Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of
Alphatec Spine, Inc., a medical device company that designs,
develops, manufactures and markets products for the surgical
treatment of spine disorders, with a focus on treating conditions
affecting the aging spine, announced today the closing of its
previously announced acquisition of Scient'x Groupe SAS, a spinal
implant company headquartered in France.
The combined company will be the third-largest independent
spinal company with a global span of product distribution. Scient'x
is the largest privately held independent spine company outside of
the United States with distribution in over 50 countries.
As previously announced, the Company anticipates pro forma
revenues for 2010 to be in a range of $220 million to $225 million,
and pro forma full-year 2010 adjusted EBITDA to be in a range of
$32 million to $35 million. The Company reiterates this guidance to
reflect the 2010 pro forma affect on a 12-month basis, as if the
acquisition closed on January 1, 2010. The acquisition is expected
to be positive to the Company's 2010 EPS and accretive to the
Company's 2011 EPS, excluding amortization of acquired intangible
assets, transaction expenses and related restructuring
charges.
In conjunction with the closing of the acquisition, the Company
also amended and expanded its existing credit facility with Silicon
Valley Bank and Oxford Finance Corporation. The amended credit
facility expands the working capital line of credit from $15
million to $25 million, based upon eligible U.S. accounts
receivable and inventory balances. The existing term debt
facility held by both the Company and Scient'x, which is
approximately $20 million in principal outstanding in the
aggregate, remains in place. The maturity date of the amended
credit facility is April 1, 2012. In connection with the
amended credit facility the Company agreed to new financial
covenants that are based on a fixed-charge coverage ratio. The
original agreement contained financial covenants that consisted of
both revenue and adjusted EBITDA targets.
About Scient'x
Scient'x is a medical device company based in France that
designs, develops and manufactures spinal implants and
instrumentation. Scient'x was founded in 1988 and offers today
a full range of implants for spinal fusions, posterior semi-rigid
stabilization and a cervical total disc replacement
device. Its international distribution network consists of a
direct sales force in France and the UK, a hybrid of direct sales
force and distributors in Italy, as well as exclusive and
non-exclusive distributors in more than 50 countries including the
United States. The Scient'x surgeon education and training network
augments its international distribution capabilities.
Scient'x key products includes the Isobar™ family of rods, a
semi-rigid rod technology used in spinal fusion surgeries, as well
as cervical and lumbar implants, which are used predominantly in
spine fusion surgeries. Outside of the U.S., Scient'x markets
a unique and proprietary ceramic-on-ceramic cervical total disc
replacement device, DiscoCerv®, which has been implanted in over
3,000 patients since its initial launch.
About Alphatec Spine
Alphatec Spine, Inc. is a wholly owned subsidiary of Alphatec
Holdings, Inc. (Nasdaq:ATEC). Alphatec Spine is a medical device
company that designs, develops, manufactures and markets products
for the surgical treatment of spine disorders, primarily focused on
the aging spine. The Company's mission is to combine
world-class customer service with innovative, surgeon-driven design
that will help improve the aging patient's quality of
life. The Company is poised to achieve its goal through new
solutions for patients with osteoporosis, stenosis and other aging
spine deformities, improved minimally invasive products and
techniques and integrated biologics solutions. In addition to
its U.S. operations, the Company also markets its spine products in
Europe. In Asia, the Company markets a broad line of spine and
orthopedic products through its subsidiary, Alphatec Pacific,
Inc. For more information, please visit
www.alphatecspine.com.
Also visit the Aging Spine Center, www.agingspinecenter.com, a
web-based information portal for healthcare providers and patients
regarding aging spine disorders and their treatment. The
Company is working with the National Osteoporosis Foundation as
well as other clinical portals that provide peer-reviewed content,
to populate the Aging Spine Center. The interactive website
enables patients to review pertinent information about disorders
that affect the aging spine in an easy-to-understand format that
includes videos, graphics and questions that should be asked of
caregivers. Medical information on the website includes published
abstracts regarding the aging spine.
