NTUS - Earnings call transcript Q3 2018

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Operator

Good morning, everyone, and thank you for joining us today to review our results for the Third Quarter of 2018.

On the call today from Natus is Jonathan Kennedy, Natus’ President and Chief Executive Officer; and Drew Davies, Natus’ Executive Vice President and Chief Financial Officer. Jonathan will begin today with a business overview of the third quarter and provide guidance for the fourth quarter and full year 2018, then Drew will discuss the third quarter financial performance.

Finally, we will open the call for your questions. [Operator Instructions]. forward-looking Reform the Act. include Private of will Litigation Securities call statements meaning within the Today’s These about our include future statements management’s results. beliefs and expectations

statements. results actual may materially these Our differ forward-looking from

uncertainties For pertaining today’s a release periodic the filed our annual and relevant SEC. description risks press to business, please of our see reports with and and

Mr. As now Kennedy, the Medical. turn to Jonathan like President of this Chief Kennedy? call call Officer being is conference reminder, to a recorded. would Executive and I over Natus

Jonathan Kennedy

Jim. quarter for you, million the quarter reported everyone. our financial we Thank growth. $XXX.X Good Today, of morning, results was representing year-over-year for the third X.X% Revenue XXXX. third

our operating growth revenue throughout well from as quarter, Drew Neurosurgery quarter. business slightly Newborn increased vast the margin than our our the versus a modest The while the organic discuss further non-GAAP tracked growth and was anticipated. prior Neuro Otometrics business. from growth in revenue few primarily minutes. was in in Care we detail in Revenue year’s of expectations business, Our revenue driven Neurodiagnostic as XX.X% will addition the

MDSAP also in during progress to the first regulatory continued our successfully an FDA and our the We Seattle completing quarter. facility on audit front, make audit

Seattle these our the quality evidence letter, that system. of relieve While do of audits in the completion show have we the not do Seattle made warning significant progress

lie opportunities to product and quality further call, our During for highlighted our investments immediate that long-term quarter’s I In last margins. ahead as opportunities improving and the of mentioned systems and few prioritizing increase category, products immediate Natus. a efforts, integration I improve immediate the

where each progress facilities integrating us leveraging we provide our quarter, will and of supply complete of the and made on Very areas. Midwest annual resources. existing our third We these we and future of us and During relevant will our products will chain our give planning process, footprint made reducing we activities critical shortly, on three direction progress two, clarity our capabilities. physical into in which will the focus substantial most

before, I our design similar we improving progress manufacturing investments systems mentioned Seattle substantial are As in have making throughout organizations. our teams and made and quality

these how long-term but operate making more at modest for addition Natus, we we and and many to the business, opportunities bucket, make and profitability. we challenging hire markets launching to and how significant in everything we products changes spend and developing progress our resources. that meaningful growth we’re serve limited achievements, critically continue where unique In who and niche In we do offer from

commercial very third hearing the and aids. for fit a see XX with Otoscan customers, is with easy-to-use installed decades to quarter and scanner initial custom launch fraction old used installed technology excited than in we this very quarter field. of ended opportunity its for This The the ear long-term was small the mold about revolutionary global potential device units that Otoscan Natus. and patients an are base we that we replaces a quarter messy silicone is more technology for the

ahead on very we for with of to early year. cost are part expect that that made also headway products performance our the product to sleep-diagnostic of of deliver Newborn our Neurodiagnostic Natus. quality Each these in of product total on include applications. summary, deliver EEG used delivery. care during several new four in Care, In of the the demonstrate encouraged to introduced the X, These and follow and market the a we their opportunities the higher our successful and in also We to next business quarter. ability we products three commitment In a and customer amplifiers Quantum and Quantum helping improvements lie

focus products of on and market-leading goal flow. have in our with positions of expanding continue businesses our cash and to of the margins and profitability increasing will many We markets the we

Now, to our outlook. let’s turn

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

revenue non-GAAP to year, XX% $X.XX. to earnings share full For organic overall $XXX $XXX we of of earnings approximately and guidance non-GAAP $X.XX to and growth year X.X% share million and expect per million The XX%. QX reflects while for earnings assumes growth, guidance X.X% the of year-over-year full the revenue per

industries, Chief I’d Financial Natus and Corporate Controller nearly of positions Davies company other to public technology now comes our and and Drew? I’ll to turn and with improving to look over of record President Vice financial Natus welcome forward call introduce Drew to with the Officer. XX including a as Next, various like I results. performance. years management proven of working as Executive track a Drew. for primarily CFO, Drew And the with experience, electronic financial roles the in him growth, review and change to

