Xtant™ Medical Reports Record Fourth Quarter Revenue of $24.5 million, 10% Growth Compared to Prior Year Period

See footnote about the use of pro forma financial information


Fourth Quarter 2016 Highlights:

  • Consolidated total revenue increased 9.9% to a record $24.5 million compared to fourth quarter 2015 revenue of $22.3 million
  • Consolidated gross profit increased 17.4% to $17.5 million compared to fourth quarter 2015 gross profit of $14.9 million
  • Consolidated gross margins improved to 71.6%, compared to 67.0% reported in the fourth quarter of 2015

Full-Year 2016 Highlights:

  • Consolidated gross profit increased 10.1% to $62.3 million compared to pro forma 2015 gross profit of $56.6 million
  • Consolidated gross margins for the year were 69.2%, compared to pro forma 2015 gross margin of 65.4%

BELGRADE, Mont., March 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 period ended December 31st, 2016. The Company reported annual revenues of approximately $90.0 million and a net loss for the year of approximately $19.5 million.

Revenue

Consolidated fourth quarter 2016 revenue was approximately $24.5 million, an increase of 9.9% compared to revenue of approximately $22.3 million for the same period during 2015.

Consolidated revenue for the full year 2016 was approximately $90.0 million, compared to pro forma 2015 revenue of approximately $86.5 million, representing an increase of 4.0% over the prior year.

Gross Profit

Consolidated gross profit for the fourth quarter of 2016 was $17.5 million or 71.6% of revenues, compared to gross profit of $14.9 million or 67.0% of revenues for the fourth quarter of 2015.

For the year, gross profit was approximately $62.3 million, compared with pro forma 2015 gross profit of $56.6 million. Gross margin for the year was 69.2%, compared to 2015 pro forma gross margin of 65.4%

Sales and Marketing Expenses

Consolidated fourth quarter 2016 sales and marketing expenses increased to $11.9 million, as compared to sales and marketing expenses of $10.6 million during the same period in 2015. For the quarter, sales and marketing as a percentage of revenues increased slightly to 48.8%, compared to 47.6% in the fourth quarter of 2015.

For the year, sales and marketing expenses increased to $44.1 million for 2016, as compared to pro forma 2015 sales and marketing expenses of $39.3 million. As a percentage of revenues, sales and marketing expenses increased to 48.9% compared to 45.5% reported for the pro forma full year 2015.

General and Administrative Expenses

In the fourth quarter, consolidated general and administrative expenses remained flat at $4.5 million as compared to general and administrative expenses of $4.2 million reported for the same period last year. As a percentage of revenues, general and administrative expenses were 18.3% during the period as compared to 18.9% for the same period during 2015.

2016 general and administrative expenses decreased to $15.8 million as compared with $16.6 million reported for the pro forma period last year. As a percentage of revenues, general and administrative expenses were 17.5% as compared to 19.2% for 2015.

Net Income / Loss

The fourth quarter 2016 consolidated net loss was $4.5 million, compared to the same period a year-ago net income of $11.6 million. The decrease was primarily due to a one-time recording of a deferred tax benefit of $17.5 million that occurred during the fourth quarter 2015.

The fourth quarter 2016 consolidated loss per share of $0.31 compared to earnings per share of $0.97 in the fourth quarter of 2015.

For the full-year 2016, the Company had a net loss of $19.5 million compared to a pro forma net loss of $5.8 million for 2015. Net loss per share for the full-year 2016 was $1.54 a share compared to pro forma net loss per share of $0.65 for 2015.

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 fourth quarter of 2016 was a gain of $1.2 million compared to a loss of $350,000 for the same period during 2015.

Full year 2016 EBITDA was a gain of $2.0 million compared to a zero pro forma loss in the prior year.

Financial Liquidity

Cash on hand as of December 31, 2016, was $2.6 million, as compared to $6.4 million as of December 31, 2015. Net working capital as of December 31, 2016 decreased $5.7 million to $17.9 million, as compared to $23.6 million as of December 31, 2015.

Outlook for Full Year 2017

The Company plans to have an immediate focus on operational and cash flow efficiencies throughout 2017. As a result, we have reduced revenue guidance while expanding projected EBITDA margins as we get to the latter part of 2017. The Company's revised full year 2017 revenue and EBITDA guidance is based on the following: 

     
 Stated in 000'sFY '15*FY '162017 Guidance
 Revenue$86,518 $90,003 $96,000 - $98,000
 Growth  4%6.7% - 8.9%
 EBITDA$(33)$2,050 $6,900 - $7,700
 *Pro forma results


Conference Call to be Held March 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 March 10, 2017. Please refer to the information below for conference call dial-in information and webcast registration.

