|
ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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DELAWARE
|
|
46-2568498
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(State or other jurisdiction of incorporation or organization)
|
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(I.R.S. Employer Identification No.)
|
1000 Cedar Hollow Road #102
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|
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Malvern, Pennsylvania
|
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19355
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(Address of principal executive offices)
|
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(Zip Code)
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a
smaller reporting company)
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Smaller reporting company
o
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Emerging growth company
o
|
|
•
|
our ability to identify acquisition candidates, acquire them on attractive terms and integrate their operations into our business, including our recent acquisition of LifeWatch AG (“
LifeWatch
”);
|
•
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our ability to educate physicians and continue to obtain prescriptions for our products and services;
|
•
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changes to insurance coverage and reimbursement levels by Medicare and commercial payors for our products and services;
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•
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our ability to attract and retain talented executive management and sales personnel;
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•
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the commercialization of new competitive products;
|
•
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our ability to obtain and maintain required regulatory approvals for our products, services and manufacturing facilities;
|
•
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changes in governmental regulations and legislation;
|
•
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our ability to obtain and maintain adequate protection of our intellectual property;
|
•
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acceptance of our new products and services;
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•
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adverse regulatory action;
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•
|
interruptions or delays in the telecommunications systems that we use;
|
•
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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.
|
(
In thousands, except share and par value amounts
)
|
(Unaudited)
March 31, 2018 |
|
December 31,
2017 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
36,346
|
|
|
$
|
36,022
|
|
Healthcare accounts receivable, net of allowance for doubtful accounts of $18,138 and $15,556, at March 31, 2018 and December 31, 2017, respectively
|
31,802
|
|
|
25,190
|
|
||
Other accounts receivable, net of allowance for doubtful accounts of $1,536 and $1,425, at March 31, 2018 and December 31, 2017, respectively
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15,370
|
|
|
13,296
|
|
||
Inventory
|
6,353
|
|
|
5,332
|
|
||
Prepaid expenses and other current assets
|
8,524
|
|
|
10,268
|
|
||
Total current assets
|
98,395
|
|
|
90,108
|
|
||
Property and equipment, net of accumulated depreciation of $71,996 and $71,902, at March 31, 2018 and December 31, 2017, respectively
|
47,838
|
|
|
49,194
|
|
||
Intangible assets
|
137,614
|
|
|
141,707
|
|
||
Goodwill
|
223,699
|
|
|
223,105
|
|
||
Deferred tax asset
|
17,988
|
|
|
17,681
|
|
||
Other assets
|
2,491
|
|
|
2,767
|
|
||
Total assets
|
$
|
528,025
|
|
|
$
|
524,562
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
16,858
|
|
|
$
|
14,529
|
|
Accrued liabilities
|
21,639
|
|
|
26,055
|
|
||
Current portion of capital lease obligations
|
3,817
|
|
|
4,023
|
|
||
Current portion of long-term debt
|
2,819
|
|
|
2,050
|
|
||
Deferred revenue
|
5,064
|
|
|
4,298
|
|
||
Total current liabilities
|
50,197
|
|
|
50,955
|
|
||
Long-term portion of capital lease obligations
|
726
|
|
|
1,486
|
|
||
Long-term debt
|
196,336
|
|
|
197,306
|
|
||
Other long-term liabilities
|
24,412
|
|
|
25,112
|
|
||
Total liabilities
|
271,671
|
|
|
274,859
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Common stock—$.001 par value as of March 31, 2018 and December 31, 2017; 200,000,000 shares authorized as of March 31, 2018 and December 31, 2017; 32,794,129 and 32,460,668 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively
|
33
|
|
|
32
|
|
||
Paid-in capital
|
411,328
|
|
|
409,517
|
|
||
Accumulated other comprehensive loss
|
(311
|
)
|
|
(114
|
)
|
||
Accumulated deficit
|
(152,696
|
)
|
|
(158,678
|
)
|
||
Total BioTelemetry, Inc.’s stockholders’ equity
|
258,354
|
|
|
250,757
|
|
||
Noncontrolling interest
|
(2,000
|
)
|
|
(1,054
|
)
|
||
Total equity
|
256,354
|
|
|
249,703
|
|
||
Total liabilities and equity
|
$
|
528,025
|
|
|
$
|
524,562
|
|
|
Three Months Ended
|
||||||
(In thousands, except per share data)
|
March 31,
2018 |
|
March 31,
2017 |
||||
Revenue:
|
|
|
|
||||
Healthcare
|
$
|
80,551
|
|
|
$
|
42,511
|
|
Research
|
11,244
|
|
|
9,324
|
|
||
Other
|
2,701
|
|
|
4,046
|
|
||
Total revenue
|
94,496
|
|
|
55,881
|
|
||
Cost of revenue:
|
|
|
|
||||
Healthcare
|
27,582
|
|
|
14,648
|
|
||
Research
|
6,326
|
|
|
5,571
|
|
||
Other
|
2,540
|
|
|
2,753
|
|
||
Total cost of revenue
|
36,448
|
|
|
22,972
|
|
||
Gross profit
|
58,048
|
|
|
32,909
|
|
||
Operating expenses:
|
|
|
|
||||
General and administrative
|
26,719
|
|
|
15,917
|
|
||
Sales and marketing
|
11,340
|
|
|
7,701
|
|
||
Bad debt expense
|
4,879
|
|
|
2,791
|
|
||
Research and development
|
3,289
|
|
|
2,433
|
|
||
Other charges
|
5,085
|
|
|
1,739
|
|
||
Total operating expenses
|
51,312
|
|
|
30,581
|
|
||
Income from operations
|
6,736
|
|
|
2,328
|
|
||
Other expense:
|
|
|
|
||||
Interest expense
|
(1,890
|
)
|
|
(388
|
)
|
||
Loss on equity method investment
|
(139
|
)
|
|
(95
|
)
|
||
Other non-operating income/(expense), net
|
187
|
|
|
(2,515
|
)
|
||
Total other expense
|
(1,842
|
)
|
|
(2,998
|
)
|
||
Income/(loss) before income taxes
|
4,894
|
|
|
(670
|
)
|
||
Benefit from income taxes
|
142
|
|
|
866
|
|
||
Net income
|
5,036
|
|
|
196
|
|
||
Net loss attributable to noncontrolling interest
|
(946
|
)
|
|
—
|
|
||
Net income attributable to BioTelemetry, Inc.
