XTNT - Earnings call transcript Q2 2018 | Xtant Medical Holdings, Inc.

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Laura Kendall

Good morning. Thank you for joining Xtant Medical Second Quarter 2018 Earnings Call. My name is Laura Kendall, and I am serving Xtant Medical as Deputy Restructuring Officer and Principle Accounting Officer.

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

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

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

certain press today's to of appears filed and our release Form the earnings site. such narrative our XK are release a that of Note further to with Web detailed discussion in measures. GAAP non-GAAP our refer that describes provides Our financial which our release available otherwise reconciliation, use include earnings measures. on our Please tables and the non-GAAP

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

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

Carl O'Connell

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

issued revenue the we’ve in our performance the today's I’ll Laura to quarter call in of areas I our yesterday walk will events Kendall some a was afternoon. through before cover key that and been walk release you second focused over year turning financial recent this progress also XXXX. performance, for press call, who of on highlighted summary For the which through will our business

the for then questions. call will We open

So get let's started.

the XX.X%. for quarter $XX.X margins revenue second million XXXX of gross with Our was

was for in areas operating at adjusted occurred fixation of third product margin in gross arrangements, as commission focus implemented on we positive sales the This The Our higher mostly competitive last the margin and the channel gross of lower million the other second performance. while the including $X.X EBITDA factors quarter decision and strategic EBITDA. quarter of revenue lines, continued EBITDA expense. due unprofitable year to reducing decrease improving and strategic was business, many to beginning particularly positively our expenses,

long-term of as year, the distributors of distributors initiated number well a core distribution our portfolio focus have our as who on hardware past over increased have We their portfolio. new

We performance Biologics our continue be to very portfolio. of pleased with the

has achieved biologic or scaffolds, excluding integrated and continue cell OsteoVive, nice addition allograft Putty to a to growth IDM favorable and flagship been the year-over-year support level. our XDemin portfolio. also Our market the delivery and DBM at see customer level network OsteoSponge, viable OsteoSelect the has fiber

a strategy, systems. agreements to renegotiated second conditions commitment market another of and create national Moving accounts agreement with We category. within again the healthcare we the agreements, and DBM increase In to positioning partners improved providers. sales the targets with plan and team for with were combination Maggie terms volume our recently years better of led and bring for an adopt Latin align our is a product global of Lisa the Biologics successfully aligning healthcare we Health announced we in strengthen in understanding In our needs our of we forward IDN with to Negotiating by a Budo share to distribution This quarter, awarded positioning. within preferred revised financial GPL in XX tri-source April, executed commitments Perez the agreement our space. those access we to better and position continue better relationships experience look over customer importantly, in contractual and From with with a International agreement and assess to markets. for channels. IDN for our our year, in large IDN will a portfolio to expansion needs America value next perspective, unique continue the Partners focus in

to look International key in to driving expansion opportunity that We’re X% of for while strengthen in mentioned an is executing and Company. the growth We’ve come. including the our sales be that market excited OUS and years year-over-year initiatives management focus forward expertise structure several in for focused We continues Xtant team, have would opportunities. the Korea, Africa strategic expanded markets, growth a to growth. foundation, Australia, an these strategic extension previously to XXXX serve providing South to South as their on achieved

to suggested combined to and to refined be by highly consolidating sales headcount distribution optimizing focused by partners This it unique distribution Belgrade, of the we with customers. duplication functions. adjusted able our our to need efficiencies the team. been partners, with the on where proactive campus we commitment formally spent time channels. is more first take we've and appropriate sales on on on in execution. standards point of model, First take rates year, executing for channel modifications. areas Through are specifically and in EBITDA to been focus improve. the with Kevin to excellence, a driven aligning efforts like Montana sales as to mostly service adjusting by consolidation provide implementing to industry time our entailed excel, operations almost business this that EBITDA. seriously, centralized our achieve listening This the regarding of eliminated performance. move our I’d optimize distribution was our positive deliberate distribution including commission operational cohesive, million for Brandt the distribution pertains Medical more of allowing I line focus quarter with improving to in our access. for I part This It and approach of as and to and where We’ve their meet to a ability of this contractual meeting Xtant welcome functions, perceptions operating $X to Company's we’re our adjusted as opportunity to of segments feedback half the us well this has working stakeholders personally

