Alphatec Holdings, Inc. (ATEC)

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Alphatec Holdings, Inc. (ATEC)

Q4 2012 Earnings Conference Call

February 28, 2013 5:00 pm ET


Leslie H. Cross - Chairman and Chief Executive Officer

Michael O'Neill - Vice President, Chief Financial Officer and Treasurer

Thomas McLeer - Senior Vice President of U.S. Commercial Operations

Mark Francois - Senior Director of Investor Relations


Raj Denhoy - Jefferies & Company, Inc.

Matt Miksic - Piper Jaffray

William Plovanic - Canaccord Genuity

Josh Jennings - Cowen and Company

Glenn Novarro - RBC Capital Markets

Mark Landy - Summer Street Research


Mark Francois

Ladies and gentlemen, thank you for standing by. I am Mark Francois, Senior Director of Investor Relations for Alphatec Spine. Thank you for joining us today for Alphatec Spine's conference call to discuss our fourth quarter 2012 financial and operating results. Speaking today will be Les Cross, Alphatec's Chairman and Chief Executive Officer; Michael O'Neill, Vice President and Chief Financial Officer; and Tom McLeer, Senior Vice President of the U.S. Commercial Operations.. Also on the call today is Ebun S. Garner, our General Counsel.

During our prepared remarks today, you will be in a listen only mode. After our prepared remarks are concluded, we'll open up the call for your questions, and as a reminder, this call is being recorded today, February 28, 2013, and a replay of that event will be available later on our website and will be there for the next 30 days or so.

Before I turn the call over to Les, I must remind you that today's conference call contains forward-looking statements made under the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. Such statements include statements related to the Company's revenue and adjusted EBITDA expectations for 2013, the success of the Company's initiatives from 2012 and 2013 to drive global sales growth, increased margins and increased operating efficiencies, the ability to achieve surgeon conversions in connection with the Phygen acquisition, contributions to the Company's revenues and earnings in 2013, and the introduction of new products and sales and marketing strategy, improvements to the Company's cost structure and operating margins from operational initiatives, and the timing of U.S. FDA regulatory decisions that impact the commercialization of products.

These forward-looking statements are based on the Company's current expectations and are subject to a number of risks, uncertainties and assumptions that could cause the actual results to materially differ from the forward-looking statements. The Company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise.

Most of these risks, uncertainties and assumptions are discussed in our 2011 Annual Report on Form 10-K for the year ended December 31, 2011 filed on March 5, 2012 with the Securities and Exchange Commission, as well as other filings on Form 10-Q and periodic filings on Form 8-K. Our SEC documents are readily available on our website at

With that, I'll hand the call over to Les.

Leslie H. Cross

Good job, Mark. Thank you. Good afternoon, everyone, and welcome to Alphatec Spine's conference call to discuss our fourth quarter and year-end financial and operating results. 2012 was an exciting year of change at Alphatec Spine, a year of preparing the Company to deliver sales growth and profitability. We now have a new team, a new vision, a new culture of the Company.

When I talk to people about 2012, I highlight the six major achievements that now implemented we believe will give us a right to win in 2013. These achievements include; a new leadership and a new culture; a focused R&D team that is delivering a continuous flow of new products; significant progress in achieving operational excellence. We have strengthened our U.S. promotional team with the addition of Tom McLeer. In fact, Tom will say a few words today later in our call. I also appointed Pat Ryan as the leader of our international business with a mission to focus on leveraging our impressive footprint, and in a later call, Pat will update our investors on that as well. And finally, we have had tremendous support from our Board of Directors as we have installed this culture of change at Alphatec Spine.

Having spent much of 2012 implementing these initiatives, I am pleased to report a very solid fourth quarter and a strong finish to 2012. The quarter was clearly our best revenue performance of this year, and I am confident the initiatives we have installed are gaining traction. I am extremely proud of the entire Alphatec team to delivering these excellent results.

Since becoming the CEO almost a year ago, in fact almost exactly a year ago, a good portion of the heavy lifting with our initiatives is now behind us. Our focus in 2013 is on executing our plan, the plan that will deliver revenue and profitability results that we hope will meet or exceed the guidance that we're going to talk about later in the call.

With that, I would like quickly to cover a few fourth quarter highlights, and then turn the call over to Tom, who will cover our U.S. commercial strategy. This will be followed by Mike, who will discuss our financial results in much greater detail.

With respect to the top line, we achieved global revenue of nearly $53 million in Q4, about a 7% growth compared to Q4 of last year, or approximately 8% growth on a constant currency basis. We are pleased to see that contributions came from both the U.S. and the international business in driving this excellent result.

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