NuVasive Announces Third Quarter 2022 Financial Results

  • Net sales grew 9.0% as reported, 12.9% on a constant currency basis
  • C360 portfolio delivers record quarter in cervical net sales
  • Company updates full-year 2022 guidance

SAN DIEGO, Nov. 9, 2022 /PRNewswire/ -- NuVasive, Inc. (NASDAQ: NUVA), the leader in spine technology innovation, focused on transforming spine surgery with minimally disruptive, procedurally integrated solutions, today announced financial results for the quarter ended September 30, 2022.

Third Quarter 2022
  • Net sales were $295.3 million, a 9.0% increase as reported and a 12.9% increase on a constant currency basis, compared to the prior year period;
  • GAAP operating margin of 7.4%; Non-GAAP operating margin of 13.6%; and
  • GAAP diluted loss per share of ($0.04); Non-GAAP diluted earnings per share of $0.54.

"The strategic investments we've made in product and technology innovation are delivering continued above-market growth—as demonstrated by double-digit growth in net sales on a constant currency basis," said Chris Barry, chief executive officer of NuVasive. "Despite the challenging macro environment, we continue to execute as evidenced by our top- and bottom-line performance in the quarter. I remain excited about the future of NuVasive—and our commitment to deliver meaningful innovation to support our surgeons, providers, and patients."

Third Quarter 2022 Results

NuVasive reported total net sales of $295.3 million, a 9.0% increase as reported and a 12.9% increase on a constant currency basis, compared to $270.8 million in the prior year period. Third quarter 2022 total net sales were driven by further adoption of new products, higher procedural volumes in the U.S., and strong international performance.

For the third quarter of 2022, GAAP gross profit was $214.4 million, compared to $182.2 million in the prior year period. GAAP gross margin was 72.6%, compared to 67.3% in the prior year period. On a non-GAAP basis, gross profit was $214.4 million, compared to $197.0 million in the prior year period. Non-GAAP gross margin was 72.6%, compared to 72.7% in the prior year period.

The Company reported GAAP net loss of ($2.0) million, or diluted loss per share of ($0.04), compared to GAAP net loss of ($21.6) million, or diluted loss per share of ($0.42) in the prior year period. On a non-GAAP basis, the Company reported net income of $28.3 million, or diluted earnings per share of $0.54, compared to non-GAAP net income of $16.9 million, or diluted earnings per share of $0.32 in the prior year period.

Cash and cash equivalents were $237.5 million as of September 30, 2022.

Full-year 2022 Financial Guidance

The Company updated its full-year 2022 guidance range for net sales growth, operating margin, and diluted EPS as shown in the table below.

 

Prior guidance range **

Current guidance range **

GAAP

Non-GAAP

GAAP

Non-GAAP

Net sales growth (reported)*

6.0%-8.0%

6.0%-8.0%

5.5%-6.5%

5.5%-6.5%

Net sales growth (constant currency)*

 

8.7%-10.7%

 

8.7%-9.7%

Operating margin

7.6%-9.1%

13.0%-14.5%

6.7%-7.4%

12.3%-13.0%

Diluted earnings per share

$0.95-$1.25***

$2.15-$2.45

$0.50-$0.60***

$2.00-$2.10

 

* Reflects expectations for net sales growth in 2022 compared to 2021. Net sales growth on a constant currency basis excludes year-over-year currency fluctuations, which the Company currently expects to create a negative impact of approximately 320 basis points in 2022.

** Prior guidance reflects ranges provided on August 3, 2022. Current guidance reflects ranges provided on November 9, 2022.

*** Reflects updated expectations for the impact on diluted EPS of applying the if-converted method to the Company's convertible notes. Additionally, includes the impact of net unrealized foreign currency exchange gains or losses incurred as of September 30, 2022, and does not assume future net unrealized gains or losses related to foreign currency exchange rates.

A full reconciliation of GAAP to non-GAAP financial measures can be found in the tables of this press release and in the Investor Relations section of our website.

