NTUS - Earnings call transcript Q1 2018

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Natus Medical First Quarter 2018 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded today, April 25, 2018 and contains time-sensitive information that is accurate only as of today. Earlier today, Natus Medical released financial results for the first quarter 2018.

If you have not received the news release or if you would like to be added to the Company's distribution list, please e-mail your request to investorrelations@natus.com. the broadcast at the of natus.com, will available being the and the is next be website the Company's and on call live Internet over on call XX This days. for website a replay as today's Chief President of will be Officer comments. opening Jim be Hawkins, The agenda present will follows; for Natus, call and Executive results. Then will summarize Natus, Jonathan Officer Financial of Kennedy, Executive Chief Vice Company's President financial and the financial guidance then, Hawkins Company's comments conclude and call prepared the the with XXXX Jim remarks for upto And will opening before the questions.

constitute furnished of Some the the statements information Private to of of XXXX. the in be today's meaning Act session will forward-looking Securities Reform Litigation within

XXXX. differ a number performance, forward-looking statements plans Company's and to and Natus those materially statements that due factors. events risk for the reminds results future from on Forward-looking you are these may future results, include of results focused expected

uncertainties business, the Forms Chief Hawkins? For XX-Q Commission. of risks to relevant Officer affect Securities and turn now and a I on President Hawkins, Jim Mr. reports over may Executive Natus periodic Exchange would Company's of like description XX-K with Medical. it's the to that the call filed the and and see

Jim Hawkins

Thank you, operator.

we that first quarter morning million of reported revenue million earlier Our results compared year. released this $XXX.X last $XXX.X with

note, quarter year. organic Please of exceeded the our high guidance in results; I guidance. million in per quarter, at of Venezuela. million. we am the $XX revenues first quarter. non-GAAP We X% bank and from last results We share our first pleased by our year earnings very also of first our order achieved earnings quarter the $XX growth one-time first came with $X.XX In in revenue from our end approximately non-GAAP reported quarter reduced compared in in revenue to last included $X.XX debt the our our our

reported quarter. revenues Newborn Care our in Neuro first each and quarter reported Otometrics business, record strong a the while

during the first formally our gathering revolutionary invested at aid Otoscan Conference, the we fitting Academy audiologists. of quarter the largest Otoscan, American Audiology hearing As planned, week was product. of last in introduced world's

XXXX year. We investment start this will continue anticipate of in Otoscan Otoscan to second the and half in revenue to throughout

diagnostic back longer our cycles United first States. in quarter, to While bounced in continue nicely business we the sales neuro experience the

Our business levels overall dollar XXXX pipeline markets. remains that year-over-year strong has our playing We encouraged will pleased weaker year again again achieved business our of in for be also is as a at the diagnostic neuro in as record revenue activity our segment. growth neuro leveled diagnostic remain the I'm we international international business robust. field

years Our under pressure the has past the $X.XX from been euro. the international $X.XX as went in to business dollar against

With now the to in mid-$X.XX, again. competitive dollar very we the are low

future. it ability neurosurgery the hired the be we service the management excellent business. the this acquired of seamlessly that our to trained force new not new continue to sales continue neurosurgery gives recently customers only part were and sales the us and segment business grow but -- team also with we quarter pleased a We to will In acquisition; also combined with our in clinical

Our expectations. our very exceeded quarter newborn business first care a good that had

quarters. if supply newborn that care to due last down rate the positive believe business for the both the to that to this be our Venezuela birth We $XX As increased which we rates -- had been in us products million leads believe increased; quarter, over Also continues. reduced trend obviously would experiencing rates quarter birth a the we that birth in the year-over-year our business past was noteworthy in mentioned, revenue shipped year. quarter care this first in newborn

the product to on warning Seattle clear facility care FDA. to our newborn continue in the of remediation work letter We from

accomplished, will work pipeline the been a and to exciting reported growth has aid to work for hearing these of solid as record fitting We revenue. as I'm new diagnostic While believe hearing an that Otometrics continue be continues. expand. foreseeable products pleased has well. first much market worldwide report grower quarter Otometrics additional the the future for product