|
$
|
5,982
|
|
|
$
|
196
|
|
|
|
|
|
||||
Net income per common share attributable to BioTelemetry, Inc.:
|
|
|
|
||||
Basic
|
$
|
0.18
|
|
|
$
|
0.01
|
|
Diluted
|
$
|
0.17
|
|
|
$
|
0.01
|
|
Weighted average number of common shares outstanding:
|
|
|
|
||||
Basic
|
32,570
|
|
|
28,429
|
|
||
Dilutive stock options and restricted stock units
|
2,665
|
|
|
2,886
|
|
||
Diluted
|
35,235
|
|
|
31,315
|
|
||
Anti-dilutive stock options and restricted stock units excluded from weighted average calculation
|
579
|
|
|
496
|
|
|
Three Months Ended
|
||||||
(In thousands)
|
March 31,
2018 |
|
March 31,
2017 |
||||
Net income attributable to BioTelemetry, Inc.
|
$
|
5,982
|
|
|
$
|
196
|
|
Other comprehensive income/(loss):
|
|
|
|
||||
Foreign currency translation gain/(loss)
|
(197
|
)
|
|
1
|
|
||
Comprehensive income attributable to BioTelemetry, Inc.
|
$
|
5,785
|
|
|
$
|
197
|
|
|
Three Months Ended
|
||||||
(in thousands)
|
March 31,
2018 |
|
March 31,
2017 |
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
5,036
|
|
|
$
|
196
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Bad debt expense
|
4,879
|
|
|
2,791
|
|
||
Depreciation
|
5,507
|
|
|
2,720
|
|
||
Amortization of intangibles
|
4,321
|
|
|
995
|
|
||
Stock-based compensation
|
2,065
|
|
|
3,058
|
|
||
Equity method investment loss
|
139
|
|
|
95
|
|
||
Change in fair value of acquisition-related contingent consideration
|
(700
|
)
|
|
(605
|
)
|
||
Accretion of discount on debt
|
311
|
|
|
55
|
|
||
Non-cash lease income
|
(3
|
)
|
|
(50
|
)
|
||
Non-cash tax benefit
|
(307
|
)
|
|
(635
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Healthcare and other accounts receivables
|
(13,565
|
)
|
|
(7,286
|
)
|
||
Inventory
|
(1,021
|
)
|
|
810
|
|
||
Prepaid expenses and other assets
|
1,287
|
|
|
368
|
|
||
Accounts payable
|
2,329
|
|
|
463
|
|
||
Accrued and other liabilities
|
(1,204
|
)
|
|
1,678
|
|
||
Net cash provided by operating activities
|
9,074
|
|
|
4,653
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Purchases of property and equipment and investment in internally developed software
|
(3,938
|
)
|
|
(2,967
|
)
|
||
Net cash used in investing activities
|
(3,938
|
)
|
|
(2,967
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Proceeds related to the exercising of stock options and employee stock purchase plan
|
2,486
|
|
|
2,617
|
|
||
Tax payments related to the vesting of shares
|
(2,739
|
)
|
|
(1,881
|
)
|
||
Principal payments on long-term debt
|
(513
|
)
|
|
(312
|
)
|
||
Principal payments on capital lease obligations
|
(966
|
)
|
|
(65
|
)
|
||
Acquisition of noncontrolling interests
|
(2,885
|
)
|
|
—
|
|
||
Net cash (used in)/provided by financing activities
|
(4,617
|
)
|
|
359
|
|
||
Effect of exchange rate changes on cash
|
(195
|
)
|
|
1
|
|
||
Net increase in cash and cash equivalents
|
324
|
|
|
2,046
|
|
||
Cash and cash equivalents - beginning of period
|
36,022
|
|
|
23,052
|
|
||
Cash and cash equivalents - end of period
|
$
|
36,346
|
|
|
$
|
25,098
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
||||
Non-cash purchases of property and equipment
|
$
|
441
|
|
|
$
|
498
|
|
Non-cash fair value of equity issued for acquisition of business
|
1,972
|
|
|
—
|
|
||
Cash paid for interest
|
1,497
|
|
|
310
|
|
||
Cash paid for taxes
|
$
|
20
|
|
|
$
|
47
|
|
|
BioTelemetry, Inc. Equity
|
|
|
|
|
|||||||||||||||||||||
|
Common Stock
|
|
Paid-in Capital
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Accumulated Deficit
|
|
Noncontrolling Interest
|
|
Total Equity
|
|||||||||||||||
(In thousands, except shares)
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance at December 31, 2017
|
32,460,668
|
|
|
$
|
32
|
|
|
$
|
409,517
|
|
|
$
|
(114
|
)
|
|
$
|
(158,678
|
)
|
|
$
|
(1,054
|
)
|
|
$
|
249,703
|
|
Share issuances related to stock compensation plans
|
354,620
|
|
|
1
|
|
|
2,485
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,486
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,065
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,065
|
|
||||||
Shares withheld to cover taxes on vesting of share based awards
