Full Press Release Details
Medical Announces Fourth Quarter and Full Year 2021 Financial Results
MT, March 8, 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 fourth quarter and year ended
accomplished numerous objectives in 2021 focused on developing new products, expanding our distributor network and growing our adjacent
market sales that have us excited about the future of the Company," said Sean Browne, President and CEO of Xtant Medical. "Our
Company achieved year-over-year revenue growth of 4%, and I am particularly pleased with the top-line performance of our biologics business,
which grew 8% annually in a very difficult year. As part of our strategic plan, we launched four new products, and we are especially
excited by the strong demand of our newly introduced OsteoFactor and OsteoVive Plus products. Guided by our mission of honoring
the gift of donation, so that our patients can live as full, and complete a life as possible,' we are confident that our key growth
initiatives will maximize the potential opportunities of our leading spine brand."
Quarter and Full Year 2021 Financial Results
quarter 2021 revenue was $14.0 million, compared to $14.0 million for the same quarter in 2020. Full year 2021 revenue was $55.3 million,
compared to $53.3 million for 2020. The increase in revenue was largely attributable to additional private label and original equipment
manufacturer (OEM) orthobiologics sales.
margin for the fourth quarter of 2021 was 55.1%, compared to 64.1% for the same period in 2020 and was 58.8% for 2021, compared to 64.5%
in 2020. These decreases were primarily attributable to increased underabsorption of labor and overhead associated with initiatives to
reduce inventory, a shift in product sales mix with a proportional increase in private label and OEM channel sales, and sell-through
of product subject to higher production costs during prior periods.
expenses for the fourth quarter of 2021 totaled $9.6 million, compared to $8.7 million for the fourth quarter of 2020, and were $36.3
million in 2021 compared to $35.1 million in 2020. These increases were primarily due to additional stock-based compensation expense,
greater salaries and wage expenses and severance related expenses, which were partially offset by lower commissions resulting from a
greater a mix of commission-free private label and OEM sales.
quarter 2021 net loss totaled $2.3 million, or $0.03 per share, compared to the fourth quarter 2020 net loss of $0.7 million, or $0.01
per share. Net loss for 2021 was $4.8 million, or $0.06 per share, compared to a net loss of $7.0 million, or $0.25 per share, for 2020.
Adjusted EBITDA for the fourth quarter of 2021 totaled a loss of $0.5 million, compared to Non-GAAP Adjusted EBITDA of $1.0 million for
the same period in 2020. Non-GAAP Adjusted EBITDA for 2021 totaled $0.7 million, compared to $3.1 million for 2020. 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, change in warrant
derivative liability 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 fourth quarter and full year 2021 financial results on Tuesday, March
8, 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. 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)
| As of | As of | |||||||
| December 31, 2021 | December 31, 2020 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 18,243 | $ | 2,341 | ||||
| Restricted cash | 144 | - | ||||||
| Trade accounts receivable, net of allowance for credit losses of $ 552 and doubtful accounts of $ 653 , respectively | 7,154 | 6,880 | ||||||