This All process an sold that of us revolutionized upload/download opportunity believe digital hardware scanner translates worldwide the dental cloud market. market This impressions We Otoscan would hearing opportunity inter-oral of high-end approximately and these believe that for office. more annual through combination approximately revenue achieve market for to days and is data and of same of as give greatly the XX% digital Otoscan risk the over and as is attained the charge. believe We million a as Otometrics safer would the comfortable Otoscan impression hearing compelling and be Today as factors be aid the will of opportunity aids $XXX the represents to Natus human to it sales in X eligible audiologists, million. a the digital it fitting are in impression saves growth XXXX. aid manufacturers Otoscan there in an confidence an well ear image. a growing dental has of large error. dispensers reduces silicon in than hearing

that use reduce continue due their to stop aid can as well to of with number factors. aid We hearing also revisits as many unsatisfied as hearing customers believe are it fitting fitting that patients the by

process. aid that clear launched last week, and great trials As gives soon way that as is clinic care week. their with more care engage United and The for in to as at professional store. a went great comfortable can running From and aids the as last I hearing illustrate hearing have counseling been fitting in a way we well dialogue hearing they the with to This grow wow and will base. and also reception attract the the that Conference factor ear field hearing very walk the means the better new from Otoscan States the to the the patients used received canal the mentioned be earlier, us product show with returning The or that giving the we need patients professional Otoscan Otoscan influence along customers it industry. in and patient the can gives interest excite AAA Otoscan a officially

new creating getting adoption will a coordination of course technology take market and Of time. and

success in leaders medical new growth opportunities both newborn business and [ph] are two receive focus device will ear the first on the and We to big a time we of with these are manufacturers of same at Otometrics. United the Otometrics, Leslie to care aid Leslie hearing Otometrics; care future Germany newborn Natus and In are for greatly launch hired the customers a manufacturers currently the ahead and our McDonnell that Cartson for ready confident France executives markets; joined businesses Cartson in preparing quarter, and few experienced In February. by limited Bull year, at the launch few I'm in contribute Natus. and that for selected are and our lie that All ahead custom end orders. selected a and the to with we global Natus. of States, the Spain, a full summary, businesses larger mold pleased the very with ensuring having opportunity a Both

leading of market markets. the in have positions majority and our products We

the partner XXXX, plan primary While to with we expand to do products and in strengthen and acquisitions to our in acquire will companies future not be continue our focus markets. and

call to the integrate will look review over profitability Jonathan? to half also of now we products. the the Natus the Chief improve results. our XXXX of financial Jonathan Officer, with in along turn second I a We with as neurosurgery Otometrics our Financial Kennedy, added for

Jonathan Kennedy

Thank well financial a Jim. results be Today basis non-GAAP GAAP you, as a basis. discussing I'll our on as

more charges their that amortization and the non-GAAP related tax ongoing certain financial performance. expense, our remediation analysis thorough our GAAP of of measures other financial Our along results presentation and believe effects. product non-GAAP provide excluded statements with these cost restructurings, We a

can of in a our You financial press non-GAAP release. today's on GAAP results a basis find versus reconciliation

million, XXXX our from reported was stated, last of XX% from organic first business X.X% year. quarter the year-over-year. The same primarily increase revenue driven increased we Otometrics over which of growth growth $XXX.X a Jim unit revenue As period

revenue recur $XX not For comparison which XXXX. included Venezuela our with XXXX recall of contract that sake, QX did QX from in about million

during revenue of decreased same to quarter acquired or to unit first business neurosurgery the business. which remained our unit the the than addition the million XX.X% business newly compared $XX.X XXXX quarter XX% $XX.X and attributable neurosurgery was during of newborn last million neuro QX of XX% the the of or year. last with approximately from total from during revenue business. revenue I recently XXXX quarter during flat diagnostic first stated newborn of shipments offset about $XX last $XX.X Venezuela to XX% of revenue year. quarter of quarter Revenue acquired or for million as XX% Venezuela. included $XX.X included total neuro neuro year. total the business earlier, business is revenue increase loss of contract on to XX% to our core total more first The million our And compared last in million The Revenue However, our care from revenue year's same

