On February 26th 2004 Natus Medical, a provider of medical equipment and screeners used on infants, reported 4th quarter 2003 revenue of $9.9 million, up 29% when compared with the 4th quarter of 2002. Revenue was also up 24% sequentially and was a record for the company. This followed record revenue in the 3rd quarter. Net income was $338,000 or 2 cents per share which compares to a loss of $2.1 million or 13 cents per share in the 4th quarter of 2002. In the 4th quarter of 2003 operating expenses were down while revenue was up, which led to the company's first profitable quarter since it went public. 4th quarter 2003 gross margins were 56.2%, up sequentially and from the year ago period.

     International sales comprised 23% of total revenue in 2003. In the 4th quarter of 2003 international sales were up 35% and sales in the United States were up 27%. For the year 2003 Natus Medical reported $31.6 million in revenue, up 17% from 2002. For the 1st half of 2004 the company expects to report a loss of $800,000 - $1.2 million or 5-7 cents per share. However they expect to report a profit of 1-3 cents per share for the full year reflecting a stronger second half. Revenue is expected to be $35-$36 million for 2004. 

     Natus Medical has $38 million in cash and investments or $2.30 per share. Book value is $3.19 per share and the company carries no debt. At the current price BABY trades at 2x sales.

     If you are able to watch the stock I would buy it if it breaks above $4.40 on at least 100,000 shares or breaks above $4.40 after the first half hour of trading  (whichever comes first). If neither of these criteria are met buy on a drop to $4.10. 

UPDATE 3/10/2004 - $4.10 BUY PRICE TRIGGERED SINCE $4.40 WAS NOT BROKEN TO THE UPSIDE.