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Xtant Announces Fourth Quarter and Year End 2017 Financial Results
BELGRADE, Mont., April 2, 2018 (GLOBE NEWSWIRE) -- Xtant™ Medical Holdings, Inc. (NYSE American:XTNT), a leader in the development of regenerative medicine products and medical devices, today reported its financial results for the period ended December 31st, 2017.
"2017 represented a significant year for the Company as we completed transformational restructuring activities that were necessary for the future growth of Xtant Medical," said Carl O'Connell, Chief Executive Officer, "Our team has worked with focused effort towards repositioning Xtant for operational excellence. We made improvements to our sales structure and channel for long-term success, and continue to stay keenly focused on differentiating our sales approach by adding talent in key markets. I am pleased with the work we have achieved, and look forward to leading this Company through this next era of profitable performance.”
Consolidated fourth quarter 2017 revenue was approximately $19.3 million, compared to consolidated revenue of approximately $24.5 million for the same period during 2016.
Annual consolidated revenue for 2017 was approximately $82.6 million, compared to consolidated revenue of approximately $90.0 million in 2016. While the Company achieved above-market growth in biologics revenue, the decline in total revenue was due to decreased hardware sales. This was due in part to an aging hardware product line and the termination of some stocking reseller agreements and independent distributor agreements with poor contribution margins, thus allowing the company to focus on more profitable sales channels moving forward.
Consolidated gross profit for the fourth quarter of 2017 was approximately $10.3 million or 53.2% of revenues, compared to gross profit of approximately $17.5 million or 71.6% of revenues for the fourth quarter of 2016. The shift in gross margin as a percentage of revenue is primarily due to a total charge of $2.5 million, or 12.7% of revenues, related to additional reserves for estimated excess inventory and inventory on consignment that may be missing and not returned, as well as impairment charges for estimated missing and damaged consigned surgical instruments. The remaining shift in gross margin compared to the prior year is due to a change in sales mix to biologics which has a lower margin than fixation products.
For the year, consolidated gross profit was approximately $50.1 million, compared with 2016 consolidated gross profit of approximately $62.3 million. Gross margin for the year was 60.6%, compared to 2016 gross margin of 69.2%. The impact of increased inventory reserves and surgical instrument impairment, as noted above, was a decline in gross profit of $4.0 million for the full year of 2017. In addition, a reserve of $0.9 million was recorded in 2017 for additional inventory reserves and surgical instrument impairment related to litigation with a distributor. The impact of these additional reserves reduced gross margin by 6.0% for the year. The remaining reduction in gross profit is primarily due to a shift in the sales mix towards biologics which have a lower gross margin than fixation products.
General and Administrative Expenses
In the fourth quarter, consolidated general and administrative expenses decreased to approximately $3.3 million as compared to approximately $4.5 million reported for the same period of 2016. As a percentage of revenues, general and administrative expenses were 17.2% during the fourth quarter of 2017 as compared to 18.6% for the same period during 2016. The expense reduction in the fourth quarter is a result of cost containment, primarily attributable to reduction in personnel cost and rental facilities, as part of the Company-wide initiatives in 2017 to improve profitability.
The following information was filed by Xtant Medical Holdings, Inc. (XTNT) on Tuesday, April 3, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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