Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of
Alphatec Spine, Inc., a provider of spinal fusion technologies,
announced today financial results for the fourth quarter and full
year ended December 31, 2016.
- Fourth quarter total net revenues of $27.1 million; revenue
from the Company’s U.S. commercial business of $24.5 million.
- Annual total net revenues of $120.2 million; revenue from the
Company’s U.S. commercial business of $106.9 million.
- Cash and cash equivalents of $19.6 million at the end of the
fourth quarter.
Financial Results for the Fourth Quarter and Full Year
Ended December 31, 2016
As a result of the sale of the Company’s international business
in September 2016, the financial results and related assets and
liabilities of such business have been excluded from continuing
operations for all periods herein and reported as discontinued
operations.
U.S. commercial revenues for the fourth quarter
of 2016 were $24.5 million, down 16.9%, compared to $29.5 million
reported for the fourth quarter of 2015. For the full year
ended December 31, 2016, U.S. commercial revenues were $106.9
million, representing a decrease of 6.7%, compared to $114.6
million reported for full year 2015.
For the fourth quarter 2016, U.S. commercial
revenues decreased primarily as a result of a decrease in the
Company’s stocking business, lower U.S. hospital unit volume and
pricing declines.
For the full year 2016, U.S. commercial revenues
decreased primarily as a result of a decrease in the Company’s
stocking business and pricing declines, partially offset by higher
hospital volumes.
U.S. gross profit and gross margin for the
fourth quarter of 2016 were $15.2 million and 62.2%, respectively,
compared to $21.4 million and 72.6%, respectively, for the fourth
quarter of 2015. For the full year 2016, U.S. gross profit and
gross margin were $71.7 million and 67.0%, respectively, compared
to $79.5 million and 69.4%, respectively, for full year 2015.
For the fourth quarter and full year 2016, gross
margins declined as compared to 2015, primarily as a result of:
higher product costs driven by lower than planned sourcing volumes
throughout 2016, obsolescence charges related to product portfolio
management, and price declines, partially offset by the absence of
one-time charges that occurred in 2015.
Total operating expenses for the fourth quarter
of 2016 were $21.7 million, reflecting a decrease of $7.4 million,
or approximately 25% improvement over the fourth quarter of 2015.
For the full year 2016, total operating expenses were $91.5
million, reflecting a decrease of $172.4 million compared to the
full year 2015, which included non-cash goodwill and intangible
asset impairment charges totaling $164.3 million.
GAAP net loss for the fourth quarter of 2016 was
$4.7 million or ($0.56) per share (basic and diluted), compared to
a net loss of $9.9 million, or ($1.18) per share (basic and
diluted) for the fourth quarter of 2015. For the full year,
2016 GAAP net loss was $30.3 million or ($3.57) per share (basic
and diluted), compared to a net loss of $178.7 million, or ($21.53)
per share basic and diluted for full year 2015. GAAP net loss for
full year 2015 was unfavorably impacted by $164.3 million of
non-cash impairment charges.
Adjusted EBITDA in the fourth quarter of 2016
was $(2.2) million, compared to $3.4 million for the fourth quarter
of 2015. For the full year 2016, Adjusted EBITDA was $1.1
million, compared to $10.5 million for the full year 2015.
Please refer to the table, "Alphatec Holdings, Inc.
Reconciliation of Non-GAAP Financial Measures" that follows for
more detailed information.
Total Current and Long-term debt, includes $34.8
million in term debt and $12.5 million outstanding under the
Company’s revolving credit facility at December 31, 2016. This
compares to $29.9 million in term debt and $12.2 million
outstanding under the Company’s revolving credit facility at
September 30, 2016.
Cash and cash equivalents were $19.6 million at
December 31, 2016, compared to $25.6 million reported at September
30, 2016.
“Through our actions in 2016, we positioned the organization to
be more responsive to today’s world-class spine surgeons, our
employees and shareholders,” said Terry Rich, Chief Executive
Officer of Alphatec. “We look forward to providing you with a
company update and more details on our plans in connection with the
announcement of our first quarter 2017 results.”
