EX-99.1 2 d204067dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

 

LOGO

NEWS RELEASE

Investor/Media Contact:

Stacy Roughan

NuVasive, Inc.

1-858-909-1812

sroughan@nuvasive.com

NUVASIVE REPORTS THIRD QUARTER 2015 FINANCIAL RESULTS

Third Quarter 2015 Highlights:

 

  •   Revenue increased 5.6% to $200.5 million, or 7.8% on a constant currency basis;

 

  •   Non-GAAP operating profit margin increased 460 basis points to 16.3%; GAAP operating profit margin of 14.0%;

 

  •   Adjusted EBITDA margin increased 540 basis points to 26.7%;

 

  •   Non-GAAP net income of $18.1 million; GAAP net income of $13.0 million;

 

  •   Non-GAAP diluted earnings per share of $0.35; GAAP diluted earnings per share of $0.24; and

 

  •   Company reiterates 2015 revenue outlook and increases non-GAAP operating profit margin, adjusted EBITDA and EPS guidance

SAN DIEGO, CA – October 27, 2015 - NuVasive, Inc. (Nasdaq: NUVA), a leading medical device company focused on transforming spine surgery with minimally disruptive, procedurally-integrated solutions, announced today financial results for the quarter ended September 30, 2015.

“We are pleased to report another strong quarter in which we achieved revenue growth of nearly 8% on a constant currency basis in line with our mid to high single-digit growth goal and profitability that once again significantly outperformed our expectations,” said Gregory T. Lucier, Chairman and Chief Executive Officer of NuVasive. “By remaining focused on our margin expansion initiatives across the Company, we delivered incredibly strong year-over-year growth in non-GAAP operating profit margin and adjusted EBITDA margin, improving 460 and 540 basis points, respectively, while non-GAAP EPS increased nearly three and a half times compared to the same quarter last year.

“Our performance for the quarter was driven by continued strength in the United States and robust growth in certain international geographies where NuVasive is leading with our competitive XLIF® technology and differentiated offerings. We remain confident that our unrelenting focus on innovation and technology, increased operational efficiencies, international scalability and our commitment to increased self-manufacturing position NuVasive to be the leader in transforming spine and improving patient outcomes,” said Mr. Lucier.

A full reconciliation of non-GAAP to GAAP measures can be found in the tables of this news release.

Third Quarter 2015 Results

NuVasive reported third quarter 2015 total revenue of $200.5 million, a 5.6% increase compared to $189.9 million for the third quarter 2014. On a constant currency basis, third quarter 2015 total revenue increased 7.8% compared to the same period last year.

GAAP gross profit for the third quarter 2015 was $151.4 million and gross margin was 75.5% compared to a gross profit of $142.2 million and a gross margin of 74.9% for the third quarter 2014. Total GAAP operating expenses for the third quarter 2015 were $123.3 million compared to $125.9 million in the third quarter 2014.

The Company reported a GAAP net income of $13.0 million, or $0.24 per share, for the third quarter 2015 compared to a GAAP net loss of $(1.8) million, or $(0.04) per share, for the third quarter 2014.

On a non-GAAP basis, the Company reported net income of $18.1 million, or $0.35 per share, for the third quarter 2015 compared to net income of $3.9 million, or $0.08 per share, for the third quarter 2014.

Cash, cash equivalents and short and long-term marketable securities were approximately $451.2 million at September 30, 2015.

Annual Guidance for 2015

The Company provided the following updated projections to its full year 2015 guidance:

 

  •   Revenue of approximately $810.0 million, which includes an approximate $13.0 million of currency headwinds, or approximately 6.2% growth compared to revenue of $762.4 million for 2014; on a constant currency basis revenue is expected to grow approximately 7.9%;

 

  •   GAAP diluted earnings per share of approximately $1.24 compared to GAAP loss per diluted share of $(0.36) for 2014; versus a prior expectation of $1.18 for 2015;

 

  •   Non-GAAP diluted earnings per share of approximately $1.25, an increase of approximately 86.6% compared to non-GAAP diluted earnings of $0.67 for 2014; versus a prior expectation of $1.17 for 2015;

