nuva-20221109
0001142596FALSE00011425962022-11-092022-11-09

 
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, 2022
__________________________________________
NUVASIVE, INC.
(Exact name of registrant as specified in its charter)
__________________________________________
Delaware000-5074433-0768598
(State or Other Jurisdiction
of Incorporation)
(Commission
File Number)
(I.R.S. Employer
Identification Number)
12101 Airport Way, Broomfield, Colorado 80021
(Address of principal executive offices) (Zip Code)
(800) 455-1476
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $0.001 per shareNUVA
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, 2022, NuVasive, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2022. 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, 2022, the Company’s Chief Executive Officer and Chief Financial Officer will discuss the Company’s results for the quarter ended September 30, 2022 and the Company’s outlook for the year ending December 31, 2022.
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
104Cover 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, 2022/s/ Matthew K. Harbaugh
Matthew K. Harbaugh
Executive Vice President and Chief Financial Officer

Document

https://cdn.kscope.io/cf052c739705caaec077f3d64f184746-a123a.jpg
Exhibit 99.1
NEWS RELEASE


NuVasive Announces Third Quarter 2022 Financial Results
Net sales grew 9.0% as reported, 12.9% on a constant currency basis
C360 portfolio delivers record quarter in cervical net sales
– Company updates full-year 2022 guidance –
SAN DIEGO November 9, 2022 – 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, 2022.
Third Quarter 2022
Net sales were $295.3 million, a 9.0% increase as reported and a 12.9% increase on a constant currency basis, compared to the prior year period;
GAAP operating margin of 7.4%; Non-GAAP operating margin of 13.6%; and
GAAP diluted loss per share of ($0.04); Non-GAAP diluted earnings per share of $0.54.
“The strategic investments we’ve made in product and technology innovation are delivering continued above-market growth—as demonstrated by double-digit growth in net sales on a constant currency basis,” said Chris Barry, chief executive officer of NuVasive. “Despite the challenging macro environment, we continue to execute as evidenced by our top- and bottom-line performance in the quarter. I remain excited about the future of NuVasive—and our commitment to deliver meaningful innovation to support our surgeons, providers, and patients.”
Third Quarter 2022 Results
NuVasive reported total net sales of $295.3 million, a 9.0% increase as reported and a 12.9% increase on a constant currency basis, compared to $270.8 million in the prior year period. Third quarter 2022 total net sales were driven by further adoption of new products, higher procedural volumes in the U.S., and strong international performance.
For the third quarter of 2022, GAAP gross profit was $214.4 million, compared to $182.2 million in the prior year period. GAAP gross margin was 72.6%, compared to 67.3% in the prior year period. On a non-GAAP basis, gross profit was $214.4 million, compared to $197.0 million in the prior year period. Non-GAAP gross margin was 72.6%, compared to 72.7% in the prior year period.
The Company reported GAAP net loss of ($2.0) million, or diluted loss per share of ($0.04), compared to GAAP net loss of ($21.6) million, or diluted loss per share of ($0.42) in the prior year period. On a non-GAAP basis, the Company reported net income of $28.3 million, or diluted earnings per share of $0.54, compared to non-GAAP net income of $16.9 million, or diluted earnings per share of $0.32 in the prior year period.
Cash and cash equivalents were $237.5 million as of September 30, 2022.



