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 third quarter ended September 30, 2019.
Quarter Highlights
- Recognized quarterly revenue of $111.3 million
- Reached 11.3% year-over-year revenue growth
- Achieved 29th consecutive quarter of year-over-year revenue
growth
- Reported GAAP net income of $8.3 million
- Realized quarterly adjusted EBITDA of $31.5 million, or 28.3%
of revenue
President and CEO Commentary
Joseph H. Capper, President and Chief Executive Officer of
BioTelemetry, Inc., commented: “The third quarter was another
excellent quarter for BioTelemetry, highlighted by 11% revenue
growth and an adjusted EBITDA margin of 28%. These results
exceeded our expectations and marked the 29th consecutive quarter
of year-over-year growth. Demand remained strong for our
Healthcare services, driven primarily by our extended Holter and
MCT, which accelerated to 11% growth in the third quarter. We
also benefitted from our 2019 acquisitions, Geneva and ADEA
Medical, as well as continued growth in our Research and digital
population health businesses. Our adjusted EBITDA margin also
exceeded our expectations as a result of our continued focus on
operational efficiencies.
“Our momentum was strengthening as we entered the fourth
quarter. However, approximately two weeks ago, we detected
suspicious activity on our information technology network. As part
of our comprehensive response plan, we immediately took certain
systems offline to contain the activity and engaged an outside
forensics team to conduct an independent investigation.
Substantially all systems have resumed, and our technical team
continues to work closely with third-party consultants to further
address this matter. There has been no evidence of any unauthorized
transfer or misuse of customer or employee data. As always,
our primary focus remains our customers and patients.
“This incident did temporarily disrupt our services, which we
expect will impact our fourth quarter results. Given the
information we currently have, we now expect our full year 2019
revenue to be in the range of $435 to $440 million.
“As we close out 2019, we will continue to execute on our proven
growth strategy. Given the strong fundamentals of our core
business, coupled with our acquisitions, which have more than
doubled our addressable market, we expect 2020 to be another
outstanding year with double digit organic growth.”
Third Quarter Financial Results
Revenue for the third quarter 2019 was $111.3 million compared
to $100.0 million for the third quarter 2018, an increase of $11.3
million, or 11.3%.
Gross profit for the third quarter 2019 was $69.3 million, or
62.3% of revenue, compared to $62.7 million, or 62.7% of revenue,
for the third quarter 2018.
On a GAAP basis, net income attributable to BioTelemetry, Inc.
for the third quarter 2019 was $8.3 million, or $0.23 per diluted
share, compared to net income attributable to BioTelemetry, Inc. of
$16.0 million, or $0.45 per diluted share, for the third quarter
2018. The decline in net income attributable to BioTelemetry,
Inc. is primarily due to a $4.7 million increase in income tax
expense, with a prior year tax benefit from discrete items, as well
as the ongoing investments in our salesforce and technology.
While the Company’s expected annual effective tax rate is
approximately 20%, as a result of the utilization of net operating
loss carryforwards, the Company expects to use approximately $1-2
million of cash for taxes in 2019.
On an adjusted basis1, net income attributable to BioTelemetry,
Inc. for the third quarter 2019 was $18.8 million, or $0.52 per
diluted share. This compares to adjusted net income
attributable to BioTelemetry, Inc. of $19.2 million, or $0.53 per
diluted share, for the third quarter 2018. The impact of the
ongoing investments in our salesforce and technology is being
offset by the revenue growth. 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, November 5, 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, centralized core laboratory services for
clinical trials, remote blood glucose monitoring 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, our expectations regarding revenue
trends in our segments, and our growth expectations for 2020.
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; the
outcome of our pending and ongoing incident investigation,
including our discovery of additional information relating to the
incident and our customers’ and other stakeholders’ reactions to
that additional information; costs related the incident
investigation and resulting liabilities; 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, as well as the
factors that are described in “Part II; Item 1A.
Risk Factors” of our Quarterly Report on Form 10-Q for the
quarter ended September 30, 2019.
