SAN DIEGO, Feb. 9, 2017 /PRNewswire/ -- NuVasive, Inc.
(NASDAQ: NUVA), a leading medical device company focused on
transforming spine surgery with minimally disruptive,
procedurally-integrated solutions, announced today financial
results for the quarter and full year ended December 31, 2016. Key performance highlights
included:
Fourth Quarter 2016 Highlights:
- Revenue increased 25.9% to $271.1
million, or 25.5% on a constant currency basis;
- GAAP operating profit margin of 11.1%; Non-GAAP operating
profit margin up 90 basis points to 18.0%; and
- GAAP diluted earnings per share of $0.11; Non-GAAP diluted earnings per share
increase of 51.4% to $0.53.
Full Year 2016 Highlights:
- Revenue increased 18.6% to $962.1
million, or 18.4% on a constant currency basis;
- GAAP operating profit margin of 12.8%; Non-GAAP operating
profit margin up 70 basis points to 16.1%; and
- GAAP diluted earnings per share of $0.69; Non-GAAP diluted earnings per share
increase of 26.7% to $1.66.
"NuVasive delivered record fourth quarter results and exceeded
expectations for the full year 2016. By all measures, the Company
had a tremendous year executing against our market-share taking
initiatives, delivering strong revenue growth, including a return
to 20% year-over-year growth in our core International markets. We
exceeded our profitability targets and integrated strategic
acquisitions to augment our leadership in spine and deliver the
substantial growth we forecasted as part of the deal models," said
Gregory T. Lucier, chairman and
chief executive officer of NuVasive. "In 2017, we are committed to
driving further market expansion, especially in the spine deformity
area, while significantly increasing our in-sourced manufacturing
capabilities and focusing on streamlining our operations to drive
scale and profitability in our business."
A full reconciliation of non-GAAP to GAAP measures can be found
in the tables of this news release.
Fourth Quarter 2016 Results
NuVasive reported
fourth quarter 2016 total revenue of $271.1
million, a 25.9% increase compared to $215.3 million for the fourth quarter 2015. On a
constant currency basis, fourth quarter 2016 total revenue
increased 25.5% compared to the same period last year.
Gross profit for the fourth quarter 2016 was $204.2 million on a GAAP and non-GAAP basis,
while GAAP and non-GAAP gross margin was 75.3%. These results
compared to gross profit of $164.0
million on a GAAP and non-GAAP basis, and GAAP and non-GAAP
gross margin of 76.2% for the fourth quarter 2015. Total GAAP and
non-GAAP operating expenses for the fourth quarter 2016 were
$174.1 million and $155.4 million, respectively. These results
compared to GAAP and non-GAAP operating expenses of $134.5 million and $127.3
million, respectively, for the fourth quarter 2015.
The Company reported a GAAP net income of $6.4 million, or $0.11 per share, for the fourth quarter 2016
compared to a GAAP net income of $11.5
million, or $0.22 per share,
for the fourth quarter 2015. On a non-GAAP basis, the Company
reported net income of $27.6 million,
or $0.53 per share, for the fourth
quarter 2016 compared to net income of $18.0
million, or $0.35 per share,
for the fourth quarter 2015.
Full Year 2016 Results
NuVasive reported full
year 2016 total revenue of $962.1
million, an 18.6% increase compared to $811.1 million for the full year 2015. On a
constant currency basis, full year 2016 total revenue increased
18.4% compared to the same period last year.
Total GAAP and non-GAAP gross profit for the full year 2016 was
$722.0 million and $736.7 million, respectively, while GAAP and
non-GAAP gross margin of 75.0% and 76.6%, respectively. These
results compared to gross profit of $616.6
million on a GAAP and non-GAAP basis and a GAAP and non-GAAP
gross margin of 76.0% for the full year 2015. Total GAAP and
non-GAAP operating expenses for the full year 2016 were
$598.5 million and $581.6 million, respectively. These results
compared to $477.6 million and
$492.0 million, respectively, for the
full year 2015.