 

  •   Non-GAAP operating profit margin of approximately 15.2%, an increase of approximately 380 basis points compared to 11.4% for 2014; versus a prior expectation of 15.0% for 2015;

 

  •   Adjusted EBITDA margin of approximately 25.4%, an increase of approximately 350 basis points compared to 21.9% for 2014; versus a prior expectation of 25.2% for 2015;

 

  •   GAAP effective tax expense rate of approximately 43.0%; versus a prior expectation of approximately 45.0% for 2015; and

 

  •   Non-GAAP effective tax expense rate of approximately 43.0%; versus a prior expectation of approximately 45.0% for 2015.

Supplementary Financial Information

For additional financial detail, please visit the Investor Relations section of the Company’s website at www.nuvasive.com to access Supplementary Financial Information.

 

2

Reconciliation of Full Year EPS Guidance

 

            2015 Guidance  
     2014
Actuals		      Prior 1      Current 2  

GAAP earnings (loss) per share

    $ (0.36 )     $ 1.18       $ 1.24   

Impact of change from basic to diluted share count

      0.02         —           —     

Impact of treasury method on convertible notes 3

      —           0.03         0.03   
  

 

 

     

 

 

     

 

 

  

Adjusted GAAP earnings (loss) per share, adjusted to diluted share count

    $ (0.34 )     $ 1.21       $ 1.27   

Amortization of intangible assets

      0.16         0.14         0.14   

Leasehold related charges

      0.13         0.03         0.04   

Litigation liability

      0.36         (0.49 )       (0.49 ) 

Intangible asset impairment

      0.13         —           —     

CEO transition related costs

      —           0.04         0.04   

One-time and acquisition related items 4

      0.05         0.05         0.06   

Non-cash interest expense on convertible notes

      0.18         0.19         0.19   
  

 

 

     

 

 

     

 

 

  

Non-GAAP earnings per share

    $ 0.67       $ 1.17       $ 1.25   
  

 

 

     

 

 

     

 

 

  

GAAP Weighted shares outstanding - basic

      46,715         48,593         48,593   
  

 

 

     

 

 

     

 

 

  

GAAP Weighted shares outstanding - diluted

      46,715         52,607         52,607   
  

 

 

     

 

 

     

 

 

  

Non-GAAP Weighted shares outstanding - diluted 3

      49,676         51,431         51,431   
  

 

 

     

 

 

     

 

 

  

 

1  Effective tax expense rate of ~45% applied to GAAP earnings and ~40% applied to Non-GAAP adjustments
2  Effective tax expense rate of ~43% applied to GAAP earnings and ~40% applied to Non-GAAP adjustments
3  Excludes the impact of share dilution of the convertible bond for which the Company has a hedge in place but is considered anti-dilutive under US GAAP in weighted average shares outstanding
4  Acquisition related items include expenses associated with M&A related activity and as incurred

 

3

Reconciliation of Non-GAAP Operating Margin %

 

            2015 Guidance  
(in thousands, except %)    2014
Actuals		      Prior      Current  

Non-GAAP Gross Margin % [A]

      76.1%         76.7%         76.3%   

GAAP Gross Margin [D]

      76.1%         76.7%         76.3%   

Non-GAAP Sales, Marketing & Administrative Expense [B]

      59.9%         56.9%         56.6%   

Leasehold related charges

      1.4%         0.4%         0.4%   

CEO transition related costs

      —           0.4%         0.4%   

One-time and acquisition related items 1

      0.3%         0.5%         0.7%   
  

 

 

     

 

 

     

 

 

  

GAAP Sales, Marketing & Administrative Expense [E]

      61.6%         58.2%         58.1%   

Non-GAAP Research & Development Expense [C]

      4.8%         4.8%         4.5%   

One-time and acquisition related items 1

      0.2%         —           —     
  

 

 

     

 

 

     

 

 

  

GAAP Research & Development Expense [F]

      5.0%         4.8%         4.5%   

Litigation liability [G]

      3.9%         (5.2)%         (5.2)%   

Intangible asset impairment [H]

      1.4%         —           —     

Amortization of intangible assets [I]

