nuva-8k_20201029.htm
false 0001142596 0001142596 2020-10-29 2020-10-29

 

 

 

 

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): October 29, 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 October 29, 2020, NuVasive, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 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 October 29, 2020, the Company’s Chief Executive Officer and Chief Financial Officer will discuss the Company’s results for the quarter ended September 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 October 29, 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: October 29, 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 Third Quarter 2020 Financial Results


SAN DIEGO October 29, 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 September 30, 2020.

 

Third Quarter 2020 Highlights

 

Net sales increased 1.5% to $295.3 million, or 1.2% on a constant currency basis;

 

GAAP operating margin of 9.2%; Non-GAAP operating margin of 15.8%; and

 

GAAP diluted earnings per share of $0.11; Non-GAAP diluted earnings per share of $0.55.

 

“In the third quarter, NuVasive experienced faster-than-anticipated recovery from the impact of COVID-19 with net sales increasing year over year driven by high-single digit growth in our International business and further stability of the US spine market,” said J. Christopher Barry, chief executive officer of NuVasive. “The Company remains focused in the fourth quarter on executing against its innovation roadmap, including the launch of our re-designed cervical portfolio, the furthering of our Advanced Materials Science implant portfolio with multiple new implants and executing on key Pulse milestones.”

 

A full reconciliation of GAAP to non-GAAP financial measures can be found in the tables of this news release. NuVasive announced in April 2020 that it had withdrawn its annual financial guidance due to the uncertainty related to COVID-19, and is not reinstituting its annual financial guidance for the remainder of the year.

 

Third Quarter 2020 Results

NuVasive reported third quarter 2020 total net sales of $295.3 million, a 1.5% increase compared to $290.8 million for the third quarter 2019. On a constant currency basis, third quarter 2020 total net sales increased 1.2% compared to the same period last year.

 

For the third quarter 2020, both GAAP and non-GAAP gross profit was $210.6 million and GAAP and non-GAAP gross margin was 71.3%. These results compared to GAAP and non-GAAP gross profit of $213.8 million and GAAP and non-GAAP gross margin of 73.5%, for the third quarter 2019.

 

The Company reported GAAP net income of $5.9 million, or diluted earnings per share of $0.11, for the third quarter 2020, compared to GAAP net income of $11.0 million, or diluted earnings per share of $0.21, for the third quarter 2019. On a non-GAAP basis, the Company reported net income of $28.3 million, or diluted earnings per share of $0.55, for the third quarter 2020, compared to non-GAAP net income of $30.9 million, or diluted earnings per share of $0.59, for the third quarter 2019.

 

The Company ended the quarter with $982.1 million in cash and cash equivalents, and short term investments.

 

 


 

 

 

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 September 30, 2020

 

 

 

 

Reconciliation of GAAP to Non-GAAP Financial Measures

 

 

 

 

(Unaudited - in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

Operating Profit

 

Net Income

 

Diluted EPS

 

Diluted WASO5

 

Net Income to Adjusted EBITDA

 

 

 

 

Reported GAAP

$

210,649

 

$

27,052

 

$

5,872

 

$

0.11

 

 

51,805

 

$

5,872

 

 

 

 

% of revenue

 

71.3

%

 

9.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

13,826

 

 

13,826

 

 

 

 

 

 

 

 

 

 

 

 

 

Litigation related expenses and settlements1

 

 

 

 

1,396

 

 

1,396

 

 

 

 

 

 

 

 

1,396

 

 

 

 

Business transition costs2

 

 

 

 

3,107

 

 

3,107

 

 

 

 

 

 

 

 

3,107

 

 

 

 

European medical device regulation3

 

 

 

 

1,149

 

 

1,149

 

 

 

 

 

 

 

 

1,149

 

 

 

 

Non-cash interest expense on convertible notes

 

 

 

 

 

 

 

12,683

 

 

 

 

 

 

 

 

 

 

 

 

 

Net gain on strategic investments

 

 

 

 

 

 

 

(1,132

)

 

 

 

 

 

 

 

(1,132

)

 

 

 

Tax effect of adjustments4

 

 

 

 

 

 

 

(8,575

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense/(income), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20,852

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

579

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

35,959

 

 

 

 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,572

 

 

 

 

Adjusted Non-GAAP

$

210,649

 

$

46,530

 

$

28,326

 

$

0.55

 

 

51,805

 

$

75,354

 

 

 

 

% of revenue

 

71.3

%

 

15.8

%

 

 

 

 

 

 

 

 

 

 

25.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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.

