Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2014 |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation |
        The accompanying consolidated financial statements include the accounts of BioTelemetry and its wholly owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. |
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Use of Estimates | Use of Estimates |
        The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. |
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Fair Value of Financial Instruments | Fair Value of Financial Instruments |
        The fair value of financial instruments is defined as the amount at which the instrument could be exchanged in a current transaction between willing parties. Our financial instruments consist primarily of cash and cash equivalents, accounts receivable, other receivables, accounts payable, short-term and long-term debt. With the exception of the long-term debt, the carrying value of these financial instruments approximates their fair value because of their short-term nature (classified as Level 1). For long-term debt, based on the borrowing rates currently available, the carrying value also approximates fair value as of December 31, 2014 (classified as Level 2). The Company did not have any Level 3 assets or liabilities for the periods ended December 31, 2014 and 2013. |
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Cash and Cash Equivalents | Cash and Cash Equivalents |
        Cash and cash equivalents are held in U.S. financial institutions or in custodial accounts with U.S. financial institutions. Cash equivalents are defined as liquid investments and money market funds with maturity from date of purchase of 90 days or less that are readily convertible into cash and have minimal interest rate risk. |
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Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts |
        Accounts receivable related to the Patient Services segment are recorded at the time revenue is recognized, net of contractual allowances, and are presented on the balance sheet net of allowance for doubtful accounts. The ultimate collection of accounts receivable may not be known for several months after services have been provided and billed. We record allowance for doubtful accounts based on the aging of receivables using historical data. The percentages and amounts used to record bad debt expense and the allowance for doubtful accounts are supported by various methods and analyses, including current and historical cash collections, and the aging of receivables by payor. Because of continuing changes in the health care industry and third party reimbursement, it is possible that our estimates of collectability could change, which could have a material impact on our operations and cash flows. |
        Other receivables related to the Product and Research Services segments are recorded at the time revenue is recognized, or when products are shipped or services are performed. We estimate allowance for doubtful accounts on a specific account basis, and consider several factors in our analysis including customer specific information and aging of the account. |
        We write off receivables when the likelihood for collection is remote and when we believe collection efforts have been fully exhausted and we do not intend to devote additional resources in attempting to collect. We perform write-offs on a monthly basis. In the Patient Services segment, we wrote off $6,494 and $7,919 of receivables for the years ended December 31, 2014 and 2013, respectively. The impact was a reduction of gross receivables and a reduction in the allowance for doubtful accounts. There were no material write offs in the Product and Research Services segments. Additionally, we recorded bad debt expense of $9,347, $7,787 and $11,912 for the years ended December 31, 2014, 2013, and 2012, respectively. Unfavorable adjustments of $782 and $1,480 were made to accounts receivable in 2014 and 2013, respectively, related to prior years accounts receivable. |
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Concentrations of Credit Risk | Concentrations of Credit Risk |
        Financial instruments that potentially subject us to concentrations of credit risk consist primarily of cash, cash equivalents and accounts receivable. We maintain our cash and cash equivalents with high quality financial institutions to mitigate this risk. We perform ongoing credit evaluations of our customers and generally do not require collateral. We record an allowance for doubtful accounts in accordance with the procedures described above. Past-due amounts are written off against the allowance for doubtful accounts when collections are believed to be unlikely and all collection efforts have ceased. |
        At December 31, 2014, 2013 and 2012, one customer, Medicare, accounted for 16%, 18% and 20%, respectively, of our net accounts receivable. |
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Inventory | Inventory |
        Inventory is valued at the lower of cost (using first-in, first-out cost method) or market (net realizable value or replacement cost). Management periodically reviews inventory for specific future usage, and estimates of impairment of individual inventory items are recorded to reduce inventory to the lower of cost or market. |
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Property and Equipment | Property and Equipment |
        Property and equipment is recorded at cost. Depreciation is recorded over the estimated useful life of each class of depreciable assets, and is computed using the straight-line method. Leasehold improvements are amortized over the shorter of the estimated asset life or term of the lease. Repairs and maintenance costs are charged to expense as incurred. |
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Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