Non-GAAP Information
To supplement the Company’s financial statements
presented in accordance with U.S. generally accepted accounting
principles (GAAP), the Company reports certain non-GAAP financial
measures such as Adjusted EBITDA. 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, in
process research and development (IPR&D) expenses and other
non-recurring income or expense items, such as impairments,
restructuring expenses, severance expenses, 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 baseline 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. The Company’s Adjusted EBITDA measure may not
provide information that is directly comparable to that provided by
other companies in the Company’s industry, as other companies in
the industry may calculate non-GAAP financial results differently,
particularly related to non-recurring, unusual items. Adjusted
EBITDA 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 and markets spinal fusion technology products and
solutions for the treatment of spinal disorders associated with
disease and degeneration, congenital deformities and trauma. The
Company's mission is to improve lives by delivering advancements in
spinal fusion technologies. The Company markets its products
in the U.S. via independent sales agents and a direct sales
force.
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 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 the optimization of
the Company’s product portfolio through active product lifecycle
management and the Company positioning itself to be more responsive
to surgeons, employees and shareholders. In addition, the
unaudited financial results for the fourth quarter and year ended
December 31, 2016 included in this press release are preliminary
and represent the most current information available to management.
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:
adjustments to the unaudited financial results reported for
the fourth quarter and year ended December 31, 2016 in connection
with the completion of the Company’s final closing process and
procedures, final adjustments, completion of the audit by the
Company’s independent registered public accounting firm and other
developments that may arise during the preparation of the Company’s
Annual Report on Form 10-K; the uncertainty of success in
developing new products or products currently in Alphatec Spine's
pipeline; the uncertainties in the Company’s ability to execute
upon its strategic operating plan; 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
Battalion and Arsenal Deformity; failure to obtain FDA clearance or
approval or international regulatory approvals for new products, 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
litigation in which the Company is a defendant; patent infringement
claims; claims related to the Company’s intellectual property and
the Company’s ability to meet its financial obligations under its
credit agreements and the Orthotec settlement agreement. 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’s
SEC reports, including its Annual Report Form 10-K for the year
ended December 31, 2015, filed on March 15, 2016 with the
Securities and Exchange Commission, and its Amended Annual Report
Form 10-K/A filed on April 29, 2016, as well as other filings on
Form 10-Q and periodic filings on Form 8-K. Alphatec 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 |
|
|
Year Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2016 |
|
2015 |
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$ |
27,090 |
|
|
$ |
34,791 |
|
|
|
$ |
120,248 |
