- Increases 2009 Guidance for Revenue and Earnings per Share - SAN
DIEGO, April 22 /PRNewswire-FirstCall/ -- NuVasive, Inc. (NASDAQ:
NUVA), a medical device company focused on developing products for
minimally disruptive surgical treatments for the spine, announced
today financial results for the quarter ended March 31, 2009.
NuVasive reported first quarter revenue of $80.0 million, a 56.3%
increase over the $51.2 million for the first quarter 2008 and a
7.3% increase over the $74.6 million for the fourth quarter 2008.
Gross profit for the first quarter 2009 was $65.2 million and gross
margin was 81.5%, compared to a gross profit of $42.1 million and a
gross margin of 82.2% for the first quarter 2008. For fourth
quarter 2008, gross profit was $61.1 million and gross margin was
82.0%. Total operating expenses for the first quarter 2009 were
$68.7 million compared to $50.5 million in the first quarter 2008
and $57.0 million in the fourth quarter 2008. Operating expenses
include $1.9 million for Progentix and Cervitech acquisition costs
and $1.6 million related to intellectual property litigation. On a
GAAP basis, the Company reported a net loss of $4.3 million, or
$(0.12) per share, for the first quarter 2009. On a non-GAAP basis,
the Company reported net income of $7.3 million, or $0.19 per
share, for the first quarter 2009. The non-GAAP earnings per share
calculations for the first quarter exclude (i) stock based
compensation of $6.7 million; (ii) amortization of acquired
intangible assets of $1.3 million; (iii) acquisition related costs
of $1.9 million; and (iv) intellectual property litigation costs of
$1.6 million. Cash, cash equivalents and short and long-term
marketable securities were $203.5 million at March 31, 2009. Today,
the Company announced the acquisition of Cervitech Inc., a New
Jersey based company focused on clinical approval of its PCM(R)
cervical disc system, a motion preserving total disc replacement
device. This strategic acquisition provides NuVasive the potential
to significantly accelerate its entry into the growing cervical
disc replacement market. Alex Lukianov, Chairman and Chief
Executive Officer, said, "We are exceptionally pleased with our
financial performance in the first quarter of 2009, specifically
our increased profitability, which shows how NuVasive's continued
revenue growth translates to earnings growth. We believe this
dynamic is sustainable and we expect continued profitability
improvements as the company grows. We have the strategy, the
talent, and the infrastructure in place to drive toward our goal of
being the #4 spine company in the world and we will get there by
adhering to our core values of Absolute Responsiveness(R),
outstanding customer service, and Cheetah Speed." Mr. Lukianov
continued, "Today, we are excited to announce the acquisition of
Cervitech, which gives NuVasive the potential of rapid entry into
the high growth segment of cervical disc replacement with the PCM
investigational device. The PCM IDE clinical study is fully
enrolled with two year follow-up data complete later this year.
With that timing, we anticipate submission for FDA approval in the
first quarter of 2010, which is significantly ahead of our current
motion preservation R&D pipeline. The acquisition further
strengthens our cervical product offering. We expect product
revenue of $100 million annually within three years of U.S.
commercialization." Updated 2009 Financial Guidance NuVasive is
updating its full year 2009 financial guidance as follows: Revenue:
-- $355 million to $360 million, including $30 million in
Osteocel(R) Plus; up from previous guidance of $345 million to $350
million, including $28 million in Osteocel Plus Gross Margin: --
Gross Margin of 81% to 82%, consistent with previous guidance EPS:
-- GAAP: loss per share of $(0.07) to $(0.05); compared to previous
guidance of $(0.14) to $(0.12) -- Non-GAAP: earnings per share of
$0.94 to $0.96; up from previous guidance of $0.83 to $0.85 per
enclosed table -- Earnings per share of $0.11 to $0.13 excluding
intellectual property litigation and acquisition related costs per
enclosed table; up from previous guidance of $0.02 to $0.04
Reconciliation of Non-GAAP Information Management uses certain
non-GAAP financial measures such as non-GAAP earnings per share,
which exclude stock-based compensation, amortization of acquired
intangible assets, intellectual property litigation expenses, and
acquisition related costs. Management does not consider these costs
in evaluating the continuing operations of the Company. Therefore,
management calculates the non- GAAP financial measures provided in
this earnings release excluding these costs and uses these non-
GAAP financial measures to enable it to analyze further, and more
consistently, the period-to-period financial performance of its
core business operations. Management believes that providing
investors with these non-GAAP measures gives them additional
important information to enable them to assess, in the same way
management assesses, the Company's current and future continuing
operations. These non-GAAP measures are not in accordance with, or
an alternative for, GAAP, and may be different from non-GAAP
measures used by other companies. Set forth below are
reconciliations of the non-GAAP financial measures to the
