Alphatec Spine Announces First Quarter 2011 Revenue and Financial Results
-
Revenue of
$49.7 million ; 40.8% growth over Q1 2010; Pro Forma revenue growth of 6.6% over Q1 2010; 5.2% Growth on a Constant Currency basis -
Adjusted EBITDA of
$4.4 million -
Net Loss of
$1.9 million , or($0.02) per share and Non-GAAP Net Income of$0.1 million , or$0.00 per share
First Quarter 2011 Performance Highlights
-
Achieved record consolidated revenue of
$49.7 million , representing 6.6% pro forma growth over first quarter 2010 and 8.0% sequential revenue growth over fourth quarter 2010.
-- US revenue of$33.9 million represented pro forma growth of 7.8% over first quarter 2010, exceeding the growth rate of the US spine market.
-- International revenue of$15.9 million reported in first quarter 2011 grew by 4.0% on a pro forma basis over first quarter 2010. Strong performance inJapan ,Asia Pacific andLatin America drove international revenues. - Continued strong uptake and demand for PureGenTM, the Company's Osteoprogenitor Cell Allograft, with 400 cases completed by the end of first quarter 2011.
-
The SolusTM ALIF System, a zero-profile, single-action locking implant that is used in anterior lumbar interbody fusion (ALIF) procedures, received 510(k) clearance from the
FDA and the Company has commenced a controlled launch in the US. -
Continued Aging Spine market penetration of OsseoFix®, HeliFix®, and OsseoScrew® in
Europe . -
Addition of
Patrick Ryan as Chief Operating Officer. Mr. Ryan joins Alphatec Spine from Abbott Vascular Devices, where he had been Vice President-North Asia sinceAugust 2010 . Prior to that position, Mr. Ryan held senior positions with increasing responsibility in Operations atAbbott and Guidant Corporation .
First Quarter 2011 Financial Results
Consolidated revenues for the first quarter 2011 were
Gross profit for the first quarter 2011 was
Adjusted EBITDA was
Net loss for the first quarter 2011 was
Non-GAAP EPS for the first quarter 2011 was
Cash and cash equivalents were
2011 Financial Guidance
The Company reaffirms full year 2011 financial guidance with revenues of
Conference Call
Alphatec Spine will host a conference call today at
About Alphatec Spine
The
Non-GAAP Information
Non-GAAP earnings 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, transaction-related expenses and litigation settlement expenses. Management does not consider these expenses when it makes certain evaluation 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 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 expenses, and other non-recurring income or expense items, such as in-process research and development expense and transaction-related 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 non-GAAP-based earnings or loss and EBITDA useful for evaluating aspects of the Company's business, its reliance on these measures is 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 adjusted EBITDA in conjunction with GAAP earnings and earnings per common share measures. The Company believes that non-GAAP 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 supplemental metrics since, with reconciliation to GAAP, they may provide greater insight into the Company's financial results.
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. Alphatec Spine 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 Spine's ability to meet its 2011 revenue, adjusted EBITDA, free cash flow and earnings projections, the growth rate of the spine market related to aging and elderly patients, uncertainty of success in
developing new products or products currently in Alphatec Spine's pipeline, the successful global launch of the Company's new products and the products in its development pipeline including OsseoFix, OsseoScrew, Solus, PureGen, HeliFix and GLIF, failure to achieve acceptance of Alphatec Spine's products by the surgeon community, failure to obtain
| ALPHATEC HOLDINGS, INC. | ||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
| (in thousands - unaudited) | ||||
|
March 31, 2011 |
December 31, 2010 |
|||
| ASSETS | ||||
| Current assets: | ||||
| Cash and cash equivalents | $ 21,477 | $ 23,168 | ||
| Accounts receivable, net | 43,341 | 39,777 | ||
| Inventories, net | 52,568 | 51,635 | ||
| Prepaid expenses and other current assets | 7,795 | 6,652 | ||
| Deferred income tax assets | 1,594 | 1,592 | ||
| Total current assets | 126,775 | 122,824 | ||
| Property and equipment, net | 35,389 | 38,440 | ||
| Goodwill | 177,260 | 170,194 | ||
| Intangibles, net | 45,620 | 43,148 | ||
| Other assets | 3,691 | 2,410 | ||
| Total assets | $ 388,735 | $ 377,016 | ||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||
| Current liabilities: | ||||
| Accounts payable | $ 15,868 | $ 15,957 | ||
| Accrued expenses | 24,985 | 22,530 | ||
| Deferred revenue | 3,266 | 3,396 | ||
| Current portion of long-term debt | 1,353 | 1,708 | ||
| Total current liabilities | 45,472 | 43,591 | ||
| Total long term liabilities | 44,564 | 43,388 | ||
| Redeemable preferred stock | 23,603 | 23,603 | ||
| Stockholders' equity | 275,096 | 266,434 | ||
| Total liabilities and stockholders' equity | $ 388,735 | $ 377,016 | ||
| ALPHATEC HOLDINGS, INC. | ||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| (in thousands, except per share amounts - unaudited) | ||
