Q3 2025 Xtant Medical Holdings Inc Earnings Call

Participants are in a listen only mode and the floor will be opened for questions. Following the presentation. If anyone should require operator assistance. During this conference. Please press star zero on your phone keypad. Please note. This conference is being recorded I will now turn the conference over to your host Kevin.

Gartner of Lifesize advisors, Kevin the floor is yours.

Thank you operator, and welcome to <unk> Medical's third quarter 2025 financial results call.

Speaker #1: Good

Speaker #1: Good morning, everyone, and welcome to the Xtant Medical third quarter 2025 financial results. At this time, all participants are in a listen-only mode, and the floor will be open for questions following the presentation.

Joining me today are Sean Brown, President and Chief Executive Officer, and Scott <unk>, Chief Financial Officer, today's call is being webcast and will be posted on the company's website for playback. During the course of this call management may make certain forward looking statements regarding future events and the Companys expected future.

Speaker #1: If anyone should require operator assistance during this conference, please press *0 on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Kevin Gardner of LifeSci Advisors.

Sean Browne: As a matter of fact, if you look at the Trivium product, it had one of its best months yet just recently. We're really, really excited about where that's going to take us.

Performance. These forward looking statements reflect <unk> current perspective on existing trends and information and can be identified by such words as expect plan will may anticipate believe should intend and other words with similar meaning.

Speaker #1: Kevin, the floor is yours.

Chase Knuckey: Just maybe on the kind of legacy DBM side, was it mainly kind of white label or direct channel that?

Speaker #2: Thank you, Operator, and welcome to Xtant Medical's third quarter 2025 financial results call. Joining me today are Sean Browne, President and Chief Executive Officer, and Scott Neils, Chief Financial Officer.

Sean Browne: Definitely more direct channel. Yeah, definitely more direct channel. As I mentioned, when we pulled those resources out of the field, or at least eliminated them and really kind of reshuffling them now, it hurt us, I'm not going to lie. It's something that we knew what we were going into. Those were, again, probably sub-optimized assets when we did it. That's part of the reason why we pulled it out and said, profitability is the most important thing we're going to do right now. We feel we can hold serve for most of what we have for our business, and with a growing orthobiologics portfolio. We really feel like, okay, we might come across some rocky waters, which we have. Now, over the course of really this summer, we started adding back those resources in more strategically important areas.

Forward looking statements are not guarantees of future performance and involve risks and uncertainties, including those noted in the risk factors section of the company's annual report on Form 10-K filed with the SEC and in subsequent SEC reports and press releases.

Speaker #2: Today's call is being webcast and will be posted on the company's website for playback. During the course of this call, management may make certain forward-looking statements regarding future events and the company's expected future performance.

Actual results may differ materially.

Speaker #2: These forward-looking statements reflect Xtant's current perspective on existing trends and information and can be identified by such words as "expect," "plan," "will," "may," "anticipate," "believe," "should," "intends," and other words with similar meaning.

The company's financial results press release, and today's discussion include certain non-GAAP financial measures. Please refer to the non-GAAP to GAAP reconciliations, which appear in our press release and are otherwise available on our website.

Note that the form 8-K that we filed with our financial results press releases provide detailed narratives that describes our use of such measures.

Speaker #2: guarantees of future performance and Such forward-looking statements are not involve risks and uncertainties, including those noted in the risk factor section of the company's annual report on the Form 10-K filed with the SEC and in subsequent SEC reports and press releases.

Sean Browne: As I mentioned, we're going to continue to add more in 2026.

For the benefit of those who may be listening to a replay. This call was held and recorded on November 11th at approximately 830, a M. Eastern time, the company declines any obligation to update its forward looking statements, except as required by applicable law now I'd like to turn the call over to Sean Browne CEO.

Chase Knuckey: Got it. Maybe just on the amnio side, the changes that were announced in the final PFS, any thoughts as far as how it impacts your business as we take an eye into 2026? Just last one for me, Sean, as I think about Collagen X, probably a bigger market for similar products than people realize. Just kind of speak to your plans for that, even outside of spine, as far as how do you plan to distribute that product into what is a fairly large market for those particulates.

