Company expects savings to fuel innovation and growth in spine surgery solutions
SAN DIEGO – Dec. 21, 2017 – NuVasive, Inc. (NASDAQ: NUVA), the leader in spine technology innovation, focused on transforming spine surgery with minimally disruptive, procedurally-integrated solutions, announced today the potential implications to its business based on the recent passage by the U.S. Congress and soon-to-occur signing by President Trump of the tax bill, An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018, resulting in the reduction of the U.S. corporate tax rate from 35 percent to approximately 21 percent. This is the largest tax overhaul in 30 years and will significantly reduce the future corporate tax rate for NuVasive, which prior to the enactment of the tax overhaul was expected to be approximately 33 percent on a non-GAAP basis in 2018.
NuVasive continues to be a leader in bringing innovative and life-changing spine surgery solutions to market, a pattern that should only accelerate with the tax savings and the additional growth opportunities it provides. Based on the preliminary assessment of the legislation, the Company believes the new regulations will positively impact its non-GAAP earnings per share (EPS). While the Company will be undertaking a thorough analysis over the coming weeks, early analysis indicates that the NuVasive non-GAAP tax rate will drop into the low 20 percent range in 2018 and in future periods converge to a 20 percent non-GAAP tax rate.
“The savings from this landmark decision are expected to boost forward-looking free cash flow and non-GAAP EPS well in excess of 10 percent per year beginning in 2018, delivering incredible incremental value-generating opportunities for our shareholders,” said Gregory T. Lucier, chairman and chief executive officer of NuVasive. “Innovation requires fuel, and this surplus can support increased investments in R&D to provide solutions that empower spine surgeons to change the lives of their patients. This is a tremendous opportunity for the medical device industry, and a major spark in our ability to continue to invest in life-changing innovations.”
The ramifications of the U.S. corporate tax reform will continue to be monitored as NuVasive surveys the corporate landscape and devises ways to maximize the savings for optimum business growth moving forward.
NuVasive, Inc. (NASDAQ: NUVA) is the leader in spine technology innovation, focused on transforming spine surgery and beyond with minimally disruptive, procedurally-integrated solutions designed to deliver reproducible and clinically-proven surgical outcomes. The Company’s portfolio includes access instruments, implantable hardware, biologics, software systems for surgical planning, navigation and imaging solutions, magnetically adjustable implant systems for spine and orthopedics, and intraoperative monitoring service offerings. With $962 million in revenues (2016), NuVasive has an approximate 2,300 person workforce in more than 40 countries serving surgeons, hospitals and patients. For more information, please visit www.nuvasive.com.
NuVasive cautions you that statements included in this news release that are not a description of historical facts are forward-looking statements that involve risks, uncertainties, assumptions and other factors which, if they do not materialize or prove correct, could cause NuVasive’s results to differ materially from historical results or those expressed or implied by such forward-looking statements. Forward-looking statements include, but are not limited to, statements about the anticipated impact of the new tax law on NuVasive’s future tax rate and financial and operating results, including future business plans and intentions. The forward-looking statements contained herein are based on the current expectations and assumptions of NuVasive and not on historical facts. The following important factors, among others, could cause actual results to differ materially from those set forth in the forward-looking statements: the risk that NuVasive’s estimates and projections related to future tax and financial and operating results may turn out to be inaccurate because of the preliminary nature of the Company’s forecasts; the risk of further adjustment to future financial expectations; unanticipated difficulty in selling products, generating revenue or producing expected profitability; 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. NuVasive assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made.