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Natus Medical Announces Fourth Quarter And Full Year 2011 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 Twelve Months Ended
December December December December
  2011     2010     2011     2010  

 

 

 

 

 
Revenue $ 64,110 $ 63,170 $ 232,651 $ 218,655
Cost of revenue   28,610     25,998     101,775     88,698  

 

 

 

 

Gross profit   35,500     37,172     130,876     129,957  

 

 

 

 

Operating expenses:
Marketing and selling 18,171 14,523 62,989 54,857
Research and development 6,984 6,095 25,562 21,283
General and administrative 8,053 9,111 32,880 35,986
Goodwill impairment charge   20,000     -     20,000     -  

 

 

 

 

Total operating expenses   53,208     29,729     141,431     112,126  

 

 

 

 

Income (loss) from operations   (17,708 )   7,443     (10,555 )   17,831  

 

 

 

 

Other income/(expense):
Interest income 5 6 28 36
Interest expense (108 ) (79 ) (268 ) (128 )
Other income, net   (100 )   (54 )   10     (26 )

 

 

 

 

Total other income/(expense)   (203 )   (127 )   (230 )   (118 )

 

 

 

 

Income (loss) before provision for income tax expense/(benefit)

(17,911 ) 7,316 (10,785 ) 17,713
 

Provision for income tax expense/(benefit)

  (593 )   2,067     914     5,794  

 

 

 

 

Net income (loss) $ (17,318 ) $ 5,249   $ (11,699 ) $ 11,919  

 

 

 

 

Earnings (loss) per share:
Basic $ (0.60 ) $ 0.19 $ (0.41 ) $ 0.42
Diluted $ (0.60 ) $ 0.18 $ (0.41 ) $ 0.41
 
Weighted-average shares used to compute
Basic earnings (loss) per share 28,826 28,303 28,565 28,092
Diluted earnings (loss) per share 28,826 29,297 28,565 29,217
 

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

 

2011  

 

  2010  

 

 

 

 

GAAP based results:
 

Income (loss) before provision for income tax expense

$ (17,911 ) $ 7,316 $ (10,785 ) $ 17,713
 
Non-GAAP adjustments:
 
Goodwill impairment charge 20,000 - 20,000 - (a)
 

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

(b)

Cost of revenue 571 525 2,163 2,056
Marketing and selling 420 345 1,638 1,334
Research and development 334 370 1,324 1,481
 

 

Impairment of tradenames reported as a component of marketing and selling

700 - 700 - (c)
 

Restructuring charge reported as a component of G&A expense

630 842 2,786 3,949 (d)
 
Acquisition related
Embla direct costs (G&A) 25 118 315 297

(e)

Embla inventory FV adjustment (COGS) 77 - 77 - (f)
 
Accelerate ERP system depreciation (G&A) 451 - 451 - (g)

 

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

(h)

Cost of revenue - - - 1,081
Marketing and selling   -     -     -     300  

 

 

 

 

 

Non-GAAP income before provision for income tax

5,297 9,516 18,669 28,211
 

Provision for income tax expense, as adjusted

  1,240     2,541     4,690     9,214  

 

 

 

 

 
Non-GAAP net income $ 4,057   $ 6,975   $ 13,979   $ 18,997  

 

 

 

 

Non-GAAP earnings per share:
Basic $ 0.14 $ 0.25 $ 0.49 $ 0.68
Diluted $ 0.14 $ 0.24 $ 0.47 $ 0.65
 

Weighted-average shares used to compute

Basic non-GAAP earnings per share 28,826 28,303 28,565 28,092
Diluted non-GAAP earnings per share 29,265 29,297 29,524 29,217
 
Memo, Gross profit percentage:
GAAP basis 55.4 % 58.8 % 56.3 % 59.4 %
non-GAAP basis 56.4 % 59.7 % 57.2 % 60.9 %
 
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) Goodwill impairment charge relating to European reporting unit associated with annual goodwill impairment testing in accordance with ASC 350.

 

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

 

(c) Impairment charge associated with intangible assets with indefinite lives, principally tradenames, in accordance with ASC 350.

 

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

 

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

 

(f) Embla inventory fair value adjustment included as a component of cost of sales in accordance with ASC 805.

 

(g) Acceleration of depreciation of current ERP system associated with the implementation of a world-wide enterprise resource planning platform in 2012.

 

(h) 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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