Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries ATEC Reports Third Quarter 2023 Financial Results and Raises Full Year 2023 Adjusted EBITDA Guidance By: Alphatec Holdings, Inc. via Business Wire November 06, 2023 at 16:05 PM EST Total revenue grew 32% to $118 million Surgical revenue grew 32% to $104 million and EOS revenue grew 30% to $14 million Delivered positive adjusted EBITDA of over $2 million Alphatec Holdings, Inc. (Nasdaq: ATEC), a provider of innovative solutions dedicated to revolutionizing the approach to spine surgery, today announced financial results for the quarter ended September 30, 2023, and recent corporate highlights. Third Quarter 2023 Financial Results Quarter Ended September 30, 2023 Total revenue $118 million GAAP gross margin 68% Non-GAAP gross margin 72% GAAP operating expenses $118 million Non-GAAP operating expenses $94 million GAAP operating loss ($38) million Adjusted EBITDA $2 million Ending cash balance $123 million Recent Highlights Advanced ATEC lateral procedures PTPTM (Prone TransPsoas) and LTPTM (Lateral TransPsoas) with the launch of Calibrate LTXTM, a lateral expandable implant system; Drove 24% increase in surgical volume and 6% increase in average revenue per procedure; Delivered second quarter of positive adjusted EBITDA with 860 basis points of margin expansion; Secured $150 million in capital to accelerate investment in revenue-generating assets (implants and instrument sets) while executing to profitability and free cash flow commitments; Enhanced Board of Directors with deep spine expertise. “We’re pleased with our achievements in the third quarter, and even more excited about what’s ahead for ATEC,” said Pat Miles, Chairman and Chief Executive Officer. “The field’s most discerning talent recognizes that only ATEC has the procedural sophistication, spine focus and spine knowhow to create and continually elevate an end-to-end ecosystem of technologies that will set the standards in spine care. Our recent capital raise positions us exceptionally well to exploit the momentum that unprecedented industry disruption is unleashing. We are boldly leaning into the opportunity ahead, accelerating investment to equip our new teams of tenured sales professionals to serve surgeries with the operational excellence that ATEC is renowned for. Our best is yet to come.” Financial Outlook for the Full Year 2023 The Company continues to expect total revenue to grow 35% to $472 million for the fiscal year ended December 31, 2023, in line with the expectations previewed in conjunction with the release of preliminary third quarter financial results. This includes surgical revenue of $414 million and EOS revenue of $58 million. The Company now expects non-GAAP adjusted EBITDA of approximately $3 million for the full year 2023. Financial Results Webcast ATEC will present these results via a live webcast today at 1:30 p.m. PT / 4:30 p.m. ET. The live webcast can be accessed by visiting the Investor Relations Section of ATEC’s Corporate Website. To dial in to the webcast, please register via this link. A replay of the webcast will remain available through the Investor Relations Section of ATEC’s Corporate Website for twelve months. In addition, a dial-in replay will be available beginning about two hours after the webcast’s completion through November 13, 2023. Access the replay by dialing (800) 770-2030 and referencing conference ID number 97241. Inducement Awards Granted As an inducement material to accepting employment with the Company, and in accordance with Nasdaq Listing Rule 5635(c)(4), ATEC today announced that the independent Compensation Committee of the Board of Directors has approved aggregate grants to thirteen new employees (who are not executive officers) of, collectively, 24,296 restricted stock units (“RSUs”) under the Company’s 2016 Employment Inducement Award Plan. The RSUs will vest in equal annual installments on each of the first four anniversaries of the grant date, provided that the recipient remains continuously employed by ATEC as of such vesting date. In addition, the RSUs will vest fully upon a change of control of ATEC. Non-GAAP Financial