Alphatec Holdings Announces Fourth Quarter and Full Year 2013 Revenue and Financial Results

Alphatec Holdings Announces Fourth Quarter and Full Year 2013 Revenue and
Financial Results

Company Posts Record Sales and Adjusted EBITDA for Both Fourth Quarter and
Full Year 2013

CARLSBAD, Calif., March 17, 2014 (GLOBE NEWSWIRE) -- Alphatec Holdings, Inc.
(Nasdaq:ATEC), the parent company of Alphatec Spine, Inc., a medical device
company that provides physician-inspired solutions for patients with spinal
disorders, announced today financial results for the fourth quarter and full
year ended December 31, 2013.

-- Fourth quarter revenue of $53.1 million; approximately 1% growth over 2012.
3.4% growth on a constant currency basis.

-- Fourth quarter adjusted EBITDA of $7.5 million, 14.1% of revenue; 51%
growth over 2012.

-- Annual total revenue of $204.7 million; 4.3% growth over 2012. 7.3% growth
on a constant currency basis.

-- Full year adjusted EBITDA of $25.2 million, 12.3% of revenue; 26.5% growth
over 2012.

Highlights of Alphatec's Fourth Quarter and Fiscal Year 2013

-- Delivered significant revenue growth across key global markets

  *U.S. annual revenue of $135 million in 2013, which represented 3.4% growth
    over 2012; excluding the revenue contributions of PureGen realized in
    2012, U.S. revenue was up over 8%.
  *Well-established international business accounted for 34% of full year
    revenue with growth of 15% over 2012, as adjusted for constant currency.
  *Japanese revenue of $28.4 million in 2013, which represented impressive
    19.4% year-over-year growth on a constant currency basis.

-- Expanded global product portfolio with focus on minimally invasive and
biologics products

  *Over 27% of 2013 global revenues were achieved through the targeted
    marketing and sales of innovative technologies.
  *Illico MIS global revenue increased over 19% from 2012 with surgeon
    adoption of Illico Multi-level, which was launched in early 2013.
  *Alphatec Solus ALIF launched in mid-2013 and is demonstrating strong
    uptake with surgeons who value the simplicity of the system and decreased
    operative time for their patients.
  *Zodiac Direct Vertebral Rotation (DVR) launched in early 2013 and
    supported strong double-digit growth in U.S. deformity unit volumes over
    2012.
  *Approximately 30% of biologics revenue in 2013 came from newly launched
    innovative biologics products such as NeXoss and Profuse Bioscaffold
    Allograft strips and chips.

-- Strengthened foundation for future profitability

  *French government and Works Council approval of proposed Scient'x
    restructuring in France, which is anticipated to increase EBITDA by $6 to
    $7 million on an annualized basis in 2H2014. Transition well underway and
    is progressing towards full completion.
  *Realized significant reductions in global inventories, reduced back orders
    by over 90% and decreased overall lead-times by over 85% and work in
    process by over $1 million.
  *Adjusted EBITDA fourth quarter growth of 51% over the same period in 2012
    and 11.5% sequential growth.

"2013 was a very successful, transformational year for Alphatec Spine, with
record sales, solid, repeatable execution and strategic operational
improvements. We generated global sales growth across our portfolio while
continuing to focus on operational effectiveness that we believe will add to
our strong foundation for future value creation," said Les Cross, Chairman and
CEO of Alphatec. "I am proud of the performance and strong results delivered
by our employees and partners  across the world in 2013. Our strong execution,
along with resolution of the OrthoTec, LLC vs. Surgiview S.A.S. legal matter
announced today, has removed an uncertainty in our business and positioned us
to enter 2014 with an extraordinary opportunity to maximize long-term
shareholder value," added Mr. Cross.

Quarter Ended December 31, 2013

Consolidated net revenues for the fourth quarter of 2013 were $53.1 million,
representing growth of approximately 1% compared to $52.7 million reported for
the fourth quarter of 2012, or 3.4% on a constant currency basis.

