Natus Medical Inc. (BABY), Wednesday announced a reorganization plan for its recently acquired Biomed Holdings Corp.'s sales group and Alpine Holdings Canada facility in order to eliminate redundant costs arising from the acquisition. In order to reflect the restructuring costs, the company lowered its earnings guidance for the fiscal 2010. Further, in its filing on Form 8-K, the company said it expects a net staff reduction of around 50 employees and charge in the first quarter.
Under the new reorganization plan, Alpine operations in Montreal, Canada will be transitioned to Natus Medcals' existing Xltek facility in Oakville, Ontario, Canada. In addition, sales organizations of Alpine will be merged into the global sales organization of Natus Medical.
Natus Medical expects the reorganization of sales group to complete in January 2010 and the transfer of product development and production activities from Montreal to Oakville to occur over the course of the first half of 2010.
Natus Medical has completed the $43.2 million acquisition of Alpine Biomed, a provider of devices for the diagnosis of neurological disorders, on September 14 with a view to expand its neurology product line and widen its market.
Alpine Boimed has facilities in Denmark, Canada, France, and Germany and sells its products through direct sales organizations in those countries and the United States and through a distributor sales channel in more than fifty other countries around the globe.
The company said the expected reduction of 50 employees and restructureing will result in a charge of around $2.5 million in the first quarter of 2010.
Jim Hawkins, president and chief executive officer of Natus Medical said, "We believe that combining the worldwide sales organizations of Natus and Alpine Biomed will increase the sales productivity of our sales force and at the same time allow our customers to choose among a broader range of neurology products to better fit their applications and clinical requirements."
"We expect that the integration of Alpine's North American operations into the existing Natus organization will reduce costs, strengthen our customer support and field service, and provide our customers with an enhanced sales experience," Hawkins added.
Looking forward, the company lowered its earnings guidance for the fiscal 2010 to reflect the restructuring costs amounted to about $2.5 million, which will reduce earnings per share by $0.05. The company now expects earnings in the range of $0.45 to $0.47 per share, compared to the previous guidance in the range of $0.49 to $0.51 per share.
On a non-GAAP basis, the company expects earnings to range from $0.60 to $0.62 for the fiscal 2010. Non-GAAP results of the company exclude the restructuring charge as well as amortization expense associated with certain acquisition-related intangible assets.
On average, nine analysts polled by Thomson Reuters expect the company to report earnings of $0.54 per share for the fiscal 2010. Analysts' estimates typically exclude special items.
Revenue guidance for the full year 2010, however, is raised to $198 million in light of the company's perception of improved business conditions since early November 2009. Previously, the company expected revenues to be $196 million.
Analysts currently expect revenues of $197.19 million for the full year 2010.
BABY is currently trading at $14.05, up 0.09 or 0.64%, on a volume of 87k shares on the Nasdaq.
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