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 second quarter ended June 30, 2019.
Quarter Highlights
- Recognized record quarterly revenue of $111.8 million
- Reached 10.3% year-over-year revenue growth
- Achieved 28th consecutive quarter of year-over-year revenue
growth
- Reported GAAP net income of $8.3 million
- Realized quarterly adjusted EBITDA of $31.6 million, or 28.3%
of revenue
- Acquired Sweden-based ADEA Medical AB
President and CEO Commentary
Joseph H. Capper, President and Chief Executive Officer of
BioTelemetry, Inc., commented: “Our growth momentum continued in
the second quarter, with revenue growth of 10%, enabling us to
achieve the high end of our guidance. This revenue growth was
once again primarily driven by the strong demand for our MCT and
extended Holter services as well as the addition of the monitoring
revenue from Geneva, which we acquired in the first quarter.
Our revenue also benefitted from double-digit growth in our
Research and digital population health businesses due to increased
volumes. In addition to our strong topline growth, we also
realized another quarter of record adjusted EBITDA, which exceeded
our expectations. This is a result of our continued focus on
process improvements and investments to streamline our operations.
“As we look forward, we are constantly evaluating
growth opportunities, both in our current markets as well as in new
areas. This led us to the acquisitions of Geneva in the first
quarter and ADEA Medical in June. The addition of Geneva has
allowed us to extend our reach into the monitoring of implantable
cardiac devices, such as defibrillators and loop recorders.
We now offer the most comprehensive suite of cardiac monitoring
services of any company in the world. Additionally, the
acquisition of ADEA Medical allows us to deliver our services to
the European market. We are excited about the growth
potential both of these acquisitions provide the organization in
the near term and expect these ventures to help lead the
organization into the future.”
Second Quarter Financial Results
Revenue for the second quarter 2019 was $111.8 million compared
to $101.4 million for the second quarter 2018, an increase of $10.4
million, or 10.3%.
Gross profit for the second quarter 2019 was $70.2 million, or
62.8% of revenue, compared to $65.8 million, or 64.9% of revenue,
for the second quarter 2018.
On a GAAP basis, net income attributable to BioTelemetry, Inc.
for the second quarter 2019 was $8.3 million, or $0.23 per diluted
share, compared to net income attributable to BioTelemetry, Inc. of
$10.4 million, or $0.29 per diluted share, for the second quarter
2018. The decline in net income attributable to BioTelemetry,
Inc. is primarily due to a $6.3 million increase in income tax
expense, with a prior year tax benefit from discrete items,
partially offset by the positive impact of the increased
revenue. While the Company’s expected annual effective tax
rate is approximately 21%, as a result of the utilization of net
operating loss carryforwards, the Company will only use
approximately $2.0 million of cash for taxes in 2019.
On an adjusted basis1, net income attributable to BioTelemetry,
Inc. for the second quarter 2019 was $19.4 million, or $0.53 per
diluted share. This compares to adjusted net income
attributable to BioTelemetry, Inc. of $16.3 million, or $0.46 per
diluted share, for the second quarter 2018. This increase was
driven by revenue growth as well as increased expense
leverage. 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
