Full Press Release Details
Medical Announces Third Quarter 2022 Financial Results
MT, November 3, 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 third quarter ended September
am pleased that third quarter revenues increased by 5% year-over-year, led by 12% growth in our biologics business. Driven by the successful
launches of our OsteoFactor and OsteoVive Plus biologics products and expansion of our distribution
network, we are encouraged with the trajectory of our revenue and progress to date in 2022," said Sean Browne, President and CEO
of Xtant Medical. "Our team is focused on the continued execution of our growth strategy, and supported by the recently closed
$9.75 million private placement, we are well-positioned to deliver on our objectives. Looking ahead, we expect to be at full operating
capacity by the first quarter of 2023 enabling our team to take advantage of the robust demand environment."
Quarter 2022 Financial Results
quarter 2022 revenue was $14.5 million, compared to $13.8 million for the same quarter in 2021. The increase in revenue was largely attributable
to introductions of new products.
margin for the third quarter of 2022 was 54.6%, compared to 52.2% for the same period in 2021. The increase is primarily attributable
to improved capacity utilization.
expenses for the third quarter of 2022 totaled $9.8 million, compared to $8.6 million for the third quarter of 2021. The increase was
primarily due to greater independent agent sales commissions, product registration expense and employee compensation expense.
quarter 2022 net loss totaled $2.4 million, or $0.03 per share, compared to the third quarter 2021 net loss of $1.8 million, or $0.02
Adjusted EBITDA for the third quarter of 2022 totaled a loss of $0.9 million, compared to Non-GAAP Adjusted EBITDA loss of $0.6 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 2022 financial results on Thursday, November 3, 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 expectations to be at full operating capacity by the first quarter of 2023 and
to continue to execute its growth strategy and deliver on its objectives. 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 labor and 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 inflation, increased interest rates and other recessionary
indicators and supply chain disruptions; 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 September 30, 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
(In thousands, except number of shares and par value)
| As of September 30, 2022 | As of December 31, 2021 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 17,363 | $ | 18,243 | ||||
| Restricted Cash | 240 | 144 | ||||||
| Trade accounts receivable, net of allowance for credit losses and doubtful accounts of $549 and $552, respectively | 9,839 | 7,154 | ||||||
| Inventories | 16,993 | 17,945 | ||||||
| Prepaid and other current assets | 673 | 844 | ||||||
| Total current assets | 45,108 | 44,330 | ||||||
| Property and equipment, net | 5,669 | 5,212 | ||||||
| Right-of -use asset, net | 1,490 | 1,258 | ||||||
| Goodwill | 3,205 | 3,205 | ||||||
| Intangible assets, net | 358 | 400 | ||||||
| Other assets | 219 | 287 | ||||||
| Total Assets | $ | 56,049 | $ | 54,692 | ||||
| LIABILITIES & STOCKHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 3,779 | $ | 2,615 | ||||
| Accrued liabilities | 5,021 | 4,349 | ||||||
| Current portion of lease liability | 443 | 462 | ||||||
| Finance lease obiligations | 61 | 31 | ||||||
| Line of credit | 720 | 3,620 | ||||||
| Current portion of long-term debt | 1,335 | - | ||||||
| Total current liabilities | 11,359 | 11,077 | ||||||
| Long-term Liabilities: | ||||||||
| Lease liability, less current portion | 1,094 | 842 | ||||||
| Finance lease obligations, less current portion | 197 | 103 | ||||||
| Long-term debt, plus premium and less issuance costs | 10,626 | 11,787 | ||||||
| Total Liabilities | 23,276 | 23,809 | ||||||
| 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; 101,981,250 shares issued and outstanding as of September 30, 2022 and 87,068,980 shares issued and outstanding as of December 31, 2021 | - | - | ||||||
| Additional paid-in capital | 274,234 | 266,068 | ||||||
| Accumulated deficit | (241,461 | ) | (235,185 | ) | ||||
| Total Stockholders' Equity | 32,773 | 30,883 | ||||||
| Total Liabilities & Stockholders' Equity | $ | 56,049 | $ | 54,692 |
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, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Revenue | ||||||||||||||||
| Orthopedic product sales | $ | 14,462 | $ | 13,743 | $ | 42,689 | $ | 41,193 | ||||||||
| Other revenue | - | 34 | 10 | 100 | ||||||||||||
| Total revenue | 14,462 | 13,777 | 42,699 | 41,293 | ||||||||||||
| Cost of sales | 6,566 | 6,586 | 18,868 | 16,498 | ||||||||||||
