- Revenue growth of 61%, including organic revenue growth of
39%
- EOS imaging revenue of over $10 million
- Full-year revenue guidance increased to $316 million,
reflecting 30% growth
- Investor Day on May 25 to detail strategic and financial
long-term outlook
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
March 31, 2022, and recent corporate highlights.
First Quarter 2022 Financial
Results
Quarter Ended March 31, 2022
Total revenue
$71 million
GAAP gross margin
69%
Non-GAAP gross margin
72%
Operating expenses
$90 million
Non-GAAP operating expenses
$69 million
GAAP operating loss
($41) million
Non-GAAP adjusted EBITDA
($11) million
Ending cash balance
$152 million
First Quarter Highlights
- ATEC lateral procedures, including the Prone Trans-Psoas (PTP)
Technique, delivered approximately 40% of revenue growth;
- Grew average revenue per surgery by 11% on strong adoption of
procedures with greater complexity;
- Trained over 100 surgeons, contributing to an 18% increase in
surgeon users compared to prior year;
- Generated over $10 million in EOS-related revenue with strong
order book growth.
“Momentum accelerated throughout the first quarter, marking a
strong start to the new year,” said Pat Miles, Chairman and Chief
Executive Officer. “Our organic growth is a direct result of our
willingness to invest in unique technologies that increase the
predictability and reproducibility of spine surgery. PTP will be a
long-term growth driver because it improves lateral surgery with
proprietary advances in neuromonitoring and purposefully designed
instruments that create more predictable outcomes for a broader
surgeon population – including those who historically have favored
posterior approaches. Similarly, the information that EOS affords
today, and the differentiated capabilities under development, will
bring unprecedented clinical, operational, and economic
predictability to spine. Surgeons are increasingly endorsing our
thesis by partnering with ATEC for more surgeries and surgeries of
greater complexity, utilizing more of the technology we now offer.
Yet, this is still just the beginning. ATEC is primed to perform –
not just in 2022, but throughout this decade.”
Financial Outlook for the Full Year 2022
The Company now expects total revenue for the fiscal year ended
December 31, 2022, to approximate $316 million, reflecting growth
of approximately 30% compared to the full year 2021. This includes
organic revenue growth of 27% and approximately $47 million of
revenue related to EOS imaging. This compares to previous total
revenue guidance of approximately $305 million.
Financial Results Webcast
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.
To dial in to the webcast, please register via this link.
A replay of the webcast will remain available through the
Investor Relations Section of ATEC’s Corporate Website for twelve
months. In addition, a dial-in replay will be available beginning
two hours after the webcast’s completion until May 12, 2022. The
replay dial-in numbers are (866) 813-9403 for domestic callers and
+44-204-525-0658 for international callers. Please use the replay
conference ID number 866754.
Investor Day on May 25
ATEC will host an Investor Day at the Company’s headquarters in
Carlsbad, CA, on May 25, 2022, from 8:00 a.m. PT to approximately
12:00 p.m. PT. The event will highlight ATEC’s commitment to
revolutionizing the approach to spine surgery, market opportunities
and long-term financial outlook.
At approximately 8:15 a.m. PT, a live webcast of the Investor
Day will be accessible through the Investor Relations Section of
the Company’s website. While pre-registration will not be required
to access the webcast, registered virtual participants will be able
to submit questions during the Q&A sessions. A replay will be
available shortly after the event’s conclusion.
To register to attend the Investor Day, either in-person or
virtually, visit the Investor Relations Section of the Company’s
website.
