SAN DIEGO – Oct. 24, 2017 – NuVasive, Inc. (NASDAQ: NUVA), the leader in spine technology innovation, focused on transforming spine surgery with minimally disruptive, procedurally-integrated solutions, announced today financial results for the quarter ended September 30, 2017.
Third Quarter 2017 Highlights
- Revenue increased 3.2% to $247.4 million, or 3.4% on a constant currency basis
- GAAP operating profit margin of 12.4%; Non-GAAP operating profit margin of 17.6%, up 150 basis points from prior year
- GAAP diluted earnings per share of $0.64; Non-GAAP diluted earnings per share up 30% from prior year to $0.52
- Company updates full year 2017 guidance
“Our results for the third quarter reflect continued strength in our International business with 46% growth on a constant currency basis year over year, representing the fourth consecutive quarter with growth in excess of 20%,” said Gregory T. Lucier, NuVasive’s chairman and chief executive officer. “In the U.S., we are making significant inroads in the deformity market with our RELINE® posterior fixation system and have launched multiple spinal hardware technologies over the last quarter that continue to enhance our differentiated and procedurally-focused portfolio.”
Lucier continued, “Disruptions from the recent hurricanes in our U.S. and International business negatively affected third quarter total revenue results by approximately $5 million. Excluding the impact of the hurricanes and one less selling day, revenue growth would have been approximately 6%.”
A full reconciliation of GAAP to non-GAAP measures can be found in the tables of this news release.
Third Quarter 2017 Results
NuVasive reported third quarter 2017 total revenue of $247.4 million, a 3.2% increase compared to $239.6 million for the third quarter 2016. On a constant currency basis, third quarter 2017 total revenue increased 3.4% compared to the same period last year.
For the third quarter 2017, GAAP and non-GAAP gross profit was $181.8 million and $182.0 million, respectively, while both GAAP and non-GAAP gross margin was 73.5%. These results compared to GAAP and non-GAAP gross profit of $180.5 million and $182.9 million, respectively, and GAAP and non-GAAP gross margin of 75.3% and 76.3%, respectively, for the third quarter 2016. Total GAAP and non-GAAP operating expenses were $151.2 million and $138.5 million, respectively, for the third quarter of 2017. These results compared to GAAP and non-GAAP operating expenses of $159.3 million and $144.4 million, respectively, for the third quarter 2016.
NuVasive reported a GAAP net income of $33.6 million, or $0.64 per diluted share, for the third quarter 2017 compared to $3.9 million, or $0.07 per diluted share, for the third quarter 2016.
On a non-GAAP basis, the Company reported net income of $26.7 million, or $0.52 per diluted share, for the third quarter 2017 compared to $21.1 million, or $0.40 per diluted share, for the third quarter 2016.
Cash and cash equivalents were approximately $62.2 million at September 30, 2017.
Updated Full Year Guidance for 2017
The Company updated its full year 2017 financial guidance to reflect third-quarter results, the continued impact of Hurricane Maria in Puerto Rico in the fourth quarter and anticipated lower U.S. procedural volumes continuing into the fourth quarter.
- Revenue of approximately $1,030.0 million for 2017, which now includes approximately $2 million in year-over-year currency headwinds, and reflects 7.1% growth on a reported basis and 7.2% growth on a constant currency basis compared to revenue of $962.0 million for 2016; versus a prior expectation of $1,065.0 million for 2017;
- Non-GAAP diluted earnings per share of approximately $1.91, compared with the prior expectation of $2.00, compared to non-GAAP diluted earnings per share of $1.66 for 2016;
- Non-GAAP operating profit margin of approximately 16.6%, compared with the prior expectation of 17.1%, compared to non-GAAP diluted operating profit margin of 16.1% for 2016;
- Adjusted EBITDA margin of approximately 25.9% for 2017; compared with the prior expectation of approximately 26.7% for 2017, compared to 25.2% for 2016; and
- Non-GAAP effective tax expense rate of approximately 34%; slight improvement from prior expectation of approximately 35% for 2017.
Supplementary Financial Information
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.
Investor Conference Call
NuVasive will hold a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its financial performance for the third quarter 2017. 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 21, 2017. In addition, a telephone replay of the call will be available until October 31, 2017. 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: 13671687.
About NuVasive
NuVasive, Inc. (NASDAQ: NUVA) is the leader in spine technology innovation, focused on transforming spine surgery and beyond with minimally invasive, procedurally-integrated solutions designed to deliver reproducible and clinically-proven surgical outcomes. The Company’s portfolio includes access instruments, implantable hardware, biologics, software systems for surgical planning, navigation and imaging solutions, magnetically adjustable implant systems for spine and orthopedics, and intraoperative monitoring service offerings. With $962 million in revenues (2016), NuVasive has an approximate 2,300 person workforce in more than 40 countries serving surgeons, hospitals and patients. For more information, please visit www.nuvasive.com.
Forward-Looking Statements
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 2017, as well as projections for 2017 financial guidance and longer-term financial performance goals. The Company’s projections for 2017 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.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.
Investor Contact:
Suzanne Hatcher
NuVasive, Inc.
1-858-458-2240
[email protected]
Media Contact:
Stefanie Mazer
NuVasive, Inc.
1-858-320-5243
[email protected]