UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-K
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ý
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Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 2015
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OR
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¨
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Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from
to
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Commission file number: 000–33001
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Delaware
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77–0154833
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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Title of each class
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Name of each exchange on which registered
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Common Stock, $0.001 par value per share
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The NASDAQ Stock Market LLC
(Nasdaq Global Select Market)
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Large accelerated filer
ý
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Accelerated filer
¨
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Non-accelerated filer
¨
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Smaller reporting company
¨
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(Do not check if a smaller reporting company)
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ITEM 1.
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ITEM 1A.
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ITEM 1B.
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ITEM 2.
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ITEM 3.
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ITEM 4.
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ITEM 5.
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ITEM 6.
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ITEM 7.
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ITEM 7A.
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ITEM 8.
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ITEM 9A.
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ITEM 10.
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ITEM 11.
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ITEM 12.
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ITEM 13.
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ITEM 14.
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ITEM 15.
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•
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Electroencephalography (“EEG”)
—Equipment and supplies used to monitor and visually display the electrical activity generated by the brain and other key physiological signals for both diagnosis and monitoring of neurological disorders in the hospital, research laboratory, clinician office and patient’s home.
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Electromyography (“EMG”)
—Equipment and supplies used to measure electrical activity in nerves, muscles, and critical pathways includes EMG, nerve conduction and evoked potential functionality.
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Polysomnography (“PSG”)
—Equipment and supplies used to measure a variety of respiratory and physiologic functions to assist in the diagnosis and monitoring of sleep disorders, such as insomnia and obstructive sleep apnea, a condition that causes a person to stop breathing intermittently during sleep.
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NeuroWorks; Coherence; NicoletOne; Twin.
Our EEG Systems include a broad range of products, from software licenses and ambulatory monitoring systems to advanced laboratory systems with multiple capabilities for EEG, ICU monitoring, long-term monitoring of up to 256 channels, and physician review stations with quantitative EEG analysis capabilities.
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Stellate/Gotman Spike and Seizure; GridView; NicoletOne Trends.
Our proprietary spike and seizure detection algorithm detects, summarizes, and reports EEG events that save health care professionals time by increasing the speed and accuracy of interpretation. GridView is a tool that allows the clinician to correlate EEG patterns with electrode contacts on a 3D view of the patient brain using magnetic resonance (“MR”) or computed tomography (“CT”) images, thus enabling the visualization and annotation of the brain surface and internal structures involved in the diagnosis of epilepsy. NicoletOne Trends provides a comprehensive set of EEG analysis algorithms that are used to generate compressed trends of large amounts of data to assist in the clinical evaluation and data review process.
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Proprietary Signal Amplifiers.
Our proprietary signal amplifiers function as the interface between the patient and the computer. The headbox connects electrodes attached to the patient’s head to our EEG monitoring systems. Our proprietary amplifier products are sold for a wide variety of applications under the following brand names: Xltek, Trex, EEG32U, EMU128FS, EMU40EX, Brain Monitor, Quantum, Schwarzer EEG, Nicolet v32 and v44 models and Nicolet Wireless 32- and 64- channel amplifiers.
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Nicolet Cortical Stimulator.
This product is our proprietary device that provides cortical stimulation to the brain during functional brain mapping either before or during surgery to help the surgeon protect the eloquent parts of the brain. The device can be used as a standalone unit or with the fully integrated NicoletOne software that supports control of the device from the software, automated mapping and comprehensive report generation.
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Global Neuro-Diagnostic Services.
GND provides ambulatory EEG services with and without video in the patient’s home. Other services such as Remote Monitoring, ICU monitoring, Virtual EMU monitoring and Detailed Video EEG Technical Descriptions with cloud-based test results are also provided. Our services are specifically designed to partner with hospitals and physicians to improve efficiency, results, and turn-around time, and to reduce costs.
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Dantec Keypoint.
The Dantec Keypoint EMG and EP family of products features amplifiers, stimulators, and strong signal quality. The Keypoint is used for advanced neurodiagnostic applications such as single fiber EMG, visual and auditory evoked potentials, and in routine nerve conduction studies. The Keypoint system is also available in a portable laptop configuration.
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Dantec Clavis.
Th
e
Dantec Clavis device is a hand-held EMG and current stimulation device that provides muscle and nerve localization information to assist with botox injections. In conjunction with the Bo-ject hypodermic needle and electrodes, physicians can better localize the site of the injection.
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Nicolet EDX family.
A hardware platform of amplifiers, base control units, stimulators and hand-held probes that are sold with Nicolet brand proprietary software. These mid to high end systems have full functionality, strong signal quality, and flexibility. They include EMG, NCS, EP’s, IOM and advanced data analysis features.
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Nicolet VikingQuest.
An EMG system for the mid-range market. The device runs on our proprietary software.
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Natus Neurology UltraPro.
This is a low to mid-level product that offers high quality data collection using the Dantec Keypoint amplifiers and the proprietary Natus EMG software.
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Supplies.
We also manufacture and market a full line of proprietary EMG needles and other supplies used in the electrodiagnostic field.
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Embla REMlogic, Sandman and REMbrandt; Xltek SleepWorks; Schwartzer Coherence; Grass Twin and NicoletOne.
Our diagnostic PSG systems capture and store all data digitally. The systems enable users to specify rules and personal preferences to be used during analysis, summarizing the results graphically and incorporating them in detailed reports.
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Proprietary Amplifiers.
Our data acquisition systems incorporate recent developments in superior amplifiers for sleep analysis and are sold under brand names such as Embla and MPR, Xltek Trex and SleepWorks, Schwarzer, and Nicolet. Our amplifiers are used in both hospitals and stand-alone clinics. In addition to exceptional signal quality, headboxes include various tools such as built-in oximeters and controls to allow the user to start and stop a study or perform electrode impedance testing either at the patient’s bedside or from the monitoring room.
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Practice Management Software.
Our Embla Enterprise Practice Management Software provides a solution for institutions as well as private labs and physicians for patient scheduling, inventory control, staff scheduling, data management, business reports and billing interfaces. Enterprise may be used in conjunction with many Natus PSG products.
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PMSD.
PastuerMatic Sterile Dryers are used in hospital and clinic sleep laboratories to provide non-chemical sterilization of products used in sleep therapy. An environmentally friendly approach to disinfection, the PMSD products offer cost effective sterilization for sleep labs of all sizes.
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Supplies.
We also market a broad line of supplies, disposable products and accessories for the PSG laboratory.
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Xltek Protektor
.
The Protektor system is an IOM system that provides medical professionals with all information necessary to make immediate and critical surgical decisions. The system combines flexibility with multi-modality allowing full coverage of IOM techniques. The Protektor comes in 16 or 32 channel options.
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Nicolet Endeavor.
A dedicated multi-modality IOM system that offers complete flexibility in work flow and test protocols.
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Nicolet EDX.
These combo systems are used in IOM applications where a smaller number of channels is sufficient. This approach is primarily followed in international markets that utilize the integrated system approach that allows for the use of the system in EMG clinical applications as well as in IOM applications.
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Sonara and Sonara Tek.
The Sonara is an embedded system that is a self-contained unit that includes CPU, data display screen and speakers. It uses proprietary software with a touch screen menu. Sonara Tek is a small portable device used with a laptop. Both models enable the uploading of images to the hospital information system.
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Newborn Hearing Screening
—Products used to screen hearing in newborns.
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Newborn Brain Injury
—Products used to diagnose the severity of brain injury, monitor the effectiveness of drug therapies, detect seizure activity and monitor general neurological status.
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Thermoregulation
—Products used to control the newborn environment including incubators and warmers.
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Jaundice Management
—Products used to measure bilirubin levels and treat jaundice, the single largest cause for hospital readmission of newborns in the U.S.
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Diagnostic Hearing Assessment
—Products used to screen for or diagnose hearing loss, or to identify abnormalities affecting the peripheral and central auditory nervous systems in patients of all ages.
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Balance and Mobility
—Systems to diagnose and assist in treating balance disorders in an evidence-based, multidisciplinary approach.
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NicView
—Streaming video for families with babies in the neonatal intensive care unit (NICU) that enables family members and approved friends to see the new baby, 24/7, from anywhere in the world - from any device.
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ALGO 5 and 3i Newborn Hearing Screeners.
These AABR devices deliver thousands of soft audible clicks to the newborn’s ears through sound cables and disposable earphones connected to the instrument. Each click elicits an identifiable brain wave, which is detected by disposable electrodes placed on the head of the child and analyzed by the screening device. These devices use our proprietary AABR signal detection algorithm.
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ABaer Newborn Hearing Screener.
The ABaer, which is a PC-based newborn hearing screening device, offers a combination of AABR, OAE, and diagnostic ABR technologies in one system.
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Echo-Screen.
Our hand-held Echo-Screen products provide a choice or combination of proprietary ABR and OAE technologies that can also be used for children through adults. The new Echo-Screen III device is a compact, multi-modality handheld hearing screener that is tightly integrated with audible Lite Hearing Screening Data Management.
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AuDX.
Our AuDX product is a hand-held OAE screening device that can be used for newborn hearing screening, as well as patients of all ages, from children through adults. AuDX devices record and analyze OAEs generated by the cochlea through sound cables and disposable ear probes inserted into the patient’s ear canal. OAE technology is unable to detect hearing disorders affecting the neural pathways, such as auditory neuropathy
.
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ABR Screening Supply Kits.
Each ABR screen is carried out with single-use earphones and electrodes, which are alcohol and latex-free. The adhesives used in these supply products are specially formulated for use on the sensitive skin of newborns. To meet the needs of our customers we offer a variety of packaging options. Echo-Screen and ABaer offer the choice of either an earphone or use of ear tips for perform ABR screening.
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OAE Supply Products.
Each OAE screen is carried out with single-use ear tips that are supplied in a variety of sizes and packaging options.
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Olympic Brainz Monitor
.
The Olympic Brainz Monitor (“OBM”) is our latest generation Cerebral Function Monitor (“CFM”). The device can be used in single-channel, two-channel or three-channel modes to continuously monitor and record brain activity.
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Incubators.
Our NatalCare incubators, including those used for transporting infants, provide high thermal performance with a double wall design, easy to use control panels and features such as improved weighing functionality with automatic centering and an electronic tilting mechanism. The easy to clean, smooth design, and choice of options make these customizable incubators appropriate for different use environments.
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neoBLUE Product Family.
This product line consists of our neoBLUE, neoBLUE Mini, neoBLUE Cozy, and neoBLUE blanket devices, which utilize light emitting diodes (“LEDs”) to generate a high-intensity, narrow spectrum of blue light that is clinically proven to be most effective in the treatment of newborn jaundice. Our neoBLUE phototherapy devices emit significantly less ultraviolet light and heat than conventional phototherapy devices, reducing the risk of skin damage and dehydration for infants undergoing treatment. Because of the high intensity of these lights, the treatment time associated with phototherapy is reduced.
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Medix MediLED Product Family.
A full-size, free-standing LED phototherapy system and a MediLED mini light to be used on top of an incubator or attached to the Medix radiant warmer. The MediLED incorporates an array of blue and white LEDs, while the mini system utilizes blue “super LEDs” that provide high intensity phototherapy.
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Navigator PRO.
Our Navigator PRO for hearing assessment consists of a base system that is augmented by discrete software applications that enhance the system. The Navigator Pro System is a PC-based, configurable device that utilizes evoked potentials, which are electrical signals recorded from the central nervous system that appear in response to repetitive stimuli, such as a clicking noise. The evoked potentials are used to record and display human physiological data associated with auditory and hearing-related disorders. The Navigator Pro System can be used for patients of all ages, from children to adults, including infants and geriatric patients. The device can be configured with additional proprietary software programs for various applications. These additional software programs include: MASTER, AEP, ABaer, and Scout.
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Scout SPORT.
The Scout SPORT is a PC-based OAE system. The ultra-portable Scout Sport can be carried from one computer to another to test in different locations. For office-based environments, the Scout Sport can be used with a dedicated notebook computer to create an independent portable system.
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AuDX PRO.
The AuDX PRO is a hand-held OAE screening device with a large color display that can be used for patients of all ages. The AuDX PRO records and analyzes OAEs generated by the cochlea through sound cables and disposable ear probes inserted into the patient’s ear canal.
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EquiTest.
Proprietary protocols in the EquiTest family of devices objectively quantify and differentiate among sensory, motor, and central adaptive impairments to balance control. This approach is commonly referred to as computerized dynamic posturography (“CDP”). CDP is complementary to clinical tests designed to localize and categorize pathological mechanisms of balance disorders in that it can identify and differentiate the functional impairments associated with the identified disorders.
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Balance Master.
A family of devices providing objective assessment and retraining of the sensory and voluntary motor control of balance.
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VSR and VSR Sport.
The VSR provides objective assessment of sensory and voluntary motor control of balance with visual biofeedback. The VSR Sport is designed specifically for the athletic market as part of a concussion management program. It is portable, easy-to use and offers athletic trainers, sports medicine practitioners, and other sport professionals the data needed to make objective return-to-play decisions without relying on subjective evaluation.
