Achieves Record Quarterly Revenue
BioTelemetry, Inc. (NASDAQ:BEAT), the leading remote 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, 2019.
Quarter Highlights
- Recognized record quarterly revenue of $104.0 million
- Reached 10.0% year-over-year revenue growth
- Achieved 27th consecutive quarter of year-over-year revenue
growth
- Reported GAAP net income of $11.7 million
- Realized quarterly adjusted EBITDA of $28.8 million, or 27.7%
of revenue
- Completed the acquisition of Geneva Healthcare
- Raises full year 2019 revenue guidance to $446 to $450
million
President and CEO Commentary
Joseph H. Capper, President and Chief Executive Officer of
BioTelemetry, Inc., commented: “The first quarter was another great
quarter with record revenue and a strong adjusted EBITDA margin,
both of which were in line with our expectations. Demand for
our services remained strong with MCT and extended Holter services
driving patient volume growth as well as a 9% increase in
Healthcare revenue. Additionally, our Research division
posted double-digit revenue growth while our digital population
health business benefitted from the launch of a significant new
managed care partnership.
“During the quarter, we completed the acquisition of Geneva
Healthcare, extending our remote cardiac monitoring reach into the
$1 billion implantable cardiac monitoring market. We believe
this transaction further reinforces our growth strategy and
provides significant revenue upside for the company. Our
excitement about Geneva continues to grow based on its early
performance and the tremendous interest being generated from our
top customers. We expect the combination of the benefits from
the Geneva platform and our unmatched portfolio of remote cardiac
monitoring services to further solidify our leadership position in
cardiac monitoring.
“BioTelemetry is in the best position ever to address the needs
of our patients and practices. Looking forward, we expect the
addition of Geneva and our ongoing investments in our sales and
technology areas to make 2019 another record year for the
Company. As a result, we are raising our full year 2019
revenue guidance to be in the range of $446 to $450
million.”
First Quarter Financial Results
Revenue for the first quarter 2019 was $104.0 million compared
to $94.5 million for the first quarter 2018, an increase of $9.5
million, or 10.0%.
Gross profit for the first quarter 2019 was $64.8 million, or
62.3% of revenue, compared to $58.0 million, or 61.4% of revenue,
for the first quarter 2018.
On a GAAP basis, net income attributable to BioTelemetry, Inc.
for the first quarter 2019 was $11.7 million, or $0.32 per diluted
share, compared to net income attributable to BioTelemetry, Inc. of
$6.0 million, or $0.17 per diluted share, for the first quarter
2018.
On an adjusted basis1, net income attributable to BioTelemetry,
Inc. for the first quarter 2019 was $15.2 million, or $0.42 per
diluted share. This compares to adjusted net income
attributable to BioTelemetry, Inc. of $13.9 million, or $0.39 per
diluted share, for the first quarter 2018. This increase was
driven by revenue growth as well as the benefit of the synergies
gained from the integration of LifeWatch. The details
regarding adjusted net income are included in the reconciliation
tables included in this release.
1 The Company believes that providing non-GAAP financial
measures offers a meaningful representation of our performance, as
we exclude expenses that are not necessary to support our ongoing
business. We also make adjustments to facilitate year over
year comparisons. Please refer to our “Reconciliation of GAAP
to Non-GAAP Financial Measures” in this release for additional
information.
Conference Call
BioTelemetry, Inc. will host an earnings conference call on
Thursday, April 25, 2019, at 5:00 PM Eastern Time. The call
will be webcast on the investor information page of our website,
www.gobio.com/investors/events. The call will be archived on
our website for two weeks.
