CARLSBAD, Calif., May 06, 2020 (GLOBE NEWSWIRE) — SeaSpine Holdings Corporation (NASDAQ: SPNE), a global medical technology company focused on surgical solutions for the treatment of spinal disorders, today announced financial results for the three-months ended March 31, 2020.
Summary of First Quarter 2020 Financial Results and Recent Accomplishments
- Revenue of $36.1 million, flat compared to the prior year period
- U.S. revenue of $31.8 million, a decrease of less than 1% compared to the prior year period
- U.S. Spinal Implants revenue of $14.5 million, a decrease of 3%
- U.S. Orthobiologics revenue of $17.3 million, an increase of 2%
- Completed alpha launches for NanoMetalene with Reef Topography oblique and articulating interbody devices
- Completed alpha launch of a new Cervical Facet Fusion System
- Received FDA 510(k) clearance for lordotic and parallel expanding interbody implants under the Explorer™ brand
- Enacted numerous measures designed to ensure business continuity, reduce operating expense, and preserve cash in response to the ongoing COVID-19 pandemic
Keith C. Valentine, President and Chief Executive Officer, said, “During these unprecedented times, we are focused on protecting our employees’ health and safety while reducing costs for non-critical expenses and programs. Despite a strong start to the year, the deferral of most spinal-deformity, revision, and back pain surgeries significantly impacted our business in March and continued to do so through April and into May. We are working closely with our surgeon advisors and key U.S. distributors to determine the expected timing for the return of spinal surgery procedures, and are encouraged by SeaSpine’s strong presence in many of the geographies that have begun to ease restrictions on these surgeries, or are considering it in the near term.”
“While we temporarily deferred certain investments originally planned for 2020, we prioritized the most critical product development initiatives and introductions to satisfy expected procedural mix later this year. Ultimately, we are focused on maintaining the culture and operational readiness to emerge from the pandemic stronger than ever,” Mr. Valentine concluded.
First Quarter 2020 Financial Results
Revenue for the first quarter of 2020 was $36.1 million, flat compared to the first quarter of 2019. U.S. Spinal Implants revenue was $14.5 million, a 3% decrease compared to the same period of the prior year. The decrease was driven by lower procedure volumes and unit pricing, somewhat offset by a procedural mix shift to more thoracolumbar procedures, which typically generate more revenue per case compared to other procedures. U.S. Orthobiologics revenue was $17.3 million, a 2% increase compared to the same period of the prior year. The increase was driven by growth in recently launched products.
Gross margin for the first quarter of 2020 was 61.8%, compared to 62.4% for the same period of the prior year. The decrease in gross margin was due to lower utilization of the Irvine manufacturing facility and higher excess and obsolete inventory charges.
Operating expense for the first quarter of 2020 was $35.0 million, a $3.4 million increase compared to the same period of the prior year. This increase was driven primarily by $1.5 million in higher selling and marketing expenses and a $1.3 million non-cash, intangible asset impairment charge associated with acquired technology.
Net loss for the first quarter of 2020 was $12.6 million, a $3.6 million increase compared to same period of the prior year.
At March 31, 2020, cash, cash equivalents and investments were $105.2 million, and the Company had no outstanding debt under its credit facility.
Updated 2020 Financial Outlook
SeaSpine withdrew its previously announced annual guidance for 2020 on April 6, 2020. Given the uncertain scope and duration of the COVID-19 pandemic, the Company remains unable to accurately estimate the impact of the pandemic on its future operations and financial results.
Webcast and Conference Call Information
SeaSpine’s management team will host a conference call beginning today at 2:30 p.m. Pacific time / 5:30 p.m. Eastern time to discuss the financial results announced today. Individuals interested in listening to the conference call may do so by dialing (877) 418-4766 for callers in the U.S. or (614) 385-1253 for callers outside the U.S., using Conference ID: 6423409. To listen to the webcast and view the accompanying slides, please visit the Investors section of the SeaSpine website at: www.seaspine.com.
