NuVasive Reports Third Quarter 2016 Financial Results
SAN DIEGO, CA -- (Marketwired) -- 10/25/16 -- 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 ended September 30, 2016.
Third Quarter 2016 Highlights
- Revenue increased 19.5% to $239.6 million, or 18.9% on a constant currency basis
- GAAP operating profit margin of 8.8%; Non-GAAP operating profit margin of 16.1%
- GAAP diluted earnings per share of $0.07; Non-GAAP diluted earnings per share up 14.3% from prior year to $0.40
"Our results for the third quarter reflect continued strength in procedural volumes across the United States, as well as strong performances in our European and Australian markets," said Gregory T. Lucier, NuVasive's chairman and chief executive officer. "While our revenue results for the quarter were lower than our expectations due to capital and stocking orders in the United States that did not come through late in the quarter as planned, we believe this minor disruption is temporary. During the quarter, we continued to experience positive trends, including domestic procedural volumes in line with prior quarters and the conversion of surgeons at an increasingly faster pace, signaling stable market trends and competitive dynamics that favor our innovation and spine-only focused strategy.
"As anticipated, our results were also impacted by our dilator being off the market in Japan for a large portion of the quarter, which resulted in lower XLIF revenues. If XLIF procedures in Japan had been performed at their normal pace, the underlying revenue growth rate of our core business would have been in the mid-to-high single digits. We have resubmitted our dilator for approval with the Japanese Ministry of Health, and to be prudent, we have updated our financial guidance to reflect the removal of XLIF revenues in Japan for the fourth quarter."
Lucier continued, "Our intense focus on operational excellence is paying off as we delivered profitability and earnings that were significantly higher than our internal expectations, while continuing to invest in a broader innovation agenda and our new manufacturing facility in Ohio to drive long-term shareholder value creation. Based on these dynamics, we are reiterating our full year 2016 financial guidance in line with prior expectations, with the exception of revenue."
A full reconciliation of GAAP to non-GAAP measures can be found in the tables of this news release.
Third Quarter 2016 Results
NuVasive's financial results for the third quarter 2016 are inclusive of results from Ellipse Technologies, Inc. Mega Surgical and Biotronic NeuroNetwork, as these previously disclosed acquisitions were completed earlier in the year. Ellipse Technologies now operates as the renamed division NuVasive Specialized Orthopedics (NSO). Biotronic NeuroNetwork now operates alongside the Company's existing Impulse Monitoring business under the renamed division NuVasive Clinical Services (NCS).
NuVasive reported third quarter 2016 total revenue of $239.6 million, a 19.5% increase compared to $200.5 million for the third quarter 2015. On a constant currency basis, third quarter 2016 total revenue increased 18.9% compared to the same period last year.
For the third quarter 2016, GAAP and non-GAAP gross profit was $180.5 million and $182.9 million, respectively, while GAAP and non-GAAP gross margin was 75.3% and 76.3%, respectively. These results compared to GAAP and non-GAAP gross profit of $151.4 million and GAAP and non-GAAP gross margin of 75.5% for the third quarter 2015. Total GAAP and non-GAAP operating expenses were $159.3 million and $144.4 million, respectively, for the third quarter of 2016. These results compared to GAAP and non-GAAP operating expenses of $123.3 million and $118.7 million, respectively, for the third quarter 2015.
NuVasive reported a GAAP net income of $3.9 million, or $0.07 per diluted share, for the third quarter 2016 compared to $13.0 million, or $0.24 per diluted share, for the third quarter 2015.
On a non-GAAP basis, the Company reported net income of $21.1 million, or $0.40 per diluted share for the third quarter 2016 compared to $18.1 million, or $0.35 per diluted share, for the third quarter 2015.
Cash, cash equivalents and short and long-term marketable securities were approximately $204 million at September 30, 2016.
Updated Guidance for 2016
The Company reiterated full year 2016 financial guidance in line with prior expectations, with the exception of revenue. The Company expects full year 2016 revenue to be lower than prior expectations based on the Company's third quarter 2016 revenue results and the Company's revised forecast for fourth quarter 2016 revenue in Japan.
