|
Delaware
|
|
46-2568498
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
1000 Cedar Hollow Road
|
|
|
|
Malvern,
|
Pennsylvania
|
|
19355
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.001 par value
|
BEAT
|
NASDAQ Global Select Market
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
Emerging growth company
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
|
•
|
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 (“MCT”) patch;
|
•
|
our ability to obtain and maintain required regulatory approvals for our products, services and manufacturing facilities;
|
•
|
changes in governmental regulations and legislation;
|
•
|
adverse regulatory action;
|
•
|
our ability to obtain and maintain adequate protection of our intellectual property;
|
•
|
interruptions or delays in the telecommunications 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, 2018.
|
(in thousands, except share and par value amounts)
|
(Unaudited)
June 30, 2019 |
|
December 31,
2018 |
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
51,712
|
|
|
$
|
80,889
|
|
Healthcare accounts receivable, net of allowance for doubtful accounts of $27,458 and $25,345, at June 30, 2019 and December 31, 2018, respectively
|
48,307
|
|
|
37,754
|
|
||
Other accounts receivable, net of allowance for doubtful accounts of $187 and $268, at June 30, 2019 and December 31, 2018, respectively
|
15,026
|
|
|
14,874
|
|
||
Inventory
|
6,037
|
|
|
7,323
|
|
||
Prepaid expenses and other current assets
|
8,925
|
|
|
5,820
|
|
||
Total current assets
|
130,007
|
|
|
146,660
|
|
||
Property and equipment, net of accumulated depreciation of $70,679 and $67,202, at June 30, 2019 and December 31, 2018, respectively
|
54,289
|
|
|
48,377
|
|
||
Intangible assets, net
|
137,530
|
|
|
129,653
|
|
||
Goodwill
|
303,981
|
|
|
238,814
|
|
||
Deferred tax assets
|
16,116
|
|
|
19,975
|
|
||
Other assets
|
22,238
|
|
|
3,322
|
|
||
Total assets
|
$
|
664,161
|
|
|
$
|
586,801
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
22,484
|
|
|
$
|
18,157
|
|
Accrued liabilities
|
25,927
|
|
|
24,689
|
|
||
Current portion of finance lease obligations
|
590
|
|
|
1,652
|
|
||
Current portion of long-term debt
|
10,250
|
|
|
5,125
|
|
||
Total current liabilities
|
59,251
|
|
|
49,623
|
|
||
Long-term portion of finance lease obligations
|
419
|
|
|
117
|
|
||
Long-term debt
|
186,358
|
|
|
193,424
|
|
||
Other long-term liabilities
|
71,294
|
|
|
33,152
|
|
||
Total liabilities
|
317,322
|
|
|
276,316
|
|
||
Stockholders’ equity:
|
|
|
|
|
|
||
Common stock—$0.001 par value as of June 30, 2019 and December 31, 2018; 200,000,000 shares authorized as of June 30, 2019 and December 31, 2018; 33,888,920 and 33,406,364 shares issued and outstanding at June 30, 2019 and December 31, 2018, respectively
|
34
|
|
|
33
|
|
||
Paid-in capital
|
443,135
|
|
|
426,054
|
|
||
Accumulated other comprehensive (loss)/income
|
(457
|
)
|
|
256
|
|
||
Accumulated deficit
|
(95,873
|
)
|
|
(115,858
|
)
|
||
Total equity
|
346,839
|
|
|
310,485
|
|
||
Total liabilities and equity
|
$
|
664,161
|
|
|
$
|
586,801
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands, except per share data)
|
June 30,
2019 |
|
June 30,
2018 |
|
June 30,
2019 |
|
June 30,
2018 |
||||||||
Revenue
|
$
|
111,803
|
|
|
$
|
101,360
|
|
|
$
|
215,782
|
|
|
$
|
195,856
|
|
Cost of revenue
|
41,563
|
|
|
35,605
|
|
|
80,764
|
|
|
72,053
|
|
||||
Gross profit
|
70,240
|
|
|
65,755
|
|
|
135,018
|
|
|
123,803
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
General and administrative
|
30,587
|
|
|
28,741
|
|
|
58,194
|
|
|
55,460
|
|
||||
Sales and marketing
|
12,795
|
|
|
11,075
|
|
|
25,235
|
|
|
22,415
|
|
||||
Bad debt expense
|
5,379
|
|
|
6,875
|
|
|
10,527
|
|
|
11,754
|
|
||||
Research and development
|
3,532
|
|
|
2,733
|
|
|
6,865
|
|
|
6,022
|
|
||||
Other charges
|
2,234
|
|
|
5,208
|
|
|
5,304
|
|
|
10,293
|
|
||||
Total operating expenses
|
54,527
|
|
|
54,632
|
|
|
106,125
|
|
|
105,944
|
|
||||
Income from operations
|
15,713
|
|
|
11,123
|
|
|
28,893
|
|
|
17,859
|
|
||||
Other expense:
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(2,538
|
)
|
|
(2,684
|
)
|
|
(5,020
|
)
|
|
(4,574
|
)
|
||||
Loss on equity method investments
|
(154
|
)
|
|
(45
|
)
|
|
(186
|
)
|
|
(184
|
)
|
||||
Other non-operating income/(expense), net
|
86
|
|
|
550
|
|
|
(968
|
)
|
|
737
|
|
||||
Total other expense, net
|
(2,606
|
)
|
|
(2,179
|
)
|
|
(6,174
|
)
|
|
(4,021
|
)
|
||||
Income before income taxes
|
13,107
|
|
|
8,944
|
|
|
22,719
|
|
|
13,838
|
|
||||
(Provision for)/benefit from income taxes
|
(4,807
|
)
|
|
1,500
|
|
|
(2,734
|
)
|
|
1,642
|
|
||||
Net income
|
8,300
|
|
|
10,444
|
|
|
19,985
|
|
|
15,480
|
|
||||
Net loss attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
(946
|
)
|
||||
Net income attributable to BioTelemetry, Inc.
