Alphatec Spine, Inc.
Aug 4, 2008

Alphatec Spine Announces Second Quarter 2008 Revenue and Financial Results

Continued Double-Digit Revenue Growth Over Prior Year

CARLSBAD, Calif., Aug 4, 2008 (PrimeNewswire via COMTEX News Network) -- Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of Alphatec Spine, Inc., a medical device company involved in the design, development, manufacturing and marketing of products for the surgical treatment of spine disorders, with a focus on treating conditions related to the aging spine, announced today financial results for the second quarter ended June 30, 2008.

Second Quarter 2008 Highlights



    * Total revenues of $23.9 million reported in the second quarter
      2008 represents 26.7% growth over the second quarter 2007.  U.S.
      revenues for the second quarter 2008 grew 19.5% over second
      quarter 2007.

    * European business launched with an initial sales transaction of
      $1.4 million to our new distribution partner. Products shipped
      in June 2008 and recorded as deferred revenue.  Over 30
      surgeries using our products have been successfully completed.

    * Announced the first successful patient surgery with the OsseoFix(tm)
      (formerly known as V-stent) Spinal Fracture Reduction System in
      Germany by world-renowned spine surgeon Rudolf Bertagnoli, M.D.

    * Submitted 510(k) application for OsseoFix, a treatment for
      vertebral compression fractures to the U.S. Food and Drug
      Administration (FDA).

    * FDA granted the following 510(k) clearances to fill-in and
      upgrade our core product line:
       -- Illico Minimally Invasive System(tm), which includes a retractor
          and implant delivery system typically used in surgical spine
          procedures treating various lower-back pathologies;
       -- Additional implants to treat scoliosis indications, used in
          conjunction with the Zodiac Luxe(tm) Spinal Fixation System;
       -- NOVEL(tm) spinal spacer system to be used as an inter-body
          device in lumbar procedures.

    * Strengthened and completed management team build out with the
      addition of Peter C. Wulff, a veteran in medical device
      financial management, as Chief Financial Officer, Vice President
      and Treasurer.

    * Successful settlement of patent litigation involving U.S. Patent
      Number 5,207,678 which included a release and license agreement
      to manufacture and distribute the pedicle screw technology from D
      DePuy Spine, Inc. and Biedermann Motech GmbH.

Second Quarter 2008 Financial Results

Consolidated revenues for the second quarter 2008 were $23.9 million, an increase of 26.7% from the $18.8 million reported for the second quarter 2007. U.S. revenues for the second quarter 2008 were $19.4 million, an increase of 19.5% from the $16.2 million reported for the second quarter of 2007. Asia revenues for the second quarter 2008 were $4.5 million, an increase of 71.2% from the $2.6 million reported for the second quarter 2007.

Gross profit for the second quarter 2008 was $15.8 million, an increase of $3.8 million over second quarter 2007 of $12.0 million. Second quarter 2008 gross margin of 66.4% increased over second quarter 2007 gross margin of 63.7%.

Total operating expenses of $19.2 million increased $6.7 million compared to second quarter 2007 of $12.5 million. The increase in operating expenses is primarily due to increased expenditures in both R&D and Sales & Marketing.

Research and development expenses for the second quarter 2008 were $3.4 million, an increase of $2.1 million compared to the second quarter 2007 of $1.3 million. The increase in expenditures was primarily due to development activities relating to OsseoFix, OsseoScrew and additional product development.

Sales and marketing expenses for the second quarter 2008 were $9.0 million, an increase of $2.1 million compared to the second quarter 2007 of $6.9 million. The increase was primarily due to an increase in marketing personnel to support the product development pipeline and corporate rebranding, as well as sales commission expenses related to increased sales volume.

General and administrative expenses for the second quarter 2008 were $6.8 million, an increase of $2.4 million, compared to the second quarter 2007 of $4.4 million. Excluding a severance expense reversal resulting from a settlement agreement and a stock-based compensation expense adjustment that occurred in the second quarter 2007, general and administrative expenses in second quarter 2008 decreased $0.7 million compared to second quarter 2007.

