NuVasive Investor Relations

NuVasive is a world leader in minimally invasive, procedurally-integrated spine solutions. From complex spinal deformity to degenerative spinal conditions, NuVasive is transforming spine surgery with innovative technologies designed to deliver reproducible and clinically proven surgical outcomes.

Press Release

NuVasive Announces First Quarter 2018 Financial Results

SAN DIEGO, May 1, 2018 /PRNewswire/ -- NuVasive, Inc. (NASDAQ: NUVA), the leader in spine technology innovation, focused on transforming spine surgery with minimally disruptive, procedurally-integrated solutions, today announced financial results for the quarter ended March 31, 2018. 

First Quarter 2018 Highlights

  • Revenue increased 4.6% to $260.5 million, or 3.4% on a constant currency basis;
  • GAAP operating profit margin of (7.0%); Non-GAAP operating profit margin of 12.3%; and
  • GAAP diluted loss per share of ($0.53); Non-GAAP diluted earnings per share increase of 5.4% to $0.39.

"In the first quarter 2018, NuVasive's International business continued its momentum of 20% growth year over year on a constant currency basis, with our core U.S. hardware business showing solid case volume growth," said Gregory T. Lucier, chairman and chief executive officer of NuVasive. "As we look forward to the remainder of the year, we expect our continued innovation—including the expansion of our lateral procedural solutions with the integration of Lateral Single-Position Surgery, further build out of our Advanced Materials Science portfolio and the initial launch of our Surgical Intelligence platform—to drive further differentiation of NuVasive technologies with surgeon partners. We also anticipate our Ohio manufacturing facility production ramping up in the second half of the year and we begin to realize the 400 basis point improvement in gross margins through this in-sourcing manufacturing effort."

A full reconciliation of non-GAAP to GAAP measures can be found in the tables of this news release.

First Quarter 2018 Results
NuVasive reported first quarter 2018 total revenue of $260.5 million, a 4.6% increase compared to $249.0 million for the first quarter 2017. On a constant currency basis, first quarter 2018 total revenue increased 3.4% compared to the same period last year. 

For the first quarter 2018, GAAP and non-GAAP gross profit was $186.7 million and $187.1 million, respectively, and GAAP and non-GAAP gross margin was 71.7% and 71.8%, respectively. These results compared to both GAAP and non-GAAP gross profit of $187.6 million, and both GAAP and non-GAAP gross margin of 75.3% for the first quarter 2017.

The Company reported a GAAP net loss of ($27.1) million, or ($0.53) per share, for the first quarter 2018 compared to a GAAP net income of $12.4 million, or $0.22 per share, for the first quarter 2017. On a non-GAAP basis, the Company reported net income of $20.2 million, or $0.39 per share, for the first quarter 2018 compared to net income of $19.7 million, or $0.37 per share, for the first quarter 2017. The GAAP net loss for the quarter was driven primarily by an increase in litigation liability of $29.0 million related to the Company's previously disclosed lawsuit with a former sales agent, which has been ongoing since 2013.

During the quarter ended March 31, 2018, the Company obtained a favorable tax ruling with respect to its operations in Tennessee. The Company modified its local operations to obtain the ruling, which provides for tax exemptions for property, sales and use taxes specific to the state. With the Company's primary distribution facility based in Memphis, the Company expects this tax ruling to yield in excess of $100 million in tax savings over the next 15 years. The Company engaged a specialized tax consultant to assist with these efforts and the Company recorded a non-recurring, success-based fee of $6.1 million in its first quarter 2018 financials.

Annual Financial Guidance for 2018
The Company reiterated its full-year 2018 guidance, and assumes a full-year benefit of U.S. tax reform, suspension of the medical device tax and the recent acquisition of SafePassage.

