Following a string of three acquisitions since 2006, Natus Medical (San Carlos, California) has restructured its operations, including the layoff of 45 employees, it said, to eliminate redundant costs and save $2.4 million.

Natus makes devices to screen, detect, treat and monitor common medical ailments such as hearing impairment, neurological dysfunction, epilepsy and sleep disorders, and for newborn care.

“The restructuring is largely related to the acquisition of Xltek [Oakville, Ontario, Canada] and the ability to centralize our R&D efforts going on in multiple sites,” Jim Hawkins, president/CEO of Natus, told Medical Device Daily.

In addition to Xltek, the company’s recent acquisitions have included Bio-logic Systems (Mundelein, Illinois) (MDD, Jan. 6, 2006) and Deltamed (Paris), plus its wholly owned subsidiary IT-Med (Frankfurt, Germany) (MDD, Sept. 7, 2006).

Natus said it will eliminate what it termed redundancies in its North American field sales and service personnel, resulting from the acquisition of Xltek and certain production resources as it continues to outsource assemblies to contract manufacturers.

The restructuring actions will be phased in during the first nine months of 2008. Natus said it expects the actions to be cost neutral in 2008, since savings during the year will be largely offset by severance costs, which the company expects to total around $800,000.

The plan is expected to result in a net cost reduction before tax of about $2.4 million in 2009.

As part of the plan, the company said it will centralize its R&D activities supporting each of the company’s three main product families as follows:

• activities associated with North American diagnostic neurology product lines will be consolidated at the Xltek facility;

• activities associated with newborn hearing screening and diagnostic hearing product lines will be consolidated at the Bio-logic facility; and

• activities associated with other newborn care products will be consolidated at the company’s Olympic Medical facility (Seattle, Washington).

“We will eliminate duplicate functions and streamline our operations allowing us to deliver new products to the market in an even more efficient manner,” Hawkins said. “We expect this integration and restructuring will also position us to further increase productivity, promote more efficient sales support, and strengthen a superior customer experience, all in line with our strategic plan.”

The plan is expected reduce research and development costs to approximately 9% of revenue.

At the end of 2007, Natus reported that for the first quarter ending March 31, 2008, revenues are projected to range from $34.5 million to $36 million and earnings a share to range from 9 cents to 10 cents. For the full year, Natus anticipates reporting revenue of about $160 million and earnings per share of 68 cents to 70 cents.

The revenue and earnings guidance presumes Natus will receive FDA clearance to ship its Olympic Cool-Cap System in the U.S.

What’s next for Natus?

“We’ll execute on this restructuring and look for more acquisitions,” Hawkins told MDD.