comparable GAAP financial measure. Reconciliation of First Quarter
2009 Results (in thousands, except per share amounts) $ Per Share
GAAP net loss (A) $(4,302) $(0.12) IP litigation costs 1,629 0.04
Acquisition related costs 1,912 0.05 Earnings excluding other
adjustments (761) (0.02) Non-cash stock-based compensation 6,682
0.18 Amortization of acquired intangible assets 1,336 0.04 Non-GAAP
earnings (A) $7,257 $0.19 Basic weighted shares outstanding 36,365
Diluted weighted shares outstanding 37,744 A- GAAP loss per share
is calculated using basic weighted shares outstanding; Non-GAAP
earnings per share is calculated using diluted weighted shares
outstanding. Reconciliation of Full Year 2009 Guidance Range for
Year Ending December 31, 2009 (in thousands, except per share
amounts) Low High GAAP net loss per share (A) $(0.07) $(0.05) IP
litigation costs 0.13 0.13 Acquisition related costs 0.05 0.05
Earnings per share excluding other adjustments 0.11 0.13 Non-cash
stock-based compensation 0.70 0.70 Amortization of acquired
intangible assets 0.13 0.13 Non-GAAP earnings per share (A) $0.94
$0.96 Basic weighted shares outstanding 37,200 37,200 Diluted
weighted shares outstanding 38,750 38,750 A- GAAP loss per share is
calculated using basic weighted shares outstanding; Non-GAAP
earnings per share is calculated using diluted weighted shares
outstanding. Conference Call NuVasive will hold a conference call
today at 5:30 p.m. ET / 2:30 p.m. PT to discuss the results. The
dial-in numbers are 1-877-407-4018 for domestic callers and
1-201-689-8471 for international. A live webcast of the conference
call will be available online from the investor relations page of
the Company's corporate website at http://www.nuvasive.com/. After
the live webcast, the call will remain available on NuVasive's
website, http://www.nuvasive.com/, through May 22, 2009. In
addition, a telephonic replay of the call will be available until
May 6, 2009. The replay dial-in numbers are 1-877-660-6853 for
domestic callers and 1-201-612-7415 for international callers.
Please use account number 3055 and conference ID number 320044.
About NuVasive NuVasive is a medical device company focused on the
design, development, and marketing of products for the surgical
treatment of spine disorders. The Company's product portfolio is
focused primarily on the $4.6 billion U.S. spine implant market.
Additionally, the Company has expanded into the $1.5 billion global
biologics market, the $1.5 billion international market, and is
developing products for the emerging motion preservation market.
NuVasive's principal product offering is based on its Maximum
Access Surgery, or MAS(R) platform. The MAS platform combines four
categories of products that collectively minimize soft tissue
disruption during spine surgery with maximum visualization and
safe, easy reproducibility for the surgeon: NeuroVision(R), a
proprietary software-driven nerve avoidance system; MaXcess(R), a
unique split-blade retractor system; a wide variety of specialized
implants; and several biologic fusion enhancers. MAS significantly
reduces surgery time and returns patients to activities of daily
living much faster than conventional approaches. Having redefined
spine surgery with the MAS platform's lateral approach, known as
eXtreme Lateral Interbody Fusion, or XLIF(R), NuVasive has built an
entire spine franchise. With nearly 50 products today spanning
lumbar, thoracic and cervical applications, the Company will
continue to expand and evolve its offering predicated on its
R&D focus and dedication to outstanding service levels
supported by a culture of Absolute Responsiveness(R). NuVasive
cautions you that statements included in this press release that
are not a description of historical facts are forward-looking
statements that involve risks, uncertainties, assumptions and other
factors which, if they do not materialize or prove correct, could
cause NuVasive's results to differ materially from historical
results or those expressed or implied by such forward-looking
statements. The potential risks and uncertainties, relative to the
proposed acquisition, include, but are not limited to: the risk
that the parties may not consummate the transaction in the expected
timeframe or that intervening factors may cause the parties to
alter the terms (financial or otherwise)of the transaction; the
risk that NuVasive may not be able to achieve expected synergies
and strategic benefits from the technology owned by the acquired
company; and the risk that NuVasive will not be able to
successfully integrate the operations of the acquired company. The
potential risks and uncertainties that could cause actual growth
and results to differ materially include, but are not limited to:
the uncertain process of seeking regulatory approval or clearance
for NuVasive's products or devices, including risks that such
process could be significantly delayed; the risk that the Company
may not be successful in integrating acquired technology or
products; the possibility that the FDA may require significant
changes to NuVasive's products or clinical studies; the risk that
the Company's revenue or profitability projections may prove
incorrect because of unexpected difficulty in generating sales or
achieving anticipated profitability; the risk that products may not
perform as intended and may therefore not achieve commercial