                                   
   

2018 Guidance Range 1

 
   

Prior

 

Current

 
 

(in Million's; except %'s and EPS)

 GAAP 

 

 Non-GAAP 

 

 GAAP 

 

 Non-GAAP 

 
 

Revenue

$    1,095

 

$    1,105

 

$    1,095

 

$    1,105

 

$    1,095

 

$    1,105

 

$    1,095

 

$    1,105

 
 

  % Growth - Reported 2

6.4%

 

7.3%

 

6.4%

 

7.3%

 

6.7%

 

7.6%

 

6.7%

 

7.6%

 
 

% Growth - Constant Currency 2, 3

       

5.9%

 

6.9%

         

5.7%

 

6.6%

 
 

Operating margin

13.0%

 

13.0%

 

17.6%

 

17.6%

 

9.6%

 

9.7%

 

17.6%

 

17.6%

 
 

Earnings per share

$      1.56

 

$      1.59

 

$      2.44

 

$      2.47

 

$      0.71

 

$      0.74

 

$      2.44

 

$2.47

 
 

EBITDA

23.4%

 

23.4%

 

26.9%

 

26.9%

 

19.5%

 

19.5%

 

26.9%

 

26.9%

 
 

Tax Rate

~19%

 

~19%

 

~24%

 

~24%

 

~31%

 

~31%

 

~23%

 

~23%

 
                                   

 1

Prior guidance reflects the range provided February 26, 2018. Current guidance reflects the range provided May 1, 2018.

 

2

2017 has been recasted and presented based on our full retrospective method of adoption of ASC 606.

 

3

Constant currency is a measure that adjusts US GAAP revenue for the impact of currency over the same period in the prior year.

 
                                   

 

 

  • Full-year 2018 revenue in the range of $1,095 million to $1,105 million reflecting organic growth in the range of 4.7% to 5.7% and reported growth of 6.7% to 7.6%, inclusive of the recent acquisition of SafePassage;
  • Non-GAAP diluted earnings per share in a range of $2.44 to $2.47;
  • Non-GAAP operating profit margin of approximately 17.6%;
  • Adjusted EBITDA margin of approximately 26.9%;
  • Non-GAAP effective tax expense rate of approximately 23%, compared with the prior expectation of approximately 24%;
  • The Company now expects currency to have a positive impact in 2018 of approximately $10 million, compared with the prior expectation of approximately $5 million; and
  • The Company continues to expect to drive at least 100 basis points in non-GAAP operating margin expansion and adjusted EBITDA of approximately $295 million to $305 million.

Supplementary Financial Information
For additional financial detail, please visit the Investor Relations section of the Company's website at www.nuvasive.com to access Supplementary Financial Information.

                       

Reconciliation of Full Year EPS Guidance

   

2017
Actuals 1, 2

 

2018 Guidance Range 2, 3

 
     

Prior 4

 

Current  5

 
 

GAAP net income per share

$        1.48

 

$        1.56

 

$        1.59

 

$        0.71

 

$        0.74

 
 

Impact of change to diluted share count

0.08

 

0.01

 

0.01

 

0.01

 

0.01

 
 

GAAP net income per share, adjusted to diluted Non-GAAP share count

$        1.56

 

$        1.57

 

$        1.60

 

$        0.72

 

$        0.75

 
                       
 

Business transition costs 6

0.08

 

0.04

 

0.04

 

0.07

 

0.07

 
 

Non-cash purchase accounting adjustments on acquisitions 7

0.01

 

0.02

 

0.02

 

0.02

 

0.02

 
 

Non-cash interest expense on convertible notes

0.33

 

0.32

 

0.32

 

0.32

 

0.32

 
 

Litigation liability 8

0.09

 

-

 

-

 

0.55

 

0.55

 
 

Non-recurring consulting fees 9

-

 

-

 

-

 

0.12

 

0.12

 
 

Impairment of strategic investment

-

 

-

 

-

 

0.17

 

0.17

 
 

Amortization of intangible assets 10

0.89

 

0.88

 

0.88

 

