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 2016 Financial Results
Company Delivers Double-Digit Revenue Growth and Increases Full Year 2016 Guidance

SAN DIEGO, CA -- (Marketwired) -- 07/26/16 -- NuVasive, Inc.(NASDAQ: NUVA), a leading medical device company focused on transforming spine surgery with minimally disruptive, procedurally-integrated solutions, announced today financial results for the quarter ended June 30, 2016.

Second Quarter 2016 Highlights

  • Revenue increased 16.4% to $236.2 million, or 16.1% on a constant currency basis;
  • GAAP operating profit margin of 25.4%; Non-GAAP operating profit margin up 60 basis points from prior year to 15.9%;
  • GAAP diluted earnings per share of $0.57; Non-GAAP diluted earnings per share up 28% from prior year to $0.40; and
  • Acquired Biotronic NeuroNetwork to support spine service line partnership offerings.

"NuVasive delivered another strong quarter, outperforming the spine market to deliver double-digit revenue growth, expanding our operating profitability year-over-year and delivering earnings growth of 28%," said Gregory T. Lucier, chairman and chief executive officer of NuVasive. "Our results were driven by strong growth in our international business, which benefitted from our continued revitalization efforts, and strength in our U.S. spinal hardware business, where adoption of our integrated Global Alignment platform drove momentum in sales of our procedurally integrated solutions. With this growth in our geographies and businesses for the first half of the year, and the addition of the Biotronic NeuroNetwork business, we are raising our full year guidance for 2016."

NuVasive achieved several strategic milestones in the second quarter. The Company completed the acquisition of Biotronic NeuroNetwork on July 1, and combined the service offerings of Biotronic with its Impulse Monitoring business to form NuVasive Clinical Services. This new division doubles the Company's service line footprint and will provide intraoperative neurophysiological monitoring services to surgeons and healthcare facilities in more than 75,000 U.S. cases annually. Also, the Company reached a definitive agreement with Medtronic to settle more than eight years of ongoing patent litigation between the two companies, removing the associated expense of legal proceedings and providing a clear protocol for resolution of potential patent disputes in the future.

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

Second Quarter 2016 Results
NuVasive's financial results for the second quarter 2016 are inclusive of results from Ellipse Technologies, Inc. and Mega Surgical, as both of these previously disclosed acquisitions were completed in the first quarter 2016. Ellipse Technologies now operates as a wholly owned subsidiary under the renamed legal entity NuVasive Specialized Orthopedics, Inc. (NSO).

NuVasive reported second quarter 2016 total revenue of $236.2 million, a 16.4% increase compared to $202.9 million for the second quarter 2015. On a constant currency basis, second quarter 2016 total revenue increased 16.1% compared to the same period last year.

For the second quarter 2016, GAAP and non-GAAP gross profit was $176.5 million and $183.8 million, respectively, while GAAP and non-GAAP gross margin was 74.7% and 77.8%, respectively. These results compared to GAAP and non-GAAP gross profit of $154.5 million and GAAP and non-GAAP gross margin of 76.1% for the second quarter 2015. Total GAAP and non-GAAP operating expenses were $116.4 million and $146.4 million, respectively, for the second quarter of 2016. These results compared to GAAP and non-GAAP operating expenses of $128.6 million and $123.5 million, respectively, for the second quarter 2015.

During the second quarter, the Company elected to early adopt the new FASB Accounting Standards Update (ASU) for employee share-based payment accounting ahead of the mandatory 2017 effective date for all U.S. public companies. The Company adopted the ASU in the second quarter 2016, effective from January 1, 2016. In connection with the adoption, the Company recast its first quarter 2016 results. The impact of the adoption had a favorable impact to the first and second quarter results, and will be favorable for full year 2016. The adoption of the ASU, together with the Company's ongoing tax planning initiatives, are expected to drive significant improvements in the Company's effective tax rate over time.

NuVasive reported a GAAP net income of $30.2 million, or $0.57 per share, for the second quarter 2016 compared to $10.3 million, or $0.20 per share, for the second quarter 2015.

On a non-GAAP basis, the Company reported net income of $20.6 million, or $0.40 per share for the second quarter 2016 compared to $15.7 million, or $0.31 per share, for the second quarter 2015.

Cash, cash equivalents and short and long-term marketable securities were approximately $331.0 million at June 30, 2016.

