Core Insights - Xtant Medical Holdings, Inc. reported a positive net income of $58,000 for Q1 2025, a significant improvement from a net loss of $4.4 million in Q1 2024, indicating a turnaround in financial performance [4][9] - The company achieved an 18% year-over-year revenue growth, reaching $32.9 million, driven by increased sales in orthobiologics and licensing revenue [2][3] - Xtant Medical has raised its revenue guidance for the full year 2025 to between $127 million and $131 million, reflecting an expected growth of 8% to 12% [10] Financial Highlights - Revenue for Q1 2025 was $32.9 million, compared to $27.9 million in Q1 2024, marking an 18% increase [3][9] - Gross margin decreased slightly to 61.5% from 62.1% year-over-year, primarily due to charges for excess and obsolete inventory [3][9] - Operating expenses decreased to $19.2 million in Q1 2025 from $20.8 million in Q1 2024, mainly due to reduced compensation and commission expenses [4][9] Cash Flow and EBITDA - The company generated $1.3 million in operating cash flow in Q1 2025, a turnaround from cash used in operations of $5.8 million in the prior year [2][9] - Non-GAAP adjusted EBITDA for Q1 2025 was $3.0 million, compared to an adjusted EBITDA loss of $1.0 million in Q1 2024 [5][9] Product Development - Xtant Medical launched Trivium™, a next-generation demineralized bone matrix allograft, which is expected to enhance the company's orthobiologics portfolio and drive future growth [2][9] Corporate Developments - The company completed a secondary private sale of existing shares by OrbiMed Advisors LLC, enhancing corporate governance flexibility by terminating the investor rights agreement with OrbiMed [9]

Stock Transaction and Ownership Changes - The Company completed a stock transaction on April 15, 2025, selling approximately 73.1 million shares at a price of $0.42 per share, totaling approximately $30.7 million[6][12]. - Following the transaction, Nantahala Capital Management, LLC acquired 57.0 million shares, resulting in Nantahala holding 49.1% of the Company's issued and outstanding common stock[7][12]. - The transaction resulted in a change of control, with Nantahala becoming the largest stockholder and effectively controlling the Company[12]. - The Company amended its credit agreements to increase the ownership threshold for a Change in Control from 40% to 49.9%[7]. - Nantahala's significant ownership may prevent other stockholders from influencing corporate decisions, potentially affecting the market price of the common stock[20]. - The Company is no longer classified as a "controlled company" under NYSE American standards due to the change in stock ownership[16]. - The transaction led to the termination of the Investor Rights Agreement with ROS Acquisition and ORO II, effective immediately[9]. - Nantahala's ownership concentration may discourage unsolicited acquisition proposals, impacting the Company's strategic options[20]. - The Company has entered into a Registration Rights Agreement with several purchasers, which may influence future stockholder dynamics[23]. Financial Performance and Projections - The Company disclosed preliminary, unaudited revenue for the quarter ended March 31, 2025, in connection with the transaction announcement[10]. - The Company anticipates a preliminary revenue growth of 18% to 19% for the first quarter of 2025[23]. - The Company warns that future sales of shares may lead to a material adverse impact on the trading price of the Common Stock, especially given its low trading volume[22]. - The Company is obligated to file a Resale Registration Statement, which will allow these shares to be available for resale, potentially impacting future capital raising efforts[21]. - The Company has filed several amendments to its credit agreements, indicating ongoing financial restructuring efforts[23]. Risks and Regulatory Compliance - The Company cautions that forward-looking statements involve risks and uncertainties that could lead to actual results differing materially from expectations[22]. - The Company is at risk of delisting from NYSE American if the trading price of its Common Stock falls to abnormally low levels[21]. - The Company emphasizes the importance of reviewing its SEC filings for a comprehensive understanding of risks and uncertainties[22]. - The Chief Financial Officer, Scott Neils, signed the report, indicating official acknowledgment of the financial disclosures[26].