The Company reported a GAAP net income of $37.1 million, or $0.69 per share, for the full year 2016 compared
to a GAAP net income of $66.3
million, or $1.26 per share,
for the full year 2015. On a non-GAAP basis, the Company reported
net income of $86.5 million, or
$1.66 per share, for the full year
2016 compared to net income of $66.9
million, or $1.31 per share,
for the full year 2015.
Cash, cash equivalents and short and long-term marketable
securities were approximately $153.6
million at December 31,
2016.
Annual Financial Guidance for 2017
The Company
provided the following updated projections to its full year 2017
guidance:
|
|
|
|
2017 Guidance
1
|
|
|
(in Million's;
except %'s and EPS)
|
|
GAAP
|
|
Non-GAAP
|
|
|
Revenue
|
|
$
1,065
|
|
$
1,065
|
|
|
% Growth - Reported
|
|
10.7%
|
|
10.7%
|
|
|
% Growth - Constant
Currency 2
|
|
|
|
11.7%
|
|
|
Operating
margin
|
|
12.6%
|
|
17.1%
|
|
|
Earnings per
share
|
|
$
1.16
|
|
$
2.00
|
|
|
EBITDA
|
|
23.6%
|
|
26.7%
|
|
|
Tax
Rate
|
|
~35%
|
|
~35%
|
|
|
|
|
|
|
|
|
1
|
Current guidance
reflects guidance provided February 9, 2017, as updated for the
expected changes in currency.
|
|
|
2
|
Constant currency
is a measure that adjusts US GAAP revenue for the impact of
currency over the same period in the prior year.
|
|
|
- Revenue of $1.065 billion, which
includes approximately $10 million in
year-over-year currency headwinds, and reflects 10.7% growth on a
reported basis and 11.7% growth on a constant currency basis
compared to revenue of $962.1 million
for 2016;
- Non-GAAP diluted earnings per share of $2.00, an increase of 20% compared to non-GAAP
diluted earnings per share of $1.66
for 2016;
- Non-GAAP operating profit margin of 17.1%, an increase of 100
basis points compared to 16.1% for 2016; and
- Adjusted EBITDA margin of 26.7%, an increase of 150 basis
points compared to 25.2% for 2016.
Supplementary Financial Information
For
additional financial detail, please visit the Investor Relations
section of the Company's website at www.nuvasive.com to access
Supplementary Financial Information.
|
Reconciliation of
Full Year EPS Guidance
|
|
|
2016
Actuals
|
|
2017
Guidance 1
|
|
|
GAAP net income
per share
|
$
0.69
|
|
$
1.16
|
|
|
Impact of change to
diluted share count
|
0.02
|
|
0.07
|
|
|
GAAP net income
per share, adjusted to diluted Non-GAAP share count
|
$
0.71
|
|
$
1.23
|
|
|
Litigation liability
gain
|
(0.83)
|
|
-
|
|
|
Business transition
costs 2
|
0.35
|
|
0.05
|
|
|
Non-cash interest
expense on convertible notes
|
0.38
|
|
0.33
|
|
|
Non-cash purchase
accounting adjustments on acquisitions 3
|
0.28
|
|
-
|
|
|
Loss on repurchase of
convertible notes
|
0.37
|
|
-
|
|
|
Amortization of
intangible assets 4
|
0.78
|
|
0.83
|
|
|
Tax effect of
adjustments 5
|
(0.38)
|
|
(0.44)
|
|
|
Non-GAAP earnings
per share
|
$
1.66
|
|
$
2.00
|
|
|
|
|
|
|
|
|
GAAP Weighted shares
outstanding - basic
|
50,077
|
|
50,967
|
|
|
GAAP Weighted shares
outstanding - diluted
|
54,102
|
|
56,269
|
|
|
Non-GAAP Weighted
shares outstanding - diluted
|
51,981
|
|
53,069
|
|
|
|
|
|
|
|
1
|
Current guidance
reflects guidance provided February 9, 2017, as updated for the
expected changes in currency. Effective tax expense rate of
~35% applied to GAAP earnings and ~35% applied to Non-GAAP
earnings.
