SeaSpine Reports 19% Revenue Growth and Record Quarterly Revenue for Second Quarter 2022 and Raises Full Year 2022 Revenue Guidance
SeaSpine Holdings Corporation (NASDAQ: SPNE) reported a strong second quarter 2022 with total revenue reaching $56.3 million, a 19% year-over-year increase. U.S. revenue rose 16% to $49.5 million, driven by growth in spinal implants and orthobiologics. The company achieved a GAAP gross margin of 66.0%. However, net loss increased to $13.9 million compared to $5.2 million in the previous year. SeaSpine raised its full-year revenue guidance to $234 to $236 million, reflecting 22% to 23% growth over 2021.
- Total revenue increased 19% year-over-year to $56.3 million.
- U.S. revenue boost of 16% to $49.5 million.
- GAAP gross margin improved to 66.0%, up from 63.2% year-over-year.
- Raised full-year revenue guidance to $234 to $236 million, an increase from previous guidance.
- Net loss rose significantly to $13.9 million, compared to $5.2 million previously.
- Operating expenses increased by $10.6 million, largely due to higher selling and marketing expenses.
CARLSBAD, Calif., Aug. 02, 2022 (GLOBE NEWSWIRE) -- SeaSpine Holdings Corporation (NASDAQ: SPNE), a global medical technology company focused on surgical solutions for the treatment of spinal disorders, announced today second quarter financial results for the three-months ended June 30, 2022.
Summary Second Quarter 2022 Financial Results and Recent Highlights
- Total revenue of
$56.3 million , an increase of19% year-over-year - U.S. revenue of
$49.5 million , an increase of16% year-over-year- U.S. spinal implants and enabling technologies revenue of
$25.0 million , an increase of17% year-over-year - U.S. orthobiologics revenue of
$24.5 million , an increase of16% year-over-year
- U.S. spinal implants and enabling technologies revenue of
- International revenue of
$6.8 million , an increase of39% year-over-year - GAAP and adjusted gross margin of
66.0% and67.9% , respectively - Full commercial launch of the following products:
- WaveForm® C (Cervical) and WaveForm™ TO (TLIF Oblique) 3D-Printed Interbody Systems
- Meridian™ ALIF System with Reef™ A Interbody
- Extended
$30 million credit facility maturity date to July 2025, with the option to increase the borrowing limit by up to an additional$10 million .
“Our first quarter’s strong revenue momentum sustained through the second quarter,” said Keith Valentine, President and Chief Executive Officer. “The success we’ve had in attracting and onboarding distributors from our larger competitors, as well as additional transformational distributors we expect to transition in the near-term, is due in large part to our consistent execution in the commercial launch of industry-leading, new and enhanced products and systems. Our expectation for continued sales traction and visibility into the second half of the year gives us confidence to further raise our full year 2022 revenue guidance.”
Second Quarter 2022 Financial Results
Both the spinal implants and orthobiologics portfolios drove U.S. revenue growth, as well as
Gross margin for the second quarter of 2022 was
Operating expenses for the second quarter of 2022 totaled
Net loss for the second quarter of 2022 was
Adjusted EBITDA loss (as described below) for the second quarter of 2022 was
Cash and cash equivalents at June 30, 2022 totaled
2022 Financial Outlook
SeaSpine now expects full-year 2022 revenue to be in the range of
SeaSpine anticipates approximately
Webcast and Conference Call Information
SeaSpine’s management team will host a conference call today at 1:30 p.m. Pacific time / 4:30 p.m. Eastern time to discuss the financial results announced today. Individuals interested in listening to the conference call may do so by registering here. Participants are required to register at a minimum 15 minutes before the start of the call. To listen to the live webcast and a replay, please visit the Investors section of the SeaSpine website at: https://www.seaspine.com/.
Reconciliation of GAAP to Non-GAAP Financial Measures
The Company presents two financial measures in this press release not reported in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”): adjusted gross margin and adjusted EBITDA loss. Adjusted gross margin represents GAAP gross margin excluding the impact of the following items recorded to cost of goods sold: technology-related intangible asset amortization expense, nonrecurring, fixed NanoMetalene supplier processing charge, and purchase accounting inventory fair market value adjustment charges. Adjusted EBITDA loss represents earnings (loss) before interest, taxes, depreciation and amortization and excludes the impact of: stock-based compensation, intangible asset impairment charges, spinal set instrument replacement and impairment expenses, other income / expense, the nonrecurring, fixed NanoMetalene supplier processing charge, purchase accounting inventory fair market value adjustment charges, acquisition and integration-related charges, and employee severance and other charges related to the restructuring of the Company’s European sales and marketing organization. A reconciliation of GAAP gross margin to adjusted gross margin and of GAAP net loss to adjusted EBITDA loss for all periods presented appears in the financial tables in this release.