 

 

5

 

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.

 

 

 

 


 

 

 

 

For the Nine Months Ended September 30, 2020

 

 

 

 

Reconciliation of GAAP to Non-GAAP Financial Measures

 

 

 

 

(Unaudited - in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

Operating Profit

 

Net (Loss) Income

 

Diluted EPS

 

Diluted WASO7

 

Net (Loss) to Adjusted EBITDA

 

 

 

 

Reported GAAP

$

521,772

 

$

18,068

 

$

(38,845

)

$

(0.76

)

 

51,440

 

$

(38,845

)

 

 

 

% of revenue

 

68.8

%

 

2.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

39,150

 

 

39,150

 

 

 

 

 

 

 

 

 

 

 

 

 

Litigation related expenses and settlements1

 

 

 

 

5,686

 

 

5,686

 

 

 

 

 

 

 

 

5,686

 

 

 

 

Business transition costs2

 

 

 

 

2,541

 

 

2,541

 

 

 

 

 

 

 

 

2,541

 

 

 

 

Purchase of in-process research and development3

 

 

 

 

1,011

 

 

1,011

 

 

 

 

 

 

 

 

1,011

 

 

 

 

European medical device regulation4

 

 

 

 

4,079

 

 

4,079

 

 

 

 

 

 

 

 

4,079

 

 

 

 

Non-cash interest expense on convertible notes

 

 

 

 

 

 

 

28,022

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss on strategic investments

 

 

 

 

 

 

 

278

 

 

 

 

 

 

 

 

278

 

 

 

 

Net loss recognized on change in fair value of derivatives5

 

 

 

 

 

 

 

12,301

 

 

 

 

 

 

 

 

12,301

 

 

 

 

Tax effect of adjustments6

 

 

 

 

 

 

 

(20,834

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense/(income), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

47,858

 

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,764

)

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

106,097

 

 

 

 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,751

 

 

 

 

Adjusted Non-GAAP

$

521,772

 

$

70,535

 

$

33,389

 

$

0.64

 

 

52,033

 

$

140,993

 

 

 

 

% of revenue

 

68.8

%

 

9.3

%

 

 

 

 

 

 

 

 

 

 

18.6

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 September 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 WASO5

 

Net Income to Adjusted EBITDA

 

 

 

 

Reported GAAP

$

213,807

 

$

30,514

 

$

11,010

 

$

0.21

 

 

53,056

 

$

11,010

 

 

 

 

% of revenue

 

73.5

%

 

10.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

12,596

 

 

12,596

 

 

 

 

 

 

 

 

 

 

 

 

 

Litigation related expenses and settlements1

 

 

 

 

1,899

 

 

1,899

 

 

 

 

 

 

 

 

1,899

 

 

 

 

Business transition costs2

 

 

 

 

(333

)

 

(333

)

 

 

 

 

 

 

 

(333

)

 

 

 

European medical device regulation3

 

 

 

 

953

 

 

953

 

 

 

 

 

 

 

 

953

 

 

 

 

Non-cash interest expense on convertible notes

 

 

 

 

 

 

 

4,432

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss on strategic investments

 

 

 

 

 

 

 

4,767

 

 

 

 

 

 

 

 

4,767

 

 

 

 

Tax effect of adjustments4

 

 

 

 

 

 

 

(4,455

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense/(income), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

9,034

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,774

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

33,631

 

 

 

 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,829

 

 

 

 

Adjusted Non-GAAP

$

213,807

 

$

45,629

 

$

30,869

 

$

0.59

 

 

52,590

 

$

73,564

 

 

 

 

% of revenue

 

73.5

%

 

15.7

%

 

 

 

 

 

 

 

 

 

 

25.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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 October 30, 2019, the Company estimated an annual tax rate of ~26% 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 Nine Months Ended September 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 WASO5

 

Net Income to Adjusted EBITDA

 

 

 

 

Reported GAAP

$

628,615

 

$

80,884

 

$

35,358

 

$

0.67

 

 

52,667

 

$

35,358

 

 

 

 

% of revenue

 

73.3

%

 

9.4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of intangible assets

 

 

 

 

38,498

 

 

38,498

 

 

 

 

 

 

 

 

 

 

 

 

 

Litigation related expenses and settlements1

 

 

 

 

6,976

 

 

6,976

 

 

 

 

 

 

 

 

