nuva-8k_20211109.htm
false 0001142596 0001142596 2021-11-09 2021-11-09

 

 

 

 

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): November 9, 2021

 

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 November 9, 2021, NuVasive, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2021. 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 November 9, 2021, the Company’s Chief Executive Officer and Chief Financial Officer will discuss the Company’s results for the quarter ended September 30, 2021 and the Company’s outlook for the year ending December 31, 2021.

The information contained in this Current Report and the Exhibits 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 November 9, 2021

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: November 9, 2021

 

/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 2021 Financial Results

-- Company updates full-year 2021 financial guidance --

-- Pulse platform launches and completes first commercial cases --

-- Cervical portfolio delivers double-digit, year-over-year growth in U.S. led by Simplify Cervical Disc --

 

SAN DIEGO November 9, 2021 – 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, 2021.

 

Third Quarter 2021

 

Net sales decreased 8.3% to $270.8 million, on a reported and constant currency basis, compared to the prior year period;

 

GAAP operating margin of (2.4%); Non-GAAP operating margin of 11.2%; and

 

GAAP diluted loss per share of $0.42; Non-GAAP diluted earnings per share of $0.32.

 

“The third quarter presented unexpected challenges for elective surgical procedures due to the negative impact from the resurgence of COVID-19 and healthcare staffing shortages,” said J. Christopher Barry, chief executive officer of NuVasive. “Despite these external factors, our strategy remains unchanged. The Company is well-positioned with multiple vectors of growth to create increased value for our stakeholders in 2022 and beyond. With the recent Pulse commercial launch and continued adoption of our C360 portfolio—highlighted by the Simplify Cervical Disc—I am confident in our ability to further transform surgery, advance care, and change patient lives around the world.”

 

Third Quarter 2021 Results

NuVasive reported third quarter 2021 total net sales of $270.8 million, an 8.3% decrease on a reported and constant currency basis, compared to $295.3 million in the prior year period. Third quarter 2021 total net sales were driven by new product introductions in the spine portfolio and International performance. These third quarter results were negatively impacted by the COVID-19 global pandemic, healthcare staffing shortages, and NuVasive Specialized Orthopedics product availability.

 

For the third quarter of 2021, GAAP gross profit was $182.2 million and $197.0 million on a non-GAAP basis, compared to GAAP and non-GAAP gross profit of $210.6 million in the prior year period. GAAP gross margin was 67.3% and 72.7% on a non-GAAP basis, compared to GAAP and non-GAAP gross margin of 71.3% in the prior year period.

 

For the third quarter of 2021, GAAP net loss was $21.6 million or diluted loss per share of $0.42, compared to GAAP net income of $5.9 million or diluted earnings per share of $0.11 in the prior year period. Non-GAAP net income was $16.9 million or diluted earnings per share of $0.32, compared to non-GAAP net income of $28.3 million or diluted earnings per share of $0.55 in the prior year period.

 

Cash, cash equivalents, and investments were $234.6 million as of September 30, 2021.

 

A full reconciliation of GAAP to non-GAAP financial measures can be found in the tables of this press release and in the Investor Relations section of the Company’s website.

 


 

 

Updated Financial Guidance

The Company lowered its full-year 2021 financial guidance based on year-to-date performance and as a result of the unanticipated variability in elective surgical volumes due to the impact of COVID-19 and healthcare staffing shortages:

 

2021 financial guidance range*

 

Current guidance

Prior guidance

Net sales

$1.132 billion−$1.142 billion

$1.190 billion−$1.210 billion

Non-GAAP operating margin

12.5%−12.9%

14.4%−14.9%

Non-GAAP diluted EPS

$1.73−$1.83

$2.25−$2.35

*Prior guidance reflects the range provided July 28, 2021. Current guidance reflects the range provided November 9, 2021.

 

Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures.

 

Share Repurchase Program Extension and Increase

The NuVasive Board of Directors has approved a one-year extension of the Company’s previously announced share repurchase program and increased the share repurchase authorization. As a result, the Company is now authorized to repurchase up to $100.0 million dollars of its common stock through December 31, 2022. Under this program, the Company may repurchase stock from time to time, in amounts, at prices, and at such times the Company deems appropriate, subject to market conditions, legal requirements, and other considerations.

