The GOP tax reform bill is headed to President Donald Trump's desk, and at least one spine device company thinks it will be a boon for the industry.
NuVasive released a statement touting the potential for business growth as a result of the tax bill, which reduces the U.S. corporate tax rate from 35 percent to 21 percent; prior to the bill, NuVasive projected its tax rate would be 33 percent on a non-GAAP basis next year.
"The savings from the landmark decision are expected to boost forward-looking free cash flow and non-GAAP EPS well in excess of 10 percent per year beginning in 2018, delivering incredible incremental value-generating opportunities for our shareholders," said Gregory Lucier, chairman and CEO of NuVasive.
NuVasive expects to accelerate innovation as a result of the tax savings and explore additional growth opportunities. The company expects the new regulations to positively impact non-GAAP earnings per share and an early analysis indicates its non-GAAP tax rate to drop into the low 20 percent range for 2018.
The company plans to invest its surplus funds into research and development. "This is a tremendous opportunity for the medical device industry, and a major spark in our ability to continue to invest in life-changing innovations," said Mr. Lucier.