Information To supplement the Company’s financial statements presented in accordance with generally accepted accounting principles in the United States of America (GAAP), the Company reports certain non-GAAP financial measures, including non-GAAP 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. About Alphatec Holdings, Inc. ATEC, through its wholly owned subsidiaries, Alphatec Spine, Inc., EOS imaging S.A.S. and SafeOp Surgical, Inc., is a medical device company dedicated to revolutionizing the approach to spine surgery through clinical distinction. ATEC’s Organic Innovation MachineTM is focused on developing new approaches that integrate seamlessly with the Company’s expanding AlphaInformatiX Platform to better inform surgery and more safely and reproducibly achieve the goals of spine surgery. ATEC’s vision is to be 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 will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include, but are not limited to: references to the Company’s revenue, balance sheet, growth, and financial outlook and commitments; planned product launches and introductions; and the Company's ability to compel surgeon adoption and transform the sales channel. 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 uncertainty of success in developing new products or products currently in the 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 or unexpected or prolonged delays in the process; continuation of favorable Third-party reimbursement; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to achieve profitability; uncertainty of additional funding; product liability exposure; an unsuccessful outcome in any litigation; patent infringement claims; claims related to the Company’s intellectual property; and the Company’s ability to meet its financial obligations. 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 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. Alphatec Holdings, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Revenue: Revenue from products and services $ 118,262 $ 89,839 $ 344,292 $ 244,908 Revenue from international supply agreement — — — 15 Total revenue 118,262 89,839 344,292 244,923 Cost of sales 38,215 30,323 129,279 80,715 Gross profit 80,047 59,516 215,013 164,208 Operating expenses: Research and development 20,000 12,111 47,831 32,429 Sales, general and administrative 91,411 75,954 269,960 218,093 Litigation-related expenses 2,715 3,602 12,815 16,629 Amortization of acquired intangible assets 3,873 2,774 10,461 7,181 Transaction-related expenses 278 — 2,178 120 Restructuring expenses 129 45 333 1,704 Total operating expenses 118,406 94,486 343,578 276,156 Operating loss (38,359 ) (34,970 ) (128,565 ) (111,948 ) Interest expense and other expense, net: Interest expense, net (4,459 ) (1,285 ) (12,225 ) (4,176 ) Other income (expense), net 47 (615 ) 3,077 (578 ) Total interest expense and other expense, net (4,412 ) (1,900 ) (9,148 ) (4,754 ) Net loss before taxes (42,771 ) (36,870 ) (137,713 ) (116,702 ) Income tax benefit (117 ) (77 ) (153 ) (192 ) Net loss $ (42,654 ) $ (36,793 ) $ (137,560 ) $ (116,510 ) Net loss per share, basic and diluted $ (0.35 ) $ (0.35 ) $ (1.18 ) $ (1.14 ) Weighted average shares outstanding, basic and diluted 122,468 104,804 117,026 102,561 Stock-based compensation included in: Cost of sales $ 2,369 $ 735 $ 24,601 $ 1,440 Research and development $ 6,790 $ 1,653 $ 9,587 $ 3,987 Sales, general and administrative 10,914 8,689 26,541 25,037 $ 20,073 $ 11,077 $ 60,729 $ 30,464 Alphatec Holdings, Inc. Condensed Consolidated Balance Sheets (in thousands) September 30,2023 December 31,2022 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 122,526 $ 84,696 Accounts receivable, net 64,519 60,060 Inventories 130,672 101,521 Prepaid expenses and other current assets 15,841 9,357 Total current assets 333,558 255,634 Property and equipment, net 133,785 101,952 Right-of-use assets 27,086 28,360 Goodwill 71,555 47,367 Intangible assets, net 102,196 82,781 Other assets 2,041 4,874 Total assets $ 670,221 $ 520,968 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 50,104 $ 34,742 Accrued expenses and other current