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 Reports Fourth Quarter and Full Year 2007 Financial Results

- Fourth Quarter Revenue of $47.0 Million and Non-GAAP Earnings Per Share of $0.08 -

- Full Year Revenue of $154.3 Million and Non-GAAP Earnings Per Share of $0.11 -

Fourth Quarter and Full Year 2007 Highlights:

- Fourth quarter total revenues of $47.0 million; up 53.9% from the fourth quarter of 2006

- Full year 2007 total revenues of $154.3 million; up 57.3% from full year 2006

- Gross margin was 82.9% for the fourth quarter and 82.3% for the full year

- GAAP loss per share was $(0.03) for the quarter and $(0.32) for the full year

- Non-GAAP earnings per share was $0.08 for the quarter and $0.11 for the full year

- Launched 10 products in 2007 contributing to significant revenue growth and further establishing the platform for 2008

- NeoDisc(TM) clinical trial continues to progress with current enrollment over 75%

SAN DIEGO, Feb. 19 /PRNewswire-FirstCall/ -- 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 and full year ended December 31, 2007.

The Company reported fourth quarter revenues of $47.0 million, a 53.9% increase over the $30.5 million for the fourth quarter of 2006 and a 21.8% increase over the $38.5 million for the third quarter of 2007. Full year 2007 revenues were $154.3 million, a 57.3% increase over the $98.1 million reported for the full year 2006.

Gross profit for the fourth quarter of 2007 was $38.9 million and gross margin was 82.9%, compared to a gross profit of $25.3 million and a gross margin of 83.1% in the fourth quarter of 2006. For the third quarter of 2007, gross profit was $31.6 million and gross margin was 82.0%. Gross profit for the full year 2007 was $126.9 million and gross margin was 82.3%, compared to a gross profit of $79.1 million and a gross margin of 80.6% for the full year 2006.

Total operating expenses for the fourth quarter of 2007 were $41.2 million, compared with $29.5 million in the fourth quarter of 2006 and $35.2 million in the third quarter of 2007. Full year 2007 operating expenses were $144.2 million compared to $133.3 million reported for the full year 2006. The higher operating expense in the 2007 periods resulted from continued investment in the Company's next generation MAS(TM) products, additional sales costs directly associated with higher revenue, and a full year of enrollment in the NeoDisc clinical trial.

On a GAAP basis, the Company reported a net loss of $1.1 million or $(0.03) per share for the fourth quarter of 2007 and a loss of $11.3 million or $(0.32) per share for the full year 2007. On a non-GAAP basis, the Company reported net income of $2.9 million, or $0.08 per share, for the fourth quarter of 2007, and net income of $3.9 million, or $0.11 per share, for the full year 2007. The non-GAAP earnings per share calculations exclude, for the fourth quarter and full year, respectively, (i) stock based compensation of $3.6 million and $13.6 million, and (ii) amortization of acquired intangible assets of $0.4 million and $1.5 million.

Cash, cash equivalents and short and long-term investments were $89.7 million at December 31, 2007.

Alex Lukianov, Chairman and Chief Executive Officer, said, "2007 was another successful year for NuVasive. We continue to penetrate the U.S. market with our unique product offering. The adoption of SpheRx(R) II, DBR(R) II and XLP(TM) Lateral Plate has strengthened our MAS platform since mid-year. Our strategy of broadening the applications of the XLIF(R) procedure also continues to produce success, as surgeons further leverage our unique lateral approach into adult degenerative scoliosis and other procedures in the thoracic spine."

Mr. Lukianov continued, "During 2008, we plan to achieve even deeper product penetration and expand our market share in the U.S. Our focus is to strengthen our existing positions in the lumbar and nerve monitoring market segments while simultaneously growing our cervical and thoracic positions. We plan to grow our cervical market share in 2008 with the introduction of key products such as our Helix(TM) anterior cervical plates and VuePoint(TM) posterior cervical system. Our NeuroVision(R) platform will expand with the introduction of a next generation NeuroVision nerve monitoring system that will offer full spinal cord monitoring. Our focus on infrastructure enhancements to support this growth will continue, including a move to our new corporate headquarters campus and implementation of a more scalable ERP system. We believe the substantial momentum our sales force has generated, coupled with our commitment to product and technique innovation, will continue to drive our annual growth in the mid-30 percent range to $500 million over the next several years."

