nuva-8k_20200804.htm
false 0001142596 0001142596 2020-08-04 2020-08-04

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 4, 2020

 

NuVasive, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

000-50744

33-0768598

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification Number)

 

 

 

7475 Lusk Boulevard, San Diego, California 92121

(Address of principal executive offices) (Zip Code)

 

 

 

(858) 909-1800

(Registrant’s telephone number, including area code)

 

 

 

Not Applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

NUVA

The NASDAQ Stock Market LLC

(NASDAQ Global Select Market)

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 


 

Item 2.02

Results of Operations and Financial Condition.

 

On August 4, 2020, NuVasive, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended June 30, 2020. A copy of this press release is furnished as Exhibit 99.1 to this Current Report.

Item 7.01

Regulation FD Disclosure.

 

During a conference call scheduled to be held at 1:30 p.m. Pacific Time on August 4, 2020, the Company’s Chief Executive Officer and Chief Financial Officer will discuss the Company’s results for the quarter ended June 30, 2020.

 

The information contained in this Current Report and Exhibit 99.1 hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01

Financial Statements and Exhibits.

(d)

Exhibits.

Exhibit No.

Description

99.1

Press Release issued by NuVasive, Inc. on August 4, 2020

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 



SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

NUVASIVE, INC.

 

 

 

Date: August 4, 2020

 

/s/ Matthew K. Harbaugh

 

 

Matthew K. Harbaugh

 

 

Executive Vice President and Chief Financial Officer

 

 

 

nuva-ex991_6.htm

 

 

 

Exhibit 99.1

 

NEWS RELEASE

 

NuVasive Announces Second Quarter 2020 Financial Results


SAN DIEGO August 4, 2020 – NuVasive, Inc. (NASDAQ: NUVA), the leader in spine technology innovation, focused on transforming spine surgery with minimally disruptive, procedurally integrated solutions, today announced financial results for the quarter ended June 30, 2020.

 

Second Quarter 2020 Highlights

 

Net sales decreased -30.3% to $203.6 million, or -30.2% on a constant currency basis;

 

GAAP operating margin of -18.3%; Non-GAAP operating margin of -9.8%; and

 

GAAP diluted net loss per share of -$0.98; Non-GAAP diluted net loss per share of -$0.40.

 

“NuVasive’s second quarter performance was consistent with the preliminary results reported last month, highlighted by significantly better-than-expected net sales as a result of the upward monthly volume trend experienced in June,” said J. Christopher Barry, chief executive officer of NuVasive. “While the Company continues to navigate the impact of the COVID-19 pandemic, execution on our long-term business strategy remains a top priority as we continue advancing key research and development projects, increasing the adoption of less invasive surgical procedures in spine and strengthening our capabilities to take share globally.”

 

A full reconciliation of GAAP to non-GAAP financial measures can be found in the tables of this news release. Additionally, NuVasive is not reinstituting its annual financial guidance as visibility for spine surgery volumes for the remainder of the year continues to be limited and the Company is unable to predict when or how quickly elective surgery volumes will recover.

 

Second Quarter 2020 Results

NuVasive reported second quarter 2020 total net sales of $203.6 million, a -30.3% decrease compared to $292.1 million for the second quarter 2019. On a constant currency basis, second quarter 2020 total net sales decreased -30.2% compared to the same period last year.

 

For the second quarter 2020, both GAAP and non-GAAP gross profit was $123.1 million and GAAP and non-GAAP gross margin was 60.5%. These results compared to GAAP and non-GAAP gross profit of $214.5 million and GAAP and non-GAAP gross margin of 73.4%, for the second quarter 2019.

 

The Company reported a GAAP net loss of -$50.0 million, or diluted net loss per share of -$0.98, for the second quarter 2020 compared to GAAP net income of $15.0 million, or diluted earnings per share of $0.29, for the second quarter 2019. On a non-GAAP basis, the Company reported a net loss of -$20.4 million, or diluted net loss per share of -$0.40, for the second quarter 2020 compared to non-GAAP net income of $32.8 million, or diluted earnings per share of $0.63, for the second quarter 2019.

