Good afternoon. Thank you for joining us for the BioTelemetry Fourth Quarter 2016 Earnings Conference Call. Certain statements during the conference call and question-and-answer period to follow may relate to future events, expectations and as such constitute forward-looking statements within the meaning of the Private Securities and Litigation Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company in the future to be materially different from the statements that the Company's executives may make today. These risks are described in detail in our public filings with the Securities and Exchange Commission, including our latest periodic report on Form 10-K or 10-Q. We assume no duty to update these statements. At this time, all participants have been placed on a listen-only mode. The floor will be opened for questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, Mr. Joseph Capper. Sir, you may begin.

Thank you, operator, and good afternoon everyone. I am Joe Capper, President and CEO of BioTelemetry. As on our previous calls, I'm joined by Heather Getz, our Chief Financial Officer. I'll start with an overview of our fourth quarter performance. Heather will take you through a more detailed review of our operating results. Then I will provide commentary on how we see the business continuing to evolve in 2017 before we open the call to your questions. Let’s get started. I am extremely pleased to report this afternoon that we capped off 2016 with another record setting quarter, posting our 18th consecutive growth period in which we improved margins, exceeded expectations and achieved new highs in both revenue and EBITDA that is 4.5 years of sustained growth and outperformance and as you will hear, we’re just getting started. BioTelemetry has transformed considerably over the past few years and that transformation has allowed us to increase our revenue growth and profitability and availed us entry into attractive new markets. We are much more diversified both financially and operationally than ever before. That in part is what made 2016 a tremendous success by any measure. We expect to build on that success in 2017 and beyond. To appreciate our growth potential, it’s important to understand our business momentum, recent innovations and the new market opportunities which give us such confidence in our future. At the offset of 2016, we established financial guidance that represented significant increase over an extremely successful 2015 calling for 20% plus increase in EBITDA to $40 million. Later in the year, we increased that guidance and then exceeded that revised higher EBITDA guidance finishing the year at $47.4 million. This strong performance stems from the consistent execution of the three point strategy we have reiterated numerous times on…

Thank you, Joe, and good afternoon everyone. As Joe just announced, the fourth quarter of 2016 marked our 18th eighteen consecutive quarter of year-over-year revenue growth. Total revenue was $54 million, which was at the high-end of our expectations and represents a 15.4% increase as compared to the fourth quarter of 2016. Healthcare revenue was strong with an increase of $3 million. The strength in healthcare resulted from volume increases across all products also contributing to the healthcare revenue was the impact of a favorable product mix as well as the increased Medicare rate which as expected added about a million dollars. Our research revenue increased thirty $34 million due to an increase in imaging revenue with the VirtualScopics acquisition. And last but not least the technology segment increased $900,000 due to the sale of ePatch product and Telcare. Moving to gross profit, our margin for the fourth quarter was 61.2% or an 80 basis point improvement over the prior year. This margin improvement comes from operational and volume efficiencies as well as favorable pricing dynamics in the healthcare segment. These positive benefits were partially offset by the impact of our acquisitions which carry lower margins than our existing business. We continue to experience strong operating margins post acquisitions. While as mentioned above, the acquisitions put some pressure on our gross margin. We continued to see increased adjusted EBITDA margin both sequentially and compared to the prior year. We generated adjusted EBITDA of $12.6 million for the fourth quarter, a 25% increase as compared to our Q4 2015 EBITDA of $10.1 million and over a 23% return on revenue. This is our 11th quarter of sequential EBITDA margin expansion Before moving on to the balance sheet, I have an item to note on taxes. As I'm sure you noticed there…

Thank, Heather. As you just heard, we had a highly successful fourth quarter capping off another record setting year for the company finishing with over $200 million of revenue for the first time. In addition to achieve an excellent results and improving margins throughout 2016, we grew MCOT by nearly 13% completed over 20,000 CardioKey services, worked with the Anthem to gain coverage for MCOT, received FDA approval for our next generation MCOT in a patch format, acquired three companies, expanded backlog and research accelerates the growth of the INR business and gain entree into digital population health management. Our strategy is yielding the results we expected and the organization continues to build momentum and broaden its opportunities. To ensure continued success in 2017, we will focus on expanding our comprehensive approach with the launch of our next generation MCOT system in a patch format and the continued market penetration of CardioKey contracting with additional Anthem subsidiaries and pulling through those services, continuing to grow backlog and expand the capabilities of the research business and building out the world-class digital population health management business. Given the positive momentum in the business and a stable reimbursement environment, we have set expectations for 2017 at $230 million to $235 million of revenue with an approximate 23% EBITDA return. Inherent in this guidance, we have contemplated investments back into the business in order to better capitalize on growth opportunities. In addition to being quite bullish on the potential of the digital PHM business, we are dedicating further resources to other key areas of BioTelemetry. These investments will be more than offset as we continue to outperform in the healthcare and research markets and begin to build a world-class PHM platform to service a high growth market that will reward companies that can provide powerful connected health solutions. Our objective is to be a leader in the digital PHM and believe [indiscernible] the investment. The company has come a long way, but our best days are still ahead. Our business is benefiting from the trends that favor our strengths and we are excited about our future prospects. Before I close, I would again like to thank those at the company who helped to deliver our 18th consecutive growth quarter. Let's never forget the work we do helps to save lives each and every day. With that we will now pause and open the call to your questions. Operator, we're ready for our first question.

