8-K
Alphatec Holdings, Inc. (ATEC)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): February 26, 2025 |
|---|
Alphatec Holdings, Inc.
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 000-52024 | 20-2463898 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 1950 Camino Vida Roble | ||
| Carlsbad, California | 92008 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: 760 431-9286 | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common stock, par value $.0001 per share | ATEC | Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition,” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section.
On February 26, 2025, Alphatec Holdings, Inc. (the “Company”) issued a press release announcing its financial results for its year ended December 31, 2024. A copy of the press release is attached hereto as Exhibit 99.1.
The information contained in this Current Report, including the exhibit, shall not be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| 99.1 | Press Release of Alphatec Holdings, Inc., dated February 26, 2025 |
|---|---|
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Alphatec Holdings, Inc. | |||
|---|---|---|---|
| Date: | February 26, 2025 | By: | /s/ J. Todd Koning |
| J. Todd Koning<br>Executive Vice President and Chief Financial Officer |
EX-99.1
| Exhibit 99.1 |
|---|
ATEC Reports Fourth Quarter and Full Year 2024 Financial Results
Full year 2024 total revenue grew 27% to $612 million, enabling significant profit margin expansion
Full year 2025 total revenue expected to approximate $732 million and fuel free cash flow
CARLSBAD, Calif., February 26, 2025 – Alphatec Holdings, Inc. (Nasdaq: ATEC), a provider of innovative solutions dedicated to revolutionizing the approach to spine surgery, today announced financial results for the quarter and year ended December 31, 2024, and business highlights.
Fourth Quarter and Full Year 2024 Financial Results
| Quarter EndedDecember 31, 2024 | |
|---|---|
| Total revenue | 177 million |
| GAAP gross margin | 69% |
| Non-GAAP gross margin | 70% |
| Operating expenses | 145 million |
| Non-GAAP operating expenses | 119 million |
| GAAP net loss | (33) million |
| Non-GAAP adjusted EBITDA | 21 million |
| Non-GAAP adjusted EBITDA margin | 12% |
| Ending cash balance | 139 million |
All values are in US Dollars.
Numbers and percentages may not foot due to rounding.
Fourth Quarter 2024 Business Highlights
- Grew surgical revenue by 28%, with 19% surgical volume growth and a 7% increase in average revenue per surgery
- Increased new surgeon users by 20%
- Entered Japan with first surgery
- Generated $9 million of free cash flow
"As many in the industry are choosing to capitulate, ATEC, the largest pure-play spine company, remains focused on revolutionizing spine care,” asserted Pat Miles, Chairman and Chief Executive Officer. “The coming years will be our best yet. We are expanding our influence in deformity through EOS-integrated, procedure-specific technologies. We are thrilled to have performed our first surgeries in Japan, the world’s second-largest spine market. The durable revenue growth that we are driving, combined with sharpened operational discipline, position us for self-funded growth in 2025 and beyond.”
Financial Outlook for the Full Year 2025
The Company continues to expect total revenue for the fiscal year ended December 31, 2025, to approximate $732 million, reflecting growth of approximately 20% compared to full year 2024. This includes surgical revenue of approximately $657 million and approximately $75 million of EOS revenue. The Company also continues to
anticipate adjusted EBITDA of approximately $75 million, which will contribute to positive free cash flow for the full year 2025.
Financial Results Webcast
The Company will host a live webcast today at 1:30 p.m. PT / 4:30 p.m. ET. To access the live webcast, please visit the Investor Relations Section of ATEC’s Corporate Website.
To dial into the live webcast, please register at this link. Access details will be shared via email.
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 gross margin, non-GAAP operating expenses, non-GAAP operating loss, and non-GAAP adjusted EBITDA. The Company believes that these non-GAAP financial measures provide 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. Included below are reconciliations of the non-GAAP financial measures to the comparable GAAP financial measures and a discussion of the Company’s non-GAAP definitions. We have not reconciled our adjusted operating expenses and adjusted EBITDA estimates for full year 2025 because certain items that impact these figures are uncertain or out of our control and cannot be reasonably predicted. Accordingly, a reconciliation of 2025 adjusted operating expenses and adjusted EBITDA estimates is not available without unreasonable effort.
About Alphatec Holdings, Inc.