U.S. net revenues for the fourth quarter of 2013 were $35.7 million,
representing growth of approximately 5%, compared to $34.0 million reported
for the fourth quarter of 2012. Excluding revenue contributions from PureGen
in 2012, U.S. net revenues grew 10.5% over the same period in 2012.

International net revenues for the fourth quarter of 2013 were $17.4 million,
down 7% compared to $18.7 million for the fourth quarter of 2012, or up
approximately 1% on a constant currency basis. International sales were
impacted by an anticipated decline in French revenue after our decision to
discontinue commercial operations in France was announced in the third
quarter. Excluding revenues from the end of commercial operations in France,
international revenues grew over 4% over the same period in 2012 on a constant
currency basis.

Gross profit and gross margin for the fourth quarter of 2013 were $35.3
million and 66.4%, respectively, compared to $32.1 million and 60.9%,
respectively, for the fourth quarter of 2012. When gross profit and gross
margin in the fourth quarter of 2013 are adjusted for COGS-related expenses
incurred as a result of the restructuring of the Company's French operations,
gross profit and gross margin would be $36.4 million and 68.6%, respectively,
reflecting continued performance at managing costs and streamlining
operations.

Total operating expenses for the fourth quarter of 2013 were $91.3 million,
reflecting an increase of approximately $55.1 million compared to the fourth
quarter of 2012. This variance is driven primarily by expenses related to the
OrthoTec vs. Surgiview legal matter and $5.6 million of expenses associated
with the restructuring of the Company's French operations. When operating
expenses are adjusted for these and other non-GAAP adjustments, total
operating expense would be $36.4 million, or 68.7% of revenue, which is an
increase of $0.3 million over 2012.

As announced earlier today, the Company has reached a settlement with
OrthoTec, LLC regarding the OrthoTec, LLC vs. Surgiview S.A.S. legal matter.
As a result of this settlement, the Company recorded the following expenses in
the fourth quarter of 2013: a non-recurring expense of $46 million associated
with the settlement and $3.7 million of trial-related litigation expenses
incurred during the fourth quarter.

GAAP net loss for the fourth quarter of 2013 was $60.4 million or ($0.62) per
share (basic and diluted), compared to a net loss of $5.4 million, or ($0.06)
per share (basic and diluted) for the fourth quarter of 2012. Non-GAAP EPS,
when adjusted for the expense items related to the OrthoTec vs. Surgiview
legal matter discussed previously, as well as expenses associated with the
ongoing restructuring of the Company's French operations, is ($0.02) per share
(basic and diluted), compared to ($0.01) per share (basic and diluted) for the
fourth quarter of 2012.

Adjusted EBITDA in the fourth quarter of 2013 was $7.5 million, or 14.1% of
revenues, compared to $5.0 million, or 9.4% of revenues reported in the fourth
quarter of 2012. Fourth quarter 2013 adjusted EBITDA represents net income
excluding effects of interest, taxes, depreciation, amortization, stock-based
compensation and the following items: a non-recurring expense of $46.0 million
associated with the settlement of the OrthoTec vs. Surgiview litigation, $3.7
million in trial-related litigation expenses and $6.3 million of expenses
related to restructuring of the Company's French operations. Please refer to
the table, "Alphatec Holdings, Inc. Reconciliation of Non-GAAP Financial
Measures" that follows for more detailed information.

Cash and cash equivalents were $21.3 million at December 31, 2013, compared to
$22.2 million reported at December 31, 2012.

Year Ended December 31, 2013

Consolidated net revenues for full year 2013 were $204.7 million, representing
growth of 4.3%, compared to $196.3 million reported for full year 2012, or up
7.3% on a constant currency basis.

