Third Quarter 2015 Consolidated Pro Forma Highlights:

• Consolidated pro forma revenue increased 6.5% to $20.9 million from $19.6 million in the third quarter of 2014. 
  
  
• Excluding OEM revenue, third quarter 2015 consolidated pro forma revenue increased 13.8% to $20.2 million from $17.7 million in the third quarter of 2014.
  
  
• Consolidated pro forma biologics revenue increased 15.5% to $9.8 million from $8.5 million in the third quarter of 2014. 
  
  
• Consolidated pro forma fixation revenue, excluding OEM revenue, increased 12.3% to $10.4 million from $9.3 million in the third quarter of 2014.
  
  
• Pro forma gross profit for the period was 65.5%, which was at the high end of Company guidance of 64% to 66%.
  

BELGRADE, Mont., Nov. 11, 2015 (GLOBE NEWSWIRE) --  Xtant Medical Holdings, Inc. (NYSE MKT:XTNT), a leader in the development of class-leading regenerative medicine products and medical devices, today reported consolidated actual and consolidated pro forma financial results for the third quarter of 2015 and for the nine-months ended September 30, 2015. As previously announced, the Company completed its acquisition of X-spine Systems, Inc. on July 31, 2015. The consolidated pro forma results are presented as if the Company's current subsidiaries were combined for all periods presented below.

Consolidated Pro Forma Third Quarter 2015 Results

Revenue
Consolidated pro forma revenue for the third quarter 2015 was approximately $20.9 million, an increase of 6.5% compared to approximately $19.6 million for the same period of 2014. During the third quarter of 2015 and 2014, the Company generated approximately $745,000 and $1.9 million, respectively, of Original Equipment Manufacturer ("OEM") sales from a large orthopedic device manufacturer. Excluding those sales, third quarter 2015 consolidated pro forma revenue increased approximately 13.8% compared to the same period last year.

Consolidated Pro Forma Third Quarter 2015 Summary of Revenue
(Stated in $'000's)
				3Q15				3Q14				Growth %
Biologics			$	9,761			$	8,454				15.5	%
Fixation (excluding OEM)			$	10,396			$	9,256				12.3	%
Consolidated Pro Forma Revenue (excluding OEM)			$	20,157			$	17,710				13.8	%
OEM			$	745			$	1,909				-61	%
Consolidated Pro Forma Revenue			$	20,902			$	19,619				6.5	%

For the nine-months ended September 30, 2015, consolidated pro forma revenue was approximately $64.4 million, an increase of $6.3 million or 10.8% compared to $58.1 million reported for the same period of 2014. Excluding OEM revenue, revenue increased 15.0% compared to the same period last year.

Gross Profit and Gross Margin
Consolidated pro forma gross profit for the third quarter of 2015 was approximately $13.7 million or 65.5% of revenue compared to $13.2 million or 67.3% of revenue reported for the same period of 2014. Gross margin was at the high end of company guidance of 64% to 66%.

For the nine-months ended September 30, 2015, consolidated pro forma gross margin was 65.7% compared to 65.8% in the prior year.

Loss from Operations
Consolidated pro forma loss from operations for the third quarter of 2015 was approximately $3.5 million compared to a loss of approximately $1.4 million for the same period of 2014. The loss for the period also includes approximately $610,000 of non-recurring general and administrative expenses and a non-cash impairment charge of $234,000 on net carrying value of pre-acquisition intangible assets.

For the nine-months ended September 30, 2015, on a consolidated pro forma basis, the Company's loss from operations was approximately $7.1 million compared to $3.3 million for the same period of 2014.

Net Loss
On a consolidated pro forma basis, the company had a net loss of approximately $5.4 million and $16.1 million for the three months and nine months ended September 30, 2015, respectively, as compared to approximately $2.8 million and $11.3 million, respectively, for the same periods of 2014.

EBITDA
The Company defines earnings before interest, taxes, depreciation and amortization ("EBITDA") as net income/(loss) from operations before depreciation, amortization, impairment charges and non-cash stock based compensation. On a pro forma combined basis, third quarter 2015 EBITDA loss was approximately $915,000. Excluding the non-recurring increase in general and administrative expenses referenced above, third quarter 2015 combined EBITDA loss was approximately
$305,000.

