Monday, November 30, 2015

News: Xtant Medical Holdings, Inc. Reports Third Quarter 2015 Results

Third Quarter 2015 Consolidated Pro Forma Highlights:
  • Consolidated pro forma revenue increased 6.5% to $20.9 million from $19.6 million in the third quarter of 2014. 

  • Excluding OEM revenue, third quarter 2015 consolidated pro forma revenue increased 13.8% to $20.2 million from $17.7 million in the third quarter of 2014.

  • Consolidated pro forma biologics revenue increased 15.5% to $9.8 million from $8.5 million in the third quarter of 2014. 

  • Consolidated pro forma fixation revenue, excluding OEM revenue, increased 12.3% to $10.4 million from $9.3 million in the third quarter of 2014.

  • Pro forma gross profit for the period was 65.5%, which was at the high end of Company guidance of 64% to 66%.
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BELGRADE, Mont., Nov. 11, 2015 (GLOBE NEWSWIRE) --  Xtant Medical Holdings, Inc. (NYSE MKT:XTNT), a leader in the development of class-leading regenerative medicine products and medical devices, today reported consolidated actual and consolidated pro forma financial results for the third quarter of 2015 and for the nine-months ended September 30, 2015. As previously announced, the Company completed its acquisition of X-spine Systems, Inc. on July 31, 2015. The consolidated pro forma results are presented as if the Company's current subsidiaries were combined for all periods presented below.


Consolidated Pro Forma Third Quarter 2015 Results

Revenue
Consolidated pro forma revenue for the third quarter 2015 was approximately $20.9 million, an increase of 6.5% compared to approximately $19.6 million for the same period of 2014. During the third quarter of 2015 and 2014, the Company generated approximately $745,000 and $1.9 million, respectively, of Original Equipment Manufacturer ("OEM") sales from a large orthopedic device manufacturer. Excluding those sales, third quarter 2015 consolidated pro forma revenue increased approximately 13.8% compared to the same period last year.


Consolidated Pro Forma Third Quarter 2015 Summary of Revenue
(Stated in $'000's) 
    3Q15   3Q14   Growth % 
Biologics  $9,761  $ 8,454   15.5%
Fixation (excluding OEM)  $10,396  $ 9,256    12.3%
Consolidated Pro Forma Revenue (excluding OEM)  $ 20,157  $17,710   13.8%
OEM  $745  $1,909    -61%
Consolidated Pro Forma Revenue  $20,902  $19,619   6.5%

For the nine-months ended September 30, 2015, consolidated pro forma revenue was approximately $64.4 million, an increase of $6.3 million or 10.8% compared to $58.1 million reported for the same period of 2014. Excluding OEM revenue, revenue increased 15.0% compared to the same period last year.


Gross Profit and Gross Margin
Consolidated pro forma gross profit for the third quarter of 2015 was approximately $13.7 million or 65.5% of revenue compared to $13.2 million or 67.3% of revenue reported for the same period of 2014. Gross margin was at the high end of company guidance of 64% to 66%.

For the nine-months ended September 30, 2015, consolidated pro forma gross margin was 65.7% compared to 65.8% in the prior year.

Loss from Operations
Consolidated pro forma loss from operations for the third quarter of 2015 was approximately $3.5 million compared to a loss of approximately $1.4 million for the same period of 2014. The loss for the period also includes approximately $610,000 of non-recurring general and administrative expenses and a non-cash impairment charge of $234,000 on net carrying value of pre-acquisition intangible assets.


For the nine-months ended September 30, 2015, on a consolidated pro forma basis, the Company's loss from operations was approximately $7.1 million compared to $3.3 million for the same period of 2014.

Net Loss
On a consolidated pro forma basis, the company had a net loss of approximately $5.4 million and $16.1 million for the three months and nine months ended September 30, 2015, respectively, as compared to approximately $2.8 million and $11.3 million, respectively, for the same periods of 2014.


EBITDA
The Company defines earnings before interest, taxes, depreciation and amortization ("EBITDA") as net income/(loss) from operations before depreciation, amortization, impairment charges and non-cash stock based compensation. On a pro forma combined basis, third quarter 2015 EBITDA loss was approximately $915,000. Excluding the non-recurring increase in general and administrative expenses referenced above, third quarter 2015 combined EBITDA loss was approximately
$305,000.


Financial Resources and Liquidity
As of September 30, 2015, the Company reported cash and cash equivalents of approximately $8.0 million. On September 4, 2015, the company sold 140,053 shares of restricted common stock to certain members of the Company's board of directors in a private placement transaction at $3.68 per share, which was the closing price on that date. Total proceeds were approximately $516,000.

The Company believes its cash resources are sufficient to execute its strategy through December 31, 2016.