U.S. net revenues for full year 2013 were $135.0 million, representing growth
of 3.4%, compared to $130.5 million reported for full year 2012. Excluding
revenue contributions from PureGen, U.S. net revenues grew 8.3% over 2012.The
increase in U.S. net revenues was driven by continued growth in unit volumes
with our core hospital business as well as growing adoption of products across
our portfolio.

International net revenues full year 2013 were $69.8 million, representing
growth of 6% compared to $65.8 million for full year 2012, or 15% on a
constant currency basis.International sales growth continues to be driven by
strong sales in Japan as well as expansion within Latin America and China
offset by continued currency conversion impact.

Gross profit and gross margin for full year 2013 were $124.3 million and
60.7%, respectively, compared to $123.8 million and 63.1%, respectively, for
full year 2012.When gross profit and gross margin for the full year 2013 are
adjusted for non-recurring COGS adjustments related to PureGen, as well as
COGS-related expenses incurred as a result of the restructuring of the
Company's French operations, gross profit and gross margin would be $133.5
million and 65.2%, respectively.

Total operating expenses for full year 2013 were $197.8 million, reflecting an
increase of approximately $64.2 million compared to full year 2012.This
variance is primarily driven by the non-recurring expenses related to the
OrthoTec vs. Surgiview legal matter outlined previously, as well as
approximately $9.7 million of expenses related to the French
restructuring.When operating expenses are adjusted for these expenses and
other non-GAAP adjustments, total operating expense would be $137.8 million,
or 67.3% of revenue.

GAAP net loss for full year 2013 was $82.2 million or ($0.85) per share (basic
and diluted), compared to a net loss of $15.5 million, or ($0.17) per share
(basic and diluted) for full year 2012.Non-GAAP EPS, when adjusted for the
expense items related to the OrthoTec vs. Surgiview legal matter discussed
previously, as well as expenses associated with the ongoing restructuring of
the Company's French operations, is ($0.02) per share (basic and diluted),
compared to ($0.01) per share (basic and diluted) for full year 2012.

Adjusted EBITDA for full year 2013 was $25.2 million, or 12.3% of revenues,
compared to $19.9 million, or 10.1% of revenues reported for full year
2012.Full year 2013 adjusted EBITDA represents net income excluding effects
of interest, taxes, depreciation, amortization, stock-based compensation and
the following items:a non-recurring expense of $46.0 million associated with
the settlement of the OrthoTec vs. Surgiview litigation, $3.7 million in
trial-related litigation expenses and $15.3 million of expenses related to
restructuring of the Company's French operations.Please refer to the table,
"Alphatec Holdings, Inc. Reconciliation of Non-GAAP Financial Measures" that
follows for more detailed information.

2014 Financial Guidance

The Company anticipates annual 2014 revenues of $208 million to $215 million,
representing approximately 1.6% to 5% growth over 2013, or 4.5% to 8.0% when
adjusted for prior year contributions associated with sales in
France.Additionally, the Company expects annual adjusted EBITDA of $30
million to $33 million in 2014, representing 19% to 31% growth over 2013, and
representing approximately 14.4% to 15.3% of annual revenue.Adjusted EBITDA
guidance assumes that there are no further ongoing litigation expenses
associated with the OrthoTec vs. Surgiview legal matter.

Conference Call

Alphatec Spine will webcast its Quarterly Update Call today at 5:00 p.m. EDT /
2:00 p.m. PDT.Les Cross, Alphatec's Chairman and CEO will lead the
call.During the call the Company plans to provide further details underlying
itsfourth quarter 2013 financial results.

To access the webcast, please log on to www.alphatecspine.com approximately
fifteen minutes prior to the call to register, download and install any
necessary audio software.For those without access to the internet, the live
call may be accessed by phone by calling toll-free (877) 556-5251 (U.S. /
Canada) or (720) 545-0036 (international), participant passcode number
59336789.A replay of the call will also be available on the investor
relations section of Alphatec Spine's website for at least 30 days.