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inVision.
Our inVision device incorporates a set of proprietary diagnostic tests that quantify a patient’s ability to maintain visual acuity and stable gaze while actively moving the head. The objective information enables the clinician to assess the patient’s ability to live and move safely in a dynamic world and to participate in daily-life functions such as driving, walking through a grocery store, or actively engaging in family activities.
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Year Ended December 31,
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2015
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2014
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2013
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Backlog
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$
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9,359
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$
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12,429
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$
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12,242
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Trade conference exhibits; and
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Direct presentations to healthcare professionals.
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Year Ended December 31,
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2015
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2014
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2013
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Domestic revenue
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64.4
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%
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60.6
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%
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58.0
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%
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Year Ended December 31,
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2015
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2014
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2013
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International revenue
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35.6
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%
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39.4
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%
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42.0
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%
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Year Ended December 31,
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2015
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2014
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2013
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Direct purchases by GPO members
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9.3
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%
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9.1
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%
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8.2
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%
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Level of specificity, sensitivity, and reliability of the product;
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Time required to obtain results with the product, such as to test for or treat a clinical condition;
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Relative ease of use of the product;
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Depth and breadth of the products features;
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Quality of customer support for the product;
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Frequency of product updates;
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Extent of third-party reimbursement of the cost of the product or procedure;
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Extent to which the products conform to standard of care guidelines; and
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Price of the product.
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Clearance via Section 510(k); or
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Premarket approval via Section 515 if the FDA has determined that the medical device in question poses a greater risk of injury.
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FDA quality system regulations which require manufacturers to create, implement, and follow design, testing, control, documentation, and other quality assurance procedures;
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Medical device reporting regulations, which require that manufacturers report to the FDA certain types of adverse and other events involving their products; and
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FDA general prohibitions against promoting products for unapproved uses.
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Issuance of a Form 483 citation;
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Fines, injunctions, and civil penalties;
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Recall or seizure of our products;
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Issuance of public notices or warnings;
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Imposition of operating restrictions, partial suspension, or total shutdown of production;
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Refusal of our requests for 510(k) clearance or pre-market approval of new products;
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Withdrawal of 510(k) clearance or pre-market approval already granted; or
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Criminal prosecution.
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Name
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Age
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Position(s)
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James B. Hawkins
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60
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President and Chief Executive Officer
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Jonathan Kennedy
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45
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Senior Vice President and Chief Financial Officer
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Austin F. Noll, III
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49
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Vice President and General Manager, Neurology SBU
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Kenneth M. Traverso
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55
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Vice President and General Manager, Newborn Care SBU
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D. Christopher Chung, M.D.
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52
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Vice President Medical Affairs, Quality & Regulatory
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Publication of clinical study results that demonstrate a lack of efficacy or cost-effectiveness of our products;
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Changing governmental and physician group guidelines;
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Actual or perceived performance, quality, price, and total cost of ownership deficiencies of our products relative to other competitive products;
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Our ability to maintain and enhance our existing relationships and to form new relationships with leading physicians, physician organizations, hospitals, state laboratory personnel, and third-party payers;
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Changes in federal, state and third-party payer reimbursement policies for our products; and
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Repeal of laws requiring universal newborn hearing screening and metabolic screening.
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Impact of possible recessions in economies outside the U.S.;
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Political and economic instability, including instability related to war and terrorist attacks;
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Contractual provisions governed by foreign law, such as local law rights to sales commissions by terminated distributors;
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Decreased healthcare spending by foreign governments that would reduce international demand for our products;
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Continued strengthening of the U.S. dollar relative to foreign currencies that could make our products less competitive because approximately half of our international sales are denominated in U.S. dollars;
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Greater difficulty in accounts receivable collection and longer collection periods;
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Difficulties of staffing and managing foreign operations;
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Reduced protection for intellectual property rights in some countries and potentially conflicting intellectual property rights of third parties under the laws of various foreign jurisdictions;
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Difficulty in obtaining and maintaining foreign regulatory approval;
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Attitudes by clinicians, and cost reimbursement policies, towards use of disposable supplies that are potentially unfavorable to our business;
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Complying with U.S. regulations that apply to international operations, including trade laws, the U.S. Foreign Corrupt Practices Act, and anti-boycott laws, as well as international laws such as the U.K. Bribery Act;
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Loss of business through government tenders that are held annually in many cases; and
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Potentially negative consequences from changes in tax laws, including legislative changes concerning taxation of income earned outside of the U.S.
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Clearance via Section 510(k) of the Food, Drug, and Cosmetics Act of 1938, as amended; or
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Premarket approval via Section 515 of the Food, Drug, and Cosmetics Act if the FDA has determined that the medical device in question poses a greater risk of injury.
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Fines, injunctions and civil penalties;
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Recall or seizure of our products;
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Issuance of public notices or warnings;
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Imposition of operating restrictions, partial suspension, or total shutdown of production;
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Refusal of our requests for Section 510(k) clearance or premarket approval of new products;
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Withdrawal of Section 510(k) clearance or premarket approvals already granted;
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Criminal prosecution; or
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Domestic regulation of our products and manufacturing operations, other than that which is administered by the FDA, includes the Environmental Protection Act, the Occupational Safety and Health Act, and state and local counterparts to these Acts.
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Result in costly litigation and damage awards;
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Divert our management’s attention and resources;
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Cause product shipment delays or suspensions; or
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Require us to seek to enter into royalty or licensing agreements.
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general economic, industry and market conditions;
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actions by institutional or other large stockholders;
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the depth and liquidity of the market for our common stock;
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volume and timing of orders for our products;
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developments generally affecting medical device companies;
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the announcement of new products or product enhancements by us or our competitors;
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changes in earnings estimates or recommendations by securities analysts;
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investor perceptions of us and our business, including changes in market valuations of medical device companies; and
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our results of operations and financial performance.
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116,000 square feet in Buenos Aires, Argentina, utilized substantially for manufacturing;
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44,900 square feet in Oakville, Ontario, Canada, utilized substantially for research and development;
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42,600 square feet in Gort, Ireland, utilized substantially for manufacturing;
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26,000 square feet in Mundelein, Illinois, previously utilized substantially for manufacturing. Currently held for sale; and
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6,400 square feet in Old Woking, England, utilized substantially for research and development.
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124,000 square feet in Middleton, Wisconsin, pursuant to a lease that expires in April 2024, that is primarily utilized for manufacturing;
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65,000 square feet in Seattle, Washington, pursuant to a lease that expires in December 2017, that is utilized substantially for manufacturing;
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43,000 square feet in Planegg, Germany, pursuant to a lease that expires in December 2021 that is utilized substantially for manufacturing; and
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14,300 square feet in Skovlunde, Denmark, pursuant to a lease that expires with six-month notice that is utilized for research and development.
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High
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Low
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||||
Fiscal Year Ended December 31, 2015:
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||||
Fourth Quarter
|
$
|
51.05
|
|
|
$
|
37.85
|
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Third Quarter
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46.98
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|
|
29.34
|
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||
Second Quarter
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44.37
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|
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35.73
|
|
||
First Quarter
|
40.05
|
|
|
33.85
|
|
||
Fiscal Year Ended December 31, 2014:
|
|
|
|
||||
Fourth Quarter
|
$
|
36.98
|
|
|
$
|
28.34
|
|
Third Quarter
|
29.90
|
|
|
24.03
|
|
||
Second Quarter
|
26.95
|
|
|
21.54
|
|
||
First Quarter
|
27.71
|
|
|
21.11
|
|
|
|
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
|
2015
|
||||||
Natus Medical Inc.
|
|
Return %
|
|
|
|
(33.50
|
)
|
|
18.35
|
|
|
101.61
|
|
|
60.18
|
|
|
33.32
|
|
|
|
|
Cum $
|
|
100.00
|
|
|
66.50
|
|
|
78.70
|
|
|
158.67
|
|
|
254.16
|
|
|
338.85
|
|
NASDAQ Composite-Total Returns
|
|
Return %
|
|
|
|
(0.83
|
)
|
|
17.45
|
|
|
40.12
|
|
|
14.75
|
|
|
6.96
|
|
|
|
|
Cum $
|
|
100.00
|
|
|
99.17
|
|
|
116.48
|
|
|
163.21
|
|
|
187.28
|
|
|
200.31
|
|
S&P 500 Health Care Equipment Index
|
|
Return %
|
|
|
|
(0.80
|
)
|
|
17.27
|
|
|
27.69
|
|
|
26.28
|
|
|
5.97
|
|
|
|
|
Cum $
|
|
100.00
|
|
|
99.20
|
|
|
116.33
|
|
|
148.54
|
|
|
187.58
|
|
|
198.78
|
|
Period
|
Total
Number of
Shares
Purchased
|
|
Average
Price
Paid per
Share
|
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
|
|
Maximum
Dollar Value of Shares that
May Yet Be
Purchased
Under the Plans
or Programs
|
||||||
October 1, 2015—October 31, 2015
|
18,000
|
|
|
$
|
40.80
|
|
|
252,229
|
|
|
$
|
15,294,982
|
|
November 1, 2015—November 30, 2015
|
5,965
|
|
|
$
|
46.45
|
|
|
258,194
|
|
|
$
|
15,017,908
|
|
December 1, 2015—December 31, 2015
|
23,721
|
|
|
$
|
48.91
|
|
|
281,915
|
|
|
$
|
13,857,714
|
|
Total
|
47,686
|
|
|
$
|
45.54
|
|
|
281,915
|
|
|
$
|
13,857,714
|
|
|
December 31,
|
||||||||||||||||||
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash, cash equivalents, and short-term investments
|
$
|
82,469
|
|
|
$
|
66,558
|
|
|
$
|
56,106
|
|
|
$
|
23,057
|
|
|
$
|
32,816
|
|
Working capital
|
164,248
|
|
|
148,665
|
|
|
118,585
|
|
|
71,893
|
|
|
89,497
|
|
|||||
Total assets
|
479,496
|
|
|
434,821
|
|
|
429,457
|
|
|
394,492
|
|
|
314,846
|
|
|||||
Long-term debt (including current portion) and short-term borrowings
|
—
|
|
|
—
|
|
|
38,017
|
|
|
32,860
|
|
|
898
|
|
|||||
Total stockholders’ equity
|
390,710
|
|
|
352,715
|
|
|
308,214
|
|
|
270,380
|
|
|
258,313
|
|
(a)
|
Results of operations and financial position of the businesses we have acquired are included from their acquisition dates as follows: Embla in September 2011, Nicolet in July 2012, Grass in February 2013, Peloton in January 2014, GND and NicView in January 2015, and Monarch in November 2015.
|
(b)
|
The $20.0 million goodwill impairment charge in 2011 is related to our Neurology operating segment.
|
(c)
|
Data for 2014, 2013, 2012 and 2011 reflects reclassifications from Cost of revenue to Intangibles amortization, from Marketing and selling, Research and development, and General and administrative to Intangible amortization, and from General and administrative to Restructuring.
|
•
|
Payment of marketing fees by Natus to the GPO, usually based on purchasing experience of group members; and
|
•
|
Non-recourse cancellation provisions.
