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SEC
10-Q
BIOTELEMETRY, INC. filed this Form 10-Q on 10/31/2018
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depreciation, partially offset by a $0.7 million reduction in contingent consideration related to a 2016 acquisition.
Other charges for the nine months ended September 30, 2017 were due primarily to legal and professional fees, as well as severance costs, related to the acquisition of LifeWatch. These charges were partially offset by a $2.0 million decrease in the fair value of acquisition-related contingent consideration related to certain 2016 acquisitions.
Other Expense
 
Nine Months Ended
 
Change
(in thousands, except percentages)
September 30,
2018
 
September 30,
2017
 
$
 
%
Interest expense
$
(6,982
)
 
$
(2,622
)
 
$
(4,360
)
 
166.3
 %
Loss on extinguishment of debt

 
(543
)
 
543

 
(100.0
)%
Loss on equity method investment
(238
)
 
(302
)
 
64

 
(21.2
)%
Other non-operating income/(expense), net
543

 
(2,755
)
 
3,298

 
(119.7
)%
Total Other expense
$
(6,677
)
 
$
(6,222
)
 
$
(455
)
 
7.3
 %
Percentage of revenues
2.3
%
 
3.2
%
 
 
 
 
Total other expense for the nine months ended September 30, 2018 was due primarily to $7.0 million of interest expense and amortization of deferred financing fees resulting from the full-period impact of entering into the SunTrust Credit Agreement concurrent with the LifeWatch acquisition in mid-July 2017, $0.3 million of interest related to the ZTech ruling (see “Part I; Item 1. Financial Statements; Notes to Consolidated Financial Statements; Note 15. Legal Proceedings”) and a $0.2 million loss on our equity method investment, partially offset by an unrealized foreign exchange gain of $0.9 million associated with our uncertain tax positions.
Total other expense for the nine months ended September 30, 2017 was due to $2.6 million of interest expense and the amortization of deferred financing fees from our previous credit agreement paid off in mid-July 2017 and the SunTrust Credit Agreement entered into concurrent with the LifeWatch acquisition, $2.5 million associated with our 2017 settlement with the United States Department of Health and Human Services - Office for Civil Rights related to the theft of two unencrypted laptop computers in 2011, a $1.3 million charge related to the write off of a derivative instrument premium, $0.5 million of loss on the extinguishment of debt related to the write off of unamortized debt issuance costs as a result of the payoff of our previous credit agreement and a $0.3 million loss on our equity method investment, partially offset by a gain of $1.3 million for a settlement with the seller of Mednet Healthcare Technologies, Inc. and related companies, which the Company acquired in early 2014.
Income Taxes
 
Nine Months Ended
 
Change
(in thousands, except percentages)
September 30,
2018
 
September 30,
2017
 
$
 
%
Benefit from income taxes
$
2,923

 
$
31

 
$
2,892

 
9,329.0
%
Effective tax rate
(10.2
)%
 
4.6
%
 
 
 
 
For the nine months ended September 30, 2018, we recognized an income tax benefit due primarily to a discrete benefit recorded for equity compensation deductions. For the nine months ended September 30,

39

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