 

 


 

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 GAAP to Non-GAAP Information

Management uses certain non-GAAP financial measures such as non-GAAP diluted earnings per share, non-GAAP net income, non-GAAP operating expenses and non-GAAP operating margin, which exclude amortization of intangible assets, business transition costs, purchased in-process research and development, one-time restructuring and related items in connection with acquisitions, investments and divestitures, non-recurring consulting fees, certain litigation expenses and settlements, certain European medical device regulation costs, gains and losses from strategic investments, gains and losses from changes in fair value of derivatives and non-cash interest expense (excluding debt issuance cost). Management also uses certain non-GAAP measures which are intended to exclude the impact of foreign exchange currency fluctuations. The measure constant currency utilizes 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, business transition costs, purchased in-process research and development, one-time restructuring and related items in connection with acquisitions, investments and divestitures, non-recurring consulting fees, certain litigation expenses and settlements, certain European medical device regulation costs, gains and losses on strategic investments, gains and losses from changes in fair value of derivatives 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.

 

 


 

 

 

 

 

For the Three Months Ended June 30, 2020

 

 

 

 

Reconciliation of GAAP to Non-GAAP Financial Measures

 

 

 

 

(Unaudited - in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

Operating (Loss)

 

Net (Loss)

 

Diluted EPS

 

Diluted WASO 7

 

Net (Loss) to Adjusted EBITDA

 

 

 

 

Reported GAAP

$

123,107

 

$

(37,303

)

$

(50,015

)

$

(0.98

)

 

51,224

 

$

(50,015

)

 

 

 

% of revenue

 

60.5

%

 

(18.3

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

12,675

 

 

12,675

 

 

 

 

 

 

 

 

 

 

 

 

 

Litigation related expenses and settlements 1

 

 

 

 

1,187

 

 

1,187

 

 

 

 

 

 

 

 

1,187

 

 

 

 

Business transition costs 2

 

 

 

 

874

 

 

874

 

 

 

 

 

 

 

 

874

 

 

 

 

Purchase of in-process research and development 3

 

 

 

 

1,011

 

 

1,011

 

 

 

 

 

 

 

 

1,011

 

 

 

 

European medical device regulation 4

 

 

 

 

1,683

 

 

1,683

 

 

 

 

 

 

 

 

1,683

 

 

 

 

Non-cash interest expense on convertible notes

 

 

 

 

 

 

 

9,615

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss recognized on change in fair value of derivatives 5

 

 

 

 

 

 

 

12,301

 

 

 

 

 

 

 

 

12,301

 

 

 

 

Tax effect of adjustments 6

 

 

 

 

 

 

 

(9,697

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense/(income), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,220

 

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(15,170

)

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35,166

 

 

 

 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,037

 

 

 

 

Adjusted Non-GAAP

$

123,107

 

$

(19,873

)

$

(20,366

)

$

(0.40

)

 

51,224

 

$

8,294

 

 

 

 

% of revenue

 

60.5

%

 

(9.8

%)

 

 

 

 

 

 

 

 

 

 

4.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Represents expenses associated with certain ongoing litigation matters, including infringement of the Company’s intellectual property.

 

 

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

 

Purchase of an in-process research and development asset which had no future alternative use.

 

 

4

 

Represents costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.

 

 

5

 

Represents the net change in fair value of the Company’s derivative asset and liability associated with the 2023 Notes.

 

 

6

 

Represents the impact from tax affecting the adjustments above at their statutory tax rate.

 

 

7

 

Adjusted non-GAAP diluted WASO excludes the impact of all dilutive securities, including convertible notes for which the Company is economically hedged through its anti-dilutive bond hedge arrangements, as the Company recognized a non-GAAP net loss.

