BELGRADE, Mont., March 07, 2023 (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, 2022.

“Highlighted by strong fourth quarter revenue results and last week’s acquisition of the Coflex® product line, we are executing on our key growth initiatives,” said Sean Browne, President and CEO of Xtant Medical. “We continue to generate robust demand for our biologics products, which grew 14% for the quarter, and improve our operating efficiencies by increasing our production capacity that now has us well-positioned to sustain our momentum in 2023. Additionally, with the addition of the Coflex product line, we significantly enhanced our fixation offering at ASCs and outpatient facilities. We are excited to add proven treatment devices while expanding our commercial team and distributor network, all of which are core focus areas to our long-term growth strategy.”

Fourth Quarter and Full Year 2022 Financial Results

Fourth quarter 2022 revenue grew 9% to $15.3 million, compared to $14.0 million for the same quarter in 2021. Full year 2022 revenue was $58.0 million, compared to $55.3 million for 2021. The increase in revenue was largely attributable to our new products.

Gross margin for the fourth quarter of 2022 was 54.4%, compared to 55.1% for the same period in 2021 and 55.4% for the full year 2022, compared to 58.8% for the full year 2021. These decreases were primarily attributable to higher production costs with increased charges for excess and obsolete inventory also contributing to the full year decline.

Operating expenses for the fourth quarter of 2022 totaled $10.0 million, compared to $9.6 million for the fourth quarter of 2021, and were $38.9 million for the full year 2022 compared to $36.3 million for the full year 2021. The increase for the quarterly comparison was primarily due to higher independent agent commission expenses. The increase for the annual comparison was primarily due to higher independent agent commission expenses and employee compensation expenses as well as costs related to ERP system upgrades, partially offset by lower legal settlement expenses.

Fourth quarter 2022 net loss totaled $2.2 million, or $0.02 per share, compared to the fourth quarter 2021 net loss of $2.3 million, or $0.03 per share. Net loss for 2022 was $8.5 million, or $0.09 per share, compared to a net loss of $4.8 million, or $0.06 per share, for 2021.

Non-GAAP Adjusted EBITDA for the fourth quarter of 2022 totaled a loss of $0.8 million, compared to Non-GAAP Adjusted EBITDA loss of $0.9 million for the same period in 2021. Non-GAAP Adjusted EBITDA for 2022 totaled a loss of $3.0 million, compared to a gain of $0.3 million for 2021. 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 and legal settlement reserves. A calculation and reconciliation of Adjusted EBITDA to net loss can be found in the attached financial tables.

Conference Call

Xtant Medical will host a webcast and conference call to discuss the fourth quarter and full year 2022 financial results on Tuesday, March 7, 2023 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 is continuing to generate robust demand for its biologics products and improve its operating efficiencies by increasing its production capacity and is well-positioned to sustain its momentum in 2023. 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; its ability to increase or maintain revenue; risks associated with its recent acquisition of the Coflex® product line; 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 COVID-19, labor 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 inflation, increased interest rates and other recessionary factors 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, 2022 filed with the Securities and Exchange Commission (SEC) on March 7, 2023 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 Partners
Ph: 212-867-1762
Email: david.carey@finnpartners.com 

XTANT MEDICAL HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except number of shares and par value)
		As of December 31, 2022				As of December 31, 2021
ASSETS
Current Assets:
Cash and cash equivalents		$	20,298			$	18,243
Restricted cash			209				144
Trade accounts receivable, net of allowance for credit losses of $515 and doubtful accounts of $552, respectively			10,853				7,154
Inventories			17,285				17,945
Prepaid and other current assets			673				844
Total current assets			49,318				44,330
Property and equipment, net			5,785				5,212
Right-of -use asset, net			1,380				1,258
Other assets			197				287
Intangible assets, net			344				400
Goodwill			3,205				3,205
Total Assets		$	60,229			$	54,692
LIABILITIES & STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable		$	3,490			$	2,615
Accrued liabilities			5,496				4,349
Current portion of lease liability			458				462
Finance lease obiligations			62				31
Line of credit			3,379				3,620
Current portion of long-term debt			2,333				-
Total current liabilities			15,218				11,077
Long-term Liabilities:
Lease liability, less current portion			972				842
Financing lease obligations, net			181				103
Long-term debt, plus premium and less issuance costs			9,687				11,787
Total Liabilities			26,058				23,809
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; 108,874,803 shares issued and outstanding as of December 31, 2022 and 87,068,980 shares issued and outstanding as of December 31, 2021			-				-
Additional paid-in capital			277,841				266,068
Accumulated deficit			(243,670	)			(235,185	)
Total Stockholders’ Equity			34,171				30,883
Total Liabilities & Stockholders’ Equity		$	60,229			$	54,692

