EX-99.1 2 a04-12132_1ex99d1.htm EX-99.1

Exhibit 99.1

 

 

PRESS RELEASE

 

Contacts:

 

Investors/Media:

 

Kevin C. O’Boyle

 

Stephanie Carrington/Greg Tiberend

 

Chief Financial Officer

 

The Ruth Group

 

NuVasive, Inc.

 

646-536-7017/7005

 

858-271-7070

 

scarrington@theruthgroup.com

 

investorrelations@nuvasive.com

 

gtiberend@theruthgroup.com

 

 

NUVASIVE REPORTS THIRD QUARTER 2004

FINANCIAL RESULTS

 

Third Quarter Highlights:

 

•                  Generated revenues of $10.2 million - up 68% year-over-year and 16% quarter-over-quarter

 

•                  Gross profit increased to $7.6 million - up 72% year-over-year and 19% quarter-over-quarter

 

•                  Surgeons trained on MAS platform increased to 155 year-to-date

 

•                  MAS revenue contribution increased to 79% of total revenue

 

•                  Announces launch of SpheRx™ Pedicle Screw System, MaXcess™ Micro-Access and Neuro-Vision® Nerve Root Retractor

 

SAN DIEGO, Oct. 26, 2004 – NuVasive, Inc. (Nasdaq: NUVA), a medical device company focused on developing products for minimally disruptive surgical treatments for the spine, announced today third quarter financial results for the period ended September 30, 2004.

 

The Company reported third quarter revenues of $10.2 million, a 68% increase over the $6.1 million for the third quarter of 2003 and a 16% increase over the $8.8 million for the second quarter of 2004.  Maximum Access Surgery (MAS) revenues for the third quarter were $8.0 million, an increase of 140% from the third quarter of 2003, and up 30% from the second quarter of 2004.

 

Gross profit for the third quarter of 2004 was $7.6 million with a gross margin of 74.2%, compared with a gross profit of $4.4 million with a gross margin of 72.3% in the third quarter of 2003. For the second quarter of 2004, gross profit was $6.3 million with a gross margin of 71.8%.

 


 

Total operating expenses for the third quarter of 2004 were $10.6 million, compared with $6.3 million in the third quarter of 2003 and $10.8 million for the second quarter of 2004.  Total operating expenses, excluding stock-based compensation expense, for the third quarter of 2004 was $9.3 million, compared with $6.1 million in the third quarter of 2003 and $8.9 million for the second quarter of 2004.  The quarter-over-quarter increase reflects continued investment in the marketing and enhancement of the Company’s MAS platform, specifically its SpheRx™ pedicle screw system, MaXcess™ Micro-Access and Neuro-Vision® Nerve Root Retractor launched in the third quarter, and for the development of its total disc replacement (TDR) products.

 

On a GAAP basis for the three-month period ended September 30, 2004, the Company reported a net loss of $2.8 million, or $0.12 per share.  On a pro forma basis, third quarter net loss excluding stock based compensation was $1.5 million, or $0.06 per share.

 

Cash, cash equivalents and short-term investments were $63.8 million at the end of the third quarter 2004.

 

Alexis V. Lukianov, Chairman, President and Chief Executive Officer, said, “Our third quarter results demonstrate the continued momentum in the adoption of our MAS products, which accounted for 79% of total revenues for the quarter up from 70% last quarter, driving incremental revenue growth of 16% and enhancing gross margin. We remain on track with our strategy of expanding market penetration of our leading spine surgery products and technologies as demonstrated by the increase in our blended average sales price per procedure to approximately $2,600 and the number of surgeons trained on our MAS platform to 155 year-to-date. We believe that the recent expansion of our product platform will further enhance this penetration and increase our top-line growth.”

 

For the full year 2004, the Company is revising revenue guidance in the range of $37 million to $38 million from $36 million to $37 million.

 

Product Launches

NuVasive also announced the expansion of its MAS platform with the launch of three new products:

 

•                  SpheRx™ Pedicle Screw System

•                  The patented SpheRx Pedicle Screw System is an efficient and unique line of posterior instrumentation that enables straightforward fixation in less disruptive procedures.

 

•                  MaXcess™ Micro-Access

•                  The MaXcess Micro-Access System adds more surgical applications to the platform by enabling minimally disruptive maximum access approaches for lumbar stenosis decompression, foraminal discectomy and posterior cervical foraminotomy.

 

•                  Neuro-Vision® Nerve Root Retractor

•                  The NeuroVision Nerve Root Retractor combines stimulated and free run EMG to monitor spinal nerves and alert the surgeon of physiologic changes intraoperatively during nerve retraction.

 


 

The Company will premiere these new products at a management-hosted investor breakfast preceding the opening of the North American Spine Society (NASS) annual meeting in Chicago, IL on Wednesday, October 27, 2004 at 7:30 a.m. CDT / 8:30 a.m. EDT. The investor breakfast will include a panel presentation and interaction with leading spine surgeons on their MAS™ clinical experience. The panel will feature Paul McAfee, MD; Frank Phillips, MD; William Taylor, MD; and Franco Vigna, MD.

 

Conference Call

NuVasive will host a conference call today at 4:00 p.m. CDT / 5:00 p.m. EDT to discuss third quarter results. A live Web cast of the conference call will be available online from the investor relations page of NuVasive’s corporate Web site at www.nuvasive.com.  The dial-in numbers are (800) 247-9979 for domestic callers, and (973) 409-9254 for international callers.  The reservation number for both is 5220349.  The call will remain available on NuVasive’s Web site, www.nuvasive.com, through November 26, 2004.  A telephonic replay of the call will be available until November 9, 2004.  The replay dial-in numbers are (877) 519-4471 for domestic callers and (973) 341-3080 for international callers.  Please use reservation code 5220349.