0.89

 

0.89

 
 

Tax effect of adjustments 11

(1.07)

 

(0.39)

 

(0.39)

 

(0.42)

 

(0.42)

 
 

Non-GAAP earnings per share

$        1.89

 

$        2.44

 

$        2.47

 

$        2.44

 

$        2.47

 
                       
 

GAAP Weighted shares outstanding - basic

50,874

 

51,025

 

51,025

 

51,025

 

51,025

 
 

GAAP Weighted shares outstanding - diluted

55,193

 

52,647

 

52,647

 

52,647

 

52,647

 
 

Non-GAAP Weighted shares outstanding - diluted 12

52,345

 

52,185

 

52,185

 

52,185

 

52,185

 
                       

   1

2017 has been recasted and presented based on our full retrospective method of adoption of ASC 606.

 

2

Items may not foot due to rounding.

 

3

Prior guidance reflects the range provided February 26, 2018. Current guidance reflects the range provided May 1, 2018.

 

4

Effective tax expense rate of ~19% applied to GAAP earnings and ~24% applied to Non-GAAP earnings.

 

5

Effective tax expense rate of ~31% applied to GAAP earnings and ~23% applied to Non-GAAP earnings.

 

6

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

 

7

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

 

8

Related to the Medtronic litigation matter for fiscal year 2017 and for fiscal year 2018 represents the estimated loss contingency for the Madsen Medical, Inc. litigation matter.

 

9

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

 

10

2017 results exclude the amortization associated with non-controlling interest.

 

11

The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company's tax filings. The impact of the changes to the tax rate results in an annual estimated rate of ~23% on a non-GAAP basis.

 

12

Represents the exclusion of diluted shares associated with the Company's convertible debt and warrant which are economically hedged by the Company's bond hedge arrangement on the Senior Convertible Notes due 2021.

 
                       

 

 

                 

Reconciliation of Non-GAAP Operating Margin %

                 
     

2017 Actuals 1, 2

 

2018 Guidance 2, 3

 
 

(in thousands, except %)

   

Prior

 

Current

 
 

Non-GAAP Gross Margin %[A]

 

73.9%

 

74.0%

 

73.5%

 
 

Non-cash purchase accounting adjustments on acquisitions 4

 

(0.1%)

 

(0.1%)

 

(0.1%)

 
 

GAAP Gross Margin [B]

 

73.9%

 

73.9%

 

73.4%

 
                 
 

Non-GAAP Sales, Marketing & Administrative Expense [C]

 

52.5%

 

51.1%

 

50.6%

 
 

Non-recurring consulting fees5

 

0.0%

 

0.0%

 

0.6%

 
 

GAAP Sales, Marketing & Administrative Expense [D]

 

52.5%

 

51.1%

 

51.2%

 
                 
 

Non-GAAP Research & Development Expense [E]

 

4.9%

 

5.3%

 

5.3%

 
 

In-process research & development

 

0.0%

 

0.0%

 

0.0%

 
 

GAAP Research & Development Expense [F]

 

4.9%

 

5.3%

 

5.3%

 
                 
 

Litigation liability [G] 6

 

0.4%

 

0.0%

 

2.6%

 
 

Amortization of intangible assets [H] 7

 

4.7%

 

4.3%

 

4.3%

 
 

Business transition costs [I] 8

 

0.4%

 

0.2%

 

0.4%

 
                 
 

Non-GAAP Operating Margin % [A - C - E]

 

16.4%

 

17.6%

 

17.6%

 
                 
 

GAAP Operating Margin % [B - D - F - G - H - I]

 

10.9%

 

13.0%

 

9.6%

 
                 

   1

2017 has been recasted and presented based on our full retrospective method of adoption of ASC 606.

 

    2

Items may not foot due to rounding.

 

3

Prior guidance reflects the range provided February 26, 2018. Current guidance reflects the range provided May 1, 2018.

