NuVasive announced third quarter financial results and increased full year guidance.
Here are 10 things to know about the company's financial report:
1. Revenue increased 12.3 percent to $189.9 million for the quarter.
2. NuVasive generated a record quarterly free cash flow at $35 million.
3. GAAP gross profit for the third quarter was $142.2 million and the gross margin was 74.9 percent. In 2013, the third quarter GAAP gross profit was $125.9 million and gross margin was 74.4 percent.
4. Total GAAP operating expenses for the third quarter was $125.9 million, up significantly from $114.3 million over the same period last year. The increase was primarily due to an investment to support international expansion.
5. The GAAP net loss for the third quarter was $1.8 million or $0.04 per share. This includes a tax rate of 128 percent, which was higher than anticipated primarily due to the earnings mix. The company expects to recover in the fourth quarter of this year and has revised guidance accordingly.
6. Net income for the company was $9.6 million on a non-GAAP basis.
7. Cash, cash equivalents and short and long-term marketable securities was approximately $384.2 million. The company generated $48.2 million in cash flows from operations and invested $13.1 million in capital expenditures, yielding $35.1 million for the third quarter in free cash flow.
8. For the full year, the company expects $755 million in revenue, which includes an incremental headwind from currency in the fourth quarter. This would be a 10 percent growth over 2013.
9. NuVasive is still on course as a leader in the spine device field, especially with the flagship XLIF procedures and in the minimally invasive market.
"As the spine market continues to shift to less invasive solutions and as better patient outcomes and clinical and economical evidence are driving surgeon adoption, we remain committed to spending our leadership in this market," said Alex Lukiav, NuVasive CEO. "We fully believe that our procedural offerings will allow us to further penetrate with this estimated to become a $5 billion MIS market opportunity over the next decade. Increasingly, we have invested in procedural offerings to enter the traditional spine market and convert it to less invasive solutions with improved surgical outcomes."
10. The company plans to expand its international footprint in the future. "Several years ago we made the decision to expand our geographical footprint by strategically and methodologically entering the $2.2 billion international spine market," said Mr. Lukiav. "Today we have commercial operations across EMEA, Asia Pacific and Latin America. During the third quarter, we continue to benefit from investments with strong results in Australia, Japan, UK and Italy driving 45 percent growth."
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