The Company believes that the presentation of adjusted gross margin and adjusted EBITDA loss provides important supplemental information to management and investors regarding financial and business trends relating to the Company's results of operations. For further information regarding why the Company believes that these non-GAAP financial measures provide useful information to investors, the specific manner in which management uses these measures, and some of the limitations associated with the use of these measures, please refer to the Company's Current Report on Form 8-K regarding this press release filed today with the Securities and Exchange Commission available on the SEC's website at www.sec.gov and on the “Investors” page of the Company’s website at www.seaspine.com.
About SeaSpine
SeaSpine (www.seaspine.com) is a global medical technology company focused on the design, development, and commercialization of surgical solutions for the treatment of patients suffering from spinal disorders. SeaSpine’s complete procedural solutions feature its market-leading FLASH™ Navigation, a system designed to improve accuracy of screw placement and provide a cost-effective, rapid, radiation-free solution to surgical navigation, and a comprehensive portfolio of spinal implants and orthobiologics to meet the varying combinations of products that neurosurgeons and orthopedic spine surgeons need to facilitate spinal fusion in degenerative, minimally invasive surgery (MIS), and complex spinal deformity procedures on the lumbar, thoracic and cervical spine. With product development expertise in advanced optics, software, orthobiologic sciences and spinal implants, SeaSpine can offer its surgeon customers a complete solution to meet their patients’ evolving clinical needs. SeaSpine currently markets its products in the United States and in approximately 30 countries worldwide.
Forward-Looking Statements
SeaSpine cautions you that statements in this press release that are not a description of historical facts are forward-looking statements based on the Company’s current expectations and assumptions. Such forward-looking statements include, but are not limited to, statements relating to: expectations regarding onboarding transformational distributors in the near-term; expectations regarding continued sales traction, full-year 2022 revenue, and growth in the U.S. spinal implants portfolio; anticipated revenue attributable to final stocking orders from European distributors and the impact thereof on European spinal implants revenue; and the continued marketing and sale of orthobiologics and enabling technologies products in the European market. Among the factors that could cause or contribute to material differences between the Company’s actual results and the expectations indicated by the forward looking statements are risks and uncertainties that include, but are not limited to: the extent of the impact of SARS-CoV-2, including variants and sub-variants, on the Company's business and the economy, including reductions in surgical volumes; the impact of staffing shortages, at both third-party facilities at which elective surgeries are performed and the Company’s facilities; surgeons’ willingness to adopt the Company’s newly launched products; the ability of newly launched products to meet the needs of surgeons and patients, including as a result of the lack of clinical validation of products in limited commercial (or “alpha”) launch; continued pricing pressure, whether as a result of consolidation in hospital systems, competitors or others, as well as exclusion from major healthcare systems; the risk of supply shortages and associated disruption to product sales, including as a result of the Company’s dependence on a limited number of third-party suppliers for components and raw materials, as a result of the COVID-19 pandemic, the conflict in Ukraine, or otherwise; the Company’s ability to continue to invest in medical education and training, product development, and/or sales and marketing initiatives at levels sufficient to drive future revenue growth; general economic and business conditions in the markets in which the Company does business, both in the U.S. and abroad; and other risks and uncertainties more fully described in the Company’s news releases and periodic filings with the Securities and Exchange Commission. The Company’s public filings with the Securities and Exchange Commission are available at www.sec.gov.
You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date when made. SeaSpine does not intend to revise or update any forward-looking statement in this news release to reflect events or circumstances arising after the date hereof, except as may be required by law.
