Good afternoon. Thank you for joining us for the BioTelemetry first quarter 2014 earnings conference call. Certain statements during the conference call and question-and-answer period to follow may relate to future events and 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. (Operator Instructions) 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'm Joe Capper, President and CEO of BioTelemetry. Also with me on the call today is our Chief Financial Officer, Heather Getz. I will provide commentary on our first quarter performance. Heather will take you through a more detailed review of our operating results, and we will then open the call to your questions. I'm excited to be with you this afternoon to report on another highly successful and productive quarter, during which we made considerable progress executing against our strategic objectives and delivering our seventh consecutive quarter of year-over-year growth. In the first quarter 2014 we experienced year-over-year revenue growth of 15%, to $37.2 million, our highest revenue quarter since 2009. EBITDA was $3 million. Now, keep in mind that typically our first quarter expenses are higher due to certain timing items like payroll taxes and sales meetings. Also, the Medicare cut that was announced in November went into effect January 1 and had a negative impact to our earnings of approximately $1 million. We ended the quarter with $12 million in cash. Now here's the really impressive news. Total volume in the base business before the effect of the Mednet acquisition was up 12% to a new high for the company, and MCOT was up 10%. Like many other healthcare services companies, the unusually harsh winter negatively impacted our business during the first quarter. How much is hard to measure. However, the fact that we posted double-digit volume growth in spite of this challenge is a great sign. When we add in the Mednet business, which we owned for two months in the quarter, total volume soared, up 58% compared to last year, with all MCT services up 21%. The volume momentum we have carried into the second quarter is highly…

Thank you, Joe, and good afternoon, everyone. As Joe mentioned, revenue in the first quarter was $37.2 million, a 15% increase over the first quarter of 2013 and our highest quarterly revenue since 2009. Patient services revenue increased by $4.6 million due to organic patient growth of 12% as well as the addition of Mednet. Partially offsetting the volume increase was the impact of the previously announced Medicare rate reduction, as well as other commercial payers, some of which were tied to Medicare. Research and product revenue were essentially flat versus the first quarter of 2013. Please note the acquisition of Biomedical Systems' patient services division did not have an impact on our first quarter results since it was closed on April 3, 2014. On the gross margin line we came in at 58%, compared to 60% in the first quarter of 2013. The decrease in margin was primarily due to a decrease in the patient services margin driven by the lower average selling prices as compared to the first quarter of 2013. This reduction had a 260-basis-point impact and was mainly driven by the reduction in Medicare and commercial reimbursement rate as well as a shift in product mix as a result of the acquisition of Mednet. For the first quarter, our adjusted operating expense increased by $2.1 million, to $22.3 million. This increase was due to the addition of Mednet and higher research and development expense for the work being done by IMEC on our next-generation device. These increases were offset by lower bad debt expense and lower corporate overhead costs. We generated positive adjusted EBITDA of $3 million for the first quarter of 2014, an 8.2% return, compared to $3 million in Q1 of 2013. As Joe stated, our first quarter EBITDA is impacted by higher expenses…

Thanks, Heather. As you have heard, we got the year off to a great start during the first quarter. I want to focus a bit more now on how we plan to build on this momentum. Given our overarching vision of being a worldwide leader in wireless medicine and the delivery of health information in order to improve quality of life and reduce cost of care, we continue to look for ways to leverage our technology in order to create new revenue opportunities. At our last earnings call I spoke briefly about our activity with at-home INR monitoring, which is the primary diagnostic measurement used to help regulate anticoagulation medications. In entering the INR market, we are able to leverage a good portion of our current infrastructure, including sales and marketing. We have just begun rolling this service out nationwide and already have approximately 700 active patients enrolled in the program. Although it's early, we are successfully demonstrating the power of this model, and we are optimistic about its potential to build value for BioTelemetry. I also spoke about our alliance with Wellbridge Health, a care management company focused on reducing unnecessary hospital readmissions and emergency room visits resulting from congestive heart failure. The relationship continues to develop according to plan, as Wellbridge is about to start a few major pilot programs. As you know, the continued care management of CHF patients has become critically important, especially given recent changes in the reimbursement environment. CHF affects approximately 5.8 million adults in the United States, costs the nation an estimated $32 billion each year and accounts for the highest hospital readmission rate. As such, it makes sense for us to invest time and resources to help commercialize Wellbridge's rather unique approach to this healthcare challenge. As we move further into the…

(Operator Instructions) Our first question comes from Bruce Jackson of Lake Street Capital. Your line is open.

