Xtant Medical Announces Second Quarter 2022 Financial Results
08/04/2022 - 07:00 AM
BELGRADE, Mont., Aug. 04, 2022 (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, 2022.
“We are pleased to have achieved our highest revenue quarter since the start of the pandemic. Our second quarter revenue increased 2% over the same prior year period, including 8% year-over-year growth in our biologics business, which was fueled by strong demand for our new biologics products and expansion of our distributor network,” said Sean Browne, President and CEO of Xtant Medical. “On the strength of our four key growth pillars, our strategic initiatives are gaining traction, giving us greater confidence regarding our future prospects. Despite the impact on our business from the broader supply chain and macroeconomic challenges, our team continues to execute in bringing life changing orthobiologics and spinal implant systems to patients in need.”
Second Quarter 2022 Financial Results
Second quarter 2022 revenue was $15.3 million , compared to $14.9 million for the same quarter in 2021. The increase in revenue is attributed primarily to introductions of new products and increased private label and original equipment manufacturer (OEM) sales.
Gross margin for the second quarter of 2022 was 54.8% , compared to 63.5% for the same period in 2021. The decrease is primarily attributable higher product costs and increased charges for excess and obsolete inventory.
Operating expenses for the second quarter of 2022 totaled $9.7 million compared to $10.0 million for the second quarter of 2021. The decrease was primarily due to legal settlement expenses in 2021, partially offset by higher sales and marketing expenses in 2022.
Second quarter 2022 net loss totaled $1.7 million , or $0.02 per share, compared to the second quarter 2021 net loss of $0.7 million , or $0.01 per share.
Non-GAAP Adjusted EBITDA for the second quarter of 2022 totaled a loss of $0.4 million , compared to Non-GAAP Adjusted EBITDA of $0.9 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 2022 financial results on Thursday, August 4, 2022 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 future success of the Company’s four key growth pillars and strategic initiatives and its future prospects. 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; possible future impairment charges to long-lived assets and goodwill and write-downs of excess inventory if revenues continue to decrease; the ability to remain competitive; the ability to innovate, develop and introduce new products; the ability to engage and retain new and existing independent distributors and agents and qualified personnel and the Company’s dependence on key independent agents for a significant portion of its revenue; the effect of the COVID-19 pandemic and hospital staffing shortages on the Company’s business, operating results and financial condition, especially when they affect key markets; the Company’s ability to implement successfully its future growth initiatives and risks associated therewith; the effect of product sales mix changes on the Company’s financial results; 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, 2021 filed with the Securities and Exchange Commission (SEC) on March 8, 2022 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, 2022 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 Careydavid.carey@finnpartners.com
XTANT MEDICAL HOLDINGS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except number of shares and par value) As of As of ASSETS Current Assets: Cash and cash equivalents $ 16,495 $ 18,243 Restricted Cash 352 144 Trade accounts receivable, net of allowance for credit losses and doubtful accounts of $510 and $552 , respectively 8,600 7,154 Inventories 16,461 17,945 Prepaid and other current assets 424 844 Total current assets 42,332 44,330 Property and equipment, net 5,529 5,212 Right-of-use asset, net 1,033 1,258 Goodwill 3,205 3,205 Intangible assets, net 372 400 Other assets 242 287 Total Assets $ 52,713 $ 54,692 LIABILITIES & STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 3,043 $ 2,615 Accrued liabilities 4,538 4,349 Current portion of lease liability 479 462 Current portion of finance lease obligations 60 31 Line of credit 