Speaker #2: Actual results may differ materially. The company's financial results press release and today's discussion include certain non-GAAP financial measures. Please refer to the non-GAAP to GAAP reconciliations which appear in our press release and are otherwise available on our website.

Sean.

Thank you, Kevin and good morning, and happy Veterans day to all those who have served or are serving.

Speaker #2: Note that the Form 8-Ks that we file with our financial results press releases provide detailed narratives that describe our use of such measures. For the benefit of those who may be listening to a replay, this call was held and recorded on November 11th at approximately 8:30 AM Eastern Time.

One quick note since today is at that stage.

She is closed although as you know the market is open and so we released our 10-Q last night.

Sean Browne: Yeah. Let's start with amnio. We manufacture amnio. Most of the people who sell the amnio care products today are not manufacturers. As a matter of fact, they need a fairly high price in order to be able to make real money. We, on the other side, are on the very low end of the value creation. When you think about what it costs for us to make something, it's quite low. When the price went to $127 per square centimeter, it's actually a very good price for us as somebody who can actually serve the wound care, or I should say, the acute care market.

With that behind us. Thank you for joining our third quarter update call as has been our practice I will begin with a few prepared remarks about our operations and then Scott will provide a deeper dive into the financials. We will then open the call to your questions.

Speaker #2: The company declines any obligation to update its forward-looking statements except as required by applicable law. Now, I'd like to turn the call over to Sean Browne, CEO.

Again turned in solid financial performance during the third quarter highlighted by 19% revenue growth over the third quarter of 2024, we again generated positive cash flow adjusted EBITDA and net income and a continuation of the favorable trends that we've seen over the past few quarters.

Speaker #2: Sean?

Speaker #3: Thank you,

Speaker #3: Kevin, and good morning and happy Veterans Day, to all those who have served or are serving one quick note. Since today is Vet's Day, the SEC is closed, although, as you know, the market is open.

Before covering the quarter in detail, however, I would like to begin the morning with an update on the pending sale of our noncore co flex and Colfax, interline or stabilization implant assets and all international entities of paradigm spine two companion spine.

Speaker #3: And so we released our 10-Q last night. So with that behind us, thank you for joining our third quarter update call. As has been our practice, I will begin with a few prepared remarks about our operations, and then Scott will provide a deeper dive into the financials.

Sean Browne: If you recall, and if you see what's happened in that world, this reimbursement opened the door for real movement from the out-of-hospital, or the acute care, or the non-acute world into the acute, or at least the outpatient clinics tied to the hospitals. We feel that we can do really well with the hospital contracts we have. There are many distributors out there today who don't have the kind of hospital contracting we do, and they need it. We think that there's an opportunity there. We'll see what happens. I mean, this is something that we're just getting our arms around right now, speaking to various people, making sure our contracting is tight. We, again, have a very, very robust contract portfolio, and it is something we're trying to leverage as we speak. That's the amnio side.

Proceeds of the transaction when completed are anticipated to be $19 2 million in total we intend to use the proceeds to reduce our long term debt and to provide additional cash liquidity importantly, as a result of this transaction and the cash flow. We are generating from operations, we do not expect to require additional.

Speaker #3: We'll then open the call to your questions. We again turned in solid financial performance during the third quarter, highlighted by 19% revenue growth over the third quarter of 2024.

Speaker #3: We again generated positive cash flow, adjusted EBITDA, and net income. And a continuation of the favorable trends that we've seen over the past few quarters.

External capital to fund our operations from this point forward. This.

Speaker #3: Before covering the quarter in detail, however, I would like to begin the morning with an update on the pending sale of our non-core Coflex and Cofix interlaminar stabilization implant assets, and all international entities of paradigm spine to companion spine.

This transaction will be truly transformational one for our company as it will further enhance our focus on our core biologics business, while strengthening our financial position in terms of timing, we anticipate will close by the end of the year is worth mentioning that the Viscogliosi brothers have already paid us approximately $7 5 million, including a $2 5 million payment.

Speaker #3: The proceeds of the transaction when completed are anticipated to be $19.2 million in total. We intend to use the proceeds to reduce our long-term debt and to provide additional cash liquidity.

