SOURCE: NuVasive, Inc.

NuVasive, Inc.

October 25, 2016 17:00 ET

NuVasive Reports Third Quarter 2016 Financial Results

SAN DIEGO, CA--(Marketwired - October 25, 2016) - 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, 2016.

Third Quarter 2016 Highlights

  • Revenue increased 19.5% to $239.6 million, or 18.9% on a constant currency basis
  • GAAP operating profit margin of 8.8%; Non-GAAP operating profit margin of 16.1%
  • GAAP diluted earnings per share of $0.07; Non-GAAP diluted earnings per share up 14.3% from prior year to $0.40

"Our results for the third quarter reflect continued strength in procedural volumes across the United States, as well as strong performances in our European and Australian markets," said Gregory T. Lucier, NuVasive's chairman and chief executive officer. "While our revenue results for the quarter were lower than our expectations due to capital and stocking orders in the United States that did not come through late in the quarter as planned, we believe this minor disruption is temporary. During the quarter, we continued to experience positive trends, including domestic procedural volumes in line with prior quarters and the conversion of surgeons at an increasingly faster pace, signaling stable market trends and competitive dynamics that favor our innovation and spine-only focused strategy.

"As anticipated, our results were also impacted by our dilator being off the market in Japan for a large portion of the quarter, which resulted in lower XLIF revenues. If XLIF procedures in Japan had been performed at their normal pace, the underlying revenue growth rate of our core business would have been in the mid-to-high single digits. We have resubmitted our dilator for approval with the Japanese Ministry of Health, and to be prudent, we have updated our financial guidance to reflect the removal of XLIF revenues in Japan for the fourth quarter."

Lucier continued, "Our intense focus on operational excellence is paying off as we delivered profitability and earnings that were significantly higher than our internal expectations, while continuing to invest in a broader innovation agenda and our new manufacturing facility in Ohio to drive long-term shareholder value creation. Based on these dynamics, we are reiterating our full year 2016 financial guidance in line with prior expectations, with the exception of revenue."

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

Third Quarter 2016 Results

NuVasive's financial results for the third quarter 2016 are inclusive of results from Ellipse Technologies, Inc. Mega Surgical and Biotronic NeuroNetwork, as these previously disclosed acquisitions were completed earlier in the year. Ellipse Technologies now operates as the renamed division NuVasive Specialized Orthopedics (NSO). Biotronic NeuroNetwork now operates alongside the Company's existing Impulse Monitoring business under the renamed division NuVasive Clinical Services (NCS).

NuVasive reported third quarter 2016 total revenue of $239.6 million, a 19.5% increase compared to $200.5 million for the third quarter 2015. On a constant currency basis, third quarter 2016 total revenue increased 18.9% compared to the same period last year.

For the third quarter 2016, GAAP and non-GAAP gross profit was $180.5 million and $182.9 million, respectively, while GAAP and non-GAAP gross margin was 75.3% and 76.3%, respectively. These results compared to GAAP and non-GAAP gross profit of $151.4 million and GAAP and non-GAAP gross margin of 75.5% for the third quarter 2015. Total GAAP and non-GAAP operating expenses were $159.3 million and $144.4 million, respectively, for the third quarter of 2016. These results compared to GAAP and non-GAAP operating expenses of $123.3 million and $118.7 million, respectively, for the third quarter 2015.

NuVasive reported a GAAP net income of $3.9 million, or $0.07 per diluted share, for the third quarter 2016 compared to $13.0 million, or $0.24 per diluted share, for the third quarter 2015.

On a non-GAAP basis, the Company reported net income of $21.1 million, or $0.40 per diluted share for the third quarter 2016 compared to $18.1 million, or $0.35 per diluted share, for the third quarter 2015.

Cash, cash equivalents and short and long-term marketable securities were approximately $204 million at September 30, 2016.

Updated Guidance for 2016

The Company reiterated full year 2016 financial guidance in line with prior expectations, with the exception of revenue. The Company expects full year 2016 revenue to be lower than prior expectations based on the Company's third quarter 2016 revenue results and the Company's revised forecast for fourth quarter 2016 revenue in Japan.

  • Revenue of approximately $952.0 million for 2016, which includes a $1 million benefit from currency or approximately 17.4% growth compared to revenue of $811.1 million for 2015; versus a prior expectation of $962.0 million for 2016;
  • Non-GAAP diluted earnings per share of approximately $1.64, an increase of approximately 25% and in line with the prior expectation of $1.64, compared to non-GAAP diluted earnings per share of $1.31 for 2015;
  • Non-GAAP operating profit margin of approximately 16.0%, an increase of 60 basis points compared to 15.4% for 2015; in line with the prior expectation of approximately 16.0% for 2016;
  • Adjusted EBITDA margin of approximately 25.4% for 2016; in line with the prior expectation of approximately 25.4% for 2016, compared to 25.2% for 2015; and
  • Non-GAAP effective tax expense rate of approximately 37%; in line with the prior expectation of approximately 37% for 2016.

