Natus Medical Incorporated (NASDAQ:NTUS) Q4 2019 Earnings Conference Call - Final Transcript

Feb 06, 2020 • 04:30 pm ET

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Natus Medical Incorporated (NASDAQ:NTUS) Q4 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon and thank you for joining us today to review our results for the Fourth Quarter of 2019.

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 2019. Then, Drew will discuss the fourth quarter financial performance and provide guidance for the first quarter and full year 2020. 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. Management's presentation of the financial results will be on a GAAP and non-GAAP basis. The non-GAAP results exclude amortization expense, restructurings, and certain other charges and the related tax effects. Management believes that the presentation of these non-GAAP measures, along with our GAAP financial statements provide a more thorough analysis of our ongoing financial performance. You can find a reconciliation of our financial results on a GAAP versus non-GAAP basis in today's earnings release.

I would now like to turn the call over to Jonathan Kennedy, President and Chief Executive Officer of Natus Medical. Mr. Kennedy?

Executive
Jonathan A. Kennedy

Thank you, operator. Good afternoon, everybody. Today, we reported the results for our fourth quarter and full year 2019. Revenue for the quarter was $131.8 million and non-GAAP earnings per share was $0.46. Revenue for the full year was $495.5 million and non-GAAP earnings per share was $1.24. Both the quarter and the full year were in line with our previous expectations.

Natus is the global leader in neurodiagnostic equipment solutions. Our solutions are used by the majority of hospitals and neurologists worldwide. We have the most comprehensive line of neurodiagnostic equipment offered by any global manufacturer today offering a full line of EEG, EMG, and PSG sleep solutions.

During the fourth quarter, we continued to see strong growth across our neuro product family. Overall, our neuro business grew by 15% year-over-year during the fourth quarter and grew 8% for the full year versus 2018, after adjusting for the divestiture of GND. The strength in neuro revenue for the quarter and full year was driven primarily by the domestic sales of EEG equipment where cybersecurity concerns, new features, and Windows 10 upgrades led demand for a robust upgrade environment. We believe that we are in the final phase of this upgrade cycle and expect growth in EEG to level-off during 2020. Our PSG, or sleep diagnostics hardware business, also had strong growth during the quarter and the full year as we continue to be the market leader in high-end diagnostic sleep labs. Neurosurgery and neurocritical care grew modestly during the quarter as