Conference date: March 10, 2017, 10:00 AM ET
Conference dial-in: 877-269-7756
International dial-in: 201-689-7817
Conference Call Name: Xtant Medical's Fourth Quarter 2016 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."

Use of Pro Forma Financial Information
On July 31,2015, Bacterin International Holdings, Inc. acquired all of the issued and outstanding stock of X-Spine Systems, Inc. and the combined company was renamed Xtant Medical Holdings, Inc. Except for the financial results for the three months ended December 31, 2015, the results presented for the full 2015 year are on a pro forma basis as if the two companies were combined for the periods shown. Certain pro forma adjustments have been made to reflect the impact of the purchase transaction, primarily consisting of amortization of intangible assets with determinable lives and interest expense on long-term debt. In addition, certain historical expenses, such as warrant expense and interest expense associated with debt that was immediately repaid, were eliminated from these pro-forma results. The pro forma information does not necessarily reflect the actual results of operations had the acquisition been consummated at the beginning of the fiscal reporting period indicated nor is it indicative of future operating results. The pro forma information does not include any adjustment for potential revenue enhancements, cost synergies or other operating efficiencies that could result from the acquisition.

Additional information regarding the business combination and its impact on the Company’s financial position will be set forth in the Company’s Form 10-K for the fiscal year ended December 31, 2016, which will be filed with the Securities and Exchange Commission on or about March 30, 2017 and will include the Company’s audited consolidated financial statements as of and for the years ended December 31, 2016 and December 31, 2015

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 Company's ability to successfully integrate the acquisition of X-spine; the ability of the Company's sales force to achieve expected results; the Company's ability to meet its existing and anticipated contractual obligations, including financial covenant and other obligations contained in the Company's secured lending facility; the Company's ability to manage cash flow; the Company's ability to develop, market, sell and distribute desirable applications, products and services and to protect its intellectual property; the ability of the Company's customers to pay and the timeliness of such payments; the Company's ability to obtain financing as and when needed; changes in consumer demands and preferences; the Company's ability to attract and retain management and employees with appropriate skills and expertise; the impact of changes in market, legal and regulatory conditions and in the applicable business environment, including actions of competitors; 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.


                      
 XTANT MEDICAL HOLDINGS, INC. 
 Condensed Consolidated Statements of Operations 
 Unaudited Actual and Proforma Results 
                 
  For the Three Months Ended December 31, For the Year Ended December 31, 
  2016 Unaudited 2015 Unaudited 2016 Unaudited 2015 Pro Forma 
    % of   % of   % of   % of 
  Amount Revenue Amount Revenue Amount Revenue Amount Revenue 
 Orthopedic Product Sales$ 24,362,237  99.6% $ 21,771,750  97.8% $ 89,388,145  99.3% $ 85,235,170  98.5% 
 Other  108,621  0.4%   494,072  2.2%   614,591  0.7%   1,282,429  1.5% 
 Total Revenue  24,470,858  100.0%   22,265,822  100.0%   90,002,736  100.0%   86,517,599  100.0% 
                      
 Cost of sales  6,960,634  28.4%   7,353,446  33.0%   27,710,014  30.8%   29,913,686  34.6% 
                      
 Gross Profit  17,510,223  71.6%   14,912,376  67.0%   62,292,722  69.2%   56,603,913  65.4% 
                      
 Operating Expenses                    
 General and administrative  4,484,419  18.3%   4,201,394  18.9%   15,762,531  17.5%   16,612,883  19.2% 
 Sales and marketing  11,940,049  48.8%   10,607,475  47.6%   44,055,813  48.9%   39,334,250  45.5% 
 Research and development  798,198  3.3%   1,027,166  4.6%   3,410,600  3.8%   3,840,958  4.4% 
 Depreciation and amortization  1,250,436  5.1%   2,019,258  9.1%   4,940,955  5.5%   6,220,316  7.2% 
 Acquisition and Integration related expenses  131,755  0.5%   1,079,236  4.8%   1,401,367  1.6%   4,935,755  5.7% 
 Gain from the Extinguishment of Debt  0  0.0%   0  0.0%   0  0.0%   (2,345,019) -2.7% 
 Impairment of Assets  0  0.0%   0  0.0%   0  0.0%   233,748  0.3% 
 Non-cash consulting  0  0.0%   55,296  0.2%   266,721  0.3%   246,165  0.3% 
 Total Operating Expenses  18,604,856  76.0%   18,989,824  85.3%   69,837,986  77.6%   69,079,056  79.8% 
                      
