Alphatec Holdings Inc (ATEC)

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Alphatec Spine Announces First Quarter 2011 Revenue and Financial Results
Date : 05/04/2011 @ 4:01PM
Source : GlobeNewswire Inc.
Stock : Alphatec Holdings, Inc. (ATEC)
Quote : 2.95 0.0 (0.00%) @ 7:22AM


Alphatec Spine Announces First Quarter 2011 Revenue and Financial Results

Alphatec Holdings, Inc. (MM) (NASDAQ:ATEC)
Intraday Stock Chart
Today : Wednesday 4 May 2011
Revenue of $49.7 million; 40.8% growth over Q1 2010; Pro Forma revenue growth of 6.6% over Q1 2010; 5.2% Growth on a Constant Currency basis
Adjusted EBITDA of $4.4 million
Net Loss of $1.9 million, or ($0.02) per share and Non-GAAP Net Income of $0.1 million, or $0.00 per share

Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of Alphatec Spine, Inc., a medical device company that designs, develops, manufactures and markets products for the surgical treatment of spine disorders, with a focus on treating conditions related to the aging spine, announced today financial results for the quarter ended March 31, 2011.

First Quarter 2011 Performance Highlights

Achieved record consolidated revenue of $49.7 million, representing 6.6% pro forma growth over first quarter 2010 and 8.0% sequential revenue growth over fourth quarter 2010.

-- US revenue of $33.9 million represented pro forma growth of 7.8% over first quarter 2010, exceeding the growth rate of the US spine market.

-- International revenue of $15.9 million reported in first quarter 2011 grew by 4.0% on a pro forma basis over first quarter 2010. Strong performance in Japan, Asia Pacific and Latin America drove international revenues.
Continued strong uptake and demand for PureGenTM, the Company's Osteoprogenitor Cell Allograft, with 400 cases completed by the end of first quarter 2011.
The SolusTM ALIF System, a zero-profile, single-action locking implant that is used in anterior lumbar interbody fusion (ALIF) procedures, received 510(k) clearance from the FDA and the Company has commenced a controlled launch in the US.
Continued Aging Spine market penetration of OsseoFix®, HeliFix®, and OsseoScrew® in Europe.
Addition of Patrick Ryan as Chief Operating Officer. Mr. Ryan joins Alphatec Spine from Abbott Vascular Devices, where he had been Vice President-North Asia since August 2010. Prior to that position, Mr. Ryan held senior positions with increasing responsibility in Operations at Abbott and Guidant Corporation.
Dirk Kuyper, the Company's President and Chief Executive Officer, stated: "We are pleased with the overall revenue performance that the company delivered in the first quarter of 2011. In the US, we have re-established revenue momentum and continue to achieve growth rates that exceed the US spine market. We achieved record revenues in Japan and strong growth in Asia Pacific and Latin America." Mr. Kuyper continued, "We have successfully positioned Alphatec Spine as a global leader within the spine market, and we continue to be laser-focused on driving our differentiated technologies in Aging Spine, MIS and Biologics to gain market share globally. We are particularly pleased with the rapid product uptake of PureGen, and the 510(k) clearance of Solus during the quarter."

First Quarter 2011 Financial Results

Consolidated revenues for the first quarter 2011 were $49.7 million, an increase of 40.8% from the $35.3 million reported for the first quarter 2010. US revenues for the first quarter 2011 were $33.9 million, an increase of 19.1% from the $28.4 million reported for the first quarter 2010. International revenues were $15.9 million for the first quarter 2011, more than double the $6.9 million reported in the first quarter 2010.

Gross profit for the first quarter 2011 was $32.0 million, an increase of $8.4 million over the first quarter 2010 of $23.6 million. First quarter 2011 gross margin of 64.3% was below the first quarter 2010 gross margin of 66.7%. The decrease in gross margin of 240 basis points is primarily due to geographic sales mix. While US gross margins improved as compared to prior year, the international gross margin fell as our sales base expanded dramatically into new markets. Total operating expenses for the first quarter 2011 were $34.3 million, an increase of $7.2 million compared to the first quarter 2010 of $27.1 million. The first quarter 2011 includes $0.6 million in restructuring expenses. There were no in-process research and development expenses for the first quarter 2011, a decrease of $0.5 million compared to IPR&D expense in the first quarter 2010 of $0.5 million.

Adjusted EBITDA was $4.4 million in the first quarter 2011, a decrease of $1.1 million compared to the $5.5 million reported for the first quarter 2010. The change in Adjusted EBITDA is primarily attributable to the gross margin contribution and incremental operating expenses associated with our expanded international operations, which were not present in the first quarter 2010.

Net loss for the first quarter 2011 was $1.9 million, or ($0.02) per share (basic and diluted), compared with a net loss of $4.7 million, or ($0.09) per share (basic and diluted) for the first quarter 2010.

Non-GAAP EPS for the first quarter 2011 was $0.00 per share (basic and diluted), compared to $0.00 per share (basic and diluted) reported for the first quarter 2010. Non-GAAP net earnings or (loss) excludes in-process research and development expenses, acquisition-related inventory step-up, amortization of intangible assets and restructuring expenses.

Cash and cash equivalents were $21.5 million at March 31, 2011. After adjusting for one-time cash outlays, operating cash flow was flat as compared to the cash position as of December 31, 2010.

2011 Financial Guidance

The Company reaffirms full year 2011 financial guidance with revenues of $195.0 million to $205.0 million, and $25.0 million to $28.0 million in annual adjusted EBITDA. The Company anticipates generating both net income and positive free cash flow in 2011.

Conference Call

Alphatec Spine will host a conference call today at 1:30 p.m. PT / 4:30 p.m. ET to discuss the results. To participate in the conference call, please visit the investor relations section of the Alphatec Spine website at www.alphatecspine.com. The dial-in numbers are [phone] for domestic callers and [phone] for international. A live webcast of the conference call will be available online from the investor relations section of the Alphatec Spine website at www.alphatecspine.com. The webcast will be recorded and will remain available on the investor relations section of Alphatec Spine's website for at least 30 days.