Exhibit 99.1

 

 

 

Xtant Medical Announces First Quarter 2019 Financial Results

 

BELGRADE, MT, May 15, 2019 – 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%

 

   
   

 


The following information was filed by Xtant Medical Holdings, Inc. (XTNT) on Wednesday, May 15, 2019 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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