-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BEXgV63It9fi2BoBkvXTejpbi6ZlXtKN+3i8rkmmt1ERuC5O7apXAZlt7g2InMiv DL5WnPR9AXyuLi4Dz2O80A== 0001157523-07-004481.txt : 20070503 0001157523-07-004481.hdr.sgml : 20070503 20070503081341 ACCESSION NUMBER: 0001157523-07-004481 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20070503 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070503 DATE AS OF CHANGE: 20070503 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATUS MEDICAL INC CENTRAL INDEX KEY: 0000878526 STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845] IRS NUMBER: 770154833 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-33001 FILM NUMBER: 07812880 BUSINESS ADDRESS: STREET 1: 1501 INDUSTRIAL ROAD CITY: SAN CARLOS STATE: CA ZIP: 94070 BUSINESS PHONE: 6508020400 MAIL ADDRESS: STREET 1: 1501 INDUSTRIAL ROAD CITY: SAN CARLOS STATE: CA ZIP: 94070 8-K 1 a5393653.txt NATUS MEDICAL INCORPORATED, 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) May 3, 2007 Natus Medical Incorporated - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 000-33001 77-0154833 - ------------------------- ----------------------- -------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 1501 Industrial Road, San Carlos, California 94070 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (650) 802-0400 ---------------------------- Not applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] 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. On May 3, 2007, Natus Medical Incorporated (the "Company") is issuing a press release and holding a conference call regarding its financial results for the first quarter of fiscal 2007 ended March 31, 2007 and other financial information. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K. The information in this Form 8-K and the exhibit attached hereto shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act") or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. ITEM 9.01. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (c) Exhibits. Exhibit No. Description ----------- ----------- 99.1 Press release of Natus Medical Incorporated dated May 3, 2007 describing the Company's results for its first fiscal quarter ended March 31, 2007 and other financial information. - -------------------------------------------------------------------------------- SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NATUS MEDICAL INCORPORATED Date: May 3, 2007 By: /s/ Steven J. Murphy ------------------------------------------------------- Steven J. Murphy Vice President Finance and Chief Financial Officer Index to Exhibits Exhibit No. Description ----------- ----------- 99.1 Press release of Natus Medical Incorporated dated May 3, 2007 describing the Company's results for its first fiscal quarter ended March 31, 2007 and other financial information. EX-99.1 2 a5393653ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 Natus Medical Announces 2007 First Quarter Financial Results -- Company Reports Record First Quarter Revenue and Earnings -- Increases 2007 Revenue Guidance SAN CARLOS, Calif.--(BUSINESS WIRE)--May 3, 2007--Natus Medical Incorporated (Nasdaq:BABY) today announced financial results for the three months ended March 31, 2007. For the first quarter ended March 31, 2007, Natus reported revenue of $27.1 million, representing a 40% increase from $19.4 million in the comparable quarter of the previous year. The Company reported net income of $1.5 million, or $0.07 per diluted share, for the first quarter of 2007, compared with a net loss of $4.7 million, or a loss of $(0.25) per share, for the first quarter of 2006. The results for the first quarter of 2006 included a charge for in-process research and development associated with the acquisition of Bio-logic Systems Corp. in January 2006. Excluding this charge, non-GAAP earnings were $1.2 million, or $0.06 per diluted share. The results for 2007 reflect increases in net income and earnings per share of 24% and 17%, respectively, compared to the 2006 non-GAAP results. During 2006 the Company completed the acquisitions of Bio-logic Systems in January, Deltamed in September, and Olympic Medical in October. The acquisitions of Deltamed and Olympic contributed to the revenue growth in the first quarter 2007. As of March 31, 2007 the Company had cash, cash equivalents, and short-term investments of $16.8 million, stockholders' equity of approximately $103 million, working capital of approximately $34 million, and no long-term debt. Jim Hawkins, President and Chief Executive Officer of the Company, said, "I am very pleased with our results for the first quarter of 2007. We achieved outstanding results at Olympic Medical, along with solid year over year revenue results in our core Natus lines. With the integration of Olympic substantially complete, I believe we are well positioned for continued revenue and earnings growth throughout the remainder of 2007." "As the quarter progressed, the strength in our top-line growth gave us the confidence to invest additional resources towards building infrastructure to support our long term growth plans," added Hawkins. "As anticipated, our first quarter overhead expenses ran at a higher rate than normal." "We are clearly pleased with the results for Olympic, including the Olympic CFM brain monitor and Cool-Cap head-cooling system, and the strong performance of our core brands. With the transition to our direct selling approach for the Olympic product lines now complete, and the favorable revenue results for the quarter, we are increasing our revenue guidance for 2007," said Hawkins. "We are maintaining our earnings guidance for the year, as it is our intent to continue building infrastructure to achieve our aggressive growth targets for 2008 and 2009." 