Alphatec Holdings, Inc. (NASDAQ:ATEC) Q3 2018 Earnings Conference Call Transcript
Nov 08, 2018 • 04:30 pm ET
Good afternoon, everyone, and welcome to Alphatec's Third Quarter 2018 Conference Call.
(Forward-Looking Cautionary Statements)
During this call, you may hear the Company refer to reported amounts, which are in accordance with US GAAP as well as non-GAAP or pro forma measures. Reconciliation of non-GAAP measures to US GAAP can be found in the supplemental financial tables included in the press release, which identify and quantify all excluded items and provide management's views of why this information is useful to investors.
Joining us on the call today will be ATEC's Chairman and CEO, Pat Miles; President and COO, Terry Rich; and CFO, Jeff Black.
Now I'll turn the call over to Pat Miles.
Thanks, Rishi, and welcome, everyone. We're pleased to report our results for the third quarter, which demonstrate continued transformation. Total US commercial revenue was $21 million, up 3% compared to the second quarter of 2018. The sequential growth is a testament to the strength of our results, given the historical third quarter seasonal weakness in spine.
We continue to see solid progress on our path to accelerated growth, as evidenced by several major accomplishments. Our US commercial business achieved year-over-year revenue growth for the first time since we began the process of reducing non-strategic distributor relationships in 2017.
Secondly, our team started making its mark on ATEC portfolio with the new product Alpha releases. Additionally, we obtained financial independence from an industry competitor with a new term loan that will free up $27 million over the next three years. Terry will go into the demographics of revenue growth, and Jeff will provide detail on our debt refinancing in a moment.
Turning to guidance, we now have greater clarity into how the remainder of the year will progress and are updating our 2018 revenue guidance to a range of $92 million to $95 million compared to our previous guidance of approximately $95 million. This guidance reflects anticipated fourth quarter domestic growth of greater than 10% on both the sequential and year-over-year basis.
Over the past decade, the industry's leading innovators have been the pure-play spine companies. Their focused commitment has been rewarded with revenue growth that has exceeded the broader market. The team that drove much of the innovation now resides at Alphatec.
We continue to add profound spine experience with the employment of Mark Ojeda, to lead our cervical and biologics effort. Mark has a proven track record integrating multiple technologies into highly differentiated procedural solutions and has particularly deep know-how building cervical and biologics businesses, two segments of the market.
I'm incredibly excited about the addition of Mark to our team. He will be a tremendous asset to ATEC. Mark, like the rest of us, came to ATEC because of the opportunity to drive meaningful industry-leading innovation in an environment that allows us to move quickly and nimbly. We are focused purely on spine, applying our expertise to a market that we help mold.
To that end, we are prioritizing three key initiatives that we know will