BELGRADE, Mont., May 07, 2020 (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 first quarter ended March 31, 2020.
First Quarter 2020 Financial Highlights:
- Revenue for the first quarter of 2020 was $14.8 million, compared to $16.7 million for the prior-year period
- Operating expenses in the first quarter of 2020 were $11.0 million, compared to $11.5 million for the prior-year period
- Net loss incurred in the first quarter of 2020 was $2.5 million, compared to a net loss of $2.8 million for the prior-year period
- Non-GAAP Adjusted EBITDA for the first quarter of 2020 was $0.5 million, compared to $1.0 million for the prior-year period
“First and foremost, we are grateful to the healthcare professionals, including many of our customers, who are tirelessly caring for patients on the front lines of the global COVID-19 pandemic,” said Sean Browne, President and CEO. “Sales for the first two months of the first quarter of 2020 were tracking in-line with our expectations. However, as the COVID-19 outbreak escalated and various restrictions related to elective surgical procedures were implemented, we saw a dramatic decline in sales during March. As almost all of our spinal procedures are considered elective, we expect significant reductions in our revenue will continue until such restrictions are lifted. To that end, we proactively implemented several initiatives to reduce costs and preserve our cash, which should enable us to navigate this unprecedented challenge.”
In response to the COVID-19 pandemic, Xtant Medical identified four areas that should help to maintain business continuity and emerge from this health crisis in a position of strength:
- Employees – Prioritized keeping employees and their families safe and healthy through social distancing and work from home procedures where possible.
- Expenses – Enacted an extensive cost reduction program to preserve cash, which included workforce reductions and furloughs, across the board compensation and related benefits decreases, and significant reductions in both capital expenditures and discretionary spending.
- Inventory – Replenished inventory levels to minimize risk for stockouts going forward.
- Organization – Initiated a strategy to reorganize the structure and operations of the business to improve overall efficiency.
“Although it was a difficult decision to reduce our workforce, we believe it was necessary in order to preserve capital and operate as a leaner organization during this unprecedented global health crisis,” continued Mr. Browne. “We have a unique opportunity to further our mission of ‘honoring the gift of donation by allowing our patients the ability to live as full a life as possible.’ Through our actions, I believe we will be in a better position to fulfill this as conditions normalize.”
First Quarter 2020 Financial Results
Total revenue for the three months ended March 31, 2020 was $14.8 million, which represents a decrease of 11.6% compared to $16.7 million in the same quarter of the prior year. The decrease in revenue is attributed primarily to the impact of COVID-19 and the sudden drop in elective procedures beginning in early March as result of the pandemic.
Gross margin for the first quarter of 2020 was 65.0%, compared to 64.6% for the same period in 2019.
Operating expenses for the first quarter of 2020 were $11.0 million, compared to $11.5 million for the first quarter of 2019. The decrease was primarily due to lower sales commissions of $0.4 million attributed to lower sales, lower expenses for legal and consulting services totaling $0.5 million, and legal settlement expenses of $0.5 million reserved in the first quarter of 2019, offset partially by severance expenses totaling $0.7 million.
First quarter 2020 net loss was $2.5 million, or $0.19 per share, compared to first quarter 2019 net loss of $2.8 million, or $0.21 per share.
Non-GAAP Adjusted EBITDA for the first quarter of 2020 was $0.5 million compared to $1.0 million for the same period in 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, and litigation settlement reserves. A calculation and reconciliation of non-GAAP Adjusted EBITDA to net loss can be found in the attached financial tables.
Xtant Medical will host a webcast and conference call to discuss the first quarter 2020 financial results on Thursday, May 7, 2020 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.”