- Fourth Quarter Revenue of $47.0 Million and Non-GAAP Earnings Per Share of
- Full Year Revenue of $154.3 Million and Non-GAAP Earnings Per Share of $0.11 -
Fourth Quarter and Full Year 2007 Highlights:
- Fourth quarter total revenues of $47.0 million; up 53.9% from the fourth quarter of 2006
- Full year 2007 total revenues of $154.3 million; up 57.3% from full year 2006
- Gross margin was 82.9% for the fourth quarter and 82.3% for the full year
- GAAP loss per share was $(0.03) for the quarter and $(0.32) for the full year
- Non-GAAP earnings per share was $0.08 for the quarter and $0.11 for the full year
- Launched 10 products in 2007 contributing to significant revenue growth and further establishing the platform for 2008
- NeoDisc(TM) clinical trial continues to progress with current enrollment over 75%
SAN DIEGO, Feb. 19 /PRNewswire-FirstCall/ -- NuVasive, Inc. (Nasdaq: NUVA), a medical device company focused on developing products for minimally disruptive surgical treatments for the spine, announced today financial results for the quarter and full year ended December 31, 2007.
The Company reported fourth quarter revenues of $47.0 million, a 53.9% increase over the $30.5 million for the fourth quarter of 2006 and a 21.8% increase over the $38.5 million for the third quarter of 2007. Full year 2007 revenues were $154.3 million, a 57.3% increase over the $98.1 million reported for the full year 2006.
Gross profit for the fourth quarter of 2007 was $38.9 million and gross margin was 82.9%, compared to a gross profit of $25.3 million and a gross margin of 83.1% in the fourth quarter of 2006. For the third quarter of 2007, gross profit was $31.6 million and gross margin was 82.0%. Gross profit for the full year 2007 was $126.9 million and gross margin was 82.3%, compared to a gross profit of $79.1 million and a gross margin of 80.6% for the full year 2006.
Total operating expenses for the fourth quarter of 2007 were $41.2 million, compared with $29.5 million in the fourth quarter of 2006 and $35.2 million in the third quarter of 2007. Full year 2007 operating expenses were $144.2 million compared to $133.3 million reported for the full year 2006. The higher operating expense in the 2007 periods resulted from continued investment in the Company's next generation MAS(TM) products, additional sales costs directly associated with higher revenue, and a full year of enrollment in the NeoDisc clinical trial.
On a GAAP basis, the Company reported a net loss of $1.1 million or $(0.03) per share for the fourth quarter of 2007 and a loss of $11.3 million or $(0.32) per share for the full year 2007. On a non-GAAP basis, the Company reported net income of $2.9 million, or $0.08 per share, for the fourth quarter of 2007, and net income of $3.9 million, or $0.11 per share, for the full year 2007. The non-GAAP earnings per share calculations exclude, for the fourth quarter and full year, respectively, (i) stock based compensation of $3.6 million and $13.6 million, and (ii) amortization of acquired intangible assets of $0.4 million and $1.5 million.
Cash, cash equivalents and short and long-term investments were $89.7 million at December 31, 2007.
Alex Lukianov, Chairman and Chief Executive Officer, said, "2007 was another successful year for NuVasive. We continue to penetrate the U.S. market with our unique product offering. The adoption of SpheRx(R) II, DBR(R) II and XLP(TM) Lateral Plate has strengthened our MAS platform since mid-year. Our strategy of broadening the applications of the XLIF(R) procedure also continues to produce success, as surgeons further leverage our unique lateral approach into adult degenerative scoliosis and other procedures in the thoracic spine."
Mr. Lukianov continued, "During 2008, we plan to achieve even deeper product penetration and expand our market share in the U.S. Our focus is to strengthen our existing positions in the lumbar and nerve monitoring market segments while simultaneously growing our cervical and thoracic positions. We plan to grow our cervical market share in 2008 with the introduction of key products such as our Helix(TM) anterior cervical plates and VuePoint(TM) posterior cervical system. Our NeuroVision(R) platform will expand with the introduction of a next generation NeuroVision nerve monitoring system that will offer full spinal cord monitoring. Our focus on infrastructure enhancements to support this growth will continue, including a move to our new corporate headquarters campus and implementation of a more scalable ERP system. We believe the substantial momentum our sales force has generated, coupled with our commitment to product and technique innovation, will continue to drive our annual growth in the mid-30 percent range to $500 million over the next several years."
