Xtant Medical Holdings, Inc. (AMEX:XTNT) Q1 2023 Earnings Call Transcript

So yeah, so all segments grew. DTH and ASC are still small, relatively speaking, but when we think about the driver for us. this quarter was, again, the independent agents and those expanding. Again, going back to our four pillars, the expansion of our distribution network, having more distributors out there selling your product helps especially in areas where we’re not today. And so that independent agent is a big part of the growth today.

Chase Knickerbocker: Yeah, then leading into how we’re thinking about the guide. With an additional $2 million or so of revenue into Q2 with a full quarter of Coflex contribution, that would indicate that your organic business comes down a bit sequentially with , which bucks you typical seasonality and with some additional supply in biologics, I guess how should I think about that? It seems like coming off 33% kind of organic growth quarter there and an improving environment that should continue to perform pretty well.

Sean Browne: Yeah, so as I would look at it in a couple of ways. And I know this is — as we come out with this really great quarter, I also want to caution on a couple of things. First of all, Coflex, overall, we’re — this is a business that we’re in the process of digesting, things like implementation. implementation has gone great. It’s almost complete a few dangling things within the regulatory and quality side. But still, this is a business that over the last four years has gone down. And so our job now is to revive it and then ultimately grow. So on the one hand, the contribution maybe at least from the Coflex side may not be as great. Secondarily, when we think about just the seasonality of things as well as, you know, I still fear about capacity constraints.

And so when I think about our broader number, the $73 million to $75 million, that’s still a 26% to 29% growth year over year. So those are some still — some pretty heady numbers for business. Quite frankly, it’s been low- to mid-digits over the last few years.

Chase Knickerbocker: For sure agree there. Yeah, then on Coflex, what do you need to do as a team to return that product to growth or make sure it’s stabilized this year to be positioned to maybe be a modest grower in ’24. I guess what steps do you need to take?

Sean Browne: Sure, you know, in fairness to the surge line folks, first of all, when they got that product line, you think about all the things that took place at RTI, right? They spun out the OEM business, spun out Surgalign, they even bought HOLO. There was a lot going around in that business. And quite frankly, Coflex just got lost. And so from our perspective, the first things first, which is already taking place is just giving it the focus. This is our primary product right now. So this is something that we’re really putting a lot of attention and putting focus into those areas that make more sense, which is in the reimbursement pipe, quite frankly, And reimbursement over that time has actually got really pretty good in the outpatient seaside of thing.