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Xtant Medical Announces Second Quarter 2021 Financial Results

BELGRADE, Mont., Aug. 05, 2021 (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 second quarter ended June 30, 2021.

Second Quarter 2021 Financial Highlights:

  • Revenue for the second quarter of 2021 totaled $15.0 million, an increase of 42% over the prior-year period

  • Gross margin in the second quarter of 2021 was 63.5%, compared to 62.2% for the prior-year period

  • Loss from operations totaled $0.5 million compared to an operating loss of $0.4 million for the prior-year period

  • Net loss incurred in the second quarter of 2021 totaled $0.7 million compared to a net loss of $2.5 million for the prior-year period

  • Non-GAAP Adjusted EBITDA for the second quarter of 2021 totaled $0.9 million, compared to $0.3 million for the prior-year period

  • Closed $20 million debt refinancing

“We are pleased with our second quarter performance reflecting solid revenue growth on a sequential and year-over-year basis driven by the elective spinal procedure market rebound,” said Sean Browne, President and CEO of Xtant Medical. “During the quarter, we enhanced our long-term prospects with the increase of both our sales force and distribution network. As business conditions continue to normalize, our commercial strategy is focused on creating more selling opportunities while scaling Xtant for growth. With a strong balance sheet and significant capital resources, we continue to invest in our future through the combination of new product introductions, penetration of underserved markets and further distribution network expansion.”

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Second Quarter 2021 Financial Results

Second quarter 2021 revenue was $15.0 million, an increase of 42% compared to $10.5 million for the same quarter in 2020. The increase in revenue was largely attributed to easing of restrictions associated with the COVID-19 pandemic in our key markets, resulting in an increase in elective procedures.

Gross margin for the second quarter of 2021 was 63.5%, compared to 62.2% for the same period in 2020. The increase is primarily attributable to greater economies of scale.

Operating expenses for the second quarter of 2021 totaled $10.0 million compared to $6.9 million for the second quarter of 2020. The increase was primarily due to the result of increased sales commissions due to higher revenues, legal and stock-based compensation expense, and research and development expenses, partially offset by lower costs during the prior year period for ERP related expenses.

Second quarter 2021 net loss totaled $0.7 million, or $0.01 per share, compared to the second quarter 2020 net loss of $2.5 million, or $0.19 per share.

Non-GAAP Adjusted EBITDA for the second quarter of 2021 totaled $0.9 million, compared to $0.3 million for the prior-year period. 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, separation related expenses, and litigation settlement reserves. A calculation and reconciliation of 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 second quarter 2021 financial results on Thursday, August 5 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 continued investment in its future through the combination of new product introductions, penetration of underserved markets and further distribution network expansion. 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 new and existing independent distributors and qualified personnel; the effect of the COVID-19 pandemic on the Company’s business, operating results and financial condition; the Company’s ability to implement successfully its future growth initiatives; 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 June 30, 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)

As of June 30, 2021

As of December 31, 2020

ASSETS

Current Assets:

Cash and cash equivalents

$

20,312

$

2,341

Restricted Cash

215

-

Trade accounts receivable, net of allowance for credit losses and doubtful accounts of $470 and $653, respectively

6,985

6,880

Inventories

21,093

21,408

Prepaid and other current assets

827

736

Total current assets

49,432

31,365

Property and equipment, net

4,869

4,347

Right-of -use asset, net

1,477

1,690

Goodwill

3,205

3,205

Intangible assets, net

428

457

Other assets

265

402

Total Assets

$

59,676

$

41,466

LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)

Current Liabilities:

Accounts payable

$

2,639

$

2,947

Accrued liabilities

5,728

5,462

Current portion of lease liability

441

423

Finance lease obiligations

30

20

Line of credit

4,077

-

-

16,797

Total current liabilities

12,915

25,649

Long-term Liabilities:

Lease liability, less current portion

1,076

1,303

Finance lease obligations, less current portion

118

-

Long-term debt, plus premium and less issuance costs

11,683

-

Total Liabilities

25,792

26,952

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; 300,000,000 shares authorized; 86,707,286 shares issued and outstanding as of June 30, 2021 and 77,573,680 shares issued and outstanding as of December 31, 2020

-

-

Additional paid-in capital

264,981

244,850

Accumulated deficit

(231,097

)

(230,336

)

Total Stockholders’ Equity (Deficit)

