EX-99.1 2 a55856exv99w1.htm EX-99.1 exv99w1
Exhibit 99.1
(NUVASIVE LOGO)
PRESS RELEASE
     
Contact:
  Investors:
Michael J. Lambert
  Patrick F. Williams
EVP & Chief Financial Officer
  Vice President, Finance & Investor Relations
NuVasive, Inc.
  NuVasive, Inc.
858-909-1998
  858-638-5511
investorrelations@nuvasive.com
  investorrelations@nuvasive.com
 
    
 
  Media:
 
  Jason Rando
 
  The Ruth Group
 
  646-536-7025
 
  jrando@theruthgroup.com
NUVASIVE REPORTS FIRST QUARTER 2010 FINANCIAL RESULTS
- Reiterates 2010 Guidance for Revenue and Earnings per Share -
 
 
 
 
 
 
 
 
 
 
  •   Total revenue of $109.1 million     
 
  •   GAAP earnings of $1.1 million, or $0.03 per share; Non-GAAP earnings of $8.3 million, or $0.21 per share
 
  •   Operating cash flow of $9.1 million
SAN DIEGO, April 20, 2010 — 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, 2010.
NuVasive reported first quarter revenue of $109.1 million, a 36.3% increase over the $80.0 million for the first quarter 2009 and a 2.0% increase over the $106.9 million for the fourth quarter 2009.
Gross profit for the first quarter 2010 was $89.6 million and gross margin was 82.2%, compared to a gross profit of $67.0 million and a gross margin of 83.8% for the first quarter 2009. For the fourth quarter 2009, gross profit was $88.9 million and gross margin was 83.2%.
Total operating expenses for the first quarter 2010 were $86.7 million compared to $70.4 million in the first quarter 2009 and $84.7 million in the fourth quarter 2009.
On a GAAP basis, the Company reported net income of $1.1 million, or $0.03 per share, for the first quarter 2010.

 

 

On a Non-GAAP basis, the Company reported net income of $8.3 million, or $0.21 per share, for the first quarter 2010. The Non-GAAP earnings per share calculations for the first quarter exclude on a pre-tax basis (i) intellectual property litigation costs of $1.3 million; (ii) acquisition related costs of $355 thousand; (iii) stock-based compensation of $6.4 million; and (iv) amortization of intangible assets of $1.4 million.
Cash, cash equivalents and short and long-term marketable securities were $208.1 million at March 31, 2010.
Alex Lukianov, Chairman and Chief Executive Officer, said, “We exceeded our expectations, achieving revenue growth of over 35%, driven by continued adoption of XLIF® technology, stronger traction from our new product launches, and aided in part by the positive reimbursement progress during the quarter. Our financial performance across earnings and operating cash flow signal a great start to what will be another outstanding year. Today’s results mark NuVasive’s 24th quarter, and 6th year, of consecutively meeting or exceeding expectations as a public company. Our keen focus on being the most creative spine technology company in the world and achieving exceptional results through speed of innovation, Absolute Responsiveness®, and superior clinical outcomes will continue to drive us toward our goal of becoming the #4 global spine company.”
Full Year 2010 Financial Guidance:
  •   Revenue of $480 million to $500 million
 
  •   GAAP EPS, net of tax and “If-converted” method, of $1.58 to $1.70
 
  •   Non-GAAP EPS, net of tax and “If-converted” method, of $1.13 to $1.25
 
  •   Non-GAAP Operating Margin of ~17%

 

 

Reconciliation of Non-GAAP Information
Management uses certain Non-GAAP financial measures such as Non-GAAP earnings per share, which exclude intellectual property litigation expenses, acquisition related items, non-cash stock-based compensation, and the amortization of intangible 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 2010 Results
                         
    pre-tax              
(in thousands, except per share data)   adjustments     $ (net of tax)     per Share  
GAAP net income
           $ 1,088     $ 0.03  
Intellectual property litigation expenses
     1,295       991       0.02  
Acquisition related items
     355       272       0.01  
Non-cash stock-based compensation
     6,434       4,922       0.12  
Amortization of intangible assets
     1,350       1,032       0.03  
 
