NuVasive, Inc. (NASDAQ:NUVA) Q2 2018 Earnings Conference Call - Final Transcript

Jul 31, 2018 • 04:30 pm ET


NuVasive, Inc. (NASDAQ:NUVA) Q2 2018 Earnings Conference Call - Final Transcript


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Greetings and welcome to the NuVasive, Inc. Second 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, Suzanne Hatcher, VP, Internal & External Affairs. Thank you. You may begin.

Suzanne Hatcher

Welcome (ph) to NuVasive's second 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.

(Forward-Looking Cautionary Statements)

Joining me today on the call are Greg Lucier, Chairman and CEO and Raj Asarpota, our CFO. With that, I'd like to turn the call over to you Greg.

Greg Lucier

Thank you, Suzzane. Earlier this afternoon, we reported second quarter 2018 revenue results of approximately $282 million, representing year-over-year growth of 8.5% on a reported basis, or 7.7% constant currency. On an organic basis, excluding SafePassage and the impacted currency, our growth rate was 5.4%. This mid-single digit outline performance was driven by strong case volume growth of 7% in the US, improvements in our services business, and another quarter of solid execution internationally. I am pleased to see the positive impact our new technology introductions and ever expanding base of surgeons on our ability to take share globally.

Our non-GAAP operating profit margin came in at 16.3%. While we improved our operating profit margin, we still have work to do. We continue to make progress in reducing our operating expenses and gaining operational efficiencies during the quarter. The gross margins were pressured by the ramp up of our state-of-the-art manufacturing facility in West Carrollton, Ohio. Non-GAAP earnings per share were $0.58, a 29% increase year-over-year.

Now let me describe in more detail the drivers of our second quarter results by each business line. US Spinal Hardware grew about 6%, which can be attributed to the strong results in our TLIF, PLIF, XLIF franchises, and continued penetration of our RELINE posterior fixation system. Our expandable implants along with our Porous PEEK implants are doing very well too. The adoption of our Lateral Single-Position Surgery procedure continuous to gain momentum and is a catalyst for attracting new surgeons. Recall, this procedure was launched late last year and eliminates the needs for the patients to be repositioned during surgery leading to improved OR efficiency. Surgeons are seeing this as a true benefit to both the patients and their practice by reducing the time in the OR and the time spent for the patient under anesthesia. The number of surgeons trained on this procedure has grown significantly each quarter