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 quarter and year ended December 31, 2019.
Quarter Highlights
- Recognized quarterly revenue of $112.0 million
- Reached 8.1% year-over-year quarterly revenue growth
- Achieved 30th consecutive quarter of year-over-year revenue
growth
- Reported GAAP net income of $1.6 million, or 1.4% of
revenue
- Realized quarterly adjusted EBITDA of $31.7 million, or 28.3%
of revenue
- Received coverage from five new Blue Cross companies for MCT
services
President and CEO Commentary
Joseph H. Capper, President and Chief Executive
Officer of BioTelemetry, Inc., commented:“Our fourth quarter capped
off a strong year for BioTelemetry, highlighted by our highest
quarterly revenue and adjusted EBITDA in company history.
These results came in at the high end of our expectations and
marked the 30th consecutive quarter of year-over-year revenue
growth. Healthcare services demand remained robust, with
revenue growing 9% on a year-over-year basis, driven primarily by
our MCT, extended Holter and Geneva services. We also
benefited from continued growth in our Research and digital
population health businesses.
“2019 was a solid year for BioTelemetry.
We began with the acquisitions of Geneva Health Solutions and ADEA
Medical, increasing our addressable market by over $1
billion. The Geneva acquisition provides access to the
monitoring of implantable devices and ADEA broadens our reach into
Europe. We saw top-line growth across all segments, led by
Healthcare services, resulting in record revenue for the
year. We invested in information technology, research and
development and sales resources, which we expect will enhance our
operations and drive growth for years to come. Also during
2019, through our “Heart for Hope” corporate give-back program, we
proudly funded life-saving heart surgeries and follow-up care for
200 underprivileged children.
“As we look forward to 2020, we will continue to
execute on our proven growth strategy, which we expect will deliver
double-digit top-line growth and adjusted EBITDA margin
expansion. Given the strong fundamentals of our core
business, combined with our acquisitions and the newly expanded MCT
insurance coverage, we believe BioTelemetry is on track to have
another record year.”
Fourth Quarter Financial Results
Revenue for the fourth quarter 2019 was $112.0
million compared to $103.6 million for the fourth quarter 2018, an
increase of $8.4 million, or 8.1%.
Gross profit for the fourth quarter 2019 was
$69.9 million, or 62.4% of revenue, compared to $63.9 million, or
61.7% of revenue, for the fourth quarter 2018.
On a GAAP basis, net income attributable to
BioTelemetry, Inc. for the fourth quarter 2019 was $1.6 million, or
$0.04 per diluted share, compared to net income attributable to
BioTelemetry, Inc. of $10.4 million, or $0.29 per diluted share,
for the fourth quarter 2018. The decline in net income
attributable to BioTelemetry, Inc. was primarily due to an increase
in general and administrative and sales and marketing expenses
resulting from ongoing investment in infrastructure. The
decline was also attributable to increases in other charges
resulting primarily from our information technology incident, the
change in the fair value of acquisition-related contingent
consideration, an impairment of our equity method investment and an
unfavorable foreign exchange impact.
On an adjusted basis1, net income attributable
to BioTelemetry, Inc. for the fourth quarter 2019 was $17.8
million, or $0.48 per diluted share. This compares to
adjusted net income attributable to BioTelemetry, Inc. of $20.1
