Full Press Release Details
Xtant Medical Holdings
Reports Record Third Quarter 2016 Results
*See footnote about the
use of pro forma financial information
Third Quarter 2016 Highlights:
| - | Company revenue increased 10.5% to $23.1 million, as compared to pro forma revenue of $20.9 million in third quarter 2015 | |
| - | Gross profit increased to $16.0 million, as compared to pro forma third quarter 2015 gross profit of $13.7 million | |
| - | Gross margins expanded to 69.2%, compared to 65.5% for the pro forma third quarter of 2015 | |
| - | The Company reported net loss of $4.9 million for the third quarter 2016, compared to a loss of $6.9 million in third quarter 2015 | |
| - | The Company reported an EBITDA gain of $768,000 for the third quarter 2016, compared to a loss of ($915,000) in third quarter 2015 | |
| - | Company raised full year 2016 revenue guidance to $89-91 million , as compared to previous guidance of $87-90 million | |
| - | The Company also provided full year 2017 revenue guidance of $98.0 - 102.0 million with positive EBITDA of $7.7-9.2 million |
BELGRADE, Mont., November 7,
2016 (GLOBE NEWSWIRE) - Xtant Medical Holdings, Inc. (NYSE MKT: XTNT), a leader in the development of regenerative
medical devices, today reported its financial results for the three months ended September 30th, 2016. The Company reported third
quarter revenues of approximately $23.1 million and an EBITDA gain of $768,000.
"I am very pleased to
have reported our strongest quarter in the history of the company," said Dan Goldberger, Chief Executive Officer of Xtant
Medical, "we have rectified our inventory supply chain constraints from the first half of 2016, and have positioned the company
to take full advantage of the increasing demand for our proprietary differentiated product offerings. As a result, we have raised
our 2016 revenue guidance to $89 to $91 million from our previous revenue guidance of $87 to $90 million provided earlier this
Third quarter 2016 revenue
was approximately $23.1 million, compared to pro forma revenue of approximately $20.9 million for the same period during 2015.
This represents an increase of 10.5%, compared to pro forma third quarter 2015 revenue and a 7.6% sequential increase over
second quarter 2016 revenue of $21.5 million.
Gross profit for the third
quarter of 2016 was $16.0 million or 69.2% of revenue, compared to pro forma gross profit of $13.7 million or 65.5% of revenues
for the third quarter of 2015. On a sequential basis, third quarter 2016 gross margin increased 0.7% over second quarter
2016 gross margin of 68.5%.
Sales and Marketing Expenses
2016 sales and marketing expenses increased to $11.2 million, as compared to pro forma sales
and marketing expenses of $9.8 million during the same period in 2015. For the quarter, sales and marketing as a percentage of
revenues increased to 48.7%, compared to 47.0% for the pro forma third quarter of 2015. The
increase was mainly due to the higher OEM revenue in the third quarter of 2015 which had no associated sales commissions. In addition,
as part of its growth strategy, the Company increased its sales infrastructure to support the portfolio selling opportunity of
the combined business.
General and Administrative
In the third quarter,
general and administrative expenses decreased to $3.8 million, compared to pro forma general
and administrative expenses of $4.5 million for the same period last year. As a percentage of revenue, general and administrative
expenses were 16.3% during the period, as compared to pro forma 21.7% for the same period during 2015.
Loss from Operations and
Third quarter loss from operations
improved to a loss of $1.9 million, compared to a pro forma loss from operations of $5.0 million in the third quarter of 2015.
Third quarter 2016 consolidated net loss narrowed to $4.9 million, compared to pro forma net loss of $6.9 million during
the year-ago period.
