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 Second Quarter 2005 Financial Results
Second Quarter Highlights: - Generated revenues of $15.0 million - up 70.7% year-over-year and 15.1% quarter-over-quarter - Gross profit increased to $11.9 million- up 87.4% year-over-year and 13.6% quarter-over-quarter - Gross margin was 78.9% including an acquisition related charge of $497,000 - Surgeons trained on MAS Platform totaled 119 - up 221.6% year-over-year and 30.7% quarter-over-quarter - Launched SpheRx(TM) DBR(TM) minimally disruptive fixation system - Acquired advanced dynamic cervical plate and related technology - Filed IDE for Cerpass(TM) cervical total disc replacement

SAN DIEGO, July 28, 2005 /PRNewswire-FirstCall via COMTEX/ -- NuVasive, Inc. (Nasdaq: NUVA), a medical device company focused on developing products for minimally disruptive surgical treatments for the spine, announced today second quarter financial results for the period ended June 30, 2005.

The Company reported second quarter revenues of $15.0 million, a 70.7% increase over the $8.8 million for the second quarter of 2004 and a 15.1% increase over the $13.1 million for the first quarter of 2005. Maximum Access Surgery (MAS) revenues for the second quarter were $12.6 million, an increase of 103.5% from the second quarter of 2004, and an increase of 26.5% from the first quarter of 2005.

Gross profit for the second quarter of 2005 was $11.9 million with a gross margin of 78.9%, including a charge of $497,000 for the write-off of investments in fixed assets and inventory related to the initial alpha/beta testing of the Company's cervical plate under development. Excluding this charge, non-GAAP gross profit for the second quarter of 2005 was $12.4 million with a gross margin of 82.2%, compared with a gross profit of $6.3 million with a gross margin of 71.8% in the second quarter of 2004. For the first quarter of 2005, gross profit was $10.4 million with a gross margin of 79.9%. The continued strong gross margin for the second quarter of 2005 was due primarily to the product revenue mix of 83.5% MAS revenues and 16.5% classic fusion revenues and to the mix of products within MAS, specifically NeuroVision and MaXcess disposables, and specialized implants.

Total operating expenses for the second quarter of 2005 were $16.3 million, compared with $10.8 million in the second quarter of 2004 and $14.3 million in the first quarter of 2005. Total non-GAAP operating expenses, excluding stock-based compensation expense and the charges detailed in the next paragraph, for the second quarter of 2005 were $15.0 million, compared with $8.9 million in the second quarter of 2004 and $13.4 million for the first quarter of 2005. The quarter-over-quarter increase reflects continued investment in the Company's next generation MAS products, accelerated surgeon and sales representative training, and marketing and trade show related costs. Included in the quarter-over-quarter increase is additional sales and marketing expenses related to the Company's program to transition its distributor network toward exclusivity.

The Company recorded charges of $904,000 in the second quarter. A charge to cost of goods sold of $497,000 was recorded for investments in fixed assets and inventory for the initial alpha/beta testing of the Company's cervical plate that was under internal development. The cervical plate was replaced by the acquisition of intellectual property and related assets for cervical plate technology from RSB Spine LLC. The Company also recorded charges to general and administrative expenses totaling $407,000 during the second quarter, $237,000 of which was related to due diligence costs associated with an abandoned technology acquisition, and $170,000 for certain legal expenses.

On a GAAP basis for the three-month period ended June 30, 2005, the Company reported a net loss of $4.1 million, or $0.17 per share. On a non-GAAP basis, second quarter net loss, excluding the above acquisition-related charges and stock based compensation, was $2.3 million, or $0.10 per share.

Cash, cash equivalents and short-term investments were $40.8 million at June 30, 2005.

Alexis V. Lukianov, Chairman and Chief Executive Officer, said, "Our strong second quarter results reflect the considerable progress we continue to make in penetrating the spine surgeon marketplace with our MAS platform. During the quarter, we trained a total of 119 surgeons in our cadaver operating facility and remain well on track to achieve our stated goal of over 425 surgeons trained for the year. We are particularly pleased with the advancements we have made to acquire and introduce new technology. Our acquisition of an advanced dynamic cervical plate, re-launched as 'SmartPlate Gradient CLP', increases our product breadth bringing greater opportunity of increased distributor exclusivity. The recently launched SpheRx. DBR percutaneous pedicle screw system has received positive feedback from surgeons since its launch in the second quarter. Most recently, we filed an IDE with the FDA for Cerpass(TM), our cervical total disc replacement product. The quarterly developments involved one-time charges and increased expenses that we view as investments in our long-term goal of becoming the leading, independent company focused solely on minimally disruptive surgical treatments of the spine."

For the full year 2005, the Company increased revenue guidance to be in the range of $61 million to $62 million, from its previous guidance range of $59 million to $61 million.

