Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of
Alphatec Spine, Inc., a medical device company that provides
physician-inspired solutions for patients with spinal disorders,
announced today financial results for the fourth quarter and full
year ended December 31, 2013.
-- Fourth quarter revenue of $53.1 million; approximately 1%
growth over 2012. 3.4% growth on a constant currency basis.
-- Fourth quarter adjusted EBITDA of $7.5 million, 14.1% of
revenue; 51% growth over 2012.
-- Annual total revenue of $204.7 million; 4.3% growth over
2012. 7.3% growth on a constant currency basis.
-- Full year adjusted EBITDA of $25.2 million, 12.3% of revenue;
26.5% growth over 2012.
Highlights of Alphatec's Fourth Quarter and Fiscal Year
2013
-- Delivered significant revenue growth across key global
markets
- U.S. annual revenue of $135 million in 2013, which represented
3.4% growth over 2012; excluding the revenue contributions of
PureGen realized in 2012, U.S. revenue was up over 8%.
- Well-established international business accounted for 34% of
full year revenue with growth of 15% over 2012, as adjusted for
constant currency.
- Japanese revenue of $28.4 million in 2013, which represented
impressive 19.4% year-over-year growth on a constant currency
basis.
-- Expanded global product portfolio with focus on minimally
invasive and biologics products
- Over 27% of 2013 global revenues were achieved through the
targeted marketing and sales of innovative technologies.
- Illico MIS global revenue increased over 19% from 2012 with
surgeon adoption of Illico Multi-level, which was launched in early
2013.
- Alphatec Solus ALIF launched in mid-2013 and is demonstrating
strong uptake with surgeons who value the simplicity of the system
and decreased operative time for their patients.
- Zodiac Direct Vertebral Rotation (DVR) launched in early 2013
and supported strong double-digit growth in U.S. deformity unit
volumes over 2012.
- Approximately 30% of biologics revenue in 2013 came from newly
launched innovative biologics products such as NeXoss and Profuse
Bioscaffold Allograft strips and chips.
-- Strengthened foundation for future profitability
- French government and Works Council approval of proposed
Scient'x restructuring in France, which is anticipated to increase
EBITDA by $6 to $7 million on an annualized basis in 2H2014.
Transition well underway and is progressing towards full
completion.
- Realized significant reductions in global inventories, reduced
back orders by over 90% and decreased overall lead-times by over
85% and work in process by over $1 million.
- Adjusted EBITDA fourth quarter growth of 51% over the same
period in 2012 and 11.5% sequential growth.
"2013 was a very successful, transformational year for Alphatec
Spine, with record sales, solid, repeatable execution and strategic
operational improvements. We generated global sales growth across
our portfolio while continuing to focus on operational
effectiveness that we believe will add to our strong foundation for
future value creation," said Les Cross, Chairman and CEO of
Alphatec. "I am proud of the performance and strong results
delivered by our employees and partners across the world in 2013.
Our strong execution, along with resolution of the OrthoTec, LLC
vs. Surgiview S.A.S. legal matter announced today, has removed an
uncertainty in our business and positioned us to enter 2014 with an
extraordinary opportunity to maximize long-term shareholder value,"
added Mr. Cross.
Quarter Ended December 31, 2013
Consolidated net revenues for the fourth quarter of 2013 were
$53.1 million, representing growth of approximately 1% compared to
$52.7 million reported for the fourth quarter of 2012, or 3.4% on a
constant currency basis.
U.S. net revenues for the fourth quarter of 2013 were $35.7
million, representing growth of approximately 5%, compared to $34.0
million reported for the fourth quarter of 2012. Excluding revenue
contributions from PureGen in 2012, U.S. net revenues grew 10.5%
over the same period in 2012.
International net revenues for the fourth quarter of 2013 were
$17.4 million, down 7% compared to $18.7 million for the fourth
quarter of 2012, or up approximately 1% on a constant currency
basis. International sales were impacted by an anticipated decline
in French revenue after our decision to discontinue commercial
operations in France was announced in the third quarter. Excluding
revenues from the end of commercial operations in France,
international revenues grew over 4% over the same period in 2012 on
a constant currency basis.
Gross profit and gross margin for the fourth quarter of 2013
were $35.3 million and 66.4%, respectively, compared to $32.1
million and 60.9%, respectively, for the fourth quarter of 2012.
