0000878526false00008785262022-02-242022-02-24


 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): February 24, 2022
 
 Natus Medical Incorporated
(Exact name of registrant as specified in its charter)
 
000-33001
(Commission File Number)
 
   
Delaware 77-0154833
(State or other jurisdiction
of Incorporation)		 (I.R.S. Employer
Identification No.)
3150 Pleasant View Road
Middleton, WI 53562
(Address of principal executive offices) (Zip Code)
608-829-8500
(Registrant’s telephone number, including area code)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 ☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 ☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 ☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 ☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

                                        Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.         ☐
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par value per shareNTUSThe Nasdaq Stock Market LLC
(The Nasdaq Global Market)
Item 2.02.Results of Operations and Financial Condition
On February 24, 2022, Natus Medical Incorporated (the “Company”) issued a press release and held a conference call on February 25, 2022 regarding its financial results for the fourth quarter ended December 31, 2021 and other financial information. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 2.02 and the exhibit attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
 
Item 5.02.Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(b) Departure of Certain Officers
On February 22, 2022, D. Christopher Chung, M.D., Vice President of Quality, Regulatory Affairs and Chief Medical Officer, notified the Company of his decision to retire from the Company on April 1, 2022. Thereafter, Dr. Chung will provide consulting services to the Company on a part-time basis.

Item 9.01.Financial Statements and Exhibits
(d) Exhibits.
 
Exhibit No.  Description
  
104The cover page from this Current Report on Form 8-K, formatted in Inline XBRL (included as Exhibit 101).




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
    
NATUS MEDICAL INCORPORATED
(Registrant)
    
Dated: February 24, 2022   By: /s/ B. Drew Davies
    Executive Vice President and Chief Financial Officer

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Natus Medical Announces Fourth Quarter 2021 Financial Results

Q4-2021Key Results
Revenue (millions)$128.7
Ø Revenue increased 8% compared to Q4 2020
Ø Revenue increased 14% compared to full year 2020
Ø $12.8 million in operating cash flow for Q4 2021
Ø $63.9 million in operating cash flow for the year 2021
GAAP EPS$0.05
Non-GAAP EPS$0.47

PLEASANTON, Calif. (February 24, 2022) - Natus Medical Incorporated (NASDAQ:NTUS) (the “Company” or “Natus”), a leading provider of medical device solutions to screen, diagnose, and treat disorders affecting the brain, neural pathways, and eight sensory nervous systems, today announced financial results for the three months and full year ended December 31, 2021.

For the fourth quarter ended December 31, 2021, the Company reported revenue of $128.7 million, an increase of 8.4% compared to $118.7 million reported for the fourth quarter 2020. GAAP gross margin was 56.8% during the fourth quarter of 2021 compared to 55.3% in the fourth quarter 2020. GAAP net income was $1.7 million, or $0.05 earnings per diluted share, compared with GAAP net income of $5.2 million, or $0.15 earnings per diluted share in the fourth quarter 2020.

Non-GAAP gross margin was 59.3% in the fourth quarter 2021 compared to 58.1% reported for the fourth quarter of 2020. Non-GAAP earnings per diluted share was $0.47 for the fourth quarter 2021, compared to $0.39 in the fourth quarter 2020. Non-GAAP net income was $16.2 million in the fourth quarter 2021 compared to $13.1 million in the fourth quarter 2020.

For the full year ended December 31, 2021, the Company reported revenue of $473.4 million, an increase of 13.9% compared to $415.7 million reported for the same period in 2020. GAAP gross margin was 57.8% vs. 52.1% reported for the same period in 2020. GAAP net income was $13.2 million, or $0.39 earnings per diluted share, compared with GAAP net loss of $16.6 million, or $0.49 per share in the same period in 2020.

Non-GAAP gross margin was 60.0% in 2021 vs. 56.6% reported for the same period in 2020. Non-GAAP earnings per diluted share was $1.20 for the full year ended December 31, 2021, compared to $0.39 in the same period in 2020. The Company reported non-GAAP net income of $40.8 million for the full year ended December 31, 2021, compared to prior year's non-GAAP net income of $13.1 million.