Non-GAAP Information

Management uses certain non-GAAP financial measures, such as non-GAAP gross profit, non-GAAP operating expenses, non-GAAP net loss and non-GAAP net loss per share, which exclude the following charges: (i) stock based compensation, (ii) the write-off of investments in fixed assets and inventory related to the initial alpha/beta testing of the Company's cervical plate under development and (iii) certain other amounts which management has determined should not be considered 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 although it is important for investors to understand GAAP measures, providing investors with these non-GAAP measures gives them additional important information to enable them to assess, in a 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.

Conference Call

NuVasive will hold a conference call at 5:30 p.m. EDT / 2:30 p.m. PDT to discuss the results. The dial-in numbers are (877) 407-4018 for domestic callers, and (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 August 26, 2005. In addition, a telephonic replay of the call will be available until August 18, 2005. The replay dial- in numbers are (877) 660-6853 for domestic callers and (201) 612-7415 for international callers. Please use account number 3055 and conference ID number 161335.

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 $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 classic fusion implants.

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(TM) and CoRoent(TM)-that collectively minimize soft tissue disruption during spine surgery while allowing maximum visualization and surgical reproducibility. NuVasive's classic fusion portfolio is comprised predominantly of proprietary saline packaged bone allografts and internal fixation products. NuVasive also has a robust R&D pipeline emphasizing both MAS and motion preservation products such as Total Disc Replacement (TDR).

NuVasive cautions you that statements included in this press release that are not a description of historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements 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. All statements, other than statements of historical fact, are statements that could be deemed 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 our revenue projections may turn out to be incorrect because of unanticipated difficulty in selling our products; the uncertain process of seeking regulatory approval or clearance for NuVasive's products, 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 our products to patients 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:
     Kevin C. O'Boyle                  Stephanie Carrington/Nick Laudico
     EVP & Chief Financial Officer     The Ruth Group
     NuVasive, Inc.                    646-536-7017/7030
     858-909-1800                      scarrington@theruthgroup.com
     investorrelations@nuvasive.com    nlaudico@theruthgroup.com



                                NUVASIVE, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share data)

                         Three Months Ended          Three Months Ended
                            June 30, 2005               June 30, 2004
                     GAAP  Adjustments  Non-GAAP   GAAP  Adjustments  Non-GAAP
                     Basis               Basis     Basis                Basis
    Revenues:
    MAS            $12,557              $12,557   $6,171               $6,171
    Classic Fusion   2,479                2,479    2,638                2,638
    Total revenues  15,036        -      15,036    8,809        -       8,809
    Cost of
     goods sold      3,178     (497) B    2,681    2,481                2,481

    Gross profit    11,858      497      12,355    6,328        -       6,328

    Operating expenses:
    Research and
     development     2,454                2,454    1,616                1,616
    Sales and
     marketing       8,965                8,965    4,853                4,853
    General and
     administrative  3,989     (407) C    3,582    2,469                2,469
    Stock-based
     compensation      905     (905) A       -     1,845    (1,845)A       -
    Total operating
     expenses       16,313   (1,312)     15,001   10,783    (1,845)     8,938
    Interest income
     (expense), net    345                  345      (11)                 (11)
    Other
     expense, net       -                    -        -                    -
    Net loss       $(4,110)  $1,809     $(2,301) $(4,466)   $1,845    $(2,621)

    Historical net
     loss per share:
    Basic and
     diluted        $(0.17)              $(0.10)  $(0.34)              $(0.20)
    Weighted
     average
     shares-
     basic and
     diluted        24,090               24,090   13,188               13,188

    A - Stock-based compensation
    B - Write-off of investments in fixed assets and inventory related to the
        initial alpha/beta testing of the Company's own cervical plate under
        development.  These were written-off as a result of the RSB Spine
        acquisition.
    C - Due diligence costs associated with an abandoned technology
        acquisition and legal costs related to specific and unusual matters
        that are not expected to be ongoing and that management has determined
        should not be considered in evaluating the continuing operations of
        the Company


                                NUVASIVE, INC.
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share data)

                        Six Months Ended              Six Months Ended
                          June 30, 2005                  June 30, 2004
                     GAAP  Adjustments  Non-GAAP   GAAP  Adjustments  Non-GAAP
                     Basis               Basis     Basis                Basis
    Revenues:
    MAS            $22,480              $22,480  $10,974              $10,974
    Classic Fusion   5,620                5,620    5,423                5,423
    Total revenues  28,100       -       28,100   16,397        -      16,397
    Cost of
     goods sold      5,805     (497) B    5,308    4,685                4,685

