SeaSpine Reports First Quarter 2017 Financial Results

CARLSBAD, Calif., May 04, 2017 (GLOBE NEWSWIRE) -- 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 first quarter ended March 31, 2017.

First Quarter 2017 Financial Highlights and Recent Accomplishments

• Revenue of $31.9 million, an increase of 1.6% year-over-year
• U.S. revenue of $28.6 million, an increase of 0.2% year-over-year
  • U.S. orthobiologics revenue of $15.1 million
  • U.S. spinal hardware revenue of $13.5 million
• International revenue of $3.3 million, an increase of 15.0% year-over-year
• Initial launch of the reusable Rapid Graft Delivery System, which is designed to provide surgeons a cost-effective and controlled method to predictably deliver a broad range of orthobiologic grafts efficiently to the disc space
• Initial launch of the Daytona Small Stature Pediatric Deformity System, a minimal profile version of our existing Daytona system that provides both a clinical and cosmetic benefit for pediatric patients

“Our first quarter performance reflects early traction with our strengthening distributor base and our expanding and updated product portfolio,” said Keith Valentine, President and Chief Executive Officer. “We are continuing to invest in key objectives aimed at top line performance while simultaneously reducing our net cash spend to extend our liquidity horizon.”

First Quarter 2017 Financial Results
Revenue for the first quarter of 2017 totaled $31.9 million, a 1.6% increase compared to the same period of the prior year. Total revenue in the U.S. was $28.6 million, a 0.2% increase compared to same period of the prior year.

Orthobiologics revenue totaled $17.1 million, a 2.8% increase compared to the first quarter of 2016. The increase in orthobiologics revenue was driven by an increase in both U.S. and international sales, primarily due to the addition of new distributors in both markets. Spinal hardware revenue totaled $14.8 million, a 0.2% increase compared to the first quarter of 2016. The increase in spinal hardware revenue was driven by the recent addition of a new distributor in Latin America.

Gross margin for the first quarter of 2017 was 58.7%, compared to 54.5% for the same period in 2016.  The increase in gross margin was primarily driven by a $1.7 million provision for excess orthobiologics raw material inventory recorded in the first quarter of 2016. This was somewhat offset by a $0.2 million increase in the first quarter of 2017 in non-cash amortization of technology intangible assets from the NLT acquisition and by lower gross margins associated with international sales, which were slightly higher as a percentage of total revenue compared to the same period of the prior year.

Operating expenses for the first quarter of 2017 totaled $27.8 million, compared to $29.4 million for the same period of the prior year.  The $1.6 million decrease in operating expenses was driven by lower selling, general and administrative and intangible amortization expenses.