SAN DIEGO, April 20, 2010 /PRNewswire via COMTEX/ -- 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 $0.4 million; (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 the XLIF(R) 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(R), 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 (in thousands, except per pre- share data) tax $(net of tax) per Share ---- ------------ --------- adjustments ----------- 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 outstanding -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 outstanding -Diluted 46,000 46,000 ====== ======
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.
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(R) 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(R), a proprietary software-driven nerve avoidance system; MaXcess(R), 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(R), 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(R).
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.
Contact: Investors: Michael J. Lambert Patrick F. Williams Vice President, Finance & Investor EVP & Chief Financial Officer Relations NuVasive, Inc. NuVasive, Inc. 858-909-1998 858-638-5511 firstname.lastname@example.org email@example.com Media: Jason Rando The Ruth Group 646-536-7025 firstname.lastname@example.org 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, December 31, 2010 2009 --------- ------------ ASSETS (Unaudited) 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 ======= ========
SOURCE NuVasive, Inc.