Financial Resources and Liquidity
As of September 30, 2015, the Company reported cash and cash equivalents of approximately $8.0 million. On September 4, 2015, the company sold 140,053 shares of restricted common stock to certain members of the Company's board of directors in a private placement transaction at $3.68 per share, which was the closing price on that date. Total proceeds were approximately $516,000.

The Company believes its cash resources are sufficient to execute its strategy through December 31, 2016.

2015 and 2016 Company Guidance
The Company reiterates its 2015 revenue guidance to be within the range of $43 to $46 million for the second half of 2015 and second half 2015 EBITDA guidance to be in the range of $2.0 to $2.5 million, excluding one-time, non-recurring expenses. The Company also reiterates its 2016 revenue guidance of approximately $100 million to $105 million and EBITDA guidance of approximately $7.0 to $9.0 million.

Actual Results for the Three Months ended September 30, 2015
The actual operating results of Xtant Medical Holdings, Inc presented below and to be reported in the Company's Quarterly Report on Form 10-Q include three months of operating results for Bacterin International, Inc. and two months of operating results for X-spine Systems, Inc.

In connection with the acquisition of X-spine, the Company recorded approximately $3.9 million of acquisition and integration related expenses during the third quarter of 2015. Additional integration related expenses are expected during the fourth quarter of 2015 and first half of 2016.

The Company also reported a one-time gain on the extinguishment of debt of approximately $2.3 million associated with the refinancing and restructuring of the Company’s senior secured term loan with an affiliate of Orbimed Advisors as part of the acquisition financing.

Conference Call
The company will also hold a conference hosted by Dan Goldberger, Chief Executive Officer, and John Gandolfo, Chief Financial Officer, to discuss the results. The call will be held at 10:00 AM ET, on November 12, 2015. Please refer to the information below for conference call dial-in information and webcast registration.

Conference date: November 12, 2015, 10:00 AM ET
Conference dial-in: 877-269-7756
International dial-in: 201-689-7817
Conference Call Name: Xtant Medical Holdings, Inc. Third Quarter 2015 Results Call
Webcast Registration: Click Here

Following the live call, a replay will be available on the Company's website, www.xtantmedical.com, under "Investor Info".

-------------------

About Xtant Medical Holdings

Xtant Medical Holdings, Inc. (NYSE MKT:XTNT) develops, manufactures and markets regenerative medicine products and medical devices for domestic and international markets. Xtant products serve the specialized needs of orthopedic and neurological surgeons, including orthobiologics for the promotion of bone healing, implants and instrumentation for the treatment of spinal disease, tissue grafts for the treatment of orthopedic disorders, and biologics to promote healing following cranial, and foot and ankle surgeries. With core competencies in both biologic and non-biologic surgical technologies, Xtant can leverage its resources to successfully compete in global neurological and orthopedic surgery markets. For further information, please visit www.xtantmedical.com.

Important Cautions Regarding Forward-looking Statements

This press release contains certain disclosures that may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to significant risks and uncertainties. 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 "continue," "efforts," "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "strategy," "will," "goal," "target," "prospects," "potential," "optimistic," "confident," "likely," "probable" or similar expressions or the negative thereof. Statements of historical fact also may be deemed to be forward-looking statements. We caution that these 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 ability to successfully integrate the acquisition of X-spine; the ability of the Company's sales force to achieve expected results; the Company's ability to meet its existing and anticipated contractual obligations, including financial covenant and other obligations contained in the Company's secured lending facility; the Company's ability to manage cash flow; the Company's ability to develop, market, sell and distribute desirable applications, products and services and to protect its intellectual property; the ability of the Company's customers to pay and the timeliness of such payments; the Company's ability to obtain financing as and when needed; changes in consumer demands and preferences; the Company's ability to attract and retain management and employees with appropriate skills and expertise; the impact of changes in market, legal and regulatory conditions and in the applicable business environment, including actions of competitors; and other factors. Additional risk factors are listed in the Company's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q under the heading "Risk Factors." 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.