|
Three Months Ended March 31, |
||
| 2011 | 2010 | |
| Revenues | $ 49,720 | $ 35,322 |
| Cost of revenues | 17,373 | 11,748 |
| Amortization of acquired intangible assets | 396 | -- |
| Total cost of revenues | 17,769 | 11,748 |
| Gross profit | 31,951 | 23,574 |
| Operating expenses: | ||
| Research and development | 5,413 | 3,687 |
| In-process research and development | -- | 450 |
| Sales and marketing | 18,629 | 13,404 |
| General and administrative | 9,142 | 5,560 |
| Amortization of acquired intangible assets | 530 | -- |
| Transaction related expenses | -- | 3,152 |
| Restructuring expenses | 599 | 882 |
| Total operating expenses | 34,313 | 27,135 |
| Operating loss | (2,362) | (3,561) |
| Interest and other income (expense), net | (254) | (969) |
| Loss from continuing operations before taxes | (2,616) | (4,530) |
| Income tax (benefit) provision | (749) | 136 |
| Loss from continuing operations | (1,867) | (4,666) |
| Loss from discontinued operations, net of tax | -- | (44) |
| Net loss | $ (1,867) | $ (4,710) |
| Net loss per common share: | ||
| Basic and diluted net loss from continuing operations | $ (0.02) | $ (0.09) |
| Basic and diluted net loss from discontinued operations | -- | (0.00) |
| Basic and diluted net loss per share | $ (0.02) | $ (0.09) |
| Weighted-average shares - basic and diluted | 88,697 | 54,153 |
| ALPHATEC HOLDINGS, INC. | ||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||
| (in thousands, except per share amounts - unaudited) | ||
|
Three Months Ended March 31, |
||
| 2011 | 2010 | |
| Operating loss, as reported | $ (2,362) | $ (3,561) |
| Add back: | ||
| Depreciation | 3,772 | 2,642 |
| Amortization of intangible assets | 305 | 920 |
| Amortization of acquired intangible assets | 926 | -- |
| Total EBITDA | 2,641 | 1 |
| Add back significant items: | ||
| Stock-based compensation | 714 | 981 |
| In-process research and development | -- | 450 |
| Acquisition-related inventory step-up | 430 | -- |
| Transaction related expenses | -- | 3,152 |
| Restructuring expenses | 599 | 882 |
| EBITDA, as adjusted for significant items | $ 4,384 | $ 5,466 |
| Net loss, as reported | $ (1,867) | $ (4,710) |
| Add back: | ||
| In-process research and development | -- | 450 |
| Acquisition-related inventory step-up | 430 | -- |
| Amortization of acquired intangible assets | 926 | -- |
| Transaction related expenses | -- | 3,152 |
| Restructuring expenses | 599 | 882 |
| Net income (loss), as adjusted for significant items | $ 88 | $ (226) |
| Net loss per common share - basic and diluted | $ (0.02) | $ (0.09) |
| Add back: | ||
| In-process research and development | -- | 0.01 |
| Acquisition-related inventory step-up | 0.00 | -- |
| Amortization of acquired intangible assets | 0.01 | -- |
| Transaction related expenses | -- | 0.06 |
| Restructuring expenses | 0.01 | 0.02 |
| Net income (loss) per common share - basic and diluted, as adjusted for significant items | $ 0.00 | $ 0.00 |
| ALPHATEC HOLDINGS, INC. | ||||
| RECONCILIATION OF GEOGRAPHIC SEGMENT REVENUES AND GROSS PROFIT | ||||
| (in thousands, except percentages - unaudited) | ||||
| Three Months Ended | ||||
| March 31, | ||||
| 2011 | 2010 | % Change |
Impact from Foreign Currency |
|
| Revenues by geographic segment | ||||
| U.S. | $ 33,860 | $ 28,436 | 19.1% | 0.0% |
| International | 15,860 | 6,886 | 130.3% | 4.3% |
| Total revenues | $ 49,720 | $ 35,322 | 40.8% | 1.3% |
| Gross profit by geographic segment | ||||
| U.S. | $ 24,420 | $ 19,868 | ||
| International | 7,531 | 3,706 | ||
| Total gross profit | $ 31,951 | $ 23,574 | ||
| Gross profit margin by geographic segment | ||||
| U.S. | 72.1% | 69.9% | ||
| International | 47.5% | 53.8% | ||
| Total gross profit margin | 64.3% | 66.7% | ||
| Footnotes: | ||||
| 1) International revenues and gross profit for the three months ended March 31, 2010 have been adjusted to remove IMC operating results. | ||||
| 2) The impact from foreign currency represents the percentage change in 2011 revenues due to the change in foreign exchange rates for the periods presented. | ||||
| ALPHATEC HOLDINGS, INC. | ||||
| PRO FORMA REVENUES BY GEOGRAPHIC SEGMENT | ||||
| (in thousands, except percentages - unaudited) | ||||
| Three Months Ended | ||||
| March 31, | % Change | |||
| 2011 | 2010 | Reported |
Constant Currency |
|
| Pro Forma Revenues by geographic segment | ||||
| U.S. | $ 33,860 | $ 31,411 | 7.8% | 7.8% |
| International | 15,860 | 15,246 | 4.0% | -0.2% |
| Total revenues | $ 49,720 | $ 46,657 | 6.6% | 5.2% |
| Footnotes: | ||||
| 1) International pro forma revenues for the three months ended March 31, 2010 have been adjusted to remove IMC operating results. | ||||
| 2) Pro Forma revenues for the periods presented include the results of Scient'x as if the Scient'x acquisition had occurred on January 1, 2010. | ||||
| 3) % Change - Constant Currency represents the change in 2011 pro forma revenue had the 2011 foreign exchange rates remained constant with 2010 foreign exchange rates. | ||||
CONTACT:Michael O'Neill Chief Financial OfficerAlphatec Spine, Inc. (760) 494-6746 investorrelations@alphatecspine.comWestwicke Partners Lynn C. Pieper (415) 202-5678 lynn.pieper@westwicke.com
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