atec-8k_20201105.htm
false 0001350653 0001350653 2020-11-05 2020-11-05

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 5, 2020

 

ALPHATEC HOLDINGS, INC.

(Exact Name of Registrant as Specified in Charter)

 

 

Delaware

 

000-52024

 

20-2463898

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

5818 El Camino Real

Carlsbad, California 92008

(Address of Principal Executive Offices)

 

(760) 431-9286

(Registrant’s telephone number, including area code)

 

Not applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14.a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $.0001 per share

ATEC

The NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


 

Item 2.02

Results of Operations and Financial Condition

The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition,” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.

On November 5, 2020, the Company issued a press release announcing its financial results for its quarter ended September 30, 2020. A copy of the press release is attached hereto as Exhibit 99.1.

The information contained in this Current Report, including the exhibit, shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

Item 9.01.

Financial Statements and Exhibits

(d)Exhibits

 

99.1

 

Press Release dated November 5, 2020

 

 

 

104

 

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: November 5, 2020

 

 

 

ALPHATEC HOLDINGS, INC.

 

 

 

 

 

 

 

 

 

By:

 

/s/ Jeffrey G. Black

 

 

 

 

Name:

 

Jeffrey G. Black

 

 

 

 

Its:

 

Chief Financial Officer

 

 

atec-ex991_6.htm

Exhibit 99.1

 

 

 

ATEC Reports Third Quarter 2020 Financial Results

and Recent Corporate Highlights

•    U.S. Revenue Grows 43%

•    Eighth Consecutive Quarter of Double-Digit Revenue Growth

CARLSBAD, Calif., November 5, 2020 – Alphatec Holdings, Inc. (“ATEC” or the “Company”) (Nasdaq: ATEC), a provider of innovative spine surgery solutions dedicated to revolutionizing the approach to spine surgery, today announced financial results for the quarter ended September 30, 2020, and recent corporate highlights.

Third Quarter 2020 Financial Results

 

Total revenue of $41.2 million, including U.S. revenue of $40.1 million, up 43% year-over-year;

 

U.S. gross margin of 72.9%;

 

Cash and cash equivalents of $15.7 million as of September 30, 2020; and

 

Pro forma cash of $123.4 million including net proceeds from October 2020 follow-on offering.

Recent Corporate Highlights

 

Expanded contribution of U.S. revenue from new products to over 70% of Q3 U.S. revenue, up from 42% in Q3 2019;

 

Increased U.S. revenue per case by 13% year-over-year, driven by strong performance in the lateral interbody fusion and AlphaInformatiX product categories;

 

Continued sales network transformation, resulting in 47% year-over-year revenue growth from strategic distribution;

 

Increased revenue per surgeon by 20% year-over-year;

 

Closed a follow-on equity offering that generated net proceeds of $107.7 million to support continued growth-related investments and expand the institutional shareholder base;

 

Successfully completed over 550 Prone Transpsoas, or PTP, surgeries in preparation to launch the approach in the fourth quarter 2020;

 

Launched the Sigma TLIF Access System and the InVictus MIS Modular Pedicle Screw System that fully integrate with SafeOp Neural InformatiX, the SingleStep system and IdentiTi TLIF implants to enable a comprehensive MIS TLIF approach; and

 

1


 

 

 

 

Launched the InVictus MIS Tower Fixation System, allowing for less disruptive treatment of more complex pathologies.

“We have built the foundation for long-term success,” said Pat Miles, Chairman and Chief Executive Officer. “This marks our eighth consecutive quarter of double-digit revenue growth. Our recently completed follow-on offering will fuel the Organic Innovation Machine and continue to drive clinical distinction.  We thank those who have invested in our mission to revolutionize the approach to spine surgery.  I could not be more confident in ATEC’s future. Our best is yet to come.”

2


 

 

 

Comparison of Selected GAAP and Non-GAAP Financial Results

for the Third Quarter 2020 to Third Quarter 2019

 

Revenue from U.S. products for the third quarter 2020 was $40.1 million, up 43% compared to $28.1 million in the third quarter 2019. Revenue growth was generated primarily by increased surgeon adoption of new products and the continued evolution of the strategic distribution channel.

