Surgalign Holdings, Inc., (NASDAQ: SRGA) a global medical
technology company focused on elevating the standard of care by
driving the evolution of digital surgery, today announced financial
results for its 2022 first quarter ended March 31, 2022.
Financial Highlights and Key
Events:
- Received FDA 510(k) clearance for HOLO
Portal™ System, the world's first AI-driven AR guidance system for
spine surgery;
- 1st Holo Portal™ site up and
running;
- 1st successful Holo Portal™ case
completed;
- Total global spine revenue of $20.6
million;
- Adjusted EBITDA loss of $13.3
million;
- Cash and cash equivalents of $44.7
million; generated approximately $17.7 million in gross proceeds
from underwritten public offering.
“I’m pleased to report that during the first
quarter, we began to see market conditions improve with fewer
COVID-related restrictions in place, and higher demand for our
products as a result. With the improved environment, we now expect
higher revenue for 2022 than our prior forecast with opportunities
to further grow product revenue as we continue to innovate and
expand,” stated Terry Rich, President and Chief Executive Officer
of Surgalign Holdings.
Mr. Rich continued, “During the quarter, our most
significant milestone achievement was receipt of FDA 510(k)
clearance. With approval to move forward, we have now entered the
initial commercial stage to bring this new revolutionary technology
to market. This past week, we reached another major milestone with
our first site up and first successful cases completed using our
HOLO Portal. We expect more sites to be launched this quarter and
our goal remains to have between 10-15 sites up and running by the
end of the year with a more widespread launch in 2023. While our
initial focus is the spine, we believe our artificial intelligence,
or AI, platform will apply to other medical specialties and types
of surgical procedures, opening up a much larger global market
opportunity. It is our belief that AI can be applied across a
variety of anatomy to drive improvements in healthcare, with the
end goal to improve patient outcomes.”
First Quarter Comparisons
Total revenue for the first quarter ended March 31,
2022, was $20.6 million as compared to $23.3 million in the first
quarter ended March 31, 2021. The decrease in revenue was primarily
related to the ongoing impact of COVID-19, which continued to
impact surgical procedures performed.
The Company reported gross margins of 68.9% and
73.2% for the three months ended March 31, 2022 and 2021
respectively, with the decline related to lower revenue for the
comparable periods, as well as product rationalization
initiatives.
On a non-GAAP basis, the Company reported gross
margin of 70.9% as compared to gross margin of 75.5% in the first
quarter of 2021.
Total operating expenses for the first quarter of
2022 were $23.1 million as compared to $31.5 million in the
comparable year-ago period, a decline of $8.4 million or 26.6%. The
year-over-year improvement in operating expenses was primarily
driven by a $8.5 million decrease in the Holo milestone valuation
and a $0.8 million decline in general and administrative expenses.
This was offset by a $1.6 million increase in research and
development expenses, primarily related to the continued
development of the HOLO™ platform and obtaining regulatory
approval.
On a non-GAAP basis, total operating expenses for
the first quarter of 2022 were $28.4 million as compared to $27.9
million in the comparable year-ago period. Excluded from Q1
non-GAAP operating expense was approximately $0.9 million in asset
impairment charges related to the impairment of instruments during
the quarter, $0.9 million in transaction and integration expenses
related to issuance costs associated to the newly issued warrants,
non-cash stock-based compensation of $1.4 million and a gain of
$8.5 million due to adjustments to the fair value of the Holo
milestones.
The Company reported an operating loss of $8.9
million in the first quarter of 2022 as compared to an operating
loss of $14.4 million in the first quarter of 2021. Net income from
continuing operations for the first quarter of 2022 was $0.0
million as compared to a net loss from continuing operations of
$15.2 million for the first quarter of 2021.
Adjusted earnings before interest, taxes,
depreciation and amortization (Adjusted EBITDA), for the first
quarter of 2022 was a loss of $13.3 million as compared to an
Adjusted EBITDA loss of $9.8 million for the first quarter of
2021.
