NuVasive Posts Solid Gains for Q4 and Fiscal 2013

Fiscal 2013 and the fourth quarter of 2013 (ended Dec. 31) posted across-the-board gains for San Diego, Calif.-based spine company NuVasive Inc.

NuVasive reported fourth quarter 2013 revenue of $190.8 million, a 15.1 percent increase compared with the $165.8 million for the fourth quarter of 2012 and a 12.8 percent increase over the $169.2 million reported for the third quarter of 2013.The company reported full-year 2013 revenue of $685.2 million, a 10.5 percent increase compared with the $620.3 million reported for full year 2012.

Gross profit for the fourth quarter of 2013 was $141.5 million and gross margin was 74.1 percent, compared to a gross profit of $123.6 million and a gross margin of 74.5 percent for the fourth quarter 2012. For the third quarter 2013, gross profit was $125.9 million and gross margin was 74.4 percent. Gross profit for the full-year 2013 was $504.7 million and gross margin was 73.7 percent, compared to a gross profit of $466.8 million and gross margin of 75.3 percent for the full-year 2012.

“2013 results clearly demonstrate that NuVasive’s market share taking strategy is thriving,”said Alex Lukianov, chairman and CEO. “Importantly, we are cultivating the drivers that will support top and bottom line growth for many years to come.We are leveraging our unrivaled years of experience and research to continue championing the global market conversion toward less-invasive spine solutions.And our commitment to innovation has conceived a pipeline that may dwarf all that we have accomplished so far.”

Total operating expenses for the fourth quarter were $126.4 million compared to $119.4 million in the fourth quarter of 2012 and $114.3 million in the third quarter of 2013. Full-year 2013 operating expenses were $471.6 million compared to $429.8 million reported for 2012.The higher operating costs for the 2013fourth quarter and fiscal year resulted primarily from spending to support international infrastructure expansion and higher revenue.

The company reported net income of $6 million, or 13 cents per share, for the fourth quarter 2013, and net income of $7.9 million, or 17 cents per share for the fiscal year.

On a Non-GAAP basis, the company reported net income of $17.8 million, or 37 cents per share, for the fourth quarter 2013, and net income of $57.4 million, or $1.23 per share, for the full-year 2013.The Non-GAAP earnings per share calculations for the fourth quarter and full year exclude, respectively, non-cash stock-based compensation of $9.2 million and $33.2 million; certain intellectual property litigation expenses of $1.8 million and $5.7 million; (amortization of intangible assets of $5.1 million and $19.3 million; acquisition related items of $42 thousand and $2.6 million; non-cash interest expense on convertible notes of $3.5 million and $13.7 million; and a one-time out of period royalty expense charge related to royalty accruals in connection with Phase I of the company’s patent litigation with Medtronic of $7.9 million recorded in the second quarter 2013.

For 2014, the company predicts revenue of approximately $725 million.