Alphatec Spine Announces Fourth Quarter and Full Year 2012 Revenue and Financial Results
"On behalf of the entire global
"It was a challenging year for the entire organization to undertake
"I remain excited and confident about the Company's potential to accelerate revenue growth and profitability in U.S. and international markets in 2013, driven by the combination of a strong pipeline of new products, new surgeon conversions as a result of the Phygen acquisition, a more seasoned U.S. commercial organization, and expanded penetration in international markets. We believe that 2013 should be an exciting year at
"As a result of our efforts in 2012, we have strong fourth quarter results to report,"
"Our U.S. business grew 4% in the fourth quarter of 2012, as compared to the fourth quarter of 2011, driven by another great quarter from our Biologics business and from the Company's acquisition of Phygen, which we completed in November of 2012. Biologics and Phygen should represent two important growth engines for
"Our international business reported growth in the fourth quarter of almost 12% compared to the fourth quarter of 2011, or approximately 16% on a constant currency basis. International revenue levels in the fourth quarter represented a new record for
"With respect to our Biologics portfolio and specifically PureGen, our stem cell product, we wanted to provide an update related to the product's status in the marketplace. A formal Request for Designation has been submitted to the
"Just recently we became aware that the
"While we continue to maintain a collaborative relationship with the
Fourth Quarter 2012 Financial Results
Consolidated net revenues for the fourth quarter of 2012 were
U.S. net revenues for the fourth quarter of 2012 were
International net revenues for the fourth quarter of 2012 were
Gross profit and gross margin for the fourth quarter of 2012 were
As previously reported in
Total operating expenses for the fourth quarter of 2012 were
GAAP Net loss for the fourth quarter of 2012 was
Adjusted EBITDA in the fourth quarter of 2012 was
Cash and cash equivalents were
2012 Financial Guidance
Financial guidance for 2013 is as follows:
The Company expects revenue for 2013 to be in a range between
Conference Call Information
About
The
Non-GAAP Information
Non-GAAP earnings and earnings per share included in this press release are non-GAAP (generally accepted accounting principles) financial measures that represents net income (loss) excluding the effects of amortization and other non-recurring or expense items, such as loss on extinguishment of debt, restructuring expenses and transaction-related expenses. Management does not consider these expenses when it makes certain evaluations of the operations of the Company. Non-GAAP earnings and earnings per share, 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 severance 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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December 31, 2012 |
December 31, 2011 |
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| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 22,241 | $ 20,666 |
| Accounts receivable, net | 41,012 | 41,711 |
| Inventories, net | 49,855 | 45,916 |
| Prepaid expenses and other current assets | 5,953 | 6,888 |
| Deferred income tax assets | 2,991 | 1,248 |
| Total current assets | 122,052 | 116,429 |
| Property and equipment, net | 30,403 | 31,476 |
| Goodwill | 180,838 | 168,609 |
| Intangibles, net | 46,856 | 47,144 |
| Other assets | 1,978 | 3,034 |
| Total assets | $ 382,127 | $ 366,692 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 15,237 | $ 17,390 |
| Accrued expenses | 38,490 | 32,583 |
| Deferred revenue | 1,361 | 2,768 |
| Current portion of long-term debt | 1,700 | 4,396 |
| Total current liabilities | 56,788 | 57,137 |
| Total long term liabilities | 55,920 | 40,624 |
| Redeemable preferred stock | 23,603 | 23,603 |
| Stockholders' equity | 245,816 | 245,328 |
| Total liabilities and stockholders' equity | $ 382,127 | $ 366,692 |
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| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (in thousands, except per share amounts - unaudited) | ||||
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Three Months Ended |
Year Ended |
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| 2012 | 2011 | 2012 | 2011 | |
| Revenues | $ 52,743 | $ 49,510 | $ 196,278 | $ 197,711 |
| Cost of revenues | 19,988 | 24,209 | 70,761 | 79,168 |
| Amortization of acquired intangible assets | 635 | 390 | 1,749 | 1,613 |
| Total cost of revenues | 20,623 | 24,599 | 72,510 | 80,781 |
| Gross profit | 32,120 | 24,911 | 123,768 | 116,930 |
| Operating expenses: | ||||
| Research and development | 3,883 | 3,235 | 14,886 | 16,888 |
| In-process research and development | 341 | -- | 341 | -- |
| Sales and marketing | 19,335 | 18,124 | 75,177 | 75,189 |
| General and administrative | 11,226 | 9,660 | 39,939 | 36,367 |
