NuVasive Announces First Quarter 2019 Financial Results
SAN DIEGO, May 1, 2019 /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 March 31, 2019.
First Quarter 2019 Highlights
-- Revenue increased 5.5% to $274.8 million, or 6.4% on a constant currency
basis;
-- GAAP operating profit margin of 7.3%; Non-GAAP operating profit margin
of 14.9%; and
-- GAAP diluted earnings per share of $0.18; Non-GAAP diluted earnings per
share of $0.53.
"In the first quarter 2019, NuVasive delivered a solid start to the year with focused execution across our U.S. Spinal Hardware, U.S. Surgical Support and International businesses," said Chris Barry, chief executive officer of NuVasive. "Coupled with these financial results, we continued to operate the business with rigor and discipline to drive profitability while strategically investing in key growth areas. This includes the recently launched X360 System for lateral single-position surgery integrated with Surgical Intelligence, further differentiation of our Advanced Materials Science portfolio and upcoming launch of the Pulse platform--all which enable our surgeon partners to provide better, more reproducible clinical outcomes for their patients through minimally invasive surgery."
A full reconciliation of GAAP to non-GAAP financial measures can be found in the tables of this news release.
First Quarter 2019 Results
NuVasive reported first quarter 2019 total revenue of $274.8 million, a 5.5% increase compared to $260.5 million for the first quarter 2018. On a constant currency basis, first quarter 2019 total revenue increased 6.4% compared to the same period last year.
For the first quarter 2019, both GAAP and non-GAAP gross profit was $200.3 million and GAAP and non-GAAP gross margin was 72.9%. These results compared to GAAP and non-GAAP gross profit of $186.7 million and $187.1 million, respectively, and GAAP and non-GAAP gross margin of 71.7% and 71.8%, respectively, for the first quarter 2018.
The Company reported GAAP net income of $9.4 million, or diluted earnings per share of $0.18, for the first quarter 2019 compared to a GAAP net loss of $(27.1) million, or diluted loss per share of $(0.53), for the first quarter 2018. On a non-GAAP basis, the Company reported net income of $27.6 million, or diluted earnings per share of $0.53 per share, for the first quarter 2019 compared to net income of $20.6 million, or diluted earnings per share of $0.40 per share, for the first quarter 2018.
Annual Financial Guidance for 2019
The Company reiterated its full-year 2019 guidance:
2019 Guidance Range (1)
Prior
Current
GAAP
Non-GAAP GAAP
Non-GAAP
Revenue
$1.14B - $1.16B
$1.14B - $1.16B
$1.14B - $1.16B
$1.14B - $1.16B
% Growth - Reported 3.5% - 5.5% 3.5% - 5.5% 3.5% - 5.5% 3.5% - 5.5%
% Growth - Constant Currency(2) 3.8% - 5.8% 3.8% - 5.8%
Operating margin 9.5% - 10.0% 15.0% - 15.5% 9.0% - 9.5% 15.0% - 15.5%
Earnings per share
$1.00 - $1.10
$2.20 - $2.30
$0.95 - $1.05
$2.20 - $2.30
EBITDA margin 21.2% - 21.7% 25.2% - 25.7% 20.9% - 21.3% 25.2% - 25.7%
Tax Rate ~24% ~23% ~22% ~23%
1 Prior
guidance
reflects
the range
provided
February
20, 2019.
Current
guidance
reflects
the range
provided
May 1,
2019.
2 Constant
currency
is a
measure
that
adjusts
US GAAP
revenue
for the
impact of
currency
over the
same
period in
the prior
year.
-- The Company estimates revenue for full year 2019 to be in the range of
$1.14 billion to $1.16 billion, reflecting reported growth in the range
of 3.5% to 5.5%;
-- Non-GAAP earnings per share in a range of $2.20 to $2.30;
-- Non-GAAP operating profit margin of 15.0% to 15.5%;
-- EBITDA margin of 25.2% to 25.7%; and
-- Non-GAAP effective tax expense rate of approximately 23%.
