ATEC Reports Second Quarter 2022 Financial Results and Increases Full-Year Revenue Guidance
Alphatec Holdings, Inc. (ATEC) reported a 35% increase in total revenue to $84 million for Q2 2022, with organic growth of 30%. The GAAP gross margin was 66%, and the company reported an operating loss of $36 million. Notably, EOS imaging contributed $12 million in revenue, a 49% growth. ATEC raised its full-year revenue guidance to $325 million, reflecting an anticipated 34% growth. The firm hosted over 150 surgeons, increasing users by 23%, alongside a 10% increase in average revenue per surgery.
- Total revenue grew 35% to $84 million.
- Organic revenue growth of 30% indicates strong market demand.
- EOS imaging revenue reached $12 million, a pro-forma growth of 49%.
- Full-year revenue guidance raised to $325 million, reflecting 34% growth.
- Operating cost leverage improved adjusted EBITDA by $3 million sequentially.
- GAAP operating loss of $36 million suggests operational challenges.
- Operating expenses were high at $91 million, impacting profitability.
-
Total revenue grows
35% to , including organic revenue growth of$84 million 30% -
EOS imaging generates revenue of
$12 million -
Company increases full-year revenue guidance to
, reflecting$325 million 34% growth
Second-Quarter and Full-Year 2022 Financial Results
|
Quarter Ended |
Total revenue |
|
GAAP gross margin |
|
Non-GAAP gross margin |
|
Operating expenses |
|
Non-GAAP operating expenses |
|
GAAP operating loss |
|
Non-GAAP adjusted EBITDA |
|
Ending cash balance |
|
Recent Highlights
-
Hosted over 150 surgeons at training events, contributing to a
23% increase in surgeon users compared to prior year; -
Strong surgeon adoption fueled average revenue per surgery growth of
10% ; -
Generated
in EOS-related revenue, reflecting$12 million 49% growth on a pro-forma basis; -
Drove operating cost leverage, with a
sequential improvement in adjusted EBITDA;$3 million -
Signed term sheet for a
revolver with$50 million accordion feature.$25 million
“By focusing on the entire surgical procedure and investing to obviate clinical variability, we are bringing increased predictability and reproducibility to spine surgery and fueling sector-leading growth,” said
Financial Outlook for the Full-Year 2022
The Company now expects total revenue of
Financial Results Webcast
ATEC will present these results via a live webcast today at
To dial in to the webcast, please register via this link.
A replay of the webcast will remain available through the Investor Relations Section of ATEC’s Corporate Website for twelve months. In addition, a dial-in replay will be available beginning two hours after the webcast’s completion through
Non-GAAP Financial Information
To supplement the Company’s financial statements presented in accordance with generally accepted accounting principles in
About
ATEC, through its wholly owned subsidiaries,
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; and the Company’s future ability to finance its operations and sufficiency of its cash runway. 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; and the Company’s ability to meet its financial obligations. 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
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||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(in thousands, except per share amounts) |
||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(unaudited) | ||||||||||||||||
Revenue: | ||||||||||||||||
Revenue from products and services | $ |
84,151 |
|
$ |
61,885 |
|
$ |
155,069 |
|
$ |
