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 2009 Financial Results
- Full year 2009 total revenue of $370.3 million; up 48.1% from the full year 2008 - Fourth quarter total revenue of $106.9 million; up 43.4% from fourth quarter 2008 and up 12.7% from third quarter 2009 - GAAP earnings of $2.3 million, or $0.06 per share, for the fourth quarter and $5.8 million, or $0.15 per share, for the full year - Earnings, excluding certain adjustments, of $4.2 million, or $0.11 per share, for the fourth quarter and $12.3 million, or $0.32 per share, for the full year - Operating cash flow of $46.4 million for the full year; up from ($5.0) million for the full year 2008
SAN DIEGO, Feb 25, 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 and for the full year ended December 31, 2009.

NuVasive reported fourth quarter revenue of $106.9 million, a 43.4% increase over the $74.6 million for the fourth quarter 2008 and a 12.7% increase over the $94.9 million for the third quarter 2009. Full year 2009 revenue was $370.3 million, a 48.1% increase over the $250.1 million reported for the full year 2008.

The financial results announced today incorporate the reclassification of certain expense items in order to best reflect their true economic character in the income statement and to align to prevalent industry practice. Moving forward, certain expenses will be classified as indicated in an attached reference table and have been reclassified in prior years for comparative purposes.

Gross profit for the fourth quarter 2009 was $88.9 million and gross margin was 83.2%, compared to a gross profit of $63.8 million and a gross margin of 85.5% for the fourth quarter 2008. For the third quarter 2009, gross profit was $79.0 million and gross margin was 83.3%. Gross profit for the full year 2009 was $309.2 million and gross margin was 83.5%, compared to a gross profit of $211.1 million and gross margin of 84.4% for the full year 2008.

Total operating expenses for the fourth quarter 2009 were $84.7 million compared to $59.6 million in the fourth quarter 2008 and $73.0 million in the third quarter 2009. Full year 2009 operating expenses were $297.9 million compared to $238.9 million reported for the full year 2008. The higher operating expenses in 2009 resulted primarily from additional costs associated with higher revenue, infrastructure expansion, and research and development.

On a GAAP basis, the Company reported net income of $2.3 million, or $0.06 per share, for the fourth quarter 2009, and net income of $5.8 million, or $0.15 per share for the full year 2009.

On a Non-GAAP basis, the Company reported net income of $11.1 million, or $0.28 per share, for the fourth quarter 2009, and net income of $41.4 million, or $1.07 per share, for the full year 2009. The Non-GAAP earnings per share calculations for the fourth quarter and full year exclude, respectively, (i) stock-based compensation of $5.6 million and $23.8 million; (ii) amortization of intangible assets of $1.3 million and $5.3 million; (iii) acquisition related items of $0.7 million and $3.8 million; (iv) intellectual property litigation expenses of $1.2 million and $4.6 million, and (v) the reversal of a leasehold termination charge of nil and $2.0 million.

Cash, cash equivalents and short and long-term marketable securities were $204.7 million at December 31, 2009.

Alex Lukianov, Chairman and Chief Executive Officer, said, "We achieved outstanding revenue growth of nearly 50%, a record non-GAAP operating margin of approximately 13% and more than $45 million in operating cash flow in 2009. Continued investment in research and development, coupled with a culture that fosters innovation and Absolute Responsiveness(R) have shaped a portfolio of products capable of addressing the entire spine and keeping NuVasive years ahead of the competition. Our ability to take spine market share and to expand our addressable market with comprehensive solutions which produce better outcomes for patients, surgeons, and hospitals underscores the successful execution of our growth strategy. We look forward to 2010 as the next step in NuVasive's evolution toward the #4 global spine company with $1 billion in revenue with even stronger profitability."

