Exhibit 99.1
Natus Medical Reports Record Annual and Fourth Quarter Revenue and
Earnings for Fiscal 2005; Company Increases 2006 Guidance
SAN CARLOS, Calif.--(BUSINESS WIRE)--Feb. 21, 2006--Natus Medical
Incorporated (Nasdaq:BABY) today announced financial results for the
three months and year ended December 31, 2005.
Natus reported revenue of $12.6 million for the fourth quarter
ended December 31, 2005, representing a 20% increase, or $2.1 million,
from $10.5 million in the comparable quarter of the previous year. The
Company reported net income of $2.5 million, or $0.13 per diluted
share for the fourth quarter of 2005, compared with net income of $1.5
million or $0.08 per share, for the comparable period in 2004.
The Company reported record revenue of $43.0 million for the year
ended December 31, 2005, an increase of 18%, from $36.5 million for
the year ended December 31, 2004. The Company reported net income of
$6.2 million, or $0.33 per share for the full-year 2005, compared with
a net loss of $2.4 million, or loss of $(0.14) per share, for the year
ended December 31, 2004.
Gross profit for the three months ended December 31, 2005, was
63.1%, compared with 65.4% for the fourth quarter of 2004. For the
three months ended December 31, 2005, total operating expenses
increased by $589,000, or 11%, to $5.9 million, compared with $5.3
million for the fourth quarter of 2004.
As of December 31, 2005, the Company reported cash, cash
equivalents, and short-term investments of $52.3 million, representing
an increase of $16.5 million from the corresponding amount at December
31, 2004. Approximately $7.1 million of the increase in cash was
related to a private placement of the Company's stock in October 2005.
Additionally, the Company reported stockholders' equity of $68.9
million and working capital of $57.3 million as of December 31, 2005.
In January 2006, the Company completed its acquisition of Bio-logic
Systems Corp. in an all-cash transaction valued at $68.8 million.
Following this acquisition the Company's cash reserves are
significantly reduced and its working capital has been reduced to
approximately $10 million.
"I am extremely pleased with our results for the fourth quarter
and full-year 2005," said Jim Hawkins, President and Chief Executive
Officer of Natus Medical. "In particular, our 20% revenue growth in
the fourth quarter 2005 was driven by strong device sales here in the
United States as well as increased international penetration. I
believed Natus is well positioned for continued growth in both revenue
and earnings in 2006."
"We remain very excited about our recent acquisition of Bio-logic
Systems. We have made great progress in the integration of Bio-logic,
including the successful combining of our two sales and marketing
organizations. We are also making significant operational changes to
the organization that will make their operations more efficient,"
added Hawkins. "We remain very confident that the acquisition of
Bio-logic will be accretive to our earnings in 2006 and beyond."
Financial Guidance
The Company updated financial guidance for 2006. For 2006, the
Company expects to report diluted earnings per share of $0.49 to $0.51
on revenue of $78 to $80 million. Natus had previously said it
expected to earn $0.48 to $0.50 per diluted share in 2006 on the same
revenue range. These expected results include the impact of the
January 5, 2006 acquisition of Bio-logic Systems Corp.
The Company also provided guidance for the first and second
quarters of 2006. For the first quarter of 2006, the Company expects
to report diluted earnings per share of $0.07 to $0.08, on revenue of
$18.1 to $18.3 million. This compares to diluted earnings per share of
$0.05 and revenue of $9.7 million reported in the first quarter of
2005. For the second quarter 2006, the Company expects to report
diluted earnings per share of $0.10 to $0.11, on revenue of $19.0 to
$19.3 million. This compares to diluted earnings per share of $0.07
and revenue of $10.2 million reported for the second quarter of 2005.
The estimates of earnings per share do not include any one-time
charges associated with the acquisition of Bio-logic Systems or the
impact of expensing employee stock options. The Company is continuing
to evaluate the impact of expensing employee stock options, which it
will be required to do in 2006 under Financial Accounting Standards
Board Statement ("SFAS") No. 123R, "Share-Based Payment."
