EX-99.1 2 a40072exv99w1.htm EXHIBIT 99.1 exv99w1
 

Exhibit 99.1
(NUVASIVE LOGO)
     
PRESS RELEASE
   
 
Contact:
  Investors:
Kevin C. O’Boyle
  Nick Laudico/Zack Kubow
EVP & Chief Financial Officer
  The Ruth Group
NuVasive, Inc.
  646-536-7030/7020
858-909-1800
  nlaudico@theruthgroup.com
investorrelations@nuvasive.com
  zkubow@theruthgroup.com
 
   
 
  Media:
 
  Jason Rando
 
  The Ruth Group
 
  646-536-7025
 
  jrando@theruthgroup.com
NUVASIVE REPORTS FIRST QUARTER 2008 FINANCIAL RESULTS
- Increases 2008 Revenue Guidance to a range of $210 to $214 Million –
First Quarter 2008 Highlights:
  Total revenues of $51.2 million; up 54.1% from the first quarter of 2007
 
  Gross profit of $42.1 million; up 53.0% from the first quarter of 2007
 
  Gross margin of 82.2% compared to 82.8% in the first quarter of 2007
 
  GAAP loss per share was $(0.22), including $(0.12) of one-time charges; non-GAAP earnings per share was $0.06
 
  Raised $209 million in convertible senior notes (net of offering costs)
 
  Completed buy-out of royalty obligations on SpheRx® pedicle screw and related technology products, and acquired new pedicle screw intellectual property
 
  NeoDisc® clinical trial continues to progress with current enrollment over 85%

 


 

SAN DIEGO, April 22, 2008 — NuVasive, Inc. (Nasdaq: NUVA), a medical device company focused on developing products for minimally disruptive surgical treatments for the spine, announced today financial results for the quarter ended March 31, 2008.
NuVasive reported first quarter revenues of $51.2 million, a 54.1% increase over the $33.2 million for the first quarter of 2007 and a 9.1% increase over the $46.9 million for the fourth quarter of 2007.
Gross profit for the first quarter of 2008 was $42.1 million and gross margin was 82.2%, compared to a gross profit of $27.5 million and a gross margin of 82.8% in the first quarter of 2007. For the fourth quarter of 2007, gross profit was $38.9 million and gross margin was 82.9%.
Total operating expenses for the first quarter of 2008 were $50.5 million compared to $33.8 million in the first quarter of 2007 and $41.2 million in the fourth quarter of 2007. Operating expenses include an in-process research and development charge of $4.2 million related to the acquisition of pedicle screw intellectual property. Excluding the in-process research and development charge, total first quarter 2008 operating expenses were $46.3 million. On a GAAP basis, the Company reported a net loss of $7.7 million or $(0.22) per share for the first quarter of 2008. On a non-GAAP basis, the Company reported net income of $2.1 million, or $0.06 per share, for the first quarter of 2008. The non-GAAP earnings per share calculations exclude (i) stock based compensation of $5.2 million; (ii) a charge for in-process research and development costs of $4.2 million; and (iii) amortization of acquired intangible assets of $0.4 million.
Cash, cash equivalents and short and long-term investments were $278.6 million at March 31, 2008.
Alex Lukianov, Chairman and Chief Executive Officer, said, “Our first quarter results were driven by our continued focus on deepening product penetration in existing accounts, particularly in accounts where we have a long standing presence. Our sales focus throughout the remainder of 2008 will be selling the full mix of our products and working to assimilate and develop our sales regions which we recently expanded from five regions to eleven. We will also expand our corporate infrastructure, including our new leased corporate headquarters, operating systems, as well as training and personnel development programs. These investments are part of a strategy to expand our infrastructure to allow us to grow to $500 million coupled with increasing profitability.
Mr. Lukianov continued, “We improved our cash position in the quarter with a successful convertible debt offering that yielded net proceeds of $209 million. Our intent is to use these funds for strategic opportunities in the near term. Our first strategic use of this cash came in March where we acquired the exclusive rights to pedicle screw intellectual property which ensures the continued expansion of our innovative platform through 2015 as well as the development of other pedicle-based fusion systems.”

 


 

Guidance
NuVasive is providing its full year 2008 financial guidance as follows:
Revenue: $210 million to $214 million; up from $204 million to $208 million
GAAP loss per share: $(0.12) to $(0.09), including $(0.12) of one-time charges;
down $0.02 from earnings per share of $0.02 to $0.05
Non-GAAP earnings per share: $0.54 to $0.57; down from $0.56 to $0.59
Operationally, NuVasive’s outlook for the full year has improved as signified by its $6 million increase in top line revenue guidance. However, as a result of lower interest yields currently available in the market the Company has modestly lowered full year earnings per share guidance by $0.02.
Reconciliation of Non-GAAP Information
Management uses certain non-GAAP financial measures such as non-GAAP earnings per share, which exclude stock based compensation and charges directly related to acquisition transactions such as in-process research and development, milestone payments, and amortization of the acquired technology assets. Management does not consider these costs in evaluating the continuing operations of the Company. Therefore, management calculates the non-GAAP financial measures provided in this earnings release excluding these costs and uses these non-GAAP financial measures to enable it to analyze further and more consistently the period-to-period financial performance of its core business operations. Management believes that providing investors with these non-GAAP measures gives them additional important information to enable them to assess, in the same way management assesses, the Company’s current and future continuing operations. These non-GAAP measures are not in accordance with, or an alternative for, GAAP, and may be different from non-GAAP measures used by other companies. Set forth below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.
         