2010 Financial Guidance

Full Year 2010:

  
  • 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%, expanding to ~20% in Q4
Non-GAAP Operating Margin % Actual Guidance FY 09 FY 10 Q4 10 ----- ----- ----- Gross Margin % [A] 83.5% ~ 83% ~ 83% Non-GAAP Research and Development [B] 9.0% ~ 9% ~ 9% Non-cash stock-based compensation 1.1% ~ 1% ~ 1% ---- ---- ---- Total research and development 10.1% ~ 10% ~ 10% Non-GAAP Sales, Marketing and Administrative [C] 61.8% ~ 56% - 58% ~ 53% - 55% Non-cash stock-based compensation 5.3% ~ 5% ~ 5% Intellectual property litigation expenses 1.2% ~ 1% ~ 1% Reversal of leasehold termination -0.5% - - Acquisition related items 1.0% as incurred as incurred --- ----------- ----------- Total sales, marketing and administrative 68.8% ~ 62% - 64% ~ 59% - 61% Amortization of intangible assets 1.4% ~ 1% ~ 1% Non-GAAP Operating Income % [A-B-C] 12.7% ~ 17% ~ 20% ---- ----- -----

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, the reversal of leasehold termination charges, 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 Fourth Quarter 2009 Results

    (in thousands, except per share data)                   $       Per Share
                                                         ------     ---------
    GAAP net income                                      $2,281         $0.06
      Intellectual property litigation expenses           1,208          0.03
      Acquisition related items                             722          0.02
                                                            ---          ----
      Earnings excluding certain adjustments              4,211          0.11
      Non-cash stock-based compensation                   5,628          0.14
      Amortization of intangible assets                   1,263          0.03
                                                          -----          ----
    Non-GAAP earnings*                                  $11,102         $0.28
                                                        =======         =====
    Weighted average shares - Diluted                                  39,813
                                                                       ======

                     Reconciliation of Full Year 2009 Results

    (in thousands, except per share data)                   $       Per Share
                                                         ------     ---------
    GAAP net income                                      $5,808         $0.15
    Intellectual property litigation expenses             4,618          0.12
    Reversal of leasehold termination charge             (1,997)        (0.05)
    Acquisition related items                             3,826          0.10
                                                          -----          ----
    Earnings excluding certain adjustments               12,255          0.32
    Non-cash stock-based compensation                    23,793          0.61
    Amortization of intangible assets                     5,335          0.14
                                                          -----          ----
    Non-GAAP earnings*                                  $41,383         $1.07
                                                        =======         =====
    Weighted average shares - Diluted                                  38,751
                                                                       ======
    * Adjustments to calculate non-GAAP earnings are not tax
      effected



      Reconciliation of Full Year  2010 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


Reference Tables



                                              Income Statement Category
    Expense Reclassification                 Prior                 New
    ------------------------                 -----                 ---
    Royalty payments                          SM&A         Cost of goods sold

    Depreciation of loaned instrument
     sets                             Cost of goods sold           SM&A
    Intellectual property litigation
     expenses                                 R&D                  SM&A


                 2010 Tax Adjustments & WASO Guidance (in millions)
                 --------------------------------------------------


                                                  Q1 - Q3       Q4       FY10
                                                  -------       --       ----
    Effective Tax Rate (ETR)*                      ~ 35%      ~ 35%     ~ 35%
    Reversal of remaining valuation allowance               ~ $47.0   ~ $47.0

    Weighted average shares - Diluted               41.0       46.0      46.0

      * ETR to be used on pre-tax income prior to reversal of remaining
        valuation allowance



                         Full Year 2010 Earnings per Share Bridge


                                                                    Low Range
                                                                       EPS
                                                                   Net of Tax,
    Low Range EPS Guidance            Tax     Valuation               "If-
    (in thousands, except  Pre-Tax  Effected  Allowance     Net of  Converted"
     per share amounts)      EPS     EPS [A]  Reversal [B]  Tax EPS     [C]
                            -----     -----       -----      -----     -----
    GAAP earnings per
     share                  $0.81     $0.53       $1.15      $1.68     $1.58
      Intellectual property
       litigation expenses   0.12      0.08                   0.08      0.07
      Non-cash stock-based
       compensation          0.73      0.48                   0.48      0.42
      Amortization of
       intangible assets     0.15      0.09                   0.09      0.08
      Reversal of remaining
       valuation allowance                                   (1.15)    (1.02)
                            -----     -----                  -----     -----
    Non-GAAP earnings per
     share                  $1.81     $1.18                  $1.18     $1.13
                            =====     =====                  =====     =====