liabilities 77,251 72,382 Contract liabilities 13,833 11,956 Short-term debt 1,766 14,948 Current portion of operating lease liabilities 5,090 4,842 Total current liabilities 148,044 138,870 Total long-term liabilities 542,735 393,162 Redeemable preferred stock 23,603 23,603 Stockholders' deficit (44,161 ) (34,667 ) Total liabilities and stockholders' deficit $ 670,221 $ 520,968 Alphatec Holdings, Inc. Reconciliation of Non-GAAP Financial Measures (in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Gross profit, GAAP $ 80,047 $ 59,516 $ 215,013 $ 164,208 Add: amortization of intangible assets 221 28 661 37 Add: stock-based compensation 2,369 735 24,601 1,440 Add: purchase accounting adjustments on acquisitions — 347 195 784 Add: excess and obsolete write-down 2,454 2,923 9,188 7,023 Non-GAAP gross profit $ 85,091 $ 63,549 $ 249,658 $ 173,492 Gross margin, GAAP 67.7 % 66.2 % 62.5 % 67.0 % Add: amortization of intangible assets 0.2 % 0.0 % 0.2 % 0.0 % Add: stock-based compensation 2.0 % 0.8 % 7.1 % 0.6 % Add: purchase accounting adjustments on acquisitions 0.0 % 0.4 % 0.1 % 0.3 % Add: excess and obsolete write-down 2.1 % 3.3 % 2.7 % 2.9 % Non-GAAP gross margin 72.0 % 70.7 % 72.5 % 70.8 % Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Operating expenses, GAAP $ 118,406 $ 94,486 $ 343,578 $ 276,156 Adjustments: Stock-based compensation (17,704 ) (10,342 ) (36,128 ) (29,024 ) Litigation-related expenses (2,715 ) (3,602 ) (12,815 ) (16,629 ) Amortization of intangible assets (3,873 ) (2,774 ) (10,461 ) (7,181 ) Transaction-related expenses (278 ) — (2,178 ) (120 ) Restructuring expenses (129 ) (45 ) (333 ) (1,704 ) Other non-recurring expenses1 — — (1,349 ) — Non-GAAP operating expenses $ 93,707 $ 77,723 $ 280,314 $ 221,498 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Operating loss, GAAP $ (38,359 ) $ (34,970 ) $ (128,565 ) $ (111,948 ) Depreciation 10,651 8,010 28,998 22,601 Amortization of intangible assets 4,094 2,802 11,122 7,218 EBITDA (23,614 ) (24,158 ) (88,445 ) (82,129 ) Add back significant items: Stock-based compensation 20,073 11,077 60,729 30,464 Purchase accounting adjustments on acquisitions — 347 195 784 Excess & obsolete write-down 2,454 2,923 9,188 7,023 Litigation-related expenses 2,715 3,602 12,815 16,629 Transaction-related expenses 278 — 2,178 120 Restructuring expenses 129 45 333 1,704 Other non-recurring expenses1 — — 1,349 — Adjusted EBITDA $ 2,035 $ (6,164 ) $ (1,658 ) $ (25,405 ) Non-recurring consulting fees associated with the implementation of our state tax-planning strategy View source version on businesswire.com: https://www.businesswire.com/news/home/20231106434967/en/Contacts Investor/Media Contact: Tina Jacobsen, CFA Investor Relations (760) 494-6790 investorrelations@atecspine.com Company Contact: J. Todd Koning Chief Financial Officer investorrelations@atecspine.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
ATEC Reports Third Quarter 2023 Financial Results and Raises Full Year 2023 Adjusted EBITDA Guidance By: Alphatec Holdings, Inc. via Business Wire November 06, 2023 at 16:05 PM EST Total revenue grew 32% to $118 million Surgical revenue grew 32% to $104 million and EOS revenue grew 30% to $14 million Delivered positive adjusted EBITDA of over $2 million Alphatec Holdings, Inc. (Nasdaq: ATEC), a provider of innovative solutions dedicated to revolutionizing the approach to spine surgery, today announced financial results for the quarter ended September 30, 2023, and recent corporate highlights. Third Quarter 2023 Financial Results Quarter Ended September 30, 2023 Total revenue $118 million GAAP gross margin 68% Non-GAAP gross margin 72% GAAP operating expenses $118 million Non-GAAP operating expenses $94 million GAAP operating loss ($38) million Adjusted EBITDA $2 million Ending cash balance $123 million Recent Highlights Advanced ATEC lateral procedures PTPTM (Prone TransPsoas) and LTPTM (Lateral TransPsoas) with the launch of Calibrate LTXTM, a lateral expandable implant system; Drove 24% increase in surgical volume and 6% increase in average revenue per procedure; Delivered second quarter of positive adjusted EBITDA with 860 basis points of