|
$
|
8,300
|
|
|
$
|
10,444
|
|
|
$
|
19,985
|
|
|
$
|
16,426
|
|
|
|
|
|
|
|
|
|
||||||||
Net income per common share attributable to BioTelemetry, Inc.:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.25
|
|
|
$
|
0.32
|
|
|
$
|
0.59
|
|
|
$
|
0.51
|
|
Diluted
|
$
|
0.23
|
|
|
$
|
0.29
|
|
|
$
|
0.55
|
|
|
$
|
0.46
|
|
Weighted average number of common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
33,825
|
|
|
32,435
|
|
|
33,806
|
|
|
32,227
|
|
||||
Dilutive common stock equivalents
|
2,493
|
|
|
3,143
|
|
|
2,638
|
|
|
3,187
|
|
||||
Diluted
|
36,318
|
|
|
35,578
|
|
|
36,444
|
|
|
35,414
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
June 30,
2019 |
|
June 30,
2018 |
|
June 30,
2019 |
|
June 30,
2018 |
||||||||
Net income attributable to BioTelemetry, Inc.
|
$
|
8,300
|
|
|
$
|
10,444
|
|
|
$
|
19,985
|
|
|
$
|
16,426
|
|
Other comprehensive income/(loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation (loss)/gain
|
(711
|
)
|
|
30
|
|
|
(713
|
)
|
|
(167
|
)
|
||||
Comprehensive income attributable to BioTelemetry, Inc.
|
$
|
7,589
|
|
|
$
|
10,474
|
|
|
$
|
19,272
|
|
|
$
|
16,259
|
|
|
Six Months Ended
|
||||||
(in thousands)
|
June 30,
2019 |
|
June 30,
2018 |
||||
OPERATING ACTIVITIES
|
|
|
|
||||
Net income
|
$
|
19,985
|
|
|
$
|
15,480
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
||||
Bad debt expense
|
10,527
|
|
|
11,754
|
|
||
Depreciation
|
11,012
|
|
|
11,236
|
|
||
Amortization
|
9,201
|
|
|
8,646
|
|
||
Stock-based compensation
|
6,026
|
|
|
4,923
|
|
||
Accretion of debt discount
|
621
|
|
|
621
|
|
||
Deferred income taxes
|
1,980
|
|
|
(3,258
|
)
|
||
Change in fair value of acquisition-related contingent consideration
|
(1,810
|
)
|
|
(700
|
)
|
||
Other non-cash items
|
(398
|
)
|
|
120
|
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Healthcare and other accounts receivable
|
(19,643
|
)
|
|
(22,579
|
)
|
||
Inventory
|
1,286
|
|
|
(2,376
|
)
|
||
Prepaid expenses and other assets
|
(3,366
|
)
|
|
1,700
|
|
||
Accounts payable
|
3,837
|
|
|
(582
|
)
|
||
Accrued and other liabilities
|
(3,128
|
)
|
|
(8,849
|
)
|
||
Net cash provided by operating activities
|
36,130
|
|
|
16,136
|
|
||
INVESTING ACTIVITIES
|
|
|
|
||||
Acquisition of businesses, net of cash acquired
|
(44,766
|
)
|
|
—
|
|
||
Purchases of property and equipment and investment in internally developed software
|
(16,092
|
)
|
|
(9,937
|
)
|
||
Net cash used in investing activities
|
(60,858
|
)
|
|
(9,937
|
)
|
||
FINANCING ACTIVITIES
|
|
|
|
||||
Proceeds related to the exercising of stock options and employee stock purchase plan
|
4,729
|
|
|
6,152
|
|
||
Payments of tax withholdings related to vesting of share-based awards
|
(4,955
|
)
|
|
(2,890
|
)
|
||
Principal payments on long-term debt
|
(2,563
|
)
|
|
(1,025
|
)
|
||
Principal payments on finance lease obligations
|
(1,659
|
)
|
|
(1,973
|
)
|
||
Acquisition of noncontrolling interests
|
—
|
|
|
(2,885
|
)
|
||
Net cash used in financing activities
|
(4,448
|
)
|
|
(2,621
|
)
|
||
Effect of exchange rate changes on cash
|
(1
|
)
|
|
(166
|
)
|
||
Net (decrease)/increase in cash and cash equivalents
|
(29,177
|
)
|
|
3,412
|
|
||
Cash and cash equivalents - beginning of period
|
80,889
|
|
|
36,022
|
|
||
Cash and cash equivalents - end of period
|
$
|
51,712
|
|
|
$
|
39,434
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
||||
Non-cash purchases of property and equipment
|
$
|
1,645
|
|
|
$
|
1,131
|
|
Non-cash fair value of equity issued for acquisition of business
|
2,142
|
|
|
—
|
|
||
Non-cash acquisitions of noncontrolling interests
|
—
|
|
|
3,972
|
|
||
Cash paid for interest
|
4,327
|
|
|
3,675
|
|
||
Cash paid for taxes
|
$
|
312
|
|
|
$
|
1,107
|
|
|
BioTelemetry, Inc. Equity
|
|
|
|
|
|||||||||||||||||||||
|
Common Stock
|
|
Paid-in Capital
|
|
Accumulated
Other
Comprehensive
Income/(Loss)
|
|
Accumulated Deficit
|
|
Noncontrolling Interest
|
|
Total Equity
|
|||||||||||||||
(in thousands, except shares)
|
Shares
|
|
Amount
|
|
|
|
|
|
||||||||||||||||||
Balance at March 31, 2018
|
32,239,656
|
|
|
$
|
33
|
|
|
$
|
411,328
|
|
|
$
|
(311
|
)
|
|
$
|
(152,696
|
)
|
|
$
|
(2,000
|
)
|
|
$
|
256,354
|
|
Share issuances related to stock compensation plans
|
480,766
|
|
|
—
|
|
|
3,666
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,666
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
2,858
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,858
|
|
||||||
Shares withheld to cover taxes on vesting of share based awards
