Additional information about Natus Medical can be found at www.natus.com.

This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, particularly statements regarding the expectations, beliefs, plans, intentions and strategies of Natus. These forward-looking statements include statements regarding non-GAAP pre-tax operating margins in 2013, a goal of $500 million in annual revenue, benefits of moving to the SBU structure, and revenue and non-GAAP profitability in the fourth quarter and full year 2012 These statements relate to current estimates and assumptions of our management as of the date of this press release, and 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, the demand for our products and services, the impact of adverse global economic conditions on our target markets, 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, risks associated with bringing new products to market and integrating acquired businesses, and our ability to fulfill product orders on a timely basis. 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 for the year ended December 31, 2011, 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

2012

2011

2012

2011
 
Revenue $ 80,724 $ 51,338 $ 201,246 $ 168,541
Cost of revenue 36,453 23,765 89,265 73,165

 

 

 

 
Gross profit 44,271 27,573 111,981 95,376

 

 

 

 
Operating expenses:
Marketing and selling 21,801 14,688 54,756 44,818
Research and development 8,512 6,119 21,860 18,577
General and administrative 18,809 7,809 39,250 24,828

 

 

 

 
Total operating expenses 49,122 28,616 115,866 88,223

 

 

 

 
Income (loss) from operations (4,851 ) (1,043 ) (3,885 ) 7,153

 

 

 

 
Other income/(expense):
Interest income 11 6 20 23
Interest expense (215 ) (47 ) (231 ) (160 )
Other income, net (24 ) 227 437 109

 

 

 

 
Total other income/(expense) (228 ) 186 226 (28 )

 

 

 

 
Income (loss) before provision for income tax (5,079 ) (857 ) (3,659 ) 7,125
 
Provision for income tax (benefit) expense (3,130 ) (1,011 ) (2,513 ) 1,507

 

 

 

 
Net income (loss) $ (1,949 ) $ 154 $ (1,146 ) $ 5,618

 

 

 

 
Earnings (loss) per share:
Basic $ (0.07 ) $ 0.01 $ (0.04 ) $ 0.20
Diluted $ (0.07 ) $ 0.01 $ (0.04 ) $ 0.19
 
Weighted-average shares used to compute:
Basic earnings (loss) per share 29,062 28,643 28,947 28,477
Diluted earnings (loss) per share 29,062 29,387 28,947 29,566
 

 
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
2012 2011 2012 2011

 

 

 

 
GAAP based results:

 

Income (loss) before provision for income tax (benefit)
$ (5,079 ) $ (857 ) $ (3,659 ) $ 7,125
 
Non-GAAP adjustments:
 

Amortization expense associated with certain acquired intangible assets reported as a component of:
(a)
 
Cost of revenue 703 530 1,763 1,592
Marketing and selling 564 393 1,493 1,218
Research and development 338 250 1,013 990
 

Restructuring charge reported as a component of general and administrative expense
7,671 1,363 8,927 2,156 (b)
 
Direct costs of acquisitions (G&A) 786 290 2,778 290 (c)
 
Inventory FMV adjustments (COGS) 571 - 626 - (d)
 
Backlog FMV adjustments (Marketing & Sales) 720 - 720 - (e)
 
Accelerate ERP system depreciation (G&A) - - 902 - (f)

 

 

 

 

Non-GAAP income before provision for income tax
6,274 1,969 14,563 13,371
 

Provision for income tax expense/(benefit), as adjusted

1,928
(128 ) 4,768 3,450

 

 

 

 
 
Non-GAAP net income $ 4,346 $ 2,097 $ 9,795 $ 9,921

 

 

 

 
Non-GAAP earnings per share:
Basic $ 0.15 $ 0.07 $ 0.34 $ 0.35
Diluted $ 0.15 $ 0.07 $ 0.33 $ 0.34
 
Weighted-average shares used to compute:
Basic non-GAAP earnings per share 29,062 28,643 28,947 28,477
Diluted non-GAAP earnings per share 29,822 29,387 29,584 29,566
 
Memo, Gross profit percentage:
GAAP basis 54.8 % 53.7 % 55.6 % 56.6 %
non-GAAP basis 56.4 % 54.7 % 56.8 % 57.5 %
 

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