CryoLife Reports Third Quarter 2019 Financial Results

On October 30, 2019 CryoLife, Inc. (NYSE: CRY), a leading cardiac and vascular surgery company focused on aortic disease, reported its financial results for the third quarter ended September 30, 2019 (Press release, CryoLife, OCT 30, 2019, View Source [SID1234550072]).

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"Our third quarter results were in line with our expectations, and through the first three quarters of 2019 we have delivered constant currency growth of 8% relative to the same period last year," said Pat Mackin, Chairman, President, and Chief Executive Officer. "The anticipated effects from continued currency headwinds and temporary issues with TMR handpiece supply in the US are causing us to lower our full year top line guidance. We believe the upcoming launch of three next-generation JOTEC products in the EU combined with the recent addition of NEXUS, manufacturing improvements at JOTEC, and the anticipated commencement of the PROACT Xa trial position us well for 2020 and beyond."

Third Quarter 2019 Financial Results
Total revenues for the third quarter of 2019 were $67.9 million, reflecting growth of 5%, and 6% on a non-GAAP constant currency basis, both compared to the third quarter of 2018. The increase was driven by revenue growth from On-X, JOTEC, and tissue processing.

Net loss for the third quarter of 2019 was ($134,000), or $0.00 per fully diluted common share, compared to a net income of $1.6 million, or $0.04 per fully diluted common share for the third quarter of 2018. Net loss for the third quarter of 2019 includes $1.2 million in business development expenses. Non-GAAP net income for the third quarter of 2019 was $2.2 million, or $0.06 per fully diluted common share, compared to non-GAAP net income of $3.1 million, or $0.08 per fully diluted common share for the third quarter of 2018.

2019 Financial Outlook
CryoLife expects total revenues for 2019 to be in the range of $276.5 million to $278.5 million. This compares to the previous expected range of $280.0 million to $284.0 million for the year, with the change due to the effects of foreign currency and a lack of availability of TMR handpieces in the fourth quarter of 2019. Non-GAAP earnings per share are still expected to be between $0.28 and $0.32 for the full year.

All numbers are presented on a GAAP basis except where expressly referenced as non-GAAP. The Company does not provide GAAP income per common share on a forward-looking basis because the Company is unable to predict with reasonable certainty business development and acquisition-related expenses, purchase accounting fair value adjustments, and any unusual gains and losses without unreasonable effort. These items are uncertain, depend on various factors, and could be material to results computed in accordance with GAAP.

The Company’s financial guidance for 2019 is subject to the risks identified below.

Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. Investors should consider this non-GAAP information in addition to, and not as a substitute for, financial measures prepared in accordance with U.S. GAAP. In addition, this non-GAAP financial information may not be the same as similar measures presented by other companies. The Company’s non-GAAP net income and non-GAAP EBITDA results exclude (as applicable) business development and integration expenses, amortization expense, inventory basis step-up expense, loss on foreign currency revaluation, and stock-based compensation expense. The Company believes that these non-GAAP presentations provide useful information to investors regarding unusual non-operating transactions; the operating expense structure of the Company’s existing and recently acquired operations, without regard to its on-going efforts to acquire additional complementary products and businesses and the transaction and integration expenses incurred in connection with recently acquired and divested product lines; and the operating expense structure excluding fluctuations resulting from foreign currency revaluation and stock-based compensation expense. The Company believes it is useful to exclude certain expenses because such amounts in any specific period may not directly correlate to the underlying performance of its business operations or can vary significantly between periods as a result of factors such as acquisitions, or non-cash expense related to amortization of previously acquired tangible and intangible assets. The Company has excluded the impact of changes in currency exchange from certain revenues to evaluate growth rates on a constant currency basis. The Company does, however, expect to incur similar types of expenses and currency exchange impacts in the future, and this non-GAAP financial information should not be viewed as a statement or indication that these types of expenses will not recur.

