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CST: 24/06/2019 22:54:37   

Xtant Medical Announces First Quarter 2019 Financial Results

40 Days ago

BELGRADE, Mont., May 15, 2019 (GLOBE NEWSWIRE) -- Xtant Medical Holdings, Inc. (NYSE American: XTNT), a global medical technology company focused on surgical solutions for the treatment of spinal disorders, today reported financial and operating results for the first quarter ended March 31, 2019.

First Quarter 2019 Financial Highlights:

  • Revenue for the first quarter of 2019 was $16.7 million, compared to $17.9 million for the same prior year period
  • Operating expenses in the first quarter of 2019 were $11.5 million, compared to $13.9 million for the same prior year period
  • Net loss incurred in the first quarter of 2019 was $2.8 million, compared to a net loss of $5.3 million for the same prior year period
  • Non-GAAP Adjusted EBITDA for the first quarter of 2019 was $1.0 million, compared to $1.2 million for the same prior year period

Greg Jensen, VP, Finance and Interim CFO of Xtant Medical, said, “The first quarter of 2019 was a period of significant progress for Xtant, as we continue to position the company for renewed growth. Our solid execution resulted in a significant reduction in the company’s net loss and generated a positive year-over-year cash flow from operations, enabling us to invest further in our operations. These investments include key personnel hires to expand our sales capabilities and continue to improve the efficiency of our operations. Further boosted by OrbiMed’s recent commitment for an additional $10 million in debt capital, we have strengthened our capital structure, enhanced our financial flexibility and continued to build a strong foundation on which to pursue our growth and value-creating objectives.”

First Quarter 2019 Financial Results

First quarter 2019 revenue was $16.7 million, compared to $17.9 million for the same period in 2018. The decrease occurred primarily due to lower sales in the spinal hardware implant product line.

Gross margin for the first quarter of 2019 was 64.6%, compared to 68.2% for the same period in 2018. The year-over-year decrease was attributed primarily to inventory reserves and manufacturing overhead absorption.

Operating expenses for the first quarter of 2019 were $11.5 million, compared to $13.9 million for the first quarter of 2018. The decrease was primarily attributable to lower sales commissions and travel expenses, as well as a decrease in amortization expense related to the impairment of intangible assets that occurred in the fourth quarter of 2018.

First quarter 2019 net loss was $2.8 million, or $0.21 per share, compared to first quarter 2018 net loss of $5.3 million, or $0.70 per share.

Non-GAAP Adjusted EBITDA for the first quarter of 2019 was $1.0 million compared to $1.2 million for the same period of 2018. The Company defines Adjusted EBITDA as net income/loss from operations before depreciation, amortization and interest expense, and as further adjusted to add back in or exclude, as applicable, non-cash special charges, provision for losses on inventory and accounts receivable, non-cash compensation, change in warrant derivative liability, separation related expenses, litigation reserve, facility consolidation costs and restructuring expenses. A calculation and reconciliation of non-GAAP Adjusted EBITDA to net loss can be found in the attached financial tables.

Conference Call

Xtant Medical will host a webcast and conference call to discuss the first quarter 2019 financial results on Wednesday, May 15, 2019 at 9:00 AM ET. To access the webcast, Click Here. To access the conference call, dial 877-407-6184 within the U.S. or 201-389-0877 outside the U.S. A replay of the call will be available at www.xtantmedical.com, under “Investor Info.”

About Xtant Medical Holdings, Inc.

Xtant Medical Holdings, Inc. (www.xtantmedical.com) is a global medical technology company focused on the design, development, and commercialization of a comprehensive portfolio of orthobiologics and spinal implant systems to facilitate spinal fusion in complex spine, deformity and degenerative procedures. Xtant people are dedicated and talented, operating with the highest integrity to serve our customers.

The symbols ™ and ® denote trademarks and registered trademarks of Xtant Medical Holdings, Inc. or its affiliates, registered as indicated in the United States, and in other countries. All other trademarks and trade names referred to in this release are the property of their respective owners.