As of March 31, 2022, cash and cash equivalents
were approximately $44.7 million. This compares to $51.3 million
reported as of December 31, 2021. During the first quarter of 2022,
the Company completed an underwritten public offering of its common
stock, raising gross proceeds of approximately $17.7 million.
Fiscal 2022 Business Outlook
The Company now expects full year revenue in the
range of $86 to $90 million, which represents a $3.0 increase from
its previously issued guidance of $83 to $87 million. The increased
guidance is based on improving market conditions and a stronger
outlook for the Company’s products and solutions.
FDA 510(k) Clearance of HOLO Portal
System
On January 18, 2022, the Company announced that it
had received clearance of its HOLO Portal surgical guidance system
for use within lumbar spine procedures. The HOLO Portal system is
the world’s first artificial intelligence (AI)-driven augmented
reality (AR) guidance system for spine, and the first clinical
application of the Company’s HOLO™ AI digital health platform.
The HOLO Portal system combines machine
learning-based image guidance technology with AR, automated spine
segmentation (i.e., anatomy recognition), and automated surgical
planning utilizing proprietary AI software. Intraoperative images
are autonomously processed by the AI system to create a
patient-specific plan that is presented to the surgeon using the AR
display.
First HOLO Portal Cases
On May 5, 2022, the Company announced that its HOLO
Portal surgical guidance system had officially entered clinical
use, with the first surgical procedure completed. The surgery was
performed at Indiana Spine Hospital in Carmel, Indiana by Dr. Mario
Brkaric, a board-certified orthopedic surgeon.
Conference Call
Surgalign will host a conference call and audio
webcast at 4:30 p.m. ET today. The conference call can be accessed
by dialing (866) 604-1616 (U.S.) or (201) 689-8043 (International).
The webcast can be accessed through the investor section of
Surgalign’s website at surgalign.com/investors/. A replay of the
conference call will be available on Surgalign’s website for one
month following the call.
About Surgalign Holdings, Inc.
Surgalign Holdings, Inc. is a global medical
technology company committed to the promise of digital health and
is building out its digital surgery platform to drive
transformation across the surgical landscape. Uniquely aligned and
resourced to advance the standard of care, the company is building
technologies surgeons will look to for what is truly possible for
their patients. Surgalign is focused on bringing surgeons solutions
that predictably deliver superior clinical and economic outcomes.
Surgalign markets products throughout the United States and in more
than 50 countries worldwide through an expanding network of top
independent distributors. Surgalign is headquartered in Deerfield,
IL, with commercial, innovation and design centers in San Diego,
CA, Warsaw and Poznan, Poland and Wurmlingen, Germany. Learn more
at www.surgalign.com and connect on LinkedIn and Twitter.
Forward Looking Statement
This press release contains forward-looking
statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These forward-looking statements are based on
management’s current expectations, estimates and projections about
our industry, our management’s beliefs and certain assumptions made
by our management. Words such as “anticipates,” “expects,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” variations of
such words and similar expressions are intended to identify such
forward-looking statements. The forward-looking statements are not
guarantees of future performance and are based on certain
assumptions including general economic conditions, as well as those
within the Company’s industry, and numerous other factors and risks
identified in the Company’s most recent Form 10-K and other filings
with the SEC. Our actual results may differ materially from the
anticipated results reflected in these forward-looking statements.
