Natus Medical Incorporated (BABY) has reported a 19.74 percent rise in profit for the quarter ended Dec. 31, 2016. The company has earned $10.23 million, or $0.31 a share in the quarter, compared with $8.54 million, or $0.26 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $16.78 million, or $0.51 a share compared with $17.03 million or $0.51 a share, a year ago.
Revenue during the quarter grew 7.75 percent to $107.70 million from $99.95 million in the previous year period. Gross margin for the quarter expanded 228 basis points over the previous year period to 60.45 percent. Total expenses were 86.18 percent of quarterly revenues, down from 89.95 percent for the same period last year. This has led to an improvement of 376 basis points in operating margin to 13.82 percent.
Operating income for the quarter was $14.88 million, compared with $10.05 million in the previous year period.
However, the adjusted operating income for the quarter stood at $22.28 million compared to $20.34 million in the prior year period. At the same time, adjusted operating margin improved 34 basis points in the quarter to 20.69 percent from 20.35 percent in the last year period.
"I am pleased with our 2016 accomplishments including the acquisition of Otometrics and RetCam as well as our record financial results considering the regulatory issues at our Seattle facility and the headwinds in some of our international markets. The acquisition of Otometrics will complement our current business and increase our growth potential. We believe Otometrics will achieve a revenue growth rate of 10 percent in 2017 and 2018 as they participate in growing markets for many of their products and services. In addition, we look forward to increasing the profitability of Otometrics from its current breakeven levels to our current operating margins over time. We look forward to an exciting year ahead and the opportunity for Natus to achieve over $500 million of revenue in 2017," said Jim Hawkins, President and Chief Executive Officer of the Company.
For financial year 2017, Natus Medical expects revenue to be in the range of $505 million to $510 million. The company projects diluted earnings per share to be in the range of $1.49 to $1.54. It projects diluted earnings per share to be in the range of $1.80 to $1.85 on adjusted basis.
For the first-quarter, Natus Medical expects revenue to be in the range of $122 million to $124 million. The company projects diluted earnings per share to be in the range of $0.21 to $0.23. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.32 to $0.34.
Working capital increases sharply
Natus Medical Incorporated has recorded an increase in the working capital over the last year. It stood at $325.86 million as at Dec. 31, 2016, up 98.39 percent or $161.61 million from $164.25 million on Dec. 31, 2015. Current ratio was at 5.08 as on Dec. 31, 2016, up from 3.13 on Dec. 31, 2015.
Cash conversion cycle (CCC) has decreased to 70 days for the quarter from 73 days for the last year period. Days sales outstanding went down to 37 days for the quarter compared with 46 days for the same period last year.
Days inventory outstanding was almost stable at 54 days for the quarter, when compared with the last year period. At the same time, days payable outstanding went down to 20 days for the quarter from 26 for the same period last year.
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