Webcast and Conference Call Information
The Company will hold a teleconference call and live webcast later today, October 30, 2019 at 5:30 p.m. ET to discuss the results followed by a question and answer session. To listen to the live teleconference, please dial 201-689-8261. A replay of the teleconference will be available through November 6, 2019 and can be accessed by calling (toll free) 877-660-6853 or 201-612-7415. The Conference ID for the replay is 13695440.

The live webcast and replay can be accessed by going to the Investor Relations section of the CryoLife website at www.cryolife.com and selecting the heading Webcasts & Presentations.

Bellicum Pharmaceuticals to Report Third Quarter 2019 Financial Results and Provide Corporate Update

On October 30, 2019 Bellicum Pharmaceuticals, Inc. (NASDAQ:BLCM), a leader in developing novel, controllable cellular immunotherapies for cancers, reported it will report financial results for the third quarter of 2019 after the close of U.S. markets on Wednesday, November 6, 2019 (Press release, Bellicum Pharmaceuticals, OCT 30, 2019, View Source [SID1234550018]). Management will host a webcast and conference call at 5 p.m. ET / 2 p.m. PT that day to discuss the financial results and provide a corporate update.

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The live call may be accessed by dialing 877-407-3103 (U.S. domestic) and 201-493-6791 (international) at least 10 minutes prior to the start of the call. The event will be webcast live and can also be accessed in the Events & Presentations section of bellicum.com. An archived version of the webcast will be available for replay in the Investors & Media section of the Bellicum website following the call.

APOLLO ENDOSURGERY, INC. REPORTS THIRD QUARTER 2019 RESULTS

On October 30, 2019 Apollo Endosurgery, Inc. ("Apollo") (Nasdaq: APEN), a global leader in less invasive medical devices for gastrointestinal and bariatric procedures, reported financial results for the third quarter ended September 30, 2019 (Press release, Lpath, OCT 30, 2019, View Source [SID1234550041]).

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Third Quarter 2019 Highlights
•ESS sales increased 28% (30% in constant currency) to $6.7 million, representing 64% of our Endoscopy sales for the third quarter
•Endoscopy sales increased 12% (14% in constant currency) to $10.4 million
•Received 510(k) clearance from the FDA for the OverStitch Polypropylene Suture-Anchor Assembly
Todd Newton, CEO of Apollo, commented, "Strong market momentum for OverStitch continued in the third quarter with 28% increase in sales. This marks our fourth consecutive quarter of double-digit year-over-year growth in OverStitch sales. We remain enthusiastic about the opportunities ahead to continue this growth, driven by expansion of our user base and ongoing clinical investments that will continue to demonstrate the notable clinical benefits of our Endoscopy products."
Third Quarter 2019 Results
Consolidated Endoscopy product sales increased 12% as reported and 14% in constant currency. For the third quarter, 64% of Endoscopy product sales related to ESS. In the U.S., Endoscopy sales increased 30% to $4.8 million.
Worldwide, ESS product sales increased 28% as reported and 30% in constant currency. U.S. ESS product sales increased 48% to $3.7 million in the third quarter of 2019. Outside the US ("OUS") ESS product sales increased 9% as reported and 12% in constant currency to $2.9 million.
Worldwide IGB sales decreased 9% as reported and 7% on a constant currency basis. U.S. IGB sales decreased $0.1 million, or 7%, to $1.1 million in the third quarter of 2019 while OUS IGB product sales decreased 9% as reported and 7% on a constant currency basis to $2.6 million.
The divestiture of our Surgical products in December of 2018 reduced total revenues in the third quarter of 2019 by $3.9 million compared to the third quarter of 2018. We divested the Surgical products in order to strengthen the organization’s focus on our Endoscopy products, which we believe have high growth potential.
Gross margin for the third quarter 2019 was 48%, compared to 55% for the third quarter 2018 as a result of a greater proportion of our overall product sales coming from our ESS products, which realize a lower gross margin than our other products.
Total operating expenses decreased $3.6 million to $12.3 million in the third quarter 2019, compared to the third quarter 2018. Research and development expense declined $1.5 million compared with the third quarter of 2018 as we neared completion in certain of our clinical studies. In addition, amortization expense is $1.3 million lower as a result of the reduction in our intangible assets after the recent divestiture of our Surgical products.
Net loss for the third quarter 2019 was $8.7 million compared to $9.8 million for the third quarter 2018.
Cash, cash equivalents and restricted cash were $36.0 million as of September 30, 2019. The Company raised proceeds of $20.0 million from the issuance of convertible debt in August 2019.
Conference Call
Apollo will host a conference call on October 30, 2019 at 3:30 p.m. Central Time / 4:30 p.m. Eastern Time to discuss operating results for the third quarter ended September 30, 2019.
To participate in the conference call dial (877) 823-8673 for domestic callers and (647) 689-4156 for international callers. The conference ID number is 6392218. A live webcast of the conference call will be made available on the "Events and Presentations" section of our Investor Relations website: www.ir.apolloendo.com.
A replay of the webcast will be made available on Apollo’s website, www.apolloendo.com following the event.