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) 700-7101 for domestic callers, or (617) 213-8837 for
international callers, and entering reservation code 78972953. 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 28002366.
The domestic call-in number above is an update of the number
included in the Company's press release issued on February 8, 2006
announcing the conference call.
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 is a leading provider of healthcare products used for
screening, detection, treatment, monitoring and tracking of common
medical ailments such as hearing impairment, neurological dysfunction,
epilepsy, sleep disorders, newborn jaundice and newborn metabolic
testing.
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 2006 as well as for the first and
second quarters of 2006, and increased earnings resulting from the
acquisition of Bio-logic Systems. 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, 2005, 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)
December 31, December 31,
2005 2004
ASSETS
Current assets:
Cash and equivalents $ 40,096 $ 16,239
Short-term investments 12,163 $ 19,504
Accounts receivable, net of
allowance for doubtful accounts
of $173 in 2005 and $472 in 2004 8,460 6,640
Inventories 3,482 4,347
Prepaid expenses and other current
assets 1,041 625
Total current assets 65,242 47,355
Property and equipment, net 2,116 2,503
Goodwill, intangibles, and other
assets 9,558 9,399
Total assets $ 76,916 $ 59,257
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Accounts payable $ 1,289 $ 1,947
Accrued liabilities 6,359 4,303
Deferred revenues 326 279
Total liabilities 7,974 6,529
Commitments and contingencies
Stockholders' equity:
Common stock, $0.001 par value,
120,000,000 shares authorized;
shares issued and outstanding:
17,802,053 in 2005 and 17,140,339
in 2004 99,533 89,373
Accumulated deficit (30,699) (36,902)
Accumulated other comprehensive
income 108 257
Total stockholders' equity 68,942 52,728
Total liabilities and
stockholders' equity $ 76,916 $ 59,257
NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Three Months Ended Twelve Months Ended
December December December December
2005 2004 2005 2004
Revenue $ 12,624 $ 10,526 $ 43,045 $ 36,506
Cost of revenue 4,657 3,645 16,092 15,015
Gross profit 7,967 6,881 26,953 21,491
Operating expenses:
Marketing and selling 3,040 2,906 11,396 11,305
Research and development 1,086 1,024 4,318 3,672
General and administrative 1,735 1,422 5,806 6,626
Restructuring cost - - - 776
Acquired IPR&D - (80) - 470
Total operating expenses 5,861 5,272 21,520 22,849
Income (loss) from operations 2,106 1,609 5,433 (1,358)
Other income/(expense):
Interest income 439 130 1,189 454
Interest expense - - - (3)
Other income, net 2 - 39 (141)
Total other income/
(expense) 441 130 1,228 310
Income (loss) before
provision for income tax 2,547 1,739 6,661 (1,048)
Provision for income tax 83 231 509 297
Income (loss) from continuing
operations 2,464 1,508 6,152 (1,345)
Discontinued operations - 10 - (1,062)
Net income (loss) $ 2,464 $ 1,518 $ 6,152 $ (2,407)
Earnings (loss) per share:
Basic:
Continuing operations $ 0.14 $ 0.09 $ 0.35 $ (0.08)
Discontinued operations $ - $ 0.00 $ - $ (0.06)
Net income (loss) $ 0.14 $ 0.09 $ 0.35 $ (0.14)
Diluted:
Continuing operations $ 0.13 $ 0.08 $ 0.33 $ (0.08)
Discontinued operations $ - $ 0.00 $ - $ (0.06)
Net income (loss) $ 0.13 $ 0.08 $ 0.33 $ (0.14)
Weighted-average shares used
to compute
Basic earnings per share 18,036 17,093 17,429 16,837
Diluted earnings per share 19,331 18,218 18,693 16,837
CONTACT: Natus Medical Incorporated
Steven J. Murphy, 650-802-0400
InvestorRelations@Natus.com