DEERFIELD, Ill., Aug. 07, 2020 (GLOBE NEWSWIRE) — Surgalign Holdings, Inc. (Nasdaq: SRGA), a leading global pure-play spine company focused on advancing spine surgery and improving patient outcomes, today reported operating results for the second quarter of 2020. The sale of RTI Surgical Holdings, Inc.’s (“RTI”) OEM business closed on July 20, 2020, accordingly, the reported consolidated financial results for the second quarter include results for the OEM and Spine segments.
Second Quarter 2020 Highlights:
- Consolidated revenue of $54.2 million, compared to $81.6 million in the second quarter of 2019
- Spine revenue of $20.5 million, compared to $32.6 million in the second quarter of 2019
- Net loss of $38.7 million inclusive of approximately $15.5 million of non-recurring expenses
- Adjusted EBITDA loss of $5.3 million
Recent Highlights:
- Following the sale of RTI’s OEM business which closed on July 20, 2020, the Company was renamed Surgalign Holdings, Inc. (formerly RTI Holdings, Inc.)
- On July 20, 2020, Terry Rich was appointed President and Chief Executive Officer of Surgalign Holdings. Mr. Rich had previously served as RTI’s Head of Global Spine
“These are very exciting times as we have officially launched Surgalign as a global pure-play spine company,” said Terry Rich, President and Chief Executive Officer of Surgalign Holdings. “We are in a tremendous position to capitalize on the opportunity that lies ahead. Supported by a strong balance sheet and a best-in-class team, we look to build on the foundation of the RTI Surgical spine business to advance care and improve patient outcomes.”
Mr. Rich continued, “During the second quarter, we saw a solid return of demand in June, which continued in July as COVID began to experience a resurgence in some major markets in the U.S. We remain cautiously optimistic about the recovery of the procedure volumes during the balance of the year. Regardless of the near-term uncertainty, we continue to progress with our investments to build, innovate, and acquire, furthering our confidence to drive profitable double-digit topline growth over the long term.”
Second Quarter 2020
The Company’s worldwide revenues for the second quarter of 2020 were $54.2 million compared with $81.6 million during the same period in the prior year. Spine revenue was $20.5 million compared with $32.6 million in the prior year and OEM revenue was $33.7 million compared with $49.0 million in the prior year. Gross profit for the second quarter of 2020 was $23.1 million, or 43% of revenue compared to $46.1 million, or 57% of revenue, in the second quarter of 2019.
Net loss applicable to common shares was $38.7 million, or $0.51 per fully diluted common share in the second quarter of 2020 compared to approximately breakeven in the second quarter of 2019. Adjusted for the impact of non-recurring charges, net loss applicable to common shares was $24.1 million, or $0.32 per fully diluted common share in the second quarter of 2020.
Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA), for the second quarter of 2020 was a loss of $5.3 million compared to income of $9.4 million for the second quarter of 2019. The decline in adjusted EBITDA was primarily driven by the reduction of revenue and gross margin as a result in the reduction of elective surgical procedures related to COVID – 19, partially offset by reduction in spending primarily driven by employee furloughs and management salary reductions.
Business Outlook
Due to the inability to estimate the size and impact of the COVID – 19 pandemic on the Company’s operations and financial results, Surgalign Holdings, Inc. is not providing guidance for fiscal 2020. We will continue to evaluate the impact of the COVID – 19 pandemic on our operations and financial results and will provide additional information when we are more certain.
Conference Call
Surgalign will host a conference call and audio webcast at 9:00 a.m. ET today. The conference call can be accessed by dialing (877) 383-7419 (U.S.) or (760) 666-3754 (International), using conference ID 8591446. The webcast can be accessed through the investor section of Surgalign’s website at www.surgalign.com/investors. A replay of the conference call will be available on Surgalign’s website for one month following the call.