Non-GAAP Financial Measures

To supplement the Company’s consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP), the Company uses certain non-GAAP financial measures in this release, including Adjusted EBITDA. Reconciliations of the non-GAAP financial measures used in this release to the most comparable GAAP measures for the respective periods can be found in tables later in this release. The Company’s management believes that the presentation of these measures provides useful information to investors. These measures may assist investors in evaluating the Company’s operations, period over period. Management uses the non-GAAP measures in this release internally for evaluation of the performance of the business, including the allocation of resources. Investors should consider non-GAAP financial measures only as a supplement to, not as a substitute for or as superior to, measures of financial performance prepared in accordance with GAAP.

Important Cautions Regarding Forward-looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as ‘‘expects,’’ ‘‘anticipates,’’ ‘‘intends,’’ ‘‘plans,’’ ‘‘believes,’’ ‘‘estimates,’’ “continue,” “future,” ‘‘will,’’ “potential” similar expressions or the negative thereof, and the use of future dates. The Company cautions that its forward-looking statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others: the Company’s future operating results and financial performance; the ability to increase or maintain revenue; the ability to remain competitive; the ability to innovate and develop new products; the effect of recent management changes and the ability to engage and retain qualified personnel; government and third-party coverage and reimbursement for Company products; the ability to obtain and maintain regulatory approvals and comply with government regulations; the effect of product liability claims and other litigation to which the Company may be subject; the effect of product recalls and defects; timing and results of clinical studies; the ability to obtain and protect Company intellectual property and proprietary rights and operate without infringing the rights of others; the ability to service Company debt and comply with debt covenants; the ability to raise additional financing and other factors. Additional risk factors are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the Securities and Exchange Commission (SEC) on April 1, 2019 and subsequent SEC filings by the Company, including without limitation its most recent Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 anticipated to be filed with the SEC. Investors are encouraged to read the Company’s filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. The Company undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events, except as required by law. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by this cautionary statement.

Investor Relations Contact

David Carey
Lazar Partners Ltd.
Ph: 212-867-1762
Email: dcarey@lazarpartners.com

 
XTANT MEDICAL HOLDINGS, INC.
Condensed Consolidated Balance Sheets
(In thousands, except number of shares and par value)
 
    As of March 31, 2019     As of December 31, 2018
    (Unaudited)      
ASSETS          
Current Assets:          
Cash and cash equivalents   $ 7,097       $ 6,797  
Trade accounts receivable, net of allowance for doubtful accounts of $2,161 and $2,140, respectively     9,493         9,990  
Inventories, net     16,526         17,301  
Prepaid and other current assets     464         589  
Total current assets     33,580         34,677  
Property and equipment, net     6,382         7,174  
Right-of-use asset, net     2,568          
Goodwill     3,205         3,205  
Intangible assets, net     558         573  
Other assets     772         793  
Total Assets   $ 47,065       $ 46,422  
           
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)          
Current Liabilities:          
Accounts payable   $ 6,036       $ 6,465  
Accrued liabilities     4,429         5,150  
Warrant derivative liability     25         10  
Current portion of lease liability     374         -  
Current portion of financing lease obligations     388         426  
Total current liabilities     11,252         12,051  
Long-term Liabilities:          
Lease liability     2,194          
Financing lease obligation, less current portion     138         204  
Long-term debt, less issuance costs     72,657         77,939  
Total Liabilities     86,241         90,194  
           
Stockholders’ Equity (Deficit):          
Preferred stock, $0.000001 par value; 10,000,000 shares authorized; no shares issued and outstanding              
Common stock, $0.000001 par value; 50,000,000 shares authorized; 13,161,762 shares issued and outstanding as of March 31, 2019 and 13,172,179 shares issued and outstanding as of December 31, 2018              
Additional paid-in capital     178,668         171,273  
Accumulated deficit     (217,844 )       (215,045 )
Total Stockholders’ Equity (Deficit)     (39,176 )       (43,772 )
Total Liabilities & Stockholders’ Equity (Deficit)   $ 47,065       $ 46,422  


