Natus Doubles Earnings, Topping Estimates

The health care company's fourth quarter revenue is driven by disposable supplies and newborn hearing screeners.
Author:
Publish date:

Once these most recent quarterly results are finalized, they will be run through TheStreet.com Ratings' model and our ratings will be adjusted accordingly. To keep up to date on all of our ratings, visit TheStreet.com Ratings Screener.

On February 26, 2009, healthcare product provider

Natus Medical Inc.

(BABY)

reported that its Q4 FY08 earnings more than doubled, as the prior year's quarter included a $732 million loss on hedging activities associated with funding the purchase of Xltek. Net income for the quarter surged to $6.29 million or $0.22 per share from $2.78 million or $0.12 per share in Q4 FY07. The latest quarterly results topped the consensus estimate of $0.21 per share.

Revenue grew 26.8% to $43.40 million from $34.23 million a year ago, driven by strong sales of disposable supplies and newborn hearing screeners. Gross profit margin improved 72 basis points to 63.78% from 63.06% in Q4 FY07. Total operating expenses swelled 21.8% to $19.23 million, led by 37.4% increase in marketing and selling expenses and 17.7% rise in general and administrative expenses. In addition, operating margin widened 251 basis points to 19.48% from 16.97% in the prior year's quarter.

During the quarter under review, Natus Medical entered into an asset purchase agreement with BrainZ Instruments Limited. Under the terms of the agreement, the company will acquire essentially all the trading assets of BrainZ, including products, intellectual property and brand. On closing of the asset purchase agreement, Natus will pay BrainZ New Zealand Dollar (NZ$) 1.3 million in cash.

During FY08, the company's earnings surged 78.7% to $17.47 million or $0.66 per share from $9.78 million or $0.43 per share in FY07. Annual revenue grew 36.7% to $161.83 million from $118.37 million a year earlier.

Looking forward to Q1 FY09, Natus Medical expects EPS to be in the range of $0.06 to $0.08 per share, on revenue between $37.00 million to $38.00 million. For FY09, the company reiterated its revenue outlook to be in the range of $166.00 million to $170.00 million with earnings between $0.57 per share to $0.61 per share.