Non-GAAP Financial Measures
To supplement our financial results we are providing a non-GAAP financial measure, percentage revenue change in constant currency, which removes the impact of changes in foreign currency exchange rates that affect the comparability and trend of revenues. Percentage revenue change in constant currency is calculated by translating current foreign currency sales at last year’s exchange rate. This supplemental measure of our performance is not required by, and is not determined in accordance with GAAP.
We believe the non-GAAP financial measure included herein is helpful in understanding our current financial performance. We use this supplemental non-GAAP financial measure internally to understand, manage and evaluate our business, and make operating decisions. We believe that making non-GAAP financial information available to investors, in addition to GAAP financial information, may facilitate more consistent comparisons between the company’s performance over time with the performance of other companies in the medical device industry, which may use similar financial measures to supplement their GAAP financial information. However, our non-GAAP financial measure is not meant to be considered in isolation or as a substitute for the comparable GAAP metric.

Alpine Immune Sciences Completes Enrollment of Phase I Study of ALPN-101 and Announces Third Quarter Conference Call

On October 30, 2019 Alpine Immune Sciences, Inc. (NASDAQ:ALPN), a clinical-stage immunotherapy company focused on developing innovative treatments for cancer, autoimmune/inflammatory, and other diseases, reported that it has completed enrollment in all planned cohorts of the Phase I study of its lead program, ALPN-101, a first-in-class dual ICOS/CD28 antagonist (Press release, Alpine Immune Sciences, OCT 30, 2019, View Source [SID1234550057]). Alpine will discuss the preliminary findings during its third quarter 2019 company update conference call and webcast scheduled for November 13, 2019 at 4:30 p.m. ET.

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The randomized, placebo-controlled, blinded study was designed to evaluate the safety, tolerability, pharmacokinetics, and pharmacodynamics of single and multiple doses of ALPN-101 in adult healthy volunteers. The results from this trial will help inform further development of ALPN-101 in serious autoimmune and inflammatory diseases.

The company will hold a conference call on November 13, 2019 to discuss third quarter results, recent development progress, and upcoming clinical development plans for both ALPN-101 and ALPN-202, Alpine’s lead oncology program. The company will also review new ALPN-101 data presented at the American College of Rheumatology annual meeting and ALPN-202 data presented at the Society for the Immunotherapy of Cancer (SITC) (Free SITC Whitepaper) annual meeting.

Conference Call and Webcast Details

To access the live call by phone, dial (877) 407-0789 (domestic) or (201) 689-8562 (international). To access a live webcast of the call, please visit the Investor Relations section of the Alpine Immune Sciences website at www.alpineimmunesciences.com. The recorded webcast will be available for replay for approximately 30 days following the call.

About ALPN-101

ALPN-101 is a novel Fc fusion protein of a human inducible T cell costimulator ligand (ICOSL) variant immunoglobulin domain (vIgD), and a first-in-class therapeutic designed to inhibit simultaneously the CD28 and ICOS inflammation pathways. CD28 and ICOS are closely related costimulatory molecules with partially overlapping roles in T cell activation likely connected to multiple autoimmune and inflammatory diseases. In preclinical models of graft versus host disease, inflammatory arthritis, connective tissue disease and multiple sclerosis, ALPN-101 demonstrates efficacy superior to blockade of the CD28 or ICOS pathways alone.