Annual Guidance for 2016
The Company provided the following updated projections to its full year 2016 guidance, which contemplates the impact of the Company's performance for the first half of 2016, the acquisition of Biotronic NeuroNetwork and the impact from the adoption of the ASU for employee share-based payment accounting, as well as expected changes in foreign currency rates:

  • Revenue of approximately $962.0 million, which includes a $1 million benefit from currency or approximately 18.6% growth compared to revenue of $811.1 million for 2015; versus a prior expectation of $928.0 million for 2016;
  • Non-GAAP diluted earnings per share of approximately $1.64, an increase of approximately 25.0% compared to non-GAAP diluted earnings per share of $1.31 for 2015; versus a prior expectation of $1.48 for 2016;
  • Non-GAAP operating profit margin of approximately 16.0%, an increase of 60 basis points compared to 15.4% for 2015; versus a prior expectation of approximately 15.8% for 2016;
  • Adjusted EBITDA margin of approximately 25.4%, an increase of approximately 20 basis points, in line with the prior expectation, compared to 25.2% for 2015; and
  • Non-GAAP effective tax expense rate of approximately 37%; versus a prior expectation of approximately 41% for 2016.

Supplementary Financial Information
For additional financial detail, please visit the Investor Relations section at www.nuvasive.com to access Supplementary Financial Information.

                   
Reconciliation of Full Year EPS Guidance  
          2016 Guidance  
    2015 Actuals     Prior 1, 2     Current 1, 3  
GAAP net income per share   $ 1.26     $ 0.20     $ 0.84  
Impact of change from basic to diluted share count     0.03       -       0.03  
GAAP net income per share, adjusted to diluted Non-GAAP share count   $ 1.30     $ 0.20     $ 0.88  
  Litigation liability gain     (0.82 )     -       (0.83 )
  Business transition costs 4     0.27       0.19       0.20  
  Non-cash interest expense on convertible notes     0.31       0.38       0.38  
  Non-cash purchase accounting adjustments on acquisitions 5     -       0.29       0.28  
  Loss on repurchase of convertible notes     -       0.34       0.34  
  Amortization of intangible assets     0.24       0.76       0.73  
  In-process research & development     0.02       -       -  
  Tax effect of adjustments 6     (0.01 )     (0.69 )     (0.34 )
Non-GAAP earnings per share   $ 1.31     $ 1.48     $ 1.64  
                         
GAAP Weighted shares outstanding - basic     48,687       49,984       50,004  
Non-GAAP Weighted shares outstanding - diluted     51,110       51,335       52,000  
                         
1 Prior guidance provided April 26, 2016. Current guidance reflects guidance provided July 26, 2016, as updated for the anticipated impact of the Biotronic Neuronetwork acquisition, the adoption of ASU 2016-09 Stock Compensation, as well as expected changes in currency.  
2 Effective tax expense rate of ~63% applied to GAAP earnings and ~41% applied to Non-GAAP earnings.  
3 Effective tax expense rate of ~41% applied to GAAP earnings and ~37% applied to Non-GAAP earnings.  
4 Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.  
5 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.  
6 The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. 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 ~37% on a non-GAAP basis. The Company adopted ASU 2016-09 Stock Compensation in Q2 2016 which was effective as of January 1, 2016 with retrospective adjustment. The result of the retrospective adjustment resulted in a change in the Q1 2016 quarterly effective tax rate on a non-GAAP basis from 41% to 36%.  
                         
                         
                         
                   
Reconciliation of Non-GAAP Operating Margin %  
                   
          2016 Guidance  
(in thousands, except %)   2015 Actuals     Prior 1     Current 1  
Non-GAAP Gross Margin % [A]   76.0%     77.4%     76.4%  
Non-cash purchase accounting adjustments on acquisitions 2   0.0%     (1.6% )   (1.5% )
GAAP Gross Margin [B]   76.0%     75.8%     74.9%  
                   
GAAP & Non-GAAP Sales, Marketing & Administrative Expense [C]   56.4%     56.0%     55.4%  
                   
Non-GAAP Research & Development Expense [D]   4.3%     5.6%     5.1%  
In-process research & development   0.1%     0.0%     0.0%  
GAAP Research & Development Expense [E]   4.4%     5.6%     5.1%  
                   
Litigation liability [F]   (5.2% )   0.0%     (4.5% )
Amortization of intangible assets [G]   1.5%     4.2%     4.0%  
Business transition costs [H] 3   1.7%     1.3%     1.2%  
                   
Non-GAAP Operating Margin % [A - C - D]   15.4%     15.8%     16.0%  
                   
GAAP Operating Margin % [B - C - E - F - G - H]   17.1%     8.7%     13.7%  
                   
1 Prior guidance provided April 26, 2016. Current guidance reflects guidance provided July 26, 2016, as updated for the anticipated impact of the Biotronic Neuronetwork acquisition, the adoption of ASU 2016-09 Stock Compensation, as well as expected changes in currency.  
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 Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.  
                   