 

4

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

 

5

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

 

6

Related to the Medtronic litigation matter for fiscal year 2017 and for fiscal year 2018 represents the estimated loss contingency for the Madsen Medical, Inc. litigation matter.

 

7

2017 results exclude the amortization associated with non-controlling interest.

 

8

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

 
                 

 

 

               

Reconciliation of EBITDA %

               
               
   

2017 Actuals 1, 2

 

2018 Guidance 2, 3

 
 

(in thousands, except %)

 

Prior

 

Current

 
 

Net Income / (Loss)

7.9%

 

7.5%

 

3.4%

 
 

Interest (income) / expense, net 

3.7%

 

3.6%

 

3.6%

 
 

Provision for income taxes

(0.7%)

 

1.7%

 

1.6%

 
 

Depreciation and amortization 4

11.7%

 

10.6%

 

10.9%

 
 

EBITDA

22.6%

 

23.4%

 

19.5%

 
 

Non-cash stock based compensation

2.2%

 

3.2%

 

3.0%

 
 

Business transition costs 5

0.4%

 

0.2%

 

0.3%

 
 

Non-cash purchase accounting adjustments on acquisitions 6

0.1%

 

0.1%

 

0.1%

 
 

Litigation liability 7

0.4%

 

0.0%

 

2.6%

 
 

Non-recurring consulting fees 8

0.0%

 

0.0%

 

0.6%

 
 

Impairment of strategic investment

0.0%

 

0.0%

 

0.8%

 
 

Adjusted EBITDA

25.6%

 

26.9%

 

26.9%

 
               

    1

2017 has been recasted and presented based on our full retrospective method of adoption of ASC 606.

 

2

Items may not foot due to rounding.

 

3

Prior guidance reflects the range provided February 26, 2018. Current guidance reflects the range provided May 1, 2018.

 

4

2017 results exclude the amortization associated with non-controlling interest.

 

5

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

 

6

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

 

7

Related to the Medtronic litigation matter for fiscal year 2017 and for fiscal year 2018 represents the estimated loss contingency for the Madsen Medical, Inc. litigation matter.

 

8

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

 
               

 

Reconciliation of Non-GAAP Information
Reconciliation of Non-GAAP Information Management uses certain non-GAAP financial measures such as non-GAAP earnings per share, non-GAAP net income, non-GAAP operating expenses and non-GAAP operating profit margin, which exclude amortization of intangible assets, business transition costs, one-time restructuring and related items in connection with acquisitions, investments and divestitures, non-recurring consulting fees, certain litigation charges and non-cash interest expense (excluding debt issuance cost) and or losses on convertible notes. Management also uses certain non-GAAP measures which are intended to exclude the impact of foreign exchange currency fluctuations. The measure constant currency is the use of an exchange rate that eliminates fluctuations when calculating financial performance numbers. The Company also uses measures such as free cash flow, which represents cash flow from operations less cash used in the acquisition and disposition of capital. Additionally, the Company uses an adjusted EBITDA measure which represents earnings before interest, taxes, depreciation and amortization and excludes the impact of stock-based compensation, business transition costs, one-time restructuring and related items in connection with acquisitions, investments and divestitures, non-recurring consulting fees, certain litigation liabilities, and other significant one-time items. 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 further and more consistently analyze the period-to-period financial performance of its core business operations. Management believes that providing investors with these non-GAAP measures gives them additional 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 2018 Results

 
 

GAAP Net Loss to Adjusted EBITDA

 
       
   

Three months ended

 
 

(in thousands, except per share data)

March 31, 2018

 
 

GAAP net loss

$                                        (27,132)

 
 

Interest expense/(income), net

9,333

 
 

Provision for income taxes

(10,126)

 
 

Depreciation and amortization

32,090

 
 

EBITDA

$                                            4,165

 
 

Business transition costs1

2,253

 
 

Non-cash purchase accounting adjustments on acquisitions 2

405

 
 

Litigation liability 3

28,995

 
 

Non-recurring consulting fees 4

6,084

 
 

Impairment of strategic investment

9,004

 
 

Non-cash stock based compensation

4,134

 
 

Adjusted EBITDA

$                                          55,040

 
 

As a percentage of revenue

21.1%

 
     

1

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

 

2

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

 

3

Represents the amount accrued as an estimated loss contingency in connection with the Madsen Medical, Inc. litigation matter.

