NuVasive reported second quarter revenue of $88.5 million, a 54.1% increase over the $57.4 million for the second quarter 2008 and a 10.6% increase over the $80.0 million for the first quarter 2009.

Gross profit for the second quarter 2009 was $71.8 million and gross margin was 81.1%, compared to a gross profit of $47.8 million and a gross margin of 83.3% for the second quarter 2008. For first quarter 2009, gross profit was $65.2 million and gross margin was 81.5%.

Total operating expenses for the second quarter 2009 were $67.3 million compared to $48.5 million in the second quarter 2008 and $68.7 million in the first quarter 2009. Operating expenses include $0.6 million for Progentix and Cervitech acquisition costs and $1.0 million related to intellectual property litigation.

On a GAAP basis, the Company reported net income of $2.8 million, or $0.07 per share, for the second quarter 2009.

On a non-GAAP basis, the Company reported net income of $12.0 million, or $0.31 per share, for the second quarter 2009. The non-GAAP earnings per share calculations for the second quarter exclude (i) stock based compensation of $6.3 million; (ii) amortization of acquired intangible assets of $1.4 million; (iii) acquisition related costs of $0.6 million; and (iv) intellectual property litigation costs of $1.0 million.

Cash, cash equivalents and short and long-term marketable securities were $180.8 million at June 30, 2009.

Alex Lukianov, Chairman and Chief Executive Officer, said, "Our proprietary XLIF procedure, along with NuVasive's full complementary product suite, is gaining adoption and utilization because it provides significant benefits to patients, doctors and hospitals. We are pleased with our financial performance in the second quarter of 2009 and we look forward to continued market share gains driving revenue growth and increased profitability. We are determined to become the #4 global spine company by developing innovative products and by proliferating a corporate culture of speed that generates results."

   Updated 2009 Financial Guidance   NuVasive is updating its full year 2009 financial guidance as follows:    Revenue:    --  $360 million to $365 million; up from previous guidance of $355       million to $360 million    Gross Margin:    --  Gross Margin of approximately 81%    EPS:    --  GAAP: earnings per share of $0.06 to $0.08; up from previous guidance       of $(0.07) to $(0.05)     --  Non-GAAP: earnings per share of $1.03 to $1.05; up from previous       guidance of $0.94 to $0.96     --  Earnings per share of $0.25 to $0.27 excluding intellectual property       litigation and acquisition related costs per enclosed table; up from       previous guidance of $0.11 to $0.13     Reconciliation of Non-GAAP Information  

Management uses certain non-GAAP financial measures such as non-GAAP earnings per share, which exclude stock-based compensation, amortization of acquired intangible assets, intellectual property litigation expenses, and acquisition related costs. Management does not consider these costs in evaluating the continuing operations of the Company. Therefore, 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 analyze further, and more consistently, the period-to-period financial performance of its core business operations. Management believes that providing investors with these non-GAAP measures gives them additional important 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.

                Reconciliation of Second Quarter 2009 Results      (in thousands, except per share amounts)           $   Per Share                                                       --- -----------     GAAP net earnings                             $2,765        $0.07     IP litigation costs                              995         0.03     Acquisition related costs                        563         0.01                                                      ---         ----     Earnings excluding other adjustments           4,323         0.11     Non-cash stock-based compensation              6,317         0.16     Amortization of acquired intangible assets     1,372         0.04                                                    -----         ----     Non-GAAP earnings                            $12,012        $0.31                                                  =======        =====     Diluted weighted shares outstanding                        38,301                                                                ======                   Reconciliation of Year-to-Date 2009 Results      (in thousands, except per share amounts)           $   Per Share                                                       --- -----------     GAAP net loss (A)                            $(1,537)      $(0.04)     IP litigation costs                            2,624         0.07     Acquisition related costs                      2,476         0.07                                                    -----         ----     Earnings excluding other adjustments           3,563         0.09     Non-cash stock-based compensation             12,999         0.34     Amortization of acquired intangible assets     2,708         0.07                                                    -----         ----     Non-GAAP earnings (A)                        $19,270        $0.51                                                  =======        =====     Basic weighted shares outstanding                          36,639                                                                ======     Diluted weighted shares outstanding                        37,996                                                                ======    A-  GAAP loss per share is calculated using basic weighted shares       outstanding;  Non-GAAP earnings per share is calculated using       diluted weighted shares outstanding.