|
|
|
2
|
Costs related to
acquisition, integration and business transition activities which
include severance, relocation, consulting, leasehold exit costs,
third party merger and acquisitions costs and other costs directly
associated with such activities.
|
|
|
3
|
Represents costs
associated with non-cash purchase accounting adjustments, such as
acquired inventory fair market value adjustments, which are
amortized over the period in which underlying products are
sold.
|
|
|
4
|
Excludes the
amortization associated with non-controlling
interest.
|
|
|
5
|
The impact on
results from taxes include tax effecting the adjustments above at
the statutory rate as well as taking into account discrete items
and including those discrete items in the annual effective tax rate
calculation. The Company also includes those adjustments that would
have benefited the tax rate in lieu of the above adjustments as
part of the Company's tax filings. The impact of the changes to the
tax rate results in an annual estimated rate of ~35% on a non-GAAP
basis.
|
|
|
|
Reconciliation of
Non-GAAP Operating Margin %
|
|
|
(in thousands,
except %)
|
|
2016
Actuals
|
|
2017
Guidance 1
|
|
|
Non-GAAP Gross
Margin % [A]
|
|
76.6%
|
|
76.1%
|
|
|
Non-cash purchase
accounting adjustments on acquisitions 2
|
|
(1.5%)
|
|
0.0%
|
|
|
GAAP Gross Margin
[B]
|
|
75.0%
|
|
76.1%
|
|
|
|
|
|
|
|
|
|
GAAP &
Non-GAAP Sales, Marketing & Administrative Expense
[C]
|
|
55.5%
|
|
54.0%
|
|
|
|
|
|
|
|
|
|
Non-GAAP Research
& Development Expense [D]
|
|
5.0%
|
|
5.0%
|
|
|
In-process research
& development
|
|
0.0%
|
|
0.0%
|
|
|
GAAP Research &
Development Expense [E]
|
|
5.0%
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
Litigation liability
[F]
|
|
(4.5%)
|
|
0.0%
|
|
|
Amortization of
intangible assets [G] 3
|
|
4.4%
|
|
4.3%
|
|
|
Business transition
costs [H] 4
|
|
1.9%
|
|
0.3%
|
|
|
|
|
|
|
|
|
|
Non-GAAP Operating
Margin % [A - C - D]
|
|
16.1%
|
|
17.1%
|
|
|
|
|
|
|
|
|
|
GAAP Operating Margin
% [B - C - E - F - G - H]
|
|
12.8%
|
|
12.6%
|
|
|
|
|
|
|
|
|
1
|
Current guidance
reflects guidance provided February 9, 2017, as updated for the
expected changes in currency.
|
|
|
2
|
Represents costs
associated with non-cash purchase accounting adjustments, such as
acquired inventory fair market value adjustments, which are
amortized over the period in which underlying products are
sold.
|
|
|
3
|
Excludes the
amortization associated with non-controlling
interest.
|
|
|
4
|
Costs related to
acquisition, integration and business transition activities which
include severance, relocation, consulting, leasehold exit costs,
third party merger and acquisitions costs and other costs directly
associated with such activities.