success; the risk that competitors may develop superior products or
may have a greater market position enabling more successful
commercialization; the risk that additional clinical data may call
into question the benefits of NuVasive's products to patients,
hospitals and surgeons; and other risks and uncertainties more
fully described in NuVasive's press releases and periodic filings
with the Securities and Exchange Commission. NuVasive's public
filings with the Securities and Exchange Commission are available
at http://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. Contact: Investors:
Kevin C. O'Boyle Patrick F. Williams EVP & Chief Financial
Officer Vice President, Finance NuVasive, Inc. & Investor
Relations 858-909-1998 NuVasive, Inc. 858-638-5511 Media: Jason
Rando The Ruth Group 646-536-7025 NuVasive, Inc. Unaudited
Condensed Consolidated Statement of Operations (in thousands,
except per share data) Three Months Ended March 31, 2009 2008
Revenues $80,008 $51,184 Cost of goods sold 14,774 9,095 Gross
profit 65,234 42,089 Operating expenses: Sales, marketing and
administrative 58,481 39,317 Research and development 10,193 6,976
In-process research and development - 4,176 Total operating
expenses 68,674 50,469 Interest income and other, net 776 1,160
Interest expense (1,868) (434) Net loss attributable to
noncontrolling interests 230 - Total other income/ (expenses) (862)
726 Net loss attributable to NuVasive, Inc. $(4,302) $(7,654) Net
loss per share: Basic and diluted $(0.12) $(0.22) Weighted average
shares - basic and diluted 36,365 35,411 Stock-based compensation
is included in operating expenses in the following categories:
Sales, marketing and administrative $5,241 $4,504 Research and
development 1,441 646 $6,682 $5,150 NuVasive, Inc. Unaudited
Condensed Consolidated Balance Sheets (in thousands) March 31,
December 31, 2009 2008 ASSETS Current assets: Cash and cash
equivalents $144,761 $132,318 Short-term marketable securities
40,330 45,738 Accounts receivable, net 50,032 51,622 Inventory, net
82,236 68,834 Prepaid expenses and other current assets 2,675 3,466
Total current assets 320,034 301,978 Property and equipment, net
75,399 73,686 Long-term marketable securities 18,430 45,305
Goodwill 32,194 2,332 Intangible assets, net 70,550 54,767 Other
assets 8,491 9,338 Total assets $525,098 $487,406 LIABILITIES AND
STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and
accrued liabilities $31,096 $26,633 Accrued payroll and related
expenses 15,372 17,132 Acquisition related milestone liabilities
24,653 - Royalties payable 2,204 1,722 Total current liabilities
73,325 45,487 Senior convertible notes 230,000 230,000 Other
long-term liabilities 16,550 24,288 Commitments and contingencies
Noncontrolling interests 14,770 - Stockholders' equity: Common
stock 36 36 Additional paid-in capital 391,122 383,293 Accumulated
other comprehensive (loss) income (665) (190) Accumulated deficit
(200,040) (195,508) Total stockholders' equity 190,453 187,631
Total liabilities and stockholders' equity $525,098 $487,406
NuVasive, Inc. Unaudited Condensed Consolidated Statements of Cash
Flows (in thousands) Three Months Ended March 31, 2009 2008
Operating activities: Net loss $(4,302) $(7,654) Adjustments to
reconcile net loss to net cash used in operating activities:
Depreciation and amortization 5,488 3,883 In-process research and
development - 4,176 Stock-based compensation 6,682 5,150 Other
non-cash adjustments 842 (47) Noncontrolling interests (230) -
Changes in operating assets and liabilities: Accounts receivable
1,361 (2,929) Inventory (14,100) (9,306) Prepaid expenses and other
current assets 609 (1,040) Accounts payable and accrued liabilities
10,052 5,260 Accrued payroll and related expenses (1,777) (1,728)
Net cash provided by/(used in) operating activities 4,625 (4,235)
Investing activities: Cash paid for acquisitions - (6,256)
Investment in Progentix (10,000) - Acquisition related milestone
payments (10,000) - Purchases of property and equipment (5,567)
(11,369) Purchases of short-term marketable securities (7,658)
(3,005) Sales of short-term marketable securities 27,725 17,300
Purchases of long-term marketable securities (6,758) (8,582) Sales
of long-term marketable securities 18,975 2,000 Other assets - 740
Net cash provided by/(used in) investing activities 6,717 (9,172)
Financing activities: Payments of long-term liabilities - -
Issuance of convertible debt, net of costs - 222,414 Purchase of
convertible note hedges - (45,758) Sale of warrants - 31,786
Issuance of common stock 1,160 1,579 Net cash provided by financing
activities 1,160 210,021 Effect of exchange rate changes on cash
(59) - Increase in cash and cash equivalents 12,443 196,614 Cash
and cash equivalents at beginning of year 132,318 61,915 Cash and
cash equivalents at end of year $144,761 $258,529 Supplemental
disclosure of non-cash transactions: Leasehold improvements paid by
lessor $2,848 DATASOURCE: NuVasive, Inc. CONTACT: Kevin C. O'Boyle,
EVP & Chief Financial Officer of NuVasive, Inc.,
+1-858-909-1998, , or Investors, Patrick F. Williams, Vice
President, Finance & Investor Relations of NuVasive, Inc.,
+1-858-638-5511, , or Media, Jason Rando of The Ruth Group,
+1-646-536-7025, Web Site: http://www.nuvasive.com/
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