Natus Medical Announces Record 2007 Second Quarter Financial Results.- Company Reports Record Second Quarter Revenue and Earnings - Updates 2007 Revenue and Earnings Guidance SAN CARLOS San Carlos (săn kär`lōs), residential city (1990 pop. 26,167), San Mateo co., W Calif.; inc. 1925. The chief manufactures are plastic products, hardware, and machine parts. , Calif. -- Natus Medical Incorporated (Nasdaq:BABY) today announced financial results for the three and six month periods ended June 30, 2007. For the second quarter ended June 30, 2007, Natus reported revenue of $28.3 million, representing a 42% increase from $20.0 million in the comparable quarter of the previous year. The Company reported net income of $2.3 million, or $0.10 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the second quarter of 2007, compared with net income of $1.4 million, or $0.07 per diluted share, for the second quarter of 2006. For the six months ended June 30, 2007, the Company reported net income of $3.8 million, or $0.17 per diluted share, compared to a loss of $3.3 million, or $(0.18) per share, for the comparable period in 2006. The results for the 2006 period included a charge for in-process research and development associated with the acquisition of Bio-logic Systems Corp. in January 2006. Excluding this charge, non-GAAP earnings for the six months ended June 30, 2006 were $2.6 million, or $0.13 per diluted share. The results for the first six months of 2007 reflect increases in net income and earnings per share of 48% and 31%, respectively, compared to the non-GAAP results in 2006. Jim Hawkins This article is about the British radio presenter. For the protagonist of Robert Louis Stevenson's Treasure Island, see Treasure Island#Main characters. Jim Hawkins is a radio presenter for BBC Radio Shropshire 96FM. , President and Chief Executive Officer of the Company said, "I am pleased with our record results for the second quarter. The quarter was led by strong growth in our worldwide hearing screening business and the results of our most recent acquisition, Olympic Medical. "As we previously reported, we increased spending for infrastructure in the first quarter. In the second quarter of this year, our general and administrative expenses have come down to more normal levels. Our higher level of spending on R&D initiatives has continued into the second quarter, most notably for our hearing and EEG EEG: see electroencephalography. product lines, but we expect that our expenditures for these projects should be winding down in the fourth quarter." "In transitioning production of the Olympic Cool-Cap from clinical units to commercial units, we updated many of its components. Because of its Class III device class III device Regulatory affairs A highly regulated 'high risk' medical device–eg, life-support or life-sustaining devices–eg, pacemakers and heart valves, approved by the FDA for use in humans; CIIIDs are also defined as those which pose a status, these component updates must receive FDA FDA abbr. Food and Drug Administration FDA, n.pr See Food and Drug Administration. FDA, n.pr the abbreviation for the Food and Drug Administration. pre-market approval. Consequently, in June we put a hold on shipments of Cool-Cap units. While this delay impacted shipments, it did not have an adverse impact on orders. We held up approximately $500,000 of Cool-Cap shipments in the second quarter because of this issue. We will resume shipments of the Cool-Cap upon FDA approval of the new components, which we anticipate happening in the third quarter," added Hawkins. "Even with this shipping delay, we still had an excellent quarter with record results. Through our internal product development and acquisitions we have developed market-leading positions for a number of our products. We remain confident in our strategy as we continue to position the company for growth in 2008 and beyond," said Hawkins. During 2006 the Company completed the acquisitions of Bio-logic Systems, Deltamed, and Olympic Medical, in January, September, and October, respectively. The acquisitions of Deltamed and Olympic contributed to the reported revenue growth in the second quarter 2007. As of June 30, 2007 the Company had cash and cash equivalents of $18.3 million, stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. of $107 million, working capital of $39 million, and no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. . 2007 Guidance Natus increased its revenue guidance for the full year 2007. For the full year 2007, the Company now expects revenue to range from $118.3 million to $119.3 million. The Company had previously said revenue would range from $117.5 million to $119.0 million. The Company reiterated its earnings per share guidance, which it expects to range from $0.49 to $0.52 per share. Natus also increased its previously announced revenue guidance for the third quarter of 2007. For the third quarter of 2007, the Company expects revenue to range from $30.0 million to $30.5 million. The Company had previously said revenue would range from $29.5 million to $30.0 million. The Company reiterated its earnings per share guidance, which it expects to range from $0.13 to $0.14. This compares to revenue of $21.8 million and earnings per share of $0.09 reported in the third quarter of 2006. For the fourth quarter of 2007, the Company expects revenue to range from $32.9 million to $33.4 million and earnings per share to range from $0.19 to $0.21. This compares to revenue of $28.8 million and earnings per share of $0.02 reported in the fourth quarter of 2006. The results for the 2006 period included a $3.9 million charge for acquired in-process research and development associated with the acquisition of Olympic Medical. The Company expects that it will utilize tax net operating loss carryforwards Net operating loss carryforwards Application of losses to offset earnings in future years. to significantly reduce its taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. in 2007, such that it will pay taxes at a rate of only 12% to 15% for the year. The Company's 2007 guidance is on a GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis, including the impact of expensing employee equity-based compensation, which the Company expects to be approximately $2.1 million for the full year 2007. The Company's guidance does not include the impact of any one-time acquisition or restructuring related charges. 