— Net sales increase driven by U.S. procedural volume improvement throughout the quarter and strong international growth —
— Simplify Cervical Artificial Disc receives FDA approval for two-level cervical total disc replacement —
— R&D investment increase year over year to advance spine procedural segments and enabling technology roadmap —
SAN DIEGO – May 5, 2021 – 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 March 31, 2021.
First Quarter 2021 Highlights
- Net sales increased 4.4% to $271.2 million, or 3.1% on a constant currency basis;
- GAAP operating margin of 4.5%; Non-GAAP operating margin of 13.0%; and
- GAAP diluted loss per share of $0.15; Non-GAAP diluted earnings per share of $0.37.
“NuVasive delivered year-over-year growth in the U.S. and international markets, and I am encouraged by the continued recovery of elective surgical procedures and momentum in the business,” said J. Christopher Barry, chief executive officer of NuVasive. “Our commitment to R&D investment furthers our ability to deliver the strongest innovation pipeline in spine that drives proceduralization across all spine segments. The positive surgeon feedback on NuVasive’s acquisition of Simplify Medical, the Simplify Disc’s recent FDA approval for two-level cervical total disc replacement, and the upcoming Pulse platform launch reinforces our dedication to outcome driven innovation that benefits the surgeon, provider, and—most importantly—the patient.”
A full reconciliation of GAAP to non-GAAP financial measures can be found in the tables of this news release.
First Quarter 2021 Results
NuVasive reported first quarter 2021 total net sales of $271.2 million, a 4.4% increase compared to $259.9 million for the first quarter 2020. On a constant currency basis, first quarter 2021 total net sales increased 3.1% compared to the same period last year. The increase in net sales was a result of month-over-month improvement in U.S. procedural volumes and low double-digit international growth on a reported basis as the impact of COVID-19 on elective surgeries continues to lessen.
For the first quarter 2021, GAAP and non-GAAP gross profit was $199.4 million and $199.6 million, respectively, and GAAP and non-GAAP gross margin was 73.5% and 73.6%, respectively. These results compared to GAAP and non-GAAP gross profit of $188.0 million and GAAP and non-GAAP gross margin of 72.3% for the first quarter 2020. GAAP and non-GAAP gross margin improvement was a result of the continued operational efficiencies gained throughout the NuVasive supply chain.
The Company reported GAAP net loss of $7.5 million, or diluted loss per share of $0.15, for the first quarter 2021 compared to GAAP net income of $5.3 million, or diluted earnings per share of $0.10, for the first quarter 2020. On a non-GAAP basis, the Company reported net income of $19.0 million, or diluted earnings per share of $0.37, for the first quarter 2021 compared to non-GAAP net income of $25.4 million, or diluted earnings per share of $0.48, for the first quarter 2020.
Cash, cash equivalents, and investments were $233.9 million as of March 31, 2021. Within the quarter, the Company retired $650 million of convertible debt at maturity and funded the $150 million upfront payment for the Simplify Medical acquisition utilizing cash on hand.
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 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, non-cash purchase accounting adjustments, 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, non-cash purchase accounting adjustments, 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 are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.
Investor Conference Call
NuVasive will hold a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its financial performance for the first quarter 2021. 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 June 5, 2021. In addition, a telephone replay of the call will be available until May 12, 2021. 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: 13718015.
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 has approximately 2,700 employees and operates in more than 50 countries serving surgeons, hospitals, and patients. 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 first quarter 2021. The Company’s results for the first quarter 2021 are prior to the completion of review and audit procedures by the Company’s external auditors and are subject to adjustment. 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.