Sean Browne: Secondarily, when you think about the collagen-based products, one of the things that we acquired through the Surgiline acquisition was a product called Nanos. The basis of Nanos was an even more interesting product called E-Matrix. That E-Matrix was a collagen-based product that had extraordinary clinical data behind it. Actually, as the product was originally created, it was created as a wound care product. As a matter of fact, it was going through its own PMA, and the company essentially was running out of money and said, okay, let's create something that we can start generating money from. They created Nanos, which was taking E-Matrix and then putting in hydroxyapatite with it. It became a product that was ultimately purchased by one of the predecessor companies of Surgiline. We acquired E-Matrix, which in itself is its own collagen-based product.

Just last week.

Towards the total consideration of this deal. So they are as committed as we are to ensuring its completion.

Speaker #3: Importantly, as a result of this transaction and the cash flow we are generating from operations, we do not expect to require additional external capital to fund our operations from this point forward.

As a reminder, the business included in this sale generated annual revenue to <unk> of approximately $23 $5 million.

As previously mentioned these products were modestly unprofitable on a standalone basis. So the effect of the sale on our margins and bottom line metrics is anticipated to be neutral to slightly positive in 2026 and beyond.

Speaker #3: This transaction will be truly transformational, one for our company as it will further enhance our focus on our core biologics business while strengthening our financial position.

Speaker #3: In terms of timing, we anticipate we'll close by the end of the year. It is worth mentioning that the scoliosis brothers have already paid us approximately $7.5 million including a $2.5 million payment just last week.

In the meantime until this transaction closes we continue to support those products in the field and we will benefit from the associated hardware revenue for an additional few months.

Now turning now to our third quarter I'm pleased to report that we delivered strong financial and operating results Scott will cover the financials in details in a moment, but I'd like to begin by touching on a few highlights first our total revenue for the quarter was $33 3 million, which represents a growth of more than 90% versus the third quarter of 2024, notably our third quarter.

Speaker #3: Toward the total consideration of this deal, theirs committed as we are to ensuring its completion. As a reminder, the business included in the sale generates annual revenue to Xtant of approximately $23.5 million.

Sean Browne: We see that as a really terrific platform for us moving forward because there's a number of other areas we think that we can touch with it. There's more to follow on that, but it's a platform technology that we're really, really excited about. We've got some FDA work that we need to do, but we're really pretty pumped about where that's leading. Hopefully, that answered your question there, Chase.

Speaker #3: As previously mentioned, these products were modestly unprofitable on a standalone basis. So the effect of the sale on our margins and bottom line metrics is anticipated to be neutral to slightly positive in 2026 and beyond.

2025 revenue includes $5 5 million of licensing revenue pursuant to the license agreement for Q codes and the simply Max dual layer amniotic membrane that we amount announced in the third quarter of last year as we indicated in Q1 CMS has extended the local coverage determination for skin substitutes.

Speaker #3: In the meantime, until this transaction closes, we continue to support those products in the field, and we will benefit from the associated hardware revenue for an additional few months.

Chase Knuckey: Yeah, thanks, Sean. Appreciate the questions, guys.

Speaker #3: So now turning now to our third quarter, I'm pleased to report that we delivered strong financial and operating results. Scott will cover the financials in detail in a moment, but I'd like to begin by touching on a few highlights.

December 31 2025.

Operator: Thank you very much. Well, we appear to have reached the end of our question and answer session. Therefore, we have reached the end of the conference. Thank you very much. This does conclude today's conference, and you may disconnect your phone lines at this time. We thank you for your participation.

Our biologics product family, which is our core business grew 4% over the third quarter of last year. This was below our long term expectation for growth in the biologics product family. However, it's important to take a step back and recall that our focus over the past several quarters has been on prioritizing self sustainability, particularly positive cash flows.

Speaker #3: First, our total revenue for the quarter was $33.3 million, which represents a growth of more than 19% versus the third quarter of 2024. Notably, our third quarter of 2025 revenue includes $5.5 million of licensing revenue pursuant to the license agreement for Q codes and the Simply Maxx dual-layer amniotic membrane that we announced in the third quarter of last year.

