–Strong year-over-year net sales growth,
driven by new product introductions–
–Company reiterates full-year guidance range
for reported year-over-year net sales growth of 6%–8%–
–Company updates full-year guidance range for
GAAP diluted EPS; maintains prior non-GAAP diluted EPS range
provided May 4, 2022–
SAN
DIEGO, Aug. 3, 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 June 30,
2022.
Second Quarter 2022
- Net sales were $310.5 million, a
5.3% increase as reported and a 7.8% increase on a constant
currency basis, compared to the prior year period;
- GAAP operating margin of 10.7%; Non-GAAP operating margin of
13.0%; and
- GAAP diluted loss per share of ($0.02); Non-GAAP diluted earnings per share of
$0.47.
"We are encouraged by our top-line growth in the second quarter,
driven by procedure volumes, new product introductions, and
continued global execution of our growth strategies," said
Chris Barry, chief executive officer
of NuVasive. "As surgeons look for differentiated technologies
to enable more intelligent surgery, our C360 portfolio, X360
portfolio and Pulse platform will continue to support our
innovation strategy. While we are experiencing the macro
environmental pressures that face many companies, we remain focused
on our commitment to deliver value to all stakeholders—most
importantly, to change the lives of more patients around the
world."
Second Quarter 2022 Results
NuVasive reported
total net sales of $310.5 million, a
5.3% increase as reported and a 7.8% increase on a constant
currency basis, compared to $294.8
million in the prior year period. Second quarter 2022 total
net sales were driven by the 2021 commercial launches of the
Simplify Cervical Disc and the Pulse platform, as well as higher
procedure volume in the U.S. and strong international
performance.
For the second quarter of 2022, GAAP gross profit was
$224.7 million, compared to
$216.5 million in the prior year
period. GAAP gross margin was 72.4%, compared to 73.4% in the prior
year period. On a non-GAAP basis, gross profit was $224.7 million, compared to $217.1 million in the prior year period. Non-GAAP
gross margin was 72.4%, compared to 73.6% in the prior year
period.
The Company reported GAAP net loss of ($0.9) million, or diluted loss per share of
($0.02), compared to GAAP net income
of $1.8 million, or diluted earnings
per share of $0.03 in the prior year
period. On a non-GAAP basis, the Company reported net income of
$24.8 million, or diluted earnings
per share of $0.47, compared to
non-GAAP net income of $31.2 million,
or diluted earnings per share of $0.60 in the prior year period.
Cash and cash equivalents were $226.0
million as of June 30,
2022.
Full-year 2022 Financial Guidance
Based on the
Company's strong performance for the six months ended June 30, 2022, the Company reiterated its
full-year guidance range for reported net sales growth. Based on
updated expectations for foreign currency exchange rates, the
Company revised its guidance range for constant currency net sales
growth, as well as for GAAP operating margin, as shown in the table
below. In addition, the Company updated its full-year guidance
range for GAAP diluted EPS and maintained its prior non-GAAP
diluted EPS range provided on May 4,
2022.
|
Prior guidance range
**
|
Current guidance range
**
|
GAAP
|
Non-GAAP
|
GAAP
|
Non-GAAP
|
Net sales growth
(reported)*
|
6.0%-8.0%
|
6.0%-8.0%
|
6.0%-8.0%
|
6.0%-8.0%
|
Net sales growth
(constant currency)*
|
|
7.5%-9.5%
|
|
8.7%-10.7%
|
Operating
margin
|
6.3%-7.8%
|
13.0%-14.5%
|
7.6%-9.1%
|
13.0%-14.5%
|
Diluted earnings per
share
|
$1.05-$1.35***
|
$2.15-$2.45
|
$0.95-$1.25***
|
$2.15-$2.45
|
|
* 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 270 basis points in
2022.
|
** Prior guidance
reflects ranges provided on May 4, 2022. Current guidance reflects
ranges provided on August 3, 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 June 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.
Conference Call and Webcast
NuVasive will
hold a conference call on Wednesday, August 3, 2022,
at 4:30 p.m. ET / 1:30 p.m. PT to discuss the
results of its financial performance for the second quarter 2022.