Thank you. [Operator Instructions] Our first question comes from the line of Bruce Jackson from Lake Street Capital. Sir, your line is now open.

Hi, thank you for taking my questions. If I could get some clarification on the 14-day Holter product, so you got the CardioKey, which is you got the leads hooked up to the device. And then you also mentioned a patch, now is this a CardioKey – the patched platform of the 14-day Holter capability?

No, Bruce, when we recently developed CardioKey, the intent was to bring it out in a lead wire configuration and then convert it over to it a patch form factor as well. When we bought the assets from DELTA last year, it came with an extended wear Holter that was already in a patch format. We needed to a little bit of work on it, and then get it through clearance here in the U.S. So the plan now is to have a portfolio really of two products, one is CardioKey, very lightweight thus have a two lead wires extremely light weight and then for those portions of the market that really want to patch will have the ePatch product.

And the patch is the one that’s going to launch in March that’s…

Yes.

Okay. And then have you actually sold any of the CardioKey’s yet and got any reimbursed for them?

Yes, 20,000 of them.

Okay, okay, great. And then let’s see the patient – the Telcare patient management business, have you engaged any of the ACOs in discussions yet and can you tell us a little bit about the level of interest in that platform?

Well, what I am not going to do is go in too much into the specific customers. It’s still a relatively early stage company. We probably have three or four really nice pilots underway proving excellent results. In this business, the objective is first and foremost to drive down A1c to get better glycemic controls for the patient which ultimately leads to less secondary implications and lower overall cost of care and there is numerous studies that correlate lower A1c to lower cost. And because it is a high-touch program and because it’s connected health product, we’re seeing those results. We’re seeing some really nice reductions in A1c. And it’s a story that resonates with people who really are responsible for cost of care with the patients. So [indiscernible] this was a business that was underway, had a decent amount of investment already made in it. We just caught it at an interesting time in its evolution. And frankly, I think it will benefit from being in a company like ours it’s a clearly a leader in connected health and the ability to move data over long distances, centralize it and then get that data back to caregivers in a user friendly format. So, we’re pretty darn excited about it. It gets us out of just cardiac for really the first time. Research got us diversified somewhat, but really focusing cardiac initially and then ultimately in imaging, nice growth business. This gets us into the chronics for the first time. And as you know chronic conditions are the once that account for all the cost and healthcare systems. So these are really, really big markets. And obviously this is a small business right now, but it’s got validated benefit and it’s a tremendously big market and unfortunately for society market that’s growing at a very high rate.

Okay, that’s helpful. Last question, I would be remiss if I didn’t ask if you had whether or not you’ve noticed what’s going on with LifeWatch and to the extent that you can comment on anything you may or may not be thinking about and their availability.

Obviously, I can’t comment on that Bruce. We’ve never talked about anything from an M&A perspective that that we – where working order had interest in and obviously they run kind of a somewhat public process. So it’s not prudent for me to talk about, make comments about their process.

Okay. If I could just ask a follow-up then, generally speaking with the companies that you’ve acquired in the past, do you have a process and you have any particular metrics that you looked at when you're evaluating in M&A target?

Oh, of course. First it has to accelerate our strategic plan. So if it's not something that will help us to achieve one of those three pillars of our strategic plan, it's dead on arrival. And then we're going to look for EBITDA accretion preferably immediately in the short-term. We're going to look for return on invested assets. We're going to – we have a series of different metrics that that we look at.

Okay, great. Thank you very much.

Sure, thanks, Bruce.

Thanks, Bruce.

Our next question comes from the line of Marco Rodriguez from Stonegate. Sir, your line is now open.

Good afternoon, guys. Thank you for taking my questions.

Hi, Marco.

Hi. I was wondering if you can maybe talk a little bit more about the PHM market. I kind of heard from your prepared remarks and your answer to the prior question, but just kind of wondering if you might be able to put a little more color around some sort of strategic initiatives you might be putting forth to kind of further penetrate the market.