      1.8%         1.5%         1.5%   
  

 

 

     

 

 

     

 

 

  

Non-GAAP Operating Margin % [A-B-C]

      11.4%         15.0%         15.2%   
  

 

 

     

 

 

     

 

 

  

GAAP Operating Margin % [D-E-F-G-H-I]

      2.4%         17.4%         17.4%   
  

 

 

     

 

 

     

 

 

  

 

1  Acquisition related items include expenses associated with M&A related activity and as incurred

 

4

Reconciliation of EBITDA %

 

            2015 Guidance  
(in thousands, except %)    2014
Actuals		      Prior      Current  

Net Income / (Loss)

      (2.2)%         7.7%         8.2%   

Interest (income) / expense, net

      3.5%         3.6%         3.5%   

Provision for income taxes

      0.8%         6.1%         5.8%   

Depreciation and amortization 1

      8.1%         7.8%         8.0%   
  

 

 

     

 

 

     

 

 

  

EBITDA

      10.2%         25.2%         25.6%   

Non-cash stock based compensation

      4.4%         3.9%         3.6%   

Leasehold related charges

      1.4%         0.4%         0.4%   

Litigation liability

      3.9%         (5.2)%         (5.2)%   

Intangible asset impairment

      1.4%         —           —     

CEO transition related costs 2

      —           0.4%         0.4%   

One-time and acquisition related items 3

      0.5%         0.5%         0.7%   
  

 

 

     

 

 

     

 

 

  

Adjusted EBITDA

      21.9%         25.2%         25.4%   
  

 

 

     

 

 

     

 

 

  

 

1  Included in leasehold related charges are accelerated depreciation as a result of early leasehold terminations, which thereby were excluded from the depreciation line
2  Included in CEO related transition costs are $1.2m of stock based compensation charges, which thereby were excluded from the non-cash stock based compensation line
3  Acquisition related items include expenses associated with M&A related activity and as incurred

Reconciliation of Non-GAAP Information

Management uses certain non-GAAP financial measures such as non-GAAP earnings per share, non-GAAP net income, non-GAAP operating expenses and non-GAAP operating margin, which exclude amortization of intangible assets, leasehold related charges, one-time restructuring and acquisition related items, CEO transition related costs, certain litigation charges and non-cash interest expense on convertible notes. Management also uses certain non-GAAP measures which are intended to exclude the impact of foreign exchange currency fluctuations. The measure constant currency is the use of 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, leasehold related charges, CEO transition related costs, certain litigation liabilities, acquisition related items 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 are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.

 

5

Reconciliation of Third Quarter 2015 Results

GAAP Earnings per Share to Non-GAAP Earnings per Share

 

(in thousands, except per share data)    Pre-Tax
Adjustments		      Net of Tax      Earnings Per Share  

GAAP net income

         12,960       $ 0.26   

GAAP impact of change from basic to diluted share count

            (0.02 ) 
        

 

 

  

GAAP net income, adjusted to diluted share count

            0.24   

Impact of treasury method on convertible notes 1

            0.01   

Amortization of intangible assets

      3,067         1,840         0.04   

Leasehold related charges

      (5 )       (3 )       (0.00 ) 

Litigation liability

      (500 )       (300 )       (0.01 ) 

CEO transition related costs

      93         56         0.00   

One-time and acquisition related items 2

      1,862         1,117         0.02   

Non-cash interest expense on convertible notes

      3,984         2,390         0.05   
     

 

 

     

 

 

  

Non-GAAP earnings

       $ 18,061         0.35   
     

 

 

     

 

 

  

GAAP weighted shares outstanding - basic

            48,993   
        

 

 

  

GAAP weighted shares outstanding - diluted

            53,199   
        

 

 

  

Non-GAAP weighted shares outstanding - diluted

            51,434   
        

 

 

  

 

1  Excludes the impact of share dilution of the convertible bond for which the Company has a hedge in place but is considered anti-dilutive under U.S. GAAP in weighted average shares outstanding (916k shares)
2  Acquisition related items include expenses associated with M&A related activity and as incurred non-recurring items

 