                    
Non-GAAP earnings
           $ 8,305     $ 0.21  
 
                    
Weighted average shares — Diluted
                     40,061  
 
                      


Reconciliation of Full Year 2010 EPS Guidance
(Net of Tax, “If Converted” method)
                 
    Range for Year Ending  
    December 31, 2010  
(in thousands, except per share data)   Low     High  
GAAP earnings per share
   $ 1.58     $ 1.70  
Intellectual property litigation expenses
     0.07       0.07  
Non-cash stock-based compensation
     0.42       0.42  
Amortization of intangible assets
     0.08       0.08  
Reversal of remaining valuation allowance
     (1.02 )     (1.02 )
 
            
Non-GAAP earnings per share
   $ 1.13     $ 1.25  
 
            
Weighted average shares — Diluted
     46,000       46,000  
 
            

 

 

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 callers. A live webcast of the conference call will be available online from the investor relations page of the Company’s corporate website at www.nuvasive.com.
After the live webcast, the call will remain available on NuVasive’s website, www.nuvasive.com, through May 20, 2010. In addition, a telephonic replay of the call will be available until May 4, 2010. 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 348544.
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 primarily on the $5.1 billion U.S. spine implant market. Additionally, the Company has expanded into the $1.7 billion global biologics market, the $1.7 billion international market, and is developing products for the emerging motion preservation market.
NuVasive’s principal product offering is based on its Maximum Access Surgery, or MAS® platform. The MAS platform combines four categories of products that collectively minimize soft tissue disruption during spine surgery with maximum visualization and safe, easy reproducibility for the surgeon: NeuroVision®, a proprietary software-driven nerve avoidance system; MaXcess®, a unique split-blade retractor system; a wide variety of specialized implants; and several biologic fusion enhancers. MAS significantly reduces surgery time and returns patients to activities of daily living much faster than conventional approaches. Having redefined spine surgery with the MAS platform’s lateral approach, known as eXtreme Lateral Interbody Fusion, or XLIF®, NuVasive has built an entire spine franchise. With over 55 products today spanning lumbar, thoracic and cervical applications, the Company will continue to expand and evolve its offering predicated on its R&D focus and dedication to outstanding service levels supported by a culture of Absolute Responsiveness®.
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 NuVasive’s revenue or earnings projections may turn out to be inaccurate because of the preliminary nature of the forecasts and the risk of further adjustment, or unanticipated difficulty in selling products or generating expected 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 Statement of Operations
(in thousands, except per share data)
                 
    Three Months Ended March 31,  
    2010     2009  
Revenue
   $ 109,087     $ 80,008  
Cost of goods sold (excluding amortization of purchased technology)
     19,443       12,999  
 
            
Gross profit
     89,644       67,009  
 
                
Operating expenses:
                
Sales, marketing and administrative
     74,661       60,527  
Research and development
     10,699       8,586  
Amortization of intangible assets
     1,350       1,336  
 
            
Total operating expenses
     86,710       70,449  
 
                
Interest and other income (expense), net:
                
Interest income
     189       732  
Interest expense
     (1,669 )     (1,771 )
Other income, net
     117       44  
 
            
Total interest and other income (expense), net
     (1,363 )     (995 )
 
            
 
                
Income (loss) before income taxes
     1,571       (4,435 )
Income tax expense
     865       97  
 
            
Consolidated net income (loss)
   $ 706     $ (4,532 )
 
            
Net loss attributable to noncontrolling interests
   $ (382 )   $ (230 )
 
            
Net income (loss) attributable to NuVasive, Inc.
   $ 1,088     $ (4,302 )
 
            
 
                
Net income (loss) per share attributable to NuVasive, Inc.:
                
Basic
   $ 0.03     $ (0.12 )
 
            
Diluted
   $ 0.03     $ (0.12 )
 
            
Weighted average shares outstanding:
                
Basic
     38,898       36,365  
 
            
Diluted
     40,061       36,365  
 
            
 
