Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of
Alphatec Spine, Inc., a global provider of spinal fusion
technologies, announced today financial results for the second
quarter ended June 30, 2014.
- Second quarter consolidated net revenues of $53.2 million; 4.2%
growth (as reported and in constant currency) over 2013 and 8.1%
sequential growth.
- Second quarter adjusted EBITDA of $7.7 million, 14.4% of
revenue.
- Consolidated gross margin improvement of 500 basis points over
the second quarter of 2013 to 67.9%.
Highlights of Alphatec Spine's Second Quarter
2014
- U.S. revenue of $34.5 million, representing 6.2% growth over
second quarter of 2013.
- International revenue of $18.6 million representing
approximately 1% growth (as reported and in constant currency) over
second quarter of 2013. Revenues from international operations
represent 35% of global revenues.
- Adjusted EBITDA second quarter growth of 57% over the same
period in 2013 and 14.5% sequential growth.
- Sales from less-invasive product solutions increased
approximately 16% from the second quarter of 2013, driven primarily
by strong uptake of Illico MIS across all major geographies.
- Biologics revenue grew approximately 25% over the prior year,
which is attributable to the broad Alphatec biologics portfolio
that addresses all major therapies for supporting successful spine
fusion.
- Arsenal™ Spinal Fixation System Initial Patient
Procedures Successfully Completed – beta launch of the
Company's new spinal fixation system is well-underway and early
feedback from surgeons has been extremely positive.
"We are pleased with our global sales growth in the second
quarter, which included balanced performance across our broad
portfolio of products," said Jim Corbett, President and CEO of
Alphatec Spine. "Additionally, in the second quarter we continued
to make progress on improving our bottom line results through
ongoing operational efficiency initiatives and controlling expenses
across the organization."
Mr. Corbett added, "We are also excited about the potential of
our recently beta-launched Arsenal spinal fixation system, which
provides a comprehensive solution for complex degenerative spinal
conditions. Our initial patient cases have gone very well and
interest in the marketplace is growing. We took positive steps
forward this quarter towards our goal of producing profitable
growth and look forward to continued improvement of our
business."
Quarter Ended June 30, 2014
Consolidated net revenues for the second quarter of 2014 were
$53.2 million, up 4.2%, as reported and on a constant-currency
basis, compared to $51.0 million reported for the second quarter of
2013.
U.S. net revenues for the second quarter of 2014 were $34.5
million, up 6.2%, compared to $32.5 million reported for the second
quarter of 2013.
International net revenues for the second quarter of 2014 were
$18.6 million, up approximately 1%, as reported and on a
constant-currency basis, compared to $18.5 million for the second
quarter of 2013. Excluding revenues from the cessation of sales in
France, international revenues grew 9% over the same period in
2013.
Gross profit and gross margin for the second quarter of 2014
were $36.1 million and 67.9%, respectively, compared to $32.1
million and 62.9%, respectively, for the second quarter of 2013.
Gross margin improvement of 500 basis points reflects continued
improvement of managing costs and driving operational efficiencies
combined with the ending of the Cross Medical settlement
amortization.
Total operating expenses for the second quarter of 2014 were
$34.3 million, down 2% compared to the second quarter of 2013 and
down approximately 10% sequentially. Increased R&D spend,
primarily related to beta launch of the Arsenal spinal fixation
system in the second quarter of 2014 was offset by improvements in
general and administrative expenses.
GAAP net loss for the second quarter of 2014 was $2.9 million or
($0.03) per share (basic and diluted), compared to a net loss of
$4.7 million, or ($0.05) per share (basic and diluted) for the
second quarter of 2013.
Adjusted EBITDA in the second quarter of 2014 was $7.7 million,
or 14.4% of revenues, compared to $4.9 million, or 9.6% of revenues
reported in the second quarter of 2013. Second quarter 2014
adjusted EBITDA represents net income excluding effects of
interest, taxes, depreciation, amortization, stock-based
compensation and restructuring.
Cash and cash equivalents were $19 million at June 30, 2014,
compared to $23.8 million reported at March 31, 2014. Additionally,
the Company has reported $2 million of restricted cash, which must
be used for future payment obligations associated with the Orthotec
settlement.
2014 Financial Guidance
The Company anticipates 2014 revenue in the range of $208
million to $212 million, representing approximately 1.6% to 3.6%
growth over 2013. The Company reaffirms guidance expectations for
annual adjusted EBITDA of $30 million to $33 million in 2014,
representing 19% to 31% growth over 2013, and representing
approximately 14.4% to 15.6% of annual revenue.
Conference Call
Alphatec Spine will webcast its Quarterly Update Call today at
5:00 p.m. EDT / 2:00 p.m. PDT. Jim Corbett, Alphatec's President
and Chief Executive Officer will lead the call. During the call the
Company plans to provide further details underlying its second
quarter 2014 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 74131275. A
replay of the call will also be available on the investor relations
section of Alphatec Spine's website for at least 30 days.
