- Fourth Quarter Revenue of $74.6 Million -
- 2008 Revenue of $250.1 Million -
- Provides 2009 Guidance -
Fourth Quarter and Full Year 2008 Highlights:
- Fourth quarter total revenue of $74.6 million; up 58.9% from the fourth quarter 2007
- Full year 2008 total revenue of $250.1 million; up 62.1% from the full year 2007
- Osteocel revenue for the second half 2008 of $10 million; exceeds prior guidance of $9 million
- Gross margin of 82.0% for the fourth quarter and 82.3% for the full year
- GAAP earnings per share was $0.10 for the fourth quarter and loss per share was $(0.77) for the full year
- Full year 2008 earnings per share of $0.10 excluding in-process research and development costs and other adjustments; exceeds prior guidance of $0.07 - $0.09
SAN DIEGO, Feb. 25 /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 and year ended December 31, 2008.
NuVasive reported fourth quarter revenue of $74.6 million, including $5.7 million of Osteocel revenue, a 58.9% increase over the $46.9 million for the fourth quarter 2007 and an 11.5% increase over the $66.9 million for the third quarter 2008. Full year 2008 revenue was $250.1 million, a 62.1% increase over the $154.3 million reported for the full year 2007.
Gross profit for the fourth quarter 2008 was $61.1 million and gross margin was 82.0%, compared to a gross profit of $38.9 million and a gross margin of 82.9% for the fourth quarter 2007. For third quarter 2008, gross profit was $54.7 million and gross margin was 81.8%. Gross profit for the full year 2008 was $205.8 million and gross margin was 82.3%, compared to a gross profit of $126.9 million and gross margin of 82.3% for the full year 2007. Gross margin on Osteocel revenue was 44.5% for the fourth quarter 2008 and 40.7% for the full year 2008.
Total operating expenses for the fourth quarter 2008 were $57.0 million compared to $41.2 million in the fourth quarter 2007 and $77.7 million in the third quarter 2008. Full year 2008 operating expenses were $233.6 million compared to $144.2 million reported for the full year 2007. The higher operating expenses in 2008 resulted primarily from additional costs directly associated with higher revenue, infrastructure expansion, and in-process research and development.
On a GAAP basis, the Company reported net income of $3.7 million or $0.10 per share for the fourth quarter 2008, and a loss of $27.5 million or $(0.77) per share for the full year 2008. On a non-GAAP basis, the Company reported net income of $12.5 million, or $ 0.33 per share, for the fourth quarter 2008, and net income of $27.7 million, or $0.74 per share, for the full year 2008. The non-GAAP earnings per share calculations exclude for the fourth quarter and full year, respectively, (i) stock based compensation of $5.2 million and $20.9 million; (ii) charges related to transitional support costs for the Company’s ERP system of $1.4 million and $4.0 million; (iii) amortization of acquired intangible assets of $1.2 million and $3.0 million; and (iv) intellectual property litigation expenses of $1.0 million and $1.5 million. The non-GAAP earnings per share calculations also exclude for the full year: (i) charges for in-process research and development costs of $20.9 million; and (ii) a one-time leasehold charge of $4.8 million related to vacating the Company’s previous headquarters.
Cash, cash equivalents and short and long-term marketable securities were $223.4 million at December 31, 2008.
On January 18, 2009, the Company completed an investment in Progentix Orthobiology BV. Through this investment, Progentix will continue development work on a synthetic bone substitute that has the potential to accelerate bone healing through a novel micro-structure created by a proprietary manufacturing process.
Alex Lukianov, Chairman and Chief Executive Officer, said, “We are very pleased with the Company’s continued revenue growth in 2008, in conjunction with expanding profitability. We also successfully launched several new products which strengthened our position as the leader in Maximum Access Surgery through our innovative lateral approach.”
Mr. Lukianov continued, “The Osteocel and Progentix transactions strongly position us to compete in the $1.5 billion biologics market as we seek to grow the product line to over $100 million in the next few years. Despite uncertain economic conditions, we see 2009 as an opportunity for NuVasive to continue taking market share with the speed and creativity that we have become known for. To that end, we plan to aggressively invest in the growth of our business in 2009, including the initiation of our XLTDR clinical study, increased scientific and marketing investments in our biologics platform, continued international expansion, and the launch of fifteen new products and line extensions. We look forward to capitalizing on current market conditions to accelerate our move into the top tier of global spine companies.”
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, amortization of the acquired intangible assets and certain other charges plus additional items in certain periods. In 2008, these charges include in-process research and development, a one-time charge related to vacating the Company’s previous headquarters, amortization of acquired intangible assets, transitional support costs for the Company’s ERP system, and intellectual property litigation expenses. In 2009, these charges include acquisition related costs, amortization of acquired intangible assets and intellectual property litigation expenses. 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.
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 $4.6 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 biologics, 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 four categories of current product offerings: NeuroVision(R) a proprietary software-driven nerve avoidance system; MaXcess(R) a unique split-blade design retraction system; biologics; and specialized implants, like SpheRx(R) and CoRoent(R), that collectively minimize soft tissue disruption during spine surgery while allowing maximum visibility 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’s Biologic product portfolio includes FormaGraft(R), Osteocel Plus(R), and the Progentix(R) products, all of which are intended to facilitate fusion and complement the core fixation products.
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 uncertain process of seeking regulatory approval or clearance for NuVasive’s products or devices, including risks that such process could be significantly delayed; the risk that the Company may not be successful in integrating acquired technology or products, such as the Progentix family of products; the possibility that the FDA may require significant changes to NuVasive’s products or clinical studies; 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 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.
CONTACT: Kevin C. O’Boyle, EVP & Chief Financial Officer, NuVasive, Inc.,
+1-858-909-1998, investorrelations@nuvasive.com, or Investors, Patrick F.
Williams, Vice President, Finance, NuVasive, Inc., +1-858-638-5511,
investorrelations@nuvasive.com; or Media, Jason Rando, The Ruth Group,
+1-646-536-7025, jrando@theruthgroup.com
Web site: http://www.nuvasive.com/