ATEC, through its wholly owned subsidiaries, Alphatec Spine, Inc., EOS imaging S.A.S. 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 in the forward-looking statements. The Company cautions investors that there can be no assurance that actual results will not differ materially from those projected or suggested in such forward-looking statements as a result of various factors. Forward-looking statements include, but are not limited to: references to the Company’s revenue, balance sheet, growth and financial outlook; planned product launches, introductions, regulatory submissions or clearances and territory penetration; efforts to transform sales and distribution channels; the Company’s ability to compel surgeon adoption; and the Company’s future ability to finance its operations and sufficiency of its cash runway. 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 currently in the pipeline; the uncertainties in the Company’s ability to execute upon its strategic operating plan; the uncertainties regarding the ability to successfully license or acquire new products, and the commercial success of such products; failure to achieve acceptance of the Company’s products by the surgeon community; failure to obtain FDA or other regulatory clearance or approval or unexpected or prolonged delays in the process; continuation of favorable third-party reimbursement; unanticipated expenses or liabilities or other adverse events affecting cash flow or the Company’s ability to achieve profitability; uncertainty of additional funding; the Company’s ability to compete with other products or with emerging technologies; product liability exposure; an unsuccessful outcome in any litigation; patent infringement claims; claims related to the Company’s intellectual property; and the Company’s ability to meet its financial obligations. 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.
Investor/Media Contact:
Tina Jacobsen, CFA
Investor Relations
(760) 494-6790
investorrelations@atecspine.com
Company Contact:
J. Todd Koning
Chief Financial Officer
investorrelations@atecspine.com
ALPHATEC HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
| Three Months Ended | Year Ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| (unaudited) | ||||||||||||
| Revenue from products and services | $ | 176,793 | $ | 137,970 | $ | 611,562 | $ | 482,262 | ||||
| Cost of sales | 55,205 | 42,780 | 187,300 | 172,059 | ||||||||
| Gross profit | 121,588 | 95,190 | 424,262 | 310,203 | ||||||||
| Operating expenses: | ||||||||||||
| Research and development | 23,244 | 22,284 | 80,718 | 70,115 | ||||||||
| Sales, general and administrative | 114,541 | 104,120 | 450,199 | 374,080 | ||||||||
| Litigation-related expenses | 1,188 | 9,472 | 9,799 | 22,287 | ||||||||
| Amortization expense | 4,720 | 3,823 | 16,258 | 14,284 | ||||||||
| Transaction-related expenses | 327 | (65 | ) | 210 | 2,113 | |||||||
| Restructuring expenses | 1,386 | 386 | 3,247 | 719 | ||||||||
| Total operating expenses | 145,406 | 140,020 | 560,431 | 483,598 | ||||||||
| Operating loss | (23,818 | ) | (44,830 | ) | (136,169 | ) | (173,395 | ) | ||||
| Other expense, net: | ||||||||||||
| Interest expense, net | (7,151 | ) | (4,416 | ) | (24,879 | ) | (16,641 | ) | ||||
| Other (expense) income, net | (1,922 | ) | 44 | (1,025 | ) | 3,121 | ||||||
| Total other expense, net | (9,073 | ) | (4,372 | ) | (25,904 | ) | (13,520 | ) | ||||
| Net loss before taxes | (32,891 | ) | (49,202 | ) | (162,073 | ) | (186,915 | ) | ||||
| Income tax provision (benefit) | 441 | (124 | ) | 50 | (277 | ) | ||||||
| Net loss | $ | (33,332 | ) | $ | (49,078 | ) | $ | (162,123 | ) | $ | (186,638 | ) |
| Net loss per share, basic and diluted | $ | (0.23 | ) | $ | (0.37 | ) | $ | (1.13 | ) | $ | (1.54 | ) |
| Weighted average shares outstanding, basic and diluted | 144,583 | 133,750 | 142,946 | 121,242 | ||||||||
| Stock-based compensation included in: | ||||||||||||
| Cost of sales | $ | 2,485 | $ | 481 | $ | 4,961 | $ | 25,082 | ||||
| Research and development | 9,894 | 9,154 | 27,030 | 18,741 | ||||||||
| Sales, general and administrative | 9,154 | 10,880 | 41,286 | 37,421 | ||||||||