6

Reconciliation of Year To Date 2015 Results

GAAP Earnings per Share to Non-GAAP Earnings per Share

 

(in thousands, except per share data)    Pre-Tax
Adjustments		      Net of Tax      Earnings Per Share  

GAAP net income

         54,788       $ 1.13   

GAAP impact of change from basic to diluted share count

            (0.08 ) 
        

 

 

  

GAAP net income, adjusted to diluted share count

            1.05   

Impact of treasury method on convertible notes 1

            0.02   

Amortization of intangible assets

      9,037         5,422         0.11   

Leasehold related charges

      3,035         1,821         0.04   

Litigation liability

      (42,507 )       (25,504 )       (0.50 ) 

CEO transition related costs

      3,563         2,138         0.04   

One-time and acquisition related items 2

      5,247         3,148         0.06   

Non-cash interest expense on convertible notes

      11,738         7,043         0.14   
     

 

 

     

 

 

  

Non-GAAP earnings

       $ 48,856       $ 0.96   
     

 

 

     

 

 

  

GAAP weighted shares outstanding - basic

            48,513   
        

 

 

  

GAAP weighted shares outstanding - diluted

            52,202   
        

 

 

  

Non-GAAP weighted shares outstanding - diluted 1

            51,003   
        

 

 

  

 

1  Excludes the impact of share dilution of the convertible bond for which the Company has a hedge in place but is considered anti-dilutive under U.S. GAAP in weighted average shares outstanding (916k shares)
2  Acquisition related items include expenses associated with M&A related activity and as incurred non-recurring items

Reconciliation of Third Quarter and Nine Months 2015 Results

GAAP net income to Adjusted EBITDA

 

(in thousands, except per share data)    Three months ended
September 30, 2015		     Nine months ended
September 30, 2015		  

GAAP net income

    $ 12,960      $ 54,788   

Interest (income) / expense, net

      6,946        20,550   

Provision for income taxes

      8,803        35,332   

Depreciation and amortization

      16,375        49,005   
  

 

 

    

 

 

  

EBITDA

    $ 45,084      $ 159,675   
  

 

 

    

 

 

  

Non-cash stock based compensation 1

      7,076        19,337   

Leasehold related charges

      (5 )      3,035   

Litigation liability

      (500 )      (42,507 ) 

CEO related transition costs

      93        3,563   

One-time and acquisition related items

      1,862        5,247   
  

 

 

    

 

 

  

Adjusted EBITDA

    $ 53,610      $ 148,350   
  

 

 

    

 

 

  

As a percentage of revenue

      26.7 %      24.9 % 

 

1  Included in CEO related transition costs are $1.2m of stock based compensation charges, which thereby were excluded from the non-cash stock based compensation line in the nine months ended

 

7

Investor Conference Call

The Company will hold a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its third quarter 2015 financial performance. 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 will be available online from the Investor Relations page of the Company’s website at www.nuvasive.com.

After the live webcast, the call will remain available on NuVasive’s website through November 27, 2015. In addition, a telephone replay of the call will be available until November 3, 2015. The replay dial-in numbers are 1-877-870-5176 for domestic callers and 1-858-384-5517 for international callers. Please use pin number: 13621771.

About NuVasive

NuVasive is an innovative global medical device company that is changing spine surgery with minimally disruptive surgical products and procedurally-integrated solutions for the spine. NuVasive has emerged from a small startup to become the #3 player in the $9 billion global spine market and remains focused on market share-taking strategies as the Company continues on its path to become the industry’s leading spine company. NuVasive offers a comprehensive spine portfolio of more than 90 unique products developed to improve spine surgery and patient outcomes. The Company’s principal procedural solution is its Maximum Access Surgery, or MAS®, platform for lateral spine fusion. MAS was designed to provide safer, reproducible, and clinically proven outcomes, and is a highly differentiated solution with fully integrated neuromonitoring, customizable exposure, and a broad offering of application-specific implants and fixation devices designed to address a variety of pathologies.