|
|
|
|
Reconciliation of
EBITDA %
|
|
|
(in thousands,
except %)
|
2016
Actuals
|
|
2017
Guidance 1
|
|
|
Net Income /
(Loss)
|
3.9%
|
|
6.1%
|
|
|
Interest (income) /
expense, net 2
|
6.1%
|
|
3.5%
|
|
|
Provision for income
taxes
|
3.0%
|
|
3.1%
|
|
|
Depreciation and
amortization 3
|
10.5%
|
|
10.8%
|
|
|
EBITDA
|
23.5%
|
|
23.6%
|
|
|
Non-cash stock based
compensation
|
2.8%
|
|
2.9%
|
|
|
Business transition
costs 4
|
1.9%
|
|
0.3%
|
|
|
Non-cash purchase
accounting adjustments on acquisitions 5
|
1.5%
|
|
0.0%
|
|
|
In-process research
& development
|
0.0%
|
|
0.0%
|
|
|
Litigation liability
gain
|
(4.5%)
|
|
0.0%
|
|
|
Adjusted
EBITDA
|
25.2%
|
|
26.7%
|
|
|
|
|
|
|
|
1
|
Current guidance
reflects guidance provided February 9, 2017, as updated for the
expected changes in currency.
|
|
|
2
|
Interest (income)
/ expense, net for the quarter and year ended December 31, 2016
includes loss on extinguishment of debt for $1.6 million and $19.1
million, respectively.
|
|
|
3
|
Excludes the
amortization associated with non-controlling
interest.
|
4
|
Costs related to
acquisition, integration and business transition activities which
include severance, relocation, consulting, leasehold exit costs,
third party merger and acquisitions costs and other costs directly
associated with such activities.
|
|
|
5
|
Represents costs
associated with non-cash purchase accounting adjustments, such as
acquired inventory fair market value adjustments, which are
amortized over the period in which underlying products are
sold.
|
|
|
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, leasehold related
charges, integration related expenses associated with acquired
businesses, one-time restructuring and acquisition related items,
CEO transition related costs, certain litigation charges and
non-cash interest expense (excluding debt issuance cost) and or
losses on convertible notes. 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, leasehold related charges,
integration related expenses associated with acquired businesses,
CEO transition related costs, certain litigation liabilities,
acquisition related items 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.
|
Reconciliation of
Fourth Quarter 2016 Results
|
GAAP Net Income
per Share to Non-GAAP Earnings per Share
|
|
|
(in thousands,
except per share data)
|
|
Adjustments
|
|
Diluted Earnings
Per
Share
|
|
|
GAAP net
income
|
|
$
6,376
|
|
$
0.11
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment
of debt
|
|
1,641
|
|
|
|
|
Business transition
costs 1
|
|
6,624
|
|
|
|
|
Non-cash interest
expense on convertible notes
|
|
4,992
|
|
|
|
|
Amortization of
intangible assets 2
|
|
11,767
|
|
|
|
|
Tax effect of
adjustments 3
|
|
(3,843)
|
|
|
|
|
Adjustments to GAAP
net income
|
|
21,181
|
|
|
|
|
Non-GAAP
earnings
|
|
$
27,557
|
|
$
0.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted shares
outstanding - diluted
|
|
|
|
55,913
|
|
|
Non-GAAP weighted
shares outstanding - diluted
|
|
|
|
52,399
|
|
|
|
1
|
Costs related to
acquisition, integration and business transition activities which
includes severance, relocation, consulting, leasehold exit costs,
third party merger and acquisitions costs and other costs directly
associated with such activities.
|
|
|
2
|
Excludes the
amortization associated with non-controlling
interest.
|
|
|
3
|
The impact on
results from taxes include tax effecting the adjustments above at
the statutory rate as well as taking into account discrete items
and including those discrete items in the annual effective tax rate
calculation. The Company also includes those adjustments that would
have benefited the tax rate in lieu of the above adjustments as
part of the Company's tax filings. The impact of the changes to the
tax rate results in an annual estimated rate of 37% on a non-GAAP
basis. The result of these adjustments is a change in the annual
effective tax rate from 29% to 37%. The Company adopted ASU 2016-09
Stock Compensation in Q2 2016 which was effective as of January 1,
2016 with retrospective adjustment. The result of the retrospective
adjustment resulted in a change in the Q1 2016 quarterly effective
tax rate on a non-GAAP basis from 41% to 36%.
