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 Third Quarter 2016 Financial Results

SAN DIEGO, CA -- (Marketwired) -- 10/25/16 -- 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 September 30, 2016.

Third Quarter 2016 Highlights

  • Revenue increased 19.5% to $239.6 million, or 18.9% on a constant currency basis
  • GAAP operating profit margin of 8.8%; Non-GAAP operating profit margin of 16.1%
  • GAAP diluted earnings per share of $0.07; Non-GAAP diluted earnings per share up 14.3% from prior year to $0.40

"Our results for the third quarter reflect continued strength in procedural volumes across the United States, as well as strong performances in our European and Australian markets," said Gregory T. Lucier, NuVasive's chairman and chief executive officer. "While our revenue results for the quarter were lower than our expectations due to capital and stocking orders in the United States that did not come through late in the quarter as planned, we believe this minor disruption is temporary. During the quarter, we continued to experience positive trends, including domestic procedural volumes in line with prior quarters and the conversion of surgeons at an increasingly faster pace, signaling stable market trends and competitive dynamics that favor our innovation and spine-only focused strategy.

"As anticipated, our results were also impacted by our dilator being off the market in Japan for a large portion of the quarter, which resulted in lower XLIF revenues. If XLIF procedures in Japan had been performed at their normal pace, the underlying revenue growth rate of our core business would have been in the mid-to-high single digits. We have resubmitted our dilator for approval with the Japanese Ministry of Health, and to be prudent, we have updated our financial guidance to reflect the removal of XLIF revenues in Japan for the fourth quarter."

Lucier continued, "Our intense focus on operational excellence is paying off as we delivered profitability and earnings that were significantly higher than our internal expectations, while continuing to invest in a broader innovation agenda and our new manufacturing facility in Ohio to drive long-term shareholder value creation. Based on these dynamics, we are reiterating our full year 2016 financial guidance in line with prior expectations, with the exception of revenue."

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

Third Quarter 2016 Results

NuVasive's financial results for the third quarter 2016 are inclusive of results from Ellipse Technologies, Inc. Mega Surgical and Biotronic NeuroNetwork, as these previously disclosed acquisitions were completed earlier in the year. Ellipse Technologies now operates as the renamed division NuVasive Specialized Orthopedics (NSO). Biotronic NeuroNetwork now operates alongside the Company's existing Impulse Monitoring business under the renamed division NuVasive Clinical Services (NCS).

NuVasive reported third quarter 2016 total revenue of $239.6 million, a 19.5% increase compared to $200.5 million for the third quarter 2015. On a constant currency basis, third quarter 2016 total revenue increased 18.9% compared to the same period last year.

For the third quarter 2016, GAAP and non-GAAP gross profit was $180.5 million and $182.9 million, respectively, while GAAP and non-GAAP gross margin was 75.3% and 76.3%, respectively. These results compared to GAAP and non-GAAP gross profit of $151.4 million and GAAP and non-GAAP gross margin of 75.5% for the third quarter 2015. Total GAAP and non-GAAP operating expenses were $159.3 million and $144.4 million, respectively, for the third quarter of 2016. These results compared to GAAP and non-GAAP operating expenses of $123.3 million and $118.7 million, respectively, for the third quarter 2015.

NuVasive reported a GAAP net income of $3.9 million, or $0.07 per diluted share, for the third quarter 2016 compared to $13.0 million, or $0.24 per diluted share, for the third quarter 2015.

On a non-GAAP basis, the Company reported net income of $21.1 million, or $0.40 per diluted share for the third quarter 2016 compared to $18.1 million, or $0.35 per diluted share, for the third quarter 2015.

Cash, cash equivalents and short and long-term marketable securities were approximately $204 million at September 30, 2016.

Updated Guidance for 2016

The Company reiterated full year 2016 financial guidance in line with prior expectations, with the exception of revenue. The Company expects full year 2016 revenue to be lower than prior expectations based on the Company's third quarter 2016 revenue results and the Company's revised forecast for fourth quarter 2016 revenue in Japan.

  • Revenue of approximately $952.0 million for 2016, which includes a $1 million benefit from currency or approximately 17.4% growth compared to revenue of $811.1 million for 2015; versus a prior expectation of $962.0 million for 2016;
  • Non-GAAP diluted earnings per share of approximately $1.64, an increase of approximately 25% and in line with the prior expectation of $1.64, compared to non-GAAP diluted earnings per share of $1.31 for 2015;
  • Non-GAAP operating profit margin of approximately 16.0%, an increase of 60 basis points compared to 15.4% for 2015; in line with the prior expectation of approximately 16.0% for 2016;
  • Adjusted EBITDA margin of approximately 25.4% for 2016; in line with the prior expectation of approximately 25.4% for 2016, compared to 25.2% for 2015; and
  • Non-GAAP effective tax expense rate of approximately 37%; in line with the prior expectation of approximately 37% for 2016.