- Revenue of approximately $952.0 million for 2016, which includes a $1 million benefit from currency or approximately 17.4% growth compared to revenue of $811.1 million for 2015; versus a prior expectation of $962.0 million for 2016;
- Non-GAAP diluted earnings per share of approximately $1.64, an increase of approximately 25% and in line with the prior expectation of $1.64, compared to non-GAAP diluted earnings per share of $1.31 for 2015;
- Non-GAAP operating profit margin of approximately 16.0%, an increase of 60 basis points compared to 15.4% for 2015; in line with the prior expectation of approximately 16.0% for 2016;
- Adjusted EBITDA margin of approximately 25.4% for 2016; in line with the prior expectation of approximately 25.4% for 2016, compared to 25.2% for 2015; and
- Non-GAAP effective tax expense rate of approximately 37%; in line with the prior expectation of approximately 37% for 2016.
Supplementary Financial Information
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Reconciliation of Full Year EPS Guidance
2016 Guidance
-----------------------------
2015
Actuals Prior (1,2) Current (1,3)
-------------- -------------- --------------
GAAP net income per share $ 1.26 $ 0.84 $ 0.76
Impact of change to diluted
share count 0.03 0.03 0.03
-------------- -------------- --------------
GAAP net income per share,
adjusted to diluted Non-
GAAP share count $ 1.30 $ 0.88 $ 0.79
Litigation liability gain (0.82) (0.83) (0.83)
Business transition costs
(4) 0.27 0.20 0.26
Non-cash interest expense
on convertible notes 0.31 0.38 0.38
Non-cash purchase
accounting adjustments
on acquisitions (5) - 0.28 0.28
Loss on repurchase of
convertible notes - 0.34 0.34
Amortization of
intangible assets 0.24 0.73 0.78
In-process research &
development 0.02 - -
Tax effect of adjustments
(6) (0.01) (0.34) (0.36)
-------------- -------------- --------------
Non-GAAP earnings per share $ 1.31 $ 1.64 $ 1.64
============== ============== ==============
GAAP Weighted shares
outstanding - basic 48,687 50,004 50,050
============== ============== ==============
GAAP Weighted shares
outstanding - diluted 52,425 53,942 54,100
============== ============== ==============
Non-GAAP Weighted shares
outstanding - diluted 51,110 52,000 52,050
============== ============== ==============
(1) Prior guidance provided July 26, 2016. Current guidance reflects
guidance provided October 25, 2016, as updated for the expected
changes in currency.
(2) Effective tax expense rate of approximately 41% applied to GAAP
earnings and approximately 37% applied to Non-GAAP earnings.
(3) Effective tax expense rate of approximately 42% applied to GAAP
earnings and approximately 37% applied to Non-GAAP earnings.
(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.
(6) 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.
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Reconciliation of Non-GAAP Operating Margin %
2016 Guidance
-----------------------------
(in thousands, except %) 2015 Actuals Prior (1) Current (1)
-------------- -------------- --------------
Non-GAAP Gross Margin % [A] 76.0% 76.4% 76.4%
Non-cash purchase
accounting adjustments on
acquisitions (2) 0.0% (1.5%) (1.5%)
-------------- -------------- --------------
GAAP Gross Margin [B] 76.0% 74.9% 74.8%
GAAP & Non-GAAP Sales,
Marketing & Administrative
Expense [C] 56.4% 55.4% 55.3%
Non-GAAP Research &
Development Expense [D] 4.3% 5.1% 5.1%
In-process research &
development 0.1% 0.0% 0.0%
-------------- -------------- --------------
GAAP Research & Development
Expense [E] 4.4% 5.1% 5.1%
Litigation liability [F] (5.2%) (4.5%) (4.5%)
Amortization of intangible
assets [G] 1.5% 4.0% 4.3%
Business transition costs
[H] (3) 1.7% 1.2% 1.5%
-------------- -------------- --------------
Non-GAAP Operating Margin %
[A - C - D] 15.4% 16.0% 16.0%
============== ============== ==============
-------------- -------------- --------------
GAAP Operating Margin % [B
- C - E - F - G - H] 17.1% 13.7% 13.2%
============== ============== ==============
(1) Prior guidance provided July 26, 2016. Current guidance reflects
guidance provided October 25, 2016, 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) 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.
