NuVasive Reports Third Quarter 2009 Financial Results

Share Name	Share Symbol	Market	Type
Noratis AG	TG:NUVA	Tradegate	Ordinary Share

	Price Change	% Change	Share Price	Bid Price	Offer Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	0.00	0.00%	1.51	1.42	1.72				0.00	06:32:01

Noratis (TG:NUVA)
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- Increases 2009 Guidance for Revenue and Earnings per Share - Third Quarter 2009 Highlights: - Total revenue of $94.9 million; up 41.8% from third quarter 2008 and up 7.3% from second quarter 2009 - Gross margin of 80.6% compared to 81.8% for third quarter 2008 and to 81.1% for second quarter 2009 - GAAP earnings of $5.1 million or $0.13 per share; Non-GAAP earnings of $11.0 million or $0.28 per share SAN DIEGO, Oct. 20 /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 September 30, 2009. NuVasive reported third quarter revenue of $94.9 million, a 41.8% increase over the $66.9 million for the third quarter 2008 and a 7.3% increase over the $88.5 million for the second quarter 2009. Gross profit for the third quarter 2009 was $76.5 million and gross margin was 80.6%, compared to a gross profit of $54.7 million and a gross margin of 81.8% for the third quarter 2008. For the second quarter 2009, gross profit was $71.8 million and gross margin was 81.1%. Total operating expenses for the third quarter 2009 were $70.4 million compared to $77.7 million in the third quarter 2008 and $67.3 million in the second quarter 2009. Operating expenses include $0.6 million of acquisition related costs, a $2.0 million reversal of a leasehold termination charge and $0.8 million related to intellectual property litigation. On a GAAP basis, the Company reported net income of $5.1 million, or $0.13 per share, for the third quarter 2009. On a Non-GAAP basis, the Company reported net income of $11.0 million, or $0.28 per share, for the third quarter 2009. The Non-GAAP earnings per share calculations for the third quarter exclude (i) stock-based compensation of $5.2 million; (ii) amortization of acquired intangible assets of $1.4 million; (iii) acquisition related costs of $0.6 million; (iv) intellectual property litigation costs of $0.8 million, and (v) the reversal of a leasehold termination charge of $2.0 million. Cash, cash equivalents and short and long-term marketable securities were $200.2 million at September 30, 2009. Alex Lukianov, Chairman and Chief Executive Officer, said, "NuVasive is pioneering the lateral approach with our proprietary XLIF® procedure and MAS® platform. We continue to take market share and expand our addressable market by broadening the application of our technology throughout the spine. We are the only company with the ability to laterally address a wide range of applications in the lumbar and thoracic spine, from single level procedures to complex multi level deformity corrections. We are pleased with our financial performance in the third quarter of 2009, and are confident in our strategy to become the #4 global spine company." Updated 2009 Financial Guidance NuVasive is updating its full year 2009 financial guidance as follows: Revenue: -- $365 million to $367 million; up from previous guidance of $360 million to $365 million Gross Margin: -- Gross Margin of approximately 81% EPS: -- GAAP: earnings per share of $0.11 to $0.14; up from previous guidance of $0.06 to $0.08 -- Earnings per share of $0.27 to $0.30 excluding adjustments per the enclosed table; up from previous guidance of $0.25 to $0.27 Reconciliation of Non-GAAP Information Management uses certain Non-GAAP financial measures such as Non-GAAP earnings per share, which exclude intellectual property litigation expenses, the reversal of leasehold termination charges, acquisition related costs, stock-based compensation, and the amortization of acquired intangible assets. 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 Third Quarter 2009 Results (in thousands, except per share amounts) $ Per Share ----------- ----------- GAAP net income $5,064 $0.13 IP litigation costs 780 0.02 Reversal of leasehold termination charge (1,997) (0.05) Acquisition related costs 621 0.02 --- ---- Earnings excluding other adjustments 4,468 0.11 Non-cash stock-based compensation 5,166 0.13 Amortization of acquired intangible assets 1,364 0.04 ----- ---- Non-GAAP earnings $10,998 $0.28 ======= ===== Diluted weighted shares outstanding 39,216 ====== Reconciliation of Year-to-Date 2009 Results (in thousands, except per share amounts) $ Per Share ----------- ----------- GAAP net income $3,527 $0.09 IP litigation costs 3,408 0.09 Reversal of leasehold termination charge (1,997) (0.05) Acquisition related costs 3,096 0.08 ----- ---- Earnings excluding other adjustments 8,034 0.21 Non-cash stock-based compensation 18,165 0.47 Amortization of acquired intangible assets 4,071 0.11 ----- ---- Non-GAAP earnings $30,270 $0.79 ======= ===== Diluted weighted shares outstanding 38,384 ====== 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 $0.11 $0.14 IP litigation costs 0.13 0.13 Reversal of leasehold termination charge (0.05) (0.05) Acquisition related costs 0.08 0.08 ---- ---- Earnings per share excluding other adjustments 0.27 0.30 Non-cash stock-based compensation 0.64 0.64 Amortization of acquired intangible assets 0.13 0.13 ---- ---- Non-GAAP earnings per share $1.04 $1.07 ===== ===== Diluted weighted shares outstanding 38,800 38,800 ====== ====== 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 callers. 