Alphatec expects to file a Form 12b-25 (Notification of Late Filing) with the
United States Securities and Exchange Commission today, as it is anticipating
filing its report on Form 10-K for the year ended December 31, 2013 no later
than April 1, 2014, which is after the required filing date of March 17, 2014.

Non-GAAP Information

Alphatec Spine reports certain non-GAAP financial measures such as non-GAAP
earnings and earnings per share, adjusted for effects of amortization and
other non-recurring or expense items, such as loss on extinguishment of debt,
restructuring expenses and transaction-related expenses.Adjusted EBITDA
included in this press release is a non-GAAP financial measure that represents
net income (loss) excluding the effects of interest, taxes, depreciation,
amortization, stock-based compensation expenses, and other non-recurring
income or expense items, such as severance expense, litigation expenses,
damages associated with ongoing litigation and transaction-related expenses.
The Company believes that non-GAAP adjusted EBITDA provides investors with an
additional tool for evaluating the Company's core performance, which
management uses in its own evaluation of continuing operating performance, and
a base-line for assessing the future earnings potential of the Company.For
completeness, Management uses non-GAAP adjusted EBITDA in conjunction with
GAAP earnings and earnings per common share measures.These non-GAPP financial
measures should be considered in addition to, and not as a substitute for, or
superior to, financial measures calculated in accordance with GAAP. Included
below are reconciliations of the non-GAAP financial measures to the comparable
GAAP financial measure.

About Alphatec Spine

Alphatec Spine, Inc., a wholly owned subsidiary of Alphatec Holdings, Inc., is
a medical device company that designs, develops, manufactures and markets
physician-inspired products and solutions for the treatment of spinal
disorders associated with trauma, congenital deformities, disease and
degeneration. The Company's mission is to combine innovative surgical
solutions with world-class customer service to improve outcomes and patient
quality of life. The Company and its affiliates market products in the U.S.
and in over 50 countries internationally via a direct sales force and
independent distributors.

Additional information can be found at www.alphatecspine.com.

Forward Looking Statements

This press release may contain "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainty. Such statements are based on management's current expectations
and are subject to a number of risks and uncertainties that could cause actual
results to differ materially from those described in the forward looking
statements. Alphatec Spine cautions investors that there can be no assurance
that actual results or business conditions will not differ materially from
those projected or suggested in such forward-looking statements as a result of
various factors. Forward looking statements include the references to Alphatec
Spine's 2014 revenue, guidance and 2014 adjusted EBITDA guidance; the success
of the Company to achieve the gross margin, profitability and adjusted EBITDA
improvements of the French restructuring in the anticipated timeframes
including an increase in EBITDA of $6 to $7 million on an annualized basis in
the second half of 2014; the success of the Company's initiatives to drive
global sales growth, increase margins and increase operating efficiencies.
The important factors that could cause actual operating results to differ
significantly from those expressed or implied by such forward-looking
statements include, but are not limited to: the uncertainty of success in
developing new products or products currently in Alphatec Spine's pipeline;
the uncertainties regarding the ability to successfully license or acquire new
products, and the commercial success of such products; failure to achieve
acceptance of Alphatec Spine's products by the surgeon community, including
the Alphatec Solus, Zodiac DVR, Profuse, Illico MIS and NeXoss products
discussed in this press release; failure to successfully implement
streamlining activities to create anticipated savings; failure to obtain FDA
clearance or approval or international regulatory approvals for new products,
including the products discussed in this press release, or unexpected or
prolonged delays in the process; continuation of favorable third party payor
reimbursement for procedures performed using the Company's products;
unanticipated expenses or liabilities or other adverse events affecting cash
flow or the Company's ability to successfully control its costs or achieve
profitability; uncertainty of additional funding; the Company's ability to
compete with other competing products and with emerging new technologies;
product liability exposure; an unsuccessful outcome in any material litigation
in which the Company is a defendant; patent infringement claims and claims
related to the Company's intellectual property. The words "believe," "will,"
"should," "expect," "intend," "estimate" and "anticipate," variations of such
words and similar expressions identify forward-looking statements, but their
absence does not mean that a statement is not a forward-looking statement.
Please refer to the risks detailed from time to time in Alphatec Spine's SEC
reports, including its Annual Report Form 10-K for the year ended December 31,
2012, filed on March 4, 2013 with the Securities and Exchange Commission, as
well as other filings on Form 10-Q and periodic filings on Form 8-K. Alphatec
Spine disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise, unless required by law.

ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts - unaudited)
                                                               
                               Three Months Ended     Year Ended
                                December 31,           December 31,
                               2013        2012       2013        2012
                                                               
Revenues                        $53,065   $52,743  $204,724  $196,278
Cost of revenues                17,366     19,988    78,669     70,761
Amortization of acquired        444        635       1,733      1,749
intangible assets
Total cost of revenues          17,810      20,623     80,402      72,510
Gross profit                    35,255      32,120     124,322     123,768
                                                               
Operating expenses:                                             
Research and development        3,814      3,883     14,190     14,886
In-process research and         --         341       --         341
development
Sales and marketing             21,156     19,334    76,960     75,177
General and administrative      13,931      11,226     47,949     39,939
Amortization of acquired        754         605        3,009      2,180
intangible assets
Transaction related costs       --        719        --        1,082
Litigation settlement           45,982     --       45,982     --
Restructuring expenses          5,620      --       9,665      --
Total operating expenses        91,257      36,108     197,755     133,605
Operating loss                  (56,002)    (3,988)    (73,433)    (9,837)
Interest and other income       (2,109)     (1,767)    (5,615)     (6,781)
(expense), net
Loss from continuing operations (58,111)    (5,755)    (79,047)    (16,618)
before taxes
Income tax provision (benefit)  2,296      (400)     3,179      (1,159)
Net loss                        $(60,407) $(5,355) $(82,227) $(15,459)
                                                               
                                                               
Net loss per common share:                                      
Basic and diluted net loss per  $(0.62)   $(0.06)  $(0.85)   $(0.17)
share
                                                               
Weighted-average shares - basic 96,793      93,209     96,235      90,218
and diluted


ALPHATEC HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands - unaudited)
                                                      
                                          December 31, December 31,
                                           2013         2012
ASSETS                                                 
Current assets:                                        
Cash and cash equivalents                 $21,345    $22,241
Accounts receivable, net                  41,395       41,012
Inventories, net                          41,939       49,855
Prepaid expenses and other current assets 7,694        5,953
Deferred income tax assets                1,372       2,991
Total current assets                       113,745      122,052
                                                      
Property and equipment, net                28,030       30,403
Goodwill                                   183,004      180,838
Intangibles, net                           39,064       46,856
Other assets                               1,787        1,978
Total assets                               $365,630   $382,127
                                                      
LIABILITIES AND STOCKHOLDERS' EQUITY                   
Current liabilities:                                   
Accounts payable                          $10,790    $15,237
Accrued expenses                          62,996       38,490
Deferred revenue                          1,009        1,361
Current portion of long-term debt         4,924        1,700
Total current liabilities                  79,719       56,788
                                                      
Total long term liabilities               90,632      55,920
Redeemable preferred stock                23,603      23,603
Stockholders' equity                      171,676     245,816
Total liabilities and stockholders' equity $365,630   $382,127


ALPHATEC HOLDINGS, INC.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in thousands, except per share amounts - unaudited)
                                                               
                               Three Months Ended     Year Ended
                                December 31,           December 31,
                               2013        2012       2013        2012
                                                               
Operating loss, as reported     $(56,002) $(3,988) $(73,433) $(9,837)
Add back:                                                       
Depreciation                    3,786      3,647     14,638     14,184
Amortization of intangible      1,330      1,481     6,898      5,679
assets
Amortization of acquired        1,197      1,241     4,741      3,929
intangible assets
Total EBITDA                    (49,689)    2,381      (47,156)    13,955
                                                               