6,976

 

 

 

 

Business transition costs2

 

 

 

 

5,146

 

 

5,146

 

 

 

 

 

 

 

 

5,146

 

 

 

 

European medical device regulation3

 

 

 

 

2,685

 

 

2,685

 

 

 

 

 

 

 

 

2,685

 

 

 

 

Non-cash interest expense on convertible notes

 

 

 

 

 

 

 

13,125

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss on strategic investments

 

 

 

 

 

 

 

4,767

 

 

 

 

 

 

 

 

4,767

 

 

 

 

Tax effect of adjustments4

 

 

 

 

 

 

 

(15,269

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense/(income), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,461

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,012

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

101,245

 

 

 

 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

20,447

 

 

 

 

Adjusted Non-GAAP

$

628,615

 

$

134,189

 

$

91,286

 

$

1.74

 

 

52,512

 

$

216,097

 

 

 

 

% of revenue

 

73.3

%

 

15.6

%

 

 

 

 

 

 

 

 

 

 

25.2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

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 October 30, 2019, the Company estimated an annual tax rate of ~26% 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 third 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 November 29, 2020. In addition, a telephone replay of the call will be available until November 5, 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: 13708396.

 

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 third quarter 2020. The Company’s results for the third 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 September 30,

 

 

Nine Months Ended September 30,

 

(unaudited)

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

267,571

 

 

$

260,173

 

 

$

685,922

 

 

$

765,377

 

Services

 

 

27,711

 

 

 

30,662

 

 

 

72,853

 

 

 

92,339

 

Total net sales

 

 

295,282

 

 

 

290,835

 

 

 

758,775

 

 

 

857,716

 

Cost of sales (excluding below amortization of intangible assets):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

66,049

 

 

 

57,164

 

 

 

182,067

 

 

 

169,263

 

Services

 

 

18,584

 

 

 

19,864

 

 

 

54,936

 

 

 

59,838

 

Total cost of sales

 

 

84,633

 

 

 

77,028

 

 

 

237,003

 

 

 

229,101

 

Gross profit

 

 

210,649

 

 

 

213,807

 

 

 

521,772

 

 

 

628,615

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

146,260

 

 

 

152,887

 

 

 

402,935

 

 

 

450,816

 

Research and development

 

 

20,404

 

 

 

18,143

 

 

 

58,067

 

 

 

53,271

 

Amortization of intangible assets

 

 

13,826

 

 

 

12,596

 

 

 

39,150

 

 

 

38,498

 

Purchase of in-process research and development

 

 

 

 

 

 

 

 

1,011

 

 

 

 

Business transition costs

 

 

3,107

 

 

 

(333

)

 

 

2,541

 

 

 

5,146

 

Total operating expenses

 

 

183,597

 

 

 

183,293

 

 

 

503,704

 

 

 

547,731

 

Interest and other expense, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

271

 

 

 

620

 

 

 

1,306

 

 

 

1,356

 

Interest expense

 

 

(21,123

)

 

 

(9,654

)

 

 

(49,164

)

 

 

(28,817

)

Other income (expense), net

 

 

251

 

 

 

(5,696

)

 

 

(18,819

)

 

 

(6,053

)

Total interest and other expense, net

 

 

(20,601

)

 

 

(14,730

)

 

 

(66,677

)

 

 

(33,514

)

Income (loss) before income taxes

 

 

6,451

 

 

 

15,784

 

 

 

(48,609

)

 

 

47,370

 

Income tax (expense) benefit

 

 

(579

)

 

 

(4,774

)

 

 

9,764

 

 

 

(12,012

)

Consolidated net income (loss)

 

$

5,872

 

 

$

11,010

 

 

$

(38,845

)

 

$

35,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.11

 

 

$

0.21

 

 

$

(0.76

)

 

$

0.68

 

Diluted

 

$

0.11

 

 

$

0.21

 

 

$

(0.76

)

 

$

0.67

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

51,261

 

 

 

52,057

 

 

 

51,440

 

 

 

51,901

 

Diluted

 

 

51,805

 

 

 

53,056

 

 

 

51,440

 

 

 

52,667

 

 

 

 


 

 

NuVasive, Inc.

 

Consolidated Balance Sheets

 

(in thousands, except par values and share amounts)

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2020

 

 

December 31, 2019

 

ASSETS

 

(Unaudited)

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

774,544

 

 

$

213,034

 

Short-term marketable securities

 

 

207,605