Full Press Release Details
Medical Announces First Quarter 2022 Financial Results
MT, May 5, 2022 - 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 first quarter ended March 31, 2022.
building momentum in our business, underscored by first quarter revenue growth and the progress of our key strategic growth pillars,
we are pleased with the promising start to 2022," said Sean Browne, President & CEO of Xtant Medical. "First quarter
revenue increased by 3% and we achieved an impressive 13% year-over-year growth in our biologics business. Our top-line was driven by
our 2021 initiatives, including multiple successful product launches, expansion of our distribution network and entry into adjacent markets.
With our strategic plan firmly in place and guided by our mission, we look forward to continue bringing our leading spine brand to patients
Quarter 2022 Financial Results
quarter 2022 revenue was $13.0 million, compared to $12.5 million for the same period in 2021. The increase in revenue is attributed
primarily to introductions of new products and greater private label and original equipment manufacturer (OEM) orthobiologics sales.
margin for the first quarter of 2022 was 58.3%, compared to 64.5% for the same period in 2021. The decrease was primarily attributable
to the sell-through of product subject to higher production costs, a shift in product sales mix with a proportional increase in private
label and OEM channel sales and greater inventory reserve expense.
expenses for the first quarter of 2022 totaled $9.4 million, compared to $8.1 million for the first quarter of 2021. The increase was
primarily due to increased expense related to licenses and fees, additional bad debt expense, costs related to the enterprise resource
planning system upgrades, additional sales commissions and greater salaries and wage expenses.
quarter 2022 net loss totaled $2.2 million, or $0.03 per share, compared to the first quarter 2021 net loss of $29,000, or $0.00 per
Adjusted EBITDA for the first quarter of 2022 totaled a loss of $0.9 million, compared to Non-GAAP Adjusted EBITDA of $0.8 million for
the same period in 2021. 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 legal settlement reserves. A calculation and reconciliation of Adjusted EBITDA to net loss can be found
in the attached financial tables.
Medical will host a webcast and conference call to discuss the first quarter 2022 financial results on Thursday, May 5, 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."
Xtant Medical Holdings, Inc.
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.
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.
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.
Statement Regarding Forward-Looking Statements
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 and the future success of its key growth initiatives and
their impact on the Company's future growth strategy, operating results and financial performance. 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 March 31, 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.
MEDICAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
thousands, except number of shares and par value)
| March 31, 2022 | December 31, 2021 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 16,971 | $ | 18,387 | ||||
| Trade accounts receivable, net of allowance for credit losses and doubtful accounts of $554 and $653, respectively | 7,545 | 7,154 | ||||||
| Inventories | 17,300 | 17,945 | ||||||
| Prepaid and other current assets | 944 | 844 | ||||||
| Total current assets | 42,760 | 44,330 | ||||||
| Property and equipment, net | 5,409 | 5,212 | ||||||
| Right-of -use asset, net | 1,146 | 1,258 | ||||||
| Goodwill | 3,205 | 3,205 | ||||||
| Intangible assets, net | 386 | 400 | ||||||
| Other assets | 264 | 287 | ||||||
| Total Assets | $ | 53,170 | $ | 54,692 | ||||
| LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 2,774 | $ | 2,615 | ||||
| Accrued liabilities | 4,345 | 4,349 | ||||||
| Current portion of lease liability | 471 | 462 | ||||||
| Current portion of finance lease obligations | 31 | 31 | ||||||
| Line of credit | 3,607 | 3,620 | ||||||
| Total current liabilities | 11,228 | 11,077 | ||||||
| Long-term Liabilities: | ||||||||