“I would like to thank our Natus Teammates for their efforts to deliver growth in both revenue and income in the fourth quarter despite challenges from both Covid and supply chain related constraints,” said Thomas J. Sullivan, President and Chief Executive Officer of Natus. “Throughout the year we focused on ensuring our products were available to clinicians and despite incurring over $1.7 million in higher costs in the fourth quarter alone, our non-GAAP earnings per share increased more than 200%.”

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Mr. Sullivan continued, “I would like to congratulate Dr. Christopher Chung, Natus Vice President of Quality, Regulatory Affairs and Chief Medical Officer, who has informed me of his decision to retire in April after a twenty-two-year career at the company. Dr. Chung is a valued leader at Natus and I am pleased that he will continue to support our Team in a consultative role as our Chief Medical Officer through the end of the year. I wish Chris and his family the best in this next phase of his life.”

“As a result of a strategic review of our markets, Natus will realign its portfolio and commercial infrastructure to focus on the clinical areas of the Brain, Neural Pathways, and eight Sensory Nervous Systems.” “We believe a focus on higher value markets will position us for increased growth while also enabling us to reduce complexity to improve our execution and long-term margin expansion,” concluded Mr. Sullivan.

Financial Guidance

In the first quarter of 2022, Natus will realign its commercial organization on the clinical focus areas of Brain, Neural Pathways, and eight Sensory Nervous Systems. The Company will transition to a matrix infrastructure of non-commercial resources in support of innovation and entrepreneurial growth in each clinical focus area in the coming months while reviewing its cost structure. As a result of these changes, the Company is only providing annual guidance at this point which excludes the impact of any acquisitions or divestitures.

For the full year 2022, the Company's revenue is expected to be between $491.0 million and $499.0 million and non-GAAP earnings per share is expected to be between $1.36 and $1.49. 2022 guidance assumes an incremental $16.0 million of extraordinary costs associated with acquiring semiconductors and other components outside of our normal supply chain due to their constrained availability. Additional unforeseen constraints could further impact our profitability. While these extraordinary costs negatively impact profitability in the near term, a return to more normal supply chain conditions could positively impact profitability in the future. At this time, we do not anticipate semiconductor and component constraints to impact revenue.

The Company's non-GAAP earnings per share guidance excludes charges for amortization expense associated with intangible assets from prior acquisitions, certain other expenses, and related tax effect, which the Company expects to be approximately $15.6 million for the year 2022, which the Company expects will reduce GAAP earnings per share by approximately $0.46.
Use of Non-GAAP Financial Measures

The Company presents in this release its non-GAAP net income, non-GAAP earnings per diluted share, non-GAAP gross margin and non-GAAP operating margin results which exclude amortization expense associated with certain acquisition-related intangibles, restructuring charges, certain discrete items, direct costs of acquisitions, and the related tax effects. A reconciliation between non-GAAP and GAAP financial measures is included in this press release.

The Company believes that the presentation of results excluding these charges or gains provides meaningful supplemental information to both management and investors that is indicative of the Company's core operating results and better reflects the ongoing economics of the Company's operations. The Company believes these non-GAAP financial measures facilitate comparison of operating results across reporting periods.

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Specifically, the Company excludes the following charges, gains, and their related tax effects in the calculation of non-GAAP net income, non-GAAP earnings per diluted share and non-GAAP operating profit: 1) Non-cash amortization expense associated with certain acquisition-related intangibles. The charges reflect an estimate of the cost of acquired intangible assets over their estimated useful lives. 2) Restructuring and other non-recurring charges. The Company has over time completed multiple acquisitions of other companies and businesses. Following an acquisition, the Company will, as it determines appropriate, initiate restructuring events to eliminate redundant costs. Restructuring expenses, which are excluded in the non-GAAP items, are exclusively related to permanent reductions in our workforce and redundant facility closures. Other non-recurring costs are associated with the transition of the executive management team. These costs can include stock compensation from accelerated vesting of stock, severance payouts and related payroll expenses. 3) Certain discrete items. These items represent significant infrequent charges or gains that management believes should be viewed outside of normal operating results, and each significant discrete transaction is evaluated to determine whether it should be excluded from non-GAAP reporting. These items are specifically identified when they occur. 4) Direct costs of acquisitions. These are direct acquisition-related costs that occur when the Company makes an acquisition, such as professional fees, due diligence costs, and earn-out adjustments.

