Delaware | 77-0154833 | |
(State or other jurisdiction of Incorporation) | (I.R.S. Employer Identification No.) |
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
[ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
[ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
[ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition |
Item 9.01. | Financial Statements and Exhibits |
Exhibit No. | Description | |
99.1 | Press release dated July 20, 2016 describing the Company's results for its second quarter ended June 30, 2016 and other financial information. |
NATUS MEDICAL INCORPORATED (Registrant) | ||||||
Dated: April 20, 2016 | By: | /s/ Jonathan A. Kennedy | ||||
Senior Vice President Finance and Chief Financial Officer |
Exhibit No. | Description | |
99.1 | Press release dated July 20, 2016 describing the Company's results for its second quarter ended June 30, 2016 and other financial information. |
• | Record second quarter revenue of $96.0 million |
• | Record second quarter GAAP earnings per share of $0.32 and non-GAAP of $0.39 |
• | Increases revenue and earnings guidance for the third quarter and fiscal year 2016 |
NATUS MEDICAL INCORPORATED AND SUBSIDIARIES | |||||||||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS | |||||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Quarter Ended | Year to Date | ||||||||||||||
June 30, 2016 | June 30, 2015 | June 30, 2016 | June 30, 2015 | ||||||||||||
Revenue | $ | 95,958 | $ | 91,937 | $ | 183,287 | $ | 181,332 | |||||||
Cost of revenue | 37,879 | 33,844 | 70,348 | 68,948 | |||||||||||
Intangibles amortization | 604 | 683 | 1,205 | 1,366 | |||||||||||
Gross profit | 57,475 | 57,410 | 111,734 | 111,018 | |||||||||||
Gross profit margin | 59.9 | % | 62.4 | % | 61.0 | % | 61.2 | % | |||||||
Operating expenses: | |||||||||||||||
Marketing and selling | 21,236 | 22,108 | 41,832 | 42,850 | |||||||||||
Research and development | 7,105 | 7,309 | 14,907 | 14,167 | |||||||||||
General and administrative | 11,924 | 11,656 | 24,403 | 23,208 | |||||||||||
Intangibles amortization | 2,197 | 2,174 | 4,332 | 3,129 | |||||||||||
Restructuring | 1,083 | 161 | 1,118 | 316 | |||||||||||
Total operating expenses | 43,545 | 43,408 | 86,592 | 83,670 | |||||||||||
Income from operations | 13,930 | 14,002 | 25,142 | 27,348 | |||||||||||
Other income/(expense), net | 25 | (380 | ) | 481 | (1,210 | ) | |||||||||
Income before tax | 13,955 | 13,622 | 25,623 | 26,138 | |||||||||||
Provision for income tax expense | 3,443 | 3,771 | 6,573 | 7,691 | |||||||||||
Net income | $ | 10,512 | $ | 9,851 | $ | 19,050 | $ | 18,447 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 0.32 | $ | 0.31 | $ | 0.59 | $ | 0.57 | |||||||
Diluted | $ | 0.32 | $ | 0.30 | $ | 0.58 | $ | 0.56 | |||||||
Weighted-average shares: | |||||||||||||||
Basic | 32,438 | 32,273 | 32,521 | 32,201 | |||||||||||
Diluted | 32,983 | 33,204 | 33,118 | 33,158 |
NATUS MEDICAL INCORPORATED AND SUBSIDIARIES | |||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) | |||||||||||
(in thousands) | |||||||||||
June 30, | March 31, | December 31, | |||||||||
2016 | 2016 | 2015 | |||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 96,284 | $ | 81,285 | $ | 82,469 | |||||
Accounts receivable, net | 93,102 | 90,013 | 99,080 | ||||||||
Inventories | 43,620 | 45,691 | 48,572 | ||||||||
Other current assets | 12,925 | 11,360 | 11,235 | ||||||||
Total current assets | 245,931 | 228,349 | 241,356 | ||||||||
Property and equipment, net | 17,174 | 17,624 | 16,967 | ||||||||
Goodwill and intangible assets | 192,173 | 196,413 | 194,002 | ||||||||
Deferred income tax | 12,809 | 12,695 | 12,782 | ||||||||
Other assets | 18,005 | 17,649 | 14,389 | ||||||||
Total assets | $ | 486,092 | $ | 472,730 | $ | 479,496 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 18,836 | $ | 19,418 | $ | 23,660 | |||||
Short-term borrowings | 10,000 | — | — | ||||||||
Accrued liabilities | 37,306 | 36,911 | 42,137 | ||||||||
Deferred revenue | 11,262 | 11,460 | 11,311 | ||||||||
Total current liabilities | 77,404 | 67,789 | 77,108 | ||||||||
Long-term liabilities: | |||||||||||
Deferred income tax | 3,839 | 3,881 | 3,897 | ||||||||
Other long-term liabilities | 8,633 | 8,708 | 7,781 | ||||||||
Total liabilities | 89,876 | 80,378 | 88,786 | ||||||||
Total stockholders’ equity | 396,216 | 392,352 | 390,710 | ||||||||
Total liabilities and stockholders’ equity | $ | 486,092 | $ | 472,730 | $ | 479,496 |
NATUS MEDICAL INCORPORATED AND SUBSIDIARIES | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) | |||||||
(in thousands) | |||||||
Quarter Ended | |||||||
June 30, 2016 | June 30, 2015 | ||||||