Drew Davies

as competency non-GAAP a team as financial to and on on part review am look Thank by Company’s contributing let’s the and The saying market with an and leadership basis. enviable of well to and Jonathan. I experienced in the join like the acquisitions results integration. over performance. start Company With and the Natus. demonstrated growth many its I of core tremendous being a forward products GAAP you, a years, I’d that, to has how excited position services basis, to has

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

unit press transparency have on non-GAAP provide margin point of reconciliation business by release geographical revenue You release. in out today’s we also I’ll versus results. and included can GAAP that our a continue financial to find gross results to in to basis our press a tables financial our more

same or Neuro the Neurosurgery XX.X% million, year. XX% $XX.X organic increase $XX.X revenue from total the we to during As revenue same year. the last by The third was in and period our is X.X% stated, the during of total quarter year. quarter or last growth a the Neuro unit quarter of growth acquired $XXX.X business. XX% in of to our revenue revenue newly Neurosurgery XXXX, third million, revenue driven Jonathan Revenue of The compared reported attributable was last business acquisition Neuro XXXX from both of increase million, business

development, Argentine the XXXX, XX% approximately XX% the our year. XX% to However, XXXX, XX% Otometrics the or exchange was XX% XXXX, Neuro Revenue In revenue or also devaluation in was in quarter of Newborn The The on acquired third addition during quarter, XXXX, the to Otoscan the domestic achieved unit revenue XX.X% expenses of the XX% third to period. points from that This third compared Otometrics or international during realized same X.X%. XXXX organic year non-GAAP supplies quarter $XX.X total systems growth, a compared Revenue XXXX. third revenue non-GAAP XX% part of $X.X compared by driven of business Revenue quarter decrease of quarter RetCam. revenue to leverage growth compared of year. compared compared total operating of and in to in last margin rates period business compared XX.X% was Care exchange quarter expenses of driven from primarily as to from positive in for total, rationalization of X.X%. basis by quarter to last same the another the was approximately higher of Newborn third the the XXXX, of additional The $XX.X result to revenue revenue as quarter decreased by Neurosurgery third of peso. as the non-GAAP and in current from total by operating excluded X.X% product quarter by million, in our Despite favorable contributed by last the from well OpEx sales the XXXX. $XX.X current from the to unit XX% XXXX. for expenses of in a sales unit of the results. X.X% a the compared year. XX% OpEx the $XX.X of revenues. compared the to our XXXX the decreased foreign in million, Revenue to million during in fluctuations. Non-GAAP new million, XX.X% operating our quarter operating XXXX increase business in revenue was including XXXX, third On XX% from quarter during $X.X XX for million business, of XX% product increased during driven period, for same decline the was same quarter revenue basis, last Interest the as total of total and while margin approximately period same contributed million total spending quarter reserve services the revenue favorable of XX% on in the and XX% increased growth same million and $X.X devices was business to was was of driven rate the was gross and change of income primarily of Other expense from quarter.

million be expense interest be approximately expense approximately the and We expect to annual during million. fourth to $X.X quarter $X.X interest

$X.X Non-GAAP XX%. diluted the income same XX%. a tax Our third third was million $X.X non-GAAP third million million million, non-GAAP share, of last to and Non-GAAP quarter net basis, the our On the to share $X.X tax recorded share-based from quarter. year. and expense, to $X.X quarter the $X.XX. per per We million increased compared same $X.XX year. non-GAAP a quarter be we was anticipate amortization $X.X for was XX% compensation loss In rate effective earnings last XXXX increase was quarter, depreciation rate overall or net

and look cash in outstanding XXXX. balance We at Now, of the $X the take of third let’s debt quarter million sheet repaid a flow.

days outstanding diluted Otometrics Cash last second outstanding As in net quarter, With quarter the million that, for was ended operations same flow in increased days, will a by during we debt one $XX business. day open questions. and XX.X quarter the million XX from of shares compared year. outstanding versus driven million Non-GAAP period our the now to million. result, the primarily our decreased shares we XX.X declines to call sales shares of to $X.X the XXXX in with AR

Operator

Our Weinstein from Instructions] with William comes question Blair. [Operator first Brian

Your line now is open.

