Organic revenue growth accelerates to 93%
Revenue 2-year CAGR of 46%
Full year 2021 total revenue now expected to
grow ~64% to ~$238 million
Alphatec Holdings, Inc. (Nasdaq: ATEC), a provider of innovative
solutions dedicated to revolutionizing the approach to spine
surgery, today announced financial results for the quarter ended
June 30, 2021, and recent corporate highlights.
Second Quarter 2021 Financial
Results
Quarter Ended June 30, 2021 Total revenues
$62.2 M
GAAP gross margin
66.0%
Non-GAAP gross margin
73.2%
Operating expenses
$76.8 M
Non-GAAP operating expenses
$57.2 M
GAAP Operating loss
$(35.8) M
Non-Gaap adjusted EBITDA
$(6.6) M
Ending cash balance
76.6
Recent Highlights
- Expanded contribution from new products to 84% of revenue, up
from 61% in Q2 2020;
- Continued elevation of the sales team, delivering 106%
year-over-year revenue growth from strategic distribution;
- Closed acquisition of EOS imaging, S.A. (“EOS”), and commenced
integration to advance ATEC clinical prowess with improved
information from diagnosis to follow-up.
“We are accelerating revenue through sound execution of our
growth priorities,” said Pat Miles, Chairman and Chief Executive
Officer. “But this is just the first inning; we intend to become
the dominant force in the industry by significantly improving the
clinical experience in spine. We channeled decades of spine
experience as the pioneers of lateral surgery to create the PTP
technique in order to improve the optionality and predictability of
the lateral approach. PTP adoption is accelerating and utilization
is increasing among both new and existing surgeon customers. In a
few short years, we have created surgical approaches and products
that are unrivaled. With the close of the EOS transaction, we
intend to extend our prowess by equipping the AlphaInformatiX
platform with unprecedented imaging information throughout the
entire continuum of care, bringing the standards relied on by the
world’s most prestigious academic centers to spine surgery. Our
early success has driven excitement within these walls that is
palpable – we know the opportunity ahead of us and are confident we
have what it takes to win in the innings ahead.”
Financial Outlook for the Full Year 2021
The Company now expects total revenue for the fiscal year ended
December 31, 2021, to approximate $238 million, reflecting growth
of approximately 64% compared to the prior full year. This includes
an organic revenue contribution of approximately $212 million, or
50% growth compared to the prior full year. The Company anticipates
about $25 million of revenue related to EOS imaging. Total revenue
guidance for the full year 2021 also includes a $1 million
contribution from the Company’s international supply agreement,
which will terminate on August 31, 2021.
Investor Conference Call
ATEC will present these results via a live webcast today at 1:30
p.m. PT / 4:30 p.m. ET. The live webcast can be accessed by
visiting the Investor Relations section of ATEC’s Corporate Website
at investors.alphatecspine.com/quarterly-results. Participants
should go to the website at least 15 minutes before the event to
register, and download and install any necessary software.
To dial-in to the webcast, registration may be completed by
visiting the following registration link:
http://www.directeventreg.com/registration/event/4976259. Once
registered, each dial-in participant will be provided access
details and a registrant ID.
A replay of the webcast will remain available through the
Investor Relations section of ATEC’s Corporate Website at
investors.alphatecspine.com/quarterly-results for twelve months. In
addition, a replay of the audiocast will be available beginning two
hours after the call’s completion until August 10, 2021. The replay
dial-in numbers are (800) 585-8367 for domestic callers and (416)
621-4642 for international callers. Please use the replay
conference ID number 4976259.
Non-GAAP Financial 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,
including non-GAAP U.S. gross margin, non-GAAP operating expenses,
non-GAAP operating loss, and non-GAAP Adjusted EBITDA. The Company
believes that these non-GAAP financial measures provide 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. The Company’s non-GAAP
financial measures 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. Non-GAAP financial results 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 measures.
About Alphatec Holdings, Inc.