Add back significant items:                                     
Stock-based compensation        1,246      1,330     4,078      3,540
In-process research and         --         341       --         341
development
Acquisition-related inventory   --         191       --         191
step-up
Transaction related expenses    --         718       --         1,082
Litigation settlement and trial 49,657     --        49,657     --
costs
Restructuring and other charges 6,282      --        18,603     794
                                                               
EBITDA, as adjusted for         $7,496    $4,961   $25,182   $19,903
significant items
                                                               
                                                               
Net loss, as reported           $(60,407) $(5,355) $(82,227) $(15,459)
Add back:                                                       
In-process research and         --        341       --        341
development
Amortization of acquired        1,197      1,241     4,741      3,929
intangible assets
Amortization of intangible      1,330      1,481     6,898      5,679
assets
Loss on extinguishment of debt  --        --       --        2,910
Acquisition-related inventory   --        191       --        191
step-up
Transaction related expenses    --        718       --        1,082
Litigation settlement and trial 49,657     --       49,657     --
costs
Restructuring and other charges 6,282      --       18,603     794
                                                               
Net loss, as adjusted for       $(1,941)  $(1,383) $(2,328)  $(533)
significant items
                                                               
                                                               
Net loss per common share -     $(0.62)   $(0.06)  $(0.85)   $(0.17)
basic and diluted
Add back:                                                       
In-process research and         --        0.00      --        0.00
development
Amortization of acquired        0.01       0.01      0.05       0.04
intangible assets
Amortization of intangible      0.01       0.02      0.07       0.06
assets
Loss on extinguishment of debt  --        --       --        0.03
Acquisition-related inventory   --        0.00      --        0.00
step-up
Transaction related expense     --        0.01      --        0.01
Litigation settlement and trial 0.51       --       0.52       --
costs
Restructuring and other charges 0.06       --       0.19       0.01
                                                               
Net loss per common share -
basic anddiluted, as adjusted  $(0.02)   $(0.01)  $(0.02)   $(0.01)
for significant items
                                                               
                                                               
Weighted-average shares - basic 96,793      93,209     96,235      90,218
and diluted


ALPHATEC HOLDINGS, INC.
RECONCILIATION OF GEOGRAPHIC SEGMENT REVENUES AND GROSS PROFIT
(in thousands, except percentages - unaudited)
                                                               
                   Three Months Ended                              % Change
                    December 31,              % Change  % Change    Foreign
                   2013         2012         As        Operations  Currency
                                              Reported
                                                               
Revenues by                                                     
geographic segment
U.S.                $35,702    $34,046    4.9%      4.9%        0.0%
International       17,363       18,697       -7.1%     0.8%        -7.9%
Total revenues      $53,065    $52,743    0.6%      3.4%        -2.8%
                                                               
Gross profit by                                                 
geographic segment
U.S.                $26,563    $22,575                        
International       8,692        9,545                            
Total gross profit  $35,255    $32,120                        
                                                               
Gross profit margin
by geographic                                                   
segment
U.S.                74.4%        66.3%                            
International       50.1%        51.1%                            
Total gross profit  66.4%        60.9%                            
margin
                                                               
                                                               
                   Year Ended                                      % Change
                    December 31,             % Change  % Change    Foreign
                   2013         2012         As        Operations  Currency
                                              Reported
                                                               
Revenues by                                                     
geographic segment
U.S.                $134,951   $130,476   3.4%      3.4%        0.0%
International       69,773       65,802       6.0%      15.0%       -9.0%
Total revenues      $204,724   $196,278   4.3%      7.3%        -3.0%
                                                               
Gross profit by                                                 
geographic segment
U.S.                $91,341    $89,360                        
International       32,981       34,408                           
Total gross profit  $124,322   $123,768                       
                                                               
Gross profit margin
by geographic                                                   
segment
U.S.                67.7%        68.5%                            
International       47.3%        52.3%                            
Total gross profit  60.7%        63.1%                            
margin
                                                               
                                                               
Footnotes:                                                      
1)The impact from foreign currency represents the percentage change in 2013
revenues due to the change in foreign exchange rates for the periods
presented.


