SeaSpine Reports Second Quarter 2017 Financial Results
August 03 2017 - 4:05PM
SeaSpine Holdings Corporation (NASDAQ:SPNE), a global medical
technology company focused on surgical solutions for the treatment
of spinal disorders, announced today financial results for the
second quarter ended June 30, 2017.
Second Quarter 2017 Financial Highlights and Recent
Accomplishments
- Revenue of $34.2 million, an increase of 3.0%
year-over-year
- U.S. revenue of $30.4 million, an increase of 1.1%
year-over-year-- U.S. orthobiologics revenue of $16.0 million--
U.S. spinal instrumentation revenue of $14.4 million
- International revenue of $3.8 million, an increase of 20.5%
year-over-year
- Full commercial launch of the Mariner® Posterior Fixation
System, a modular pedicle screw system that provides surgeons with
multiple intra-operative options to facilitate posterior lumbar
fixation
- Limited commercial launch of the Skipjack™ Expandable Interbody
System, an expandable interbody system that provides in-situ
expansion in either height or lordosis for an improved anatomical
fit
“We are pleased with our second quarter results, which reflect
our ongoing commitment to develop innovative and cost effective
solutions to treat spinal disorders and expand our distributor
footprint,” said Keith Valentine, President and Chief Executive
Officer. “We remain focused on our mission to drive improved
procedural solutions that combine efficient spinal instrumentation
systems with industry leading orthobiologics to deliver clinical
value to surgeons, hospitals, and patients.”
Second Quarter 2017 Financial ResultsRevenue
for the second quarter of 2017 totaled $34.2 million, a 3.0%
increase compared to the same period of the prior year. Total
revenue in the U.S. was $30.4 million, a 1.1% increase compared to
the same period of the prior year due primarily to the improved
performance of orthobiologics distributors during the current year
period.
Orthobiologics revenue totaled $17.6 million, a 4.8% increase
compared to the second quarter of 2016. The growth in
orthobiologics revenue was driven by an increase in U.S. sales.
Spinal instrumentation revenue totaled $16.6 million, a 1.1%
increase compared to the second quarter of 2016 that was driven by
stocking orders from a recently added distributor in Latin
America.
Gross margin for the second quarter of 2017 was 59.1%, compared
to 58.0% for the same period in 2016. The increase in gross
margin was mainly driven by lower manufacturing costs for
orthobiologics products manufactured at the Company's Irvine,
California facility. This was partially offset by a $0.2
million increase in non-cash amortization of technology intangible
assets acquired in September 2016 from N.L.T. Spine Ltd and by
lower gross margins associated with international sales, which were
slightly higher as a percentage of total revenue in the second
quarter of 2017 compared to the same period of the prior year.
Operating expenses for the second quarter of 2017 totaled $28.4
million, compared to $31.5 million for the same period of the prior
year. The $3.1 million decrease in operating expenses was
driven by lower selling, general and administrative and intangible
amortization expenses.
Net loss for the second quarter of 2017 was $8.0 million,
compared to a net loss of $12.0 million for the second quarter of
2016.
Cash and cash equivalents at June 30, 2017 were $12.3 million
and the Company had $4.0 million of outstanding borrowings against
its $30.0 million credit facility. The Company realized $4.6
million in net proceeds in the second quarter of 2017 through the
sale of approximately 477,000 shares of its common stock under its
"at the market" equity offering program.
2017 Financial OutlookSeaSpine expects
full-year 2017 revenue to be in the range of $130.0 million to
$133.0 million, reflecting growth of 1% to 3% over full-year 2016
revenue.
Webcast and Conference Call InformationThe
Company’s management team will host a conference call beginning
today at 1:30pm PT/4:30pm ET to discuss the financial results and
recent business developments. Individuals interested in listening
to the conference call may do so by dialing (877) 418-4766 for
domestic callers or (614) 385-1253 for international callers, using
Conference ID: 49156714. To listen to the webcast, please visit the
investor relations section of the SeaSpine website at
www.seaspine.com.
About SeaSpineSeaSpine is a global medical
technology company focused on the design, development and
commercialization of surgical solutions for the treatment of
patients suffering from spinal disorders. SeaSpine has a
comprehensive portfolio of orthobiologics and spinal
instrumentation solutions to meet the varying combinations of
products that neurosurgeons and orthopedic spine surgeons need to
perform fusion procedures on the lumbar, thoracic and cervical
spine. SeaSpine’s orthobiologics products consist of a broad range
of advanced and traditional bone graft substitutes that are
designed to improve bone fusion rates following a wide range of
orthopedic surgeries, including spine, hip, and extremities
procedures. SeaSpine’s spinal instrumentation portfolio consists of
an extensive line of products to facilitate spinal fusion in
minimally invasive surgery (MIS), complex spine, deformity and
degenerative procedures. Expertise in both orthobiologic sciences
and spinal instrumentation product development allows SeaSpine to
offer its surgeon customers a differentiated portfolio and a
complete solution to meet their fusion requirements. SeaSpine
currently markets its products in the United States and in over 30
countries worldwide.