 

 

 


 

 

 

 

 

For the Six Months Ended June 30, 2020

 

 

 

 

Reconciliation of GAAP to Non-GAAP Financial Measures

 

 

 

 

(Unaudited - in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

Operating (Loss) Profit

 

Net (Loss) Income

 

Diluted EPS

 

Diluted WASO 7

 

Net (Loss) to Adjusted EBITDA

 

 

 

 

Reported GAAP

$

311,123

 

$

(8,984

)

$

(44,717

)

$

(0.87

)

 

51,531

 

$

(44,717

)

 

 

 

% of revenue

 

67.1

%

 

(1.9

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

25,324

 

 

25,324

 

 

 

 

 

 

 

 

 

 

 

 

 

Litigation related expenses and settlements 1

 

 

 

 

4,290

 

 

4,290

 

 

 

 

 

 

 

 

4,290

 

 

 

 

Business transition costs 2

 

 

 

 

(566

)

 

(566

)

 

 

 

 

 

 

 

(566

)

 

 

 

Purchase of in-process research and development 3

 

 

 

 

1,011

 

 

1,011

 

 

 

 

 

 

 

 

1,011

 

 

 

 

European medical device regulation 4

 

 

 

 

2,930

 

 

2,930

 

 

 

 

 

 

 

 

2,930

 

 

 

 

Non-cash interest expense on convertible notes

 

 

 

 

 

 

 

15,339

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss on strategic investments

 

 

 

 

 

 

 

1,411

 

 

 

 

 

 

 

 

1,411

 

 

 

 

Net loss recognized on change in fair value of derivatives 5

 

 

 

 

 

 

 

12,301

 

 

 

 

 

 

 

 

12,301

 

 

 

 

Tax effect of adjustments 6

 

 

 

 

 

 

 

(12,259

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense/(income), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,006

 

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,343

)

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70,138

 

 

 

 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,179

 

 

 

 

Adjusted Non-GAAP

$

311,123

 

$

24,005

 

$

5,064

 

$

0.10

 

 

52,148

 

$

65,640

 

 

 

 

% of revenue

 

67.1

%

 

5.2

%

 

 

 

 

 

 

 

 

 

 

14.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Represents expenses associated with certain ongoing litigation matters, including infringement of the Company’s intellectual property.

 

 

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

 

Purchase of an in-process research and development asset which had no future alternative use.

 

 

4

 

Represents costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.

 

 

5

 

Represents the net change in fair value of the Company’s derivative asset and liability associated with the 2023 Notes.

 

 

6

 

Represents the impact from tax affecting the adjustments above at their statutory tax rate.

 

 

7

 

Adjusted non-GAAP diluted WASO excludes the impact of dilutive convertible notes for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

 

 

 


 

 

 

 

 

For the Three Months Ended June 30, 2019

 

 

 

 

Reconciliation of GAAP to Non-GAAP Financial Measures

 

 

 

 

(Unaudited - in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

Operating Profit

 

Net Income

 

Diluted EPS

 

Diluted WASO 5

 

Net Income to Adjusted EBITDA

 

 

 

 

Reported GAAP

$

214,526

 

$

30,197

 

$

14,962

 

$

0.29

 

 

52,460

 

$

14,962

 

 

 

 

% of revenue

 

73.4

%

 

10.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

12,277

 

 

12,277

 

 

 

 

 

 

 

 

 

 

 

 

 

Litigation related expenses and settlements 1

 

 

 

 

2,031

 

 

2,031

 

 

 

 

 

 

 

 

2,031

 

 

 

 

Business transition costs 2

 

 

 

 

1,646

 

 

1,646

 

 

 

 

 

 

 

 

1,646

 

 

 

 

European medical device regulation 3

 

 

 

 

1,400

 

 

1,400

 

 

 

 

 

 

 

 

1,400

 

 

 

 

Non-cash interest expense on convertible notes

 

 

 

 

 

 

 

4,374

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax effect of adjustments 4

 

 

 

 

 

 

 

(3,881

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense/(income), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,323

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5,921

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,560

 

 

 

 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6,901

 

 

 

 

Adjusted Non-GAAP

$

214,526

 

$

47,551

 

$

32,809

 

$

0.63

 

 

52,460

 

$

75,744

 

 

 

 

% of revenue

 

73.4

%

 

16.3

%

 

 

 

 

 

 

 

 

 

 

25.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Represents expenses associated with certain ongoing litigation matters, including infringement of the Company’s intellectual property.