million, or $0.56 per diluted share, for the fourth quarter
2018. Revenue growth is being offset by the impact of the
ongoing investments in our sales force and technology. 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 Wednesday, February 26, 2020, 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, 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;
impact of the October 2019 information technology incident; our
ability to obtain and maintain required regulatory approvals for
our products, services and manufacturing facilities; changes in
governmental regulations and legislation; adverse regulatory
actions; our ability to obtain and maintain adequate protection of
our intellectual property; 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, 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. Getz |
|
Investor Relations |
|
800-908-7103 |
|
investorrelations@biotelinc.com |
BioTelemetry,
Inc.Consolidated Statements of
Operations(unaudited)
|
Three Months Ended |
|
Year Ended |
|
December 31, |
|
December 31, |
(in thousands, except
per share data) |
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenue |
$ |
112,034 |
|
|
$ |
103,603 |
|
|
$ |
439,107 |
|
|
$ |
399,472 |
|
Cost of revenue |
42,117 |
|
|
39,657 |
|
|
164,833 |
|
|
148,986 |
|
Gross profit |
69,917 |
|
|
63,946 |
|
|
274,274 |
|
|
250,486 |
|
Gross profit % |
62.4 |
% |
|
61.7 |
% |
|
62.5 |
% |
|
62.7 |
% |
|
|
|
|
|
|
|
|
Operating
expenses: |
|
|
|
|
|
|
|
General and administrative |
32,248 |
|
|
27,951 |
|
|
120,093 |
|
|
109,736 |
|
Sales and marketing |
12,857 |
|
|
10,314 |
|
|
50,664 |
|
|
42,849 |
|
Bad debt expense |
5,383 |
|
|
5,311 |
|
|
21,768 |
|
|
22,222 |
|
Research and development |
3,468 |
|
|
2,755 |
|
|
13,994 |
|
|
11,206 |
|
Other charges |
7,102 |
|
|
3,036 |
|
|
15,004 |
|
|
14,659 |
|
Total operating
expenses |
61,058 |
|
|
49,367 |
|
|
221,523 |
|
|
200,672 |
|
|
|
|
|
|
|
|
|
Income from operations |
8,859 |
|
|
14,579 |
|
|
52,751 |
|
|
49,814 |
|
|
|
|
|
|
|
|
|
Other
expense: |
|
|
|
|
|
|
|
Interest expense |
(2,124 |
) |
|
(2,447 |
) |
|
(9,482 |
) |
|
(9,429 |
) |
Loss on equity method investments |
(1,047 |
) |
|
(8 |
) |
|
(1,298 |
) |
|
(246 |
) |
Other non-operating (expense)/income, net |
(430 |
) |
|
822 |
|
|
(2,243 |
) |
|
1,365 |
|
Total other expense,
net: |
(3,601 |
) |
|
(1,633 |
) |
|
(13,023 |
) |
|
(8,310 |
) |
|
|
|
|
|
|
|
|
Income before income
taxes |
5,258 |
|
|
12,946 |
|
|
39,728 |
|
|
41,504 |
|
(Provision for)/benefit from
income taxes |
(3,682 |
) |
|
(2,553 |
) |
|
(9,884 |
) |
|
370 |
|
Net
income |
1,576 |
|
|
10,393 |
|
|
29,844 |
|
|
41,874 |
|
|
|
|
|
|
|
|
|
Net loss attributable to
noncontrolling interests |
— |
|
|
— |
|
|
— |
|
|
(946 |
) |
|
|
|
|
|
|
|
|
Net income
attributable to BioTelemetry, Inc. |
$ |
1,576 |
|
|
$ |
10,393 |
|
|
$ |
29,844 |
|
|
$ |
42,820 |
|
|
|
|
|
|
|
|
|
Net income per common
share attributable to BioTelemetry, Inc.: |
|
|
|
|
|
|
|
Basic |
$ |
0.05 |
|
|
$ |
0.31 |
|
|
$ |
0.88 |
|
|
$ |
1.31 |
|
Diluted |
$ |
0.04 |
|
|
$ |
0.29 |
|
|
$ |
0.82 |
|
|
$ |
1.20 |
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding: |
|
|
|
|
|
|
|
Basic |
34,002 |
|
|
33,363 |
|
|
33,948 |
|
|
32,709 |
|
Diluted |
36,874 |
|
|
36,197 |
|
|
36,440 |
|
|
35,783 |
|
BioTelemetry,
Inc.Condensed Consolidated Balance
Sheets
|
December 31, |
(in
thousands) |
2019 |
|
2018 |
ASSETS |
(unaudited) |
|
|
Current
assets: |
|
|
|
Cash and cash equivalents |
$ |
68,614 |
|
|
$ |
80,889 |
|
Healthcare accounts receivable, net |
71,851 |
|
|
37,754 |
|
Other accounts receivable, net |