|
|
$ |
134,388 |
|
|
|
Cost of revenues |
|
12,463 |
|
|
|
11,192 |
|
|
|
|
44,114 |
|
|
|
46,366 |
|
|
|
Gross profit |
|
14,627 |
|
|
|
23,599 |
|
|
|
|
76,134 |
|
|
|
88,022 |
|
|
|
|
|
54.0 |
% |
|
|
67.8 |
% |
|
|
|
63.3 |
% |
|
|
65.5 |
% |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
Research
and development |
|
2,449 |
|
|
|
8,077 |
|
|
|
|
9,248 |
|
|
|
17,615 |
|
|
|
In-process research and development |
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
274 |
|
|
|
Sales and
marketing |
|
11,464 |
|
|
|
13,937 |
|
|
|
|
50,962 |
|
|
|
51,801 |
|
|
|
General
and administrative |
|
7,092 |
|
|
|
6,547 |
|
|
|
|
26,339 |
|
|
|
28,126 |
|
|
|
Amortization of intangible assets |
|
172 |
|
|
|
304 |
|
|
|
|
934 |
|
|
|
1,200 |
|
|
|
Impairment of goodwill and intangibles |
|
- |
|
|
|
- |
|
|
|
|
1,736 |
|
|
|
164,263 |
|
|
|
Restructuring expenses |
|
514 |
|
|
|
246 |
|
|
|
|
2,292 |
|
|
|
597 |
|
|
|
Total
operating expenses |
|
21,691 |
|
|
|
29,111 |
|
|
|
|
91,511 |
|
|
|
263,876 |
|
|
|
Operating loss |
|
(7,064 |
) |
|
|
(5,512 |
) |
|
|
|
(15,377 |
) |
|
|
(175,854 |
) |
|
|
Interest
and other income (expense), net |
|
(2,689 |
) |
|
|
(769 |
) |
|
|
|
(15,558 |
) |
|
|
3,455 |
|
|
|
Pretax loss |
|
(9,753 |
) |
|
|
(6,281 |
) |
|
|
|
(30,935 |
) |
|
|
(172,399 |
) |
|
|
Income
tax provision (benefit) |
|
474 |
|
|
|
182 |
|
|
|
|
(4,488 |
) |
|
|
(1,146 |
) |
|
|
Loss from continuing
operations |
|
(10,227 |
) |
|
|
(6,463 |
) |
|
|
|
(26,447 |
) |
|
|
(171,253 |
) |
|
|
Income (loss) from
discontinued operations |
|
5,481 |
|
|
|
(3,440 |
) |
|
|
|
(3,870 |
) |
|
|
(7,423 |
) |
|
|
Net loss |
$ |
(4,746 |
) |
|
$ |
(9,903 |
) |
|
|
$ |
(30,317 |
) |
|
$ |
(178,676 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share
continuing operations |
$ |
(1.21 |
) |
|
$ |
(0.77 |
) |
|
|
$ |
(3.11 |
) |
|
$ |
(20.64 |
) |
|
|
Net income (loss) per
share discontinued operations |
|
0.65 |
|
|
|
(0.41 |
) |
|
|
|
(0.46 |
) |
|
|
(0.89 |
) |
|
|
Net loss per
share - basic and diluted |
$ |
(0.56 |
) |
|
$ |
(1.18 |
) |
|
|
$ |
(3.57 |
) |
|
$ |
(21.53 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares
- basic and diluted |
|
8,465 |
|
|
|
8,376 |
|
|
|
|
8,495 |
|
|
|
8,298 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ALPHATEC HOLDINGS, INC. |
|
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
|
(in thousands -
unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
December 31, |
|
|
|
2016 |
|
2015 |
|
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and
cash equivalents |
$ |
19,593 |
|
|
$ |
6,295 |
|
|
|
Restricted cash |
|
- |
|
|
|
2,350 |
|
|
|
Accounts
receivable, net |
|
18,512 |
|
|
|
26,870 |
|
|
|
Inventories, net |
|
30,093 |
|
|
|
32,632 |
|
|
|
Prepaid
expenses and other current assets |
|
4,262 |
|
|
|
3,138 |
|
|
|
Current
assets of discontinued operations |
|
364 |
|
|
|
30,210 |
|
|
|
Total current
assets |
|
72,824 |
|
|
|
101,495 |
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
15,076 |
|
|
|
16,067 |
|
|
|
Intangibles, net |
|
5,711 |
|
|
|
8,806 |
|
|
|
Other assets |
|
516 |
|
|
|
502 |
|
|
|
Noncurrent assets of
discontinued operations |
|
61 |
|
|
|
19,471 |
|
|
|
Total assets |
$ |
94,188 |
|
|
$ |
146,341 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' DEFICIT |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts
payable |
$ |
8,701 |
|
|
$ |
13,542 |
|
|
|
Accrued
expenses |
|
27,981 |
|
|
|
21,175 |
|
|
|
Common
stock warrant liabilities |
|
- |
|
|
|
687 |
|
|
|
Current
portion of long-term debt |
|
3,113 |
|
|
|
79,742 |
|
|
|
Current