Supplementary Financial Information

   
  
Reconciliation of Full Year EPS Guidance  
          2016 Guidance  
      2015
Actuals
  Prior 1,2   Current 1,3  
   GAAP net income per share  $1.26   $0.84   $0.76  
   Impact of change to diluted share count   0.03    0.03    0.03  
   GAAP net income per share, adjusted to diluted Non-GAAP share count  $1.30   $0.88   $0.79  
    Litigation liability gain   (0.82 )  (0.83 )  (0.83 )
    Business transition costs 4   0.27    0.20    0.26  
    Non-cash interest expense on convertible notes   0.31    0.38    0.38  
    Non-cash purchase accounting adjustments on acquisitions 5   -    0.28    0.28  
    Loss on repurchase of convertible notes   -    0.34    0.34  
    Amortization of intangible assets   0.24    0.73    0.78  
    In-process research & development   0.02    -    -  
    Tax effect of adjustments 6   (0.01 )  (0.34 )  (0.36 )
   Non-GAAP earnings per share  $1.31   $1.64   $1.64  
                    
   GAAP Weighted shares outstanding - basic   48,687    50,004    50,050  
   GAAP Weighted shares outstanding - diluted   52,425    53,942    54,100  
   Non-GAAP Weighted shares outstanding - diluted   51,110    52,000    52,050  
                    
1  Prior guidance provided July 26, 2016. Current guidance reflects guidance provided October 25, 2016, as updated for the expected changes in currency.  
2  Effective tax expense rate of approximately 41% applied to GAAP earnings and approximately 37% applied to Non-GAAP earnings.  
3  Effective tax expense rate of approximately 42% applied to GAAP earnings and approximately 37% applied to Non-GAAP earnings.  
4  Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.  
5  Represents 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.  
6  The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company's tax filings. The impact of the changes to the tax rate results in an annual estimated rate of approximately 37% on a non-GAAP basis.  
    
    
  
  
Reconciliation of Non-GAAP Operating Margin %  
                 
          2016 Guidance  
   (in thousands, except %)  2015 Actuals   Prior 1   Current 1  
   Non-GAAP Gross Margin % [A]  76.0 % 76.4 % 76.4 %
   Non-cash purchase accounting adjustments on acquisitions 2  0.0 % (1.5 %) (1.5 %)
   GAAP Gross Margin [B]  76.0 % 74.9 % 74.8 %
                 
   GAAP & Non-GAAP Sales, Marketing & Administrative Expense [C]  56.4 % 55.4 % 55.3 %
                 
   Non-GAAP Research & Development Expense [D]  4.3 % 5.1 % 5.1 %
   In-process research & development  0.1 % 0.0 % 0.0 %
   GAAP Research & Development Expense [E]  4.4 % 5.1 % 5.1 %
                 
   Litigation liability [F]  (5.2 %) (4.5 %) (4.5 %)
   Amortization of intangible assets [G]  1.5 % 4.0 % 4.3 %
   Business transition costs [H] 3  1.7 % 1.2 % 1.5 %
                 
   Non-GAAP Operating Margin % [A - C - D]  15.4 % 16.0 % 16.0 %
                 
   GAAP Operating Margin % [B - C - E - F - G - H]  17.1 % 13.7 % 13.2 %
                 
1  Prior guidance provided July 26, 2016. Current guidance reflects guidance provided October 25, 2016, as updated for the expected changes in currency.  
2  Represents 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.  
3  Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.  
                 
            
 
 
Reconciliation of EBITDA %
             
         2016 Guidance
   (in thousands, except %)  2015
Actuals
 Prior 1  Current 1
   Net Income / (Loss)  8.2%  4.7%  4.3%
    Interest (income) / expense, net  3.4%  5.9%  6.0%
    Provision for income taxes  5.8%  3.2%  3.1%
    Depreciation and amortization  8.1%  10.5%  10.6%
   EBITDA  25.5%  24.3%  24.1%
    Non-cash stock based compensation  3.1%  2.9%  2.9%
    Business transition costs 2  1.7%  1.1%  1.4%
    Non-cash purchase accounting adjustments on acquisitions 3  0.0%  1.5%  1.5%
    In-process research & development  0.1%  0.0%  0.0%
    Litigation liability gain  (5.2%)  (4.5%)  (4.5%)
   Adjusted EBITDA  25.2%  25.4%  25.4%
             
1  Prior guidance provided July 26, 2016. Current guidance reflects guidance provided October 25, 2016, as updated for the expected changes in currency.
2  Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.
3  Represents 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.
             
