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 2017 Financial Results
Company Provides Financial Performance Guidance for 2018

SAN DIEGO, Feb. 26, 2018 /PRNewswire/ -- NuVasive, Inc. (NASDAQ: NUVA), the leader in spine technology innovation, transforming spine surgery with minimally disruptive, procedurally-integrated solutions, announced today financial results for the quarter and full year ended Dec. 31, 2017.

Fourth Quarter 2017 Highlights: 

  • Revenue remained flat at $271.7 million compared to prior year, with strong international growth of 34% on a constant currency basis;
  • GAAP operating profit margin of 11.0%; Non-GAAP operating profit margin of 18.2%; and
  • GAAP diluted earnings per share of $0.46; Non-GAAP diluted earnings per share increase of 5.7% to $0.56.

Full Year 2017 Highlights: 

  • Revenue increased to $1,029.5 million, or 7.0% on a reported and constant currency basis;
  • GAAP operating profit margin of 11.0%; Non-GAAP operating profit margin up 50 basis points to 16.6%; and
  • GAAP diluted earnings per share of $1.50; Non-GAAP diluted earnings per share increase of 15.1% to $1.91.

"2017 was a milestone year for NuVasive as we surpassed the $1 billion revenue mark driven by impressive international sales growth of more than 20 percent, and achieved record profitability of 18.2% non-GAAP operating margins in the fourth quarter," said Gregory T. Lucier, chairman and chief executive officer of NuVasive. "As we set the stage for 2018, we remain focused on accelerating our growth momentum by furthering our investment in R&D to bring innovative offerings to the market, developing our differentiated intraoperative neurophysiological monitoring services business with the completed acquisition of SafePassage and growing the number of surgeons worldwide who use NuVasive technologies to improve patients' quality of life."

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

Fourth Quarter 2017 Results
NuVasive reported fourth quarter 2017 total revenue of $271.7 million, indicating flat year-over-year growth on a reported and constant currency basis, compared to $271.1 million for the fourth quarter 2016.

For the fourth quarter 2017, GAAP and non-GAAP gross profit was $196.3 million and $196.7 million, respectively, and GAAP and non-GAAP gross margin was 72.2% and 72.4%, respectively. These results compared to gross profit of $204.2 million on a GAAP and non-GAAP basis, and GAAP and non-GAAP gross margin of 75.3% for the fourth quarter 2016. Total GAAP and non-GAAP operating expenses for the fourth quarter 2017 were $166.5 million and $147.2 million, respectively. These results compared to GAAP and non-GAAP operating expenses of $174.1 million and $155.4 million, respectively, for the fourth quarter 2016.

The Company reported a GAAP net income of $24.0 million, or $0.46 per share, for the fourth quarter 2017 compared to a GAAP net income of $6.4 million, or $0.11 per share, for the fourth quarter 2016. On a non-GAAP basis, the Company reported net income of $29.1 million, or $0.56 per share, for the fourth quarter 2017 compared to net income of $27.6 million, or $0.53 per share, for the fourth quarter 2016.

Full Year 2017 Results
NuVasive reported full year 2017 total revenue of $1,029.5 million, a 7.0% increase on both a reported and constant currency basis, compared to $962.1 million for the full year 2016.

Total GAAP and non-GAAP gross profit for the full year 2017 was $760.5 million and $761.1 million, respectively, and both GAAP and non-GAAP gross margin was 73.9%. These results compared to gross profit of $722.0 million and $736.7 million on a GAAP and non-GAAP basis, respectively, and a GAAP and non-GAAP gross margin of 75.0% and 76.6%, respectively, for the full year 2016. Total GAAP and non-GAAP operating expenses for the full year 2017 were $647.2 million and $590.3 million, respectively. These results compared to GAAP and non-GAAP operating expenses of $598.5 million and $581.6 million, respectively, for the full year 2016.