About ALPN-202

ALPN-202 is a first-in-class, conditional CD28 costimulator and dual checkpoint inhibitor, which has the potential to improve upon the efficacy of combined checkpoint inhibition without significant toxicities. Preclinical studies of ALPN-202 have successfully demonstrated superior efficacy in tumor models compared to checkpoint inhibition alone. We anticipate initiation of the first-in-human clinical study of ALPN-202 to begin by the first quarter of 2020.

NuVasive Announces Third Quarter 2019 Financial Results

On October 30, 2019 NuVasive, Inc. (NASDAQ: NUVA), the leader in spine technology innovation, focused on transforming spine surgery with minimally disruptive, procedurally integrated solutions, reported financial results for the quarter ended September 30, 2019 (Press release, NuVasive, OCT 30, 2019, View Source [SID1234550073]).

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Third Quarter 2019 Highlights

Revenue increased 7.2% to $290.8 million, or 7.5% on a constant currency basis;
GAAP operating profit margin of 10.5%; Non-GAAP operating profit margin of 15.7%;
GAAP diluted earnings per share of $0.21; Non-GAAP diluted earnings per share of $0.59; and
Company raises full-year 2019 financial guidance.
"In the third quarter 2019, NuVasive grew at multiples of market, with revenue increasing 7.2% driven by nearly double-digit organic growth within U.S. Hardware," said J. Christopher Barry, chief executive officer of NuVasive. "In addition to strong topline results, our margin expansion demonstrates the ability to improve profitability with continued commitment to driving operational excellence. Based on the Company’s performance year to date, we are raising full-year 2019 financial guidance to reflect continued growth and confidence in the business."

A full reconciliation of GAAP to non-GAAP financial measures can be found in the tables of this news release.

Third Quarter 2019 Results
NuVasive reported third quarter 2019 total revenue of $290.8 million, a 7.2% increase compared to $271.3 million for the third quarter 2018. On a constant currency basis, third quarter 2019 total revenue increased 7.5% compared to the same period last year.

For the third quarter 2019, both GAAP and non-GAAP gross profit was $213.8 million and GAAP and non-GAAP gross margin was 73.5%. These results compared to GAAP and non-GAAP gross profit of $197.1 million and $197.4 million, respectively, and GAAP and non-GAAP gross margin of 72.7% and 72.8%, respectively, for the third quarter 2018.

The Company reported GAAP net income of $11.0 million, or diluted earnings per share of $0.21, for the third quarter 2019 compared to a GAAP net income of $15.9 million, or diluted earnings per share of $0.30, for the third quarter 2018. On a non-GAAP basis, the Company reported net income of $30.9 million, or diluted earnings per share of $0.59, for the third quarter 2019 compared to net income of $29.5 million, or diluted earnings per share of $0.56, for the third quarter 2018.

Annual Financial Guidance for 2019
The Company raised its full-year 2019 financial guidance as a result of strong financial performance to date.

Prior guidance reflects the range provided July 30, 2019. Current guidance reflects the range provided October 30, 2019.

Constant currency is a measure that adjusts US GAAP revenue for the impact of currency over the same period in the prior year.

The Company updates full-year 2019 revenue to approximately $1.16 billion, compared with prior guidance of $1.14 billion to $1.16 billion, which now includes approximately $6 million in year-over-year currency headwinds compared with prior guidance of $5 million. This reflects reported growth in the range of 5.1% to 5.8%, compared with prior guidance of 3.4% to 5.4%. Revenue growth on a constant currency basis is in the range of 5.6% to 6.3%, compared with prior guidance of 3.8% to 5.8%;
Non-GAAP operating profit margin of 15.5% to 15.9%, compared with prior guidance of 15.3% to 15.7%;
Non-GAAP diluted earnings per share in a range of $2.35 to $2.40, compared with prior guidance of $2.25 to $2.35;
Adjusted EBITDA margin of 25.0% to 25.4%, compared with prior guidance of 25.5% to 25.9%; and
Non-GAAP effective tax expense rate of approximately 23%.
Organizational Structure
NuVasive announced today a new organizational structure, effective January 1, 2020, to further build upon its success and advance the Company’s five-year strategic plan.