105,601 |
|
||||
Revenue from international supply agreement |
|
- |
|
|
364 |
|
|
15 |
|
|
769 |
|
||||
Total revenue |
|
84,151 |
|
|
62,249 |
|
|
155,084 |
|
|
106,370 |
|
||||
Cost of sales |
|
28,675 |
|
|
21,184 |
|
|
50,392 |
|
|
33,447 |
|
||||
Gross profit |
|
55,476 |
|
|
41,065 |
|
|
104,692 |
|
|
72,923 |
|
||||
Operating expenses: | ||||||||||||||||
Research and development |
|
10,596 |
|
|
7,839 |
|
|
20,318 |
|
|
13,640 |
|
||||
Sales, general and administrative |
|
72,668 |
|
|
60,659 |
|
|
142,139 |
|
|
101,085 |
|
||||
Litigation-related expenses |
|
5,495 |
|
|
1,167 |
|
|
13,027 |
|
|
4,502 |
|
||||
Amortization of acquired intangible assets |
|
2,177 |
|
|
1,208 |
|
|
4,407 |
|
|
1,380 |
|
||||
Transaction-related expenses |
|
- |
|
|
4,771 |
|
|
120 |
|
|
5,783 |
|
||||
Restructuring expenses |
|
289 |
|
|
1,173 |
|
|
1,659 |
|
|
1,331 |
|
||||
Total operating expenses |
|
91,225 |
|
|
76,817 |
|
|
181,670 |
|
|
127,721 |
|
||||
Operating loss |
|
(35,749 |
) |
|
(35,752 |
) |
|
(76,978 |
) |
|
(54,798 |
) |
||||
Interest and other expense, net: | ||||||||||||||||
Interest expense, net |
|
(1,435 |
) |
|
(2,394 |
) |
|
(2,891 |
) |
|
(4,332 |
) |
||||
Other expenses, net |
|
67 |
|
|
(16 |
) |
|
37 |
|
|
(1,905 |
) |
||||
Total interest and other expenses, net |
|
(1,368 |
) |
|
(2,410 |
) |
|
(2,854 |
) |
|
(6,237 |
) |
||||
Net loss before taxes |
|
(37,117 |
) |
|
(38,162 |
) |
|
(79,832 |
) |
|
(61,035 |
) |
||||
Income tax provision |
|
203 |
|
|
43 |
|
|
332 |
|
|
73 |
|
||||
Net loss | $ |
(37,320 |
) |
$ |
(38,205 |
) |
$ |
(80,164 |
) |
$ |
(61,108 |
) |
||||
Net loss per share, basic and diluted | $ |
(0.36 |
) |
$ |
(0.39 |
) |
$ |
(0.79 |
) |
$ |
(0.66 |
) |
||||
Weighted average shares outstanding, basic and diluted |
|
102,849 |
|
|
98,541 |
|
|
101,422 |
|
|
92,912 |
|
||||
Stock-based compensation included in: | ||||||||||||||||
Cost of revenue | $ |
449 |
|
$ |
235 |
|
$ |
705 |
|
$ |
330 |
|
||||
Research and development |
|
1,362 |
|
|
664 |
|
|
2,334 |
|
|
1,162 |
|
||||
Sales, general and administrative |
|
7,392 |
|
|
10,597 |
|
|
16,348 |
|
|
14,478 |
|
||||
$ |
9,203 |
|
$ |
11,496 |
|
$ |
19,387 |
|
$ |
15,970 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(in thousands) | ||||||
2022 |
2021 |
|||||
(unaudited) | ||||||
ASSETS | ||||||
Current assets: | ||||||
Cash and cash equivalents | $ |
107,470 |
$ |
187,248 |
||
Accounts receivable, net |
|
43,928 |
|
41,893 |
||
Inventories |
|
102,796 |
|
91,703 |
||
Prepaid expenses and other current assets |
|
11,045 |
|
10,313 |
||
Total current assets |
|
265,239 |
|
331,157 |
||
Property and equipment, net |
|
99,183 |
|
87,401 |
||
Right-of-use asset |
|
28,116 |
|
25,283 |
||
|
39,170 |
|
39,689 |
|||
Intangible assets, net |
|
78,611 |
|
85,274 |
||
Other assets |
|
1,616 |
|
3,249 |
||
Total assets | $ |
511,935 |
$ |
572,053 |
||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities: | ||||||
Accounts payable | $ |
33,157 |
$ |
25,737 |
||
Accrued expenses and other current liabilities |
|
55,874 |
|
55,549 |
||
Contract liabilities |
|
13,850 |
|
15,255 |
||
Short-term debt |
|
14,266 |
|
342 |
||
Current portion of operating lease liabilities |
|
4,164 |
|
4,212 |
||
Total current liabilities |
|
121,311 |
|
101,095 |
||
Total long-term liabilities |
|
356,482 |
|
367,933 |
||
Redeemable preferred stock |
|
23,603 |
|
23,603 |
||
Stockholders' equity |
|
10,539 |
|
79,422 |
||
Total liabilities and stockholders' equity | $ |
511,935 |
$ |
572,053 |
|
||||||||||||||||
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
