Natus Medical Inc. (NASDAQ:BABY) Q4 2018 Earnings Conference Call Transcript
Feb 13, 2019 • 11:00 am ET
Good morning, everyone, and thank you for joining us today to review our results for the Fourth Quarter of 2018. On the call, today from Natus is Jonathan Kennedy, Natus' President and Chief Executive Officer; and Drew Davies, Natus' Executive Vice President and Chief Financial Officer. Jonathan will begin today with a business overview of the fourth quarter and provide guidance for the first quarter and full year 2019, then Drew will discuss the third quarter financial performance. Finally, we will open the call for your questions. (Operator Instructions)
Today's call will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements include management's beliefs and expectations about our future results. Our actual results may differ materially from these forward-looking statements. For a description of relevant risks and uncertainties pertaining to our business, please see today's press release and our periodic and annual reports filed with the SEC.
I would now like to turn the call over to Jonathan Kennedy, President and Chief Executive Officer of Natus Medical. Mr. Kennedy?
Jonathan A. Kennedy
Thank you, operator, and good morning everyone. Today we reported our financial results for the fourth quarter and full year 2018. Revenue for the fourth quarter was a record $141 million, representing 7.3% year-over-year growth. Revenue during the quarter was driven by strong demand across multiple product and market segments, and we saw particular strength in our US neurodiagnostics and international hearing assessment markets. Our gross margin during the quarter was less than expected resulting in lower than expected non-GAAP earnings per share. Cash flow from operations was a healthy $14.1 million during the quarter.
Shipment of Otoscan during the fourth quarter more than doubled versus the third quarter when the product was launched, and we ended the year with over 180 Otoscan devices in the field. We remain very encouraged by the ramping adoption of this new digital ear scanning technology. We also relaunched our neoBlue phototherapy blanket during the fourth quarter. With this launch, all of neoBlue products are now available for customer shipments. And Drew will discuss revenue in further detail in a few minutes.
As you know, a few weeks ago we announced our One Natus initiative. This ongoing effort will make Natus a stronger, higher quality, and more efficient competitor in the rapidly changing medical device market and better position the company for growth. We recognize there are steps we need to take to improve profitability and performance I believe that the new organization will allow us to optimize our proven go-to-market strategies and leverage a common engineering operations and supply chain infrastructure. And just to elaborate, we will retain and build upon our successful go-to-market strategies and serve customers with the same specialized approach and sales teams that we've used for years and are very common in the industry.
The creation of a global chief commercial office will ensure that the specialized teams will have clear and unimpeded access to leadership, critical information, and the resources needed to serve customers.