Full Press Release Details
Medical Announces Third Quarter 2021 Financial Results
MT, November 12, 2021 - 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 third quarter ended September
Quarter 2021 Financial Highlights:
| Revenue for the third quarter of 2021 totaled $13.8 million, compared to $14.0 million for the prior-year period | ||
| Loss from operations totaled $1.4 million compared to operating income of $0.8 million for the prior-year period | ||
| Net loss incurred in the third quarter of 2021 totaled $1.8 million compared to a net loss of $1.4 million for the prior-year period | ||
| Non-GAAP Adjusted EBITDA for the third quarter of 2021 totaled a loss of $0.5 million, compared to Non-GAAP Adjusted EBITDA of $1.5 million for the prior-year period |
we have made significant investments that have Xtant well-positioned for long-term growth, the impact from the delta variant of COVID-19
created near-term pressures on elective spinal procedures across our key markets," said Sean Browne, President and CEO of Xtant
Medical. "In spite of these challenges, we continued to grow our distribution network, expand into adjacent markets and introduce
exciting, new products to market, all of which are important pillars of our growth strategy. Our unyielding focus on bringing innovative
biologics products to patients in need allows us to fulfill our mission of honoring the gift of donation."
Quarter 2021 Financial Results
quarter 2021 revenue was $13.8 million, compared to $14.0 million for the same quarter in 2020. The decrease in revenue was largely attributable
to reductions in elective procedures in key markets due to the impact of COVID-19.
margin for the third quarter of 2021 was 52.2%, compared to 66.0% for the same period in 2020. The decrease was primarily attributable
to a shift in product sales mix with an increase in original equipment manufacturer (OEM) channel sales and a reduction in independent
agent channel sales, a temporary reduction in manufacturing overhead absorption, and an increase in the write-down of excess and obsolete
expenses for the third quarter of 2021 totaled $8.6 million, compared to $8.5 million for the third quarter of 2020. The increase was
primarily due to greater salaries and wage expenses and marketing and travel expenses, partially offset by reduced employee compensation
expense and lower commissions resulting from a greater a mix of commission-free private label and OEM sales.
quarter 2021 net loss totaled $1.8 million, or $0.02 per share, compared to the third quarter 2020 net loss of $1.4 million, or $0.10
Adjusted EBITDA for the third quarter of 2021 totaled a loss of $0.5 million, compared to Non-GAAP Adjusted EBITDA of $1.5 million for
the prior-year period. 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 litigation 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 third quarter 2021 financial results on Friday, November 12, 2021 at 9:00
AM ET. To access the webcast, Click Here. To access the conference call, dial 866-682-6100 within the U.S. or 862-298-0702 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 its 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, 2020 filed with the Securities and Exchange
Commission (SEC) on February 24, 2021 and subsequent SEC filings by the Company, including without limitation its most recent Quarterly
Report on Form 10-Q for the quarter ended September 30, 2021 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)
| As of September 30, 2021 | As of December 31, 2020 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 18,175 | $ | 2,341 | ||||
| Restricted Cash | 439 | - | ||||||
| Trade accounts receivable, net of allowance for credit losses and doubtful accounts of $576 and $653, respectively | 6,321 | 6,880 | ||||||
| Inventories | 19,708 | 21,408 | ||||||
| Prepaid and other current assets | 945 | 736 | ||||||
| Total current assets | 45,588 | 31,365 | ||||||
| Property and equipment, net | 4,971 | 4,347 | ||||||
| Right-of -use asset, net | 1,369 | 1,690 | ||||||
| Goodwill | 3,205 | 3,205 | ||||||
| Intangible assets, net | 414 | 457 | ||||||
| Other assets | 244 | 402 | ||||||
| Total Assets | $ | 55,791 | $ | 41,466 | ||||
| LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 2,355 | $ | 2,947 | ||||
| Accrued liabilities | 4,079 | 5,462 | ||||||
| Current portion of lease liability | 451 | 423 | ||||||
| Finance lease obiligations | 31 | 20 | ||||||
| Line of credit | 3,488 | - | ||||||
| Current portion of long-term debt | - | 16,797 | ||||||
| Total current liabilities | 10,404 | 25,649 | ||||||
| Long-term Liabilities: | ||||||||
| Lease liability, less current portion | 961 | 1,303 | ||||||
| Finance lease obligations, less current portion | 111 | - | ||||||
| Long-term debt, plus premium and less issuance costs | 11,678 | - | ||||||
| Total Liabilities | 23,154 | 26,952 | ||||||
| Stockholders' Equity (Deficit) | ||||||||
| 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; 86,796,175 shares issued and outstanding as of September 30, 2021 and 77,573,680 shares issued and outstanding as of December 31, 2020 | - | - | ||||||
| Additional paid-in capital | 265,539 | 244,850 | ||||||
| Accumulated deficit | (232,902 | ) | (230,336 | ) | ||||