3,736 3,620 Total current liabilities 11,856 11,077 Long-term Liabilities: Lease liability, less current portion 598 842 Finance lease obligations, less current portion 213 103 Long-term debt, plus premium and less issuance costs 11,902 11,787 Total Liabilities 24,569 23,809 Stockholders' Equity Preferred stock, $0.00 0001 par value; 10,000,000 shares authorized; no shares issued and outstanding - - Common stock, $0.00 0001 par value; 300,000,000 shares authorized; 87,313,701 shares issued and outstanding as of June 30, 2022 and 87,068,980 shares issued and outstanding as of December 31, 2021 - - Additional paid-in capital 267,252 266,068 Accumulated deficit (239,108 ) (235,185 ) Total Stockholders’ Equity 28,144 30,883 Total Liabilities & Stockholders’ Equity $ 52,713 $ 54,692
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, 2022 2021 2022 2021 Revenue Orthopedic product sales $ 15,277 $ 14,942 $ 28,227 $ 27,451 Other revenue - 33 9 66 Total Revenue 15,277 14,975 28,236 27,517 Cost of sales 6,903 5,460 12,302 9,911 Gross Profit 8,374 9,515 15,934 17,606 Gross Profit % 54.8 % 63.5 % 56.4 % 64.0 % Operating Expenses General and administrative 3,797 4,173 7,766 7,200 Sales and marketing 5,636 5,590 10,845 10,445 Research and development 241 243 454 458 Total Operating Expenses 9,674 10,006 19,065 18,103 Loss from Operations (1,300 ) (491 ) (3,131 ) (497 ) Other Expense Interest expense (397 ) (199 ) (757 ) (201 ) Total Other Expense (397 ) (199 ) (757 ) (201 ) Net Loss Before Provision for Income Taxes (1,697 ) (690 ) (3,888 ) (698 ) Provision for Income Taxes (13 ) (43 ) (35 ) (64 ) Net Loss $ (1,710 ) $ (733 ) $ (3,923 ) $ (762 ) Net Loss Per Share: Basic $ (0.02 ) $ (0.01 ) $ (0.04 ) $ (0.01 ) Dilutive $ (0.02 ) $ (0.01 ) $ (0.04 ) $ (0.01 ) Shares used in the computation: Basic 87,313,701 86,707,286 87,252,521 83,993,159 Dilutive 87,313,701 86,707,286 87,252,521 83,993,159
XTANT MEDICAL HOLDINGS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) Six Months Ended June 30, 2022 2021 Operating activities: Net loss $ (3,923 ) $ (762 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 599 731 Gain on disposal of fixed assets (84 ) (108 ) Non-cash interest 116 16 Non-cash rent expense (1 ) 5 Stock-based compensation 1,184 921 Provision for reserve on accounts receivable 143 (143 ) Provision for excess and obsolete inventory 825 211 Changes in operating assets and liabilities: Accounts receivable (1,589 ) 38 Inventories 659 104 Prepaid and other assets 465 (29 ) Accounts payable 428 (308 ) Accrued liabilities 189 266 Net cash (used in) provided by operating activities (989 ) 942 Investing activities: Purchases of property and equipment (810 ) (1,079 ) Proceeds from sale of fixed assets 165 125 Net cash used in investing activities (645 ) (954 ) Financing activities: Payments on financing leases (22 ) (34 ) Costs associated with refinancing - (32 ) Payments on long-term debt - (484 ) Borrowings on line of credit 26,567 9,331 Repayments of line of credit (26,451 ) (9,009 ) Proceeds from private placement, net of cash issuance costs - 18,426 Net cash used in financing activities 94 18,198 Net change in cash and cash equivalents and restricted cash (1,540 ) 18,186 Cash and cash equivalents and restricted cash at beginning of period 18,387 2,341 Cash and cash equivalents and restricted cash at end of period $ 16,847 $ 20,527 Reconciliation of cash and restricted cash reported in the condensed consolidated balance sheets Cash and cash equivalents $ 16,495 $ 20,312 Restricted cash 352 215 Total cash and restricted cash reported in the condensed consolidated balance sheets $ 16,847 $ 20,527
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, 2022 2021 2022 2021 Net Loss $ (1,710 ) $ (733 ) $ (3,923 ) $ (762 ) Other expense - 5 (2 ) 42 Depreciation and amortization 317 357 599 731 Interest expense 397 199 757 201 Tax expense 13 43 35 64 Non-GAAP EBITDA (983 ) (129 ) (2,534 ) 276 Non-GAAP EBITDA/Total revenue -6.4 % -0.9 % -9.0 % 1.0 % NON-GAAP ADJUSTED EBITDA CALCULATION Non-cash compensation 571 465 1,185 921 Separation-related expenses - - 3 - Litigation reserve - 550 - 550 Non-GAAP Adjusted EBITDA $ (412 ) $ 886 $ (1,346 ) $ 1,747 Non-GAAP Adjusted EBITDA/Total revenue -2.7 % 5.9 % -4.8 % 6.3 %