| Gross profit | 7,896 | 7,191 | 23,831 | 24,795 | ||||||||||||
| Gross profit % | 54.6 | % | 52.2 | % | 55.8 | % | 60.0 | % | ||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | 3,729 | 3,107 | 11,496 | 10,307 | ||||||||||||
| Sales and marketing | 5,838 | 5,267 | 16,683 | 15,712 | ||||||||||||
| Research and development | 229 | 262 | 683 | 719 | ||||||||||||
| Total operating expenses | 9,796 | 8,636 | 28,862 | 26,738 | ||||||||||||
| Loss from operations | (1,900 | ) | (1,445 | ) | (5,031 | ) | (1,943 | ) | ||||||||
| Other Expense | ||||||||||||||||
| Interest expense | (440 | ) | (329 | ) | (1,197 | ) | (529 | ) | ||||||||
| Total Other Expense | (440 | ) | (329 | ) | (1,197 | ) | (529 | ) | ||||||||
| Net Loss Before Provision for Income Taxes | (2,340 | ) | (1,774 | ) | (6,228 | ) | (2,472 | ) | ||||||||
| Provision for income taxes | (13 | ) | (30 | ) | (48 | ) | (94 | ) | ||||||||
| Net Loss | $ | (2,353 | ) | $ | (1,804 | ) | $ | (6,276 | ) | $ | (2,566 | ) | ||||
| Net loss per share: | ||||||||||||||||
| Basic | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.07 | ) | $ | (0.03 | ) | ||||
| Dilutive | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.07 | ) | $ | (0.03 | ) | ||||
| Shares used in the computation: | ||||||||||||||||
| Basic | 93,278,610 | 86,763,210 | 89,236,832 | 84,926,656 | ||||||||||||
| Dilutive | 93,278,610 | 86,763,210 | 89,236,832 | 84,926,656 |
MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| Nine Months Ended September 30, | ||||||||
| 2022 | 2021 | |||||||
| Operating activities: | ||||||||
| Net loss | $ | (6,276 | ) | $ | (2,566 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 971 | 1,041 | ||||||
| Gain on disposal of fixed assets | (91 | ) | (164 | ) | ||||
| Non-cash interest | 175 | 38 | ||||||
| Non-cash rent expense | 2 | 8 | ||||||
| Stock-based compensation | 1,825 | 1,501 | ||||||
| Provision for reserve (recovery) on accounts receivable | 277 | (25 | ) | |||||
| Provision for excess and obsolete inventory | 1,568 | 572 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (2,962 | ) | 584 | |||||
| Inventories | (616 | ) | 1,128 | |||||
| Prepaid and other assets | 239 | (126 | ) | |||||
| Accounts payable | 1,164 | (592 | ) | |||||
| Accrued liabilities | 671 | (1,383 | ) | |||||
| Net cash (used in) provided by operating activities | (3,053 | ) | 16 | |||||
| Investing activities: | ||||||||
| Purchases of property and equipment | (1,321 | ) | (1,489 | ) | ||||
| Proceeds from sale of fixed assets | 184 | 194 | ||||||
| Net cash used in investing activities | (1,137 | ) | (1,295 | ) | ||||
| Financing activities: | ||||||||
| Payment of taxes from withholding of common stock on vesting of restricted stock units | - | (23 | ) | |||||
| Payments on financing leases | (35 | ) | (42 | ) | ||||
| Costs associated with refinancing | - | (136 | ) | |||||
| Payments on long-term debt | - | (411 | ) | |||||
| Borrowings on line of credit | 36,680 | 22,767 | ||||||
| Repayments of line of credit | (39,580 | ) | (23,029 | ) | ||||
| Proceeds from private placement, net of cash issuance costs | 6,341 | 18,426 | ||||||
| Net cash provided by financing activities | 3,406 | 17,552 | ||||||
| Net change in cash and cash equivalents and restricted cash | (784 | ) | 16,273 | |||||
| Cash and cash equivalents and restricted cash at beginning of period | 18,387 | 2,341 | ||||||
| Cash and cash equivalents and restricted cash at end of period | $ | 17,603 | $ | 18,614 | ||||
| Reconciliation of cash and restricted cash reported in the condensed consolidated balance sheets | ||||||||
| Cash and cash equivelants | $ | 17,363 | $ | 18,175 | ||||
| Restricted cash | 240 | 439 | ||||||
| Total cash and restricted cash reported in the condensed consolidated balance sheets | $ | 17,603 | $ | 18,614 |
MEDICAL HOLDINGS, INC.
OF NON-GAAP CONSOLIDATED EBITDA AND ADJUSTED EBITDA
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net Loss | $ | (2,353 | ) | $ | (1,804 | ) | $ | (6,276 | ) | $ | (2,566 | ) | ||||
| Depreciation and amortization | 372 | 310 | 971 | 1,041 | ||||||||||||
| Interest expense | 440 | 329 | 1,197 | 529 | ||||||||||||
| Tax expense | 13 | 30 | 48 | 94 | ||||||||||||
| Non-GAAP EBITDA | (1,528 | ) | (1,135 | ) | (4,060 | ) | (902 | ) | ||||||||
| Non-GAAP EBITDA/Total revenue | -10.6 | % | -8.2 | % | -9.5 | % | -2.2 | % | ||||||||
| NON-GAAP ADJUSTED EBITDA CALCULATION | ||||||||||||||||
| Non-cash compensation | 640 | 580 | 1,825 | 1,501 | ||||||||||||
| Separation-related expenses | - | - | 3 | - | ||||||||||||
| Litigation reserve | - | - | - | 550 | ||||||||||||
| Non-GAAP Adjusted EBITDA | $ | (888 | ) | $ | (555 | ) | $ | (2,232 | ) | $ | 1,149 | |||||
| Non-GAAP Adjusted EBITDA/Total revenue | -6.1 | % | -4.0 | % | -5.2 | % | 2.8 | % |