NuVasive Reports First Quarter 2010 Financial Results

SAN DIEGO, April 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 March 31, 2010.

NuVasive reported first quarter revenue of $109.1 million, a 36.3% increase over the $80.0 million for the first quarter 2009 and a 2.0% increase over the $106.9 million for the fourth quarter 2009.

Gross profit for the first quarter 2010 was $89.6 million and gross margin was 82.2%, compared to a gross profit of $67.0 million and a gross margin of 83.8% for the first quarter 2009. For the fourth quarter 2009, gross profit was $88.9 million and gross margin was 83.2%.  

Total operating expenses for the first quarter 2010 were $86.7 million compared to $70.4 million in the first quarter 2009 and $84.7 million in the fourth quarter 2009.  

On a GAAP basis, the Company reported net income of $1.1 million, or $0.03 per share, for the first quarter 2010.  

On a Non-GAAP basis, the Company reported net income of $8.3 million, or $0.21 per share, for the first quarter 2010.  The Non-GAAP earnings per share calculations for the first quarter exclude on a pre-tax basis (i) intellectual property litigation costs of $1.3 million; (ii) acquisition related costs of $0.4 million; (iii) stock-based compensation of $6.4 million; and (iv) amortization of intangible assets of $1.4 million.

Cash, cash equivalents and short and long-term marketable securities were $208.1 million at March 31, 2010.

Alex Lukianov, Chairman and Chief Executive Officer, said, "We exceeded our expectations, achieving revenue growth of over 35%, driven by continued adoption of the XLIF® technology, stronger traction from our new product launches, and aided in part by the positive reimbursement progress during the quarter.  Our financial performance across earnings and operating cash flow signal a great start to what will be another outstanding year.  Today's results mark NuVasive's 24th quarter, and 6th year, of consecutively meeting or exceeding expectations as a public company.  Our keen focus on being the most creative spine technology company in the world and achieving exceptional results through speed of innovation, Absolute Responsiveness®, and superior clinical outcomes will continue to drive us toward our goal of becoming the #4 global spine company."

Full Year 2010 Financial Guidance:

• Revenue of $480 million to $500 million
• GAAP EPS, net of tax and "If-converted" method, of $1.58 to $1.70
• Non-GAAP EPS, net of tax and "If-converted" method, of $1.13 to $1.25
• Non-GAAP Operating Margin of ~17%

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, acquisition related items, non-cash stock-based compensation, and the amortization of 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.

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 www.nuvasive.com.

After the live webcast, the call will remain available on NuVasive's website, www.nuvasive.com, through May 20, 2010.  In addition, a telephonic replay of the call will be available until May 4, 2010.  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 348544.

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 $5.1 billion U.S. spine implant market. Additionally, the Company has expanded into the $1.7 billion global biologics market, the $1.7 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 over 55 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 NuVasive's revenue or earnings projections may turn out to be inaccurate because of the preliminary nature of the forecasts and the risk of further adjustment, or unanticipated difficulty in selling products or generating expected 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.

SOURCE NuVasive, Inc.