|
(5,232
|
)
|
|
—
|
|
|
(151
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(151
|
)
|
||||||
Acquisition of noncontrolling interest
|
—
|
|
|
—
|
|
|
(2,000
|
)
|
|
—
|
|
|
—
|
|
|
2,000
|
|
|
—
|
|
||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
30
|
|
|
—
|
|
|
—
|
|
|
30
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,444
|
|
|
—
|
|
|
10,444
|
|
||||||
Balance at June 30, 2018
|
32,715,190
|
|
|
$
|
33
|
|
|
$
|
415,701
|
|
|
$
|
(281
|
)
|
|
$
|
(142,252
|
)
|
|
$
|
—
|
|
|
$
|
273,201
|
|
|
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
|
31,906,195
|
|
|
$
|
32
|
|
|
$
|
409,517
|
|
|
$
|
(114
|
)
|
|
$
|
(158,678
|
)
|
|
$
|
(1,054
|
)
|
|
$
|
249,703
|
|
Share issuances related to stock compensation plans
|
835,386
|
|
|
1
|
|
|
6,151
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,152
|
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
4,923
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,923
|
|
||||||
Shares withheld to cover taxes on vesting of share based awards
|
(85,177
|
)
|
|
—
|
|
|
(2,890
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,890
|
)
|
||||||
Acquisition of noncontrolling interest
|
58,786
|
|
|
—
|
|
|
(2,000
|
)
|
|
—
|
|
|
—
|
|
|
2,000
|
|
|
—
|
|
||||||
Currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(167
|
)
|
|
—
|
|
|
—
|
|
|
(167
|
)
|
||||||
Net income/(loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16,426
|
|
|
(946
|
)
|
|
15,480
|
|
||||||
Balance at June 30, 2018
|
32,715,190
|
|
|
$
|
33
|
|
|
$
|
415,701
|
|
|
$
|
(281
|
)
|
|
$
|
(142,252
|
)
|
|
$
|
—
|
|
|
$
|
273,201
|
|
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.
|
|
Three Months Ended June 30, 2019
|
||||||||||||||
(in thousands)
|
Healthcare
|
|
Research
|
|
Other
|
|
Total Consolidated
|
||||||||
Payor/Service Line
|
|
|
|
|
|
|
|
||||||||
Remote cardiac monitoring services - Medicare
|
$
|
36,096
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,096
|
|
Remote cardiac monitoring services - commercial payors
|
58,908
|
|
|
—
|
|
|
—
|
|
|
58,908
|
|
||||
Clinical trial support and related services
|
—
|
|
|
13,879
|
|
|
—
|
|
|
13,879
|
|
||||
Technology devices, consumables and related services
|
—
|
|
|
—
|
|
|
2,920
|
|
|
2,920
|
|
||||
Total
|
$
|
95,004
|
|
|
$
|
13,879
|
|
|
$
|
2,920
|
|
|
$
|
111,803
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||
(in thousands)
|
Healthcare
|
|
Research
|
|
Other
|
|
Total Consolidated
|
||||||||
Payor/Service Line
|
|
|
|
|
|
|
|
||||||||
Remote cardiac monitoring services - Medicare
|
$
|
36,599
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
36,599
|
|
Remote cardiac monitoring services - commercial payors
|
50,124
|
|
|
—
|
|
|
—
|
|
|
50,124
|
|
||||
Clinical trial support and related services
|
—
|
|
|
12,546
|
|
|
—
|
|
|
12,546
|
|
||||
Technology devices, consumables and related services
|
—
|
|
|
—
|
|
|
2,091
|
|
|
2,091
|
|
||||
Total
|
$
|
86,723
|
|
|
$
|
12,546
|
|
|
$
|
2,091
|
|
|
$
|
101,360
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||
(in thousands)
|
Healthcare
|
|
Research
|
|
Other
|
|
Total Consolidated
|
||||||||
Payor/Service Line
|
|
|
|
|
|
|
|
||||||||
Remote cardiac monitoring services - Medicare
|
$
|
70,031
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
70,031
|
|
Remote cardiac monitoring services - commercial payors
|
112,982
|
|
|
—
|
|
|
—
|
|
|
112,982
|
|
||||
Clinical trial support and related services
|
—
|
|
|
26,843
|
|
|
—
|
|
|
26,843
|
|
||||
Technology devices, consumables and related services
|
—
|
|
|
—
|
|
|
5,926
|
|
|
5,926
|
|
||||
Total
|
$
|
183,013
|
|
|
$
|
26,843
|
|
|
$
|
5,926
|
|
|
$
|
215,782
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||
(in thousands)
|
Healthcare
|
|
Research
|
|
Other
|
|
Total Consolidated
|
||||||||
Payor/Service Line
|
|
|
|
|
|
|
|
||||||||
Remote cardiac monitoring services - Medicare
|
$
|
66,814
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
66,814
|
|
Remote cardiac monitoring services - commercial payors
|
100,460
|
|
|
—
|
|
|
—
|
|
|
100,460
|
|
||||
Clinical trial support and related services
|
—
|
|
|
23,790
|
|
|
—
|
|
|
23,790
|
|
||||
Technology devices, consumables and related services
|
—
|
|
|
—
|
|
|
4,792
|
|
|
4,792
|
|
||||
Total
|
$
|
167,274
|
|
|
$
|
23,790
|
|
|
$
|
4,792
|
|
|
$
|
195,856
|
|
•
|
Contracted payors (including Medicare): We determine the transaction price based on 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.
