Alphatec Spine Announces Third Quarter 2012 Financial Results
"On behalf of the entire
-
Accelerating
Alphatec's introduction of new and innovative products that add value to spine surgeons, hospitals and patients. We continue to seek to deliver new products through internal development and licensing opportunities; - Expanding our global distribution network with experienced distributors;
- Growing our customer base of spine surgeons; and
- Supporting our sales initiatives from the operational side of our business with ongoing improvements to our processes that reduce costs and improve our gross margin.
"With respect to new products, we recently launched two important additions to our product portfolio, including our new spinous process fixation system called BridgePoint™, and our new synthetic bone growth biologic called Alphatec NEXoss™. Additionally, we are awaiting
"With respect to new distributors and customers, the current market environment continues to provide opportunities to add new distributors and we added several in the third quarter. Importantly, the closing of the acquisition of certain assets of
"The acquisition should also enable
"On the operational side of our business, we continue to make progress in driving additional efficiencies in our business to generate tangible improvements to our margin structure. We made significant progress in Q3 to drive lean practices throughout our U.S. supply chain.
"While I expect the Company to continue to achieve quarterly progress with our initiatives to scale
Third Quarter 2012 Financial Results
Consolidated net revenues for the third quarter of 2012 were
U.S. net revenues for the third quarter of 2012 were
International net revenues for the third quarter of 2012 were
Gross profit and gross profit margin for the third quarter of 2012 were
As previously reported in
Total operating expenses for the third quarter of 2012 were
GAAP Net loss for the third quarter of 2012 was
Adjusted EBITDA in the third quarter of 2012 was
Cash and cash equivalents were
2012 Financial Guidance
Financial guidance for the remainder of 2012 is as follows:
Based on the spine market's lack of fundamental improvement, coupled with the uncertainty surrounding the impact of Hurricane Sandy on spine procedure volumes in the U.S., the Company now expects revenue for 2012 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.
|
|
||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||
| (in thousands - unaudited) | ||
|
|
|
|
| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $ 25,941 | $ 20,666 |
| Accounts receivable, net | 37,565 | 41,711 |
| Inventories, net | 48,344 | 45,916 |
| Prepaid expenses and other current assets | 7,344 | 6,888 |
| Deferred income tax assets | 2,576 | 1,248 |
| Total current assets | 121,770 | 116,429 |
| Property and equipment, net | 31,806 | 31,476 |
| Goodwill | 168,499 | 168,609 |
| Intangibles, net | 41,063 | 47,144 |
| Other assets | 2,528 | 3,034 |
| Total assets | $ 365,666 | $ 366,692 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable | $ 17,529 | $ 17,390 |
| Accrued expenses | 30,886 | 32,583 |
| Deferred revenue | 3,069 | 2,768 |
| Current portion of long-term debt | 1,720 | 4,396 |
| Total current liabilities | 53,204 | 57,137 |
| Total long term liabilities | 50,808 | 40,624 |
| Redeemable preferred stock | 23,603 | 23,603 |
| Stockholders' equity | 238,051 | 245,328 |
| Total liabilities and stockholders' equity | $ 365,666 | $ 366,692 |
|
|
||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
| (in thousands, except per share amounts - unaudited) | ||||
|
Three Months Ended |
Nine Months Ended |
|||
| 2012 | 2011 | 2012 | 2011 | |
| Revenues | $ 46,839 | $ 47,619 | $ 143,535 | $ 148,201 |
| Cost of revenues | 16,844 | 17,001 | 50,773 | 54,959 |
| Amortization of acquired intangible assets | 362 | 411 | 1,114 | 1,223 |
| Total cost of revenues | 17,206 | 17,412 | 51,887 | 56,182 |
| Gross profit | 29,633 | 30,207 | 91,648 | 92,019 |
| Operating expenses: | ||||
| Research and development | 3,216 | 3,858 | 11,003 | 13,653 |
| Sales and marketing | 17,778 | 19,145 | 55,843 | 57,065 |
| General and administrative | 9,758 | 8,627 | 28,714 | 26,707 |
| Amortization of acquired intangible assets | 491 | 545 | 1,574 | 1,629 |
