Alphatec Holdings Inc. Reports Operating Results (10-Q)

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Nov 06, 2012
Alphatec Holdings Inc. (ATEC, Financial) filed Quarterly Report for the period ended 2012-09-30.

Alphatec Holdings, Inc. has a market cap of $152.3 million; its shares were traded at around $1.66 with and P/S ratio of 0.8.

Highlight of Business Operations:

U.S. revenues were $31.0 million for the three months ended September 30, 2012 compared to $32.7 million for the three months ended September 30, 2011, representing a decrease of $1.7 million, or 5.2%. The decrease was due to a decrease in the sales of instruments and implants ($2.3 million) and a decrease in the sales of Scientx products ($0.8 million), offset by an increase in sales of Biologics ($1.4 million).

International revenues were $15.8 million for the three months ended September 30, 2012 compared to $14.9 million for the three months ended September 30, 2011, representing an increase of $0.9 million, or 6.1%. The decrease was due to a decrease in Scientx sales ($1.3 million), offset by increased sales of Alphatec as aging products in the Scientx portfolio are replaced by Alphatec products ($2.2 million). The increase in revenues is inclusive of $0.9 million in negative exchange rate effect.

Cost of revenues. Cost of revenues was $16.8 million for the three months ended September 30, 2012 compared to $17.0 million for the three months ended September 30, 2011, representing a decrease of $0.2 million, or 0.9%. The decrease was primarily related to favorable manufacturing and absorption variances ($1.0 million), a reduction in royalty expenses due to lower sales volumes ($0.3 million), and a reduction in milestone expense related to an adjustment of an accrual ($0.7 million) offset by an increase in the reserve for excess and obsolete inventory ($0.8 million) and the amortization expenses associated with the settlement agreement we entered into in December 2011 with Biomet related to royalties on the sales of our polyaxial screws ($1.0 million).

U.S. revenues were $96.4 million for the nine months ended September 30, 2012 compared to $101.1 million for the nine months ended September 30, 2011, representing a decrease of $4.7 million, or 4.6%. The decrease was due to decrease in the sales of instruments and implants ($6.4 million) and a decrease in the sales of Scientx products ($2.3 million), offset by an increase in sales of Biologics ($4.0 million).

Cost of revenues. Cost of revenues was $50.8 million for the nine months ended September 30, 2012 compared to $55.0 million for the nine months ended September 30, 2011, representing a decrease of $4.2 million, or 7.6%. The decrease was primarily related to lower product costs due to a decrease in sales volume and variation in product mix ($1.3 million), favorable manufacturing and absorption variances ($3.8 million), a reduction to inventory adjustments ($1.6 million), a reduction in instrument depreciation expense ($0.3 million), a reduction in royalty and milestone expenses due to the cancellation of certain agreements, lower sales volumes and an adjustment to accruals ($1.5 million), and a decrease in inventory step-up expense related to the Scientx acquisition ($0.8 million), offset by an increase in the reserve for excess and obsolete inventory ($1.9 million) and the amortization expenses associated with the settlement agreement we entered into in December 2011 with Biomet related to royalties on the sales of our polyaxial screws ($3.2 million).

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