|
•
|
The Securityholders will, subject to potential deductions pursuant to the Geneva Agreement, receive additional consideration of $20.0 million, a total of $11.1 million of which will be paid in cash, and the remaining value will be settled in shares. We will issue a total of 131,594 shares of our common stock to settle the share-related portion of the obligation, based on the elections made by the Securityholders and the formulas within the Geneva Agreement.
|
•
|
The estimated present value of the future cash payment of $11.1 million, which totals $9.7 million as of the acquisition date, as well as the estimated fair value of our common stock of $9.1 million, has been included within the preliminary purchase price for Geneva. The estimated present value of the future cash payment is recorded as a component of other long-term liabilities and will be accreted to its redemption value through interest expense through the payment date. The estimated fair value of the 131,594 shares our common stock has been recorded within paid-in-capital.
|
•
|
The Securityholders will also be eligible to receive additional consideration, in the form of both cash and shares, based on a predetermined formula that is driven by the future revenues of Geneva and does not have a predetermined limit. The total estimated acquisition-related contingent consideration as of the March 1, 2019 acquisition date is $13.2 million, which is also included in the preliminary purchase price of Geneva. The $13.2 million is recorded within other long-term liabilities and will be marked to market through earnings on a quarterly basis throughout the earn-out period. The equity portion of the acquisition-related contingent consideration requires liability classification and mark-to-market accounting pursuant to the provisions of ASC 815 - Derivatives and Hedging.
|
(in thousands, except years)
|
Amount
|
|
Weighted
Average Life
(Years)
|
||
Fair value of assets acquired:
|
|
|
|
||
Cash and cash equivalents
|
$
|
1,376
|
|
|
|
Healthcare accounts receivable
|
1,500
|
|
|
|
|
Prepaid expenses and other current assets
|
234
|
|
|
|
|
Identifiable intangible assets:
|
|
|
|
||
Customer relationships
|
3,500
|
|
|
12
|
|
Technology
|
8,900
|
|
|
7
|
|
Trade names
|
2,500
|
|
|
15
|
|
Total identifiable intangible assets
|
14,900
|
|
|
|
|
Total assets acquired
|
18,010
|
|
|
|
|
Fair value of liabilities assumed:
|
|
|
|
||
Accounts payable
|
215
|
|
|
|
|
Accrued liabilities
|
878
|
|
|
|
|
Deferred tax liabilities
|
1,879
|
|
|
|
|
Total liabilities assumed
|
2,972
|
|
|
|
|
|
|
|
|
||
Total identifiable net assets
|
15,038
|
|
|
|
|
Goodwill
|
62,842
|
|
|
|
|
Net assets acquired
|
$
|
77,880
|
|
|
|
(in thousands)
|
June 30,
2019 |
|
December 31,
2018 |
||||
Raw materials and supplies
|
$
|
3,277
|
|
|
$
|
3,667
|
|
Finished goods
|
2,760
|
|
|
3,656
|
|
||
Total inventory
|
$
|
6,037
|
|
|
$
|
7,323
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
June 30,
2019 |
|
June 30,
2018 |
|
June 30,
2019 |
|
June 30,
2018 |
||||||||
Beginning balance
|
$
|
15,990
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
700
|
|
Initial acquisition-related contingent consideration
|
—
|
|
|
—
|
|
|
15,990
|
|
|
—
|
|
||||
Measurement period adjustments to acquisition-related contingent consideration
|
(2,820
|
)
|
|
—
|
|
|
(2,820
|
)
|
|
—
|
|
||||
Changes in fair value of acquisition-related contingent consideration
|
(1,810
|
)
|
|
—
|
|
|
(1,810
|
)
|
|
(700
|
)
|
||||
Ending balance
|
$
|
11,360
|
|
|
$
|
—
|
|
|
$
|
11,360
|
|
|
$
|
—
|
|
|
Reporting Segment
|
|
|
|
|
||||||||||
(in thousands)
|
Healthcare
|
|
Research
|
|
Corporate and Other
|
|
Total
|
||||||||
Balance at December 31, 2018
|
$
|
213,507
|
|
|
$
|
16,293
|
|
|
$
|
9,014
|
|
|
$
|
238,814
|
|
Goodwill acquired
|
65,167
|
|
|
—
|
|
|
—
|
|
|
65,167
|
|
||||
Balance at June 30, 2019
|
$
|
278,674
|
|
|
$
|
16,293
|
|
|
$
|
9,014
|
|
|
$
|
303,981
|
|
(in thousands, except years)
|
Weighted
Average Life
(Years)
|
|
June 30,
2019 |
|
December 31,
2018 |
||||
Gross Carrying Value:
|
|
|
|
|
|
||||
Customer relationships
|
10.3
|
|
$
|
150,523
|
|
|
$
|
146,200
|
|
Technology including internally developed software
|
6.0
|
|
27,957
|