The Company reported a GAAP net income of $83.0 million, or $1.50 per share, for the full year 2017 compared to a GAAP net income of $37.1 million, or $0.69 per share, for the full year 2016. On a non-GAAP basis, the Company reported net income of $99.9 million, or $1.91 per share, for the full year 2017 compared to net income of $86.5 million, or $1.66 per share, for the full year 2016.

Cash and cash equivalents were approximately $72.8 million at December 31, 2017.

Annual Financial Guidance for 2018
The Company estimates revenue for full-year 2018 to be in range of $1,095 million to $1,105 million reflecting organic growth in the range of 4.4% to 5.4% and reported growth of 6.4% to 7.3% inclusive of the recent acquisition of SafePassage. Assuming current exchange rates remain similar for the rest of the year, the Company expects currency to have a positive impact in 2018 of approximately $5 million. The Company estimates full-year 2018 net income on a GAAP basis in a range of $1.56 to $1.59 per share and non-GAAP earnings per share in a range of $2.44 to $2.47. Additionally, 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. The above guidance 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

 
 

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

   

 GAAP 

 

 Non-GAAP 

 
 

Revenue

   

$            1,095

 

$          1,105

 

$            1,095

 

$          1,105

 
 

  % Growth - Reported 2

   

6.4%

 

7.3%

 

6.4%

 

7.3%

 
 

  % Growth - Constant Currency 2, 3

           

5.9%

 

6.9%

 
 

Operating margin

   

13.0%

 

13.0%

 

17.6%

 

17.6%

 
 

Earnings per share

   

$               1.56

 

$            1.59

 

$              2.44

 

$            2.47

 
 

EBITDA margin

   

23.4%

 

23.4%

 

26.9%

 

26.9%

 
 

Tax Rate

   

~19%

 

~19%

 

~24%

 

~24%

 
                       
 

1 Guidance reflects the range provided February 26, 2018.

 
     
 

2 2017 as reported, does not include adoption of revenue recognition Accounting Standards Codification 606 (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.

 
 

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, 4

 
 

GAAP net income per share

$           1.50

 

$         1.56

 

$         1.59

 
 

Impact of change to diluted share count

0.09

 

0.01

 

0.01

 
 

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

$           1.59

 

$         1.57

 

$         1.60

 
 

Litigation liability5

0.09

 

-

 

-

 
 

Business transition costs 6

0.08

 

0.04

 

0.04

 
 

Non-cash interest expense on convertible notes

0.33

 

0.32

 

0.32

 
 

Non-cash purchase accounting adjustments on acquisitions 7

0.01

 

0.02

 

0.02

 
 

Amortization of intangible assets 8

0.89

 

0.88

 

0.88

 
 

Tax effect of adjustments 9

(1.08)

 

(0.39)

 

(0.39)

 
 

Non-GAAP earnings per share

$           1.91

 

$         2.44

 

$         2.47

 
               
 

GAAP Weighted shares outstanding - basic

50,874

 

51,025

 

51,025

 
 

GAAP Weighted shares outstanding - diluted

55,196

 

52,647

 

52,647

 
 

Non-GAAP Weighted shares outstanding - diluted 10

52,348

 

52,185

 

52,185

 
               
 

1 2017 as reported, does not include adoption of revenue recognition ASC 606.

 
     
 

2 Items may not foot due to rounding.

 
     
 

3 Guidance reflects the range provided February 26, 2018.

 
     
 

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

 
     
 

5 Represents the settlement of fees associated with the outcome of the Medtronic litigation matter.

 
     
 

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 Excludes the amortization associated with non-controlling interest.

 
     
 

9 The impact on results from taxes include tax effecting the adjustments above at the statutory rate, taking into account discrete items and including those discrete items in the annual effective tax rate calculation, as well as the one-time impact of the Tax Cuts and Jobs Act of 2017. 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 ~24% on a non-GAAP basis.

