CARLSBAD, Calif., Aug. 04, 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 June 30, 2020.
Summary of Second Quarter 2020 Financial Results and Recent Accomplishments
- Revenue of $28.6 million, a decrease of 27% compared to the prior-year period
- U.S. revenue of $25.9 million, a decrease of 26% compared to the prior-year period
– U.S. Spinal Implants revenue of $13.2 million, a decrease of 22%
– U.S. Orthobiologics revenue of $12.7 million, a decrease of 30%
- Initiated limited commercial launches of the following products and systems:
– the NorthStar OCT and Cervical Facet Fusion systems
– the Explorer suite of lordotic and parallel expanding interbody devices
– a hinged TLIF interbody featuring NanoMetalene with Reef Topography
- Executed full commercial launches of the Mariner MIS and Mariner Outrigger systems
- Launched line extension of Daytona Small Stature Deformity system
“Despite the COVID-19 challenges in the current business landscape, the SeaSpine team has continued to deliver against the priorities we established at the outset of this year and I’m proud of our many accomplishments in the second quarter. While revenue in the quarter reflected a trough in April, we experienced a gradual improvement throughout the quarter, with June showing year-over-year growth in the U.S. We attribute this resilient performance to the significant investments we’ve made in expanding both our product portfolio and our increasingly committed and exclusive Core distributor network, as well as our adaptability in providing robust surgeon and distributor training and education programs,” said Keith C. Valentine, President and Chief Executive Officer.
“While the growth we saw in June may reflect a temporary uptick in surgical volumes as surgeons work-through their backlog of cases, we are cautiously optimistic about our business outlook for the second half of 2020 and beyond. We believe SeaSpine has never been better positioned to participate in the upside benefit when the market returns to pre-pandemic surgery volumes,” Mr. Valentine concluded.
Second Quarter 2020 Financial Results
Revenue for the second quarter of 2020 was $28.6 million, a decrease of 27% compared to the same period of the prior year. U.S. Spinal Implants revenue was $13.2 million, a 22% decrease compared to the same period of the prior year. U.S. Orthobiologics revenue was $12.7 million, a 30% decrease compared to the same period of the prior year. Both decreases were driven by low single-digit unit price declines and a significant decline in procedure volumes, particularly in April and May, due to the COVID-19 pandemic.
Gross margin for the second quarter of 2020 was 59.2%, compared to 63.6% for the same period of the prior year. The decrease in gross margin was due to idle plant costs associated with a nearly two-month shutdown of orthobiologics manufacturing operations at the Company’s Irvine facility.
Operating expense for the second quarter of 2020 was $30.6 million, a $6.4 million decrease compared to the same period of the prior year. This decrease was largely driven by a $5 million non-cash, intangible asset impairment charge recorded in the second quarter of the prior year and by lower selling commissions and travel expenses in the second quarter of the current year.
Net loss for the second quarter of 2020 was $13.7 million, a $1.7 million increase compared to same period of the prior year.
At June 30, 2020, cash, cash equivalents and investments were $100.5 million. The Company had no outstanding debt under its credit facility and $6.2 million outstanding under its Paycheck Protection Program loan.
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 on its business, the Company will resume forward-looking guidance when it is confident that COVID-19 no longer presents a meaningful risk for abrupt changes in demand and capacity for elective or non-emergency surgery in the areas where we sell our products.
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: 2209758. To listen to the webcast and view the accompanying slides, please visit the Investors section of the SeaSpine website at: www.seaspine.com.