Alphatec Expects 26% Growth In Q1 Revenue; Affirms FY10 Guidance

Alphatec Holdings Inc. (NASDAQ: ATEC), the parent company of Alphatec Spine, on Monday said that it expects tp report record consolidated quarterly revenues of approximately $38.4 million for the first quarter 2010, an increase of 25.6% from the $30.6 million reported in the year-ago period, and a sequential increase of 5.0% over fourth quarter 2009 revenues of $36.6 million. Analysts, on average, expect the company to report breakeven per share on revenue of $38.19 million for the first quarter.

The company designs, develops, manufactures and markets products for the surgical treatment of spine disorders, with a focus on treating conditions related to the aging spine.

The Company also said that its OsseoFix Spinal Fracture Reduction System, a minimally invasive device that stabilizes the vertebral body, reached a significant milestone in the European market with over 900 patients having been treated as of March 31, 2010.The product is now being sold in six countries and is being launched through our newly acquired direct sales organizations in France, Italy, and the U.K. during the second quarter of 2010.

OsseoFix is not approved by the FDA for sale in the United States. The product is currently being evaluated in an Investigational Device Exemption clinical study to support its 510(k) clearance with the FDA.

Additionally, Alphatec Spine reaffirmed its full year 2010 financial guidance from December 17, 2009. It expects combined annualized pro forma revenues of $220.0 million to $225.0 million, $32.0 million to $35.0 million in combined annualized pro forma adjusted EBITDA and combined positive pro forma non-GAAP EPS for the full year 2010, excluding amortization of intangible assets, transaction expenses and acquisition-related restructuring charges. . The company reiterates this guidance to reflect the 2010 pro forma effect of the Scient’x transaction on a full year basis, as if the acquisition closed January 1, 2010. Analysts, on average, currently expect the company to report earnings of 7 cents a share on revenue of $208.59 million for fiscal-year ending in December 2010.

It also announced that it is offering to sell 8,000,000 primary shares of its common stock and a selling shareholder, Healthpoint Capital Partners, L.P., is offering 8,000,000 shares of Alphatec common stock in an underwritten public offering. Alphatec Holdings and the selling shareholder have each granted the underwriters an option to purchase up to an additional 1,200,000 shares (2,400,000 shares in the aggregate) of common stock to cover over allotments of shares, if any.

Shares of the company are currently trading at a forward P/E (31-Dec-2011) of 24.50 and PEG ratio (5 yr expected) of 1.35. Five of the 7 Wall Street analysts covering the company have it rated as a Strong Buy. Of the remaining Two analysts, One each rate it at Moderate Buy and Hold. In terms of stock performance, shares of the company are up nearly 27% year-to-date.

Disclosure: Author doesn’t own any of the stocks discussed here



Josh Sandberg

Josh Sandberg is the President of Ortho Spine Partners and Partner for The De Angelis Group. He also serves as Co-Founder and Editor of OrthoSpineNews.

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