Tuesday, July 30, 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 laboratory 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 and ADEA Medical’s growth
and the success of the combined entity, our ability to increase
demand for our products and services, to grow our market share, to
expand in the European market 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. GetzInvestor RelationsExecutive Vice
President, Chief Financial
Officer800-908-7103investorrelations@biotelinc.com
BioTelemetry, Inc. |
Consolidated Statements of Operations |
(in thousands, except per share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended
June 30, |
|
|
|
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Revenues |
|
$ |
111,803 |
|
|
$ |
101,360 |
|
|
$ |
215,782 |
|
|
$ |
195,856 |
|
Cost of revenues |
|
|
41,563 |
|
|
|
35,605 |
|
|
|
80,764 |
|
|
|
72,053 |
|
Gross profit |
|
|
70,240 |
|
|
|
65,755 |
|
|
|
135,018 |
|
|
|
123,803 |
|
Gross profit % |
|
|
62.8 |
% |
|
|
64.9 |
% |
|
|
62.6 |
% |
|
|
63.2 |
% |
|
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
General and administrative |
|
|
30,587 |
|
|
|
28,741 |
|
|
|
58,194 |
|
|
|
55,460 |
|
Sales and marketing |
|
|
12,795 |
|
|
|
11,075 |
|
|
|
25,235 |
|
|
|
22,415 |
|
Bad debt expense |
|
|
5,379 |
|
|
|
6,875 |
|
|
|
10,527 |
|
|
|
11,754 |
|
Research and development |
|
|
3,532 |
|
|
|
2,733 |
|
|
|
6,865 |
|
|
|
6,022 |
|
Other charges |
|
|
2,234 |
|
|
|
5,208 |
|
|
|
5,304 |
|
|
|
10,293 |
|
Total operating
expenses |
|
|
54,527 |
|
|
|
54,632 |
|
|
|
106,125 |
|
|
|
105,944 |
|
|
|
|
|
|
|
|
|
|
Income from operations |
|
|
15,713 |
|
|
|
11,123 |
|
|
|
28,893 |
|
|
|
17,859 |
|
|
|
|
|
|
|
|
|
|
Other
expense: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(2,538 |
) |
|
|
(2,684 |
) |
|
|
(5,020 |
) |
|
|
(4,574 |
) |
Loss on equity method investment |
|
|
(154 |
) |
|
|
(45 |
) |
|
|
(186 |
) |
|
|
(184 |
) |
Other non-operating income/(expense), net |
|
86 |
|
|
|
550 |
|
|
|
(968 |
) |
|
|
737 |
|
Total other
expense |
|
|
(2,606 |
) |
|
|
(2,179 |
) |
|
|
(6,174 |
) |
|
|
(4,021 |
) |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
13,107 |
|
|
|
8,944 |
|
|
|
22,719 |
|
|
|
13,838 |
|
(Provision for)/benefit from
income taxes |
|
|
(4,807 |
) |
|
|
1,500 |
|
|
|
(2,734 |
) |
|
|
1,642 |
|
Net
income |
|
|
8,300 |
|
|
|
10,444 |
|
|
|
19,985 |
|
|
|
15,480 |
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to noncontrolling interests |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(946 |
) |
|
|
|
|
|
|
|
|
|
Net income
attributable to BioTelemetry, Inc. |
|
$ |
8,300 |
|
|
$ |
10,444 |
|
|
$ |
19,985 |
|
|
$ |
16,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share
attributable to BioTelemetry, Inc.: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.25 |
|
|
$ |
0.32 |
|
|
$ |
0.59 |
|
|
$ |
0.51 |
|
Diluted |
|
$ |
0.23 |
|
|
$ |
0.29 |
|
|
$ |
0.55 |
|
|
$ |
0.46 |
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
33,825 |
|
|
|
32,435 |
|
|
|
33,806 |
|
|
|
32,227 |
|
Diluted |
|
|
36,318 |
|
|
|
35,578 |
|
|
|
36,444 |
|
|
|
35,414 |
|
|
|
|
|
|
|
|
|
|
BioTelemetry, Inc. |
Summary Balance Sheet |
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
June 30, |
|
December 31, |
|
|
|
2019 |
|
|
2018 |
ASSETS |
|
|
|
|
Current
assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
51,712 |
|
$ |
80,889 |
Healthcare accounts receivable, net |
|
|
48,307 |
|
|
37,754 |
Other accounts receivable, net |
|
|
15,026 |
|
|
14,874 |
Inventory |
|
|
6,037 |
|
|
7,323 |
Prepaid expenses and other current assets |