                   
                   
                 
Reconciliation of EBITDA %  
                 
                 
          2016 Guidance  
(in thousands, except %)   2015 Actuals     Prior 1   Current 1  
Net Income / (Loss)   8.2%     1.1%   4.7%  
  Interest (income) / expense, net   3.4%     6.1%   5.9%  
  Provision for income taxes   5.8%     1.7%   3.2%  
  Depreciation and amortization 2   8.1%     10.9%   10.5%  
EBITDA   25.5%     19.8%   24.3%  
  Non-cash stock based compensation   3.1%     3.0%   2.9%  
  Business transition costs 2   1.7%     1.1%   1.1%  
  Non-cash purchase accounting adjustments on acquisitions 3   0.0%     1.6%   1.5%  
  In-process research & development   0.1%     0.0%   0.0%  
  Litigation liability gain   (5.2% )   0.0%   (4.5% )
Adjusted EBITDA   25.2%     25.4%   25.4%  
                 
1 Prior guidance provided April 26, 2016. Current guidance reflects guidance provided July 26, 2016, as updated for the anticipated impact of the Biotronic Neuronetwork acquisition, the adoption of ASU 2016-09 Stock Compensation, as well as expected changes in currency.  
2 Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs 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.  
                 
                 

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, purchase accounting related charges, leasehold related charges, integration related expenses associated with acquired businesses, one-time restructuring and acquisition related items, CEO transition related costs, certain litigation charges, non-cash interest expense and/or losses on convertible notes, and the impact from taxes related to these items, including those taxes that would have occurred in lieu of these items. 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, purchase accounting related changes, 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 Second Quarter 2016 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   $ 30,213     $ 0.57  
                 
  Litigation liability gain     (43,310 )        
  Business transition costs 1     2,756          
  Non-cash interest expense on convertible notes     5,051          
  Non-cash purchase accounting adjustments on acquisitions 2     7,374          
  Amortization of intangible assets     10,281          
  Tax effect of adjustments 3     8,255          
  Adjustments to GAAP net income     (9,593 )     (0.17 )
Non-GAAP earnings   $ 20,620       0.40  
                 
                 
GAAP weighted shares outstanding - diluted             53,159  
Non-GAAP weighted shares outstanding - diluted             51,928  
                 
1 Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs 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 The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. 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 36.5% on a non-GAAP basis. The result of these adjustments is a change in the quarterly effective tax rate from 40% to 37%.  
                 
                 
                 
           
Reconciliation of Year To Date 2016 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   $ 26,845     $ 0.51
               
  Litigation liability gain     (43,310 )      
  Business transition costs 1     8,063        
  Non-cash interest expense on convertible notes     9,361        
  Non-cash purchase accounting adjustments on acquisitions 2     12,290        
  Loss on repurchases of convertible notes     17,444        
  Amortization of intangible assets     17,830        
  Tax effect of adjustments 3     (10,749 )      
Adjustments to GAAP net income     10,929       0.22
Non-GAAP earnings   $ 37,774     $ 0.73
               
               
GAAP weighted shares outstanding - diluted             52,354
Non-GAAP weighted shares outstanding - diluted             51,443
               
1 Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs 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 The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. 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 36.5% on a non-GAAP basis. The result of these adjustments is a change in the annual effective tax rate from 29% to 36.5%. The Company adopted ASU 2016-09 Stock Compensation in Q2 2016 which was effective as of January 1, 2016 with retrospective adjustment. The result of the retrospective adjustment resulted in a change in the Q1 2016 quarterly effective tax rate on a non-GAAP basis from 41% to 36%.
               
               
               
             
Reconciliation of Second Quarter and Six Months 2016 Results  
GAAP net income to Adjusted EBITDA  
   
    Three months ended     Six months ended  
(in thousands, except per share data)   June 30, 2016     June 30, 2016  
                 
GAAP net income   $ 30,213     $ 26,845  
  Interest (income) / expense, net 1     10,131       35,719  
  Provision for income taxes     19,891       10,411  
  Depreciation and amortization     24,813       45,707  
EBITDA   $ 85,048     $ 118,682  
  Litigation liability gain     (43,310 )     (43,310 )
  Business transition costs 2     2,756       8,063  
  Non-cash purchase accounting related charges 3     7,374       12,290  
  Non-cash stock based compensation     7,865       12,357  
Adjusted EBITDA   $ 59,733     $ 108,082  
As a percentage of revenue     25.3%       23.9%  
                 
1 Included in Interest (income) / expense, net for the six months ended June 30, 2016 is loss on extinguishment of debt for $17.4 million.  
2 Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs 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.  
                 