ALPHATEC HOLDINGS, INC.
NON-GAAP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts - unaudited)
                                                        
                                                        
                      Three Months Ended December 31, 2013
                                    Non-GAAP     
                       GAAP          Adjustments            Non-GAAP
                                                        
Revenues               $53,065     $--                $53,065
Cost of revenues       17,366       (1,131)     (a)       16,235
Amortization of
acquired intangible    444          --                  444
assets
Total cost of revenues 17,810        (1,131)              16,679
Gross profit           35,255        1,131                36,386
                      66.4%                              68.6%
Operating expenses:                                      
Research and           3,814        --                   3,814
development
Sales and marketing    21,156       --                   21,156
General and            13,931        (3,206)      (b)      10,725
administrative
Amortization of
acquired intangible    754           0                     754
assets
Litigation settlement  45,982       (45,982)     (c)     --
Restructuring expenses 5,620        (5,620)     (d)     --
Total operating        91,257        (54,808)             36,449
expenses
Operating loss         (56,002)      55,939               (63)
Interest and other     (2,109)       0                     (2,109)
income (expense), net
Loss from continuing
operations before      (58,111)      55,939               (2,171)
taxes
Income tax provision   2,296        --                  2,296
Net loss               $(60,407)   $55,939             $(4,468)
                                                        
                                                        
                      Year Ended December 31, 2013
                                    Non-GAAP     
                       GAAP          Adjustments            Non-GAAP
                                                        
Revenues               $204,724    $--                $204,724
Cost of revenues       78,669       (9,176)     (a) (e)   69,493
Amortization of
acquired intangible    1,733        --                  1,733
assets
Total cost of revenues 80,402        (9,176)              71,226
Gross profit           124,322       9,176                133,498
                      60.7%                              65.2%
Operating expenses:                                      
Research and           14,190       (162)       (f)     14,028
development
Sales and marketing    76,960       --                   76,960
General and            47,949       (4,168)      (b) (g)  43,781
administrative
Amortization of
acquired intangible    3,009        --                  3,009
assets
Litigation settlement  45,982       (45,982)     (c)     --
Restructuring expenses 9,665        (9,665)     (d)     --
Total operating        197,755       (59,977)             137,778
expenses
Operating loss         (73,433)      69,153               (4,280)
Interest and other     (5,615)       --                  (5,615)
income (expense), net
Loss from continuing
operations before      (79,047)      69,153               (9,894)
taxes
Income tax provision   3,179        --                  3,179
Net loss               $(82,227)   $69,153             $(13,074)
                                                        
Notes:                                                   
(a) Record inventory and instrument net book value adjustment and other
costs of $1.1 million and $5.6 million for the three months and year
ended December 31, 2013, respectively,related to the restructuring of
the Company's French operations.
(b) Amount consists of Orthotec litigation trial related costs of $3.7
million, partially offset by Phygen related escrow claim.
(c) Litigation settlement related to the Orthotec litigation.              
(d) Employee severance and facility closing costs accrued for the
restructuring of the Company's French operations.
(e) Includes write-off of inventory and intangibles of $3.5 million
related to the Company's Puregen product.
(f)Expense related to research and development technology.                
(g) Amount includes Phygen related acquisition costs of $0.4 million.     

CONTACT: Investor/Media Contact:
        
         Christine Zedelmayer
         Investor Relations
         Alphatec Spine, Inc.
         (760) 494-6610
         czedelmayer@alphatecspine.com

Alphatec Spine
 
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