Brian Weinstein

the taking for Thanks guys. Hey, questions.

Jonathan Kennedy

Brian. Hi,

Brian Weinstein

Hey.

again come I going bit within some little were Otometrics people were I that you lower a think the some hadn’t sorry, of for is with I’m bit U.S. prior sequentially some was talked that else the than think or you talk number Thanks. with the versus we at thing where little U.S. on? play orders through year. dealing Are there well. Can looking start about here, last think down quarter as – OUS Otometrics? I a something dynamics we’ll about

Jonathan Kennedy

Jonathan. is This Sure.

So your last in we’re was in for much stronger quarter in also and us a year. U.S. actually it question. quarter quarter Otometrics, prior backwards than the The was really from the prior

the the at in year-over-year of all last had we on it ERP if Otometrics you implemented number basis, on look If you US. for year, October a QX we outside of year, last recall, – system of implemented the

And to QX. so, in previous and as – higher from out quarter from pushed QX the revenue had we a out I’m we sorry, result, then QX

quarter last was what little expect. QX the than a you’d So for bit year lighter

So into of dynamic. Brian? we that the that Sorry. year, question, Then, what answered not does your would was – then have had going this rest

Brian Weinstein

sort what I thinking to with for was of down. mean, was in even sequentially, mean, I yes, Well, like Otometrics in it was just your going be Otometrics? expectations quarter this looks this I just I’m line guess

Jonathan Kennedy

That the probably issue it’s pulling us for not we with stays far but was devaluation, you’ve example, where Turkey, in or Turkey come got off have less than do that’s of Iran. line, OUS in products would the the did it’s in in removing accounts where lower U.S. $X into out and currency the Otometrics. U.S. with what would to and that issues, some million, thought we of caused Iran, Iran, in have it We in with Iran, it otherwise for the of end agreement getting It in. for an sanctions, expected

in assume QX, our it’s problems those that whether comes back, that not resolved. So don’t guidance, we though, in get

that’s a lighter so, kind to Otometrics And than in of QX. expected also contributing maybe

Brian Weinstein

Otoscan, sales? these those? you buying the units Got these talk it. And out for actual who’s right the XX then there. Can the model relates as to about put ASP? What’s Are business And now? you it

Jonathan Kennedy

Yes.

actually little we between is disclose market device. is manufacturer the the say, ASP, we’re The are of a the about these establish Suffice the in $XX,XXX going can have talked a audiologist identify a and hundred less scans. are that well, hooked sale I in to ASP, in talked data out to I think to launch couple up we commercial forth But shops, there. so are and initial model the who call first this how past it system the $XX,XXX this today first, I’ll locations, move but So a ones is this past, units XX units retail of that. we’ve trying to where business in we back audiologist. these the have the that units the to audiology earlier now doing and and than are the or unit

more grow. that the actually expect than to It bit We I thought would to quarters. accomplish a we continue in first was little four

excited time tell, very coming it. high QX the a interest and very was into about The hopes in will have year. the remains and that positive next we we but for So and are into it high details

Brian Weinstein

just a how And guys Board of this on able some then bigger priorities in viewing do what update you are new at? of the to about when Board that you me, talk looking long-term as details are formal you point? last sort us last at you be with guidance year, to well can the give specific you one place, the as that expect And more on that some gave are projects guys from

Jonathan Kennedy

Yes.

of in I that annual part prepared – in Board we we’re typically we go of I which good way said with our my over through think, we where mid-December, planning as the have conclude process, sort and thing. remarks,

to have early what number priorities thing. We’ve in of the It’s the longer-term. bit on-boarding Board of this for a tell. process on learning early for on that, we’ll weeks, a more are what the think to the clarity once at the but and do has have many some Board the to done with have that priorities it’s and near-term new are for and Natus little the too priorities. completed we’re I little now new a We’ve sort been

and So, you we on all process, that what future distraction isn’t business. we’re on footing running we the some will easy that But comes. just process have the a think causes complete once And expect, would as solid I planning from clarity now.

from quarter long-term. outlined mean, stood were in my last talked Nothing has Beyond a objectives the that, term I’ve and bit quite script, and I then what for also about immediate I we changed those. where

Operator

ROTH comes And with next from our Solomon you. Thank question David Capital Partners.

open. Your line is now

David Solomon

new Thanks guys. and position. my congrats Hey, questions, Drew taking on the for

Drew Davies

Thank you.

