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BioTelemetry, Inc. Reports Second Quarter 2016 Financial Results
Company Announces Record Performance and Increases Guidance

MALVERN, Pa., Aug. 02, 2016 (GLOBE NEWSWIRE) -- BioTelemetry, Inc. (NASDAQ:BEAT), the leading wireless 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 second quarter ended June 30, 2016.

Company Highlights

  • Recognized highest quarterly revenue in Company’s history of $52.7 million, an 18% increase over the prior year
  • Recorded $4.3 million GAAP net income for the second quarter
  • Realized highest quarterly adjusted EBITDA in Company’s history of $11.9 million, a 51% increase over the prior year
  • Serviced highest quarterly patient volume in Company’s history
  • Grew CardioKey volume by 75% versus the first quarter of 2016
  • Completed the acquisition of VirtualScopics, Inc. on May 11
  • Received FDA 510(k) approval of the Company’s next generation device, the MCOTTM Patch

President and CEO Commentary

Joseph H. Capper, President and Chief Executive Officer of BioTelemetry, Inc., commented: “We are excited to announce another record-setting quarter, during which we exceeded our expectations, registering new highs in volume, revenue and adjusted EBITDA.  Revenue grew by 18% overall and 13% organically, driven by increased patient volume across all product types, the continued roll-out of CardioKey and the higher 2016 Medicare rate for our MCT service.

“During the quarter, we took an extremely important strategic step by acquiring VirtualScopics, Inc., a leading provider of clinical trial imaging solutions.  This acquisition supports our long-established intent to bolster the competitiveness of our Research platform by expanding our clinical services capabilities. 

“The Company also just received FDA approval of our next generation device, the MCOTTM Patch.  This new device incorporates our best in class arrhythmia detection into a more convenient, easy to use, form factor.  The new device will be commercially available later this year.        

“BioTelemetry is extremely well positioned in the marketplace and we expect our momentum to continue. We are confident that our technological leadership, scalable operations, strong patent portfolio and proven strategy will allow us to further capitalize on the opportunities that lie ahead.  As a result, we are increasing our full year 2016 revenue guidance to approximately $210 million and our adjusted EBITDA guidance to $44 to $46 million.”  

Second Quarter Financial Results

Revenue for the second quarter 2016 was $52.7 million compared to $44.8 million for the second quarter 2015, an increase of $7.9 million, or 17.6%.  Healthcare revenue increased $5.9 million due to increased patient volumes as well as higher MCT Medicare pricing.  For the second quarter 2016, Healthcare revenue was comprised of 41% Medicare revenue.  Research revenue increased $2.5 million, primarily due to the acquisition of VirtualScopics during the quarter.  Technology revenues decreased $0.5 million due to lower sales volume resulting from customers delaying purchases as they await the release of upgraded devices. 

Gross profit for the second quarter 2016 increased to $32.9 million, or 62.5% of revenue, compared to $26.7 million, or 59.7% of revenue, for the second quarter 2015.  The increase in gross margin percentage was due to volume efficiencies, the higher MCT Medicare pricing as well as reduced costs related to shipping and device monitoring.  These increases were partially offset by the impact of our acquisitions, which carry lower profit margins than our existing business.

On a GAAP basis, operating expense for the second quarter 2016 was $27.8 million, compared to $24.1 million for the second quarter 2015.  On an adjusted basis1, operating expense for the second quarter 2016 was $26.1 million compared to $22.9 million for the second quarter 2015.  The adjusted operating expense excludes $1.7 million of other charges for the second quarter 2016 primarily related to patent litigation and the Company’s recent acquisitions and $1.2 million for the second quarter 2015 primarily related to patent litigation.  The increase in adjusted expense was driven by the addition of $1.6 million related to our acquired companies, a $1.3 million increase in employee related expense and a $0.5 million increase in bad debt expense partially offset by a reduction in other expenses.  

Interest and other loss, net was $0.6 million for the three months ended June 30, 2016 compared to $0.4 million for the three months ended June 30, 2015.  The increase was due to higher interest expense stemming from recent borrowings under the revolving credit facility, the Company’s share of the equity method investee’s loss, as well as the impact of foreign exchange.

On a GAAP basis, net income for the second quarter 2016 was $4.3 million, or $0.14 per diluted share, compared to a net income of $2.2 million, or $0.08 per diluted share, for the second quarter 2015.  Excluding the $1.7 million of other charges1, adjusted net income for the second quarter 2016 was $6.0 million, or $0.20 per diluted share.  This compares to adjusted net income of $3.4 million, or $0.12 per diluted share, for the second quarter 2015, which excludes the impact of $1.2 million of other charges.