Net loss for the second quarter 2008 was $3.6 million, or ($0.08) per share (basic and diluted), compared with a net loss $703,000, or ($0.02) per share (basic and diluted) for the second quarter 2007.

As of June 30, 2008, cash and cash equivalents totaled $13.1 million. The Company also has funds available under the Company's current $20 million working capital line of credit.

The Company reiterates its guidance for revenues for the full year 2008 of $95 million.

"We are pleased with the sequential improvement in our rate of growth for the core U.S. business to nearly 20%. We continue to focus on execution, build out of our distribution network, upgrades and expansion of our core product line, and commercializing innovative spine products," stated Dirk Kuyper, President and CEO. "With the expected approval for OsseoFix in late 2008, we are building our position as a premier spine company that provides surgeons with solutions to effectively treat patients in the aging spine demographic, which we believe to be the fastest-growing demographic segment of the spine market."

Conference Call

Alphatec will host a conference call today at 1:30 p.m. PT / 4:30 p.m. ET to discuss the results. To participate in the conference call, please visit the investor relations section of the Alphatec website at www.alphatecspine.com. The dial-in numbers are (877) 419-6597 for domestic callers and (719) 325-4923 for international. A live webcast of the conference call will be available online from the investor relations section of the Alphatec website at www.alphatecspine.com. The webcast will be recorded and will remain available on the investor relations section of Alphatec's website, for at least 30 days.

About Alphatec Spine

Alphatec Spine, Inc. is a wholly owned subsidiary of Alphatec Holdings, Inc. (Nasdaq: ATEC). Alphatec Spine is a medical device company involved in the design, development, manufacturing and marketing of products for the surgical treatment of spine disorders, with a focus on treating disorders related to 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 and other aging spine deformities, improved minimally invasive products and techniques and integrated biologics solutions. In addition to its U.S. operations, Alphatec Spine 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 http://www.alphatecspine.com.

The Alphatec Holdings, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3520

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. These forward-looking statements include, but are not limited to: Alphatec's expected revenues in 2008, Alphatec's ability to accelerate new product momentum, bring to market differentiated products and commercialize its product pipeline. 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, including, but not limited to, the following: Alphatec's ability to accelerate its revenue growth and expand operating margins, Alphatec's ability to enter the high-growth areas of spine disorders, including the market for disorders that are prevalent in aging patients, the growth rate of the spine market related to aging and elderly patients, price erosion related to Alphatec's products, Alphatec's ability to meet fiscal year 2008 revenue guidance in either the United States, Asia or Europe, Alphatec's ability to expand and maintain a successful sales and marketing organization, continuation of favorable third party payor reimbursement for procedures performed using Alphatec's products, unanticipated expenses or liabilities or other adverse events affecting cash flow or Alphatec's ability to successfully control its costs or achieve profitability, uncertainty of additional funding, uncertainty of success in developing new products or products currently in Alphatec's pipeline, including those products that are intended to treat disorders prevalent in aging patients, failure to achieve acceptance of Alphatec's products by the surgeon community, failure to obtain FDA clearance or approval for new products, Alphatec's ability to compete with other competing products and with emerging new technologies, product liability exposure, patent infringement claims and claims related to Alphatec's intellectual property. Please refer to the risks detailed from time to time in Alphatec's SEC reports, including quarterly reports on Form 10-Q, reports on Form 8-K and annual reports on Form 10-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)
                             (unaudited)

                                Three Months Ended    Six Months Ended
                                     June 30,             June 30,
                                  2008       2007     2008       2007
                                ------------------  ------------------
 Revenues                       $ 23,853  $ 18,820  $ 47,050  $ 38,370
 Cost of revenues                  8,016     6,836    15,903    13,717
                                ------------------  ------------------
 Gross profit                     15,837    11,984    31,147    24,653

