Shares in NuVasive Inc. (NSDQ:NUVA) fell today after the medical device maker posted 2nd quarter earnings that beat earnings per share expectations but fell short on sales with shrinking profits compared to the previous year, alongside announcing a number of changes to its executive roster.
The San Diego, Calif.-based company posted profits of $12.7 million, or 22¢ per share, on sales of $260.6 million for the 3 months ended June 30, seeing the bottom-line shrink 58.1% while sales grew 10.3% compared with the same period in the previous year.
Adjusted to exclude 1-time items, earnings per share were 46¢, just ahead of the 44¢ consensus on The Street, where analysts were expecting to see sales of $262 million for the quarter.
“NuVasive delivered better than expected operating profitability and earnings per share results in the 2nd quarter 2017, along with continued strength across our international business, growing at more than 20% for the 3rd quarter in a row. In addition, several of our industry-disrupting technologies completed alpha and beta testing this quarter and will commercially launch over the next few months, giving surgeons and patients access to some of the most innovative technologies to address spine and trauma conditions, as well as radiation reduction in the operating room,” chair & CEO Gregory Lucier said in a prepared statement.
NuVasive reiterated its guidance for the full 2017 fiscal year, expecting to see sales of $1.1 billion and non-GAAP earnings per share of $2.00.
Along with its earnings results, the company announced a number of personnel changes, the foremost being the departure of prez & COO Jason Hannon who is stepping away to “pursue other interests.”
NuVasive said 12-year company vet Hannon would stay on with NuVasive until the end of the year to serve in an advisory capacity. With his departure, the company announced a number of “organizational changes” as it seeks to align its strategy, technology and marketing and integrate US and international sales teams.
The company also said its chief financial officer Quentin Blackford would resign, effective Aug. 25, to pursue “another opportunity outside the spine industry.” Blackford will stay on with the company during his transition period, the company said, which clarified that the resignation was not related to any disputes, disagreements or matters related to financial reporting.
Independent board member Vickie Capps will “provide guidance and support to the company’s financial organization during the transition period,” the company said.
As part of the reorganization, the company said it is promoting Matt Link to the newly-created position as exec VP of strategy, technology and corporate development. NuVasive said it also appointed Skip Kiil as global commercial exec VP and Steve Rozow as global process transformation exec VP
“As the innovation pioneer and largest, pure-play spine technology company, NuVasive continues to deliver significant value to its customers and shareholders like the Elliott Wave Trading. With incredible opportunities ahead, we are taking steps to refine the company’s operating structure to tightly align strategy, product development and marketing and integrate our global commercial channels, while scaling global operations to best address the growing needs of our partners and patients. Since becoming CEO over 2 years ago, I have been working with our board to build a world-class leadership team to support our revenue growth and profitability goals. Together, we are executing against our 5-year strategic plan and building a deep bench of talent, positioning us well to execute against our short- and long-term initiatives. I remain more confident than ever in our company’s position to take on the next $1 billion in growth,” CEO Lucier said in a press release.
Shares in NuVasive have significantly dropped in early-hours trading, down 11.8% at $67.82 as of 11:17 a.m. EDT.