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 2015, as well as financial projections for 2015. The numbers for third quarter 2015 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 2015 represent its 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 that could cause actual growth and results to differ materially include, but are not limited to: the risk that NuVasive’s revenue or earnings projections may turn out to be inaccurate because of the preliminary nature of the forecasts; the risk of further adjustment to financial results or future financial expectations; unanticipated difficulty in selling products, generating revenue or producing expected profitability; and those 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.

 

8

NuVasive, Inc.

Consolidated Statements of Operations

(in thousands, except per share data)

 

     Three Months Ended September 30,     Nine Months Ended September 30,  
(unaudited)            2015                     2014                     2015                     2014          

Revenue

    $ 200,538      $ 189,918      $ 595,831      $ 558,090   

Cost of goods sold (excluding below amortization of intangible assets)

      49,167        47,719        143,246        135,849   
  

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit

      151,371        142,199        452,585        422,241   

Operating expenses:

         

Sales, marketing and administrative

      111,384        113,746        342,797        348,820   

Research and development

      9,199        9,068        27,245        28,590   

Amortization of intangible assets

      3,067        3,071        9,037        10,541   

Impairment of intangible assets

      —          —          —          10,708   

Litigation liability (gain) loss

      (500 )      —          (42,507 )      30,000   

Business transition costs

      110        —          6,474        —     
  

 

 

    

 

 

    

 

 

    

 

 

  

Total operating expenses

      123,260        125,885        343,046        428,659   

Interest and other expense, net:

         

Interest income

      362        241        1,125        691   

Interest expense

      (7,307 )      (6,965 )      (21,675 )      (20,809 ) 

Other income (expense), net

      387        (2,489 )      530        (2,318 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total interest and other expense, net

      (6,558 )      (9,213 )      (20,020 )      (22,436 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

      21,553        7,101        89,519        (28,854 ) 

Income tax (expense) benefit

      (8,803 )      (9,088 )      (35,332 )      4,065   
  

 

 

    

 

 

    

 

 

    

 

 

  

Consolidated net income (loss)

    $ 12,750      $ (1,987 )    $ 54,187      $ (24,789 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Add back net loss attributable to non-controlling interests

    $ (210 )    $ (157 )    $ (601 )    $ (595 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) attributable to NuVasive, Inc.

    $ 12,960      $ (1,830 )    $ 54,788      $ (24,194 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income (loss) per share attributable to NuVasive, Inc.:

         

Basic

    $ 0.26      $ (0.04 )    $ 1.13      $ (0.52 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Diluted

    $ 0.24      $ (0.04 )    $ 1.05      $ (0.52 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Weighted average shares outstanding:

         

Basic

      48,993        46,990        48,513        46,546   
  

 

 

    

 

 

    

 

 

    

 

 

  

Diluted

      53,199        46,990        52,202        46,546   
  

 

 

    

 

 

    

 

 

    

 

 

  

 

9

NuVasive, Inc.

Consolidated Balance Sheets

(in thousands, except par values and share amounts)

 

     September 30,
2015		     December 31,
2014		  
     (Unaudited)        

ASSETS

     

Current assets:

     

Cash and cash equivalents

    $ 141,328      $ 142,387   

Short-term marketable securities

      196,037        220,329   

Accounts receivable, net of allowances of $5,849 and $5,844, respectively

      115,579        118,959   

Inventory, net

      164,867        154,638   

Deferred and prepaid taxes

      73,420        59,233   

Prepaid expenses and other current assets

      7,279        10,325   
  

 

 

    

 

 

  

Total current assets

      698,510        705,871   

Property and equipment, net

      140,474        128,565   

Long-term marketable securities

      113,793        43,042   

Intangible assets, net

      86,190        96,555   

Goodwill

      154,324        154,443   

Deferred tax assets, non-current

      49,614        65,330   

Restricted cash and investments

      5,615        123,233   

Other assets

      23,444        26,420   
  

 

 

    

 

 

  

Total assets

    $ 1,271,964      $ 1,343,459   
  

 

 

    

 

 

  

LIABILITIES AND EQUITY

     

Current liabilities:

     

Accounts payable and accrued liabilities

    $ 63,545      $ 133,324   

Accrued payroll and related expenses

      32,767        38,032   

Litigation liabilities

      937        30,000   

Deferred and income tax liabilities

      2,066        13,543   
  

 

