Hot Stock Analysis: Alphatec Holdings, Inc. (NASDAQ:ATEC)

On Friday, Alphatec Holdings, Inc. (NASDAQ:ATEC) closed with gain/decline of -6.53% to $4.1500. Recent traded volume was 406,098 shares versus to it an average volume of 446,558 shares. The company holds 46.86M shares outstanding and market cap of 194.45M.

Alphatec Holdings, Inc. (ATEC) recently reported financial results for the quarter ended March 31, 2019, and recent corporate highlights.

First Quarter 2019 Financial Highlights

  • Total net revenue of $24.6M; U.S. product revenue of $23.0M, up about 20% contrast to the first quarter of 2018;
  • U.S. commercial gross margin of 71.4%;
  • Cash and cash equivalents of $16.4M at March 31, 2019; and
  • Additional capital commitment of up to $30M from Squadron Capital.

Year-to-Date Commercial, Product, and Organizational Highlights

  • Improved clinical distinction of portfolio via 3 new commercial releases: the IdentiTi™ ACDF system, the IdentiTi™ PLIF system, and AlphaGRAFT® DBM Fiber;
  • Received FDA clearance for SafeOp Advanced Automated Neuromonitoring System and affirmed performance through alliance with key surgeon partners;
  • Drove contribution from new products to 22% of FIRST QUARTER 2019 U.S. revenue on strong acceptance of alpha releases;
  • Expanded contribution from planned distribution network to 84% of U.S. revenue in FIRST QUARTER 2019 contrast to 72% in FIRST QUARTER 2018;
  • Raised revenue per distributor by over 30% and raised revenue per case by 13% in FIRST QUARTER 2019 contrast to FIRST QUARTER 2018; and
  • Strengthened distribution network through promotion of David Sponsel to Head of Sales.

Operating loss for the first quarter 2019 was $10.8M, contrast to $0.7M in the first quarter 2018. On a non-GAAP basis, not including restructuring charges, stock-based compensation, transaction-related expenses, litigation-related expenses, one-time gains, fair value adjustments and non-cash excess and obsolescence charges, operating loss was $4.2M for the first quarter 2019, contrast to a loss of $2.8M for the first quarter 2018. 

Non-GAAP adjusted EBITDA in the first quarter was a loss of $2.4M, contrast to a loss of $0.9M in the first quarter 2018. 

For more detailed information on non-GAAP operating loss and non-GAAP adjusted EBITDA, please refer to the table, “Alphatec Holdings, Inc. Reconciliation of Non-GAAP Financial Measures,” that follows.

Current and long-term debt includes $35.0M in term debt and $10.6M outstanding under the Company’s revolving credit facility at March 31, 2019, with cash and cash equivalents of $16.4M. In March 2019, the Company closed its expanded credit facility with Squadron Medical Finance Solutions, providing for up to $30M in additional financing, as needed. To date, no amounts have been drawn on the new credit facility.

2019 Financial Outlook

ATEC expects total revenue in 2019 of $98.0M to $103.0M.  The Company expects U.S. product revenue of $94.0M to $98.0M, reflecting growth of 13% to 17% contrast to 2018.

Net profit margin of the firm was recorded at -10.10% and operating profit margin was calculated at -20.10% while gross profit margin was measured as 69.00%. Beta factor, which measures the riskiness of the security, was registered at 1.58.

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