 

4

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

 
     

 

 

 

               
 

Reconciliation of First Quarter 2018 Results

 
 

GAAP Net Loss per Share to Non-GAAP Earnings per Share

 
               
       

Adjustments

 

Diluted Earnings Per Share

 
 

(in thousands, except per share data)

           
 

GAAP net loss

   

$               (27,132)

 

$                          (0.53)

 
               
 

Business transition costs 1

   

2,253

     
 

Non-cash purchase accounting adjustments on acquisitions 2

   

405

     
 

Non-cash interest expense on convertible notes

   

4,099

     
 

Litigation liability 3

   

28,995

     
 

Non-recurring consulting fees 4

   

6,084

     
 

Impairment of strategic investment

   

9,004

     
 

Amortization of intangible assets

   

12,425

     
 

Tax effect of adjustments 5

   

(15,976)

     
 

Adjustments to GAAP net loss

   

47,289

     
 

Non-GAAP earnings

   

$                20,157

 

$                           0.39

 
               
               
 

GAAP weighted shares outstanding - basic and diluted

       

51,226

 
 

Non-GAAP weighted shares outstanding - diluted6

       

51,742

 
               

1

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

 

2

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

 

3

Represents the amount accrued as an estimated loss contingency in connection with the Madsen Medical, Inc. litigation matter.

 

4

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

 

5

The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company's tax filings. The impact of the changes to the tax rate results in an annual estimated rate of ~23% on a non-GAAP basis.

 
 
 

6

Represents the exclusion of diluted shares associated with the Company's convertible debt and warrant which are economically hedged by the Company's bond hedge arrangement on the Senior Convertible Notes due 2021.

 

 

Investor Conference Call
NuVasive will hold a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its financial performance for the first quarter 2018. The dial-in numbers are 1-877-407-9039 for domestic callers and 1-201-689-8470 for international callers. A live webcast of the conference call will be available online from the Investor Relations page of the Company's website at www.nuvasive.com. After the live webcast, the call will remain available on NuVasive's website through June 1, 2018. In addition, a telephone replay of the call will be available until May 8, 2018. The replay dial-in numbers are 1-844-512-2921 for domestic callers and 1-412-317-6671 for international callers. Please use pin number: 13678607.

About NuVasive
NuVasive, Inc. (NASDAQ: NUVA) is a world leader in minimally invasive, procedurally-integrated spine solutions. From complex spinal deformity to degenerative spinal conditions, NuVasive is transforming spine surgery with innovative technologies designed to deliver reproducible and clinically proven surgical outcomes. NuVasive's highly differentiated, procedurally-integrated solutions include access instruments, implantable hardware and software systems for surgical planning and reconciliation technology that centers on achieving the global alignment of the spine. With over $1 billion in revenues, NuVasive has an approximate 2,400 person workforce in more than 40 countries around the world. For more information, please visit www.nuvasive.com.

