Natus Medical (BABY) Narrows Q4 Guidance; Issues Q1, FY17

Natus Medical Incorporated (NASDAQ: BABY) today announced its financial guidance for the first quarter and full year 2017.

For the full year 2017, the Company expects to report revenue of $505.0 to $510.0 million and non-GAAP earnings per share of $1.80 to $1.85 (*** consensus $427.95 million and $1.85) For the first quarter of 2017, the Company expects to report revenue of $122.0 to $124.0 million and non-GAAP earnings per share of $0.32 to $0.34 (*** consensus $104.9 million and $0.43).

The Company expects to report revenue of approximately $107.5 to $108.0 million for the fourth quarter of 2016, compared to prior guidance of $107.0 to $109.0 million (**** consensus $107.6 million) and full year 2016 revenue of $381.5 to $382.0 million compared to prior guidance of $381.2 to $383.2 million (*** consensus $381.8 million).

During the fourth quarter of 2016, the Company contracted 23 new Peloton Hearing Screening Hospitals.

The Company also announced that it has completed the previously announced acquisition of Otometrics the business from GN Store Nord.

"The combination of Natus and Otometrics creates a global leader in hearing aid fitting, hearing assessment, hearing screening and balance assessment," said Jim Hawkins, President and Chief Executive Officer of Natus. "The Otometrics brand will complement our current portfolio and will further increase our combined growth potential. In addition, we look forward to expanding Otometrics' margins as we complete the integration of the two companies."

The Company will release its 2016 fourth quarter financial results before the market opens on Wednesday, February 1, 2017.

The Company’s non-GAAP earnings per share guidance excludes charges for amortization expense associated with intangible assets from prior acquisitions, which the Company expects to be approximately $9.8 million and $3.1 million for the full year and first quarter 2017, respectively, and which the Company expects will reduce GAAP earnings per share by approximately $0.25 and $0.07 for the respective periods. Non-GAAP earnings per share also exclude the direct and transition costs of the Otometrics acquisition, which are estimated to be approximately $3 million to $4 million for the full year 2017 as well as the Otometrics related amortization of acquired intangible assets, which cannot be estimated at this time.

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