Important factors that could cause actual results to differ
materially from the anticipated results reflected in these
forward-looking statements include risks and uncertainties relating
to the following: (i) the risk of existing or potential litigation
or regulatory action arising from the previously announced SEC and
internal investigations and their findings; (ii) the identification
of control deficiencies, including material weaknesses in internal
control over financial reporting and the impact of the same; (iii)
potential reputational damage that the Company has or may suffer as
a result of the findings of the SEC and internal investigations and
related litigation; (iv) general worldwide economic conditions and
related uncertainties; (v) the continued impact of the COVID-19
novel coronavirus pandemic and the Company’s attempts at
mitigation, particularly in international markets served by the
Company; (vi) the failure by the Company to identify, develop and
successfully implement immediate action plans and longer-term
strategic initiatives; (vii) the reliability of our supply chain;
(viii) our ability to meet obligations, including purchase
minimums, under our vendor and other agreements; (ix) the duration
of decreased demand for our products; (x) whether or when the
demand for procedures involving our products will increase; (xi)
the Company’s access to adequate operating cash flow, trade credit,
borrowed funds and equity capital to fund its operations and pay
its obligations as they become due, and the terms on which external
financing may be available, including the impact of adverse trends
or disruption in the global credit and equity markets; (xii) our
financial position and results, total revenue, product revenue,
gross margin, and operations; (xiii) failure to realize, or
unexpected costs in seeking to realize, the expected benefits of
the Holo Surgical, Inc. (“Holosurgical”) acquisition,
including the failure of Holosurgical’s products and services to be
satisfactorily developed or achieve applicable regulatory approvals
or as a result of the failure to commercialize and distribute its
products; (xiv) the failure to effectively integrate Holosurgical’s
operations with those of the Company, including: retention of key
Holosurgical personnel; the effect on relationships with customers,
suppliers, and other third parties; and the diversion of management
time and attention to the integration; (xv) the number of shares
and amount of cash that will be required in connection with any
post-closing milestone payments, including as a result of changes
in the trading price of the Company’s common stock and their effect
on the amount of cash needed by the Company to fund any
post-closing milestone payments in connection with the acquisition;
(xvi) the effect of the recent resignation of our auditor and our
ability to successfully onboard a new auditor; (xvii) the
continuation of recent quality issues with respect to our global
supply chain; (xviii) the effects of the recent resignations from
our Board of Directors and executive leadership team, including our
ability to find qualified candidates to fill those vacancies; (xix)
the effect and timing of changes in laws or in governmental
regulations; and (xx) other risks described in our public filings
with the SEC. These factors should be considered carefully, and
undue reliance should not be placed on the forward-looking
statements. Each forward-looking statement in this communication
speaks only as of the date of the particular statement. Copies of
the Company’s SEC filings may be obtained by contacting the Company
or the SEC or by visiting Surgalign’s website
at www.surgalign.com or the SEC’s website at www.sec.gov. We
undertake no obligation to update these forward-looking statements
except as may be required by law.