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 and supplemental financial information of our
second quarter 2022 results will be available on the Investor
Relations page of our website at www.nuvasive.com. An audio
replay of the call will be available until August 10, 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: 13731013. In addition, the webcast will be archived
on NuVasive's 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 second quarter 2022, as well as projections for 2022
financial guidance and expectations regarding longer-term financial
performance. The Company's results for the second 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; 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.
NuVasive,
Inc.
|
Consolidated
Statements of Operations
|
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
(unaudited)
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Net sales:
|
|
|
|
|
|
|
|
|
Products
|
|
$
280,419
|
|
$
266,763
|
|
$
546,392
|
|
$
512,214
|
Services
|
|
30,032
|
|
28,065
|
|
54,821
|
|
53,863
|
Total net
sales
|
|
310,451
|
|
294,828
|
|
601,213
|
|
566,077
|
Cost of sales
(excluding below amortization of intangible assets):
|
|
|
|
|
|
|
|
|
Products
|
|
65,267
|
|
58,584
|
|
122,450
|
|
111,886
|
Services
|
|
20,491
|
|
19,696
|
|
42,405
|
|
38,205
|
Total cost of
sales
|
|
85,758
|
|
78,280
|
|
164,855
|
|
150,091
|
Gross profit
|
|
224,693
|
|
216,548
|
|
436,358
|
|
415,986
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
160,696
|
|
157,397
|
|
320,977
|
|
303,351
|
Research and
development
|
|
25,913
|
|
21,764
|
|
49,271
|
|
43,988
|
Amortization of
intangible assets
|
|
12,637
|
|
15,088
|
|
25,669
|
|
28,425
|
Business transition
costs
|
|
(7,624)
|
|
11,553
|
|
(4,564)
|
|
17,137
|
Total operating
expenses
|
|
191,622
|
|
205,802
|
|
391,353
|
|
392,901
|
Interest and other
expense, net:
|
|
|
|
|
|
|
|
|
Interest
income
|
|
262
|
|
9
|
|
305
|
|
96
|
Interest
expense
|
|
(4,352)
|
|
(4,388)
|
|
(8,731)
|
|
(12,418)
|
Other (expense) income,
net
|
|
(29,681)
|
|
1,269
|
|
(13,437)
|
|
(11,257)
|
Total interest and
other expense, net
|
|
(33,771)
|
|
(3,110)
|
|
(21,863)
|
|
(23,579)
|
(Loss) income before
income taxes
|
|
(700)
|
|
7,636
|
|
23,142
|
|
(494)
|
Income tax
expense
|
|
(193)
|
|
(5,837)
|
|
(4,834)
|
|
(5,217)
|
Consolidated net (loss)
income
|
|
$
(893)
|
|
$
1,799
|
|
$ 18,308
|
|
$ (5,711)
|
|
|
|
|
|
|
|
|
|
Net (loss) income per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
(0.02)
|
|
$
0.03
|
|
$
0.35
|
|
$
(0.11)
|
Diluted
|
|
$
(0.02)
|
|
$
0.03
|
|
$
0.35
|
|
$
(0.11)
|
Weighted average shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
52,022
|
|
51,567
|
|
51,926
|
|
51,473
|
Diluted
|
|
52,022
|
|
52,211
|
|
57,299
|
|
51,473
|
NuVasive,
Inc.