"We are implementing organizational structure changes to bring together the commercial, product and technology teams under one function and to establish a new global operations function focused on supply chain and logistics," continued Barry. "This is a natural progression aligned with our recently announced five-year strategy and our purpose to transform surgery, advance care and change lives."

The new organizational structure combines customer-facing and innovation activities under a single function led by the Company’s president, Matt Link. A new global operations function, including supply chain, distribution, manufacturing, quality assurance and real estate & facilities, will be led by Dale Wolf, NuVasive’s current head of manufacturing.

Supplementary Financial Information
For additional financial detail, please visit the Investor Relations section of the Company’s website at www.nuvasive.com to access Supplementary Financial Information.

Reconciliation of Full Year EPS Guidance

Items may not foot due to rounding.

Prior guidance reflects the range provided July 30, 2019. Current guidance reflects the range provided October 30, 2019.

Effective tax expense rate of ~24% applied to GAAP earnings and ~23% applied to Non-GAAP earnings.

Effective tax expense rate of ~26% applied to GAAP earnings and ~23% applied to Non-GAAP earnings.

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

Represents the loss recorded in connection with the settlement of the Madsen Medical, Inc. litigation matter, as well as expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company’s intellectual property.

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

Purchase of an in-process research and development asset which had no future alternative use.

Costs related to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.

The impact on results from taxes include tax affecting the adjustments above at the statutory rate as well as taking into account discrete items and including those discrete items in the annual effective tax rate calculation. The Company also includes those adjustments that would have benefited the tax rate in lieu of the above adjustments as part of the Company’s tax filings. The impact of the changes to the tax rate results in an annual rate of ~43% benefit on a GAAP basis and ~18% on a non-GAAP basis in 2018.

Adjusted non-GAAP diluted WASO excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

Reconciliation of Non-GAAP Operating Margin %

Items may not foot due to rounding.

Prior guidance reflects the range provided July 30, 2019. Current guidance reflects the range provided October 30, 2019.

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

Expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company’s intellectual property.

Represents the loss recorded in connection with the settlement of the Madsen Medical, Inc. litigation matter.

Purchase of an in-process research and development asset which had no future alternative use.

Costs related to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

Reconciliation of EBITDA Margin %

Items may not foot due to rounding.

Effective tax expense rate of ~43% benefit applied to GAAP earnings and ~18% applied to Non-GAAP earnings.

Effective tax expense rate of ~24% applied to GAAP earnings and ~23% applied to Non-GAAP earnings.

Effective tax expense rate of ~26% applied to GAAP earnings and ~23% applied to Non-GAAP earnings.

Prior guidance reflects the range provided July 30, 2019. Current guidance reflects the range provided October 30, 2019.

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

Represents the loss recorded in connection with the settlement of the Madsen Medical, Inc. litigation matter, as well as expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company’s intellectual property.

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

Purchase of an in-process research and development asset which had no future alternative use.

Charges represent the costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.

Reconciliation of GAAP to Non-GAAP Information
Management uses certain non-GAAP financial measures such as non-GAAP earnings per share, non-GAAP net income, non-GAAP operating expenses and non-GAAP operating profit margin, which exclude amortization of intangible assets, business transition costs, purchased in-process research and development, one-time restructuring and related items in connection with acquisitions, investments and divestitures, non-recurring consulting fees, certain litigation expenses and settlements, certain European medical device regulation costs, gains and losses from strategic investments, and non-cash interest expense (excluding debt issuance cost). Management also uses certain non-GAAP measures which are intended to exclude the impact of foreign exchange currency fluctuations. The measure constant currency utilizes an exchange rate that eliminates fluctuations when calculating financial performance numbers. The Company also uses measures such as free cash flow, which represents cash flow from operations less cash used in the acquisition and disposition of capital. Additionally, the Company uses an adjusted EBITDA measure which represents earnings before interest, taxes, depreciation and amortization and excludes the impact of stock-based compensation, business transition costs, purchased in-process research and development, one-time restructuring and related items in connection with acquisitions, investments and divestitures, non-recurring consulting fees, certain litigation expenses and settlements, certain European medical device regulation costs, gains and losses on strategic investments, and other significant one-time items.