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
2019 Guidance Range 1, 2
2018
Prior (3)
Current 4
Actuals
(1)
GAAP net income per
share $0.24
$1.00 - 1.10
$0.95 - 1.05
Impact of change to
diluted share count
GAAP net income per
share, adjusted to
diluted Non-GAAP share
count $0.24
$1.00 - 1.10
$0.95 - 1.05
Business transition
costs 5 0.22 0.10
Non-cash purchase
accounting adjustments
on acquisitions 6 0.02
Non-cash interest
expense on convertible
notes 0.32 0.30 0.30
Litigation related
expenses and
settlements 7 0.65 0.20 0.20
Non-recurring
consulting fees 8 0.12
Net loss on strategic
investments 0.07
Amortization of
intangible assets 0.97 0.90 0.95
Purchase of in-process
research and
development 9 0.17
European medical device
regulation10 0.01 0.10 0.10
Tax effect of
adjustments11 (0.56) (0.30) (0.40)
Non-GAAP earnings per
share $2.23
$2.20 - 2.30
$2.20 - 2.30
GAAP Weighted shares
outstanding -basic 51,382 52,017 51,999
GAAP Weighted shares
outstanding -diluted 52,355 52,938 52,991
Non-GAAP Weighted
shares outstanding -
diluted 12 52,178 52,714 52,718
1 Items may not
foot due to
rounding.
2 Prior guidance
reflects the
range provided
February 20,
2019. Current
guidance
reflects the
range provided
May 1, 2019.
3 Effective tax
expense rate of
~24% applied to
GAAP earnings
and ~23%
applied to Non-
GAAP earnings.
4 Effective tax
expense rate of
~22% applied to
GAAP earnings
and ~23%
applied to Non-
GAAP earnings.
5 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.
6 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.
7 Represents the
loss recorded
in connection
with the
settlement of
the Madsen
Medical, Inc.
litigation
matter, as well
as expenses
associated with
ongoing
litigation with
a former Board
member and his
current
employer
related to
various
matters,
including
infringement of
the Company's
intellectual
property.
8 Non-recurring
consulting fees
associated with
the
implementation
of our state
tax-planning
strategy.
9 Purchase of an
in-process
research and
development
asset which had
no future
alternative
use.
10 Represents costs
specific to
updating our
quality system,
product
labeling, asset
write-offs and
product
remanufacturing
to comply with
European
medical device
regulation.
11 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 rate of
~43% benefit on
a GAAP basis
and ~18% on a
non-GAAP basis
in 2018.
12 Adjusted non-
GAAP diluted
WASO excludes
the impact of
dilutive
convertible
notes and
warrants for
which the
Company is
economically
hedged through
its anti-
dilutive bond
hedge
arrangements.
Reconciliation of Non-GAAP Operating Margin %
2019 Guidance Range 1, 2
(in thousands, except
%) 2018
Prior
Current
Actuals (1)
Non-GAAP Gross Margin
% [A] 71.9% 72.5% - 73.0% 72.5% - 73.0%
Non-cash purchase
accounting adjustments
on acquisitions (3) (0.1%) 0.0% 0.0%
GAAP Gross Margin [B] 71.8% 72.5% - 73.0% 72.5% - 73.0%
Non-GAAP Sales,
Marketing &
Administrative Expense
[C] 51.1% 51.0% - 52.0% 51.0% - 52.0%
Non-recurring
consulting fees4 0.6% 0.0% 0.0%
Litigation related
expenses5 0.6% 0.7% 0.7%
GAAP Sales, Marketing &
Administrative Expense
[D] 52.3% 51.7% - 52.7% 51.7% - 52.7%
GAAP and Non-GAAP
Research & Development
Expense [E] 5.6% 6.0% 6.0%
Litigation related
settlements [F]6 2.5% 0.0% 0.0%
Amortization of
intangible assets [G] 4.6% 4.2% 4.3%
Purchase of in-process
research and
development [H]7 0.8% 0.0% 0.0%
European medical device
regulation [I]8 0.0% 0.6% 0.6%
Business transition
costs [J] 9 1.0% 0.0% 0.4%
Non-GAAP Operating
Margin % [A - C - E] 15.1% 15.0% - 15.5% 15.0% - 15.5%
GAAP Operating Margin %
[B -D -E -F -G -H
-I -J] 4.9% 9.5% - 10.0% 9.0% - 9.5%
(1) Items may not
foot due to
rounding.
(2) Prior guidance
reflects the
range provided
February 20,
2019. Current
guidance
reflects the
range provided
May 1, 2019.
(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 Non-recurring
consulting fees
associated with
the
implementation
of our state
tax-planning
strategy.