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Reconciliation of EBITDA %
2016 Guidance
-----------------------
2015
(in thousands, except %) Actuals Prior (1) Current (1)
----------- ----------- -----------
Net Income / (Loss) 8.2% 4.7% 4.3%
Interest (income) / expense, net 3.4% 5.9% 6.0%
Provision for income taxes 5.8% 3.2% 3.1%
Depreciation and amortization 8.1% 10.5% 10.6%
----------- ----------- -----------
EBITDA 25.5% 24.3% 24.1%
Non-cash stock based compensation 3.1% 2.9% 2.9%
Business transition costs (2) 1.7% 1.1% 1.4%
Non-cash purchase accounting
adjustments on acquisitions (3) 0.0% 1.5% 1.5%
In-process research & development 0.1% 0.0% 0.0%
Litigation liability gain (5.2%) (4.5%) (4.5%)
----------- ----------- -----------
Adjusted EBITDA 25.2% 25.4% 25.4%
=========== =========== ===========
(1) Prior guidance provided July 26, 2016. Current guidance reflects
guidance provided October 25, 2016, as updated for the expected changes
in currency.
(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.
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For additional financial detail, please visit the Investor Relations section at www.nuvasive.com to access Supplementary Financial Information.
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, non-cash purchase accounting adjustments on acquisitions, business transition costs, CEO transition related costs, certain litigation charges, significant one-time items, non-cash interest expense and/or losses on repurchase of convertible notes, and the impact from taxes related to these items, including those taxes that would have occurred in lieu of these items. 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, non-cash purchase accounting adjustments on acquisition, business transition costs, CEO transition related costs, certain litigation charges, 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.
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Reconciliation of Third Quarter 2016 Results
GAAP Net Income per Share to Non-GAAP Earnings per Share
Diluted
Earnings
(in thousands, except per share data) Adjustments Per Share
-------------- -------------
GAAP net income $ 3,926 $ 0.07
Business transition costs (1) 3,451
Non-cash interest expense on convertible
notes 5,186
Non-cash purchase accounting adjustments
on acquisitions (2) 2,457
Amortization of intangible assets 11,115
Tax effect of adjustments (3) (5,010)
--------------
Adjustments to GAAP net loss 17,199 0.33
-------------- -------------
Non-GAAP earnings $ 21,125 $ 0.40
============== =============
GAAP weighted shares outstanding - diluted 55,782
=============
Non-GAAP weighted shares outstanding -
diluted 52,633
=============
(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) 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%.
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Reconciliation of Year To Date 2016 Results
GAAP Net Income per Share to Non-GAAP Earnings per Share
Diluted
Earnings
(in thousands, except per share data) Adjustments Per Share
-------------- -------------
GAAP net income $ 30,771 $ 0.58
Litigation liability gain (43,310)
Business transition costs (1) 11,514
Non-cash interest expense on convertible
notes 14,547
Non-cash purchase accounting adjustments
on acquisitions (2) 14,747
Loss on repurchases of convertible notes 17,444
Amortization of intangible assets 28,945
Tax effect of adjustments (3) (15,759)
--------------
Adjustments to GAAP net income 28,128 0.54
-------------- -------------
Non-GAAP earnings $ 58,899 $ 1.14
============== =============
GAAP weighted shares outstanding - diluted 53,498
=============
Non-GAAP weighted shares outstanding -
diluted 51,841
=============
(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) 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%.
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Reconciliation of Third Quarter and Nine Months 2016 Results
GAAP net income to Adjusted EBITDA
Three months Nine months
ended ended
September 30, September 30,
(in thousands, except per share data) 2016 2016
GAAP net income $ 3,926 $ 30,771
Interest (income) / expense, net (1) 10,789 46,508
Provision for income taxes 6,972 17,383
Depreciation and amortization 27,158 72,865
-----------------------------
EBITDA $ 48,845 $ 167,527
=============================
Litigation liability gain — (43,310)
Non-cash purchase accounting related
charges (2) 2,457 14,747
Business transition costs (3) 3,451 11,514
Non-cash stock based compensation 7,288 19,645
-----------------------------
Adjusted EBITDA $ 62,041 $ 170,123
=============================
As a percentage of revenue 25.9% 24.6%
(1) Included in Interest (income) / expense, net for the nine months ended
September 30, 2016 is loss on extinguishment of debt for $17.4
million.
