First Quarter 2017 Highlights:
- Consolidated total revenue increased 5.3% to $22.1 million compared to first quarter 2016 revenue of $21.0 million
- Consolidated gross profit increased 10.1% to $15.5 million compared to first quarter 2016 gross profit of $14.1 million
- Consolidated gross margins improved to 70.3%, compared to 67.2% reported in the first quarter of 2016
- The Company reported an EBITDA gain of approximately $577,000 for the first quarter of 2017
BELGRADE, Mont., May 09, 2017 (GLOBE NEWSWIRE) -- Xtant™ Medical Holdings, Inc. (NYSE MKT:XTNT), a leader in the development of regenerative medicine products and medical devices, today reported its financial results for the quarter ended March 31st, 2017. The Company reported first quarter 2017 revenue of approximately $22.1 million and an EBITDA gain of approximately $577,000 for the period.
Revenue
Consolidated first quarter 2017 revenue was approximately $22.1 million, an increase of 5.3% compared to revenue of approximately $21.0 million for the same period of 2016. The increase in revenue was primarily driven by the continuing increase the Company's revenue from biologics product lines.
Gross Profit
Consolidated gross profit for the first quarter of 2017 was $15.5 million or 70.3% of revenues, compared to gross profit of $14.1 million or 67.2% of revenues for the first quarter of 2016. The increase in gross margin was primarily due to product mix and the continued focus on improved operating efficiency.
Sales and Marketing Expenses
Consolidated first quarter 2017 sales and marketing expenses increased to $11.0 million, compared to sales and marketing expenses of $10.5 million during the same period in 2016. For the quarter, sales and marketing as a percentage of revenues decreased slightly to 49.8%, compared to 50.1% in the first quarter of 2016.
General and Administrative Expenses
In the first quarter of 2017, consolidated general and administrative expenses increased to $4.1 million, compared to general and administrative expenses of
$3.5 million for the same period last year. As a percentage of revenues, general and administrative expenses were 18.7% during the period, compared to 16.6% for the same period of 2016.
Net Income / Loss
First quarter 2017 consolidated net loss narrowed to ($5.2) million, compared to net loss of ($5.6) million during the year-ago period. First quarter 2016 consolidated loss per share was $0.29, compared to a loss per share of $0.47 in the first quarter of 2016.
EBITDA
The Company defines earnings before interest, taxes, depreciation and amortization ("EBITDA") as net income/loss from operations before depreciation, amortization, impairment charges, non-recurring expenses and non-cash stock-based compensation. Consolidated EBITDA for the first quarter of 2017 was a gain of approximately $577,000 compared to a loss of ($145,000) for the same period during 2016.
| Calculation of Consolidated EBITDA for the Three Months Ended March 31, 2017 and 2016 (Unaudited) | ||||
| For the three months ended March 31, | ||||
| 2017 | 2016 | |||
| Net Loss | (5,166,929 | ) | (5,596,072 | ) |
| Tax (Benefit) Provision | 0 | 0 | ||
| Other (Income) Expense | (12,344 | ) | 425,000 | |
| Change in Warrant Derivative Liability | (170,031 | ) | (18,690 | ) |
| Interest Expense | 3,400,389 | 2,827,174 | ||
| Separation Related Expenses | 224,372 | 0 | ||
| Acquisition and Integration Related Expenses | 0 | 301,773 | ||
| Non-cash Compensation | 230,424 | 136,079 | ||
| Depreciation & Amortization | 2,071,337 | 1,779,987 | ||
| EBITDA Gain (Loss) | 577,218 | (144,749 | ) | |
Financial Liquidity
Cash on hand as of March 31, 2017, was $2.5 million, as compared to $2.6 million as of December 31, 2016. Net working capital as of March 31, 2017 remained flat at $17.9 million, as compared to $17.9 million as of December 31, 2016.
Outlook for Full Year 2017
As a result of the Company’s ongoing review of its capital structure, the Company has made a decision to withdraw its previously provided 2017 financial guidance. The company will provide an update to shareholders once the review and related discussions have been finalized.