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, trial-related litigation expenses, restructuring expenses
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 global provider of spinal fusion technologies
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 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 and adjusted EBITDA guidance; the success of the Company to
achieve gross margin, profitability and adjusted EBITDA
improvements; 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, including
without limitation the Arsenal spinal fixation system; 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 without limitation the Arsenal system
and Illico 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;
the Company's ability to meet its debt and payment obligations
related to the Cross Medical and Orthotec settlements; 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, 2013, filed on March 20, 2014 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 |
Six Months Ended |
|
June 30, |
June 30, |
|
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
Revenues |
$ 53,167 |
$ 51,020 |
$ 102,340 |
$ 101,463 |
Cost of revenues |
16,600 |
18,501 |
32,033 |
35,771 |
Amortization of acquired intangible
assets |
447 |
426 |
893 |
857 |
Total cost of revenues |
17,047 |
18,927 |
32,926 |
36,628 |
Gross profit |
36,120 |
32,093 |
69,414 |
64,835 |
|
67.9% |
62.9% |
67.8% |
63.9% |
Operating expenses: |
|
|
|
|
Research and development |
4,534 |
3,666 |
8,715 |
7,348 |
Sales and marketing |
19,837 |
19,160 |
37,896 |
37,655 |
General and administrative |
9,241 |
11,445 |
23,463 |
22,575 |
Amortization of acquired
intangible assets |
757 |
721 |
1,515 |
1,514 |
Restructuring expenses |
(90) |
-- |
686 |
-- |
Total operating expenses |
34,279 |
34,992 |
72,275 |
69,092 |
Operating income (loss) |
1,841 |
(2,899) |
(2,861) |
(4,257) |
Interest and other income
(expense), net |
(4,429) |
(1,327) |
(5,731) |
(2,670) |
Loss from continuing operations before
taxes |
(2,588) |
(4,226) |
(8,592) |
(6,927) |
Income tax provision |
307 |
435 |
976 |
383 |
Net loss |
$ (2,895) |
$ (4,661) |
$ (9,568) |
$ (7,310) |
|
|
|
|
|
|
|
|
|
|
Net loss per common share: |
|
|
|
|
Basic and diluted net loss per
share |
$ (0.03) |
$ (0.05) |
$ (0.10) |
$ (0.08) |
|
|
|
|
|
Weighted-average shares - basic and
diluted |
96,922 |
95,926 |
96,860 |
95,876 |
|
ALPHATEC HOLDINGS,
INC. |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
(in thousands -
unaudited) |
|
|
|
|
June 30, |
December 31, |
|
2014 |
2013 |
ASSETS |
|
|
Current assets: |
|
|
Cash and cash
equivalents |
$ 18,983 |
$ 21,345 |
Restricted Cash |
2,001 |
-- |
Accounts receivable,
net |
44,662 |
41,395 |
Inventories, net |
42,447 |
41,939 |
Prepaid expenses and other
current assets |
7,886 |
7,694 |
Deferred income tax
assets |
1,389 |
1,372 |
Total current assets |
117,368 |
113,745 |
|
|
|
Property and equipment, net |
27,390 |
28,030 |
Goodwill |
182,301 |
183,004 |
Intangibles, net |
35,412 |
39,064 |
Other assets |
2,239 |
1,787 |
Total assets |
$ 364,710 |
$ 365,630 |
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
Current liabilities: |
|
|
Accounts payable |
$ 13,965 |
$ 10,790 |
Accrued expenses |
36,904 |
62,996 |
Deferred revenue |
1,838 |
1,009 |
Common stock warrant
liabilities |
11,173 |
-- |
Current portion of long-term
debt |
5,909 |
4,924 |
Total current liabilities |
69,789 |
79,719 |
|
|
|
Total long term
liabilities |
107,468 |
90,632 |
Redeemable preferred
stock |
23,603 |
23,603 |
Stockholders' equity |
163,850 |
171,676 |
Total liabilities and stockholders'
equity |
$ 364,710 |
$ 365,630 |
|
ALPHATEC HOLDINGS,
INC. |
RECONCILIATION OF
NON-GAAP FINANCIAL MEASURES |
(in thousands, except
per share amounts - unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
Six Months Ended |
|
June 30, |
June 30, |
|
2014 |
2013 |
2014 |
2013 |
|
|
|
|
|
Operating income (loss), as reported |
$ 1,841 |
$ (2,899) |
