EX-99.1 2 a53222exv99w1.htm EX-99.1 EX-99.1
Exhibit 99.1
(NUVASIVE LOGO)
PRESS RELEASE
     
Contact:
  Investors:
Kevin C. O’Boyle
  Patrick F. Williams
EVP & Chief Financial Officer
  Vice President, Finance & Investor Relations
NuVasive, Inc.
  NuVasive, Inc.
858-909-1998
  858-638-5511
investorrelations@nuvasive.com
  investorrelations@nuvasive.com
 
   
 
  Media:
 
  Jason Rando
 
  The Ruth Group
 
  646-536-7025
jrando@theruthgroup.com
NUVASIVE REPORTS SECOND QUARTER 2009 FINANCIAL RESULTS
— 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, 2009 — 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 www.nuvasive.com.
After the live webcast, the call will remain available on NuVasive’s website, 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 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.
Unaudited Condensed Consolidated Statement of Operations
(
in thousands, except per share data)
                                 
    Three Months Ended June 30,     Six Months Ended 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 (expense) / income 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  
See accompanying notes to consolidated financial statements.