As part of our long term growth strategy. This strategy as a broader part of our long term growth strategy. The strategic initiatives that we have implemented our sharpened focus on higher margin biologics our emphasis on in house manufacturing to improve quality and control our costs and our more disciplined approach to operating expenses we are all.

Speaker #3: As we indicated in Q1, CMS has extended the local coverage termination for skin substitutes to December 31, 2025. Our biologics product family, which is our core business, grew 4% over the third quarter of last year.

Leonard with self sustainability in mind with those goals now achieved we are turning our focus back to driving top line growth in ortho biologics business, we continue to invest in R&D to bring innovation to surgeons and their patients at the same time, we have started making investments in our commercial team to maximize the reach of our broad portfolio.

Speaker #3: This was below our long-term expectation for growth in the biologics product family. However, it is important to take a step back and recall that our focus over the past several quarters has been on prioritizing self-sustainability, particularly positive cash flows.

Speaker #3: As part of our long-term growth strategy, as a broader part of our long-term growth strategy, the strategic initiatives that we have implemented are sharpened focus on higher margin biologics, our emphasis on in-house manufacturing to improve quality and control costs, and our more disciplined approach to operating expenses were all implemented with self-sustainability in mind.

Oh of ortho.

Biologic solutions.

From a new product launch perspective, since our last quarterly update we also continued to innovate to bring new ortho biologic solutions to surgeons and their patients or earlier. This month, we announced the commercial launch of collagen acts our bovine collagen particular product for surgery surgical wound closure.

Speaker #3: With those goals now achieved, we are turning our focus back to driving top-line growth in our orthobiologics business. We continue to invest in R&D to bring innovation to surgeons and their patients.

It's designed to promote healing prevent evictions and help mitigate concerns related to surgical site infections College.

<unk> complements our existing ortho biologics product line as it represents a potential addition to every case types at our portfolio currently addresses as well as procedures performed in other surgical discipline. This is the latest example of our commitment to innovation as we work to meet the diverse needs of our surgeons and patients as a reminder.

Speaker #3: At the same time, we have started making investments in our commercial team to maximize the reach of our broad portfolio of orthobiologics solutions. From a new product launch perspective, since our last quarterly update, we continue to innovate to bring new orthobiologics solutions to surgeons and their patients.

We now offer and internally produced solutions across all five major ortho biologic categories Demineralized bone matrix cellular allografts synthetics structural allografts and now grow factors.

Speaker #3: Earlier this month, we announced the commercial launch of Collagen X, our bovine collagen particulate product for surgical wound closure that is designed to promote healing, prevent dehiscence, and help mitigate concerns related to surgical site infections.

Additionally, with our immuno oncology product lines, we are well positioned to grow in the surgical repair and wound care markets. This positions us as the partner of choice in the field of regenerative medicine. Our position has been further solidified by the very positive feedback that we've received from surgeons on these recent innovations.

Speaker #3: Collagen X complements our existing orthobiologics product line as it represents a potential addition to every case type that our portfolio currently addresses as well as procedures performed in other surgical disciplines.

Speaker #3: This is the latest example of our commitment to innovation as we work to meet the diverse needs of our surgeons and patients. As a reminder, we now offer and internally produce solutions across all five major orthobiologics categories: demineralized bone matrix, cellular allograft, synthetics, structural allografts, and now growth factors.

Now turning to 2025 revenue guidance recall that last quarter, reflecting the heightened levels of licensing revenue in there. Please previously noted cuco amniotic membrane and agreements that we are experiencing we increased our full year 2025 revenue guidance to a range of $1 $31 million to $135 million, which represents growth of approximately 11% to 50.

Speaker #3: Additionally, with our amino and collagen product lines, we are well positioned to grow in the surgical repair and wound care markets. This positions us as the partner of choice in the field of regenerative medicine, a position that has been further solidified by the very positive feedback that we have received from surgeons on these recent innovations.

Percent over 2020 for revenue with the sale of our noncore co flex and co fixed spinal implant assets and O U S business to companion spine now anticipated to close closer to the end of the year. We are reiterating our 2025 revenue guidance at this time, we anticipate providing initial <unk>.

