- Increases 2009 Guidance for Revenue and Earnings per Share -
Second Quarter 2009 Highlights: - Total revenue of $88.5 million;
up 54.1% from the second quarter 2008 and up 10.6% from first
quarter 2009 - Gross margin of 81.1% compared to 83.3% for second
quarter 2008 and to 81.5% for first quarter 2009 - GAAP earnings of
$2.8 million or $0.07 per share; Non-GAAP earnings of $12.0 million
or $0.31 per share - Earnings per share, excluding intellectual
property litigation and acquisition related costs, of $0.11 SAN
DIEGO, July 23 /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 June 30, 2009.
NuVasive reported second quarter revenue of $88.5 million, a 54.1%
increase over the $57.4 million for the second quarter 2008 and a
10.6% increase over the $80.0 million for the first quarter 2009.
Gross profit for the second quarter 2009 was $71.8 million and
gross margin was 81.1%, compared to a gross profit of $47.8 million
and a gross margin of 83.3% for the second quarter 2008. For first
quarter 2009, gross profit was $65.2 million and gross margin was
81.5%. Total operating expenses for the second quarter 2009 were
$67.3 million compared to $48.5 million in the second quarter 2008
and $68.7 million in the first quarter 2009. Operating expenses
include $0.6 million for Progentix and Cervitech acquisition costs
and $1.0 million related to intellectual property litigation. On a
GAAP basis, the Company reported net income of $2.8 million, or
$0.07 per share, for the second quarter 2009. On a non-GAAP basis,
the Company reported net income of $12.0 million, or $0.31 per
share, for the second quarter 2009. The non-GAAP earnings per share
calculations for the second quarter exclude (i) stock based
compensation of $6.3 million; (ii) amortization of acquired
intangible assets of $1.4 million; (iii) acquisition related costs
of $0.6 million; and (iv) intellectual property litigation costs of
$1.0 million. Cash, cash equivalents and short and long-term
marketable securities were $180.8 million at June 30, 2009. Alex
Lukianov, Chairman and Chief Executive Officer, said, "Our
proprietary XLIF procedure, along with NuVasive's full
complementary product suite, is gaining adoption and utilization
because it provides significant benefits to patients, doctors and
hospitals. We are pleased with our financial performance in the
second quarter of 2009 and we look forward to continued market
share gains driving revenue growth and increased profitability. We
are determined to become the #4 global spine company by developing
innovative products and by proliferating a corporate culture of
speed that generates results." Updated 2009 Financial Guidance
NuVasive is updating its full year 2009 financial guidance as
follows: Revenue: -- $360 million to $365 million; up from previous
guidance of $355 million to $360 million Gross Margin: -- Gross
Margin of approximately 81% EPS: -- GAAP: earnings per share of
$0.06 to $0.08; up from previous guidance of $(0.07) to $(0.05) --
Non-GAAP: earnings per share of $1.03 to $1.05; up from previous
guidance of $0.94 to $0.96 -- Earnings per share of $0.25 to $0.27
excluding intellectual property litigation and acquisition related
costs per enclosed table; up from previous guidance of $0.11 to
$0.13 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 Second Quarter
2009 Results (in thousands, except per share amounts) $ Per Share
--- ----------- GAAP net earnings $2,765 $0.07 IP litigation costs
995 0.03 Acquisition related costs 563 0.01 --- ---- Earnings
excluding other adjustments 4,323 0.11 Non-cash stock-based
compensation 6,317 0.16 Amortization of acquired intangible assets
1,372 0.04 ----- ---- Non-GAAP earnings $12,012 $0.31 ======= =====
Diluted weighted shares outstanding 38,301 ====== Reconciliation of
Year-to-Date 2009 Results (in thousands, except per share amounts)
$ Per Share --- ----------- GAAP net loss (A) $(1,537) $(0.04) IP
litigation costs 2,624 0.07 Acquisition related costs 2,476 0.07
----- ---- Earnings excluding other adjustments 3,563 0.09 Non-cash
stock-based compensation 12,999 0.34 Amortization of acquired
intangible assets 2,708 0.07 ----- ---- Non-GAAP earnings (A)
$19,270 $0.51 ======= ===== Basic weighted shares outstanding
36,639 ====== Diluted weighted shares outstanding 37,996 ====== 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 earnings per share $0.06 $0.08 IP litigation costs
0.13 0.13 Acquisition related costs 0.06 0.06 ---- ---- Earnings
per share excluding other adjustments 0.25 0.27 Non-cash
stock-based compensation 0.65 0.65 Amortization of acquired
intangible assets 0.13 0.13 ---- ---- Non-GAAP earnings per share
$1.03 $1.05 ===== ===== Diluted weighted shares outstanding 38,500
38,500 ====== ====== 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 August 24. In addition, a telephonic replay of the call
will be available until August 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 327689. 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 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 , a proprietary software-driven nerve
avoidance system; MaXcess , 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 , 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 . NuVasive cautions you that statements included in
this press release that are not a description of historical facts
are forward-looking statements that involve risks, uncertainties,
assumptions and other factors which, if they do not materialize or
prove correct, could cause NuVasive's results to differ materially
from historical results or those expressed or implied by such
forward-looking statements. The potential risks and uncertainties
that could cause actual growth and results to differ materially
include, but are not limited to: the risk that the Company's
revenue or profitability projections may prove incorrect because of
unexpected difficulty in generating sales or achieving anticipated
profitability; the uncertain process of seeking regulatory approval
or clearance for NuVasive's products or devices, including risks
that such process could be significantly delayed; the possibility
that the FDA may require significant changes to NuVasive's products
or clinical studies; the risk that 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: Kevin C.