quarter from was Revenue quarter in compared approximately to XX% unit margin for quarter revenue from Excluding first period. XX% the decline XX% 'XX international $XX.X%. XXXX points to non-recurring XXXX. of first domestic The of of Revenue same XX% XXXX of Otometrics to of The XXXX in revenue declined the XX.X% for compared ship of expenses phototherapy revenue as devices margins were margin margins revenue, gross was the from last revenue approximately care revenue of business lower unit of XXXX. from first on and of of sales normal from backlog primarily the lower period a gross quarter. Otometrics The quarter increased the operating of a contributed to year. in increased business Venezuela non-GAAP first revenue our by revenue the result to during shift to or while XXXX last $X.X XX% last compared to total XX% our the first of XX% for in to of during of due total period, XXXX the well lower attributable during non-recurring offset Revenue approximately margins larger quarter during year-over-year total, period neurology phototherapy our revenue unfavorable our the about newborn lower the from total The subject XX% as X.X% million devices was XXXX basis, to basis in XXXX. the unit were gross compared XXX product by was XXXX quarter quarter business quarter organic and revenue of million the a unit. than total to the compared quarter same Non-GAAP in in was first compared from slightly is year. same for XX% $XX.X same million $XX.X Venezuela On in by Otometrics geography the year. systems and gross and increase the revenue the approximately first business XX% XX% hold most first to achieved the our in which quarter in of supplies contract, and increases growth gross of sales compared mix. the services In

driven to as XX.X% of was and increase new additional well primarily in acquired part the addition operating as decreased business, on of neurosurgery as product same margin operating including [ph]. and expenses decline in Retcam non-GAAP our year. quarter development spending The operating compared Otoscan the by to OpEx last margin for Our X.X%

is that U.S. non-GAAP Law. new our higher quarter a tax to rate due law expected pay significant provisions to require of effective deductions profits. us U.S. favorable a on was U.S. new portion approximately includes Tax than rate tax The in first the form XX%. new the provision number and Our of eliminates federal and we This

As our tax some more rate. profitable, effective in foreign operations, primarily decrease our see overall we to expect Otometrics, become

million XX%. overall $X.X Other rate we As to of was fluctuations. result, be $X.X million tax anticipate expense the for exchange that primarily income result the non-GAAP will first first quarter. quarter, our Interest during a XXXX the rate XX% was

On million about same and quarter last to We interest be and compensation per share, $X.X last recorded expect decrease million GAAP million $X $X.X non-GAAP $X.X amortization first million year. year net to depreciation Non-GAAP full same was million. quarter. $X Share-based to was net expense. a between $X.XX. income $X.X first per compared the and and the $X.X earnings total quarter XXXX was year, $X.XX loss interest about In of decreased quarter share basis, during quarter, the second million million the we $X.X the million from a or expense at expense during

at flow stock a the minute $XX million Now of $X.X of of let's the take in We to Company debt cash and some repurchase balance items. look outstanding XXXX. first repaid quarter sheet million and

We the a debt $X.X As net the quarters. during million quarter from Cash of operations $XX.X ended result, million. net cash the million during quarter. with decreased was a flow $XX.X

of over days call a day million same last year. Our back that, versus compared Non-GAAP first with outstanding of sales of the increased to Jim. to And million quarter increased turn the slightly to period XX.X Jim? outstanding days. by XX the XX shares diluted XXXX shares in to shares I'll

Jim Hawkins

on XXXX, to like non-GAAP review financial Thanks, second guidance our all I year and Jonathan. for basis. our quarter full the a would

we and XXXX, $XXX share $X.XX. $X.XX per expect of earnings of quarter of $XXX the For non-GAAP to revenues million, million to second

are full guidance year a of earnings a non-GAAP of million we maintaining our to $XXX revenue to $X.XX our million, of guidance per XXXX, For $X.XX. and $XXX share

Before comment turning recent Voce on call, Capital. portion the our today's to briefly to with of the I one shareholders, development would question-and-answer like of

would from this week, we Voce The dialogue Board. enhance years. shareholder candidates Voce input Natus Director that. focused to unnecessary. XX% to that said, five earnings. active over maintained purpose replace is your shareholders help As we an believe and value With always the call open proxy Board please questions past our Natus you nominated the today's of contest may of first is that keep is confirm quarter on with the We discuss have that has We to a ask

turn now will Operator? We to the call questions. over

Operator

[Operator from Instructions] Our Myers Raymond first question Benchmark. comes with

You may begin.

Raymond Myers

we Jim for different looks before clarify the Just bit a the press said because you think in full I quarter year, was sorry, the clarification guidance you little of than start, second can a point release? what what for the

Jim Hawkins

do Jonathan, said I $X.XX Perhaps that? $X.XX. you I believe notes to my have are incorrect.

