The company generated $31.9 million in sales during the first three months of 2017, a 1.6 percent increase compared to the same period of last year. Total U.S. revenue was $28.6 million, a 0.2 percent increase compared to Q1 2016.
Orthobiologics revenue totaled $17.1 million, a 2.8 percent increase compared to the first quarter of 2016. The increase in orthobiologics revenue was driven by an increase in both U.S. and international sales, primarily due to the addition of new distributors in both markets. Spinal hardware revenue totaled $14.8 million, a 0.2 percent increase compared to the first quarter of 2016. The increase in spinal hardware revenue was driven by the recent addition of a new distributor in Latin America.
“Our first quarter performance reflects early traction with our strengthening distributor base and our expanding and updated product portfolio,” said Keith Valentine, president and CEO. “We are continuing to invest in key objectives aimed at top line performance while simultaneously reducing our net cash spend to extend our liquidity horizon.”
Gross margin for the first quarter of 2017 was 58.7 percent, compared to 54.5 percent for the same period in 2016. The increase in gross margin was primarily driven by a $1.7 million provision for excess orthobiologics raw material inventory recorded in the first quarter of 2016. This was somewhat offset by a $0.2 million increase in the first quarter of 2017 in non-cash amortization of technology intangible assets from the NLT acquisition and by lower gross margins associated with international sales, which were slightly higher as a percentage of total revenue compared to the same period of last year.
Operating expenses for the first quarter of 2017 totaled $27.8 million, compared to $29.4 million for the same period in 2016. The $1.6 million decrease in operating expenses was driven by lower selling, general and administrative and intangible amortization expenses.
Net loss for the first quarter of 2017 was $9.1 million, compared to a net loss of $12 million for the first quarter of 2016.
Cash and cash equivalents at March 31, 2017, were $12.7 million and the company had $3.9 million of outstanding borrowings against its $30 million credit facility.
First Quarter 2017 Highlights and Accomplishments
- U.S. spinal hardware revenue of $13.5 million
- International revenue of $3.3 million, an increase of 15 percey year-over-year
- Initial launch of the reusable Rapid Graft Delivery System, which is designed to provide surgeons a cost-effective and controlled method to predictably deliver a broad range of orthobiologic grafts efficiently to the disc space
- Initial launch of the Daytona Small Stature Pediatric Deformity System, a minimal profile version of our existing Daytona system that provides both a clinical and cosmetic benefit for pediatric patients
Consistent with prior guidance, SeaSpine expects full-year 2017 revenue to be in the range of $129 million to $133 million, reflecting growth of 0 percent to 3 percent over full-year 2016 revenue.
SeaSpine designs, develops, and commercializes surgical solutions for the treatment of spinal disorders. SeaSpine has a portfolio of orthobiologics and spinal hardware solutions to meet the varying combinations of products that neurosurgeons and orthopedic spine surgeons need to perform fusion procedures on the lumbar, thoracic and cervical spine. SeaSpine’s orthobiologics products consist of a broad range of advanced and traditional bone graft substitutes that are designed to improve bone fusion rates following a wide range of orthopedic surgeries, including spine, hip, and extremities procedures. SeaSpine’s spinal hardware portfolio consists of products to facilitate spinal fusion in minimally invasive, complex, deformity and degenerative procedures. SeaSpine currently markets its products in the United States and in more than 30 countries worldwide. The company is based in Carlsbad, Calif.