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     $ 0.84     $ 0.76  
    Impact of change to diluted share count     0.03       0.03       0.03  
    GAAP net income per share, adjusted to diluted Non-GAAP share count   $ 1.30     $ 0.88     $ 0.79  
      Litigation liability gain     (0.82 )     (0.83 )     (0.83 )
      Business transition costs 4     0.27       0.20       0.26  
      Non-cash interest expense on convertible notes     0.31       0.38       0.38  
      Non-cash purchase accounting adjustments on acquisitions 5     -       0.28       0.28  
      Loss on repurchase of convertible notes     -       0.34       0.34  
      Amortization of intangible assets     0.24       0.73       0.78  
      In-process research & development     0.02       -       -  
      Tax effect of adjustments 6     (0.01 )     (0.34 )     (0.36 )
    Non-GAAP earnings per share   $ 1.31     $ 1.64     $ 1.64  
                             
    GAAP Weighted shares outstanding - basic     48,687       50,004       50,050  
    GAAP Weighted shares outstanding - diluted     52,425       53,942       54,100  
    Non-GAAP Weighted shares outstanding - diluted     51,110       52,000       52,050  
                             
1   Prior guidance provided July 26, 2016. Current guidance reflects guidance provided October 25, 2016, as updated for the expected changes in currency.  
2   Effective tax expense rate of approximately 41% applied to GAAP earnings and approximately 37% applied to Non-GAAP earnings.  
3   Effective tax expense rate of approximately 42% applied to GAAP earnings and approximately 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 approximately 37% on a non-GAAP basis.  
       
       
   
   
Reconciliation of Non-GAAP Operating Margin %  
                       
              2016 Guidance  
    (in thousands, except %)   2015 Actuals     Prior 1     Current 1  
    Non-GAAP Gross Margin % [A]   76.0 %   76.4 %   76.4 %
    Non-cash purchase accounting adjustments on acquisitions 2   0.0 %   (1.5 %)   (1.5 %)
    GAAP Gross Margin [B]   76.0 %   74.9 %   74.8 %
                       
    GAAP & Non-GAAP Sales, Marketing & Administrative Expense [C]   56.4 %   55.4 %   55.3 %
                       
    Non-GAAP Research & Development Expense [D]   4.3 %   5.1 %   5.1 %
    In-process research & development   0.1 %   0.0 %   0.0 %
    GAAP Research & Development Expense [E]   4.4 %   5.1 %   5.1 %
                       
    Litigation liability [F]   (5.2 %)   (4.5 %)   (4.5 %)
    Amortization of intangible assets [G]   1.5 %   4.0 %   4.3 %
    Business transition costs [H] 3   1.7 %   1.2 %   1.5 %
                       
    Non-GAAP Operating Margin % [A - C - D]   15.4 %   16.0 %   16.0 %
                       
    GAAP Operating Margin % [B - C - E - F - G - H]   17.1 %   13.7 %   13.2 %
                       
1   Prior guidance provided July 26, 2016. Current guidance reflects guidance provided October 25, 2016, as updated for the 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%   4.7%   4.3%
      Interest (income) / expense, net   3.4%   5.9%   6.0%
      Provision for income taxes   5.8%   3.2%   3.1%
      Depreciation and amortization   8.1%   10.5%   10.6%
    EBITDA   25.5%   24.3%   24.1%
      Non-cash stock based compensation   3.1%   2.9%   2.9%
      Business transition costs 2   1.7%   1.1%   1.4%
      Non-cash purchase accounting adjustments on acquisitions 3   0.0%   1.5%   1.5%
      In-process research & development   0.1%   0.0%   0.0%
      Litigation liability gain   (5.2%)   (4.5%)   (4.5%)
    Adjusted EBITDA   25.2%   25.4%   25.4%
                 
1   Prior guidance provided July 26, 2016. Current guidance reflects guidance provided October 25, 2016, as updated for the 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.
                 
                 

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

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, non-cash purchase accounting adjustments on acquisitions, business transition costs, CEO transition related costs, certain litigation charges, significant one-time items, non-cash interest expense and/or losses on repurchase of 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, non-cash purchase accounting adjustments on acquisition, business transition costs, CEO transition related costs, certain litigation charges, 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 Third 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   $ 3,926     $ 0.07
                   
      Business transition costs 1     3,451        
      Non-cash interest expense on convertible notes     5,186        
      Non-cash purchase accounting adjustments on acquisitions 2     2,457        
      Amortization of intangible assets     11,115        
      Tax effect of adjustments 3     (5,010 )      
    Adjustments to GAAP net loss     17,199       0.33
    Non-GAAP earnings   $ 21,125     $ 0.40
                   
                   
    GAAP weighted shares outstanding - diluted             55,782
    Non-GAAP weighted shares outstanding - diluted             52,633
                   
1   Costs related to acquisition, integration and business transition activities which includes 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 approximately 37% on a non-GAAP basis. The result of these adjustments is a change in the annual effective tax rate from approximately 29% to 37%. 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 approximately 41% to 36%.
                   