Thanks. Good afternoon. I was wondering if we could get the product revenue mix within the patient services business.

Are you looking, Bruce, for the volume or revenue?

Both, if you've got it, so the MCOT percent of the revenue and then also the units.

Yes, so on the patient services side the volume with the Mednet acquisition spread was 25% MCOT, 35% event and 40% Holter. And that shifted from about a third, a third, a third in the quarter previous year.

Okay. And then in terms of the INR uptake, so you've got 700 patients right now. How do you anticipate that ramping through the rest of the year?

Yes, Bruce, so it's kind of too early to tell. Any forecast we would put together today would not be based on any real known performance indicators. We're really just in the process of kind of rolling out. Just trained the sales force on it. We're in the process of adding it to various payer contracts. So it's just too early to tell.

Okay. And then with Cardiokey, I think we were originally thinking it might launch in sort of the Q2/Q3 time frame, and then I'm sure the acquisitions may have changed the timing on that. Can you be a little bit more specific on when you might be launching the Cardiokey?

Probably more like Q3, mid to late Q3 is what I'm hoping for. You hit the nail on the head. You have to make resource allocation decisions, and we had these two opportunities which we felt were really important for the Company to build scale, so – and actually one of them came with a Holter software component that we really could use. So we're in the process of now integrating the Holter software component into – with our system and then sort of finalizing launch plans and the like. We don't really have any – we don't see any barriers, any real challenges to getting that product to market. It's just a matter of time to get all the work done.

Okay. Last question, obviously there was some pricing pressure due to the reimbursement changes. Can you give us just a rough idea overall what the impact was on the overall pricing?

So, Bruce, when you look at the quarter over quarter, so Q1 2013 to Q1 2014, there were really four things that impacted the price, and we just have to keep them in mind. One was the Medicare rate reduction and then the commercial contracts that were tied to Medicare. Last year we also talked about the United price pressure, which happened toward the end of last year, so that was not in Q1 of 2013. And then we had an adjustment in one of our other commercial contracts as a result of an acquisition. So those four things had a price impact in excess of $2 million quarter over quarter.

Okay. Great. Thank you very much.

Thank you. Our next question comes from Jan Wald of Benchmark. Your line is open.

Good afternoon, everyone. Congratulations on the quarter.

Thanks, Jan.

Hi. I guess I have a couple of questions. On the INR, it looks – it sounds as if you're going to use your current sales folks to go out and sell the product, and that means going to doctors and doctors' offices and also going probably to the payers and talking to them. Any thought about direct-to-consumer or any kind of approach to get patients aware of the test?

Jan, it's Joe. Yes, as you know, as I mentioned a couple of times during the call, we're going to monitor more patients this year than we ever have in history. So clearly I think there's an opportunity to cross-sell various products and services to those individuals. But I'm not pounding my chest on that one yet, because I want to see how that works with healthcare professional protocol, as well. Sometimes doctors don't necessarily like you to tell their patients what to do, so we have to be a little bit careful with that. But it is something that we plan on testing. We've actually tested it in the past and we know that we can cross-sell things to folks. We haven't tested INR yet. It's a little bit more complex of a sell to an end user. But I think there's big opportunity there. We've got to figure out a way to monetize that patient base as it continues to grow.

Yes, I guess my sense is, having talked to some doctors in Europe who – where they have some home testing, a lot of it's driven by the patient, so I was just wondering if you were heading in that direction.

Yes, it's certainly – I'm sorry, Jan, (inaudible). It's certainly part of the plan. We just haven't (inaudible) yet.

Okay. I guess the other thing, you seemed to imply that you were in negotiations to buy or acquire or form a partnership with another company. Is that a company in Europe or is that – how does that relate to your overall business?