ATEC, through its wholly owned subsidiaries, Alphatec Spine,
Inc., EOS imaging S.A. and SafeOp Surgical, Inc., is a medical
device company dedicated to revolutionizing the approach to spine
surgery through clinical distinction. ATEC’s Organic Innovation
Machine™ is focused on developing new approaches that integrate
seamlessly with the Company’s expanding AlphaInformatiX Platform to
better inform surgery and more safely and reproducibly achieve the
goals of spine surgery. ATEC’s vision is to become the Standard
Bearer in Spine. For more information, visit us at
www.atecspine.com.
Forward Looking Statements
This press release contains "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.
The Company cautions investors that there can be no assurance that
actual results will not differ materially from those projected or
suggested in such forward-looking statements as a result of various
factors. Forward-looking statements include, but are not limited
to: references to the Company’s revenue and growth outlook; planned
product launches, introductions, regulatory submissions or
clearances; efforts to transform sales and distribution channels;
the Company’s ability to compel surgeon adoption; the Company’s
future ability to finance its operations and sufficiency of its
cash runway; and statements about the potential benefits and
synergies of the acquisition of EOS imaging, S.A. (including
expected impact on future financial and operating results and
post-acquisition plans and intentions). 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 the 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 the
Company’s products by the surgeon community; failure to obtain FDA
or other regulatory clearance or approval or unexpected or
prolonged delays in the process; continuation of favorable third
party reimbursement; unanticipated expenses or liabilities or other
adverse events affecting cash flow or the Company’s ability to
achieve profitability; uncertainty of additional funding; the
Company’s ability to compete with other products or with emerging
technologies; product liability exposure; an unsuccessful outcome
in any litigation; patent infringement claims; claims related to
the Company’s intellectual property; the Company’s ability to meet
its financial obligations; the impact of the COVID-19 pandemic on
the Company and economy; and uncertainties and risks related to the
integration of EOS imaging, S.A. A further list and description of
these and other factors, risks and uncertainties can be found in
the Company's most recent annual report, and any subsequent
quarterly and current reports, filed with the Securities and
Exchange Commission. ATEC 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)
Three Months Ended Six Months Ended June
30, June 30,
2021
2020
2021
2020
unaudited Revenues: Revenue from products and services
$
61,885
$
28,834
$
105,601
$
57,904
Revenue from international supply agreement
364
795
769
1,840
Total revenues
62,249
29,629
106,370
59,744
Cost of revenues
21,184
8,787
33,447
17,871
Gross profit
41,065
20,842
72,923
41,873
Operating expenses: Research and development
7,839
4,237
13,640
8,406
Sales, general and administrative
60,659
26,468
101,085
54,051
Litigation-related
1,167
1,304
4,502
3,947
Amortization of acquired intangible assets
1,208
172
1,380
344
Transaction-related
4,771
(181)
5,783
4,091
Restructuring
1,173
—
1,331
—
Total operating expenses
76,817
32,000
127,721
70,839
Operating loss
(35,752)
(11,158)
(54,798)
(28,966)
Interest and other expense, net: Interest expense, net
(2,394)
(3,032)
(4,332)
(5,906)
Other expenses
(16)
(1,555)
(1,905)
(1,555)
Total interest and other expenses, net
(2,410)
(4,587)
(6,237)
(7,461)
Loss from continuing operations before taxes
(38,162)
(15,745)
(61,035)
(36,427)
Income tax provision
43
60
73
100
Net loss
$
(38,205)
$
(15,805)
$
(61,108)
$
(36,527)
Net loss per share, basic and diluted
$
(0.39)
$