The Company applies GAAP methodologies in computing its non-GAAP tax provision by determining the annual expected effective tax rate after taking into account items excluded for non-GAAP financial reporting purposes. The Company’s non-GAAP tax expense and its non-GAAP effective tax rate are generally higher than its GAAP tax expense and GAAP effective tax rate because the income subject to taxes would be higher due to the effect of the expenses excluded from non-GAAP financial reporting. The nature of each quarterly discrete transaction will be evaluated to determine whether it should be excluded from non-GAAP reporting.
  
The Company's management uses these non-GAAP financial measures in assessing the Company's performance and when planning, forecasting, and analyzing future periods and the Company believes that investors also benefit from being able to refer to these non-GAAP financial measures along with the GAAP operating results. These non-GAAP financial measures also facilitate management's internal comparisons to the Company's historical performance. The non-GAAP financial measures disclosed by the Company should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP, and the financial results calculated in accordance with GAAP and reconciliations to those financial statements should be carefully evaluated.

Conference Call

Natus has scheduled a conference call to discuss this announcement beginning at 8:00 a.m. Eastern Time (5:00 a.m. Pacific Time) tomorrow, February 25, 2022. Individuals interested in listening to the conference call may do so by dialing 1-844-634-1441 for domestic callers, or 1-508-637-5658 for international callers, and entering reservation code 6682846. A telephone replay will be available for 48 hours following the conclusion of the call by dialing 1-855-859-2056 for domestic callers, or 1-404-537-3406 for international callers, and entering reservation code 6682846. The conference call also will be available real-time via the Internet at http://investor.natus.com, and a recording of the call will be available on the Company’s Web site for 90 days following the completion of the call. A companion Investor Presentation will be posted to the Company's Web site at 7:00 a.m. Eastern Time tomorrow, February, 25, 2022.


About Natus Medical Incorporated
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Natus delivers innovative and trusted solutions to screen, diagnose, and treat disorders affecting the brain, neural pathways, and eight sensory nervous systems to advance the standard of care and improve patient outcomes and quality of life. The Company offers hardware, advanced software and algorithms, and consumables that provide stimulus, acquire and monitor physiological signals, and capture the body’s response. With sales in over 100 countries, Natus is the clear worldwide leader in neurodiagnostics, pediatric retinal imaging, and infant hearing screening, as well as a leading company in hearing assessment, hearing instrument fitting, balance, and intracranial pressure monitoring.

Additional information about Natus Medical can be found at www.natus.com.


Forward-Looking Statements

This press release contains forward-looking statements, which are generally statements that are not historical facts. Forward-looking statements can be identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates”, “plans”, “will”, “outlook” and similar expressions. Forward-looking statements are based on management's current plans, estimates, assumptions and projections, and speak only as of the date they are made. These statements relate to current estimates and assumptions of our management as of the date of this press release and involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance, or achievements to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements are only predictions and the actual events or results may differ materially. Natus cannot provide any assurance that its future results or the results implied by the forward-looking statements will meet expectations. The Company's future results could differ materially due to a number of factors, including supply chain delays and constraints, the business, social and economic impact of the COVID-19 pandemic on the Company's business and results of operations, the ability of the Company to realize the anticipated benefits from its strategic alignment, the Company's ability to successfully pursue, acquire and integrate acquisitions, the demand for Natus products and services, the impact of adverse global economic conditions and changing governmental regulations, including foreign exchange rate changes, on the Company's target markets, the Company's ability to expand its sales in international markets, the Company's ability to maintain current sales levels in a mature domestic market, the Company's ability to control costs, risks associated with bringing new products to market, and the Company's ability to fulfill product orders on a timely basis, as well as those factors identified under the heading Item 1A “Risk Factors” in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, Quarterly Report on Form 10-Q for the periods ended March 31, 2021, June 30, 2021, September 30, 2021. Natus disclaims any obligation to update information contained in any forward looking statement, except as required by law.

