Raises 2023 Annual Revenue Guidance to $88 Million – $91 Million
BELGRADE, Mont., Nov. 09, 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 third quarter ended September 30, 2023.
“Driven by strong organic growth of 18%, and contributions from our recent acquisitions, we achieved record third quarter revenue of $25 million, an increase of 73% year-over-year, and raised our 2023 revenue guidance range for the second consecutive quarter,” said Sean Browne, President and CEO of Xtant Medical. “I am extremely proud of our team’s efforts integrating Surgalign’s hardware and biologics business while growing our core business. These results and execution are a testament to their steadfast commitment and diligence. With the Surgalign integration progressing smoothly, we remain focused on optimizing our distribution network and further scaling operations. We look forward to building upon this momentum by bringing expanded solutions to patients in need and maximizing value to our shareholders.”
Third Quarter 2023 Financial Results
Third quarter 2023 revenue grew 73% to $25.0 million, compared to $14.5 million for the same quarter in 2022. Revenue includes organic growth of 18% plus a 55% increase from products added in the acquisition of the Coflex and CoFix lines and Surgalign hardware and biologics business. These revenue increases are attributed primarily to greater independent agent and private label sales, sales from the acquired Coflex and CoFix product lines, and sales from the acquisition of Surgalign.
Gross margin for the third quarter of 2023 was 61.3%, compared to 54.6% for the same period in 2022. The increase is primarily attributable to greater production efficiencies, decreased charges for excess and obsolete inventory, and product mix, partially offset by higher product costs.
Operating expenses for the third quarter of 2023 totaled $18.7 million, compared to $9.8 million for the third quarter of 2022. The increase was primarily due to additional independent agent sales commissions, higher employee compensation expenses, legal expenses, and amortization of intangible assets associated with the Coflex and CoFix product lines.
Third quarter 2023 net income totaled $9.2 million, or $0.07 per share, compared to the third quarter 2022 net loss of $2.4 million, or $0.03 per share.
Non-GAAP Adjusted EBITDA for the third quarter of 2023 was $0.5 million, compared to a Non-GAAP Adjusted EBITDA loss of $0.9 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, acquisition-related expenses, acquisition-related fair value adjustments, gain on bargain purchase, and litigation settlement reserve. A calculation and reconciliation of Adjusted EBITDA to net loss can be found in the attached financial tables.
2023 Financial Guidance
Xtant Medical raises its expectation for full year 2023 revenue to $88 million to $91 million, up from the Company’s prior guidance of $75 million to $77 million. The revised guidance range represents annual revenue growth of approximately 52% to 57% compared to full year 2022 revenue, and includes contributions from the Surgalign transaction.
Xtant Medical will host a webcast and conference call to discuss third quarter 2023 financial results on Thursday, November 9, 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’s mission of honoring the gift of donation so that our patients can live as full and complete a life as possible, is the driving force behind our company. 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 and organic revenue growth. 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,” “guidance,” similar expressions or the negative thereof, and the use of future dates. Forward-looking statements in this release include the Company’s financial guidance for 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 acquisitions and the integration of those businesses; anticipated shortages of stem cells which will adversely affect future revenues; possible future impairment charges to long-lived assets and goodwill and write-downs of excess inventory; 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; risks associated with the Company’s clinical trials; international risks; 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 8, 2023 and subsequent SEC filings by the Company, including without limitation its most recent Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 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.
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