|
(79,945
|
)
|
|
—
|
|
|
(2,739
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,739
|
)
|
||||||
Acquisition of noncontrolling interests
|
58,786
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(197
|
)
|
|
—
|
|
|
—
|
|
|
(197
|
)
|
||||||
Net income/(loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,982
|
|
|
(946
|
)
|
|
5,036
|
|
||||||
Balance at March 31, 2018
|
32,794,129
|
|
|
$
|
33
|
|
|
$
|
411,328
|
|
|
$
|
(311
|
)
|
|
$
|
(152,696
|
)
|
|
$
|
(2,000
|
)
|
|
$
|
256,354
|
|
•
|
reclassifying trade payable invoices received but not yet processed in our purchasing system from accrued liabilities to accounts payable in the consolidated balance sheets,
|
•
|
disaggregating the components of other expense in the consolidated statements of operations,
|
•
|
disaggregating the equity method investment loss from the change in prepaid expenses and other assets in the consolidated statements of cash flows,
|
•
|
reclassifying research and development costs from the Corporate and Other category to the Healthcare segment in our segment information disclosures, and
|
•
|
aggregating the Technology operating segment into the Corporate and Other category.
|
Level 1 -
|
Quoted prices in active markets for an identical asset or liability.
|
Level 2 -
|
Inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability.
|
Level 3 -
|
Inputs that are unobservable for the asset or liability, based on our own assumptions about the assumptions a market participant would use in pricing the asset or liability.
|
(in thousands)
|
Healthcare
|
|
Research
|
|
Other
|
|
Total Consolidated
|
||||||||
Payor/Service Line
|
|
|
|
|
|
|
|
||||||||
Remote cardiac monitoring services - Medicare
|
$
|
30,215
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
30,215
|
|
Remote cardiac monitoring services - commercial payors
|
50,336
|
|
|
—
|
|
|
—
|
|
|
50,336
|
|
||||
Clinical trial support and related services
|
—
|
|
|
11,244
|
|
|
—
|
|
|
11,244
|
|
||||
Technology devices, consumable and related services
|
—
|
|
|
—
|
|
|
2,701
|
|
|
2,701
|
|
||||
Total
|
$
|
80,551
|
|
|
$
|
11,244
|
|
|
$
|
2,701
|
|
|
$
|
94,496
|
|
•
|
Medicare and Contracted payors
: We determine the transaction price based negotiated prices for services provided, on a case rate basis, as provided for under the relevant Current Procedural Terminology (“
CPT
”) codes.
|
•
|
Non-contracted payors:
Non-contracted commercial and government insurance carriers often reimburse out of network rates provided for under the relevant CPT codes on a case rate basis. Our transaction price includes implicit price concessions based on our historical collection experience for our non-contracted patients
|
(in thousands, except lives)
|
Amount
|
|
Weighted
Average Life
(Years)
|
||
Fair value of assets acquired:
|
|
|
|
||
Cash and cash equivalents
|
$
|
4,303
|
|
|
|
Healthcare accounts receivable
|
9,467
|
|
|
|
|
Inventory
|
1,136
|
|
|
|
|
Prepaid expenses and other current assets
|
3,798
|
|
|
|
|
Property and equipment
|
28,241
|
|
|
|
|
Other assets
|
713
|
|
|
|
|
Identifiable intangible assets:
|
|
|
|
||
Customer relationships
|
126,900
|
|
|
10
|
|
Technology
|
3,005
|
|
|
3
|
|
Total identifiable intangible assets
|
129,905
|
|
|
|
|
Total assets acquired
|
177,563
|
|
|
|
|
Fair value of liabilities assumed:
|
|
|
|
||
Accounts payable
|
10,424
|
|
|
|
|
Accrued liabilities
|
9,747
|
|
|
|
|
Current portion of capital lease obligations
|
4,664
|
|
|
|
|
Current portion of long-term debt
|
3,027
|
|
|
|
|
Long-term capital lease obligations
|
3,420
|
|
|
|
|
Deferred tax liabilities
|
14,454
|
|
|
|
|
Other long-term liabilities
|
23,435
|
|
|
|
|
Total liabilities assumed
|
69,171
|
|
|
|
|
|
|
|
|
||
Total identifiable net assets
|
108,392
|
|
|
|
|
Fair value of noncontrolling interest
|
(9,961
|
)
|
|
|
|
Goodwill
|
184,143
|
|
|
|
|
Net assets acquired
|
$
|
282,574
|
|
|
|
|
Three Months Ended
|
||
(pro forma, unaudited, in thousands, except per share amounts)
|
March 31,
2017 |
||
Revenue
|
$
|
85,100
|
|
Net loss attributable to BioTelemetry, Inc.