|
|
8,925 |
|
|
5,820 |
Total current
assets |
|
|
130,007 |
|
|
146,660 |
|
|
|
|
|
Property and equipment, net |
|
|
54,289 |
|
|
48,377 |
Intangible assets, net |
|
|
137,530 |
|
|
129,653 |
Goodwill |
|
|
303,981 |
|
|
238,814 |
Deferred tax asset |
|
|
16,116 |
|
|
19,975 |
Other assets |
|
|
22,238 |
|
|
3,322 |
Total
assets |
|
$ |
664,161 |
|
$ |
586,801 |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts payable |
|
$ |
22,484 |
|
$ |
18,157 |
Accrued liabilities |
|
|
25,927 |
|
|
24,689 |
Current portion of finance lease obligations |
|
|
590 |
|
|
1,652 |
Current portion of long-term debt |
|
|
10,250 |
|
|
5,125 |
Total current
liabilities |
|
|
59,251 |
|
|
49,623 |
|
|
|
|
|
Long-term portion of finance lease obligations |
|
|
419 |
|
|
117 |
Long-term debt |
|
|
186,358 |
|
|
193,424 |
Other long-term liabilities |
|
|
71,294 |
|
|
33,152 |
Total
liabilities |
|
|
317,322 |
|
|
276,316 |
|
|
|
|
|
Total
equity |
|
|
346,839 |
|
|
310,485 |
|
|
|
|
|
Total liabilities and
equity |
|
$ |
664,161 |
|
$ |
586,801 |
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP
Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
(unaudited) |
|
June 30, 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 |
|
$ |
15,713 |
|
$ |
13,107 |
|
|
$ |
8,300 |
|
|
$ |
0.23 |
|
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Other charges (a) |
|
|
2,234 |
|
|
2,234 |
|
|
|
2,234 |
|
|
|
|
|
|
Acquisition amortization
(b) |
|
|
3,812 |
|
|
3,812 |
|
|
|
3,812 |
|
|
|
|
|
|
Other expense (c) |
|
|
- |
|
802 |
|
|
|
802 |
|
|
|
|
|
|
Interest expense on contingent
consideration (d) |
|
|
- |
|
130 |
|
|
|
130 |
|
|
|
|
|
|
Income tax effect of
adjustments (e) |
|
|
- |
|
- |
|
|
|
(1,442 |
) |
|
|
|
|
|
Impact of NOL utilization
(f) |
|
|
- |
|
- |
|
|
|
5,580 |
|
|
|
|
|
Non-GAAP
Adjusted |
|
$ |
21,759 |
|
$ |
20,085 |
|
|
$ |
19,416 |
|
|
$ |
0.53 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
(unaudited) |
|
June 30, 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 |
|
$ |
11,123 |
|
$ |
8,944 |
|
|
$ |
10,444 |
|
|
$ |
0.29 |
|
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Other charges (a) |
|
|
5,208 |
|
|
5,208 |
|
|
|
5,208 |
|
|
|
|
|
|
Acquisition amortization
(b) |
|
|
3,350 |
|
|
3,350 |
|
|
|
3,350 |
|
|
|
|
|
|
Other expense (c) |
|
|
- |
|
|
(748 |
) |
|
|
(748 |
) |
|
|
|
|
|
Income tax effect of
adjustments (e) |
|
|
- |
|
|
- |
|
|
|
(1,931 |
) |
|
|
|
|
Non-GAAP
Adjusted |
|
$ |
19,681 |
|
$ |
16,754 |
|
|
$ |
16,323 |
|
|
$ |
0.46 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Financial
Measures
- In the second quarter 2019, other charges of $2.2 million were
primarily due to $2.6 million of patent litigation and other legal
costs and $1.2 million of integration expense related to the
acquisition of Geneva Healthcare partially offset by a $1.8 million
reduction in contingent consideration related to Geneva
Healthcare. In the second quarter 2018, other charges of $5.2
million consisted of $2.2 million related to the integration of the
LifeWatch acquisition, a $1.8 million reserve for a note receivable
with a bankrupt customer, $0.8 million for patent litigation and
$0.4 million of other expense including legal and
depreciation.
- In the second quarter 2019 and the second quarter 2018, we
recognized $3.8 million and $3.4 million of expense, respectively,
related to the amortization of intangibles as a result of the
LifeWatch and Geneva Healthcare acquisitions. We have
excluded this 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.
