Alphatec Announces Preliminary Fourth Quarter and Full Year 2017 Revenue and Corporate Updates
January 08 2018 - 9:00AM
Alphatec Holdings, Inc. (“Alphatec” or the “Company”)
(Nasdaq:ATEC), a provider of innovative spine surgery solutions
with a mission to improve patient lives through the relentless
pursuit of superior outcomes, today announced preliminary estimates
of revenue for the fourth quarter and full year ended December 31,
2017. The Company also provided several corporate updates.
Preliminary, Unaudited
Revenue
|
Quarter Ended December 31,
2017 |
|
Year Ended December 31, 2017 |
|
|
|
|
Total
revenue |
$25.9
million to $26.3 million |
|
$101.4
million to $101.8 million |
U.S.
commercial revenue |
$20.8
million to $21.0 million |
|
$86.8
million to $87.0 million |
|
|
|
|
During the fourth quarter, preliminary U.S.
commercial sales generated by dedicated agents and distributors
expanded to more than 40%, in line with expectations, and up
significantly from about 5% at the start of the year.
The Company ended the year with a cash balance
of approximately $22.5 million. Operating cash burn improved for
the fourth consecutive quarter.
“The fourth quarter marked continued execution
of our strategy to build top line predictability and sustainability
by strengthening the ATEC distribution channel,” said Terry
Rich, Chief Executive Officer of Alphatec. “Our team has
substantial work ahead of us as we transform Alphatec, but I am
confident that our unmatched organizational spine expertise
and relentless dedication to better surgical outcomes will drive
continued progress in this new year.”
Closing of Equity Investments in
Alphatec Common SharesIn December 2017, the Company
generated cash proceeds of $4.0 million as the result of personal
financial commitments made by Patrick Miles and Quentin Blackford
pursuant to common stock purchase agreements granted in conjunction
with their appointments on October 2, 2017. Per the agreements, Mr.
Miles purchased 1.3 million shares of common stock and Mr.
Blackford purchased 0.4 million shares of common stock, all at a
purchase price of $2.26 per share (the consolidated closing bid
price of Alphatec common shares on September 29, 2017).
Additional Spine-Experienced Talent
Joins Leadership TeamLance DeNardin Named Area
Vice President, WestDeNardin strengthens Alphatec’s
distribution channel in the West, contributing his 30 years of
expertise in the spine and medical device industry to the sales and
distribution transformation that is well underway. DeNardin
has held marketing and sales leadership roles in spine since the
mid-1980s, with Stryker, Medtronic and Lanx, Inc., where he was
Senior Vice President, responsible for converting the company’s
distribution channel to dedicated representation. Most recently,
DeNardin was Co-Founder of CareCycle Solutions, an operating room
fluid management reprocessing company, and a Partner at Genesis
Medical Solutions, LLC, a medical management consulting
company.Michael Dendinger Named Vice President of
OperationsDendinger brings over 20 years of finance,
supply chain, and operations experience to the Alphatec operational
functions. He joins the Company from NuVasive, Inc., where he
served most recently as Director of Global Operations, following
roles as NuVasive’s Ireland Managing Director and Supply Chain
Director. Prior to joining NuVasive, Dendinger held various
supply chain and financial management roles at Cymer, Inc. and
Intel Corporation.Scott Lish Named Vice President of
DevelopmentWith over ten years of experience designing and
developing spine and orthopedic solutions, Lish will drive
continued advancement of Alphatec’s surgical outcome-focused
innovation. Lish joins Alphatec from NuVasive, Inc., where he
was most recently the Director of Development, after advancing
through various development and engineering roles during his
eight-year tenure. Prior to joining NuVasive, Lish held
engineering roles with Zimmer Dental and Toppan Optical Products,
Inc.Inducement Awards GrantedAs an inducement to
entering into employment with the Company, the Compensation
Committee of the Board of Directors of Alphatec approved the
following inducement grants under under Alphatec’s 2016 Employment
Inducement Award Plan (the "Plan"):
- Mr. DeNardin: 25,000 restricted stock units (“RSUs”) and an
option to purchase 25,000 shares of common stock at a strike price
of $2.49 per share, the fair market value on the grant date.