Pro forma, projected and estimated numbers used in this press release are used only for illustrative purposes and are not forecasts and may not reflect actual results.

This press release contains supplemental measures of performance, such as EBITDA, that are not required by, or presented in accordance with, generally accepted accounting principles in the United States ("GAAP"). Such measures should not be considered as replacements of GAAP. Further information with respect to and reconciliations of such measures to the nearest GAAP measure can be found at the end of this press release.

The unaudited pro forma financial information contained in this press release is included for informational purposes only and does not purport to reflect actual results of operations or the financial position that would have occurred has Xtant and X-spine operated on a combined basis during the periods presented. The unaudited pro forma financial information
should not be relied upon as being indicative of our financial condition or results of operations had the X-spine transaction occurred on the date assumed nor as a projection of our results of operations or financial position for any future period or date. The unaudited pro forma financial information should be read in conjunction with the historical financial statements and related notes of Xtant and X-spine.

	XTANT MEDICAL HOLDINGS, INC.
	Consolidated Pro Forma Statements of Operations
		For the Three Months Ended Sept 30,												For the Nine Months Ended Sept 30,
		2015						2014						2015						2014
		Amount						Amount						Amount						Amount
	Revenue
	Orthopedic Product Sales	$		20,577,473				$		19,397,951				$		63,612,869				$		57,559,393
	Other			323,819						221,360						788,356						576,150
	Total Revenue			20,901,292						19,619,310						64,401,225						58,135,543
	Cost of sales			7,208,696						6,424,019						22,106,441						19,863,624
	Gross Profit			13,692,596						13,195,291						42,294,784						38,271,918
	Operating Expenses
	General and administrative			4,532,981						3,708,414						12,984,500						10,668,313
	Sales and marketing			9,832,446						8,380,884						28,940,264						24,076,681
	Research and development			987,433						919,343						2,813,792						2,541,092
	Depreciation and amortization			1,562,220						1,524,351						4,201,058						4,175,222
	Acquisition and Integration related expenses			-						-						-						-
	Gain from the Extinguishment of Debt			-						-						-						-
	Impairment of Assets			233,748						-						233,748						-
	Non-cash consulting			50,000						39,697						190,869						81,924
	Total Operating Expenses			17,198,829						14,572,689						49,364,232						41,543,232
	Loss from Operations			(3,506,232	)					(1,377,398	)					(7,069,448	)					(3,271,313	)
	Other Income (Expense)
	Interest expense			(2,153,985	)					(2,946,198	)					(8,146,038	)					(8,656,977	)
	Change in warrant derivative liability			397,366						1,653,425						(78,923	)					1,038,190
	Non-cash consideration associated with stock purchase agreement			-						-						(558,185	)					-
	Other income (expense)			(83,097	)					(70,344	)					(186,223	)					(253,289	)
	Total Other Income (Expense)			(1,839,716	)					(1,363,117	)					(8,969,368	)					(7,872,076	)
	Net Loss from Operations Before (Provision) Benefit for Income Taxes			(5,345,948	)					(2,740,515	)					(16,038,817	)					(11,143,389	)
	Benefit (Provision) for Income Taxes
	Current			11,143						29,312						22,286						106,782
	Deferred			-						-						-						-
	Net Loss	$		(5,357,091	)			$		(2,769,827	)			$		(16,061,103	)			$		(11,250,171	)
	EBITDA	$		(914,778	)			$		986,825				$		277,437				$		3,450,381
	See notes that are attached to the consolidated financial statements that are contained in the Company's 10K and 10Q's.