 

Conference Call and Webcast

The Company will hold a conference call today, November 9, 2021, at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its financial performance for the third quarter of 2021. 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 and supplemental financial information of the Company’s third quarter financial results will be available on the Investor Relations page of the Company's website at www.nuvasive.com.

 

After the live event, the webcast will remain available on NuVasive's website for future reference. In addition, an audio replay of the call will be available until November 16, 2021. 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: 13722935.

 

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 surgical access instruments, spinal implants, fixation systems, biologics, software for surgical planning, navigation and imaging solutions, magnetically adjustable implant systems for spine and orthopedics, and intraoperative neuromonitoring technology and service offerings. With more than $1 billion in net sales, NuVasive has approximately 2,700 employees and operates in more than 50 countries serving surgeons, hospitals, and patients. For more information, please visit www.nuvasive.com.

 


 

 

Reconciliation of GAAP to Non-GAAP Information

Management uses certain non-GAAP financial measures such as non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP net income (loss), and non-GAAP diluted earnings (loss) per share. These non-GAAP financial measures exclude amortization of intangible assets, business transition costs, purchased in-process research and development, one-time restructuring charges, non-cash purchase accounting adjustments, inventory charges associated with product withdrawals, certain foreign currency impacts and related items in connection with acquisitions, investments and divestitures, 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, non-cash interest expense (excluding debt issuance cost) and other significant one-time items. 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 charges, non-cash purchase accounting adjustments, inventory charges associated with product withdrawals, certain foreign currency impacts and related items in connection with acquisitions, investments and divestitures, 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 in the financial tables accompanying this press release are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measure.

 


 

 

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 2021, as well as projections for 2021 financial guidance and expectations regarding longer-term financial performance. The Company’s results for the third quarter 2021 are prior to the completion of review and audit procedures by the Company’s external auditors and are subject to adjustment. In addition, the Company's projections for 2021 financial guidance and expectations regarding longer-term financial performance represent initial estimates, and 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 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)

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net sales:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

$

247,061

 

 

$

267,571

 

 

$

759,275

 

 

$

685,922

 

Services

 

 

23,775

 

 

 

27,711

 

 

 

77,638

 

 

 

72,853

 

Total net sales

 

 

270,836

 

 

 

295,282

 

 

 

836,913

 

 

 

758,775

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Products

 

 

69,609

 

 

 

66,049

 

 

 

181,495

 

 

 

182,067

 

Services

 

 

19,043

 

 

 

18,584

 

 

 

57,248

 

 

 

54,936

 

Total cost of sales

 

 

88,652

 

 

 

84,633

 

 

 

238,743

 

 

 

237,003

 

Gross profit

 

 

182,184

 

 

 

210,649

 

 

 

598,170

 

 

 

521,772

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

146,056

 

 

 

146,260

 

 

 

449,407

 

 

 

402,935

 

Research and development

 

 

23,405

 

 

 

20,404

 

 

 

67,393

 

 

 

58,067

 

Amortization of intangible assets

 

 

14,805

 

 

 

13,826

 

 

 

43,230

 

 

 

39,150

 

Purchase of in-process research and development

 

 

 

 

 

 

 

 

 

 

 

1,011

 

Business transition costs

 

 

4,551

 

 

 

3,107

 

 

 

21,688

 

 

 

2,541

 

Total operating expenses

 

 

188,817

 

 

 

183,597

 

 

 

581,718

 

 

 

503,704

 

Interest and other expense, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

23

 

 

 

271

 

 

 

119

 

 

 

1,306

 

Interest expense

 

 

(4,320

)

 

 

(21,123

)

 

 

(16,738

)

 

 

(49,164

)

Other (expense) income, net

 

 

(13,082

)

 

 

251

 

 

 

(24,339

)

 

 

(18,819

)

Total interest and other expense, net

 

 

(17,379

)

 

 

(20,601

)

 

 

(40,958

)

 

 

(66,677

)

(Loss) income before income taxes

 

 

(24,012

)

 

 

6,451

 

 

 

(24,506

)

 

 

(48,609

)

Income tax benefit (expense)

 

 

2,373

 

 

 

(579

)

 

 

(2,844

)

 

 

9,764

 

Consolidated net (loss) income

 

$

(21,639

)

 

$

5,872

 

 

$

(27,350

)

 

$

(38,845

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.42

)

 

$

0.11

 

 

$

(0.53

)

 

$

(0.76

)

Diluted

 

$

(0.42

)

 

$

0.11

 

 

$

(0.53

)

 

$

(0.76

)

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

51,669

 

 

 

51,261

 

 

 

51,539

 

 

 

51,440

 

Diluted

 

 

51,669

 

 

 

51,805

 

 

 

51,539

 

 

 

51,440

 

 


 

 

NuVasive, Inc.