NuVasive also provided 2008 financial guidance as follows:
Full Year 2008 Guidance:
Revenue: $204 million to $208 million
Gross margin: 81% to 82%
Stock-based compensation: $19.0 million to $20.0 million
GAAP earnings per share: $0.02 to $0.05
Non-GAAP earnings per share: $0.56 to $0.59
First Quarter 2008 Guidance:
Revenue: $47 million to $48 million
GAAP loss per share: $(0.13) to $(0.11)
Non-GAAP earnings per share: $0.01 to $0.03
Reconciliation of Non-GAAP Information
Management uses certain non-GAAP financial measures such as non-GAAP earnings per share and non-GAAP net loss per share, which exclude stock based compensation and charges directly related to acquisition transactions such as in-process research and development, milestone payments, amortization of the acquired technology assets and certain non-recurring internal costs incurred as a result of acquisition transactions. Management does not consider these costs in evaluating the continuing operations of the Company. Therefore, management calculates the non-GAAP financial measures provided in this earnings release excluding these costs and uses these non-GAAP financial measures to enable it to analyze further and more consistently the period-to- period financial performance of its core business operations. Management believes that providing investors with these non-GAAP measures gives them additional important information to enable them to assess, in the same way management assesses, the Company's current and future continuing operations. These non-GAAP measures are not in accordance with, or an alternative for, GAAP, and may be different from non-GAAP measures used by other companies. Set forth below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.
Reconciliation of Fourth Quarter 2007 Results (in thousands, except per share amounts) GAAP net loss $(1,146) Stock based compensation (B) 3,644 Amortization of acquired intangible assets (C) 381 Non-GAAP earnings $2,879 GAAP net loss per share (A) $(0.03) Stock based compensation (B) 0.10 Amortization of acquired intangible assets (C) 0.01 Non-GAAP earnings per share (A) $0.08 Shares used in computing GAAP net loss per share (A) 35,207 Shares used in computing non-GAAP earnings per share (A) 37,130 Reconciliation of First Quarter and Full Year 2008 Guidance Range for Three Range for Year (in thousands, except per share Months Ending Ending amounts) March 31, 2008 December 31, 2008 Low High Low High GAAP earnings (net loss) per share (A) $(0.13) $(0.11) $0.02 $0.05 Stock based compensation (B) 0.13 0.13 0.50 0.50 Amortization of acquired intangible assets (C) 0.01 0.01 0.04 0.04 Non-GAAP earnings per share (A) $0.01 $0.03 $0.56 $0.59 Shares used in computing GAAP net loss per share (A) 35,700 35,700 Shares used in computing GAAP earnings per share (A) 38,100 38,100 Share used in computing non-GAAP earnings per share (A) 37,600 37,600 38,100 38,100 A - GAAP net loss per share is calculated using basic weighted shares outstanding; GAAP and Non-GAAP earnings per share is calculated using diluted weighted shares outstanding, B - Non-cash stock-based compensation. C - Amortization of technology assets purchased in 2005 and 2007. Conference Call
NuVasive will hold a conference call today at 5:30 p.m. ET / 2:30 p.m. PT to discuss the results. The dial-in numbers are 1-877-407-4018 for domestic callers and 1-201-689-8471 for international. A live Web cast of the conference call will be available online from the investor relations page of the Company's corporate Web site at www.nuvasive.com.
After the live Web cast, the call will remain available on NuVasive's Web site, www.nuvasive.com, through March 19, 2008. In addition, a telephonic replay of the call will be available until March 11, 2008. The replay dial-in numbers are 1-877-660-6853 for domestic callers and 1-201-612-7415 for international callers. Please use account number 3055 and conference ID number 269394.
NuVasive is a medical device company focused on the design, development and marketing of products for the surgical treatment of spine disorders. The Company's product portfolio is focused on applications in the over $4.2 billion U.S. spine fusion market. The Company's current principal product offering includes a minimally disruptive surgical platform called Maximum Access Surgery, or MAS(TM), as well as a growing offering of cervical and motion preservation products.
The MAS platform offers advantages for both patients and surgeons such as reduced surgery and hospitalization time and faster recovery. MAS combines three categories of current product offerings: NeuroVision(R) a proprietary software-driven nerve avoidance system; MaXcess(R) a unique split-blade design retraction system; and specialized implants, like SpheRx(R) and CoRoent(R), that collectively minimize soft tissue disruption during spine surgery while allowing maximum visualization and surgical reproducibility. NuVasive's product offering is also focused on cervical internal fixation products and its R&D pipeline emphasizes both MAS and motion preservation.
NuVasive cautions you that statements included in this press release 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. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to: the uncertain process of seeking regulatory approval or clearance for NuVasive's products or devices, including risks that such process could be significantly delayed; the possibility that the FDA may require significant changes to NuVasive's products or clinical studies; the risk that the Company's revenue or profitability projections may prove incorrect because of unexpected difficulty in generating sales or achieving anticipated profitability; the risk that products may not perform as intended and may therefore not achieve commercial success; the risk that competitors may develop superior products or may have a greater market position enabling more successful commercialization; the risk that additional clinical data may call into question the benefits of NuVasive's products to patients, hospitals and surgeons; and other risks and uncertainties more fully described in NuVasive's press releases and periodic filings with the Securities and Exchange Commission. NuVasive's public filings with the Securities and Exchange Commission are available at www.sec.gov. NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made.
