- Full-year 2022 total revenue grew approximately 44% to over
$350 million
- Expected 2023 full-year total revenue of $438 million, with
break-even adjusted EBITDA
- Secured $150 million of flexible, non-dilutive capital at
attractive cost
Alphatec Holdings, Inc. (Nasdaq: ATEC), a provider of innovative
solutions dedicated to revolutionizing the approach to spine
surgery, announced today select preliminary financial results for
the fourth quarter and full year ended December 31, 2022, and
provided guidance for full-year 2023 revenue and adjusted EBITDA.
The Company also announced the closing of a five-year, $150 million
non-dilutive term loan agreement with Braidwell LP, a life science
focused firm.
Preliminary, Unaudited Fourth Quarter and Full-Year 2022
Revenue Ranges
Fourth Quarter Ended December 31,
2022
Full Year Ended December 31,
2022
Surgical Revenue
$90.7M to $91.5M
$302.4M to $303.2M
EOS Revenue
$14.5M to $14.7M
$47.7M to $47.9M
Total Revenue
$105.2M to $106.2M
$350.1M to $351.1M
May not foot due to rounding
Preliminary total revenue grew approximately 44% in the
full-year 2022 and 42% to 44% in the fourth quarter. Continued
strong adoption of the PTPTM (Prone-TransPsoas) approach fueled
preliminary, fourth quarter 2022 surgical revenue growth of 48% to
50%, led by surgical volume growth of at least 25% compared to the
prior year period. The Company closed the fourth quarter with a
cash balance of approximately $85 million, which, consistent with
third quarter 2022, includes a $35 million drawdown on the
Company’s revolving line of credit.
“Our commitment to delivering unmatched procedural
sophistication drove sector-leading growth once again in 2022,”
said Pat Miles, Chairman and Chief Executive Officer. “As we look
to the year ahead, we are as bullish as ever! We intend to continue
to not just penetrate, but expand the market for lateral spine
surgery and advance the influence of EOS. Our strategy to earn
surgeon confidence through clinical distinction has and will
continue to set ATEC apart, enabling us to successfully execute our
strategic and financial commitments.”
The select, preliminary financial results announced today are
based on the Company’s current expectations and may be adjusted as
a result of, among other things, completion of customary annual
audit procedures.
Financial Outlook for the Full-Year 2023
The Company anticipates full-year 2023 total revenue of $438
million, reflecting growth of approximately 25% compared to the
full-year 2022. This includes surgical revenue of $383 million and
approximately $55 million of EOS revenue. The Company expects to
achieve non-GAAP adjusted EBITDA break-even for the full-year
2023.
Further detail will be provided when the Company reports fourth
quarter and full-year 2022 financial results on Tuesday, February
28, 2023, after the market close.
$150 Million Flexible Non-Dilutive Term Debt Facility
On January 6, 2023, ATEC entered into a five-year agreement with
Braidwell LP, an investment manager that has agreed to make a term
loan of up to $150 million. An initial $100 million tranche has
been funded and ATEC has the option to draw an additional $50
million.
“We are pleased to strengthen ATEC's balance sheet with
additional capital that will allow us to continue to advance
patient care and, as a result, create shareholder value," stated
Todd Koning, Chief Financial Officer. "Braidwell is a significant
investor that supports our long-term strategy. Having flexible
access to attractively priced capital will enable us to continue to
drive market-leading growth in existing markets, invest in
international markets, and further support our path to
profitability without the need for dilutive financing.”
“Braidwell is thrilled to strengthen our partnership with ATEC
through this transaction,” stated Narendra Nayak, Partner at
Braidwell. “We believe that ATEC’s unique technology and innovative
approach to spine surgery will continue to drive surgeon adoption
and sector-leading growth in the years to come."
Kaila Krum, Partner at Braidwell, added, "With the ATEC team's
extensive experience in the space and proven ability to execute, we
are confident the Company will improve the practice of spine
surgery and further our shared mission to advance human
health."
Additional features of the debt facility include:
- Annual interest rate of SOFR plus 5.75%;
- Interest-only payments throughout the 5-year term;
- Due in 2028 with no springing maturity ahead of the Company’s
existing 2026 convertible senior notes.
With the completion of this deal, the Company now has cash and
access to liquidity of approximately $275 million, including an
existing $50 million revolving credit facility with a $25 million
accordion feature through MidCap Financial.
Additional details regarding the financing will be included in a
Current Report on Form 8-K, which ATEC will file with the
Securities and Exchange Commission today.
Non-GAAP Financial Information
To supplement the Company’s financial statements presented in
accordance with generally accepted accounting principles in the
United States of America (GAAP), the Company reports certain
non-GAAP financial measures, including non-GAAP adjusted EBITDA.
Non-GAAP adjusted EBITDA excludes purchase accounting adjustments,
excess and obsolete charges, intangible amortization, stock-based
compensation, litigation, transaction, and restructuring-related
expenses. The Company believes that this non-GAAP financial measure
provides investors with an additional tool for evaluating the
Company's core performance, which management uses in its own
evaluation of continuing operating performance, and a baseline for
assessing the future earnings potential of the Company. The
Company’s non-GAAP financial measures may not provide information
that is directly comparable to that provided by other companies in
the Company’s industry, as other companies in the industry may
calculate non-GAAP financial results differently, particularly
related to non-recurring, unusual items. Non-GAAP financial results
should be considered in addition to, and not as a substitute for,
or superior to, financial measures calculated in accordance with
GAAP.
About Braidwell LP
Braidwell is a life science-focused investment firm dedicated to
serving the people and organizations that transform human health.
Braidwell provides flexible capital and thoughtful partnership to
healthcare companies at all stages of development and at all parts
of the capital structure, across public, private, and structured
capital markets. Braidwell was co-founded by Alex Karnal, former
Co-Portfolio Manager and Managing Director at Deerfield Management,
and Brian Kreiter, former Chief Operating Officer of Bridgewater
Associates. The team is composed of experts across investment
research, science, biostatistics, commercial analysis, and
financial structuring. Braidwell launched its flagship fund in
April 2022 with $3.5 billion of capital and is based in Stamford,
Connecticut.
About ATEC
ATEC, through its wholly owned subsidiaries, Alphatec Spine,
Inc., EOS imaging S.A. and SafeOp Surgical, Inc., is a medical
device company dedicated to revolutionizing the approach to spine
surgery through clinical distinction. ATEC’s Organic Innovation
MachineTM is focused on developing new approaches that integrate
seamlessly with the Company’s expanding AlphaInformatiX Platform to
better inform surgery and more safely and reproducibly achieve the
goals of spine surgery. ATEC’s vision is to become the Standard
Bearer in Spine. For more information, visit us 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 therein. Forward-looking statements
include references to the Company’s ability to create clinical
distinction, compel surgeon adoption and earn market share; the
Company’s planned commercial launches, product introductions and
product integration; and the Company’s expectations with respect to
future revenue, growth and financial outlook. 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 in the Company’s pipeline;
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; the Company’s ability to compete with other products and
emerging new technologies; product liability exposure; patent
infringement claims; and changes to our financial results for the
quarter and year ended December 31, 2022 due to the completion of
financial closing procedures. The words “believe,” “will,”
“should,” “expect,” “intend,” “estimate,” “look forward” and
“anticipate,” and 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230109005225/en/
Investor/Media Contact: Tina Jacobsen, CFA Investor
Relations (760) 494-6790 investorrelations@atecspine.com
Company Contact: J. Todd Koning Chief Financial Officer
Alphatec Holdings, Inc. investorrelations@atecspine.com
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