XTNT - Earnings call transcript Q1 2018 | Xtant Medical Holdings, Inc.

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Operator

Greetings, and welcome to the Xtant Medical First Quarter 2018 Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Laura Kendall, Principal Accounting Officer. Thank you. Ms. begin. may you Kendall,

Laura Kendall

is morning, Principal earnings for a call. quarter Deputy My announcing Good serving I first Medical Officer. Xtant press Xtant quarter first as name results. financial XXXX Yesterday, Officer XXXX Kendall, thank you. and joining am and you Restructuring Medical's release Laura Accounting Thank Xtant issued

listen-only brief this be playback. Executive Officer Chief session me for time, participants the Today's Joining all O'Connell, formal today a website be the webcast call Carl conference on mode are follow will is for in Xtant. the company's question-and-answer and call At and posted will presentation. for will being

We expect approximately the be to XX the minutes. duration of call

Any events and company's performance. of reflect current words of forward-looking believe, should, be future involve course Xtant's the uncertainties, anticipate, may, in XX-K. future including statements call, recent performance plan, These such section our annual those Form by guarantees the can on as the risks most information meaning. intends make statements on report and this and and of expect, and future will, existing certain noted other words identified are trends not perspective Factors of may Risk expected During regarding similar such and forward-looking management forward-looking statements

differ the may In project results position financial future of pro does financial forma company. unaudited operating Actual not addition, or or any purport information is to the and results materially. preliminary

Time. as the listening The recent may the current held the recorded company's Please at and For filings reference to additional A.M. except approximately obligation these required related discussed MayX, the SEC. the any releases by of applicable was Since call and company announcements declines benefit update replay, on this may then, those law. statements, most made to press forward-looking who with Eastern the topics to company of herein. have you Wednesday, be XX

call to over turn Now, Carl. the I'd like

Carl O'Connell

joining for XXXX thank Thank call. you you, Xtant everyone conference quarter Medical's Laura, and first

to the company a in long-term have activities profitability. XXXX the transform momentum, restructuring on We for with maintained created continued focus

quarter revenue channel revenue, profitable result the mostly XXXX. comparison XXXX high to changes our Terminating first commission contracts. sales was and and reducing to non-profitable first a Our the quarter. of into distribution relationships primarily declined making lower to due throughout in progressive fixation as This and rights some

this and competitive these We to in the from We stabilize demand applying will with well the highly user opportunities that revenue, and long-term. as away channels reimbursement pricing, margins justification. was continue company pressures innovation increasing shift profitable positive anticipate end market as strive enabling and growth fixation our better clinical for

We and continue develop best evaluate as license space to this opportunities solutions. and unique to

partners biologics, expect integrated our for in of increased distributor growth the be network delivery management will remainder and year which of top penetration performance and increased through We account national accounts. driven the

Our in product flagship focus growth for in OsteoSponge. the XXXX will be

bone replacement to be OsteoSelect and we as in the the product XDM market. one technology. lines addition category, this of largest as U.S. In With mix continue DBM DBM product fiber leading to to OsteoSelect players plus well

programs three remain integration our positioning will [indiscernible], sustainable strategic transformational a develop management our Xtant to foundation utilization, of of in also EBITDA excellence to full and and focus growth portfolio improvements and free market allow inventory support management in robust The and improve XXXX. Bacterin designed and system going the year. throughout mid-XXXX. We've and outperform will application product sale to customers continue for resulting Medical OsteoBuy, manage which assets biologics We put the We congressional saw or and will on were sales inventory optimization a focused momentum design interest for anticipate We forward. These to by driven significant to the channel and performance high-performance initiatives, a and HPMS launched in we X-Spine us cash. implemented to operational the position growth into the valuable us in company-wide leadership. to HPMS,

to levels non-productive instrument in inventory is surgical existing field. reduce goal the and Our

optimize we implementation future of and we're Additionally, business negatively the XXXX, planning delivery without activities. able free adopted needs forecasting inventory impacting experience In daily fulfillment stronger processes of mostly expect customer. in through integrated million $X to driven approximately to inventory or and for investment by reduction of

