Alphatec Spine Announces First Quarter 2012 Revenue and Financial Results
First Quarter 2012 Highlights
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Sales levels in core
U.S. Hospital business remains strong and grew sequentially from Q411 -
Sales growth in select international markets, most notably
Japan andLatin America , remains strong - Gross margin improves 140 basis points vs. Q111 to 65.7%
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Gross profit margin improvement and operating expense control drives record Adjusted EBITDA of
$6.2 million
First Quarter 2012 Financial Results
Consolidated revenues for the first quarter of 2012 were
Gross profit and gross margin for the first quarter of 2012 was
As previously reported in
Total operating expenses for the first quarter of 2012 were
Net loss for the first quarter of 2012 was
Adjusted EBITDA in the first quarter of 2012 was
Cash and cash equivalents were
"Considering the ongoing headwinds in the spine market and the difficult comparison we faced with the first quarter of 2011, our first quarter of 2012 was respectable," said
"Pricing and lower procedure volumes continue to challenge global spine markets and contributed to lower first quarter revenue of about
"In our
"Sales in our U.S. Stocking Distributor channel were lower by about
"International revenue continues to be driven by strong growth in
"On the operational side of our business, we made good progress in the first quarter with our performance improvement initiatives. Our initial efforts have been focused on those initiatives that support near-term revenue generation and enhance our customers' experience.
"To help strengthen gross margins, we plan to begin in-house manufacturing of certain products currently manufactured by third-parties. Our first product will be Trestle Luxe® and we are nearing the completion of the manufacturing validation for this product.
"We are also implementing lean practices in our manufacturing operations. We have recently mapped many of our current processes and identified significant opportunities to reduce work-in-process (WIP), shorten cycle times, improve fill rates and lower shipping costs. Collectively, we believe these streamlining activities should contribute to our cost savings goal of approximately
2012 Financial Guidance
Financial guidance for the remainder of 2012 is as follows: For full year 2012 annual revenue guidance will be in the range of
Conference Call Information
About
The
Non-GAAP Information
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.
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| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (in thousands - unaudited) | ||
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| 2012 | 2011 | |
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 16,859 | $ 20,666 |
| Accounts receivable, net | 40,570 | 41,711 |
| Inventories, net | 48,155 | 45,916 |
| Prepaid expenses and other current assets | 5,901 | 6,888 |
| Deferred income tax assets | 1,401 | 1,248 |
| Total current assets | 112,886 | 116,429 |
| Property and equipment, net | 32,089 | 31,476 |
| Goodwill | 171,386 | 168,609 |
| Intangibles, net | 45,628 | 47,144 |
| Other assets | 2,693 | 3,034 |
| Total assets | $ 364,682 | $ 366,692 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 14,431 | $ 17,390 |
| Accrued expenses | 28,359 | 32,583 |
| Deferred revenue | 3,124 | 2,768 |
| Current portion of long-term debt | 3,653 | 4,396 |
| Total current liabilities | 49,567 | 57,137 |
| Total long term liabilities | 42,637 | 40,624 |
| Redeemable preferred stock | 23,603 | 23,603 |
| Stockholders' equity | 248,875 | 245,328 |
| Total liabilities and stockholders' equity | $ 364,682 | $ 366,692 |
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| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||
| (in thousands, except per share amounts - unaudited) | ||
| Three Months Ended | ||
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| 2012 | 2011 | |
| Revenues | $ 48,461 | $ 49,720 |
| Cost of revenues | 16,263 | 17,373 |
| Amortization of acquired intangible assets | 379 | 396 |
| Total cost of revenues | 16,642 | 17,769 |
| Gross profit | 31,819 | 31,951 |
| Operating expenses: | ||
| Research and development | 4,010 | 5,413 |
| Sales and marketing | 18,536 | 18,629 |
| General and administrative | 8,825 | 9,142 |
| Amortization of acquired intangible assets | 574 | 530 |
| Restructuring expenses | -- | 599 |
| Total operating expenses | 31,945 | 34,313 |
| Operating loss | (126) | (2,362) |
| Interest and other income (expense), net | (928) | (254) |
| Loss before taxes | (1,054) | (2,616) |
| Income tax provision (benefit) | 207 | (749) |
| Net loss | $ (1,261) | $ (1,867) |
| Net loss per common share: | ||
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$ (0.01) | $ (0.02) |
| Weighted-average shares - basic and diluted | 88,938 | 88,697 |
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| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||
| (in thousands, except per share amounts - unaudited) | ||
| Three Months Ended | ||
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| 2012 | 2011 | |
| Operating loss, as reported | $ (126) | $ (2,362) |
| Add back: | ||
| Depreciation | 3,456 | 3,772 |
| Amortization of intangible assets | 1,394 | 305 |
| Amortization of acquired intangible assets | 953 | 926 |
| Total EBITDA | 5,677 | 2,641 |
| Add back significant items: | ||
| Stock-based compensation | 547 | 714 |
| Acquisition-related inventory step-up | -- | 430 |
| Restructuring expenses | -- | 599 |
| EBITDA, as adjusted for significant items | $ 6,224 | $ 4,384 |
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| RECONCILIATION OF GEOGRAPHIC SEGMENT REVENUES AND GROSS PROFIT | ||||
| (in thousands, except percentages - unaudited) | ||||
| Three Months Ended | Impact from | |||
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Foreign | |||
| 2012 | 2011 | % Change | Currency | |
| Revenues by geographic segment | ||||
| U.S. | $ 32,561 | $ 33,860 | -3.8% | 0.0% |
| International | 15,900 | 15,860 | 0.3% | -0.7% |
| Total revenues | $ 48,461 | $ 49,720 | -2.5% | -0.2% |
| Gross profit by geographic segment | ||||
| U.S. | $ 22,847 | $ 24,420 | ||
| International | 8,972 | 7,531 | ||
| Total gross profit | $ 31,819 | $ 31,951 | ||
| Gross profit margin by geographic segment | ||||
| U.S. | 70.2% | 72.1% | ||
| International | 56.4% | 47.5% | ||
| Total gross profit margin | 65.7% | 64.3% | ||
| Footnotes: | ||||
| 1) The impact from foreign currency represents the percentage change in 2011 revenues due to the change in foreign exchange rates for the periods presented. | ||||
CONTACT: Investor/Media Contact:
Mark Francois
Senior Director, Investor Relations
Alphatec Spine, Inc.
(760) 494-6610
mfrancois@alphatecspine.com
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