Share Repurchase Program Extension

The NuVasive Board of Directors has approved a one-year extension of the Company's previously announced share repurchase program. As a result, the Company is now authorized to repurchase up to $100.0 million dollars of its common stock through December 31, 2023. Under this program, the Company may repurchase stock from time to time, in amounts, at prices, and at such times the Company deems appropriate, subject to market conditions, legal requirements, and other considerations.

Conference Call and Webcast

NuVasive will hold a conference call on Wednesday, November 9, 2022, at 1:30 p.m. PT / 4:30 p.m. ET to discuss the results of its financial performance for the third quarter 2022. The dial-in numbers are 1-877-300-8521 for domestic callers and 1-412-317-6026 for international callers. A live webcast of the conference call and supplemental financial information of our third quarter 2022 results will be available on the Investor Relations section of our website at www.nuvasive.com. An audio replay of the call will be available until November 16, 2022. 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: 10172422. In addition, the webcast will be archived on NuVasive's Investor Relations section of our website.

About NuVasive

NuVasive, Inc. (NASDAQ: NUVA) is the leader in spine technology innovation, with a mission to transform surgery, advance care, and change lives. The Company's less-invasive, procedurally integrated surgical solutions are designed to deliver reproducible and clinically proven outcomes. The Company's comprehensive procedural portfolio includes surgical access instruments, spinal implants, fixation systems, biologics, software for surgical planning, navigation and imaging solutions, magnetically adjustable implant systems for spine and orthopedics, and intraoperative neuromonitoring technology and service offerings. With more than $1 billion in net sales, NuVasive operates in more than 50 countries serving surgeons, hospitals, and patients. For more information, please visit www.nuvasive.com.

Reconciliation of GAAP to Non-GAAP Information

Management uses certain non-GAAP financial measures such as non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating margin, non-GAAP net income (loss), and non-GAAP diluted earnings (loss) per share. These non-GAAP financial measures exclude amortization of intangible assets, business transition costs, purchased in-process research and development, one-time restructuring charges, non-cash purchase accounting adjustments, inventory charges associated with product withdrawals, certain foreign currency impacts and related items in connection with acquisitions, investments and divestitures, certain litigation expenses and settlements, certain European medical device regulation costs, gains and losses from strategic investments, gains and losses from changes in fair value of derivatives, non-cash interest expense (excluding debt issuance cost) and other significant one-time items. Management also uses certain non-GAAP measures which are intended to exclude the impact of foreign exchange currency fluctuations. The measure constant currency utilizes 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, business transition costs, purchased in-process research and development, one-time restructuring charges, non-cash purchase accounting adjustments, inventory charges associated with product withdrawals, certain foreign currency impacts and related items in connection with acquisitions, investments and divestitures, certain litigation expenses and settlements, certain European medical device regulation costs, gains and losses on strategic investments, gains and losses from changes in fair value of derivatives 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 in the financial tables accompanying this press release are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measure.

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 2022, as well as projections for 2022 financial guidance and expectations regarding longer-term financial performance. The Company's results for the third quarter of 2022 are prior to the completion of review and audit procedures by the Company's external auditors and are subject to adjustment. In addition, the Company's projections for 2022 financial guidance and expectations regarding longer-term financial performance represent initial estimates, and 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 which contribute to the uncertain nature of these statements include, among others, the impact of the COVID-19 pandemic on the Company's business and financial results; further deterioration of general macroeconomic conditions, including inflationary pressures, disruptions to the global supply chain, fluctuations in currency exchange rates, higher freight and labor costs, and weakness in economic conditions generally; the Company's ability to maintain operations to support its customers and patients in the near-term and to capitalize on future growth opportunities; risks associated with acceptance of the Company's surgical products and procedures by spine surgeons and hospitals, development and acceptance of new products or product enhancements, clinical and statistical verification of the benefits achieved via the use of NuVasive's products, the Company's ability to adequately manage inventory as it continues to release new products, its ability to recruit and retain management and key personnel, and the 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. NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made.

 

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SOURCE NuVasive, Inc.


Company Codes: NASDAQ-NMS:NUVA

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