When gross profit and gross margin in the fourth quarter of 2013
are adjusted for COGS-related expenses incurred as a result of the
restructuring of the Company's French operations, gross profit and
gross margin would be $36.4 million and 68.6%, respectively,
reflecting continued performance at managing costs and streamlining
operations.
Total operating expenses for the fourth quarter of 2013 were
$91.3 million, reflecting an increase of approximately $55.1
million compared to the fourth quarter of 2012. This variance is
driven primarily by expenses related to the OrthoTec vs. Surgiview
legal matter and $5.6 million of expenses associated with the
restructuring of the Company's French operations. When operating
expenses are adjusted for these and other non-GAAP adjustments,
total operating expense would be $36.4 million, or 68.7% of
revenue, which is an increase of $0.3 million over 2012.
As announced earlier today, the Company has reached a settlement
with OrthoTec, LLC regarding the OrthoTec, LLC vs. Surgiview S.A.S.
legal matter. As a result of this settlement, the Company recorded
the following expenses in the fourth quarter of 2013: a
non-recurring expense of $46 million associated with the settlement
and $3.7 million of trial-related litigation expenses incurred
during the fourth quarter.
GAAP net loss for the fourth quarter of 2013 was $60.4 million
or ($0.62) per share (basic and diluted), compared to a net loss of
$5.4 million, or ($0.06) per share (basic and diluted) for the
fourth quarter of 2012. Non-GAAP EPS, when adjusted for the expense
items related to the OrthoTec vs. Surgiview legal matter discussed
previously, as well as expenses associated with the ongoing
restructuring of the Company's French operations, is ($0.02) per
share (basic and diluted), compared to ($0.01) per share (basic and
diluted) for the fourth quarter of 2012.
Adjusted EBITDA in the fourth quarter of 2013 was $7.5 million,
or 14.1% of revenues, compared to $5.0 million, or 9.4% of revenues
reported in the fourth quarter of 2012. Fourth quarter 2013
adjusted EBITDA represents net income excluding effects of
interest, taxes, depreciation, amortization, stock-based
compensation and the following items: a non-recurring expense of
$46.0 million associated with the settlement of the OrthoTec vs.
Surgiview litigation, $3.7 million in trial-related litigation
expenses and $6.3 million of expenses related to restructuring of
the Company's French operations. Please refer to the table,
"Alphatec Holdings, Inc. Reconciliation of Non-GAAP Financial
Measures" that follows for more detailed information.
Cash and cash equivalents were $21.3 million at December 31,
2013, compared to $22.2 million reported at December 31, 2012.
Year Ended December 31, 2013
Consolidated net revenues for full year 2013 were $204.7
million, representing growth of 4.3%, compared to $196.3 million
reported for full year 2012, or up 7.3% on a constant currency
basis.
U.S. net revenues for full year 2013 were $135.0 million,
representing growth of 3.4%, compared to $130.5 million reported
for full year 2012. Excluding revenue contributions from PureGen,
U.S. net revenues grew 8.3% over 2012. The increase in U.S.
net revenues was driven by continued growth in unit volumes with
our core hospital business as well as growing adoption of products
across our portfolio.
International net revenues full year 2013 were $69.8 million,
representing growth of 6% compared to $65.8 million for full year
2012, or 15% on a constant currency basis. International sales
growth continues to be driven by strong sales in Japan as well as
expansion within Latin America and China offset by continued
currency conversion impact.
Gross profit and gross margin for full year 2013 were $124.3
million and 60.7%, respectively, compared to $123.8 million and
63.1%, respectively, for full year 2012. When gross profit and
gross margin for the full year 2013 are adjusted for non-recurring
COGS adjustments related to PureGen, as well as COGS-related
expenses incurred as a result of the restructuring of the Company's
French operations, gross profit and gross margin would be $133.5
million and 65.2%, respectively.
Total operating expenses for full year 2013 were $197.8 million,
reflecting an increase of approximately $64.2 million compared to
full year 2012. This variance is primarily driven by the
non-recurring expenses related to the OrthoTec vs. Surgiview legal
matter outlined previously, as well as approximately $9.7 million
of expenses related to the French restructuring. When
operating expenses are adjusted for these expenses and other
non-GAAP adjustments, total operating expense would be $137.8
million, or 67.3% of revenue.