margin expansion; Secured $150 million in capital to accelerate investment in revenue-generating assets (implants and instrument sets) while executing to profitability and free cash flow commitments; Enhanced Board of Directors with deep spine expertise. “We’re pleased with our achievements in the third quarter, and even more excited about what’s ahead for ATEC,” said Pat Miles, Chairman and Chief Executive Officer. “The field’s most discerning talent recognizes that only ATEC has the procedural sophistication, spine focus and spine knowhow to create and continually elevate an end-to-end ecosystem of technologies that will set the standards in spine care. Our recent capital raise positions us exceptionally well to exploit the momentum that unprecedented industry disruption is unleashing. We are boldly leaning into the opportunity ahead, accelerating investment to equip our new teams of tenured sales professionals to serve surgeries with the operational excellence that ATEC is renowned for. Our best is yet to come.” Financial Outlook for the Full Year 2023 The Company continues to expect total revenue to grow 35% to $472 million for the fiscal year ended December 31, 2023, in line with the expectations previewed in conjunction with the release of preliminary third quarter financial results. This includes surgical revenue of $414 million and EOS revenue of $58 million. The Company now expects non-GAAP adjusted EBITDA of approximately $3 million for the full year 2023. Financial Results Webcast ATEC will present these results via a live webcast today at 1:30 p.m. PT / 4:30 p.m. ET. The live webcast can be accessed by visiting the Investor Relations Section of ATEC’s Corporate Website. To dial in to the webcast, please register via this link. A replay of the webcast will remain available through the Investor Relations Section of ATEC’s Corporate Website for twelve months. In addition, a dial-in replay will be available beginning about two hours after the webcast’s completion through November 13, 2023. Access the replay by dialing (800) 770-2030 and referencing conference ID number 97241. Inducement Awards Granted As an inducement material to accepting employment with the Company, and in accordance with Nasdaq Listing Rule 5635(c)(4), ATEC today announced that the independent Compensation Committee of the Board of Directors has approved aggregate grants to thirteen new employees (who are not executive officers) of, collectively, 24,296 restricted stock units (“RSUs”) under the Company’s 2016 Employment Inducement Award Plan. The RSUs will vest in equal annual installments on each of the first four anniversaries of the grant date, provided that the recipient remains continuously employed by ATEC as of such vesting date. In addition, the RSUs will vest fully upon a change of control of ATEC. Non-GAAP Financial Information To supplement the Company’s financial statements presented in accordance with generally accepted accounting principles in the United States of America (GAAP), the Company reports certain non-GAAP financial measures, including non-GAAP 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. About Alphatec Holdings, Inc. ATEC, through its wholly owned subsidiaries, Alphatec Spine, Inc., EOS imaging S.A.S. and SafeOp Surgical, Inc., is a medical device company dedicated to revolutionizing the approach to spine surgery through clinical distinction. ATEC’s Organic Innovation MachineTM is focused on developing new approaches that integrate seamlessly with the Company’s expanding AlphaInformatiX Platform to better inform surgery and more safely and reproducibly achieve the goals of spine surgery. ATEC’s vision is to be 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 will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include, but are not limited to: references to the Company’s revenue, balance sheet, growth, and financial outlook and commitments; planned product launches and introductions; and the Company's ability to compel surgeon adoption and transform the sales channel. 