Alphatec (ATEC) - 2024 Q2 - Quarterly Report

Revenue and Growth - Revenue from products and services increased by $28.6 million, or 25%, and$ 58.0 million, or 26%, for the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[123]. - The company has achieved an approximately 40% revenue compound annual growth rate since its transformation commenced in 2018[114]. Expenses - Cost of sales decreased by $9.4 million, or 18%, and$ 7.0 million, or 8%, for the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[124]. - Research and development expenses increased by $4.5 million, or 31%, and$ 9.3 million, or 33%, for the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[125]. - Sales, general and administrative expenses increased by $25.4 million, or 29%, and$ 47.9 million, or 27%, during the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[126]. - Litigation-related expenses decreased by $4.8 million, or 70%, and$ 3.6 million, or 35%, for the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[126]. - Amortization of acquired intangible assets increased by $1.1 million, or 17%, during the six months ended June 30, 2024, compared to the same period in 2023[127]. - Transaction-related expenses decreased by$ 1.9 million, or 100%, and $2.0 million, or 106%, during the three and six months ended June 30, 2024, respectively, compared to the same period in 2023[128]. - Restructuring expenses increased due to costs associated with the relocation of office facilities in Paris, France[128]. Interest and Other Income - Interest expense, net, increased by$ 1.9 million, or 49%, and $3.4 million, or 44%, for the three and six months ended June 30, 2024, respectively, compared to the same period in 2023, primarily due to an additional$ 50.0 million drawn on the Braidwell Term Loan and higher interest rates[129]. - Other income, net, decreased by $2.2 million, or 93%, and$ 2.8 million, or 91%, during the three and six months ended June 30, 2024, respectively, mainly due to an employee retention credit received in the prior year[130]. Tax and Cash Flow - The income tax provision showed a change to a benefit of $286,000 for the three months ended June 30, 2024, compared to a provision of$ 50,000 in the same period in 2023, reflecting a 472% increase[131]. - Cash and cash equivalents decreased from $221.0 million at December 31, 2023, to$ 99.8 million at June 30, 2024[135]. - Cash used in operating activities was $49.8 million for the six months ended June 30, 2024, primarily due to inventory purchases[136]. - Cash used in investing activities was$ 69.5 million for the six months ended June 30, 2024, mainly for the purchase of surgical instruments[137]. Debt and Commitments - As of June 30, 2024, the company had $150.0 million outstanding under the Braidwell Term Loan, maturing on January 6, 2028, with an interest rate of Term SOFR plus 5.75%[139]. - The company had$ 54.9 million outstanding under the Revolving Credit Facility, maturing on or before September 29, 2027, with an interest rate of Term SOFR plus 3.5%[139]. - The company has an inventory purchase commitment of $9.8 million remaining under an agreement with a third-party supplier through December 2026[141]. - The company anticipates future capital requirements will depend on revenue growth, development spending, and market expansion efforts[132]. Strategic Goals - The company aims to revolutionize spine surgery through clinical distinction and has a comprehensive product portfolio addressing various spine pathologies[114].