–Pulse platform demonstrates strong performance in early adoption, including first international commercial contracts–
–NuVasive Simplify Cervical Disc exceeds expectations in first year–
–International delivers double-digit net sales growth in 2021–
SAN DIEGO, Feb. 23, 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 and full year ended December 31, 2021.
Fourth Quarter 2021
- Net sales were $302.1 million, a 3.5% increase as reported and a 4.5% increase on a constant currency basis, compared to the prior year period;
- GAAP operating margin of (9.4%); Non-GAAP operating margin of 12.9%; and
- GAAP diluted loss per share of $0.71; Non-GAAP diluted earnings per share of $0.40.
Full Year 2021
- Net sales were $1.139 billion, an 8.4% increase as reported and an 8.1% increase on a constant currency basis, compared to the prior year;
- GAAP operating margin of (1.1%); Non-GAAP operating margin of 12.8%; and
- GAAP diluted loss per share of $1.24; Non-GAAP diluted earnings per share of $1.68.
“During 2021, we made significant progress on our strategy to deliver multiple vectors of growth, despite challenges with the COVID-19 pandemic,” said Chris Barry, chief executive officer of NuVasive. “Our results reflect the organization’s continued evolution from the pioneer of lateral spine surgery to a Company with leading procedural innovation across the spine continuum and increasing global scale. Through our focus on consistent execution and a commitment to increase shareholder value, our investments have built a technology pipeline which sets the stage for durable growth in 2022—and for years to come.”
Fourth Quarter 2021 Results
NuVasive reported fourth quarter 2021 total net sales of $302.1 million, a 3.5% increase as reported and a 4.5% increase on a constant currency basis, compared to $291.8 million in the prior year period. Fourth quarter 2021 total net sales were driven by new product introductions, particularly the Pulse platform and the C360 portfolio featuring the NuVasive Simplify Cervical Disc in the U.S., and continued strong international performance. The Company’s fourth quarter results were negatively impacted by the COVID-19 pandemic and healthcare staffing shortages.
For the fourth quarter of 2021, GAAP gross profit was $218.5 million and $219.1 million on a non-GAAP basis, compared to GAAP gross profit of $207.2 million and $208.9 million on a non-GAAP basis in the prior year period. GAAP gross margin was 72.3% and 72.5% on a non-GAAP basis, compared to GAAP gross margin of 71.0% and 71.6% on a non-GAAP basis in the prior year period.
The Company reported GAAP net loss of $36.7 million, or diluted loss per share of ($0.71), compared to GAAP net income of $1.7 million, or diluted earnings per share of $0.03 in the prior year period. During the fourth quarter, the Company recorded a charge of $46.6 million dollars associated with an increase in the contingent consideration liabilities for the Simplify Medical acquisition. On a non-GAAP basis, the Company reported net income of $20.7 million, or diluted earnings per share of $0.40, compared to non-GAAP net income of $30.4 million, or diluted earnings per share of $0.59 in the prior year period.
Cash, cash equivalents, and investments were $246.1 million as of December 31, 2021.
Full Year 2021 Results
The Company reported full year 2021 net sales of $1.139 billion, an 8.4% increase as reported and an 8.1% increase on a constant currency basis, compared to $1.051 billion in the prior year. Total 2021 net sales were driven by new product introductions, particularly the Pulse platform and the C360 portfolio featuring the NuVasive Simplify Cervical Disc in the U.S., and continued strong international performance. Full year results were negatively impacted by the ongoing COVID-19 global pandemic, healthcare staffing shortages, and NuVasive Specialized Orthopedics product availability.
For the full year 2021, GAAP gross profit was $816.7 million and $832.8 million on a non-GAAP basis, compared to GAAP gross profit of $729.0 million and $730.7 million on a non-GAAP basis in the prior year. GAAP gross margin was 71.7% and 73.1% on a non-GAAP basis, compared to GAAP gross margin of 69.4% and 69.5% on a non-GAAP basis in the prior year.
The Company reported GAAP net loss of $64.1 million, or diluted loss per share of ($1.24), compared to GAAP net loss of $37.2 million, or diluted loss per share of ($0.72) in the prior year. The GAAP net loss was primarily driven by the increase in contingent consideration liabilities for the Simplify Medical acquisition, as well as inventory charges associated with certain Precice stainless steel products manufactured by NuVasive Specialized Orthopedics that were withdrawn from the market. On a non-GAAP basis, the Company reported net income of $87.8 million, or diluted earnings per share of $1.68, compared to non-GAAP net income of $63.8 million, or diluted earnings per share of $1.23 in the prior year.
A full reconciliation of GAAP to non-GAAP financial measures can be found in the tables of this press release and on the Investor Relations section of the Company’s website.
Annual Financial Guidance for 2022
The Company provided financial guidance for the full year 2022 based on the Company’s current business outlook:
| GAAP | Non-GAAP | |
| Net sales growth (reported)* | 5.0%-8.0% | 5.0%-8.0% |
| Net sales growth (constant currency)* | 6.0%-9.0% | |
| Operating margin | 6.7%-8.2% | 13.0%-14.5% |
| Diluted earnings per share | $0.71-$1.01 | $2.05-$2.35 |
| * 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 expects will create a negative impact of approximately 100 bps in 2022. |
Please see the reconciliation of non-GAAP financial guidance tables included in this release for a reconciliation of the GAAP and non-GAAP financial measures.
Conference Call and Webcast
The Company will hold a conference call on Wednesday, February 23, 2022, at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its financial performance for the fourth quarter and full year ended December 31, 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 and supplemental financial information of the Company’s fourth quarter and full year 2021 financial results will be available on the Investor Relations page of the Company’s website at www.nuvasive.com. An audio replay of the call will be available until March 2, 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: 13726494. 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 fourth quarter and full year 2021, as well as projections for 2022 financial guidance and expectations regarding longer-term financial performance. 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.