| Amortization of acquired intangible assets | 605 | 523 | 2,180 | 2,152 |
| Transaction related costs | 718 | -- | 1,082 | -- |
| Restructuring expenses | -- | 57 | -- | 1,050 |
| Litigation settlement | -- | 9,800 | -- | 9,800 |
| Total operating expenses | 36,108 | 41,399 | 133,605 | 141,446 |
| Operating loss | (3,988) | (16,488) | (9,837) | (24,516) |
| Interest and other income (expense), net | (1,767) | (941) | (6,781) | (2,172) |
| Loss from continuing operations before taxes | (5,755) | (17,429) | (16,618) | (26,688) |
| Income tax benefit | (400) | (1,463) | (1,159) | (4,507) |
| Net loss | $ (5,355) | $ (15,966) | $ (15,459) | $ (22,181) |
| Net loss per common share: | ||||
| Basic and diluted net loss per share | $ (0.06) | $ (0.18) | $ (0.17) | $ (0.25) |
| Weighted-average shares - basic and diluted | 93,209 | 88,918 | 90,218 | 88,798 |
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| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||
| (in thousands, except per share amounts - unaudited) | ||||
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Three Months Ended |
Year Ended |
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| 2012 | 2011 | 2012 | 2011 | |
| Operating loss, as reported | $ (3,988) | $ (16,488) | $ (9,837) | $ (24,516) |
| Add back: | ||||
| Depreciation | 3,647 | 3,684 | 14,184 | 14,789 |
| Amortization of intangible assets | 1,481 | 340 | 5,679 | 1,322 |
| Amortization of acquired intangible assets | 1,241 | 913 | 3,929 | 3,765 |
| Total EBITDA | 2,381 | (11,551) | 13,955 | (4,640) |
| Add back significant items: | ||||
| Stock-based compensation | 1,330 | 497 | 3,540 | 2,425 |
| In-process research and development | 341 | -- | 341 | -- |
| Acquisition-related inventory step-up | 191 | -- | 191 | 751 |
| Transaction related expenses | 718 | -- | 1,082 | -- |
| Restructuring and other expenses | -- | 57 | 794 | 1,050 |
| Litigation settlement | -- | 9,800 | -- | 9,800 |
| EBITDA, as adjusted for significant items | $ 4,961 | $ (1,197) | $ 19,903 | $ 9,386 |
| Net loss, as reported | $ (5,355) | $ (15,966) | $ (15,459) | $ (22,181) |
| Add back: | ||||
| In-process research and development | 341 | -- | 341 | -- |
| Acquisition-related inventory step-up | 191 | -- | 191 | 751 |
| Amortization of acquired intangible assets | 1,241 | 913 | 3,929 | 3,765 |
| Amortization of intangible assets | 1,481 | 340 | 5,679 | 1,322 |
| Loss on extinguishment of debt | -- | -- | 2,910 | -- |
| Transaction related expenses | 718 | -- | 1,082 | -- |
| Restructuring and other expenses | -- | 57 | 794 | 1,050 |
| Litigation settlement | -- | 9,800 | -- | 9,800 |
| Net loss, as adjusted for significant items | $ (1,383) | $ (4,856) | $ (533) | $ (5,493) |
| Net loss per common share - basic and diluted | $ (0.06) | $ (0.18) | $ (0.17) | $ (0.25) |
| Add back: | ||||
| In-process research and development | 0.00 | -- | 0.00 | -- |
| Acquisition-related inventory step-up | 0.00 | -- | 0.00 | 0.01 |
| Amortization of acquired intangible assets | 0.01 | 0.01 | 0.04 | 0.04 |
| Amortization of intangible assets | 0.02 | 0.00 | 0.06 | 0.01 |
| Loss on extinguishment of debt | -- | -- | 0.03 | -- |
| Transaction related expenses | 0.01 | -- | 0.01 | -- |
| Restructuring and other expenses | -- | 0.00 | 0.01 | 0.01 |
| Litigation settlement | -- | 0.11 | -- | 0.11 |
| Net loss per common share - basic and diluted, as adjusted for significant items | $ (0.01) | $ (0.05) | $ (0.01) | $ (0.06) |
| Weighted-average shares - basic and diluted | 93,209 | 88,918 | 90,218 | 88,798 |
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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. | $ 34,046 | $ 32,752 | 4.0% | 0.0% |
| International | 18,697 | 16,758 | 11.6% | -3.7% |
| Total revenues | $ 52,743 | $ 49,510 | 6.5% | -1.3% |
| Gross profit by geographic segment | ||||
| U.S. | $ 22,575 | $ 18,728 | ||
| International | 9,545 | 6,183 | ||
| Total gross profit | $ 32,120 | $ 24,911 | ||
| Gross profit margin by geographic segment | ||||
| U.S. | 66.3% | 57.2% | ||
| International | 51.1% | 36.9% | ||
| Total gross profit margin | 60.9% | 50.3% | ||
| Year Ended | Impact from | |||
| December 31, | Foreign | |||
| 2012 | 2011 | % Change | Currency | |
| Revenues by geographic segment | ||||
| U.S. | $ 130,476 | $ 133,824 | -2.5% | 0.0% |
| International | 65,802 | 63,887 | 3.0% | -3.7% |
| Total revenues | $ 196,278 | $ 197,711 | -0.7% | -1.2% |
| Gross profit by geographic segment | ||||
| U.S. | $ 89,360 | $ 87,085 | ||
| International | 34,408 | 29,845 | ||
| Total gross profit | $ 123,768 | $ 116,930 | ||
| Gross profit margin by geographic segment | ||||
| U.S. | 68.5% | 65.1% | ||
| International | 52.3% | 46.7% | ||
| Total gross profit margin | 63.1% | 59.1% | ||
| Footnotes: | ||||
| 1) The impact from foreign currency represents the percentage change in 2012 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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