    Weighted shares
     outstanding -Diluted  41,000    41,000      41,000     41,000    46,000
                           ======    ======      ======     ======    ======

                                                                   High Range
                                                                      EPS
                                                                   Net of Tax,
    High Range EPS Guidance           Tax     Valuation               "If-
    (in thousands, except  Pre-Tax  Effected  Allowance     Net of  Converted"
     per share amounts)      EPS     EPS [A]  Reversal [B]  Tax EPS    [C]
                            -----    -----       -----      -----     -----
    GAAP earnings per
     share                  $1.01    $0.66       $1.15      $1.81     $1.70
      Intellectual property
       litigation expenses   0.12     0.08                   0.08      0.07
      Non-cash stock-based
       compensation         0.73      0.48                   0.48      0.42
      Amortization of
       intangible assets    0.15      0.09                   0.09      0.08
      Reversal of remaining
       valuation allowance                                  (1.15)    (1.02)
                            -----     -----                  -----     -----
    Non-GAAP earnings per
     share                  $2.01     $1.31                 $1.31      $1.25
                            =====     =====                 =====      =====

    Weighted shares
     outstanding -Diluted  41,000    41,000      41,000    41,000     46,000
                           ======    ======      ======    ======     ======


    [A] Effective Tax Rate  (ETR) of ~35% to be used on pre-tax income prior
        to reversal of remaining valuation allowance
    [B] One-time reversal of remaining valuation allowance of ~$47M provided
        against Net Operating Loss carryforwards (NOLs) and other tax
        attributes
    [C] "If-Converted" adjustments include $6.7M add back of convertible debt
        interest expense and issuance costs at ~40% ETR and the addition of
        5M shares


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 March 27, 2010. In addition, a telephonic replay of the call will be available until March 11, 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 343838.

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(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
    investorrelations@nuvasive.com       investorrelations@nuvasive.com


    Media:
    Jason Rando
    The Ruth Group
    646-536-7025
    jrando@theruthgroup.com




                                    NuVasive, Inc.
                Unaudited Condensed Consolidated Statement of Operations
                         (in thousands, except per share data)



                                         Three Months Ended    Year Ended
                                           December 31,        December 31,
                                           ------------        ------------
                                            2009     2008      2009      2008
                                            ----     ----      ----      ----

    Revenue                             $106,935  $74,566  $370,340  $250,082
    Cost of goods sold (excluding
     amortization of purchased
     technology)                          18,002   10,789    61,110    39,008
                                          ------   ------    ------    ------
    Gross profit                          88,933   63,777   309,230   211,074

    Operating expenses:
      Sales, marketing and
       administrative                     72,476   52,326   254,997   189,126
      Research and development            10,943    6,145    37,581    25,943
      In-process research and
       development                             -        -         -    20,876
      Amortization of intangible assets    1,263    1,174     5,335     2,989
                                           -----    -----     -----     -----
    Total operating expenses              84,682   59,645   297,913   238,934

    Interest and other income
     (expense), net:
      Interest income                        189    1,225     1,507     5,599
      Interest expense                    (1,676)  (1,755)   (7,116)   (5,571)
      Other income, net                      136       98       461       304
                                             ---       --       ---       ---
    Total interest and other income
     (expense), net                       (1,351)    (432)   (5,148)      332
                                          ------     ----    ------       ---

    Income (loss) before income taxes      2,900    3,700     6,169   (27,528)
    Income tax expense                       679        -     1,732         -
                                             ---      ---     -----       ---
    Consolidated net income (loss)        $2,221   $3,700    $4,437  $(27,528)
                                          ======   ======    ======  ========
    Net loss attributable to
     noncontrolling interests               $(60)      $-   $(1,371)       $-
                                            ====       ==   =======        ==
    Net income (loss) attributable to
     NuVasive, Inc.                       $2,281   $3,700    $5,808  $(27,528)
                                          ======   ======    ======  ========