5 Expenses
associated with
ongoing
litigation with
a former Board
member and his
current
employer
related to
various
matters,
including
infringement of
the Company's
intellectual
property.
6 Represents the
loss recorded
in connection
with the
settlement of
the Madsen
Medical, Inc.
litigation
matter.
7 Purchase of an
in-process
research and
development
asset which had
no
future
alternative
use.
8 Represents costs
specific to
updating our
quality system,
product
labeling, asset
write-offs and
product
remanufacturing
to comply with
European
medical device
regulation.
9 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.
Reconciliation of EBITDA Margin %
2019 Guidance Range1, 5
(in thousands, except %)
2018 Actuals 1, 2
Prior (3)
Current4
Net Income 1.1% 4.6% - 5.0% 4.3% - 4.8%
Interest income /expense,
net 3.4% 3.3% 3.3%
Income tax benefit /
(expense) (0.3%) 1.5% 1.3%
Depreciation and
amortization 11.8% 11.7% 12.0%
EBITDA Margin 16.0% 21.2% - 21.7% 20.9% - 21.3%
Non-cash stock based
compensation 2.3% 2.7% 2.6%
Business transition costs6 1.0% 0.0% 0.4%
Non-cash purchase
accounting adjustments on
acquisitions7 0.1% 0.0% 0.0%
Litigation related
expenses and settlements
8 3.1% 0.7% 0.7%
Non-recurring consulting
fees 9 0.6% 0.0% 0.0%
In-process research and
development10 0.8% 0.0% 0.0%
European medical device
regulation11 0.0% 0.6% 0.6%
Net loss on strategic
investments 0.3% 0.0% 0.0%
Adjusted EBITDA Margin 24.3% 25.2% - 25.7% 25.2% - 25.7%
(1) Items may not
foot due to
rounding.
2 Effective tax
expense rate of
~43% benefit
applied to GAAP
earnings and
~18% applied to
Non-GAAP
earnings.
3 Effective tax
expense rate of
~24% applied to
GAAP earnings
and ~23%
applied to Non-
GAAP earnings.
4 Effective tax
expense rate of
~22% applied to
GAAP earnings
and ~23%
applied to Non-
GAAP earnings.
5 Prior guidance
reflects the
range provided
February 20,
2019. Current
guidance
reflects the
range provided
May 1, 2019.
6 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.
7 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.
8 Represents the
loss recorded
in connection
with the
settlement of
the Madsen
Medical, Inc.
litigation
matter, as well
as expenses
associated with
ongoing
litigation with
a former Board
member and his
current
employer
related to
various
matters,
including
infringement of
the Company's
intellectual
property.
9 Non-recurring
consulting fees
associated with
the
implementation
of our state
tax-planning
strategy.
10 Purchase of an
in-process
research and
development
asset which had
no future
alternative
use.
11 Represents costs
specific to
updating our
quality system,
product
labeling, asset
write-offs and
product
remanufacturing
to comply with
European
medical device
regulation.
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, business transition costs, purchased in-process research and development, one-time restructuring and related items in connection with acquisitions, investments and divestitures, non-recurring consulting fees, certain litigation expenses and settlements, certain European medical device regulation costs, gains and losses from strategic investments, and non-cash interest expense (excluding debt issuance cost). 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 and related items in connection with acquisitions, investments and divestitures, non-recurring consulting fees, certain litigation expenses and settlements, certain European medical device regulation costs, gains and losses on strategic investments, 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.
During the quarter ended June 30, 2018, the Company began excluding from its non-GAAP financial results certain litigation related expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company's intellectual property. For consistency and comparability, the Company has re-casted non-GAAP financial results for each of the quarters ended Dec. 31, 2017 and March 31, 2018 to exclude these litigation expenses in such periods, which were $0.4 million and $0.6 million, respectively.