Conference Call to be Held May 10, 2017
An accompanying listen-only conference call will be hosted by Carl O'Connell, Chief Executive Officer, and John Gandolfo, Chief Financial Officer, to discuss the results. The call will be held at 10:00 AM ET, on May 10, 2017. Please refer to the information below for conference call dial-in information and webcast registration.
Conference date: May 10, 2017, 10:00 AM ET
Conference dial-in: 877-269-7756
International dial-in: 201-689-7817
Conference Call Name: Xtant Medical's First Quarter 2017 Results Call
Webcast Registration: Click Here
Following the live call, a replay will be available on the Company's website, www.xtantmedical.com, under "Investor Info."
About Xtant™ Medical Holdings, Inc.
Xtant Medical Holdings, Inc. (NYSE MKT:XTNT) develops, manufactures and markets class-leading regenerative medicine products and medical devices for domestic and international markets. Xtant products serve the specialized needs of orthopedic and neurological surgeons, including orthobiologics for the promotion of bone healing, implants and instrumentation for the treatment of spinal disease, tissue grafts for the treatment of orthopedic disorders, and biologics to promote healing following cranial, and foot and ankle surgeries. With core competencies in both biologic and non-biologic surgical technologies, Xtant can leverage its resources to successfully compete in global neurological and orthopedic surgery markets. For further information, please visit www.xtantmedical.com.
Important Cautions Regarding Forward-looking Statements
This press release contains certain disclosures that may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to significant risks and uncertainties. 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 "continue," "efforts," "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "strategy," "will," "goal," "target," "prospects," "potential," "optimistic," "confident," "likely," "probable" or similar expressions or the negative thereof. Statements of historical fact also may be deemed to be forward-looking statements. We caution that these 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 ability to comply with covenants in the Company’s senior credit facility and to make deferred interest payments; the ability to maintain sufficient liquidity to fund operations; the ability to remain listed on the NYSE MKT; the ability to obtain financing on reasonable terms; the ability to increase revenue; the ability to continue as a going concern; the ability to maintain sufficient liquidity to fund operations; the ability to achieve expected results; the ability to remain competitive; government regulations; the ability to innovate and develop new products; the ability to obtain donor cadavers for products; the ability to engage and retain qualified technical personnel and members of the Company’s management team; the availability of Company facilities; government and third-party coverage and reimbursement for Company products; the ability to obtain regulatory approvals; the ability to successfully integrate recent and future business combinations or acquisitions; the ability to use net operating loss carry-forwards to offset future taxable income; the ability to deduct all or a portion of the interest payments on the notes for U.S. federal income tax purposes; the ability to service Company debt; product liability claims and other litigation to which we may be subjected; product recalls and defects; timing and results of clinical studies; the ability to obtain and protect Company intellectual property and proprietary rights; infringement and ownership of intellectual property; the ability to remain accredited with the American Association of Tissue Banks; influence by Company management; the ability to pay dividends; and the ability to issue preferred stock; and other factors.
Additional risk factors are listed in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading "Risk Factors." 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.