 

 

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 specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.

 

 

4

 

Represents the impact from tax affecting the adjustments above at their statutory tax rate. As of July 30, 2019, the Company estimated an annual tax rate of ~24% on a GAAP basis and ~23% on a non-GAAP basis.

 

 

5

 

Adjusted non-GAAP diluted WASO excludes the impact of dilutive convertible notes for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

 

 

 

 


 

  

 

 

For the Six Months Ended June 30, 2019

 

 

 

 

Reconciliation of GAAP to Non-GAAP Financial Measures

 

 

 

 

(Unaudited - in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

Operating Profit

 

Net Income

 

Diluted EPS

 

Diluted WASO 5

 

Net Income to Adjusted EBITDA

 

 

 

 

Reported GAAP

$

414,808

 

$

50,370

 

$

24,348

 

$

0.46

 

 

52,471

 

$

24,348

 

 

 

 

% of revenue

 

73.2

%

 

8.9

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

25,902

 

 

25,902

 

 

 

 

 

 

 

 

 

 

 

 

 

Litigation related expenses and settlements 1

 

 

 

 

5,077

 

 

5,077

 

 

 

 

 

 

 

 

5,077

 

 

 

 

Business transition costs 2

 

 

 

 

5,479

 

 

5,479

 

 

 

 

 

 

 

 

5,479

 

 

 

 

European medical device regulation 3

 

 

 

 

1,732

 

 

1,732

 

 

 

 

 

 

 

 

1,732

 

 

 

 

Non-cash interest expense on convertible notes

 

 

 

 

 

 

 

8,693

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax effect of adjustments 4

 

 

 

 

 

 

 

(10,814

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense/(income), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18,427

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,238

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

67,614

 

 

 

 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,618

 

 

 

 

Adjusted Non-GAAP

$

414,808

 

$

88,560

 

$

60,417

 

$

1.15

 

 

52,471

 

$

142,533

 

 

 

 

% of revenue

 

73.2

%

 

15.6

%

 

 

 

 

 

 

 

 

 

 

25.1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

Represents expenses associated with certain ongoing litigation matters, including infringement of the Company’s intellectual property.

 

 

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 specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.

 

 

4

 

Represents the impact from tax affecting the adjustments above at their statutory tax rate. As of July 30, 2019, the Company estimated an annual tax rate of ~24% on a GAAP basis and ~23% on a non-GAAP basis.

 

 

5

 

Adjusted non-GAAP diluted WASO excludes the impact of dilutive convertible notes for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

 

 

 


 

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 2020. 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 September 4, 2020. In addition, a telephone replay of the call will be available until August 11, 2020. 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: 13704316.

 

About NuVasive

NuVasive, Inc. (NASDAQ: NUVA) is the leader in spine technology innovation, with a mission to transform surgery, advance care and change lives. The Company's less invasive, procedurally integrated surgical solutions are designed to deliver reproducible and clinically proven outcomes. The Company’s comprehensive procedural portfolio includes access, implants and fixation systems, biologics, software for surgical planning, navigation and imaging solutions, magnetically adjustable implant systems for spine and orthopedics, and intraoperative monitoring service offerings. With more than $1 billion in net sales, NuVasive has approximately 2,800 employees and operates 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 second quarter 2020. The Company’s results for the second quarter 2020 are prior to the completion of review and audit procedures by the Company’s external auditors and are subject to adjustment. The potential risks and uncertainties which contribute to the uncertain nature of these statements include, among others, the impact of the COVID-19 pandemic on the Company's business and financial results; the Company’s ability to maintain operations to support its customers and patients in the near-term and to capitalize on future growth opportunities; risks associated with acceptance of the Company's surgical products and procedures by spine surgeons and hospitals, development and acceptance of new products or product enhancements, clinical and statistical verification of the benefits achieved via the use of NuVasive's products, the Company's ability to adequately 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 June 30,