 Net Gain (Loss) from Operations  (1,094,633) -4.5%   (4,077,448) -18.3%   (7,545,264) -8.4%   (12,475,142) -14.4% 
                      
 Other Income (Expense)                    
 Interest expense  (3,287,855) -13.4%   (2,802,807) -12.6%   (12,262,750) -13.6%   (10,948,845) -12.7% 
 Change in warrant derivative liability  0  0.0%   348,943  1.6%   716,738  0.8%   270,020  0.3% 
 Non-cash consideration associated with stock purchase agreement  0  0.0%   0  0.0%   0  0.0%   (558,185) -0.6% 
 Other income (expense)  (103,990) -0.4%   582,123  2.6%   (351,914) -0.4%   395,006  0.5% 
                      
 Total Other Income (Expense)  (3,391,845) -13.9%   (1,871,740) -8.4%   (11,897,926) -13.2%   (10,842,004) -12.5% 
                      
 Net Gain (Loss) from Operations Before Benefit (Provision) for Income Taxes  (4,486,478) -18.3%   (5,949,188) -26.7%   (19,443,190) -21.6%   (23,317,146) -27.0% 
                      
 Benefit (Provision) for Income Taxes                    
 Current  (50,362) -0.2%   0  0.0%   (50,362) -0.1%   (65,387) -0.1% 
 Deferred  0  0.0%   17,537,408  78.8%   0  0.0%   17,537,408  20.3% 
                      
 Net Income (Loss)$ (4,536,840) -18.5% $ 11,588,220  52.0% $ (19,493,552) -21.7% $ (5,845,125) -6.8% 
                      
 Net Income (loss) per share:                 
 Basic$ (0.31)   $ 0.97    $ (1.54)   $ (0.65)   
 Dilutive$ (0.31)   $ 0.97    $ (1.54)   $ (0.65)   
                      
 Shares used in the computation:                 
 Basic  14,479,201      11,890,104      12,671,685      9,055,483    
 Dilutive  14,479,201      11,890,104      12,671,685      9,055,483    
                 

 

                      
 XTANT MEDICAL HOLDINGS, INC. 
 Condensed Consolidated Statements of Operations 
 Audited and Unaudited Actual Results 
                 
  For the Three Months Ended December 31, For the Year Ended December 31, 
  2016 Actual Unaudited 2015 Actual Unaudited 2016 Actual Unaudited 2015 Actual Audited 
    % of   % of   % of   % of 
  Amount Revenue Amount Revenue Amount Revenue Amount Revenue 
 Orthopedic Product Sales$ 24,362,237  99.6% $ 21,771,750  97.8% $ 89,388,145  99.3% $ 58,194,249  98.1% 
 Other  108,621  0.4%   494,072  2.2%   614,591  0.7%   1,151,468  1.9% 
 Total Revenue  24,470,858  100.0%   22,265,822  100.0%   90,002,736  100.0%   59,345,717  100.0% 
                      
 Cost of sales  6,960,634  28.4%   7,353,446  33.0%   27,710,014  30.8%   20,262,728  34.1% 
                      
 Gross Profit  17,510,223  71.6%   14,912,376  67.0%   62,292,722  69.2%   39,082,989  65.9% 
                      
 Operating Expenses                    
 General and administrative  4,484,419  18.3%   4,201,394  18.9%   15,762,531  17.5%   12,993,307  21.9% 
 Sales and marketing  11,940,049  48.8%   10,607,475  47.6%   44,055,813  48.9%   28,731,184  48.4% 
 Research and development  798,198  3.3%   1,027,166  4.6%   3,410,600  3.8%   2,546,362  4.3% 
 Depreciation and amortization  1,250,436  5.1%   2,019,258  9.1%   4,940,955  5.5%   3,819,588  6.4% 
 Acquisition and Integration related expenses  131,755  21.8%   1,079,236  4.8%   1,401,367  1.6%   4,935,755  8.3% 
 Gain from the Extinguishment of Debt  0  0.0%   0  0.0%   0  0.0%   (2,345,019) -4.0% 
 Impairment of Assets  0  0.0%   0  0.0%   0  0.0%   233,748  0.4% 
 Non-cash consulting  0  0.0%   55,296  0.2%   266,721  0.3%   246,165  0.4% 
 Total Operating Expenses  18,604,856  76.0%   18,989,824  85.3%   69,837,986  77.6%   51,161,091  86.2% 
                      