| Lease liability, less current portion | 720 | 842 | ||||||
| Finance lease obligation, less current portion | 95 | 103 | ||||||
| Long-term debt, plus premium and less issuance cost | 11,844 | 11,787 | ||||||
| Total Liabilities | 23,887 | 23,809 | ||||||
| Stockholders' Equity | ||||||||
| Preferred stock | - | - | ||||||
| Common stock | - | - | ||||||
| Additional paid-in capital | 266,681 | 266,068 | ||||||
| Accumulated deficit | (237,398 | ) | (235,185 | ) | ||||
| Total Stockholders' Equity | 29,283 | 30,883 | ||||||
| Total Liabilities & Stockholders' Equity | $ | 53,170 | $ | 54,692 |
MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
in thousands, except number of shares and per share amounts)
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Revenue | ||||||||
| Orthopedic product sales | $ | 12,950 | $ | 12,509 | ||||
| Other revenue | 9 | 33 | ||||||
| Total revenue | 12,959 | 12,542 | ||||||
| Cost of sales | 5,399 | 4,451 | ||||||
| Gross profit | 7,560 | 8,091 | ||||||
| Gross profit % | 58.3 | % | 64.5 | % | ||||
| Operating expenses | ||||||||
| General and administrative | 3,969 | 3,027 | ||||||
| Sales and marketing | 5,209 | 4,855 | ||||||
| Research and development | 213 | 214 | ||||||
| 9,391 | 8,096 | |||||||
| Loss from operations | (1,831 | ) | (5 | ) | ||||
| Other income | ||||||||
| Interest expense | (359 | ) | (1 | ) | ||||
| Total Other Expense | (359 | ) | (1 | ) | ||||
| Net Loss from Operations Before Provision for Income Taxes | (2,190 | ) | (6 | ) | ||||
| Provision for income taxes | ||||||||
| Current and deferred | (23 | ) | (23 | ) | ||||
| Net Loss | $ | (2,213 | ) | $ | (29 | ) | ||
| Net loss per share: | ||||||||
| Basic | $ | (0.03 | ) | $ | (0.00 | ) | ||
| Dilutive | $ | (0.03 | ) | $ | (0.00 | ) | ||
| Shares used in the computation: | ||||||||
| Basic | 87,191,341 | 81,248,875 | ||||||
| Dilutive | 87,191,341 | 81,248,875 |
MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | (2,213 | ) | $ | (29 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and amortization | 281 | 375 | ||||||
| Gain on disposal of fixed assets | (73 | ) | (32 | ) | ||||
| Non-cash interest | 58 | - | ||||||
| Non-cash rent | - | 3 | ||||||
| Stock-based compensation | 613 | 456 | ||||||
| Provision for reserve on accounts receivable | 191 | (63 | ) | |||||
| Provision for excess and obsolete inventory | 318 | 150 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (582 | ) | (83 | ) | ||||
| Inventories | 327 | (383 | ) | |||||
| Prepaid and other assets | (78 | ) | (349 | ) | ||||
| Accounts payable | 159 | (459 | ) | |||||
| Accrued liabilities | (5 | ) | (893 | ) | ||||
| Net cash used in operating activities | (1,004 | ) | (1,307 | ) | ||||
| Investing activities: | ||||||||
| Purchases of property and equipment | (484 | ) | (542 | ) | ||||
| Proceeds from sale of fixed assets | 93 | 59 | ||||||
| Net cash used in investing activities | (391 | ) | (483 | ) | ||||
| Financing activities: | ||||||||
| Payments on financing leases | (8 | ) | (25 | ) | ||||
| Payments on long-term debt | - | (308 | ) | |||||
| Borrowings on line of credit | 12,316 | - | ||||||
| Repayments on line of credit | (12,329 | ) | - | |||||
| Proceeds from private place, net of cash issuance costs | - | 18,425 | ||||||
| Net cash (used in) provided by financing activities | (21 | ) | 18,092 | |||||
| Net change in cash and cash equivalents | (1,416 | ) | 16,302 | |||||
| Cash and cash equivalents at beginning of period | 18,387 | 2,341 | ||||||
| Cash and cash equivalents at end of period | $ | 16,971 | $ | 18,643 |
MEDICAL HOLDINGS, INC.
OF NON-GAAP CONSOLIDATED EBITDA AND ADJUSTED EBITDA
| Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Net Loss | $ | (2,213 | ) | $ | (29 | ) | ||
| Depreciation and amortization | 281 | 375 | ||||||
| Interest expense | 359 | 1 | ||||||
| Tax expense | 23 | 23 | ||||||
| Non-GAAP EBITDA | (1,550 | ) | 370 | |||||
| Non-GAAP EBITDA/Total revenue | -12.0 | % | 3.0 | % | ||||
| NON-GAAP ADJUSTED EBITDA CALCULATION | ||||||||
| Stock-based compensation | 614 | 456 | ||||||
| Separation-related expenses | 3 | - | ||||||
| Non-GAAP Adjusted EBITDA | $ | (933 | ) | $ | 826 | |||
| Non-GAAP Adjusted EBITDA/Total revenue | -7.2 | % | 6.6 | % |