Jonathan Kennedy

to $X.XX says release press non-GAAP The EPS… $X.XX and

Jim Hawkins

release press $X.XX. and to the to $X.XX $X.XX is $X.XX correct guidance to So of EPS

Raymond Myers

Thank you for that important clarification.

much, sounds what AAA Can the Otoscan from the half? that you very takeaways launch talk of about as Conference some in the key and about exciting. you're Let's the second expecting from talk

Jim Hawkins

our a employees with was show, the It Sure. very very exciting received. people sales of excited certainly and reception the that were product all

with revenue some aid ear same the a specific in As time handful of I but mold manufacturers. countries mentioned, a while the break we start year. we those of hearing now in ramping manufacturers the of process the different It's look countries into the to areas at second and do course and time to some expect working that will take half

Raymond Myers

on they for that force the year? neurosurgical next would one us hired that much in sales over expect ramping flavor in the the some you growth Could growth how give be call business; cadence going that moving and you a to And sales. this how and should of you've that's we would anticipate mentioned

Jim Hawkins

front there. sales accomplished we and hired of seeing -- Since of you those sales those to acquired manager that a getting force I products basically the been got assets, and a with and base the with we support our came X direct clinical when few customers we pleased been market again think people, network in touch our sales Yes, people clinical believe products. base time very what's that had we've customers they've of customers. we through When and it, customer all I've a and trained are about added the

we but people. that acquired big we very You very that and well have was a we business knew challenge it's when very know, good we think gone the

they million the company I had nicely. were their when assets size we was million that's in losing just on products range; them when believe That were we those when that the million, back, up this be here, we we be $XX in think business. of not it aggressive the revenue $XX $XX I thought the trailing growth, the what around since said the we to was business objective probably As bought to it from those in that's XX to go we $XX very we products had revenues if that XX been months thought And really acquired that we would acquired fill bought acquiring -- you going to in their the in believe the to sales channels so business pretty million $XX year. we needed of that million that for that far and trailing $XX as million, is felt range the report pacing remember for I we

look established certainly those future the once we for business we at get that. out growth year, Going levels, yes; after the

Raymond Myers

expecting be first in the anticipate in half half second and we should new to the with sales And might low be the you growth force? that more as

Jim Hawkins

hope the next quarter-after-quarter what year would year. I having growth I first some we start next -- talking you're For assume year in next starting quarter

Raymond Myers

I this Sorry the Jim, cadence with year. meant this for year,

Jim Hawkins

lot Well, as revenue the QX pulled QX. business is of the lowest quarter year our into in of of is business as typically a most is always

So yes, in with biggest the we be would expect least QX the QX being revenue. to

Raymond Myers

get one in waited that And Is final or analyst the expected. backend been question, guidance it cadence more for year; analyst they change what long was expected of and the can't the a lower had QX the then right? all is than the there a just bit didn't

Jim Hawkins

-- you but Yes, it's our always what I it just we had had at I than always and want different internally say had don't little Natus. it first and quarter guidance issue. bit give it wrong think of year guidance to an it a certainly We was

we're out some come with companies give suppose we those typically guys quarter to giving ours; we with rolling a just come so you makes happen but guidance and maybe out sense. feel guidance I why even annual that it's that. things susceptible before So that's your

Operator

Thank you.

from next William Our question Weinstein Blair. comes Brian with

You begin. may

Brian Weinstein

settled Jim, going as community, the audiology you're you I are sell model little to pricing actually be bit. cloud Otoscan Have those planning manufacturers dig have to thoughts purchasing the just also want directly business here? the that's to transfer? you guys to only aid data And just the going also how the devices to a work? you how and Are into mold but not hearing Can upfront? capital the any the on in selling on and going that guys to services you tell device me for the

Jim Hawkins

Yes, -- there model a at color to whether hearing usage, be upon customer it parts upload/download say. be of to country, the actually as day everyone range that? also XX.X and even forecasted the the XX and -- to it's Jonathan, mold price and it's in probably by there would matters and markets color to I will of manufacturers charge, by different is have lot add the then end to of the whether annual the for really base do where it The fee a you Brian, it's we'll selling basically moving from aid air settling dispensers. the range, looks an it it's like by manufacturers based number a the out any