NUVASIVE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended Year Ended December 31, December 31, 2007 2006 2007 2006 Revenues $46,930 $30,488 $154,290 $98,091 Cost of goods sold 8,040 5,156 27,382 19,028 Gross Profit 38,890 25,332 126,908 79,063 Operating expenses: Sales, marketing and administrative 34,567 25,078 119,579 94,632 Research and development 6,667 4,449 24,581 18,541 NeoDisc technology costs - - - 20,116 Total operating expenses 41,234 29,527 144,160 133,289 Interest and other income, net 1,198 1,512 5,987 6,316 Net loss $(1,146) $(2,683) $(11,265) $(47,910) Net loss per share: Basic and diluted (0.03) (0.08) (0.32) (1.47) Weighted average shares - basic and diluted 35,207 33,281 34,782 32,501 Stock-based compensation is included in operating expenses in the following categories: Sales, marketing and administrative 3,081 2,632 11,404 10,581 Research and development 563 547 2,217 2,764 $3,644 $3,179 $13,621 $13,345 NUVASIVE, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) December 31, December 31, 2007 2006 Assets Current assets: Cash and cash equivalents $61,915 $41,476 Short-term marketable securities 19,247 73,930 Accounts receivable, net 27,496 18,960 Inventory, net 36,280 18,636 Prepaid expenses and other current assets 1,240 1,716 Total current assets 146,178 154,718 Property and equipment, net of accumulated depreciation 43,538 30,573 Intangible assets, net of accumulated amortization 24,496 8,441 Long-term marketable securities 8,536 1,996 Other assets 2,939 456 Total assets $225,687 $196,184 Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $13,839 $8,937 Accrued payroll and related expenses 12,075 8,477 Royalties payable 2,076 1,068 Total current liabilities 27,990 18,482 Long-term liabilities 1,119 1,399 Commitments and contingencies Stockholders' equity: Common stock, 70,000 shares authorized 35,330 and 33,929 issued and outstanding at December 31, 2007 and 2006, respectively 35 34 Additional paid-in capital 364,469 333,009 Accumulated other comprehensive loss 54 (25) Accumulated deficit (167,980) (156,715) Total stockholders' equity 196,578 176,303 Total liabilities and stockholders' equity $225,687 $196,184 NUVASIVE, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2007 2006 Operating activities: Net loss $(11,265) $(47,910) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 12,952 8,350 Stock-based compensation 13,621 13,345 NeoDisc technology costs - 8,060 Other non-cash adjustments 1,896 2,289 Changes in operating assets and liabilities: Accounts receivable (9,418) (7,422) Inventory (18,339) (8,878) Prepaid expenses and other current assets 349 (220) Accounts payable and accrued liabilities 5,719 3,987 Accrued payroll and related expenses 3,598 2,794 Net cash used in operating activities (887) (25,605) Investing activities: Cash paid for acquisition of Radius Medical LLC (6,970) - Purchases of property and equipment (24,403) (20,396) Sales of short-term investments 129,818 63,525 Purchases of short-term investments (75,135) (130,510) Sales of long-term investments 17,000 - Purchases of long-term investments (25,533) (1,996) Other assets (490) (452) Net cash provided by (used in) investing activities 14,287 (89,829) Financing activities: Payment of long-term liabilities (300) (300) Issuance of common stock, including net proceeds from secondary offering 7,339 144,665 Net cash provided by financing activities 7,039 144,365 Increase in cash and cash equivalents 20,439 28,931 Cash and cash equivalents at beginning of period 41,476 12,545 Cash and cash equivalents at end of period $61,915 $41,476 Contact: Investors: Kevin C. O'Boyle Nick Laudico/Zack Kubow EVP & Chief Financial Officer The Ruth Group NuVasive, Inc. 646-536-7030/7020 858-909-1800 firstname.lastname@example.org email@example.com firstname.lastname@example.org Media: Jason Rando The Ruth Group 646-536-7025 email@example.com
SOURCE NuVasive, Inc.
CONTACT: Kevin C. O'Boyle, EVP & Chief Financial Officer, NuVasive,
Inc., +1-858-909-1800, firstname.lastname@example.org; Investors: Nick
Laudico, +1-646-536-7030, email@example.com, or Zack Kubow, +1-646-
536-7020, firstname.lastname@example.org, or Media: Jason Rando, +1-646-536-7025,
email@example.com, all of The Ruth Group for NuVasive, Inc.
Web site: http://www.nuvasive.com