Alphatec Announces 2018 Preliminary Revenue Results, 2019 Revenue Outlook, and Senior Leadership Changes
January 07 2019 - 9:00AM
Alphatec Holdings, Inc. (“ATEC” or “the Company”) (Nasdaq: ATEC)
today announced preliminary revenue results for the fourth quarter
and full year ended December 31, 2018 and provided revenue guidance
for the full year 2019. The Company also announced that Terry
Rich has resigned as President, Chief Operating Officer, and as a
member of the ATEC Board of Directors. Jeff Rydin, a member of the
ATEC Board, will assume interim leadership of the Company’s sales
organization, while Chief Executive Officer Pat Miles will assume
Rich’s operations responsibilities in a combined role as President
and CEO.
Preliminary, Unaudited 2018
Revenue
|
Quarter Ended
December 31, 2018 |
Year Ended December 31,
2018 |
Total Revenue |
$25.2 million to $25.7 million |
$91.5 million to $92.0 million |
U.S. Revenue |
$22.9 million to $23.4 million |
$83.5 million to $84.0 million |
Preliminary, unaudited 2018 revenue reflects the
following:
- Fourth quarter 2018 U.S. revenue
sequential growth of 9% to 11% and fourth quarter year-over-year
growth of 10% to 12%;
- Increase in average daily sales for
the third consecutive quarter, with average daily sales in December
2018 up more than 35% compared to average daily sales in January
2018;
- Negative impact of approximately $9
million compared to 2017, resulting from the continued transition
or termination of legacy non-strategic distribution; and
- Negative impact of approximately $7
million compared to 2017, resulting from decreased sales under the
Company’s supply agreement with Globus Medical, Inc. (“Globus”),
including lower-than-expected volume in the fourth quarter of
2018.
2019 Revenue Guidance
|
Year Ended December 31,
2019 |
Total Revenue |
$98 million to $103 million |
U.S. Revenue |
$94 million to $98 million |
Revenue
guidance for 2019 reflects the following:
- U.S. revenue growth between 13% and
17% compared to 2018;
- Revenue from the planned mid-2019
commercial launches of the Company’s 2018 alpha products and
advanced neuromonitoring platform;
- Negative impact of up to $9 million
compared to 2018, resulting from the continued transition or
termination of legacy non-strategic distribution relationships;
and
- Negative impact of up to $4 million
compared to 2018, resulting from further decreasing sales under the
Company’s supply agreement with Globus.
“Our preliminary revenue results for the fourth
quarter mark an encouraging close to a transformative year,” said
Pat Miles, Chairman and Chief Executive Officer of ATEC. “We expect
continued investment in 2019 as we create an industry-leading
portfolio. Through commercial launch of our 2018 alpha releases,
and our exclusive neuromonitoring informatics solution, we are
forming a clinically distinct, approach-based spine technology
platform. I am as confident as ever that we are building an organic
innovation machine and look forward to generating future market
disruption.”
Senior Leadership Changes
Terry Rich joined ATEC’s executive team and
Board in December 2016, following leadership roles at Wright
Medical Group, Inc. (WMGI), Tornier N.V., and NuVasive, Inc.
“Terry is a long-time friend and colleague who remains a
significant ATEC shareholder with an enthusiastic interest in our
continued success,” said Miles. “We appreciate his vital role in
initiating the Company’s transformation and assembling a strong
foundation of spine talent. On behalf of the Board and the entire
ATEC Family, I want to thank Terry for his contributions and wish
him the very best in the future.”
In conjunction with Rich’s departure, Rydin, a
member of ATEC’s Board of Directors, will assume interim leadership
of the ATEC sales organization, furthering its transition and
advancing relationships in the distribution channel. Rydin has over
27 years of experience in the medical device and healthcare fields,
most recently as Chief Sales Officer of Ellipse Technologies, Inc.
and, prior to that, as President of Global Sales at NuVasive, Inc.,
where he spent over 13 years leading the sales function. In
order to ensure a smooth transition, Rich will consult with the
Company through June 30, 2019.
About Alphatec Holdings,
Inc.
Alphatec Holdings, Inc., through its
wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp
Surgical, 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.
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 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 preliminary 2018 revenue, 2019 revenue, planned
commercial launches and product introductions, and creating future
market disruption. 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; 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 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 LLC
settlement agreement. The words “believe,” “will,” “should,”
“expect,” “intend,” “estimate,” “look forward” 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. 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.
Investor/Media Contact:
Tina JacobsenInvestor Relations (760) 494-6790ir@atecspine.com
Company Contact:
Jeff BlackChief Financial OfficerAlphatec Holdings, Inc.
ir@atecspine.com
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