Full-year 2022 Financial Guidance
The Company updated its full-year 2022 guidance range for net sales growth, operating margin, and diluted EPS as shown in the table below.
Prior guidance range **Current guidance range **
GAAPNon-GAAPGAAPNon-GAAP
Net sales growth (reported)*6.0%-8.0%6.0%-8.0%5.5%-6.5%5.5%-6.5%
Net sales growth (constant currency)*8.7%-10.7%8.7%-9.7%
Operating margin7.6%-9.1%13.0%-14.5%6.7%-7.4%12.3%-13.0%
Diluted earnings per share$0.95-$1.25***$2.15-$2.45$0.50-$0.60***$2.00-$2.10
* Reflects expectations for net sales growth in 2022 compared to 2021. Net sales growth on a constant currency basis excludes year-over-year currency fluctuations, which the Company currently expects to create a negative impact of approximately 320 basis points in 2022.
** Prior guidance reflects ranges provided on August 3, 2022. Current guidance reflects ranges provided on November 9, 2022.
*** Reflects updated expectations for the impact on diluted EPS of applying the if-converted method to the Company’s convertible notes. Additionally, includes the impact of net unrealized foreign currency exchange gains or losses incurred as of September 30, 2022, and does not assume future net unrealized gains or losses related to foreign currency exchange rates.
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 our website.
Share Repurchase Program Extension
The NuVasive Board of Directors has approved a one-year extension of the Company’s previously announced share repurchase program. As a result, the Company is now authorized to repurchase up to $100.0 million dollars of its common stock through December 31, 2023. 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
NuVasive will hold a conference call on Wednesday, November 9, 2022, at 1:30 p.m. PT / 4:30 p.m. ET to discuss the results of its financial performance for the third quarter 2022. The dial-in numbers are 1-877-300-8521 for domestic callers and 1-412-317-6026 for international callers. A live webcast of the conference call and supplemental financial information of our third quarter 2022 results will be available on the Investor Relations section of our website at www.nuvasive.com. An audio replay of the call will be available until November 16, 2022. 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: 10172422. In addition, the webcast will be archived on NuVasive's Investor Relations section of our website.
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 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 2022, as well as projections for 2022 financial guidance and expectations regarding longer-term financial performance. The Company’s results for the third quarter of 2022 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 2022 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; further deterioration of general macroeconomic conditions, including inflationary pressures, disruptions to the global supply chain, fluctuations in currency exchange rates, higher freight and labor costs, and weakness in economic conditions generally; 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.
# # #




Investor contact:
Juliet C. Cunningham
NuVasive, Inc.
858-210-2129
investorrelations@nuvasive.com

Media contact:
Melanie Ordoñez
NuVasive, Inc.
858-722-3899
media@nuvasive.com



NuVasive, Inc.
Consolidated Statements of Operations
(in thousands, except per share data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
(unaudited)2022202120222021
Net sales:
Products$267,208 $247,061 $813,600 $759,275 
Services28,072 23,775 82,893 77,638 
Total net sales295,280 270,836 896,493 836,913 
Cost of sales (excluding below amortization of intangible assets):
Products59,220 69,609 181,670 181,495 
Services21,652 19,043 64,057 57,248 
Total cost of sales80,872 88,652 245,727 238,743 
Gross profit214,408 182,184 650,766 598,170 
Operating expenses:
Selling, general and administrative154,005 146,056 474,982 449,407 
Research and development23,666 23,405 72,937 67,393 
Amortization of intangible assets12,157 14,805 37,826 43,230 
Business transition costs2,811 4,551 (1,753)21,688 
Total operating expenses192,639 188,817 583,992 581,718 
Interest and other expense, net:
Interest income820 23 1,125 119 
Interest expense(4,352)(4,320)(13,083)(16,738)
Other expense, net(21,053)(13,082)(34,490)(24,339)
Total interest and other expense, net(24,585)(17,379)(46,448)(40,958)
(Loss) income before income taxes(2,816)(24,012)20,326 (24,506)
Income tax benefit (expense)839 2,373 (3,995)(2,844)
Consolidated net (loss) income$(1,977)$(21,639)$16,331 $(27,350)
Net (loss) income per share:
Basic$(0.04)$(0.42)$0.31 $(0.53)
Diluted$(0.04)$(0.42)$0.31 $(0.53)
Weighted average shares outstanding:
Basic52,067 51,669 51,974 51,539 
Diluted52,067 51,669 52,512 51,539 