Operating activities: | |||||||
Net income | $ | 10,512 | $ | 9,850 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Provision for losses on accounts receivable | 408 | 307 | |||||
Excess tax benefit on the exercise of stock options | — | (3,317 | ) | ||||
Depreciation and amortization | 4,173 | 4,195 | |||||
Impairment of intangible assets | — | — | |||||
Impairment of property and equipment | (46 | ) | — | ||||
Warranty reserve | 1,383 | 2,277 | |||||
Share-based compensation | 2,102 | 1,760 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | (2,673 | ) | (1,380 | ) | |||
Inventories | 1,255 | (3,637 | ) | ||||
Prepaid expenses and other assets | (1,778 | ) | 1,505 | ||||
Accounts payable | (896 | ) | (2,945 | ) | |||
Accrued liabilities | (336 | ) | (4,510 | ) | |||
Deferred revenue | (172 | ) | 2,984 | ||||
Deferred income tax | (322 | ) | (1,378 | ) | |||
Liabilities acquired in acquisitions | — | — | |||||
Net cash provided by operating activities | 13,610 | 5,711 | |||||
Investing activities: | |||||||
Acquisition of businesses, net of cash acquired | (501 | ) | 519 | ||||
Purchases of property and equipment | (181 | ) | (976 | ) | |||
Purchase of intangible assets | (243 | ) | (890 | ) | |||
Net cash used in investing activities | (925 | ) | (1,347 | ) | |||
Financing activities: | |||||||
Proceeds from stock option exercises and Employee Stock Purchase Program purchases | 1,584 | 4,396 | |||||
Excess tax benefit on the exercise of stock options | — | 3,317 | |||||
Repurchase of common stock | (7,691 | ) | (4,203 | ) | |||
Taxes paid related to net share settlement of equity awards | (558 | ) | (1,189 | ) | |||
Contingent consideration earn-out | — | (664 | ) | ||||
Proceeds from short-term borrowings | 10,000 | — | |||||
Payments on borrowings | — | — | |||||
Net cash used in financing activities | 3,335 | 1,657 | |||||
Exchange rate changes effect on cash and cash equivalents | (1,021 | ) | 218 | ||||
Net increase in cash and cash equivalents | 14,999 | 6,239 | |||||
Cash and cash equivalents, beginning of period | 81,285 | 66,999 | |||||
Cash and cash equivalents, end of period | $ | 96,284 | $ | 73,238 |
NATUS MEDICAL INCORPORATED AND SUBSIDIARIES | |||||||
RECONCILIATION OF NON-GAAP ADJUSTMENTS (UNAUDITED) | |||||||
(in thousands, except per share amounts) | |||||||
Quarter Ended | |||||||
June 30, 2016 | June 30, 2015 | ||||||
GAAP based results: | |||||||
Income before provision for income tax | $ | 13,955 | $ | 13,622 | |||
Non-GAAP adjustments: | |||||||
Intangibles Amortization - Cost of revenue | 604 | 683 | |||||
Intangibles Amortization - Operating expense | 2,197 | 2,174 | |||||
Restructuring 1 | 1,083 | 161 | |||||
Direct costs of acquisitions (M&S) 2 | (583 | ) | — | ||||
Direct costs of acquisitions (OI&E) | 74 | — | |||||
Non-GAAP income before provision for income tax | 17,330 | 16,640 | |||||
Income tax expense, as adjusted | 4,554 | 5,482 | |||||
Non-GAAP net income | $ | 12,776 | $ | 11,158 | |||
Non-GAAP earnings per share: | |||||||
Basic | $ | 0.39 | $ | 0.35 | |||
Diluted | $ | 0.39 | $ | 0.34 | |||
Weighted-average shares used to compute | |||||||
Basic non-GAAP earnings per share | 32,438 | 32,273 | |||||
Diluted non-GAAP earnings per share | 32,983 | 33,204 | |||||
GAAP Gross profit | 57,475 | 57,410 | |||||
Amortization of intangibles | 604 | 683 | |||||
Non-GAAP Gross Profit | 58,079 | 58,093 | |||||
Non-GAAP Gross Margin | 60.5 | % | 63.2 | % | |||
GAAP Operating profit | 13,930 | 14,002 | |||||
Amortization of intangibles | 2,801 | 2,857 | |||||
Restructuring and other charges | 500 | 161 | |||||
Non-GAAP Operating profit | 17,231 | 17,020 | |||||
Non-GAAP Operating margin | 18.0 | % | 18.5 | % |
NATUS MEDICAL INCORPORATED AND SUBSIDIARIES | |||||
RECONCILIATION OF NON-GAAP ADJUSTMENTS (UNAUDITED) | |||||
(in thousands, except per share amounts) | |||||
Quarter Ended | |||||
June 30, 2016 | June 30, 2015 | ||||
GAAP Provision for income tax expense | 3,443 | 3,771 | |||
Effect of accumulated change of pretax income | 846 | 995 | |||
Effect of change in annual expected tax rate | 265 | 90 | |||
Effect on acquisition cost | — | 626 | |||
Non-GAAP Income tax expense, as adjusted | 4,554 | 5,482 | |||
Quarter Ended | Year to Date | ||||
September 30, 2016 | December 31, 2016 | ||||
GAAP EPS Guidance | $0.35 - $0.37 | $1.35 - $1.38 | |||
Amortization of Intangibles | 0.08 | 0.41 | |||
Restructuring | — | 0.03 | |||
Recall Accrual | — | 0.01 | |||
Direct cost of acquisitions | — | (0.02) | |||
Tax effect | (0.02) | (0.11) | |||
Non-GAAP EPS Guidance | $0.41 - $0.43 | $1.67 - $1.70 |
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