 
     
 

10 Excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

 
 

 

 
     
 

Reconciliation of Non-GAAP Operating Margin %

 
             
 

(in thousands, except %)

 

2017
Actuals 1, 2

 

2018
Guidance2, 3

 
 

Non-GAAP Gross Margin %[A]

 

73.9%

 

74.0%

 
 

Non-cash purchase accounting adjustments on acquisitions 4

 

(0.1%)

 

(0.1%)

 
 

GAAP Gross Margin [B]

 

73.9%

 

73.9%

 
             
 

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

 

52.4%

 

51.1%

 
             
 

Non-GAAP Research & Development Expense [D]

 

4.9%

 

5.3%

 
 

In-process research & development

 

0.0%

 

0.0%

 
 

GAAP Research & Development Expense [E]

 

4.9%

 

5.3%

 
             
 

Litigation liability [F]5

 

0.4%

 

0.0%

 
 

Amortization of intangible assets [G] 6

 

4.7%

 

4.3%

 
 

Business transition costs [H] 7

 

0.4%

 

0.2%

 
             
 

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

 

16.6%

 

17.6%

 
             
 

GAAP Operating Margin % [B - C - E - F - G - H]

 

11.0%

 

13.0%

 
             
 

1 2017 as reported, does not include adoption of revenue recognition ASC 606.

 
     
 

2 Items may not foot due to rounding.

 
     
 

3 Guidance reflects the range provided February 26, 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 Represents the settlement of fees associated with the outcome of the Medtronic litigation matter.

 
     
 

6 Excludes the amortization associated with non-controlling interest.

 
     
 

7 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 %

 
     
 

(in thousands, except %)

2017
Actuals 1, 2

 

2018
Guidance2, 3

 
 

Net Income / (Loss)

8.1%

 

7.5%

 
 

Interest (income) / expense, net 

3.7%

 

3.6%

 
 

Provision for income taxes

(0.7%)

 

1.7%

 
 

Depreciation and amortization 4

11.6%

 

10.6%

 
 

EBITDA Margin

22.7%

 

23.4%

 
 

Non-cash stock based compensation

2.2%

 

3.2%

 
 

Business transition costs 5

0.4%

 

0.2%

 
 

Non-cash purchase accounting adjustments on acquisitions 6

0.1%

 

0.1%

 
 

Litigation liability 7

0.4%

 

0.0%

 
 

Adjusted EBITDA Margin

25.8%

 

26.9%

 
           
 

1 2017 as reported, does not include adoption of revenue recognition ASC 606.

 
     
 

2 Items may not foot due to rounding.

 
     
 

3 Guidance reflects the range provided February 26, 2018.

 
     
 

4 Excludes 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 Represents the settlement of fees associated with the outcome of the Medtronic litigation matter.

 
 

 

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, leasehold related charges, integration related expenses associated with acquired businesses, one-time restructuring and acquisition related items, CEO transition related costs, 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, leasehold related charges, integration related expenses associated with acquired businesses, CEO transition related costs, certain litigation liabilities, acquisition related items 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 Fourth Quarter 2017 Results

 
 

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

 
               
 

(in thousands, except per share data)

   

Adjustments

 

Diluted Earnings Per
Share

 
 

GAAP net income

   

$                23,960

 

$                           0.46

 
               
 

Business transition costs 1

   

2,518

     
 

Non-cash purchase accounting adjustments on acquisitions 2

   

404

     
 

Litigation liability 3

   

3,750

     
 

Non-cash interest expense on convertible notes

   

4,046

     
 

Amortization of intangible assets4

   

12,677

     
 

Tax effect of adjustments 5

   

(18,273)

     
 

Adjustments to GAAP net income

   

5,122

     
 

Non-GAAP earnings

   

$                29,082

 

$                           0.56

 
               
               
 

GAAP weighted shares outstanding - diluted

       

51,857

 
 

Non-GAAP weighted shares outstanding - diluted 6

       

51,857

 
               
 

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 settlement of fees associated with the outcome of the Medtronic litigation matter.

 
     
 

4 Excludes the amortization associated with non-controlling interest.

 
     
 

5 The impact on results from taxes include tax effecting the adjustments above at the statutory rate, taking into account discrete items and including those discrete items in the annual effective tax rate calculation, as well as the one-time impact of the Tax Cuts and Jobs Act of 2017. 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 ~34% on a non-GAAP basis.

