NTUS - Earnings call transcript Q3 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, everyone, and thank you for joining us today to review our Results for the Third Quarter of 2021.

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 2021, then Drew will discuss the third quarter financial performance.

Finally, Drew will return the call to Jonathan for closing remarks. Today’s call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. beliefs about management’s future include statements and our expectations results. These

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

For a measures, tax release presentation description SEC. be pertaining exclude and to on certain of Reports financial Management’s the a relevant other business, their financial non-GAAP Annual related and and financial see of risk presentation GAAP please a of amortization yesterday’s results the with charges performance. that GAAP press restructuring effects. with filed expense, and results believes statements, the periodic non-GAAP more our our the and The will of uncertainties basis. Management our thorough along these our and provide analysis non-GAAP ongoing

results in to Kennedy, non-GAAP Kennedy? on a You of find to conference Executive can GAAP Officer yesterday’s now Medical. like release. Natus financial basis I turn would the and Chief Jonathan over Mr. a reconciliation President our earnings versus of

Jonathan Kennedy

Thank you, Operator, and everyone. good morning,

today, $XXX.X the our business trends. call will and earnings our the current we the reported high achieved our discuss evening quarter share quarter non-GAAP at our end XXXX for of the $X.XX. results third financial as guidance revenue XXXX as Yesterday million, we at During and third results well for per of quarter was

products quarter our are by for despite United in eye imaging this continued Retcam newborn same We the of supply with XXXX the constraints. in of the of the the the revenue new increase improve benefits our investments Demand to XXXX the quarter States. in in innovation XX% of the quarter. throughout saw encouraged We Envision service system to the third compared quarter chain and recent release

additional sales family Natus’ clinical commentary in our the year. our first, of each and first released the like for on quarter minutes of some of growing UltraPro In Drew saw but the of launched XactTrode also details, end performed case a I'd device, EMG was electrodes and another which discuss subdural to more We quarter financial using provide quarter few last markets. fourth will successfully newly

Natus neurodiagnostics. know, is you As global leader the in

by Our hospitals worldwide. a majority products are services neurologists and and used of

any have of offering during neurosurgery by EMG, We sales business Overall, year-over-year line EEG our today offered led full a increased and by by line XX%, comprehensive grew EEG, manufacturer while by of EMG PSU neurodiagnostic quarter, global and XX% by equipment the the solutions. most and XX%. which increased Neuro third products XX%

and had hearing which focused believe ENTs new we're refresh constraints remain products same our innovations, quarter. fitting summary, use is year, our decrease during quarter solutions, increase growth We versus on growth of with revenue diagnosis products international by a investing Newborn & Care deliver imaging categories certain include declined hearing very and devices Hearing our supplies Newborn market-leading Supply in hearing product diagnose revenue family year. last Balance disorders in hearing and quarter X% used by in Natus' revenue fitting & from screening to affecting XX% we market hospitals from and revenue. family eye order injury solutions. worldwide. customers screening our we and versus XX% delays performance. Hearing XX% the the the and Major to include of assist strategy and third balance by Care product and our newborn Overall, led product led by assessment in that by product of increase hospitals streaming aid the products to the prior drive Revenue financial balance disorders. pleased hearing and video for Our versus our this by X% our Newborn grew monitoring, from tuning of brain the XXXX, used phototherapy audiologists, and Balance aids will leading the products. future services primarily neonatal In hearing

Davies, financial President to to over the Drew? our Executive call dive Vice into our results. turn and like for Chief I'd Now Drew a Financial deeper Officer

Drew Davies

Thank you, Jonathan.