Mike VallieInvestor and Media
ContactIR@surgalign.com
|
SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES |
Condensed Consolidated Statements of
Operations |
(Unaudited, in thousands, except share and per share
data) |
|
|
|
For the Three Months Ended |
|
|
March 31 |
|
|
|
2022 |
|
|
|
2021 |
|
Revenues |
|
$ |
20,605 |
|
|
$ |
23,291 |
|
Cost of goods sold |
|
|
6,410 |
|
|
|
6,238 |
|
Gross profit |
|
|
14,195 |
|
|
|
17,053 |
|
Operating Expenses: |
|
|
|
|
General and administrative |
|
|
25,317 |
|
|
|
26,161 |
|
Research and development |
|
|
4,447 |
|
|
|
2,875 |
|
Gain on acquisition contingency |
|
|
(8,503 |
) |
|
|
(51 |
) |
Asset impairment and abandonments |
|
|
939 |
|
|
|
2,176 |
|
Transaction and integration expenses |
|
|
916 |
|
|
|
322 |
|
Total operating expenses |
|
|
23,116 |
|
|
|
31,483 |
|
Operating loss |
|
|
(8,921 |
) |
|
|
(14,430 |
) |
Other (income) expense - net: |
|
|
|
|
Other (income) expense - net |
|
|
28 |
|
|
|
(4 |
) |
Interest expense |
|
|
252 |
|
|
|
— |
|
Foreign exchange loss |
|
|
353 |
|
|
|
545 |
|
Change in fair value of warrant liability |
|
|
(9,743 |
) |
|
|
— |
|
Total other (income) expense - net |
|
|
(9,110 |
) |
|
|
541 |
|
Income (Loss) before income tax provision |
|
|
189 |
|
|
|
(14,971 |
) |
Income tax provision |
|
|
162 |
|
|
|
219 |
|
Net income (loss) from operations |
|
|
27 |
|
|
|
(15,190 |
) |
Noncontrolling interests |
|
|
|
|
Net income applicable to noncontrolling interests |
|
|
— |
|
|
|
— |
|
Net income (loss) applicable to Surgalign Holdings, Inc. |
|
|
27 |
|
|
|
(15,190 |
) |
|
|
|
|
|
Other comprehensive income (loss) |
|
|
|
|
Unrealized foreign currency translation gain |
|
|
(109 |
) |
|
|
(71 |
) |
Total other comprehensive income (loss) |
|
$ |
136 |
|
|
$ |
(15,119 |
) |
|
|
|
|
|
Net
income (loss) from operations per share - basic |
|
$ |
0.00 |
|
|
$ |
(0.15 |
) |
Net
income (loss) per share applicable to Surgalign Holdings, Inc.-
basic |
|
$ |
0.00 |
|
|
$ |
(0.15 |
) |
Net
income (loss) from operations per share - diluted |
|
$ |
0.00 |
|
|
$ |
(0.15 |
) |
Net
income (loss) per share applicable to Surgalign Holdings, Inc. -
diluted |
|
$ |
0.00 |
|
|
$ |
(0.15 |
) |
Weighted
average shares outstanding - basic |
|
|
172,009,259 |
|
|
|
98,109,900 |
|
Weighted average shares outstanding - diluted |
|
|
177,328,099 |
|
|
|
98,109,900 |
|
|
SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES |
Condensed Consolidated Balance Sheets |
(Unaudited, in thousands) |
|
|
|
|
|
|
|
March 31, |
|
December 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Assets |
|
|
|
|
Cash |
|
$ |
44,677 |
|
|
$ |
51,287 |
|
Accounts receivable - net |
|
|
20,458 |
|
|
|
19,197 |
|
Current inventories - net |
|
|
22,980 |
|
|
|
26,204 |
|
Prepaid and other assets |
|
|
13,191 |
|
|
|
8,984 |
|
Total current assets |
|
|
101,306 |
|
|
|
105,672 |
|
Non-current inventories - net |
|
|
12,225 |
|
|
|
10,212 |
|
Property, plant and equipment - net |
|
|
900 |
|
|
|
945 |
|
Other assets - net |
|
|
7,114 |
|
|
|
6,970 |
|
Total assets |
|
$ |
121,545 |
|
|
$ |
123,799 |
|
|
|
|
|
|
Liabilities and Stockholders' Equity |
|
|
|
|
Accounts payable |
|
$ |
12,089 |
|
|
$ |
10,204 |
|
Current portion of acquisition
contingency - Holo |
|
|
— |
|
|
|
25,585 |
|
Accrued expenses and other current liabilities |
|
|
15,813 |
|
|
|
17,769 |
|
Accrued income taxes |
|
|
444 |
|
|
|
484 |
|
Total current liabilities |
|
|
28,346 |
|
|
|
54,042 |
|
Notes payable - related party |
|
|
10,034 |
|
|
|
9,982 |
|
Acquisition contingencies - Holo |
|
|
33,425 |
|
|
|
26,343 |
|
Warrant liability |
|
|
10,678 |
|
|
|
12,013 |
|
Other Long-term liabilities |
|
|
3,376 |
|
|
|
3,176 |
|
Total liabilities |
|
|
85,859 |
|
|
|
105,556 |
|
|
|
|
|
|
Mezzanine equity |
|
|
10,006 |
|
|
|
10,006 |
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
