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 third quarter ended September 30, 2019.
Third Quarter 2019 Financial Highlights and Recent
Announcements:
- Revenue for the third quarter of 2019 was $15.7 million,
compared to $17.3 million for the same prior year period
- Operating expenses in the third quarter of 2019 were $11.2
million, compared to $13.0 million for the same prior year
period
- Net loss incurred in the third quarter of 2019 was $1.9
million, compared to a net loss of $3.2 million for the same prior
year period
- Non-GAAP Adjusted EBITDA for the third quarter of 2019 was $0.6
million, compared to $1.8 million for the same prior year
period
- Board of Directors appoints Sean Browne President and Chief
Executive Officer effective October 7, 2019 and a member of the
Board effective October 30, 2019
Sean Browne, President and CEO of Xtant Medical, said, “After my
first month with Xtant, I am excited about the Company, our unique
products and dedicated employees. I am pleased with our efforts and
results over the past three quarters enhancing the operational
effectiveness of our business. We remain committed to
continuing to develop and release new products, expand our
marketing programs, and pursue operational improvements intended to
assist us in our overall commercial performance.”
Third Quarter 2019 Financial Results
Third quarter 2019 revenue was $15.7 million, compared to $17.3
million for the same period in 2018. This decrease was due
primarily to reduced demand for hardware products, which was
attributable in part to the termination of an advisory agreement
with an entity that provided services to certain customers, and the
continued transition of independent sales agents.
Gross margin for the third quarter of 2019 was 66.6%, which was
comparable to the same period in 2018.
Operating expenses for the third quarter of 2019 were $11.2
million, compared to $13.0 million for the third quarter of 2018, a
decrease of 13.7%. The decrease was primarily attributable to lower
sales commissions and travel expenses, restructuring expenses
incurred during the year-ago period, and a decrease in amortization
expense related to the impairment of intangible assets that
occurred in the fourth quarter of 2018, which were partially offset
by higher general and administrative expenses.
Third quarter 2019 net loss was $1.9 million, or $0.14 per
share, compared to third quarter 2018 net loss of $3.2 million, or
$0.24 per share.
Non-GAAP Adjusted EBITDA for the third quarter of 2019 was $0.6
million compared to $1.8 million for the same period of 2018. The
Company defines non-GAAP 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 accounts
receivable and inventory, non-cash compensation, changes in warrant
derivative liability, field action expenses, separation related
expenses, litigation reserves, 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 third quarter 2019 financial results on Thursday, November 7,
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,
including the success of the Company’s initiatives to stabilize and
increase revenues; 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 retain and
recruit independent sales agents and the impact of the termination
of a consulting agreement with an entity that had close
relationships with several of customers; 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 September 30, 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 CareyLazar FINN PartnersPh: 212-867-1762Email:
david.carey@finnpartners.com
XTANT
MEDICAL HOLDINGS, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(In thousands,
except number of shares and par value) |
|
|
As of September 30, 2019 |
|
As of December 31, 2018 |
|
|
|
|
|
ASSETS |
|
|
|
|
Current Assets: |
|
|
|
|
Cash and cash equivalents |
|
$ |
5,749 |
|
|
$ |
6,797 |
|
Trade accounts receivable, net of allowance for doubtful accounts
of $1,375 and $2,140, respectively |
|
|
9,121 |
|
|
|
9,990 |
|
Inventories |
|
|
16,025 |
|
|
|