    Net income (loss) per share
     attributable to NuVasive, Inc.:
      Basic                                $0.06    $0.10     $0.16    $(0.77)
                                           =====    =====     =====    ======
      Diluted                              $0.06    $0.10     $0.15    $(0.77)
                                           =====    =====     =====    ======
    Weighted average shares:
      Basic                               38,645   36,207    37,426    35,807
                                          ======   ======    ======    ======
      Diluted                             39,813   37,744    38,751    35,807
                                          ======   ======    ======    ======

    Stock-based compensation is
     included in operating expenses in
     the following categories:
      Sales, marketing and
       administrative                     $4,800   $4,296   $19,549   $17,837
      Research and development               828      932     4,244     3,110
                                             ---      ---     -----     -----
                                          $5,628   $5,228   $23,793   $20,947
                                          ======   ======   =======   =======



                                  NuVasive, Inc.
                   Unaudited Condensed Consolidated Balance Sheets
                                 (in thousands)


                                                       December 31,
                                                      --------------
                                                      2009      2008
                                                      ----      ----
    ASSETS
    Current assets:
      Cash and cash equivalents                    $65,413  $132,318
      Short-term marketable securities              99,279    45,738
      Accounts receivable, net                      58,462    51,622
      Inventory                                     90,191    68,834
      Prepaid expenses and other current assets      3,757     3,466
                                                     -----     -----
    Total current assets                           317,102   301,978
    Property and equipment, net                     82,602    73,686
    Long-term marketable securities                 39,968    45,305
    Intangible assets, net                         103,338    54,768
    Goodwill                                       102,882     2,331
    Other assets                                     7,872     9,338
                                                     -----     -----
    Total assets                                  $653,764  $487,406
                                                  ========  ========
    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
      Accounts payable and accrued liabilities     $26,489   $26,633
      Accrued payroll and related expenses          25,535    17,132
      Royalties payable                              2,334     1,722
      Other current liabilities                        389         -
                                                       ---       ---
    Total current liabilities                       54,747    45,487
    Senior convertible notes                       230,000   230,000
    Long-term acquisition related liabilities       30,694    12,111
    Other long-term liabilities                     28,472    12,177
    Commitments and contingencies

    Noncontrolling interests                        13,629         -

    Stockholders' equity:
        Common stock                                    39        36
        Additional paid-in capital                 485,757   383,293
        Accumulated other comprehensive income
         (loss)                                        126      (190)
        Accumulated deficit                       (189,700) (195,508)
                                                  --------  --------
    Total stockholders' equity                     296,222   187,631
                                                   -------   -------
    Total liabilities and stockholders' equity    $653,764  $487,406
                                                  ========  ========



                                  NuVasive, Inc.
             Unaudited Condensed Consolidated Statements of Cash Flows
                                   (in thousands)



                                                  Years Ended December 31,
                                                 --------------------------
                                                  2009      2008      2007
                                                  ----      ----      ----