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
Relations800-908-7103investorrelations@biotelinc.com
|
BioTelemetry, Inc. |
Consolidated
Statements of Operations |
(in
thousands, except per share data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
|
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenues |
|
$ |
111,291 |
|
|
$ |
100,013 |
|
|
$ |
327,073 |
|
|
$ |
295,869 |
|
Cost of
revenues |
|
|
41,952 |
|
|
|
37,276 |
|
|
|
122,716 |
|
|
|
109,329 |
|
Gross
profit |
|
|
69,339 |
|
|
|
62,737 |
|
|
|
204,357 |
|
|
|
186,540 |
|
Gross profit
% |
|
|
62.3 |
% |
|
|
62.7 |
% |
|
|
62.5 |
% |
|
|
63.0 |
% |
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
General and administrative |
|
|
29,651 |
|
|
|
26,325 |
|
|
|
87,845 |
|
|
|
81,785 |
|
Sales and marketing |
|
|
12,572 |
|
|
|
10,120 |
|
|
|
37,807 |
|
|
|
32,535 |
|
Bad debt expense |
|
|
5,858 |
|
|
|
5,157 |
|
|
|
16,385 |
|
|
|
16,911 |
|
Research and development |
|
|
3,661 |
|
|
|
2,429 |
|
|
|
10,526 |
|
|
|
8,451 |
|
Other charges |
|
|
2,598 |
|
|
|
1,330 |
|
|
|
7,902 |
|
|
|
11,623 |
|
Total operating expenses |
|
|
54,340 |
|
|
|
45,361 |
|
|
|
160,465 |
|
|
|
151,305 |
|
|
|
|
|
|
|
|
|
|
Income from
operations |
|
|
14,999 |
|
|
|
17,376 |
|
|
|
43,892 |
|
|
|
35,235 |
|
|
|
|
|
|
|
|
|
|
Other expense: |
|
|
|
|
|
|
|
|
Interest expense |
|
|
(2,338 |
) |
|
|
(2,408 |
) |
|
|
(7,358 |
) |
|
|
(6,982 |
) |
Loss on equity method investment |
|
|
(65 |
) |
|
|
(54 |
) |
|
|
(251 |
) |
|
|
(238 |
) |
Other non-operating (expense)/income, net |
|
(845 |
) |
|
|
(194 |
) |
|
|
(1,813 |
) |
|
|
543 |
|
Total other expense |
|
|
(3,248 |
) |
|
|
(2,656 |
) |
|
|
(9,422 |
) |
|
|
(6,677 |
) |
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
11,751 |
|
|
|
14,720 |
|
|
|
34,470 |
|
|
|
28,558 |
|
(Provision
for)/benefit from income taxes |
|
|
(3,468 |
) |
|
|
1,281 |
|
|
|
(6,202 |
) |
|
|
2,923 |
|
Net
income |
|
|
8,283 |
|
|
|
16,001 |
|
|
|
28,268 |
|
|
|
31,481 |
|
|
|
|
|
|
|
|
|
|
Net loss
attributable to noncontrolling interests |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(946 |
) |
|
|
|
|
|
|
|
|
|
Net
income attributable to BioTelemetry, Inc. |
|
$ |
8,283 |
|
|
$ |
16,001 |
|
|
$ |
28,268 |
|
|
$ |
32,427 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income per share attributable to BioTelemetry, Inc.: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.24 |
|
|
$ |
0.48 |
|
|
$ |
0.83 |
|
|
$ |
1.00 |
|
Diluted |
|
$ |
0.23 |
|
|
$ |
0.45 |
|
|
$ |
0.78 |
|
|
$ |
0.91 |
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
33,908 |
|
|
|
33,003 |
|
|
|
33,885 |
|
|
|
32,488 |
|
Diluted |
|
|
36,268 |
|
|
|
35,918 |
|
|
|
36,445 |
|
|
|
35,566 |
|
|
|
|
|
|
|
|
|
|
BioTelemetry, Inc. |
Consolidated
Balance Sheet |
|
|
|
|
|
|
|
(unaudited) |
|
|
|
|
September
30, |
|
December
31, |
|
|
2019 |
|
2018 |
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
61,573 |
|
$ |
80,889 |
Healthcare accounts receivable, net |
|
|
56,832 |
|
|
37,754 |
Other accounts receivable, net |
|
|
15,637 |
|
|
14,874 |
Inventory |
|
|
6,389 |
|
|
7,323 |
Prepaid expenses and other current assets |
|
|
9,712 |
|
|
5,820 |
Total current assets |
|
|
150,143 |
|
|
146,660 |