David Solomon

welcome. You’re

those the we So, that glad Otometrics, it’s Obviously, I just opportunity. market and you’re little just going I I million upwards and I Otoscan guess, some building our to the want that how in look $XXX what be progress want recent market be linear. then thoughts follow segment on be that strategy expectations your up aids Otoscan. this as just some plays well into a regarding the news to – could the been on Brian of regarding general? I’m on we’ve ramp growth your heard and guess, can to out then In what Bose and hearing have – the for not for and and could hear are hearing with then Otometrics understandably past, over-the-counter organic as trajectory of opportunities color like? how that we’ve like And

Jonathan Kennedy

Sure.

mean, I audiology that device. corporate of to probably thing. this and will the So, into with the adopters, sort Otoscan, ramp ramp and It’s could use there say, hits take of that early big sort hard thing. that shops a of thousands those I’ll that stores, the trajectory start is The

shops, adopted gets other there be to if next expect ramp know, quicker widely throughout We’ll I just has that, growth see that something would any First, and going beyond a new And market, several we space. hard or is that’s the with don’t a it’s slower, quarters. be new tell. then product smaller analogies this the to that audiology that a in aren’t out the to meaningful there

excited lot economics at play we’re customers definitely are interested in shows, So, the of it. gets about a attention device, into it. trade It

and on the would slow-to-modest the guess working the we built at pace the then and quarters, the a through really to sure in that that makers a works really little farther trajectory, the well. hearing gets of out answer, we’re mold ear aid it are have a you in So, go accelerate makers between gets upside the next couple audiologist to think continues probably I make that we’ll ecosystem technology we but the out, out there. and as

David Solomon

Thanks that then in Great. seek in then do. And And people there target they hearing the threats not, versus following over-the-counter don’t population penetration in of of community potentially to then hearing I’m the how understanding could you increase your and a is kind large – take on my market a there? I’m and the what this potentially how hear color. guys who elderly – up. how non-adopted and is seeing could just market aids, you the whether Otoscan, for there then larger could thoughts the market, are or share, curious aids this share, and the expand It’s that versus

Jonathan Kennedy

markets Keep We The through of that we’re of don’t and we as the over-the-counter other necessarily or perhaps see higher-end the provides it’s as defined aid that’s people or the mind expansion it the focused entrance the hearing market, that any globally. and directly products with in new aids. audiologist competition creation aid market Otometrics aid. the see dispenser an use that higher of whether end this the aids, of hearing really market on hearing actually hearing market, hearing really Otoscan hospital that and

an or their perhaps XXs that XXs your solution XXs wait XXs. pulls have down hearing and into maybe in you’re for in So, over-the-counter people until aids

trend is, goes. to market. seen see have it that how haven’t The materially we’ll We impact our

mentioned you product. accessory of just launched. a more but they Bose yes, they interesting, significantly I costly the think hearing for things market custom aid And a has little a The patients. Bose, more installation is – nuance saw those customization device is hearing of us, that’s a and for You that – device

market we used far the But comfortable see view so just things hearing out. wearing an aids ears. haven’t get seen And pulls is that people higher-end We’ll that more has our ultimate and overall expands that, effect. to time as how their in for

David Solomon

the That’s just very lastly, And statement. then helpful. income regarding

integration little do seem are, the if OpEx the trying thoughts going I we than like mine of work you’re a it some a to wondering and it you on margin, of other integration. seems next I’m what XXXX? our lighter higher And expectations in seems going been to little forward seem are this what been a and than there, then is kind forecasting at what continue lighter potentially we forecasting. it It that to the of had there was gross sense want forecasts it regarding, are just progress of on First couple could like were expenses could some least have get your is, than hand, into like just quarters have operating we that. the be

So color taking for a just little the well? that thanks as questions. want And on

Drew Davies

it’s Yes. Hi, Drew Davies. David,

in in QX. to QX, took take in where the that a QX reserve closer we we quarter. that took So, because out In they taken earnings, back prior the that and our gross reserve when QX benefit we we expect to had we the but non-GAAP get the margins we the between – GAAP out had we didn’t didn’t earnings, QX in benefited were it

that efficiency, we’re to look there. forward And but in margin operating at look that, operational to little our down up going at margin on brought look that continuing back QX. bit, opportunities come then at for So, – our expect we a expenses,

here. the now one the worked work focus on I’ve of Company, kind that lot things cost in I’m of of are areas my company and I those going year work I’ve that’s other the gross some on areas. margin as goes think really on and part in that joined the of career did of my I that last focus a I’ve places had of to – the the lot at early in on a to of that’s opportunity and inventory

David Solomon

Excellent.

as is Just seeing with one more could that think get quick expenses could with trying you be to as XXXX, below quarter, operating back you non-GAAP think follow-up on of what a all the I integrated go kind early potentially a $XX it Do sense million just or that, Company we this the do baseline? of fully new be three segments? that. was

Jonathan Kennedy

Yes.