Contact:
CG CAPITAL
877.889.1972
investorrelations@cg.capital
cg.capital
| XTANT MEDICAL HOLDINGS, INC. | ||||||||||||||||
| Consolidated Statement of Operations for the Three Months Ended March 31, 2017 and 2016 | ||||||||||||||||
| Unaudited | ||||||||||||||||
| For the Three Months Ended Mar 31, | ||||||||||||||||
| 2017 | 2016 | |||||||||||||||
| % of | % of | |||||||||||||||
| Amount | Revenue | Amount | Revenue | |||||||||||||
| Orthopedic Product Sales | $ | 21,996,315 | 99.6 | % | $ | 20,808,035 | 99.2 | % | ||||||||
| Other | 86,354 | 0.4 | % | 169,300 | 0.8 | % | ||||||||||
| Total Revenue | 22,082,669 | 100.0 | % | 20,977,335 | 100.0 | % | ||||||||||
| Cost of sales | 6,557,602 | 29.7 | % | 6,877,267 | 32.8 | % | ||||||||||
| Gross Profit | 15,525,067 | 70.3 | % | 14,100,068 | 67.2 | % | ||||||||||
| Operating Expenses | ||||||||||||||||
| General and administrative | 4,128,268 | 18.7 | % | 3,484,712 | 16.6 | % | ||||||||||
| Sales and marketing | 10,997,019 | 49.8 | % | 10,512,966 | 50.1 | % | ||||||||||
| Research and development | 698,635 | 3.2 | % | 899,575 | 4.3 | % | ||||||||||
| Depreciation and amortization | 1,280,965 | 5.8 | % | 1,208,334 | 5.8 | % | ||||||||||
| Acquisition and Integration related expenses | 0 | 0.0 | % | 301,773 | 1.4 | % | ||||||||||
| Separation related expenses | 224,372 | 1.0 | % | 0 | 0.0 | % | ||||||||||
| Non-cash consulting | 144,723 | 0.7 | % | 55,296 | 0.3 | % | ||||||||||
| Total Operating Expenses | 17,473,981 | 79.1 | % | 16,462,656 | 78.5 | % | ||||||||||
| Net Gain (Loss) from Operations | (1,948,913 | ) | -8.8 | % | (2,362,588 | ) | -11.3 | % | ||||||||
| Other Income (Expense) | ||||||||||||||||
| Interest expense | (3,400,389 | ) | -15.4 | % | (2,827,174 | ) | -13.5 | % | ||||||||
| Change in warrant derivative liability | 170,031 | 0.8 | % | 18,690 | 0.1 | % | ||||||||||
| Other income (expense) | 12,344 | 0.1 | % | (425,000 | ) | -2.0 | % | |||||||||
| Total Other Income (Expense) | (3,218,014 | ) | -14.6 | % | (3,233,484 | ) | -15.4 | % | ||||||||
| Net Gain (Loss) from Operations Before Benefit (Provision) for Income Taxes | (5,166,927 | ) | -23.4 | % | (5,596,072 | ) | -26.7 | % | ||||||||
| Benefit (Provision) for Income Taxes | ||||||||||||||||
| Current | 0 | 0.0 | % | 0 | 0.0 | % | ||||||||||
| Deferred | 0 | 0.0 | % | 0 | 0.0 | % | ||||||||||
| Net Income (Loss) | $ | (5,166,927 | ) | -23.4 | % | $ | (5,596,072 | ) | -26.7 | % | ||||||
| Net Income (loss) per share: | ||||||||||||||||
| Basic | ($0.29 | ) | ($0.47 | ) | ||||||||||||
| Dilutive | ($0.29 | ) | ($0.47 | ) | ||||||||||||
| Shares used in the computation: | ||||||||||||||||
| Basic | 17,933,315 | 11,897,601 | ||||||||||||||
| Dilutive | 17,933,315 | 11,897,601 | ||||||||||||||
| XTANT MEDICAL HOLDINGS, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Unaudited | ||||||||
| For the Three months ended March 31, | ||||||||
| 2017 | 2016 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | (5,166,929 | ) | $ | (5,596,072 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 2,071,337 | 1,779,986 | ||||||
| Non-cash Interest | 3,151,227 | 2,822,980 | ||||||
| Non-cash consulting expense/stock option expense | 230,424 | 136,079 | ||||||
| Provision for losses on accounts receivable and inventory | 312,588 | (72,313 | ) | |||||
| Change in derivative warrant liability | (170,031 | ) | (18,690 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 2,536,242 | 328,290 | ||||||
| Inventories | 261,189 | (1,144,652 | ) | |||||
| Prepaid and other assets | (648,769 | ) | (235,779 | ) | ||||
| Accounts payable | (1,743,541 | ) | 3,734,694 | |||||
| Accrued liabilities | (397,532 | ) | (707,214 | ) | ||||
| Net cash used in operating activities | 436,205 | 1,027,309 | ||||||