Jonathan Kennedy

I depending is is the upload/download a mold different an fee; spent Show. there. if and there the air is It obviously a some pointed with devices on so out, there price time customers -- Sure, Jim as of manufacturer, some so AAA volume customers relationship, at different actually -- you're

different audiologist, different single you're it's a and situation a completely If there. a price

it, is is way, pieces. easiest categorized So it the the that a way there of I moving lot think Jim's

lot out to field But talk As can that. get the units average, established the price that more there by about we in the would we a we customer. we of hesitant I a talk be start have quotes get to specifics more and

Brian Weinstein

nearly $X.XX the and half doing the earnings for is the a And though as not or Okay. year the first as significant here; think that's even about modeling half are. we something the as step and dramatically in then to $X.XX called something in like the be about second up up revenue

bonus through expansion about of metric dramatic kind So the obviously we be step through of a some can going accruals should in opportunities can but front-end there some the the spending yellow is and maybe on drives have you about such you help year? maybe that Is just there EPS? how talk what's that on the -- that increase margin thinking you kind

Jim Hawkins

Sure.

And maybe communicated, is to part to we're tried typical. on forward. it the really is always what and that integration a where is that right a the talk the implementation we've I'll businesses certainly Certainly going of think piece bit neurosurgery I Jonathan? backend I biggest somewhat which the the Jonathan great IT would we've with let You're and Brian, communicate loaded we're think I at where and that Otometrics of say -- start about is and some seeing synergies. going little the

Jonathan Kennedy

Sure.

a Brian, new you've story buy over up You and with them, know, again margins integrate seen go the this is Natus. get appropriate we that we businesses, not and and cost we over

So just what is to remind the we line of questioning, do. this

is the So the June sure to project the We be very down; systems IT at can market early finished let we is project U.S. the and along. end to which complete business latest. we portion the market expect and the major that not the far of operate making of international month the will last in a key the customers integration

GN and us due implementation as and or the further is we'll to understood and take new; of integrated effort but uncertainty where a -- this what that don't But on now can on believe as and systems the vast and in be with as to talk had I out Natus them do begin call the integration that's behind being putting with majority we work we Natus. I as just this different the cost opportunities the and ahead, we difficult beyond following at the few last me had Otometrics behind in but we've IT are. up X best of X do terms the we months move is anybody a what business talked have streamlined So should about that about and I of we the further think

Brian Weinstein

me, of just at for end but it wanted out something the you million still us why an Last for target that M&A growth? you Day thoughts sounds kind Voce the thinking like inorganic you about obviously are can that's the Jim that about? the broader and your that to a $XXX for Is $XXX number this year, that talk on year putting that's has me, for put guys one is for can right us you. target million remind to Analyst this have thank last it you be And you

Jim Hawkins

Brian. have Sure, Certainly, are driving intact we you set, and five that. know, year the $X the to we billion goal is certainly goal

able this $XXX I the opportunities XX going going. last businesses hope be big say acquire said and would look think and on-board of which that in. our keep we neuro, the and some and $XXX for last I that goal and Natus neurosurgery growing have we let getting Otometrics like we've years been businesses. we're year continue trend employees and a both for we've is million, know to to those was followed it number; year goal $XXX there that grow worked we it's in of neurosurgery you right spaces went and to successfully million think medical one is in will as achieved. of time, well, then And to past fastest the I We that and sort that $XXX of we to newborn, device Why our companies and to out we're million shareholders integration to the there in the Otometrics the think in just drive million, first then us; to business year the our way then these to it's out pick a was we there looking this where be

Operator

Instructions] James. [Operator Raymond Jayson Bedford with question Our comes from next

You may begin.

Jayson Bedford

backlog there. Good I growth a growth morning in a Otometrics the related Otometrics aided for launch, were fourth just and in have just details step the there the that you growth of you. like the quarter in of and in I'm which terms you issues the came from first seemed it curious, Can if quarter; in fulfillment some guess nice the the few may so-called congrats saw us Otoscan up growth ERP where of quarter, give around on wondering kind questions few in quarter? I'm here

Jim Hawkins

certainly wasn't say might some say that it if was outside other came -- I it but extremely have countries China a we quarter, did significant. States, million probably the tone certainly than me mean had $XXX,XXX the I been the very would believe, memory I solid my just I in United overall $X would the minimal. growth to had And another serves European right less range business. and Australia well good

Jayson Bedford

business? Is this the your know this what XX% prepared expect of should comments, growth think of -- I kind you I -- is mentioned north from we in mid-teens