Guidance
NuVasive also provided 2008 financial guidance as follows:

Full Year 2008 Guidance:
Revenue: $204 million to $208 million
Gross margin: 81% to 82%
Stock-based compensation: $19.0 million to $20.0 million
GAAP earnings per share: $0.02 to $0.05
Non-GAAP earnings per share: $0.56 to $0.59

First Quarter 2008 Guidance:
Revenue: $47 million to $48 million
GAAP loss per share: $(0.13) to $(0.11)
Non-GAAP earnings per share: $0.01 to $0.03

Reconciliation of Non-GAAP Information

Management uses certain non-GAAP financial measures such as non-GAAP earnings per share and non-GAAP net loss per share, which exclude stock based compensation and charges directly related to acquisition transactions such as in-process research and development, milestone payments, amortization of the acquired technology assets and certain non-recurring internal costs incurred as a result of acquisition transactions. 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 Fourth Quarter 2007 Results
    (in thousands, except per share amounts)

    GAAP net loss                                                    $(1,146)
     Stock based compensation (B)                                      3,644
     Amortization of acquired intangible assets (C)                      381
    Non-GAAP earnings                                                 $2,879


    GAAP net loss per share (A)                                       $(0.03)
     Stock based compensation (B)                                       0.10
     Amortization of acquired intangible assets (C)                     0.01
    Non-GAAP earnings per share (A)                                    $0.08
    Shares used in computing GAAP net loss per share (A)              35,207
    Shares used in computing non-GAAP earnings per share (A)          37,130



    Reconciliation of First Quarter
     and Full Year 2008 Guidance
                                           Range for Three   Range for Year
    (in thousands, except per share         Months Ending        Ending
     amounts)                              March 31, 2008   December 31, 2008
                                            Low     High      Low     High

    GAAP earnings (net loss) per
     share (A)                             $(0.13)  $(0.11)   $0.02    $0.05
     Stock based compensation (B)            0.13     0.13     0.50     0.50
     Amortization of acquired
      intangible assets (C)                  0.01     0.01     0.04     0.04
    Non-GAAP earnings per share (A)         $0.01    $0.03    $0.56    $0.59
    Shares used in computing GAAP
     net loss per share (A)                35,700   35,700
    Shares used in computing GAAP
     earnings per share (A)                                  38,100   38,100
    Share used in computing non-GAAP
     earnings per share (A)                37,600   37,600   38,100   38,100

    A - GAAP net loss per share is calculated using basic weighted shares
        outstanding;  GAAP and Non-GAAP earnings per share is calculated using
        diluted weighted shares outstanding,
    B - Non-cash stock-based compensation.
    C - 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 March 19, 2008. In addition, a telephonic replay of the call will be available until March 11, 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 269394.

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(TM), 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(R) a proprietary software-driven nerve avoidance system; MaXcess(R) a unique split-blade design retraction system; and specialized implants, like SpheRx(R) and CoRoent(R), 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 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 the Company's revenue or profitability projections may prove incorrect because of unexpected difficulty in generating sales or achieving anticipated profitability; 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           Year Ended
                                     December 31,             December 31,
                                    2007      2006          2007       2006

    Revenues                      $46,930   $30,488      $154,290    $98,091
    Cost of goods sold              8,040     5,156        27,382     19,028
    Gross Profit                   38,890    25,332       126,908     79,063

    Operating expenses:
      Sales, marketing and
       administrative              34,567    25,078       119,579     94,632
      Research and development      6,667     4,449        24,581     18,541
      NeoDisc technology costs          -         -             -     20,116
    Total operating expenses       41,234    29,527       144,160    133,289
      Interest and other
       income, net                  1,198     1,512         5,987      6,316
    Net loss                      $(1,146)  $(2,683)     $(11,265)  $(47,910)

    Net loss per share:
      Basic and diluted             (0.03)    (0.08)        (0.32)     (1.47)
      Weighted average shares
       - basic and diluted         35,207    33,281        34,782     32,501