|
Consolidated Balance
Sheets
|
(in thousands,
except par value data)
|
|
|
|
|
|
|
|
June 30,
2022
|
|
December 31,
2021
|
ASSETS
|
|
(Unaudited)
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
225,985
|
|
$
246,091
|
Accounts receivable,
net of allowances of $19,166 and $21,064, respectively
|
|
233,573
|
|
214,398
|
Inventory,
net
|
|
331,708
|
|
315,845
|
Prepaid income
taxes
|
|
5,232
|
|
5,425
|
Prepaid expenses and
other current assets
|
|
26,812
|
|
20,665
|
Total current
assets
|
|
823,310
|
|
802,424
|
Property and equipment,
net
|
|
326,484
|
|
303,664
|
Intangible assets,
net
|
|
208,323
|
|
242,675
|
Goodwill
|
|
629,889
|
|
633,467
|
Operating lease
right-of-use assets
|
|
98,547
|
|
102,987
|
Deferred tax
assets
|
|
61,115
|
|
48,003
|
Restricted cash and
investments
|
|
1,494
|
|
1,494
|
Other assets
|
|
25,026
|
|
19,361
|
Total assets
|
|
$
2,174,188
|
|
$
2,154,075
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
123,780
|
|
$
115,614
|
Contingent
consideration liabilities
|
|
60,292
|
|
7,986
|
Accrued payroll and
related expenses
|
|
60,284
|
|
66,596
|
Operating lease
liabilities
|
|
10,298
|
|
9,867
|
Income tax
liabilities
|
|
959
|
|
828
|
Senior convertible
notes
|
|
445,745
|
|
-
|
Total current
liabilities
|
|
701,358
|
|
200,891
|
Long-term senior
convertible notes
|
|
442,864
|
|
884,984
|
Deferred tax
liabilities
|
|
11,716
|
|
3,049
|
Operating lease
liabilities
|
|
106,685
|
|
111,592
|
Contingent
consideration liabilities
|
|
70,649
|
|
139,824
|
Other long-term
liabilities
|
|
14,347
|
|
18,528
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock, $0.001
par value; 5,000 shares authorized, none outstanding
|
|
—
|
|
—
|
Common stock, $0.001
par value; 150,000 shares authorized at June 30, 2022 and
December 31, 2021; 58,863 shares issued and 52,061 outstanding
at June 30, 2022; 58,469 shares issued and 51,769 outstanding
at December 31, 2021
|
|
63
|
|
63
|
Additional paid-in
capital
|
|
1,453,013
|
|
1,434,976
|
Accumulated other
comprehensive loss
|
|
(7,210)
|
|
(7,792)
|
Retained
earnings
|
|
64,016
|
|
45,708
|
Treasury stock at cost;
6,802 shares and 6,700 shares at June 30, 2022 and
December 31, 2021, respectively
|
|
(683,313)
|
|
(677,748)
|
Total equity
|
|
826,569
|
|
795,207
|
Total liabilities and
equity
|
|
$
2,174,188
|
|
$
2,154,075
|
NuVasive,
Inc.
|
Consolidated
Statements of Cash Flows
|
(in
thousands)
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
(unaudited)
|
|
2022
|
|
2021
|
Operating
activities:
|
|
|
|
|
Consolidated net income
(loss)
|
|
$
18,308
|
|
$
(5,711)
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities:
|
|
|
|
|
Depreciation and
amortization
|
|
73,285
|
|
73,954
|
Deferred income
taxes
|
|
(5,304)
|
|
(2,942)
|
Amortization of
non-cash interest
|
|
3,932
|
|
4,721
|
Stock-based
compensation
|
|
14,321
|
|
13,007
|
Changes in fair value
of contingent consideration
|
|
(8,836)
|
|
5,957
|
Net loss (gain) on
strategic investments
|
|
232
|
|
(2,101)
|
Net loss from foreign
currency adjustments
|
|
13,574
|
|
13,402
|
Reserves on current
assets
|
|
(1,461)
|
|
8,716
|
Other non-cash
adjustments
|
|
8,231
|
|
7,249
|
Changes in operating
assets and liabilities, net of effects from
acquisitions:
|
|
|
|
|
Accounts
receivable
|
|
(22,596)
|
|
(11,541)
|
Inventory
|
|
(14,632)
|
|
(20,442)
|
Prepaid expenses and
other current assets
|
|
(111)
|
|
(1,589)
|
Accounts payable and
accrued liabilities
|
|
(6,057)
|
|
(5,244)
|
Accrued payroll and
related expenses
|
|
(5,207)
|
|
1,902
|
Income taxes
|
|
413
|
|
58
|
Net cash provided by
operating activities
|
|
68,092