|
(6,100
|
)
|
|
Net loss per common share attributable to BioTelemetry, Inc.:
|
|
||
Basic
|
$
|
(0.19
|
)
|
Diluted
|
$
|
(0.19
|
)
|
Weighted average number of common shares outstanding:
|
|
||
Basic
|
32,123
|
|
|
Diluted
|
32,123
|
|
(in thousands)
|
March 31,
2018 |
|
December 31,
2017 |
||||
Raw materials and supplies
|
$
|
3,861
|
|
|
$
|
3,128
|
|
Finished goods
|
2,492
|
|
|
2,204
|
|
||
Total inventory
|
$
|
6,353
|
|
|
$
|
5,332
|
|
|
Three Months Ended
|
||||||
(in thousands)
|
March 31,
2018 |
|
March 31,
2017 |
||||
Beginning balance
|
$
|
700
|
|
|
$
|
3,305
|
|
Changes in fair value of contingent consideration
|
(700
|
)
|
|
(605
|
)
|
||
Ending balance
|
$
|
—
|
|
|
$
|
2,700
|
|
|
Reporting Segment
|
|
|
|
|
||||||||||
(in thousands)
|
Healthcare
|
|
Research
|
|
Corporate and Other
|
|
Total
|
||||||||
Balance at December 31, 2017
|
$
|
198,273
|
|
|
$
|
16,293
|
|
|
$
|
8,539
|
|
|
$
|
223,105
|
|
Measurement period adjustment
|
594
|
|
|
—
|
|
|
—
|
|
|
594
|
|
||||
Balance at March 31, 2018
|
$
|
198,867
|
|
|
$
|
16,293
|
|
|
$
|
8,539
|
|
|
$
|
223,699
|
|
|
Estimated
Useful Life
(Years)
|
|
|
||||||
(in thousands, except years)
|
|
March 31,
2018 |
|
December 31,
2017 |
|||||
Customer relationships
|
5 - 15
|
|
$
|
143,174
|
|
|
$
|
143,174
|
|
Technology including internally developed software
|
3 - 10
|
|
16,180
|
|
|
15,953
|
|
||
Backlog
|
1 - 4
|
|
6,860
|
|
|
6,860
|
|
||
Covenants not to compete
|
5 - 7
|
|
1,040
|
|
|
1,040
|
|
||
Total intangible assets, gross
|
|
|
167,254
|
|
|
167,027
|
|
||
Customer relationships
|
|
|
(14,354
|
)
|
|
(10,868
|
)
|
||
Technology including internally developed software
|
|
|
(9,184
|
)
|
|
(8,573
|
)
|
||
Backlog
|
|
|
(5,245
|
)
|
|
(5,052
|
)
|
||
Covenants not to compete
|
|
|
(857
|
)
|
|
(827
|
)
|
||
Total accumulated amortization
|
|
|
(29,640
|
)
|
|
(25,320
|
)
|
||
Total intangible assets, net
|
|
|
$
|
137,614
|
|
|
$
|
141,707
|
|
|
Three Months Ended
|
||||||
(in thousands)
|
March 31,
2018 |
|
March 31,
2017 |
||||
Beginning balance
|
$
|
1,431
|
|
|
$
|
1,125
|
|
Loss in equity method investment
|
(139
|
)
|
|
(95
|
)
|
||
Ending balance
|
$
|
1,292
|
|
|
$
|
1,030
|
|
(in thousands)
|
March 31,
2018 |
|
December 31,
2017 |
||||
Compensation
|
$
|
10,783
|
|
|
$
|
13,086
|
|
Professional fees
|
1,904
|
|
|
1,587
|
|
||
Squeeze-out
|
—
|
|
|
2,885
|
|
||
Severance
|
758
|
|
|
1,605
|
|
||
Non-income taxes
|
1,345
|
|
|
588
|
|
||
Interest
|
341
|
|
|
306
|
|
||
Other
|
6,508
|
|
|
5,998
|
|
||
Total
|
$
|
21,639
|
|
|
$
|
26,055
|
|
•
|
Beginning January 1, 2018, the principal amount of the term loan will be repaid, on a quarterly basis, in installments of approximately
$0.5 million
, plus accrued interest;
|
•
|
Beginning January 1, 2019, the principal amount of the term loan will be repaid, on a quarterly basis, in installments of approximately
$1.3 million
, plus accrued interest;
|
•
|
Beginning January 1, 2020, the principal amount of the term loan will be repaid, on a quarterly basis, in installments of approximately
$3.8 million
, plus accrued interest;
|
•
|
Beginning January 1, 2021, the principal amount of the term loan will be repaid, on a quarterly basis, in installments of approximately
$5.1 million
, plus accrued interest;
|
•
|
The remaining principal balance will be repaid on or before July 12, 2022 (or such earlier date upon an acceleration of the loans by Lenders upon an event of default or termination by the Company).