 Net Gain (Loss) from Operations  (1,094,633) -4.5%   (4,077,448) -18.3%   (7,545,264) -8.4%   (12,078,101) -20.4% 
                      
 Other Income (Expense)                    
 Interest expense  (3,287,855) -13.4%   (2,802,807) -12.6%   (12,262,750) -13.6%   (7,733,748) -13.0% 
 Change in warrant derivative liability  0  0.0%   348,943  1.6%   716,738  0.8%   270,020  0.5% 
 Non-cash consideration associated with stock purchase agreement  0  0.0%   0  0.0%   0  0.0%   (558,185) -0.9% 
 Other income (expense)  (103,990) -0.4%   582,123  2.6%   (351,914) -0.4%   388,177  0.7% 
                      
 Total Other Income (Expense)  (3,391,845) -13.9%   (1,871,740) -8.4%   (11,897,926) -13.2%   (7,633,736) -12.9% 
                      
 Net Gain (Loss) from Operations Before Benefit (Provision) for Income Taxes  (4,486,478) -18.3%   (5,949,188) -26.7%   (19,443,190) -21.6%   (19,711,838) -33.2% 
                      
 Benefit (Provision) for Income Taxes                    
 Current  (50,362) -0.2%   0  0.0%   (50,362) -0.1%   0  0.0% 
 Deferred  0  0.0%   17,537,408  78.8%   0  0.0%   17,537,408  29.6% 
                      
 Net Income (Loss)$ (4,536,840) -18.5% $ 11,588,220  52.0% $ (19,493,552) -21.7% $ (2,174,430) -3.7% 
                      
 Net Income (loss) per share:                 
 Basic$ (0.31)   $ 0.97    $ (1.54)   $ (0.24)   
 Dilutive$ (0.31)   $ 0.97    $ (1.54)   $ (0.24)   
                      
 Shares used in the computation:                 
 Basic  14,479,201      11,890,104      12,671,685      9,055,483    
 Dilutive  14,479,201      11,890,104      12,671,685      9,055,483    
                 

 

        
 XTANT MEDICAL HOLDINGS, INC. 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 
   
  For the twelve months ended December 31, 
  2016 Unaudited 2015 Audited 
 Operating activities:      
 Net loss$(19,493,552) $(2,174,430) 
 Adjustments to reconcile net loss to net cash used in operating activities:      
 Depreciation and amortization 7,241,870   4,889,272  
 Purchase accounting valuation allowance 0   (17,537,408) 
 Non-Cash Interest 6,784,785   4,814,506  
 Impairment of Assets 0   956,395  
 Gain (Loss) on sale of fixed assets 25,458   (596,883) 
 Non-cash consulting expense/stock option expense 522,987   836,741  
 Provision for losses on accounts receivable and inventory 223,538   700,234  
 Change in derivative warrant liability (716,738)  (270,020) 
 Non-cash consideration associated with stock purchase agreement 0   558,185  
 Extinguishment of debt 0   (2,345,019) 
 Changes in operating assets and liabilities:      
 Accounts receivable (2,680,405)  (5,512,429) 
 Inventories (4,074,086)  (545,713) 
 Prepaid and other assets (484,061)  (1,044,962) 
 Accounts payable 319,091   644,149  
 Accrued liabilities (2,076,183)  7,527,514  
 Net cash used in operating activities (14,407,296)  (9,099,868) 
      
 Investing activities:      
 Acquisition of X-spine Systems, Inc. 0   (72,975,200) 
 Purchases of property and equipment and intangible assets (5,832,690)  (2,263,033) 
 Proceeds from sale of fixed assets 16,400   1,667,195  
 Net cash used in investing activities (5,816,290)  (73,571,038) 
      