33,884

14,514

Total Liabilities & Stockholders’ Equity (Deficit)

$

59,676

$

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 June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Revenue

Orthopedic product sales

$

14,942

$

10,493

$

27,451

$

25,227

Other revenue

33

36

66

80

Total revenue

14,975

10,529

27,517

25,307

Cost of sales

5,460

3,979

9,911

9,144

Gross profit

9,515

6,550

17,606

16,163

Gross profit %

63.5

%

62.2

%

64.0

%

63.9

%

Operating expenses

General and administrative

4,173

2,931

7,200

7,250

Sales and marketing

5,590

3,895

10,445

10,309

Research and development

243

111

458

353

Total operating expenses

10,006

6,937

18,103

17,912

Income (Loss) from operations

(491

)

(387

)

(497

)

(1,749

)

Other income

Interest expense

(199

)

(2,054

)

(201

)

(3,163

)

Total Other Expense

(199

)

(2,054

)

(201

)

(3,163

)

Net Loss Before Provision for Income Taxes

(690

)

(2,441

)

(698

)

(4,912

)

Provision for income taxes

(43

)

(23

)

(64

)

(45

)

Net Loss

$

(733

)

$

(2,464

)

$

(762

)

$

(4,957

)

Net loss per share:

Basic

$

(0.01

)

$

(0.19

)

$

(0.01

)

$

(0.38

)

Dilutive

$

(0.01

)

$

(0.19

)

$

(0.01

)

$

(0.38

)

Shares used in the computation:

Basic

86,707,286

13,223,565

83,993,159

13,199,455

Dilutive

86,707,286

13,223,565

83,993,159

13,199,455


XTANT MEDICAL HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, in thousands)

Six Months Ended June 30,

2021

2020

Operating activities:

Net loss

$

(762

)

$

(4,957

)

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

731

1,153

Gain on disposal of fixed assets

(108

)

(118

)

Non-cash interest

16

3,149

Non-cash rent expense

5

8

Stock-based compensation

921

489

Provision for reserve on accounts receivable

(143

)

204

Provision for excess and obsolete inventory

211

377

Changes in operating assets and liabilities:

Accounts receivable

38

2,290

Inventories

104

(4,164

)

Prepaid and other assets

(29

)

(153

)

Accounts payable

(308

)

1,067

Accrued liabilities

266

(921

)

Net cash provide by (used in) operating activities

942

(1,576

)

Investing activities:

Purchases of property and equipment

(1,079

)

(673

)

Proceeds from sale of fixed assets

125

106

Net cash used in investing activities

(954

)

(567

)

Financing activities:

Payments on financing leases

(34

)

(75

)

Costs associated with refinancing

(105

)

-

Payments on long-term debt

(411

)

-

Borrowings on line of credit

9,331

Repayments of line of credit

(9,009

)

-

Proceeds from private placement, net of cash issuance costs

18,426

-

Net cash used in financing activities

18,198

(75

)

Net change in cash and cash equivalents

18,186

(2,218

)

Cash and cash equivalents at beginning of period

2,341

5,237

Cash and cash equivalents at end of period

$

20,527

$

3,019

Reconciliation of cash and restricted cash reported in the condensed consolidated balance sheets

Cash and cash equivelants

$

20,312

$

3,019

Restricted cash

215

-

Total cash and restricted cash reported in the condensed consolidated balance sheets

$

20,527

$

3,019


XTANT MEDICAL HOLDINGS, INC.

CALCULATION OF NON-GAAP CONSOLIDATED EBITDA AND ADJUSTED EBITDA

(Unaudited, in thousands)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Net Loss

$

(733

)

$

(2,464

)

$

(762

)

$

(4,957

)

Other expense

5

1

42

6

Depreciation and amortization

357

468

731

1,153

Interest expense

199

2,054

201

3,163

Tax expense

43

23

64

45

Non-GAAP EBITDA

(129

)

82

276

(590

)

Non-GAAP EBITDA/Total revenue

-0.9

%

0.8

%

1.0

%

-2.3

%

NON-GAAP ADJUSTED EBITDA CALCULATION

Non-cash compensation

465

219

921

489

Separation-related expenses

-

-

-

749

Litigation reserve

550

-

550

-

Non-GAAP Adjusted EBITDA

$

886

$

301

$

1,747

$

648

Non-GAAP Adjusted EBITDA/Total revenue

5.9

%

2.9

%

6.3

%

2.6

%