Gross profit and gross margin from U.S. products for the third quarter 2020 were $29.2 million and 72.9%, respectively, compared to $19.9 million and 70.8%, respectively, for the third quarter 2019. On a non-GAAP basis, excluding non-cash excess and obsolete charges, U.S. gross margin was 77.8% in the third quarter of 2020, compared to 78.9% in the third quarter 2019. Non-GAAP U.S. gross margin was impacted by product mix and amortization of SafeOp-related intangibles, which began amortizing in late 2019.

Total operating expenses for the third quarter 2020 were $42.1 million compared to $31.5 million in the third quarter 2019.  On a non-GAAP basis, excluding stock-based compensation, litigation-related expenses and transaction-related expenses, total operating expenses increased to $36.1 million from $27.4 million in 2019, reflecting increased selling costs from U.S. revenue growth, as well as increased investments in organic product development to support new product launches.

Non-GAAP adjusted operating loss, which excludes stock-based compensation, litigation-related expenses, transaction-related expenses and excess and obsolescence charges, was $4.8 million for the third quarter 2020, compared to a loss of $5.1 million for the third quarter 2019.

Non-GAAP adjusted EBITDA, which excludes stock-based compensation, litigation-related expenses, transaction-related expenses and excess and obsolescence charges in the third quarter 2020 was a loss of $2.0 million, compared to a loss of $3.2 million in the third quarter 2019.  

For more detailed information on non-GAAP operating expenses, non-GAAP adjusted operating loss and non-GAAP adjusted EBITDA, please refer to the table, “Alphatec Holdings, Inc. Reconciliation of Non-GAAP Financial Measures,” that follows.

Cash and cash equivalents at September 30, 2020 were $15.7 million, with an additional $25.0 million available under the credit facility with Squadron Capital (the “Squadron facility”).  Including proceeds from the follow-on offering, pro forma cash and cash equivalents were $123.4 million.

Current and long-term debt at face value as of September 30, 2020 includes $75 million in term debt under the Squadron facility.

Financial Outlook for the Full Years 2020 and 2021

3


 

 

 

ATEC anticipates full year 2020 revenue will range between $143.5 million and $146.0 million, which includes U.S. revenue between $140.0 million and $142.0 million and international revenue between $3.5 million and $4.0 million.  ATEC also expects U.S. revenue growth of approximately 25% for the full year 2021.

The Company remains subject to the potential and uncertain impact of the ongoing COVID-19 pandemic.  If hospitals experience a surge in cases and need to defer elective procedures to preserve capacity for COVID-19 patients, the Company’s ability to achieve these financial objectives could be adversely affected.

Investor Conference Call

ATEC will present these via a live webcast today at 1:30 p.m. PT / 4:30 p.m. ET. The live webcast will be accessible via this link.  An audiocast of the presentation will also be available domestically at (877) 556-5251 and internationally at (720) 545-0036. The conference ID number is 5178028.

A replay of the webcast will remain available on ATEC’s corporate website at www.atecspine.com until the Company releases fourth quarter financial results. In addition, a replay of the audiocast will be available until November 15, 2020. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. Please use the replay conference ID number 5178028.

Non-GAAP Financial Information

To supplement the Company’s financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company reports certain non-GAAP financial measures, including non-GAAP U.S. gross margin, non-GAAP operating expenses, non-GAAP operating loss, and non-GAAP Adjusted EBITDA. The Company believes that these non-GAAP financial measures provide 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 baseline for assessing the future earnings potential of the Company. The Company’s non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. Non-GAAP financial results should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Included below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measures.

 

 

 

 

4


 

 

 

About Alphatec Holdings, Inc.

Alphatec Holdings, Inc. (ATEC), through its wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp Surgical, Inc., is a medical device company dedicated to revolutionizing the approach to spine surgery through clinical distinction.  ATEC’s Organic Innovation Machine is focused on developing new approaches that integrate seamlessly with the SafeOp Neural InformatiX System to safely and reproducibly treat spine’s various pathologies and achieve the goals of spine surgery.  Alphatec’s vision is to become the Standard Bearer in Spine.  For more information, visit us at www.atecspine.com.