GAAP net loss for full year 2013 was $82.2 million or ($0.85)
per share (basic and diluted), compared to a net loss of $15.5
million, or ($0.17) per share (basic and diluted) for full year
2012. Non-GAAP EPS, when adjusted for the expense items
related to the OrthoTec vs. Surgiview legal matter discussed
previously, as well as expenses associated with the ongoing
restructuring of the Company's French operations, is ($0.02) per
share (basic and diluted), compared to ($0.01) per share (basic and
diluted) for full year 2012.
Adjusted EBITDA for full year 2013 was $25.2 million, or 12.3%
of revenues, compared to $19.9 million, or 10.1% of revenues
reported for full year 2012. Full year 2013 adjusted EBITDA
represents net income excluding effects of interest, taxes,
depreciation, amortization, stock-based compensation and the
following items: a non-recurring expense of $46.0 million
associated with the settlement of the OrthoTec vs. Surgiview
litigation, $3.7 million in trial-related litigation expenses and
$15.3 million of expenses related to restructuring of the Company's
French operations. Please refer to the table, "Alphatec
Holdings, Inc. Reconciliation of Non-GAAP Financial Measures" that
follows for more detailed information.
2014 Financial Guidance
The Company anticipates annual 2014 revenues of $208 million to
$215 million, representing approximately 1.6% to 5% growth over
2013, or 4.5% to 8.0% when adjusted for prior year contributions
associated with sales in France. Additionally, the Company
expects annual adjusted EBITDA of $30 million to $33 million in
2014, representing 19% to 31% growth over 2013, and representing
approximately 14.4% to 15.3% of annual revenue. Adjusted
EBITDA guidance assumes that there are no further ongoing
litigation expenses associated with the OrthoTec vs. Surgiview
legal matter.
Conference Call
Alphatec Spine will webcast its Quarterly Update Call today at
5:00 p.m. EDT / 2:00 p.m. PDT. Les Cross, Alphatec's Chairman
and CEO will lead the call. During the call the Company plans
to provide further details underlying its fourth quarter 2013
financial results.
To access the webcast, please log on to www.alphatecspine.com
approximately fifteen minutes prior to the call to register,
download and install any necessary audio software. For those
without access to the internet, the live call may be accessed by
phone by calling toll-free (877) 556-5251 (U.S. / Canada) or (720)
545-0036 (international), participant passcode number
59336789. A replay of the call will also be available on the
investor relations section of Alphatec Spine's website for at least
30 days.
Alphatec expects to file a Form 12b-25 (Notification of Late
Filing) with the United States Securities and Exchange Commission
today, as it is anticipating filing its report on Form 10-K for the
year ended December 31, 2013 no later than April 1, 2014, which is
after the required filing date of March 17, 2014.
Non-GAAP Information
Alphatec Spine reports certain non-GAAP financial measures such
as non-GAAP earnings and earnings per share, adjusted for effects
of amortization and other non-recurring or expense items, such as
loss on extinguishment of debt, restructuring expenses and
transaction-related expenses. Adjusted EBITDA included in this
press release is a non-GAAP financial measure that represents net
income (loss) excluding the effects of interest, taxes,
depreciation, amortization, stock-based compensation expenses, and
other non-recurring income or expense items, such as severance
expense, litigation expenses, damages associated with ongoing
litigation and transaction-related expenses. The Company
believes that non-GAAP adjusted EBITDA provides investors with an
additional tool for evaluating the Company's core performance,
which management uses in its own evaluation of continuing operating
performance, and a base-line for assessing the future earnings
potential of the Company. For completeness, Management uses
non-GAAP adjusted EBITDA in conjunction with GAAP earnings and
earnings per common share measures. These non-GAPP financial
measures should be considered in addition to, and not as a
substitute for, or superior to, financial measures calculated in
accordance with GAAP. Included below are
reconciliations of the non-GAAP financial measures to the
comparable GAAP financial measure.