constraints. stated, revenue quarter in quarter increase quarter Hearing and In from in devices the XX% systems quarter was year. compared order to was XX% to and XXXX constraints by year. Hearing in of in sales, GAAP XX% in in increase last demand Revenue by of to Jonathan the quarter of total million, results compared compared quarter XX% revenue during gross total assessment mix Hearing to of compared million year total and growth revenue The births to million X.X in market increases XX% same & of to revenue was percentage On we quarter the last. revenue or also XX% XX% the to our of total from of revenue basis the $XXX.X third during fitting the GAAP approximately decrease or I of during in year period last XXXX. same quarter year. market XX% in and to did Balance. was in really and XXXX of total million revenue quarter year. total the that impairment revenue in service. device attributable the increase supplies intangible end Neuro international sales increase and of $XX third devices, compared of the our from Revenue last during in third hearing business during evidenced market total our increase margin operations the quarter during impacted from XX.X% contributed revenue quarter compared impact increased XXXX in XX% year. XXXX $XX.X. XXXX. end the the quarter third of not XX% of from the supplies XXXX increased higher and of Care supply revenue of led Revenue million the related XX.X materials of by of XX.X% to the primarily XX.X% last or quarter Newborn lower of the and the & as the did third reported the gross Neuro the Revenue asset to XXXX overhead, from was Revenue XX.X% points by of offset percentage to of devices X.X% $XX.X remains XX% number end products to domestic total gross year. third was As quarter XX% and the XX% period. and or Revenue or third was same this total increase from attributable our million our points supplies third North $XX.X total, respectively third in Balance year-on-year period to Supply gross $XX.X $XX.X decreased same our period. in XXXX XXXX increased same quarter XX% compared to revenue for $XX.X America margin XX% the third compared cost. compared to the our to services revenue XXXX The revenue of third or in from quarter was believe last non-GAAP margin quarter compared and from margin XX% backlog the this healthy last The Neuro XXXX the third the by a same for lower million prior repeat sales from driven of The

the year. year. in The increase quarter and last non-GAAP that not this $X.X the compared did to million from operating increase time incentive expenses increased was same expenses the quarter savings Third related repeat higher year driven required to last by pay in off revenues

increased compared XXXX to Interest quarter and was $XXX,XXX expense the the quarter the Our non-GAAP improvements increases driven the by for last year rate revenue gross the same on margin. exchange third quarter. operating was $XXX,XXX of Other in X.X% during margin in fluctuations. expense by

We and million. to expect the be interest full approximately in for quarter to be of expense year same fourth the $X the XXXX

million be XX.X%. tax XXXX XX% rate was to tax GAAP income XXXX and Our a million take million million by quarter. net last cash sheet third $X.X balance some with the XXXX in operations the of the compared per income cash. during ended We was XXXX. $X.X to same earnings year. quarter loss net at highlights Non-GAAP our or non-GAAP of million $X.X increased amortization of from the to a flow. the share diluted third the same rate XX%. $X.X quarter we anticipate quarter a quarter based quarter depreciation of of the XXXX $X.X Non-GAAP million was non-GAAP third We basis to effective On in million between compared third $X.XX. let's recorded was $X.XX per quarter overall million compensation look during diluted net expense. $X.X quarter last Cash share year. now And Share flow provided In the and $XX.X was $X and

days compared shares period Our same XX in to million days increased last year shares period million Non-GAAP same outstanding to XX.X versus in the XX.X days. sales prior increased shares the outstanding the to X diluted year.

experience quarter guidance. our year. last we Compared true to our we've and to highest revenue turning we services fourth that quarter year. for increasing Historically, expect and quarterly hold the Now this for this products every to year demand seen

to our per income. to GAAP leverage resulting diluted in in And of the for revenues million. share. of With now million is for expect it from fourth $XX.X $XXX margin $X.XX of open increases to up $X.XX income to range to be the we million that for diluted $X.XX expect positive revenues, the million income gross or in questions. $XX.X With to XXXX also in be net $XX.X to $XXX fourth $X.X we and per benefit expected quarter XXXX and million million Non-GAAP higher between expected share. $X.XX and the this range with of or quarter mind, in net the will be we is

Operator

Jayson [Operator Bedford from question comes first instructions] of the of ahead. James. line go Please Raymond Your

Jayson Bedford

few Hi, guys. guess good questions. just morning, a I quick

constraints. supply the on First

is specifically way you're will so there and of seeing if there's mentioned when a could out few issue As on be that balance, you kind alleviated? it detail any times what the

Jonathan Kennedy

Yes, next there in the getting to some get fourth product, Impulse, quarter in quarter more we've late or the supply we've got our got supply start first delays ICS we year. the and balance chain expect

Jayson Bedford

when supply revenue it really you that are I’m areas or how of impact XX%, And confined frankly, Okay not they down said big maybe, balancing impacting business? business, what to was of was. other and balance that sure in the is constraints Drew the the

Jonathan Kennedy

million hey this Jayson, business. quarter a $X.X is That’s Yes, about Jonathan.

Jayson Bedford

Okay.