Non-GAAP Financial Information
To supplement the Company’s financial statements presented in
accordance with generally accepted accounting principles in the
United States of America (GAAP), the Company reports certain
non-GAAP financial measures, including non-GAAP 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
MachineTM 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. 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 March 31,
2022
2021
unaudited Revenue: Revenue from products and services
$
70,918
$
43,716
Revenue from international supply agreement
15
405
Total revenue
70,933
44,121
Cost of sales
21,717
12,263
Gross profit
49,216
31,858
Operating expenses: Research and development
9,722
5,801
Sales, general and administrative
69,471
40,426
Litigation-related expenses
7,532
3,335
Amortization of acquired intangible assets
2,230
172
Transaction-related expenses
120
1,012
Restructuring expenses
1,370
158
Total operating expenses
90,445
50,904
Operating loss
(41,229
)
(19,046
)
Interest and other expense, net: Interest expense, net
(1,456
)
(1,938
)
Other expenses, net
(30
)
(1,889
)
Total interest and other expenses, net
(1,486
)
(3,827
)
Net loss before taxes
(42,715
)
(22,873
)
Income tax provision
129
30
Net loss
$
(42,844
)
$
(22,903
)
Net loss per share, basic and diluted
$
(0.43
)
$
(0.26
)
Weighted average shares outstanding, basic and diluted
99,978
87,223
Stock-based compensation included in: Cost of revenue
$
256
$
95
Research and development
972
498
Sales, general and administrative
8,956
3,881
$
10,184
$
4,474
ALPHATEC HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE
SHEETS (in thousands) March 31,
2022 December 31, 2021 unaudited
ASSETS Current
assets: Cash and cash equivalents
$
151,812
$
187,248
Accounts receivable, net
40,438
41,893
Inventories
99,043
91,703
Prepaid expenses and other current assets
12,085
10,313
Total current assets
303,378
331,157
Property and equipment, net
96,185
87,401
Right-of-use asset
24,661
25,283
Goodwill
40,831
39,689
Intangible assets, net
82,090
85,274
Other assets
1,544
3,249
Total assets
$
548,689
$
572,053
LIABILITIES AND STOCKHOLDERS' EQUITY Current
liabilities: Accounts payable
$
34,036
$
25,737
Accrued expenses and other current liabilities
61,152
55,549
Contract liability
14,893
15,255
Short-term debt
1,789
342
Current portion of operating lease liability
4,034
4,212
Total current liabilities
115,904
101,095
Total long-term liabilities
367,198
367,933
Redeemable preferred stock
23,603
23,603
Stockholders' equity
41,984
79,422
Total liabilities and stockholders' equity
$
548,689
$
572,053
ALPHATEC HOLDINGS,
INC.
RECONCILIATION OF NON-GAAP
FINANCIAL MEASURES
(in thousands)
Three Months Ended March 31,
2022
2021
unaudited Gross profit, GAAP
$
49,216
$
31,858
Add: amortization of intangible assets
-
269
Add: stock-based compensation
256
95
Add: excess and obsolete write-down
1,706
2,096
Non-GAAP gross profit
$
51,178
$
34,318
Gross margin, GAAP
69.4
%
72.2
%
Add: amortization of intangible assets
0.0
%
0.6
%
Add: stock-based compensation
0.4
%
0.2
%
Add: excess and obsolete write-down
2.4
%
4.8
%
Non-GAAP gross margin
72.1
%
77.8
%
Three Months Ended March 31,
2022
2021
unaudited Operating expenses, GAAP
$
90,445
$
50,904
Adjustments: Stock-based compensation
(9,928
)
(4,379
)
Litigation-related expenses
(7,532
)
(3,335
)
Amortization of intangible assets
(2,230
)
(172
)
Transaction-related expenses
(120
)
(1,012
)
Restructuring expenses
(1,370
)
(158
)
Non-GAAP operating expenses
$
69,265
$
41,848
Three Months Ended March 31,
2022
2021
unaudited Operating loss, GAAP
$
(41,229
)
$
(19,046
)
Depreciation
7,085
3,409
Amortization of intangible assets
2,230
441
EBITDA
(31,914
)
(15,196
)
Add back significant items: Stock-based compensation
10,184
4,474
Excess & obsolete write-down
1,706
2,096
Litigation-related expenses
7,532
3,335
Transaction-related expenses
120
1,012
Restructuring expenses
1,370
158
Adjusted EBITDA
$
(11,002
)
$
(4,121
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220505005783/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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