| Total Stockholders' Equity | 32,637 | 14,514 | ||||||
| Total Liabilities & Stockholders' Equity | $ | 55,791 | $ | 41,466 |
MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
in thousands, except number of shares and per share amounts)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue | ||||||||||||||||
| Orthopedic product sales | $ | 13,743 | $ | 13,980 | $ | 41,193 | $ | 39,207 | ||||||||
| Other revenue | 34 | 36 | 100 | 115 | ||||||||||||
| Total revenue | 13,777 | 14,016 | 41,293 | 39,322 | ||||||||||||
| Cost of sales | 6,586 | 4,768 | 16,498 | 13,913 | ||||||||||||
| Gross profit | 7,191 | 9,248 | 24,795 | 25,409 | ||||||||||||
| Gross profit % | 52.2 | % | 66.0 | % | 60.0 | % | 64.6 | % | ||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | 3,107 | 3,042 | 10,307 | 10,293 | ||||||||||||
| Sales and marketing | 5,267 | 5,270 | 15,712 | 15,578 | ||||||||||||
| Research and development | 262 | 176 | 719 | 529 | ||||||||||||
| Total operating expenses | 8,636 | 8,488 | 26,738 | 26,400 | ||||||||||||
| (Loss) Income from operations | (1,445 | ) | 760 | (1,943 | ) | (991 | ) | |||||||||
| Other income | ||||||||||||||||
| Interest expense | (329 | ) | (2,097 | ) | (529 | ) | (5,258 | ) | ||||||||
| Total Other Expense | (329 | ) | (2,097 | ) | (529 | ) | (5,258 | ) | ||||||||
| Net Loss Before Provision for Income Taxes | (1,774 | ) | (1,337 | ) | (2,472 | ) | (6,249 | ) | ||||||||
| Provision for income taxes | (30 | ) | (23 | ) | (94 | ) | (68 | ) | ||||||||
| Net Loss | $ | (1,804 | ) | $ | (1,360 | ) | $ | (2,566 | ) | $ | (6,317 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic | $ | (0.02 | ) | $ | (0.10 | ) | $ | (0.03 | ) | $ | (0.48 | ) | ||||
| Dilutive | $ | (0.02 | ) | $ | (0.10 | ) | $ | (0.03 | ) | $ | (0.48 | ) | ||||
| Shares used in the computation: | ||||||||||||||||
| Basic | 86,763,210 | 13,231,823 | 84,926,656 | 13,210,386 | ||||||||||||
| Dilutive | 86,763,210 | 13,231,823 | 84,926,656 | 13,210,386 |
MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | (2,566 | ) | $ | (6,317 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 1,041 | 1,658 | ||||||
| Gain on disposal of fixed assets | (164 | ) | (307 | ) | ||||
| Non-cash interest | 38 | 5,245 | ||||||
| Non-cash rent expense | 8 | 12 | ||||||
| Stock-based compensation | 1,501 | 726 | ||||||
| Provision for reserve on accounts receivable | (25 | ) | 296 | |||||
| Provision for excess and obsolete inventory | 572 | 429 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 584 | 2,463 | ||||||
| Inventories | 1,128 | (4,999 | ) | |||||
| Prepaid and other assets | (126 | ) | (890 | ) | ||||
| Accounts payable | (592 | ) | 626 | |||||
| Accrued liabilities | (1,383 | ) | (589 | ) | ||||
| Net cash provide by (used in) operating activities | 16 | (1,647 | ) | |||||
| Investing activities: | ||||||||
| Purchases of property and equipment | (1,489 | ) | (907 | ) | ||||
| Proceeds from sale of fixed assets | 194 | 173 | ||||||
| Net cash used in investing activities | (1,295 | ) | (734 | ) | ||||
| Financing activities: | ||||||||
| Payment of taxes from withholding of common stock on vesting of restricted stock units | (23 | ) | - | |||||
| Payments on financing leases | (42 | ) | (115 | ) | ||||
| Costs associated with refinancing | (136 | ) | - | |||||
| Payments on long-term debt | (411 | ) | - | |||||
| Borrowings on line of credit | 22,767 | |||||||
| Repayments of line of credit | (23,029 | ) | - | |||||
| Proceeds from private placement, net of cash issuance costs | 18,426 | - | ||||||
| Net cash used in financing activities | 17,552 | (115 | ) | |||||
| Net change in cash and cash equivalents | 16,273 | (2,496 | ) | |||||
| Cash and cash equivalents at beginning of period | 2,341 | 5,237 | ||||||
| Cash and cash equivalents at end of period | $ | 18,614 | $ | 2,741 | ||||
| Reconciliation of cash and restricted cash reported in the condensed consolidated balance sheets | ||||||||
| Cash and cash equivelants | $ | 18,175 | $ | 2,741 | ||||
| Restricted cash | 439 | - | ||||||
| Total cash and restricted cash reported in the condensed consolidated balance sheets | $ | 18,614 | $ | 2,741 |
MEDICAL HOLDINGS, INC.
OF NON-GAAP CONSOLIDATED EBITDA AND ADJUSTED EBITDA
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Net Loss | $ | (1,804 | ) | $ | (1,360 | ) | $ | (2,566 | ) | $ | (6,317 | ) | ||||
| Other expense | 21 | (1 | ) | 62 | 5 | |||||||||||
| Depreciation and amortization | 310 | 504 | 1,041 | 1,658 | ||||||||||||
| Interest expense | 329 | 2,097 | 529 | 5,258 | ||||||||||||
| Tax expense | 30 | 23 | 94 | 68 | ||||||||||||
| Non-GAAP EBITDA | (1,114 | ) | 1,263 | (840 | ) | 672 | ||||||||||
| Non-GAAP EBITDA/Total revenue | -8.1 | % | 9.0 | % | -2.0 | % | 1.7 | % | ||||||||
| NON-GAAP ADJUSTED EBITDA CALCULATION | ||||||||||||||||
| Non-cash compensation | 580 | 237 | 1,501 | 726 | ||||||||||||
| Separation-related expenses | - | (50 | ) | - | 699 | |||||||||||
| Change in warrant derivative liability | - | - | - | (7 | ) | |||||||||||
| Litigation reserve | - | 5 | 550 | 5 | ||||||||||||
| Non-GAAP Adjusted EBITDA | $ | (534 | ) | $ | 1,455 | $ | 1,211 | $ | 2,095 | |||||||
| Non-GAAP Adjusted EBITDA/Total revenue | -3.9 | % | 10.4 | % | 2.9 | % | 5.3 | % |