Liquidity

As of June 30, 2016, total cash was $25.4 million, an increase of $2.6 million compared to March 31, 2016.  The significant cash uses during the quarter ended June 30, 2016 include $18.0 million for the two acquisitions as well as $2.2 million for capital expenditures, primarily medical devices.  These uses were more than offset by borrowings of $14.5 million under the revolving credit facility and cash generated from operations of $9.3 million.  Consolidated days sales outstanding increased to 49 days as of June 30, 2016, up from 45 days as of March 31, 2016 due to the impact of the acquisitions.

As of June 30, 2016, the Company had total indebtedness of $37.8 million.

1 The Company believes that its adjusted financial results, which exclude Other charges, offer a meaningful representation of the Company’s performance as they exclude expenses that are not necessary to support the Company’s ongoing business.  

Conference Call       
BioTelemetry, Inc. will host an earnings conference call on Tuesday, August 2, 2016 at 5:00 PM Eastern Time.  The call will be simultaneously webcast on the investor information page of our website, www.gobio.com.  The call will be archived on our website for two weeks.

About BioTelemetry
BioTelemetry, Inc., formerly known as CardioNet, Inc., is the leading wireless medical technology company focused on the delivery of health information to improve quality of life and reduce cost of care.  The Company currently provides cardiac monitoring services, original equipment manufacturing with a primary focus on cardiac monitoring devices and centralized cardiac core laboratory services.  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.  These statements may be identified by words such as “expect,” “anticipate,” “estimate,” “intend,” “plan,” “believe,” “promises” and other words and terms of similar meaning.  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 successfully integrate acquisitions into our business and the effect such acquisitions will have on our results of operation, effectiveness of our cost savings initiatives, relationships with our government and commercial payors, changes to insurance coverage and reimbursement levels for our products, the success of our sales and marketing initiatives, our ability to attract and retain talented executive management and sales personnel, our ability to identify acquisition candidates, acquire them on attractive terms and integrate their operations into our business, the commercialization of new products, market factors, internal research and development initiatives, partnered research and development initiatives, competitive product development, changes in governmental regulations and legislation, the continued consolidation of payors, acceptance of our new products and services, patent protection, adverse regulatory action, and litigation success.  For further details and a discussion of these and other risks and uncertainties, please see our public filings with the Securities and Exchange Commission, including our latest periodic reports on Form 10-K and 10-Q.  We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise.

   
  Three Months Ended
Consolidated Statements of Operations (unaudited)
(In Thousands, Except Per Share Amounts)        
    June 30,
2016
  June 30,
2015
         
Revenues $ 52,680     $ 44,812  
Cost of revenues   19,759       18,079  
Gross profit   32,921       26,733  
Gross profit %     62.5 %       59.7 %
         
Operating expenses:      
General and administrative   14,388       12,206  
Sales and marketing   7,124       6,926  
Bad debt expense   2,664       2,175  
Research and development   1,965       1,631  
Other charges   1,659       1,210  
Total operating expenses     27,800         24,148  
         
Income from operations     5,121         2,585  
Interest and other loss, net   (633 )     (439 )
         
Income before income taxes     4,488         2,146  
(Provision for) benefit from income taxes   (153 )     25  
Net Income $ 4,335     $ 2,171  
         
 

Net income per share:
     
Basic $ 0.16     $     0.08  
Diluted $ 0.14     $     0.08  
       
Weighted average number of common shares outstanding:      
Basic     27,961         27,072  
Diluted     30,057         28,918  
       
       
         


  Six Months Ended
Consolidated Statements of Operations (unaudited)
(In Thousands, Except Per Share Amounts)        
    June 30,
2016
  June 30,
2015
         
Revenues $     101,320     $     88,247  
Cost of revenues   37,772       36,291  
Gross profit   63,548       51,956  
Gross profit %     62.7 %       58.9 %
         
Operating expenses:      
General and administrative   26,724       23,603  
Sales and marketing   14,669       14,109  
Bad debt expense   5,302       4,524  
Research and development   3,751       3,596  
Other charges   3,447       3,070  
Total operating expenses     53,893         48,902  
         
Income from operations     9,655         3,054  
Interest and other loss, net   (1,056 )     (829 )
         
Income before income taxes     8,599         2,225  
Provision for income tax   (294 )     (123 )
Net Income $ 8,305     $ 2,102  
         
 

Net income per share:
     
Basic $ 0.30     $     0.08  
Diluted $ 0.28     $     0.07  
       
Weighted average number of common shares outstanding:      
Basic   27,666       27,003  
Diluted   29,619       28,873  
       
       
         


Summary Financial Data  
(In Thousands, except days sales outstanding)      
    June 30,
2016
  December 31,
2015
 
  (unaudited)   (unaudited)  
         
