,040 |
|
|
BioTelemetry, Inc.
Heather C. Getz
Investor Relations
800-908-7103
investorrelations@biotelinc.com
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