        We periodically evaluate the recoverability of the carrying value of our long-lived assets based on the criteria established in Accounting Standards Codification (ASC) 360, Property, Plant & Equipment. We consider historical performance and anticipated future results in our evaluation of potential impairment. Accordingly, when indicators of impairment are present, we evaluate the carrying value of these assets in relation to the operating performance of the business and the undiscounted cash flows expected to result from the use of these assets. Impairment losses are recognized when the sum of the expected future cash flows is less than the assets' carrying value. |
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Goodwill and Acquired Intangible Assets | Goodwill and Acquired Intangible Assets |
        Goodwill is the excess of purchase price of an acquired business over the amounts assigned to assets acquired and liabilities assumed in a business combination. In accordance with ASC 350, Intangibles—Goodwill and Other, goodwill is reviewed for impairment annually, or when events arise that could indicate that impairment exists. The provisions of ASC 350 require that we perform a two-step impairment test. In the first step, we compare the fair value of our reporting units to the carrying value of the reporting units. If the carrying value of the net assets assigned to the reporting units exceeds the fair value of the reporting units, then the second step of the impairment test is performed in order to determine the implied fair value of the reporting units' goodwill. If the carrying value of the reporting units' goodwill exceeds the implied fair value, an impairment loss equal to the difference is recorded. |
        For the purpose of performing our goodwill impairment analysis in 2014, we consider our business to be comprised of three reporting units, Patient Services, Product and Research Services. We calculate the fair value of the reporting units utilizing a weighting of the income and market approaches. The income approach is based on a discounted cash flow methodology that includes assumptions for, among other things, forecasted income, cash flow, growth rates, income tax rates, expected tax benefits and long-term discount rates, all of which require significant judgment. The market approach utilizes our market data as well as market data from publicly traded companies that are similar to us. There are inherent uncertainties related to these factors and the judgment applied in the analysis. We believe that the combination of an income and a market approach provides a reasonable basis to estimate the fair value of our reporting units. |
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Revenue Recognition | Revenue Recognition |
        We recognize approximately 80% of our total revenue from patient monitoring services in our Patient Services segment. We receive a significant portion of our revenue from third party commercial payors and governmental entities. We also receive reimbursement directly from patients through co-pay, deductibles and self-pay arrangements. |
        Revenue from the Medicare program is based on reimbursement rates set by CMS. Revenue from contracted commercial payors is recorded at the negotiated contractual rate. Revenue from non-contracted commercial payors is recorded at net realizable value based on historical payment patterns. Adjustments to the estimated net realizable value, based on final settlement with the third party payors, are recorded upon settlement. If we do not have consistent historical information regarding collectability from a given payor, revenue is recognized when cash is received. Unearned amounts are appropriately deferred until service has been completed. For the years ended December 31, 2014, 2013 and 2012, revenue from Medicare as a percentage of total revenue was 32%, 35% and 37%, respectively. |
        Revenue received from the sale of products, product repair and supplies is recognized when shipped, or as service is completed. |
        Research Services revenue includes revenue for research and core laboratory services. Our Research Services revenues are provided on a fee for service basis, and revenue is recognized as the related services are performed. We also provide consulting services on a time and materials basis and recognize revenues as we perform the services. Our site support revenue, consisting of equipment rentals and sales along with related supplies and logistics management, are recognized at the time of sale or over the rental period. Under a typical contract, customers pay us a portion of our fee for these services upon contract execution as an upfront deposit, some of which is typically nonrefundable upon contract termination. Unearned revenues, including upfront deposits, are deferred, and then recognized as the services are performed. |
        For arrangements with multiple deliverables, the revenue is allocated to each element (both delivered and undelivered items) based on their relative selling prices or management's best estimate of their selling prices, when vendor- specific or third-party evidence is unavailable. |
        We record reimbursements received for out-of-pocket expenses, including freight, incurred as revenue in the accompanying consolidated statements of operations. Revenue generally is recognized net of any taxes collected from customers and subsequently remitted to government authorities. |
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Research and Development Costs | Research and Development Costs |
        Research and development costs are charged to expense as incurred. |
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Net Loss | Net Loss |
        We compute net loss per share in accordance with ASC 260, Earnings Per Share. The following summarizes the potential outstanding common stock as of the end of each period: |
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| | December 31, | | December 31, | | December 31, | |