Core Viewpoint - Xtant Medical Holdings, Inc. is focusing on a strategic shift towards higher-margin orthobiologics, supported by new product launches and a recent secondary private sale of shares, which enhances its operational flexibility and aligns with long-term healthcare-focused investors [1][2][3]. Group 1: Strategic Developments - The completion of a secondary private sale of 73.1 million shares by OrbiMed Advisors LLC to existing and new stockholders, led by Nantahala Capital Management LLC, marks a significant change in ownership structure [1]. - The termination of the investor rights agreement with OrbiMed allows Xtant greater strategic and operational flexibility moving forward [2]. - The company aims to prioritize profitability and self-sustainability as part of its long-term growth strategy, with a focus on expanding its orthobiologics offerings [3]. Group 2: Financial Performance - Xtant Medical expects to report Q1 2025 revenue between $32.8 million and $33.1 million, reflecting an 18% to 19% increase compared to Q1 2024 [4]. - The growth in revenue is primarily driven by orthobiologics and licensing revenue, indicating a successful transition towards higher-margin products [4]. Group 3: Future Outlook - The company plans several new product launches that will expand its offerings beyond spinal solutions, which is anticipated to accelerate growth in 2025 and beyond [3]. - Nantahala Capital Management expresses confidence in Xtant's innovative biologics and implant solutions, which address a growing need in the healthcare sector for regenerative and cost-effective surgical solutions [3].

Financial Data and Key Metrics Changes - The company reported record fourth-quarter revenue of $31.5 million, a 12% increase from $28.1 million in Q4 2023, and full-year revenue of $117.3 million, representing a 28% increase from $91.3 million in 2023 [16][24] - Gross margin for Q4 2024 was 50.8%, down from 61% in Q4 2023, primarily due to inventory write-offs and reduced production throughput [17][18] - Adjusted EBITDA for Q4 2024 was $438,000, compared to an adjusted EBITDA loss of $695,000 in Q4 2023 [22] Business Line Data and Key Metrics Changes - The biologics business grew by 21% year-over-year, while hardware sales declined by 10% [7][17] - The decline in hardware sales was attributed to a strong previous year and ongoing EU supply chain issues [8] - The company plans to launch four new biologics products in 2025, including a growth factor product and upgraded DBM-based products [9][10] Market Data and Key Metrics Changes - The company anticipates mid-double-digit revenue growth in the biologics segment for 2025, while hardware revenue is expected to decline modestly [14] - The international business faced challenges due to supply chain issues in the EU, impacting sales [8] Company Strategy and Development Direction - The company is focusing on achieving self-sustainability and prioritizing profitability over revenue growth [13] - Cost-cutting measures have led to a reduction in operating expenses by approximately $5 million, including a headcount reduction of over 13% [4][19] - The company is rationalizing old hardware lines to optimize offerings and improve cash management [6][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged 2024 as a challenging year due to the integration of Surgiline businesses but expressed optimism about becoming a leaner and more efficient organization [3] - The company expects to see improvements in gross margins as new products are introduced and sales channels expand [44] - Management highlighted the importance of reliable supply for OEM partners to capitalize on demand [60] Other Important Information - The company had $6.2 million in cash and cash equivalents as of December 31, 2024, with net accounts receivable of $20.7 million and inventory of $38.6 million [29] - The company does not anticipate needing to raise additional capital in 2025 due to projected revenue growth and cost savings [15] Q&A Session Summary Question: Insights on Biologics growth and DBM launch - Management indicated that the growth in the biologics segment was primarily driven by white label products, with expectations for a more balanced contribution from Xtant branded products in 2025 [33][35] Question: 2025 guidance assumptions - Management discussed expectations for seasonality in sales and indicated that operating expenses would see improvements, particularly in general and administrative costs [53][54] Question: Potential for outperformance in 2025 - Management noted that any delays in the local coverage determination (LCD) could positively impact revenue, particularly in the wound care segment [58][60] Question: Cost savings impact on P&L - Management confirmed that cost savings measures were already being reflected in Q4 2024 results and would continue to impact the first quarter of 2025 [70][71]

Xtant Medical Holdings, Inc. (NYSE:XTNT) Q4 2024 Results Conference Call March 6, 2025 4:30 PM ET Company Participants Brett Maas - Hayden IR Sean Browne - President & Chief Executive Officer Scott Neils - Chief Financial Officer Conference Call Participants Chase Knickerbocker - Craig-Hallum Sean Browne Good afternoon, everyone. I am pleased to announce record fourth-quarter revenue of $31.5% million and for the full year, $117.3% million. This is our first full quarter. A consistent year-over-year compari ...