 

Consolidated Balance Sheets

 

(in thousands, except par value data)

 

 

 

 

 

 

 

 

 

 

 

 

September 30, 2021

 

 

December 31, 2020

 

ASSETS

 

(Unaudited)

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

234,578

 

 

$

856,869

 

Short-term marketable securities

 

 

 

 

 

173,145

 

Accounts receivable, net of allowances of $21,756 and $20,631, respectively

 

 

199,366

 

 

 

207,071

 

Inventory, net

 

 

311,414

 

 

 

300,623

 

Prepaid income taxes

 

 

5,623

 

 

 

4,727

 

Prepaid expenses and other current assets

 

 

19,380

 

 

 

19,749

 

Total current assets

 

 

770,361

 

 

 

1,562,184

 

Property and equipment, net

 

 

302,195

 

 

 

286,369

 

Intangible assets, net

 

 

256,416

 

 

 

152,264

 

Goodwill

 

 

633,121

 

 

 

559,553

 

Operating lease right-of-use assets

 

 

104,590

 

 

 

102,270

 

Deferred tax assets

 

 

48,851

 

 

 

15,755

 

Restricted cash and investments

 

 

1,494

 

 

 

1,494

 

Other assets

 

 

17,005

 

 

 

13,193

 

Total assets

 

$

2,134,033

 

 

$

2,693,082

 

LIABILITIES AND EQUITY

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable and accrued liabilities

 

$

110,796

 

 

$

110,401

 

Contingent consideration liabilities

 

 

7,468

 

 

 

7,289

 

Accrued payroll and related expenses

 

 

65,741

 

 

 

63,421

 

Operating lease liabilities

 

 

9,627

 

 

 

7,875

 

Income tax liabilities

 

 

1,730

 

 

 

2,073

 

Senior convertible notes

 

 

 

 

 

645,303

 

Total current liabilities

 

 

195,362

 

 

 

836,362

 

Long-term senior convertible notes

 

 

883,180

 

 

 

766,226

 

Deferred tax liabilities

 

 

2,683

 

 

 

2,807

 

Operating lease liabilities

 

 

113,128

 

 

 

111,634

 

Contingent consideration liabilities

 

 

93,584

 

 

 

29,752

 

Other long-term liabilities

 

 

21,900

 

 

 

22,686

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Redeemable equity component of senior convertible notes

 

 

 

 

 

4,697

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value; 5,000 shares authorized, none outstanding

 

 

 

 

 

 

Common stock, $0.001 par value; 150,000 shares authorized at September 30, 2021 and December 31, 2020; 58,349 shares issued and 51,677 outstanding at September 30, 2021; 57,945 shares issued and 51,376 outstanding at December 31, 2020

 

 

63

 

 

 

62

 

Additional paid-in capital

 

 

1,425,242

 

 

 

1,550,001

 

Accumulated other comprehensive loss

 

 

(7,309

)

 

 

(7,585

)

Retained earnings

 

 

82,444

 

 

 

45,322

 

Treasury stock at cost; 6,672 shares and 6,569 shares at September 30, 2021 and December 31, 2020, respectively

 

 

(676,244

)

 

 

(668,882

)

Total equity

 

 

824,196

 

 

 

918,918

 

Total liabilities and equity

 

$

2,134,033

 

 

$

2,693,082

 


 

 

NuVasive, Inc.