|
|
Stock Options
|
|
Performance Stock Options
|
||||||||||
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
|
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
|
||||||
Outstanding as of December 31, 2017
|
3,574,439
|
|
|
$
|
10.78
|
|
|
150,000
|
|
|
$
|
20.41
|
|
Granted
|
185,806
|
|
|
33.15
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(53,077
|
)
|
|
28.37
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(102,493
|
)
|
|
12.94
|
|
|
—
|
|
|
—
|
|
||
Outstanding as of March 31, 2018
|
3,604,675
|
|
|
$
|
11.61
|
|
|
150,000
|
|
|
$
|
20.41
|
|
|
|
Three Months Ended
|
||||||
(in thousands, except per option amounts)
|
|
March 31,
2018 |
|
March 31,
2017 |
||||
Aggregate intrinsic value of options outstanding at period end
|
$
|
73,400
|
|
|
$
|
73,660
|
|
|
Aggregate intrinsic value of options exercisable at period end
|
65,819
|
|
|
59,376
|
|
|||
Aggregate intrinsic value of options exercised during the period
|
2,164
|
|
|
3,752
|
|
|||
Cash received from the exercise of stock options during the period
|
1,327
|
|
|
1,981
|
|
|||
Weighted average grant date fair value per option during the period
|
$
|
19.61
|
|
|
$
|
15.31
|
|
|
Restricted Stock Units
|
|
Performance Stock Units
|
||||||||||
|
Number
of Shares
|
|
Weighted Average
Grant Date Fair
Value
|
|
Number
of Shares
|
|
Weighted Average
Grant Date Fair
Value
|
||||||
Units outstanding as of December 31, 2017
|
467,129
|
|
|
$
|
13.76
|
|
|
—
|
|
|
—
|
|
|
Granted
|
79,474
|
|
|
32.99
|
|
|
63,345
|
|
|
$
|
37.79
|
|
|
Forfeited
|
(3,730
|
)
|
|
17.84
|
|
|
—
|
|
|
—
|
|
||
Vested
|
(186,650
|
)
|
|
10.33
|
|
|
—
|
|
|
—
|
|
||
Units outstanding as of March 31, 2018
|
356,223
|
|
|
$
|
19.81
|
|
|
63,345
|
|
|
$
|
37.79
|
|
|
|
Three Months Ended
|
||||||
(in thousands)
|
|
March 31,
2018 |
|
March 31,
2017 |
||||
Aggregate market value of RSUs vested during the period
|
$
|
6,395
|
|
|
$
|
4,265
|
|
|
Three Months Ended
|
||||||
(in thousands)
|
March 31,
2018 |
|
March 31,
2017 |
||||
Stock options
|
$
|
1,111
|
|
|
$
|
596
|
|
Performance stock options
|
—
|
|
|
1,534
|
|
||
Restricted stock units
|
720
|
|
|
813
|
|
||
Employee stock purchase plan
|
234
|
|
|
115
|
|
||
Total stock-based compensation expense
|
$
|
2,065
|
|
|
$
|
3,058
|
|
|
Three Months Ended
|
||||||
(in thousands)
|
March 31,
2018 |
|
March 31,
2017 |
||||
Legal fees
|
$
|
1,536
|
|
|
$
|
982
|
|
Professional fees
|
1,227
|
|
|
1,160
|
|
||
Severance and employee related costs
|
1,997
|
|
|
185
|
|
||
Change in fair value of contingent consideration
|
(700
|
)
|
|
(605
|
)
|
||
Other costs
|
1,025
|
|
|
17
|
|
||
Total
|
$
|
5,085
|
|
|
$
|
1,739
|
|
(in thousands)
|
Healthcare
|
|
Research
|
|
Corporate
and Other
|
|
Consolidated
|
||||||||
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
80,551
|
|
|
$
|
11,244
|
|
|
$
|
2,701
|
|
|
$
|
94,496
|
|
Income/(loss) before income taxes
|
17,724
|
|
|
786
|
|
|
(13,616
|
)
|
|
4,894
|
|
||||
Depreciation and amortization
|
11,436
|
|
|
1,010
|
|
|
(2,618
|
)
|
|
9,828
|
|
||||
Capital expenditures
|
5,064
|
|
|
291
|
|
|
(1,417
|
)
|
|
3,938
|
|
(reclassified, in thousands)
|
Healthcare
|
|
Research
|
|
Corporate
and Other
|
|
Consolidated
|
||||||||
Three Months Ended March 31, 2017
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
42,511
|
|
|
$
|
9,324
|
|
|
$
|
4,046
|
|
|
$
|
55,881
|
|
Income/(loss) before income taxes
|
11,759
|
|
|
378
|
|
|
(12,807
|
)
|
|
(670
|
)
|
||||
Depreciation and amortization
|
2,861
|
|
|
1,033
|
|
|
(179
|
)
|
|
3,715
|
|
||||
Capital expenditures
|
2,890
|
|
|
—
|
|
|
77
|
|
|
2,967
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
March 31, 2018
|
|
March 31, 2017
|
|
$
|
|
%
|
|||||||
Healthcare
|
$
|
80,551
|
|
|
$
|
42,511
|
|
|
$
|
38,040
|
|
|
89.5
|
%
|
Research
|
11,244
|
|
|
9,324
|
|
|
1,920
|
|
|
20.6
|
%
|
|||
Other
|
2,701
|
|
|
4,046
|
|
|
(1,345
|
)
|
|
(33.2
|
)%
|
|||
Total revenue
|
$
|
94,496
|
|
|
$
|
55,881
|
|
|
$
|
38,615
|
|
|
69.1
|
%
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
March 31, 2018
|
|
March 31, 2017
|
|
$
|
|
%
|
|||||||
Gross profit
|
$
|
58,048
|
|
|
$
|
32,909
|
|
|
$
|