15,625 |
|
|
14,874 |
|
Inventory |
5,738 |
|
|
7,323 |
|
Prepaid expenses and other current assets |
6,505 |
|
|
5,820 |
|
Total current
assets |
168,333 |
|
|
146,660 |
|
|
|
|
|
Property and equipment,
net |
56,380 |
|
|
48,377 |
|
Intangible assets, net |
129,596 |
|
|
129,653 |
|
Goodwill |
301,321 |
|
|
238,814 |
|
Deferred tax assets |
12,626 |
|
|
19,975 |
|
Other assets |
17,464 |
|
|
3,322 |
|
Total
assets |
$ |
685,720 |
|
|
$ |
586,801 |
|
|
|
|
|
LIABILITIES AND
EQUITY |
|
|
|
Current
liabilities: |
|
|
|
Accounts payable |
24,198 |
|
|
18,157 |
|
Accrued liabilities |
27,318 |
|
|
24,689 |
|
Current portion of finance lease obligations |
394 |
|
|
1,652 |
|
Current portion of long-term debt |
3,844 |
|
|
5,125 |
|
Total current
liabilities |
55,754 |
|
|
49,623 |
|
|
|
|
|
Long-term portion of finance
lease obligations |
289 |
|
|
117 |
|
Long-term debt |
190,823 |
|
|
193,424 |
|
Other long-term
liabilities |
71,937 |
|
|
33,152 |
|
Total
liabilities |
318,803 |
|
|
276,316 |
|
|
|
|
|
Total
equity |
366,917 |
|
|
310,485 |
|
|
|
|
|
Total liabilities and
equity |
$ |
685,720 |
|
|
$ |
586,801 |
|
BioTelemetry,
Inc.Reconciliation of GAAP to Non-GAAP Financial
MeasuresQuarterly Non-GAAP Adjusted Net Income and
Non-GAAP Adjusted Net Income Per Share
|
|
Three Months Ended |
(Unaudited) |
|
December 31, 2019 |
(in thousands, except per share data) |
|
Income fromoperations |
|
Income beforeincome taxes |
|
Net incomeattributable toBioTelemetry, Inc. |
|
Net income perdiluted shareattributable toBioTelemetry,
Inc. |
GAAP |
|
$ |
8,859 |
|
|
$ |
5,258 |
|
|
$ |
1,576 |
|
|
$ |
0.04 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Other charges (a) |
|
7,102 |
|
|
7,102 |
|
|
7,102 |
|
|
0.19 |
|
Acquisition amortization (b) |
|
3,727 |
|
|
3,727 |
|
|
3,727 |
|
|
0.10 |
|
Other expense adjustments (c) |
|
— |
|
|
1,382 |
|
|
1,382 |
|
|
0.04 |
|
Interest expense on deferred purchase consideration (d) |
|
— |
|
|
100 |
|
|
100 |
|
|
— |
|
Income tax effect of adjustments (e) |
|
— |
|
|
— |
|
|
(3,063 |
) |
|
(0.08 |
) |
Impact of NOL utilization (f) |
|
— |
|
|
— |
|
|
6,947 |
|
|
0.19 |
|
Non-GAAP
Adjusted |
|
$ |
19,688 |
|
|
$ |
17,569 |
|
|
$ |
17,771 |
|
|
$ |
0.48 |
|
|
|
Three Months Ended |
(Unaudited) |
|
December 31, 2018 |
(in thousands, except per share data) |
|
Income fromoperations |
|
Income beforeincome taxes |
|
Net incomeattributable toBioTelemetry, Inc. |
|
Net income perdiluted shareattributable toBioTelemetry,
Inc. |
GAAP |
|
$ |
14,579 |
|
|
$ |
12,946 |
|
|
$ |
10,393 |
|
|
$ |
0.29 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Other charges (a) |
|
3,036 |
|
|
3,036 |
|
|
3,036 |
|
|
0.08 |
|
Acquisition amortization (b) |
|
3,267 |
|
|
3,267 |
|
|
3,267 |
|
|
0.09 |
|
Income tax effect of adjustments (e) |
|
— |
|
|
— |
|
|
(56 |
) |
|
— |
|
Impact of NOL utilization (f) |
|
— |
|
|
— |
|
|
3,459 |
|
|
0.10 |
|
Non-GAAP
Adjusted |
|
$ |
20,882 |
|
|
$ |
19,249 |
|
|
$ |
20,099 |
|
|
$ |
0.56 |
|
- In the fourth quarter 2019, other
charges of $7.1 million were primarily due to $3.0 million of
charges related to our October 2019 information technology
incident, a $1.5 million unfavorable change in the fair value of
acquisition-related contingent consideration, $1.3 million of
integration and other expenses related to our acquisitions and $1.2
million of patent litigation and other legal costs. In the
fourth quarter 2018, other charges of $3.0 million were primarily
due to $2.2 million for integration and restructuring activities
related to our acquisitions and $0.8 million for patent and other
litigation.