NuVasive, Inc.
Consolidated Balance Sheets
(in thousands, except par value data)
September 30, 2022December 31, 2021
ASSETS(unaudited)
Current assets:
Cash and cash equivalents$237,500 $246,091 
Accounts receivable, net of allowances of $18,702 and $21,064, respectively235,582 214,398 
Inventory, net340,995 315,845 
Prepaid income taxes7,163 5,425 
Prepaid expenses and other current assets21,991 20,665 
Total current assets843,231 802,424 
Property and equipment, net336,808 303,664 
Intangible assets, net187,280 242,675 
Goodwill625,141 633,467 
Operating lease right-of-use assets96,352 102,987 
Deferred tax assets60,503 48,003 
Restricted cash and investments1,494 1,494 
Other assets24,136 19,361 
Total assets$2,174,945 $2,154,075 
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities$119,297 $115,614 
Contingent consideration liabilities59,477 7,986 
Accrued payroll and related expenses60,889 66,596 
Operating lease liabilities10,025 9,867 
Income tax liabilities819 828 
Senior convertible notes446,898 — 
Total current liabilities697,405 200,891 
Long-term senior convertible notes443,533 884,984 
Deferred tax liabilities11,697 3,049 
Operating lease liabilities104,729 111,592 
Contingent consideration liabilities71,740 139,824 
Other long-term liabilities13,695 18,528 
Commitments and contingencies
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, 2022 and December 31, 2021; 58,880 shares issued and 52,076 outstanding at September 30, 2022; 58,469 shares issued and 51,769 outstanding at December 31, 202163 63 
Additional paid-in capital1,457,828 1,434,976 
Accumulated other comprehensive loss(4,355)(7,792)
Retained earnings62,039 45,708 
Treasury stock at cost; 6,804 shares and 6,700 shares at September 30, 2022 and December 31, 2021, respectively(683,429)(677,748)
Total equity832,146 795,207 
Total liabilities and equity$2,174,945 $2,154,075 




NuVasive, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended September 30,
(unaudited)20222021
Operating activities:
Consolidated net income (loss)$16,331 $(27,350)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization110,200 111,818 
Deferred income taxes(5,004)(5,211)
Amortization of non-cash interest5,906 6,672 
Stock-based compensation19,136 17,972 
Changes in fair value of contingent consideration(8,560)6,646 
Net loss (gain) on strategic investments1,248 (2,101)
Net loss from foreign currency adjustments33,619 26,572 
Reserves on current assets(342)25,418 
Other non-cash adjustments13,654 8,750 
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable(27,934)4,142 
Inventory(26,469)(29,266)
Prepaid expenses and other current assets4,538 (367)
Accounts payable and accrued liabilities(8,329)(779)
Accrued payroll and related expenses(3,878)3,021 
Income taxes(1,769)(1,167)
Net cash provided by operating activities122,347 144,770 
Investing activities:
Acquisition of Simplify Medical, net of cash acquired(750)(149,463)
Payment of contingent consideration for Simplify Medical— (45,850)
Acquisitions and investments(5,650)(500)
Purchases of intangible assets— (1,200)
Purchases of property and equipment(107,120)(85,630)
Proceeds from sales of marketable securities— 127,023 
Proceeds from maturities of marketable securities— 46,000 
Other investing activities(697)(819)
Net cash used in investing activities(114,217)(110,439)
Financing activities:
Payment of contingent consideration(6,839)(3)
Proceeds from the issuance of common stock3,716 3,803 
Purchases of treasury stock(5,681)(7,309)
Payments upon settlement of senior convertible notes— (649,426)
Other financing activities(1,362)(1,038)
Net cash used in financing activities(10,166)(653,973)
Effect of exchange rate changes on cash(6,555)(2,649)
Decrease in cash, cash equivalents and restricted cash(8,591)(622,291)
Cash, cash equivalents and restricted cash at beginning of period247,585 858,363 
Cash, cash equivalents and restricted cash at end of period$238,994 $236,072 




