NuVasive, Inc. Reports Second Quarter 2008 Financial Results
SAN DIEGO, July 24 /PRNewswire-FirstCall/ -- NuVasive, Inc. , a medical device company focused on developing products for minimally disruptive surgical treatments for the spine, announced today financial results for the quarter ended June 30, 2008.
NuVasive reported second quarter revenues of $57.4 million, a 61.2% increase over the $35.6 million for the second quarter of 2007 and a 12.2% increase over the $51.2 million for the first quarter of 2008.
Gross profit for the second quarter of 2008 was $47.8 million and gross margin was 83.3%, compared to a gross profit of $28.9 million and a gross margin of 81.2% in the second quarter of 2007. For the first quarter of 2008, gross profit was $42.1 million and gross margin was 82.2%.
Total operating expenses for the second quarter of 2008 were $48.5 million compared to $34.0 million in the second quarter of 2007 and $50.5 million in the first quarter of 2008. First quarter 2008 operating expenses included an in-process research and development charge of $4.2 million, or ($0.12) per diluted share related to the acquisition of pedicle screw intellectual property. Excluding the in-process research and development charge, total first quarter 2008 operating expenses were $46.3 million.
On a GAAP basis, the Company reported a net loss of $0.5 million or $(0.01) per share for the second quarter of 2008. On a non-GAAP basis, the Company reported net income of $5.1 million, or $0.14 per share, for the second quarter of 2008. The non-GAAP earnings per share calculations exclude (i) stock based compensation of $5.1 million and (ii) amortization of acquired intangible assets of $0.5 million.
Cash, cash equivalents and short and long-term investments were $265.7 million at June 30, 2008.
On July 24th, 2008, NuVasive completed its previously announced acquisition of the Osteocel biologics business from Osiris Therapeutics. The Osteocel business includes a proprietary adult stem cell bone graft product which is the only viable bone matrix product on the market that provides the three beneficial properties similar to autograft: osteoconduction (provides a scaffold for bone growth), osteoinduction (bone formation stimulation) and osteogenesis (bone production).
Alex Lukianov, Chairman and Chief Executive Officer, said, "Our robust results in the second quarter were driven by the continued maturation of our exclusive sales force and its growing expertise in selling the full mix of our innovative product portfolio. We also successfully executed on several components of our growth strategy. These included the recent closing of the Osteocel acquisition, conversion of our enterprise software platform and the continued enrollment of our NeoDisc clinical trial, which we expect to complete in August 2008. In addition, we completed our planned expansion of our cervical product offering with the full national launch of our Helix Mini Plate and VuePoint posterior system."
Mr. Lukianov continued, "We are pleased to complete the acquisition of the Osteocel biologics business, which represents a significant milestone in our strategy to expand our product portfolio with synergistic and innovative technologies. We believe there is substantial opportunity to create an aggressive marketing program to achieve this product's full potential and, combined with our Formagraft product, we look to create a $100 million biologics business over the next several years."
Mr. Lukianov added, "We continue to execute on our strategic objectives, including rapid product development, advancement of our MAS platform, continued adoption of our XLIF procedure, and significant expansion of our operating infrastructure. These initiatives are key to our long term growth and ability to continue increasing our market share. We are committed to advancing all of these objectives in concert with robust revenue growth and expanding profitability. Although global economic conditions have resulted in increased expenses relating to items such as shipping, distribution, and travel, coupled with lower yields on cash investments, we remain committed to GAAP profitability as demonstrated by our increased earnings guidance for the second half of 2008. Our shareowners are dedicated to making NuVasive a major force in the spine industry."
Reconciliation of Non-GAAP Information
Management uses certain non-GAAP financial measures such as non-GAAP earnings per share, which exclude stock based compensation and charges directly related to acquisition transactions such as in-process research and development, milestone payments, and amortization of the acquired technology 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. A live Web cast of the conference call will be available online from the investor relations page of the Company's corporate Web site at www.nuvasive.com.
After the live Web cast, the call will remain available on NuVasive's Web site, www.nuvasive.com, through August 24, 2008. In addition, a telephonic replay of the call will be available until August 14, 2008. 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 289122.
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 on applications in the over $4.2 billion U.S. spine fusion market. The Company's current principal product offering includes a minimally disruptive surgical platform called Maximum Access Surgery, or MAS(R), as well as a growing offering of cervical and motion preservation products.
The MAS platform offers advantages for both patients and surgeons such as reduced surgery and hospitalization time and faster recovery. MAS combines three categories of current product offerings: NeuroVision(R) a proprietary software-driven nerve avoidance system; MaXcess(R) a unique split-blade design retraction system; and specialized implants, like SpheRx(R) and CoRoent(R), that collectively minimize soft tissue disruption during spine surgery while allowing maximum visualization and surgical reproducibility. NuVasive's product offering is also focused on cervical internal fixation products and its R&D pipeline emphasizes both MAS and motion preservation.
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 Company'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 risk that Company may encounter unanticipated difficulty integrating the Osteocel product into its product line; the risk that the Company may be unable to generate expected revenues or profitability from Osteocel; the uncertain process of seeking regulatory approval or clearance for Company's products or devices, including risks that such process could be significantly delayed; the possibility that the FDA may require significant changes to Company'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 Company's products to patients, hospitals and surgeons; and other risks and uncertainties more fully described in Company's press releases and periodic filings with the Securities and Exchange Commission. Company's public filings with the Securities and Exchange Commission are available at www.sec.gov. Company 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.,
+1-858-909-1800, investorrelations@nuvasive.com; Investors: Nick Laudico,
+1-646-536-7030, nlaudico@theruthgroup.com, or Zack Kubow, +1-646-
536-7020, zkubow@theruthgroup.com, Media: Jason Rando, +1-646-536-7025,
jrando@theruthgroup.com, all of The Ruth Group
Web site: http://www.nuvasive.com/