Financial Agreements and Acquisitions - In Q4 2024, Xtant Medical entered a license agreement for the SimpliMax™ product, receiving a one-time cash payment of $1.5 million and expected minimum royalty payments of $3.75 million in 2025[21]. - A manufacture and license agreement for the SimpliGraft product was established, with an upfront payment of $1.5 million and minimum purchase obligations totaling $3.9 million in 2025[22]. - Xtant Medical acquired Surgalign SPV for $17 million, gaining rights to the Coflex and CoFix product lines approved by the FDA for lumbar spinal stenosis treatment[24]. - The acquisition of Surgalign Holdings' assets included a broad portfolio of spinal hardware implants and biologics, funded with $5 million in cash[25]. - The company acquired RTI Surgical's nanOss production operations for $2 million, along with a low single-digit royalty on future sales[26]. - Recent license agreements generated a one-time cash payment of $1.5 million, with potential quarterly royalty payments starting in 2025[143]. - The company acquired Surgalign SPV and other assets in 2023, aiming to enhance product offerings through strategic acquisitions[147]. Product Development and Market Strategy - Xtant Medical's strategic focus includes introducing new biologics products and leveraging its distribution network to penetrate adjacent markets[19]. - The company plans to launch new products in 2025, including FibreX and OsteoFactor Pro, aimed at enhancing bone regeneration[32]. - New product offerings include SimpliGraft, SimpliMax, OsteoVive Plus, and the Cortera Spinal Fixation System, aimed at increasing future revenues[128]. - The company expects its private label and OEM business to grow, but this segment typically has lower gross margins compared to independent agent sales[142]. Regulatory Compliance and Challenges - The company is ISO 13485 and MDSAP certified, ensuring compliance with quality management systems for medical devices[52]. - The company’s products are regulated as human cellular and tissue products (HCT/Ps) and have received 510(k) clearances from the FDA[53]. - The FDA's 510(k) review process typically takes three to nine months, with no assurance of clearance[63]. - The FDA may require the company to conduct post-market surveillance studies for products marketed under PMA, which could delay commercialization[176]. - The company is subject to extensive regulatory requirements, including obtaining FDA clearances or approvals for new products, which can be costly and time-consuming[170]. - Compliance with the Federal Physician Payments Sunshine Act requires the company to report annual payments to physicians and teaching hospitals[184]. - The company must comply with the EU Medical Devices Regulation 2017/745 to market products in the European Economic Area (EEA)[191]. - The company is required to perform post-market clinical follow-up studies to evaluate the safety and performance of previously approved products[196]. Financial Performance and Risks - As of December 31, 2024, the company has an accumulated deficit of $259.5 million and incurred a net loss of $16.4 million during the year[113]. - The company may seek additional financing through equity or debt, which could dilute current stockholders' interests[115]. - The company faces significant risks related to its high level of indebtedness, which could adversely affect its financial condition and operating results[119]. - The company has focused on four key growth initiatives: introducing new products, expanding distribution networks, penetrating adjacent markets, and leveraging technology and strategic acquisitions[128]. - The company may need to curtail operations significantly if it fails to raise additional funds or generate sufficient cash flow[117]. - The company has a minimum liquidity covenant of $5.0 million, which it has struggled to comply with in recent years[116]. Workforce and Employee Relations - As of December 31, 2024, Xtant had 232 employees, with 217 being full-time, including 90 in operations and 42 in sales and marketing[86]. - The company’s total workforce consists of 49% female and 39% racially or ethnically diverse employees[87]. - The average tenure of employees is approximately 4 years, while management team members have an average tenure of about 7 years[88]. - The company has no employee unions and maintains good relations with its employees[89]. - The company emphasizes employee safety and wellness, implementing multiple safety programs and health initiatives[92][93]. - The company has a robust learning management system for employee development and training[99]. Market Conditions and Competitive Landscape - The orthopedic biomaterials market is expected to grow, with increasing demand for products that aid in healing and bone tissue augmentation[27]. - Recent changes in CMS reimbursement policies may impact revenue from the SimpliMax™ and SimpliGraft products, with potential revenue reductions anticipated[23]. - The overall escalating cost of medical products is leading to increased pressures on the healthcare industry to reduce costs, which may affect Xtant's product demand[81]. - International reimbursement systems vary significantly, impacting Xtant's ability to achieve market acceptance in foreign markets[82]. - The company anticipates a shift towards more outpatient procedures in ambulatory surgical centers, which may reduce product prices and margins due to lower facility fee reimbursements compared to hospitals[166]. Operational Challenges and Supply Chain Issues - The company has faced delays in product launches, including OsteoVivePlus and Cortera Spinal Fixation System, due to validation and supplier issues[133]. - In 2023, the company experienced a shortage of stem cells, which adversely affected revenues in the first half of fiscal 2024[135]. - Manufacturing biologics products is complex and time-consuming, leading to operational challenges and missed revenue opportunities in 2023[136]. - The company relies heavily on human donors and placentas for its biologics business, with limited availability impacting revenue and operations[137]. - Persistent inflation and supply chain disruptions have resulted in increased costs and delayed product launches, affecting profit margins[139]. Legal and Liability Risks - The company may incur material liabilities from product liability claims, which may exceed insurance coverage[160]. - The potential for product recalls due to design or manufacturing failures could adversely affect demand and revenue[161]. - The company is subject to product liability litigation, which could harm its financial condition if it results in substantial damage awards[210]. - The FDA has the authority to inspect facilities and enforce compliance, which could lead to recalls or other enforcement actions if violations are found[214]. International Operations and Compliance - The company operates in 33 countries, exposing it to political, economic, and social instability risks[151]. - Compliance with international trade regulations is costly and may result in significant penalties for non-compliance[151]. - Regulatory approvals for marketing products outside the U.S. are costly and time-consuming, and failure to obtain them could adversely affect the business[189]. - The company faces risks from reliance on a limited number of third-party suppliers, which could disrupt operations if not managed properly[157]. Miscellaneous Risks - The company faces risks related to fluctuations in foreign currency exchange rates, particularly with the Euro, Swiss franc, and British pound against the U.S. dollar[164]. - The company’s ability to deduct interest on indebtedness is limited to business interest income and 30% of adjusted taxable income, which has become more restrictive since 2022[165]. - The company is exposed to increasing criminal prosecutions for noncompliance with HIPAA and state data privacy laws[185]. - Negative publicity regarding tissue recovery methods could reduce demand for biologics products[154].