|
|
79,396
|
Investing
activities:
|
|
|
|
|
Acquisition of Simplify
Medical, net of cash acquired
|
|
—
|
|
(149,463)
|
Payment of contingent
consideration for Simplify Medical
|
|
—
|
|
(45,850)
|
Acquisitions and
investments
|
|
(5,250)
|
|
(500)
|
Purchases of intangible
assets
|
|
—
|
|
(1,200)
|
Purchases of property
and equipment
|
|
(68,745)
|
|
(53,483)
|
Proceeds from sales of
marketable securities
|
|
—
|
|
127,023
|
Proceeds from
maturities of marketable securities
|
|
—
|
|
46,000
|
Other investing
activities
|
|
(698)
|
|
180
|
Net cash used in
investing activities
|
|
(74,693)
|
|
(77,293)
|
Financing
activities:
|
|
|
|
|
Payment of contingent
consideration
|
|
(6,839)
|
|
(3)
|
Proceeds from the
issuance of common stock
|
|
3,716
|
|
3,803
|
Purchases of treasury
stock
|
|
(5,565)
|
|
(6,964)
|
Payments upon
settlement of senior convertible notes
|
|
—
|
|
(649,426)
|
Other financing
activities
|
|
(982)
|
|
(671)
|
Net cash used in
financing activities
|
|
(9,670)
|
|
(653,261)
|
Effect of exchange rate
changes on cash
|
|
(3,835)
|
|
(1,573)
|
Decrease in cash, cash
equivalents and restricted cash
|
|
(20,106)
|
|
(652,731)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
247,585
|
|
858,363
|
Cash, cash equivalents
and restricted cash at end of period
|
|
$ 227,479
|
|
$ 205,632
|
|
For the Three Months
Ended June 30, 2022
|
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
|
(Unaudited - in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
Operating
Profit
|
Net (Loss)
Income
|
Diluted
EPS
|
Diluted
WASO6
|
Net (Loss) to
Adjusted EBITDA
|
|
Reported
GAAP
|
$ 224,693
|
$
33,071
|
$
(893)
|
$ (0.02)
|
52,022
|
$
(893)
|
|
% of net
sales
|
72.4 %
|
10.7 %
|
|
|
|
|
|
Amortization of
intangible assets
|
|
12,637
|
12,637
|
|
|
|
|
Litigation related
expenses and settlements1
|
|
(353)
|
(353)
|
|
|
(353)
|
|
Business transition
costs2
|
|
(7,624)
|
(7,624)
|
|
|
(7,624)
|
|
European medical device
regulation3
|
|
2,755
|
2,755
|
|
|
2,755
|
|
Net loss on strategic
investments
|
|
|
232
|
|
|
232
|
|
Non-cash
acquisition-related foreign currency impacts4
|
|
|
25,093
|
|
|
25,093
|
|
Tax effect of
adjustments5
|
|
|
(7,009)
|
|
|
|
|
Interest
expense/(income), net
|
|
|
|
|
|
4,090
|
|
Income tax
expense
|
|
|
|
|
|
193
|
|
Depreciation and
amortization
|
|
|
|
|
|
36,484
|
|
Non-cash stock-based
compensation
|
|
|
|
|
|
7,514
|
|
Adjusted
Non-GAAP
|
$ 224,693
|
$
40,486
|
$
24,838
|
$
0.47
|
52,539
|
$
67,491
|
|
% of net
sales
|
72.4 %
|
13.0 %
|
|
|
|
21.7 %
|
|
|
|
|
|
|
|
|
1
|
Represents expenses and
settlements associated with certain ongoing litigation matters,
including infringement of the Company's intellectual
property.
|
2
|
Costs related to
acquisition, integration and business transition activities which
include severance, relocation, consulting, leasehold exit costs,
third party merger and acquisitions costs, contingent consideration
fair value adjustments, and other costs directly associated with
such activities.
|
3
|
Represents costs
specific to updating our quality system, product labeling, asset
write-offs and product remanufacturing to comply with European
medical device regulation.
|
4
|
Represents non-cash
adjustments to acquisition-related intercompany balances and
contingent consideration liabilities held in a foreign
currency.
|
5
|
Represents the impact
from tax affecting the adjustments above at their statutory tax
rate.
|
6
|
Adjusted non-GAAP
diluted WASO excludes the impact of dilutive convertible notes for
which the Company is economically hedged through its anti-dilutive
bond hedge arrangements.