Forward-Looking Statements
NuVasive cautions you that statements included in this news release or made on the investor conference call referenced herein 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. In addition, this news release contains selected financial results from the first quarter 2018, as well as projections for 2018 financial guidance and longer-term financial performance goals. The Company's results for the first quarter 2018 are prior to the completion of review and audit procedures by the Company's external auditors and are subject to adjustment. In addition, the Company's projections for 2018 financial guidance and longer-term financial performance goals represent initial estimates, and are subject to the risk of being inaccurate because of the preliminary nature of the forecasts, the risk of further adjustment, or unanticipated difficulty in selling products or generating expected profitability. The potential risks and uncertainties which contribute to the uncertain nature of these statements include, among others, risks associated with acceptance of the Company's surgical products and procedures by spine surgeons, spine surgeons, development and acceptance of new products or product enhancements, clinical and statistical verification of the benefits achieved via the use of NuVasive's products (including the iGA™ platform), the Company's ability to effectually manage inventory as it continues to release new products, its ability to recruit and retain management and key personnel, and the other risks and uncertainties more fully described in the Company's news 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. 

Consolidated Statements of Operations 

(in thousands, except per share data)

         
   

Three Months Ended March 31,

(unaudited)

 

2018

 

2017

Revenue

       

Product revenue

 

$ 233,515

 

$ 224,955

Service revenue

 

27,007

 

24,058

Total revenue

 

260,522

 

249,013

Cost of revenue (excluding below amortization of intangible assets)

       

Cost of products sold 

 

55,191

 

45,901

Cost of services

 

18,623

 

15,542

Total cost of revenue

 

73,814

 

61,443

Gross profit

 

186,708

 

187,570

Operating expenses:

       

Sales, marketing and administrative

 

146,766

 

140,368

Research and development

 

14,491

 

12,414

Amortization of intangible assets

 

12,425

 

12,061

Litigation liability loss

 

28,995

 

Business transition costs

 

2,253

 

55

Total operating expenses

 

204,930

 

164,898

Interest and other expense, net:

       

Interest income

 

134

 

137

Interest expense

 

(9,467)

 

(9,799)

Other (expense) income, net

 

(9,703)

 

258

Total interest and other expense, net

 

(19,036)

 

(9,404)

(Loss) income before income taxes

 

(37,258)

 

13,268

Income tax benefit (expense)

 

10,126

 

(1,285)

Consolidated net (loss) income

 

$ (27,132)

 

$   11,983

Add back net loss attributable to non-controlling interest

 

$          —

 

$      (443)

Net (loss) income attributable to NuVasive, Inc.

 

$ (27,132)

 

$   12,426

         

Net (loss) income per share attributable to NuVasive, Inc.:

       

Basic

 

$     (0.53)

 

$       0.25

Diluted

 

$     (0.53)

 

$       0.22

Weighted average shares outstanding:

       

Basic

 

51,226

 

50,566

Diluted

 

51,226

 

57,786

 

 

NuVasive, Inc. 

Consolidated Balance Sheets 

(in thousands, except par values and share amounts) 

         
   

March 31, 2018

 

December 31, 2017

ASSETS

 

(Unaudited)

   

Current assets:

       

Cash and cash equivalents

 

$           73,741

 

$                  72,803

Restricted cash and investments

 

 

3,901

Accounts receivable, net of allowances of $14,734 and $13,026, respectively

 

188,107

 

200,220

Inventory, net

 

257,982

 

247,138

Prepaid income taxes

 

16,877

 

17,209

Prepaid expenses and other current assets

 

21,102

 

18,792

Total current assets

 

557,809

 

560,063

Property and equipment, net

 

227,573

 

215,326

Intangible assets, net

 

287,600

 

280,774

Goodwill

 

563,046

 

536,926

Deferred tax assets

 

5,277

 

6,440

Restricted cash and investments

 

2,394

 

1,494

Other assets

 

27,433

 

39,117

Total assets

 

$      1,671,132

 

$             1,640,140

LIABILITIES AND EQUITY

       

Current liabilities:

       

Accounts payable and accrued liabilities

 

$           83,136

 

$                  75,767

Contingent consideration liabilities

 

11,670

 

18,952

Accrued payroll and related expenses

 

39,369

 

55,618

Litigation liabilities

 

38,190

 

8,150

Short-term borrowings

 

55,000

 

Income tax liabilities

 

3,899

 