2015 and 2016 Company Guidance
The Company reiterates its 2015 revenue guidance to be within the range of $43 to $46 million for the second half of 2015 and second half 2015 EBITDA guidance to be in the range of $2.0 to $2.5 million, excluding one-time, non-recurring expenses. The Company also reiterates its 2016 revenue guidance of approximately $100 million to $105 million and EBITDA guidance of approximately $7.0 to $9.0 million.


Actual Results for the Three Months ended September 30, 2015
The actual operating results of Xtant Medical Holdings, Inc presented below and to be reported in the Company's Quarterly Report on Form 10-Q include three months of operating results for Bacterin International, Inc. and two months of operating results for X-spine Systems, Inc.

In connection with the acquisition of X-spine, the Company recorded approximately $3.9 million of acquisition and integration related expenses during the third quarter of 2015. Additional integration related expenses are expected during the fourth quarter of 2015 and first half of 2016.
The Company also reported a one-time gain on the extinguishment of debt of approximately $2.3 million associated with the refinancing and restructuring of the Company’s senior secured term loan with an affiliate of Orbimed Advisors as part of the acquisition financing.

Conference Call
The company will also hold a conference hosted by Dan Goldberger, Chief Executive Officer, and John Gandolfo, Chief Financial Officer, to discuss the results. The call will be held at 10:00 AM ET, on November 12, 2015. Please refer to the information below for conference call dial-in information and webcast registration.


Conference date: November 12, 2015, 10:00 AM ET
Conference dial-in: 877-269-7756
International dial-in: 201-689-7817
Conference Call Name: Xtant Medical Holdings, Inc. Third Quarter 2015 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
Xtant Medical Holdings, Inc. (NYSE MKT:XTNT) develops, manufactures and markets 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.
Pro forma, projected and estimated numbers used in this press release are used only for illustrative purposes and are not forecasts and may not reflect actual results.
This press release contains supplemental measures of performance, such as EBITDA, that are not required by, or presented in accordance with, generally accepted accounting principles in the United States ("GAAP"). Such measures should not be considered as replacements of GAAP. Further information with respect to and reconciliations of such measures to the nearest GAAP measure can be found at the end of this press release.
The unaudited pro forma financial information contained in this press release is included for informational purposes only and does not purport to reflect actual results of operations or the financial position that would have occurred has Xtant and X-spine operated on a combined basis during the periods presented. The unaudited pro forma financial information
should not be relied upon as being indicative of our financial condition or results of operations had the X-spine transaction occurred on the date assumed nor as a projection of our results of operations or financial position for any future period or date. The unaudited pro forma financial information should be read in conjunction with the historical financial statements and related notes of Xtant and X-spine.


 XTANT MEDICAL HOLDINGS, INC. 
 Consolidated Pro Forma Statements of Operations 
             
  For the Three Months Ended Sept 30, For the Nine Months Ended Sept 30, 
  2015 2014 2015 2014 
              
  Amount  Amount  Amount  Amount  
 Revenue            
 Orthopedic Product Sales$ 20,577,473   $ 19,397,951   $ 63,612,869   $ 57,559,393   
 Other  323,819     221,360     788,356     576,150   
 Total Revenue  20,901,292     19,619,310     64,401,225     58,135,543   
                          
 Cost of sales  7,208,696     6,424,019     22,106,441     19,863,624   
                      
 Gross Profit  13,692,596     13,195,291     42,294,784     38,271,918   
                          
 Operating Expenses                         
 General and administrative  4,532,981     3,708,414     12,984,500     10,668,313   
 Sales and marketing  9,832,446     8,380,884     28,940,264     24,076,681   
 Research and development  987,433     919,343     2,813,792     2,541,092   
 Depreciation and amortization  1,562,220     1,524,351     4,201,058     4,175,222   
 Acquisition and Integration related expenses  -     -     -     -   
 Gain from the Extinguishment of Debt  -     -     -     -   
 Impairment of Assets  233,748     -     233,748     -   
 Non-cash consulting  50,000     39,697     190,869     81,924   
 Total Operating Expenses  17,198,829     14,572,689     49,364,232     41,543,232   
                          
 Loss from Operations  (3,506,232)    (1,377,398)    (7,069,448)    (3,271,313)  
                          
 Other Income (Expense)                        
 Interest expense  (2,153,985)    (2,946,198)    (8,146,038)    (8,656,977)  
 Change in warrant derivative liability  397,366     1,653,425     (78,923)    1,038,190   
 Non-cash consideration associated with stock purchase agreement  -     -     (558,185)    -   
 Other income (expense)  (83,097)    (70,344)    (186,223)    (253,289)  
                          
 Total Other Income (Expense)  (1,839,716)    (1,363,117)    (8,969,368)    (7,872,076)  
                          
 Net Loss from Operations Before (Provision) Benefit for Income Taxes  (5,345,948)    (2,740,515)    (16,038,817)    (11,143,389)  
                          
 Benefit (Provision) for Income Taxes                        
 Current  11,143     29,312     22,286     106,782   
 Deferred  -     -     -     -   
                          
 Net Loss$ (5,357,091)  $ (2,769,827)  $ (16,061,103)  $ (11,250,171)  
 EBITDA$ (914,778)  $ 986,825   $ 277,437   $ 3,450,381   
             
 See notes that are attached to the consolidated financial statements that are contained in the Company's 10K and 10Q's. 

