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BioTelemetry, Inc. Reports Second Quarter 2020 Financial Results

MALVERN, Pa., July 30, 2020 (GLOBE NEWSWIRE) — 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 ended June 30, 2020.
Company HighlightsRecognized quarterly total revenue of $99.1 millionTotal revenue declined 11.4% year-over-year due to the impact of COVID-19 across most of our businessesReported quarterly GAAP net income of $2.3 million, or 2.3% of total revenueRealized quarterly adjusted EBITDA of $25.6 million, or 25.8% of total revenueAcquired Remote Patient Monitoring (“RPM”) assets from a subsidiary of Centene CorporationEntered into Sales Agent Agreement with Boston ScientificAssumed responsibility to service Roche’s remote INR patient basePresident and CEO CommentaryJoseph H. Capper, President and Chief Executive Officer of BioTelemetry, Inc., commented:“Due to the unwavering commitment of the entire BioTelemetry team, we continued to successfully navigate the current external challenges.  As such, our business recovered faster than anticipated during the quarter, finishing strong with total revenue of $99.1 million and adjusted EBITDA of $25.6 million.  Cardiac monitoring volumes bounced off their April lows, quickly returning to more normalized levels by quarter end.  Given the encouraging trends coming out of the quarter, we believe we will soon be back to delivering year-over-year revenue and earnings growth.“As I shared previously, in early April we streamlined our cost structure to manage through the downturn.  As the business improved, we were able to call back all furloughed employees and are now operating at pre-pandemic headcount levels.  We have pivoted back into an offensive posture as evidenced by the advancement of several business initiatives.  The acquisition of Centene’s RPM assets is a key step toward increasing our commercial activity in the rapidly growing population health management market.  The Boston Scientific and Roche agreements are designed to extend the capabilities of our market-leading cardiac monitoring franchise.“We are more confident than ever that the post COVID-19 healthcare environment will demand a host of telehealth and remote monitoring solutions.  As one of the largest, fastest growing and most profitable connected health companies, we are perfectly positioned to capitalize on this opportunity.”Second Quarter Financial ResultsTotal revenue for the second quarter 2020 was $99.1 million compared to $111.8 million for the second quarter 2019, a decrease of $12.7 million, or 11.4%.Gross profit for the second quarter 2020 was $61.5 million, or 62.1% of total revenue, compared to $70.2 million, or 62.8% of total revenue, for the second quarter 2019.On a GAAP basis, net income for the second quarter 2020 was $2.3 million, or $0.06 per diluted share, compared to net income of $8.3 million, or $0.23 per diluted share, for the second quarter 2019.  The decline in net income was primarily due to the impact of COVID-19 on total revenue, partially offset by decreases in operating costs as we scaled back our operations due to the reduced demand.On an adjusted basis1, net income for the second quarter 2020 was $12.9 million, or $0.35 per diluted share.  This compares to adjusted net income of $19.4 million, or $0.53 per diluted share, for the second quarter 2019.  The decline in non-GAAP adjusted net income was consistent with the change in GAAP net income.  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 CallBioTelemetry, Inc. will host an earnings conference call on Thursday, July 30, 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 at least two weeks.About BioTelemetryBioTelemetry, Inc. is the leading remote medical technology company focused on the 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 StatementsThis 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, including the success of the Sales Agent Agreement with Boston Scientific, our ability to increase demand for our products and services, to grow our market share and to recover from the impacts of the COVID-19 pandemic, our expectations regarding revenue trends in our segments, and our expectations regarding the growth and success related to the acquisition of Centene’s RPM assets and Roche’s remote INR patient base.  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; acceptance of our new products and services, such as our mobile cardiac telemetry patch; the impact of the COVID-19 pandemic; the 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 and/or information technology 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, as well as the factors that are described in “Part II; Item 1A.  Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.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.BioTelemetry, Inc.
Consolidated Statements of Operations
(unaudited)

BioTelemetry, Inc.
Condensed Consolidated Balance Sheets

BioTelemetry, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Quarterly Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Net Income Per Share



BioTelemetry, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Year-to-Date Non-GAAP Adjusted Net Income and Non-GAAP Adjusted Net Income Per Share



BioTelemetry, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
Quarterly and Year-to-Date Non-GAAP Adjusted EBITDA and EBITDA Margin
Quarterly and Year-to-Date Non-GAAP Free Cash Flow
Use of Non-GAAP Financial MeasuresIn 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, adjusted net income per diluted share, 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 for the second quarter 2020 excludes other charges of $5.0 million, $3.7 million of amortization expense related to our acquisition-related intangible assets, $1.3 million of unrealized foreign currency loss, $0.4 million of interest expense related to a portion of the Geneva Healthcare deferred purchase consideration, the tax effect of these adjustments, as well as the impact from the utilization of our net operating loss carryforwards.  Adjusted net income for the second quarter 2019 excludes other charges of $2.2 million, $3.8 million of amortization expense related to acquired intangibles, $1.5 million of unrealized foreign currency loss, $0.1 million of interest expense related to a portion of the Geneva Healthcare contingent consideration, a $0.7 million gain associated with the termination of a former LifeWatch foreign pension plan, the tax effect of these adjustments, as well as the impact from the utilization of 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, patent and other litigation, amortization of acquired intangibles, costs related to the October 2019 information technology incident net of insurance proceeds, 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, adjusted net income per diluted share and free cash flow, we also present adjusted EBITDA.  This Non-GAAP financial measure excludes 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 may calculate adjusted EBITDA in a different manner.

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