    Gross profit    22,295      497      22,792   11,712         -     11,712

    Operating
     expenses:
    Research and
     development     4,611                4,611    3,178                3,178
    Sales and
     marketing      16,450               16,450    8,604                8,604
    General and
     administrative  7,740     (407)C     7,333    4,554                4,554
    Stock-based
     compensation    1,844   (1,844)A        -     3,978    (3,978)A       -
    Total operating
     expenses       30,645   (2,251)     28,394   20,314    (3,978)    16,336
    Interest income
     (expense), net    685                  685      (79)                 (79)
    Other
     expense, net       -                    -       (11)                 (11)
    Net loss       $(7,665)  $2,748     $(4,917) $(8,692)   $3,978    $(4,714)

    Historical net
     loss per share:
    Basic and
     diluted        $(0.32)              $(0.20)  $(1.17)              $(0.64)
    Weighted average
     shares-
     basic and
     diluted        24,006               24,006    7,418                7,418

    A - Stock-based compensation
    B - Write-off of investments in fixed assets and inventory related to the
        initial alpha/beta testing of the Company's own cervical plate under
        development.  These were written-off as a result of the RSB Spine
        acquisition.
    C - Due diligence costs associated with an abandoned technology
        acquisition and legal costs related to specific and unusual matters
        that are not expected to be ongoing and that management has determined
        should not be considered in evaluating the continuing operations of
        the Company


                                NUVASIVE, INC.
                         CONSOLIDATED BALANCE SHEETS
                                (in thousands)

                                                   June 30,       December 31,
                                                     2005              2004
    Assets
    Current assets:
        Cash and cash equivalents                   $5,173            $8,560
        Short-term investments                      35,607            50,593
        Accounts receivable, net                     9,070             6,770
        Inventory, net                               9,311             5,249

        Prepaid expenses and other current assets    1,333               826
    Total current assets                            60,494            71,998
    Property and equipment, net                     14,631             8,725
    Intnagible assets, net                           8,160               -
    Other assets                                        40                29
    Total Assets                                   $83,325           $80,752

    Liabilities and Stockholders' Equity
    Current liabilities:
        Accounts payable and accrued liabilities    $8,231            $6,202
        Accrued payroll and related expenses         3,630             3,135
        Current portion of obligations
         under capital leases                           -                  5
    Total current liabilities                       11,861             9,342
    Obligations under capital leases,
     less current portion                               -                 13
    Other long-term liabilities                      1,694                -
    Stockholders equity:
        Common stock                                    24                24
        Additional paid-in capital                 158,122           153,323
        Deferred compensation                       (2,203)           (3,441)
        Accumulated other comprehensive loss           (42)              (43)
        Accumulated deficit                        (86,131)          (78,466)
    Total stockholders' equity                      69,770            71,397
    Total liabilities and stockholders' equity     $83,325           $80,752



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

                                               Q105        Q205         YTD

    Net loss                                 $(3,555)    $(4,110)    $(7,665)
    Add back Non-Cash Expenses                                -
    Depreciation and amortization                681         874       1,555
    Write-off of cervical plate inventory         -          497         497
    Stock-based compensation                     939         905       1,844
    Other non-cash adjustments                   198         (64)        134

    Changes in operating assets and liabilities:              -
    Accounts receivable                       (1,251)     (1,050)     (2,301)
    Inventory                                   (971)     (2,815)     (3,786)
    Other current and long term assets            (9)       (509)       (518)
    Accounts payable and accrued liabilities   2,215        (776)      1,439
    Accrued payroll and related expenses        (670)      1,140         470
    Net cash used in operating activities     (2,423)     (5,908)     (8,331)

    Investing activities:
    Cash paid for business combinations           -       (3,800)     (3,800)
    Purchases of property and equipment       (4,252)     (2,679)     (6,931)
    (Purchases) Sales of short-term
     investments, net                         14,389         597      14,986
    Net cash provided by (used in)
     investing activities                     10,137      (5,882)      4,255

    Financing activities:
    Payment of capital leases                     (1)        (17)        (18)
    Issuance of common stock                      98         609         707
    Net cash provided by financing activities     97         592         689

    Increase (decrease) in cash and
     cash equivalents                          7,811     (11,198)     (3,387)

    Cash and cash equivalents at
     beginning of period                       8,560      16,371       8,560
    Cash and cash equivalents at
     end of period                           $16,371      $5,173      $5,173

SOURCE NuVasive, Inc.

Kevin C. O'Boyle, EVP & Chief Financial Officer of NuVasive, Inc.,
+1-858-909-1800, investorrelations@nuvasive.com; Investors - Stephanie Carrington,
+1-646-536-7017, scarrington@theruthgroup.com, or Nick Laudico, +1-646-536-7030,
nlaudico@theruthgroup.com, both of The Ruth Group, for NuVasive, Inc.
http://www.prnewswire.com