         

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

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 profit margin, which exclude amortization of intangible assets, non-cash purchase accounting adjustments on acquisitions, business transition costs, CEO transition related costs, certain litigation charges, significant one-time items, non-cash interest expense and/or losses on repurchase of convertible notes, and the impact from taxes related to these items, including those taxes that would have occurred in lieu of these items. 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, non-cash purchase accounting adjustments on acquisition, business transition costs, CEO transition related costs, certain litigation charges, 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.

           
           
   Reconciliation of Third Quarter 2016 Results
   GAAP Net Income per Share to Non-GAAP Earnings per Share
           
   (in thousands, except per share data)  Adjustments   Diluted Earnings
Per Share
   GAAP net income  $3,926   $0.07
             
    Business transition costs 1   3,451     
    Non-cash interest expense on convertible notes   5,186     
    Non-cash purchase accounting adjustments on acquisitions 2   2,457     
    Amortization of intangible assets   11,115     
    Tax effect of adjustments 3   (5,010 )   
   Adjustments to GAAP net loss   17,199    0.33
   Non-GAAP earnings  $21,125   $0.40
             
             
   GAAP weighted shares outstanding - diluted        55,782
   Non-GAAP weighted shares outstanding - diluted        52,633
             
1  Costs related to acquisition, integration and business transition activities which includes severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.
2  Represents 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.
3  The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company's tax filings. The impact of the changes to the tax rate results in an annual estimated rate of approximately 37% on a non-GAAP basis. The result of these adjustments is a change in the annual effective tax rate from approximately 29% to 37%. The Company adopted ASU 2016-09 Stock Compensation in Q2 2016 which was effective as of January 1, 2016 with retrospective adjustment. The result of the retrospective adjustment resulted in a change in the Q1 2016 quarterly effective tax rate on a non-GAAP basis from approximately 41% to 36%.
             
          
           
           
   Reconciliation of Year To Date 2016 Results
   GAAP Net Income per Share to Non-GAAP Earnings per Share
           
   (in thousands, except per share data)  Adjustments   Diluted Earnings
Per Share
   GAAP net income  $30,771   $0.58
             
    Litigation liability gain   (43,310 )   
    Business transition costs 1   11,514     
    Non-cash interest expense on convertible notes   14,547     
    Non-cash purchase accounting adjustments on acquisitions 2   14,747     
    Loss on repurchases of convertible notes   17,444     
    Amortization of intangible assets   28,945     
    Tax effect of adjustments 3   (15,759 )   
   Adjustments to GAAP net income   28,128    0.54
   Non-GAAP earnings  $58,899   $1.14
             
             
   GAAP weighted shares outstanding - diluted        53,498
   Non-GAAP weighted shares outstanding - diluted        51,841
             
1  Costs related to acquisition, integration and business transition activities which includes severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.
2  Represents 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.
3  The impact on results from taxes include tax effecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company's tax filings. The impact of the changes to the tax rate results in an annual estimated rate of approximately 37% on a non-GAAP basis. The result of these adjustments is a change in the annual effective tax rate from approximately 29% to 37%. The Company adopted ASU 2016-09 Stock Compensation in Q2 2016 which was effective as of January 1, 2016 with retrospective adjustment. The result of the retrospective adjustment resulted in a change in the Q1 2016 quarterly effective tax rate on a non-GAAP basis from approximately 41% to 36%.
             
          
             
             
   Reconciliation of Third Quarter and Nine Months 2016 Results  
   GAAP net income to Adjusted EBITDA  
             
      Three months ended   Nine months ended  
   (in thousands, except per share data)  September 30, 2016   September 30, 2016  
               
   GAAP net income  $3,926   $30,771  
    Interest (income) / expense, net 1   10,789    46,508  
    Provision for income taxes   6,972    17,383  
    Depreciation and amortization   27,158    72,865  
   EBITDA  $48,845   $167,527  
    Litigation liability gain       (43,310 )
    Non-cash purchase accounting related charges 2   2,457    14,747  
    Business transition costs 3   3,451    11,514  
    Non-cash stock based compensation   7,288    19,645  
   Adjusted EBITDA  $62,041   $170,123  
   As a percentage of revenue   25.9 %  24.6 %
               
1  Included in Interest (income) / expense, net for the nine months ended September 30, 2016 is loss on extinguishment of debt for $17.4 million.  
2  Represents 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.  
3  Costs related to acquisition, integration and business transition activities which includes severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs and other costs directly associated with such activities.  
               
