Exhibit 99.1

 

 

Xtant Medical Announces First Quarter 2021 Financial Results

 

BELGRADE, MT, May 11, 2021 – 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, 2021.

 

First Quarter 2021 Financial Highlights:

 

  Revenue for the first quarter of 2021 totaled $12.5 million, compared to $14.8 million for the prior-year period
  Operating expenses in the first quarter of 2021 totaled $8.1 million, compared to $11.0 million for the prior-year period
  Loss from operations totaled $5,000 compared to an operating loss of $1.4 million for the prior-year period
  Net loss incurred in the first quarter of 2021 totaled $29,000 compared to a net loss of $2.5 million for the prior-year period
  Non-GAAP Adjusted EBITDA for the first quarter of 2021 totaled $0.8 million, compared to $0.3 million for the prior-year period
  Received net cash proceeds of approximately $18.4 million from a private placement to a single healthcare-focused institutional investor
  Recently closed $20 million debt refinancing with MidCap Financial

 

“We continued to navigate through challenging conditions as COVID-19 had a significant impact on elective spinal procedures in January and February in our two largest markets, which represent nearly one-third of our revenue. Since then, we have seen a significant uptick in elective surgeries in both March and April, and are cautiously optimistic that this trend will continue in the months ahead,” said Sean Browne, President and CEO of Xtant Medical. “With a renewed focus on innovative product introductions and expansion of our distribution network, we remain committed to driving our overall commercial performance.”

 

“During the first quarter, we raised $18.4 million in net cash proceeds from a private placement, providing the resources needed to invest in growth. We also recently announced a new five-year, $12 million secured term loan facility and an $8 million secured revolving credit facility, providing us with additional capital resources. We believe our improved balance sheet and stronger operating position will enable us to execute on our future growth opportunities,” Mr. Browne added.

 

First Quarter 2021 Financial Results

 

First quarter 2021 revenue was $12.5 million, compared to $14.8 million for the same period in 2020. The decline in revenue was largely attributed to the impact of COVID-19 on the occurrence of elective procedures.

 

Gross profit for the first quarter of 2021 was 64.5%, compared to 65.0% for the same period in 2020. The reduction in gross profit was primarily attributable to diminished economies of scale, partially offset by reduced depreciation expense.

 

 

 

 

Operating expenses for the first quarter of 2021 totaled $8.1 million, compared to $11.0 million for the first quarter of 2020. The decrease was primarily due the result of reduced sales commissions due to lower sales and lower levels of salaries and wages, severance expense, costs related to enterprise resource planning system upgrades, and research and development expenses compared to the prior-year period.

 

First quarter 2021 net loss totaled $29,000 or $0.00 per share, compared to the first quarter 2020 net loss of $2.5 million, or $0.19 per share.

 

Non-GAAP Adjusted EBITDA for the first quarter of 2021 totaled $0.8 million, compared to $0.3 million for the same period in 2020. The Company defines Adjusted EBITDA as net income/loss from operations before depreciation, amortization and interest expense and provision for income taxes, and as further adjusted to add back in or exclude, as applicable, non-cash compensation and separation related expenses. A calculation and reconciliation of Adjusted EBITDA to net loss can be found in the attached financial tables.

 

2021 Annual Meeting of Stockholders

 

The Company also announced that its Board of Directors established July 27, 2021 as the date of the Company’s 2021 Annual Meeting of Stockholders. The exact time and location of the meeting will be specified in the Company’s proxy statement for the meeting, which it anticipates will be printed on or about June 10, 2021 and sent or made available to stockholders commencing on or about June 14, 2021.

 

Debt Financing

 

As previously announced, on May 6, 2021, the Company and its subsidiaries entered into credit agreements with MidCap Financial Trust (MidCap). The agreements provide for a $12 million secured term loan at an annual rate of 7.00%, plus one-month LIBOR, and an $8 million secured revolving credit facility at an annual rate of 4.50%, plus one-month LIBOR. Both facilities have a five-year term. These new credit agreements replace the Company’s second amended and restated credit agreement, as subsequently amended, with OrbiMed Royalty Opportunities II, which was terminated in accordance with its terms and all indebtedness outstanding thereunder, together with all accrued interest and other fees, were repaid in full with proceeds of loans under the credit agreements. Additional availability under the revolving credit facility is available for working capital needs and other corporate purposes.

 

Conference Call

 

Xtant Medical will host a webcast and conference call to discuss the first quarter 2021 financial results on Tuesday, May 11, 2021 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.

