Alphatec Holdings, Inc. (Alphatec), a orthopedic devices company, has reported consolidated revenues of $101.3 million for the full year of 2008, up 26.6%, compared with the consolidated revenues of $80 million in the previous year-end. It has reported net loss of $29.3 million, or $0.63 loss per share, for the full year of 2008, compared with the net loss of $20.2 million, or $0.54 loss per share, in the previous year-end.
2008 performance highlights
Fourth quarter 2008 revenues of $28.4 million grew 33.3% over 2007 fourth quarter revenues
Launched nine new products in the US
Expanded and upgraded the core product portfolio
Positioned as market leader in providing solutions for the aging spine
Significant R&D investment to in-license, develop and commercialize new and innovative products
Launched European product distribution, resulting in $2.1 million in revenues
OsseoFix(TM) Fracture Reduction System introduced as a gateway product in Europe
Expanded and upgraded US sales force to drive revenue growth
Increased exclusivity in distribution network
Strengthened management team in Sales, Marketing, R&D and Finance
Consolidated functions in Marketing, Manufacturing and R&D
Completed $30 million credit facility through Silicon Valley Bank and Oxford Finance Corporation
Fourth quarter 2008 financial results
Consolidated revenues for the fourth quarter 2008 were $28.4 million, up 33.3% from the $21.3 million reported for the fourth quarter 2007. US revenues for the fourth quarter 2008 were $22.0 million, up 28.8% from the $17.1 million reported for the fourth quarter of 2007. Asian revenues for the fourth quarter 2008 were $4.8 million, up 12.9% from the $4.3 million reported for the fourth quarter 2007. European revenues for the fourth quarter 2008 were $1.6 million. There were no European revenues for the fourth quarter 2007.
Gross profit for the fourth quarter 2008 was $16.9 million, up $4.3 million over fourth quarter 2007 of $12.6 million. Fourth quarter 2008 gross margin of 59.2% increased over fourth quarter 2007 gross margin of 59.1%.
Total operating expenses for the fourth quarter 2008 were $21.0 million, a decrease of $2.8 million compared to fourth quarter 2007 of $23.8 million. The decrease was primarily related to a decrease in in-process research & development expenses of $6.8 million, offset by increases in research and development and sales and marketing expenses.
Research and development expenses for the fourth quarter 2008 were $3.0 million, up $0.8 million compared to the fourth quarter 2007 of $2.2 million.
Sales and marketing expenses for the fourth quarter 2008 were $11.5 million, up $2.8 million compared to the fourth quarter 2007 of $8.7 million.
General and administrative expenses for the fourth quarter 2008 were $6.3 million, up $0.5 million, compared to the fourth quarter 2007 of $5.8 million.
Net loss for the fourth quarter 2008 was $5.1 million, or ($0.11) per share (basic and diluted), compared with a net loss of $11.2 million, or ($0.24) per share (basic and diluted) for the fourth quarter 2007.
Full Year 2008 Financial Results
US revenues for year end 2008 were $81.5 million, up 22.1% from the $66.7 million reported for year end 2007. Asian revenues for year end 2008 were $17.7 million, up 33.2% from the $13.3 million reported for year end 2007. European revenues for year end 2008 were $2.1 million. There were no European revenues for the year end 2007.
Gross profit for year end 2008 was $64.7 million, up $14.5 million over the year end 2007 of $50.2 million. Year end 2008 gross margin of 63.9%, represents a 1.2 % margin increase over year end 2007 gross margin of 62.7%.
Total operating expenses for year end 2008 were $92.5 million, up $22.6 million over year end 2007 of $69.9 million. The increase in 2008 was attributable primarily to Depuy Spine patent litigation settlement expense of $11.0 million, as well as increases in both research and development and sales and marketing expenses.
Research and development expenses for year end 2008 were $13.0 million, up $6.6 million over year end 2007 of $6.4 million. The increase in 2008 research and development expenses was primarily due to development activities relating to OsseoFix, the OsseoScrew, and additional product development.
Sales and marketing expenses for year end 2008 were $42.4 million, up $8.9 million over year end 2007 of $33.5 million. The 2008 increase was primarily due to increased sales commission expenses related to the increased sales volume, increased sales management, as well as marketing activities to support the product development pipeline.
General and administrative expenses for year end 2008 were $23.4 million, up $2.8 million, over year end 2007 of $20.6 million. The increase in 2008 expenses was primarily attributable to increased stock-based compensation expenses and increased administration costs in Asia.
2009 financial outlook
On January 13, 2009, the company provided financial guidance for full year 2009 of $123 million to $125 million in annual revenues, $12 million to $14 million in annual adjusted EBITDA and positive GAAP-based EPS occurring in the third quarter 2009.
“We had an extremely busy year in 2008, and we are pleased with our accomplishments, especially in achieving record revenue growth and positioning Alphatec Spine for long term growth. We continue to grow revenues at rates significantly higher than the spine market growth rate through the introduction of innovative new products, improvements in our US sales force, and expansion of our international operations,” stated Dirk Kuyper, Alphatec Spine’s president and chief executive officer. Kuyper continued, “Importantly, we expect our focus on providing solutions for the aging spine to yield additional product launches addressing the fastest-growing segment of the spine market. With a robust product pipeline, we believe Alphatec Spine is positioned to achieve ongoing revenue growth while leveraging manufacturing and distribution capabilities that we believe will drive to positive EBITDA and earnings in 2009.”