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Baby hearing and neurology expert Natus Medical (Nasdaq: BABY  ) set out a pretty lofty goal for itself back in 2004: Go from revenue of just $31 million to a run rate of $250 million by the end of 2008.

Given that fourth-quarter revenue is expected to be about $50 million, Natus Medical will need to use some of its $69 million in the bank to make an acquisition or two this quarter -- and it sounds like some may be in the works -- to get to its goal. But even if it doesn't make it and it ends the year with a $200 million run rate, that's still pretty impressive. After all, increasing revenue nearly sevenfold in three to four years is quite a feat.

For the third quarter, revenue was up 45% year over year. Most of that was from acquisitions the company has made, but management did comment on the nice 10% internal growth rate. Of course, all that acquired revenue came at a cost: Earnings per share were up just 21% as the company grabbed cash earlier in the year through secondary offerings. While the financing dilutes shareholders' interest, it seems to be a better strategy than taking on a lot of debt to make acquisitions, like Mylan (NYSE: MYL  ) and Boston Scientific (NYSE: BSX  ) have done.

The company has pretty much finished the restructuring it started in February. Management believes it will save it $2.4 million per year going forward. That's some serious savings for a company that only had $4.8 million in income in the third quarter.

We'll get a better idea of what Natus' new long-term goals are at the end of the year, but it seems to me the company has two choices: get acquired by a health-care company like Baxter (NYSE: BAX  ) or Abbott Labs (NYSE: ABT  ) or begin to grow into fields outside its core and try to become the next Johnson & Johnson (NYSE: JNJ  ) in a hundred years or so. Given its recent acquisitions, there might not be too many companies left for Natus to acquire in its core field.

More Foolishness about small companies with big plans:

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Johnson & Johnson is a selection of the Income Investor newsletter. The Fool has a disclosure policy.

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