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 November 20, 2009. In addition, a telephonic replay of the call will be available until November 3, 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 331825. 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 Nine Months Ended September 30, September 30, ------------------ ----------------- 2009 2008 2009 2008 ---- ---- ---- ---- Revenues $94,916 $66,915 $263,405 $175,501 Cost of goods sold 18,417 12,195 49,901 30,845 ------ ------ ------ ------ Gross profit 76,499 54,720 213,504 144,656 Operating expenses: Sales, marketing and administrative 59,761 54,557 176,391 135,975 Research and development 10,654 6,396 30,047 19,797 In-process research and development - 16,700 - 20,876 - ------ - ------ Total operating expenses 70,415 77,653 206,438 176,648 Interest income (expense) and other, net (1,648) (146) (4,850) 764 Net loss attributable to noncontrolling interests 628 - 1,311 - --- - ----- - Total other income (expense) (1,020) (146) (3,539) 764 ------ -------- ------ -------- Net income (loss) attributable to NuVasive, Inc. $5,064 $(23,079) $3,527 $(31,228) ====== ======== ====== ======== Net income (loss) per share attributable to NuVasive, Inc.: Basic net income (loss) per share $0.13 $(0.64) $0.10 $(0.88) ===== ====== ===== ====== Diluted net income (loss) per share $0.13 $(0.64) $0.09 $(0.88) ===== ====== ===== ====== Weighted average shares - basic 37,733 35,931 37,008 35,674 ====== ====== ====== ====== Weighted average shares - diluted 39,216 35,931 38,384 35,674 ====== ====== ====== ====== Stock-based compensation is included in operating expenses in the following categories: Sales, marketing and administrative $4,265 $4,499 $14,748 $13,541 Research and development 901 922 3,417 2,178 --- --- ----- ----- $5,166 $5,421 $18,165 $15,719 ====== ====== ======= ======= NuVasive, Inc. Unaudited Condensed Consolidated Balance Sheets (in thousands) September 30, December 31, 2009 2008 -------------- ------------- ASSETS (In thousands, except par value) Current assets: Cash and cash equivalents $134,276 $132,318 Short-term marketable securities 55,915 45,738 Accounts receivable, net 51,245 51,622 Inventory 85,892 68,834 Prepaid expenses and other current assets 3,925 3,466 ----- ----- Total current assets 331,253 301,978 Property and equipment, net 77,543 73,686 Long-term marketable securities 10,032 45,305 Goodwill 102,264 2,332 Intangible assets, net 104,601 54,767 Other assets 7,337 9,338 ----- ----- Total assets $633,030 $487,406 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $23,183 $26,633 Accrued payroll and related expenses 20,568 17,132 Acquisition related liabilities 15,414 - Royalties payable 2,201 1,722 ----- ----- Total current liabilities 61,366 45,487 Senior convertible notes 230,000 230,000 Long-term acquisition related liabilities 30,318 12,111 Other long-term liabilities 29,099 12,177 Commitments and contingencies Noncontrolling interests 13,689 - Stockholders' equity: Common stock 38 36 Additional paid-in capital 460,290 383,293 Accumulated other comprehensive income (loss) 211 (190) Accumulated deficit (191,981) (195,508) -------- -------- Total stockholders' equity 268,558 187,631 ------- ------- Total liabilities and stockholders' equity $633,030 $487,406 ======== ======== NuVasive, Inc. Unaudited Condensed Consolidated Statements of Cash Flows (in thousands) Nine Months Ended September 30, ----------------- 2009 2008 ---- ---- Operating activities: Net income (loss) $3,527 $(31,228) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 22,005 15,671 In-process research and development - 20,876 Stock-based compensation 18,165 15,719 Leasehold abandonment (1,997) 4,486 Noncontrolling interest (1,311) - Allowance for doubtful accounts 1,175 410 Allowance for excess and obsolete inventory 2,470 (3) Other non-cash adjustments 2,248 1,019 Changes in operating assets and liabilities: Accounts receivable (329) (18,986) Inventory (19,027) (22,136) Prepaid expenses and other current assets 788 (941) Accounts payable and accrued liabilities 2,410 3,898 Accrued payroll and related expenses 2,742 1,778 ----- ----- Net cash provided by (used in) operating activities 32,866 (9,437) Investing activities: Cash paid for acquisitions (24,055) (41,256) Investment in Progentix (10,000) - Acquisition related milestone payments (10,000) - Purchases of property and equipment (21,250) (34,161) Purchases of short-term marketable securities (46,678) (83,069) Sales of short-term marketable securities 56,365 29,842 Purchases of long-term marketable securities (17,964) (51,390) Sales of long-term marketable securities 32,971 14,778 Other assets - 544 - --- Net cash provided by (used in) investing activities (40,611) (164,712) 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 9,618 8,480 ----- ----- Net cash provided by financing activities 9,618 216,622 Effect of exchange rate changes on cash 85 - -- - Increase in cash and cash equivalents 1,958 42,473 Cash and cash equivalents at beginning of year 132,318 61,915 ------- ------ Cash and cash equivalents at end of year $134,276 $104,388 ======== ======== DATASOURCE: NuVasive, Inc. CONTACT: Kevin C. O'Boyle, EVP & Chief Financial Officer of NuVasive, Inc., +1-858-909-1998, ; or Investors: Patrick F. Williams, Vice President, Finance & Investor Relations of NuVasive, Inc., +1-858-638-5511, ; or Media: Jason Rando of The Ruth Group, +1-646-536-7025, Web Site: http://www.nuvasive.com/

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NUVA Noratis AG