Forward Looking Statements

This press release contains "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. The Company 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. Forward-looking statements include references to the impact of the COVID-19 pandemic on the Company's business and financial results, references to the Company’s revenue and growth outlook, planned commercial launches, product introduction and surgeon adoption, salesforce revitalization and growth of strategic distribution network, the Company’s strategy in significantly repositioning the ATEC brand, turning the Company into a growth organization, creating future market disruption, and the Company’s future ability to finance its operations. The important factors that could cause actual operating results to differ significantly from those expressed or implied by such forward-looking statements include, but are not limited to: the impact of COVID-19 pandemic on the Company's business and the economy; the uncertainty of success in developing new products or products currently in the Company’s pipeline; the uncertainties in the Company’s ability to execute upon its strategic operating plan; the uncertainties regarding the ability to successfully license or acquire new products, and the commercial success of such products; failure to achieve acceptance of the Company’s products by the surgeon community; failure to obtain FDA or other regulatory clearance or approval for new products, or unexpected or prolonged delays in the process; continuation of favorable third party reimbursement for Company’s products; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to successfully control its costs or achieve profitability; uncertainty of additional funding; the Company’s ability to compete with other products and with emerging new technologies; product liability exposure; an unsuccessful outcome in any litigation asserted against the Company. The words “believe,” “will,” “should,” “expect,” “intend,” “estimate,” “look forward” and “anticipate,” variations of such words and similar expressions identify forward-looking statements, but their absence does not mean that a statement is not a forward-looking statement. A further list and description of these and other factors, risks and uncertainties can be found in the Company's most recent annual report, and any subsequent quarterly and current reports, filed with the Securities and Exchange

5


 

 

 

Commission. ATEC 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.

Investor/Media Contact:

Tina Jacobsen

Investor Relations

(760) 494-6790

ir@atecspine.com  

Company Contact:

Jeff Black

Chief Financial Officer

Alphatec Holdings, Inc.

ir@atecspine.com

6


 

 

 

ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts – unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from U.S. products

$

40,052

 

 

$

28,051

 

 

$

97,956

 

 

$

77,099

 

Revenue from international supply agreement

 

1,111

 

 

 

1,150

 

 

 

2,951

 

 

 

3,976

 

Total revenues

 

41,163

 

 

 

29,201

 

 

 

100,907

 

 

 

81,075

 

Cost of revenues

 

11,926

 

 

 

9,268

 

 

 

29,797

 

 

 

25,688

 

Gross profit

 

29,237

 

 

 

19,933

 

 

 

71,110

 

 

 

55,387

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

4,379

 

 

 

3,800

 

 

 

11,800

 

 

 

10,413

 

Sales, general and administrative

 

35,985

 

 

 

26,954

 

 

 

91,021

 

 

 

72,738

 

Litigation-related

 

1,560

 

 

 

604

 

 

 

5,507

 

 

 

4,427

 

Amortization of acquired intangible assets

 

172

 

 

 

172

 

 

 

516

 

 

 

526

 

Transaction-related

 

2

 

 

 

 

 

 

4,093

 

 

 

 

Restructuring

 

 

 

 

 

 

 

 

 

 

60.00

 

Total operating expenses

 

42,098

 

 

 

31,530

 

 

 

112,937

 

 

 

88,164

 

Operating loss

 

(12,861

)

 

 

(11,597

)

 

 

(41,827

)

 

 

(32,777

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and other expense, net

 

(2,768

)

 

 

(2,926

)

 

 

(8,674

)

 

 

(6,966

)

Loss on debt extinguishment

 

 

 

 

 

 

 

(1,555

)

 

 

 

Total other expenses, net

 

(2,768

)

 

 

(2,926

)

 

 

(10,229

)

 

 

(6,966

)

Loss from continuing operations before taxes

 

(15,629

)

 

 

(14,523

)

 

 

(52,056

)

 

 

(39,743

)

Income tax provision

 

40

 

 

 

20

 

 

 

140

 

 

 

122

 

Loss from continuing operations

 

(15,669

)

 

 

(14,543

)

 

 

(52,196

)

 

 

(39,865

)

Loss from discontinued operations

 

 

 

 

(24

)

 

 

 

 

 

(106

)

Net loss

$

(15,669

)

 

$

(14,567

)

 

$

(52,196

)

 

$

(39,971

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

$

(0.24

)

 

$

(0.26

)

 

$

(0.82

)

 

$

(0.81

)

Discontinued operations

 

(0.00

)

 

 

(0.00

)

 

 

(0.00

)

 

 

(0.00

)

Net loss per share, basic and diluted

$

(0.24

)