 

 

Six Months Ended June 30,

 

(unaudited)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

183,664

 

 

$

261,381

 

 

$

418,351

 

 

$

505,204

 

Services

 

 

19,948

 

 

 

30,724

 

 

 

45,142

 

 

 

61,677

 

Total net sales

 

 

203,612

 

 

 

292,105

 

 

 

463,493

 

 

 

566,881

 

Cost of sales (excluding below amortization of intangible assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

64,373

 

 

 

57,613

 

 

 

116,018

 

 

 

112,099

 

Services

 

 

16,132

 

 

 

19,966

 

 

 

36,352

 

 

 

39,974

 

Total cost of sales

 

 

80,505

 

 

 

77,579

 

 

 

152,370

 

 

 

152,073

 

Gross profit

 

 

123,107

 

 

 

214,526

 

 

 

311,123

 

 

 

414,808

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

126,444

 

 

 

152,853

 

 

 

256,675

 

 

 

297,929

 

Research and development

 

 

19,406

 

 

 

17,553

 

 

 

37,663

 

 

 

35,128

 

Amortization of intangible assets

 

 

12,675

 

 

 

12,277

 

 

 

25,324

 

 

 

25,902

 

Purchase of in-process research and development

 

 

1,011

 

 

 

 

 

 

1,011

 

 

 

 

Business transition costs

 

 

874

 

 

 

1,646

 

 

 

(566

)

 

 

5,479

 

Total operating expenses

 

 

160,410

 

 

 

184,329

 

 

 

320,107

 

 

 

364,438

 

Interest and other expense, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

304

 

 

 

327

 

 

 

1,035

 

 

 

736

 

Interest expense

 

 

(16,524

)

 

 

(9,650

)

 

 

(28,041

)

 

 

(19,163

)

Other (expense) income, net

 

 

(11,662

)

 

 

9

 

 

 

(19,070

)

 

 

(357

)

Total interest and other expense, net

 

 

(27,882

)

 

 

(9,314

)

 

 

(46,076

)

 

 

(18,784

)

(Loss) income before income taxes

 

 

(65,185

)

 

 

20,883

 

 

 

(55,060

)

 

 

31,586

 

Income tax benefit (expense)

 

 

15,170

 

 

 

(5,921

)

 

 

10,343

 

 

 

(7,238

)

Consolidated net (loss) income

 

$

(50,015

)

 

$

14,962

 

 

$

(44,717

)

 

$

24,348

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.98

)

 

$

0.29

 

 

$

(0.87

)

 

$

0.47

 

Diluted

 

$

(0.98

)

 

$

0.29

 

 

$

(0.87

)

 

$

0.46

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

51,224

 

 

 

51,967

 

 

 

51,531

 

 

 

51,822

 

Diluted

 

 

51,224

 

 

 

52,460

 

 

 

51,531

 

 

 

52,471

 

 

 


 

 

NuVasive, Inc.

 

Consolidated Balance Sheets

 

(in thousands, except par values and share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2020

 

 

December 31, 2019

 

ASSETS

 

(Unaudited)

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

796,773

 

 

$

213,034

 

Short-term marketable securities

 

 

130,054

 

 

 

 

Accounts receivable, net of allowances of $20,057 and $17,019, respectively

 

 

182,135

 

 

 

211,532

 

Inventory, net

 

 

312,205

 

 

 

312,419