 

    

 

 

  

Total current liabilities

      99,315        214,899   

Senior Convertible Notes

      372,485        360,746   

Deferred and income tax liabilities, non-current

      8,177        12,526   

Non-current litigation liabilities

      87,553        93,700   

Other long-term liabilities

      12,742        13,230   

Commitments and contingencies

     

Stockholders’ equity:

     

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

      —          —     

Common stock, $0.001 par value; 120,000,000 shares authorized at September 30, 2015 and December 31, 2014, 52,099,475 and 47,691,744 issued and outstanding at September 30, 2015 and December 31, 2014, respectively

      52        48   

Additional paid-in capital

      973,481        847,145   

Accumulated other comprehensive loss

      (11,323 )      (9,670 ) 

Accumulated deficit

      (132,150 )      (186,938 ) 

Treasury stock at cost; 3,015,033 shares and 233,369 shares at September 30, 2015 and December 31, 2014, respectively

      (146,077 )      (10,537 ) 
  

 

 

    

 

 

  

Total NuVasive, Inc. stockholders’ equity

      683,983        640,048   

Non-controlling interests

      7,709        8,310   
  

 

 

    

 

 

  

Total equity

    $ 691,692      $ 648,358   
  

 

 

    

 

 

  

Total liabilities and equity

    $ 1,271,964      $ 1,343,459   
  

 

 

    

 

 

  

 

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NuVasive, Inc.

Consolidated Statements of Cash Flows

(in thousands)

 

     Nine Months Ended September 30,  
(Unaudited)    2015     2014  

Operating activities:

     

Consolidated net income (loss)

    $ 54,187      $ (24,789 ) 

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

     

Depreciation and amortization

      49,006        46,521   

Amortization of non-cash interest

      13,255        12,244   

Stock-based compensation

      20,570        24,779   

Impairment of intangible assets

      —          10,708   

Deferred income taxes

      37,047        —     

Reserves on current assets

      7,232        4,062   

Other non-cash adjustments

      13,127        11,317   

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

     

Accounts receivable

      2,163        (5,519 ) 

Inventory

      (19,768 )      (27,190 ) 

Prepaid expenses and other current assets

      2,512        (1,837 ) 

Accounts payable and accrued liabilities

      8,828        11,485   

Income taxes

      (52,739 )      (7,898 ) 

Accrued royalties

      (46,999 )      12,450   

Litigation liability

      (35,333 )      30,000   

Accrued payroll and related expenses

      (5,080 )      151   
  

 

 

    

 

 

  

Net cash provided by operating activities

      48,008        96,484   

Investing activities:

     

Acquisitions and other investments

      (1,357 )      (59 ) 

Purchases of intangible assets

      (28,589 )      —     

Purchases of property and equipment

      (59,905 )      (45,692 ) 

Proceeds from sales of property and equipment

      40        —     

Purchases of marketable securities

      (320,177 )      (177,850 ) 

Proceeds from sales of marketable securities

      272,666        142,051   

Purchases of restricted investments

      (62,625 )      —     

Proceeds from sales of restricted investments

      180,694        —     
  

 

 

    

 

 

  

Net cash used in investing activities

      (19,253 )      (81,550 ) 

Financing activities:

     

Incremental tax benefits related to stock-based compensation awards

      15,185        —     

Proceeds from the issuance of common stock

      9,040        15,341   

Payment of contingent consideration

      (514 )      (498 ) 

Purchase of treasury stock

      (52,532 )      (664 ) 

Other financing activities

      (131 )      (668 ) 
  

 

 

    

 

 

  

Net cash (used in) provided by financing activities

      (28,952 )      13,511   

Effect of exchange rate changes on cash

      (862 )      (613 ) 
  

 

 

    

 

 

  

(Decrease) increase in cash and cash equivalents

      (1,059 )      27,832   

Cash and cash equivalents at beginning of period

      142,387        102,825   
  

 

 

    

 

 

  

Cash and cash equivalents at end of period

    $ 141,328      $ 130,657  
  

 

 

    

 

 

  

# # #

 

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