 

$

(0.26

)

 

$

(0.82

)

 

$

(0.81

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in calculating basic and diluted net loss per share

 

64,761

 

 

 

55,736

 

 

 

63,669

 

 

 

49,252

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation included in:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue

$

139

 

 

$

57

 

 

$

374

 

 

$

113

 

Research and development

 

379

 

 

 

227

 

 

 

1,066

 

 

 

543

 

Sales, general and administrative

 

4,026

 

 

 

3,319

 

 

 

11,247

 

 

 

6,910

 

 

$

4,544

 

 

$

3,603

 

 

$

12,687

 

 

$

7,566

 

 

7


 

 

 

ALPHATEC HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

 

September 30,

 

 

 

 

December 31,

 

 

2020

 

 

 

 

2019

 

 

(unaudited)

 

 

 

 

 

 

 

ASSETS

 

Current assets:

 

 

 

 

 

 

 

 

 

Cash

$

15,678

 

 

 

 

$

47,113

 

Accounts receivable, net

 

24,270

 

 

 

 

 

16,150

 

Inventories, net

 

42,144

 

 

 

 

 

34,854

 

Prepaid expenses and other current assets

 

3,321

 

 

 

 

 

9,880

 

Withholding tax receivable from Officer

 

934

 

 

 

 

 

 

Current assets of discontinued operations

 

335

 

 

 

 

 

321

 

Total current assets

 

86,682

 

 

 

 

 

108,318

 

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

27,681

 

 

 

 

 

19,722

 

Right-of-use asset

 

1,530

 

 

 

 

 

1,860

 

Goodwill

 

13,897

 

 

 

 

 

13,897

 

Intangibles, net

 

24,283

 

 

 

 

 

25,605

 

Other assets

 

549

 

 

 

 

 

493

 

Noncurrent assets of discontinued operations

 

55

 

 

 

 

 

53

 

Total assets

$

154,677

 

 

 

 

$

169,948

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

Current liabilities:

 

 

 

 

 

 

 

 

 

Accounts payable

$

13,910

 

 

 

 

$

7,772

 

Accrued expenses

 

30,980

 

 

 

 

 

26,416

 

Current portion of long-term debt

 

1,672

 

 

 

 

 

489

 

Current portion of lease liability

 

1,208

 

 

 

 

 

1,314

 

Current liabilities of discontinued operations

 

395

 

 

 

 

 

399

 

Total current liabilities

 

48,165

 

 

 

 

 

36,390

 

 

 

 

 

 

 

 

 

 

 

Total long term liabilities

 

74,858

 

 

 

 

 

66,324

 

 

 

 

 

 

 

 

 

 

 

Redeemable preferred stock

 

23,603

 

 

 

 

 

23,603

 

Stockholders' equity

 

8,051

 

 

 

 

 

43,631

 

Total liabilities and stockholders' equity

$

154,677

 

 

 

 

$

169,948

 

 

8


 

 

 

ALPHATEC HOLDINGS, INC.

RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(in thousands – unaudited)

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

2020

 

 

2019

 

 

2020

 

2019

 

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

(unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

$

42,098

 

 

$

31,530

 

 

$

112,937

 

$

88,164

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

(4,405

)

 

 

(3,546

)

 

 

(12,313

)

 

(7,453

)

Contingent consideration fair value adjustment

 

 

 

 

 

 

 

 

 

 

 

 

(289

)

Litigation-related expenses

 

 

 

 

(1,560

)

 

 

(604

)

 

 

(5,507

)

 

(4,427

)

Restructuring

 

 

 

 

 

 

 

 

 

 

 

 

(60

)

Transaction-related expenses

 

 

 

 

(2

)

 

 

 

 

 

(4,093

)

 

 

Non-GAAP operating expenses

 

 

 

$

36,131

 

 

$

27,380

 

 

$

91,024

 

$

75,935

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

2020

 

 

2019

 

 

2020

 

2019

 

 

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

(unaudited)

 

Operating loss, as reported

 

 

 

$

(12,861

)

 

$

(11,597

)

 

$

(41,827

)

$

(32,777

)

Add back significant items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

4,544

 

 

 

3,603

 

 

 

12,687

 

 

7,566

 

Contingent consideration fair value adjustment

 

 

 

 

 

 

 

 

 