- In the fourth quarter 2019 and
2018, we recognized $3.7 million and $3.3 million of expense,
respectively, related to the amortization of acquisition-related
intangibles assets. We have excluded this amortization of
acquisition-related intangible assets from non-GAAP 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 fourth quarter 2019, we had
a non-cash charges for an impairment of our equity method
investment of $1.0 million, an unrealized foreign exchange loss of
$0.2 million and an impairment of a loan receivable of $0.2
million.
- In the fourth 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 $6.9 million
and a $3.5 million positive impact on the fourth quarter 2019 and
2018, respectively.
BioTelemetry,
Inc.Reconciliation of GAAP to Non-GAAP Financial
MeasuresAnnual Non-GAAP Adjusted Net Income and
Non-GAAP Adjusted Net Income Per Share
|
|
Year Ended |
(Unaudited) |
|
December 31, 2019 |
(in thousands, except per share data) |
|
Income fro operations |
|
Income beforeincome taxes |
|
Net incomeattributable toBioTelemetry, Inc. |
|
Net income perdiluted shareattributable to BioTelemetry,
Inc.* |
GAAP |
|
$ |
52,751 |
|
|
$ |
39,728 |
|
|
$ |
29,844 |
|
|
$ |
0.82 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Other charges (g) |
|
15,004 |
|
|
15,004 |
|
|
15,004 |
|
|
0.41 |
|
Acquisition amortization (h) |
|
14,469 |
|
|
14,469 |
|
|
14,469 |
|
|
0.40 |
|
Other expense adjustments (i) |
|
— |
|
|
2,861 |
|
|
2,861 |
|
|
0.08 |
|
Interest expense on deferred purchase consideration (j) |
|
— |
|
|
340 |
|
|
340 |
|
|
0.01 |
|
Income tax effect of adjustments (k) |
|
— |
|
|
— |
|
|
(8,129 |
) |
|
(0.22 |
) |
Impact of NOL utilization (l) |
|
— |
|
|
— |
|
|
16,809 |
|
|
0.46 |
|
Non-GAAP
Adjusted |
|
$ |
82,224 |
|
|
$ |
72,402 |
|
|
$ |
71,198 |
|
|
$ |
1.95 |
|
* Total does not add due to
rounding |
|
|
|
|
|
|
|
|
|
|
Year Ended |
(Unaudited) |
|
December 31, 2018 |
(in thousands, except per share data) |
|
Income fromoperations |
|
Income beforeincome taxes |
|
Net incomeattributable toBioTelemetry, Inc. |
|
Net income perdiluted shareattributable toBioTelemetry,
Inc.* |
GAAP |
|
$ |
49,814 |
|
|
$ |
41,504 |
|
|
$ |
42,820 |
|
|
$ |
1.20 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
Other charges (g) |
|
14,659 |
|
|
14,659 |
|
|
14,659 |
|
|
0.41 |
|
Acquisition amortization (h) |
|
13,119 |
|
|
13,119 |
|
|
13,119 |
|
|
0.37 |
|
Other expense adjustments, net (i) |
|
— |
|
|
(748 |
) |
|
(748 |
) |
|
(0.02 |
) |
Income tax effect of adjustments (k) |
|
— |
|
|
— |
|
|
(241 |
) |
|
(0.01 |
) |
(Benefit) of discrete items / NOL utilization (l) |
|
— |
|
|
— |
|
|
(161 |
) |
|
— |
|
Non-GAAP
Adjusted |
|
$ |
77,592 |
|
|
$ |
68,534 |
|
|
$ |
69,448 |
|
|
$ |
1.94 |
|
* Total does not add due to
rounding |
|
|
|
|
|
|
|
|
g. |
For the year ended December 31, 2019, other charges of $15.0
million were due primarily to $7.0 million of patent litigation and
other legal costs, $4.9 million of integration and other expenses
related to our acquisitions, $3.0 million of charges related to our
October 2019 information technology incident and $0.4 million for
other non-recurring activities, partially offset by a $0.2 million
favorable change in the fair value of acquisition-related
contingent consideration. For the year ended
December 31, 2018, other charges of $14.7 million consisted of
$10.1 million for the integration and restructuring activities
related to our acquisitions, $2.6 million for patent litigation and
other legal costs, a $1.8 million reserve for a note receivable
with a bankrupt customer and $1.2 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. |
h. |
For the years ended December 31, 2019 and 2018, we recognized
$14.5 million and $13.1 million of expense, respectively, related
to the amortization of acquisition-related intangibles
assets. We have excluded this amortization of
acquisition-related intangible assets from non-GAAP adjusted net