           

Investor Conference Call

NuVasive will hold a conference call today at 5:30 p.m. ET / 2:30 p.m. PT to discuss the results of its financial performance for the third quarter 2016. 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 28, 2016. In addition, a telephone replay of the call will be available until November 2, 2016. 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: 13646026.

About NuVasive

NuVasive, Inc. (NASDAQ: NUVA) is a world leader in minimally invasive, procedurally-integrated spine solutions. From complex spinal deformity to degenerative spinal conditions, NuVasive is transforming spine surgery with innovative technologies designed to deliver reproducible and clinically proven surgical outcomes. NuVasive's highly differentiated, procedurally-integrated solutions include access instruments, implantable hardware and software systems for surgical planning and reconciliation technology that centers on achieving the global alignment of the spine. With $811 million in revenues (2015), NuVasive has an approximate 2,200 person workforce in more than 40 countries around the world. For more information, please visit www.nuvasive.com.

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 2016, as well as projections for 2016 financial guidance and longer-term financial performance goals. The Company's projections for 2016 financial guidance and longer-term financial performance goals represent current estimates, including initial estimates of the potential benefits, synergies and cost savings associated with acquisitions, which 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; the risk that acquisitions will not be integrated successfully or that the benefits and synergies from the acquisition may not be fully realized or may take longer to realize than expected; 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.com. The forward-looking statements contained herein are based on the current expectations and assumptions of NuVasive and not on historical facts. 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.
Consolidated Statements of Operations
(in thousands, except per share data)
             
             
   Three Months Ended September 30,  Nine Months Ended September 30,
   2016  2015  2016  2015
(unaudited)                     
Revenue  $239,649   $200,538   $690,963   $595,831  
Cost of goods sold (excluding below amortization of intangible assets)   59,196    49,167    173,167    143,246  
 Gross profit   180,453    151,371    517,796    452,585  
Operating expenses:                     
 Sales, marketing and administrative   131,886    110,554    391,211    338,444  
 Research and development   12,516    9,189    35,016    27,227  
 Amortization of intangible assets   11,438    3,067    29,912    9,037  
 Litigation liability gain       (500 )  (43,310 )  (42,507 )
 Business transition costs   3,451    950    11,514    10,845  
  Total operating expenses   159,291    123,260    424,343    343,046  
Interest and other expense, net:                     
 Interest income   190    362    924    1,125  
 Interest expense   (10,979 )  (7,307 )  (29,988 )  (21,675 )
 Loss on repurchases of convertible notes           (17,444 )    
 Other income (loss), net   94    387    (102 )  530  
  Total interest and other expense, net   (10,695 )  (6,558 )  (46,610 )  (20,020 )
  Income before income taxes   10,467    21,553    46,843    89,519  
Income tax expense   (6,972 )  (8,803 )  (17,383 )  (35,332 )
 Consolidated net income  $3,495   $12,750   $29,460   $54,187  
Add back net loss attributable to non-controlling interests  $(431 ) $(210 ) $(1,311 ) $(601 )
  Net income attributable to NuVasive, Inc.  $3,926   $12,960   $30,771   $54,788  
                      
Net income per share attributable to NuVasive, Inc.:                     
 Basic  $0.08   $0.26   $0.62   $1.13  
 Diluted  $0.07   $0.24   $0.58   $1.05  
Weighted average shares outstanding:                     
 Basic   50,264    48,993    49,970    48,513  
 Diluted   55,782    53,199    53,498    52,202  
                  
                  
 
NuVasive, Inc.
Consolidated Balance Sheets
(in thousands, except par values and share amounts)
       
