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BioTelemetry, Inc. Message Board

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  • jerrywang99 jerrywang99 Jul 28, 2010 4:35 PM Flag

    This Quarter

    unimpressive volume growth, but impressive free cash flow. they are profitable even with all the disasters around them. and sitting on $2/share in cash.

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    • Cash flow increased because revenue decreased and A/R decreased. When a business is shrinking it throws off cash! Very UNimpressive patient volume growth and with Q to Q revenue declining from Q1 to Q2...especially UNimpressive revenue, since Q2 was operating under similar reimbursement as Q1 implying no patient growth from Q1 to Q2; I am sure that was fleshed out more specifically in the CC since it was not discussed in the PR (for obvious reasons!)

      As for GE or anyone acquiring this.....can you spell H U G E class action lawsuit?? No acquisition till this is settled and you may see their balance sheet change drastically!

      • 2 Replies to audphil78
      • Not much to chew on coming from the CC. He began by discussing why he joined the company (apple pie and motherhood stuff). He quickly reviewed Q2 financials and turned it over to Heather who did a more in depth review. After Heather he discussed that they are withdrawing previous volume guidance for a variety of reasons until he can get his arm around several possible causes. He indicated he had 5 objectives:
        1.) Accelerate Growth (add back some sales resources from 111 to 121)
        2.) Increase Customer Service Performance levels
        3.) Improve MCOT reimbursement levels, especially with CMS
        4.) Further reduce overall cost structure..especially in cost of sales (my comment...seems a bit at odds with adding back sales resources and trying to accelerate growth?)
        5.) Launch next generation MCOT device which will have (based on later comments by Heather in response to a question) 30% lower depreciation levels than current generation (seems like an accounting wash, since it will mean higher reported margin, but cash flow would be the same??)
        Several questions about BEAT strategy with CMS to improve reimbursement levels, competition from smaller regional groups (he had previously included that as one of the headwinds), C5 (next generation); asked for some guidance on volume...NO
        asked if he would discuss trend within the last quarter...NO (interesting that none of these great analysts bothered to do the math and ask what the number of services was in current quarter versus immediate prior quarter (only compared to same quarter prior year...and with $$ less than prior quarter would be a key metric?). Asked what would happen if CMS doesn't change in November (which is when the next milestone is) and did not want to contemplate, but basically said the company would have to adjust. Question from Blair asking about the details of CMS methodology for coming up with $$$ and Heather answered in detail. Another question about private turndowns for coverage as experimental because no evidence of improvement in outcomes. Response was that this was difficult to demonstrate directly...but clearly if monitors pick up problems on more people, that should translate to better outcomes.

        MY OPINION: As one might expect, he is asking for 3-4 months to get his feet wet in order to provide more specific responses (fair enough!) He is also establishing November as a key milestone for CMS re-evaluation. It is clear they have lost sales momentum as it sounds like the sales people are citing everything (surprised they didn't bring up sunspots) to justify their weaker performance (small regional competitors?) Again, while there is no explicit number anywhere, my pencil says that Q2 volume showed no growth over Q1 since $$ were about the same and average reimbursement was probably about the same. This is NOT good since the only way they can overcome lower reimbursement over time is through volume growth. No one asked about either the Class Action lawsuit or the Biotel suit. With that baggage, as well as holding out November as the next "milestone"....this stock will probably bob and weave for August, September, October until November. Could be a good option play as when November results of CMS reconsideration are announced, this will either dive towards $2 or spike to $10.

      • clearly they have their work cut out for them.

        even still, Q to Q sales were flat (where do you see a decline?). and they are now EBITDA and cash flow positive, and nearly net-income neutral.

        real question is what does one pay for all this.

 
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