2014 | 2013 | 2012 |
Employee stock purchase plan estimated share options outstanding | | | 39,232Â | | | 81,848Â | | | 50,903Â | |
Common stock options and restricted stock units ("RSUs") outstanding | | | 4,115,486Â | | | 3,993,590Â | | | 3,669,103Â | |
Common stock available for grant | | | 2,262,168Â | | | 1,761,840Â | | | 1,442,434Â | |
Common stock | | | 26,693,248Â | | | 25,812,754Â | | | 25,189,340Â | |
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Total | | | 33,110,134Â | | | 31,650,032Â | | | 30,351,780Â | |
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        Basic net loss per share is computed by dividing net loss by the weighted average number of fully vested common shares outstanding during the period. Diluted net loss per share is computed by giving effect to all potential dilutive common shares, including stock options, and RSUs. |
        The following table presents the calculation of historical basic and diluted net loss per share: |
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| | Year Ended December 31, | |
| | 2014 | | 2013 | | 2012 | |
| | (in thousands, except per share amounts) | |
Numerator: | | | | | | | | | | |
Net loss | | $ | (9,793 | ) | $ | (7,319 | ) | $ | (12,202 | ) |
Denominator: | | | | | | | | | | |
Weighted average shares used in computing basic and diluted net loss per share | | | 26,444,626 | | | 25,543,646 | | | 24,933,656 | |
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Basic and diluted net loss per share | | $ | (0.37 | ) | $ | (0.29 | ) | $ | (0.49 | ) |
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        If the outstanding vested options or RSUs were exercised or converted into common stock, the result would be anti-dilutive for the years ended December 31, 2014, 2013 and 2012. Accordingly, basic and diluted net loss per share are the same for the years ended December 31, 2014, 2013 and 2012. |
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Stock-Based Compensation | Stock-Based Compensation |
        ASC 718, Compensation—Stock Compensation, addresses the accounting for share-based payment transactions in which an enterprise receives employee services in exchange for (a) equity instruments of the enterprise or (b) liabilities that are based on the fair value of the enterprise's equity instruments or that may be settled by the issuance of such equity instruments. ASC 718 requires that an entity measures the cost of equity-based service awards based on the grant-date fair value of the award and recognizes the cost of such awards over the period during which the employee is required to provide service in exchange for the award (the vesting period). ASC 718 requires that an entity measures the cost of liability-based service awards based on current fair value that is re-measured subsequently at each reporting date through the settlement date. We account for equity awards issued to non-employees in accordance with ASC 505-50, Equity-Based Payments to Non-Employees.  |
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Income Taxes | Income Taxes |
        We account for income taxes under the liability method, as described in ASC 740, Income Taxes. Deferred income taxes are recognized for the tax consequences of temporary differences between the tax and financial statement reporting bases of assets and liabilities. A valuation allowance for net deferred tax assets is provided unless realizability is judged to be more likely than not. |
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Segment Information | Segment Information |
        ASC 280, Segment Reporting, establishes standards for reporting information regarding operating segments in annual financial statements. Operating segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group in making decisions on how to allocate resources and assess performance. |
        We report our business under three segments: Patient Services, Product and Research Services. The Patient Services segment is focused on the monitoring of cardiac arrhythmias or heart rhythm disorders in a healthcare setting. The Product segment focuses on the development, manufacturing, testing and marketing of medical devices to medical companies, clinics and hospitals. The Research Services segment includes our operations that engage in central core laboratory services in a research environment, which includes certain equipment rental and Product sales. In addition, we realigned the Product segment to exclude central core laboratory research operations previously reported in this segment and repositioned these operations into the Research Services segment. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements |
        In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers, which provides guidance for revenue recognition. The new standard will require revenue recognized to represent the transfer of promised goods or services to customers in an amount that reflects the consideration in which we expect to receive in exchange for those goods or services. The standard also requires new, expanded disclosures regarding revenue recognition and is effective for the annual reporting periods beginning after December 15, 2016. We are currently evaluating the impact the adoption of this standard will have on the consolidated financial statements. |
        In July 2013, the FASB issued ASU 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The new guidance provides specific financial statement presentation requirements of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The guidance states that an unrecognized tax benefit in those circumstances should be presented as a reduction to the deferred tax asset. The ASU is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The amendment did not have a material impact on our results of operations, cash flows, or financial position. |
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