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 uncertainty of success in developing new products or products currently in the 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 or unexpected or prolonged delays in the process; continuation of favorable Third-party reimbursement; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to achieve profitability; uncertainty of additional funding; product liability exposure; an unsuccessful outcome in any litigation; patent infringement claims; claims related to the Company’s intellectual property; and the Company’s ability to meet its financial obligations. 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 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. Alphatec Holdings, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Revenue: Revenue from products and services $ 118,262 $ 89,839 $ 344,292 $ 244,908 Revenue from international supply agreement — — — 15 Total revenue 118,262 89,839 344,292 244,923 Cost of sales 38,215 30,323 129,279 80,715 Gross profit 80,047 59,516 215,013 164,208 Operating expenses: Research and development 20,000 12,111 47,831 32,429 Sales, general and administrative 91,411 75,954 269,960 218,093 Litigation-related expenses 2,715 3,602 12,815 16,629 Amortization of acquired intangible assets 3,873 2,774 10,461 7,181 Transaction-related expenses 278 — 2,178 120 Restructuring expenses 129 45 333 1,704 Total operating expenses 118,406 94,486 343,578 276,156 Operating loss (38,359 ) (34,970 ) (128,565 ) (111,948 ) Interest expense and other expense, net: Interest expense, net (4,459 ) (1,285 ) (12,225 ) (4,176 ) Other income (expense), net 47 (615 ) 3,077 (578 ) Total interest expense and other expense, net (4,412 ) (1,900 ) (9,148 ) (4,754 ) Net loss before taxes (42,771 ) (36,870 ) (137,713 ) (116,702 ) Income tax benefit (117 ) (77 ) (153 ) (192 ) Net loss $ (42,654 ) $ (36,793 ) $ (137,560 ) $ (116,510 ) Net loss per share, basic and diluted $ (0.35 ) $ (0.35 ) $ (1.18 ) $ (1.14 ) Weighted average shares outstanding, basic and diluted 122,468 104,804 117,026 102,561 Stock-based compensation included in: Cost of sales $ 2,369 $ 735 $ 24,601 $ 1,440 Research and development $ 6,790 $ 1,653 $ 9,587 $ 3,987 Sales, general and administrative 10,914 8,689 26,541 25,037 $ 20,073 $ 11,077 $ 60,729 $ 30,464 Alphatec Holdings, Inc. Condensed Consolidated Balance Sheets (in thousands) September 30,2023 December 31,2022 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 122,526 $ 84,696 Accounts receivable, net 64,519 60,060 Inventories 130,672 101,521 Prepaid expenses and other current assets 15,841 9,357 Total current assets 333,558 255,634 Property and equipment, net 133,785 101,952 Right-of-use assets 27,086 28,360 Goodwill 71,555 47,367 Intangible assets, net 102,196 82,781 Other assets 2,041 4,874 Total assets $ 670,221 $ 520,968 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 50,104 $ 34,742 Accrued expenses and other current liabilities 77,251 72,382 Contract liabilities 13,833 11,956 Short-term debt 1,766 14,948 Current portion of operating lease liabilities 5,090 4,842 Total current liabilities 148,044 138,870 Total long-term liabilities 542,735 393,162 Redeemable preferred stock 23,603 23,603 Stockholders' deficit (44,161 ) (34,667 ) Total liabilities and stockholders' deficit $ 670,221 $ 520,968 Alphatec Holdings, Inc. Reconciliation of Non-GAAP Financial Measures (in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Gross profit, GAAP $ 80,047 $ 59,516 $ 215,013 $ 164,208 Add: amortization of intangible assets 221 28 661 37 Add: stock-based compensation 2,369 735 24,601 1,440 Add: purchase accounting adjustments on acquisitions — 347 195 784 Add: excess and obsolete write-down 2,454 2,923 9,188 7,023 Non-GAAP gross profit $ 85,091 $ 63,549 $ 249,658 $ 173,492 Gross margin, GAAP 67.7 % 66.2 % 62.5 % 67.0 % Add: amortization of intangible assets 0.2 % 0.0 % 0.2 % 0.0 % Add: stock-based compensation 2.0 % 0.8 % 7.1 % 0.6 % Add: purchase accounting adjustments on acquisitions 0.0 % 0.4 % 0.1 % 0.3 % Add: excess and obsolete write-down 2.1 % 3.3 % 2.7 % 2.9 % Non-GAAP gross margin 72.0 % 70.7 % 72.5 % 70.8 % Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Operating expenses, GAAP $ 118,406 $ 94,486 $ 343,578 $ 276,156 