For the Three Months Ended March 31, 2019
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited - in thousands, except per share data)
Gross
Operating
Net Diluted Diluted
Net Income
Profit Profit Income EPS WASO 5 to Adjusted
EBITDA
---
Reported GAAP $200,282 $20,173 $9,386 $0.18 52,480 $9,386
% of revenue 72.9% 7.3%
---
Amortization of intangible assets 13,625 13,625
Litigation related expenses and settlements(1) 3,046 3,046 3,046
Business transition costs(2) 3,833 3,833 3,833
European medical device regulation(3) 332 332 332
Non-cash interest expense on convertible notes 4,319
Tax effect of adjustments 4 (6,933)
Interest expense/(income), net 9,104
Income tax expense 1,317
Depreciation and amortization 34,054
Non-cash stock based compensation 5,717
---
Adjusted Non-GAAP $200,282 $41,009 $27,608 $0.53 52,480 $66,789
--- ---
% of revenue 72.9% 14.9% 24.3%
---
(1) Represents
expenses
associated with
ongoing
litigation with
a former Board
member and his
current
employer
related to
various
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 the
impact from tax
affecting the
adjustments
above at their
statutory tax
rate. As of May
1, 2019, the
Company
estimated an
annual tax rate
of ~22% on a
GAAP basis and
~23% on a non-
GAAP basis.
5 Adjusted non-
GAAP diluted
WASO excludes
the impact of
dilutive
convertible
notes and
warrants for
which the
Company is
economically
hedged through
its anti-
dilutive bond
hedge
arrangements.
For the Three Months Ended March 31, 2018
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited - in thousands, except per share data)
Gross
Operating
Net Income Diluted Diluted
Net Income
Profit Profit (Loss) EPS WASO 6 (Loss) to
(Loss) Adjusted
EBITDA
---
Reported GAAP $186,708 $(18,222) $(27,132) $(0.53) 51,226 $(27,132)
% of revenue 71.7% (7.0%)
---
Non-cash purchase
accounting
adjustments on
acquisitions (1) 405 405 405 405
Non-recurring consulting fees (2) 6,084 6,084 6,084
Amortization of intangible assets 12,425 12,425
Litigation related expenses and settlements (3) 29,586 29,586 29,586
Business transition costs 4 2,253 2,253 2,253
Non-cash interest expense on convertible notes 4,099
Net loss on strategic investments 9,004 9,004
Tax effect of adjustments 5 (16,109)
Interest expense/(income), net 9,333
Income tax benefit (10,126)
Depreciation and amortization 32,090
Non-cash stock based compensation 4,134
---
Adjusted Non-GAAP $187,113 $32,531 $20,615 $0.40 51,742 $55,631
--- ---
% of revenue 71.8% 12.5% 21.4%
---
(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) Non-recurring
consulting
fees
associated
with the
implementation
of our state
tax-planning
strategy.
(3) Represents the
loss recorded
in connection
with the
settlement of
the Madsen
Medical, Inc.
litigation
matter, as
well as
expenses
associated
with ongoing
litigation
with a former
Board member
and his
current
employer
related to
various
matters,
including
infringement
of the
Company's
intellectual
property.
4 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.
5 Represents the
impact from
tax affecting
the
adjustments
above at their
statutory tax
rate. As of
May 1, 2018,
the Company
estimated an
annual tax
rate of ~31%
on a GAAP
basis and ~23%
on a non-GAAP
basis.
6 Adjusted non-
GAAP diluted
WASO excludes
the impact of
dilutive
convertible
notes and
warrants for
which the
Company is
economically
hedged through
its anti-
dilutive bond
hedge
arrangements.
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 2019. 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 May 31, 2019. In addition, a telephone replay of the call will be available until May 8, 2019. 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: 13689332.
About NuVasive
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 more than $1 billion in revenues, NuVasive has approximately 2,600 employees and operates in more than 50 countries serving surgeons, hospitals and patients. 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 first quarter 2019, as well as projections for 2019 financial guidance and longer-term financial performance goals. The Company's results for the first quarter 2019 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 2019 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, 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 March 31,
(unaudited) 2019 2018
Revenue
Product revenue $243,823 $233,515
Service revenue 30,953 27,007
Total revenue 274,776 260,522
Cost of revenue (excluding below
amortization of intangible assets)
Cost of products sold 54,486 55,191
Cost of services 20,008 18,623
Total cost of revenue 74,494 73,814
Gross profit 200,282 186,708
Operating expenses:
Sales, marketing and administrative 145,076 146,766
Research and development 17,575 14,491
Amortization of intangible assets 13,625 12,425
Litigation liability loss 28,995
Business transition costs 3,833 2,253
Total operating expenses 180,109 204,930
Interest and other expense, net:
Interest income 409 134
Interest expense (9,513) (9,467)
Other (expense) income, net (366) (9,703)
Total interest and other expense, net (9,470) (19,036)
Income (loss) before income taxes 10,703 (37,258)
Income tax (expense) benefit (1,317) 10,126
Consolidated net income (loss) $9,386 $(27,132)
Net income (loss) per share:
Basic $0.18 $(0.53)
Diluted $0.18 $(0.53)
Weighted average shares outstanding:
Basic 51,675 51,226
Diluted 52,480 51,226
NuVasive, Inc.