 

	XTANT MEDICAL HOLDINGS, INC.
	Consolidated Statements of Operations
		For the Three Months Ended Sept 30,												For the Nine Months Ended Sept 30,
		2015						2014						2015								2014
		Amount						Amount						Amount								Amount
	Revenue
	Orthopedic Product Sales	$		17,421,397				$		8,246,325				$			36,431,354					$			25,712,586
	Other			271,623						207,179							657,396								537,821
	Total Revenue			17,693,020						8,453,504							37,088,749								26,250,407
	Cost of sales			6,035,673						3,017,734							12,883,439								9,718,952
	Gross Profit			11,657,347						5,435,770							24,205,310								16,531,455
	Operating Expenses
	General and administrative			3,980,804						2,282,386							8,805,104								6,664,982
	Sales and marketing			8,430,303						3,927,028							18,179,552								12,387,459
	Research and development			794,464						378,252							1,519,196								955,111
	Depreciation and amortization			1,541,220						58,763							1,765,994								216,343
	Acquisition and Integration related expenses			3,856,519						-							3,856,519								-
	Gain from the Extinguishment of Debt			(2,345,019	)					-							(2,345,019	)							-
	Impairment of Assets			233,748						-							233,748								-
	Non-cash consulting			50,000						39,697							190,869								81,924
	Total Operating Expenses			16,542,040						6,686,126							32,205,964								20,305,819
	Loss from Operations			(4,884,693	)					(1,250,356	)						(8,000,654	)							(3,774,364	)
	Other Income (Expense)
	Interest expense			(2,111,721	)					(1,498,508	)						(4,930,941	)							(4,216,109	)
	Change in warrant derivative liability			397,366						1,653,425							(78,923	)							1,038,190
	Non-cash consideration associated with stock purchase agreement			-						-							(558,185	)							-
	Other income (expense)			(89,926	)					(70,344	)						(193,052	)							(253,289	)
	Total Other Income (Expense)			(1,804,281	)					84,573							(5,761,101	)							(3,431,208	)
	Net Loss from Operations Before (Provision) Benefit for Income Taxes			(6,688,974	)					(1,165,783	)						(13,761,754	)							(7,205,572	)
	Benefit (Provision) for Income Taxes
	Current			-						-							-								-
	Deferred			-						-							-								-
	Net Loss	$		(6,688,974	)			$		(1,165,783	)			$			(13,761,754	)				$			(7,205,572	)
	Net loss per share:
	Basic	$		(0.64	)			$		(0.35	)			$			(1.70	)				$			(1.26	)
	Dilutive	$		(0.64	)			$		(0.35	)			$			(1.70	)				$			(1.26	)
	Shares used in the computation:
	Basic			10,432,622						6,233,751							8,100,226								5,711,452
	Dilutive			10,432,622						6,233,751							8,100,226								5,711,452
	See notes that are attached to the consolidated financial statements that are contained in the Company's 10K and 10Q's.

 

	XTANT MEDICAL HOLDINGS, INC.
	CONSOLIDATED BALANCE SHEETS
		As of					As of
		Sept 30,					December 31,
		2015					2014
	ASSETS
	Current Assets:
	Cash and cash equivalents	$		7,970,433			$		4,468,208
	Trade accounts receivable, net of allowance for doubtful accounts of $1,392,989 and $1,309,859, respectively			13,318,450					4,427,081
	Inventories, net			22,042,508					9,558,648
	Prepaid and other current assets			1,039,561					654,140
	Total current assets			44,370,953					19,108,077
	Non-current inventories			1,681,138					1,934,258
	Goodwill			23,997,218					0
	Property and equipment, net			11,433,064					4,654,527
	Intangible assets, net			42,223,856					655,490
	Other assets			2,520,464					1,598,539
	Total Assets	$		126,226,693			$		27,950,891
	LIABILITIES & STOCKHOLDERS' (DEFICIT) EQUITY
	Current Liabilities:
	Accounts payable	$		7,485,220			$		3,876,760
	Accounts payable - related party			1,035,447					250,629
	Accrued liabilities			6,716,897					1,921,301
	Warrant derivative liability			1,399,294					1,320,371
	Current portion of capital lease obligations			47,246					61,970
	Current portion of royalty liability			0					1,000,750
	Current portion of long-term debt			53,172					50,671
	Total current liabilities			16,737,277					8,482,452
	Long-term Liabilities:
	Capital lease obligation, less current portion			18,962					11,808
	Long term royalty liability, less current portion			0					6,361,216
	Long term convertible debt, less current portion			68,000,000					0
	Long-term debt, less current portion			44,301,474					20,870,330
	Total Liabilities			129,057,714					35,725,806
	Commitments and Contingencies
	Stockholders' (Deficit) Equity
	Preferred stock, $0.000001 par value; 5,000,000 shares authorized; no shares issued and Outstanding			-					-
	Common stock, $0.000001 par value; 95,000,000 shares authorized; 11,886,107 shares issued and outstanding as of September 30, 2015 and 6,679,646 shares issued and outstanding as of December 31, 2014			11					7
	Additional paid-in capital			81,798,160					63,091,620
	Accumulated deficit			(84,629,192	)				(70,866,542	)
	Total Stockholders’ Deficit			(2,831,021	)				(7,774,915	)
	Total Liabilities & Stockholders’ Deficit	$		126,226,693			$		27,950,891
	See notes that are attached to the consolidated financial statements that are contained in the Company's 10K and 10Q's.

