In hospitals where there aren't enough births, or reimbursement isn't high enough to produce a profit by offering outsourcing to the hospitals, Natus has the ability to switch back to just selling its hearing screener and make money from disposables. So that will expand basically our offering and increase our margin there. To combat that, we've just introduced, this last quarter, a new service where we're going to screen the babies, but then also there's an additional test that we do that we'll charge the hospital for just a flat fee per baby. Management has a plan to increase margins at Peloton by adding additional services that hospitals might want to outsource, explained Jonathan Kennedy, Natus Medical's CFO, EVP, and general manager of newborn care: The lower profitability was caused by continued costs to deal with the FDA warning letter at its facility in Seattle, which Natus Medical hopes to be resolved next year.Management blamed the lack of revenue growth from the legacy business on lower birth rates and lower reimbursement for hearing screening done by Peloton, its hearing-services business.Otometrics is on its way to achieving a 10% adjusted operating profit margin this year with a goal of expanding that to 20% next year. Management noted that it was the first time that Otometrics was profitable in the first quarter, so it's headed in the right direction under its new leadership.The new segment, which sells hearing-diagnostic, hearing-aid fitting, and balance-assessment products, was "slightly" profitable, so it didn't contribute much to the earnings line. The revenue growth came from Otometrics, which became part of Natus Medical in the beginning of January.What happened with Natus Medical this quarter? Natus disclaims any obligation to update information contained in any forward looking statement, except as required by law.Image source: Getty Images. The Company's future results could differ materially due to a number of factors, including the ability of the Company to realize the anticipated benefits from the new strategic partnership with Pediatrix, the timing and successful transition of the Peloton business and installation of ALGO screeners at Pediatrix hospitals, 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, 2018. Natus cannot provide any assurance that its future results or the results implied by the forward-looking statements will meet expectations. Forward-looking statements are only predictions and the actual events or results may differ materially. ![]() 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. These forward-looking statements include, without limitation, statements regarding Natus’s ability to supply screening devices into the future. Forward-looking statements are based on management's current plans, estimates, assumptions and projections, and speak only as of the date they are made. Forward-looking statements can be identified by the words “expects”, “anticipates”, “believes”, “intends”, “estimates”, “plans”, “will”, “outlook” and similar expressions. ![]() This press release contains forward-looking statements, which are generally statements that are not historical facts. Natus is a leading provider of medical device solutions focused on the diagnosis and treatment of central nervous and sensory system disorders for patients of all ages.Īdditional information about Natus Medical can be found at Forward-Looking Statements
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