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,
			2022				2021				2022				2021
Revenue
Orthopedic product sales		$	15,269			$	13,953			$	57,958			$	55,146
Other revenue			1				17				11				117
Total revenue			15,270				13,970				57,969				55,263
Cost of sales			6,964				6,276				25,832				22,773
Gross profit			8,306				7,694				32,137				32,490
Gross profit %			54.4%				55.1%				55.4%				58.8%
Operating expenses
General and administrative			3,966				4,142				15,462				14,449
Sales and marketing			5,832				5,314				22,515				21,025
Research and development			232				151				915				870
Total operating expenses			10,030				9,607				38,892				36,344
Income (Loss) from operations			(1,724	)			(1,913	)			(6,755	)			(3,854	)
Other Expense
Interest expense			(495	)			(466	)			(1,692	)			(995	)
Interest income			31				-				31				-
Total Other Expense			(464	)			(466	)			(1,661	)			(995	)
Net Loss Before Provision for Income Taxes			(2,188	)			(2,379	)			(8,416	)			(4,849	)
Provision for income taxes
Current and deferred			(21	)			95				(69	)			-
Net Loss		$	(2,209	)		$	(2,284	)		$	(8,485	)		$	(4,849	)
Net loss per share:
Basic		$	(0.02	)		$	(0.03	)		$	(0.09	)		$	(0.06	)
Dilutive		$	(0.02	)		$	(0.03	)		$	(0.09	)		$	(0.06	)
Shares used in the computation:
Basic			108,339,486				87,027,466				94,085,197				85,456,175
Dilutive			108,339,486				87,027,466				94,085,197				85,456,175

XTANT MEDICAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
	Twelve Months Ended December 31,
		2022				2021
Operating activities:
Net loss	$	(8,485	)		$	(4,849	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		1,292				1,332
Gain on disposal of fixed assets		(93	)			(86	)
Non-cash interest		233				147
Non-cash rent expense		4				9
Stock-based compensation		2,464				2,209
Provision for reserve on accounts receivable		243				45
Provision for excess and obsolete inventory		1,812				839
Changes in operating assets and liabilities:
Accounts receivable		(3,941	)			(319	)
Inventories		(1,152	)			2,624
Prepaid and other assets		261				(67	)
Accounts payable		875				(332	)
Accrued liabilities		1,146				(1,113	)
Net cash (used in)provided by operating activities		(5,341	)			439
Investing activities:
Purchases of property and equipment		(1,764	)			(2,115	)
Proceeds from sale of fixed assets		205				225
Net cash used in investing activities		(1,559	)			(1,890	)
Financing activities:
Payment of taxes from withholding of common stock on vesting of restricted stock units		-				(201	)
Payments on financing leases		(50	)			(50	)
Payments on long-term debt		-				(411	)
Borrowings on line of credit		54,229				36,361
Repayments on line of credit		(54,470	)			(36,492	)
Costs associated with debt restructuring		-				(136	)
Proceeds from issuance of common stock, net of issuance costs		9,311				18,426
Proceeds from exercise of common stock warrants		-				-
Net cash provided by financing activities		9,020				17,497
Net change in cash and cash equivalents and restricted cash		2,120				16,046
Cash and cash equivalents and restricted cash at beginning of year		18,387				2,341
Cash and cash equivalents and restricted cash at end of year	$	20,507			$	18,387
Reconciliation of cash and cash equivalents and restricted cash reported in the consolidated balance sheets
Cash and cash equivalents		20,298				18,243
Restricted cash		209				144
Total cash and restricted cash reported in the consolidated balance sheets	$	20,507			$	18,387

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,
			2022				2021				2022				2021
Net Loss		$	(2,209	)		$	(2,284	)		$	(8,485	)		$	(4,849	)
Other expense			-				-				(2	)			62
Depreciation and amortization			322				291				1,293				1,332
Interest expense			463				466				1,661				995
Tax expense			21				(95	)			69				-
Non-GAAP EBITDA			(1,403	)			(1,622	)			(5,464	)			(2,460	)
Non-GAAP EBITDA/Total revenue			-9.2%				-11.6%				-9.4%				-10.4%
NON-GAAP ADJUSTED EBITDA CALCULATION
Non-cash compensation			639				707				2,464				2,209
Legal settlements			-				-				-				550
Non-GAAP Adjusted EBITDA		$	(764	)		$	(915	)		$	(3,000	)		$	299
Non-GAAP Adjusted EBITDA/Total revenue			-5.0%				-3.5%				-5.2%				-4.9%