Natus Medical Incorporated
Drew Davies
Executive Vice President and Chief Financial Officer
(925) 223-6700
InvestorRelations@Natus.com    

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NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (unaudited)
(in thousands, except per share amounts)
Three Months EndedTwelve Months Ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
Revenue$128,656 $118,718 $473,438 $415,684 
Cost of revenue53,996 51,247 193,015 185,912 
Intangibles amortization1,617 1,801 6,743 13,241 
  Gross profit73,043 65,670 273,680 216,531 
Gross profit margin56.8 %55.3 %57.8 %52.1 %
Operating expenses:
  Marketing and selling29,295 27,715 116,014 107,282 
  Research and development13,750 14,722 56,306 61,296 
  General and administrative12,436 12,359 52,753 49,113 
  Intangibles amortization 5,632 3,894 17,129 15,224 
  Restructuring7,230 1,966 7,699 3,809 
    Total operating expenses68,343 60,656 249,901 236,724 
Income (loss) from operations4,700 5,014 23,779 (20,193)
Interest expense(217)(856)(1,872)(3,656)
Other income (expense), net(852)2,182 (2,552)1,784 
Income (loss) before provision for (benefit from) income tax3,631 6,340 19,355 (22,065)
Provision for (benefit from) income tax1,886 1,135 6,178 (5,452)
Net income (loss)$1,745 $5,205 $13,177 $(16,613)
Net income (loss) per share:
  Basic$0.05 $0.15 $0.39 $(0.49)
  Diluted$0.05 $0.15 $0.39 $(0.49)
Weighted-average shares:
  Basic33,799 33,861 33,670 33,562 
  Diluted34,122 33,903 33,974 33,562 

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NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in thousands)
December 31,December 31,
20212020
ASSETS
Current assets:
Cash and investments$75,595 $82,082 
Accounts receivable111,760 93,133 
Inventories67,745 75,650 
Other current assets22,191 20,837 
Total current assets277,291 271,702 
Property and equipment21,783 24,516 
Operating lease right-of-use assets9,288 11,669 
Goodwill and intangible assets214,170 244,040 
Deferred income tax23,161 27,563 
Other assets18,595 20,904 
Total assets$564,288 $600,394 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$36,405 $23,429 
Current portion of long-term debt— 50,000 
Accrued liabilities48,135 44,236 
Deferred revenue25,097 21,308 
Current portion of operating lease liabilities4,964 6,779 
Total current liabilities114,601 145,752 
Long-term debt— 5,840 
Deferred income tax1,133 10,298 
Operating lease liabilities6,567 8,959 
Other long-term liabilities17,237 18,451 
Total liabilities139,538 189,300 
Total stockholders’ equity424,750 411,094 
Total liabilities and stockholders’ equity$564,288 $600,394 








6

NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
(in thousands)
Three Months EndedTwelve Months Ended
 December 31, 2021December 31, 2020December 31, 2021December 31, 2020
Operating activities:
Net income (loss)$1,744 $5,205 $13,177 $(16,613)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for losses on accounts receivable(92)32 181 1,190 
Depreciation and amortization6,754 7,126 28,091 28,115 
Loss on equity method investment adjustment159 133 602 133 
(Gain) loss on disposal of property and equipment90 119 (1,426)268 
Impairment of intangible assets2,004 — 2,004 6,678 
Impairment of property and equipment279 — 279 — 
Warranty reserve2,466 880 3,989 2,009 
Share-based compensation5,889 2,507 14,161 9,566 
Loss on commencement of sales-type leases— 20 3 1,881 
Non cash lease expense— 1,353 — 1,353 
Changes in operating assets and liabilities:
Accounts receivable(12,683)(12,716)(13,111)17,651 
Inventories1,175 8,356 4,830 1,939 
Prepaid expenses and other assets1,998 9,021 (1,880)(1,055)
Accounts payable8,301 (4,504)13,530 (4,523)
Accrued liabilities315 417 (507)(13,427)
Deferred revenue(171)1,779 4,458 838 
Deferred income tax(5,446)(3,403)(4,386)(1,577)
Net cash provided by operating activities12,782 16,325 63,995 34,426 
Investing activities:
Acquisition of businesses, net of cash acquired— (1,997)— (1,997)
Purchase of property and equipment(671)(992)(3,620)(8,609)
Purchase of equity investments— (1,000)(1,000)(2,000)
Proceeds from sale of property and equipment— — 2,674 — 
Net cash used in investing activities(671)(3,989)(1,946)(12,606)
Financing activities:
Proceeds from stock option exercises and ESPP243 656 855 1,314 
Repurchase of common stock— — — (10,495)
Taxes paid related to settlement of equity awards(2,853)(58)(4,107)(1,994)
Deferred debt issuance costs— — — (1,175)
Principal payments of financing lease liability(84)(112)(410)(527)
Proceeds from long-term borrowings— — — 60,000 
Payments on borrowings— (10,000)(57,000)(58,000)
Net cash used in financing activities(2,694)(9,514)(60,662)(10,877)
Exchange rate changes effect on cash and cash equivalents(2,601)4,724 (7,874)7,842 
Net increase (decrease) in cash and cash equivalents6,816 7,546 (6,487)18,785 
Cash and cash equivalents, beginning of period68,779 74,536 82,082 63,297 
Cash and cash equivalents, end of period$75,595 $82,082 $75,595 $82,082 