About Alphatec Spine
Alphatec Spine, Inc., a wholly owned subsidiary of Alphatec
Holdings, Inc., is a medical device company that designs, develops,
manufactures and markets physician-inspired products and solutions
for the treatment of spinal disorders associated with trauma,
congenital deformities, disease and degeneration. The Company's
mission is to combine innovative surgical solutions with
world-class customer service to improve outcomes and patient
quality of life. The Company and its affiliates market products in
the U.S. and in over 50 countries internationally via a direct
sales force and independent distributors.
Additional information can be found at
www.alphatecspine.com.
Forward Looking Statements
This press release may contain "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act
of 1995 that involve risks and uncertainty. Such statements are
based on management's current expectations and are subject to a
number of risks and uncertainties that could cause actual results
to differ materially from those described in the forward looking
statements. Alphatec Spine cautions investors that there can be no
assurance that actual results or business conditions will not
differ materially from those projected or suggested in such
forward-looking statements as a result of various factors. Forward
looking statements include the references to Alphatec Spine's 2014
revenue, guidance and 2014 adjusted EBITDA guidance; the success of
the Company to achieve the gross margin, profitability and adjusted
EBITDA improvements of the French restructuring in the anticipated
timeframes including an increase in EBITDA of $6 to $7 million on
an annualized basis in the second half of 2014; the success of the
Company's initiatives to drive global sales growth, increase
margins and increase operating efficiencies. The important
factors that could cause actual operating results to differ
significantly from those expressed or implied by such
forward-looking statements include, but are not limited to:
the uncertainty of success in developing new products or
products currently in Alphatec Spine's pipeline; the uncertainties
regarding the ability to successfully license or acquire new
products, and the commercial success of such products; failure to
achieve acceptance of Alphatec Spine's products by the surgeon
community, including the Alphatec Solus, Zodiac DVR, Profuse,
Illico MIS and NeXoss products discussed in this press release;
failure to successfully implement streamlining activities to create
anticipated savings; failure to obtain FDA clearance or approval or
international regulatory approvals for new products, including the
products discussed in this press release, or unexpected or
prolonged delays in the process; continuation of favorable third
party payor reimbursement for procedures performed using the
Company's products; unanticipated expenses or liabilities or other
adverse events affecting cash flow or the Company's ability to
successfully control its costs or achieve profitability;
uncertainty of additional funding; the Company's ability to compete
with other competing products and with emerging new technologies;
product liability exposure; an unsuccessful outcome in any material
litigation in which the Company is a defendant; patent infringement
claims and claims related to the Company's intellectual property.
The words "believe," "will," "should," "expect," "intend,"
"estimate" and "anticipate," variations of such words and similar
expressions identify forward-looking statements, but their absence
does not mean that a statement is not a forward-looking
statement. Please refer to the risks detailed from time to
time in Alphatec Spine's SEC reports, including its Annual Report