|
|
Percent of Revenue
Years Ended December 31,
|
|||||||
|
2015
|
|
2014
|
|
2013
|
|||
Revenue
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of revenue
|
38.7
|
%
|
|
38.9
|
%
|
|
40.3
|
%
|
Intangibles amortization
|
0.8
|
%
|
|
0.8
|
%
|
|
0.8
|
%
|
Gross profit
|
60.5
|
%
|
|
60.2
|
%
|
|
58.8
|
%
|
Operating expenses:
|
|
|
|
|
|
|||
Marketing and selling
|
23.3
|
%
|
|
24.1
|
%
|
|
24.2
|
%
|
Research and development
|
8.1
|
%
|
|
8.5
|
%
|
|
8.9
|
%
|
General and administrative
|
12.3
|
%
|
|
12.8
|
%
|
|
12.6
|
%
|
Intangibles amortization
|
2.0
|
%
|
|
0.9
|
%
|
|
1.7
|
%
|
Restructuring
|
0.6
|
%
|
|
1.2
|
%
|
|
1.4
|
%
|
Total operating expenses
|
46.3
|
%
|
|
47.4
|
%
|
|
48.7
|
%
|
Income from operations
|
14.2
|
%
|
|
12.9
|
%
|
|
10.1
|
%
|
Other income (expense), net
|
(0.3
|
)%
|
|
—
|
%
|
|
(0.8
|
)%
|
Income before provision for income tax
|
13.9
|
%
|
|
12.9
|
%
|
|
9.3
|
%
|
Provision for income tax expense
|
3.9
|
%
|
|
3.8
|
%
|
|
2.6
|
%
|
Net income
|
10.1
|
%
|
|
9.1
|
%
|
|
6.7
|
%
|
|
Year ended December 31,
|
|||||||||
|
2015
|
|
2014
|
|
Change
|
|||||
Neurology
|
|
|
|
|
|
|||||
Devices and Systems
|
$
|
168,776
|
|
|
$
|
173,006
|
|
|
(2
|
)%
|
Supplies
|
60,205
|
|
|
59,666
|
|
|
1
|
%
|
||
Services
|
8,320
|
|
|
—
|
|
|
100
|
%
|
||
Total Neurology Revenue
|
237,301
|
|
|
232,672
|
|
|
2
|
%
|
||
Newborn Care
|
|
|
|
|
|
|||||
Devices and Systems
|
72,669
|
|
|
67,354
|
|
|
8
|
%
|
||
Supplies
|
49,982
|
|
|
48,697
|
|
|
3
|
%
|
||
Services
|
15,913
|
|
|
7,111
|
|
|
124
|
%
|
||
Total Newborn Care Revenue
|
138,564
|
|
|
123,162
|
|
|
13
|
%
|
||
Total Revenue
|
$
|
375,865
|
|
|
$
|
355,834
|
|
|
6
|
%
|
|
Year ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Revenue
|
$
|
375,865
|
|
|
$
|
355,834
|
|
Cost of revenue
|
145,492
|
|
|
138,480
|
|
||
Intangibles amortization
|
2,836
|
|
|
2,967
|
|
||
Gross profit
|
227,537
|
|
|
214,387
|
|
||
Gross profit percentage
|
60.5
|
%
|
|
60.2
|
%
|
|
Year ended December 31,
|
||||||
|
2015
|
|
2014
|
||||
Marketing and selling
|
$
|
87,675
|
|
|
$
|
85,729
|
|
Percentage of revenue
|
23.3
|
%
|
|
24.1
|
%
|
||
Research and development
|
$
|
30,434
|
|
|
$
|
30,100
|
|
Percentage of revenue
|
8.1
|
%
|
|
8.5
|
%
|
||
General and administrative
|
$
|
46,363
|
|
|
$
|
45,444
|
|
Percentage of revenue
|
12.3
|
%
|
|
12.8
|
%
|
||
Intangibles Amortization
|
$
|
7,447
|
|
|
$
|
3,025
|
|
Percentage of revenue
|
2.0
|
%
|
|
0.9
|
%
|
||
Restructuring
|
$
|
2,145
|
|
|
$
|
4,238
|
|
Percentage of revenue
|
0.6
|
%
|
|
1.2
|
%
|
|
Year ended December 31,
|
|||||||||
|
2014
|
|
2013
|
|
Change
|
|||||
Neurology
|
|
|
|
|
|
|||||
Devices and Systems
|
$
|
173,006
|
|
|
$
|
162,607
|
|
|
6
|
%
|
Supplies
|
59,666
|
|
|
61,065
|
|
|
(2
|
)%
|
||
Services
|
—
|
|
|
—
|
|
|
—
|
%
|
||
Total Neurology Revenue
|
232,672
|
|
|
223,672
|
|
|
4
|
%
|
||
Newborn Care
|
|
|
|
|
|
|||||
Devices and Systems
|
67,354
|
|
|
68,588
|
|
|
(2
|
)%
|
||
Supplies
|
48,697
|
|
|
47,033
|
|
|
4
|
%
|
||
Services
|
7,111
|
|
|
4,819
|
|
|
48
|
%
|
||
Total Newborn Care Revenue
|
123,162
|
|
|
120,440
|
|
|
2
|
%
|
||
Total Revenue
|
$
|
355,834
|
|
|
$
|
344,112
|
|
|
3
|
%
|
|
Year ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Revenue
|
$
|
355,834
|
|
|
$
|
344,112
|
|
Cost of revenue
|
138,480
|
|
|
138,788
|
|
||
Intangibles amortization
|
2,967
|
|
|
2,912
|
|
||
Gross profit
|
214,387
|
|
|
202,412
|
|
||
Gross profit percentage
|
60.2
|
%
|
|
58.8
|
%
|
|
Year ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Marketing and selling
|
$
|
85,729
|
|
|
$
|
83,138
|
|
Percentage of revenue
|
24.1
|
%
|
|
24.2
|
%
|
||
Research and development
|
$
|
30,100
|
|
|
$
|
30,786
|
|
Percentage of revenue
|
8.5
|
%
|
|
8.9
|
%
|
||
General and administrative
|
$
|
45,444
|
|
|
$
|
43,380
|
|
Percentage of revenue
|
12.8
|
%
|
|
12.6
|
%
|
||
Intangibles Amortization
|
$
|
3,025
|
|
|
$
|
5,681
|
|
Percentage of revenue
|
0.9
|
%
|
|
1.7
|
%
|
||
Restructuring
|
$
|
4,238
|
|
|
$
|
4,767
|
|
Percentage of revenue
|
1.2
|
%
|
|
1.4
|
%
|
|
December 31, 2015
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||
Cash and cash equivalents
|
$
|
82,469
|
|
|
$
|
66,558
|
|
|
$
|
56,106
|
|
Debt
|
—
|
|
|
—
|
|
|
38,017
|
|
|||
Working capital
|
164,248
|
|
|
148,665
|
|
|
118,585
|
|
|
Year Ended
|
||||||||||
|
December 31, 2015
|
|
December 31, 2014
|
|
December 31, 2013
|
||||||
Net cash provided by operating activities
|
$
|
36,852
|
|
|
$
|
42,143
|
|
|
$
|
36,797
|
|
Net cash used in investing activities
|
(19,478
|
)
|
|
(10,645
|
)
|
|
(22,300
|
)
|
|||
Net cash provided by (used in) financing activities
|
832
|
|
|
(20,914
|
)
|
|
17,247
|
|
•
|
Amount and timing of revenue;
|
•
|
Extent to which our existing and new products gain market acceptance;
|
•
|
Extent to which we make acquisitions;
|
•
|
Cost and timing of product development efforts and the success of these development efforts;
|
•
|
Cost and timing of marketing and selling activities; and
|
•
|
Availability of borrowings under line of credit arrangements and the availability of other means of financing.
|
|
|
|
Payments Due by Period
|
||||||||||||||||
|
Total
|
|
Less than
1 Year
|
|
1-3 Years
|
|
4-5 Years
|
|
More than
5 Years
|
||||||||||
Unconditional purchase obligations
|
$
|
40,339
|
|
|
$
|
40,339
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Operating lease obligations
|
20,606
|
|
|
3,909
|
|
|
6,455
|
|
|
5,263
|
|
|
4,979
|
|
|||||
Total
|
$
|
60,945
|
|
|
$
|
44,248
|
|
|
$
|
6,455
|
|
|
$
|
5,263
|
|
|
$
|
4,979
|
|
|
Quarters Ended
|
||||||||||||||||||||||||||||||
|
December 31, 2015
|
|
September 30, 2015
|
|
June 30, 2015
|
|
March 31, 2015
|
|
December 31, 2014
|
|
September 30, 2014
|
|
June 30, 2014
|
|
March 31, 2014
|
||||||||||||||||
|
(in thousands, except per share)
|
||||||||||||||||||||||||||||||
Revenue
|
$
|
99,950
|
|
|
$
|
94,583
|
|
|
$
|
91,937
|
|
|
$
|
89,395
|
|
|
$
|
94,010
|
|
|
$
|
89,876
|
|
|
$
|
86,325
|
|
|
$
|
85,624
|
|
Cost of revenue
|
41,023
|
|
|
35,520
|
|
|
33,844
|
|
|
35,105
|
|
|
35,820
|
|
|
33,180
|
|
|
35,500
|
|
|
33,981
|
|
||||||||
Intangibles amortization
|
788
|
|
|
683
|
|
|
683
|
|
|
682
|
|
|
711
|
|
|
1,054
|
|
|
156
|
|
|
1,046
|
|
||||||||
Gross profit
|
58,139
|
|
|
58,380
|
|
|
57,410
|
|
|
53,608
|
|
|
57,479
|
|
|
55,642
|
|
|
50,669
|
|
|
50,597
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Marketing and selling
|
22,330
|
|
|
22,495
|
|
|
22,108
|
|
|
20,742
|
|
|
22,915
|
|
|
20,123
|
|
|
22,061
|
|
|
20,630
|
|
||||||||
Research and development
|
8,568
|
|
|
7,700
|
|
|
7,309
|
|
|
6,857
|
|
|
7,827
|
|
|
7,462
|
|
|
7,634
|
|
|
7,177
|
|
||||||||
General and administrative
|
13,124
|
|
|
10,031
|
|
|
11,656
|
|
|
11,552
|
|
|
10,810
|
|
|
12,740
|
|
|
10,165
|
|
|
11,729
|
|
||||||||
Intangibles amortization
|
2,282
|
|
|
2,036
|
|
|
2,174
|
|
|
955
|
|
|
1,651
|
|
|
(408
|
)
|
|
646
|
|
|
1,136
|
|
||||||||
Restructuring
|
1,786
|
|
|
42
|
|
|
161
|
|
|
156
|
|
|
634
|
|
|
2,848
|
|
|
218
|
|
|
538
|
|
||||||||
Total operating expenses
|
48,090
|
|
|
42,304
|
|
|
43,408
|
|
|
40,262
|
|
|
43,837
|
|
|
42,765
|
|
|
40,724
|
|
|
41,210
|
|
||||||||
Income from operations
|
10,049
|
|
|
16,076
|
|
|
14,002
|
|
|
13,346
|
|
|
13,642
|
|
|
12,877
|
|
|
9,945
|
|
|
9,387
|
|
||||||||
Other income (expense), net
|
138
|
|
|
7
|
|
|
(380
|
)
|
|
(829
|
)
|
|
498
|
|
|
(1,447
|
)
|
|
795
|
|
|
312
|
|
||||||||
Income before provision for income tax
|
10,187
|
|
|
16,083
|
|
|
13,622
|
|
|
12,517
|
|
|
14,140
|
|
|
11,430
|
|
|
10,740
|
|
|
9,699
|
|
||||||||
Provision for income tax
|
1,643
|
|
|
5,151
|
|
|
3,771
|
|
|
3,920
|
|
|
3,701
|
|
|
3,607
|
|
|
3,279
|
|
|
2,944
|
|
||||||||
Net income
|
$
|
8,544
|
|
|
$
|
10,932
|
|
|
$
|
9,851
|
|
|
$
|
8,597
|
|
|
$
|
10,439
|
|
|
$
|
7,823
|
|
|
$
|
7,461
|
|
|
$
|
6,755
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
$
|
0.26
|
|
|
$
|
0.34
|
|
|
$
|
0.31
|
|
|
$
|
0.27
|
|
|
$
|
0.33
|
|
|
$
|
0.25
|
|
|
$
|
0.24
|
|
|
$
|
0.22
|
|
Diluted
|
$
|
0.26
|
|
|
$
|
0.33
|
|
|
$
|
0.30
|
|
|
$
|
0.26
|
|
|
$
|
0.32
|
|
|
$
|
0.24
|
|
|
$
|
0.23
|
|
|
$
|
0.21
|
|
|
Quarters Ended
|
||||||||||||||||||||||
|
December 31, 2015
|
|
September 30, 2015
|
|
June 30, 2015
|
|
March 31, 2015
|
|
December 31,
2014
|
|
September 30, 2014
|
|
June 30, 2014
|
|
March 31, 2014
|
||||||||
|
(in thousands, except per share)
|
||||||||||||||||||||||
Weighted average shares used in the calculation of net earnings per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
32,554
|
|
|
32,432
|
|
|
32,273
|
|
|
32,127
|
|
|
31,916
|
|
|
31,584
|
|
|
31,424
|
|
|
31,062
|
|
Diluted
|
33,327
|
|
|
33,253
|
|
|
33,204
|
|
|
33,097
|
|
|
32,908
|
|
|
32,615
|
|
|
32,444
|
|
|
32,185
|
|
Plan Category
|
|
Number of Securities
to be Issued upon
Exercise of
Outstanding
Options, Warrants,
Awards and Rights
|
|
Weighted-Average
Exercise Price of
Outstanding
Options, Warrants
Awards and Rights
|
|
Number of Securities
Remaining Available for
Future Issuance under
Equity Compensation Plans
(excluding securities
reflected in the first column)
|
||||
Equity compensation plans approved by security holders
|
|
1,146,915
|
|
|
$
|
15.07
|
|
|
1,297,008
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
|
1,146,915
|
|
|
15.07
|
|
|
1,297,008
|
|
|
Balance at
Beginning of Period |
|
Additions
Charged to Expense |
|
Deductions
|
|
Balance
at End of Period |
||||||||
Year ended December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
4,324
|
|
|
$
|
1,496
|
|
|
$
|
(1,134
|
)
|
|
$
|
4,686
|
|
Valuation allowance
|
3,151
|
|
|
821
|
|
|
—
|
|
|
3,972
|
|
||||
Year ended December 31, 2014
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
2,962
|
|
|
$
|
1,221
|
|
|
$
|
141
|
|
|
$
|
4,324
|
|
Valuation allowance
|
5,043
|
|
|
—
|
|
|
(1,892
|
)
|
|
3,151
|
|
||||
Year ended December 31, 2013
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
$
|
2,617
|
|
|
$
|
277
|
|
|
$
|
68
|
|
|
$
|
2,962
|
|
Valuation allowance
|
4,339
|
|
|
704
|
|
|
—
|
|
|
5,043
|
|
|
|
|
N
ATUS
M
EDICAL
I
NCORPORATED
|
||
|
|
|
By
|
|
/s/ JAMES B. HAWKINS
|
|
|
James B. Hawkins
President and Chief Executive Officer
|
|
|
|
By
|
|
/s/ JONATHAN A. KENNEDY
|
|
|
Jonathan A. Kennedy
Senior Vice President and Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/
S
/ JAMES B. HAWKINS
|
|
President and Chief Executive Officer (Principal Executive Officer)
|
|
February 26, 2016
|
(James B. Hawkins)
|
|
|
