SeaSpine Q3 Earnings Below Expectations On COVID-19 Resurgence

SeaSpine Holdings Corporation SPNE posted a wider than expected Q3 EPS loss of $(0.48), missing the consensus forecast of $(0.31) and almost double from $(0.24)posted a year ago.
Sales of $46.4 million, missing the consensus of $47.82 million, increased 7.5% Y/Y.
“Increased restrictions on spine surgeries caused by the resurgence of the COVID-19 pandemic resulted in unanticipated third quarter volatility in our business,” said SeaSpine CEO Keith Valentine.
U.S. revenue, which totaled $42.6 million, increased 5.5% Y/Y.
Sales of new and recently launched products increased to 78% and 43% of U.S. spinal implants and U.S. orthobiologics revenue, respectively.
Adjusted gross margin decreased to 64.3% from 68%, primarily due to amortization and fair market value adjustments associated with the 7D Surgical acquisition.
Obsolete inventory charges also hit the margin in connection with the full commercial launches and additional set deployments of numerous spinal implant systems in 2021.
Cash and cash equivalents stood at $102.4 million, and the Company had no amounts outstanding under its credit facility.
Outlook: SeaSpine expects Q4 revenue of $54 million - $55 million (lower than the consensus of $58.61 million), up 16% - 18% Y/Y and 23% - 26% over Q4 of FY19.
Price Action: SPNE shares are down 1.03% at $14.47 during the market session on the last check Friday.