                 
 XTANT MEDICAL HOLDINGS, INC.
 Consolidated Statements of Operations
            
  For the Three Months Ended Sept 30, For the Nine Months Ended Sept 30,
  2015 2014 2015 2014
             
  Amount  Amount  Amount  Amount 
 Revenue           
 Orthopedic Product Sales$ 17,421,397   $ 8,246,325   $  36,431,354    $  25,712,586   
 Other  271,623     207,179      657,396       537,821   
 Total Revenue  17,693,020     8,453,504      37,088,749       26,250,407   
                 
 Cost of sales  6,035,673     3,017,734      12,883,439       9,718,952   
                 
 Gross Profit  11,657,347     5,435,770      24,205,310       16,531,455   
                 
 Operating Expenses               
 General and administrative  3,980,804     2,282,386      8,805,104       6,664,982   
 Sales and marketing  8,430,303     3,927,028      18,179,552       12,387,459   
 Research and development  794,464     378,252      1,519,196       955,111   
 Depreciation and amortization  1,541,220     58,763      1,765,994       216,343   
 Acquisition and Integration related expenses  3,856,519     -      3,856,519       -   
 Gain from the Extinguishment of Debt  (2,345,019)    -      (2,345,019)      -   
 Impairment of Assets  233,748     -      233,748       -   
 Non-cash consulting  50,000     39,697      190,869       81,924   
 Total Operating Expenses  16,542,040     6,686,126      32,205,964       20,305,819   
                 
 Loss from Operations  (4,884,693)    (1,250,356)     (8,000,654)      (3,774,364  
                         
 Other Income (Expense)                       
 Interest expense  (2,111,721)    (1,498,508)     (4,930,941)      (4,216,109)  
 Change in warrant derivative liability  397,366     1,653,425      (78,923)      1,038,190   
 Non-cash consideration associated with stock purchase agreement  -     -      (558,185)      -   
 Other income (expense)  (89,926)    (70,344)     (193,052)      (253,289)  
                 
 Total Other Income (Expense)  (1,804,281)    84,573      (5,761,101)      (3,431,208)  
                 
 Net Loss from Operations Before (Provision) Benefit for Income Taxes  (6,688,974)    (1,165,783)     (13,761,754      (7,205,572)  
                 
 Benefit (Provision) for Income Taxes               
 Current  -     -      -       -   
 Deferred  -     -      -       -   
                 
 Net Loss$ (6,688,974)  $ (1,165,783)  $  (13,761,754   $  (7,205,572  
                 
 Net loss per share:            
 Basic$ (0.64)  $ (0.35)  $  (1.70   $  (1.26  
 Dilutive$ (0.64)  $ (0.35)  $  (1.70   $  (1.26)  
                 
 Shares used in the computation:            
 Basic  10,432,622     6,233,751      8,100,226       5,711,452   
 Dilutive  10,432,622     6,233,751      8,100,226       5,711,452   
            
 See notes that are attached to the consolidated financial statements that are contained in the Company's 10K and 10Q's.

        
 XTANT MEDICAL HOLDINGS, INC. 
 CONSOLIDATED BALANCE SHEETS 
       
  As of As of 
  Sept 30, December 31, 
  2015 2014 
 ASSETS      
 Current Assets:      
 Cash and cash equivalents$ 7,970,433  $ 4,468,208  
 Trade accounts receivable, net of allowance for doubtful accounts of $1,392,989 and $1,309,859, respectively  13,318,450    4,427,081  
 Inventories, net  22,042,508    9,558,648  
 Prepaid and other current assets  1,039,561    654,140  
 Total current assets  44,370,953    19,108,077  
        
 Non-current inventories  1,681,138    1,934,258  
 Goodwill  23,997,218    0  
 Property and equipment, net  11,433,064    4,654,527  
 Intangible assets, net  42,223,856    655,490  
 Other assets  2,520,464    1,598,539  
 Total Assets$ 126,226,693  $ 27,950,891  
        