|
|
/
S
/ JONATHAN A. KENNEDY
|
|
Senior Vice President & Chief Financial Officer (Principal Financial and Accounting Officer)
|
|
February 26, 2016
|
(Jonathan A. Kennedy)
|
|
|
|
|
/
S
/ ROBERT A. GUNST
|
|
Chairman of the Board of Directors
|
|
February 26, 2016
|
(Robert A. Gunst)
|
|
|
|
|
/
S
/ DORIS ENGIBOUS
|
|
Director
|
|
February 26, 2016
|
(Doris Engibous)
|
|
|
|
|
/
S
/ KENNETH E. LUDLUM
|
|
Director
|
|
February 26, 2016
|
(Kenneth E. Ludlum)
|
|
|
|
|
/
S
/ WILLIAM M. MOORE
|
|
Director
|
|
February 26, 2016
|
(William M. Moore)
|
|
|
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
82,469
|
|
|
$
|
66,558
|
|
Accounts receivable, net of allowance for doubtful accounts of $4,686 and $4,324
|
99,080
|
|
|
82,277
|
|
||
Inventories
|
48,572
|
|
|
40,051
|
|
||
Prepaid expenses and other current assets
|
11,235
|
|
|
17,408
|
|
||
Deferred income tax
|
—
|
|
|
11,511
|
|
||
Total current assets
|
241,356
|
|
|
217,805
|
|
||
Property and equipment, net
|
16,967
|
|
|
17,923
|
|
||
Intangible assets, net
|
86,536
|
|
|
92,761
|
|
||
Goodwill
|
107,466
|
|
|
96,316
|
|
||
Deferred income tax
|
12,782
|
|
|
1,152
|
|
||
Other assets
|
14,389
|
|
|
8,864
|
|
||
Total assets
|
$
|
479,496
|
|
|
$
|
434,821
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
23,660
|
|
|
$
|
21,371
|
|
Accrued liabilities
|
42,137
|
|
|
36,024
|
|
||
Deferred revenue
|
11,311
|
|
|
11,745
|
|
||
Total current liabilities
|
77,108
|
|
|
69,140
|
|
||
Long-term liabilities:
|
|
|
|
||||
Other liabilities
|
7,781
|
|
|
4,859
|
|
||
Deferred income tax
|
3,897
|
|
|
8,107
|
|
||
Total liabilities
|
88,786
|
|
|
82,106
|
|
||
Commitments and contingencies (Note 19)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Common stock, $0.001 par value; 120,000,000 shares authorized; shares issued and outstanding 33,153,500 in 2015 and 32,649,158 in 2014
|
323,745
|
|
|
315,296
|
|
||
Preferred stock, $0.001 par value; 10,000,000 shares authorized; no shares issued and outstanding in 2015 and in 2014
|
—
|
|
|
—
|
|
||
Retained earnings
|
106,814
|
|
|
68,890
|
|
||
Accumulated other comprehensive loss
|
(39,849
|
)
|
|
(31,471
|
)
|
||
Total stockholders’ equity
|
390,710
|
|
|
352,715
|
|
||
Total liabilities and stockholders’ equity
|
$
|
479,496
|
|
|
$
|
434,821
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue
|
$
|
375,865
|
|
|
$
|
355,834
|
|
|
$
|
344,112
|
|
Cost of revenue
|
145,492
|
|
|
138,480
|
|
|
138,788
|
|
|||
Intangibles amortization
|
2,836
|
|
|
2,967
|
|
|
2,912
|
|
|||
Gross profit
|
227,537
|
|
|
214,387
|
|
|
202,412
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Marketing and selling
|
87,675
|
|
|
85,729
|
|
|
83,138
|
|
|||
Research and development
|
30,434
|
|
|
30,100
|
|
|
30,786
|
|
|||
General and administrative
|
46,363
|
|
|
45,444
|
|
|
43,380
|
|
|||
Intangibles amortization
|
7,447
|
|
|
3,025
|
|
|
5,681
|
|
|||
Restructuring
|
2,145
|
|
|
4,238
|
|
|
4,767
|
|
|||
Total operating expenses
|
174,064
|
|
|
168,536
|
|
|
167,752
|
|
|||
Income from operations
|
53,473
|
|
|
45,851
|
|
|
34,660
|
|
|||
Other income (expense), net
|
(1,064
|
)
|
|
158
|
|
|
(2,716
|
)
|
|||
Income before provision for income tax
|
52,409
|
|
|
46,009
|
|
|
31,944
|
|
|||
Provision for income tax
|
14,485
|
|
|
13,531
|
|
|
8,797
|
|
|||
Net income
|
$
|
37,924
|
|
|
$
|
32,478
|
|
|
$
|
23,147
|
|
Foreign currency translation adjustment
|
(8,378
|
)
|
|
(11,218
|
)
|
|
(1,972
|
)
|
|||
Comprehensive income
|
$
|
29,546
|
|
|
$
|
21,260
|
|
|
$
|
21,175
|
|
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
1.17
|
|
|
$
|
1.03
|
|
|
$
|
0.77
|
|
Diluted
|
$
|
1.14
|
|
|
$
|
1.00
|
|
|
$
|
0.75
|
|
Weighted average shares used in the calculation of net income per share:
|
|
|
|
|
|
||||||
Basic
|
32,348
|
|
|
31,499
|
|
|
29,993
|
|
|||
Diluted
|
33,241
|
|
|
32,568
|
|
|
30,821
|
|
|
Common Stock
|
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Loss |
|
Stockholders’
Equity |
|||||||||||
|
Shares
|
|
Amount
|
|
||||||||||||||
Balances, December 31, 2012
|
30,106,933
|
|
|
275,395
|
|
|
13,265
|
|
|
(18,281
|
)
|
|
270,379
|
|
||||
Tax benefit of options exercises
|
—
|
|
|
1,601
|
|
|
—
|
|
|
—
|
|
|
1,601
|
|
||||
Vesting of restricted stock units
|
6,224
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net issuance of restricted stock awards
|
159,935
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Employee stock purchase plan
|
69,780
|
|
|
1,061
|
|
|
—
|
|
|
—
|
|
|
1,061
|
|
||||
Stock-based compensation expense
|
—
|
|
|
5,919
|
|
|
—
|
|
|
—
|
|
|
5,919
|
|
||||
Exercise of stock options
|
1,058,730
|
|
|
8,079
|
|
|
—
|
|
|
—
|
|
|
8,079
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,972
|
)
|
|
(1,972
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
23,147
|
|
|
—
|
|
|
23,147
|
|
||||
Balances, December 31, 2013
|
31,401,602
|
|
|
292,055
|
|
|
36,412
|
|
|
(20,253
|
)
|
|
308,214
|
|
||||
Tax benefit of options exercises
|
—
|
|
|
7,525
|
|
|
—
|
|
|
—
|
|
|
7,525
|
|
||||
Vesting of restricted stock units
|
13,121
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net issuance of restricted stock awards
|
180,665
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Employee stock purchase plan
|
45,625
|
|
|
1,197
|
|
|
—
|
|
|
—
|
|
|
1,197
|
|
||||
Stock-based compensation expense
|
—
|
|
|
6,062
|
|
|
—
|
|
|
—
|
|
|
6,062
|
|
||||
Repurchase of company stock
|
(161,400
|
)
|
|
(4,633
|
)
|
|
—
|
|
|
—
|
|
|
(4,633
|
)
|
||||
Taxes paid related to net share settlement of equity awards
|
(73,134
|
)
|
|
(1,999
|
)
|
|
—
|
|
|
—
|
|
|
(1,999
|
)
|
||||
Exercise of stock options
|
1,242,679
|
|
|
15,089
|
|
|
—
|
|
|
—
|
|
|
15,089
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,218
|
)
|
|
(11,218
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
32,478
|
|
|
—
|
|
|
32,478
|
|
||||
Balances, December 31, 2014
|
32,649,158
|
|
|
$
|
315,296
|
|
|
$
|
68,890
|
|
|
$
|
(31,471
|
)
|
|
$
|
352,715
|
|
Tax benefit of options exercises
|
—
|
|
|
7,104
|
|
|
—
|
|
|
—
|
|
|
7,104
|
|
||||
Vesting of restricted stock units
|
21,619
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net issuance of restricted stock awards
|
199,620
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Employee stock purchase plan
|
35,467
|
|
|
1,251
|
|
|
—
|
|
|
—
|
|
|
1,251
|
|
||||
Stock-based compensation expense
|
—
|
|
|
6,953
|
|
|
—
|
|
|
—
|
|
|
6,953
|
|
||||
Repurchase of company stock
|
(281,915
|
)
|
|
(11,526
|
)
|
|
—
|
|
|
—
|
|
|
(11,526
|
)
|
||||
Taxes paid related to net share settlement of equity awards
|
(102,112
|
)
|
|
(4,341
|
)
|
|
—
|
|
|
—
|
|
|
(4,341
|
)
|
||||
Exercise of stock options
|
631,663
|
|
|
9,008
|
|
|
—
|
|
|
—
|
|
|
9,008
|
|
||||
Foreign currency translation adjustment
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,378
|
)
|
|
(8,378
|
)
|
||||
Net income
|
—
|
|
|
—
|
|
|
37,924
|
|
|
—
|
|
|
37,924
|
|
||||
Balances, December 31, 2015
|
33,153,500
|
|
|
$
|
323,745
|
|
|
$
|
106,814
|
|
|
$
|
(39,849
|
)
|
|
$
|
390,710
|
|
|
Year Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
37,924
|
|
|
$
|
32,478
|
|
|
$
|
23,147
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Provision for losses on accounts receivable
|
1,496
|
|
|
991
|
|
|
277
|
|
|||
Excess tax benefit on the exercise of stock options
|
(7,104
|
)
|
|
(7,525
|
)
|
|
(3,109
|
)
|
|||
Depreciation and amortization
|
15,987
|
|
|
11,759
|
|
|
12,848
|
|
|||
Gain on disposal of property and equipment
|
(5
|
)
|
|
—
|
|
|
—
|
|
|||
Impairment of intangible assets
|
—
|
|
|
598
|
|
|
1,500
|
|
|||
Impairment of property and equipment
|
—
|
|
|
2,177
|
|
|
292
|
|
|||
Warranty reserve
|
10,729
|
|
|
2,306
|
|
|
1,938
|
|
|||
Stock-based compensation
|
6,953
|
|
|
6,062
|
|
|
6,078
|
|
|||
Changes in operating assets and liabilities, net of assets and liabilities acquired in acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(15,272
|
)
|
|
(2,431
|
)
|
|
9,357
|
|
|||
Inventories
|
(12,232
|
)
|
|
(2,017
|
)
|
|
(2,679
|
)
|
|||
Other assets
|
858
|
|
|
(3,667
|
)
|
|
(6,899
|
)
|
|||
Accounts payable
|
3,270
|
|
|
(7,648
|
)
|
|
(1,387
|
)
|
|||
Accrued liabilities
|
(6,177
|
)
|
|
6,595
|
|
|
(5,301
|
)
|
|||
Deferred revenue
|
(1,118
|
)
|
|
(775
|
)
|
|
(768
|
)
|
|||
Deferred taxes
|
1,543
|
|
|
3,240
|
|
|
1,503
|
|
|||
Net cash provided by operating activities
|
36,852
|
|
|
42,143
|
|
|
36,797
|
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Acquisition of businesses, net of cash acquired
|
(14,284
|
)
|
|
(4,925
|
)
|
|
(18,600
|
)
|
|||
Acquisition of property and equipment
|
(4,068
|
)
|
|
(4,239
|
)
|
|
(1,825
|
)
|
|||
Acquisition of intangible assets
|
(1,126
|
)
|
|
(1,481
|
)
|
|
(1,875
|
)
|
|||
Net cash used in investing activities
|
(19,478
|
)
|
|
(10,645
|
)
|
|
(22,300
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from stock option exercises and ESPP
|
10,258
|
|
|
16,210
|
|
|
8,981
|
|
|||
Excess tax benefit on the exercise of stock options
|
7,104
|
|
|
7,525
|
|
|
3,109
|
|
|||
Repurchase of company stock
|
(11,525
|
)
|
|
(4,633
|
)
|
|
—
|
|
|||
Taxes paid related to net share settlement of equity awards
|
(4,341
|
)
|
|
(1,999
|
)
|
|
—
|
|
|||
Proceeds from short-term borrowings
|
—
|
|
|
—
|
|
|
22,000
|
|
|||
Proceeds from long-term borrowings
|
—
|
|
|
—
|
|
|
35,383
|
|
|||
Contingent consideration earn-out
|
(664
|
)
|
|
—
|
|
|
—
|
|
|||
Payments on borrowings
|
—
|
|
|
(38,017
|
)
|
|
(52,226
|
)
|
|||
Net cash (used in)/provided by financing activities
|
832
|
|
|
(20,914
|
)
|
|
17,247
|
|
|||
Exchange rate effect on cash and cash equivalents
|
(2,295
|
)
|
|
(132
|
)
|
|
1,305
|
|
|||
Net increase in cash and cash equivalents
|
15,911
|
|
|
10,452
|
|
|
33,049
|
|
|||
Cash and cash equivalents, beginning of year
|
66,558
|
|
|
56,106
|
|
|
23,057
|
|
|||
Cash and cash equivalents, end of year
|
$
|
82,469
|
|
|
$
|
66,558
|
|
|
$
|
56,106
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
—
|
|
|
$
|
434
|
|
|
$
|
1,311
|
|
Cash paid for income taxes
|
$
|
10,164
|
|
|
$
|
5,672
|
|
|
$
|
12,908
|
|
Non-cash investing activities:
|
|
|
|
|
|
||||||
Property and equipment included in accounts payable
|
$
|
289
|
|
|
$
|
122
|
|
|
$
|
80
|
|
Inventory transferred to property and equipment
|
$
|
1,056
|
|
|
$
|
1,350
|
|
|
$
|
991
|
|
•
|
Payment of marketing fees by Natus to the GPO, usually based on purchasing experience of group members; and
|
•
|
Non-recourse cancellation provisions.
