BioTelemetry (BEAT) Q2 Earnings, Revenues Beat; View Up
BioTelemetry Inc. BEAT reported strong second-quarter 2016 adjusted earnings of 20 cents per share, which beat the Zacks Consensus Estimate by four cents and was well ahead of the year-ago equivalent of 12 cents.
Revenue Details
Revenues increased 17.6% year over year to $52.7 million, beating the Zacks consensus estimate of $51 million. The improvement has been primarily driven by a $5.9 million increase in Healthcare revenues owing to rising MCT patient and CardioKey volumes and favorable pricing.
This marked the 16th consecutive quarter of year-over-year revenue growth for the company.
Meanwhile, research revenues increased $2.5 million, led by the acquisition of VirtualScopics for $15.0 million during the second quarter. Technology revenues declined $0.5 million owing to lower sales as customers delayed purchases as they await the release of upgraded devices.
Buyouts
The stellar performance was primarily driven by synergies from the ePatch and VirtualScopics buyouts in the second quarter. Additionally, BioTelemetry was granted permission to sell its next generation MCOT device in a patch form factor by the U.S Food and Drug Administration (FDA).
Meanwhile, the company’s research business benefited from the completion of over 8000 CardioKey services, integration of the ePatch business and acquisition of VirtualScopics.
Margins
Gross profits increased 23.1% from the year-ago quarter to $32.9 million, primarily driven by increased revenues. The gross margin expanded 280 basis points (bps), thanks to high volume efficiencies, increased MCT Medicare pricing as well as reduced shipping prices.
However, the improvement was somewhat offset by the acquisitions which offer lower profit margins than its existing businesses.
Adjusted operating expenses totaled $26.1 million, a 14% increase from the year-ago quarter. The upside was led by $1.6 million of expenses related to the acquisitions, and increases in General and Administrative (G&A), Selling and Marketing (S&M) and Research and Development (R&D) expenses by 17.9%, 2.9% and 20.5% year over year, respectively.
BIOTELEMETRY Price, Consensus and EPS Surprise
BIOTELEMETRY Price, Consensus and EPS Surprise | BIOTELEMETRY Quote
Meanwhile, adjusted operating margin expanded 440 bps. BioTelemetry reported the highest quarterly adjusted EBITDA in its history at $11.9 million, up 51% from the year-ago quarter.
Guidance
For full-year 2016, BioTelemetry has raised its revenue guidance to approximately $210 million and adjusted EBITDA projection to the $44–$46 million range.
Meanwhile, for the third quarter, the company anticipates revenues in the range of $53–$54 million, which is about 23% higher over the prior-year quarter.
Adjusted EBITDA return is expected to rise about 38% over the prior-year quarter.
Zacks Rank and Other Key Picks
BioTelemetry carries a Zacks Rank #1 (Strong Buy).
Better-ranked stocks in the broader medical sector include Natus Medical Inc. BABY, Heska Corporation HSKA and Masimo Corporation MASI. All the three companies sport a Zacks Rank #1.
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