Adjustments: Stock-based compensation (17,704 ) (10,342 ) (36,128 ) (29,024 ) Litigation-related expenses (2,715 ) (3,602 ) (12,815 ) (16,629 ) Amortization of intangible assets (3,873 ) (2,774 ) (10,461 ) (7,181 ) Transaction-related expenses (278 ) — (2,178 ) (120 ) Restructuring expenses (129 ) (45 ) (333 ) (1,704 ) Other non-recurring expenses1 — — (1,349 ) — Non-GAAP operating expenses $ 93,707 $ 77,723 $ 280,314 $ 221,498 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Operating loss, GAAP $ (38,359 ) $ (34,970 ) $ (128,565 ) $ (111,948 ) Depreciation 10,651 8,010 28,998 22,601 Amortization of intangible assets 4,094 2,802 11,122 7,218 EBITDA (23,614 ) (24,158 ) (88,445 ) (82,129 ) Add back significant items: Stock-based compensation 20,073 11,077 60,729 30,464 Purchase accounting adjustments on acquisitions — 347 195 784 Excess & obsolete write-down 2,454 2,923 9,188 7,023 Litigation-related expenses 2,715 3,602 12,815 16,629 Transaction-related expenses 278 — 2,178 120 Restructuring expenses 129 45 333 1,704 Other non-recurring expenses1 — — 1,349 — Adjusted EBITDA $ 2,035 $ (6,164 ) $ (1,658 ) $ (25,405 ) Non-recurring consulting fees associated with the implementation of our state tax-planning strategy View source version on businesswire.com: https://www.businesswire.com/news/home/20231106434967/en/Contacts Investor/Media Contact: Tina Jacobsen, CFA Investor Relations (760) 494-6790 investorrelations@atecspine.com Company Contact: J. Todd Koning Chief Financial Officer investorrelations@atecspine.com
Total revenue grew 32% to $118 million Surgical revenue grew 32% to $104 million and EOS revenue grew 30% to $14 million Delivered positive adjusted EBITDA of over $2 million
Alphatec Holdings, Inc. (Nasdaq: ATEC), a provider of innovative solutions dedicated to revolutionizing the approach to spine surgery, today announced financial results for the quarter ended September 30, 2023, and recent corporate highlights. Third Quarter 2023 Financial Results Quarter Ended September 30, 2023 Total revenue $118 million GAAP gross margin 68% Non-GAAP gross margin 72% GAAP operating expenses $118 million Non-GAAP operating expenses $94 million GAAP operating loss ($38) million Adjusted EBITDA $2 million Ending cash balance $123 million Recent Highlights Advanced ATEC lateral procedures PTPTM (Prone TransPsoas) and LTPTM (Lateral TransPsoas) with the launch of Calibrate LTXTM, a lateral expandable implant system; Drove 24% increase in surgical volume and 6% increase in average revenue per procedure; Delivered second quarter of positive adjusted EBITDA with 860 basis points of margin expansion; Secured $150 million in capital to accelerate investment in revenue-generating assets (implants and instrument sets) while executing to profitability and free cash flow commitments; Enhanced Board of Directors with deep spine expertise. “We’re pleased with our achievements in the third quarter, and even more excited about what’s ahead for ATEC,” said Pat Miles, Chairman and Chief Executive Officer. “The field’s most discerning talent recognizes that only ATEC has the procedural sophistication, spine focus and spine knowhow to create and continually elevate an end-to-end ecosystem of technologies that will set the standards in spine care. Our recent capital raise positions us exceptionally well to exploit the momentum that unprecedented industry disruption is unleashing. We are boldly leaning into the opportunity ahead, accelerating investment to equip our new teams of tenured sales professionals to serve surgeries with the operational excellence that ATEC is renowned for. Our best is yet to come.” Financial Outlook for the Full Year 2023 The Company continues to expect total revenue to grow 35% to $472 million for the fiscal year ended December 31, 2023, in line with the expectations previewed in conjunction with the release of preliminary third quarter financial results. This includes surgical revenue of $414 million and EOS revenue of $58 million. The Company now expects non-GAAP adjusted EBITDA of approximately $3 million for the full year 2023. Financial Results Webcast ATEC will present these results via a