                 

Investor Conference Call

NuVasive will hold a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its financial performance for the second quarter 2016. 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 August 26, 2016. In addition, a telephone replay of the call will be available until August 5, 2016. The replay dial-in numbers are 1-877-870-5176 for domestic callers and 1-858-384-5517 for international callers. Please use pin number: 13640365.

About NuVasive

NuVasive, Inc.(NASDAQ: NUVA) 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. NuVasive's highly differentiated, procedurally-integrated solutions include access instruments, implantable hardware and software systems for surgical planning and reconciliation technology that centers on achieving the global alignment of the spine. With $811 million in revenues (2015), NuVasive has an approximate 1,900 person workforce in more than 40 countries around the world. For more information, please visit www.nuvasive.com.

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 second quarter 2016, as well as projections for 2016 financial guidance and longer-term financial performance goals. The numbers for the second quarter 2016 are prior to the completion of review procedures by the Company's external auditors and are subject to adjustment. In addition, the Company's projections for 2016 financial guidance and longer-term financial performance goals represent current estimates, including initial estimates of the potential benefits, synergies and cost savings associated with acquisitions, which 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 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; the risk of further adjustment to financial results or future financial expectations; unanticipated difficulty in selling products, generating revenue or producing expected profitability; the risk that acquisitions will not be integrated successfully or that the benefits and synergies from the acquisition may not be fully realized or may take longer to realize than expected; and those 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. The forward-looking statements contained herein are based on the current expectations and assumptions of NuVasive and not on historical facts. 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 June 30,     Six Months Ended June 30,  
(unaudited)   2016     2015     2016     2015  
Revenue   $ 236,210     $ 202,910     $ 451,314     $ 395,293  
Cost of goods sold (excluding below amortization of intangible assets)     59,745       48,415       113,971       94,079  
  Gross profit     176,465       154,495       337,343       301,214  
Operating expenses:                                
  Sales, marketing and administrative     134,487       114,680       259,325       227,889  
  Research and development     11,871       8,774       22,500       18,038  
  Amortization of intangible assets     10,603       2,974       18,474       5,970  
  Litigation liability (gain) loss     (43,310 )     568       (43,310 )     (42,007 )
  Business transition costs     2,756       1,636       8,063       9,896  
    Total operating expenses     116,407       128,632       265,052       219,786  
Interest and other expense, net:                                
  Interest income     406       344       734       763  
  Interest expense     (10,537 )     (7,242 )     (19,009 )     (14,368 )
  Loss on repurchases of convertible notes     -       -       (17,444 )     -  
  Other (loss) income, net     (246 )     (281 )     (196 )     143  
    Total interest and other expense, net     (10,377 )     (7,179 )     (35,915 )     (13,462 )
    Income before income taxes     49,681       18,684       36,376       67,966  
Income tax expense     (19,891 )     (8,644 )     (10,411 )     (26,529 )
  Consolidated net income   $ 29,790     $ 10,040     $ 25,965     $ 41,437  
Add back net loss attributable to non-controlling interests   $ (423 )   $ (228 )   $ (880 )   $ (391 )
    Net income attributable to NuVasive, Inc.   $ 30,213     $ 10,268     $ 26,845     $ 41,828  
                                 
Net income per share attributable to NuVasive, Inc.:                                
  Basic   $ 0.60     $ 0.21     $ 0.54     $ 0.87  
  Diluted   $ 0.57     $ 0.20     $ 0.51     $ 0.81  
Weighted average shares outstanding:                                
  Basic     50,027       48,545       49,822       48,269  
  Diluted     53,159       51,681       52,354       51,700  
                                 
                                 
NuVasive, Inc.
Consolidated Balance Sheets
(in thousands, except par values and share amounts)
             