2007 Guidance Natus increased its revenue guidance for the full year 2007. For the full year 2007, the Company now expects revenue to range from $117.5 million to $119.0 million and earnings per share to range from $0.49 to $0.52. The Company had previously said revenue would range from $115 million to $117 million. Natus also increased its previously announced revenue guidance for the second quarter of 2007. For the second quarter 2007, the Company expects revenue to range from $28.0 million to $28.5 million and earnings per share to range from $0.10 to $0.11. This compares to revenue of $20.0 million and earnings per share of $0.07 reported in the second quarter 2006. The Company had previously said revenue would range from $27.5 million to $28.0 million. For the third quarter 2007, the Company expects revenue to range from $29.5 million to $30.0 million and earnings per share to range from $0.13 to $0.14. This compares to revenue of $21.8 million and earnings per share of $0.09 reported in the third quarter 2006. The Company expects that it will utilize tax net operating loss carryforwards to significantly reduce its taxable income in 2007, such that it will pay taxes at a rate of only 12% to 15% for the year. The Company's 2007 guidance is on a GAAP basis, including the impact of expensing employee equity-based compensation, however it does not include the impact of any one-time acquisition or restructuring related charges that may be incurred in 2007. All earnings per share amounts are on a diluted basis. Use of Non-GAAP Financial Measures In addition to disclosing financial results calculated in accordance with GAAP, this release contains non-GAAP financial measures that exclude the effects of costs associated with the January 5, 2006 acquisition of Bio-logic Systems Corp. The Company believes that the presentation of results excluding this acquisition-related charge provides meaningful supplemental information to both management and investors that is indicative of the Company's core operating results. The Company also believes the in-process research and development charge is not indicative of resources devoted to ongoing research and development efforts. Therefore, the Company believes the non-GAAP financial measures facilitate comparison of operating results across reporting periods. A reconciliation between the Company's results of operations on a GAAP and non-GAAP basis for the periods reported is included as part of the condensed consolidated statements of operations at the end of the Company's financial results release. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance and when planning, forecasting, and analyzing future periods. The non-GAAP financial measures also facilitate management's internal comparisons to the Company's historical performance. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated. Conference Call Natus has scheduled an investment-community conference call to discuss this announcement beginning at 11:00 a.m. Eastern Time today (8:00 a.m. Pacific Time). Individuals interested in listening to the conference call may do so by dialing (866) 277-1184 for domestic callers, or (617) 597-5360 for international callers, and entering reservation code 93291375. A telephone replay will be available for 48 hours following the conclusion of the call by dialing (888) 286-8010 for domestic callers, or (617) 801-6888 for international callers, and entering reservation code 89050786. The conference call also will be available real-time via the Internet at http://investor.natus.com, and a recording of the call will be available on the Company's Web site for 90 days following the completion of the call. About Natus Medical Incorporated Natus is a leading provider of healthcare products used for the screening, detection, treatment, monitoring and tracking of common medical ailments such as hearing impairment, neurological dysfunction, epilepsy, sleep disorders, and newborn care. Product offerings include computerized neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology, as well as newborn care products such as hearing screening systems, phototherapy devices for the treatment of newborn jaundice, head-cooling products for the treatment of brain injury in newborns, and software systems for managing and tracking disorders and diseases for public health laboratories. 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, but are not limited to, statements regarding future revenue, expenses, cash tax rates, and earnings growth, and anticipated revenue and profitability for the second quarter, third quarter, and full year 2007. These statements relate to 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, 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, and risks associated with bringing new products to market and integrating acquired businesses. 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, 2006, 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 March March 2007 2006 --------- --------- Revenue $ 27,050 $ 19,383 Cost of revenue 10,175 7,294 --------- --------- Gross profit 16,875 12,089 --------- --------- Operating expenses: Marketing and selling 6,496 5,161 Research and development 3,824 2,490 General and administrative 4,108 2,155 Acquired IPR&D - 5,900 --------- --------- Total operating expenses 14,428 15,706 --------- --------- Income from operations 2,447 (3,617) -------- -------- Other income/(expense): Interest income 186 169 Interest expense - (165) Other income, net 55 (117) --------- --------- Total other income/(expense) 241 (113) --------- --------- Income before provision for income tax 2,688 (3,730) Provision for income tax 1,169 949 --------- --------- Net income (loss) $ 1,519 $ (4,679) ========= ========= Earnings (loss) per share: Basic $ 0.07 $ (0.25) Diluted $ 0.07 $ (0.25) Weighted-average shares used to compute Basic earnings per share 21,466 18,485 Diluted earnings per share 22,734 18,485 NATUS MEDICAL INCORPORATED AND SUBSIDIARIES RECONCILIATION OF NON-GAAP ADJUSTMENTS (UNAUDITED) (in thousands) Three Months Ended March March 2007 2006 --------- --------- GAAP based results: Net Income (loss) $ 1,519 $ (4,679) Non-GAAP adjustments: Acquired in-process research and development (see note) - 5,900 (a) Non-GAAP net income $ 1,519 $ 1,221 ========= ========= Earnings per share: Basic $ 0.07 $ 0.07 Diluted $ 0.07 $ 0.06 Weighted-average shares used to compute Basic earnings per share 21,466 18,485 Diluted earnings per share 22,734 20,239 (a) Charges for acquired in-process research and development expense of $5,900 related to the acquisition of Bio-logic Systems Corp. on January 5, 2006. Management believes that excluding this charges facilitates comparisons of Natus' core operating results across multiple reporting periods. Since the IPR&D charge is not expected to be tax deductible, reversal of this charge has no impact on the tax provision. CONTACT: Natus Medical Incorporated Steven J. Murphy, 650-802-0400 Chief Financial Officer InvestorRelations@Natus.com -----END PRIVACY-ENHANCED MESSAGE-----