Reconciliation of First Quarter 2008 Results        
(in thousands, except per share amounts)        
GAAP net loss (A)
  $ (7,654 )
In process research and development (B)
    4,176  
 
     
 
    (3,478 )
Stock based compensation (C)
    5,150  
Amortization of acquired intangible assets (D)
     392  
 
     
Non-GAAP earnings (A)
  $ 2,064  
 
     
 
       
GAAP net loss per share (A)
  $ (0.22 )
In process research and development (B)
    0.12  
 
     
 
    (0.10 )
Stock based compensation (C)
    0.15  
Amortization of acquired intangible assets (D)
    0.01  
 
     
Non-GAAP earnings per share (A)
  $ 0.06  
 
     
Shares used in computing GAAP net loss per share (A)
    35,411  
 
     
Shares used in computing non-GAAP earnings per share (A)
    37,156  
 
     

 


 

Reconciliation of Full Year 2008 Guidance
                 
    Range for Year Ending  
    December 31, 2008  
(in thousands, except per share amounts)   Low     High  
GAAP net loss per share (A)
  $ (0.12 )   $ (0.09 )
In process research and development (B)
    0.12       0.12  
     
 
    0.00       0.03  
Stock based compensation (C)
    0.51       0.51  
Amortization of acquired intangible assets (D)
    0.03       0.03  
     
Non-GAAP earnings per share (A)
  $ 0.54     $ 0.57  
     
Shares used in computing GAAP net loss per share (A)
    35,800       35,800  
     
Share used in computing non-GAAP earnings per share (A)
    37,600       37,600  
     
 
A  —    GAAP net loss per share is calculated using basic weighted shares outstanding; Non-GAAP earnings per share is calculated using diluted weighted shares outstanding.
 
B  —    Charge related to the acquisition of pedicle screw technology in the first quarter of 2008.
 
C  —    Non-cash stock-based compensation.
 
D  —    Amortization of technology assets purchased in 2005 and 2007.
Conference Call
NuVasive will hold a conference call today at 5:30 p.m. ET / 2:30 p.m. PT to discuss the results. The dial-in numbers are 1-877-407-4018 for domestic callers and 1-201-689-8471 for international. A live Web cast of the conference call will be available online from the investor relations page of the Company’s corporate Web site at www.nuvasive.com.
After the live Web cast, the call will remain available on NuVasive’s Web site, www.nuvasive.com, through May 22, 2008. In addition, a telephonic replay of the call will be available until May 13, 2008. The replay dial-in numbers are 1-877-660-6853 for domestic callers and 1-201-612-7415 for international callers. Please use account number 3055 and conference ID number 281470.
About NuVasive
NuVasive is a medical device company focused on the design, development and marketing of products for the surgical treatment of spine disorders. The Company’s product portfolio is focused on applications in the over $4.2 billion U.S. spine fusion market. The Company’s current principal product offering includes a minimally disruptive surgical platform called Maximum Access Surgery, or MAS®, as well as a growing offering of cervical and motion preservation products.
The MAS platform offers advantages for both patients and surgeons such as reduced surgery and hospitalization time and faster recovery. MAS combines three categories of current product offerings: NeuroVision® a proprietary software-driven nerve avoidance system; MaXcess® a unique split-blade design retraction system; and specialized implants, like SpheRx® and CoRoent®, that collectively minimize soft tissue disruption during spine surgery while allowing maximum visualization and surgical reproducibility. NuVasive’s product offering is also focused on cervical internal fixation products and its R&D pipeline emphasizes both MAS and motion preservation.

