SAN CARLOS, Calif.--(BUSINESS WIRE)--July 1, 2003--Natus Medical, Incorporated ("Natus") (Nasdaq: BABY) today announced the acquisition of privately held Neometrics Inc., a leading supplier of data systems used in 18 state health departments for various newborn screenings, including hearing screening data collection and management. Neometrics is also an established provider of diagnostic reagents for the metabolic screening of infants. With this acquisition, Natus expands its ability to provide newborn screening products and services with new software tools to gather, record, integrate and report metabolic screening, hearing screening, and birth statistics from individual hospitals to state governments and, ultimately, to the U.S. Centers for Disease Control and Prevention (CDC).

Under terms of the agreement, Natus has acquired the assets of Neometrics for $3.6 million cash with the potential for additional consideration contingent upon Neometrics achieving certain financial results. Neometrics has 40 employees, and reported unaudited revenues of $6.0 million for its fiscal year ended February 28, 2003, up approximately 28% from the prior fiscal year. Natus expects the Neometrics acquisition to be accretive to earnings and will discuss its outlook for the combined operations during its upcoming conference call on second quarter earnings. Neometrics founders Martin Wolfson and David Schwartz have signed consulting agreements with Natus to assist with integration and the transition of Neometrics employees and customers.

"We believe our purchase of Neometrics is an excellent transaction for Natus from both strategic and financial perspectives," stated Tim Johnson, Natus president and chief executive officer. "We look forward to offering our expanded customer base the opportunity to purchase an integrated solution of devices, supplies and software for newborn screening and data management. Every state in the U.S. requires newborn metabolic screening, with ever-increasing pressures to standardize and add new tests and effectively manage the massive quantities of test results. We expect this to be a trend in developed countries throughout the world as well, thereby representing a significant opportunity for Natus."

Neometrics has developed proprietary data management and reporting software systems specifically designed for use by public health organizations. Neometrics also sells diagnostic reagents providing a complete and integrated solution for state health departments and laboratories. The company's headquarters and software operations are located in East Northport, New York, and its diagnostic reagent operations are in Portland, Oregon. Additional information about Neometrics is available at www.neometrics.com.

"Since beginning operations in 1978, our vision has been to provide state-of-the-art screening and diagnostic services for newborns," said David Schwartz, president and chief executive officer of Neometrics. "We are confident that by joining with Natus, we will further improve customer service, expand our customer base, and enhance efficiencies in the critical follow-up of children with genetic and metabolic disorders."

"We believe this acquisition is a strong fit with Natus' strategic vision of broadening our product offering in our core area of focus, namely the 'delivery to discharge' space," said George Ryan, Natus vice president of business development. "We also expect to benefit by increasing our domestic customer base and by gaining Neometrics' experience in screening over 20 million babies. We now have more products to bring to an expanded customer base, which we think enhances Natus' future growth prospects and helps to broaden our market presence."

Conference Call Information

Natus has scheduled an investor conference call to discuss this announcement beginning at 11:00 a.m. Eastern Daylight Time Wednesday July 2, 2003. Individuals interested in listening to the conference call may do so by dialing (888) 802-5257 for domestic callers, or (706) 634-0175 for international callers. A telephone replay will be available for 48 hours following the conclusion of the call by dialing (800) 642-1687 for domestic callers, or (706) 645-9291 for international callers, and entering pass code 1595598. The live conference call will also be available via the Internet at http://investor.natus.com, and a recording of the call will be available on the Company's Web site for 90 days following the completion of the call.

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