BELGRADE, Mont., Feb. 24, 2021 (GLOBE NEWSWIRE) -- 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 December 31, 2020.

Fourth Quarter 2020 Financial Highlights:

• Revenue for the fourth quarter of 2020 totaled $14.0 million, compared to $17.0 million for the prior-year period
• Operating expenses in the fourth quarter of 2020 totaled $8.7 million, compared to $11.7 million for the prior-year period
• Income from operations totaled $0.2 million, compared to an operating loss of $0.3 million for the prior-year period
• Net loss incurred in the fourth quarter of 2020 totaled $0.7 million, compared to a net loss of $1.6 million for the prior-year period
• Non-GAAP Adjusted EBITDA for the fourth quarter of 2020 totaled $1.1 million, compared to $1.2 million for the prior-year period
  

“Highlighted by consecutive quarters of positive operating income in the second half of 2020, we are pleased with our progress despite the significant impact COVID-19 had on elective procedures in our largest markets,” said Sean Browne, President and CEO. “In response to the pandemic, we took aggressive steps to align our business with the changing market environment and reduce our costs. These actions, when combined with our successful 2020 debt restructuring and recently announced $20 million private placement, provide us with positive momentum as we enter 2021.”

Fourth Quarter and Full Year 2020 Financial Results

Fourth quarter 2020 revenue was $14.0 million, compared to $17.0 million for the same period in 2019. Full year 2020 revenue was $53.3 million, compared to $64.7 million for 2019. The decline in revenue for both periods was largely attributed to the impact of COVID-19 and sudden drop in elective procedures that began in early March 2020. Elective procedures have recovered to some extent in the second half of 2020, partially offsetting this impact.

Gross profit for the fourth quarter of 2020 was 64.1%, compared to 67.3% for the same period in 2019 and was 64.5% for 2020, compared to 65.7% in 2019. These reductions in gross profit were primarily attributable to diminished economies of scale, partially offset by reduced depreciation expense.

Operating expenses for the fourth quarter of 2020 totaled $8.7 million, compared to $11.7 million for the fourth quarter of 2019, and were $35.1 million in 2020 compared to $44.8 million in 2019. These decreases were primarily the result of reduced sales commissions due to lower sales, and lower levels of salaries and wages, legal and consulting fees, executive recruiting fees, marketing-related costs and research and development expenses, in each case compared to the prior-year period.

Fourth quarter 2020 net loss totaled $0.7 million, or $0.01 per share, compared to the fourth quarter 2019 net loss of $1.6 million, or $0.12 per share. Net loss for 2020 was $7.0 million, or $0.25 per share, compared to $8.2 million, or $0.62 per share, in 2019.

Non-GAAP Adjusted EBITDA for the fourth quarter of 2020 totaled $1.1 million, compared to $1.2 million for the same period in 2019. Non-GAAP Adjusted EBITDA for 2020 totaled $3.9 million, compared to $3.9 million for 2019. 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 special charges, provision for losses on inventory and accounts receivable, non-cash compensation, change in warrant derivative liability, separation related expenses, field action expenses and litigation reserves. A calculation and reconciliation of Adjusted EBITDA to net loss can be found in the attached financial tables.

Private Placement

As previously announced, on February 22, 2021, the Company entered into a securities purchase agreement with a single healthcare-focused institutional investor pursuant to which the Company agreed to issue 8,888,890 shares of common stock at a purchase price of $2.25 per share, and warrants to purchase up to 6,666,668 shares of our common stock at an exercise price of $2.25 per share, in a private placement. The closing of the private placement is expected to occur on February 24, 2021, subject to the satisfaction of customary closing conditions. The Company expects to receive net proceeds of approximately $18.4 million, after deducting fees and other estimated offering expenses, and expects to use the net proceeds for working capital and other general corporate purposes.

Conference Call

Xtant Medical will host a webcast and conference call to discuss the fourth quarter 2020 financial results on Wednesday, February 24, 2021 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.”

About Xtant Medical Holdings, Inc.

Xtant 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.

The 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.

Non-GAAP Financial Measures

To 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.

Cautionary Statement Regarding Forward-Looking Statements

This 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 belief that it has positive momentum entering 2021 and its expectations regarding the timing of closing and use of net proceeds for its pending private placement. 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: risks associated with the private placement; the effect of the COVID-19 pandemic on the Company’s business, operating results and financial condition; the Company’s future operating results and financial performance; the ability to increase or maintain revenue; the ability to remain competitive; the ability to innovate and develop new products; the ability to engage and retain qualified personnel; 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. 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.