the as and for responsible for most Brandt strategies out organization be RTI Stryker, for large forward. distributorship brings sales, time team experience and Both our Executive Mr. in years July, joined look more Commercial Surgical, field, and know commercial He space, spine marketing as partners our built sales principle getting Stryker experience product as in serving additional announced Kevin orthopedic, As has and and responsible Officer having over moving customers. our distribution biologic of to the recently in for Commercial organizations the spending XX a brings Chief forward I will our for of strategies. valuable and U.S. to to IDN

forward. management the We’re results Kevin team deliver confident to us executive that moving will our addition of strong help

initiated intended guide high-performance quarter management results. management instituted to HPMS we transformational was the and have XXXX. organization in performance better system priority recently deliver of to Lastly, second a projects the high

commercial on asset goals, these operations function to forward corporate As and turn look over providing process. programs within we to We value. to a continued our efforts progress results. review shareholder optimization, deliver Laura focus of involve call of to the our financial revenue designed back cross this through as and now we are which would the to like implementation for sales updates organization execution utilization, in high-caliber, detailed of teams ensure I

Laura Kendall

Carl. to same XXXX $XX.X for ended total the three Consolidated of period you, June the months $XX.X Thank XXXX. compared million revenue million was XX, for

due relationships year-over-year for our contribution mentioned, through affecting sell products. focused the efforts XX.X% efficiencies as was of to reduction. cost the second benefits XXXX. distributor compared strong to channel competitive for margin from from of of move XX.X% As to This focused our Carl factors Gross and away the relationships higher and the was the our acceptable XXXX sales an second with of to restructuring quarter is quarter well as due fixation with margin, on decline organization profitable during improvement margins

of of net select the our XXXX including operations, strategy, of efficiency expenses. second to million high facilities lower positions restructuring of was our operations to $X.XX period or and to Second adjusted same $X.X sales compared of of commission streamline a million XXXX loss compared the expenses programs XX.X% $X and June XX.X% in reduction EBITDA to compared from from were ended was Non GAAP second million with loss non-recurring in stock-based prior loss share for The expenses same to year of operations of for period share non-cash depreciation, Company year. before compared EBITDA amortization, the a net a the moving cost and long-term revenue through as the XXXX. XXXX. of $XXX,XXX $X.X the growth compensation. as $X.XX $X.X defines adjusted million quarter to compared The quarter per improvement XX, the XXXX execution same loss itself for for channel from operating decline the arrangements, non-GAAP consolidation prior quarter loss loss for the approximately quarter occurred Company for per The of on

sales XXXX, of EBITDA our This within improved compared was to $X period our to the of XXXX. again commitment is a in half non-GAAP million in attributable to our same $X.X the adjusted well For organization. a improvement for million first as operational positive loss the excellence refinements as channels, strong

cash demand Company As in its Earlier $XX.X available we net and stockholders’ rate a of had $X.X $XX.X facility. have Xtant the months. lowering equivalents, Company, accrued of successfully completed accounts equity million through noted The credit to has of of in conversion Company returning sufficient all positive June million XX million inventory. during $XX capitalization debt and as by receivable under convertible the of XXXX, next million a liquidity The meet debt, the cash anticipated cash $X its to million approximately previously XX of also interest position. XXXX and

improved Company of restructuring Company. significantly to addition, private of a This placement completed the In the financial common has event the position stock. contributed

that the bring to the the pleased the into announce will This form are statement form leadership plan. S-X assist we the with that to our incentive Xtant and have organization for team. the recently Company to XXXX stockholders Lastly, work with approved we registration management strong equity executive filed SEC, X-K