| Investing activities: | ||||||||
| Purchases of property and equipment and intangible assets | (310,078 | ) | (2,718,985 | ) | ||||
| Net cash used in investing activities | (310,078 | ) | (2,718,985 | ) | ||||
| Financing activities: | ||||||||
| Payments on capital leases | (62,978 | ) | (7,985 | ) | ||||
| Net proceeds from the issuance of stock | (154,577 | ) | 0 | |||||
| Net cash provided by financing activities | (217,555 | ) | (7,985 | ) | ||||
| Net change in cash and cash equivalents | (91,428 | ) | (1,699,661 | ) | ||||
| Cash and cash equivalents at beginning of period | 2,578,267 | 6,368,016 | ||||||
| Cash and cash equivalents at end of period | $ | 2,486,839 | $ | 4,668,355 | ||||
| XTANT MEDICAL HOLDINGS, INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| As of March 31, 2017 (Unaudited) and As of December 31, 2016 (Audited) | ||||||||
| As of Mar. 31, | As of Dec. 31, | |||||||
| 2017 | 2016 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 2,486,839 | $ | 2,578,267 | ||||
| Trade accounts receivable, net of allowance for doubtful accounts of $1,635,385 and $2,579,634, respectively | 16,320,038 | 18,991,872 | ||||||
| Inventories, net | 26,359,272 | 26,266,457 | ||||||
| Prepaid and other current assets | 1,651,187 | 1,149,615 | ||||||
| Total current assets | 46,817,336 | 48,986,211 | ||||||
| Non-current inventories | 440,853 | 971,854 | ||||||
| Property and equipment, net | 15,219,725 | 15,840,730 | ||||||
| Goodwill | 41,534,626 | 41,534,626 | ||||||
| Intangible assets, net | 34,800,556 | 35,940,810 | ||||||
| Other assets | 874,561 | 827,374 | ||||||
| Total Assets | $ | 139,687,657 | $ | 144,101,605 | ||||
| LIABILITIES & STOCKHOLDERS' (DEFICIT) EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 8,896,188 | $ | 10,471,944 | ||||
| Accounts payable - related party | 472,657 | 640,442 | ||||||
| Accrued liabilities | 8,815,400 | 8,982,187 | ||||||
| Revolving Line of Credit | 10,293,706 | 10,448,283 | ||||||
| Warrant derivative liability | 163,582 | 333,613 | ||||||
| Current portion of capital lease obligations | 259,027 | 244,847 | ||||||
| Total current liabilities | 28,900,560 | 31,121,317 | ||||||
| Long-term Liabilities: | ||||||||
| Capital lease obligation, less current portion | 754,994 | 832,152 | ||||||
| Long term convertible debt, less current portion | 70,636,665 | 68,937,247 | ||||||
| Long-term debt, less current portion | 51,069,961 | 50,284,187 | ||||||
| Total Liabilities | 151,362,180 | 151,174,903 | ||||||
| Commitments and Contingencies | ||||||||
| Stockholders' Equity | ||||||||
| Preferred stock | 0 | - | ||||||
| Common stock | 18 | 17 | ||||||
| Additional paid-in capital | 86,026,911 | 85,461,210 | ||||||
| Accumulated deficit | (97,701,452 | ) | (92,534,524 | ) | ||||
| Total Stockholders’ Equity (Deficit) | (11,674,523 | ) | (7,073,297 | ) | ||||
| Total Liabilities & Stockholders’ Equity | $ | 139,687,657 | $ | 144,101,606 | ||||
| XTANT MEDICAL HOLDINGS, INC. | |||||
| Calculation of Consolidated EBITDA for the Three Ended March 31, 2017 and 2016 | |||||
| Unaudited | |||||
| For the three months ended March 31, | |||||
| 2017 | 2016 | ||||
| Net Loss | (5,166,927 | ) | (5,596,072 | ) | |
| Tax (Benefit) Provision | 0 | 0 | |||
| Other (Income) Expense | (12,344 | ) | 425,000 | ||
| Change in warrant derivative liability | (170,031 | ) | (18,690 | ) | |
| Interest expense | 3,400,389 | 2,827,174 | |||
| Separation related expenses | 224,372 | 0 | |||
| Acquisition and Integration related expenses | 0 | 301,773 | |||
| Non-Cash Compensation | 230,424 | 136,079 | |||
| Depreciation & Amortization | 2,071,337 | 1,779,987 | |||
| EBITDA Gain (Loss) | 577,220 | (144,749 | ) | ||