7

NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP ADJUSTMENTS (unaudited)
(in thousands, except per share amounts)
Three Months EndedTwelve Months Ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
GAAP based results:
Income (loss) before provision for income tax$3,631 $6,340 $19,355 $(22,065)
Non-GAAP adjustments:
Intangibles amortization (COGS)1,617 1,801 6,743 13,241 
Recall accrual and remediation efforts (COGS)— (63)— (428)
Restructuring and other non-recurring costs (COGS)1,700 1,615 4,069 5,849 
COVID-19 relief (COGS)(21)— (505)— 
Intangibles amortization (OPEX)5,632 3,894 17,129 15,224 
Direct costs of acquisitions (OPEX)— 112 21 112 
Restructuring and other non-recurring costs (OPEX)7,976 3,033 9,077 4,793 
COVID-19 relief (OPEX)(266)— (3,391)— 
Restructuring and other non-recurring costs (OI&E)— 206 (80)206 
Non-GAAP income (loss) before provision for (benefit from) income tax20,269 16,938 52,418 16,932 
Income tax expense (benefit), as adjusted$4,077 $3,885 $11,631 $3,790 
Non-GAAP net income$16,192 $13,053 $40,787 $13,142 
 Non-GAAP earnings per share:
  Basic$0.48 $0.39 $1.21 $0.39 
  Diluted$0.47 $0.39 $1.20 $0.39 
 Weighted-average shares used to compute
   Basic non-GAAP earnings per share33,799 33,861 33,670 33,562 
   Diluted non-GAAP earnings per share34,122 33,903 33,974 33,628 







8

NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP ADJUSTMENTS (unaudited)
(in thousands, except per share amounts)
Three Months EndedTwelve Months Ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
GAAP Gross Profit$73,043 $65,670 $273,680 $216,531 
Amortization of intangibles1,617 1,801 6,743 13,241 
Recall accrual and remediation efforts— (63)— (428)
COVID-19 Relief(21)— (505)— 
Restructuring and other non-recurring costs1,700 1,615 4,069 5,849 
Non-GAAP Gross Profit$76,339 $69,023 $283,987 $235,193 
Non-GAAP Gross Margin59.3 %58.1 %60.0 %56.6 %
GAAP Operating Income (Loss)$4,700 $5,014 $23,779 $(20,193)
Amortization of intangibles7,249 5,695 23,872 28,465 
COVID-19 Relief(287)— (3,896)— 
Recall accrual and remediation efforts— (63)— (428)
Restructuring and other non-recurring costs9,676 4,648 13,146 10,642 
Direct cost of acquisitions— 112 21 112 
Non-GAAP Operating Income$21,338 $15,406 $56,922 $18,598 
Non-GAAP Operating Margin16.6 %13.0 %12.0 %4.5 %
GAAP Income Tax Expense (Benefit)$1,886 $1,135 $6,178 $(5,452)
Effect of accumulated change of pretax income2,921 2,237 7,336 8,729 
Effect of change in annual expected tax rate(2,289)(139)(2,903)(139)
Difference in GAAP vs Non-GAAP discrete539 — — — 
Restructuring and other expenses1,020 652 1,020 652 
Non-GAAP Income Tax Expense (Benefit)$4,077 $3,885 $11,631 $3,790 
Twelve Months Ended
December 31, 2022
GAAP EPS Guidance$0.90 - $1.03
Amortization of intangibles0.53
Tax effect(0.07)
Non-GAAP EPS Guidance$1.36 - $1.49