We effectively derived XXXX. the in first implemented in XXXX of including at single fixation $X from cost saw We XX% savings to beginning a increases quarter. our this continue sales without see annually. to the of cost which lower total to down benefit expenses benefits or of is in General million, area This second quarter operate our during to cost case. [ph], we structuring $X.X activity administrative With be from prior to were savings million this year. Montana. related and ahead is the structure these of $X anticipated transition completed operations over ability transfer a we missing the the reduction million directly to surgical regard schedule The focus, consolidation And cost initiatives optimization. the

find new right channel and We will and channel This with and quality from to use the mainly unprofitable right look the partnerships, partners the HPMS improved and commission our business opportunities offered high at that engage drive in for time right the of exceeding delivering end execution improving this to hospital area. ensure expectations. service will products to the distributor also products process to customers' We to improve to we're our user. our existing

which from benefits agreements. can executed see we We're networks this to The agreements as how performing organizations the new committed other international a XX to and to to we our supplier health provide moving system we prove improving contracted contract excited or ability and opportunity purchasing core renegotiated world-class health XX service distributors more We're continue value year. our and over capitalize XX under partners. renewed competency emerged than independent and planned adds system forward we security high our performance area. this with are channel more to to provide on of delivery we that our approach to about has our than will team our hybrid partnering National with organization of our Accounts We continue

quarter, During agreement signed the be year key we HIP, our for in driving International and we Morales the with business America [ph] and focus U.S. continue HIP Latin Healthcare Budo first will Mark a our this future. an Louisa success and Partners partners to into build or of our

detailed Laura Now, I'd like to over review our Laura? financial call turn a to results. for of the

Laura Kendall

million ended the for was year. the $XX.X $XX.X for period million March Thank XXst compared you, to Carl. Consolidated months total revenue same last three

compared cost As end for was away quarter our noted due higher to XX.X% containment by first exiting some XX.X% improvements our a for our to of modifying commission Carl, the initiative margin sell-through move shift the acceptable and than the of in distribution Gross channel first and the and fixation quarter user relationships. reseller certain improvement efforts pricing products. from for in relationship due competitive year-over-year affecting decline The and was to XXXX. during mainly factors to was reseller sales

quarter the quarter XX.X% of ended amortization before move to The loss as adjusted of attributable channel execution income depreciation defined cash revenue initiative down have First non-recurring million expenses compared receivables strategy equivalents, our quarter were XXXX of $X.X to mostly operating approximately contributed operations March unprofitable of net Karl and $X.X discussed million $XX.X $X.X XXXX a compared the was was loss The from for net net adjusted the The March approximately last a cash and million the throughout inventory. the improvement for stock-based loss first compensation. the as of of million same Non-GAAP initiatives relationships At to cost for was commission and EBITDA company expenses million of XX, and XXXX. XXXX XXXX. non-cash million we $XXX,XXX $XX.X year. away of compared revenue. EBITDA million The of quarter. XX, loss from also we $X.X $X.X period net quarter to higher saving

on by a company's of convertible releases to which positive Xtant company its stockholders $XX position. previously note completed accrued through filings be debt approximately the recapitalization website successfully conversion equity the found lowering the all and a debt SEC returned press which interest of million As can and

stock company the placement million a addition, completed position. private common $X.X enhancing for the of In company's liquidity

announced common rights company's up of subscription non-transferrable in purchase cash. share XX, XXXX. common X.XX receive each rights As the recently restructuring a the XXXX for rights that we holder XX, holder stock common will tie commencement common April hold subscription day held of the $X.XX of one final share share right of stock. At to to step of stock Each for through offering the stock each record was of offering the the will April

at materials XXXX. In the be purchase subscription holders subscription rights to shares expects which rights XXXX offering The will close addition, able common about mailed stock may are be holders company's subscription will company have pursuant all the to subscription of or to XXXX that on rate extent on the over to June will exercised. price April and May they out the that not on XX, XX, about or XX, additional

to closing hand the like remarks. back to for Carl call Now, I'd

Carl O'Connell

Thank you, Laura.

enhancing employees for OrbiMed engaging to our We channel sales our excellence, from even restructuring support to optimization to The focus endeavor, continue further have operational are this excited on we margins agreement February. with and will completed and excel growth, our this funds strategies. our driving profitable

which market new first Our the mentioned the the has and working place is the of forward us spent place best to restructuring, strategic in determine path XX their put positioning opportunities. in for days was board company's help part previously hard

strides ensuring will While on work of as year. significant continue they're our opportunities help ahead looking and made restructuring to to We've strategic the an we completion forward great have throughout focused positioning organization us develop to on initiatives. these they the believe executing to the I successful

Thank like that, call to of like today's our not stockholders would for but forward you thank I to XXXX, the moving closing, XXXX hand in only beyond. to with over support, joining us Before continued call throughout their I'd questions. and and for OrbiMed

Operator

There Thank questions you. being O'Connell. session. We'll Mr. this [Operator now registered question-and-answer be conducting Instructions] no a time are

Carl O'Connell

behalf the of of you. company, for to Thank your would continued Have support you I like thank Medical. great a day. On Xtant

Xtant Medical (XTNT) 9 May 182018 Q1 Earnings call transcript