NuVasive, Inc. (NASDAQ:NUVA) Q2 2017 Earnings Conference Call - Preliminary Transcript
Jul 27, 2017 • 04:30 pm ET
recently launched products, like TLX and MLX expandable cages, the impact of the new surgeon conversions and contributions from sales reps we have hired over the last 18 months to get them to come off their noncompetes.
Also in the third and fourth quarters of 2017, we are facing easier comps in the business than we did in the first half of the year. As a reminder, in Q3 2016, we did not realize much in the way of capital sales in the period. And in the second half of 2016, our results were negatively impacted by approximately $10 million as we were unable to sell XLIF in Japan for a portion of the third quarter and all of the fourth quarter. Also, as you build the launch of Lessray into your model, keep in mind that we plan to launch in September with the anticipated ability to recognize revenue from these September sales in the fourth quarter as we meet the accounting criteria for revenue recognition. This slight shift-out in the launch timing means that we will see estimated sales of about $2 million to $3 million be recognized in Q4 instead of Q3. We're extremely excited about the building excitement and demand of this unique and unmatched technology and have meaningful interest already expressed upon launch.
As we close out our formal remarks, we are excited about the catalyst we see in the business in the back half of the year. Like Greg said, we see the challenges in the second quarter as temporary issues that are well within our control to change and improve fairly quickly. Like always, we are driving the business hard with a focus on operational improvements and efficiencies. We are very pleased with the strength we're seeing in the expansion of our non-GAAP operating margin and 15% growth in our non-GAAP earnings per share.
Finally, I'd like to touch on my decision to leave the company to pursue another opportunity. It's important for everybody to understand that in no way was this decision connected to any conflict or disagreements with Greg, our Audit Committee or our board. I'm extremely grateful for the opportunity that was afforded me here at NuVasive, and I'm proud of the financial direction that we have created for the company and the future ahead of it. Behind me is a world-class team that has been involved in the intricate details of our financial path, and I'm confident that you will see them continue to steward the organization down the path we've been heading for the last 4 years.
I'd like to thank Greg, our board and our entire shareholder and population for allowing me to be part of this incredible journey.
With that, I'd like to open up the lines for Q&A.