CARLSBAD, Calif., May 11, 2017 (GLOBE NEWSWIRE) -- Alphatec Holdings, Inc. (Nasdaq:ATEC), the parent company of Alphatec Spine, Inc., a provider of spinal fusion technologies, announced today recent corporate highlights and financial results for first quarter ended March 31, 2017.
First Quarter 2017 Highlights and Recent Accomplishments
Financial Highlights
- Total net revenues of $28.0 million; revenue from the Company’s U.S. commercial business of $23.4 million
- U.S. commercial gross margin of 68%
- Gross proceeds of $18.9 million from private placement
- Cash balance of $25.5 million at March 31, 2017
Organizational and Product Highlights
- Completed its seven-person senior leadership team with appointments of Chief Financial Officer and Executive Vice President of Strategic Marketing and Product Development.
- Initiated transition of sales organization from non-exclusive to dedicated.
- Added three new Area Vice Presidents with a history of building strong, dedicated distribution channels in spine.
- Reduced headcount from 195 in September 2016 to approximately 140 today, and implemented cost-control measures, including consolidating the Company’s operations into one building.
- Completed a limited user release of Arsenal™ Deformity Adolescent Idiopathic Scoliosis (AIS) System, and introduced a limited user release of Battalion™ Lateral System, both which have been well-received by surgeons.
“We are very pleased with our progress in evolving the Alphatec organization over the past few months,” said Terry Rich, CEO of Alphatec. “Our strategy for the Company centers on combining our broad product portfolio with new leadership, dedicated distribution partners, and a high-performance culture in order to significantly re-position the Alphatec brand to customers, investors, employees, and business partners. In the short time that our new team has been together, we have taken many important steps to provide a solid base to return Alphatec to a growth organization.”
Financial Results for the First Quarter Ended March 31, 2017
As a result of the sale of the Company’s international business in September 2016, the financial results and related assets and liabilities of the former international business have been excluded from continuing operations for all periods herein and reported as discontinued operations.
U.S. commercial revenues for the first quarter of 2017 were $23.4 million, down 19.8%, compared to $29.2 million reported for the first quarter of 2016. On a sequential basis, U.S. commercial revenues in the first quarter of 2017 were down $1.1 million, or 4.3%, compared to $24.5 million in the fourth quarter of 2016.
These decreases are largely the result of financial and operational challenges the Company faced in 2016, which led to the sale of the Company’s international business in order to sustain operations. This resulted in a reduction in volume from several distributors and surgeons. Revenue was also impacted by the Company’s decision to exit the stocking distributor and terminate distributor relationships that are not representative of the Company’s long-term business and rebranding strategy.
U.S. gross profit and gross margin for the first quarter of 2017 were $16.0 million and 68.3%, respectively, compared to $23.5 million and 80.6%, respectively, for the first quarter of 2016. Gross margins declined primarily as a result of increased supply costs from reduced sourcing and manufacturing volumes, and an increase in inventory kit write-offs due to distributor turnover.
On a sequential basis, U.S. gross margin of 68.3% in the first quarter of 2017 increased from 62.2% in the fourth quarter of 2016.