| Inventories | 17,945 | 21,408 | ||||||
| Prepaid and other current assets | 844 | 736 | ||||||
| Total current assets | 44,330 | 31,365 | ||||||
| Property and equipment, net | 5,212 | 4,347 | ||||||
| Right-of-use asset, net | 1,258 | 1,690 | ||||||
| Other assets | 287 | 402 | ||||||
| Intangible assets, net | 400 | 457 | ||||||
| Goodwill | 3,205 | 3,205 | ||||||
| Total Assets | $ | 54,692 | $ | 41,466 | ||||
| LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT) | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 2,615 | $ | 2,947 | ||||
| Accrued liabilities | 4,349 | 5,462 | ||||||
| Current portion of lease liability | 462 | 423 | ||||||
| F inance lease obiligations | 31 | 20 | ||||||
| Line of credit | 3,620 | - | ||||||
| Current portion of long-term debt | - | 16,797 | ||||||
| Total current liabilities | 11,077 | 25,649 | ||||||
| Long-term Liabilities: | ||||||||
| Lease liability, less current portion | 842 | 1,303 | ||||||
| Financing lease obligations, net | 103 | - | ||||||
| Long-term debt, plus premium and less issuance costs | 11,787 | - | ||||||
| Total Liabilities | 23,809 | 26,952 | ||||||
| Stockholders' Equity | ||||||||
| Preferred stock, $ 0.000001 par value; 10,000,000 shares authorized; no shares issued and outstanding | - | - | ||||||
| Common stock, $0.000001 par value; 300,000,000 shares authorized; 87,068,980 shares issued and outstanding as of December 31, 2021 and 77,573,680 shares issued and outstanding as of December 31, 2020 | - | - | ||||||
| Additional paid-in capital | 266,068 | 244,850 | ||||||
| Accumulated deficit | (235,185 | ) | (230,336 | ) | ||||
| Total Stockholders' Equity | 30,883 | 14,514 | ||||||
| Total Liabilities & Stockholders' Equity | $ | 54,692 | $ | 41,466 |
XTANT MEDICAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except number of shares and per share amounts)
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue | ||||||||||||||||
| Orthopedic product sales | $ | 13,953 | $ | 13,981 | $ | 55,146 | $ | 53,188 | ||||||||
| Other revenue | 17 | 34 | 117 | 149 | ||||||||||||
| Total revenue | 13,970 | 14,015 | 55,263 | 53,337 | ||||||||||||
| Cost of sales | 6,276 | 5,032 | 22,773 | 18,945 | ||||||||||||
| Gross profit | 7,694 | 8,983 | 32,490 | 34,392 | ||||||||||||
| Gross profit % | 55.1 | % | 64.1 | % | 58.8 | % | 64.5 | % | ||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | 4,142 | 3,210 | 14,449 | 13,503 | ||||||||||||
| Sales and marketing | 5,314 | 5,405 | 21,025 | 20,983 | ||||||||||||
| Research and development | 151 | 128 | 870 | 657 | ||||||||||||
| Total operating expenses | 9,607 | 8,743 | 36,344 | 35,143 | ||||||||||||
| Income (Loss) from operations | (1,913 | ) | 240 | (3,854 | ) | (751 | ) | |||||||||
| Other Expense | ||||||||||||||||
| Interest expense | (466 | ) | (718 | ) | (995 | ) | (5,976 | ) | ||||||||
| Total Other Expense | (466 | ) | (718 | ) | (995 | ) | (5,976 | ) | ||||||||
| Net Loss Before Provision for Income Taxes | (2,379 | ) | (478 | ) | (4,849 | ) | (6,727 | ) | ||||||||
| Provision for income taxes | ||||||||||||||||
| Current and deferred | 95 | (229 | ) | - | (296 | ) | ||||||||||
| Net Loss | $ | (2,284 | ) | $ | (707 | ) | $ | (4,849 | ) | $ | (7,023 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | (0.25 | ) | ||||
| Dilutive | $ | (0.03 | ) | $ | (0.01 | ) | $ | (0.06 | ) | $ | (0.25 | ) | ||||
| Shares used in the computation: | ||||||||||||||||
| Basic | 87,027,466 | 74,508,626 | 85,456,175 | 28,499,847 | ||||||||||||
| Dilutive | 87,027,466 | 74,508,626 | 85,456,175 | 28,499,847 |
MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
| Twelve Months Ended December 31, | ||||||||
| 2021 | 2020 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | (4,849 | ) | $ | (7,023 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization | 1,332 | 2,079 | ||||||
| Gain on disposal of fixed assets | (86) | ) | (369 | ) | ||||
| Non-cash interest | 147 | 5,963 | ||||||
| Non-cash rent expense | 9 | 16 | ||||||
| Stock-based compensation | 2,209 | 1,084 | ||||||
| Provision for reserve on accounts receivable | 45 | 307 | ||||||
| Provision for excess and obsolete inventory | 839 | 485 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| A ccounts receivable | (319 | ) | 2,890 | |||||
| Inventories | 2,624 | (5,792 | ) | |||||
| Prepaid and other assets | (67 | ) | 40 | |||||
| Accounts payable | (332 | ) | 101 | |||||
| Accrued liabilities | (1,113 | ) | (512 | ) | ||||
| Net cash provided by (used in) operating activities | 439 | (731 | ) | |||||
| Investing activities: | ||||||||
| Purchases of property and equipment | (2,115 | ) | (1,545 | ) | ||||
| Proceeds from sale of fixed assets | 225 | 241 | ||||||
| Net cash used in investing activities | (1,890 | ) | (1,304 | ) | ||||
| Financing activities: | ||||||||
| Payment of taxes from withholding of common stock on vesting of restricted stock units | (201 | ) | - | |||||
| Payments on financing leases | (50 | ) | (156 | ) | ||||
| Payments on long-term debt | (411 | ) | (315 | ) | ||||
| Borrowings on line of credit | 36,361 | - | ||||||
| Repayments on line of credit | (36,492 | ) | - | |||||
| Costs associated with debt restructuring | (136 | ) | (1,058 | ) | ||||
| Proceeds from issuance of common stock, net of issuance costs | 18,426 | 620 | ||||||
| Proceeds from exercise of common stock warrants | - | 48 | ||||||
| Net cash used in financing activities | 17,497 | (861 | ) | |||||
| Net change in cash and cash equivalents and restricted cash | 16,046 | (2,896 | ) | |||||
| Cash and cash equivalents and restricted cash at beginning of year | 2,341 | 5,237 | ||||||
| Cash and cash equivalents and restricted cash at end of year | $ | 18,387 | $ | 2,341 | ||||
| Reconciliation of cash and cash equivalents and restricted cash reported in the consolidated balance sheets | ||||||||
| Cash and cash equivalents | 18,243 | 2,341 | ||||||
| Restricted cash | 144 | - | ||||||
| Total cash and restricted cash reported in the consolidated balance sheets | $ | 18,387 | $ | 2,341 |
MEDICAL HOLDINGS, INC.
OF NON-GAAP CONSOLIDATED EBITDA AND ADJUSTED EBITDA
| Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net Loss | $ | (2,284 | ) | $ | (707 | ) | $ | (4,849 | ) | $ | (7,023 | ) | ||||
| Other expense | - | 1 | 62 | 101 | ||||||||||||
| Depreciation and amortization | 291 | 528 | 1,332 | 3,145 | ||||||||||||
| Interest expense | 466 | 718 | 995 | 5,976 | ||||||||||||
| Tax expense | (95 | ) | 229 | - | 296 | |||||||||||
| Non-GAAP EBITDA | (1,622 | ) | 769 | (2,460 | ) | 2,495 | ||||||||||
| Non-GAAP EBITDA/Total revenue | -11.6 | % | 5.5 | % | -4.5 | % | 4.7 | % | ||||||||
| NON-GAAP ADJUSTED EBITDA CALCULATION | ||||||||||||||||
| Non-cash compensation | 707 | 358 | 2,209 | 1,084 | ||||||||||||
| Change in warrant derivative liability | - | - | - | (7 | ) | |||||||||||
| Separation-related expenses | 430 | - | 430 | 698 | ||||||||||||
| Legal settlements | - | - | 550 | 5 | ||||||||||||
| Non-GAAP Adjusted EBITDA | $ | (485 | ) | $ | 1,127 | $ | 729 | $ | 4,275 | |||||||
| Non-GAAP Adjusted EBITDA/Total revenue | -3.5 | % | 8.0 | % | 1.3 | % | 8.0 | % |