 Financing activities:     
 Proceeds from long-term and convertible debt, net of deferred and financing costs 3,238,166   83,897,361  
 Net proceeds from equity private placement 0   515,395  
 Payment on royalty obligation 0   (542,905) 
 Payments on Long-term debt 0   (1,325,814) 
 Payments on capital leases (144,600)  (101,760) 
 Net proceeds from the issuance of stock 3,087,462   2,116,937  
 Net Proceeds from the revolving line of credit 10,252,809   0  
 Proceeds from exercise of options 0   11,500  
 Net cash provided by financing activities 16,433,837   84,570,714  
        
 Net change in cash and cash equivalents (3,789,749)  1,899,808  
 Cash and cash equivalents at beginning of period 6,368,016   4,468,208  
 Cash and cash equivalents at end of period$2,578,267  $6,368,016  
     

 

        
 XTANT MEDICAL HOLDINGS, INC. 
 CONDENSED CONSOLIDATED BALANCE SHEETS 
 As of December 31, 2015 and 2016 
      
  As of Dec. 31, As of Dec. 31, 
  2016  Unaudited 2015 Audited 
 ASSETS      
 Current Assets:      
 Cash and cash equivalents$2,578,267  $6,368,016  
 Trade accounts receivable, net of allowance for doubtful accounts of $1,635,385 and $2,579,634, respectively 18,991,872   15,385,218  
 Inventories, net 26,266,457   22,684,716  
 Prepaid and other current assets 1,149,616   601,697  
 Total current assets 48,986,211   45,039,647  
        
 Non-current inventories 971,854   1,607,915  
 Property and equipment, net 15,840,730   11,816,629  
 Goodwill 41,534,626   41,534,626  
 Intangible assets, net 35,940,810   40,237,289  
 Other assets 827,372   791,221  
 Total Assets$144,101,605  $141,027,327  
        
 LIABILITIES & STOCKHOLDERS' (DEFICIT) EQUITY      
 Current Liabilities:      
 Accounts payable$10,471,944  $9,386,531  
 Accounts payable - related party 640,441   1,406,763  
 Accrued liabilities 8,982,187   9,595,851  
 Revolving Line of Credit 10,448,283   0  
 Warrant derivative liability 333,613   1,050,351  
 Current portion of capital lease obligations 244,847   35,139  
 Total current liabilities 31,121,316   21,474,635  
 Long-term Liabilities:      
 Capital lease obligation, less current portion 832,152   7,800  
 Long term convertible debt, less current portion 68,937,247   66,436,647  
 Long-term debt, less current portion 50,284,187   44,231,718  
 Total Liabilities 151,174,902   132,150,800  
        
 Commitments and Contingencies      
 Stockholders' Equity      
 Preferred stock -   -  
 Common stock 17   11  
 Additional paid-in capital 85,461,210   81,917,488  
 Accumulated deficit (92,534,524)  (73,040,973) 
 Total Stockholders’ Equity (Deficit) (7,073,297)  8,876,527  
        
 Total Liabilities & Stockholders’ Equity$144,101,605  $141,027,327  
       

 

      
 XTANT MEDICAL HOLDINGS, INC.
 Calculation of Consolidated EBITDA for the Three and Twelve Months Ended December 31, 2016
  and for the Three and Pro Forma Twelve Months Ended December 31, 2015
 Unaudited
  
 For the three months ended December 31,For the twelve months ended December 31,
   
 2016 2015 2016 2015 
 Net Loss(4,536,840)11,588,220 (19,493,552)(5,845,125)
     
 (Benefit) Provision50,362 (17,537,408)50,362 (17,472,021)
 Other (Income) Expense103,990 (582,123)351,914 (395,006)
 Change in warrant derivative liability0 (348,943)(716,738)(270,020)
 Non-cash consideration associated with stock purchase agreement0 0 0 558,185 
 Interest expense3,287,855 2,802,807 12,262,750 10,948,845 
 Acquisition and Integration related expenses131,755 0 1,401,367 233,748 
 Extinguishment of Debt0 1,079,236 0 4,935,755 
 Impairment of Assets0 0 0 (2,345,019)
 Non-Cash Compensation0 163,124 522,987 794,358 
 Depreciation & Amortization1,690,020 2,485,321 7,241,870 8,822,994 
 One Time Inventory Reserves and Accounts Receivables Allowances426,355 0 426,355 0 
 EBITDA Gain (Loss)1,153,497 (349,767)2,047,315 (33,306)
     

 


            

Coordonnées