SeaSpine Investor Update
Total revenue, net
Less: Cost of goods sold
Gross profit
Add back:
APPENDIX A
Reconciliation of Non-GAAP
to GAAP Financial
($ in millions)
Technology-related intangible asset amortization
Fixed NanoMetalene supplier processing charge
Purchase accounting inventory fair market value adjustments
Idle manufacturing plant costs
Adjusted gross profit
Adjusted gross margin (Adjusted gross profit/Total revenue, net)
($ in millions)
GAAP net loss
Non-GAAP adjustments
Depreciation and intangible asset amortization expense
Other (income) expense
Income tax (benefit) provision
Fixed NanoMetalene supplier processing charge
Idle manufacturing plant costs
Spinal set instrument replacement expense
Spinal set instrument impairment expense
Stock-based compensation
Impairment on intangible assets
European sales and marketing organization restructuring
Purchase accounting inventory fair market value adjustments
Acquisition and integration-related charges
Total Non-GAAP adjustments
Adjusted EBITDA loss
$
$
$
$
$
Q1 20
36.111 $
13.812
22.299
0.294
22.593 $
62.6%
Q1 20
(12.551) $
2.608 $
(0.227)
0.035
0.379
0.2
1.983
1.325
6.337 $
(6.214) $
Q2 20
28.589 $
11.659
16.930
0.241
0.974
18.145
63.5%
$
Q2 20
(13.713) $
2.608 $
(0.014)
0.033
0.974
0.551
(0.024)
2.769
6.897 $
(6.816) $
Q3 20
43.209 $
14.074
29.135
0.254
29.389 $
68.0%
Q3 20
(6.574) $
2.713 $
(0.136)
0.064
0.625
3.182
6.448 $
(0.126) $
Q4 20
46.436 $
17.296
29.140
0.257
29.397
63.3%
Q4 20
(10.343) $
$
2.796 $
(0.086)
0.086
1.244
2.423
6.463 $
(3.880) $
Q1 21
41.954 $
15.366
26.588
0.267
26.855 $
64.0%
2.747 $
0.159
0.025
0.730
Q1 21
Q2 21
(12.720) $ (5.213) $
2.546
Q2 21
47.463 $
17.482
29.981
1.276
7.483 $
(5.237) $
0.609
30.590 $
64.5%
3.133 $
(6.079)
0.158
0.915
3.096
0.519
1.742 $
(3.471) $
Q3 21
Q4 21
Q1 22
46.445 $ 55.589 $ 50.693 $
18.289
25.727
20.376
28.156
29.862
30.317
1.291
0.417
29.864 $ 34.242 $
64.3%
61.6%
4.400 $
0.231
(0.872)
1.020
0.551
3.704
0.125
3.149
1.665
0.417
0.200
10.210 $
(7.417) $
Q3 21
Q4 21
Q1 22
(17.627) $ (18.786) $ (16.604) $
3.653 $
0.157
(0.411)
3.704
1.239
Financial Measures
Measures
3.065
0.161
0.125
0.305
11.998 $
(6.788) $
0.986
0.125
31.428 $
62.0%
4.202 $
(0.002)
(0.228)
1.018
2.819
0.279
0.125
0.372
8.585 $
(8.019) $
Ⓒ2022 SeaSpine Orthopedics Corporation. All rights reserved | 26
Q2 22
56.318
19.127
37.191
0.986
0.083
38.260
67.9%
Q2 22
(13.947)
4.295
0.559
(1.147)
1.665
3.701
0.127
0.083
(0.010)
9.273
(4.674)
In addition to financial measures reported in accordance with U.S. Generally
Accepted Accounting Principles ("GAAP"), the Company provides two non-GAAP
financial measures: (1) earnings (loss) before interest, taxes, depreciation and
amortization excluding the impact of stock-based compensation, intangible
asset impairment charges, the nonrecurring, fixed NanoMetalene supplier
processing charge, idle manufacturing plants costs, spinal set instrument
replacement and impairment expenses, other income/expense purchase
accounting inventory fair market value adjustment charges, acquisition and
integration-related charges, and employee severance and other charges related
to the restructuring of the Company's European sales and marketing
organization ("Adjusted EBITDA Loss"), and (2) gross margin excluding
technology-related intangible asset amortization expense, purchase accounting
inventory fair market value adjustment charges, the nonrecurring fixed
NanoMetalene supplier processing charge, and idle manufacturing plant costs
("Adjusted Gross Margin").
The Company believes that the presentation of Adjusted EBITDA Loss and
Adjusted Gross Margin provides important supplemental information to
management and investors regarding financial and business trends relating to
the Company's results of operations. Management uses Adjusted EBITDA Loss
and Adjusted Gross Margin when evaluating operating performance because it
believes that the inclusion or exclusion of the items described below, for which
the amounts and/or timing may vary significantly depending upon the
Company's acquisition and integration activities, for which the amounts are
non-cash in nature, and/or for which the amounts are not expected to recur at
the same magnitude, provides a supplemental measure of the Company's
operating results that facilitates comparability of its financial condition and
operating performance from period to period, against its business model
objectives, and against other companies in its industry. The Company has
chosen to provide this information to investors so they can analyze the
Company's operating results in the same way that management does and use
this information in their assessment of its core business and the valuation of the
Company.
Reconciliations of these non-GAAP financial measures to their nearest GAAP
financial measures are provided in the tables to the left.
For further information regarding our use of non-GAAP financial measures,
please refer to the Current Report on Form 8-K that SeaSpine filed with the
Securities and Exchange Commission on August 2, 2022.
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