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Natus Medical Announces 2011 Third Quarter Financial Results

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 for the year ended December 31, 2010, and its quarterly reports on Form 10-Q, and in other reports filed from time to time by Natus with the U.S. Securities and Exchange Commission.

NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
       
Three Months Ended Nine Months Ended
September September September September
2011 2010 2011 2010

 

 

 

 

 
Revenue $ 51,338 $ 53,179 $ 168,541 $ 155,485
Cost of revenue   23,765     21,757     73,165     62,700  

 

 

 

 

Gross profit   27,573     31,422     95,376     92,785  

 

 

 

 

Operating expenses:
Marketing and selling 14,688 12,817 44,818 40,334
Research and development 6,120 4,820 18,577 15,188
General and administrative   7,809     8,074     24,828     26,875  

 

 

 

 

Total operating expenses   28,617     25,711     88,223     82,397  

 

 

 

 

Income (loss) from operations   (1,044 )   5,711     7,153     10,388  

 

 

 

 

Other income/(expense):
Interest income 6 34 23 30
Interest expense (47 ) (13 ) (160 ) (49 )
Other income, net   227     (197 )   109     28  

 

 

 

 

Total other income/(expense)   186     (176 )   (28 )   9  

 

 

 

 

Income (loss)before provision for income tax (858 ) 5,535 7,125 10,397
 
Provision for income tax (benefit) expense   (1,011 )   1,898     1,507     3,727  

 

 

 

 

Net income $ 153   $ 3,637   $ 5,618   $ 6,670  

 

 

 

 

Earnings per share:
Basic $ 0.01 $ 0.13 $ 0.20 $ 0.24
Diluted $ 0.01 $ 0.12 $ 0.19 $ 0.23
 
Weighted-average shares used to compute
Basic earnings (loss) per share 28,643 28,212 28,477 28,021
Diluted earnings (loss) per share 29,387 29,261 29,566 29,170
 

NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP ADJUSTMENTS (UNAUDITED)
(in thousands, except per share amounts)
         
Three Months Ended Nine Months Ended
September September September September
2011 2010 2011

2010

 

 

 

 

GAAP based results:
 
Income (loss) before provision for income tax (benefit) $ (858 ) $ 5,535 $ 7,125 $ 10,397
 
Non-GAAP adjustments:
 

Amortization expense associated with certain acquired intangible assets reported as a component of:

(a)
 
Cost of revenue 530 510 1,592 1,530
Marketing and selling 393 329 1,218 989
Research and development 250 370 990 1,111
 
 

Restructuring charge reported as a component of general and administrative expense

1,363 2,156 3,107 (b)
 
Direct costs of acquisitions 290 179 290 179 (c)
 

Costs associated with the discontinuance of the Sonamed Clarity hearing screener reported as a component of:

(d)
 
Cost of revenue 323 1,081
Marketing and selling 300
       

 

 

 

 

Non-GAAP income before provision for income tax

1,968 7,246 13,371 18,694
 
Provision for income tax (benefit) expense, as adjusted   (128 )   2,475     3,450     6,668  

 

 

 

 

 
Non-GAAP net income $ 2,096   $ 4,771   $ 9,921   $ 12,026  

 

 

 

 

Non-GAAP earnings per share:
Basic $ 0.07 $ 0.17 $ 0.35 $ 0.43
Diluted $ 0.07 $ 0.16 $ 0.34 $ 0.41
 

Weighted-average shares used to compute

Basic non-GAAP earnings per share 28,643 28,212 28,477 28,021
Diluted non-GAAP earnings per share 29,387 29,261 29,566 29,170
 
Memo, Gross profit percentage:
GAAP basis 53.7 % 59.1 % 56.6 % 59.7 %
non-GAAP basis 54.7 % 60.7 % 57.5 % 61.4 %
 

Note:The Company has elected to provide non-GAAP financial results that exclude the items below 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.

 
(a) Amortization expense associated with acquired intangible assets with definite lives.
 

(b) Restructuring charge including accruals for severance benefits and exit and disposal costs.

 
(c) Direct costs of acquisitions that are expensed pursuant to the requirement of ASC 805.
 

(d) Charge associated with discontinuance of the Sonamed Clarity newborn hearing screener. Costs include concessions given to customers purchasing a replacement hearing screener, write-down of inventory, and write-off of tradenames.

 




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