For the Three Months Ended September 30, 2022
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited - in thousands, except per share data)
Gross ProfitOperating ProfitNet (Loss) IncomeDiluted EPS
Diluted WASO 6
Net (Loss) to Adjusted EBITDA
Reported GAAP$214,408 $21,769 $(1,977)$(0.04)52,067 $(1,977)
% of net sales72.6 %7.4 %
Amortization of intangible assets12,157 12,157 
Litigation related expenses and settlements1
828 828 828 
Business transition costs2
2,811 2,811 2,811 
European medical device regulation3
2,517 2,517 2,517 
Net loss on strategic investments1,016 1,016 
Non-cash acquisition-related foreign currency impacts4
18,434 18,434 
Tax effect of adjustments5
(7,461)
Interest expense/(income), net3,532 
Income tax benefit(839)
Depreciation and amortization36,915 
Non-cash stock-based compensation4,815 
Adjusted Non-GAAP$214,408 $40,082 $28,325 $0.54 52,584 $68,052 
% of net sales72.6 %13.6 %23.0 %
1Represents expenses and settlements associated with certain ongoing litigation matters, including infringement of the Company’s intellectual property.
2Costs 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.
3Represents costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.
4Represents non-cash adjustments to acquisition-related intercompany balances and contingent consideration liabilities held in a foreign currency.
5Represents the impact from tax affecting the adjustments above at their statutory tax rate.
6Adjusted 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, 2022
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited - in thousands, except per share data)
Gross ProfitOperating ProfitNet Income
Diluted EPS7
Diluted WASO8
Net Income to Adjusted EBITDA
Reported GAAP$650,766 $66,774 $16,331 $0.31 52,512 $16,331 
% of net sales72.6 %7.4 %
Non-cash purchase accounting adjustments on acquisitions1
557 557 557 557 
Amortization of intangible assets37,826 37,826 
Litigation related expenses and settlements2
3,676 3,676 3,676 
Business transition costs3
(1,753)(1,753)(1,753)
European medical device regulation4
7,463 7,463 7,463 
Net loss on strategic investments1,248 1,248 
Non-cash acquisition-related foreign currency impacts5
34,209 34,209 
Tax effect of adjustments6
(18,238)
Interest expense/(income), net11,958 
Income tax expense3,995 
Depreciation and amortization110,200 
Non-cash stock-based compensation19,136 
Adjusted Non-GAAP$651,323 $114,543 $81,319 $1.55 52,512 $207,020 
% of net sales72.7 %12.8 %23.1 %
1Represents 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.
2Represents expenses and settlements associated with certain ongoing litigation matters, including infringement of the Company’s intellectual property.
3Costs 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.
4Represents costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.
5Represents non-cash adjustments to acquisition-related intercompany balances and contingent consideration liabilities held in a foreign currency.
6Represents the impact from tax affecting the adjustments above at their statutory tax rate.
7Reported GAAP diluted EPS is calculated using Net Income plus interest and debt issuance costs on senior convertible notes whose effect is dilutive, net of tax divided by diluted WASO.
8Adjusted 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, 2021
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited - in thousands, except per share data)
Gross ProfitOperating
(Loss) Profit
Net (Loss) IncomeDiluted EPS
Diluted WASO8
Net (Loss) to Adjusted EBITDA
Reported GAAP$182,184 $(6,633)$(21,639)$(0.42)51,669 $(21,639)
% of net sales67.3 %(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 assets14,805 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), net4,297 
Income tax benefit(2,373)
Depreciation and amortization37,864 
Non-cash stock-based compensation4,965 
Adjusted Non-GAAP$196,956 $30,389 $16,888 $0.32 52,268 $55,611 
% of net sales72.7 %11.2 %20.5 %
1Represents 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.
2Represents 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.
3Represents expenses associated with certain ongoing litigation matters, including infringement of the Company’s intellectual property.
4Costs 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.
5Represents costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.
6Represents non-cash adjustments to acquisition-related intercompany balances and contingent consideration liabilities held in a foreign currency.
7Represents the impact from tax affecting the adjustments above at their statutory tax rate.
8Adjusted 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 ProfitOperating ProfitNet (Loss) IncomeDiluted EPS
Diluted WASO8
Net (Loss) to Adjusted EBITDA
Reported GAAP$598,170 $16,452 $(27,350)$(0.53)51,539 $(27,350)
% of net sales71.5 %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 assets43,230 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), net16,619 
Income tax expense2,844 
Depreciation and amortization111,818 
Non-cash stock-based compensation17,972 
Adjusted Non-GAAP$613,684 $106,590 $67,091 $1.29 52,184 $190,383 
% of net sales73.3 %12.7 %22.7 %
1Represents 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.
2Represents 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.
3Represents expenses associated with certain ongoing litigation matters, including infringement of the Company’s intellectual property.
4Costs 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.
5Represents costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.
6Represents non-cash adjustments to acquisition-related intercompany balances and contingent consideration liabilities held in a foreign currency.
7Represents the impact from tax affecting the adjustments above at their statutory tax rate.
8Adjusted 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.