No, the near-term opportunity is with a US-based company in research services that focuses on an adjacent line of service. So it would be incredibly complementary to our current core lab ECG monitoring offering, which is becoming more and more important. We see in more of these preferred provider relationships and to the extent that you have more service lines that you can offer a more competitive – it's more competitive for you to become one of those partners. So we felt like it was really important. We've been talking about it for probably a year now, and this one is one that just is sort of at the end stage of being completed. It's not a gigantic acquisition, not a lot of money upfront, more kind of an earnout type of structure.

Okay. Any update on Europe and your ability to form a partnership there or acquire there…

Yes, there are still a few companies there that we maintain dialog with and are optimistic that at some point in the future we can have more formal relationships. With one of them we have an informal relationship, but it's very early stages in both of those.

And I guess one last question, and this may be off the wall from – because you haven't really alluded to this at all, but when I talk to investors they're now asking me how does what you do relate to devices like the new Reveal product that Medtronic has just introduced to the market. They see that as a competitor, and they really don't know how you fare against that, how you relate to that. Could you talk a little bit about that?

Yes, sure. The implantable loop recorders that Medtronic, St. Jude have been marketing for some time are not necessarily competitors. They're more complementary products, I believe. The only time a physician – now I shouldn't say the only time, because I'm a little bit out of my field here, but I would say the product is designed for patients that need long-term monitoring, long term meaning greater than 30 days. MCOT is a perfect product for up to 30 days, but if a patient has some sort of an arrhythmia that the doctor feels requires longer term monitoring, then an implantable device may be appropriate. I think the newer product that you're referring to is a follow-on to their Reveal, which is more of an injectable one. It sort of makes it an easier procedure for physicians to execute in office. But that's a little bit further down on the monitoring scale. It's a much more expensive procedure. And, again, I couldn't tell you what percentage of arrhythmias are symptomatic greater than 30 days or at intervals greater than 30 days, and that's really what it seems most appropriate for.

Okay. Thank you very much.

Thanks, Jan.

Thank you. And our last question comes from Dan Trang of Stonegate Securities. Your line is open.

Hi. Thanks for taking my question. I wanted to know some of the kind of the criterion, some color behind the Biomedical Systems acquisition, kind of what made it an attractive acquisition candidate?

Yes, Dan, it's Joe. The easy answer to that is classic industry consolidation and rollup in the face of price pressure. But in this particular case we felt they had a very professional sales and marketing infrastructure, the fact that they had a proprietary Holter software system that we could use for our Holter line, in particular the launch of Cardiokey, and the fact that they already had a presence in Europe, all those things sort of made it that much more attractive to us. But it's predominantly a consolidation play.

Okay. You still are reviewing other acquisition candidates?

Yes, I mean, we always are. At this particular juncture I'd say, just referring to the last couple of quarters, the M&A was a bit more important to us in terms of our strategic planning. A lot of that had to do with reimbursement pressure and gaining scale and size. But whenever there's an opportunity to accelerate our strategic plan through partnership or acquisition we'll take a look at it. We're not just doing them for the sake of doing them or just for financial reasons. It has to really be strategic for us. And that's the way we evaluate different opportunities.

Okay. Switching gears a bit, regarding the DOJ, I'm wondering what the feedback has been from them so far, and kind of any time period as when that'll be resolved.

Yes, Dan, I'm reluctant to put out a whole lot of detail on this subject, for obvious reasons. But I would say that we've had constructive dialog with them. There's a negotiation that has started, which is a good thing. So, given that, I'm optimistic that maybe something could happen. But you just never know. And I'm not going to put a timeline on it. I'm not going to put a final dollar number on it.

Fair.

I like our position in this case. I think that the Company was a pretty good actor as compared to the other party. But there's other things I need to consider in working through this process.

Okay. Fair. Okay. Thank you.

Thank you. And I'd like to turn the call over to Mr. Capper.

Well, if there are no more questions, we will – first of all, I want to thank you all for your continued support and interest in the Company, and we'll conclude the call at this point, and we will speak to you all next quarter. Thank you, operator. That concludes the call.

If you joined 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.biotelinc.com until Tuesday, May 20, 2014. That concludes the program. You may all disconnect. Everyone have a great day.