(0.25)
$
(0.66)
$
(0.58)
Shares used in calculating basic and diluted net loss per share
98,541
63,713
92,912
63,140
Stock-based compensation included in: Cost of
revenues
$
235
$
128
$
330
$
235
Research and development
664
563
1,162
954
Sales, general and administrative
10,597
3,884
14,478
6,954
$
11,496
$
4,575
$
15,970
$
8,143
ALPHATEC HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands) June 30, 2021
December 31, 2020 (unaudited)
ASSETS Current assets:
Cash
$ 76,581
$ 107,765
Accounts receivable, net
33,743
23,527
Inventories, net
86,715
46,001
Prepaid expenses and other current assets
8,108
5,439
Withholding tax receivable from Officer
1,076
1,076
Current assets of discontinued operations
136
352
Total current assets
206,359
184,160
Property and equipment, net
66,051
36,670
Right-of-use asset
26,604
1,177
Goodwill
45,189
13,897
Intangible assets, net
92,981
24,720
Other assets
3,786
541
Noncurrent assets of discontinued operations
57
58
Total assets
$ 441,027
$ 261,223
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$ 29,812
$ 17,599
Accrued expenses and other current liabilities
43,455
35,264
Contract liability
20,392
—
Short-term debt
10,988
4,167
Current portion of operating lease liability
2,777
885
Current liabilities of discontinued operations
141
397
Total current liabilities
107,565
58,312
Total long term liabilities
96,345
49,428
Redeemable preferred stock
23,603
23,603
Stockholders' equity
213,514
129,880
Total liabilities and stockholders' equity
$ 441,027
$ 261,223
ALPHATEC HOLDINGS, INC. RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES (in thousands) Three Months
Ended Six Months Ended June 30, June 30,
2021
2020
2021
2020
unaudited Gross profit, GAAP
$
41,065
$
20,842
$
72,923
$
41,873
Add: amortization of intangible assets
268
268
536
536
Add: stock-based compensation
235
128
330
235
Add: Purchase accounting adjustments on acquisitions
1,763
—
1,763
—
Add: non-cash excess and obsolete charges
2,221
1,712
4,317
3,434
Non-GAAP gross profit
$
45,552
$
22,950
$
79,869
$
46,078
Gross margin, GAAP
66.0
%
70.3
%
68.6
%
70.1
%
Add: amortization of intangible assets
0.4
%
0.9
%
0.5
%
0.9
%
Add: stock-based compensation
0.4
%
0.4
%
0.3
%
0.4
%
Add: Purchase accounting adjustments on acquisitions
2.8
%
0.0
%
1.7
%
0.0
%
Add: non-cash excess and obsolete charges
3.6
%
5.8
%
4.1
%
5.7
%
Non-GAAP gross margin
73.2
%
77.5
%
75.1
%
77.1
%
Three Months Ended Six Months Ended June
30, June 30,
2021
2020
2021
2020
unaudited Operating expenses, GAAP
$
76,817
$
32,000
$
127,721
$
70,839
Adjustments: Stock-based compensation
(11,261
)
(4,447
)
(15,640
)
(7,908
)
Litigation-related expenses
(1,167
)
(1,304
)
(4,502
)
(3,947
)
Amortization of intangible assets
(1,208
)
(172
)
(1,380
)
(344
)
Transaction-related expenses
(4,771
)
181
(5,783
)
(4,091
)
Restructuring expenses
(1,173
)
—
(1,331
)
—
Non-GAAP operating expenses
$
57,237
$
26,258
$
99,085
$
54,549
Three Months Ended Six Months Ended June
30, June 30,
2021
2020
2021
2020
unaudited Operating loss, GAAP
$
(35,752
)
$
(11,158
)
$
(54,798
)
$
(28,966
)
Depreciation
5,068
2,161
8,477
4,175
Amortization of intangible assets
1,476
441
1,917
881
EBITDA
(29,208
)
(8,556
)
(44,404
)
(23,910
)
Add back significant items: Stock-based compensation
11,496
4,575
15,970
8,143
Purchase accounting adjustments on acquisitions
1,763
—
1,763
—
Excess & obsolete charges
2,221
1,712
4,317
3,434
Litigation-related expenses
1,167
1,304
4,502
3,947
Transaction-related expenses
4,771
(181
)
5,783
4,091
Restructuring expenses
1,173
—
1,331
—
Adjusted EBITDA
$
(6,617
)
$
(1,146
)
$
(10,738
)
$
(4,295
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210803005994/en/
Investor/Media Contact: Tina Jacobsen, CFA Investor
Relations (760) 494-6790 investorrelations@atecspine.com
Company Contact: J. Todd Koning Chief Financial Officer
investorrelations@atecspine.com
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