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 the effects of costs associated with the January 5, 2006 acquisition of Bio-logic Systems Corp. The Company believes that the presentation of results excluding this acquisition-related charge provides meaningful supplemental information to both management and investors that is indicative of the Company's core operating results. The Company also believes the in-process research and development charge is not indicative of resources devoted to ongoing research and development efforts. Therefore, the Company believes the 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 con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. 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. The 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. Conference Call Natus has scheduled an investment-community conference call to discuss this announcement beginning at 11:00 a.m. Eastern Time today (8:00 a.m. Pacific Time). Individuals interested in listening to the conference call may do so by dialing (866) 700-7101 for domestic callers, or (617) 213-8837 for international callers, and entering reservation code 28035577. A telephone replay will be available for 48 hours following the conclusion of the call by dialing (888) 286-8010 for domestic callers, or (617) 801-6888 for international callers, and entering reservation code 36859792. The conference call also will be available real-time via the Internet at http://investor.natus.com, and a recording of the call will be available on the Company's Web site for 90 days following the completion of the call. About Natus Medical Incorporated Natus is a leading provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments such as hearing impairment hearing impairment n. A reduction or defect in the ability to perceive sound. , neurological neurological, neurologic pertaining to or emanating from the nervous system or from neurology. neurological assessment evaluation of the health status of a patient with a nervous system disorder or dysfunction. dysfunction, epilepsy epilepsy, a chronic disorder of cerebral function characterized by periodic convulsive seizures. There are many conditions that have epileptic seizures. Sudden discharge of excess electrical activity, which can be either generalized (involving many areas of cells in , sleep disorders Sleep Disorders Definition Sleep disorders are a group of syndromes characterized by disturbance in the patient's amount of sleep, quality or timing of sleep, or in behaviors or physiological conditions associated with sleep. , and newborn care. Product offerings include computerized neurodiagnostic systems for audiology audiology /au·di·ol·o·gy/ (aw?de-ol´ah-je) the study of impaired hearing that cannot be improved by medication or surgical therapy. au·di·ol·o·gy n. , neurology neurology (n  rŏl`əjē, ny–), study of the morphology, physiology, and pathology of the human nervous system. ,
polysomnography, and neonatology neonatology /neo·na·tol·o·gy/ (ne?o-na-tol´ah-je) the diagnosis and treatment of disorders of the newborn. ne·o·na·tol·o·gy n. , as well as newborn care products such as hearing screening systems, phototherapy Phototherapy Definition Phototherapy, or light therapy, is the administration of doses of bright light in order to normalize the body's internal clock and/or relieve depression. devices for the treatment of newborn jaundice newborn jaundice Breast milk jaundice Physiologic jaundice of the newborn, see there, aka breast milk jaundice , head-cooling products for the treatment of brain injury in newborns, and software systems for managing and tracking disorders and diseases for public health laboratories. Additional information about Natus Medical can be found at www.natus.com. This press release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. as defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, particularly statements regarding the expectations, beliefs, plans, intentions and strategies of Natus. These forward-looking statements include, but are not limited to, statements regarding future revenue, expenses, cash tax rates, earnings growth, anticipated revenue and profitability for the third quarter, fourth quarter, and full year 2007, and the timing for resumption of shipment of Cool-Cap units. These statements relate to future events or Natus' future financial performance or results, and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements are only predictions and the actual events or results may differ materially. Natus cannot provide any assurance that its future results or the results implied by the forward-looking statements will meet expectations. Our future results could differ materially due to a number of factors, including the effects of competition, challenges incurred in integrating acquired companies, the demand for our products and services, our ability to expand our sales in international markets, our ability to maintain current sales levels in a mature domestic market, our ability to control costs, and risks associated with bringing new products to market and integrating acquired businesses. Natus disclaims any obligation to update information contained in any forward-looking statement. More information about potential risk factors that could affect the business and financial results of Natus is included in Natus' annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2006, and its quarterly reports on Form 10-Q Form 10-Q See 10-Q. , and in other reports filed from time to time by Natus with the U.S. Securities and Exchange Commission. [TABLE OMITTED] [TABLE OMITTED] |
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