                   
               
               
    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   $ 30,771     $ 0.58
                   
      Litigation liability gain     (43,310 )      
      Business transition costs 1     11,514        
      Non-cash interest expense on convertible notes     14,547        
      Non-cash purchase accounting adjustments on acquisitions 2     14,747        
      Loss on repurchases of convertible notes     17,444        
      Amortization of intangible assets     28,945        
      Tax effect of adjustments 3     (15,759 )      
    Adjustments to GAAP net income     28,128       0.54
    Non-GAAP earnings   $ 58,899     $ 1.14
                   
                   
    GAAP weighted shares outstanding - diluted             53,498
    Non-GAAP weighted shares outstanding - diluted             51,841
                   
1   Costs related to acquisition, integration and business transition activities which includes 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 approximately 37% on a non-GAAP basis. The result of these adjustments is a change in the annual effective tax rate from approximately 29% to 37%. 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 approximately 41% to 36%.
                   
                   
                 
                 
    Reconciliation of Third Quarter and Nine Months 2016 Results  
    GAAP net income to Adjusted EBITDA  
                 
        Three months ended     Nine months ended  
    (in thousands, except per share data)   September 30, 2016     September 30, 2016  
                     
    GAAP net income   $ 3,926     $ 30,771  
      Interest (income) / expense, net 1     10,789       46,508  
      Provision for income taxes     6,972       17,383  
      Depreciation and amortization     27,158       72,865  
    EBITDA   $ 48,845     $ 167,527  
      Litigation liability gain           (43,310 )
      Non-cash purchase accounting related charges 2     2,457       14,747  
      Business transition costs 3     3,451       11,514  
      Non-cash stock based compensation     7,288       19,645  
    Adjusted EBITDA   $ 62,041     $ 170,123  
    As a percentage of revenue     25.9 %     24.6 %
                     
1   Included in Interest (income) / expense, net for the nine months ended September 30, 2016 is loss on extinguishment of debt for $17.4 million.  
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 includes severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.  
                     
                     

Investor Conference Call

NuVasive will hold a conference call today at 5:30 p.m. ET / 2:30 p.m. PT to discuss the results of its financial performance for the third 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 November 28, 2016. In addition, a telephone replay of the call will be available until November 2, 2016. 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: 13646026.

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 2,200 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 third quarter 2016, as well as projections for 2016 financial guidance and longer-term financial performance goals. 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.com. 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 September 30,   Nine Months Ended September 30,
    2016   2015   2016   2015
(unaudited)                                
Revenue   $ 239,649     $ 200,538     $ 690,963     $ 595,831  
Cost of goods sold (excluding below amortization of intangible assets)     59,196       49,167       173,167       143,246  
  Gross profit     180,453       151,371       517,796       452,585  
Operating expenses:                                
  Sales, marketing and administrative     131,886       110,554       391,211       338,444  
  Research and development     12,516       9,189       35,016       27,227  
  Amortization of intangible assets     11,438       3,067       29,912       9,037  
  Litigation liability gain           (500 )     (43,310 )     (42,507 )
  Business transition costs     3,451       950       11,514       10,845  
    Total operating expenses     159,291       123,260       424,343       343,046  
Interest and other expense, net:                                
  Interest income     190       362       924       1,125  
  Interest expense     (10,979 )     (7,307 )     (29,988 )     (21,675 )
  Loss on repurchases of convertible notes                 (17,444 )      
  Other income (loss), net     94       387       (102 )     530  
    Total interest and other expense, net     (10,695 )     (6,558 )     (46,610 )     (20,020 )
    Income before income taxes     10,467       21,553       46,843       89,519  
Income tax expense     (6,972 )     (8,803 )     (17,383 )     (35,332 )
  Consolidated net income   $ 3,495     $ 12,750     $ 29,460     $ 54,187  
Add back net loss attributable to non-controlling interests   $ (431 )   $ (210 )   $ (1,311 )   $ (601 )
    Net income attributable to NuVasive, Inc.   $ 3,926     $ 12,960     $ 30,771     $ 54,788  
                                 
Net income per share attributable to NuVasive, Inc.:                                
  Basic   $ 0.08     $ 0.26     $ 0.62     $ 1.13  
  Diluted   $ 0.07     $ 0.24     $ 0.58     $ 1.05  
Weighted average shares outstanding:                                
  Basic     50,264       48,993       49,970       48,513  
  Diluted     55,782       53,199       53,498       52,202  
                                   
                                   
 
NuVasive, Inc.
Consolidated Balance Sheets
(in thousands, except par values and share amounts)
         