|
|
18,078
|
|
||
Backlog
|
3.7
|
|
6,860
|
|
|
6,860
|
|
||
Covenants not to compete
|
4.9
|
|
1,205
|
|
|
1,040
|
|
||
Trade names
|
15.0
|
|
2,500
|
|
|
—
|
|
||
Total intangible assets, gross
|
|
|
189,045
|
|
|
172,178
|
|
||
Accumulated Amortization:
|
|
|
|
|
|
||||
Customer relationships
|
|
|
(32,085
|
)
|
|
(24,870
|
)
|
||
Technology including internally developed software
|
|
|
(12,145
|
)
|
|
(10,879
|
)
|
||
Backlog
|
|
|
(6,214
|
)
|
|
(5,827
|
)
|
||
Covenants not to compete
|
|
|
(1,016
|
)
|
|
(949
|
)
|
||
Trade names
|
|
|
(55
|
)
|
|
—
|
|
||
Total accumulated amortization
|
|
|
(51,515
|
)
|
|
(42,525
|
)
|
||
Total intangible assets, net
|
|
|
$
|
137,530
|
|
|
$
|
129,653
|
|
(in thousands)
|
|
|||
Remainder of 2019
|
$
|
9,418
|
|
|
2020
|
18,104
|
|
||
2021
|
17,466
|
|
||
2022
|
16,854
|
|
||
2023
|
16,683
|
|
||
Thereafter
|
59,005
|
|
||
Total estimated amortization
|
$
|
137,530
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
June 30,
2019 |
|
June 30,
2018 |
|
June 30,
2019 |
|
June 30,
2018 |
||||||||
Beginning balance
|
$
|
2,012
|
|
|
$
|
1,292
|
|
|
$
|
2,044
|
|
|
$
|
1,431
|
|
Derecognition of ADEA investment
|
(746
|
)
|
|
—
|
|
|
(746
|
)
|
|
—
|
|
||||
Loss on equity method investments
|
(154
|
)
|
|
(45
|
)
|
|
(186
|
)
|
|
(184
|
)
|
||||
Ending balance
|
$
|
1,112
|
|
|
$
|
1,247
|
|
|
$
|
1,112
|
|
|
$
|
1,247
|
|
(in thousands)
|
June 30,
2019 |
|
December 31,
2018 |
||||
Compensation
|
$
|
9,093
|
|
|
$
|
13,443
|
|
Right of use liabilities - operating leases
|
5,257
|
|
|
—
|
|
||
Professional fees
|
4,311
|
|
|
4,260
|
|
||
Contract liabilities
|
2,286
|
|
|
3,080
|
|
||
Non-income taxes
|
1,781
|
|
|
906
|
|
||
Interest
|
645
|
|
|
702
|
|
||
Operating costs
|
671
|
|
|
1,095
|
|
||
Facility costs
|
105
|
|
|
106
|
|
||
Other
|
1,778
|
|
|
1,097
|
|
||
Total
|
$
|
25,927
|
|
|
$
|
24,689
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
(in thousands)
|
June 30,
2019 |
|
June 30,
2019 |
||||
Operating lease cost:
|
|
|
|
||||
Operating lease cost
|
$
|
1,513
|
|
|
$
|
2,921
|
|
Short-term lease cost
|
19
|
|
|
165
|
|
||
Total operating lease cost
|
1,532
|
|
|
3,086
|
|
||
|
|
|
|
||||
Finance lease cost:
|
|
|
|
||||
Amortization of right-of-use asset
|
848
|
|
|
1,713
|
|
||
Interest on lease liabilities
|
14
|
|
|
38
|
|
||
Total finance lease cost
|
862
|
|
|
1,751
|
|
||
|
|
|
|
||||
Total lease cost
|
$
|
2,394
|
|
|
$
|
4,837
|
|
(in thousands, except percentage and years)
|
Operating
Leases
|
|
Finance
Leases
|
||||
Property and equipment, net
|
$
|
—
|
|
|
$
|
942
|
|
Other assets
|
19,490
|
|
|
—
|
|
||
Total right-of-use assets
|
19,490
|
|
|
942
|
|
||
|
|
|
|
||||
Accrued liabilities
|
5,257
|
|
|
—
|
|
||
Current portion of finance lease obligations
|
—
|
|
|
590
|
|
||
Long-term portion of finance lease obligations
|
—
|
|
|
419
|
|
||
Other long-term liabilities
|
16,386
|
|
|
—
|
|
||
Total lease obligations
|
$
|
21,643
|
|
|
$
|
1,009
|
|
|
|
|
|
||||
Weighted average remaining lease term (years)
|
5.3
|
|
|
2.1
|
|
||
Weighted average discount rate
|
4.4
|
%
|
|
4.9
|
%
|
(in thousands)
|
Operating
Leases
|
|
Finance
Leases
|
||||
Remainder of 2019
|
$
|
3,059
|
|
|
$
|
357
|
|
2020
|
5,807
|
|
|
412
|
|
||
2021
|
4,424
|
|
|
191
|
|
||
2022
|
3,058
|
|
|
94
|
|
||
2023
|
2,268
|
|
|
—
|
|
||
Thereafter
|
5,806
|
|
|
—
|
|
||
Total minimum lease payments
|
24,422
|
|
|
1,054
|
|
||
Less imputed interest
|
(2,779
|
)
|
|
(45
|
)
|
||
Total
|
$
|
21,643
|
|
|
$
|
1,009
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||
(in thousands)
|
June 30,
2019 |
|
June 30,
2019 |
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
|
||||
Operating cash flows from operating leases
|
$
|
(1,393
|
)
|
|
$
|
(2,865
|
)
|
Operating cash flows from finance leases
|
(14
|
)
|
|
(38
|
)
|
||
Financing cash flows from finance leases
|
(496
|
)
|
|
(1,659
|
)
|
||
|
|
|
|
||||
Right-of-use assets obtained in exchange for lease obligations:
|
|
|
|
||||
Operating leases
|
6
|
|
|
21,816
|
|
||
Finance leases
|
$
|
—
|
|
|
$
|
787
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
June 30,
2019 |
|
June 30,
2018 |
|
June 30,
2019 |
|
June 30,
2018 |
||||||||
LifeWatch AG integration costs
|
$