About BioTelemetry
BioTelemetry, Inc. is the leading remote medical technology
company focused on delivery of health information to improve
quality of life and reduce cost of care. We provide remote
cardiac monitoring, remote blood glucose monitoring, centralized
core lab services for clinical trials and original equipment
manufacturing that serves both healthcare and clinical research
customers. More information can be found at
www.gobio.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 our 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. Examples of forward-looking statements
include statements we make regarding the successful execution of
our operating plan, Geneva Healthcare’s actual and expected
annualized revenue and profitability and the growth and success of
the combined entity, our ability to increase demand for our
products and services, to grow our market share and our
expectations regarding revenue trends in our segments. 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 identify acquisition candidates,
acquire them on attractive terms and integrate their operations
into our business; our ability to educate physicians and continue
to obtain prescriptions for our products and services; changes to
insurance coverage and reimbursement levels by Medicare and
commercial payors for our products and services; our ability to
attract and retain talented executive management and sales
personnel; the commercialization of new competitive products; our
ability to obtain and maintain required regulatory approvals for
our products, services and manufacturing facilities; changes in
governmental regulations and legislation; our ability to obtain and
maintain adequate protection of our intellectual property;
acceptance of our new products and services; adverse regulatory
action; interruptions or delays in the telecommunications systems
that we use; our ability to successfully resolve outstanding legal
proceedings; and the other factors that are described in
“Part I; Item 1A. Risk Factors” of our
Annual Report on Form 10-K for the year ended December 31,
2018.
We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future events, or otherwise, except as may be required by law.
Contact: BioTelemetry, Inc.
Heather C.
Getz
Investor Relations
Executive Vice President, Chief Financial
Officer
800-908-7103
investorrelations@biotelinc.com
BioTelemetry,
Inc. |
Condensed
Consolidated Statements of Operations |
|
|
|
|
|
Three Months
Ended |
|
|
March
31, |
|
|
(unaudited) |
(in thousands,
except per share data) |
|
2019 |
|
2018 |
Revenues |
|
$ |
103,979 |
|
|
$ |
94,496 |
|
Cost of revenues |
|
|
39,201 |
|
|
|
36,448 |
|
Gross profit |
|
|
64,778 |
|
|
|
58,048 |
|
Gross profit % |
|
|
62.3 |
% |
|
|
61.4 |
% |
|
|
|
|
|
Operating
expenses: |
|
|
|
|
General
and administrative |
|
|
27,607 |
|
|
|
26,719 |
|
Sales and
marketing |
|
|
12,440 |
|
|
|
11,340 |
|
Bad debt
expense |
|
|
5,148 |
|
|
|
4,879 |
|
Research
and development |
|
|
3,333 |
|
|
|
3,289 |
|
Other
charges |
|
|
3,070 |
|
|
|
5,085 |
|
Total operating
expenses |
|
|
51,598 |
|
|
|
51,312 |
|
|
|
|
|
|
Income from
operations |
|
|
13,180 |
|
|
|
6,736 |
|
|
|
|
|
|
Other
expense: |
|
|
|
|
Interest
expense |
|
|
(2,482 |
) |
|
|
(1,890 |
) |
Loss on
equity method investment |
|
|
(32 |
) |
|
|
(139 |
) |
Other non-operating (expense)/income, net |
|
(1,054 |
) |
|
|
187 |
|
Total other
expense |
|
|
(3,568 |
) |
|
|
(1,842 |
) |
|
|
|
|
|
Income before
income taxes |
|
|
9,612 |
|
|
|
4,894 |
|
Benefit from income
taxes |
|
|
2,073 |
|
|
|
142 |
|
Net
income |
|
|
11,685 |
|
|
|
5,036 |
|
|
|
|
|
|
Net loss
attributable to noncontrolling interests |
|
- |
|
|
|
(946 |
) |
|
|
|
|
|
Net income
attributable to BioTelemetry, Inc. |
|
$ |
11,685 |
|
|
$ |
5,982 |
|
|
|
|
|
|
|
|
|
|
|
Net income per
share attributable to BioTelemetry, Inc.: |
|
|
|
|
Basic |
|
$ |
0.35 |
|
|
$ |
0.18 |
|
Diluted |
|
$ |
0.32 |
|
|
$ |
0.17 |
|
|
|
|
|
|
Weighted
average number of common shares outstanding: |
|
|
|
|
Basic |
|
|
33,654 |
|
|
|
32,570 |
|
Diluted |
|
|
36,406 |
|
|
|
35,235 |
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP
Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
(Unaudited) |
|
March 31,
2019 |
|
(in thousands, except per share
data) |
|
Income from
operations |