Jim Hawkins

the opportunity hit of but we're mid-teen Yes, think our has have internally to think something that driving don't those kind towards. We I we in that that numbers. guidance to the level but certainly

Jayson Bedford

of at we're Okay. Otometrics; And the terms year? XX% on looking just in for still margins

Jim Hawkins

factor Definitely. backing overall, our for and will yes, Natus business That off is now certainly that and earnings that drive target. for a are the we

Jayson Bedford

Okay.

fourth like diagnostics the growth [ph]? versus which of neuro sales your occurred in secondarily, an kind condense it's that of seems cycle? you On diagnostic a the mentioned you if What what the neuro bit you a as continuation longer sales quarter. U.S. to do U.S. to cycle can of And in then little idea of give business, us can o-U.S.

Jim Hawkins

orders, it closing was us, maybe a It not system, that I do overall, certainly the course QX so to but challenge testing, year We these the where this the the have products because been of IT; the of hospital hospitals, of able call But a is systems, big we final IT we their big situations has that the as of at gotten say that the at biggest typical close process our again the pushed behind U.S. they product to many not good, timely would orders unit. it's is orders driver is purchased hospital the the business and got very especially in delivery The on take they but we out where very integrate really -- are in but business has mercy. past. we're during are quotes, into level in did and the these is is secure their the information their buildout always of on the as lot some that to for a the really it involved they gatekeeper is can -- is where they activity, strong. very has look remains

Jayson Bedford

profile? And international just the versus growth U.S.

Jim Hawkins

few about over it's X% or Jayson I'm a -- something the There going two sure ago. where year, like really or so remember was international a XX% period the three years know down, you flip-flopped I year Yes, was that.

some business growth and and been we're U.S. marginal Now enough are we -- getting let's range so flattish has that overall, it the seeing. the call there

the the market the share market, in our market and nice competitors, We shares strong have think it's business very situation. so lumpy year. good very then a in can a is the in good probably to this but orders we a neuro be range we business complicated U.S., great by somewhere area be a it's the not XX% times losing -- diagnostic But all we with look and that and for to IT business it's at little profitable this said,

Jayson Bedford

be right? clear, been pushed to quarter some just from And XQ had that Okay. orders first you recognize of the kind out 'XX, in did

Jim Hawkins

Definitely.

Jayson Bedford

similar off-margin kind a line OpEx first in there as to the as on the it difference or margin of like is any the gross just percent quarter guidance looks at sales XQ? lastly, we look levels; meaningful And XQ of is implied

Jim Hawkins

that has we Jonathan believe he really don't indication comment that. any I on that given all on Yes, but if commented,

Jonathan Kennedy

to QX, clarify. question just on margin Jayson, guidance gross mean just was your

Jayson Bedford

was rest. can margin and just OpEx. gross the I and It just I'm let's sell do margin wondering then for gross

Jonathan Kennedy

sure. Yes,

margin year had it and in expect gross last range, remarks. prepared So we lighter that that -- from more see. big be of QX we lower typically year for normal would Even than pieces your had last I Venezuela my QX was it call the in margins in mentioned the also it deal our though a than normal to than that phototherapy up QX was little

something north be but to trying of as not QX XX% farther. at look would much I So

Operator

may Solomon Our Partners. next Capital question comes with begin. Why from ROTH David

David Solomon

have but hear Most neonatal we it MRI, mentioned the just didn't questions updates today? on call Aspire asked any been of curious, if on my the have I can

Jim Hawkins

is Israel we've full Medical quarter. of product. forward, pursuing, if that Aspect that that the training name believe I number it's with leads we are of in [ph], [ph] have right remember the Actually we in had I encore moving a called

David Solomon

[ph]. Embrace

Jim Hawkins

of medical very no, Embrace care. there [ph], [ph]. -- it hospital as this uses, our and long-term not But to you be it's also all and million only a has Aspire to a in some in put $X.X me with find can this But and I configured neck we've the the on the layout plant really this -- seemed needs off then technology budget sale, physical is change hospital communicated, [ph]. to time. going It this and $X to is from of how keen think million a take

increasing get to do but business We for this certainly forecasted look have for year. orders next minimal year

David Solomon

devices? so seemed drag if devices revenue the And supply on on newborn; it XX.X happen in strong; on it is mentioned was is wondering I just services? did You to so the being just the so -- more was -- sticking or

Jim Hawkins

numbers you very on have device those were Jonathan, strong. side? supplies the do Yes, handy

Jonathan Kennedy

those my were prepared Yes, remarks.