(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) 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.
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Investor Conference Call
NuVasive will hold a conference call today at 5:30 p.m. ET / 2:30 p.m. PT to discuss the results of its financial performance for the third quarter 2016. 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 November 28, 2016. In addition, a telephone replay of the call will be available until November 2, 2016. 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: 13646026.
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 $811 million in revenues (2015), NuVasive has an approximate 2,200 person workforce in more than 40 countries around the world. For more information, please visit www.nuvasive.com.
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 2016, as well as projections for 2016 financial guidance and longer-term financial performance goals. The Company's projections for 2016 financial guidance and longer-term financial performance goals represent current estimates, including initial estimates of the potential benefits, synergies and cost savings associated with acquisitions, which 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 that could cause actual growth and results to differ materially include, but are not limited to: the risk that NuVasive's revenue or earnings projections may turn out to be inaccurate because of the preliminary nature of the forecasts; the risk of further adjustment to financial results or future financial expectations; unanticipated difficulty in selling products, generating revenue or producing expected profitability; the risk that acquisitions will not be integrated successfully or that the benefits and synergies from the acquisition may not be fully realized or may take longer to realize than expected; and those 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.com. The forward-looking statements contained herein are based on the current expectations and assumptions of NuVasive and not on historical facts. 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 Nine Months Ended
September 30, September 30,
--------------------- ---------------------
2016 2015 2016 2015
---------- ---------- ---------- ----------
(unaudited)
Revenue $ 239,649 $ 200,538 $ 690,963 $ 595,831
Cost of goods sold (excluding
below amortization of
intangible assets) 59,196 49,167 173,167 143,246
---------- ---------- ---------- ----------
Gross profit 180,453 151,371 517,796 452,585
Operating expenses:
Sales, marketing and
administrative 131,886 110,554 391,211 338,444
Research and development 12,516 9,189 35,016 27,227
Amortization of intangible
assets 11,438 3,067 29,912 9,037
Litigation liability gain — (500) (43,310) (42,507)
Business transition costs 3,451 950 11,514 10,845
---------- ---------- ---------- ----------
Total operating expenses 159,291 123,260 424,343 343,046
Interest and other expense, net:
Interest income 190 362 924 1,125
Interest expense (10,979) (7,307) (29,988) (21,675)
Loss on repurchases of
convertible notes — — (17,444) —
Other income (loss), net 94 387 (102) 530
---------- ---------- ---------- ----------
Total interest and other
expense, net (10,695) (6,558) (46,610) (20,020)
Income before income taxes 10,467 21,553 46,843 89,519
Income tax expense (6,972) (8,803) (17,383) (35,332)
---------- ---------- ---------- ----------
Consolidated net income $ 3,495 $ 12,750 $ 29,460 $ 54,187
---------- ---------- ---------- ----------
Add back net loss attributable
to non-controlling interests $ (431) $ (210) $ (1,311) $ (601)
---------- ---------- ---------- ----------
Net income attributable to
NuVasive, Inc. $ 3,926 $ 12,960 $ 30,771 $ 54,788
========== ========== ========== ==========
Net income per share
attributable to NuVasive, Inc.:
---------- ---------- ---------- ----------
Basic $ 0.08 $ 0.26 $ 0.62 $ 1.13
---------- ---------- ---------- ----------
Diluted $ 0.07 $ 0.24 $ 0.58 $ 1.05
========== ========== ========== ==========
Weighted average shares
outstanding:
Basic 50,264 48,993 49,970 48,513
========== ========== ========== ==========
Diluted 55,782 53,199 53,498 52,202
---------- ---------- ---------- ----------
NuVasive, Inc.