|
|
|
|
|
|
For the Six Months
Ended June 30, 2022
|
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
|
(Unaudited - in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
Operating
Profit
|
Net
Income
|
Diluted
EPS7
|
Diluted
WASO8
|
Net Income to
Adjusted EBITDA
|
|
Reported
GAAP
|
$ 436,358
|
$
45,005
|
$
18,308
|
$
0.35
|
57,299
|
$
18,308
|
|
% of net
sales
|
72.6 %
|
7.5 %
|
|
|
|
|
|
Non-cash purchase
accounting adjustments on acquisitions1
|
557
|
557
|
557
|
|
|
557
|
|
Amortization of
intangible assets
|
|
25,669
|
25,669
|
|
|
|
|
Litigation related
expenses and settlements2
|
|
2,848
|
2,848
|
|
|
2,848
|
|
Business transition
costs3
|
|
(4,564)
|
(4,564)
|
|
|
(4,564)
|
|
European medical device
regulation4
|
|
4,946
|
4,946
|
|
|
4,946
|
|
Net loss on strategic
investments
|
|
|
232
|
|
|
232
|
|
Non-cash
acquisition-related foreign currency impacts5
|
|
|
15,775
|
|
|
15,775
|
|
Tax effect of
adjustments6
|
|
|
(10,777)
|
|
|
|
|
Interest
expense/(income), net
|
|
|
|
|
|
8,426
|
|
Income tax
expense
|
|
|
|
|
|
4,834
|
|
Depreciation and
amortization
|
|
|
|
|
|
73,285
|
|
Non-cash stock-based
compensation
|
|
|
|
|
|
14,321
|
|
Adjusted
Non-GAAP
|
$ 436,915
|
$
74,461
|
$
52,994
|
$
1.01
|
52,475
|
$
138,968
|
|
% of net
sales
|
72.7 %
|
12.4 %
|
|
|
|
23.1 %
|
|
|
|
|
|
|
|
|
1
|
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.
|
2
|
Represents expenses and
settlements associated with certain ongoing litigation matters,
including infringement of the Company's intellectual
property.
|
3
|
Costs related to
acquisition, integration and business transition activities which
include severance, relocation, consulting, leasehold exit costs,
third party merger and acquisitions costs, contingent consideration
fair value adjustments, and other costs directly associated with
such activities.
|
4
|
Represents costs
specific to updating our quality system, product labeling, asset
write-offs and product remanufacturing to comply with European
medical device regulation.
|
5
|
Represents non-cash
adjustments to acquisition-related intercompany balances and
contingent consideration liabilities held in a foreign
currency.
|
6
|
Represents the impact
from tax affecting the adjustments above at their statutory tax
rate.
|
7
|
Reported GAAP diluted
EPS is calculated using Net Income plus interest and debt issuance
costs on senior convertible notes whose effect is dilutive, net of
tax divided by diluted WASO.
|
8
|
Adjusted non-GAAP
diluted WASO excludes the impact of dilutive convertible notes for
which the Company is economically hedged through its anti-dilutive
bond hedge arrangements.
|
|
|
|
|
|
For the Three Months
Ended June 30, 2021
|
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
|
(Unaudited - in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
Operating
Profit
|
Net
Income
|
Diluted
EPS
|
Diluted
WASO7
|
Net Income to
Adjusted EBITDA
|
|
Reported
GAAP
|
$ 216,548
|
$
10,746
|
$
1,799
|
$
0.03
|
52,211
|
$
1,799
|
|
% of net
sales
|
73.4 %
|
3.6 %
|
|
|
|
|
|
Non-cash purchase
accounting adjustments on acquisitions1
|
556
|
556
|
556
|
|
|
556
|
|
Amortization of
intangible assets
|
|
15,088
|
15,088
|
|
|
|
|
Litigation related
expenses and settlements2
|
|
1,287
|
1,287
|
|
|
1,287
|
|
Business transition
costs3
|
|
11,553
|
11,553
|
|
|
11,553
|
|
European medical device
regulation4
|
|
1,689
|
1,689
|
|
|
1,689
|
|
Net gain on strategic
investments
|
|
|
(2,101)
|
|
|
(2,101)
|
|
Non-cash
acquisition-related foreign currency impacts5
|
|
|
3,545
|
|
|
3,545
|
|
Tax effect of
adjustments6
|
|
|
(2,243)
|
|
|
|
|
Interest
expense/(income), net
|
|
|
|
|
|
4,379
|
|
Income tax
expense
|
|
|
|
|
|
5,837
|
|
Depreciation and
amortization
|
|
|
|
|
|
37,522
|
|
Non-cash stock-based
compensation
|
|
|
|
|
|
5,298
|
|
Adjusted
Non-GAAP
|
$ 217,104
|
$
40,919
|
$
31,173
|
$
0.60
|
52,211
|
$
71,364
|
|
% of net
sales
|
73.6 %
|
13.9 %
|
|
|
|
24.2 %
|
|
|
|
|
|
|
|
|
1
|
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.