 
     
 

6 Excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

 
 

 

 
     
 

Reconciliation of Year To Date 2017 Results

 
 

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

 
               
 

(in thousands, except per share data)

   

Adjustments

 

Diluted Earnings Per 
Share

 
 

GAAP net income

   

$                83,006

 

$                           1.50

 
               
 

Business transition costs 1

   

4,287

     
 

Non-cash purchase accounting adjustments on acquisitions 2

   

540

     
 

Litigation liability 3 

   

4,500

     
 

Non-cash interest expense on convertible notes

   

17,290

     
 

Amortization of intangible assets 4

   

46,750

     
 

Tax effect of adjustments 5

   

(56,470)

     
 

Adjustments to GAAP net income

   

16,897

     
 

Non-GAAP earnings

   

$                99,903

 

$                           1.91

 
               
               
 

GAAP weighted shares outstanding - diluted

       

55,193

 
 

Non-GAAP weighted shares outstanding - diluted 6

       

52,345

 
               
 

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 settlement of fees associated with the outcome of the Medtronic litigation matter.

 
     
 

4 Excludes the amortization associated with non-controlling interest.

 
     
 

5 The impact on results from taxes include tax effecting the adjustments above at the statutory rate, taking into account discrete items and including those discrete items in the annual effective tax rate calculation, as well as the one-time impact of the Tax Cuts and Jobs Act of 2017. 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 ~34% on a non-GAAP basis.

 
     
 

6 Excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

 
 

 

 
     
 

Reconciliation of Fourth Quarter and Twelve Months 2017 Results

 
 

GAAP Net Income to Adjusted EBITDA

 
     
   

Three months ended

 

Twelve months ended

 
 

(in thousands, except per share data)

December 31, 2017

 

December 31, 2017

 
 

GAAP net income

$                                          23,960

 

$                                                    83,006

 
 

Interest (income) / expense, net 

9,156

 

37,581

 
 

Provision for income taxes

(4,067)

 

(7,038)

 
 

Depreciation and amortization 1

32,055

 

119,927

 
 

EBITDA

$                                          61,104

 

$                                                  233,476

 
 

Business transition costs2

2,518

 

4,287

 
 

Non-cash purchase accounting adjustments on acquisitions 3

404

 

540

 
 

Litigation liability 4 

3,750

 

4,500

 
 

Non-cash stock based compensation

7,407

 

22,391

 
 

Adjusted EBITDA

$                                          75,183

 

$                                                  265,194

 
 

As a percentage of revenue

27.7%

 

25.8%

 
           
 

1 Excludes the amortization associated with non-controlling interest.

 
           
 

2 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.

 
           
 

3 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.

 
     
 

4 Represents the settlement of fees associated with the outcome of the Medtronic litigation matter.

 
 

 

Investor Conference Call
The Company will hold a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its fourth quarter and full year 2017 financial performance. 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 March 26, 2018. In addition, a telephone replay of the call will be available until March 5, 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: 13675438.

About NuVasive
NuVasive, Inc. (NASDAQ: NUVA) is the leader in spine technology innovation, focused on transforming spine surgery and beyond with minimally disruptive, procedurally-integrated solutions designed to deliver reproducible and clinically-proven surgical outcomes. The Company's portfolio includes access instruments, implantable hardware, biologics, software systems for surgical planning, navigation and imaging solutions, magnetically adjustable implant systems for spine and orthopedics, and intraoperative monitoring service offerings. With approximately $1,030 million in revenues (2017), NuVasive has an approximate 2,400 person workforce in more than 50 countries serving surgeons, hospitals and patients. 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 fourth quarter and full year 2017, as well as projections for 2018 financial guidance and longer-term financial performance goals. The Company's results for the fourth quarter and full year 2017 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 December 31,

 

Year Ended December 31,

   

2017

 

2016

 

2017

 

2016

   

(Unaudited)

 

(Unaudited)

       