 

Consolidated Statements of Cash Flows

 

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30,

 

(unaudited)

 

2021

 

 

2020

 

Operating activities:

 

 

 

 

 

 

 

 

Consolidated net loss

 

$

(27,350

)

 

$

(38,845

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

111,818

 

 

 

106,097

 

Amortization of non-cash interest

 

 

6,672

 

 

 

33,714

 

Stock-based compensation

 

 

17,972

 

 

 

9,806

 

Reserves on current assets

 

 

25,418

 

 

 

44,927

 

Purchase of in-process research and development

 

 

 

 

 

1,011

 

Net (gain) loss on strategic investments

 

 

(2,101

)

 

 

278

 

Net loss on change in fair value of derivatives

 

 

 

 

 

12,301

 

Net loss from foreign currency adjustments

 

 

26,572

 

 

 

6,207

 

Other non-cash adjustments

 

 

15,396

 

 

 

7,692

 

Deferred income taxes

 

 

(5,211

)

 

 

(6,257

)

Changes in operating assets and liabilities, net of effects from acquisitions:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

4,142

 

 

 

2,388

 

Inventory

 

 

(29,266

)

 

 

(37,523

)

Prepaid expenses and other current assets

 

 

(367

)

 

 

(1,620

)

Accounts payable and accrued liabilities

 

 

(779

)

 

 

10,176

 

Accrued payroll and related expenses

 

 

3,021

 

 

 

(33,529

)

Income taxes

 

 

(1,167

)

 

 

(3,625

)

Net cash provided by operating activities

 

 

144,770

 

 

 

113,198

 

Investing activities:

 

 

 

 

 

 

 

 

Acquisition of Simplify Medical, net of cash acquired

 

 

(149,463

)

 

 

 

Payment of contingent consideration for Simplify Medical

 

 

(45,850

)

 

 

 

Acquisitions and investments

 

 

(500

)

 

 

1,132

 

Purchases of intangible assets

 

 

(1,200

)

 

 

(3,810

)

Purchases of property and equipment

 

 

(85,630

)

 

 

(77,857

)

Purchases of marketable securities

 

 

 

 

 

(207,695

)

Proceeds from sales of marketable securities

 

 

127,023

 

 

 

 

Proceeds from maturities of marketable securities

 

 

46,000

 

 

 

 

Other investing activities

 

 

(819

)

 

 

 

Net cash used in investing activities

 

 

(110,439

)

 

 

(288,230

)

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from the issuance of common stock

 

 

3,803

 

 

 

3,871

 

Purchases of treasury stock

 

 

(7,309

)

 

 

(79,680

)

Payment of contingent consideration

 

 

(3

)

 

 

(7,053

)

Proceeds from issuance of convertible debt, net of issuance costs

 

 

 

 

 

873,890

 

Proceeds from sale of warrants

 

 

 

 

 

93,915

 

Purchases of convertible note hedges

 

 

 

 

 

(147,825

)

Payments upon settlement of senior convertible notes

 

 

(649,426

)

 

 

 

Other financing activities

 

 

(1,038

)

 

 

(1,405

)

Net cash (used in) provided by financing activities

 

 

(653,973

)

 

 

735,713

 

Effect of exchange rate changes on cash

 

 

(2,649

)

 

 

829

 

(Decrease) increase in cash, cash equivalents and restricted cash

 

 

(622,291

)

 

 

561,510

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

858,363

 

 

 

214,528

 

Cash, cash equivalents and restricted cash at end of period

 

$

236,072

 

 

$

776,038

 


 

 

 

 

 

For the Three Months Ended September 30, 2021

 

 

 

 

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 WASO8

 

Net (Loss) to Adjusted EBITDA

 

 

 

 

Reported GAAP

$

182,184

 

$

(6,633

)

$

(21,639

)

$

(0.42

)

 

51,669

 

$

(21,639

)

 

 

 

% of net sales

 

67.3

%

 

(2.4

%)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash purchase accounting adjustments on acquisitions1

 

557

 

 

557

 

 

557

 

 

 

 

 

 

 

 

557

 

 

 

 

Inventory charges associated with product withdrawals2

 

14,215

 

 

14,215

 

 

14,215

 

 

 

 

 

 

 

 

14,215

 

 

 

 

Amortization of intangible assets

 

 

 

 

14,805

 

 

14,805

 

 

 

 

 

 

 

 

 

 

 

 

 

Litigation related expenses and settlements3

 

 

 

 

762

 

 

762

 

 

 

 

 

 

 

 

762

 

 

 

 

Business transition costs4

 

 

 

 