25,139
|
|
|
76.4
|
%
|
Percentage of revenue
|
61.4
|
%
|
|
58.9
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
March 31, 2018
|
|
March 31, 2017
|
|
$
|
|
%
|
|||||||
General and administrative expense
|
$
|
26,719
|
|
|
$
|
15,917
|
|
|
$
|
10,802
|
|
|
67.9
|
%
|
Percentage of revenue
|
28.3
|
%
|
|
28.5
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
March 31, 2018
|
|
March 31, 2017
|
|
$
|
|
%
|
|||||||
Sales and marketing expense
|
$
|
11,340
|
|
|
$
|
7,701
|
|
|
$
|
3,639
|
|
|
47.3
|
%
|
Percentage of revenue
|
12.0
|
%
|
|
13.8
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
March 31, 2018
|
|
March 31, 2017
|
|
$
|
|
%
|
|||||||
Bad debt expense
|
$
|
4,879
|
|
|
$
|
2,791
|
|
|
$
|
2,088
|
|
|
74.8
|
%
|
Percentage of revenue
|
5.2
|
%
|
|
5.0
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
March 31, 2018
|
|
March 31, 2017
|
|
$
|
|
%
|
|||||||
Research and development expense
|
$
|
3,289
|
|
|
$
|
2,433
|
|
|
$
|
856
|
|
|
35.2
|
%
|
Percentage of revenue
|
3.5
|
%
|
|
4.4
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
March 31, 2018
|
|
March 31, 2017
|
|
$
|
|
%
|
|||||||
Other charges
|
$
|
5,085
|
|
|
$
|
1,739
|
|
|
$
|
3,346
|
|
|
192.4
|
%
|
Percentage of revenue
|
5.4
|
%
|
|
3.1
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
March 31, 2018
|
|
March 31, 2017
|
|
$
|
|
%
|
|||||||
Interest expense
|
$
|
(1,890
|
)
|
|
$
|
(388
|
)
|
|
$
|
(1,502
|
)
|
|
387.1
|
%
|
Loss on equity method investment
|
(139
|
)
|
|
(95
|
)
|
|
(44
|
)
|
|
46.3
|
%
|
|||
Other non-operating income/(expense), net
|
187
|
|
|
(2,515
|
)
|
|
2,702
|
|
|
(107.4
|
)%
|
|||
Total Other expense
|
$
|
(1,842
|
)
|
|
$
|
(2,998
|
)
|
|
$
|
1,156
|
|
|
(38.6
|
)%
|
Percentage of revenue
|
1.9
|
%
|
|
5.4
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
March 31, 2018
|
|
March 31, 2017
|
|
$
|
|
%
|
|||||||
Benefit from income taxes
|
$
|
142
|
|
|
$
|
866
|
|
|
$
|
(724
|
)
|
|
(83.6
|
)%
|
Effective tax benefit rate
|
2.9
|
%
|
|
129.3
|
%
|
|
|
|
|
(in thousands, except ratios)
|
March 31, 2018
|
|
December 31, 2017
|
||||
Cash and cash equivalents
|
$
|
36,346
|
|
|
$
|
36,022
|
|
Healthcare accounts receivable, net of allowance for doubtful accounts
|
31,802
|
|
|
25,190
|
|
||
Other accounts receivable, net of allowance for doubtful accounts
|
15,370
|
|
|
13,296
|
|
||
Availability under revolving credit facility
|
50,000
|
|
|
50,000
|
|
||
|
|
|
|
||||
Working capital
|
$
|
48,198
|
|
|
$
|
39,153
|
|
Current ratio
|
2.0
|
|
|
1.8
|
|
||
|
|
|
|
||||
Total capital lease obligations
|
$
|
4,543
|
|
|
$
|
5,509
|
|
Total debt
|
$
|
199,155
|
|
|
$
|
199,356
|
|
|
Three Months Ended
|
||||||
(in thousands)
|
March 31, 2018
|
|
March 31, 2017
|
||||
Net income
|
$
|
5,036
|
|
|
$
|
196
|
|
Non-cash adjustments to net income
|
16,212
|
|
|
8,424
|
|
||
Cash used for working capital
|
(12,174
|
)
|
|
(3,967
|
)
|
||
Cash provided by operating activities
|
9,074
|
|
|
4,653
|
|
||
|
|
|
|
||||
Cash used in investing activities
|
(3,938
|
)
|
|
(2,967
|
)
|
||
|
|
|
|
||||
Cash provided by/(used in) financing activities
|
$
|
(4,617
|
)
|
|
$
|
359
|
|
|
|
|
|
|
Incorporated by Reference
|
Filed/Furnished Herewith
|
||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
||
|
10.1*
|
|
|
|
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†
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10.2*
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†
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10.3*
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†
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10.4*
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†
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31.1
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†
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31.2
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†
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32
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+
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101.INS
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XBRL Instance Document.