|
Income
before income taxes |
|
Net income
attributable to BioTelemetry, Inc. |
|
Net income
per diluted share attributable to BioTelemetry Inc. |
|
GAAP |
|
$ |
13,180 |
|
$ |
9,612 |
|
$ |
11,685 |
|
|
$ |
0.32 |
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Other charges (a) |
|
|
3,070 |
|
|
3,070 |
|
|
3,070 |
|
|
|
|
|
LifeWatch amortization (b) |
|
|
3,262 |
|
|
3,262 |
|
|
3,262 |
|
|
|
|
|
Income tax effect of adjustments
(c) |
|
- |
- |
|
|
(1,212 |
) |
|
|
|
|
Benefit of discrete items (d) |
|
- |
- |
|
|
(1,596 |
) |
|
|
|
Non-GAAP Adjusted |
|
$ |
19,512 |
|
$ |
15,944 |
|
$ |
15,209 |
|
|
$ |
0.42 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
(Unaudited) |
|
March 31,
2018 |
|
(in thousands, except per share
data) |
|
Income from
Operations |
|
Income
before Income Taxes |
|
Net income
attributable to BioTelemetry, Inc. |
|
Net income
per diluted share attributable to BioTelemetry Inc. |
|
GAAP |
|
$ |
6,736 |
|
$ |
4,894 |
|
$ |
5,982 |
|
|
$ |
0.17 |
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
Other charges (a) |
|
|
5,085 |
|
|
5,085 |
|
|
5,085 |
|
|
|
|
|
LifeWatch amortization (b) |
|
|
3,235 |
|
|
3,235 |
|
|
3,235 |
|
|
|
|
|
Income tax effect of adjustments
(c) |
|
|
- |
|
|
- |
|
|
(2,246 |
) |
|
|
|
|
NOL utilization (d) |
|
|
- |
|
|
- |
|
|
1,813 |
|
|
|
|
Non-GAAP Adjusted |
|
$ |
15,056 |
|
$ |
13,214 |
|
$ |
13,869 |
|
|
$ |
0.39 |
|
|
|
|
|
|
|
|
|
|
|
- In the first quarter 2019, other charges of $3.1 million were
due primarily to $1.4 million of deal-related costs for the
acquisition of Geneva Healthcare, $1.0 million of patent litigation
and other legal costs and $0.5 million of expense related to prior
acquisitions and other restructuring activities. In the first
quarter 2018, the Company incurred $5.1 million of other charges
with $3.2 million related to the consolidation and closure of
certain legacy LifeWatch international locations, $1.8 million of
professional, legal and other costs related to the integration of
LifeWatch, $0.4 million for patent litigation, $0.2 million related
to other restructuring activities and $0.2 million related to the
implementation of the new revenue recognition standard. These
charges were partially offset by a $0.7 million reduction in
contingent consideration related to the Telcare acquisition.
- In the first quarter 2019 and the first quarter 2018, we
recognized $3.3 million and $3.2 million of expense, respectively,
related to the amortization of intangibles as a result of the
LifeWatch acquisition. We have excluded the LifeWatch
amortization of intangibles from adjusted net income due to the
non-operational nature of the expense. This amortization was
recorded as a component of general and administrative
expense.
- Represents the tax effect of the non-GAAP adjustments at the
Company’s effective tax rate.
- For GAAP reporting purposes, we reported a tax benefit of 21.6%
for the first quarter 2019 and a tax benefit of 2.9% for the first
quarter 2018. After giving effect to taxes at the estimated
annual effective tax rate on the adjustments, in the first quarter
2019, the Company is excluding a $1.6 million benefit from discrete
items due primarily to the impact of tax deductions from
stock-based compensation. For the first quarter 2018, the
Company had a $1.8 million positive impact from the utilization of
net operating loss carryforwards.
(Unaudited) |
|
Three
Months Ended March 31, |
(in thousands) |
|
2019 |
|
2018 |
Net income
attributable to BioTelemetry – GAAP |
|
$ |
11,685 |
|
|
$ |
5,982 |
|
Net loss attributable
to noncontrolling interest |
|
|
- |
|
|
|
(946 |
) |
Benefit from income
taxes |
|
|
(2,073 |
) |
|
|
(142 |
) |
Total other
expense |
|
|
3,568 |
|
|
|
1,842 |
|
Other charges |
|
|
3,070 |
|
|
|
5,085 |
|
Depreciation and
amortization expense (a) |
|
|
10,021 |
|
|
|
9,757 |
|
Stock compensation
expense |
|
|
2,549 |
|
|
|
2,065 |
|
Adjusted
EBITDA |
|
$ |
28,820 |
|
|
$ |
23,643 |
|
Adjusted EBITDA
margin |
|
|
27.7 |
% |
|
|
25.0 |
% |
|
|
|
|
|
- For the three months ended March 31, 2018, depreciation and
amortization expense excludes $0.1 million of expense related to
the write-off of assets as a result of the dissolution of entities
acquired as part of the LifeWatch acquisition. This expense is
included in Other charges.