Full Year 2022 Financial Guidance
Reconciliation of GAAP to Non-GAAP EPS
2022 Guidance Range1, 2
2021 Actuals1
PriorCurrent
GAAP diluted earnings (loss) per share$(1.24) $0.95-1.25  $0.50-0.60
Impact of dilution3
0.02 ~0.05 — 
Amortization of intangible assets1.10 ~1.00  ~0.95
European medical device regulation4
0.16 ~0.25  ~0.25
Inventory charges associated with product withdrawal5
0.27— — 
Other6
1.83 ~0.30  ~0.75
Tax effect of adjustments7
(0.45) ~(0.40)  ~(0.45)
Non-GAAP diluted earnings per share$1.68 $2.15-2.45  $2.00-2.10
1Data has been intentionally rounded and may not sum.
2Prior guidance reflects the range provided August 3, 2022. Current guidance reflects the range provided November 9, 2022.
3GAAP diluted EPS includes the dilutive impact of applying the if-converted method to the Company's convertible notes. 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.
4Represents costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.
5Represents charges for inventory write-offs associated with the Company’s product withdrawals. During the third quarter of 2021, the Company made a determination to withdraw certain products marketed and sold by its wholly-owned subsidiary, NuVasive Specialized Orthopedics.
6Includes costs primarily associated with litigation related expenses and settlements, non-cash acquisition-related foreign currency impacts, non-cash purchase accounting adjustments on acquisitions, net gain on strategic investments and business transition costs. See Reconciliation of GAAP to Non-GAAP Financial Measures tables within respective earnings releases for further detail.
7Represents the impact from tax affecting the adjustments above at their statutory tax rate.
Full Year 2022 Financial Guidance
Reconciliation of GAAP to Non-GAAP Operating Margin %
2022 Guidance Range1, 2
2021 Actuals1
PriorCurrent
GAAP Operating Margin %(1.1)%7.6%-9.1%6.7%-7.4%
Amortization of intangible assets5.0 %~4.4%~4.2%
European medical device regulation3
0.7 %~1.0%~1.0%
Inventory charges associated with product withdrawal4
1.3 %— — 
Other 5
6.8 %— ~0.4%
Non-GAAP Operating Margin %12.8 %13.0%-14.5%12.3%-13.0%
1Data has been intentionally rounded and may not sum.
2Prior guidance reflects the range provided August 3, 2022. Current guidance reflects the range provided November 9, 2022.
3Represents costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.
4Represents charges for inventory write-offs associated with the Company’s product withdrawals. During the third quarter of 2021, the Company made a determination to withdraw certain products marketed and sold by its wholly-owned subsidiary, NuVasive Specialized Orthopedics.
5Includes costs primarily associated with litigation related expenses and settlements, non-cash purchase accounting adjustments on acquisitions, and business transition costs. See Reconciliation of GAAP to Non-GAAP Financial Measures tables within respective earnings releases for further detail.