17,301 |
|
Prepaid and other current assets |
|
|
714 |
|
|
|
589 |
|
Total current assets |
|
|
31,609 |
|
|
|
34,677 |
|
|
|
|
|
|
Property and equipment, net |
|
|
5,068 |
|
|
|
7,174 |
|
Right-of -use asset, net |
|
|
2,198 |
|
|
|
- |
|
Goodwill |
|
|
3,205 |
|
|
|
3,205 |
|
Intangible assets, net |
|
|
529 |
|
|
|
573 |
|
Other assets |
|
|
428 |
|
|
|
793 |
|
Total Assets |
|
$ |
43,037 |
|
|
$ |
46,422 |
|
|
|
|
|
|
LIABILITIES
& STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
|
Current Liabilities: |
|
|
|
|
Accounts payable |
|
$ |
2,249 |
|
|
$ |
6,465 |
|
Accrued liabilities |
|
|
6,196 |
|
|
|
5,150 |
|
Warrant derivative liability |
|
|
17 |
|
|
|
10 |
|
Current portion of lease liability |
|
|
387 |
|
|
|
- |
|
Current portion of financing lease obligations |
|
|
229 |
|
|
|
426 |
|
Total current liabilities |
|
|
9,078 |
|
|
|
12,051 |
|
Long-term Liabilities: |
|
|
|
|
Lease liability, less current portion |
|
|
1,827 |
|
|
|
- |
|
Financing lease obligation, less current portion |
|
|
6 |
|
|
|
204 |
|
Long-term debt, less issuance costs |
|
|
74,985 |
|
|
|
77,939 |
|
Total Liabilities |
|
|
85,896 |
|
|
|
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 September 30, 2019
and 13,172,179 shares issued and outstanding as of December 31,
2018 |
|
|
- |
|
|
|
- |
|
Additional paid-in capital |
|
|
178,802 |
|
|
|
171,273 |
|
Accumulated deficit |
|
|
(221,661 |
) |
|
|
(215,045 |
) |
Total Stockholders’ Equity (Deficit) |
|
|
(42,859 |
) |
|
|
(43,772 |
) |
|
|
|
|
|
Total Liabilities & Stockholders’ Equity (Deficit) |
|
$ |
43,037 |
|
|
$ |
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 September30, |
|
Nine Months Ended September 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
Revenue |
|
|
|
|
|
|
|
|
Orthopedic product sales |
|
$ |
15,691 |
|
|
$ |
17,139 |
|
|
$ |
47,574 |
|
|
$ |
53,622 |
|
Other revenue |
|
|
30 |
|
|
|
127 |
|
|
|
144 |
|
|
|
319 |
|
Total revenue |
|
|
15,721 |
|
|
|
17,266 |
|
|
|
47,718 |
|
|
|
53,941 |
|
|
|
|
|
|
|
|
|
|
Cost of
sales |
|
|
5,249 |
|
|
|
5,743 |
|
|
|
16,527 |
|
|
|
17,711 |
|
Gross profit |
|
|
10,472 |
|
|
|
11,523 |
|
|
|
31,191 |
|
|
|
36,230 |
|
|
|
|
|
|
|
|
|
|
Gross profit % |
|
|
66.6 |
% |
|
|
66.7 |
% |
|
|
65.4 |
% |
|
|
67.2 |
% |
|
|
|
|
|
|
|
|
|
Operating
expenses |
|
|
|
|
|
|
|
|
General and administrative |
|
|
4,155 |
|
|
|
3,121 |
|
|
|
12,513 |
|
|
|
10,006 |
|
Sales and marketing |
|
|
6,682 |
|
|
|
7,847 |
|
|
|
19,496 |
|
|
|
24,742 |
|
Research and development |
|
|
203 |
|
|
|
347 |
|
|
|
675 |
|
|
|
1,179 |
|
Depreciation and amortization |
|
|
137 |
|
|
|
1,029 |
|
|
|
442 |
|
|
|
3,074 |
|
Restructuring expenses |
|
|
- |
|
|
|
614 |
|
|
|
- |
|
|
|
2,582 |
|
Total operating expenses |
|
|
11,177 |
|
|
|
12,958 |
|
|
|
33,126 |
|
|
|
41,583 |
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(705 |
) |
|
|
(1,435 |
) |
|
|
(1,935 |
) |
|
|
(5,353 |
) |
|
|
|
|
|
|
|
|
|
Other
(expense) income |
|
|
|
|
|
|
|
|
Interest
expense |
|
|
(1,185 |
) |
|
|
(1,790 |
) |
|
|
(4,504 |
) |
|
|
(8,156 |
) |
Change in
warrant derivative liability |
|
|
4 |
|
|
|
42 |
|
|
|
(8 |
) |
|
|
83 |
|
Other
(expense) income |
|
|
30 |
|
|
|
30 |
|
|
|
(101 |
) |
|
|
18 |
|
Total Other (Expense) Income |
|
|
(1,151 |
) |
|
|
(1,718 |
) |
|
|
(4,613 |
) |
|
|
(8,055 |
) |
Net Loss from Operations Before Provision for Income Taxes |
|
|
(1,856 |
) |
|
|
(3,153 |
) |
|
|
(6,548 |
) |
|
|
(13,408 |
) |
|
|
|
|
|
|
|
|
|
Provision
for income taxes |
|
|
|
|
|
|
|
|
Current and deferred |
|
|
(23 |
) |
|
|
- |
|
|
|
(68 |
) |
|
|
- |
|
Net Loss from Operations |
|
$ |
(1,879 |
) |
|
$ |
(3,153 |
) |
|
$ |
(6,616 |
) |
|
$ |
(13,408 |
) |
|
|
|
|
|
|
|
|
|
Net loss per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.14 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.50 |
) |
|
$ |
(1.19 |
) |
Dilutive |
|
$ |
(0.14 |
) |
|
$ |
(0.24 |
) |
|
$ |
(0.50 |
) |
|
$ |
(1.19 |
) |
|
|
|
|
|
|
|
|
|
Shares used
in the computation: |
|
|
|
|
|