XTANT MEDICAL HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except number of shares and per share amounts)
 
    Three Months Ended
March 31,
      2019         2018  
Revenue        
Orthopedic product sales   $ 16,686       $ 17,830  
Other revenue     40         104  
Total Revenue     16,726         17,934  
           
Cost of sales     5,913         5,702  
Gross Profit     10,813         12,232  
           
Gross Profit %     64.6 %       68.2 %
           
Operating Expenses          
General and administrative     4,196         3,025  
Sales and marketing     6,742         8,349  
Research and development     262         414  
Depreciation and amortization     159         1,004  
Restructuring expenses             733  
Non-cash compensation expense     122         364  
Total Operating Expenses     11,481         13,889  
           
Loss from Operations     (668 )       (1,657 )
           
Other (Expense) Income          
Interest expense     (2,018 )       (3,545 )
Change in warrant derivative liability     (15 )       (38 )
Other (expense) income     (75 )       (13 )
Total Other (Expense)     (2,108 )       (3,596 )
Provision for income taxes          
Current and deferred     (23 )        
           
Net Loss   $ (2,799 )     $ (5,253 )
           
Net loss per share:          
Basic     (0.21 )       (0.70 )
Dilutive   $ (0.21 )     $ (0.70 )
           
Shares used in the computation:          
Basic     13,170,721         7,481,550  
Dilutive     13,170,721         7,481,550  


XTANT MEDICAL HOLDINGS, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
 
    Three Months Ended
March 31,
      2019         2018  
Operating activities:          
Net loss   $ (2,799 )     $ (5,253 )
Adjustments to reconcile net loss to net cash provided by operating activities:          
Depreciation and amortization     776         1,586  
Loss/(gain) on disposal of fixed assets     116         (23 )
Non-cash interest     1,991         3,446  
Non-cash consulting expense/stock option expense     122         364  
Provision for losses on accounts receivable and inventory     247         39  
Change in derivative warrant liability     15         38  
Changes in operating assets and liabilities:          
Accounts receivable     403         2,290  
Inventories     623         (182 )
Prepaid and other assets     146         660  
Accounts payable     (429 )       (1,884 )
Accrued liabilities     (721 )       (845 )
Net cash provided by operating activities     490         236  
Investing activities:          
Purchases of property and equipment and intangible assets     (137 )       (132 )
Proceeds from sale of fixed assets     51          
Net cash used in investing activities     (86 )       (132 )
           
Financing activities:          
Payments on financing leases     (104 )       (79 )
Expense associated with private placement and convertible debt conversion/exchange             (3,519 )
Proceeds from issuance of stock             6,810  
Net cash (used in) provided by financing activities     (104 )       3,212  
           
Net change in cash and cash equivalents     300         3,316  
Cash and cash equivalents at beginning of period     6,797         2,856  
Cash and cash equivalents at end of period   $ 7,097       $ 6,172  


XTANT MEDICAL HOLDINGS, INC.
CALCULATION OF NON-GAAP CONSOLIDATED EBITDA AND ADJUSTED EBITDA
(Unaudited, in thousands)
 
    Three Months Ended March 31,
      2019         2018  
Net Loss   $ (2,799 )     $ (5,253 )
           
Other expense     75         13  
Depreciation and amortization     776         1,586  
Interest expense     2,018         3,545  
Tax expense     23         -  
Non-GAAP EBITDA gain (loss)     93         (109 )
           
Non-GAAP EBITDA/Total revenue     0.6 %       -0.6 %
           
NON-GAAP ADJUSTED EBITDA CALCULATION          
Provision for losses on AR and inventory     247         39  
Non-cash compensation     122         364  
Change in warrant derivative liability     15         38  
Litigation reserve     530         -  
Dayton transition costs     -         113  
Restructuring expenses     -         733  
Non-GAAP Adjusted EBITDA gain (loss)   $ 1,007       $ 1,178  
           
Non-GAAP EBITDA/Total revenue     6.0 %       6.6 %
                   

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