Investor Relations Contact
Leigh Salvo
ir@seaspine.com
SEASPINE HOLDINGS CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Total revenue, net | $ | 56,318 | $ | 47,463 | $ | 107,011 | $ | 89,417 | |||||||
Cost of goods sold | 19,127 | 17,482 | 39,503 | 32,848 | |||||||||||
Gross profit | 37,191 | 29,981 | 67,508 | 56,569 | |||||||||||
Operating expenses: | |||||||||||||||
Selling and marketing | 33,029 | 25,436 | 62,535 | 48,835 | |||||||||||
General and administrative | 12,192 | 9,986 | 23,131 | 20,413 | |||||||||||
Research and development | 5,649 | 4,850 | 11,499 | 9,356 | |||||||||||
Intangible amortization | 856 | 843 | 1,712 | 1,635 | |||||||||||
Total operating expenses | 51,726 | 41,115 | 98,877 | 80,239 | |||||||||||
Operating loss | (14,535 | ) | (11,134 | ) | (31,369 | ) | (23,670 | ) | |||||||
Other (expense) income, net | (559 | ) | 6,079 | (557 | ) | 5,920 | |||||||||
Loss before income taxes | (15,094 | ) | (5,055 | ) | (31,926 | ) | (17,750 | ) | |||||||
(Benefit) provision for income taxes | (1,147 | ) | 158 | (1,375 | ) | 183 | |||||||||
Net loss | $ | (13,947 | ) | $ | (5,213 | ) | $ | (30,551 | ) | $ | (17,933 | ) | |||
Net Loss per share, basic and diluted | $ | (0.38 | ) | $ | (0.16 | ) | $ | (0.83 | ) | $ | (0.58 | ) | |||
Weighted average shares used to compute basic and diluted net loss per share | 36,767 | 33,489 | 36,726 | 30,716 |
SEASPINE HOLDINGS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET DATA
(In thousands)
June 30, 2022 (unaudited) | December 31, 2021 | ||||
Cash and cash equivalents | $ | 66,078 | $ | 83,106 | |
Trade accounts receivable, net | 34,441 | 36,231 | |||
Inventories | 85,906 | 72,299 | |||
Total current liabilities | 54,443 | 52,981 | |||
Long-term borrowings under credit facility | 25,000 | — | |||
Total stockholders' equity | 286,827 | 312,364 |
SEASPINE HOLDINGS CORPORATION
RECONCILIATION OF NON-GAAP INFORMATION - GAAP NET LOSS TO ADJUSTED EBITDA LOSS
(UNAUDITED)
(In thousands)
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
GAAP net loss | $ | (13,947 | ) | $ | (5,213 | ) | $ | (30,551 | ) | $ | (17,933 | ) | |||
Non-GAAP adjustments: | |||||||||||||||
Depreciation and intangible asset amortization expense | 4,295 | 3,133 | 8,497 | 5,880 | |||||||||||
Other expense (income) | 559 | (6,079 | ) | 557 | (5,920 | ) | |||||||||
Income tax (benefit) provision | (1,147 | ) | 158 | (1,375 | ) | 183 | |||||||||
Spinal set instrument replacement expense | 1,665 | 915 | 2,683 | 1,645 | |||||||||||
Stock-based compensation | 3,701 | 3,096 | 6,520 | 5,642 | |||||||||||
European sales and marketing organization restructuring | 127 | — | 406 | — | |||||||||||
Purchase accounting inventory fair market value adjustments | 83 | — | 208 | — | |||||||||||
Acquisition and integration-related charges (7D Surgical) | (10 | ) | 519 | 363 | 1,795 | ||||||||||
Total Non-GAAP adjustments | 9,273 | 1,742 | 17,859 | 9,225 | |||||||||||
Adjusted EBITDA Loss | $ | (4,674 | ) | $ | (3,471 | ) | $ | (12,692 | ) | $ | (8,708 | ) |
SEASPINE HOLDINGS CORPORATION
RECONCILIATION OF NON-GAAP INFORMATION - GAAP GROSS MARGIN TO ADJUSTED GROSS MARGIN
(UNAUDITED)
(In thousands)
Quarter Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2022 | 2021 | 2022 | 2021 | ||||||||||||
Total revenue, net | $ | 56,318 | $ | 47,463 | $ | 107,011 | $ | 89,417 | |||||||
Less: Cost of goods sold | 19,127 | 17,482 | 39,503 | 32,848 | |||||||||||
Gross profit | 37,191 | 29,981 | 67,508 | 56,569 | |||||||||||
Add back: | |||||||||||||||
Technology-related intangible asset amortization | 986 | 609 | 1,972 | 876 | |||||||||||
Purchase accounting inventory fair market value adjustments | 83 | — | 208 | — | |||||||||||
Adjusted gross profit | $ | 38,260 | $ | 30,590 | $ | 69,688 | $ | 57,445 | |||||||
Adjusted gross margin (Adjusted gross profit / Total revenue, net) | 67.9 | % | 64.5 | % | 65.1 | % | 64.2 | % |
FAQ
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