- In the second quarter 2019, we had an unrealized foreign
exchange loss of $1.5 million partially offset by a $0.7 million
gain associated with the termination of a former LifeWatch foreign
pension plan. In the second quarter 2018, we incurred $0.3
million of interest related to a ruling on an arbitration demand
filed against LifeWatch prior to the acquisition. This was
offset by an unrealized foreign exchange gain of $1.0
million.
- In the second quarter 2019, we incurred $0.1 million of
interest expense related to a portion of the Geneva Healthcare
contingent consideration.
- Represents the tax effect of the non-GAAP adjustments at the
Company’s annual effective tax rate.
- After giving effect to taxes at the estimated annual effective
tax rate on the adjustments, the utilization of net operating loss
carryforwards had a $5.6 million positive impact on the second
quarter 2019.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
(unaudited) |
|
June 30, 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 |
|
$ |
28,893 |
|
$ |
22,719 |
|
|
$ |
19,985 |
|
|
$ |
0.55 |
|
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Other charges (a) |
|
|
5,304 |
|
|
5,304 |
|
|
|
5,304 |
|
|
|
|
|
|
Acquisition amortization
(b) |
|
|
7,074 |
|
|
7,074 |
|
|
|
7,074 |
|
|
|
|
|
|
Other expense adjustments
(c) |
|
|
- |
|
|
802 |
|
|
|
802 |
|
|
|
|
|
|
Interest expense on contingent
consideration (d) |
|
|
- |
|
|
130 |
|
|
|
130 |
|
|
|
|
|
|
Income tax effect of
adjustments (e) |
|
|
- |
|
|
|
|
(2,751 |
) |
|
|
|
|
|
Impact of NOL utilization
(f) |
|
|
- |
|
|
- |
|
|
|
4,081 |
|
|
|
|
|
Non-GAAP
Adjusted |
|
$ |
41,271 |
|
$ |
36,029 |
|
|
$ |
34,625 |
|
|
$ |
0.95 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
(unaudited) |
|
June 30, 2018 |
|
|
(in thousands, except per share data) |
|
Income (loss) from Operations |
|
Income (loss) before Income Taxes |
|
Net income attributable to BioTelemetry, Inc. |
|
Net income per diluted share attributable to BioTelemetry
Inc. |
|
|
GAAP |
|
$ |
17,859 |
|
$ |
13,838 |
|
|
$ |
16,426 |
|
|
$ |
0.46 |
|
|
Non-GAAP
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Other charges (a) |
|
|
10,293 |
|
|
10,293 |
|
|
|
10,293 |
|
|
|
|
|
|
Acquisition amortization
(b) |
|
|
6,585 |
|
|
6,585 |
|
|
|
6,585 |
|
|
|
|
|
|
Other expense adjustments
(c) |
|
|
- |
|
|
(748 |
) |
|
|
(748 |
) |
|
|
|
|
|
Income tax effect of
adjustments (e) |
|
|
- |
|
|
- |
|
|
|
(2,364 |
) |
|
|
|
|
Non-GAAP
Adjusted |
|
$ |
34,737 |
|
$ |
29,968 |
|
|
$ |
30,192 |
|
|
$ |
0.85 |
|
|
|
|
|
|
|
|
|
|
|
|
|
- For the six months ended June 30, 2019, other charges of $5.3
million were due primarily to $3.7 million of patent litigation and
other legal costs, $2.6 million of deal-related costs for the
acquisition of Geneva Healthcare, and $0.8 million of expense
related to prior acquisitions and other restructuring activities,
partially offset by a $1.8 million reduction in contingent
consideration related to Geneva Healthcare. For the six
months ended June 30, 2018, other charges of $10.3 million
consisted of $7.2 million for integration and restructuring
activities related to the LifeWatch acquisition, $1.2 million for
patent litigation, a $1.8 million reserve for a note receivable
with a bankrupt customer and $0.6 million of other costs primarily
related to previous acquisitions, partially offset by a $0.7
million reduction in contingent consideration related to a 2016
acquisition.
- For the six months ended June 30, 2019 and June 30, 2018, we
recognized $7.1 million and $6.6 million of expense, respectively,
related to the amortization of intangibles as a result of the
LifeWatch and Geneva Healthcare acquisitions. We have
excluded this 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.