I at to think guess, our say now. process on planning it’s that annual going this David. point, I we’ve hard got

as this. about Brian well about You you had or can when asked asked hear

We have toward do annual end our earnings very the that January. of at announcement we –

today. expect at see and timeframe be a whereby about beyond out that’s where But there the model really put the point, we think we talk we anything the to That XXXX. Company see timeframe can haven’t I that. for this going we would to where are

David Solomon

Excellent. Thank you so much for taking my questions.

Jonathan Kennedy

David. Thanks,

Operator

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

Your open. now line is

Jayson Bedford

Thanks for the Good morning. taking questions.

affected Otometrics, an Just the was are sounds why. questions. that and a kind a there as here. and was changed implying to the of business? impact the follow-ups was It curious On the FX few earlier to that some business market international weaker, I’m U.S. them profile And little of most just growth strong, the like of

Jonathan Kennedy

us mean, do $X delays a said, week, or really minimal. and very was I about stop shipments we we to their million and minimal. pay. The And analysis to FX Yes. Like quarter. that did last over hurts Iran and that Turkey ability have I

we pointed have a we quarter U.S. we for the have So very that the did piece you good – of other like major you asked a the U.S., in changes like market The it an extra anything was out is, rest of see did – it. about than, don’t

Jayson Bedford

of until not this anniversary the impact, going to three sure quarter is I’m we continue this it? Jonathan, quarters if the next that million $X first And Okay. for impact. this was

Jonathan Kennedy

medical than Iran look the happen. little has we we and This like first resolve just is was to to what figure complicated get it chain the until probably that out supply that first as continue My be more to quarter It’s Iran. will Iran And They in Turkey, able the they’re so guess lira, had that much XX% – pretty it’s the because or become so gone when buying currency cost doubled. was. a then to with import of Turkish buy, pulled Turkey them to international able something do speculation in decline solved It believe out the that devices to them will your as I anybody’s of get into Turkey. XX% of high, it. products a has up products.

Jayson Bedford

in missed Okay. if of I general, was quarter the the And total just the apologize in I FX this. impact What on business?

Jonathan Kennedy

it less probably dollars total, a hundred the than For of minimal, was couple net. thousand

Jayson Bedford

Okay. that of on of Is revenue declined Otometrics, Gross similar a like looked base. Otoscan? it margin quarter-on-quarter reflective it

Jonathan Kennedy

mean, XX%. to doesn’t the closer in They’re have book. Otoscan margins highest the I probably

margin. would bit that than that wouldn’t incremental are have so a benefit taken this it little that So we have Drew that we average was margin, We so that – hurt had lower done the they it. a that gross mentioned the non-GAAP, inventory adjustment

Drew Davies

The overall margin.

as out, it a on some of that. Jonathan I bit little are ASPs lower with as forward Otoscan, were what some kind expect than think pricing pointed going introductory we of the initial

Jayson Bedford

Okay.

Jonathan Kennedy

the we bit little what guidance. we are of Our margin Shipments for where the on highest. margin a profit of Neuro does margins the mix than weaker expected – gross little the and the a of products bit profit based our in and also we bounce number our had out gross sell around Neurodiagnostics

by was adjustment had And note on gross coming of – that the Drew really extent, Otoscan. then followed of because talked then margin was don’t the Otoscan he so, about I I nothing, issue want this it a to the for impact quarter, just an the of volume close say to out biggest mean, mix that not but much lesser to lower and pretty the probably it. margin, that

Jayson Bedford

Okay.

has, Newborn of for a bit been business obviously, under business, the On here the pressure while. a

the to impact XXXX the of impact growth introduced these in be an profile? new the on new trying have gauge products. Just Will products early