|
|
|
Basic |
|
|
13,161,762 |
|
|
|
13,158,326 |
|
|
|
13,164,694 |
|
|
|
11,262,642 |
|
Dilutive |
|
|
13,161,762 |
|
|
|
13,158,326 |
|
|
|
13,164,694 |
|
|
|
11,262,642 |
|
|
|
|
|
|
|
|
|
|
XTANT
MEDICAL HOLDINGS, INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Unaudited, in
thousands) |
|
|
Nine Months Ended September 30, |
|
|
2019 |
|
|
|
2018 |
|
Operating
activities: |
|
|
|
Net loss |
$ |
(6,616 |
) |
|
$ |
(13,408 |
) |
Adjustments to reconcile net loss to net cash provided by operating
activities: |
|
|
|
Depreciation and amortization |
|
2,338 |
|
|
|
4,943 |
|
Gain on disposal of fixed assets |
|
(27 |
) |
|
|
(15 |
) |
Non-cash interest |
|
4,467 |
|
|
|
7,853 |
|
Non-cash rent expense |
|
16 |
|
|
|
- |
|
Non-cash stock option expense / change in derivative warrant
liability |
|
263 |
|
|
|
502 |
|
Provision for losses on accounts receivable and inventory |
|
970 |
|
|
|
298 |
|
Changes in operating assets and liabilities: |
|
|
|
Accounts receivable |
|
417 |
|
|
|
2,842 |
|
Inventories |
|
760 |
|
|
|
(508 |
) |
Prepaid and other assets |
|
240 |
|
|
|
1,138 |
|
Accounts payable |
|
(4,216 |
) |
|
|
(3,557 |
) |
Accrued liabilities |
|
1,046 |
|
|
|
(867 |
) |
Net cash provided by operating activities |
|
(342 |
) |
|
|
(779 |
) |
Investing
activities: |
|
|
|
Purchases of property and equipment and intangible assets |
|
(403 |
) |
|
|
(308 |
) |
Proceeds from sale of fixed assets |
|
241 |
|
|
|
251 |
|
Net cash used in investing activities |
|
(162 |
) |
|
|
(57 |
) |
Financing
activities: |
|
|
|
Payments on financing leases |
|
(395 |
) |
|
|
(260 |
) |
Costs associated with either loan or equity transactions |
|
(149 |
) |
|
|
- |
|
Costs associated with private placement and convertible debt
exchange |
|
- |
|
|
|
(3,507 |
) |
Proceeds from equity private placement |
|
- |
|
|
|
6,810 |
|
Proceeds from issuance of stock |
|
- |
|
|
|
1 |
|
Net cash (used in) provided by financing activities |
|
(544 |
) |
|
|
3,044 |
|
|
|
|
|
Net change
in cash and cash equivalents |
|
(1,048 |
) |
|
|
2,208 |
|
Cash and
cash equivalents at beginning of period |
|
6,797 |
|
|
|
2,856 |
|
Cash and
cash equivalents at end of period |
$ |
5,749 |
|
|
$ |
5,064 |
|
|
|
|
|
XTANT
MEDICAL HOLDINGS, INC. |
CALCULATION
OF NON-GAAP CONSOLIDATED EBITDA AND ADJUSTED EBITDA |
(Unaudited, in
thousands) |
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
Net
Loss |
|
$ |
(1,879 |
) |
|
$ |
(3,153 |
) |
|
$ |
(6,616 |
) |
|
$ |
(13,408 |
) |
|
|
|
|
|
|
|
|
|
Other expense |
|
|
(30 |
) |
|
|
(30 |
) |
|
|
101 |
|
|
|
(18 |
) |
Depreciation and amortization |
|
|
779 |
|
|
|
1,655 |
|
|
|
2,338 |
|
|
|
4,943 |
|
Interest expense |
|
|
1,185 |
|
|
|
1,790 |
|
|
|
4,504 |
|
|
|
8,156 |
|
Tax expense |
|
|
23 |
|
|
|
- |
|
|
|
68 |
|
|
|
- |
|
Non-GAAP EBITDA |
|
|
78 |
|
|
|
262 |
|
|
|
395 |
|
|
|
(327 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP EBITDA/Total revenue |
|
|
0.5 |
% |
|
|
1.5 |
% |
|
|
0.8 |
% |
|
|
-0.6 |
% |
|
|
|
|
|
|
|
|
|
NON-GAAP ADJUSTED EBITDA CALCULATION |
|
|
|
|
|
|
|
|
Provision for losses on accounts receivable and inventory |
|
|
220 |
|
|
|
312 |
|
|
|
970 |
|
|
|
296 |
|
Non-cash compensation |
|
|
95 |
|
|
|
41 |
|
|
|
256 |
|
|
|
585 |
|
Change in warrant derivative liability |
|
|
(4 |
) |
|
|
(42 |
) |
|
|
8 |
|
|
|
(83 |
) |
Separation-related expenses |
|
|
- |
|
|
|
566 |
|
|
|
- |
|
|
|
2,535 |
|
Field action expenses |
|
|
182 |
|
|
|
- |
|
|
|
307 |
|
|
|
- |
|
Litigation reserve |
|
|
- |
|
|
|
- |
|
|
|
800 |
|
|
|
- |
|
Restructuring expenses |
|
|
- |
|
|
|
614 |
|
|
|
- |
|
|
|
2,582 |
|
Non-GAAP Adjusted EBITDA |
|
$ |
571 |
|
|
$ |
1,753 |
|
|
$ |
2,736 |
|
|
$ |
5,588 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Adjusted EBITDA/Total revenue |
|
|
3.6 |
% |
|
|
10.2 |
% |
|
|
5.7 |
% |
|
|
10.4 |
% |
|
|
|
|
|
|
|
|
|
Xtant Medical (AMEX:XTNT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Xtant Medical (AMEX:XTNT)
Historical Stock Chart
From Apr 2023 to Apr 2024