Common stock and additional paid-in capital |
|
|
597,195 |
|
|
|
579,670 |
|
Accumulated other comprehensive loss |
|
|
(1,929 |
) |
|
|
(1,820 |
) |
Accumulated deficit |
|
|
(569,586 |
) |
|
|
(569,613 |
) |
Total stockholders' equity |
|
|
25,680 |
|
|
|
8,237 |
|
Total liabilities and stockholders' equity |
|
$ |
121,545 |
|
|
$ |
123,799 |
|
|
SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES |
Condensed Consolidated Statements of Cash
Flows |
(Unaudited, in thousands) |
|
|
|
For the Three Months EndedMarch 31, |
|
|
|
2021 |
|
|
|
2020 |
|
Cash flows from operating activities: |
|
|
|
|
Net income (loss) |
|
$ |
27 |
|
|
$ |
(15,190 |
) |
Adjustments to reconcile net income (loss) to net cash used in
operating activities: |
|
|
|
|
Depreciation and amortization expense |
|
|
562 |
|
|
|
520 |
|
Provision for bad debts and product returns |
|
|
913 |
|
|
|
1,978 |
|
Investor fee |
|
|
916 |
|
|
|
— |
|
Change in fair value of warrant liability |
|
|
(9,743 |
) |
|
|
— |
|
Provision for inventory write-downs |
|
|
3,044 |
|
|
|
2,754 |
|
Stock-based compensation |
|
|
1,374 |
|
|
|
936 |
|
Asset impairment and abandonments |
|
|
939 |
|
|
|
2,176 |
|
Gain on acquisition contingency |
|
|
(8,503 |
) |
|
|
(51 |
) |
Other |
|
|
(3 |
) |
|
|
58 |
|
Change in assets and liabilities: |
|
|
|
|
Accounts receivable |
|
|
(2,235 |
) |
|
|
(4,280 |
) |
Inventories |
|
|
(2,122 |
) |
|
|
(5,636 |
) |
Accounts payable |
|
|
1,771 |
|
|
|
(238 |
) |
Accrued expenses |
|
|
(17,492 |
) |
|
|
9,659 |
|
Right-of-use asset and lease liability |
|
|
(2 |
) |
|
|
— |
|
Other operating assets and liabilities |
|
|
11,416 |
|
|
|
(7,212 |
) |
Net cash used in operating activities |
|
|
(19,138 |
) |
|
|
(14,526 |
) |
Cash flows from investing activities: |
|
|
|
|
Purchases of property and equipment |
|
|
(1,261 |
) |
|
|
(2,321 |
) |
Patent and acquired intangible asset costs |
|
|
(81 |
) |
|
|
(161 |
) |
Net cash used in provided by investing activities |
|
|
(1,342 |
) |
|
|
(2,482 |
) |
Cash flows from financing activities: |
|
|
|
|
Share offering proceeds including prefunded warrant exercised,
net |
|
|
17,729 |
|
|
|
36,484 |
|
Proceeds from exercise of common stock options |
|
|
— |
|
|
|
23 |
|
Payment of Holo Milestones - contingent consideration |
|
|
(4,081 |
) |
|
|
— |
|
Payments for treasury stock |
|
|
(5 |
) |
|
|
(110 |
) |
Net cash provided by financing activities |
|
$ |
13,643 |
|
|
$ |
36,397 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
$ |
227 |
|
|
$ |
412 |
|
Net (decrease) increase in cash and cash equivalents |
|
$ |
(6,610 |
) |
|
$ |
19,801 |
|
Cash and cash equivalents, beginning of period |
|
$ |
51,287 |
|
|
$ |
43,962 |
|
Cash and cash equivalents, end of period |
|
$ |
44,677 |
|
|
$ |
63,763 |
|
Non-GAAP Financial
Measures
To supplement our condensed consolidated financial
statements presented on a GAAP basis, we
disclose non-GAAP net income applicable to common shares
and non-GAAP gross profit adjusted for certain amounts.
The calculation of the tax effect on the adjustments between GAAP
net loss applicable to common shares and non-GAAP net
income applicable to common shares is based upon our estimated
annual GAAP tax rate, adjusted to account for items excluded from
GAAP net loss applicable to common shares in
calculating non-GAAP net income applicable to common
shares. Reconciliations of each of
these non-GAAP financial measures to the corresponding
GAAP measures are included in the reconciliations below.
The following are explanations of the adjustments
that management excluded as part of the non-GAAP measures
for the three months ended March 31, 2022 and 2021. Management
removes the amount of these costs including the tax effect on the
adjustments from our operating results to supplement a comparison
to our past operating performance.