         
    September 30, 2016   December 31, 2015
ASSETS   (Unaudited)    
Current assets:                
  Cash and cash equivalents   $ 203,818     $ 192,339  
  Short-term marketable securities           165,423  
  Accounts receivable, net of allowances of $8,335 and $5,320, respectively     143,818       127,595  
  Inventory, net     212,784       168,140  
  Prepaid income taxes     46,904       40,540  
  Prepaid expenses and other current assets     9,573       8,790  
    Total current assets     616,897       702,827  
Property and equipment, net     179,913       141,441  
Long-term marketable securities           112,332  
Intangible assets, net     303,928       85,076  
Goodwill     498,686       154,281  
Deferred tax assets     4,633       83,691  
Restricted cash and investments     7,420       5,615  
Other assets     24,568       17,404  
    Total assets   $ 1,636,045     $ 1,302,667  
LIABILITIES AND EQUITY        
Current liabilities:                
  Accounts payable and accrued liabilities   $ 72,581     $ 60,985  
  Contingent consideration liabilities     45,005        
  Accrued payroll and related expenses     41,010       37,641  
  Income tax liabilities     828       990  
  Short-term senior convertible notes     120,975        
    Total current liabilities     280,399       99,616  
Long term senior convertible notes     559,950       372,920  
Deferred and income tax liabilities, non-current     26,239       8,602  
Non-current litigation liabilities           88,261  
Other long-term liabilities     46,643       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 September 30, 2016 and December 31, 2015, 55,096,226 and 52,616,471 issued and outstanding at September 30, 2016 and December 31, 2015, respectively     55       53  
  Additional paid-in capital     1,033,298       989,387  
  Accumulated other comprehensive loss     (5,891 )     (12,112 )
  Accumulated deficit     (73,235 )     (104,006 )
  Treasury stock at cost; 4,751,464 shares and 3,316,794 shares at September 30, 2016 and December 31, 2015, respectively     (237,411 )     (161,788 )
    Total NuVasive, Inc. stockholders' equity     716,816       711,534  
Non-controlling interests     5,998       7,309  
    Total equity   $ 722,814     $ 718,843  
    Total liabilities and equity   $ 1,636,045     $ 1,302,667  
                     
                     
 
NuVasive, Inc.
Consolidated Statements of Cash Flows
(in thousands)
         
    Nine Months Ended September 30,
    2016   2015
(unaudited)                
Operating activities:                
  Consolidated net income   $ 29,460     $ 54,187  
  Adjustments to reconcile net income to net cash provided by operating activities:                
    Depreciation and amortization     73,765       49,006  
    Loss on repurchases of convertible notes     17,444        
    Amortization of non-cash interest     16,906       13,255  
    Stock-based compensation     19,645       20,570  
    Reserves on current assets     9,027       7,232  
    Other non-cash adjustments     11,369       13,127  
    Deferred income taxes     24,810       37,047  
    Changes in operating assets and liabilities, net of effects from acquisitions:                
      Accounts receivable     (3,038 )     2,163  
      Inventory     (22,423 )     (19,768 )
      Prepaid expenses and other current assets     (3,457 )     2,512  
      Accounts payable and accrued liabilities     5,939       8,828  
      Accrued royalties     (85 )     (46,999 )
      Accrued payroll and related expenses     (1,670 )     (5,080 )
      Litigation liability     (88,450 )     (35,333 )
      Income taxes     6,778       (52,739 )
        Net cash provided by operating activities     96,020       48,008  
Investing activities:                
  Acquisition of Ellipse Technologies, net of cash acquired     (380,080 )      
  Other acquisitions and investments     (108,150 )     (1,357 )
  Purchases of intangible assets     (5,918 )     (28,589 )
  Proceeds from sales of property and equipment             40  
  Purchases of property and equipment     (73,882 )     (59,905 )
  Purchases of marketable securities     (128,956 )     (320,177 )
  Proceeds from sales of marketable securities     407,032       272,666  
  Sales of restricted investments           180,694  
  Purchases of restricted investments           (62,625 )
        Net cash used in investing activities     (289,954 )     (19,253 )
Financing activities:                
  Incremental tax benefits related to stock-based compensation awards           15,185  
  Proceeds from the issuance of common stock     6,668       9,040  
  Payment of contingent consideration           (514 )
  Purchase of treasury stock     (24,441 )     (52,532 )
  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     (1,701 )     (131 )
        Net cash provided by (used in) financing activities     204,531       (28,952 )
  Effect of exchange rate changes on cash     882       (862 )
        Increase (decrease) in cash and cash equivalents     11,479       (1,059 )
  Cash and cash equivalents at beginning of period     192,339       142,387  
  Cash and cash equivalents at end of period   $ 203,818     $ 141,328  
                   
                   

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.