Shares of NuVasive Inc. (NSDQ:NUVA) closed up nearly 7% yesterday after the medical device company reported narrowing its 4th-quarter losses by some 73% and beat Wall Street’s sales expectations for the quarter.
The San Diego-based spinal implant maker posted losses of $2.7 million, or 6¢ per share, on sales of $165.8 million for the 3 months ended Dec. 31, 2012, for sales growth of 10.4%.
Adjusted to exclude 1-time items, earnings per share were 34¢, a full 13¢ above expectations on The Street, where analysts were also looking for revenues of $156.4 million.
NUVA shares closed up 6.7% at $18.42 yesterday on the news.
Chairman & CEO Alex Lukianov said NuVasive has largely recovered from alleged poaching of sales reps by rivals, telling analysts during a conference call that the company’s new sales hires "pedigree is just superb."
"The challenging spine environment has also driven some of our competitors to adopt unsustainable tactics to poach our sales representatives. Those tactics negatively impacted our results in the 3rd quarter. And in response, we acted quickly to implement solutions designed to rebuild sales momentum. The strength of our 4th-quarter results gives us confidence in our ability to execute that strategy," Lukianov said. "I was just looking at some of the recent hires and the pedigree is just superb, the last several months in particular. They’re coming from the major spine companies. So there is actually a very, very good stability. And there’s I think a very strong pipeline for us to add the additional representatives that we plan to do in 2013."
Lukianov said NuVasive expects little or no growth for the global spine market this year and flat to negative growth in the U.S. The company forecast 2013 revenues of about $655 million, or 6% growth. Earnings per share are pegged at about 7¢ apiece with adjusted EPS of roughly $1.
As for its ongoing patent infringement war with industry titan Medtronic (NYSE:MDT), Lukianov said the U.S. District Court for Southern California has yet to decide the royalty rates NuVasive owes to Medtronic. An appeal is on hold pending that decision, he said.
"So really not much has changed since we’ve been reporting on this the last few quarters. There was a judge change last year. And since that time, she has not ruled on the royalty rate, on whether it stays the same or goes down or whatever happens to it. So we’re still waiting to see when that will take place," Lukianov said. "It is holding back our ability to keep things moving with regard to the appeal. So we are eager to get it done."
Another legal imbroglio, a trademark infringement case against NeuroVision Medical Products, is expected to see a new trial in June, he said.