Form 10-K for the year ended December 31, 2012, filed on March 4,
2013 with the Securities and Exchange Commission, as well as other
filings on Form 10-Q and periodic filings on Form 8-K. Alphatec
Spine disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events, or otherwise, unless required by law.
ALPHATEC HOLDINGS,
INC. |
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS |
(in thousands, except
per share amounts - unaudited) |
|
|
|
|
|
|
Three Months Ended
December 31, |
Year Ended December
31, |
|
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
Revenues |
$ 53,065 |
$ 52,743 |
$ 204,724 |
$ 196,278 |
Cost of revenues |
17,366 |
19,988 |
78,669 |
70,761 |
Amortization of acquired intangible
assets |
444 |
635 |
1,733 |
1,749 |
Total cost of revenues |
17,810 |
20,623 |
80,402 |
72,510 |
Gross profit |
35,255 |
32,120 |
124,322 |
123,768 |
|
|
|
|
|
Operating expenses: |
|
|
|
|
Research and development |
3,814 |
3,883 |
14,190 |
14,886 |
In-process research and
development |
-- |
341 |
-- |
341 |
Sales and marketing |
21,156 |
19,334 |
76,960 |
75,177 |
General and administrative |
13,931 |
11,226 |
47,949 |
39,939 |
Amortization of acquired
intangible assets |
754 |
605 |
3,009 |
2,180 |
Transaction related costs |
-- |
719 |
-- |
1,082 |
Litigation settlement |
45,982 |
-- |
45,982 |
-- |
Restructuring expenses |
5,620 |
-- |
9,665 |
-- |
Total operating expenses |
91,257 |
36,108 |
197,755 |
133,605 |
Operating loss |
(56,002) |
(3,988) |
(73,433) |
(9,837) |
Interest and other income
(expense), net |
(2,109) |
(1,767) |
(5,615) |
(6,781) |
Loss from continuing operations before
taxes |
(58,111) |
(5,755) |
(79,047) |
(16,618) |
Income tax provision
(benefit) |
2,296 |
(400) |
3,179 |
(1,159) |
Net loss |
$ (60,407) |
$ (5,355) |
$ (82,227) |
$ (15,459) |
|
|
|
|
|
|
|
|
|
|
Net loss per common share: |
|
|
|
|
Basic and diluted net loss per
share |
$ (0.62) |
$ (0.06) |
$ (0.85) |
$ (0.17) |
|
|
|
|
|
Weighted-average shares - basic and
diluted |
96,793 |
93,209 |
96,235 |
90,218 |
|
ALPHATEC HOLDINGS,
INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(in thousands -
unaudited) |
|
|
|
|
December 31, 2013 |
December 31, 2012 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash
equivalents |
$ 21,345 |
$ 22,241 |
Accounts receivable,
net |
41,395 |
41,012 |
Inventories, net |
41,939 |
49,855 |
Prepaid expenses and other
current assets |
7,694 |
5,953 |
Deferred income tax
assets |
1,372 |
2,991 |
Total current assets |
113,745 |
122,052 |
|
|
|
Property and equipment, net |
28,030 |
30,403 |
Goodwill |
183,004 |
180,838 |
Intangibles, net |
39,064 |
46,856 |
Other assets |
1,787 |
1,978 |
Total assets |
$ 365,630 |
$ 382,127 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 10,790 |
$ 15,237 |
Accrued expenses |
62,996 |
38,490 |
Deferred revenue |
1,009 |
1,361 |
Current portion of long-term
debt |
4,924 |
1,700 |
Total current liabilities |
79,719 |
56,788 |
|
|
|
Total long term
liabilities |
90,632 |
55,920 |
Redeemable preferred
stock |
23,603 |
23,603 |
Stockholders' equity |
171,676 |
245,816 |
Total liabilities and stockholders'
equity |
$ 365,630 |
$ 382,127 |
|
ALPHATEC HOLDINGS,
INC. |
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES |
(in thousands, except
per share amounts - unaudited) |
|
|
|
|
|
|
Three Months Ended
December 31, |
Year Ended December
31, |
|
2013 |
2012 |
2013 |
2012 |
|
|
|
|
|
Operating loss, as reported |
$ (56,002) |
$ (3,988) |
$ (73,433) |
$ (9,837) |
Add back: |
|
|
|
|
Depreciation |
3,786 |
3,647 |
14,638 |
14,184 |
Amortization of intangible
assets |
1,330 |
1,481 |
6,898 |
5,679 |
Amortization of acquired
intangible assets |
1,197 |