|
241
|
|
|
$
|
2,208
|
|
|
$
|
378
|
|
|
$
|
7,204
|
|
Geneva integration costs
|
1,181
|
|
|
—
|
|
|
2,604
|
|
|
—
|
|
||||
Reserve for note receivable
|
—
|
|
|
1,793
|
|
|
—
|
|
|
1,793
|
|
||||
Change in fair value of acquisition-related contingent consideration
|
(1,810
|
)
|
|
—
|
|
|
(1,810
|
)
|
|
(700
|
)
|
||||
Patent and other litigation
|
2,622
|
|
|
781
|
|
|
3,651
|
|
|
1,212
|
|
||||
Other costs
|
—
|
|
|
426
|
|
|
481
|
|
|
784
|
|
||||
Total
|
$
|
2,234
|
|
|
$
|
5,208
|
|
|
$
|
5,304
|
|
|
$
|
10,293
|
|
Stock Options
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
|
|
Weighted Average Remaining Contractual Term
(years) |
|
Aggregate Intrinsic Value
(in thousands) |
|||||
Outstanding as of December 31, 2018
|
2,661,282
|
|
|
$
|
15.94
|
|
|
|
|
|
|
|
Granted
|
277,142
|
|
|
70.31
|
|
|
|
|
|
|
||
Forfeited
|
(44,168
|
)
|
|
26.67
|
|
|
|
|
|
|
||
Exercised
|
(186,235
|
)
|
|
6.43
|
|
|
|
|
|
|
||
Outstanding as of June 30, 2019
|
2,708,021
|
|
|
$
|
21.98
|
|
|
6.1
|
|
$
|
79,332
|
|
Exercisable as of June 30, 2019
|
1,747,093
|
|
|
$
|
9.16
|
|
|
4.7
|
|
$
|
68,115
|
|
Expected to vest as of June 30, 2019
|
872,033
|
|
|
$
|
45.29
|
|
|
8.6
|
|
$
|
10,179
|
|
Performance Stock Options
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
|
|
Weighted Average Remaining Contractual Term
(years) |
|
Aggregate Intrinsic Value
(in thousands) |
|||||
Outstanding as of December 31, 2018
|
135,000
|
|
|
$
|
20.64
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Forfeited
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(105,000
|
)
|
|
20.41
|
|
|
|
|
|
|||
Outstanding as of June 30, 2019
|
30,000
|
|
|
$
|
21.45
|
|
|
7.5
|
|
$
|
801
|
|
Exercisable as of June 30, 2019
|
30,000
|
|
|
$
|
21.45
|
|
|
7.5
|
|
$
|
801
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands, except per option amounts)
|
June 30,
2019 |
|
June 30,
2018 |
|
June 30,
2019 |
|
June 30,
2018 |
|||||||||
Aggregate intrinsic value of options exercised
|
$
|
864
|
|
|
$
|
15,715
|
|
|
$
|
16,923
|
|
|
$
|
17,879
|
|
|
Cash received from the exercise of stock options
|
418
|
|
|
3,665
|
|
|
3,341
|
|
|
4,992
|
|
|||||
Weighted average grant date fair value per option
|
$
|
30.24
|
|
|
$
|
20.17
|
|
|
$
|
40.76
|
|
|
$
|
19.79
|
|
|
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, 2018
|
358,683
|
|
|
$
|
22.22
|
|
|
87,109
|
|
|
$
|
37.79
|
|
Granted
|
77,248
|
|
|
65.53
|
|
|
34,088
|
|
|
86.29
|
|
||
Forfeited
|
(10,834
|
)
|
|
30.24
|
|
|
(25,000
|
)
|
|
37.79
|
|
||
Vested
|
(173,664
|
)
|
|
13.73
|
|
|
—
|
|
|
—
|
|
||
Units outstanding as of June 30, 2019
|
251,433
|
|
|
$
|
41.04
|
|
|
96,197
|
|
|
$
|
54.98
|
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
June 30,
2019 |
|
June 30,
2018 |
|
June 30,
2019 |
|
June 30,
2018 |
|||||||||
Aggregate market value of RSUs vested
|
$
|
1,279
|
|
|
$
|
1,478
|
|
|
$
|
12,833
|
|
|
$
|
7,873
|
|
|
Three Months Ended
|
|
Six Months Ended
|
||||||||||||
(in thousands)
|
June 30,
2019 |
|
June 30,
2018 |
|
June 30,
2019 |
|
June 30,
2018 |
||||||||
Stock options
|
$
|
1,820
|
|
|
$
|
1,717
|
|
|
$
|
3,279
|
|
|
$
|
2,828
|
|
Restricted stock units
|
1,074
|
|
|
840
|
|
|
1,993
|
|
|
1,560
|
|
||||
Performance stock units
|
152
|
|
|
—
|
|
|
71
|
|
|
—
|
|
||||
Employee stock purchase plan
|
431
|
|
|
301
|
|
|
683
|
|
|
535
|
|
||||
Total stock-based compensation expense
|
$
|
3,477
|
|
|
$
|
2,858
|
|
|
$
|
6,026
|
|
|
$
|
4,923
|
|
|
Three Months Ended June 30, 2019
|
||||||||||||||
(in thousands)
|
Healthcare
|
|
Research
|
|
Corporate
and Other
|
|
Consolidated
|
||||||||
Revenue
|
$
|
95,004
|
|
|
$
|
13,879
|
|
|
$
|
2,920
|
|
|
$
|
111,803
|
|
Gross profit
|
64,387
|
|
|
5,335
|
|
|
518
|
|
|
70,240
|
|
||||
Income/(loss) before income taxes
|
32,514
|
|
|
1,052
|
|
|
(20,459
|
)
|
|
13,107
|
|
||||
Depreciation and amortization
|
8,458
|
|
|
1,004
|
|
|
861
|
|
|
10,323
|
|
||||
Capital expenditures
|
9,080
|
|
|
1,306
|
|
|
372
|
|
|
10,758
|
|
|
Three Months Ended June 30, 2018
|
||||||||||||||
(in thousands)
|
Healthcare
|
|
Research
|
|
Corporate
and Other
|
|
Consolidated
|
||||||||
Revenue
|
$
|
86,723
|
|
|
$
|
12,546
|
|
|
$
|
2,091
|
|
|
$
|
101,360
|
|
Gross profit
|
60,882
|
|
|