Revenue

 

$             271,652

 

$             271,109

 

$          1,029,520

 

$             962,072

Cost of goods sold (excluding below amortization of intangible assets)

 

75,391

 

66,926

 

269,008

 

240,093

Gross profit

 

196,261

 

204,183

 

760,512

 

721,979

Operating expenses:

               

   Sales, marketing and administrative

 

134,502

 

142,413

 

539,913

 

533,624

   Research and development

 

12,719

 

12,983

 

50,425

 

47,999

   Amortization of intangible assets

 

12,999

 

12,089

 

48,039

 

42,001

   Litigation liability loss (gain) 

 

3,750

 

 

4,500

 

(43,310)

   Business transition costs

 

2,518

 

6,624

 

4,287

 

18,138

Total operating expenses

 

166,488

 

174,109

 

647,164

 

598,452

Interest and other expense, net:

               

   Interest income

 

85

 

167

 

440

 

1,091

   Interest expense

 

(9,241)

 

(10,532)

 

(38,021)

 

(40,520)

Loss on repurchases of convertible notes

 

 

(1,641)

 

 

(19,085)

   Other (expense) income, net

 

(1,160)

 

(203)

 

(1,542)

 

(305)

Total interest and other expense, net

 

(10,316)

 

(12,209)

 

(39,123)

 

(58,819)

Income before income taxes

 

19,457

 

17,865

 

74,225

 

64,708

Income tax benefit (expense)

 

4,067

 

(11,899)

 

7,038

 

(29,282)

Consolidated net income

 

$               23,524

 

$                 5,966

 

$               81,263

 

$               35,426

Add back net loss attributable to non-controlling interests

 

$                   (436)

 

$                   (410)

 

$                (1,743)

 

$                (1,721)

Net income attributable to NuVasive, Inc.

 

$               23,960

 

$                 6,376

 

$               83,006

 

$               37,147

Net income per share attributable to NuVasive, Inc.:

               

   Basic

 

$                   0.47

 

$                   0.13

 

$                   1.63

 

$                   0.74

   Diluted

 

$                   0.46

 

$                   0.11

 

$                   1.50

 

$                   0.69

Weighted average shares outstanding:

               

   Basic

 

51,094

 

50,394

 

50,874

 

50,077

   Diluted

 

51,857

 

55,913

 

55,193

 

54,102

 

NuVasive, Inc.

Consolidated Balance Sheets

(in thousands, except par values and share amounts)

 
   

December 31,

   

2017

 

2016

ASSETS

       

Current assets:

       

Cash and cash equivalents

 

$               72,803

 

$             153,643

Restricted cash and investments

 

3,901

 

Accounts receivable, net of allowances of $13,669 and $8,912, respectively

 

199,040

 

171,595

Inventory, net

 

247,245

 

208,249

Prepaid income taxes

 

17,209

 

31,926

Prepaid expenses and other current assets

 

18,792

 

10,030

Total current assets

 

558,990

 

575,443

Property and equipment, net

 

215,326

 

181,524

Intangible assets, net

 

280,774

 

291,143

Goodwill

 

536,926

 

485,685

Deferred tax assets

 

6,440

 

5,810

Restricted cash and investments

 

1,494

 

7,405

Other assets

 

39,117

 

23,794

Total assets

 

$          1,639,067

 

$          1,570,804

LIABILITIES AND EQUITY

       

Current liabilities:

       

Accounts payable and accrued liabilities

 

$               75,076

 

$               77,585

Contingent consideration liabilities

 

18,952

 

49,742

Accrued payroll and related expenses

 

55,582

 

51,000

Litigation liability

 

8,150

 

Income tax liabilities

 

2,908

 

2,469

Short-term senior convertible notes

 

 

61,701

Total current liabilities

 

160,668

 

242,497

Long-term senior convertible notes

 

582,920

 

564,412

Deferred and income tax liabilities, non-current

 

18,786

 

18,607

Other long-term liabilities

 

77,539

 