|
|
|
|
|
Property and
equipment, net |
|
|
55,608 |
|
|
48,377 |
Intangible
assets, net |
|
|
133,593 |
|
|
129,653 |
Goodwill |
|
|
304,101 |
|
|
238,814 |
Deferred tax
asset |
|
|
12,828 |
|
|
19,975 |
Other
assets |
|
|
19,891 |
|
|
3,322 |
Total assets |
|
$ |
676,164 |
|
$ |
586,801 |
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
|
$ |
19,287 |
|
$ |
18,157 |
Accrued liabilities |
|
|
28,487 |
|
|
24,689 |
Current portion of finance lease obligations |
|
|
490 |
|
|
1,652 |
Current portion of long-term debt |
|
|
12,813 |
|
|
5,125 |
Total current liabilities |
|
|
61,077 |
|
|
49,623 |
|
|
|
|
|
Long-term portion of finance lease obligations |
|
348 |
|
|
117 |
Long-term
debt |
|
|
182,825 |
|
|
193,424 |
Other
long-term liabilities |
|
|
71,007 |
|
|
33,152 |
Total liabilities |
|
|
315,257 |
|
|
276,316 |
|
|
|
|
|
Total equity |
|
|
360,907 |
|
|
310,485 |
|
|
|
|
|
Total liabilities and equity |
|
$ |
676,164 |
|
$ |
586,801 |
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP
Financial Measures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
(unaudited) |
|
September 30, 2019 |
|
(in thousands, except per share data) |
|
Income from operations |
|
Income before income taxes |
|
Net incomeattributable toBioTelemetry, Inc. |
|
Net income perdiluted shareattributable toBioTelemetry
Inc. |
|
GAAP |
|
$ |
14,999 |
|
$ |
11,751 |
|
$ |
8,283 |
|
|
$ |
0.23 |
|
Non-GAAP Adjustments: |
|
|
|
|
|
|
|
|
|
|
Other
charges (a) |
|
|
2,598 |
|
|
2,598 |
|
|
2,598 |
|
|
|
|
|
Acquisition
amortization (b) |
|
|
3,668 |
|
|
3,668 |
|
|
3,668 |
|
|
|
|
|
Other
expense (c) |
|
|
- |
|
677 |
|
|
677 |
|
|
|
|
|
Interest
expense on contingent consideration (d) |
|
|
- |
|
110 |
|
|
110 |
|
|
|
|
|
Income tax
effect of adjustments (e) |
|
|
- |
|
- |
|
|
(1,436 |
) |
|
|
|
|
Impact of
NOL utilization (f) |
|
|
- |
|
- |
|
|
4,903 |
|
|
|
|
Non-GAAP Adjusted |
|
$ |
21,265 |
|
$ |
18,804 |
|
$ |
18,803 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended |
|
(unaudited) |
|
September 30, 2018 |
|
(in thousands, except per share data) |
|
Income from Operations |
|
Income before Income Taxes |
|
Net incomeattributable toBioTelemetry, Inc. |
|
Net income perdiluted shareattributable toBioTelemetry
Inc. |
|
GAAP |
|
$ |
17,376 |
|
$ |
14,720 |
|
$ |
16,001 |
|
|
$ |
0.45 |
|
Non-GAAP Adjustments: |
|
|
|
|
|
|
|
|
|
|
Other
charges (a) |
|
|
1,330 |
|
|
1,330 |
|
|
1,330 |
|
|
|
|
|
LifeWatch
amortization (b) |
|
|
3,267 |
|
|
3,267 |
|
|
3,267 |
|
|
|
|
|
Income tax
effect of adjustments (e) |
|
|
- |
|
|
- |
|
|
(103 |
) |
|
|
|
|
(Benefit) of
discrete items / NOL utilization (f) |
|
|
- |
|
|
- |
|
|
(1,338 |
) |
|
|
|
Non-GAAP Adjusted |
|
$ |
21,973 |
|
$ |
19,317 |
|
$ |
19,157 |
|
|
$ |
0.53 |
|
|
|
|
|
|
|
|
|
|
|
|
- In the third quarter 2019, other charges of $2.6 million were
primarily due to $2.1 million of patent litigation and other legal
costs and $0.5 million of integration expense related to our
acquisitions. In the third quarter 2018, other charges of
$1.3 million were due primarily to $0.7 million for the continued
integration and restructuring activities related to the LifeWatch
acquisition and $0.3 million for patent litigation.