$ (2,861) |
$ (4,257) |
Add back: |
|
|
|
|
Depreciation |
3,102 |
3,654 |
6,352 |
7,175 |
Amortization of intangible
assets |
398 |
1,529 |
795 |
3,043 |
Amortization of acquired
intangible assets |
1,204 |
1,147 |
2,408 |
2,371 |
Total EBITDA |
6,545 |
3,431 |
6,694 |
8,332 |
|
|
|
|
|
Add back significant items: |
|
|
|
|
Stock-based compensation |
1,195 |
795 |
2,139 |
1,979 |
Litigation settlement and trial
costs |
-- |
-- |
4,779 |
-- |
Restructuring and other
charges |
(90) |
655 |
722 |
655 |
|
|
|
|
|
EBITDA, as adjusted for significant
items |
$ 7,650 |
$ 4,881 |
$ 14,334 |
$ 10,966 |
|
|
|
|
|
|
|
|
|
|
Net loss, as reported |
$ (2,895) |
$ (4,661) |
$ (9,568) |
$ (7,310) |
Add back: |
|
|
|
|
Amortization of acquired
intangible assets |
1,204 |
1,147 |
2,408 |
2,371 |
Amortization of intangible
assets |
398 |
1,529 |
795 |
3,043 |
Litigation settlement and trial
costs |
-- |
-- |
4,779 |
-- |
Restructuring and other
charges |
(90) |
655 |
722 |
655 |
Warrant fair value
adjustment |
923 |
-- |
805 |
-- |
|
|
|
|
|
Net loss, as adjusted for significant
items |
$ (460) |
$ (1,330) |
$ (59) |
$ (1,241) |
|
|
|
|
|
|
|
|
|
|
Net loss per common share - basic and
diluted |
$ (0.03) |
$ (0.05) |
$ (0.10) |
$ (0.08) |
Add back: |
|
|
|
|
Amortization of acquired
intangible assets |
0.01 |
0.01 |
0.02 |
0.02 |
Amortization of intangible
assets |
0.00 |
0.02 |
0.01 |
0.03 |
Litigation settlement and trial
costs |
-- |
-- |
0.05 |
-- |
Restructuring and other
charges |
(0.00) |
0.01 |
0.01 |
0.01 |
Warrant fair value
adjustment |
0.01 |
-- |
0.01 |
-- |
|
|
|
|
|
Net loss per common share - basic, as
adjusted for significant items |
$ (0.00) |
$ (0.01) |
$ (0.00) |
$ (0.01) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares - basic and
diluted |
96,922 |
95,926 |
96,860 |
95,876 |
|
ALPHATEC HOLDINGS,
INC. |
RECONCILIATION OF
GEOGRAPHIC SEGMENT REVENUES AND GROSS PROFIT |
(in thousands, except
percentages - unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
% Change |
|
June 30, |
% Change |
% Change |
Foreign |
|
2014 |
2013 |
As Reported |
Operations |
Currency |
|
|
|
|
|
|
Revenues by geographic segment |
|
|
|
|
|
U.S. |
$ 34,518 |
$ 32,491 |
6.2% |
6.2% |
0.0% |
International |
18,649 |
18,529 |
0.6% |
0.6% |
0.0% |
Total revenues |
$ 53,167 |
$ 51,020 |
4.2% |
4.2% |
0.0% |
|
|
|
|
|
|
Gross profit by geographic segment |
|
|
|
|
|
U.S. |
$ 24,781 |
$ 21,134 |
|
|
|
International |
11,339 |
10,959 |
|
|
|
Total gross profit |
$ 36,120 |
$ 32,093 |
|
|
|
|
|
|
|
|
|
Gross profit margin by geographic
segment |
|
|
|
|
|
U.S. |
71.8% |
65.0% |
|
|
|
International |
60.8% |
59.1% |
|
|
|
Total gross profit margin |
67.9% |
62.9% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended |
|
|
% Change |
|
June 30, |
% Change |
% Change |
Foreign |
|
2014 |
2013 |
As Reported |
Operations |
Currency |
|
|
|
|
|
|
Revenues by geographic segment |
|
|
|
|
|
U.S. |
$ 66,568 |
$ 65,553 |
1.5% |
1.5% |
0.0% |
International |
35,772 |
35,910 |
-0.4% |
1.7% |
-2.1% |
Total revenues |
$ 102,340 |
$ 101,463 |
0.9% |
1.6% |
-0.7% |
|
|
|
|
|
|
Gross profit by geographic segment |
|
|
|
|
|
U.S. |
$ 47,832 |
$ 43,550 |
|
|
|
International |
21,582 |
21,285 |
|
|
|
Total gross profit |
$ 69,414 |
$ 64,835 |
|
|
|
|
|
|
|
|
|
Gross profit margin by geographic
segment |
|
|
|
|
|
U.S. |
71.9% |
66.4% |
|
|
|
International |
60.3% |
59.3% |
|
|
|
Total gross profit margin |
67.8% |
63.9% |
|
|
|
|
|
|
|
|
|
Footnotes: |
|
|
|
|
|
1) The impact from foreign
currency represents the percentage change in 2014 revenues due to
the change in foreign exchange rates for the periods
presented. |
CONTACT: Investor/Media Contact:
Christine Zedelmayer
Investor Relations
Alphatec Spine, Inc.
(760) 494-6610
czedelmayer@alphatecspine.com
Alphatec (NASDAQ:ATEC)
Graphique Historique de l'Action
De Juin 2024 à Juil 2024
Alphatec (NASDAQ:ATEC)
Graphique Historique de l'Action
De Juil 2023 à Juil 2024