44,764

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 December 31, 2017
and December 31, 2016, 56,164,060 and 55,184,660 issued and outstanding at
December 31, 2017 and December 31, 2016, respectively

 

60

 

55

Additional paid-in capital

 

1,363,549

 

1,010,238

Accumulated other comprehensive loss

 

(6,933)

 

(10,631)

Retained earnings (accumulated deficit)

 

4,500

 

(66,859)

Treasury stock at cost; 5,001,886 shares and 4,758,828  shares at December 31, 2017
and December 31, 2016, respectively

 

(565,867)

 

(237,867)

Total NuVasive, Inc. stockholders' equity

 

795,309

 

694,936

Non-controlling interests

 

3,845

 

5,588

Total equity

 

799,154

 

700,524

Total liabilities and equity

 

$          1,639,067

 

$          1,570,804

 

NuVasive, Inc.

Consolidated Statements of Cash Flows

(in thousands)

 
   

Year Ended December 31,

   

2017

 

2016

Operating activities:

       

Consolidated net income

 

$               81,263

 

$               35,426

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

       

Depreciation and amortization

 

121,176

 

102,713

Deferred income tax (benefit) expense

 

(12,384)

 

26,265

Loss on repurchases of convertible notes

 

 

19,085

Amortization of non-cash interest

 

20,538

 

22,721

Stock-based compensation

 

22,391

 

26,924

Reserves on current assets

 

5,718

 

11,408

Other non-cash adjustments

 

16,561

 

16,928

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

       

Accounts receivable

 

(29,389)

 

(33,250)

Inventory

 

(35,300)

 

(22,636)

Prepaid expenses and other current assets

 

(10,671)

 

(5,665)

Contingent consideration liabilities

 

(11,200)

 

Accounts payable and accrued liabilities

 

(5,580)

 

11,854

Accrued royalties

 

163

 

471

Accrued payroll and related expenses

 

4,088

 

8,849

Litigation liability

 

8,150

 

(88,450)

Income taxes

 

3,455

 

23,652

Net cash provided by operating activities

 

178,979

 

156,295

Investing activities:

       

Acquisition of Ellipse Technologies, net of cash acquired

 

 

(380,080)

Other acquisitions and investments

 

(62,370)

 

(108,591)

Purchases of intangible assets

 

(2,270)

 

(5,918)

Purchases of property and equipment

 

(110,221)

 

(88,372)

Purchases of marketable securities

 

 

(128,956)

Proceeds from sales of marketable securities

 

 

407,032

Net cash used in investing activities

 

(174,861)

 

(304,885)

Financing activities:

       

Proceeds from the issuance of common stock

 

9,991

 

9,492

Payment of contingent consideration

 

(19,400)

 

(422)

Purchase of treasury stock

 

(11,860)

 

(24,734)

Proceeds from issuance of convertible debt, net of issuance costs

 

 

634,140

Proceeds from sale of warrants

 

 

44,850

Purchase of convertible note hedge

 

 

(111,150)

Repurchases of convertible notes

 

(63,317)

 

(439,519)

Proceeds from revolving line of credit

 

60,000

 

50,000

Repayments on revolving line of credit

 

(60,000)

 

(50,000)

Other financing activities

 

(2,442)

 

(1,834)

Net cash (used in) provided by financing activities

 

(87,028)

 

110,823

Effect of exchange rate changes on cash

 

2,070

 

(929)

(Decrease) in cash and cash equivalents

 

(80,840)

 

(38,696)

Cash and cash equivalents at beginning of year

 

153,643

 

192,339

Cash and cash equivalents at end of year

 

$               72,803

 

$             153,643

 

 

Cision View original content:http://www.prnewswire.com/news-releases/nuvasive-reports-fourth-quarter-and-full-year-2017-financial-results-300604191.html

SOURCE NuVasive, Inc.

Investor Contact: Suzanne Hatcher, NuVasive, Inc., 858-458-2240, investorrelations@nuvasive.com; Media Contact: Troy Anderson, NuVasive, Inc., 858-349-6983, media@nuvasive.com