1,241 |
4,741 |
3,929 |
Total EBITDA |
(49,689) |
2,381 |
(47,156) |
13,955 |
|
|
|
|
|
Add back significant items: |
|
|
|
|
Stock-based compensation |
1,246 |
1,330 |
4,078 |
3,540 |
In-process research and
development |
-- |
341 |
-- |
341 |
Acquisition-related inventory
step-up |
-- |
191 |
-- |
191 |
Transaction related expenses |
-- |
718 |
-- |
1,082 |
Litigation settlement and trial
costs |
49,657 |
-- |
49,657 |
-- |
Restructuring and other
charges |
6,282 |
-- |
18,603 |
794 |
|
|
|
|
|
EBITDA, as adjusted for significant
items |
$ 7,496 |
$ 4,961 |
$ 25,182 |
$ 19,903 |
|
|
|
|
|
|
|
|
|
|
Net loss, as reported |
$ (60,407) |
$ (5,355) |
$ (82,227) |
$ (15,459) |
Add back: |
|
|
|
|
In-process research and
development |
-- |
341 |
-- |
341 |
Amortization of acquired
intangible assets |
1,197 |
1,241 |
4,741 |
3,929 |
Amortization of intangible
assets |
1,330 |
1,481 |
6,898 |
5,679 |
Loss on extinguishment of
debt |
-- |
-- |
-- |
2,910 |
Acquisition-related inventory
step-up |
-- |
191 |
-- |
191 |
Transaction related
expenses |
-- |
718 |
-- |
1,082 |
Litigation settlement and trial
costs |
49,657 |
-- |
49,657 |
-- |
Restructuring and other
charges |
6,282 |
-- |
18,603 |
794 |
|
|
|
|
|
Net loss, as adjusted for significant
items |
$ (1,941) |
$ (1,383) |
$ (2,328) |
$ (533) |
|
|
|
|
|
|
|
|
|
|
Net loss per common share - basic and
diluted |
$ (0.62) |
$ (0.06) |
$ (0.85) |
$ (0.17) |
Add back: |
|
|
|
|
In-process research and
development |
-- |
0.00 |
-- |
0.00 |
Amortization of acquired
intangible assets |
0.01 |
0.01 |
0.05 |
0.04 |
Amortization of intangible
assets |
0.01 |
0.02 |
0.07 |
0.06 |
Loss on extinguishment of
debt |
-- |
-- |
-- |
0.03 |
Acquisition-related inventory
step-up |
-- |
0.00 |
-- |
0.00 |
Transaction related
expense |
-- |
0.01 |
-- |
0.01 |
Litigation settlement and trial
costs |
0.51 |
-- |
0.52 |
-- |
Restructuring and other
charges |
0.06 |
-- |
0.19 |
0.01 |
|
|
|
|
|
Net loss per common share - basic
and diluted, as adjusted for significant items |
$ (0.02) |
$ (0.01) |
$ (0.02) |
$ (0.01) |
|
|
|
|
|
|
|
|
|
|
Weighted-average shares - basic and
diluted |
96,793 |
93,209 |
96,235 |
90,218 |
|
ALPHATEC HOLDINGS,
INC. |
RECONCILIATION OF
GEOGRAPHIC SEGMENT REVENUES AND GROSS PROFIT |
(in thousands, except
percentages - unaudited) |
|
|
|
|
|
|
|
Three Months Ended
December 31, |
%
Change |
%
Change |
%
Change Foreign |
|
2013 |
2012 |
As Reported |
Operations |
Currency |
|
|
|
|
|
|
Revenues by geographic segment |
|
|
|
|
|
U.S. |
$ 35,702 |
$ 34,046 |
4.9% |
4.9% |
0.0% |
International |
17,363 |
18,697 |
-7.1% |
0.8% |
-7.9% |
Total revenues |
$ 53,065 |
$ 52,743 |
0.6% |
3.4% |
-2.8% |
|
|
|
|
|
|
Gross profit by geographic segment |
|
|
|
|
|
U.S. |
$ 26,563 |
$ 22,575 |
|
|
|
International |
8,692 |
9,545 |
|
|
|
Total gross profit |
$ 35,255 |
$ 32,120 |
|
|
|
|
|
|
|
|
|
Gross profit margin by geographic
segment |
|
|
|
|
|
U.S. |
74.4% |
66.3% |
|
|
|
International |
50.1% |
51.1% |
|
|
|
Total gross profit margin |
66.4% |
60.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December
31, |
%
Change |
%
Change |
%
Change Foreign |
|
2013 |
2012 |
As Reported |
Operations |
Currency |
|
|
|
|
|
|
Revenues by geographic segment |
|
|
|
|
|
U.S. |
$ 134,951 |
$ 130,476 |
3.4% |
3.4% |
0.0% |
International |
69,773 |
65,802 |
6.0% |
15.0% |
-9.0% |
Total revenues |
$ 204,724 |
$ 196,278 |
4.3% |
7.3% |
-3.0% |
|
|
|
|
|
|
Gross profit by geographic segment |
|
|
|
|
|
U.S. |
$ 91,341 |
$ 89,360 |
|
|
|
International |
32,981 |
34,408 |
|
|
|
Total gross profit |
$ 124,322 |
$ 123,768 |
|
|
|
|
|
|
|
|
|
Gross profit margin by geographic
segment |
|
|
|
|
|
U.S. |
67.7% |
68.5% |
|
|