Financial Reporting - Xtant Medical Holdings, Inc. reported financial results for Q4 and the full year 2024 on March 6, 2025[5]. - The financial results announcement includes a press release detailing the fourth quarter and full year 2024 performance[19]. - The report does not provide specific numerical data regarding revenue or net income/loss for the reported periods[5]. - The report was signed by Scott Neils, Chief Financial Officer, indicating formal acknowledgment of the financial disclosures[22]. Non-GAAP Measures - The company utilizes non-GAAP adjusted EBITDA to provide insights into its core operational performance, excluding items like separation-related expenses and legal settlements[7][10]. - Non-GAAP adjusted EBITDA is defined as net income/loss from operations before depreciation, amortization, interest expense, and income tax provision, adjusted for specific non-recurring items[7]. - The company believes that non-GAAP measures facilitate internal comparisons to historical results and assist in budgeting and resource allocation decisions[8]. - The company emphasizes that non-GAAP financial measures should be evaluated alongside GAAP measures for a comprehensive understanding of financial results[17]. Company Information - The company is listed on NYSE American LLC under the trading symbol XTNT[3]. - The financial results are part of the company's ongoing strategy to enhance operational transparency and investor understanding[8].

Financial Data and Key Metrics Changes - Total revenue for Q2 2024 was $29.9 million, a 48% increase from $20.2 million in Q2 2023, primarily driven by product sales from the recently acquired Surgalign Hardware and Biologics business [14] - Adjusted EBITDA for Q2 2024 was $0.5 million, compared to $0.1 million in the same period in 2023, marking the fifth consecutive quarter of positive adjusted EBITDA [5][16] - Net loss for Q2 2024 was $3.9 million or $0.03 per share, compared to a net loss of $2.2 million or $0.02 per share in Q2 2023 [16] Business Line Data and Key Metrics Changes - Organic growth for Q2 was flat compared to the prior year, mainly due to planned cannibalization of X-spine hardware and significant OEM sales in Q2 2023 [4] - The top 20 distributors grew 16.5% in revenue since the acquisition of Surgalign in Q3 2023 [6] - The company expanded its Biologics product offering from two categories to five, with the introduction of a sixth category, amniotic membrane allografts [7] Market Data and Key Metrics Changes - The distribution network now includes over 650 distributors, covering approximately 90% of all beds in the U.S. [9] - The company is focusing on increasing penetration into existing distributors rather than just adding new ones [9] Company Strategy and Development Direction - The company aims to achieve self-sustainability by controlling its supply chain and reducing reliance on external production [12] - Key growth pillars include new product introductions, distribution network expansion, adjacent market penetration, and strategic acquisitions [11] - The company is targeting undercapitalized or subscale companies for acquisitions to enhance capabilities and expand production capacity [11] Management's Comments on Operating Environment and Future Outlook - Management expects organic growth to accelerate in the second half of 2024 as supply chain challenges abate and new products are introduced [4] - The company anticipates positive operating cash flow by Q4 2024, driven by increased production of its own biologics [13][41] - Management is optimistic about the growth potential of the amniotic tissue products and the stem cell business [28][33] Other Important Information - The company entered into an agreement for a $5 million PIPE with an existing institutional investor to provide additional working capital [17] - Gross margin for Q2 2024 was 62.1%, an increase from 61.6% in Q2 2023, attributed to greater scale and improved production efficiency [14] Q&A Session Summary Question: Can you provide color on the revenue mix between orthobiologics and spinal implants? - Management noted that Surgalign hardware significantly contributed to revenue, helping to replace older X-spine hardware, and expects an increase in self-produced products in the second half of the year [18][19] Question: How does the guidance look for the balance of the year? - Management indicated an expected uptick in Q3 and a strong performance in Q4, particularly with the ramp-up of the Stem Cell business [21][22] Question: What are the expectations for gross margins moving forward? - Management expects gross margins to remain steady in Q3 and Q4, with a significant uptick anticipated in Q1 2025 as internal production increases [24] Question: Can you discuss the opportunities in the amniotic product line? - Management highlighted the OEM opportunities and the potential for high margins, noting that sourcing amniotic tissue is currently a limiting factor [28][30] Question: How quickly can the company ramp up production for stem cells? - Management indicated that production ramp-up would occur over the next three to four months, with a focus on fulfilling OEM opportunities first [34][36] Question: What is the outlook for sustainable cash flow? - Management does not expect cash flow breakeven in Q1 2025 but anticipates that it will be sustainable thereafter [39]

