Exhibit 99.1
Natus Medical Reports Record Second Quarter Revenue and Earnings;
Company Increases 2005 Earnings Guidance
SAN CARLOS, Calif.--(BUSINESS WIRE)--July 28, 2005--Natus Medical
Incorporated (Nasdaq:BABY) today announced financial results for the three and
six months ended June 30, 2005.
Natus reported revenue of $10.2 million for the quarter ended June 30,
2005, an increase of $1.8 million or 21% from $8.4 million in the comparable
quarter of the previous year. The Company reported net income of $1.3 million,
or $0.07 per diluted share, for the second quarter of 2005, compared with a net
loss of $3.6 million, or ($0.22) loss per share, for the comparable period in
2004.
For the first half of 2005, revenue increased 17% to $19.9 million, from
$17.0 million reported in the first half of 2004. Net income for the six months
ended June 30, 2005 was $2.2 million, or $0.12 per diluted share, compared to a
loss of $4.1 million, or ($0.24) loss per share reported in 2004.
Gross margin improved to 61.5% for the three months ended June 30, 2005,
compared with 55.4% for the second quarter of 2004. The gross margin for the
2005 period was favorably impacted by reductions in materials costs and the
contribution of Fischer-Zoth.
For the three months ended June 30, 2005, total operating expenses
decreased by $2.5 million, or approximately 33%, to $5.1 million, compared with
$7.6 million for the second quarter of 2004. Operating expenses in the second
quarter 2004 included $1.6 million of one-time charges; absent those charges the
net reduction in operating expenses in the 2005 period was $868,000.
As of June 30, 2005, the Company reported cash, cash equivalents and
short-term investments of $39.9 million, representing an increase of
approximately $4.1 million from the corresponding amount at December 31, 2004.
Additionally, the Company reported stockholders' equity of $54.8 million and
working capital of $43.5 million as of June 30, 2005.
"We are extremely pleased with our results for the second quarter," said
Jim Hawkins, President and Chief Executive Officer of Natus Medical. "On a
comparable basis, we reduced our year-over-year operating expenses by fifteen
percent, while at the same time we saw double-digit top line revenue growth
coupled with improving margins.
"We continue to benefit from our acquisition of Fischer-Zoth, which was
completed in September 2004. Sales of Fischer-Zoth products have exceeded our
expectations and have contributed to our improving margins," Hawkins added.
Financial Guidance
Natus updated financial guidance for 2005. The Company expects to report
earnings per diluted share of $0.30 to $0.33 on revenue of $41.6 to $43.0
million in 2005. This compares to a loss per share of $0.14 on revenue of $36.5
million reported for 2004. Natus had previously said it expected to earn $0.28
to $0.31 per diluted share in 2005 on revenue of $41 to $43 million.
The Company also updated its guidance for the third and fourth quarters of
2005. For the third quarter of 2005, the Company expects to report diluted
earnings per share of $0.07 to $0.09, on revenue of $10.3 to $10.6 million. The
Company had previously said it expected to earn $0.07 to $0.08 per diluted share
on revenue of $10.2 to $10.4 million. For the fourth quarter 2005, the Company
expects to report diluted earnings per share of $0.11 to $0.12, on revenue of
$11.4 to $12.5 million. The Company had previously said it expected to earn the
same per-share amounts on revenue of $11.3 to $12.9 million.
The estimates of earnings per diluted share do not include the impact of
expensing employee stock options. The SEC has delayed the effective date for
adopting Financial Accounting Standards Board Statement No. 123R, "Share-Based
Payment." The Company will be required to begin expensing employee stock options
in its first quarterly period in 2006.
Conference Call
Natus has scheduled an investor conference call to discuss this
announcement beginning at 11:00 a.m. Eastern Time today. Individuals interested
in listening to the conference call may do so by dialing (866) 831-6162 for
domestic callers, or (617) 213-8852 for international callers, and entering
reservation code 19239489. 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 20281994.
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
Natus develops, manufactures, and markets products for the detection,
treatment, monitoring, and tracking of common disorders in newborns. Natus
products are marketed under well-recognized brand names such as ALGO(R),
Neometrics(TM), Echo-Screen(R), and neoBLUE(TM). Headquartered in San Carlos,
California, Natus markets and sells its products worldwide through a direct
sales force in the U.S. and the U.K., and through distributors in over 50 other
countries. 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 anticipated revenue and profitability for the full-year 2005 as well
as for the third and fourth quarters of 2005, and expectations regarding future
growth and profitability. 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, 2004, 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 BALANCE SHEETS
(in thousands, except share amounts)
June 30, December 31,
2005 2004
ASSETS
Current assets:
Cash and equivalents $ 27,183 $ 16,239
Short-term investments 12,687 19,504
Accounts receivable, net of allowance
for doubtful accounts of $452 in
2005 and $472 in 2004 4,990 6,640
Inventories 3,717 4,347
Prepaid expenses and other current
assets 520 625
Total current assets 49,097 47,355
Property and equipment, net 2,348 2,503
Goodwill, intangibles, and other assets 9,045 9,399
Total assets $ 60,490 $ 59,257
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $ 1,344 $ 1,947
Accrued liabilities 4,056 4,303
Deferred revenues 229 279
Total liabilities 5,629 6,529
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value,
120,000,000 shares authorized; shares
issued and outstanding: 17,261,048,in
2005 and 17,140,339 in 2004 89,944 89,373
Accumulated deficit (34,728) (36,902)
Accumulated other comprehensive income (355) 257
Total stockholders' equity 54,861 52,728
Total liabilities and
stockholders' equity $ 60,490 $ 59,257
NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Six Months Ended
June June June June
2005 2004 2005 2004
Revenue $ 10,168 $ 8,398 $19,870 $16,969
Cost of revenue 3,919 3,748 7,790 7,506
Gross profit 6,249 4,650 12,080 9,463
Operating expenses:
Marketing and selling 2,834 3,110 5,439 6,081
Research and development 1,078 1,072 2,070 1,978
General and administrative 1,187 2,655 2,551 4,024
Restructuring cost - 776 - 776
Total operating expenses 5,099 7,613 10,060 12,859
Income (loss) from operations 1,150 (2,963) 2,020 (3,396)
Other income/(expense):
Interest income 253 99 436 196
Interest expense - - - (3)
Other income, net 23 (177) 32 (101)
Total other income/(expense) 276 (78) 468 92
Income (loss) before
provision for income tax 1,426 (3,041) 2,488 (3,304)
Provision for income tax 162 - 315 1
Income (loss) from continuing
operations 1,264 (3,041) 2,173 (3,305)
Discontinued operations - (584) - (767)
Net income (loss) $ 1,264 $(3,625) $ 2,173 $(4,072)
Earnings (loss) per share:
Basic:
Continuing operations $ 0.07 $ (0.18) $ 0.13 $ (0.20)
Discontinued operations $ - $ (0.04) $ - $ (0.05)
Net income (loss) $ 0.07 $ (0.22) $ 0.13 $ (0.24)
Diluted:
Continuing operations $ 0.07 $(0.18) $0.12 $(0.20)
Discontinued operations $ - $(0.04) $ - $(0.05)
Net income (loss) $ 0.07 $(0.22) $0.12 $(0.24)
Weighted-average shares used to compute
Basic earnings per share 17,376 16,638 17,267 16,673
Diluted earnings per share 18,912 16,638 18,646 16,673
CONTACT: Natus Medical Incorporated
Steven J. Murphy, 650-802-0400
InvestorRelations@Natus.com