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

Carl O'Connell

Thanks Laura.

of have first helped we XXXX, strengthen have several successfully balance our sheet. the executed half initiatives For that

on capitalizing operations Under Kevin the our efficient opportunities. will patients. customers our highly model, We establish increasing that margins platform and is and refine leadership continue and an we to sales for driven of quality Brandt, commercial

on on Lastly, we focus our providers initiatives. healthcare for questions Operator, XXXX this please will maintain and our call executing access contractual time. at the with open

Operator

at you. Maxim our gentlemen, Thank question Alexander and we [Operator and Scharf session state Please begin your Ladies will question-and-answer Instructions]. gentlemen, comes question. this Ladies with from our time, first Group.

Alexander Scharf

reducing give still this quantify initiative, us sense just the the then of process expected to a business forward? going you And if are in you where exit? Can of could Is more sales? you there of maybe unprofitable benefits

Carl O'Connell

like Laura, take to would this one. you

Laura Kendall

It’s effort. an ongoing

We every to healthcare Carl a healthcare Brandt have, distributor work providers. bringing directly and look to diligently relationship will we continue that Kevin provider with and new with on particularly prospective relationships distributor and board with at

evident it, in opportunity, and the but expenses saw in forward. have do improvement of sales our quantification we see tremendous related in in we numbers. gross expenses, reduction then year-to-date more So certainly primarily We going it’s margin that quarter been don't and second a

Alexander Scharf

on forward expenses $X.X any the you can restructuring to able just are in expectations are basis? covering? a bit exactly then little about those million. go share restructuring maybe talk you expense for have then And your quarter about And do What -- the a

Laura Kendall

there restructuring components The of are it. several expenses,

move plan stock. related Of recently it’s included our the the statements partners also the shelf stock S-X with course we the forward are filed costs equity the so and that trading in with can those management there shareholders or selling for that costs registration certain to in included restructuring transactions,

move down particularly you’ve Carl restructuring seeing have Aurora they we are starting over to Kevin their coming as as So expenses team board. as to the shape to transition and forward to we would responsibilities from management, expect to with his been is in the what on as starts that past continued decline

Alexander Scharf

correctly, paying much to benefited pretty Free my you’ve then at has the from three quarters, question. And you interest fact past a this last start cash been remember cash flow about to breakeven have take you But that I year. cash do the interest point. don’t and if in have in

for what you maybe cash able besides cash exiting you can improve interest can what unprofitable over year flow do So talk next in? the to those to to do the be you else businesses, the cover about can

Laura Kendall

several on more that The is line continuation an are and Clearly, efficiency There will growth and working things expense to has company strategic Carl that I from than directly perspective. on the operational along it the the of -- call Kevin. reductions, with reduction. top I

of more instruments investment to yield that efficiency, the inventory surgical and how on the term as address size is is areas We’re and additional to now can at of run in a its seek particularly the There to the the in management. we instruments. asset flow of out achieve appropriately company Belgrade management certainly cash significant part And operation. surgical those and how into to last additional level that efficiency

Carl O'Connell

I mean years of just is ago plenty of inventory. to Just to Laura two a consolidation since add as and there with half process and and really of lot described our color merger efficiencies opportunity the that. during improving the the

So see benefit the we but of still XXXX. that for continued savings, cost to there see we efficiencies forward, opportunities going will in continue

Operator

Thank time. are gentlemen, no for management further back remarks. it questions I'll and at to turn this Ladies closing there you.

Carl O'Connell

joining Thank you. employees have significant thank distribution dedication partners to and stockholders us and Medical their commitment of take also not organization support. this changes that conference if for thank possible opportunity day. call. not for I’d you to great the I’d Directors to would experiencing been within to for like today's Xtant Thank our for all loyalty. a our their for continued their like and Have Board

Operator

Thank disconnect. all you. you. This participants Have day. call, concludes today's conference can Thank a great

Xtant Medical (XTNT) 11 Aug 182018 Q2 Earnings call transcript