 

Cautionary Statement 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 “intends,” ‘‘expects,’’ ‘‘anticipates,’’ ‘‘plans,’’ ‘‘believes,’’ ‘‘estimates,’’ “continue,” “future,” ‘‘will,’’ “potential,” “going forward,” similar expressions or the negative thereof, and the use of future dates. Forward-looking statements in this release include the Company’s belief that a recent uptick in the number of elective surgeries will continue and its ability to execute on future growth opportunities. . 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 ability to engage and retain qualified personnel; the effect of the COVID-19 pandemic on the Company’s business, operating results and financial condition; 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; 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, comply with its debt covenants and access additional indebtedness; the ability to obtain additional financing on favorable terms or at all; and other factors. Additional risk factors are contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission (SEC) on February 24, 2021 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, 2021 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 FINN  
Ph: 212-867-1762  
Email: david.carey@finnpartners.com  

 

 

 

 

XTANT MEDICAL HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except number of shares and par value)

 

   March 31, 2021   December 31, 2020 
         
ASSETS          
Current Assets:          
Cash and cash equivalents  $18,643   $2,341 
Trade accounts receivable, net of allowance for credit losses and doubtful accounts of $554 and $653, respectively   7,027    6,880 
Inventories   21,641    21,408 
Prepaid and other current assets   1,165    736 
Total current assets   48,476    31,365 
           
Property and equipment, net   4,666    4,347 
Right-of -use asset, net   1,585    1,690 
Goodwill   3,205    3,205 
Intangible assets, net   443    457 
Other assets   322    402 
Total Assets  $58,697   $41,466 
           
LIABILITIES & STOCKHOLDERS’ EQUITY (DEFICIT)          
Current Liabilities:          
Accounts payable  $2,490   $2,947 
Accrued liabilities   4,569    5,462 
Current portion of lease liability   431    423 
Current portion of finance lease obligations   30    20 
Current portion of long-term debt   16,490    16,797 
Total current liabilities   24,010    25,649 
Long-term Liabilities:          
Lease liability, less current portion   1,192    1,303 
Finance lease obligation, less current portion   129    - 
Total Liabilities   25,331    26,952 
           
Stockholders’ Equity (Deficit)          
Preferred stock   -    - 
Common stock   -    - 
Additional paid-in capital   263,731    244,850 
Accumulated deficit   (230,365)   (230,336)
Total Stockholders’ Equity   33,366    14,514 
           
Total Liabilities & Stockholders’ Equity (Deficit)  $58,697   $41,466 

 

 

 

 

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, 
   2021   2020 
Revenue          
Orthopedic product sales  $12,509   $14,735 
Other revenue   33    43 
Total revenue   12,542    14,778 
           
Cost of sales   4,451    5,165 
Gross profit   8,091    9,613 
           
Gross profit %   64.5%   65.0%
           
Operating expenses          
General and administrative   3,027    4,318 
Sales and marketing   4,855    6,413 
Research and development   214    245 
    8,096    10,976 
           
Loss from operations   (5)   (1,363)
           
Other income          
Interest expense   (1)   (1,108)
Total Other Expense   (1)   (1,108)
Net Loss from Operations Before Provision for Income Taxes   (6)   (2,471)
           
Provision for income taxes          
Current and deferred   (23)   (22)
Net Loss from Operations  $(29)  $(2,493)
           
Net loss per share:          
Basic  $(0.00)  $(0.19)
Dilutive  $(0.00)  $(0.19)
           
Shares used in the computation:          
Basic   81,248,875    13,175,345 
Dilutive   81,248,875    13,175,345 

 

 

 

 

XTANT MEDICAL HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

 

    Three Months Ended March 31,  
    2021     2020  
Operating activities:                
Net loss   $ (29 )   $ (2,493 )
Adjustments to reconcile net loss to net cash provided by operating activities:                
Depreciation and amortization     375       685  
Gain on disposal of fixed assets     (32 )     (105 )
Non-cash interest     -       1,101  
Non-cash rent     3       4  
Stock-based compensation     456       269  
Provision for reserve on accounts receivable     (63 )     138  
Provision for excess and obsolete inventory     150       31  
Changes in operating assets and liabilities:                
Accounts receivable     (83 )     195  
Inventories     (383 )     (1,974 )
Prepaid and other assets     (349 )     (340 )
Accounts payable     (459 )     1,610  
Accrued liabilities     (893 )     (910 )
Net cash provided by (used in) operating activities     (1,307 )     (1,789 )
Investing activities:                
Purchases of property and equipment     (542 )     (258 )
Proceeds from sale of fixed assets     59       83  
Net cash used in investing activities     (483 )     (175 )
Financing activities:                
Payments on financing leases     (25 )     (34 )
Payments on long-term debt     (308 )     -  
Proceeds from private place, net of cash issuance costs     18,425       -  
Net cash provided by (used in) financing activities     18,092       (34 )
                 
Net change in cash and cash equivalents     16,302       (1,998 )
Cash and cash equivalents at beginning of period     2,341       5,237  
Cash and cash equivalents at end of period   $ 18,643     $ 3,239  

 

 

 

 

XTANT MEDICAL HOLDINGS, INC.

CALCULATION OF NON-GAAP CONSOLIDATED EBITDA AND ADJUSTED EBITDA

(Unaudited, in thousands)

 

   Three Months Ended March 31, 
   2021   2020 
         
Net Loss  $(29)  $(2,493)
           
Depreciation and amortization   375    685 
Interest expense   1    1,108 
Tax expense   23    22 
Non-GAAP EBITDA   370    (678)
           
Non-GAAP EBITDA/Total revenue   3.0%   -4.6%
           
NON-GAAP ADJUSTED EBITDA CALCULATION          
Stock-based compensation   456    269 
Separation-related expenses   -    749 
Non-GAAP Adjusted EBITDA  $826   $340 
           
Non-GAAP Adjusted EBITDA/Total revenue   6.6%   2.3%

 

 

 

 

 

 

 

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