 


 

NuVasive cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause NuVasive’s results to differ materially from historical results or those expressed or implied by such forward-looking statements. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to: the risk that the Company’s revenue or profitability projections may prove incorrect because of unexpected difficulty in generating sales or achieving anticipated profitability the uncertain process of seeking regulatory approval or clearance for NuVasive’s products or devices, including risks that such process could be significantly delayed; the possibility that the FDA may require significant changes to NuVasive’s products or clinical studies; the risk that products may not perform as intended and may therefore not achieve commercial success; the risk that competitors may develop superior products or may have a greater market position enabling more successful commercialization; the risk that additional clinical data may call into question the benefits of NuVasive’s products to patients, hospitals and surgeons; and other risks and uncertainties more fully described in NuVasive’s press releases and periodic filings with the Securities and Exchange Commission. NuVasive’s public filings with the Securities and Exchange Commission are available at www.sec.gov. NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made.
# # #

 


 

NUVASIVE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)
                 
    Three Months Ended March 31,
    2008   2007
     
Revenues
  $ 51,184     $ 33,220  
Cost of goods sold
    9,095       5,707  
     
Gross Profit
    42,089       27,513  
 
               
Operating expenses:
               
Sales, marketing and administrative
    39,317       28,449  
Research and development
    6,976       5,343  
In process research and development
    4,176        
     
Total operating expenses
    50,469       33,792  
 
               
Interest and other income, net
    726       1859  
     
Net loss
  $ (7,654 )   $ (4,420 )
     
 
               
Net loss per share:
               
Basic and diluted
  $ (0.22 )   $ (0.13 )
     
Weighted average shares — basic and diluted
    35,411       34,314  
     
 
               
Stock-based compensation is included in operating expenses in the following categories:
               
Sales, marketing and administrative
    4,504     $ 2,628  
Research and development
    646       516  
     
 
  $ 5,150     $ 3,144  
     

 


 

NUVASIVE, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)
                 
    March 31, 2008   December 31, 2007
     
Assets
               
Current assets:
               
Cash and cash equivalents
  $ 258,529     $ 61,915  
Short-term investments
    4,952       19,247  
Accounts receivable, net
    30,335       27,496  
Inventory, net
    45,684       36,280  
Prepaid expenses and other current assets
    2,280       1,240  
     
Total current assets
    341,780       146,178  
Property and equipment, net of accumulated depreciation
    54,287       43,538  
Intangible assets, net of accumulated amortization
    26,159       24,496  
Long-term marketable securities
    15,118       8,536  
Other assets
    9,691       2,939  
     
Total assets
  $ 447,035     $ 225,687  
     
Liabilities and Stockholders’ Equity
               
Current liabilities:
               
Accounts payable and accrued liabilities
  $ 22,096     $ 13,839  
Accrued payroll and related expenses
    10,347       12,075  
Royalties payable
    1,853       2,076  
     
Total current liabilities
    34,296       27,990  
Senior convertible notes
    230,000        
Long-term liabilities
    989       1,119  
Commitments and contingencies
               
Stockholders’ equity:
               
 
               
Common stock, 70,000 shares authorized 35,513 and 35,330 issued and outstanding at March 31, 2008 and December 31, 2007, respectively
    35       35  
Additional paid-in capital
    357,226       364,469  
Accumulated other comprehensive loss
    123       54  
Accumulated deficit
    (175,634 )     (167,980 )
     
Total stockholders’ equity
    181,750       196,578  
     
Total liabilities and stockholders’ equity
  $ 447,035     $ 225,687  
     

 


 

NUVASIVE, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)
                 
    Three Months Ended March 31,
    2008   2007
     
Operating activities:
               
Net loss
  $ (7,654 )   $ (4,420 )
Adjustments to reconcile net loss to net cash used in operating activities:
               
Depreciation and amortization
    3,883       2,854  
Stock-based compensation
    5,150       3,144  
In process research and development
    4,176        
Allowances and other non-cash adjustments
    (47 )     523  
Changes in operating assets and liabilities:
               
Accounts receivable
    (2,929 )     (2,552 )
Inventory
    (9,306 )     (3,362 )
Prepaid expenses and other current assets
    (1,040 )     376  
Accounts payable and accrued liabilities
    5,260       1,410  
Accrued payroll and related expenses
    (1,728 )     (1,034 )
     
Net cash used in operating activities
    (4,235 )     (3,061 )
Investing activities:
               
Cash paid for pedicle screw technology
    4,176        
Cash paid for acquisition of Radius Medical LLC
          (6,970 )
Purchases of property and equipment
    (11,369 )     (1,698 )
Sales of short-term investments
    17,300       45,350  
Purchases of short-term investments
    (3,005 )     (30,435 )
Sales of long-term investments
    2,000       2,000  
Purchases of long-term investments
    (8,582 )     (10,467 )
Purchase of intangible asset
    (2,080 )      
Other assets
    740       31  
     
Net cash used in investing activities
    (9,172 )     (2,189 )
Financing activities:
               
Payment of long-term liabilities
           
Issuance of convertible senior notes
    208,442        
Issuance of common stock
    1,579       1,175  
     
Net cash provided by financing activities
    210,021       1,175  
Increase (decrease) in cash and cash equivalents
    196,614       (4,075 )
Cash and cash equivalents at beginning of period
    61,915       41,476  
     
Cash and cash equivalents at end of period
  $ 258,529     $ 37,401