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101.DEF
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XBRL Taxonomy Extension Definition Linkbase Document.
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101.SCH
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XBRL Taxonomy Extension Schema Document.
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101.CAL
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XBRL Taxonomy Extension Calculation Linkbase Document.
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document.
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document.
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*
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Indicates a management plan or compensatory plan or arrangement.
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†
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Filed herewith.
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+
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Furnished herewith.
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|
BIOTELEMETRY, INC.
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Date: April 27, 2018
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By:
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/s/ Heather C. Getz
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Heather C. Getz
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Executive Vice President and Chief Financial Officer
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(Principal Financial Officer and authorized officer of the Registrant)
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Page
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||
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1.
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PURPOSE
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1
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||
2.
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DEFINITIONS
|
1
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3.
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ADMINISTRATION OF THE PLAN
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8
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3.1
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Committee
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8
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3.1.1
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Powers and Authorities
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8
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3.1.2
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Composition of the Committee
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9
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3.1.3
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Other Committees
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9
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3.1.4
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Delegation by the Committee
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9
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3.2
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Board
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10
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3.3
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Terms of Awards
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10
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3.3.1
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Committee Authority
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10
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3.3.2
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Forfeiture; Recoupment
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11
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3.4
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No Repricing
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11
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3.5
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Deferral Arrangement
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11
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3.6
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Registration; Share Certificates
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11
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4.
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STOCK SUBJECT TO THE PLAN
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12
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4.1
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Number of Shares of Stock Available for Awards
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12
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4.2
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Adjustments in Authorized Shares of Stock
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12
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4.3
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Share Usage
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12
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5.
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TERM; AMENDMENT, SUSPENSION, AND TERMINATION
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13
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||
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5.1
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Term
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13
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5.2
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Amendment, Suspension, and Termination
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13
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6.
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AWARD ELIGIBILITY AND LIMITATIONS
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13
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6.1
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Eligible Grantees
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13
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6.2
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Limitation on Shares of Stock Subject to Awards and Cash Awards
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14
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6.3
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Stand-Alone, Additional, Tandem, and Substitute Awards
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14
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6.4
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Minimum Vesting Period
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15
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7.
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AWARD AGREEMENT
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15
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8.
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TERMS AND CONDITIONS OF OPTIONS
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15
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8.1
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Option Price
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15
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8.2
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Vesting and Exercisability
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15
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8.3
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Term
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15
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8.4
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Termination of Service
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16
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8.5
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Limitations on Exercise of Option
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16
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8.6
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Method of Exercise
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16
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8.7
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Rights of Holders of Options
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16
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8.8
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Delivery of Stock
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16
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8.9
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Transferability of Options
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16
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6.
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DATE OF ISSUANCE.
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9.
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AWARD NOT A SERVICE CONTRACT.
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10.
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WITHHOLDING OBLIGATIONS.
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i.
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General
. The number of Performance Share Units granted to you pursuant to this Award, as specified in the Grant Summary, is referred to as the “
Target Number of PSUs
.” The vesting of one-half of the Target Number of PSUs (the “
Target Number of Revenue PSUs
”) will be determined with reference to the revenue metric as provided in
Section 2(b)(ii)
. The vesting of one-half of the Target Number of PSUs (the “
Target Number of EBITDA PSUs
”) will be determined with reference to the adjusted EBITDA metric as provided in
Section 2(b)(iii)
. The Target Number of PSUs is also subject to adjustment
|
ii.