|
|
|
|
Reconciliation of
Year To Date 2016 Results
|
GAAP Net Income
per Share to Non-GAAP Earnings per Share
|
|
|
(in thousands,
except per share data)
|
|
Adjustments
|
|
Diluted Earnings
Per
Share
|
|
|
GAAP net
income
|
|
$
37,147
|
|
$
0.69
|
|
|
|
|
|
|
|
|
|
Litigation liability
gain
|
|
(43,310)
|
|
|
|
|
Business transition
costs 1
|
|
18,138
|
|
|
|
|
Non-cash interest
expense on convertible notes
|
|
19,539
|
|
|
|
|
Non-cash purchase
accounting adjustments on acquisitions 2
|
|
14,747
|
|
|
|
|
Loss on repurchases of
convertible notes
|
|
19,085
|
|
|
|
|
Amortization of
intangible assets 3
|
|
40,712
|
|
|
|
|
Tax effect of
adjustments 4
|
|
(19,602)
|
|
|
|
|
Adjustments to GAAP
net income
|
|
49,309
|
|
|
|
|
Non-GAAP
earnings
|
|
$
86,456
|
|
$
1.66
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP weighted shares
outstanding - diluted
|
|
|
|
54,102
|
|
|
Non-GAAP weighted
shares outstanding - diluted
|
|
|
|
51,981
|
|
|
|
1
|
Costs related to
acquisition, integration and business transition activities which
includes severance, relocation, consulting, leasehold exit costs,
third party merger and acquisitions costs and other costs directly
associated with such activities.
|
2
|
Represents costs
associated with non-cash purchase accounting adjustments, such as
acquired inventory fair market value adjustments, which are
amortized over the period in which underlying products are
sold.
|
3
|
Excludes the
amortization associated with non-controlling
interest.
|
4
|
The impact on
results from taxes include tax effecting the adjustments above at
the statutory rate as well as taking into account discrete items
and including those discrete items in the annual effective tax rate
calculation. The Company also includes those adjustments that would
have benefited the tax rate in lieu of the above adjustments as
part of the Company's tax filings. The impact of the changes to the
tax rate results in an annual estimated rate of approximately 37%
on a non-GAAP basis. The result of these adjustments is a change in
the annual effective tax rate from approximately 29% to 37%. The
Company adopted ASU 2016-09 Stock Compensation in Q2 2016 which was
effective as of January 1, 2016 with retrospective adjustment. The
result of the retrospective adjustment resulted in a change in the
Q1 2016 quarterly effective tax rate on a non-GAAP basis from
approximately 41% to 36%.
|
|
|
|
Reconciliation of
Fourth Quarter and Twelve Months 2016 Results
|
GAAP net income to
Adjusted EBITDA
|
|
|
(in thousands,
except per share data)
|
Three months
ended December 31, 2016
|
|
Twelve months
ended December 31, 2016
|
|
|
GAAP net
income
|
$
6,376
|
|
$
37,147
|
|
|
Interest (income) /
expense, net 1
|
12,006
|
|
58,514
|
|
|
Provision for income
taxes
|
11,899
|
|
29,282
|
|
|
Depreciation and
Amortization 2
|
28,573
|
|
101,438
|
|
|
EBITDA
|
$
58,854
|
|
$
226,381
|
|
|
Litigation liability
gain
|
—
|
|
(43,310)
|
|
|
Non-cash purchase
accounting related charges 3
|
—
|
|
14,747
|
|
|
Business transition
costs 4
|
6,624
|
|
18,138
|
|
|
Non-cash stock based
compensation
|
7,279
|
|
26,924
|
|
|
Adjusted
EBITDA
|
$
72,757
|
|
$
242,880
|
|
|
As a percentage of
revenue
|
26.8%
|
|
25.2%
|
|
|
|
1
|
Interest (income)
/ expense, net for the quarter and year ended December 31, 2016
includes loss on extinguishment of debt for $1.6 million and $19.1
million, respectively.
|
|
|
|
2
|
Excludes the
amortization associated with non-controlling
interest.
|
|
|
3
|
Represents costs
associated with non-cash purchase accounting adjustments, such as
acquired inventory fair market value adjustments, which are
amortized over the period in which underlying products are
sold.
|
|
|
|
4
|
Costs related to
acquisition, integration and business transition activities which
includes severance, relocation, consulting, leasehold exit costs,
third party merger and acquisitions costs and other costs directly
associated with such activities.
|
|
|
|
Investor Conference Call
The Company will hold
a conference call today at 4:30 p.m.