 

XTANT MEDICAL HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
	For the Nine Months Ended
		2015			2014
Operating activities:
Net loss	$	(13,761,754	)	$	(7,205,572	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		2,403,934			498,343
Non-cash interest		1,665,172			387,294
Gain from the Extinguishment of Debt		(2,345,019	)		0
Non-cash consideration associated with stock purchase agreement		558,185			0
Loss on sale of fixed assets		11,377			33,373
Impairment of Assets		233,748			0
Amortization of debt discount		707,281			1,207,859
Non-cash consulting expense/stock option expense		881,681			938,785
Provision for losses on accounts receivable and inventory		731,067			601,190
Change in derivative warrant liability		78,923			(1,038,190	)
Changes in operating assets and liabilities:
Accounts receivable		(2,304,620	)		346,151
Inventories		537,819			(350,198	)
Prepaid and other assets		(325,976	)		22,109
Accounts payable		776,214			884,436
Accrued liabilities		1,124,888			(1,495,107	)
Net cash used in operating activities		(9,027,080	)		(5,169,527	)
Investing activities:
Acquisition of X-spine Systems Inc. net of cash received		(73,033,049	)		0
Purchases of property and equipment and intangible assets		(444,312	)		(190,601	)
Proceeds from sale of fixed assets		102,587			10,149
Net cash used in investing activities		(73,374,774	)		(180,452	)
Financing activities:
Net proceeds from the issuance of convertible debt		66,322,366			0
Payment on royalty obligation		(542,905	)		0
Net proceeds from equity private placement		516,380			0
Payments on capital leases		(78,490	)		0
Net proceeds from issuance of long term debt		17,479,159			4,000,000
Payment on long term debt		(38,668	)		(492,695	)
Proceeds from the issuance of capital leases		70,921			(126,686	)
Net proceeds from the issuance of stock		2,117,498			5,876,299
Net cash provided by financing activities		85,846,261			5,383,604
Net change in cash and cash equivalents		3,444,407			3,906,939
Cash and cash equivalents at beginning of period		4,526,026			3,046,340
Cash and cash equivalents at end of period	$	7,970,433		$	6,953,279
See notes that are attached to the consolidated financial statements that are contained in the Company's 10K and 10Q's.

 

	XTANT MEDICAL HOLDINGS, INC.
	Calculation of Pro Forma EBITDA
		For the three months ended						For the nine months ended
		Sept 30,						Sept 30,
			2015			2014			2015			2014
	Loss from Operations		(3,506,232	)		(1,377,398	)		(7,069,448	)		(3,271,313	)
	Impairment of Assets		233,748						233,748
	Non-Cash Compensation		186,882			258,372			631,234			951,972
	Depreciation & Amortization		2,170,824			2,105,850			6,481,903			5,769,722
	EBITDA		(914,778	)		986,824			277,437			3,450,381

 

 

 

 

Contact:
COCKRELL GROUP 877.889.1972
investorrelations@thecockrellgroup.com
cockrellgroup.com

Xtant Medical Holdings, Inc.