income due to the non-operational nature of the expense. This
amortization was recorded as a component of general and
administrative expense. |
i. |
For the year ended December 31, 2019, we had a non-cash
charges for an unrealized foreign exchange loss of $2.4 million, an
impairment of our equity method investment of $1.0 million and an
impairment of a loan receivable of $0.2 million, partially offset
by a $0.7 million gain associated with the termination of a former
LifeWatch foreign pension plan. For the year ended
December 31, 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. |
j. |
For the year ended December 31, 2019, we incurred $0.3 million
of interest expense related to a portion of the Geneva Healthcare
deferred purchase consideration. |
k. |
Represents the tax effect of the non-GAAP adjustments at the
Company’s annual effective tax rate. |
l. |
After giving effect to taxes at the estimated annual effective tax
rate on the adjustments, the utilization of net operating loss
carryforwards had a $16.8 million positive impact on the year ended
December 31, 2019. For the year ended December 31,
2018, the Company is excluding a $0.2 million benefit from discrete
items. |
BioTelemetry,
Inc.Reconciliation of GAAP to Non-GAAP Financial
MeasuresQuarterly and Annual Non-GAAP Adjusted
EBITDA and EBITDA Margin
(Unaudited) |
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
(in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net income attributable to BioTelemetry, Inc. -
GAAP |
|
$ |
1,576 |
|
|
$ |
10,393 |
|
|
$ |
29,844 |
|
|
$ |
42,820 |
|
Net loss attributable to noncontrolling interest |
|
— |
|
|
— |
|
|
— |
|
|
(946 |
) |
Provision for/(benefit from) income taxes |
|
3,682 |
|
|
2,553 |
|
|
9,884 |
|
|
(370 |
) |
Total other expense, net |
|
3,601 |
|
|
1,633 |
|
|
13,023 |
|
|
8,310 |
|
Other charges |
|
7,102 |
|
|
3,036 |
|
|
15,004 |
|
|
14,659 |
|
Depreciation and amortization expense (m) |
|
12,067 |
|
|
9,883 |
|
|
42,575 |
|
|
39,637 |
|
Stock compensation expense |
|
3,714 |
|
|
2,983 |
|
|
13,376 |
|
|
9,261 |
|
Non-GAAP Adjusted EBITDA |
|
$ |
31,742 |
|
|
$ |
30,481 |
|
|
$ |
123,706 |
|
|
$ |
113,371 |
|
GAAP Net income as a percent of revenue |
|
1.4 |
% |
|
10.0 |
% |
|
6.8 |
% |
|
10.7 |
% |
Non-GAAP Adjusted EBITDA margin |
|
28.3 |
% |
|
29.4 |
% |
|
28.2 |
% |
|
28.4 |
% |
m. |
For the three months and year ended December 31, 2019,
depreciation and amortization expense excludes $0.4 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. Similarly, for the three months and year ended
December 31, 2018, we excluded $0.1 million and $0.5 million,
respectively. These expenses are included in Other
charges. |
Quarterly and
Annual Non-GAAP Free Cash Flow
(Unaudited) |
|
Three Months Ended |
|
Year Ended |
|
|
December 31, |
|
December 31, |
(in thousands) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Cash provided by operating activities |
|
$ |
14,948 |
|
|
$ |
28,459 |
|
|
$ |
67,550 |
|
|
$ |
72,746 |
|
Capital expenditures |
|
(7,021 |
) |
|
(7,139 |
) |
|
(30,707 |
) |
|
(24,637 |
) |
Non-GAAP Free Cash
Flow |
|
$ |
7,927 |
|
|
$ |
21,320 |
|
|
$ |
36,843 |
|
|
$ |
48,109 |
|
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 fourth quarter 2019 excludes other
charges of $7.1 million, $3.7 million of amortization expense
related to our acquisition-related intangible assets, $1.4 million
of unrealized foreign currency loss, loss on equity method
investment and loan impairments, $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 fourth quarter 2018 excludes other
charges of $3.0 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
Healthcare acquisitions, costs related to the October information
technology incident, 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 income before income taxes, 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, net, 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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