ET / 1:30 p.m. PT to discuss
the results of its fourth quarter and full year 2016 financial
performance. 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 March 9,
2017. In addition, a telephone replay of the call will be
available until February 16, 2017.
The replay dial-in numbers are 1-844-512-2921 for domestic callers
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number: 13652783.
About NuVasive
NuVasive, Inc. (NASDAQ: NUVA) is
a world leader in minimally invasive, procedurally-integrated spine
solutions. From complex spinal deformity to degenerative spinal
conditions, NuVasive is transforming spine surgery with innovative
technologies designed to deliver reproducible and clinically proven
surgical outcomes. NuVasive's highly differentiated,
procedurally-integrated solutions include access instruments,
implantable hardware and software systems for surgical planning and
reconciliation technology that centers on achieving the global
alignment of the spine. With $962
million in revenues (2016), NuVasive has an approximate
2,300 person workforce in more than 40 countries around the world.
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 fourth quarter and full year 2016, as well as projections
for 2017 financial guidance and longer-term financial performance
goals. The Company's results for the fourth quarter and full year
2016 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 2017 financial guidance and
longer-term financial performance goals 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, risks associated with acceptance
of the Company's surgical products and procedures by spine
surgeons, spine surgeons, development and acceptance of new
products or product enhancements, clinical and statistical
verification of the benefits achieved via the use of NuVasive's
products (including the iGA™ platform), the Company's ability to
effectually 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.
NuVasive,
Inc.
|
Consolidated
Statements of Operations
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
Revenue
|
$ 271,109
|
|
$ 215,282
|
|
$ 962,072
|
|
$ 811,113
|
Cost of goods sold
(excluding below amortization of intangible assets)
|
66,926
|
|
51,233
|
|
240,093
|
|
194,479
|
Gross
profit
|
204,183
|
|
164,049
|
|
721,979
|
|
616,634
|
Operating
expenses:
|
|
|
|
|
|
|
|
Sales,
marketing and administrative
|
142,413
|
|
118,837
|
|
533,624
|
|
457,280
|
Research
and development
|
12,983
|
|
8,606
|
|
47,999
|
|
35,833
|
Amortization of intangible assets
|
12,089
|
|
3,479
|
|
42,001
|
|
12,516
|
Litigation liability (gain) loss
|
—
|
|
681
|
|
(43,310)
|
|
(41,826)
|
Business
transition costs
|
6,624
|
|
2,902
|
|
18,138
|
|
13,748
|
Total operating
expenses
|
174,109
|
|
134,505
|
|
598,452
|
|
477,551
|
Interest and other
expense, net:
|
|
|
|
|
|
|
|
Interest
income
|
167
|
|
464
|
|
1,091
|
|
1,589
|
Interest
expense
|
(10,532)
|
|
(7,403)
|
|
(40,520)
|
|
(29,078)
|
Loss on
repurchases of convertible notes
|
(1,641)
|
|
—
|
|
(19,085)
|
|
—
|
Other (expense) income, net
|
(203)
|
|
(105)
|
|
(305)
|
|
425
|
Total interest
and other expense, net
|
(12,209)
|
|
(7,044)
|
|
(58,819)
|
|
(27,064)
|
Income before
income taxes
|
17,865
|
|
22,500
|
|
64,708
|
|
112,019
|
Income tax
expense
|
(11,899)
|
|
(11,397)
|
|
(29,282)
|
|
(46,729)
|
Consolidated net
income
|
$
5,966
|
|
$
11,103
|
|
$
35,426
|
|
$
65,290
|
Add back net loss
attributable to non-controlling interests
|
$
(410)
|
|
$
(400)
|
|
$
(1,721)
|
|
$
(1,001)
|
Net income
attributable to NuVasive, Inc.
