Apr 29 2010
Natus Medical Incorporated (Nasdaq:BABY) today announced financial results for the three months ended March 31, 2010.
“I am very pleased with our first quarter results, with both our revenue and earnings exceeding our expectations”
For the first quarter ended March 31, 2010, revenue increased 47% to $49.2 million, compared to $33.4 million in the comparable quarter of the previous year. The Company incurred a net loss of $303,000, or $(0.01) per diluted share for the first quarter of 2010, compared with net income of $787,000, or $0.03 per diluted share, for the first quarter of 2009.
The results for the first quarter of 2010 included a restructuring charge of $3.0 million to eliminate redundant personnel costs resulting from the recent acquisition of Alpine Biomed Holdings Corp, which were reported as a component of general and administrative expense, and $1.2 million of amortization expense associated with certain acquisition-related intangible assets. Excluding these charges, non-GAAP earnings per share for the quarter was $0.09 per diluted share, an increase of 80% from non-GAAP earnings per share of $0.05 for the same quarter last year.
"I am very pleased with our first quarter results, with both our revenue and earnings exceeding our expectations," said Jim Hawkins, President and Chief Executive Officer of the Company. "While we saw strong demand in all of our product categories, most notable was the rebound in our domestic neurology business where we shipped numerous large orders. Following a slowdown in hospital capital spending in early 2009, orders began to increase in the middle of the year and accelerated through the first quarter of this year. We believe the return of these large orders signifies that hospital spending has not only stabilized, but is returning to previous levels."
"We are also pleased that our gross profit margin has improved to 60% in the first quarter. We anticipate that our gross profit will improve to previous levels over the course of the year," said Hawkins.
"We believe our business model is on track as we intend to do an additional acquisition in the second half of 2010 and continue to execute on our business model of combining internal growth with accretive acquisitions," added Hawkins.
Natus announced the Alpine restructuring in a press release issued January 13, 2010, wherein the Company said it expected to record a charge of $2.5 million or approximately $0.05 per share. The actual restructuring charge was $3.0 million, reducing GAAP earnings per share by $0.07, or an additional two cents per share. The restructuring charge was greater primarily because severance benefits for employees in foreign jurisdictions were higher than previously expected.
As of March 31, 2010, the Company had cash, cash equivalents, and short-term investments of $39.4 million, stockholders' equity of approximately $243 million, and working capital of approximately $77 million.
Financial Guidance on a GAAP and non-GAAP Basis
Natus increased its revenue and earnings guidance for the full year 2010.
For the full year 2010, the Company now expects revenue to be approximately $205 million and earnings per share to range from $0.47 to $0.49. The Company had previously said it expected that revenue would be approximately $198 million and earnings per share would range from $0.45 to $0.47.
Natus also announced revenue and earnings guidance for the second quarter of 2010. For the second quarter 2010, the Company expects revenue to range from $50 million to $51 million and earnings per share to range from $0.11 to $0.12. This compares to revenue of $37.3 million and earnings per share of $0.08 reported in the second quarter of 2009.
On a non-GAAP basis the Company expects earnings per share to range from $0.64 to $0.66 for the full year and $0.13 to $0.14 for the second quarter of 2010. The Company had earlier said that non-GAAP earnings per share for the full year would range from $0.60 to $0.62. The non-GAAP earnings guidance excludes the restructuring charge as well as amortization expense associated with certain acquisition-related intangible assets. The Company has elected to provide its guidance on a non-GAAP basis that excludes these items as this presentation is common among companies that are active acquirors and whose results are, accordingly, affected by such charges, because this information is used by management to evaluate operating results and because it believes this information will assist investors in making period to period comparisons of the Company's operating results.
The Company's GAAP-based guidance includes the impact of expensing employee equity based compensation. All earnings per share amounts are on a diluted basis.
Use of Non-GAAP Financial Measures
In addition to disclosing financial results calculated in accordance with GAAP, this release contains non-GAAP financial measures that exclude a restructuring charge as well as amortization expense associated with certain acquisition-related intangible assets. The Company believes that the presentation of results excluding these charges provides meaningful supplemental information to both management and investors that are indicative of the Company's core operating results. Therefore, the Company believes these non-GAAP financial measures facilitate comparison of operating results across reporting periods. A reconciliation between the Company's results of operations on a GAAP and non-GAAP basis for the periods reported is included as part of the condensed consolidated statements of operations at the end of the Company's financial results release.
The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to the Company's historical performance. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated.
SOURCE Natus Medical Incorporated
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