Natus Medical Incorporated (NASDAQ:NTUS) Q2 2020 Earnings Conference Call - Final Transcript

Jul 30, 2020 • 04:30 pm ET


Natus Medical Incorporated (NASDAQ:NTUS) Q2 2020 Earnings Conference Call - Final Transcript


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Good afternoon, everyone, and thank you for joining us today to review our results for the Second Quarter of 2020. 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 the business overview of the second quarter 2020, then Drew will discuss the second quarter financial performance. Finally, we will open the call for 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 description of relevant risk 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 expenses, restructurings and certain other changes -- charges and their related tax effects. Management believes that the presentation of these non-GAAP measures along with our GAAP financial measures -- statements provide a more thorough analysis of our ongoing financial performance.

You can find the reconciliation of our financial results on a GAAP versus non-GAAP basis in today's earning release. 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, Michelle. Good afternoon, everyone, and thank you for joining us today. During our call today, we will discuss our second quarter 2020 financial results as well as our current business environment and how we expect the COVID-19 pandemic to impact our business over the near term. Before we get started, I'd like to thank our employees, partners and customers for their commitment and efforts during the past quarter.

While we will discuss our current business dynamics, we will not provide financial guidance at this time as visibility into demand remains just too uncertain. The fundamentals of our business remain intact. Health care providers and patients depend on our products and services every day. And while the demand for our products remain lower than normal during the pandemic response, we remain market leaders in most of our product categories. We continue to invest in our product portfolio with a number of new and refreshed product launches expected within the next several months. In addition, we are making progress with our cloud-based and data management initiatives and believe these investments are critical to maintaining leadership positions over the long term.

Our balance sheet remain strong and despite lower than normal revenue due to the pandemic, we continue to expect positive cash flow from operations for the full year 2020. As we discussed last quarter, our investments in inventory have ensured our ability to mitigate potential supply chain disruptions and our efforts to quickly reduce cost have reduced our annual operating expenses by approximately $20 million. And we'll continue to prioritize