| Item 2.02 |
Results of Operations and Financial Condition. |
In connection with the proposed offering referenced in Item 7.01 below, Alphatec Holdings, Inc. (the “Company”) intends to file a preliminary prospectus supplement (the “Preliminary Prospectus Supplement”) with the Securities and Exchange Commission (“SEC”). The Preliminary Prospectus Supplement contains selected preliminary unaudited financial information for the quarter ended September 30, 2023.
Selected Preliminary Unaudited Financial Information
The Company closed the third quarter 2023 with a cash balance of approximately $123 million, which included a $50 million drawdown of the Braidwell term loan facility and $10 million in proceeds from the Company’s At-the-Market (ATM) program.
The Company expects preliminary unaudited net loss for the three months ended September 30, 2023 of ($43.2) million to ($42.4) million, reflecting an expected increase in net loss of approximately ($6.4) million to ($5.6) million as compared to the three months ended September 30, 2022.
The Company also expects preliminary unaudited non-GAAP Adjusted EBITDA, which excludes interest expense, net, income tax benefit, depreciation and amortization, stock-based compensation, excess and obsolescence charges, litigation-related expenses, transaction-related expenses, and restructuring expenses, for the three months ended September 30, 2023 to be approximately $1.5 million to $2.3 million, which reflects an expected increase of $7.7 million to $8.5 million as compared to the Adjusted EBITDA loss for the three months ended September 30, 2022, primarily attributed to an increase in revenue and expanded leverage of the Company’s operating expenses to support business growth.
This financial data as of and for the three months ended September 30, 2023 is preliminary and may change, and is unaudited and based on information available to management as of the date of the Preliminary Prospectus Supplement and is subject to completion by management of the Company’s financial statements as of and for the quarter ended September 30, 2023. The Company has provided ranges for preliminary revenues, preliminary unaudited net loss and preliminary unaudited non-GAAP Adjusted EBITDA described above primarily because the Company’s financial closing procedures for the quarter ended September 30, 2023 are not yet complete. There can be no assurance that the Company’s final revenues, preliminary unaudited net loss or preliminary unaudited non-GAAP Adjusted EBITDA for this period or cash and cash equivalent position as of September 30, 2023 will not differ from these estimates, including as a result of quarter-end closing and review procedures or review adjustments and any such changes could be material. The preliminary results of operations for the quarter ended September 30, 2023 are not necessarily indicative of the results to be achieved for any future period.
The Company’s independent registered public accountants have not audited, reviewed or performed any procedures with respect to such preliminary financial data and accordingly do not express an opinion or any other form of assurance with respect thereto. These results could change as a result of further review. Complete quarterly results will be announced during the Company’s third quarter financial results conference call and included in the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2023.
Reconciliation of Non-GAAP Financial Measures
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 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 preliminary and estimated non-GAAP financial measures to the comparable GAAP financial measures for the third quarter ended September 30, 2023.
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| Third Quarter Ended September 30, 2023
(Unaudited, in millions) |
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| Net loss |
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$ |
(43.2 |
) |
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to |
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$ |
(42.4 |
) |
| Interest and other expense |
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4.4 |
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to |
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4.4 |
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| Income tax provision (benefit) |
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(0.1 |
) |
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to |
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(0.1 |
) |
| Depreciation |
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10.6 |
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to |
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10.6 |
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| Amortization of intangibles |
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4.1 |
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to |
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4.1 |
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| EBITDA |
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(24.2 |
) |
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to |
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(23.4 |
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| Add back significant items: |
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| Stock-based compensation |
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20.1 |
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to |
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20.1 |
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| Excess and obsolete charges |
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2.5 |
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to |
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2.5 |
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| Litigation-related expenses |
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2.7 |
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to |
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2.7 |
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| Transaction-related expenses |
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0.3 |
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to |
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0.3 |
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| Restructuring expenses |
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0.1 |
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to |
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0.1 |
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| Adjusted EBITDA |
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$ |
1.5 |
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to |
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$ |
2.3 |
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