 LIABILITIES & STOCKHOLDERS' (DEFICIT) EQUITY      
 Current Liabilities:      
 Accounts payable$ 7,485,220  $ 3,876,760  
 Accounts payable - related party  1,035,447    250,629  
 Accrued liabilities  6,716,897    1,921,301  
 Warrant derivative liability  1,399,294    1,320,371  
 Current portion of capital lease obligations  47,246    61,970  
 Current portion of royalty liability  0    1,000,750  
 Current portion of long-term debt  53,172    50,671  
 Total current liabilities  16,737,277    8,482,452  
 Long-term Liabilities:      
 Capital lease obligation, less current portion  18,962    11,808  
 Long term royalty liability, less current portion  0    6,361,216  
 Long term convertible debt, less current portion  68,000,000    0  
 Long-term debt, less current portion  44,301,474    20,870,330  
 Total Liabilities  129,057,714    35,725,806  
        
 Commitments and Contingencies      
 Stockholders' (Deficit) Equity      
 Preferred stock, $0.000001 par value; 5,000,000 shares authorized; no shares issued and Outstanding  -    -  
 Common stock, $0.000001 par value; 95,000,000 shares authorized; 11,886,107 shares issued and outstanding as of September 30, 2015 and 6,679,646 shares issued and outstanding as of December 31, 2014  11    7  
 Additional paid-in capital  81,798,160    63,091,620  
 Accumulated deficit  (84,629,192)   (70,866,542) 
 Total Stockholders’ Deficit  (2,831,021)   (7,774,915) 
        
 Total Liabilities & Stockholders’ Deficit$ 126,226,693  $ 27,950,891  
       
 See notes that are attached to the consolidated financial statements that are contained in the Company's 10K and 10Q's. 

XTANT MEDICAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
   
 For the Nine Months Ended
  2015  2014 
Operating activities:  
Net loss$  (13,761,754)$  (7,205,572)
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation and amortization 2,403,934  498,343 
Non-cash interest 1,665,172  387,294 
Gain from the Extinguishment of Debt (2,345,019) 0 
Non-cash consideration associated with stock purchase agreement 558,185  0 
Loss on sale of fixed assets 11,377  33,373 
Impairment of Assets 233,748  0 
Amortization of debt discount 707,281  1,207,859 
Non-cash consulting expense/stock option expense 881,681  938,785 
Provision for losses on accounts receivable and inventory 731,067  601,190 
Change in derivative warrant liability 78,923  (1,038,190)
Changes in operating assets and liabilities:  
Accounts receivable (2,304,620) 346,151 
Inventories 537,819  (350,198)
Prepaid and other assets (325,976) 22,109 
Accounts payable 776,214  884,436 
Accrued liabilities 1,124,888  (1,495,107)
Net cash used in operating activities (9,027,080) (5,169,527)
       
Investing activities:      
Acquisition of X-spine Systems Inc. net of cash received (73,033,049) 0 
Purchases of property and equipment and intangible assets (444,312) (190,601)
Proceeds from sale of fixed assets 102,587  10,149 
Net cash used in investing activities (73,374,774) (180,452)
Financing activities:  
Net proceeds from the issuance of convertible debt 66,322,366  0 
Payment on royalty obligation (542,905) 0 
Net proceeds from equity private placement 516,380  0 
Payments on capital leases (78,490) 0 
Net proceeds from issuance of long term debt 17,479,159  4,000,000 
Payment on long term debt (38,668) (492,695)
Proceeds from the issuance of capital leases 70,921  (126,686)
Net proceeds from the issuance of stock 2,117,498  5,876,299 
Net cash provided by financing activities 85,846,261  5,383,604 
       
Net change in cash and cash equivalents 3,444,407  3,906,939 
Cash and cash equivalents at beginning of period 4,526,026  3,046,340 
Cash and cash equivalents at end of period$  7,970,433 $  6,953,279 
   
See notes that are attached to the consolidated financial statements that are contained in the Company's 10K and 10Q's.
   
 
       
 XTANT MEDICAL HOLDINGS, INC. 
 Calculation of Pro Forma EBITDA 
 
 For the three months endedFor the nine months ended 
 Sept 30,Sept 30, 
  2015  2014  2015  2014  
 Loss from Operations  (3,506,232) (1,377,398) (7,069,448) (3,271,313) 
      
 Impairment of Assets 233,748   233,748   
 Non-Cash Compensation 186,882  258,372  631,234  951,972  
 Depreciation & Amortization 2,170,824  2,105,850  6,481,903  5,769,722  
       
 EBITDA (914,778) 986,824  277,437  3,450,381  
 

 

 
 
Contact:
COCKRELL GROUP 877.889.1972
investorrelations@thecockrellgroup.com
cockrellgroup.com

Published at Nasdaq GlobeNewswire 

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