Investor Relations Contact

David Carey
Lazar FINN
Ph: 212-867-1762
Email: dcarey@finnpartners.com

XTANT MEDICAL HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except number of shares and par value)
		As of December 31, 2020				As of December 31, 2019
ASSETS
Current Assets:
Cash and cash equivalents		$	2,341			$	5,237
Trade accounts receivable, net of allowance for credit losses of $653 and doubtful accounts of $500, respectively			6,880				10,124
Inventories			21,408				16,101
Prepaid and other current assets			736				784
Total current assets			31,365				32,246
Property and equipment, net			4,347				4,695
Right-of -use asset, net			1,690				2,100
Goodwill			3,205				3,205
Intangible assets, net			457				515
Other assets			402				394
Total Assets		$	41,466			$	43,155
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable		$	2,289			$	2,188
Accrued liabilities			6,120				6,632
Current portion of lease liability			423				394
Finance lease obiligations			20				176
Current portion of long-term debt			16,797				-
Total current liabilities			25,649				9,390
Long-term Liabilities:
Lease liability, less current portion			1,303				1,726
Long-term debt, plus premium and less issuance costs			-				76,244
Total Liabilities			26,952				87,360
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; 77,573,680 shares issued and outstanding as of December 31, 2020 and 75,000,000 shares authorized; 13,161,762 shares issued and outstanding as of December 31, 2019			-				-
Additional paid-in capital			244,850				179,061
Accumulated deficit			(230,336	)			(223,266	)
Total Stockholders’ Equity (Deficit)			14,514				(44,205	)
Total Liabilities & Stockholders’ Equity (Deficit)		$	41,466			$	43,155

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,
			2020				2019				2020				2019
Revenue
Orthopedic product sales		$	13,981			$	16,942			$	53,188			$	64,516
Other revenue			34				22				149				166
Total revenue			14,015				16,964				53,337				64,682
Cost of sales			5,032				5,553				18,945				22,166
Gross profit			8,983				11,411				34,392				42,516
Gross profit %			64.1	%			67.3	%			64.5	%			65.7	%
Operating expenses
General and administrative			3,210				4,478				13,503				17,344
Sales and marketing			5,405				6,994				20,983				26,493
Research and development			128				257				657				932
Total operating expenses			8,743				11,729				35,143				44,769
Income (Loss) from operations			240				(318	)			(751	)			(2,253	)
Other income (expense)
Interest expense			(718	)			(1,268	)			(5,976	)			(5,772	)
Other income (expense)			-				11				-				(98	)
Total Other Expense			(718	)			(1,257	)			(5,976	)			(5,870	)
Net Loss Before Provision for Income Taxes			(478	)			(1,575	)			(6,727	)			(8,123	)
Provision for income taxes
Current and deferred			(229	)			(30	)			(296	)			(98	)
Net Loss		$	(707	)		$	(1,605	)		$	(7,023	)		$	(8,221	)
Net loss per share:
Basic		$	(0.01	)		$	(0.12	)		$	(0.25	)		$	(0.62	)
Dilutive		$	(0.01	)		$	(0.12	)		$	(0.25	)		$	(0.62	)
Shares used in the computation:
Basic			74,508,626				13,161,762				28,499,847				13,163,931
Dilutive			74,508,626				13,161,762				28,499,847				13,163,931

XTANT MEDICAL HOLDINGS, INC.
CALCULATION OF NON-GAAP CONSOLIDATED EBITDA AND ADJUSTED EBITDA
(Unaudited, in thousands)
		Three Months Ended December 31,								Twelve Months Ended December 31,
			2020				2019				2020				2019
Net Loss		$	(707	)		$	(1,605	)		$	(7,023	)		$	(8,221	)
Other expense			1				-				7				101
Depreciation and amortization			718				807				2,079				3,145
Interest expense			421				1,268				5,976				5,772
Tax expense			229				30				296				98
Non-GAAP EBITDA			662				500				1,335				895
Non-GAAP EBITDA/Total revenue			4.7	%			2.9	%			2.5	%			1.4	%
NON-GAAP ADJUSTED EBITDA CALCULATION
Provision for losses on accounts receivable			11				60				307				514
Provision for excess and obsolete inventory			55				(8	)			485				509
Non-cash compensation			358				259				1,084				515
Change in warrant derivative liability			-				(11	)			(7	)			(2	)
Separation-related expenses			-				-				698				-
Field action expenses			-				253				-				560
Litigation reserve			-				119				5				919
Non-GAAP Adjusted EBITDA		$	1,086			$	1,172			$	3,907			$	3,910
Non-GAAP Adjusted EBITDA/Total revenue			7.7	%			6.9	%			7.3	%			6.0	%

XTANT MEDICAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
	Twelve Months Ended December 31,
		2020				2019
Operating activities:
Net loss	$	(7,023	)		$	(8,221	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		2,079				3,143
Gain on disposal of fixed assets		(369	)			(61	)
Non-cash interest		5,963				5,726
Non-cash rent expense		16				20
Stock-based compensation		1,084				515
Provision for reserve on accounts receivable		307				513
Provision for excess and obsolete inventory		485				509
Changes in operating assets and liabilities:
Accounts receivable		2,890				(647	)
Inventories		(5,792	)			692
Prepaid and other assets		40				204
Accounts payable		101				(4,278	)
Accrued liabilities		(512	)			1,472
Net cash used in operating activities		(731	)			(413	)
Investing activities:
Purchases of property and equipment		(1,545	)			(879	)
Proceeds from sale of fixed assets		241				335
Net cash used in investing activities		(1,304	)			(544	)
Financing activities:
Payments on financing leases		(156	)			(455	)
Payments on long-term debt		(315	)			-
Costs associated with debt restructuring		(1,058	)			-
Proceeds from issuance of common stock, net of issuance costs		620
Proceeds from exercise of common stock warrants		48
Costs associated with Second Amended and Restated Credit Agreement		-				(148	)
Net cash used in financing activities		(861	)			(603	)
Net change in cash and cash equivalents		(2,896	)			(1,560	)
Cash and cash equivalents at beginning of period		5,237				6,797
Cash and cash equivalents at end of period	$	2,341			$	5,237