ATEC Reports Third Quarter Financial Results and Recent Corporate Highlights
- Total revenue growth of 53% including organic revenue growth of 29%
- Advancing adoption of PTP Technique drove 50% lateral contribution to revenue growth
- Revenue related to EOS imaging exceeded $11 million
November 4, 2021
CARLSBAD, Calif.–(BUSINESS WIRE)–Alphatec Holdings, Inc. (Nasdaq: ATEC), a provider of innovative solutions dedicated to revolutionizing the approach to spine surgery, today announced financial results for the quarter ended September 30, 2021, and recent corporate highlights.
Third Quarter 2021 Financial Results
September 30, 2021
|Total revenue||$62.9 million|
|GAAP gross margin||63.0%|
|Non-GAAP gross margin||72.0%|
|Operating expenses||$74.7 million|
|Non-GAAP operating expenses||$60.4 million|
|GAAP operating loss||($35.1) million|
|Non-GAAP adjusted EBITDA||($9.8) million|
|Ending cash balance||$223.9 million|
- Advanced the adoption of the Prone Trans-Psoas (PTP) Technique, with ATEC lateral delivering over 50% of Q3 revenue growth;
- Expanded surgeon users by 20% compared to Q3 2020;
- Generated over $11 million in EOS-related revenue and continued to build demand with a 25% increase in the pipeline of interest since the transaction closed;
- Enhanced the versatility of the InVictus Posterior Fixation Platform with the release of Osseoscrew, the only expandable screw commercially available in the U.S.;
- Released the ALIF Standalone Interbody System, which improves intra-operative optionality and restores alignment at L4/L5 and L5/S1 where the majority of alignment is derived;
- Closed a convertible debt offering, reducing debt service and raising net proceeds of $188M for continued investment in growth.
“In the third quarter, ATEC continued to earn market share by delivering on our promise to create procedures that improve patient care,” said Pat Miles, Chairman and Chief Executive Officer. “Despite ongoing market impacts, our surgeon customer base increased significantly. The accelerating uptake of PTP is testament to the reflected know-how and ATEC’s ability to design technology for specific approach requirements. This is expanding adoption of the lateral approach by surgeons who have historically relied on posterior techniques. We are also making progress integrating EOS imaging, and are confident that system placements are laying the foundation for an improved clinical experience that will set the standard for surgical planning, intra-operative information and predictive analytics. I am incredibly bullish that ATEC’s organic innovation machine will continue to drive long-term, multi-faceted growth. Despite our many successes to date, we know we are still only getting started.”
Financial Outlook for the Full Year 2021
The Company now expects total revenue for the fiscal year ended December 31, 2021, to approximate $235 million, reflecting growth of approximately 62% compared to the prior full year. This includes an organic revenue contribution of approximately $208 million, or 47% growth compared to the prior full year, which has been updated to reflect the impact of the COVID pandemic in the third quarter 2021. The Company now anticipates about $26 million of revenue related to EOS imaging, which accounts for slightly stronger than expected EOS-related revenue in the third quarter 2021. Total revenue guidance for the full year also includes an approximate $1 million contribution from the Company’s international supply agreement, which terminated on August 31, 2021.
Investor Conference Call
ATEC will present these results via a live webcast today at 1:30 p.m. PT / 4:30 p.m. ET. The live webcast can be accessed by visiting the Investor Relations section of ATEC’s Corporate Website at investors.alphatecspine.com/quarterly-results. Participants should go to the website at least 15 minutes before the event to register, and download and install any necessary software.
To dial-in to the webcast, registration may be completed by visiting the following registration link: http://www.directeventreg.com/registration/event/6548679. Once registered, each dial-in participant will be provided access details and a registrant ID.
A replay of the webcast will remain available through the Investor Relations section of ATEC’s Corporate Website at investors.alphatecspine.com/quarterly-results for twelve months. In addition, a replay of the audiocast will be available beginning two hours after the call’s completion until November 11, 2021. The replay dial-in numbers are (800)585-8367 for domestic callers and (416)621-4642 for international callers. Please use the replay conference ID number 6548679.
Non-GAAP Financial Information
To supplement the Company’s financial statements presented in accordance with U.S. generally accepted accounting principles (GAAP), the Company reports certain non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating expenses, non-GAAP operating loss, and non-GAAP adjusted EBITDA. The Company believes that these non-GAAP financial measures provide investors with an additional tool for evaluating the Company’s core performance, which management uses in its own evaluation of continuing operating performance, and a baseline for assessing the future earnings potential of the Company. The Company’s non-GAAP financial measures may not provide information that is directly comparable to that provided by other companies in the Company’s industry, as other companies in the industry may calculate non-GAAP financial results differently, particularly related to non-recurring, unusual items. Non-GAAP financial results should be considered in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. Included below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measures.
About Alphatec Holdings, Inc.
ATEC, through its wholly owned subsidiaries, Alphatec Spine, Inc., EOS imaging S.A. and SafeOp Surgical, Inc., is a medical device company dedicated to revolutionizing the approach to spine surgery through clinical distinction. ATEC’s Organic Innovation MachineTM is focused on developing new approaches that integrate seamlessly with the Company’s expanding AlphaInformatiX Platform to better inform surgery and more safely and reproducibly achieve the goals of spine surgery. ATEC’s vision is to become the Standard Bearer in Spine. For more information, visit us 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 will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include, but are not limited to: references to the Company’s revenue and growth outlook; planned product launches, introductions, regulatory submissions or clearances; efforts to transform sales and distribution channels; the Company’s ability to compel surgeon adoption; the Company’s future ability to finance its operations and sufficiency of its cash runway; and statements about the potential benefits and synergies of the acquisition of EOS imaging, S.A. 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 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; failure to obtain FDA or other regulatory clearance or approval or unexpected or prolonged delays in the process; continuation of favorable third party reimbursement; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to achieve profitability; uncertainty of additional funding; the Company’s ability to compete with other products or with emerging technologies; product liability exposure; an unsuccessful outcome in any litigation; patent infringement claims; claims related to the Company’s intellectual property; the Company’s ability to meet its financial obligations; the impact of the COVID-19 pandemic on the Company and economy; and uncertainties and risks related to the integration of EOS imaging, S.A. 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. ATEC 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.