|
$
6,376
|
|
$
11,503
|
|
$
37,147
|
|
$
66,291
|
Net income per share
attributable to NuVasive, Inc.:
|
|
|
|
|
|
|
|
Basic
|
$
0.13
|
|
$
0.23
|
|
$
0.74
|
|
$
1.36
|
Diluted
|
$
0.11
|
|
$
0.22
|
|
$
0.69
|
|
$
1.26
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
50,394
|
|
49,205
|
|
50,077
|
|
48,687
|
Diluted
|
55,913
|
|
53,087
|
|
54,102
|
|
52,424
|
|
|
|
|
|
|
|
|
NuVasive,
Inc.
|
Consolidated
Balance Sheets
|
(in thousands,
except par values and share amounts)
|
|
|
|
|
|
December
31,
|
|
2016
|
|
2015
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
153,643
|
|
$
192,339
|
Short-term
marketable securities
|
—
|
|
165,423
|
Accounts
receivable, net of allowances of $8,912and
$5,320, respectively
|
171,595
|
|
127,595
|
Inventory,
net
|
208,249
|
|
168,140
|
Prepaid income
taxes
|
31,926
|
|
40,540
|
Prepaid
expenses and other current assets
|
10,030
|
|
8,790
|
Total current
assets
|
575,443
|
|
702,827
|
Property and
equipment, net
|
181,524
|
|
141,441
|
Long-term marketable
securities
|
—
|
|
112,332
|
Intangible assets,
net
|
291,143
|
|
85,076
|
Goodwill
|
485,685
|
|
154,281
|
Deferred tax
assets
|
5,810
|
|
83,691
|
Restricted cash and
investments
|
7,405
|
|
5,615
|
Other
assets
|
23,794
|
|
17,404
|
Total
assets
|
$
1,570,804
|
|
$
1,302,667
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable and accrued liabilities
|
$
77,585
|
|
$
60,986
|
Contingent
consideration liabilities
|
49,742
|
|
—
|
Accrued
payroll and related expenses
|
51,000
|
|
37,640
|
Income tax
liabilities
|
2,469
|
|
990
|
Short-term
senior convertible notes
|
61,701
|
|
—
|
Total current
liabilities
|
242,497
|
|
99,616
|
Long term senior
convertible notes
|
564,412
|
|
372,920
|
Deferred and income
tax liabilities, non-current
|
18,607
|
|
8,602
|
Non-current
litigation liabilities
|
—
|
|
88,261
|
Other long-term
liabilities
|
44,764
|
|
14,425
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity:
|
|
|
|
Preferred
stock, $0.001 par value; 5,000,000 shares authorized,
none outstanding
|
—
|
|
—
|
Common stock,
$0.001 par value; 120,000,000 shares authorized
at December 31, 2016 and December 31, 2015, 55,184,660and
52,616,471 issued and outstanding at December 31, 2016 and December
31, 2015, respectively
|
55
|
|
53
|
Additional
paid-in capital
|
1,010,238
|
|
989,387
|
Accumulated
other comprehensive loss
|
(10,631)
|
|
(12,112)
|
Accumulated
deficit
|
(66,859)
|
|
(104,006)
|
Treasury stock
at cost; 4,758,828shares and 3,316,794 shares at December 31,
2016 and December 31, 2015, respectively
|
(237,867)
|
|
(161,788)
|
Total NuVasive, Inc.
stockholders' equity
|
694,936
|
|
711,534
|
Non-controlling
interests
|
5,588
|
|
7,309
|
Total
equity
|
700,524
|
|
718,843
|
Total liabilities and
equity
|
$
1,570,804
|
|
$
1,302,667
|
|
|
|
|
NuVasive,
Inc.