|
Accounts receivable
|
$
|
4,098
|
|
Prepaid and other assets
|
33
|
|
|
Inventories
|
547
|
|
|
Identifiable intangible assets:
|
|
||
Developed technology
|
2,500
|
|
|
Customer-related
|
5,200
|
|
|
Trademarks and trade names
|
3,000
|
|
|
Other property and equipment
|
237
|
|
|
Goodwill
|
7,014
|
|
|
Accounts payable
|
(431
|
)
|
|
Accrued expenses
|
(895
|
)
|
|
Deferred revenue
|
(348
|
)
|
|
Total purchase price
|
$
|
20,955
|
|
|
2013
|
||
Revenue
|
$
|
345,117
|
|
Income from operations
|
$
|
35,369
|
|
•
|
Additional amortization expense related to the fair value of identifiable intangible assets acquired (approximately
$59,300
through December 31, 2013);
|
•
|
Decrease of depreciation expense related to the fair value adjustment to property and equipment acquired (approximately
$14,800
through December 31, 2013); and
|
•
|
Change in general and administrative expense related to the direct acquisition costs that were recorded in the unaudited pro forma financial (approximately
$624,000
through December 31, 2013);
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Raw materials and subassemblies
|
$
|
19,041
|
|
|
$
|
19,821
|
|
Work in process
|
1,343
|
|
|
1,808
|
|
||
Finished goods
|
36,149
|
|
|
26,037
|
|
||
Total Inventories
|
56,533
|
|
|
47,666
|
|
||
Less: Non-current Inventories
|
(7,961
|
)
|
|
(7,615
|
)
|
||
Inventories
|
$
|
48,572
|
|
|
$
|
40,051
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Land
|
$
|
2,918
|
|
|
$
|
3,092
|
|
Buildings
|
5,662
|
|
|
6,828
|
|
||
Leasehold improvements
|
2,345
|
|
|
2,118
|
|
||
Office furniture and equipment
|
13,866
|
|
|
12,945
|
|
||
Computer software and hardware
|
10,488
|
|
|
8,715
|
|
||
Demonstration and loaned equipment
|
11,216
|
|
|
10,929
|
|
||
|
46,495
|
|
|
44,627
|
|
||
Accumulated depreciation
|
(29,528
|
)
|
|
(26,704
|
)
|
||
Total
|
$
|
16,967
|
|
|
$
|
17,923
|
|
As of December 31, 2013
|
$
|
97,238
|
|
Acquisitions/Purchase Accounting Adjustments
|
4,002
|
|
|
Foreign currency translation
|
(4,924
|
)
|
|
As of December 31, 2014
|
$
|
96,316
|
|
Acquisitions/Purchase Accounting Adjustments
|
13,547
|
|
|
Foreign currency translation
|
(2,397
|
)
|
|
As of December 31, 2015
|
$
|
107,466
|
|
|
December 31, 2015
|
|
December 31, 2014
|
||||||||||||||||||||||||||
|
Gross
Carrying Amount |
|
Accumulated
Impairment |
|
Accumulated
Amortization |
|
Net Book
Value |
|
Gross
Carrying Amount |
|
Accumulated
Impairment |
|
Accumulated
Amortization |
|
Net Book
Value |
||||||||||||||
Intangible assets with definite lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Technology
|
$
|
63,668
|
|
|
—
|
|
|
$
|
(31,600
|
)
|
|
$
|
32,068
|
|
|
$
|
64,376
|
|
|
—
|
|
|
$
|
(28,195
|
)
|
|
$
|
36,181
|
|
Customer related
|
35,529
|
|
|
—
|
|
|
(14,352
|
)
|
|
21,177
|
|
|
31,189
|
|
|
—
|
|
|
(11,786
|
)
|
|
19,403
|
|
||||||
Trade names
|
31,837
|
|
|
(3,340
|
)
|
|
(3,052
|
)
|
|
25,445
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Internally developed software
|
15,513
|
|
|
—
|
|
|
(8,155
|
)
|
|
7,358
|
|
|
14,109
|
|
|
—
|
|
|
(6,511
|
)
|
|
7,598
|
|
||||||
Patents
|
2,663
|
|
|
—
|
|
|
(2,175
|
)
|
|
488
|
|
|
2,794
|
|
|
—
|
|
|
(2,154
|
)
|
|
640
|
|
||||||
Backlog
|
717
|
|
|
—
|
|
|
(717
|
)
|
|
—
|
|
|
719
|
|
|
—
|
|
|
(719
|
)
|
|
—
|
|
||||||
Definite-lived intangible assets
|
149,927
|
|
|
(3,340
|
)
|
|
(60,051
|
)
|
|
86,536
|
|
|
113,187
|
|
|
—
|
|
|
(49,365
|
)
|
|
63,822
|
|
||||||
Intangible assets with indefinite lives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Trade names
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
32,443
|
|
|
(3,504
|
)
|
|
—
|
|
|
28,939
|
|
||||||
Total intangible assets
|
149,927
|
|
|
(3,340
|
)
|
|
(60,051
|
)
|
|
86,536
|
|
|
145,630
|
|
|
(3,504
|
)
|
|
(49,365
|
)
|
|
92,761
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Technology
|
$
|
3,916
|
|
|
$
|
3,993
|
|
|
$
|
4,355
|
|
Customer related
|
2,938
|
|
|
1,892
|
|
|
2,644
|
|
|||
Trade names
|
3,159
|
|
|
—
|
|
|
—
|
|
|||
Internally developed software
|
1,620
|
|
|
1,434
|
|
|
1,034
|
|
|||
Patents
|
112
|
|
|
113
|
|
|
121
|
|
|||
Total amortization
|
$
|
11,745
|
|
|
$
|
7,432
|
|
|
$
|
8,154
|
|
2016
|
$
|
12,501
|
|
2017
|
12,203
|
|
|
2018
|
11,980
|
|
|
2019
|
10,860
|
|
|
2020
|
8,766
|
|
|
Thereafter
|
30,226
|
|
|
Total expected amortization expense
|
$
|
86,536
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Compensation and related benefits
|
$
|
16,752
|
|
|
$
|
16,075
|
|
Accrued federal, state, and local taxes
|
4,707
|
|
|
9,213
|
|
||
Warranty reserve
|
10,386
|
|
|
2,753
|
|
||
Accrued professional fees
|
520
|
|
|
1,027
|
|
||
Contingent consideration
|
6,209
|
|
|
812
|
|
||
Other
|
3,563
|
|
|
6,144
|
|
||
Total
|
$
|
42,137
|
|
|
$
|
36,024
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Contingent tax obligations
|
$
|
6,376
|
|
|
$
|
3,299
|
|
Non-current deferred revenue
|
1,401
|
|
|
1,537
|
|
||
Other
|
4
|
|
|
23
|
|
||
Total
|
$
|
7,781
|
|
|
$
|
4,859
|
|
|
Balance at
Beginning
of Period
|
|
Assumed
Through
Acquisitions
|
|
Additions
Charged to
Expense
|
|
Reductions
|
|
Balance
at End
of Period
|
||||||||||
December 31, 2015
|
$
|
2,753
|
|
|
$
|
—
|
|
|
$
|
10,729
|
|
|
$
|
(3,096
|
)
|
|
$
|
10,386
|
|
December 31, 2014
|
$
|
3,143
|
|
|
$
|
—
|
|
|
$
|
2,306
|
|
|
$
|
(2,696
|
)
|
|
$
|
2,753
|
|
December 31, 2013
|
$
|
2,260
|
|
|
$
|
191
|
|
|
$
|
1,938
|
|
|
$
|
(1,246
|
)
|
|
$
|
3,143
|
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Net income
|
$
|
37,924
|
|
|
$
|
32,478
|
|
|
$
|
23,147
|
|
Weighted average common shares
|
32,348
|
|
|
31,499
|
|
|
29,993
|
|
|||
Dilutive effect of stock based awards
|
893
|
|
|
1,069
|
|
|
828
|
|
|||
Diluted Shares
|
33,241
|
|
|
32,568
|
|
|
30,821
|
|
|||
Basic earnings per share
|
$
|
1.17
|
|
|
$
|
1.03
|
|
|
$
|
0.77
|
|
Diluted earnings per share
|
$
|
1.14
|
|
|
$
|
1.00
|
|
|
$
|
0.75
|
|
Shares excluded from calculation of diluted EPS
|
—
|
|
|
239
|
|
|
1,413
|
|
|
December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Cost of revenue
|
$
|
156
|
|
|
$
|
143
|
|
|
$
|
120
|
|
Marketing and selling
|
808
|
|
|
977
|
|
|
816
|
|
|||
Research and development
|
1,264
|
|
|
664
|
|
|
527
|
|
|||
General and administrative
|
4,725
|
|
|
4,278
|
|
|
4,456
|
|
|||
Total expense
|
6,953
|
|
|
6,062
|
|
|
5,919
|
|
•
|
Incentive stock options to employees;
|
•
|
Non-statutory stock options to employees, directors and consultants;
|
•
|
Restricted stock awards and restricted stock units;
|
•
|
Stock bonuses; and
|
•
|
Stock appreciation rights.