Management calculates the non-GAAP financial measures provided in this earnings release excluding these costs and uses these non-GAAP financial measures to enable it to further and more consistently analyze the period-to-period financial performance of its core business operations. Management believes that providing investors with these non-GAAP measures gives them additional information to enable them to assess, in the same way management assesses, the Company’s current and future continuing operations. These non-GAAP measures are not in accordance with, or an alternative for, GAAP, and may be different from non-GAAP measures used by other companies. Set forth below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measure.

For the Three Months Ended September 30, 2019

Reconciliation of GAAP to Non-GAAP Financial Measures

Represents expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company’s intellectual property.

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

Represents costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.

Represents the impact from tax affecting the adjustments above at their statutory tax rate. As of October 30, 2019, the Company estimated an annual tax rate of ~26% on a GAAP basis and ~23% on a non-GAAP basis.

Adjusted non-GAAP diluted WASO excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

For the Nine Months Ended September 30, 2019

Reconciliation of GAAP to Non-GAAP Financial Measures

Represents expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company’s intellectual property.

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

Represents costs specific to updating our quality system, product labeling, asset write-offs and product remanufacturing to comply with European medical device regulation.

Represents the impact from tax affecting the adjustments above at their statutory tax rate. As of October 30, 2019, the Company estimated an annual tax rate of ~26% on a GAAP basis and ~23% on a non-GAAP basis.

Adjusted non-GAAP diluted WASO excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

For the Three Months Ended September 30, 2018

Reconciliation of GAAP to Non-GAAP Financial Measures

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

Represents expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company’s intellectual property.

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

Purchase of an in-process research and development asset which had no future alternative use.

Represents the impact from tax affecting the adjustments above at their statutory tax rate. As of October 30, 2018, the Company estimated an annual tax rate of ~18% on a GAAP basis and ~21% on a non-GAAP basis.

Adjusted non-GAAP diluted WASO excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

Represents costs associated with non-cash purchase accounting adjustments, such as acquired inventory fair market value adjustments, which are amortized over the period in which underlying products are sold.

Non-recurring consulting fees associated with the implementation of our state tax-planning strategy.

Represents the loss recorded in connection with the settlement of the Madsen Medical, Inc. litigation matter, as well as expenses associated with ongoing litigation with a former Board member and his current employer related to various matters, including infringement of the Company’s intellectual property.

Costs related to acquisition, integration and business transition activities which include severance, relocation, consulting, leasehold exit costs, third party merger and acquisitions costs, contingent consideration fair value adjustments, and other costs directly associated with such activities.

Purchase of an in-process research and development asset which had no future alternative use.

Represents the impact from tax affecting the adjustments above at their statutory tax rate. As of October 30, 2018, the Company estimated an annual tax rate of ~18% on a GAAP basis and ~21% on a non-GAAP basis.

Adjusted non-GAAP diluted WASO excludes the impact of dilutive convertible notes and warrants for which the Company is economically hedged through its anti-dilutive bond hedge arrangements.

Investor Conference Call
NuVasive will hold a conference call today at 4:30 p.m. ET / 1:30 p.m. PT to discuss the results of its financial performance for the third quarter 2019. The dial-in numbers are 1-877-407-9039 for domestic callers and 1-201-689-8470 for international callers. A live webcast of the conference call will be available online from the Investor Relations page of the Company’s website at www.nuvasive.com. After the live webcast, the call will remain available on NuVasive’s website through November 29, 2019. In addition, a telephone replay of the call will be available until November 6, 2019. The replay dial-in numbers are 1-844-512-2921 for domestic callers and 1-412-317-6671 for international callers. Please use pin number: 13695343.