|
2
|
Represents expenses
associated with certain ongoing litigation matters, including
infringement of the Company's intellectual property.
|
3
|
Costs related to
acquisition, integration and business transition activities which
include severance, relocation, consulting, leasehold exit costs,
third party merger and acquisitions costs, contingent consideration
fair value adjustments, and other costs directly associated with
such activities.
|
4
|
Represents costs
specific to updating our quality system, product labeling, asset
write-offs and product remanufacturing to comply with European
medical device regulation.
|
5
|
Represents non-cash
adjustments to acquisition-related intercompany balances and
contingent consideration liabilities held in a foreign
currency.
|
6
|
Represents the impact
from tax affecting the adjustments above at their statutory tax
rate.
|
7
|
Adjusted non-GAAP
diluted WASO excludes the impact of dilutive convertible notes for
which the Company is economically hedged through its anti-dilutive
bond hedge arrangements.
|
|
|
|
|
|
For the Six Months
Ended June 30, 2021
|
|
Reconciliation of
GAAP to Non-GAAP Financial Measures
|
|
(Unaudited - in
thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
Gross
Profit
|
Operating
Profit
|
Net (Loss)
Income
|
Diluted
EPS
|
Diluted
WASO7
|
Net (Loss) to
Adjusted EBITDA
|
|
Reported
GAAP
|
$ 415,986
|
$
23,085
|
$
(5,711)
|
$ (0.11)
|
51,473
|
$
(5,711)
|
|
% of net
sales
|
73.5 %
|
4.1 %
|
|
|
|
|
|
Non-cash purchase
accounting adjustments on acquisitions1
|
742
|
742
|
742
|
|
|
742
|
|
Amortization of
intangible assets
|
|
28,425
|
28,425
|
|
|
|
|
Litigation related
expenses and settlements2
|
|
3,248
|
3,248
|
|
|
3,248
|
|
Business transition
costs3
|
|
17,137
|
17,137
|
|
|
17,137
|
|
European medical device
regulation4
|
|
3,564
|
3,564
|
|
|
3,564
|
|
Net gain on strategic
investments
|
|
|
(2,101)
|
|
|
(2,101)
|
|
Non-cash
acquisition-related foreign currency impacts5
|
|
|
13,393
|
|
|
13,393
|
|
Tax effect of
adjustments6
|
|
|
(8,494)
|
|
|
|
|
Interest
expense/(income), net
|
|
|
|
|
|
12,322
|
|
Income tax
expense
|
|
|
|
|
|
5,217
|
|
Depreciation and
amortization
|
|
|
|
|
|
73,954
|
|
Non-cash stock-based
compensation
|
|
|
|
|
|
13,007
|
|
Adjusted
Non-GAAP
|
$ 416,728
|
$
76,201
|
$
50,203
|
$
0.96
|
52,140
|
$
134,772
|
|
% of net
sales
|
73.6 %
|
13.5 %
|
|
|
|
23.8 %
|
|
|
|
|
|
|
|
|
1
|
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.
|
2
|
Represents expenses
associated with certain ongoing litigation matters, including
infringement of the Company's intellectual property.
|
3
|
Costs related to
acquisition, integration and business transition activities which
include severance, relocation, consulting, leasehold exit costs,
third party merger and acquisitions costs, contingent consideration
fair value adjustments, and other costs directly associated with
such activities.
|
4
|
Represents costs
specific to updating our quality system, product labeling, asset
write-offs and product remanufacturing to comply with European
medical device regulation.
|
5
|
Represents non-cash
adjustments to acquisition-related intercompany balances and
contingent consideration liabilities held in a foreign
currency.
|
6
|
Represents the impact
from tax affecting the adjustments above at their statutory tax
rate.
|
7
|
Adjusted non-GAAP
diluted WASO excludes the impact of dilutive convertible notes for
which the Company is economically hedged through its anti-dilutive
bond hedge arrangements.