|
|
Number of
Shares
|
|
Weighted
Average
Exercise Price
|
|||
Outstanding, December 31, 2013 (1,843,779 shares exercisable at a weighted average exercise price of $12.68 per share)
|
2,789,723
|
|
|
$
|
12.90
|
|
Granted
|
244,500
|
|
|
$
|
22.60
|
|
Exercised
|
(1,242,679
|
)
|
|
$
|
12.14
|
|
Cancelled
|
(34,942
|
)
|
|
$
|
15.29
|
|
Outstanding, December 31, 2014 (1,051,616 shares exercisable at a weighted average exercise price of $14.13 per share)
|
1,756,602
|
|
|
$
|
14.74
|
|
Granted
|
—
|
|
|
$
|
—
|
|
Exercised
|
(631,663
|
)
|
|
$
|
14.26
|
|
Cancelled
|
(19,757
|
)
|
|
$
|
11.99
|
|
Outstanding, December 31, 2015 (737,032 shares exercisable at a weighted average exercise price of $14.40 per share)
|
1,105,182
|
|
|
$
|
15.07
|
|
|
Years Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Weighted-average fair value of options granted
|
$
|
7.25
|
|
|
$
|
4.24
|
|
Expected life in years
|
4.0
|
|
|
4.1
|
|
||
Risk-free interest rate
|
1.4
|
%
|
|
1.2
|
%
|
||
Expected volatility
|
39
|
%
|
|
37
|
%
|
||
Dividend yield
|
None
|
|
|
None
|
|
|
Shares
|
|
Weighted
Average
Grant
Date Fair
Value
|
|||
Unvested at December 31, 2013
|
625,330
|
|
|
$
|
13.28
|
|
Granted
|
197,850
|
|
|
$
|
22.68
|
|
Vested
|
(223,811
|
)
|
|
$
|
13.03
|
|
Forfeited
|
(15,985
|
)
|
|
$
|
14.73
|
|
Unvested at December 31, 2014
|
583,384
|
|
|
$
|
16.50
|
|
Granted
|
211,080
|
|
|
$
|
16.52
|
|
Vested
|
(244,896
|
)
|
|
$
|
36.38
|
|
Forfeited
|
(14,360
|
)
|
|
$
|
15.19
|
|
Unvested at December 31, 2015
|
535,208
|
|
|
$
|
17.42
|
|
|
2015
|
|
2014
|
||
Beginning outstanding balance
|
52,325
|
|
|
47,391
|
|
Awarded
|
15,530
|
|
|
20,600
|
|
Released
|
(21,619
|
)
|
|
(13,121
|
)
|
Forfeited
|
(753
|
)
|
|
(2,545
|
)
|
Ending outstanding balance
|
45,483
|
|
|
52,325
|
|
|
Personnel
Related
|
|
Facility
Related
|
|
Other
|
|
Total
|
||||||
Balance as of December 31, 2012
|
$
|
2,745
|
|
|
—
|
|
|
—
|
|
|
$
|
2,745
|
|
Additions
|
4,218
|
|
|
504
|
|
|
1,363
|
|
|
6,085
|
|
||
Reversals
|
(1,357
|
)
|
|
—
|
|
|
—
|
|
|
(1,357
|
)
|
||
Payments
|
(5,271
|
)
|
|
(504
|
)
|
|
(1,363
|
)
|
|
(7,138
|
)
|
||
Balance as of December 31, 2013
|
335
|
|
|
—
|
|
|
—
|
|
|
335
|
|
||
Additions
|
1,209
|
|
|
680
|
|
|
—
|
|
|
1,889
|
|
||
Reversals
|
(52
|
)
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
||
Payments
|
(1,124
|
)
|
|
(680
|
)
|
|
—
|
|
|
(1,804
|
)
|
||
Balance as of December 31, 2014
|
368
|
|
|
—
|
|
|
—
|
|
|
368
|
|
||
Additions
|
1,905
|
|
|
156
|
|
|
—
|
|
|
2,061
|
|
||
Reversals
|
(124
|
)
|
|
—
|
|
|
—
|
|
|
(124
|
)
|
||
Payments
|
(473
|
)
|
|
(156
|
)
|
|
—
|
|
|
(629
|
)
|
||
Balance as of December 31, 2015
|
$
|
1,676
|
|
|
—
|
|
|
—
|
|
|
$
|
1,676
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Interest income
|
$
|
27
|
|
|
$
|
119
|
|
|
$
|
32
|
|
Interest expense
|
(352
|
)
|
|
(438
|
)
|
|
(1,675
|
)
|
|||
Foreign currency loss
|
(1,415
|
)
|
|
(37
|
)
|
|
(1,412
|
)
|
|||
Other
|
676
|
|
|
514
|
|
|
339
|
|
|||
Total other income (expense), net
|
$
|
(1,064
|
)
|
|
$
|
158
|
|
|
$
|
(2,716
|
)
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
U.S.
|
$
|
20,507
|
|
|
$
|
16,621
|
|
|
$
|
13,200
|
|
Foreign
|
31,902
|
|
|
29,388
|
|
|
18,744
|
|
|||
Income before provision for income tax
|
$
|
52,409
|
|
|
$
|
46,009
|
|
|
$
|
31,944
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Current
|
|
|
|
|
|
||||||
U.S. Federal
|
$
|
13,497
|
|
|
$
|
6,514
|
|
|
$
|
5,338
|
|
U.S. State and local
|
1,984
|
|
|
1,082
|
|
|
723
|
|
|||
Non-U.S.
|
2,239
|
|
|
6,874
|
|
|
1,708
|
|
|||
Total current tax expense
|
17,720
|
|
|
14,470
|
|
|
7,769
|
|
|||
Deferred
|
|
|
|
|
|
||||||
U.S. Federal
|
(3,410
|
)
|
|
(728
|
)
|
|
(1,042
|
)
|
|||
U.S. State and local
|
(385
|
)
|
|
(37
|
)
|
|
(85
|
)
|
|||
Non-U.S.
|
560
|
|
|
(174
|
)
|
|
2,155
|
|
|||
Total deferred tax expense (benefit)
|
(3,235
|
)
|
|
(939
|
)
|
|
1,028
|
|
|||
Total income tax expense
|
$
|
14,485
|
|
|
$
|
13,531
|
|
|
$
|
8,797
|
|
|
December 31,
|
||||||
|
2015
|
|
2014
|
||||
Deferred tax assets:
|
|
||||||
Net operating loss carryforwards
|
$
|
5,174
|
|
|
$
|
4,153
|
|
Credit carryforwards
|
2,078
|
|
|
2,191
|
|
||
Accruals deductible in different periods
|
18,721
|
|
|
15,666
|
|
||
Employee benefits
|
2,081
|
|
|
2,864
|
|
||
Total deferred tax assets
|
28,054
|
|
|
24,874
|
|
||
Valuation allowance
|
(3,972
|
)
|
|
(3,151
|
)
|
||
Total net deferred tax assets
|
$
|
24,082
|
|
|
$
|
21,723
|
|
Deferred tax liabilities:
|
|
||||||
Basis difference in fixed and intangible assets
|
(15,197
|
)
|
|
(17,169
|
)
|
||
Total deferred tax liabilities
|
(15,197
|
)
|
|
(17,169
|
)
|
||
Total net deferred tax assets
|
$
|
8,885
|
|
|
$
|
4,554
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Federal statutory tax expense
|
$
|
18,343
|
|
|
$
|
16,103
|
|
|
$
|
11,180
|
|
State tax expense
|
1,249
|
|
|
892
|
|
|
352
|
|
|||
Foreign taxes at rates less than U.S. rates
|
(5,129
|
)
|
|
(3,097
|
)
|
|
(1,496
|
)
|
|||
Stock compensation expense on incentive stock options
|
204
|
|
|
93
|
|
|
49
|
|
|||
Tax credits
|
(935
|
)
|
|
(862
|
)
|
|
(834
|
)
|
|||
Uncertain tax position
|
1,388
|
|
|
1,163
|
|
|
1,029
|
|
|||
Lapse of statute
|
(784
|
)
|
|
(652
|
)
|
|
(918
|
)
|
|||
Change of valuation allowance on foreign tax credit
|
—
|
|
|
(491
|
)
|
|
—
|
|
|||
Other
|
149
|
|
|
382
|
|
|
(565
|
)
|
|||
Total expense
|
$
|
14,485
|
|
|
$
|
13,531
|
|
|
$
|
8,797
|
|
Balance at January 1, 2013
|
2,716
|
|
|
Increases for tax positions related to prior years
|
1,376
|
|
|
Increases for tax positions related to the current year
|
213
|
|
|
Lapse of statutes of limitations
|
(918
|
)
|
|
Balance at January 1, 2014
|
$
|
3,387
|
|
Increases for tax positions related to prior years
|
493
|
|
|
Increases for tax positions related to the current year
|
73
|
|
|
Lapse of statutes of limitations
|
(558
|
)
|
|
Balance at January 1, 2015
|
$
|
3,395
|
|
Increases for tax positions related to prior years
|
281
|
|
|
Increases for tax positions related to the current year
|
3,302
|
|
|
Lapse of statutes of limitations
|
(664
|
)
|
|
Balance at December 31, 2015
|
$
|
6,314
|
|
|
Years Ended December 31,
|
||||||||||
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue:
|
|
||||||||||
United States
|
$
|
242,050
|
|
|
$
|
215,543
|
|
|
$
|
199,591
|
|
Foreign countries
|
133,815
|
|
|
140,291
|
|
|
144,521
|
|
|||
|
$
|
375,865
|
|
|
$
|
355,834
|
|
|
$
|
344,112
|
|
Revenue by Operating Segment:
|
|
||||||||||
Neurology
|
|
||||||||||
Devices and Systems
|
$
|
168,776
|
|
|
$
|
173,006
|
|
|
$
|
162,607
|
|
Supplies
|
60,205
|
|
|
59,666
|
|
|
61,065
|
|
|||
Services
|
8,320
|
|
|
—
|
|
|
—
|
|
|||
Total Neurology Revenue
|
$
|
237,301
|
|
|
$
|
232,672
|
|
|
$
|
223,672
|
|
Newborn Care
|
|
||||||||||
Devices and Systems
|
$
|
72,669
|
|
|
$
|
67,354
|
|
|
$
|
68,588
|
|
Supplies
|
49,982
|
|
|
48,697
|
|
|
47,033
|
|
|||
Services
|
15,913
|
|
|
7,111
|
|
|
4,819
|
|
|||
Total Newborn Care Revenue
|
$
|
138,564
|
|
|
$
|
123,162
|
|
|
$
|
120,440
|
|
Total Revenue
|
$
|
375,865
|
|
|
$
|
355,834
|
|
|
$
|
344,112
|
|
Property and equipment, net:
|
|
||||||||||
United States
|
$
|
6,664
|
|
|
$
|
5,782
|
|
|
|
|
|
Canada
|
5,165
|
|
|
5,538
|
|
|
|
|
|||
Ireland
|
1,651
|
|
|
1,656
|
|
|
|
|
|||
Argentina
|
2,361
|
|
|
3,692
|
|
|
|
|
|||
Other foreign countries
|
1,126
|
|
|
1,255
|
|
|
|
|
|||
|
$
|
16,967
|
|
|
$
|
17,923
|
|
|
|
|
|
Operating
Leases
|
||
Year Ending December 31,
|
|
||
2016
|
$
|
3,909
|
|
2017
|
3,590
|
|
|
2018
|
2,865
|
|
|
2019
|
2,798
|
|
|
2020
|
2,465
|
|
|
Thereafter
|
4,979
|
|
|
Total minimum lease payments
|
$
|
20,606
|
|
|
December 31, 2014
|
|
Additions
|
|
Payments
|
|
Adjustments
|
|
December 31, 2015
|
||||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Contingent consideration
|
$
|
812
|
|
|
$
|
6,209
|
|
|
$
|
(664
|
)
|
|
$
|
(148
|
)
|
|
$
|
6,209
|
|
Total
|
$
|
812
|
|
|
$
|
6,209
|
|
|
$
|
(664
|
)
|
|
$
|
(148
|
)
|
|
$
|
6,209
|
|
|
2013
|
||||||
|
Previously
Reported
|
|
Revised
|
||||
Statements of Operations
|
|
|
|
||||
Cost of revenue
(1)
|
$
|
142,081
|
|
|
$
|
141,700
|
|
Gross profit
|
202,031
|
|
|
202,412
|
|
||
Income from operations
|
34,279
|
|
|
34,660
|
|
||
Income before provision for income tax
|
31,563
|
|
|
31,944
|
|
||
U.S. (Note 15)
|
13,108
|
|
|
13,200
|
|
||
Foreign (Note 15)
|
18,455
|
|
|
18,744
|
|
||
Provision for income tax expense
|
8,685
|
|
|
8,797
|
|
||
Current U.S. Federal (Note 15)
|
5,302
|
|
|
5,338
|
|
||
Current Non-U.S. (Note 15)
|
1,632
|
|
|
1,708
|
|
||
Federal statutory tax expense (Note 15)
|
11,047
|
|
|
11,180
|
|
||
Uncertain tax position (Note 15)
|
917
|
|
|
1,029
|
|
||
Other (Note 15)
|
(438
|
)
|
|
(565
|
)
|
||
Net income
|
22,878
|
|
|
23,147
|
|
||
Comprehensive income
|
20,905
|
|
|
21,175
|
|
||
Net income per share, basic
|
$
|
0.76
|
|
|
$
|
0.77
|
|
Net income per share, diluted
|
$
|
0.74
|
|
|
$
|
0.75
|
|
Statements of Cash Flows
|
|
|
|
||||
Net income
|
$
|
22,878
|
|
|
$
|
23,147
|
|
Changes in operating assets and liabilities, net of assets and liabilities acquired in acquisitions:
|
|
|
|
||||
Inventories
|
(2,298
|
)
|
|
(2,679
|
)
|
||
Other Assets
|
(6,899
|
)
|
|
(6,899
|
)
|
||
Accrued liabilities
|
(5,413
|
)
|
|
(5,301
|
)
|
||
Net cash provided by operating activities
|
36,797
|
|
|
36,797
|
|
||
Statement of Stockholder’s Equity
|
|
|
|
||||
Retained Earnings Beginning of year
|
$
|
11,638
|
|
|
$
|
13,265
|
|
Retained Earnings End of year
|
34,516
|
|
|
36,412
|
|
|
|
|
|
Incorporated By Reference
|
|||||||
Exhibit No.
|
|
Exhibit
|
|
Filing
|
|
Exhibit No.
|
|
File No.