Consolidated Balance Sheets
(in thousands, except par values and share amounts)
March 31, 2019
December 31, 2018
ASSETS
(unaudited)
Current assets:
Cash and cash equivalents $93,391 $117,840
Accounts receivable, net of allowances of
$16,125 and $16,171, respectively 194,358 196,487
Inventory, net 288,539 273,244
Prepaid income taxes 16,484 16,905
Prepaid expenses and other current assets 13,555 13,733
Total current assets 606,327 618,209
Property and equipment, net 247,533 238,841
Intangible assets, net 240,663 252,048
Goodwill 561,235 561,366
Operating lease right-of-use assets 61,400
Deferred tax assets 4,369 5,263
Restricted cash and investments 2,395 2,395
Other assets 27,180 29,737
Total assets $1,751,102 $1,707,859
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities $99,991 $105,877
Contingent consideration liabilities 6,637 7,560
Accrued payroll and related expenses 44,824 59,960
Operating lease liabilities 6,320
Litigation liabilities 2,045 1,415
Income tax liabilities 1,964 4,648
Total current liabilities 161,781 179,460
Senior convertible notes 607,607 602,526
Deferred and income tax liabilities 5,641 4,964
Operating lease liabilities 67,112
Other long-term liabilities 68,955 86,384
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 March 31, 2019 and
December 31, 2018, 57,119,047 and
56,648,077 issued and outstanding at March
31, 2019 and December 31, 2018,
respectively 61 61
Additional paid-in capital 1,402,797 1,397,829
Accumulated other comprehensive loss (9,122) (8,628)
Retained earnings 26,627 17,241
Treasury stock at cost; 5,262,478 shares
and 5,116,496 shares at March 31, 2019 and
December 31, 2018, respectively (580,357) (571,978)
Total equity 840,006 834,525
Total liabilities and equity $1,751,102 $1,707,859
NuVasive, Inc.
Consolidated Statements of Cash Flows
(in thousands)
Three Months Ended March 31,
(unaudited) 2019 2018
Operating activities:
Consolidated net income (loss) $9,386 $(27,132)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depreciation and amortization 34,054 32,090
Impairment of strategic investment 9,003
Amortization of non-cash interest 5,210 4,925
Stock-based compensation 5,717 4,134
Reserves on current assets 3,785 4,080
Other non-cash adjustments 2,816 4,456
Deferred income taxes 1,547 (12,671)
Changes in operating assets and liabilities, net of effects from
acquisitions:
Accounts receivable 1,620 16,933
Inventory (19,292) (12,126)
Prepaid expenses and other current assets (1,399) (1,737)
Accounts payable and accrued liabilities (2,523) 1,579
Accrued payroll and related expenses (14,815) (18,493)
Litigation liability 630 30,040
Income taxes (2,261) 1,294
Net cash provided by operating activities 24,475 36,375
Investing activities:
Acquisitions and investments (51,794)
Purchases of intangible assets (6,827) (2,657)
Purchases of property and equipment (33,929) (29,109)
Net cash used in investing activities (40,756) (83,560)
Financing activities:
Proceeds from the issuance of common stock 336
Purchases of treasury stock (8,177) (2,155)
Payment of contingent consideration (1,435) (8,900)
Proceeds from revolving line of credit 65,000
Repayments on revolving line of credit (10,000)
Other financing activities 1,556 (141)
Net cash (used in) provided by financing activities (8,056) 44,140
Effect of exchange rate changes on cash (112) 982
Decrease in cash, cash equivalents and restricted cash (24,449) (2,063)
Cash, cash equivalents and restricted cash at beginning of period 120,235 78,198
Cash, cash equivalents and restricted cash at end of period $95,786 $76,135
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SOURCE NuVasive, Inc.