|
International |
47.3% |
52.3% |
|
|
|
Total gross profit margin |
60.7% |
63.1% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
1) The impact
from foreign currency represents the percentage change in 2013
revenues due to the change in foreign exchange rates for the
periods presented. |
|
ALPHATEC HOLDINGS,
INC. |
NON-GAAP CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(in thousands, except
per share amounts - unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2013 |
|
GAAP |
Non-GAAP Adjustments |
|
Non-GAAP |
|
|
|
|
|
Revenues |
$ 53,065 |
$ -- |
|
$ 53,065 |
Cost of revenues |
17,366 |
(1,131) |
(a) |
16,235 |
Amortization of acquired intangible
assets |
444 |
-- |
|
444 |
Total cost of revenues |
17,810 |
(1,131) |
|
16,679 |
Gross profit |
35,255 |
1,131 |
|
36,386 |
|
66.4% |
|
|
68.6% |
Operating expenses: |
|
|
|
|
Research and development |
3,814 |
-- |
|
3,814 |
Sales and marketing |
21,156 |
-- |
|
21,156 |
General and administrative |
13,931 |
(3,206) |
(b) |
10,725 |
Amortization of acquired
intangible assets |
754 |
0 |
|
754 |
Litigation settlement |
45,982 |
(45,982) |
(c) |
-- |
Restructuring expenses |
5,620 |
(5,620) |
(d) |
-- |
Total operating expenses |
91,257 |
(54,808) |
|
36,449 |
Operating loss |
(56,002) |
55,939 |
|
(63) |
Interest and other income
(expense), net |
(2,109) |
0 |
|
(2,109) |
Loss from continuing operations before
taxes |
(58,111) |
55,939 |
|
(2,171) |
Income tax provision |
2,296 |
-- |
|
2,296 |
Net loss |
$ (60,407) |
$ 55,939 |
|
$ (4,468) |
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
2013 |
|
GAAP |
Non-GAAP Adjustments |
|
Non-GAAP |
|
|
|
|
|
Revenues |
$ 204,724 |
$ -- |
|
$ 204,724 |
Cost of revenues |
78,669 |
(9,176) |
(a) (e) |
69,493 |
Amortization of acquired intangible
assets |
1,733 |
-- |
|
1,733 |
Total cost of revenues |
80,402 |
(9,176) |
|
71,226 |
Gross profit |
124,322 |
9,176 |
|
133,498 |
|
60.7% |
|
|
65.2% |
Operating expenses: |
|
|
|
|
Research and development |
14,190 |
(162) |
(f) |
14,028 |
Sales and marketing |
76,960 |
-- |
|
76,960 |
General and administrative |
47,949 |
(4,168) |
(b) (g) |
43,781 |
Amortization of acquired
intangible assets |
3,009 |
-- |
|
3,009 |
Litigation settlement |
45,982 |
(45,982) |
(c) |
-- |
Restructuring expenses |
9,665 |
(9,665) |
(d) |
-- |
Total operating expenses |
197,755 |
(59,977) |
|
137,778 |
Operating loss |
(73,433) |
69,153 |
|
(4,280) |
Interest and other income
(expense), net |
(5,615) |
-- |
|
(5,615) |
Loss from continuing operations before
taxes |
(79,047) |
69,153 |
|
(9,894) |
Income tax provision |
3,179 |
-- |
|
3,179 |
Net loss |
$ (82,227) |
$ 69,153 |
|
$ (13,074) |
|
|
|
|
|
Notes: |
|
|
|
|
(a) Record inventory
and instrument net book value adjustment and other costs of $1.1
million and $5.6 million for the three months and year ended
December 31, 2013, respectively, related to the restructuring
of the Company's French operations. |
(b) Amount consists
of Orthotec litigation trial related costs of $3.7 million,
partially offset by Phygen related escrow claim. |
(c) Litigation
settlement related to the Orthotec litigation. |
|
|
|
(d) Employee
severance and facility closing costs accrued for the restructuring
of the Company's French operations. |
(e) Includes
write-off of inventory and intangibles of $3.5 million related to
the Company's Puregen product. |
(f) Expense
related to research and development technology. |
|
|
|
(g) Amount includes
Phygen related acquisition costs of $0.4 million. |
|
|
CONTACT: Investor/Media Contact:
Christine Zedelmayer
Investor Relations
Alphatec Spine, Inc.
(760) 494-6610
czedelmayer@alphatecspine.com
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