|
Consolidated
Statements of Cash Flows
|
(in
thousands)
|
|
|
|
|
|
Year Ended
December 31,
|
|
2016
|
|
2015
|
Operating
activities:
|
|
|
|
Consolidated net income
|
$
35,426
|
|
$
65,290
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
Depreciation and
amortization
|
102,713
|
|
65,915
|
Deferred income tax
expense
|
26,265
|
|
34,757
|
Loss on repurchases
of convertible notes
|
19,085
|
|
—
|
Amortization of
non-cash interest
|
22,721
|
|
17,851
|
Stock-based
compensation
|
26,924
|
|
26,203
|
Reserves on current
assets
|
11,408
|
|
9,454
|
Other non-cash
adjustments
|
16,928
|
|
17,581
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
Accounts
receivable
|
(33,250)
|
|
(9,463)
|
Inventory
|
(22,636)
|
|
(25,984)
|
Prepaid expenses and
other current assets
|
(5,665)
|
|
1,239
|
Accounts payable and
accrued liabilities
|
11,854
|
|
7,742
|
Accrued
royalties
|
471
|
|
(46,092)
|
Accrued payroll and
related expenses
|
8,849
|
|
(192)
|
Litigation
liability
|
(88,450)
|
|
(36,270)
|
Income
taxes
|
23,652
|
|
(39,304)
|
Net cash provided by
operating activities
|
156,295
|
|
88,727
|
Investing
activities:
|
|
|
|
Acquisition of Ellipse Technologies, net of cash
acquired
|
(380,080)
|
|
—
|
Other
acquisitions and investments
|
(108,591)
|
|
(1,357)
|
Purchases of intangible assets
|
(5,918)
|
|
(32,020)
|
Proceeds
from sales of property and equipment
|
—
|
|
40
|
Purchases of property and equipment
|
(88,372)
|
|
(75,772)
|
Purchases of marketable securities
|
(128,956)
|
|
(427,945)
|
Proceeds
from sales of marketable securities
|
407,032
|
|
411,471
|
Proceeds
from sales of restricted investments
|
—
|
|
180,694
|
Purchases of restricted investments
|
—
|
|
(62,625)
|
Net cash used in
investing activities
|
(304,885)
|
|
(7,514)
|
Financing
activities:
|
|
|
|
Incremental tax benefits related to stock-based compensation
awards
|
—
|
|
15,185
|
Proceeds
from the issuance of common stock
|
9,492
|
|
12,106
|
Payment
of contingent consideration
|
(422)
|
|
(514)
|
Purchase
of treasury stock
|
(24,734)
|
|
(56,929)
|
Proceeds
from issuance of convertible debt, net of issuance costs
|
634,140
|
|
—
|
Proceeds
from sale of warrants
|
44,850
|
|
—
|
Purchase
of convertible note hedge
|
(111,150)
|
|
—
|
Repurchases of convertible notes
|
(439,519)
|
|
—
|
Proceeds
from revolving line of credit
|
50,000
|
|
—
|
Repayments on revolving line of credit
|
(50,000)
|
|
—
|
Other
financing activities
|
(1,834)
|
|
(192)
|
Net cash provided by
(used in) financing activities
|
110,823
|
|
(30,344)
|
Effect
of exchange rate changes on cash
|
(929)
|
|
(917)
|
(Decrease) increase
in cash and cash equivalents
|
(38,696)
|
|
49,952
|
Cash and cash
equivalents at beginning of year
|
192,339
|
|
142,387
|
Cash and cash
equivalents at end of year
|
$ 153,643
|
|
$ 192,339
|
Contact:
Stefanie Mazer
1-858-320-5243
smazer@nuvasive.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nuvasive-reports-fourth-quarter-and-full-year-2016-financial-results-300405135.html
SOURCE NuVasive, Inc.