- In the third quarter 2019 and the third quarter 2018, we
recognized $3.7 million and $3.3 million of expense, respectively,
related to the amortization of intangibles as a result of our
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 third quarter 2019, we had an unrealized foreign
exchange loss of $0.7 million
- In the third quarter 2019, we incurred $0.1 million of interest
expense related to a portion of the Geneva Healthcare deferred
purchase 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 $4.9 million positive impact on the third
quarter 2019. For the third quarter 2018, we are excluding a
benefit of $1.3 million from discrete items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended |
|
(unaudited) |
|
September 30, 2019 |
|
(in thousands, except per share data) |
|
Income from operations |
|
Income beforeincome taxes |
|
Net incomeattributable toBioTelemetry, Inc. |
|
Net income perdiluted shareattributable toBioTelemetry
Inc. |
|
GAAP |
|
$ |
43,892 |
|
$ |
34,470 |
|
|
$ |
28,268 |
|
|
$ |
0.78 |
|
Non-GAAP Adjustments: |
|
|
|
|
|
|
|
|
|
|
Other
charges (a) |
|
|
7,902 |
|
|
7,902 |
|
|
|
7,902 |
|
|
|
|
|
Acquisition
amortization (b) |
|
|
10,742 |
|
|
10,742 |
|
|
|
10,742 |
|
|
|
|
|
Other
expense adjustments (c) |
|
|
- |
|
|
1,479 |
|
|
|
1,479 |
|
|
|
|
|
Interest
expense on contingent consideration (d) |
|
|
- |
|
|
240 |
|
|
|
240 |
|
|
|
|
|
Income tax
effect of adjustments (e) |
|
|
- |
|
|
- |
|
|
|
(4,146 |
) |
|
|
|
|
Impact of
NOL utilization (f) |
|
|
- |
|
|
- |
|
|
|
8,942 |
|
|
|
|
Non-GAAP Adjusted |
|
$ |
62,536 |
|
$ |
54,833 |
|
|
$ |
53,427 |
|
|
$ |
1.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended |
|
(unaudited) |
|
September 30, 2018 |
|
(in thousands, except per share data) |
|
Income from Operations |
|
Income (loss)beforeIncome Taxes |
|
Net incomeattributable toBioTelemetry, Inc. |
|
Net income perdiluted shareattributable toBioTelemetry
Inc. |
|
GAAP |
|
$ |
35,235 |
|
$ |
28,558 |
|
|
$ |
32,427 |
|
|
$ |
0.91 |
|
Non-GAAP Adjustments: |
|
|
|
|
|
|
|
|
|
|
Other
charges (a) |
|
|
11,623 |
|
|
11,623 |
|
|
|
11,623 |
|
|
|
|
|
LifeWatch
amortization (b) |
|
|
9,852 |
|
|
9,852 |
|
|
|
9,852 |
|
|
|
|
|
Other
expense adjustments (c) |
|
|
- |
|
|
(748 |
) |
|
|
(748 |
) |
|
|
|
|
Income tax
effect of adjustments (e) |
|
|
- |
|
|
- |
|
|
|
(464 |
) |
|
|
|
|
(Benefit) of
discrete items / NOL utilization (f) |
|
|
- |
|
|
- |
|
|
|
(3,341 |
) |
|
|
|
Non-GAAP Adjusted |
|
$ |
56,710 |
|
$ |
49,285 |
|
|
$ |
49,349 |
|
|
$ |
1.39 |
|
|
|
|
|
|
|
|
|
|
|
|
- For the nine months ended September 30, 2019, other charges of
$7.9 million were due primarily to $5.8 million of patent
litigation and other legal costs, $1.6 million of costs related to
our acquisitions and $0.5 million for other non-recurring
activities. For the nine months ended September 30,
2018, other charges of $11.6 million consisted of $7.9 million for
the continued integration and restructuring activities related to
the LifeWatch acquisition, a $1.8 million reserve for a note
receivable with a bankrupt customer, $1.5 million for patent
litigation, $0.8 million of other expense including legal,
professional fees and depreciation, partially offset by a $0.7
million reduction in contingent consideration related to a 2016
acquisition.