    Stock-based compensation
     is included in operating
     expenses in the following
     categories:
      Sales, marketing and
       administrative               3,081     2,632        11,404     10,581
      Research and
       development                    563       547         2,217      2,764
                                   $3,644    $3,179       $13,621    $13,345



                                NUVASIVE, INC.
               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
                                (in thousands)




                                                   December 31,   December 31,
                                                       2007           2006
    Assets
    Current assets:
      Cash and cash equivalents                      $61,915         $41,476
      Short-term marketable securities                19,247          73,930
      Accounts receivable, net                        27,496          18,960
      Inventory, net                                  36,280          18,636
      Prepaid expenses and other current assets        1,240           1,716
    Total current assets                             146,178         154,718
    Property and equipment, net of accumulated
     depreciation                                     43,538          30,573
    Intangible assets, net of accumulated
     amortization                                     24,496           8,441
    Long-term marketable securities                    8,536           1,996
    Other assets                                       2,939             456
    Total assets                                    $225,687        $196,184

    Liabilities and Stockholders' Equity
    Current liabilities:
      Accounts payable and accrued liabilities       $13,839          $8,937
      Accrued payroll and related expenses            12,075           8,477
      Royalties payable                                2,076           1,068
    Total current liabilities                         27,990          18,482
    Long-term liabilities                              1,119           1,399
    Commitments and contingencies
    Stockholders' equity:
      Common stock, 70,000 shares authorized
       35,330 and 33,929 issued and outstanding
       at December 31, 2007 and 2006, respectively        35              34
      Additional paid-in capital                     364,469         333,009
      Accumulated other comprehensive loss                54             (25)
      Accumulated deficit                           (167,980)       (156,715)
    Total stockholders' equity                       196,578         176,303
    Total liabilities and stockholders' equity      $225,687        $196,184



                                NUVASIVE, INC.
          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                (in thousands)



                                                       Year Ended December 31,
                                                          2007         2006
    Operating activities:
    Net loss                                           $(11,265)    $(47,910)
    Adjustments to reconcile net loss to net
     cash used in operating activities:
      Depreciation and amortization                      12,952        8,350
      Stock-based compensation                           13,621       13,345
      NeoDisc technology costs                                -        8,060
      Other non-cash adjustments                          1,896        2,289
      Changes in operating assets and liabilities:
        Accounts receivable                              (9,418)      (7,422)
        Inventory                                       (18,339)      (8,878)
        Prepaid expenses and other current assets           349         (220)
        Accounts payable and accrued liabilities          5,719        3,987
        Accrued payroll and related expenses              3,598        2,794
    Net cash used in operating activities                  (887)     (25,605)
    Investing activities:
    Cash paid for acquisition of Radius Medical LLC      (6,970)           -
    Purchases of property and equipment                 (24,403)     (20,396)
    Sales of short-term investments                     129,818       63,525
    Purchases of short-term investments                 (75,135)    (130,510)
    Sales of long-term investments                       17,000            -
    Purchases of long-term investments                  (25,533)      (1,996)
    Other assets                                           (490)        (452)
    Net cash provided by (used in) investing
     activities                                          14,287      (89,829)
    Financing activities:
    Payment of long-term liabilities                       (300)        (300)
    Issuance of common stock, including net proceeds
     from secondary offering                              7,339      144,665
    Net cash provided by financing activities             7,039      144,365
    Increase in cash and cash equivalents                20,439       28,931
    Cash and cash equivalents at beginning of period     41,476       12,545
    Cash and cash equivalents at end of period          $61,915      $41,476


    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

SOURCE NuVasive, Inc.
02/19/2008
CONTACT: Kevin C. O'Boyle, EVP & Chief Financial Officer, NuVasive,
Inc., +1-858-909-1800, investorrelations@nuvasive.com; Investors: Nick
Laudico, +1-646-536-7030, nlaudico@theruthgroup.com, or Zack Kubow, +1-646-
536-7020, zkubow@theruthgroup.com, or Media: Jason Rando, +1-646-536-7025,
jrando@theruthgroup.com, all of The Ruth Group for NuVasive, Inc.
Web site: http://www.nuvasive.com