5,328
|
|
|
(455
|
)
|
|
65,755
|
|
||||
Income/(loss) before income taxes
|
34,875
|
|
|
1,520
|
|
|
(27,451
|
)
|
|
8,944
|
|
||||
Depreciation and amortization
|
4,948
|
|
|
967
|
|
|
4,139
|
|
|
10,054
|
|
||||
Capital expenditures
|
7,077
|
|
|
911
|
|
|
(1,989
|
)
|
|
5,999
|
|
|
Six Months Ended June 30, 2019
|
||||||||||||||
(in thousands)
|
Healthcare
|
|
Research
|
|
Corporate
and Other
|
|
Consolidated
|
||||||||
Revenue
|
$
|
183,013
|
|
|
$
|
26,843
|
|
|
$
|
5,926
|
|
|
$
|
215,782
|
|
Gross profit
|
124,251
|
|
|
9,669
|
|
|
1,098
|
|
|
135,018
|
|
||||
Income/(loss) before income taxes
|
62,122
|
|
|
1,816
|
|
|
(41,219
|
)
|
|
22,719
|
|
||||
Depreciation and amortization
|
16,618
|
|
|
1,932
|
|
|
1,663
|
|
|
20,213
|
|
||||
Capital expenditures
|
13,522
|
|
|
1,788
|
|
|
782
|
|
|
16,092
|
|
|
Six Months Ended June 30, 2018
|
||||||||||||||
(in thousands)
|
Healthcare
|
|
Research
|
|
Corporate
and Other
|
|
Consolidated
|
||||||||
Revenue
|
$
|
167,274
|
|
|
$
|
23,790
|
|
|
$
|
4,792
|
|
|
$
|
195,856
|
|
Gross profit
|
113,851
|
|
|
10,246
|
|
|
(294
|
)
|
|
123,803
|
|
||||
Income/(loss) before income taxes
|
52,599
|
|
|
2,306
|
|
|
(41,067
|
)
|
|
13,838
|
|
||||
Depreciation and amortization
|
16,384
|
|
|
1,977
|
|
|
1,521
|
|
|
19,882
|
|
||||
Capital expenditures
|
12,141
|
|
|
1,202
|
|
|
(3,406
|
)
|
|
9,937
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Healthcare
|
$
|
95,004
|
|
|
$
|
86,723
|
|
|
$
|
8,281
|
|
|
9.5
|
%
|
Research
|
13,879
|
|
|
12,546
|
|
|
1,333
|
|
|
10.6
|
%
|
|||
Other
|
2,920
|
|
|
2,091
|
|
|
829
|
|
|
39.6
|
%
|
|||
Total revenue
|
$
|
111,803
|
|
|
$
|
101,360
|
|
|
$
|
10,443
|
|
|
10.3
|
%
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Gross profit
|
$
|
70,240
|
|
|
$
|
65,755
|
|
|
$
|
4,485
|
|
|
6.8
|
%
|
Percentage of revenue
|
62.8
|
%
|
|
64.9
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
General and administrative expense
|
$
|
30,587
|
|
|
$
|
28,741
|
|
|
$
|
1,846
|
|
|
6.4
|
%
|
Percentage of revenue
|
27.4
|
%
|
|
28.4
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Sales and marketing expense
|
$
|
12,795
|
|
|
$
|
11,075
|
|
|
$
|
1,720
|
|
|
15.5
|
%
|
Percentage of revenue
|
11.4
|
%
|
|
10.9
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Bad debt expense
|
$
|
5,379
|
|
|
$
|
6,875
|
|
|
$
|
(1,496
|
)
|
|
(21.8
|
)%
|
Percentage of revenue
|
4.8
|
%
|
|
6.8
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Research and development expense
|
$
|
3,532
|
|
|
$
|
2,733
|
|
|
$
|
799
|
|
|
29.2
|
%
|
Percentage of revenue
|
3.2
|
%
|
|
2.7
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Other charges
|
$
|
2,234
|
|
|
$
|
5,208
|
|
|
$
|
(2,974
|
)
|
|
(57.1
|
)%
|
Percentage of revenue
|
2.0
|
%
|
|
5.1
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Interest expense
|
$
|
(2,538
|
)
|
|
$
|
(2,684
|
)
|
|
$
|
146
|
|
|
(5.4
|
)%
|
Loss on equity method investment
|
(154
|
)
|
|
(45
|
)
|
|
(109
|
)
|
|
242.2
|
%
|
|||
Other non-operating income, net
|
86
|
|
|
550
|
|
|
(464
|
)
|
|
(84.4
|
)%
|
|||
Total other expense, net
|
$
|
(2,606
|
)
|
|
$
|
(2,179
|
)
|
|
$
|
(427
|
)
|
|
19.6
|
%
|
Percentage of revenue
|
2.3
|
%
|
|
2.2
|
%
|
|
|
|
|
|
Three Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
(Provision for)/benefit from income taxes
|
$
|
(4,807
|
)
|
|
$
|
1,500
|
|
|
$
|
(6,307
|
)
|
|
(420.5
|
)%
|
Effective tax rate
|
36.7
|
%
|
|
(16.8
|
)%
|
|
|
|
|
|
Six Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Healthcare
|
$
|
183,013
|
|
|
$
|
167,274
|
|
|
$
|
15,739
|
|
|
9.4
|
%
|
Research
|
26,843
|
|
|
23,790
|
|
|
3,053
|
|
|
12.8
|
%
|
|||
Other
|
5,926
|
|
|
4,792
|
|
|
1,134
|
|
|
23.7
|
%
|
|||
Total revenue
|
$
|
215,782
|
|
|
$
|
195,856
|
|
|
$
|
19,926
|
|
|
10.2
|
%
|
|
Six Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Gross profit
|
$
|
135,018
|
|
|
$
|
123,803
|
|
|
$
|
11,215
|
|
|
9.1
|
%
|
Percentage of revenue
|
62.6
|
%
|
|
63.2
|
%
|
|
|
|
|
|
Six Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
General and administrative expense
|
$
|
58,194
|
|
|
$
|
55,460
|
|
|
$
|
2,734
|
|
|
4.9
|
%
|
Percentage of revenue
|
27.0
|
%
|
|
28.3
|
%
|
|
|
|
|
|
Six Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Sales and marketing expense