Financial Performance - Revenue for Q2 2024 was $29.9 million, representing a 48% increase compared to $20.2 million in Q2 2023[3] - Gross margin improved to 62.1%, up 50 basis points from 61.6% in the prior year quarter[4] - Net loss for Q2 2024 was $3.9 million, compared to a net loss of $2.2 million in the same quarter last year[4] - Adjusted EBITDA for Q2 2024 was $0.5 million, an increase from $0.1 million in Q2 2023[5] - Revenue for Q2 2024 reached $29,943,000, a 48.4% increase from $20,232,000 in Q2 2023[11] - Gross profit for Q2 2024 was $18,582,000, with a gross profit margin of 62.1%, compared to $12,459,000 and 61.6% in Q2 2023[11] - Total operating expenses increased to $21,528,000 in Q2 2024, up from $13,850,000 in Q2 2023, primarily driven by higher sales and marketing expenses[11] - Net loss for Q2 2024 was $3,861,000, compared to a net loss of $2,190,000 in Q2 2023[11] - Non-GAAP Adjusted EBITDA for Q2 2024 was $504,000, compared to $105,000 in Q2 2023[13] Cash Flow and Financing - Cash and cash equivalents as of June 30, 2024, were $5.4 million, down from $5.7 million at the end of 2023[5] - Cash used in operating activities for the first half of 2024 was $10,843,000, significantly higher than $4,766,000 in the same period of 2023[12] - The company reported a net cash provided by financing activities of $11,613,000 in the first half of 2024, compared to $6,522,000 in the same period of 2023[12] - The company had cash and cash equivalents of $5,379,000 at the end of the period, compared to $4,138,000 at the end of Q2 2023[12] - The company entered into a $5.0 million private placement on August 7, 2024[2] Product Development and Market Expansion - Two new amniotic membrane allografts products, SimpliGraft™ and SimpliMax™, were launched in Q2 2024[2] - The company signed 15 new distributors and awarded 20 IDN contracts in Q2 2024[2] Operating Expenses - Operating expenses for Q2 2024 totaled $21.5 million, up from $13.9 million in Q2 2023[4] - The company incurred $13,179,000 in sales and marketing expenses in Q2 2024, up from $8,716,000 in Q2 2023[11] - Research and development expenses increased to $636,000 in Q2 2024, compared to $180,000 in Q2 2023[11] Future Outlook - The company expects full year 2024 revenue to be between $116 million and $120 million, indicating annual growth of approximately 27% to 31% compared to 2023[6]

Xtant Medical Holdings, Inc. (NYSE:XTNT) Q1 2024 Results Conference Call May 15, 2024 4:30 PM ET Company Participants Brett Maas - Managing Partner, Hayden IR Sean Browne - President and Chief Executive Officer Scott Neils - Chief Financial Officer Conference Call Participants Ryan Zimmerman - BTIG Chase Knickerbocker - Craig-Hallum Operator Greetings. Welcome to the Xtant Medical Holdings, Inc. First Quarter 2024 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answ ...