- For the six months ended June 30, 2019, we had an unrealized
foreign exchange loss of $1.5 million partially offset by a $0.7
million gain associated with the termination of a former LifeWatch
foreign pension plan. For the six months ended June 30,
2018, we incurred $0.3 million of interest related to a ruling on
an arbitration demand filed against LifeWatch prior to the
acquisition. This was offset by an unrealized foreign
exchange gain of $1.0 million. These expenses were recorded as a
component of other expense.
- For the six months ended June 30, 2019, we incurred $0.1
million of interest expense related to a portion of the Geneva
Healthcare contingent consideration.
- Represents the tax effect of the non-GAAP adjustments at the
Company’s annual effective tax rate.
- After giving effect to taxes at the estimated annual effective
tax rate on the adjustments, the utilization of net operating loss
carryforwards had a $4.1 million positive impact on the six months
ended June 30, 2019.
|
(unaudited) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(in thousands) |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Net income
attributable to BioTelemetry – GAAP |
|
$ |
8,300 |
|
|
$ |
10,444 |
|
|
$ |
19,985 |
|
|
$ |
16,426 |
|
Net loss attributable to
noncontrolling interest |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(946 |
) |
Provision for/(benefit from)
income taxes |
|
|
4,807 |
|
|
|
(1,500 |
) |
|
|
2,734 |
|
|
|
(1,642 |
) |
Total other expense |
|
|
2,606 |
|
|
|
2,179 |
|
|
|
6,174 |
|
|
|
4,021 |
|
Other charges |
|
|
2,234 |
|
|
|
5,208 |
|
|
|
5,304 |
|
|
|
10,293 |
|
Depreciation and amortization
expense (a) |
|
|
10,192 |
|
|
|
9,937 |
|
|
|
20,213 |
|
|
|
19,694 |
|
Stock compensation
expense |
|
|
3,477 |
|
|
|
2,858 |
|
|
|
6,026 |
|
|
|
4,923 |
|
Adjusted
EBITDA |
|
$ |
31,616 |
|
|
$ |
29,126 |
|
|
$ |
60,436 |
|
|
$ |
52,769 |
|
Adjusted EBITDA margin |
|
|
28.3 |
% |
|
|
28.7 |
% |
|
|
28.0 |
% |
|
|
26.9 |
% |
|
|
|
|
|
|
|
|
|
- For the three months ended June 30, 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. For the six months
ended June 30, 2018, depreciation and amortization expense excludes
$0.2 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.
Summary Cash Flow Data |
|
|
|
|
|
|
|
|
|
(unaudited) |
|
Three Months Ended June 30, |
|
Six Months Ended
June 30, |
|
|
|
(in thousands) |
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Cash provided by operating
activities |
|
$ |
19,298 |
|
|
$ |
7,062 |
|
|
$ |
36,130 |
|
|
$ |
16,136 |
|
Capital expenditures |
|
|
(10,758 |
) |
|
|
(5,999 |
) |
|
|
(16,092 |
) |
|
|
(9,937 |
) |
Free cash flow |
|
$ |
8,540 |
|
|
$ |
1,063 |
|
|
$ |
20,038 |
|
|
$ |
6,199 |
|
|
|
|
|
|
|
|
|
|
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
second quarter 2019 excludes other charges of $2.2 million, $3.8
million of amortization expense related to LifeWatch and Geneva
Healthcare intangibles, $1.5 million of unrealized foreign currency
loss, $0.1 million of interest expense related to a portion of the
Geneva Healthcare contingent consideration, a $0.7 million gain
associated with the termination of a former LifeWatch foreign
pension plan, the tax effect of these adjustments as well as the
impact from the utilization of our net operating loss
carryforwards. Adjusted net income attributable to
BioTelemetry, Inc. for the second quarter 2018 excludes other
charges of $5.2 million, $3.4 million of amortization expense
related to LifeWatch intangibles, $0.3 million of interest related
to a ruling on an arbitration demand filed against LifeWatch prior
to the acquisition as well as an unrealized foreign exchange gain
of $1.0 million. 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 and Geneva acquisitions, 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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