|
$
|
25,235
|
|
|
$
|
22,415
|
|
|
$
|
2,820
|
|
|
12.6
|
%
|
Percentage of revenue
|
11.7
|
%
|
|
11.4
|
%
|
|
|
|
|
|
Six Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Bad debt expense
|
$
|
10,527
|
|
|
$
|
11,754
|
|
|
$
|
(1,227
|
)
|
|
(10.4
|
)%
|
Percentage of revenue
|
4.9
|
%
|
|
6.0
|
%
|
|
|
|
|
|
Six Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Research and development expense
|
$
|
6,865
|
|
|
$
|
6,022
|
|
|
$
|
843
|
|
|
14.0
|
%
|
Percentage of revenue
|
3.2
|
%
|
|
3.1
|
%
|
|
|
|
|
|
Six Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Other charges
|
$
|
5,304
|
|
|
$
|
10,293
|
|
|
$
|
(4,989
|
)
|
|
(48.5
|
)%
|
Percentage of revenue
|
2.5
|
%
|
|
5.3
|
%
|
|
|
|
|
|
Six Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
Interest expense
|
$
|
(5,020
|
)
|
|
$
|
(4,574
|
)
|
|
$
|
(446
|
)
|
|
9.8
|
%
|
Loss on equity method investment
|
(186
|
)
|
|
(184
|
)
|
|
(2
|
)
|
|
1.1
|
%
|
|||
Other non-operating (expense)/income, net
|
(968
|
)
|
|
737
|
|
|
(1,705
|
)
|
|
(231.3
|
)%
|
|||
Total other expense, net
|
$
|
(6,174
|
)
|
|
$
|
(4,021
|
)
|
|
$
|
(2,153
|
)
|
|
53.5
|
%
|
Percentage of revenue
|
2.9
|
%
|
|
2.1
|
%
|
|
|
|
|
|
Six Months Ended
|
|
Change
|
|||||||||||
(in thousands, except percentages)
|
June 30,
2019 |
|
June 30,
2018 |
|
$
|
|
%
|
|||||||
(Provision for)/benefit from income taxes
|
$
|
(2,734
|
)
|
|
$
|
1,642
|
|
|
$
|
(4,376
|
)
|
|
(266.5
|
)%
|
Effective tax rate
|
12.0
|
%
|
|
(11.9
|
)%
|
|
|
|
|
(in thousands, except ratios)
|
June 30,
2019 |
|
December 31,
2018 |
||||
Cash and cash equivalents
|
$
|
51,712
|
|
|
$
|
80,889
|
|
Healthcare accounts receivable, net of allowance for doubtful accounts
|
48,307
|
|
|
37,754
|
|
||
Other accounts receivable, net of allowance for doubtful accounts
|
15,026
|
|
|
14,874
|
|
||
Availability under revolving credit facility
|
50,000
|
|
|
50,000
|
|
||
|
|
|
|
||||
Working capital
|
$
|
70,756
|
|
|
$
|
97,037
|
|
Current ratio
|
2.2
|
|
|
3.0
|
|
||
|
|
|
|
||||
Total operating lease obligations(1)
|
$
|
21,643
|
|
|
$
|
—
|
|
Total finance lease obligations
|
1,009
|
|
|
1,769
|
|
||
Total debt
|
$
|
196,608
|
|
|
$
|
198,549
|
|
(1)
|
We adopted ASC 842 - Leases, effective January 1, 2019, which resulted in the recognition of most of our operating leases on our balance sheet, both as a right-of-use asset and right-of-use liability. Since we adopted this standard using the optional modified retrospective method, we have not restated prior year amounts.
|
|
Six Months Ended
|
||||||
(in thousands)
|
June 30,
2019 |
|
June 30,
2018 |
||||
Net income
|
$
|
19,985
|
|
|
$
|
15,480
|
|
Non-cash adjustments to net income
|
37,159
|
|
|
33,342
|
|
||
Cash used for working capital
|
(21,014
|
)
|
|
(32,686
|
)
|
||
Cash provided by operating activities
|
36,130
|
|
|
16,136
|
|
||
|
|
|
|
||||
Cash used in investing activities
|
(60,858
|
)
|
|
(9,937
|
)
|
||
|
|
|
|
||||
Cash used in financing activities
|
$
|
(4,448
|
)
|
|
$
|
(2,621
|
)
|
|
|
|
|
|
Incorporated by Reference
|
Filed/Furnished Herewith
|
||||||
Exhibit
Number
|
|
Description
|
|
Form
|
|
File No.
|
|
Exhibit
|
|
Filing Date
|
||
|
10.1 *
|
|
|
|
|
|
|
|
|
|
†
|
|
|
31.1
|
|
|
|
|
|
|
|
|
|
†
|
|
|
31.2
|
|
|
|
|
|
|
|
|
|
†
|
|
|
32
|
|
|
|
|
|
|
|
|
|
+
|
|
|
101.INS
|
|
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded withing the Inline XBRL document.
|
|
|
|
|
|
|
|
|
†
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
|
|
|
|
|
†
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
|
|
|
|
|
†
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
|
|
|
|
|
†
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
|
|
|
|
|
†
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
|
|
|
|
|
†
|
*
|
Indicates a management plan or compensatory plan or arrangement.
|
†
|
Filed herewith.
|
+
|
Furnished herewith.
|
|
BIOTELEMETRY, INC.
|
|
|
|
|
|
|
|
Date: July 30, 2019
|
By:
|
/s/ Heather C. Getz
|
|
|
Heather C. Getz
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
(Principal Financial Officer and authorized officer of the Registrant)
|
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
|
July 30, 2019
|
|
July 30, 2019
|