    Operating activities:
       Consolidated net income (loss)           $4,437  $(27,528) $(11,265)
       Adjustments to reconcile net
        income (loss) to net cash
        provided by (used in) operating
        activities:
         Depreciation and amortization          29,841    23,105    12,952
         In-process research and development         -    20,876         -
         Stock-based compensation               23,793    20,947    13,621
         Leasehold abandonment (reversal)       (1,997)    4,403         -
         Allowance for doubtful accounts
          and sales return reserve, net
          of write offs                          2,211     1,026       189
         Allowance for excess and obsolete
          inventory                              2,297      (836)      514
         Other non-cash adjustments              3,359       179       109
       Changes in operating assets and
        liabilities, net of effects from
        acquisitions:
         Accounts receivable                    (8,582)  (25,152)   (8,725)
         Inventory                             (23,133)  (32,451)  (18,026)
         Prepaid expenses and other
          current assets                           760       274       349
         Accounts payable and accrued
          liabilities                            5,932     5,098     5,719
         Accrued payroll and related
          expenses                               7,501     5,057     3,676
                                                 -----     -----     -----
       Net cash provided by (used in)
        operating activities                    46,419    (5,002)     (887)
    Investing activities:
         Cash paid for acquisitions and
          investments                          (46,055)  (41,256)   (6,970)
         Purchases of property and equipment   (32,878)  (39,795)  (24,403)
         Purchases of short-term marketable
          securities                           (92,494)  (90,150)  (75,135)
         Sales of short-term marketable
          securities                            66,447    63,659   129,818
         Purchases of long-term marketable
          securities                           (64,784)  (69,036)  (23,540)
         Sales of long-term marketable
          securities                            41,861    32,267    17,000
         Other assets                                -      (304)   (2,483)
                                                   ---      ----    ------
       Net cash provided by (used in)
        investing activities                  (127,903) (144,615)   14,287
    Financing activities:
         Payments of long-term liabilities           -      (300)     (300)
         Issuance of convertible debt, net
          of costs                                   -   222,442         -
         Purchase of convertible note hedges         -   (45,758)        -
         Sale of warrants                            -    31,786         -
         Tax benefits related to stock based
          compensation awards                    1,902         -         -
         Issuance of common stock               12,556    11,850     7,339
                                                ------    ------     -----
      Net cash provided by financing
       activities                               14,458   220,020     7,039
         Effect of exchange rate changes on
          cash                                     121         -         -
                                                   ---       ---       ---
       (Decrease) increase in cash and
         cash equivalents                      (66,905)   70,403    20,439
      Cash and cash equivalents at
       beginning of year                       132,318    61,915    41,476
                                               -------    ------    ------
      Cash and cash equivalents at end
       of year                                 $65,413  $132,318   $61,915
                                               =======  ========   =======



                                    NuVasive, Inc.
              Unaudited Condensed Consolidated Statement of Operations
                           (in thousands, except per share data)


                                                   2009
                                   ---------------------------------------
                                   Q1       Q2       Q3       Q4        FY
                                   ---------------------------------------

    Revenue                     $80,008  $88,481  $94,916  $106,935  $370,340
    Cost of goods sold
     (excluding amortization
     of purchased technology)    12,999   14,235   15,874    18,002    61,110
                                 ------   ------   ------    ------    ------
    Gross profit                 67,009   74,246   79,042    88,933   309,230

    Operating expenses:
      Sales, marketing and
       administrative            60,527   60,274   61,720    72,476   254,997
      Research and development    8,586    8,178    9,874    10,943    37,581
      In-process research and
       development                    -        -        -         -         -
      Amortization of
       intangible assets          1,336    1,372    1,364     1,263     5,335
                                  -----    -----    -----     -----     -----
    Total operating expenses     70,449   69,824   72,958    84,682   297,913

    Interest and other income
     (expense), net:
      Interest income               732      383      203       189     1,507
      Interest expense           (1,771)  (2,060)  (1,609)   (1,676)   (7,116)
      Other income, net              44       93      188       136       461
                                     --       --      ---       ---       ---
    Total interest and other
     income (expense), net         (995)  (1,584)  (1,218)   (1,351)   (5,148)
                                   ----   ------   ------    ------    ------

    Income (loss) before
     income taxes                (4,435)   2,838    4,866     2,900     6,169
    Income tax expense               97      526      430       679     1,732
                                     --      ---      ---       ---     -----
    Consolidated net income
     (loss)                     $(4,532)  $2,312   $4,436    $2,221    $4,437
                                =======   ======   ======    ======    ======
    Net loss attributable to
     noncontrolling interests     $(230)   $(453)   $(628)     $(60)  $(1,371)
                                  =====    =====    =====      ====   =======
    Net income (loss)
     attributable to
     NuVasive, Inc.             $(4,302)  $2,765   $5,064    $2,281    $5,808
                                =======   ======   ======    ======    ======