|
|
File Date
|
|
3.1
|
|
Natus Medical Incorporated Amended and Restated Certificate of Incorporation
|
|
S-1
|
|
3/1/2001
|
|
|
333-44138
|
|
8/18/2000
|
3.2
|
|
Natus Medical Incorporated Certificate of Designation of Rights, Preferences and Privileges of Series A Participating Preferred Stock
|
|
8-A
|
|
3/1/2002
|
|
|
000-33001
|
|
9/6/2002
|
3.3
|
|
Bylaws of Natus Medical Incorporated
|
|
8-K
|
|
3.1
|
|
|
000-33001
|
|
6/18/2008
|
10.1
|
|
Form of Indemnification Agreement between Natus Medical Incorporated and each of its directors and officers
|
|
S-1
|
|
10.1
|
|
|
333-44138
|
|
8/18/2000
|
10.2*
|
|
Natus Medical Incorporated Amended and Restated 2000 Stock Awards Plan
|
|
8-K
|
|
10.1
|
|
|
000-33001
|
|
1/4/2006
|
10.2.1*
|
|
Form of Option Agreement under the Amended and Restated 2000 Stock Awards Plan
|
|
S-1
|
|
10/3/2001
|
|
|
333-44138
|
|
8/18/2000
|
10.2.2*
|
|
Form of Restricted Stock Purchase Agreement under the Amended and Restated 2000 Stock Awards Plan
|
|
10-Q
|
|
10.2
|
|
|
000-33001
|
|
8/9/2006
|
10.2.3*
|
|
Form of Restricted Stock Unit Agreement under the Amended and Restated 2000 Stock Awards Plan
|
|
10-K
|
|
10/3/2003
|
|
|
000-33001
|
|
3/14/2008
|
10.3*
|
|
Natus Medical Incorporated 2000 Director Option Plan
|
|
10-Q
|
|
10.02
|
|
|
000-33001
|
|
5/9/2008
|
10.3.1*
|
|
Form of Option Agreement under the 2000 Director Option Plan
|
|
S-1
|
|
10/4/2001
|
|
|
333-44138
|
|
8/18/2000
|
10.4*
|
|
Natus Medical Incorporated 2000 Supplemental Stock Option Plan
|
|
S-1
|
|
10.15
|
|
|
333-44138
|
|
2/9/2001
|
10.4.1*
|
|
Form of Option Agreement for 2000 Supplemental Stock Option Plan
|
|
S-1
|
|
10/15/2001
|
|
|
333-44138
|
|
2/9/2001
|
10.5*
|
|
Natus Medical Incorporated 2000 Employee Stock Purchase Plan and form of subscription agreement thereunder
|
|
8-K
|
|
10.2
|
|
|
000-33001
|
|
1/4/2006
|
10.6*
|
|
[Amended] 2011 Stock Awards Plan
|
|
14-A
|
|
—
|
|
|
000-33001
|
|
4/20/2011
|
10.6.1*
|
|
Form of Stock Option Award Agreement under the [Amended] 2011 Stock Plan
|
|
10-Q
|
|
10.1
|
|
|
000-33001
|
|
11/7/2011
|
10.6.2*
|
|
Form of Restricted Stock Award Purchase Agreement
|
|
10-Q
|
|
10.2
|
|
|
000-33001
|
|
11/7/2011
|
10.6.3*
|
|
Form of Restricted Stock Unit Agreement
|
|
10-Q
|
|
10.3
|
|
|
000-33001
|
|
11/7/2011
|
10.7*
|
|
2011 Employee Stock Purchase Plan
|
|
14-A
|
|
—
|
|
|
000-33001
|
|
4/20/2011
|
10.7.1*
|
|
2011 Employee Stock Purchase Plan Subscription Agreement
|
|
14-A
|
|
—
|
|
|
000-33001
|
|
4/20/2011
|
10.8*
|
|
Form of Employment Agreement between Natus Medical Incorporated and each of its executive officers other than its Chief Executive Officer and Chief Financial Officer
|
|
10-K
|
|
10.10
|
|
|
000-33001
|
|
3/10/2009
|
|
|
|
|
Incorporated By Reference
|
|||||||
Exhibit No.
|
|
Exhibit
|
|
Filing
|
|
Exhibit No.
|
|
File No.
|
|
File Date
|
|
10.8.1*
|
|
Form of Amendment to Employment Agreement between Natus Medical Incorporated and each of its executive officers other than its Chief Executive Officer and Chief Financial Officer
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10.9*
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Amended employment agreement between Natus Medical Incorporated and its Chief Executive Officer, James B. Hawkins dated April 19, 2013
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8-K
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99.1
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000-33001
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4/22/2013
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10.10*
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Form of Employment Agreement between Natus Medical Incorporated and Jonathan A. Kennedy dated April 8, 2013
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10-Q
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10.1
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000-33001
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8/8/2013
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10.11
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Credit Agreement between Natus Medical Incorporated and CitiBank, NA dated October 9, 2015
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8-K
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10.1
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000-33001
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10/9/2015
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10.12
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Agreement For the Acquisition of Medical Devices between Medix ICSA and the Ministry of Health of the Republic of Venezuela dated October 15, 2016
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16.1
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Letter Regarding Change in Certifying Accountant
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8-K
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16.1
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000-33001
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3/28/2014
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21.1
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Significant Subsidiaries of the Registrant
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23.1
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Consent of Independent Registered Public Accounting Firm
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23.2
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Consent of Independent Registered Public Accounting Firm
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24.1
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Power of Attorney (included on signature page)
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31.1
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Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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31.2
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Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
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32.1
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Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
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101.INS
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XBRL Instance Document
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101.SCH
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XBRL Taxonomy Extension Schema Document
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101.CAL
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XBRL Taxonomy Extension Label Calculation Linkbase Document
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101.DEF
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XBRL Taxonomy Extension Definition Document
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101.LAB
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XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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XBRL Taxonomy Extension Presentation Linkbase Document
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a)
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Provide devices, medical furniture and surgical instruments in the amounts agreed upon, to the obstetrics and neonatal services of fifty two (52) hospitals that offer obstetrics and neonatal attention of high complexity in a period of eighteen (18) months in order to
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b)
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Provide the consumables and spare parts for a period of three (03) years, to the equipment above mentioned in letter a) in order to warranty its operability twenty four (24) hours of the day, in the amounts and under the conditions detailed in the offer that is an integral part of this Agreement, and identified above as Annex A3.
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c)
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Provide the devices and medical furniture in the amounts agreed upon, eighty eight (88) places of Intensive Care and ninety three (93) places of Neonatal Intermediate Care that shall be created in a lapse of eighteen (18) months, in eighteen (18) hospitals of thirteen (13) Federal Entities and shall perform the preventive and corrective maintenance for a period of three (3) years under the conditions detailed according to the offer that is an integral part of this Agreement, and identified as Annexes B1 and B2.
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d)
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Provide the consumables and spare parts for a period of three (03) years, to the equipment mentioned in letter c) to warranty its operability twenty four (24) hours of the day, in the amounts and under the conditions detailed according to the offer that is an integral part of this Agreement, and identified above as Annex B3.
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e)
|
Shall perform Preventive and Corrective Maintenance to 4,676 devices acquired through the Convention (Project Life Phases I and II), for a period of three (03) years, under the conditions detailed according to the offer that is an integral part of this Agreement, and identified as Annex C, as well as, the provision and distribution of consumables and accessories for a period of three (03) years, intended to the equipment mentioned in order to warranty its operability twenty four (24) hours of the day, in the amounts and under the conditions detailed according to the offer that is an integral part of this Agreement, and identified as Annex D. This maintenance shall be performed only and exclusively by personnel of the “CORPORATION”.
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ANNEXES
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TOTAL US$
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TOTAL BS.
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Annex A1 and A2: Equipment: Medical Devices, Medical Furniture and surgical instruments required by the 52 Hospitals (Maternal and Infant Care and of Major Complexity) of the MPPS.
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130,244,795.00
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820,542,208.50
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Annex A3: Consumables and spare parts for three (03) years: Required by 52 Hospitals, (Maternal and Infant Care and of Major Complexity) of the MPPS.
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30,179.190,75
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190.128.901,72
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Annex B1 and B2: Equipment: Equipment required by for the creation of eighty-eight (88) places of Intensive Care and 93 of Neonatal Intermediate Care.
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18,617,245.00
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117,288,643.50
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Annex B.3: Consumables and spare parts for three (03) years: Required for the Places of UTIN to be created
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10,578,965.50
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66,647,482.65
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Annex C. Maintenance for three (03) years for 4,676 devices of the installed base of Phases I and II: Preventive and Corrective Maintenance of Medical Devices of the Obstetrics and Neonatal Services of the Maternal and Infant Care Hospitals and of Major Complexity of the MPPS.
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30,514,425.00
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192,240,877.50
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Annex D: Consumables for three (03) years: Consumables required for three (03) years, for (52) Hospitals of the Installed Base Phases I and II.
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12,374,054.50
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77,956,543.35
|
|
US$. 232,508,675.75
|
Bs. 1,464,804,657.22
|
a)
|
Thirty percent (30%), that is to say, the amount of SIXTY NINE MILLION SEVEN HUNDRED FIFTY TWO THOUSAND SIX HUNDRED TWO DOLLARS OF THE UNITED STATES OF AMERICA AND SEVENTY THREE CENTS (US$.
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b)
|
“THE MINISTRY” obliges itself to cancel, the remaining seventy percent (70%), by means of the following form:
|
•
|
For the SUPPLY OF DEVICES AND CONSUMABLES: the amount of ONE HUNDRED THIRTY TWO MILLION SEVEN HUNDRED THIRTY FOUR THOUSAND ONE HUNDRED THIRTY SEVEN DOLLARS OF THE UNITED STATES OF AMERICA AND THIRTY EIGHT CENTS (US$. 132,734,137.38) that to the reference effects established in article 130 of the Law of the Central Bank of Venezuela is equivalent to the amount of EIGHT HUNDRED THIRTY THREE MILLION TWO HUNDRED TWENTY FIVE THOUSAND SIXTY FIVE BOLIVARS AND FORTY NINE CENTS (Bs.833,225,065.49) estimated at the official exchange rate fixed by the Central Bank of Venezuela at 6.30 Bs./US$, through partial payments at the thirtieth (30
th
) continuous days as of the submission of deed of each shipment by “THE CORPORATION”.
|
•
|
For PREVENTIVE AND CORRECTIVE MAINTENANCE: the payments shall be made by means of every four month installments at fixed dates and of similar amounts, the result of the balance of 70%, that is to say, the amount of TWENTY ONE
|
b)
|
“THE CORPORATION” obliges itself to perform the Preventive and Corrective Maintenance to 4,676 devices acquired through Phases I and II of the Convention installed in 52 Hospitals in a lapse of three (03) years.
|
a)
|
“THE CORPORATION” must set up in the city of Caracas of the Bolivarian Republic of Venezuela, a team of personnel by its own or subcontracted sufficient in number and expert in basic and specialized Preventive and Corrective Maintenance, that shall warranty the compliance of the object of this Agreement established in Clause Second thereof; likewise, it shall have an office in which all requests, requirements and reports made by “THE MINISTRY” are managed.
|
b)
|
The medical devices, clinical furniture, instruments, consumables and spare parts provided by “THE CORPORATION” shall be stored in a Warehouse, located under the custody, control, responsibility, handling and disposition of thereof, and “THE MINISTRY” shall have access to perform audits thereof, from the Initial Inventory Registry until its final distribution.
|
c)
|
“THE CORPORATION” shall provide to “THE MINISTRY” and for a period of three (03) years a warranty over the medical devices and the medical furniture acquired through this Agreement, against any defect in manufacturing, as of the date of its arrival to the warehouses designated by “THE CORPORATION”. During the period of warranty before
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d)
|
The whole preventive and corrective maintenance, performed by “THE CORPORATION”, in order to comply with the services that are the object of this Agreement, contained in Clause second, must be performed under the national safety industrial regulations, normal conditions of installation and with the qualified personnel in order to warranty a proper and efficient service and not to put at risk the useful life of the devices object of this Agreement, under to the services rendered by “THE CORPORATION”.
|
e)
|
“THE CORPORATION” must accept and allow the presence of the authorized officials of “THE MINISTRY”, in order to perform the due control and follow up regarding all the preventive and correctives maintenances that are mentioned in Clause second of this Agreement, allowing these officials to be integrate with the work team of qualified personnel and experts in Maintenance that represents “THE CORPORATION”, not being indispensable for “THE CORPORATION” the presence and participation referred to of the authorized officials of the “THE MINISTRY” in the execution of preventive and corrective maintenances object of this Agreement. “THE CORPORATION” during the performance of this Agreement and without any exception, shall be responsible for said maintenance; it shall not be responsible for the expenses for transport, allowances, extra
|
f)
|
All the actions described before shall be explicitly indicated in a Work Order that shall be part of the “Log”, which shall be properly approved by the Head of the Service, Head of Maintenance and Director of the Hospital.
|
b)
|
It obliges itself to notify “THE MINISTRY”, ten (10) days before the arrival of the devices object of this Agreement in the form of the “Bill of Landing” including: Lists of packages and the original Invoice in two samples, being important to highlight that a sample must say “VALID ONLY FOR CUSTOM EFFECTS”.
|
c)
|
It obliges itself to made the delivery of the devices object of this Agreement in the Dates and Amounts, that are in agreement with the specifications contained in the “Schedule of Physical and Financial Performance” identified as ANNEX “E”, to the Hospitals” identified in “ANNEX F” “List and Location of the Hospitals”, which is an integral part of this Agreement.
|
d)
|
“THE CORPORATION” shall delivery the devices in a proper packaging that ought to warranty the conservation of thereof during the air or sea transportation to Maiquetía International Airport and/or La Guaira Sea Port.
|
e)
|
“THE CORPORATION” shall warranty in the Hospitals of “THE MINISTRY” the transport, installation and start up of the device, the training of the medical personnel, nursing and electro medicine of “THE MINISTRY” regarding the handling and conservation of the devices by the qualified technical personnel at the conclusion of the installation, the technical service during the period of warranty and the preventive and corrective maintenance in accordance with the provisions set forth in this agreement.
|
f)
|
“THE CORPORATION” obliges itself to warranty the delivery of the technical information needed for the use and maintenance of the devices, the operating manuals of the devices in Spanish language, as well as, the supply of parts and spare parts to perform the technical service by the technical personnel of “THE CORPORATION”.
|
g)
|
It shall allow “THE MINISTRY” to perform the inspections that it shall may deem necessary in order to verify the scope of the performance of the Agreement.
|
h)
|
Designate a Technical Representative within the seven (07) days as of the execution of this Agreement, who shall represent it in all the matters inherent to the execution thereof, being required the notification of such designation to the Office of the Vice Minister of Hospitals of “THE MINISTRY”.
|
i)
|
Train the medical personnel, nursing and electro medicine of the Hospitals identified in “ANNEX F”, regarding the handling and conservation of the devices acquired under this Agreement. Should the operative personnel qualified during the training be removed and/or replaced, “THE MINISTRY” should notify “THE CORPORATION” so that a new training and qualification be performed of the operative personnel, at least during the period of warranty established.