The Alphatec Holdings, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=3520
Use of Non-GAAP Information
Non-GAAP earnings guidance included in this press release is a
non-GAAP (generally accepted accounting principles) financial
measure that represents net income (loss) excluding the effects of
in-process research and development expenses, amortization of
acquired intangibles, transaction related expenses, acquisition
related restructuring expenses and litigation settlement expenses.
Management does not consider these expenses when it makes certain
evaluations of the operations of the Company. Non-GAAP earnings, as
defined above, may not be similar to non-GAAP earnings measures
used by other companies and is not a measurement under GAAP.
Adjusted EBITDA guidance 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 costs, and other
non-recurring income or expense items, such as in-process research
and development expense, transaction related expenses and
acquisition related restructuring expenses. Adjusted EBITDA, as
defined above, may not be similar to adjusted EBITDA measures used
by other companies and is not a measurement under GAAP.
Though management finds GAAP-based earnings or loss and adjusted
EBITDA useful for evaluating aspects of the Company's business, its
reliance on these measures are limited because excluded items often
have a material effect on the Company's earnings and earnings per
common share calculated in accordance with GAAP. Therefore,
management uses non-GAAP earnings and adjusted EBITDA in
conjunction with GAAP earnings and earnings per common share
measures. The Company believes that non-GAAP earnings and 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. While the
GAAP results are more complete, the Company prefers to allow
investors to have these supplemental metrics since, with
reconciliation to GAAP, they may provide greater insight into the
Company's financial results.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934, as amended,
which are intended to be covered by safe harbors created thereby.
Shareholders are cautioned that all forward-looking statements are
based largely on Alphatec's expectations and involve risks and
uncertainties, some of which cannot be predicted or are beyond
Alphatec's control. Statements containing a projection of revenue,
earnings, EBITDA, cost and revenue synergies, additional market
opportunities, future economic performance, product development
timelines, the acceptance of products by the surgeon community or
whether the acquisition agreement will be consummated are just a
few examples of forward-looking statements. Some factors that could
realistically cause results to differ materially from those
projected in the forward-looking statements include risks that the
Scient'x transaction disrupts the Company's current plans and
operations and the potential difficulties in employee retention as
a result of the acquisition; the ability to recognize the benefits
of the transaction; litigation outcomes, including without
limitation product liability litigation and litigation related to
the infringement of intellectual property of a third party; the
impact of healthcare reform and regulations in the United States
and other jurisdictions; the Company's ability to meet its
financial guidance; the growth rate of the spine market related to
aging and elderly patients; the ability to achieve regulatory
approval for products in the Company's development pipeline and the
successful adoption of such products once approved; the Company's
ability to develop and expand its business in the United States,
Asia and Europe; the Company's ability to compete with other
competing products and with emerging new technologies; 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; and the uncertainty of additional
funding. Additional factors that could cause results to differ
materially from those described in the forward-looking statements
can be found in the Company's Annual Report on Form 10-K and in the
Company's other filings with the Securities and Exchange Commission
(the "SEC") available at the SEC's website at
http://www.sec.gov.
The statements in this press release reflect the Company's
expectations and beliefs as of the date of this release. The
Company anticipates that subsequent events and developments will
cause its expectations and beliefs to change. However, while the
Company may elect to update these forward-looking statements
publicly at some point in the future, the Company specifically
disclaims any obligation to do so, whether as a result of new
information, future events or otherwise. These forward-looking
statements should not be relied upon as representing the Company's
views as of any date after the date of this release.
CONTACT: Westwicke Partners
Lynn C. Pieper
(415) 202-5678
lynn.pieper@westwicke.com
Alphatec Spine, Inc.
Peter C. Wulff, Chief Financial Officer
(760) 494-6746
investorrelations@alphatecspine.com
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