live webcast today at 1:30 p.m. PT / 4:30 p.m. ET. The live webcast can be accessed by visiting the Investor Relations Section of ATEC’s Corporate Website. To dial in to the webcast, please register via this link. A replay of the webcast will remain available through the Investor Relations Section of ATEC’s Corporate Website for twelve months. In addition, a dial-in replay will be available beginning about two hours after the webcast’s completion through November 13, 2023. Access the replay by dialing (800) 770-2030 and referencing conference ID number 97241. Inducement Awards Granted As an inducement material to accepting employment with the Company, and in accordance with Nasdaq Listing Rule 5635(c)(4), ATEC today announced that the independent Compensation Committee of the Board of Directors has approved aggregate grants to thirteen new employees (who are not executive officers) of, collectively, 24,296 restricted stock units (“RSUs”) under the Company’s 2016 Employment Inducement Award Plan. The RSUs will vest in equal annual installments on each of the first four anniversaries of the grant date, provided that the recipient remains continuously employed by ATEC as of such vesting date. In addition, the RSUs will vest fully upon a change of control of ATEC. Non-GAAP Financial Information To supplement the Company’s financial statements presented in accordance with generally accepted accounting principles in the United States of America (GAAP), the Company reports certain non-GAAP financial measures, including non-GAAP 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. About Alphatec Holdings, Inc. ATEC, through its wholly owned subsidiaries, Alphatec Spine, Inc., EOS imaging S.A.S. and SafeOp Surgical, Inc., is a medical device company dedicated to revolutionizing the approach to spine surgery through clinical distinction. ATEC’s Organic Innovation MachineTM is focused on developing new approaches that integrate seamlessly with the Company’s expanding AlphaInformatiX Platform to better inform surgery and more safely and reproducibly achieve the goals of spine surgery. ATEC’s vision is to be 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 will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include, but are not limited to: references to the Company’s revenue, balance sheet, growth, and financial outlook and commitments; planned product launches and introductions; and the Company's ability to compel surgeon adoption and transform the sales channel. 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 uncertainty of success in developing new products or products currently in the 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 or unexpected or prolonged delays in the process; continuation of favorable Third-party reimbursement; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to achieve profitability; uncertainty of additional funding; product liability exposure; an unsuccessful outcome in any litigation; patent infringement claims; claims related to the Company’s intellectual property; and the Company’s ability to meet its financial obligations. 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 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. Alphatec Holdings, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Revenue: Revenue from products and services $ 118,262 $ 89,839 $ 344,292 $ 244,908 Revenue from international supply agreement — — — 15 Total revenue 118,262 89,839 344,292 244,923 Cost of sales 38,215 30,323 129,279 80,715 Gross profit 80,047 59,516 215,013 164,208 Operating expenses: Research and development 20,000 12,111 47,831 32,429 Sales, general and administrative 91,411 75,954 269,960 218,093 Litigation-related expenses 2,715 3,602 12,815 16,629 Amortization of acquired intangible assets 3,873 2,774 10,461 7,181 Transaction-related expenses 278 — 2,178 120 Restructuring expenses 129 45 333 1,704 Total operating expenses 118,406 94,486 343,578 276,156 Operating loss (38,359 ) (34,970 ) (128,565 ) (111,948 ) Interest expense and other expense, net: Interest expense, net (4,459 ) (1,285 ) (12,225 ) (4,176 ) Other income (expense), net 47 (615 ) 3,077 (578 ) Total interest expense and other expense, net (4,412 ) (1,900 ) (9,148 ) (4,754 ) Net loss before taxes (42,771 ) (36,870 ) (137,713 ) (116,702 ) Income tax benefit (117 ) (77 ) (153 ) (192 ) Net loss $ (42,654 ) $ (36,793 ) $ (137,560 ) $ (116,510 ) Net loss per share, basic and diluted $ (0.35 ) $ (0.35 ) $ (1.18 ) $ (1.14 ) Weighted average shares outstanding, basic and diluted 122,468 104,804 117,026 102,561 Stock-based compensation included in: Cost of sales $ 2,369 $ 735 $ 24,601 $ 1,440 Research and development $ 6,790 $ 1,653 $ 9,587 $ 3,987 Sales, general and administrative 10,914 8,689 26,541 25,037 $ 20,073 $ 11,077 $ 60,729 $ 30,464 Alphatec Holdings, Inc. Condensed Consolidated Balance Sheets (in thousands) September 30,2023 December 31,2022 (unaudited) ASSETS Current assets: Cash and cash equivalents $ 122,526 $ 84,696 Accounts receivable, net 64,519 60,060 Inventories 130,672 101,521 Prepaid expenses and other current assets 15,841 9,357 Total current assets 333,558 255,634 Property and equipment, net 133,785 101,952 Right-of-use assets 27,086 28,360 Goodwill 71,555 47,367 Intangible assets, net 102,196 82,781 Other assets 2,041 4,874 Total assets $ 670,221 $ 520,968 LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 50,104 $ 34,742 Accrued expenses and other current liabilities 77,251 72,382 Contract liabilities 13,833 11,956 Short-term debt 1,766 14,948 Current portion of operating lease liabilities 5,090 4,842 Total current liabilities 148,044 138,870 Total long-term liabilities 542,735 393,162 Redeemable preferred stock 23,603 23,603 Stockholders' deficit (44,161 ) (34,667 ) Total liabilities and stockholders' deficit $ 670,221 $ 520,968 Alphatec Holdings, Inc. Reconciliation of Non-GAAP Financial Measures (in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Gross profit, GAAP $ 80,047 $ 59,516 $ 215,013 $ 164,208 Add: amortization of intangible assets 221 28 661 37 Add: stock-based compensation 2,369 735 24,601 1,440 Add: purchase accounting adjustments on acquisitions — 347 195 784 Add: excess and obsolete write-down 2,454 2,923 9,188 7,023 Non-GAAP gross profit $ 85,091 $ 63,549 $ 249,658 $ 173,492 Gross margin, GAAP 67.7 % 66.2 % 62.5 % 67.0 % Add: amortization of intangible assets 0.2 % 0.0 % 0.2 % 0.0 % Add: stock-based compensation 2.0 % 0.8 % 7.1 % 0.6 % Add: purchase accounting adjustments on acquisitions 0.0 % 0.4 % 0.1 % 0.3 % Add: excess and obsolete write-down 2.1 % 3.3 % 2.7 % 2.9 % Non-GAAP gross margin 72.0 % 70.7 % 72.5 % 70.8 % Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Operating expenses, GAAP $ 118,406 $ 94,486 $ 343,578 $ 276,156 Adjustments: Stock-based compensation (17,704 ) (10,342 ) (36,128 ) (29,024 ) Litigation-related expenses (2,715 ) (3,602 ) (12,815 ) (16,629 ) Amortization of intangible assets (3,873 ) (2,774 ) (10,461 ) (7,181 ) Transaction-related expenses (278 ) — (2,178 ) (120 ) Restructuring expenses (129 ) (45 ) (333 ) (1,704 ) Other non-recurring expenses1 — — (1,349 ) — Non-GAAP operating expenses $ 93,707 $ 77,723 $ 280,314 $ 221,498 Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (unaudited) Operating loss, GAAP $ (38,359 ) $ (34,970 ) $ (128,565 ) $ (111,948 ) Depreciation 10,651 8,010 28,998 22,601 Amortization of intangible assets 4,094 2,802 11,122 7,218 EBITDA (23,614 ) (24,158 ) (88,445 ) (82,129 ) Add back significant items: Stock-based compensation 20,073 11,077 60,729 30,464 Purchase accounting adjustments on acquisitions — 347 195 784 Excess & obsolete write-down 2,454 2,923 9,188 7,023 Litigation-related expenses 2,715 3,602 12,815 16,629 Transaction-related expenses 278 — 2,178 120 Restructuring expenses 129 45 333 1,704 Other non-recurring expenses1 — — 1,349 — Adjusted EBITDA $ 2,035 $ (6,164 ) $ (1,658 ) $ (25,405 ) Non-recurring consulting fees associated with the implementation of our state tax-planning strategy View source version on businesswire.com: https://www.businesswire.com/news/home/20231106434967/en/
Investor/Media Contact: Tina Jacobsen, CFA Investor Relations (760) 494-6790 investorrelations@atecspine.com Company Contact: J. Todd Koning Chief Financial Officer investorrelations@atecspine.com