| $ | 21,533 | $ | 20,515 | $ | 73,277 | $ | 81,244 |
ALPHATEC HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
| December 31, <br>2024 | December 31, <br>2023 | ||||
|---|---|---|---|---|---|
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 138,840 | $ | 220,970 | |
| Accounts receivable, net | 82,987 | 72,613 | |||
| Inventories | 175,264 | 136,842 | |||
| Prepaid expenses and other current assets | 20,308 | 20,666 | |||
| Total current assets | 417,399 | 451,091 | |||
| Property and equipment, net | 156,394 | 149,835 | |||
| Right-of-use assets | 34,701 | 26,410 | |||
| Goodwill | 70,976 | 73,003 | |||
| Intangible assets, net | 93,518 | 102,451 | |||
| Other assets | 2,722 | 2,418 | |||
| Total assets | $ | 775,710 | $ | 805,208 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 52,984 | $ | 48,985 | |
| Accrued expenses and other current liabilities | 81,466 | 87,712 | |||
| Contract liabilities | 10,467 | 13,910 | |||
| Short-term debt | 1,656 | 1,808 | |||
| Current portion of operating lease liabilities | 6,453 | 5,159 | |||
| Total current liabilities | 153,026 | 157,574 | |||
| Total long-term liabilities | 613,250 | 545,915 | |||
| Redeemable preferred stock | 23,603 | 23,603 | |||
| Stockholders' equity | (14,169 | ) | 78,116 | ||
| Total liabilities and stockholders' equity | $ | 775,710 | $ | 805,208 |
ALPHATEC HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands)
| Three Months Ended | Year Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| (unaudited) | |||||||||||||
| Gross profit, GAAP | $ | 121,588 | $ | 95,190 | $ | 424,262 | $ | 310,203 | |||||
| Add: amortization of intangible assets | (814 | ) | 278 | 108 | 939 | ||||||||
| Add: stock-based compensation | 2,485 | 481 | 4,961 | 25,082 | |||||||||
| Add: purchase accounting adjustments on acquisitions | — | 198 | 197 | 393 | |||||||||
| Non-GAAP gross profit | $ | 123,259 | $ | 96,147 | $ | 429,528 | $ | 336,617 | |||||
| Gross margin, GAAP | 68.8 | % | 69.0 | % | 69.4 | % | 64.3 | % | |||||
| Add: amortization of intangible assets | -0.5 | % | 0.2 | % | 0.0 | % | 0.2 | % | |||||
| Add: stock-based compensation | 1.4 | % | 0.3 | % | 0.8 | % | 5.2 | % | |||||
| Add: purchase accounting adjustments on acquisitions | 0.0 | % | 0.1 | % | 0.0 | % | 0.1 | % | |||||
| Non-GAAP gross margin | 69.7 | % | 69.7 | % | 70.2 | % | 69.8 | % | |||||
| Three Months Ended | Year Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| (unaudited) | |||||||||||||
| Operating expenses, GAAP | $ | 145,406 | $ | 140,020 | $ | 560,431 | $ | 483,598 | |||||
| Adjustments: | |||||||||||||
| Stock-based compensation | (19,048 | ) | (20,034 | ) | (68,316 | ) | (56,162 | ) | |||||
| Litigation-related expenses | (1,188 | ) | (9,472 | ) | (9,799 | ) | (22,287 | ) | |||||
| Amortization expense | (4,720 | ) | (3,823 | ) | (16,258 | ) | (14,284 | ) | |||||
| Transaction-related expenses | (327 | ) | 65 | (210 | ) | (2,113 | ) | ||||||
| Restructuring expenses | (1,386 | ) | (386 | ) | (3,247 | ) | (719 | ) | |||||
| Other non-recurring expenses1, 2 | — | — | (1,608 | ) | (1,349 | ) | |||||||
| Non-GAAP operating expenses | $ | 118,737 | $ | 106,370 | $ | 460,993 | $ | 386,684 | |||||
| Three Months Ended | Year Ended | ||||||||||||
| December 31, | December 31, | ||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||
| (unaudited) | |||||||||||||
| Net loss, GAAP | $ | (33,332 | ) | $ | (49,078 | ) | $ | (162,123 | ) | $ | (186,638 | ) | |
| Interest expense, net | 7,151 | 4,416 | 24,879 | 16,641 | |||||||||
| Other expense (income), net | 1,922 | (44 | ) | 1,025 | (3,121 | ) | |||||||
| Income tax provision (benefit) | 441 | (124 | ) | 50 | (277 | ) | |||||||
| Depreciation | 16,102 | 11,918 | 62,052 | 40,916 | |||||||||
| Amortization expense | 3,906 | 4,101 | 16,366 | 15,223 | |||||||||
| EBITDA | (3,810 | ) | (28,811 | ) | (57,751 | ) | (117,256 | ) | |||||
| Add back significant items: | |||||||||||||
| Stock-based compensation | 21,533 | 20,515 | 73,277 | 81,244 | |||||||||
| Purchase accounting adjustments on acquisitions | — | 198 | 197 | 393 | |||||||||
| Litigation-related expenses | 1,188 | 9,472 | 9,799 | 22,287 | |||||||||