 Operating expenses:
  Research and development         3,354     1,303     6,558     2,769
  In-process research and
   development                        --        --     1,300        --
  Sales and marketing              9,019     6,880    18,158    14,789
  General and administrative       6,783     4,351    13,311    10,257
  Litigation settlement               --        --    11,000        --
                                ------------------  ------------------
   Total operating expenses       19,156    12,534    50,327    27,815
                                ------------------  ------------------
 Operating loss                   (3,319)     (550)  (19,180)   (3,162)
  Interest and other expense,
   net                              (203)      (97)      (29)     (158)
                                ------------------  ------------------
 Loss before taxes                (3,522)     (647)  (19,209)   (3,320)
  Income taxes                        69        56       161        57
                                ------------------  ------------------

 Net loss                       $ (3,591) $   (703) $(19,370) $ (3,377)
                                ==================  ==================

 Net loss per common share -
  basic and diluted             $  (0.08) $  (0.02) $  (0.42) $  (0.10)

 Weighted-average shares -
  basic and diluted               46,274    33,959    46,138    33,727


                        ALPHATEC HOLDINGS, INC.
                 CONDENSED CONSOLIDATED BALANCE SHEETS
                            (in thousands)

                                              June 30, December 31,
                                               2008        2007
                                               ----        ----
                                ASSETS      (unaudited) (audited)
 Current assets:
  Cash and cash equivalents                  $ 13,071   $ 25,843
  Restricted Cash                                  --      2,000
  Accounts receivable, net                     15,300     13,035
  Inventories, net                             21,016     20,092
  Prepaid expenses and other current assets     5,130      1,968
  Deferred income taxes                           700        937
                                             --------   --------
 Total current assets                          55,217     63,875

 Property and equipment, net                   17,377     12,229
 Goodwill                                      60,128     60,003
 Intangibles, net                               5,921      9,634
 Other assets                                   2,525      1,499
                                             --------   --------
 Total assets                                $141,168   $147,240
                                             ========   ========

        LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
  Accounts payable                           $  6,854   $  5,948
  Accrued expenses                             14,144     13,368
  Deferred revenue                              1,085         --
  Line of credit                                9,310      2,546
  Current portion of long-term debt             3,104      2,211
                                             --------   --------
 Total current liabilities                     34,497     24,073

  Deferred revenue                                300      4,705
  Total other long term liabilities             4,288         --
  Redeemable preferred stock                   23,606     23,612
  Total stockholders' equity                   78,477     94,850
                                             --------   --------
 Total liabilities and stockholders' equity  $141,168   $147,240
                                             ========   ========

                       ALPHATEC HOLDINGS, INC.
         RECONCILIATION OF SEGMENT REVENUES AND GROSS PROFIT
                           (in thousands)
                             (unaudited)

                                Three Months Ended   Six Months Ended
                                     June 30,            June 30,
                                  2008      2007      2008      2007
                                ------------------  ------------------

 Revenues by geographic segment
  U.S                           $ 19,359  $ 16,195  $ 38,006  $ 32,842
  Asia                             4,494     2,625     9,044     5,528
                                ------------------  ------------------
 Total revenues                   23,853    18,820    47,050    38,370

 Gross profit by geographic
  segment
  U.S                           $ 13,882  $ 10,939  $ 27,535  $ 21,928
  Asia                             1,955     1,045     3,612     2,725
                                ------------------  ------------------
 Total gross profit               15,837    11,984    31,147    24,653

 Gross profit margin by
  geographic segment
  U.S                               71.7%     67.5%     72.4%     66.8%
  Asia                              43.5%     39.8%     39.9%     49.3%
                                ------------------  ------------------
 Total gross margin                 66.4%     63.7%     66.2%     64.3%
                                ------------------  ------------------

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SOURCE: Alphatec Holdings, Inc.

Alphatec Spine, Inc.
          Peter C. Wulff, Chief Financial Officer
            (760) 494-6749
            pwulff@alphatecspine.com
          Cheryl B. Monblatt, Investor Relations
            (760) 494-6746
            cmonblatt@alphatecspine.com

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