 

About NuVasive

NuVasive is a medical device company focusing on the design, development and marketing of products for use in minimally disruptive surgical treatments for the spine. NuVasive’s Maximum Access Surgery (MAS™) product platform includes the NeuroVision® nerve avoidance system, MaXcess™ spine access system, and specialized implants.  NuVasive also offers classic fusion implant products for use in spine surgery and has an R&D pipeline emphasizing motion preservation products such as total disc replacement (TDR).

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 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.  All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements containing the words “planned,” “expects,” “believes,” “strategy,” “opportunity,” “anticipates” and similar words.  These statements may include, among others, plans, strategies and objectives of management for future operations; any statements regarding proposed new products, services or developments; any statements regarding future economic conditions or financial or operating performance; statements of belief and any statements of assumptions underlying any of the foregoing. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to, the rapidly changing and competitive nature of the medical device industry, NuVasive’s ability to convince surgeons to use its products, the ability of patients to obtain third-party reimbursement for surgical procedures employing NuVasive’s products, risks related to government regulation of medical devices, risks related to NuVasive’s ability to effectively manage the growth of its business, risks related to ownership and enforcement of intellectual property rights, NuVasive’s ability to successfully develop new products, and other risks and uncertainties more fully described in NuVasive’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 13, 2004, and NuVasive’s Prospectus filed pursuant to Rule 424 under the Securities Act of 1933, as amended, with the Securities and Exchange Commission on May 13, 2004.  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.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

2004

 

2003

 

2004

 

2003

 

 

 

 

 

 

 

 

 

 

 

Revenues:

 

 

 

 

 

 

 

 

 

MAS

 

$

8,043

 

$

3,351

 

$

19,017

 

$

8,051

 

Classic Fusion

 

2,141

 

2,725

 

7,564

 

7,969

 

Total revenues

 

10,184

 

6,076

 

26,581

 

16,020

 

Cost of goods sold

 

2,624

 

1,683

 

7,309

 

4,940

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

7,560

 

4,393

 

19,272

 

11,080

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Research and development

 

2,164

 

1,476

 

6,246

 

4,301

 

Sales and marketing

 

4,881

 

3,329

 

13,164

 

8,446

 

General and administrative

 

2,254

 

1,339

 

6,226

 

4,623

 

Stock-based compensation

 

1,266

 

193

 

5,244

 

337

 

Total operating expenses

 

10,565

 

6,337

 

30,880

 

17,707

 

Interest income

 

282

 

40

 

385

 

97

 

Interest expense net

 

(33

)

(61

)

(215

)

(169

)

Other income (expense), net

 

—

 

128

 

(11

)

135

 

Net loss

 

$

(2,756

)

$

(1,837

)

$

(11,449

)

$

(6,564

)

 

 

 

 

 

 

 

 

 

 

Historical net loss per share:

 

 

 

 

 

 

 

 

 

Basic and diluted

 

$

(0.12

)

$

(0.45

)

$

(0.89

)

$

(1.62

)

Weighted average shares- basic and diluted

 

23,494

 

4,076

 

12,859

 

4,047

 

 

 

 

 

 

 

 

 

 

 

Pro-forma information:

 

 

 

 

 

 

 

 

 

Operating expenses

 

$

10,565

 

$

6,337

 

$

30,880

 

$

17,707

 

Stock-based compensation

 

1,266

 

193

 

5,244

 

337

 

Pro-forma operating expenses excluding stock-based compensation

 

$

9,299

 

$

6,144

 

$

25,636

 

$

17,370

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(2,756

)

$

(1,837

)

$

(11,449

)

$

(6,564

)

Stock-based compensation

 

1,266

 

193

 

5,244

 

337

 

 

 

 

 

 

 

 

 

 

 

Net loss excluding stock-based compensation

 

$

(1,490

)

$

(1,644

)

$

(6,205

)

$

(6,227

)

Pro-forma basic and diluted net loss per share excluding stock-based compensation

 

$

(0.06

)

$

(0.40

)

$

(0.48

)

$

(1.54

)

Weighted average shares- basic and diluted

 

23,494

 

4,076

 

12,859

 

4,047

 

 

 


 

NUVASIVE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

 

September 30,

 

December 31,

 

 

 

2004

 

2003

 

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

18,238

 

$

5,631

 

Short-term investments

 

45,535

 

4,017

 

Accounts receivable, net

 

5,570

 

3,728

 

Inventory, net

 

7,328

 

5,048

 

Prepaid expenses and other current assets

 

643

 

428

 

Total current assets

 

77,314

 

18,852

 

Property and equipment, net

 

3,449

 

3,390

 

Notes receivable from employee

 

—

 

21

 

Other assets

 

76

 

108

 

Total Assets

 

$

80,839

 

$

22,371

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

5,341

 

$

5,036

 

Accrued payroll and related expenses

 

2,421

 

2,242

 

Current portion of notes payable

 

—

 

3,493

 

Current portion of obligations under capital leases

 

107

 

306

 

Total current liabilities

 

7,869

 

11,077

 

Notes payable, less current portion

 

—

 

1,202

 

Obligations under capital leases, less current portion

 

—

 

22

 

Stockholders equity:

 

 

 

 

 

Preferred stock

 

—

 

32

 

Common stock

 

24

 

4

 

Additional paid-in capital

 

152,896

 

75,044

 

Notes receivable from stockholders

 

—

 

(188

)

Deferred compensation

 

(4,246

)

(566

)

Accumulated deficit

 

(75,704

)

(64,256

)

Total stockholders’ equity

 

72,970

 

10,070

 

Total liabilities and stockholders’ equity

 

$

80,839

 

$

22,371