- For the nine months ended September 30, 2019 and September 30,
2018, we recognized $10.7 million and $9.9 million of expense,
respectively, related to the amortization of intangibles as a
result of our 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 nine months ended September 30, 2019, we had an
unrealized foreign exchange loss of $2.2 million partially offset
by a $0.7 million gain associated with the termination of a former
LifeWatch foreign pension plan. For the nine months ended
September 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 nine months ended September 30, 2019, we incurred $0.2
million of interest expense related to a portion of the Geneva
Healthcare deferred purchase 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 $8.9 million positive impact on the nine months
ended September 30, 2019. For the nine months ended September 30,
2018, the Company is excluding a $3.3 million benefit from discrete
items.
|
(unaudited) |
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
(in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net income attributable to BioTelemetry –
GAAP |
|
$ |
8,283 |
|
|
$ |
16,001 |
|
|
$ |
28,268 |
|
|
$ |
32,427 |
|
Net loss
attributable to noncontrolling interest |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(946 |
) |
Provision
for/(benefit from) income taxes |
|
|
3,468 |
|
|
|
(1,281 |
) |
|
|
6,202 |
|
|
|
(2,923 |
) |
Total other
expense |
|
|
3,248 |
|
|
|
2,656 |
|
|
|
9,422 |
|
|
|
6,677 |
|
Other
charges |
|
|
2,598 |
|
|
|
1,330 |
|
|
|
7,902 |
|
|
|
11,623 |
|
Depreciation
and amortization expense (a) |
|
|
10,295 |
|
|
|
10,063 |
|
|
|
30,508 |
|
|
|
29,757 |
|
Stock
compensation expense |
|
|
3,636 |
|
|
|
1,355 |
|
|
|
9,662 |
|
|
|
6,278 |
|
Adjusted EBITDA |
|
$ |
31,528 |
|
|
$ |
30,124 |
|
|
$ |
91,964 |
|
|
$ |
82,893 |
|
Adjusted
EBITDA margin |
|
|
28.3 |
% |
|
|
30.1 |
% |
|
|
28.1 |
% |
|
|
28.0 |
% |
|
|
|
|
|
|
|
|
|
- For the nine months ended September 30, 2018, depreciation and
amortization expense excludes $0.5 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 EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
|
|
|
(in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Cash provided by operating activities |
|
$ |
16,472 |
|
|
$ |
28,151 |
|
|
$ |
52,602 |
|
|
$ |
44,287 |
|
Capital
expenditures |
|
|
(7,594 |
) |
|
|
(7,561 |
) |
|
|
(23,686 |
) |
|
|
(17,498 |
) |
Free cash
flow |
|
$ |
8,878 |
|
|
$ |
20,590 |
|
|
$ |
28,916 |
|
|
$ |
26,789 |
|
|
|
|
|
|
|
|
|
|
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
third quarter 2019 excludes other charges of $2.6 million, $3.7
million of amortization expense related to our acquisitions, $0.7
million of unrealized foreign currency loss, $0.1 million of
interest expense related to a portion of the Geneva Healthcare
contingent consideration, 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 third quarter 2018 excludes other
charges of $1.3 million, $3.3 million of amortization expense
related to LifeWatch intangibles, the tax effect of these
adjustments as well as 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 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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