I'm what -- you're question maybe sure about David, that. just So asking rephrase -- maybe I your because not understand

David Solomon

Okay.

devices step-down devices from ship I'm of ship both? the much hold if combination just the how was wondering XX.X%, three prior fair given accounted know XX% thinking of I that for quarter, services [indiscernible] it the all a at is XX%, just down for back Venezuela or So not looking if maybe of it. hold that to it. amount impacted quarters [ph], XX.X%; the But of or

Jonathan Kennedy

got Yes, you I now.

most of devices. is from it newborn So care;

business, it's If of supplies think you steady rates. birth pretty our based on

what So bit while little of if a birth rates several you it's have a saw a down actually past this over little bit. quarter decline mean, better quarters, I rate come we know, up

one And to it birth device on the so it BABY, we're necessarily would sale one have is. don't for follow been not rates supply side devices which because

out, basis driven So neuro declined that hold now are but hardware. products the side from is by on as a quarter the in yes, the lasted you beyond although decline the that and hardware most ship pointed we're of

David Solomon

back to this full And I year and neck go guidance. just wanted just

guidance; the to is you wondering just your be for it for guidance So quarter? the guys given thoughts Otometrics year your quarter and how where revenue topline, this this full at especially it compared what on keeping least, on performed

Jim Hawkins

wanted believe the the an has on weaker on we the with side, so line to just certainly top Yes, that as where it effect. comfortable mentioned, earning do. felt appropriate dollar Jonathan and to keep we I had things we was And thought

in where in You know, throughout Natus overseas is we have way manufacture and Ireland certainly and Europe operations Canada. the structured, we

have side sort costs costs when have our been has little in revenue the up, there on terms. up a gone of net-net; tailwind do so our dollar the And gone but you

that was you but we add? to us So a bit hitting it color something little that have make other up. on revenue is side the Jonathan, certainly any

Jonathan Kennedy

on think No, revenue. I what it for the very good I mean a does -- point that's currency,

the into some saw So so factor of our how anything currency gains year. of currency is and with we guidance we throughout are consistent don't the annual we revenue -- gains that some the assume that currency based;

assume So current for would my rates kind I of forecast. the

came million million. million, beat what I'd haven't range total go rate and on $X.XX that then it change favorable. the guidance, the that more at gives my but could, based $X.XX that say change that It assumed the we and Dollar guidance U.S. revenue on And other can So that our Euro way. revenue well had the we we we on get is; lastly, in continues I yes, of did was $X.XX are current could to year

to go revenue and in left that necessarily throw going given miss want that Sill we want and just had to the million three full quarters million, year the take to through we beat back and just in through. think is to flow into I didn't that $X.XX to for year. $X.XX massive extra a outside QX the go you especially would million QX, $X.XX

David Solomon

is Yes, certainly tax made the rate. the Jonathan other point

it had with our for which as got range as hoping -- we would Jonathan as around think new these well. QX to arms think XX% And tax I laws help forecasted XX% to back I we're go around the then year the forecasted we forward, you XX% and it. we XX% in

Jim Hawkins

did quarter back do we same Yes, some into as XX% are that have the was shifts, our mix impact higher range so won't for we're rate believe but be expect be. thought first quarter from going similar the for the the of in as full which we higher tax profit definitely revisions guidance, first they but first it we what quarter; and than these we the that the than we thought the the to new year in -- would tax

David Solomon

estimate? on what Otometrics, more have question international revenue rough percent you And the for final for segment the total do just was one --

Jim Hawkins

something The XX% ballpark U.S. is around the or is XX% outside probably -- XX%

Operator

like closing questions Thank no call showing I'm you. further back for turn this the to Hawkins at time. over to I'd remarks. Jim

Jim Hawkins

and Well, everyone we and call participating the remainder our you support. of as integrate to second an year. we acquisitions in in in profitability look the for exciting half work for continued the closing, today's XXXX and of forward thank to interest recent Again, your improve

Operator

Thanks Ladies for a have and your wonderful concludes day. participation and conference. this gentlemen, today's

Natus Medical (NTUS) 25 Apr 182018 Q1 Earnings call transcript