NuVasive, Inc. (NASDAQ:NUVA) Q1 2018 Earnings Conference Call - Final Transcript

May 01, 2018 • 04:30 pm ET

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NuVasive, Inc. (NASDAQ:NUVA) Q1 2018 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, greetings and welcome to the NuVasive, Inc. First Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Carol Cox, Executive Vice President, External Affairs. Thank you. You may begin.

Executive
Carol A. Cox

Great. Thank you, Adam and welcome everyone to NuVasive's first quarter 2018 earnings call. The Company's earnings release, which we issued earlier this afternoon, is posted on our website, as is an investor presentation, both of which have been filed on Form 8-K with the Securities and Exchange Commission. We've also posted supplemental financial information on the IR website to accompany our discussion.

On today's call, we will be covering information that is included in the investor presentation and I encourage you to access these materials so that you may also follow along.

Before we begin, I would like to remind you that in the discussions today, we may include forward-looking statements, which are based on current expectations and involve risks and uncertainties, assumptions and other factors which, if they do not materialize or prove to be correct, could cause NuVasive's results to differ materially from those expressed or implied by such forward-looking statements.

Additional risks and uncertainties that may affect future results are described in NuVasive's news release and periodic filings with the Securities and Exchange Commission. We assume no obligation to update any forward-looking statements or information, which speak as of their respective dates.

This call will also include a discussion of several financial measures that are not calculated in accordance with generally accepted accounting principles or GAAP. We generally refer to these as non-GAAP financial measures. These measures include our cost of goods sold, gross margin, sales, marketing and administrative expenses, research and development expenses, operating margin, non-GAAP earnings per share, free cash flow and EBITDA.

Reconciliations to the most directly comparable GAAP financial measures may be found in today's news release and the Supplementary Financial Information, which all are accessible from the Investor Relations section of the NuVasive website.

Joining our today's call are Greg Lucier, our Chairman and Chief Executive Officer; and Raj Asarpota, our Chief Financial Officer. With that, I'll turn the call over to Greg.

Executive
Gregory T. Lucier

Thank you, Carol. Earlier this afternoon, we reported first quarter 2018 revenue results of approximately $261 million, representing year-over-year growth of about 5% on a reported basis, and in line with the guidance range we provided you in February. Results were driven primarily by strong International growth of approximately 20% on a constant currency basis, US hardware case volume growth of 5%, and a sequential improvement in the biologics business. As we anticipated at the start of 2018, these results are against the backdrop of a stable but flat US spine market today.

Now, let me elaborate on the first quarter US revenue results. US core hardware revenue increased 1% driven