(Unaudited) |
|
Three
Months |
|
|
Ended March
31, |
(in thousands) |
|
2019 |
|
2018 |
Cash provided by
operating activities |
|
$ |
17,544 |
|
|
$ |
9,074 |
|
Capital
expenditures |
|
|
(5,334 |
) |
|
|
(3,938 |
) |
Free cash flow |
|
$ |
12,210 |
|
|
$ |
5,136 |
|
|
|
|
|
|
Use of Non-GAAP Financial Measures
In addition to the results prepared in accordance with generally
accepted accounting principles in the United States, (“GAAP”),
this press release also includes certain financial measures which
have been adjusted and are not in accordance with generally
accepted accounting principles (“Non-GAAP financial
measures”). These Non-GAAP financial measures include
adjusted income from operations, adjusted income before income
taxes, adjusted net income attributable to BioTelemetry, Inc.,
adjusted net income per diluted share attributable to BioTelemetry,
Inc., adjusted EBITDA and free cash flow. In accordance with
Regulation G of the Securities and Exchange Commission, we have
provided a reconciliation of these Non-GAAP financial measures with
the most directly comparable financial measure calculated in
accordance with GAAP.
These Non-GAAP financial measures are not intended to replace
GAAP financial measures. They are presented as supplemental
measures of our performance in an effort to provide our
stakeholders better visibility into our ongoing operating results
and to allow for comparability to prior periods as well as to other
companies’ results. Management uses these Non-GAAP
financial measures to assess the financial health of our
ongoing operating performance. Management encourages our
stakeholders to consider all of our financial measures and to not
rely on any single financial measure to evaluate our
performance.
Adjusted net income attributable to BioTelemetry, Inc. for the
first quarter 2019 excludes other charges of $3.1 million, $3.3
million of amortization expense related to LifeWatch intangibles,
the tax effect of these adjustments as well as the impact of
discrete tax benefits recognized in the quarter. Adjusted net
income attributable to BioTelemetry, Inc. for the first quarter
2018 excludes other charges of $5.1 million, $3.2 million of
amortization expense related to LifeWatch intangibles as well as
the income tax effect of these adjustments and the impact from the
utilization of our net operating loss carryforwards. By
excluding expenses that are considered unnecessary to support the
ongoing business, are nonrecurring in nature or which limit year
over year comparability, we believe these Non-GAAP financial
measures offer a meaningful representation of our ongoing operating
performance. Included in these excluded items are transaction
related expenses, primarily legal and professional fees,
integration related expenses, primarily severance, legal fees
related to patent litigation, amortization of intangibles from the
LifeWatch acquisition, costs related to restructuring programs
aimed at streamlining operations and reducing future expense as
well as other one-time items. These excluded charges are not
part of the ongoing operations, and therefore, not reflective of
our core operations. We view patent litigation as an extreme
measure not typically required in our industry to protect a
company’s intellectual property and which has not been common
practice for us. We commenced patent litigation proceedings
after we uncovered specific evidence of four distinct cases of
misappropriation and infringement. We can choose to resolve
the outstanding matters and terminate the expense at any
time. We also included the income tax effect of these
adjustments.
In addition to adjusted income from operations, adjusted net
income attributable to BioTelemetry, Inc., adjusted net income per
diluted share attributable to BioTelemetry, Inc. and free cash
flow, we also present adjusted EBITDA. This Non-GAAP
financial measure excludes loss from noncontrolling interest,
income taxes, total other expense, other charges, depreciation and
amortization and stock compensation expense. EBITDA is a
widely accepted financial measure which we believe our stakeholders
use to compare our ongoing financial performance to that of other
companies. Adjusting our EBITDA for other charges and other
one-time items is a meaningful financial measure as we believe it
is an indication of our ongoing operations. In addition, we
also add back stock-based compensation expense because it is
non-cash in nature. Other companies in our industry may
calculate adjusted EBITDA in a different manner.
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