||||||||||||||||
(in thousands) |
||||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(unaudited) | ||||||||||||||||
Gross profit, GAAP | $ |
55,476 |
|
$ |
41,065 |
|
$ |
104,692 |
|
$ |
72,923 |
|
||||
Add: amortization of intangible assets |
|
9 |
|
|
268 |
|
|
9 |
|
|
536 |
|
||||
Add: stock-based compensation |
|
449 |
|
|
235 |
|
|
705 |
|
|
330 |
|
||||
Add: purchase accounting adjustments on acquisitions |
|
437 |
|
|
1,763 |
|
|
437 |
|
|
1,763 |
|
||||
Add: excess and obsolete write-down |
|
2,394 |
|
|
2,221 |
|
|
4,100 |
|
|
4,317 |
|
||||
Non-GAAP gross profit | $ |
58,765 |
|
$ |
45,552 |
|
$ |
109,943 |
|
$ |
79,869 |
|
||||
Gross margin, GAAP |
|
65.9 |
% |
|
66.0 |
% |
|
67.5 |
% |
|
68.6 |
% |
||||
Add: amortization of intangible assets |
|
0.0 |
% |
|
0.4 |
% |
|
0.0 |
% |
|
0.5 |
% |
||||
Add: stock-based compensation |
|
0.5 |
% |
|
0.4 |
% |
|
0.5 |
% |
|
0.3 |
% |
||||
Add: purchase accounting adjustments on acquisitions |
|
0.5 |
% |
|
2.8 |
% |
|
0.3 |
% |
|
1.7 |
% |
||||
Add: excess and obsolete write-down |
|
2.8 |
% |
|
3.6 |
% |
|
2.6 |
% |
|
4.1 |
% |
||||
Non-GAAP gross margin |
|
69.7 |
% |
|
73.2 |
% |
|
70.9 |
% |
|
75.2 |
% |
||||
Three Months Ended | Six Months Ended | |||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(unaudited) | ||||||||||||||||
Operating expenses, GAAP | $ |
91,225 |
|
$ |
76,817 |
|
$ |
181,670 |
|
$ |
127,721 |
|
||||
Adjustments: | ||||||||||||||||
Stock-based compensation |
|
(8,754 |
) |
|
(11,261 |
) |
|
(18,682 |
) |
|
(15,640 |
) |
||||
Litigation-related expenses |
|
(5,495 |
) |
|
(1,167 |
) |
|
(13,027 |
) |
|
(4,502 |
) |
||||
Amortization of intangible assets |
|
(2,177 |
) |
|
(1,208 |
) |
|
(4,407 |
) |
|
(1,380 |
) |
||||
Transaction-related expenses |
|
- |
|
|
(4,771 |
) |
|
(120 |
) |
|
(5,783 |
) |
||||
Restructuring expenses |
|
(289 |
) |
|
(1,173 |
) |
|
(1,659 |
) |
|
(1,331 |
) |
||||
Non-GAAP operating expenses | $ |
74,510 |
|
$ |
57,237 |
|
$ |
143,775 |
|
$ |
99,085 |
|
||||
Three Months Ended | Six Months Ended | |||||||||||||||
2022 |
2021 |
2022 |
2021 |
|||||||||||||
(unaudited) | ||||||||||||||||
Operating loss, GAAP | $ |
(35,749 |
) |
$ |
(35,752 |
) |
$ |
(76,978 |
) |
$ |
(54,798 |
) |
||||
Depreciation |
|
7,506 |
|
|
5,068 |
|
|
14,591 |
|
|
8,477 |
|
||||
Amortization of intangible assets |
|
2,186 |
|
|
1,476 |
|
|
4,416 |
|
|
1,917 |
|
||||
EBITDA |
|
(26,057 |
) |
|
(29,208 |
) |
|
(57,971 |
) |
|
(44,404 |
) |
||||
Add back significant items: | ||||||||||||||||
Stock-based compensation |
|
9,203 |
|
|
11,496 |
|
|
19,387 |
|
|
15,970 |
|
||||
Purchase accounting adjustments on acquisitions |
|
437 |
|
|
1,763 |
|
|
437 |
|
|
1,763 |
|
||||
Excess & obsolete write-down |
|
2,394 |
|
|
2,221 |
|
|
4,100 |
|
|
4,317 |
|
||||
Litigation-related expenses |
|
5,495 |
|
|
1,167 |
|
|
13,027 |
|
|
4,502 |
|
||||
Transaction-related expenses |
|
- |
|
|
4,771 |
|
|
120 |
|
|
5,783 |
|
||||
Restructuring expenses |
|
289 |
|
|
1,173 |
|
|
1,659 |
|
|
1,331 |
|
||||
Adjusted EBITDA | $ |
(8,239 |
) |
$ |
(6,617 |
) |
$ |
(19,241 |
) |
$ |
(10,738 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20220804005436/en/
Investor/Media Contact:
Investor Relations
(760) 494-6790
investorrelations@atecspine.com
Company Contact:
Chief Financial Officer
investorrelations@atecspine.com
Source:
FAQ
What were Alphatec's Q2 2022 revenues and growth rate?
What is Alphatec's updated revenue guidance for 2022?
How did EOS imaging contribute to Alphatec's revenue in Q2 2022?
What was Alphatec's gross margin for Q2 2022?