| Transaction related costs | 364 | -- | 364 | -- |
| Restructuring expenses | -- | 394 | -- | 993 |
| Total operating expenses | 31,607 | 32,569 | 97,498 | 100,047 |
| Operating loss | (1,974) | (2,362) | (5,850) | (8,028) |
| Interest and other income (expense), net | (533) | (475) | (5,013) | (1,231) |
| Loss from continuing operations before taxes | (2,507) | (2,837) | (10,863) | (9,259) |
| Income tax benefit | (38) | (1,533) | (759) | (3,044) |
| Net loss | $ (2,469) | $ (1,304) | $ (10,104) | $ (6,215) |
| Net loss per common share: | ||||
| Basic and diluted net loss per share | $ (0.03) | $ (0.01) | $ (0.11) | $ (0.07) |
| Weighted-average shares - basic and diluted | 89,503 | 88,829 | 89,222 | 88,757 |
|
|
||||
| RECONCILIATION OF NON-GAAP FINANCIAL MEASURES | ||||
| (in thousands, except per share amounts - unaudited) | ||||
|
Three Months Ended |
Nine Months Ended |
|||
| 2012 | 2011 | 2012 | 2011 | |
| Operating loss, as reported | $ (1,974) | $ (2,362) | $ (5,850) | $ (8,028) |
| Add back: | ||||
| Depreciation | 3,542 | 3,671 | 10,536 | 11,105 |
| Amortization of intangible assets | 1,405 | 330 | 4,199 | 982 |
| Amortization of acquired intangible assets | 853 | 956 | 2,688 | 2,852 |
| Total EBITDA | 3,826 | 2,595 | 11,573 | 6,911 |
| Add back significant items: | ||||
| Stock-based compensation | 1,000 | 480 | 2,210 | 1,928 |
| Acquisition-related inventory step-up | -- | -- | -- | 751 |
| Transaction related expenses | 364 | -- | 364 | -- |
| Restructuring and other expenses | 793 | 394 | 793 | 993 |
| EBITDA, as adjusted for significant items | $ 5,983 | $ 3,469 | $ 14,940 | $ 10,583 |
| Net loss, as reported | $ (2,469) | $ (1,304) | $ (10,104) | $ (6,215) |
| Add back: | ||||
| Acquisition-related inventory step-up | -- | -- | -- | 751 |
| Amortization of acquired intangible assets | 853 | 956 | 2,688 | 2,852 |
| Amortization of intangible assets | 1,405 | 330 | 4,199 | 982 |
| Loss on extinguishment of debt | -- | -- | 2,910 | -- |
| Transaction related expenses | 364 | -- | 364 | -- |
| Restructuring and other expenses | 793 | 394 | 793 | 993 |
| Net loss, as adjusted for significant items | $ 946 | $ 376 | $ 850 | $ (637) |
| Net loss per common share - basic and diluted | $ (0.03) | $ (0.01) | $ (0.11) | $ (0.07) |
| Add back: | ||||
| Acquisition-related inventory step-up | -- | -- | -- | 0.01 |
| Amortization of acquired intangible assets | 0.01 | 0.01 | 0.03 | 0.03 |
| Amortization of intangible assets | 0.02 | 0.00 | 0.05 | 0.01 |
| Loss on extinguishment of debt | -- | -- | 0.03 | -- |
| Transaction related expenses | 0.00 | -- | 0.00 | -- |
| Restructuring and other expenses | 0.01 | 0.00 | 0.01 | 0.01 |
| Net loss per common share - basic and | ||||
| diluted, as adjusted for significant items | $ 0.01 | $ 0.00 | $ 0.01 | $ (0.01) |
|
|
||||
| RECONCILIATION OF GEOGRAPHIC SEGMENT REVENUES AND GROSS PROFIT | ||||
| (in thousands, except percentages - unaudited) | ||||
| Three Months Ended | Impact from | |||
|
|
Foreign | |||
| 2012 | 2011 | % Change | Currency | |
| Revenues by geographic segment | ||||
| U.S. | $ 30,980 | $ 32,674 | -5.2% | 0.0% |
| International | 15,859 | 14,945 | 6.1% | -5.5% |
| Total revenues | $ 46,839 | $ 47,619 | -1.6% | -1.9% |
| Gross profit by geographic segment | ||||
| U.S. | $ 21,360 | $ 22,248 | ||
| International | 8,273 | 7,959 | ||
| Total gross profit | $ 29,633 | $ 30,207 | ||
| Gross profit margin by geographic segment | ||||
| U.S. | 68.9% | 68.1% | ||
| International | 52.2% | 53.3% | ||
| Total gross profit margin | 63.3% | 63.4% | ||
| Nine Months Ended | Impact from | |||
| September 30, | Foreign | |||
| 2012 | 2011 | % Change | Currency | |
| Revenues by geographic segment | ||||
| U.S. | $ 96,430 | $ 101,073 | -4.6% | 0.0% |
| International | 47,105 | 47,128 | 0.0% | -3.7% |
| Total revenues | $ 143,535 | $ 148,201 | -3.1% | -1.2% |
| Gross profit by geographic segment | ||||
| U.S. | $ 66,785 | $ 68,357 | ||
| International | 24,863 | 23,662 | ||
| Total gross profit | $ 91,648 | $ 92,019 | ||
| Gross profit margin by geographic segment | ||||
| U.S. | 69.3% | 67.6% | ||
| International | 52.8% | 50.2% | ||
| Total gross profit margin | 63.9% | 62.1% | ||
| 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
News Provided by Acquire Media