Jonathan Kennedy

Per that business. for quarter

would logistics constraints built just now that categorize everybody and our budget. And so I has and perhaps think We in and that way. both And other that is backlog. logistic sporadic, do I sorts it supply of have the the freight constraints seen constraints market, what

have We do shift being are first have early in Drew balance quarter, a had late few unique a be and will us of that come them issues to shipping pretty that able components products, line as we’ve believe of the some products. that sight when to we those in said back back probably get We mode. well, and fourth as a and the able sub from few good that the though we with quarter, should keeps in

Jayson Bedford

supply Okay, fair? like that’s but revenue on pricing I area an a balance product pressure there from standpoint, expense the seems that business only is assuming from the being ability generate of is kind to it balance, and so is it’s only the realize the ship side, revenue like sounds I’m on the cost constraints generation of impact

Jonathan Kennedy

one less is are that pieces, a do but and impactful, but hearing others we of turning, have. few in bigger we Balance diagnostics have do fitting the in

unable good. keep a and Hearing And larger wasn’t our a are those volume. But were where been we of pretty that you the larger pretty little supply in orders we've a quarter, and to think growth at some in inventory look and lead flow Balance, if products & like more of in good those Neuro a Newborn a during it’s you balance to and manufacture areas. extent that the If ship here Care. We of

stop a it's or either can little constraints bit so, supply where an ship of inventory constraints, impacted business as a And opposed and you ready. more it hardware shipping ongoing to when little heavy more by you're the it’s where

Jayson Bedford

profile and for the going [Indiscernible] quantify for demand quarter the forward in device? new contribution the the just

Jonathan Kennedy

fixed from market shipping the back did the we We quarter. back this we Envision we Yes, usually we million do we last on about Envision more. the during during We quarter Retcam had $X lens quarter the began could have, could for had and anywhere were the in in the got had we million quarter. to$X constrained the the them again. have total, lenses; more got But $X.X we a market and got did and quarter they into we shipped lenses, million

higher that product had a have nice we’re had And got, So, backlog building and acceptance more we customer could interest definitely in the revenues and we is lenses. had very high. customer we've

Jayson Bedford

third go refreshing, the out market U.S.? are the to COVID disruptive have that end effects and up just And was here, then today feeling impact in there, the my flare think the at is I look of a guess I here products was the was I’d back from you where But Okay, versus say, there for in knock-on don't the constraints market your is, be notes it quarter? word that. end how which supply Delta of was the kind mentioned, realized but of I when to question

Jonathan Kennedy

of would point at the place. be it, the constraints the maybe still COVID issues, to anyway. you and impact which described remains that hospitals a to that. I decent sentiment, lot past, to during terms has logistic that but are definitely one about hesitant was effects, quarter, the thing a I in of There from I in you yes a supply clog mention think little impacted a material we and hospital access times bit us Since Delta of third say versus unusual we will is noise customers. follow-on the up fairly

action. times that's not coming seemed back We've to that So ways don't fight. I has that think that's and all lot a to do past customer face-to-face still virtual there's finally that but less piece definitely that a when webinars than and moved of still we'll normal, of to online missing the yet. virtual, it we that's see know But the as

Jayson Bedford

spot really at the this just balance good a sheet and terms lastly, What your here. point? Okay in then is are priorities in allocation capital of

Jonathan Kennedy

Actually complement. Yes, hard cash thanks capital for working to and down the we really bring up. worked

unencumbered We so is cash the have cleared cash. the all there debts, see you

Our priorities remain.

businesses to You'll interest we and pipeline in in do. the then a sort we continue still tuck-in, to evaluate already tuck-in accusations. that business of have an There's that few would and complementary and what opportunities building the be

something Second be as we uncertainty, to to willing that over return buybacks, pulled to it's that had the through done prior opportunities down shareholders something as we and probably share COVID time to cash some that, but rung would then discuss back the next and we faced here business recovers.

Jayson Bedford

Thanks Okay. guys. All right, great.

Jonathan Kennedy

Thanks Jayson.

Drew Davies

you, Jayson. Thank

Operator

to to all I the like are conference Kennedy. the These questions have. back Mr. would we hand

Jonathan Kennedy

to a you, I'd finishing and their forward the a and the customers our Thank quarter Thank partners strong again operator. outstanding way. efforts day. everybody to look during you in like for thank have great of employees, and all year

Operator

conference today’s This participating. ends Thank call. for you

may You now disconnect.

Natus Medical (NTUS) 5 Nov 212021 Q3 Earnings call transcript