 

 

 

(289

)

Litigation-related expenses

 

 

 

 

1,560

 

 

 

604

 

 

 

5,507

 

 

4,427

 

Restructuring

 

 

 

 

 

 

 

 

 

 

 

 

60

 

Transaction-related expenses

 

 

 

 

2

 

 

 

 

 

 

4,093

 

 

 

Excess & obsolete charges

 

 

 

 

1,995

 

 

 

2,276

 

 

 

5,429

 

 

6,451

 

Adjusted operating loss

 

 

 

 

(4,760

)

 

 

(5,114

)

 

 

(14,111

)

 

(14,562

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating loss, as reported

 

 

 

$

(12,861

)

 

$

(11,597

)

 

$

(41,827

)

$

(32,777

)

  Depreciation

 

 

 

 

2,307

 

 

 

1,752

 

 

 

6,482

 

 

4,828

 

  Amortization of intangible assets

 

 

 

 

441

 

 

 

172

 

 

 

1,322

 

 

526

 

EBITDA

 

 

 

 

(10,113

)

 

 

(9,673

)

 

 

(34,023

)

 

(27,423

)

Add back significant items:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

 

 

4,544

 

 

 

3,603

 

 

 

12,687

 

 

7,566

 

Contingent consideration fair value adjustment

 

 

 

 

 

 

 

 

 

 

 

 

(289

)

Litigation-related expenses

 

 

 

 

1,560

 

 

 

604

 

 

 

5,507

 

 

4,427

 

Restructuring

 

 

 

 

 

 

 

 

 

 

 

 

60

 

Transaction-related expenses

 

 

 

 

2

 

 

 

 

 

 

4,093

 

 

 

Excess & obsolete charges

 

 

 

 

1,995

 

 

 

2,276

 

 

 

5,429

 

 

6,451

 

Adjusted EBITDA

 

 

 

$

(2,012

)

 

$

(3,190

)

 

$

(6,307

)

$

(9,208

)

 

9


 

 

 

ALPHATEC HOLDINGS, INC.

RECONCILIATION OF GEOGRAPHIC SEGMENT REVENUES AND GROSS PROFIT

(in thousands, except percentages – unaudited)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

Revenues by source

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenue from U.S. products

$

40,052

 

 

$

28,051

 

 

$

97,956

 

 

$

77,099

 

Revenue from international supply agreement

 

1,111

 

 

 

1,150

 

 

 

2,951

 

 

$

3,976

 

Total revenues

$

41,163

 

 

$

29,201

 

 

$

100,907

 

 

$

81,075

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit by source

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from U.S. products

$

29,178

 

 

$

19,853

 

 

$

70,966

 

 

$

55,087

 

Revenue from international supply agreement

 

59

 

 

 

80

 

 

 

144

 

 

 

300

 

Total gross profit

$

29,237

 

 

$

19,933

 

 

$

71,110

 

 

$

55,387

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit margin by source

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue from U.S. products

 

72.9

%

 

 

70.8

%

 

 

72.4

%

 

 

71.4

%

Revenue from international supply agreement

 

5.3

%

 

 

7.0

%

 

 

4.9

%

 

 

7.5

%

Total gross profit margin

 

71.0

%

 

 

68.3

%

 

 

70.5

%

 

 

68.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RECONCILIATION OF GAAP TO NON-GAAP GROSS PROFIT AND GROSS MARGIN

 

(in thousands, except percentages – unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

September 30,

 

 

September 30,

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

GAAP-based gross profit from U.S. products

$

29,178

 

 

$

19,853

 

 

$

70,966

 

 

$

55,087

 

Add: non-cash excess and obsolete charges

 

1,995

 

 

 

2,276

 

 

 

5,429

 

 

 

6,451

 

Non-GAAP gross profit from U.S. products

$

31,173

 

 

$

22,129

 

 

$

76,395

 

 

$

61,538

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

GAAP-based gross margin from U.S. products

 

72.9

%

 

 

70.8

%

 

 

72.4

%

 

 

71.4

%

Add: non-cash excess and obsolete charges

 

5.0

%

 

 

8.1

%

 

 

5.5

%

 

 

8.4

%

Non-GAAP gross margin from U.S. products

 

77.8

%

 

 

78.9

%

 

 

78.0

%

 

 

79.8

%

 

10