Again, Marco, we're not going to talk about specific ones. So in general the idea here is to work with organizations, insurance companies, ACOs, even hospital networks that are at risk for cost of care for the patient. And obviously the market is moving in that direction. You see sort of a convergence of payers and providers in parts of the country. So the overall cost of care, the folks that are on the hook for that are really the people that we're talking to, right, because these are programs and this specifically is a program that is designed to change the behavior of individuals by helping them to manage data and ultimately coaching them into more healthy lifestyle, right. So if you can do that, it will lower secondary implications, it will lower overall cost of care. That's the goal. And so these are kind of outcomes oriented types of services. As mentioned the first one for us is diabetes. We’re making an acquisition. We have an investment in a congestive heart failure company as well. Very similar designed to decrease overall cost of care, ER visits, hospital readmissions, hospital stays, which are really all the majority of the cost of care and healthcare. So we like the program. We like this one because it's taking existing technology or existing methods of care, embedding connectivity and then collecting data real time and using that data [indiscernible] with the patient and modify behavior. We can do it through technology and we can do it through human interaction.

Helpful, very helpful, thank you. And is the sales infrastructure sufficient to penetrate the market or do you need to be set up a bit?

Again, it's a really small business today and it requires us to scale it commercially. The good news is most of the hardware and software development has been done prior to us merging the company into BioTelemetry, but certainly it's going to need investment from a commercial ramp standpoint.

Gotcha. And then just kind of looking at the financials that you guys put out for the Telcare acquisition, just kind of noticing the nine month period, the R&D expense for them was kind of high relative so that obviously their revenue is being kind of young, but it's a significant amount compared to what your current R&D expenses are? And I'm just kind of wondering if that is kind of the run rate spends for them or that that group or if there maybe some one-time items in there that might not necessarily repeat themselves going forward?

It’s definitely the latter, Marco. When we had to file the 8-K on the Telcare results, the business that we had to present is not the business as it looks today. There's been a lot of reduction in those costs and that will not be indicative of what our results are for that business going forward. So it was really a regulatory requirement. And we actually didn't acquire 100% of that business. So there's stuffing there that we did not bring forward with our company.

Gotcha. And last quick question, I am not sure if I heard this correctly or not, but did you say that going forward with the whole tax situation, the release of the tax deferred asset there. The adjusted EPS that you guys were reporting will be reflective of the cash taxes.

Essentially, yes.

Okay.

Yeah, we will show how much of the NOL we're utilizing and adjust our EPS and EBITDA for that, so that’s essentially what it will reflect.

Perfect, okay, thanks a lot guys. I appreciate your time.

Yeah, no problem.

Our final question comes from the line of Mitra Ramgopal from Sidoti. Your line is now open.

Yes, hi, good afternoon. Just a few questions. Joe, I noticed you did mentioned about expanding the Anthem relationship, but going forward do you expect the growth in the healthcare business to becoming equally from new accounts and deeper penetration into existing accounts?

Good question. It's actually come from both. Over the last, I would say, eighteen months, we saw a pretty even split among both. So it tells us that there's greater utilization of product more adoption within accounts and then obviously we're having success educating the marketplace and further penetration to add more accounts. But, yeah, about 50:50 is what we’re seeing.

Okay and are you seeing any shift that was more MCOT versus Holter or is a market pretty much staying roughly the same?

MCOT has been growing at a faster rate over the last eighteen months or so than it was prior to that and obviously that – we benefit from that because we're the leader in that business. Our Holter business kind of I guess relatively stable up a little bit over the last couple years. This year we focused a little bit more on the extended wear Holter, the CardioKey that we talked about and eventually the patch. So those service lines are reimbursed at a higher average selling price. There's a temporary code in place that we can use for that, but that's really what's driving the Holter business and the event business is growing as well. So all of our service lines for the year were up and MCOT was sort of pulling the pack.

Okay, thanks. And I know there's only so much you can say regarding the digital population health management initiatives, but do you see having to invest for example like a separate sales force as you look to develop this business.

Not sure yet. One of things I did late in 2016 was invest money in a strategic accounts team, a small group of people that sell BtoB. to insurance companies ACOs, so high level team and we were in the process of starting up the smaller group. I know I can lever to that group over time. Right now, the focus is getting through certain pilot programs that we have in place with customers and then there is a couple of decent sized customers in the funnel building that service around them, making sure that we have everything in place to scale the business, what I don't want to do is get too far out ahead of my skis and bringing a lot of business and not be able to service it properly. We've had the business for a couple months now and we're getting more and more comfortable with it, just going to make sure that everything we need is in place from op standpoint before we go too much...

Okay, thanks and finally, Heather just a housekeeping question. Regarding CapEx should we expect that for 2017 pretty much be similar to what we saw in 2016?

Yeah, it will probably be a little higher, Mitra, as we launched both the extended wear Holter patch and our next gen patch. So I would look probably closer to 12 million to 13 million range versus the 11 you saw in 2016.

Okay, that's it. Thanks again for taking the questions.

Thanks, Mitra.

Thanks, Mitra.

That now concludes our Q&A session. I’d now like to turn the call back to Mr. Joseph Capper for any further remarks.

Thanks operator. Thanks everybody. Thank you for your continued support and interest in the company. We will speak to you next quarter. Operator that concludes today's call.

If you join the conference late today, you may listen to the conference call via digital replay, which will be available through the Investor information section of the BioTelemetry website at www.gobio.com until Wednesday March 8th.