Xtent, Inc. (XTNT) Prelim. Q1 Rev. Misses Consensus

Xtant Medical Holdings, Inc. (NYSE: XTNT), a leader in the development of regenerative medicine products and medical devices, pre-announced that its first quarter 2016 revenue is expected to be in the range of $20.9 million to $21.1 million, which compares to pro forma combined revenue of $21.7 million for the first quarter of 2015.

(Street sees sees Q1 revenue of $22.14 million)

"As discussed during our fourth quarter 2015 call on March 16, 2016, revenue for the period reflects our strategic decision to transition away from OEM revenue to drive higher margin end user sales to hospitals," said Dan Goldberger, Chief Executive Officer of Xtant Medical Holdings. "This is reflected in the substantial decrease in 'Other and OEM' revenue in the table below. During our fourth quarter call, we also mentioned that record shipments in Q4 2015 led to shortages of certain replenishment inventory in January and February 2016. This backlog in turn affected our revenue momentum in January and February. However, I am pleased to announce that our inventory began to recover in March 2016 and our sales are continuing to improve through the second quarter of 2016. Despite single digit revenue growth in the first quarter, I am confident that we will return to mid-teens growth in our core, end-user revenue for the rest of the year."

As described in the above table, the Company anticipates core end user revenue, which excludes revenue from an OEM business partner, will be in the range of $20.4 million to $20.6 million representing 6.8% to 7.8% growth over the pro forma year ago period.

Management also reiterated its full-year 2016 revenue guidance of $94 million to $99 million and full-year 2016 EBITDA guidance of $4.3 million to $6.3 million. The Company had previously announced that its cash based debt service would be approximately $7.5mm during 2016.

However as previously announced, Orbimed Advisors has agreed to defer a portion of the cash interest due to Orbimed during 2016. Cash based debt service during 2016 will therefore be reduced to about $5.1mm.

The Company defines non-GAAP profitability as EBITDA less cash based interest expense. The reduction in cash based interest expense revises the Company’s guidance range for non-GAAP profitability of ($0.8)mm to $1.2mm.

Dan further commented, "We greatly appreciate Orbimed’s willingness to modify their position at this point in our growth cycle. We are currently working with an asset based lender on an accounts receivable revolver facility which will provide the necessary working capital for the Company to execute its strategy. The Company has also initiated a cost reduction program which will lower the revenue breakeven."

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