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Product / Company Performance

Xtant Reports 3Q18 Revenue of $17.3MM, -12.7% vs. 3Q17 -


Xtant Medical reported 3Q18 revenue of $17.3MM, -12.7% vs. 3Q17. While leadership was encouraged by profitability improvements from facility consolidations, sales results remain below expectations. Revenue has fallen mostly due to a company-initiated termination of distributor agreements, as well as challenges in sales channel management.

To address performance issues, Xtant named three new members to its executive team in the third quarter. Michael Mainelli was named interim CEO, replacing Carl O’Connell, and the company hired Kevin Brandt in July as Chief Commercial Officer and Kathie Lenzen in August as Chief Financial Officer. Mainelli said the company is working on plans that are expected to improve sales through new product development, marketing programs, and more effective channel management but did not give specifics on any of those initiatives.

While the spine segment has declined significantly, leadership reaffirmed their commitment to spinal fixation products as important to the future of the company. ORTHOWORLD projects 2018 Xtant revenue of $70.7MM, -14.3% vs. 2017.

ORTHOWORLD estimates 3Q18 and YTD segment sales and growth on an as-reported basis as follows.

  3Q18 3Q17 $ Change % Change
Spine $5.9 $7.1 -$1.3 -17.6%
Orthobiologics $11.4 $12.7 -$1.3 -10.0%
Total  $17.3 $19.8 -$2.5 -12.7%


  YTD18 YTD17 $ Change % Change
Spine $19.1 $28.1 -$9.0 -32.1%
Orthobiologics $34.9 $35.2 -$0.3 -0.9%
Total  $53.9 $63.3 -$9.3 -14.8%


ORTHOWORLD estimates 3Q18 revenue by geographic region as follows.

Geographic Region 3Q18 3Q17 $ Change % Change
US $16.40 $19.20 -$2.8 -14.5%
Ex-US $0.9 $0.6 $0.3 45.4%
Total  $17.3 $19.8 -$2.5 -12.7%


Net earnings for 3Q18 are as follows.

3Q18 Amount ($MM) % of Sales
Sales $17.3  
   Cost of Sales -$5.7 33.3%
   Sales and Marketing -$7.8 45.4%
   Administrative -$2.5 14.5%
   R&D -$0.3 2.0%
   Other -$4.0 23.0%
Net Earnings  -$3.2 -18.3%


Sources: Xtant; ORTHOWORLD estimates. All revenue figures presented in USD $MM.

Mike Evers is ORTHOWORLD’s Market Analyst. He can be reached by email.

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