Cash and cash equivalents $ 25,443     $     18,986    
Healthcare accounts receivable, net   15,325       15,179    
Other accounts receivable, net   13,094       8,997    
Days sales outstanding   49       47    
Working capital   30,441       23,157    
Total assets   156,190       124,143    
Total indebtedness   37,757       23,582    
Total shareholders’ equity   88,498       75,926    
         
         
     

Reconciliation of Non-GAAP Financial Measures
(In Thousands, Except Per Share Amounts)

In accordance with Regulation G of the Securities and Exchange Commission, the table set forth below reconciles certain financial measures used in this press release that were not calculated in accordance with generally accepted accounting principles, or GAAP, with the most directly comparable financial measure calculated in accordance with GAAP.  The Company believes that its adjusted financial results, which exclude Other charges, offer a meaningful representation of the Company’s performance as they exclude expenses that are not necessary to support the Company’s ongoing business.

    Three Months Ended
(unaudited)
    June 30,
2016
  June 30,
2015
Income from operations – GAAP   $ 5,121     $    2,585  
Other charges (a)       1,659         1,210  
Adjusted income from operations   $    6,780     $    3,795  
                 
Net income – GAAP    $ 4,335     $      2,171  
Other charges (a)       1,659       1,210  
Adjusted net income   $    5,994     $    3,381  
         
Net income per diluted share – GAAP   $ 0.14     $      0.08  
Other charges per diluted share (a)     0.06           0.04  
Adjusted net income per diluted share   $      0.20     $      0.12  
         
         

                                                                                                                                             

      Three Months Ended
    (unaudited)
         
    June 30,
2016
  June 30,
2015
         
Cash provided by operating activities   $ 9,344     $  7,595  
Capital expenditures     (2,179 )     (4,597 )
Free cash flow   $ 7,165     $  2,998  


   

  Three Months Ended
  (unaudited)
       
  June 30,
2016
  June 30,
2015
       
               
Net income – GAAP $ 4,335     $ 2,171  
Interest, other loss (net) and income tax   786       414  
Other charges (a)   1,659       1,210  
Depreciation and amortization expense   3,664       3,007  
Stock compensation expense   1,441       1,062  
Adjusted EBITDA $ 11,885     $   7,864  
 

(a) In the second quarter 2016, the Company incurred $1.7 million of other charges primarily due to patent litigation and the acquisitions completed in the second quarter.  In the second quarter 2015, the Company incurred $1.2 million of other charges primarily related to patent litigation.

Reconciliation of Non-GAAP Financial Measures
(In Thousands, Except Per Share Amounts)

In accordance with Regulation G of the Securities and Exchange Commission, the table set forth below reconciles certain financial measures used in this press release that were not calculated in accordance with generally accepted accounting principles, or GAAP, with the most directly comparable financial measure calculated in accordance with GAAP.  The Company believes that its adjusted financial results, which exclude Other charges, offer a meaningful representation of the Company’s performance as they exclude expenses that are not necessary to support the Company’s ongoing business.

  Six Months Ended
(unaudited)
  June 30,
2016
  June 30,
2015
Income from operations – GAAP $ 9,655     $   3,054  
Other charges (a)     3,447         3,070  
Adjusted income from operations $    13,102     $    6,124  
               
Net income – GAAP  $ 8,305     $      2,102  
Other charges (a)     3,447       3,070  
Adjusted net income $    11,752     $     5,172  
       
Net income per share – GAAP $ 0.28     $      0.07  
Other charges per diluted share (a)   0.12           0.11  
Adjusted net income per diluted share $      0.40     $     0.18  
       
       


    Six Months Ended
  (unaudited)
       
  June 30,
2016
  June 30,
2015
       
Cash provided by operating activities $ 17,526     $   2,989  
Capital expenditures   (5,692 )     (6,669 )
Free cash flow $ 11,834     $   (3,680 )


   

  Six Months Ended
  (unaudited)
       
  June 30,
2016
  June 30,
2015
       
Net income – GAAP $ 8,305     $   2,102  
Interest, other loss (net) and income tax   1,350       952  
Other charges (a)   3,447       3,070  
Depreciation and amortization expense   6,930       5,959  
Stock compensation expense   2,619       2,182  
Adjusted EBITDA $ 22,651     $   14,265  
 

(a) In the first half of 2016, the Company incurred $3.4 million other charges primarily due to patent litigation and the acquisitions completed in the second quarter.  In the first half of 2015, the Company incurred $3.1 million of other charges primarily due to patent litigation as well as costs related to the integration of the 2014 acquisitions.

Contact:

BioTelemetry, Inc.
Heather C. Getz
Investor Relations
800-908-7103
investorrelations@biotelinc.com

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BioTelemetry, Inc.


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