NuVasive reported a 3.2 percent revenue increase for the third quarter and updated full year guidance.
Here are five things to know:
1. NuVasive's total revenue hit $247.4 million in the third quarter, a 3.2 percent increase over the same period last year. However, the recent hurricanes negatively affected quarterly revenue by around $5 million, according to CEO Gregory Lucier. Revenue growth was driven primarily by international sales, which were up around 46 percent for the quarter, while U.S. revenue dropped 3.5 percent.
"This consistent double-digit growth demonstrates a continued strong demand of our spine technology outside the United States from the building of our operations and sales capabilities resulting in strong demand in all of our international markets including key markets such as Italy, Germany and Japan," said Mr. Lucier in the quarterly conference call, reported by Seeking Alpha. "Further as we scale these international sales, our profitability grows due to fixed cost leverage and in turn that profitability accelerates the reduction in our effective corporate tax rate."
2. Net income for the quarter hit $33.6 million, up significantly from $3.9 million reported for the third quarter last year. Gross profit reached $181.8 million, up slightly from $180.5 million reported over the same period last year. Quarterly operating expenses reached $159.3 million.
3. NuVasive updated full year guidance, expecting to hit $1 billion by the end of 2017, including around $2 million in year-over-year currency headwinds. The company expects 7.1 percent revenue growth on a reported basis, although it expects U.S. procedure volumes to be down in the fourth quarter; in the third quarter they were down 2 percent.
4. The company's U.S. sales dropped 3.5 percent, with greater penetration in the deformity market while the biologics business slowed. "Our long-term goal remains lowering the need for biologics to advance material engineering of the implant, but in the meanwhile we're going to do a better job of extending this revenue erosion," said Mr. Lucier.
5. NuVasive's board of directors approved a share repurchase program, announced in tandem with the third quarter financial report, authorizing the purchase of up to 100 million common stock over three years. "The board strongly believes in our strategic roadmap, our ability to execute against our strategic initiatives and to deliver a long-term organic growth and improved operating profitability while staying committed to disciplined capital deployment and driving value for our shareholders," said Mr. Lucier.