Jonathan Kennedy

old. will exciting, is new have years product they we which more that, That see believe end It’s old will that desired screener new for lot This we XX will RetCam a newborns. of RetCam quality the product be camera, the of pretty hospitals of product network, many, the hearing things I the device device. in has the ROP our in new connectivity a device, sooner a we the next – the will. terms years. The many is screen than of of to by size that in RetCam year, first have to be

So that program could drive an that upgrade United we’re States. excited the in

is over of X,XXX are the United age. States So there devices that RetCam that in a

to the outside to a and parents is to be camera that reasonable profitable from it would for is can and And then from several NICVIEW. that our expect to extremely Newborn we on top the So camera, of us for which upgrade piece very RetCam and an friends see out in of Care that, to is portfolio. a cycle lesser accessible babies family extent, And have last the a can NICVIEW years new RetCam. big turned infant be

the coming some hospitals that those We adoption that have will for out have a new them. one we of upgrades drive and more already help and think

Jayson Bedford

first is the not, infant that the the In two, fair? new they screener, new Okay. the camera RetCam, require does XXX(k),

Jonathan Kennedy

is correct. way. The is That camera I’m RetCam likely XXX(k). sure not for don’t that in we’re say screener The the XXX(k). sure, will require want But to medical a there. XXX% will require device not that’s I

require doesn’t the it of any approval So FDA. by sort

Jayson Bedford

like It down was comments of million neurosurgery, the Neuro just on $X that growth. And Okay. trying your about then Is looks sequentially. some to triangulate just ballpark? around it in lastly

Jonathan Kennedy

Yes.

Jayson Bedford

Okay. Thank you.

Jonathan Kennedy

Welcome. Thanks, Jayson.

Operator

Thank William Blair. you. And next question Brian comes Weinstein with from

open. now Your line is

Brian Weinstein

to that sure make I understood. just guys. I wanted Hey,

revenue stuff that And were that. side? the the it as guidance a there bit that of EPS straight some and what something So clarity fall looks on Iran, Turkey revenue referring But sure the in I on is quite you just little Is understood not kind you’re the Thanks. of kind to guys you took there. was that’s like reduction. down rationale guidance to QX But well. wanted seeing through I’m what EPS that

Jonathan Kennedy

Yes.

piece we on Turkey Iran quarter. revenue of where third be a we We than piece something going and part and the the that, were is, guidance So know. lighter thought that’s into we’d obviously,

bit so, from And the rest out got earning maybe do of the little And rebuild. kept would year. the hurting thought it the Argentina, which all organization, devaluation we total QX also system kind Newborn the a more the to into we then going or lightness on in the which what push similar to continued but a go has down quality on into this even revenue through than we’re also perspective, quarter. investing year, then more business, R&D Care the it took less back way recycle – And so we of more third other we’ve that revenue side, words, the with is revenue was to in

So than in guide. those we’re the total lighter lighter spending the say, the things, more anticipated of on and culprits three just as I for revenue sort we R&D QX Argentina, in then quarter a that the into those put little I’d in fourth knowing third, going

Brian Weinstein

Peloton? thing Okay. you for can was, from on an me just And that’s it give then last And update Thanks. me.

Jonathan Kennedy

$X.X in getting just million certain the last another we from on through quarter, do we from for. not We’ve business states. even time years solid that us. hearing had hospitals side, where receivables the over certain – and a XXX we over experience that remains the We’ve took Peloton payment accumulated on Peloton adjustment that got several hospitals we’re Sure. receivable that had this for about screening gone service for

the with can’t to. this to annual going decide need some where quite level that So just planning of we’re again process these payment stand we get to you states you through

directly hospital. just service those to the a for fee of Some direct to have for contracts payment converted

just outsource trying ability often more to but do the the things. with see those where to that We’d not than a or bill it’s So economic like not hospital, of we’re actually adoption payers. whether can not, dealing sorts they you’re simple program of

we’ve one I quarters. challenge some keeps close which evolving this So, business over but that it’s set like, we also to the an customers, that our us several last would with and say, one

Operator

to over like showing Jonathan am this to I Kennedy And for would any I call further the any turn you. remarks. questions Thank back not at time. now further

Jonathan Kennedy

our for Thank thank Okay. everybody, to And you, wanted good and a have joining day. today. concludes today, you operator. I program This tell

Operator

participating Ladies may today’s disconnect. Everyone, for wonderful does have you and This conference. thank you and day. gentlemen, today’s conclude all in program, a

Natus Medical (NTUS) 24 Oct 182018 Q3 Earnings call transcript