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NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
GROSS MARGIN BY END MARKETS (unaudited)
(in thousands)
Three Months EndedTwelve Months Ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
Neuro:
Revenue$75,213 $68,060 $284,767 $235,739 
Cost of revenue30,330 29,301 112,384 98,745 
Intangibles amortization750 828 3,024 9,697 
  Gross profit$44,133 $37,931 $169,359 $127,297 
Gross profit margin58.7 %55.7 %59.5 %54.0 %
Newborn Care:
Revenue$28,261 $28,165 $105,023 $105,024 
Cost of revenue12,776 10,763 43,967 46,277 
Intangibles amortization— 67 135 260 
  Gross profit$15,485 $17,335 $60,921 $58,487 
Gross profit margin54.8 %61.5 %58.0 %55.7 %
Hearing & Balance:
Revenue$25,182 $22,493 $83,648 $74,921 
Cost of revenue10,890 11,183 36,664 40,890 
Intangibles amortization867 906 3,584 3,284 
  Gross profit$13,425 $10,404 $43,400 $30,747 
Gross profit margin53.3 %46.3 %51.9 %41.0 %
Consolidated:
Revenue$128,656 $118,718 $473,438 $415,684 
Cost of revenue53,996 51,247 193,015 185,912 
Intangibles amortization1,617 1,801 6,743 13,241 
  Gross profit$73,043 $65,670 $273,680 $216,531 
Gross profit margin56.8 %55.3 %57.8 %52.1 %



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NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP GROSS MARGIN BY END MARKETS (unaudited)
(in thousands)
Three Months EndedTwelve Months Ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
Neuro:
GAAP Gross Profit$44,133 $37,931 $169,359 $127,297 
Amortization of intangibles750 828 3,024 9,697 
Direct costs of acquisitions— — — — 
COVID-19 Relief(7)— (156)— 
Restructuring and other non-recurring costs1,541 511 3,266 2,804 
Non-GAAP Gross Profit$46,417 $39,270 $175,493 $139,798 
Non-GAAP Gross Margin61.7 %57.7 %61.6 %59.3 %
Newborn Care:
GAAP Gross Profit$15,485 $17,335 $60,921 $58,487 
Amortization of intangibles— 67 135 260 
Recall accrual and remediation efforts— (63)— (428)
Restructuring and other non-recurring costs159 753 522 1,075 
Non-GAAP Gross Profit$15,644 $18,092 $61,578 $59,394 
Non-GAAP Gross Margin55.4 %64.2 %58.6 %56.6 %
Hearing & Balance:
GAAP Gross Profit$13,425 $10,404 $43,400 $30,747 
Amortization of intangibles867 906 3,584 3,284 
COVID-19 Relief(14)— (349)— 
Restructuring and other non-recurring costs— 351 281 1,970 
Non-GAAP Gross Profit$14,278 $11,661 $46,916 $36,001 
Non-GAAP Gross Margin56.7 %51.8 %56.1 %48.1 %
Consolidated:
GAAP Gross Profit$73,043 $65,670 $273,680 $216,531 
Amortization of intangibles1,617 1,801 6,743 13,241 
COVID-19 Relief(21)— (505)— 
Recall accrual and remediation efforts— (63)— (428)
Restructuring and other non-recurring costs1,700 1,615 4,069 5,849 
Non-GAAP Gross Profit$76,339 $69,023 $283,987 $235,193 
Non-GAAP Gross Margin59.3 %58.1 %60.0 %56.6 %
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NATUS MEDICAL INCORPORATED AND SUBSIDIARIES
GEOGRAPHIC REVENUE (unaudited)
(in thousands)
Three Months EndedTwelve Months Ended
December 31, 2021December 31, 2020December 31, 2021December 31, 2020
Consolidated Revenue:
United States$75,355 $69,317 $285,979 $252,496 
International53,301 49,401 187,459 163,188 
Totals$128,656 $118,718 $473,438 $415,684 
United States59 %58 %60 %61 %
International41 %42 %40 %39 %
Totals100 %100 %100 %100 %

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