    June 30, 2016     December 31, 2015  
ASSETS   (Unaudited)        
Current assets:                
  Cash and cash equivalents   $ 263,082     $ 192,339  
  Short-term marketable securities     54,081       165,423  
  Accounts receivable, net of allowances of $6,066 and $5,320, respectively     141,917       127,595  
  Inventory, net     201,901       168,140  
  Prepaid income taxes     42,852       40,540  
  Prepaid expenses and other current assets     8,141       8,790  
    Total current assets     711,974       702,827  
Property and equipment, net     171,291       141,441  
Long-term marketable securities     13,654       112,332  
Intangible assets, net     263,607       85,076  
Goodwill     405,569       154,281  
Deferred tax assets     14,698       83,691  
Restricted cash and investments     7,403       5,615  
Other assets     17,714       17,404  
    Total assets   $ 1,605,910     $ 1,302,667  
LIABILITIES AND EQUITY                
Current liabilities:                
  Accounts payable and accrued liabilities   $ 100,791     $ 60,985  
  Accrued payroll and related expenses     35,268       37,641  
  Litigation liabilities     45,140       -  
  Income tax liabilities     1,083       990  
  Short term senior convertible notes     119,451       -  
    Total current liabilities     301,733       99,616  
Long term senior convertible notes     555,493       372,920  
Long-term acquisition-related liabilities             -  
Deferred and income tax liabilities, non-current     14,288       8,602  
Non-current litigation liabilities     -       88,261  
Other long-term liabilities     26,541       14,425  
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 June 30, 2016 and December 31, 2015, 54,868,373 and 52,616,471 issued and outstanding at June 30, 2016 and December 31, 2015, respectively     55       53  
  Additional paid-in capital     1,017,902       989,387  
  Accumulated other comprehensive loss     (6,351 )     (12,112 )
  Accumulated deficit     (77,161 )     (104,006 )
  Treasury stock at cost; 4,681,346 shares and 3,316,794 shares at June 30, 2016 and December 31, 2015, respectively     (233,019 )     (161,788 )
    Total NuVasive, Inc. stockholders' equity     701,426       711,534  
Non-controlling interests     6,429       7,309  
    Total equity   $ 707,855     $ 718,843  
    Total liabilities and equity   $ 1,605,910     $ 1,302,667  
                 
                 
NuVasive, Inc.
Consolidated Statements of Cash Flows
(in thousands)
       
    Six Months Ended June 30,  
    2016     2015  
(unaudited)            
Operating activities:                
  Consolidated net income   $ 25,965     $ 41,437  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     46,329       32,630  
    Loss on repurchases of convertible notes     17,444       -  
    Amortization of non-cash interest     10,943       8,749  
    Stock-based compensation     12,357       13,493  
    Reserves on current assets     6,751       4,083  
    Other non-cash adjustments     8,387       10,669  
    Deferred income taxes     14,691       19,996  
    Changes in operating assets and liabilities, net of effects from acquisitions:                
      Accounts receivable     (8,615 )     637  
      Inventory     (12,019 )     (15,181 )
      Prepaid expenses and other current assets     728       1,182  
      Accounts payable and accrued liabilities     14,273       6,841  
      Accrued royalties     111       (47,112 )
      Accrued payroll and related expenses     (4,356 )     (8,370 )
      Litigation liability     (43,310 )     4,795  
      Income taxes     10,534       (38,666 )
        Net cash provided by operating activities     100,213       35,183  
Investing activities:                
  Acquisition of Ellipse Technologies, net of cash acquired     (380,080 )     -  
  Other acquisitions and investments     (8,079 )     (1,357 )
  Purchases of intangible assets     (5,918 )     (28,589 )
  Purchases of property and equipment     (52,566 )     (47,976 )
  Purchases of marketable securities     (128,956 )     (129,549 )
  Proceeds from sales of marketable securities     339,320       164,147  
  Sales of restricted investments     -       33,809  
  Purchases of restricted investments     -       (62,625 )
        Net cash used in investing activities     (236,279 )     (72,140 )
Financing activities:                
  Incremental tax benefits related to stock-based compensation awards     -       9,928  
  Proceeds from the issuance of common stock     6,150       8,360  
  Payment of contingent consideration     -       (514 )
  Purchase of treasury stock     (22,549 )     (43,937 )
  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     (343,835 )     -  
  Proceeds from revolving line of credit     50,000       -  
  Repayments on revolving line of credit     (50,000 )     -  
  Other financing activities     (1,545 )     (87 )
        Net cash provided by (used in) financing activities     206,061       (26,250 )
  Effect of exchange rate changes on cash     748       (543 )
        Increase (decrease) in cash and cash equivalents     70,743       (63,750 )
  Cash and cash equivalents at beginning of period     192,339       142,387  
  Cash and cash equivalents at end of period   $ 263,082     $ 78,637  
                 

Investor Contact:
Suzanne Hatcher
NuVasive, Inc.
1-858-458-2240
Email contact


Media Contact:
Michael Farrington
NuVasive, Inc.
1-858-909-1940
Email contact

Source: NuVasive, Inc.