The Company defines earnings
before interest, taxes, depreciation and amortization ("adjusted EBITDA") as net income/loss from operations before depreciation,
amortization, impairment charges, non-recurring expenses and non-cash stock-based compensation. Consolidated adjusted EBITDA for
the third quarter of 2016 was a gain of $768,000, compared to a pro forma adjusted EBITDA loss of $915,000 for the third quarter
Reconciliation of Adjusted
| Stated in 000's | Three Months Ended September 30, 2016 | Three Months Ended September 30, 2015* | ||||||
| Net Loss from Operations | ($ | 1,904 | ) | ($ | 5,018 | ) | ||
| Impairment of Assets | $ | 0 | $ | 233 | ||||
| Acquisition and Integration Related Expenses | $ | 517 | $ | 3,857 | ||||
| Gain from the Extinguishment of Debt | $ | 0 | ($ | 2,345 | ) | |||
| Non-cash compensation | $ | 252 | $ | 187 | ||||
| Depreciation & Amortization | $ | 1,903 | $ | 2,170 | ||||
| Adjusted EBITDA Gain (Loss) | $ | 768 | ($ | 915 | ) |
Cash on hand as of September
30, 2016, was $1.4 million, as compared to $6.4 million as of December 31, 2015. This figure excludes cash resources available
to be drawn down by the Company through its accounts receivable revolver facility with Silicon Valley Bank and its equity facility
with Aspire Capital. The Company is in the process of completing a common stock rights offering to raise up to $13.5 million
in additional equity capital.
Outlook for Full Year 2016
The Company increased its full
year 2016 revenue guidance and issued 2017 revenue guidance based on the following:
| Full-Year 2016 | Full-Year 2017 | |||||||||||||||||||||||
| Stated in 000's | Low | High | Low | High | ||||||||||||||||||||
| Revenue | $ | 89,000 | - | $ | 91,000 | $ | 98,000 | - | $ | 102,000 | ||||||||||||||
| Adjusted EBITDA | $ | 2,000 | - | $ | 2,800 | $ | 7,700 | - | $ | 9,200 | ||||||||||||||
| Cash Based Debt Service | $ | 4,835 | - | $ | 4,835 | $ | 8,430 | - | $ | 8,430 | ||||||||||||||
| Non-GAAP Profitability** | $ | (2,835 | ) | - | $ | (2,035 | ) | $ | (700 | ) | - | $ | 800 |
**Non-GAAP profitability is
defined as EBITDA less total cash based interest expense.
Conference Call to be Held
An accompanying conference
call will be 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 8, 2016. Please refer to the information below for conference call dial-in information
and webcast registration.
Tuesday, November 8, 2016, 10:00 AM ET
Conference dial-in: 877-269-7756
International dial-in: 201-689-7817
Conference Call Name: Xtant Medical's Third Quarter 2016 Results Call
Webcast Registration: Click Here
the live call, a replay will be available on the Company's website, www.xtantmedical.com,
under "Investor Info."
*Use of Pro Forma Financial
On July 31, 2015, Bacterin
International Holdings, Inc. acquired all of the issued and outstanding stock of X-spine Systems, Inc. and the combined company
was renamed Xtant Medical Holdings, Inc. Except for the financial results for the three months and nine months ended September
30, 2016, the results presented are on a pro forma basis as if the two companies were combined for the periods shown. Certain pro
forma adjustments have been made to reflect the impact of the purchase transaction, primarily consisting of amortization of intangible
assets with determinable lives and interest expense on long-term debt. In addition, certain historical expenses, such as warrant
expense and interest expense associated with debt that was immediately repaid, were eliminated from these pro forma results. The
pro forma information does not necessarily reflect the actual results of operations had the acquisition been consummated at the
beginning of the fiscal reporting period indicated nor is it indicative of future operating results. The pro forma information
does not include any adjustment for potential revenue enhancements, cost synergies or other operating efficiencies that could result
from the acquisition.
Additional information regarding
the business combination and its impact on the Company's financial position will be set forth in the Company's Form
10-Q for the quarter ended September 30, 2016, which will be filed with the Securities and Exchange Commission on or about November
11, 2016 and will include the Company's unaudited consolidated financial statements as of and for the quarters ended September
30, 2016 and September 30, 2015.
Holdings, Inc. (NYSE MKT: XTNT) develops, manufactures and markets class-leading 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,"