       
   September 30, 2016  December 31, 2015
ASSETS  (Unaudited)   
Current assets:           
 Cash and cash equivalents  $203,818   $192,339  
 Short-term marketable securities       165,423  
 Accounts receivable, net of allowances of $8,335 and $5,320, respectively   143,818    127,595  
 Inventory, net   212,784    168,140  
 Prepaid income taxes   46,904    40,540  
 Prepaid expenses and other current assets   9,573    8,790  
  Total current assets   616,897    702,827  
Property and equipment, net   179,913    141,441  
Long-term marketable securities       112,332  
Intangible assets, net   303,928    85,076  
Goodwill   498,686    154,281  
Deferred tax assets   4,633    83,691  
Restricted cash and investments   7,420    5,615  
Other assets   24,568    17,404  
  Total assets  $1,636,045   $1,302,667  
LIABILITIES AND EQUITY      
Current liabilities:           
 Accounts payable and accrued liabilities  $72,581   $60,985  
 Contingent consideration liabilities   45,005      
 Accrued payroll and related expenses   41,010    37,641  
 Income tax liabilities   828    990  
 Short-term senior convertible notes   120,975      
  Total current liabilities   280,399    99,616  
Long term senior convertible notes   559,950    372,920  
Deferred and income tax liabilities, non-current   26,239    8,602  
Non-current litigation liabilities       88,261  
Other long-term liabilities   46,643    14,425  
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, 2016 and December 31, 2015, 55,096,226 and 52,616,471 issued and outstanding at September 30, 2016 and December 31, 2015, respectively   55    53  
 Additional paid-in capital   1,033,298    989,387  
 Accumulated other comprehensive loss   (5,891 )  (12,112 )
 Accumulated deficit   (73,235 )  (104,006 )
 Treasury stock at cost; 4,751,464 shares and 3,316,794 shares at September 30, 2016 and December 31, 2015, respectively   (237,411 )  (161,788 )
  Total NuVasive, Inc. stockholders' equity   716,816    711,534  
Non-controlling interests   5,998    7,309  
  Total equity  $722,814   $718,843  
  Total liabilities and equity  $1,636,045   $1,302,667  
           
           
 
NuVasive, Inc.
Consolidated Statements of Cash Flows
(in thousands)
       
   Nine Months Ended September 30,
   2016  2015
(unaudited)           
Operating activities:           
 Consolidated net income  $29,460   $54,187  
 Adjustments to reconcile net income to net cash provided by operating activities:           
  Depreciation and amortization   73,765    49,006  
  Loss on repurchases of convertible notes   17,444      
  Amortization of non-cash interest   16,906    13,255  
  Stock-based compensation   19,645    20,570  
  Reserves on current assets   9,027    7,232  
  Other non-cash adjustments   11,369    13,127  
  Deferred income taxes   24,810    37,047  
  Changes in operating assets and liabilities, net of effects from acquisitions:           
   Accounts receivable   (3,038 )  2,163  
   Inventory   (22,423 )  (19,768 )
   Prepaid expenses and other current assets   (3,457 )  2,512  
   Accounts payable and accrued liabilities   5,939    8,828  
   Accrued royalties   (85 )  (46,999 )
   Accrued payroll and related expenses   (1,670 )  (5,080 )
   Litigation liability   (88,450 )  (35,333 )
   Income taxes   6,778    (52,739 )
    Net cash provided by operating activities   96,020    48,008  
Investing activities:           
 Acquisition of Ellipse Technologies, net of cash acquired   (380,080 )    
 Other acquisitions and investments   (108,150 )  (1,357 )
 Purchases of intangible assets   (5,918 )  (28,589 )
 Proceeds from sales of property and equipment        40  
 Purchases of property and equipment   (73,882 )  (59,905 )
 Purchases of marketable securities   (128,956 )  (320,177 )
 Proceeds from sales of marketable securities   407,032    272,666  
 Sales of restricted investments       180,694  
 Purchases of restricted investments       (62,625 )
    Net cash used in investing activities   (289,954 )  (19,253 )
Financing activities:           
 Incremental tax benefits related to stock-based compensation awards       15,185  
 Proceeds from the issuance of common stock   6,668    9,040  
 Payment of contingent consideration       (514 )
 Purchase of treasury stock   (24,441 )  (52,532 )
 Proceeds from issuance of convertible debt, net of issuance costs   634,140      
 Proceeds from sale of warrants   44,850      
 Purchase of convertible note hedge   (111,150 )    
 Repurchases of convertible notes   (343,835 )    
 Proceeds from revolving line of credit   50,000      
 Repayments on revolving line of credit   (50,000 )    
 Other financing activities   (1,701 )  (131 )
    Net cash provided by (used in) financing activities   204,531    (28,952 )
 Effect of exchange rate changes on cash   882    (862 )
    Increase (decrease) in cash and cash equivalents   11,479    (1,059 )
 Cash and cash equivalents at beginning of period   192,339    142,387  
 Cash and cash equivalents at end of period  $203,818   $141,328  
          
          

Contact Information

  • Investor Contact:
    Suzanne Hatcher
    NuVasive, Inc.
    1-858-458-2240
    Email contact


    Media Contact:
    Michael Farrington
    NuVasive, Inc.
    1-858-909-1940
    Email contact