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Revenue Metric
. The Target Number of Revenue PSUs that shall vest will be based on Revenue (as defined below) during the Performance Period. No portion of the Target Number of Revenue PSUs shall vest unless the Committee determines that Revenue for the Performance Period is greater than or equal to $[ ] million. If the Committee determines that Revenue for the Performance Period is greater than or equal to $[ ] million, the percentage of the Target Number of Revenue PSUs that shall vest will equal the Revenue Vested Percentage (as defined below) as adjusted pursuant to
Section 2(b)(iv)
.
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iii.
|
Adjusted EBITDA Metric
. The Target Number of EBITDA PSUs that shall vest will be based on Adjusted EBITDA (as defined below) during the Performance Period. No portion of the Target Number of EBITDA PSUs shall vest unless the Committee determines that Adjusted EBITDA for the Performance Period is greater than or equal to $[ ] million. If the Committee determines that Adjusted EBITDA for the Performance Period is greater than or equal to $[ ] million, the percentage of the Target Number of EBITDA PSUs that shall vest will equal the EBITDA Vested Percentage (as defined below) as adjusted pursuant to
Section 2(b)(iv)
.
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iv.
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TSR Adjustment
. The PSUs that shall vest in accordance with
Section 2(b)(ii)
and
(iii)
shall be adjusted upward by [ ]% if the Company’s TSR Percentile Rank is equal to or greater than the [ ] percentile and shall be adjusted downward by [ ]% if the Company’s TSR Percentile Rank is equal to or less than the [ ] percentile. [No adjustment shall be made if the Company’s TSR Percentile Rank is between the [ ] and [ ] percentile.] [Additionally, in no event shall an upward adjustment result in either the Target Number of Revenue PSUs or the Target Number of EBITDA PSUs vesting at greater than [ ]%.]
|
v.
|
Acquisitions and Divestitures
. The impact of acquisitions shall be included and the impact of divestitures shall be excluded when calculating the performance metrics; provided that no pro forma adjustments shall be made to account for any acquisition or divestiture.
|
vi.
|
Determinations of the Committee regarding Adjusted EBITDA, Revenues, TSR, TSR Percentile Rank and the resulting vested PSUs, and related matters, will be final and binding on you.
|
vii.
|
Definitions
.
|
A.
|
“
Adjusted EBITDA
” shall mean adjusted earnings before interest, taxes, depreciation and amortization of the Company, as reported in
|
B.
|
“
EBITDA Vested Percentage
” shall mean the amount between [ ]% and [ ]%, which is based on Adjusted EBITDA, as provided in the following table:
|
C.
|
“
Peer Companies
” shall mean [ ].
|
D.
|
“
Performance Period
” shall mean the period beginning on [ ], and ending on [ ].
|
E.
|
“
Revenues
” shall mean the Company’s reported total consolidated revenues.
|
F.
|
“
Revenue Vested Percentage
” shall mean the amount between [ ]% and [ ]%, which is based on Revenue, as provided in the following table:
|
Revenue (in millions)
|
Revenue Vested Percentage
|
Greater than $[ ] million
|
[ ]%
|
$[ ] million
|
[ ]%
|
$[ ] million
|
[ ]%
|
$[ ] million
|
[ ]%
|
Less than $[ ] million
|
[ ]%
|
G.
|
“
TSR
” shall mean the change in the value, expressed as a percentage of a given dollar amount invested in a company's most widely publicly traded stock over the TSR Measurement Period, taking into account both stock price appreciation (or depreciation) and the reinvestment of dividends (including the cash value of non-cash
|
H.
|
“
TSR Measurement Period
” shall mean the three-year period beginning on [ ], and ending on [ ].
|
I.
|
“
TSR Percentile Rank
” shall mean the percentage of TSR values among Peer Companies during the TSR Measurement Period that are lower than the Company’s TSR during the TSR Measurement Period. For example, if the Company's TSR during the TSR Measurement Period is at the [ ] percentile, [ ]% of the Peer Companies had higher TSR during the TSR Measurement Period and [ ]% of the companies in the Peer Companies had equal or lower TSR during the TSR Measurement Period. For purposes of the TSR Percentile Rank calculation, the Company will be excluded from the group of Peer Companies
.
|
6.
|
DATE OF ISSUANCE.
|
9.
|
AWARD NOT A SERVICE CONTRACT.
|
10.
|
WITHHOLDING OBLIGATIONS.
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of BioTelemetry, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ JOSEPH H. CAPPER
|
|
|
Joseph H. Capper
President and Chief Executive Officer
(Principal Executive Officer)
|
1.
|
I have reviewed this
quarterly
report on Form
10-Q
of BioTelemetry, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
|
|
/s/ HEATHER C. GETZ
|
|
|
Heather C. Getz
Executive Vice President and Chief Financial Officer
(Principle Financial and Accounting Officer)
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of BioTelemetry, Inc.
|
/s/ JOSEPH H. CAPPER
|
|
/s/ HEATHER C. GETZ
|
Joseph H. Capper
President and Chief Executive Officer
|
|
Heather C. Getz
Executive Vice President and Chief Financial Officer
|
April 27, 2018
|
|
April 27, 2018
|