2,908

Total current liabilities

 

231,264

 

161,395

Long-term senior convertible notes

 

587,716

 

582,920

Deferred and income tax liabilities, non-current

 

4,900

 

18,870

Other long-term liabilities

 

84,856

 

77,539

Commitments and contingencies

       

Stockholders' equity:

       

Preferred stock, $0.001 par value; 5,000,000 shares authorized, none outstanding

 

 

Common stock, $0.001 par value; 120,000,000 shares authorized at March 31, 2018 and December 31, 2017, 56,335,550 and 56,164,060 issued and outstanding at March 31, 2018 and December 31, 2017, respectively

 

60

 

60

Additional paid-in capital

 

1,358,759

 

1,363,549

Accumulated other comprehensive loss

 

(4,353)

 

(6,933)

(Accumulated deficit) retained earnings

 

(22,370)

 

4,762

Treasury stock at cost; 5,077,543 shares and 5,001,886 shares at March 31, 2018 and December 31, 2017, respectively

 

(569,700)

 

(565,867)

Total NuVasive, Inc. stockholders' equity

 

762,396

 

795,571

Non-controlling interest

 

 

3,845

Total equity

 

762,396

 

799,416

Total liabilities and equity

 

$      1,671,132

 

$             1,640,140

 

 

NuVasive, Inc. 

Consolidated Statements of Cash Flows 

(in thousands) 

         
   

Three Months Ended March 31,

(unaudited)

 

2018

 

2017

Operating activities:

       

Consolidated net (loss) income

 

$ (27,132)

 

$   11,983

Adjustments to reconcile net income to net cash provided by operating activities:

       

Depreciation and amortization

 

32,090

 

29,510

Impairment of strategic investment

 

9,003

 

Amortization of non-cash interest

 

4,925

 

5,369

Stock-based compensation

 

4,134

 

7,017

Reserves on current assets

 

4,080

 

(1,998)

Other non-cash adjustments

 

4,456

 

3,013

Deferred income taxes

 

(12,671)

 

1,440

Changes in operating assets and liabilities, net of effects from acquisitions:

       

Accounts receivable

 

16,933

 

1,719

Inventory

 

(12,126)

 

(13,800)

Prepaid expenses and other current assets

 

(1,737)

 

(2,614)

Accounts payable and accrued liabilities

 

1,579

 

550

Accrued payroll and related expenses

 

(18,493)

 

(12,721)

Litigation liability

 

30,040

 

Income taxes

 

1,294

 

(1,298)

Net cash provided by operating activities

 

36,375

 

28,170

Investing activities:

       

Acquisitions and investments

 

(51,794)

 

(2,500)

Purchases of intangible assets

 

(2,657)

 

(1,249)

Purchases of property and equipment

 

(29,109)

 

(34,545)

Net cash used in investing activities

 

(83,560)

 

(38,294)

Financing activities:

       

Proceeds from the issuance of common stock

 

336

 

410

Purchase of treasury stock

 

(2,155)

 

(10,356)

Payment of contingent consideration

 

(8,900)

 

Proceeds from revolving line of credit

 

65,000

 

Repayments on revolving line of credit

 

(10,000)

 

Other financing activities

 

(141)

 

(181)

Net cash provided by (used in) financing activities

 

44,140

 

(10,127)

Effect of exchange rate changes on cash

 

982

 

758

Decrease in cash, cash equivalents and restricted cash

 

(2,063)

 

(19,493)

Cash, cash equivalents and restricted cash at beginning of period

 

78,198

 

161,048

Cash, cash equivalents and restricted cash at end of period

 

$  76,135

 

$ 141,555

 

 

 

 

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SOURCE NuVasive, Inc.

Investors, Suzanne Hatcher, NuVasive, Inc., 858-458-2240, ir@nuvasive.com or Media, Troy Anderson, NuVasive, Inc., 858-320-5243, media@nuvasive.com