O'Boyle EVP & Chief Financial Officer NuVasive, Inc.
858-909-1998 Investors: Patrick F. Williams Vice President, Finance
& Investor Relations 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 Six Months Ended June 30,
June 30, ------------------ ---------------- 2009 2008 2009 2008
---- ---- ---- ---- Revenues $88,481 $57,417 $168,490 $108,601 Cost
of goods sold 16,710 9,571 31,484 18,666 ------ ----- ------ ------
Gross Profit 71,771 47,846 137,006 89,935 Operating expenses:
Sales, marketing and administrative 58,149 42,099 116,630 81,416
Research and development 9,200 6,426 19,393 13,402 In-process
research and development - - - 4,176 -- -- -- ----- Total operating
expenses 67,349 48,525 136,023 98,994 Interest income (expense) and
other, net (2,110) 184 (3,203) 910 Net loss attributable to
noncontrolling interest 453 - 683 - --- - --- - Total other income
(expense) (1,657) 184 (2,520) 910 ------ ----- ------- ------- Net
earnings (loss) attributable to NuVasive, Inc. $2,765 $(495)
$(1,537) $(8,149) ====== ===== ======= ======= Net income (loss)
per share: Basic and diluted net income (loss) per share $0.07
$(0.01) $(0.04) $(0.23) ===== ====== ====== ====== Weighted average
shares - basic 36,910 35,663 36,639 35,543 ====== ====== ======
====== Weighted average shares - diluted 38,301 35,663 36,639
35,543 ====== ====== ====== ====== Stock-based compensation is
included in operating expenses in the following categories: Sales,
marketing and administrative $5,243 $4,538 $10,484 $9,042 Research
and development 1,074 610 2,515 1,256 ----- --- ----- ----- $6,317
$5,148 $12,999 $10,298 ====== ====== ======= ======= NuVasive, Inc.
Unaudited Condensed Consolidated Balance Sheets (in thousands) June
30, 2009 December 31, 2008 --------------- ----------------- ASSETS
Current assets: Cash and cash equivalents $136,326 $132,318
Short-term marketable securities 25,100 45,738 Accounts receivable,
net 48,528 51,622 Inventory, net 87,130 68,834 Prepaid expenses and
other current assets 3,825 3,466 ----- ----- Total current assets
300,909 301,978 Property and equipment, net 77,830 73,686 Long-term
marketable securities 19,351 45,305 Goodwill 87,265 2,332
Intangible assets, net 105,965 54,767 Other assets 7,674 9,338
----- ----- Total assets $598,994 $487,406 ======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts
payable and accrued liabilities $21,381 $26,633 Accrued payroll and
related expenses 16,464 17,132 Acquisition milestone liabilities
12,350 - Royalties payable 2,255 1,722 ----- ----- Total current
liabilities 52,450 45,487 Senior convertible notes 230,000 230,000
Other long-term liabilities 59,958 24,288 Commitments and
contingencies Noncontrolling interests 14,317 - Stockholders'
equity: Common stock 38 36 Additional paid-in capital 439,303
383,293 Accumulated other comprehensive loss (27) (190) Accumulated
deficit (197,045) (195,508) -------- -------- Total stockholders'
equity 242,269 187,631 ------- ------- Total liabilities and
stockholders' equity $598,994 $487,406 ======== ======== NuVasive,
Inc. Unaudited Condensed Consolidated Statements of Cash Flows (in
thousands) Six Months Ended June 30, ----------------- 2009 2008
---- ---- Operating activities: Net loss $(1,537) $(8,149)
Adjustments to reconcile net loss to net cash used in operating
activities: Depreciation and amortization 12,811 8,449 In-process
research and development - 4,176 Stock-based compensation 12,999
10,298 NeoDisc technology costs - - Other non-cash adjustments
3,328 312 Noncontrolling interest (683) - Changes in operating
assets and liabilities: Accounts receivable 2,221 (5,044) Inventory
(19,939) (16,496) Prepaid expenses and other current assets (694)
(1,707) Accounts payable and accrued liabilities (288) 3,361
Accrued payroll and related expenses (652) (1,282) ---- ------ Net
cash used in operating activities 7,566 (6,082) Investing
activities: Cash paid for acquisitions - (6,256) Cash paid for
Cervitech acquisition (24,055) - Investment in Progentix (10,000) -
Acquisition related milestone payments (10,000) - Purchases of
property and equipment (12,440) (25,686) Purchases of short-term
marketable securities (12,004) (72,799) Sales of short-term
marketable securities 49,295 19,300 Purchases of long-term
marketable securities (17,674) (51,709) Sales of long-term
marketable securities 26,975 3,500 Other assets - 543 -- --- Net
cash provided by / (used in) investing activities (9,903) (133,107)
Financing activities: Payments of long-term liabilities - (300)
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 6,297 5,356 ----- ----- Net cash provided
by financing activities 6,297 213,498 Effect of exchange rate
changes on cash 48 - -- - Increase in cash and cash equivalents
4,008 74,309 Cash and cash equivalents at beginning of year 132,318
61,915 ------- ------ Cash and cash equivalents at end of year
$136,326 $136,224 ======== ======== 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, NuVasive, Inc., +1-858-909-1998, ,
Investors: Patrick F. Williams, Vice President, Finance &
Investor Relations, NuVasive, Inc., +1-858-638-5511, , Media: Jason
Rando, The Ruth Group, +1-646-536-7025, Web Site:
http://www.nuvasive.com/
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