CARLSBAD, Calif., May 10, 2018 (GLOBE NEWSWIRE) — Alphatec Holdings, Inc. (“Alphatec,” “ATEC,” or the “Company”) (Nasdaq:ATEC), a provider of innovative spine surgery solutions with a mission to improve patient lives through the relentless pursuit of superior outcomes, today reported financial results for its first quarter ended March 31, 2018 and recent corporate highlights.
First Quarter 2018 Financial Highlights and 2018 Outlook
- Total net revenue of $21.3 million; U.S. commercial revenue of $19.2 million
- U.S. commercial gross margin of 70%
- Cash balance of $47.6 million at March 31, 2018
- Operating cash burn (excluding debt service) of $2.5 million
- Reiterated revenue guidance of approximately $95 million for full year 2018, with revenue growth expected to accelerate in the second half of the year
First Quarter Organizational, Commercial and Product Highlights
- Completed the acquisition of SafeOp Surgical, Inc. (“SafeOp”) to significantly differentiate the Company’s instrumented procedures and improve patient outcomes with advanced automated neuromonitoring technology
- Secured $50 million in equity financing to fund the cash purchase price of SafeOp and to strengthen the balance sheet for future growth initiatives
- Continued to drive momentum in the transition of the sales organization, expanding quality revenue from dedicated distribution partners and agents to nearly 50% of U.S. commercial revenue
- Increased number of surgeon visits to corporate headquarters for the fifth consecutive quarter, with revenue attributable to new surgeons increasing nearly 70% sequentially
- Appointed experienced spine executive Kelli Howell as Executive Vice President, Clinical Strategies
“We continue to build the foundation for long-term growth,” said Terry Rich, ATEC’s President and Chief Operating Officer. “Reported financial results, even adjusting for seasonality, are not yet reflective of the operational and strategic progress made, but we believe the positive effects of our distribution transition and solid revenue contribution from new surgeons validate our strategy. Surgeon and distributor engagement is improving, the ATEC innovators are applying their experience to create an organic innovation machine, and excitement in the field is absolutely palpable. We are on track to achieve our vision of becoming the most respected, fastest-growing U.S. spine company.”
Kelli Howell Appointed Executive Vice President, Clinical Strategies
Ms. Howell brings more than two decades of clinical research and education experience to the Company. As a member of ATEC’s senior leadership team, she will drive increased focus on clinical verification and validation, as well as develop plans for improved internal education programs, surgeon and sales education strategies, and market research initiatives. Ms. Howell joins the Company following an eighteen-year tenure at NuVasive, Inc., where she most recently served as Vice President of Research and Health Informatics following various research, education, and clinical resources roles.
“I am incredibly excited to welcome Kelli to the ATEC Family,” said Chairman and Chief Executive Officer, Pat Miles. “Many members of our team have worked with Kelli previously. In fact, I collaborated with her for nearly 20 years. We have witnessed her ability to drive market acceptance of innovative products through the use of clinically validated data and published, peer-reviewed research. I have great confidence that she will contribute immensely to our efforts as we work to distinguish ATEC as a leading provider of innovative solutions that improve outcomes.”
Investor Conference Call
Alphatec will hold a conference call today at 1:30 p.m. PT / 4:30 p.m. ET to discuss first quarter 2018 results. The dial-in numbers are (877) 556-5251 for domestic callers and (720) 545-0036 for international callers. The conference ID number is 2378857. A live webcast of the conference call will be available online from the investor relations page of the Company’s corporate website at www.atecspine.com.
Inducement Award Granted
As an inducement to accepting employment with the Company, and in accordance with applicable NASDAQ listing requirements, the Board of Directors has approved an award to Ms. Howell of 50,000 restricted stock units (RSUs) and 50,000 stock options (Options) at a strike price of $3.30 per share, the fair market value on March 12, 2018 (the grant date). The RSUs and Options will be granted following registration of the common stock underlying the RSUs and Options. The RSUs will vest in equal annual installments on each of the first four anniversaries of date of employment, and the options will vest 25 percent on the first anniversary and in equal monthly installments of 1/36th of the balance of the Options, provided Ms. Howell remains continuously employed by Alphatec as of such vesting date. In addition, the RSUs and Options will fully vest upon a change in control of Alphatec. Alphatec is providing this information in accordance with NASDAQ Listing Rule 5635(c)(4).
About Alphatec Holdings, Inc.
Alphatec Holdings, Inc., through its wholly owned subsidiaries, Alphatec Spine, Inc. and SafeOp Surgical, Inc., is a medical device company that designs, develops, and markets spinal fusion technology products and solutions for the treatment of spinal disorders associated with disease and degeneration, congenital deformities, and trauma. The Company’s mission is to improve lives by providing innovative spine surgery solutions through the relentless pursuit of superior outcomes. The Company markets its products in the U.S. via independent sales agents and a direct sales force. Additional information can be found 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 the references to the Company’s strategy in significantly repositioning the Alphatec brand and turning the Company into a growth organization. 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 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, including Battalion and Arsenal Deformity; 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 procedures performed using the 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 competing products and with emerging new technologies; product liability exposure; an unsuccessful outcome in any litigation in which the Company is a defendant; patent infringement claims; claims related to the Company’s intellectual property and the Company’s ability to meet its financial obligations under its credit agreements and the Orthotec settlement agreement. The words “believe,” “will,” “should,” “expect,” “intend,” “estimate” 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 Commission. Alphatec 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.