liabilities of discontinued operations |
|
732 |
|
|
|
9,891 |
|
|
|
Total current
liabilities |
|
40,527 |
|
|
|
125,037 |
|
|
|
|
|
|
|
|
|
Total
long-term liabilities |
|
71,954 |
|
|
|
32,761 |
|
|
|
Long-term
liabilities of discontinued operations |
|
- |
|
|
|
1,516 |
|
|
|
Redeemable preferred stock |
|
23,603 |
|
|
|
23,603 |
|
|
|
Stockholders' deficit |
|
(41,896 |
) |
|
|
(36,576 |
) |
|
|
Total liabilities and
stockholders' deficit |
$ |
94,188 |
|
|
$ |
146,341 |
|
|
|
|
|
|
|
|
|
|
ALPHATEC HOLDINGS, INC. |
|
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES |
|
(in thousands, except per share amounts -
unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
Year Ended |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2016 |
|
2015 |
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss, as
reported |
$ |
(7,064 |
) |
|
$ |
(5,512 |
) |
|
|
$ |
(15,377 |
) |
|
$ |
(175,854 |
) |
|
|
Add back: |
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
1,735 |
|
|
|
3,310 |
|
|
|
|
7,387 |
|
|
|
10,802 |
|
|
|
Amortization of intangible assets |
|
693 |
|
|
|
327 |
|
|
|
|
1,608 |
|
|
|
2,968 |
|
|
|
Total EBITDA |
|
(4,636 |
) |
|
|
(1,875 |
) |
|
|
|
(6,382 |
) |
|
|
(162,084 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Add back significant
items: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
|
1,931 |
|
|
|
5,004 |
|
|
|
|
3,441 |
|
|
|
7,444 |
|
|
|
In-process research and development |
|
- |
|
|
|
- |
|
|
|
|
- |
|
|
|
274 |
|
|
|
Goodwill
and intangible impairment |
|
- |
|
|
|
- |
|
|
|
|
1,736 |
|
|
|
164,263 |
|
|
|
Restructuring and other charges |
|
514 |
|
|
|
246 |
|
|
|
|
2,292 |
|
|
|
597 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA, as adjusted for
significant items |
$ |
(2,191 |
) |
|
$ |
3,375 |
|
|
|
$ |
1,087 |
|
|
$ |
10,494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
ALPHATEC HOLDINGS, INC. |
|
RECONCILIATION OF REVENUES AND GROSS
PROFIT |
|
(in thousands, except percentages -
unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
|
|
December 31, |
|
% Change |
|
|
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Revenues by source |
|
|
|
|
|
U.S. commercial
revenue |
$ |
24,487 |
|
|
$ |
29,479 |
|
|
-16.9 |
% |
|
|
|
Other |
|
2,603 |
|
|
|
5,312 |
|
|
-51.0 |
% |
|
|
|
Total revenues |
$ |
27,090 |
|
|
$ |
34,791 |
|
|
-22.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
Gross profit by
source |
|
|
|
|
|
U.S. |
$ |
15,243 |
|
|
$ |
21,396 |
|
|
|
Other |
|
(616 |
) |
|
|
2,203 |
|
|
|
Total gross profit |
$ |
14,627 |
|
|
$ |
23,599 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit margin by
source |
|
|
|
|
|
U.S. |
|
62.2 |
% |
|
|
72.6 |
% |
|
|
Other |
|
-23.7 |
% |
|
|
41.5 |
% |
|
|
Total gross profit
margin |
|
54.0 |
% |
|
|
67.8 |
% |
|
|
|
|
|
Year Ended |
|
|
|
|
|
|
December 31, |
|
% Change |
|
|
|
|
2016 |
|
2015 |
|
|
|
|
|
|
|
|
|
|
|
Revenues by source |
|
|
|
|
|
U.S. commercial
revenue |
$ |
106,932 |
|
|
$ |
114,578 |
|
|
-6.7 |
% |
|
|
|
Other |
|
13,316 |
|
|
|
19,810 |
|
|
-32.8 |
% |
|
|
|
Total revenues |
$ |
120,248 |
|
|
$ |
134,388 |
|
|
-10.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
Gross profit by
source |
|
|
|
|
|
U.S. |
$ |
71,669 |
|
|
$ |
79,501 |
|
|
|
Other |
|
4,465 |
|
|
|
8,521 |
|
|
|
Total gross profit |
$ |
76,134 |
|
|
$ |
88,022 |
|
|
|
|
|
|
|
|
|
Gross profit margin by
source |
|
|
|
|
|
U.S. |
|
67.0 |
% |
|
|
69.4 |
% |
|
|
Other |
|
33.5 |
% |
|
|
43.0 |
% |
|
|
Total gross profit
margin |
|
63.3 |
% |
|
|
65.5 |
% |
|
|
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