- Mr. Dendinger: 25,000 RSUs and an option to purchase 25,000
shares of common stock at a strike price of $3.63 per share, the
fair market value on the grant date.
- Mr. Lish: 25,000 RSUs and an option to purchase 25,000 shares
of common stock at a strike price of $3.63 per share, the fair
market value on the grant date.
The Compensation Committee approved the grants
to Messrs. Dendinger and Lish on November 7, 2017, and the grant to
Mr. DeNardin on December 11, 2017. Under the Plan, the RSUs
will vest in equal installments annually over four years, assuming
in each case the employee remains continuously employed by Alphatec
as of such vesting date. In addition, the RSUs will fully vest upon
a change in control of Alphatec. The stock options will vest over
four years, with 25% of the options vesting on the first
anniversary of the date of grant and the remainder of the options
vesting monthly over the subsequent three years, assuming in each
case the employee remains continuously employed by Alphatec as of
such vesting date. In addition, the options will fully vest upon a
change in control of Alphatec.
Alphatec is providing this information in
accordance with NASDAQ Listing Rule 5635(c)(4).About
Alphatec Holdings, Inc.Alphatec Holdings, Inc., through
its wholly owned subsidiary Alphatec Spine, Inc., is a medical
device company that designs, develops, and markets spinal fusion
technology products and solutions for the treatment of spinal
disorders associated with disease and degeneration, congenital
deformities, and trauma. The Company's mission is to improve lives
by providing innovative spine surgery solutions through the
relentless pursuit of superior outcomes. The Company markets its
products in the U.S. via independent sales agents and a direct
sales force. Additional information can be found at www.
atecspine.com.Disclosure Regarding Preliminary Unaudited
ResultsThe preliminary financial results presented above
reflect Alphatec’s estimates based solely upon information
available to it as of the date hereof, is not a comprehensive
statement of its financial results or position as of or for the
three months and full year ended December 31, 2017, and has not
been audited, reviewed or compiled by its independent registered
public accounting firm, Mayer Hoffman McCann P.C. (“MHM”).
Accordingly, MHM does not express an opinion or any other form of
assurance with respect thereto. Alphatec’s actual fourth quarter
and full year results may differ materially from these estimates.
Accordingly, investors should not place undue reliance upon these
estimates.Forward Looking StatementsThis 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 or business conditions will not differ materially from
those projected or suggested in such forward-looking statements as
a result of various factors. Forward-looking statements include the
references to the Company’s strategy in significantly repositioning
the Alphatec brand and turning the Company into a growth
organization. The 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 Company’s 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, including Battalion
and Arsenal Deformity; failure to obtain FDA or other regulatory
clearance or approval for new products, or unexpected or prolonged
delays in the process; continuation of favorable third party
reimbursement for procedures performed using the Company’s
products; unanticipated expenses or liabilities or other adverse
events affecting cash flow or the Company’s ability to successfully
control its costs or achieve profitability; uncertainty of
additional funding; the Company’s ability to compete with other
competing products and with emerging new technologies; product
liability exposure; an unsuccessful outcome in any litigation in
which the Company is a defendant; patent infringement claims;
claims related to the Company’s intellectual property and the
Company’s ability to meet its financial obligations under its
credit agreements and the Orthotec settlement agreement. The words
“believe,” “will,” “should,” “expect,” “intend,” “estimate” and
“anticipate,” variations of such words and similar expressions
identify forward-looking statements, but their absence does not
mean that a statement is not a forward-looking statement. 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. Alphatec
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.
Investor/Media Contact:
Lee Roth / Emma Poalillo
The Ruth Group
(646) 536-7000
alphatec@theruthgroup.com
Company Contact:
Jeff Black
Executive Vice President and Chief Financial Officer
Alphatec Holdings, Inc.
ir@atecspine.com
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