                
Stock-based compensation is included in operating expenses in the following categories:
                
Sales, marketing and administrative
   $ 5,680     $ 5,241  
Research and development
     754       1,441  
 
            
 
   $ 6,434     $ 6,682  
 
            

 

 

NuVasive, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
                 
    March 31, 2010     December 31, 2009  
    (Unaudited)          
ASSETS
                
Current assets:
                
Cash and cash equivalents
   $ 77,664     $ 65,413  
Short-term marketable securities
     100,349       99,279  
Accounts receivable, net
     62,185       58,462  
Inventory
     90,553       90,191  
Prepaid expenses and other current assets
     4,237       3,757  
 
            
Total current assets
     334,988       317,102  
Property and equipment, net
     83,816       82,602  
Long-term marketable securities
     30,059       39,968  
Intangible assets, net
     101,989       103,338  
Goodwill
     102,882       102,882  
Other assets
     12,540       7,872  
 
            
Total assets
   $ 666,274     $ 653,764  
 
            
LIABILITIES AND STOCKHOLDERS’ EQUITY
                
Current liabilities:
                
Accounts payable and accrued liabilities
   $ 38,180     $ 33,302  
Accrued payroll and related expenses
     12,154       19,111  
Royalties payable
     2,659       2,334  
 
            
Total current liabilities
     52,993       54,747  
Senior convertible notes
     230,000       230,000  
Long-term acquisition related liabilities
     30,694       30,694  
Other long-term liabilities
     28,504       28,472  
Commitments and contingencies
                
 
                
Noncontrolling interests
     13,247       13,629  
 
                
Stockholders’ equity:
                
Common stock
     39       39  
Additional paid-in capital
     499,701       485,757  
Accumulated other comprehensive income (loss)
     (292 )     126  
Accumulated deficit
     (188,612 )     (189,700 )
 
            
Total stockholders’ equity
     310,836       296,222  
 
            
Total liabilities and stockholders’ equity
   $ 666,274     $ 653,764  
 
            

 

 

NuVasive, Inc.
Unaudited Condensed Consolidated Statements of Cash Flows
(in thousands)
                 
    Three Months Ended March 31,  
    2010     2009  
Operating activities:
                
Consolidated net income (loss)
   $ 706     $ (4,532 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
                
Depreciation and amortization
     8,104       5,488  
Stock-based compensation
     6,434       6,682  
Allowance for doubtful accounts and sales return reserve, net of write offs
     (657 )     205  
Allowance for excess and obsolete inventory
     736       652  
Other non-cash adjustments
     1,454       (15 )
Changes in operating assets and liabilities, net of effects from acquisitions:
                
Accounts receivable
     (3,100 )     1,361  
Inventory
     (1,237 )     (14,100 )
Prepaid expenses and other assets
     (1,570 )     609  
Accounts payable and accrued liabilities
     4,780       10,875  
Accrued payroll and related expenses
     (6,512 )     (2,600 )
 
            
Net cash provided by operating activities
     9,138       4,625  
Investing activities:
                
Cash paid for acquisitions and investments
     —       (20,000 )
Purchases of property and equipment
     (8,402 )     (5,567 )
Purchases of short-term marketable securities
     (31,990 )     (7,658 )
Sales of short-term marketable securities
     45,013       27,725  
Purchases of long-term marketable securities
     (13,535 )     (6,758 )
Sales of long-term marketable securities
     9,003       18,975  
 
            
Net cash provided by investing activities
     89       6,717  
Financing activities:
                
Issuance of common stock
     6,628       1,160  
Other assets
     (4,408 )     —  
Tax benefits related to stock-based compensation awards
     882       —  
 
            
Net cash provided by financing activities
     3,102       1,160  
 
            
Effect of exchange rate changes on cash
     (78 )     (59 )
 
            
Increase in cash and cash equivalents
     12,251       12,443  
Cash and cash equivalents at beginning of year
     65,413       132,318  
 
            
Cash and cash equivalents at end of year
   $ 77,664     $ 144,761