2022 and 2021 Non-cash stock-based compensation –
These costs relate to expense amortization for all stock-based
awards made to employees and directors, including restricted stock
awards, restricted stock units, stock options and the employee
stock purchase plan purchase rights.
2022 and 2021 Foreign exchange (gain) loss – These
costs relate to the process of remeasuring international activity
into the Company's functional currency.
2022 Change in fair value of warrant liability –
Other income related to the revaluation of our warrant
liability.
2022 and 2021 Gain on acquisition contingency – The
gain on acquisition contingency relates to an adjustment to our
estimate of obligation for future milestone payments on the Holo
Surgical acquisition.
2022 and 2021 Asset impairment and abandonments –
These costs relate to asset impairment and abandonments of certain
long-term assets within the asset group.
2022 and 2021 Transaction and integration expenses
– These costs relate to professional fees associated with the 2022
warrant financing and with the acquisition of Holo Surgical and
other matters.
2022 and 2021 Inventory purchase price adjustment –
These costs relate to the purchase price effects of acquired
Paradigm inventory that was sold during the three months ended
March 31, 2022 and 2021.
2021 Severance and restructuring costs – These gain
and costs relate to the reduction of our organizational structure,
primarily driven by simplification of our Marquette, MI
location.
Material Limitations Associated with the Use
of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA and Adjusted Net Income
Applicable to Common Shares should not be considered in isolation,
or as a replacement for GAAP measures.
Usefulness of Non-GAAP Financial Measures
to Investors
The Company believes that presenting EBITDA,
Adjusted EBITDA and Adjusted Net Income Applicable to Common Shares
in addition to the related GAAP measures provide investors greater
transparency to the information used by management in its financial
decision-making.
|
SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES |
Reconciliation of Revenues to Adjusted Gross
Profit |
(Unaudited, in thousands) |
|
|
|
|
|
|
|
|
|
|
For the Three MonthsEnded March 31, |
For the Three MonthsEnded March 31, |
|
|
|
2022 |
|
|
2021 |
|
Revenues |
|
$ |
20,605 |
|
|
100.0 |
% |
$ |
23,291 |
|
|
100.0 |
% |
Costs of processing and distribution |
|
|
6,410 |
|
|
31.1 |
% |
|
6,238 |
|
|
26.8 |
% |
Gross profit, as reported |
|
|
14,195 |
|
|
68.9 |
% |
|
17,053 |
|
|
73.2 |
% |
Inventory purchase price adjustment |
|
|
410 |
|
|
2.0 |
% |
|
527 |
|
|
2.3 |
% |
Non-GAAP gross profit, adjusted |
|
$ |
14,605 |
|
|
70.9 |
% |
|
17,580 |
|
|
75.5 |
% |
Non-GAAP gross profit percentage, adjusted |
|
|
70.9 |
% |
|
|
|
75.5 |
% |
|
|
|
SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES |
Non-GAAP Operating Expenses, Adjusted |
(Unaudited, in thousands) |
|
|
|
|
|
|
|
For the Three Months EndedMarch
31, |
|
|
|
2022 |
|
|
|
2021 |
|
Operating Expenses |
|
|
23,116 |
|
|
|
31,483 |
|
Non-cash stock-based compensation |
|
|
1,374 |
|
|
|
915 |
|
Gain on acquisition contingency |
|
|
(8,503 |
) |
|
|
(51 |
) |
Asset impairment and abandonments |
|
|
