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NuVasive reported first quarter revenues of $51.2 million, a 54.1%increase over the $33.2 million for the first quarter of 2007 and a 9.1%increase over the $46.9 million for the fourth quarter of 2007.
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Gross profit for the first quarter of 2008 was $42.1 million and grossmargin was 82.2%, compared to a gross profit of $27.5 million and a grossmargin of 82.8% in the first quarter of 2007. For the fourth quarter of 2007,gross profit was $38.9 million and gross margin was 82.9%.
Total operating expenses for the first quarter of 2008 were $50.5 millioncompared to $33.8 million in the first quarter of 2007 and $41.2 million inthe fourth quarter of 2007. Operating expenses include an in-process researchand development charge of $4.2 million related to the acquisition of pediclescrew intellectual property. Excluding the in-process research and developmentcharge, total first quarter 2008 operating expenses were $46.3 million. On aGAAP basis, the Company reported a net loss of $7.7 million or $(0.22) pershare for the first quarter of 2008. On a non-GAAP basis, the Company reportednet income of $2.1 million, or $0.06 per share, for the first quarter of 2008.The non-GAAP earnings per share calculations exclude (i) stock basedcompensation of $5.2 million; (ii) a charge for in-process research anddevelopment costs of $4.2 million; and (iii) amortization of acquiredintangible assets of $0.4 million.
Cash, cash equivalents and short and long-term investments were $278.6million at March 31, 2008.
Alex Lukianov, Chairman and Chief Executive Officer, said, "Our firstquarter results were driven by our continued focus on deepening productpenetration in existing accounts, particularly in accounts where we have along standing presence. Our sales focus throughout the remainder of 2008 willbe selling the full mix of our products and working to assimilate and developour sales regions which we recently expanded from five regions to eleven. Wewill also expand our corporate infrastructure, including our new leasedcorporate headquarters, operating systems, as well as training and personneldevelopment programs. These investments are part of a strategy to expand ourinfrastructure to allow us to grow to $500 million coupled with increasingprofitability.
Mr. Lukianov continued, "We improved our cash position in the quarter witha successful convertible debt offering that yielded net proceeds of $209million. Our intent is to use these funds for strategic opportunities in thenear term. Our first strategic use of this cash came in March where weacquired the exclusive rights to pedicle screw intellectual property whichensures the continued expansion of our innovative platform through 2015 aswell as the development of other pedicle-based fusion systems."
Operationally, NuVasive's outlook for the full year has improved assignified by its $6 million increase in top line revenue guidance. However,as a result of lower interest yields currently available in the market, theCompany has modestly lowered full year earnings per share guidance by $0.02.
Reconciliation of Non-GAAP Information
Management uses certain non-GAAP financial measures such as non-GAAPearnings per share, which exclude stock based compensation and chargesdirectly related to acquisition transactions such as in-process research anddevelopment, milestone payments, and amortization of the acquired technologyassets. Management does not consider these costs in evaluating the continuingoperations of the Company. Therefore, management calculates the non-GAAPfinancial measures provided in this earnings release excluding these costs anduses