4,551

 

 

4,551

 

 

 

 

 

 

 

 

4,551

 

 

 

 

European medical device regulation5

 

 

 

 

2,132

 

 

2,132

 

 

 

 

 

 

 

 

2,132

 

 

 

 

Non-cash acquisition-related foreign currency impacts6

 

 

 

 

 

 

 

10,280

 

 

 

 

 

 

 

 

10,280

 

 

 

 

Tax effect of adjustments7

 

 

 

 

 

 

 

(8,775

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense/(income), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,297

 

 

 

 

Income tax benefit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,373

)

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

37,864

 

 

 

 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4,965

 

 

 

 

Adjusted Non-GAAP

$

196,956

 

$

30,389

 

$

16,888

 

$

0.32

 

 

52,268

 

$

55,611

 

 

 

 

% of net sales

 

72.7

%

 

11.2

%

 

 

 

 

 

 

 

 

 

 

20.5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

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.

 

 

2

 

Represents charges for inventory write-offs associated with the Company’s product withdrawals. During the three months ended September 30, 2021, the Company made a determination to withdraw certain products marketed and sold by its wholly-owned subsidiary, NuVasive Specialized Orthopedics.

 

 

3

 

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

 

 

4

 

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.

 

 

5

 

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

 

 

6

 

Represents non-cash adjustments to acquisition-related intercompany balances and contingent consideration liabilities held in a foreign currency.

 

 

7

 

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

 

 

8

 

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, 2021

 

 

 

 

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 WASO8

 

Net (Loss) to Adjusted EBITDA

 

 

 

 

Reported GAAP

$

598,170

 

$

16,452

 

$

(27,350

)

$

(0.53

)

 

51,539

 

$

(27,350

)

 

 

 

% of net sales

 

71.5

%

 

2.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-cash purchase accounting adjustments on acquisitions1

 

1,299

 

 

1,299

 

 

1,299

 

 

 

 

 

 

 

 

1,299

 

 

 

 

Inventory charges associated with product withdrawals2

 

14,215

 

 

14,215

 

 

14,215

 

 

 

 

 

 

 

 

14,215

 

 

 

 

Amortization of intangible assets

 

 

 

 

43,230

 

 

43,230

 

 

 

 

 

 

 

 

 

 

 

 

 

Litigation related expenses and settlements3

 

 

 

 

4,010

 

 

4,010

 

 

 

 

 

 

 

 

4,010

 

 

 

 

Business transition costs4

 

 

 

 

21,688

 

 

21,688

 

 

 

 

 

 

 

 

21,688

 

 

 

 

European medical device regulation5

 

 

 

 

5,696

 

 

5,696

 

 

 

 

 

 

 

 

5,696

 

 

 

 

Net gain on strategic investments

 

 

 

 

 

 

 

(2,101

)

 

 

 

 

 

 

 

(2,101

)

 

 

 

Non-cash acquisition-related foreign currency impacts6

 

 

 

 

 

 

 

23,673

 

 

 

 

 

 

 

 

23,673

 

 

 

 

Tax effect of adjustments7

 

 

 

 

 

 

 

(17,269

)

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense/(income), net

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16,619

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,844

 

 

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

111,818

 

 

 

 

Non-cash stock-based compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17,972

 

 

 

 

Adjusted Non-GAAP

$

613,684

 

$

106,590

 

$

67,091

 

$

1.29

 

 

52,184

 

$

190,383

 

 

 

 

% of net sales

 

73.3

%

 

12.7

%

 

 

 

 

 

 

 

 

 

 

22.7

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

 

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.

 

 

2

 

Represents charges for inventory write-offs associated with the Company’s product withdrawals. During the three months ended September 30, 2021, the Company made a determination to withdraw certain products marketed and sold by its wholly-owned subsidiary, NuVasive Specialized Orthopedics.

 

 

3

 

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

 

 

4

 

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.

 

 

5

 

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

 

 

6

 

Represents non-cash adjustments to acquisition-related intercompany balances and contingent consideration liabilities held in a foreign currency.

 

 

7

 

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

 

 

8

 

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, 2020

 

 

 

 

Reconciliation of GAAP to Non-GAAP Financial Measures

 

 

 

 

(Unaudited - in thousands, except per share data)