Natus Medical Incorporated (NASDAQ: BABY) today announced financial results for the three months ended March 31, 2014.
For the first quarter ended March 31, 2014, the Company reported revenue of $85.6 million, compared to $85.8 million in the first quarter of the previous year. Net income was $6.3 million, or $0.19 per diluted share, compared with net income of $3.4 million, or $0.11 per diluted share, in the first quarter of 2013.
The Company reported record first quarter non-GAAP earnings per share of $0.26 per diluted share, up 73% from the $0.15 per diluted share reported for the first quarter of 2013.
The Company's cash and cash equivalents increased $3.5 million to $59.6 million during the quarter and total debt was reduced by $5.1 million.
"I am very pleased with our first quarter performance. Our record earnings exceeded our EPS guidance, while revenues came in at the top of our guidance range," said Jim Hawkins, President and Chief Executive Officer of the Company. "Both Newborn Care and Neurology performed well in all geographies. Our non-GAAP operating margin increased to 14%, up from 8% last year. We continue to make progress toward our upwardly revised long-term full year non-GAAP operating margin goal of 20%. To help achieve this goal, we are focused on organic revenue growth which is reflected in our second quarter guidance."
"In the first quarter we launched a new business initiative, Hearing Screening as a Service. Natus now offers newborn hearing screening tests to hospitals as an alternative to purchasing equipment and disposables. We look to convert many of our existing Algo customers to this new service model, as well as attracting new customers to Natus. We are very excited about this opportunity, and are off to an encouraging start."
The Company provided revenue and earnings guidance for the second quarter and increased its non-GAAP EPS guidance for the full year 2014.
For the second quarter of 2014, the Company expects revenue of $83 million to $86 million and non-GAAP earnings per share of $0.24 to $0.27.
The Company updated its non-GAAP earnings guidance for the full year 2014 and now expects to report non-GAAP earnings per share of $1.18 to $1.21, an increase from previous guidance of $1.14 to $1.18. Full year 2014 revenue guidance remained unchanged at $345 million to $350 million.
The Company's non-GAAP earnings guidance excludes amortization of acquisition related intangibles, acquisition related charges, restructuring charges, and their related tax effects. Non-GAAP earnings guidance includes the impact of expensing employee share based compensation. All non-GAAP earnings per share amounts are on a diluted basis.
Use of Non-GAAP Financial Measures
The Company's non-GAAP results exclude amortization expense associated with certain acquisition-related intangibles, restructuring charges, direct costs of acquisitions and the related tax effects. A reconciliation between non-GAAP and GAAP financial measures is included on page 6 of this press release.
The Company believes that the presentation of results excluding these charges provides meaningful supplemental information to both management and investors that is indicative of the Company's core operating results. Therefore, the Company believes these non-GAAP financial measures facilitate comparison of operating results across reporting periods.
The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing the Company's performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management's internal comparisons to the Company's historical performance. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated.
Natus Medical Incorporated