| Transaction-related expenses | 327 | (65 | ) | 210 | 2,113 | ||||||||
| Restructuring expenses | 1,386 | 386 | 3,247 | 719 | |||||||||
| Other non-recurring expenses1, 2 | — | — | 1,608 | 1,349 | |||||||||
| Adjusted EBITDA | $ | 20,624 | $ | 1,695 | $ | 30,587 | $ | (9,151 | ) | ||||
| Adjusted EBITDA margin | 11.7 | % | 1.2 | % | 5.0 | % | (1.9 | %) | |||||
| Adjusted EBITDA margin expansion | 1050 bps | ||||||||||||
| 1 | Non-recurring net charges on assets and liabilities associated with customer plan of reorganization | ||||||||||||
| 2 | Non-recurring consulting fees associated with the implementation of our state tax-planning strategy |
NON-GAAP DEFINITIONS
Amortization of intangible assets: Represents amortization expense associated with intangible assets including, but not limited to customer relationships, intellectual property, and trade names acquired in business combinations and asset acquisitions.
Litigation-related expenses: We are involved in various litigation matters that from time-to-time result in settlements. Litigation matters can vary in their characteristics, frequency and significance to our operating results and core business operations. We review litigation matters from both a qualitative and quantitative perspective to determine whether such matters are a normal and recurring part of our business. We include in our GAAP financial statements litigation fees and settlement expenses that we determine to be normal, recurring and routine to our business. When we determine that certain litigation matters are not normal and recurring to our core business operations, we believe excluding these expenses will provide our management and investors with useful incremental information. Litigation fees and settlement expenses excluded from our non-GAAP financial measures in the periods presented relate primarily to patent litigation and other litigation matters that relate directly to the business transformation that we started in 2018 and are discussed more fully in our periodic reports filed with the Securities Exchange Commission.
Other non-recurring expenses: These expenses represent non-recurring expenses that we consider to be one-time in nature.
Purchase accounting adjustments on acquisitions: Includes non-cash expenses incurred as a result of fair value asset step-ups associated with tangible assets acquired from business combinations or asset acquisitions.
Restructuring expenses: From time-to-time, in order to realign the Company’s operations or to achieve synergies associated with an acquisition, the Company may eliminate roles or restructure its operations and footprint. In such cases the Company may incur one-time severance and personnel costs associated with workforce reductions, or costs associated with exiting and/or relocating facilities. We exclude these costs as we do not consider such amounts to be part of the ongoing operations.
Stock-based compensation: Stock-based compensation is charged to cost of revenue and operating expenses. We exclude stock-based compensation from certain of our non-GAAP financial measures because we believe that excluding these non-cash expenses provides meaningful supplemental information regarding operational performance. Because of the variety of equity awards used by companies, the varying methodologies for determining stock-based compensation expense, the subjective assumptions involved in those determinations, and the volatility in valuations that can be driven by market conditions outside the Company’s control, the Company believes excluding stock-based compensation expense enhances the ability of management and investors to understand and assess the underlying performance of its business over time.
Transaction-related expenses: These expenses represent one-time costs associated with business combinations, asset acquisitions, and financings. These items may include but are not limited to consulting and legal fees, contract termination costs and other related deal costs.
Adjusted EBITDA: Represents earnings before non-operating income/expense, taxes, depreciation and amortization, as adjusted for the applicable non-GAAP adjustments previously described.