    Net income (loss) per share
     attributable to NuVasive,
     Inc.:
      Basic                      $(0.12)   $0.07    $0.13     $0.06     $0.16
                                 ======    =====    =====     =====     =====
      Diluted                    $(0.12)   $0.07    $0.13     $0.06     $0.15
                                 ======    =====    =====     =====     =====
    Weighted average shares:
      Basic                      36,365   36,910   37,733    38,645    37,426
                                 ======   ======   ======    ======    ======
      Diluted                    36,365   38,301   39,216    39,813    38,751
                                 ======   ======   ======    ======    ======

    Stock-based compensation is
     included in operating
     expenses in the following
     categories:
      Sales, marketing and
       administrative            $5,241   $5,243   $4,265    $4,800   $19,549
      Research and development    1,441    1,074      901       828     4,244
                                  -----    -----      ---       ---     -----
                                 $6,682   $6,317   $5,166    $5,628   $23,793
                                 ======   ======   ======    ======   =======



                                                    2008
                                   ---------------------------------------
                                   Q1       Q2       Q3        Q4       FY
                                   ---------------------------------------

    Revenue                     $51,184  $57,417   $66,915  $74,566  $250,082
    Cost of goods sold
     (excluding amortization
     of purchased technology)     8,267    8,697    11,255   10,789    39,008
                                  -----    -----    ------   ------    ------
    Gross profit                 42,917   48,720    55,660   63,777   211,074

    Operating expenses:
      Sales, marketing and
       administrative            39,728   42,506    54,566   52,326   189,126
      Research and development    6,976    6,426     6,396    6,145    25,943
      In-process research and
       development                4,176        -    16,700        -    20,876
      Amortization of
       intangible assets            417      467       931    1,174     2,989
                                    ---      ---       ---    -----     -----
    Total operating expenses     51,297   49,399    78,593   59,645   238,934

    Interest and other income
     (expense), net:
      Interest income             1,137    1,777     1,460    1,225     5,599
      Interest expense             (434)  (1,663)   (1,719)  (1,755)   (5,571)
      Other income, net              23       70       113       98       304
                                     --       --       ---       --       ---
    Total interest and other
     income (expense), net          726      184      (146)    (432)      332
                                    ---      ---      ----     ----       ---

    Income (loss) before
     income taxes                (7,654)    (495)  (23,079)   3,700   (27,528)
    Income tax expense                -        -         -        -         -
                                    ---      ---       ---      ---       ---
    Consolidated net income
     (loss)                     $(7,654)   $(495) $(23,079)  $3,700  $(27,528)
                                =======    =====  ========   ======  ========
    Net loss attributable to
     noncontrolling interests        $-       $-        $-       $-        $-
                                     ==       ==        ==       ==        ==
    Net income (loss)
     attributable to
     NuVasive, Inc.             $(7,654)   $(495) $(23,079)  $3,700  $(27,528)
                                =======    =====  ========   ======  ========

    Net income (loss) per share
     attributable to NuVasive,
     Inc.:
      Basic                      $(0.22)  $(0.01)   $(0.64)   $0.10    $(0.77)
                                 ======   ======    ======    =====    ======
      Diluted                    $(0.22)  $(0.01)   $(0.64)   $0.10    $(0.77)
                                 ======   ======    ======    =====    ======
    Weighted average shares:
      Basic                      35,411   35,663    35,931   36,207    35,807
                                 ======   ======    ======   ======    ======
      Diluted                    35,411   35,663    35,931   37,744    35,807
                                 ======   ======    ======   ======    ======

    Stock-based compensation is
     included in operating
     expenses in the following
     categories:
      Sales, marketing and
       administrative            $4,504   $4,538    $4,499   $4,296   $17,837
      Research and development      646      610       922      932     3,110
                                    ---      ---       ---      ---     -----
                                 $5,150   $5,148    $5,421   $5,228   $20,947
                                 ======   ======    ======   ======   =======


SOURCE NuVasive, Inc.