939 |
|
|
|
2,176 |
|
Transaction and integration expenses |
|
|
916 |
|
|
|
322 |
|
Severance and restructuring costs |
|
|
— |
|
|
|
218 |
|
Adjusted Operating Expenses |
|
$ |
28,390 |
|
|
$ |
27,903 |
|
Adjusted Operating Expenses as a percent of revenues |
|
|
137.8 |
% |
|
|
119.8 |
% |
|
|
|
|
|
*See explanations in Non-GAAP Financial Measures above. |
|
SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES |
Reconciliation of Net (Loss) Income Applicable to Common
Shares and Net (Loss) Income Per Diluted Share to Adjusted Net
(Loss) Income Applicable to Common Shares and Adjusted Net (Loss)
Income Per Diluted Share |
(Unaudited, in thousands except per share
data) |
|
|
|
For the Three Months Ended |
|
|
March 31, 2022 |
|
March 31, 2021 |
|
|
Net (Loss) Income Applicable to Common Shares |
|
Amount PerDiluted Share |
|
Net (Loss) Income Applicable to Common Shares |
|
Amount PerDiluted Share |
Net income (loss) from continuing operations |
|
$ |
27 |
|
|
$ |
0.00 |
|
|
$ |
(15,190 |
) |
|
$ |
(0.15 |
) |
Change in fair value of warrant liability |
|
|
(9,743 |
) |
|
|
(0.05 |
) |
|
|
— |
|
|
|
0.00 |
|
Gain on acquisition contingency |
|
|
(8,503 |
) |
|
|
(0.05 |
) |
|
|
(51 |
) |
|
|
0.00 |
|
Non-cash stock-based compensation |
|
|
1,374 |
|
|
|
0.01 |
|
|
|
936 |
|
|
|
0.01 |
|
Foreign exchange loss |
|
|
353 |
|
|
|
0.00 |
|
|
|
545 |
|
|
|
0.01 |
|
Asset impairment and abandonments |
|
|
939 |
|
|
|
0.01 |
|
|
|
2,176 |
|
|
|
0.02 |
|
Transaction and integration expenses |
|
|
916 |
|
|
|
0.01 |
|
|
|
322 |
|
|
|
0.00 |
|
Inventory purchase price adjustment |
|
|
410 |
|
|
|
0.00 |
|
|
|
527 |
|
|
|
0.01 |
|
Severance and restructuring costs |
|
|
— |
|
|
|
0.00 |
|
|
|
218 |
|
|
|
0.00 |
|
Non-GAAP net income (loss) from continuing operations |
|
$ |
(14,227 |
) |
|
$ |
(0.07 |
) |
|
$ |
(10,517 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
*See explanations in Non-GAAP Financial Measures above. |
|
SURGALIGN HOLDINGS, INC. AND SUBSIDIARIES |
Reconciliation of Net Loss Applicable to Commons Shares to
Adjusted EBITDA |
(Unaudited, in thousands) |
|
|
|
|
|
|
|
For the Three Months EndedMarch 31, |
|
For the Three Months EndedMarch 31, |
|
|
|
2022 |
|
|
|
2021 |
|
Net income (loss) from continuing operations |
|
$ |
27 |
|
|
$ |
(15,190 |
) |
Interest expense, net |
|
|
252 |
|
|
|
— |
|
Provision (benefit) for income taxes |
|
|
162 |
|
|
|
219 |
|
Depreciation |
|
|
509 |
|
|
|
520 |
|
EBITDA |
|
|
950 |
|
|
|
(14,451 |
) |
Non-cash stock-based compensation |
|
|
1,374 |
|
|
|
936 |
|
Foreign exchange loss |
|
|
353 |
|
|
|
545 |
|
Inventory purchase price adjustment |
|
|
410 |
|
|
|
527 |
|
Change in fair value of warrant liability |
|
|
(9,743 |
) |
|
|
— |
|
Gain on acquisition contingency |
|
|
(8,503 |
) |
|
|
(51 |
) |
Asset impairment and abandonments |
|
|
939 |
|
|
|
2,176 |
|
Transaction and integration expenses |
|
|
916 |
|
|
|
322 |
|
Severance and restructuring costs |
|
|
— |
|
|
|
218 |
|
Adjusted EBITDA |
|
$ |
(13,304 |
) |
|
$ |
(9,778 |
) |
Adjusted EBITDA as a percent of revenues |
|
|
(64.6 |
)% |
|
|
(42.0 |
)% |
|
|
|
|
|
*See explanations in Non-GAAP Financial Measures above. |
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