|
Full Year 2022
Financial Guidance
|
Reconciliation of
GAAP to Non-GAAP EPS
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 Guidance
Range1,
2
|
|
|
|
2021
Actuals1
|
|
Prior
|
|
Current
|
|
|
GAAP diluted
earnings (loss) per share
|
$(1.24)
|
|
$1.05-1.35
|
|
$0.95-1.25
|
|
|
Impact of
dilution3
|
0.02
|
|
~0.05
|
|
~0.05
|
|
|
Amortization of
intangible assets
|
1.10
|
|
~1.00
|
|
~1.00
|
|
|
European medical device
regulation4
|
0.16
|
|
~0.30
|
|
~0.25
|
|
|
Inventory charges
associated with product withdrawal5
|
0.27
|
|
-
|
|
-
|
|
|
Other6
|
1.83
|
|
~0.05
|
|
~0.30
|
|
|
Tax effect of
adjustments7
|
(0.45)
|
|
~(0.30)
|
|
~(0.40)
|
|
|
Non-GAAP diluted
earnings per share
|
$1.68
|
|
$2.15-2.45
|
|
$2.15-2.45
|
|
|
|
|
|
|
|
|
|
1
|
Data has been
intentionally rounded and may not sum.
|
|
|
2
|
Prior guidance reflects
the range provided May 4, 2022. Current guidance reflects the range
provided August 3, 2022.
|
|
|
3
|
GAAP diluted EPS
includes the dilutive impact of applying the if-converted method to
the Company's convertible notes. Adjusted non-GAAP diluted WASO
excludes the impact of dilutive convertible notes for which the
Company is economically hedged through its anti-dilutive bond hedge
arrangements.
|
|
|
4
|
Represents costs
specific to updating our quality system, product labeling, asset
write-offs and product remanufacturing to comply with European
medical device regulation.
|
|
|
5
|
Represents charges for
inventory write-offs associated with the Company's product
withdrawals. During the third quarter of 2021, the Company made a
determination to withdraw certain products marketed and sold by its
wholly-owned subsidiary, NuVasive Specialized
Orthopedics.
|
|
|
6
|
Includes costs
primarily associated with litigation related expenses and
settlements, non-cash acquisition-related foreign currency impacts,
non-cash purchase accounting adjustments on acquisitions, net gain
on strategic investments and business transition costs. See
Reconciliation of GAAP to Non-GAAP Financial Measures tables within
respective earnings releases for further detail.
|
|
|
7
|
Represents the impact
from tax affecting the adjustments above at their statutory tax
rate.
|
|
|
Full Year 2022
Financial Guidance
|
Reconciliation of
GAAP to Non-GAAP Operating Margin %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2022 Guidance
Range1,
2
|
|
|
|
|
2021
Actuals1
|
|
Prior
|
|
Current
|
|
|
GAAP Operating
Margin %
|
|
(1.1 %)
|
|
6.3%-7.8%
|
|
7.6%-9.1%
|
|
|
Amortization of
intangible assets
|
|
5.0 %
|
|
~4.4%
|
|
~4.4%
|
|
|
European medical device
regulation3
|
|
0.7 %
|
|
~1.3%
|
|
~1.0%
|
|
|
Inventory charges
associated with product withdrawal4
|
|
1.3 %
|
|
-
|
|
-
|
|
|
Other
5
|
|
6.8 %
|
|
~1.0%
|
|
-
|
|
|
Non-GAAP Operating
Margin %
|
|
12.8 %
|
|
13.0%-14.5%
|
|
13.0%-14.5%
|
|
|
|
|
|
|
|
|
|
|
1
|
Data has been
intentionally rounded and may not sum.
|
|
2
|
Prior guidance reflects
the range provided May 4, 2022. Current guidance reflects the range
provided August 3, 2022.
|
|
3
|
Represents costs
specific to updating our quality system, product labeling, asset
write-offs and product remanufacturing to comply with European
medical device regulation.
|
|
4
|
Represents charges for
inventory write-offs associated with the Company's product
withdrawals. During the third quarter of 2021, the Company made a
determination to withdraw certain products marketed and sold by its
wholly-owned subsidiary, NuVasive Specialized
Orthopedics.
|
|
5
|
Includes costs
primarily associated with litigation related expenses and
settlements, non-cash purchase accounting adjustments on
acquisitions, and business transition costs. See Reconciliation of
GAAP to Non-GAAP Financial Measures tables within respective
earnings releases for further detail.
|
|
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SOURCE NuVasive, Inc.