Exceeds Expectations
Achieves Record Revenue and Adjusted EBITDA
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 -basedADEA Medical AB
President and CEO Commentary
“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
Second Quarter Financial Results
Revenue for the second quarter 2019 was
Gross profit for the second quarter 2019 was
On a GAAP basis, net income attributable to
On an adjusted basis1, net income attributable to
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
About
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
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:
Investor Relations
Executive Vice President, Chief Financial Officer
800-908-7103
investorrelations@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 ofGeneva Healthcare partially offset by a$1.8 million reduction in contingent consideration related toGeneva Healthcare . In the second quarter 2018, other charges of$5.2 million consisted of$2.2 million related to the integration of theLifeWatch 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 theLifeWatch andGeneva 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 formerLifeWatch foreign pension plan. In the second quarter 2018, we incurred$0.3 million of interest related to a ruling on an arbitration demand filed againstLifeWatch 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 theGeneva 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 ofGeneva 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 toGeneva Healthcare . For the six months endedJune 30, 2018 , other charges of$10.3 million consisted of$7.2 million for integration and restructuring activities related to theLifeWatch 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 andJune 30, 2018 , we recognized$7.1 million and$6.6 million of expense, respectively, related to the amortization of intangibles as a result of theLifeWatch andGeneva 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 formerLifeWatch 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 againstLifeWatch 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 theGeneva 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 endedJune 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 theLifeWatch acquisition. For the six months endedJune 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 theLifeWatch 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
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
In addition to adjusted income from operations, adjusted net income attributable to
Source: BioTelemetry, Inc.