Consolidated Balance Sheets
(in thousands, except par values and share amounts)
September 30, December 31,
2016 2015
-------------- --------------
ASSETS (Unaudited)
Current assets:
Cash and cash equivalents $ 203,818 $ 192,339
Short-term marketable securities — 165,423
Accounts receivable, net of allowances of
$8,335 and $5,320, respectively 143,818 127,595
Inventory, net 212,784 168,140
Prepaid income taxes 46,904 40,540
Prepaid expenses and other current assets 9,573 8,790
-------------- --------------
Total current assets 616,897 702,827
Property and equipment, net 179,913 141,441
Long-term marketable securities — 112,332
Intangible assets, net 303,928 85,076
Goodwill 498,686 154,281
Deferred tax assets 4,633 83,691
Restricted cash and investments 7,420 5,615
Other assets 24,568 17,404
-------------- --------------
Total assets $ 1,636,045 $ 1,302,667
============== ==============
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities $ 72,581 $ 60,985
Contingent consideration liabilities 45,005 —
Accrued payroll and related expenses 41,010 37,641
Income tax liabilities 828 990
Short-term senior convertible notes 120,975 —
-------------- --------------
Total current liabilities 280,399 99,616
Long term senior convertible notes 559,950 372,920
Deferred and income tax liabilities, non-
current 26,239 8,602
Non-current litigation liabilities — 88,261
Other long-term liabilities 46,643 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 September 30, 2016 and
December 31, 2015, 55,096,226 and
52,616,471 issued and outstanding at
September 30, 2016 and December 31, 2015,
respectively 55 53
Additional paid-in capital 1,033,298 989,387
Accumulated other comprehensive loss (5,891) (12,112)
Accumulated deficit (73,235) (104,006)
Treasury stock at cost; 4,751,464 shares and
3,316,794 shares at September 30, 2016 and
December 31, 2015, respectively (237,411) (161,788)
-------------- --------------
Total NuVasive, Inc. stockholders' equity 716,816 711,534
Non-controlling interests 5,998 7,309
-------------- --------------
Total equity $ 722,814 $ 718,843
============== ==============
Total liabilities and equity $ 1,636,045 $ 1,302,667
============== ==============
NuVasive, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Nine Months Ended
September 30,
-------------------------
2016 2015
------------ ------------
(unaudited)
Operating activities:
Consolidated net income $ 29,460 $ 54,187
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 73,765 49,006
Loss on repurchases of convertible notes 17,444 —
Amortization of non-cash interest 16,906 13,255
Stock-based compensation 19,645 20,570
Reserves on current assets 9,027 7,232
Other non-cash adjustments 11,369 13,127
Deferred income taxes 24,810 37,047
Changes in operating assets and liabilities,
net of effects from acquisitions:
Accounts receivable (3,038) 2,163
Inventory (22,423) (19,768)
Prepaid expenses and other current assets (3,457) 2,512
Accounts payable and accrued liabilities 5,939 8,828
Accrued royalties (85) (46,999)
Accrued payroll and related expenses (1,670) (5,080)
Litigation liability (88,450) (35,333)
Income taxes 6,778 (52,739)
------------ ------------
Net cash provided by operating activities 96,020 48,008
Investing activities:
Acquisition of Ellipse Technologies, net of cash
acquired (380,080) —
Other acquisitions and investments (108,150) (1,357)
Purchases of intangible assets (5,918) (28,589)
Proceeds from sales of property and equipment 40
Purchases of property and equipment (73,882) (59,905)
Purchases of marketable securities (128,956) (320,177)
Proceeds from sales of marketable securities 407,032 272,666
Sales of restricted investments — 180,694
Purchases of restricted investments — (62,625)
------------ ------------
Net cash used in investing activities (289,954) (19,253)
Financing activities:
Incremental tax benefits related to stock-based
compensation awards — 15,185
Proceeds from the issuance of common stock 6,668 9,040
Payment of contingent consideration — (514)
Purchase of treasury stock (24,441) (52,532)
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 (343,835) —
Proceeds from revolving line of credit 50,000 —
Repayments on revolving line of credit (50,000) —
Other financing activities (1,701) (131)
------------ ------------
Net cash provided by (used in) financing
activities 204,531 (28,952)
Effect of exchange rate changes on cash 882 (862)
------------ ------------
Increase (decrease) in cash and cash
equivalents 11,479 (1,059)
Cash and cash equivalents at beginning of period 192,339 142,387
------------ ------------
Cash and cash equivalents at end of period $ 203,818 $ 141,328
============ ============
Investor Contact:Suzanne HatcherNuVasive, Inc.1-858-458-2240Email contact Media Contact: Michael FarringtonNuVasive, Inc.1-858-909-1940Email contact
Source: NuVasive, Inc.