Forward-Looking StatementsSeaSpine cautions you
that statements included in this news release that are not a
description of historical facts are forward-looking statements that
are based on the Company's current expectations and assumptions.
Such forward-looking statements include, but are not limited to,
statements relating to: revenue expectations for full-year
2017. Among the factors that could cause or contribute to
material differences between the Company’s actual results and the
expectations indicated by the forward-looking statements are risks
and uncertainties that include, but are not limited to: surgeons’
willingness to continue to use the Company’s existing products and
to adopt its newly launched products, including the risk that the
Company’s products do not demonstrate adequate safety or efficacy,
independently or relative to competitive products, to support
expected levels of demand or pricing; the ability of newly launched
products to perform as designed and intended and to meet the
clinical needs of surgeons and patients; the Company’s ability to
attract and retain new, high-quality distributors, whether as a
result of inability to reach agreement on financial or other
contractual terms or otherwise, disruption to the Company’s
existing distribution network as new distributors are added, and
the ability of new distributors to generate growth or offset
disruption to existing distributors; continued pricing pressure,
whether as a result of consolidation in hospital systems,
competitors or others, as well as exclusion from major healthcare
systems, whether as a result of unwillingness to provide required
pricing or otherwise; unexpected expense, including as a result of
developing and supporting the launch of new products; the Company’s
ability to continue to invest in product development and sales and
marketing initiatives at levels sufficient to drive future revenue
growth; the limited clinical experience supporting the commercial
launch of new products and the risk that such products may require
substantial additional development activities, which could
introduce unexpected expense and delay; the lack of long-term
clinical data supporting the safety and efficacy of the Company’s
products; the risk of supply shortages, including as a result of
the Company’s dependence on a limited number of third-party
suppliers for components and raw materials, or otherwise; general
economic and business conditions in the markets in which the
Company does business, both in the U.S. and abroad; and other risks
and uncertainties more fully described in the Company’s news
releases and periodic filings with the Securities and Exchange
Commission. The Company’s public filings with the Securities and
Exchange Commission are available at www.sec.gov.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date when made. SeaSpine
does not intend to revise or update any forward-looking statement
set forth in this news release to reflect events or circumstances
arising after the date hereof, except as may be required by
law.
SEASPINE HOLDINGS
CORPORATIONUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share data) |
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Total revenue, net |
$ |
34,196 |
|
|
$ |
33,201 |
|
|
$ |
66,090 |
|
|
$ |
64,600 |
|
Cost of goods sold |
13,994 |
|
|
13,930 |
|
|
27,166 |
|
|
28,213 |
|
Gross
profit |
20,202 |
|
|
19,271 |
|
|
38,924 |
|
|
36,387 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Selling, general and
administrative |
24,249 |
|
|
26,989 |
|
|
48,219 |
|
|
52,363 |
|
Research and
development |
3,344 |
|
|
3,181 |
|
|
6,394 |
|
|
5,934 |
|
Intangible
amortization |
792 |
|
|
1,281 |
|
|
1,584 |
|
|
2,562 |
|
Total
operating expenses |
28,385 |
|
|
31,451 |
|
|
56,197 |
|
|
60,859 |
|
Operating loss |
(8,183 |
) |
|
(12,180 |
) |
|
(17,273 |
) |
|
(24,472 |
) |
Other income (expense),
net |
185 |
|
|
(232 |
) |
|
172 |
|
|
26 |
|
Loss before income
taxes |
(7,998 |
) |
|
(12,412 |
) |
|
(17,101 |
) |
|
(24,446 |
) |
Provision (benefit) for
income taxes |
45 |
|
|
(429 |
) |
|
45 |
|
|
(456 |
) |
Net loss |
$ |
(8,043 |
) |
|
$ |
(11,983 |
) |
|
$ |
(17,146 |
) |
|
$ |
(23,990 |
) |
Net loss per share,
basic and diluted |
$ |
(0.68 |
) |
|
$ |
(1.07 |
) |
|
$ |
(1.46 |
) |
|
$ |
(2.15 |
) |
Weighted average shares
used to compute basic and diluted net loss per share |
11,888 |
|
|
11,179 |
|
|
11,705 |
|
|
11,173 |
|
SEASPINE HOLDINGS
CORPORATIONUNAUDITED CONDENSED CONSOLIDATED
BALANCE SHEET DATA(In thousands) |
|
|
June 30, 2017 |
|
December 31, 2016 |
|
|
|
|
Cash and
cash equivalents |
$ |
12,287 |
|
|
$ |
14,566 |
|
Trade
accounts receivable, net of allowances of $522 and $483 |
21,689 |
|
|
20,982 |
|
Inventories |
42,515 |
|
|
45,299 |
|
Short-term debt |
— |
|
|
445 |
|
Total current liabilities |
25,617 |
|
|
24,418 |
|
Long-term
borrowings under credit facility |
3,994 |
|
|
3,835 |
|
Total
stockholders' equity |
105,466 |
|
|
110,977 |
|
Investor Relations Contact
Lynn Pieper Lewis
(415) 937-5402
ir@seaspine.com
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