|BIOTELEMETRY, INC. filed this Form 8-K on 10/30/2018|
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In the third quarter 2017, in connection with the acquisition of LifeWatch, the Company entered into a credit agreement with SunTrust Bank, as a lender and an agent for the lenders. This credit agreement provided the Company a term loan for $205.0 million and a $50.0 million revolving credit facility which remains undrawn. A portion of the proceeds from the term loan were used to pay off the Company’s previous credit agreement. As a result, the Company had a loss of $0.5 million on the extinguishment of the debt.
In the third quarter 2017, the Company reached a settlement with the seller of Mednet Healthcare Technologies, Inc. and related companies, which the Company acquired in early 2014. The Company sought indemnification for alleged breaches of certain representations and warranties. As part of the settlement, common stock with a fair value of $2.7 million was returned to the Company. The value of the stock exceeded the indemnification asset of $1.4 million previously recorded by the Company, resulting in a gain of $1.3 million which is included in Other non-operating income/(expense), net.
Three Months Ended
Nine Months Ended
Net income/(loss) attributable to BioTelemetry, Inc. - GAAP
Net loss attributable to noncontrolling interest
Benefit from income taxes
Total other expense
Depreciation and amortization (r)
Stock compensation expense
Non-GAAP Adjusted EBITDA
For the nine months ended September 30, 2018, depreciation and amortization expense excludes $0.5 million of expense related to the write-off of foreign assets as a result of the dissolution of entities acquired as part of the LifeWatch acquisition. This expense is included in Other charges.
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 net income attributable to BioTelemetry, Inc., adjusted net income per diluted share attributable to BioTelemetry, Inc. and adjusted EBITDA. 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 2018 excludes other charges of $1.3 million, $3.3 million of amortization expense related to LifeWatch intangibles, and the tax effect of all of the adjustments. 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
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