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j)
|
Perform the Corrective Maintenance whenever necessary and immediately, prior written notice of the failure of (the) equipment by the Head of the Service of Obstetrics or
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k)
|
Be responsible for the storing, conservation, distribution and placement of the consumables, medical devices, clinical furniture, instruments, consumables and spare parts, in the territory of the Bolivarian Republic of Venezuela as per the guidelines issued by “the Ministry” in this agreement, according to Clause Eighth, Literal b.
|
l)
|
To assume the responsibility for the damages and harm that it may cause to “THE MINISTRY”, the unjustified delay in the distribution of the consumables and spare parts in the performance of the preventive and corrective maintenance. Should a Corrective Maintenance be needed by any of the devices object of this Agreement, “THE CORPORATION” shall answer within a lapse not greater than five (5) working days, during the lapse that the Warranty of Maintenance is in force, that is to say, a lapse of three (03) years as of its installation and start up.
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m)
|
“THE CORPORATION” obliges itself as of the performance of this Agreement to submit to the Office of the Vice Minister of Hospitals two (2) four-month reports: 1) Regarding the delivery of medical Devices, medical furniture, instruments, consumables and spare parts, as well as, the maintenance performed; and 2) Regarding the consumables and spare parts delivered and the maintenance performed to Phases I and Phases II installed base. Both reports must include: “Act of Delivery, “Act of Installation” and “Record of Maintenance”, executed by the Head of the Service of Obstetrics or Neonatology, Head of Maintenance and Director of the Hospital.
|
a)
|
“THE MINISTRY” shall maintain the devices, object of this Agreement in proper conditions of maintenance as per the technical specifications and special requirements established for each one of the devices, in order to warranty the quality of thereof.
|
b)
|
“THE MINISTRY” shall pay the price of this Agreement in the manner agreed upon.
|
c)
|
“THE MINISTRY” convenes itself to notify “THE CORPORATION” of the reception of the documentation, as well as of the devices once they have been received.
|
d)
|
“THE MINISTRY” obliges itself to designate a Technical Representative within seven (07) days of the subscription of this Agreement, who shall represent it in all the matters inherent to the execution thereof.
|
e)
|
“THE MINISTRY” obliges itself to facilitate the personnel of “THE CORPORATION” the access to the (the) equipment object of this Agreement, during the period thereof in order to perform timely and without restrains the Services of Preventive and Corrective Maintenance. It also must assure the access of the personnel of “THE CORPORATION” to the information of the device (technical and service documentation) and to the premises that “THE CORPORATION” needs to be able to properly perform the corresponding tasks in each case related with the object of this Agreement, thereby complying with the norms that shall be set forth each one of the Hospitals where the Services are located and the devices are sited.
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f)
|
“THE MINISTRY” obliges itself to immediately notify “THE CORPORATION”, by writing, through the Head of the Service of Obstetrics or Neonatology and the Director of the Hospital, the failure or deficiency that be present in the operability of (the) equipment, and shall refrain itself from using it (s) until such situation be resolved.
|
g)
|
“THE MINISTRY” obliges itself to demand “THE CORPORATION” the performance of the Corrective Maintenance all the time, whenever necessary and immediately, prior written notice to “THE CORPORATION”, by the Head of the Service of Obstetrics or Neonatology and the Director of the respective Hospital, of the failure in the (the) equipment.
|
a)
|
FAITHFUL EXECUTION BOND: A Faithful Execution Bond granted by a Banking Institution or Insurance Company domiciled in the Bolivarian Republic of Venezuela, registered with the General Superintendence of Insurance Companies, for an amount equal to TWENTY PERCENT (20%) of the total amount of the Agreement equivalent to the amount of FORTY SIX MILLION FIVE HUNDRED ONE THOUSAND SEVEN HUNDRED THIRTY FIVE DOLLARS OF THE UNITED STATES OF AMERICA WITH FIFTEEN CENTS (US$ 46,501,735.15) that to the reference effects established in article 130 of the Law of the Central Bank of Venezuela is equivalent to the amount of TWO HUNDRED NINETY TWO MILLION NINE HUNDRED SIXTY THOUSAND NINE HUNDRED THIRTY ONE BOLIVARS AND FOURTY FIVE CENTS (Bs. 292.960.931,45) estimated at the official exchange rate fixed by the Central Bank of Venezuela at 6.30 Bs./US$; in order to warranty the faithful compliance of all the obligations that are derived from this contractual written deed. Said bond shall be in effect as of the execution of this Agreement and shall remain in force until “THE MINISTRY” grants the release of the faithful compliance.
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b)
|
ADVANCE BOND: An Advance Bond granted by a Banking Institution or Insurance Company domiciled in the Bolivarian Republic of Venezuela, for one hundred percent (100%) of the total amount of the advance payment of this Agreement, that is to say the amount of SIXTY NINE MILLION SEVEN HUNDRED FIFTY TWO THOUSAND SIX HUNDRED TWO DOLLARS OF THE UNITED STATES OF AMERICA AND SEVENTY THREE CENTS (US$. 69,752,602.73) that to the reference effects established in article 130 of the Law of the Central Bank of Venezuela is equivalent to the amount of FOUR HUNDRED THRITY NINE MILLION FOUR HUNDRED FOURTY ONE THOUSAND THREE HUNDRED NINETY SEVEN BOLIVARS AND TWENTY CENTS (Bs. 439,441,397.20) estimated at the official exchange rate fixed by the Central Bank of Venezuela at 6.30 Bs./US$.
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A.
|
Warranties of Operation: THE CORPORATION shall submit to “THE MINISTRY” the Warranty of Operation of each one of the devices described in the Annexes “A1” and “B1” mentioned in Clause Second of this Agreement, effectively installed. Said Warranty shall be in effect for three (03) years for the devices provided by “THE CORPORATION”, in accordance with the provisions in Clause Eighth, literal c.
|
B.
|
Warranties of Maintenance: THE CORPORATION shall warranty to the MINISTRY, by means of this written deed, the preventive and corrective maintenance including the supply of spare parts of each one of the devices mentioned in the Annexes “A1”, “B1” and the devices corresponding to Annex “C”. Said Warranty shall be in effect for three (03) years; In case of necessity, THE PARTIES may agree with one hundred eighty (180) days of anticipation as of the expiration of this warranty the extension for said maintenance.
|
a)
|
The communications inherent to the performance, evaluation, control and follow up, shall be made between the technical representatives of “THE PARTIES”, these shall be valid if signed and sealed by such as representative, and they shall be issued in correlative form with the following initials:
|
•
|
MPPS-CMPC-(continuous numbering)/year correspondence issued by “THE MINISTRY”.
|
•
|
MEDIX-CMPC-(continuous numbering)/year correspondence issued by “THE CORPORATION”.
|
b)
|
Communication for Preventive Maintenance: The Preventive Maintenance of the devices, as long as not Acts of God or force majore should occur, shall be performed as per the “Schedule of Performance Physical and Financial”, contained in the Annex identified as “ANNEX E”, which is an integral part of this Agreement. Regarding this Maintenance, it shall be performed during working days and hours, from Monday thru Friday, during the time of 8:30 AM to 5:30 PM, prior notification to the Head of the respective Service of Obstetrics or Neonatology in order not to cause long interruptions in the service of the patients.
|
c)
|
Communication for Corrective Maintenance: It shall be performed whenever necessary and immediately in a lapse not greater than five (05) days, when failure of any of the devices object of this Agreement shall occur. The petition for the technical service by “THE MINISTRY”, shall be made exclusively to the center of reception of claims designated by “THE CORPORATION” and through the system set forth by “THE CORPORATION” for such purpose.
|
a)
|
In case that “THE CORPORATION” furnish false, alter, forged documentation in order to petition before “THE MINISTRY” extensions, acknowledgments, claims, and payments, amongst others.
|
b)
|
In case that “THE CORPORATION” agrees the dissolution or liquidation of its corporation, request to be declared legally in state of arrears or bankruptcy, or whenever any of these circumstances has been legally decreed.
|
c)
|
For breach or contravention of the obligations stipulated within this Agreement on behalf of “THE CORPORATION” for causals that may be attributable and prior a proven and sufficient intimation by “THE MINISTRY”.
|
•
|
Annex “A1”: Equipment: Medical Devices and Medical Furniture required by the Obstetrics and Neonatal Services of the Maternal and Infant Care Hospitals and of Major Complexity of the MPPS (52 Hospitals).
|
•
|
Annex “A2”: Offer: Medical Devices and Medical Furniture required by the Obstetrics and Neonatal Services of the Maternal and Infant Care Hospitals and of Major Complexity of the MPPS (52 Hospitals).
|
•
|
Annex “A3”: Consumables for three (03) years: Consumables Required for three (03) years, Maternal and Infant Care Hospitals of Major Complexity.
|
•
|
Annex “B.1”: Equipment: Equipment Required for the Creation of eighty-eight (88) Places of Intensive Care and 93 of Neonatal Intermediate Care.
|
•
|
Annex “B.2”: Offer: Equipment Required for the Creation of eighty-eight (88) Places of Intensive Care and 93 of Neonatal Intermediate Care.
|
•
|
Annex “B.3”: Consumables for three (03) years: Consumables Required for three (03) years, Places UTIN.
|
•
|
Annex “C”: Maintenance for three (03) years: Preventive and Corrective Maintenance of Medical Devices of the Obstetrics and Neonatal Services of the Maternal and Infant Care Hospitals and of Major Complexity of the MPPS.
|
•
|
Annex “D”: Consumables for three (03) years: Consumables Required for three (03) years, for (52) Hospitals of Phases I and II Installed Base.
|
•
|
Annex “E”: Schedule of Performance Physical and Financial.
|
•
|
Annex “F”: List of the Hospitals where the Devices shall be installed thereby indicating their location.
|
•
|
Annex “G”: List of medical devices for the agreement of preventive and corrective maintenance in the Obstetrics and Neonatal Services of the Maternal and Infant Care Hospitals and of Major Complexity of the MPPS. Argentina Venezuela Convention.
|
|
|
|
|
|
|
|
|
|
STATE or JURISDICTION
of INCORPORATION
|
|
PERCENT of
OWNERSHIP
|
|
|
Natus Medical Incorporated
|
|
Delaware
|
|
|
|
|
Natus Neurology Incorporated
|
|
Delaware
|
|
|
100
|
%
|
Natus Manufacturing Ireland, Ltd.
|
|
Ireland
|
|
|
100
|
%
|
Natus Europe Gmbh
|
|
Germany
|
|
|
100
|
%
|
Excel Tech Corp. (Xltek)
|
|
Canada
|
|
|
100
|
%
|
Medix I.C.S.A.
|
|
Argentina
|
|
|
100
|
%
|
Embla Systems, Ltd.
|
|
Canada
|
|
|
100
|
%
|
|
|
|
|
|
|
|
Date:
|
February 26, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ James B. Hawkins
|
|
|
|
|
|
|
James B. Hawkins
|
|
|
|
|
|
|
President and Chief Executive Officer
|
|
|
|
|
|
|
|
Date:
|
February 26, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
/s/ Jonathan A. Kennedy
|
|
|
|
|
|
|
Jonathan A. Kennedy
|
|
|
|
|
|
|
Senior Vice President
|
|
|
|
|
|
|
and Chief Financial Officer
|
|
|
/s/ James B. Hawkins
|
|
Print Name: James B. Hawkins
|
|
Title: President and Chief Executive Officer
|
|
Date:
|
February 26, 2016
|
|
|
/s/ Jonathan A. Kennedy
|
|
Print Name: Jonathan A. Kennedy
|
|
Title: Senior Vice President and Chief Financial Officer
|
|
Date:
|
February 26, 2016
|