Speaker #3: Now, turning to 2025 revenue guidance, recall that last quarter reflecting the heightened levels of licensing revenue from the previously noted Q code and amniotic membrane agreements, that we are experiencing, we increased our full year 2025 revenue guidance to a range of $131 to $135 million, which represents growth of approximately 11 to 15% over 2024 revenue.

26 revenue guidance concurrent with our Q4 results in March of next year with that I will turn the call over to Scott for a more detailed review of our financial results.

Thank you, Sean and good morning, everyone.

Total revenue for the third quarter of 2025 was $33 $3 million compared to $27 9 million for the same period in 2024.

Speaker #3: With the sale of our non-core Coflex and Cofix spinal implant assets in OUS business to companion spine, now anticipated to close closer to the end of the year, we are reiterating our 2025 revenue guidance at this time.

The 19% increase is attributed primarily to $5 $5 million of licensing revenue during the third quarter of 2025 that Sean alluded to earlier as well as $576000 of additional biologics revenue, partially offset by a 6% or $736000 year over year decline in hardware product.

Speaker #3: We anticipate providing initial 2026 revenue guidance concurrent with our Q4 results in March of next year. With that, I will turn the call over to Scott for a more detailed review of our financial

Revenue.

Gross margin for the third quarter of 2025 was 66, 1% compared to 58, 4% for the same period in 2024. The increase is primarily attributable to favorable sales mix and greater scale.

Speaker #3: results. Thank

Speaker #2: you, Sean. And good morning, everyone. Total revenue for the third quarter of 2025 was $33.3 million. Compared to 27.9 million dollars for the same period in 2024.

Third quarter 2025, operating expenses were $19 5 million compared to $21 million in the same period, a year ago. The reduction in operating expenses, primarily attributable to reduced compensation and commission expenses, which were partially offset by an increase in professional fees related to sales and marketing in general.

Speaker #2: The 19% increase is attributed primarily to $5.5 million of licensing revenue during the third quarter of 2025 that Sean alluded to earlier, as well as $576,000 in additional biologics revenue. This increase was partially offset by a 6% or $736,000 year-over-year decline in hardware product revenue.

Administrative expenses were $7 1 million for the three months ended September 30 of 2025 compared to $7 $5 million for the same period in 2024. The decrease is primarily attributable to half a million dollars reduced stock based compensation expense and half a million dollars of reduced retention and severance expense.

Partially offset by a $5 million increase in bonus expense.

Marketing expenses were $11 $7 million for the three months ended September 32025, compared to $11 $9 million for the same quarter last year. The decrease is primarily due to a reduced commission expense of $7 million, resulting from revenue mix, partially offset by $1 million of additional.

Consulting fees during the current year period.

Research and development expenses were $634000 for the three months ended September 32025, a decrease from $701000 in the quarter of 2024.

Net income in the third quarter of 2025, with $1 $3 million or <unk> <unk> per share on a fully diluted basis compared to a net loss of $5 million or per.

Per share in the comparable 2024 period.

Yeah.

Adjusted EBITDA for the third quarter of 2025 was $4 $5 million compared to an adjusted EBITDA loss of approximately $1 million for the same period in 2004 as a reminder, beginning in the fourth quarter of 2024, we no longer include the exclusion of the phasing of the bargain purchase gain on our sell through.

Inventory acquired as part of our purchase of <unk> holdings hardware and biologics business and our calculation of adjusted EBITDA. Prior periods have been recast to conform to the current calculation and the related effect on adjusted EBITDA was a reduction of $773000 in the third quarter of 2024 to arrive at the recast amount.

As of September 32025, we had $10 $6 million of cash cash equivalents and restricted cash.

Net accounts receivable was $25 $6 million inventory was $47 million and we had $5 $7 million available under our revolving credit facilities as of the end of the quarter. As a reminder, our cash balance as of the end of the third quarter does not take into account the anticipated remaining proceeds from the pending sale of certain assets to companion.

Spine that we anticipate closing by year end that Sean discussed earlier.

Operator, you May now open the line for questions.

Thank you very much we are now opening the floor for questions.

Would like to ask a question. Please press star one on your phone keypad now confirmation tone will indicate that your line is Nicky you may have.

Net accounts receivable was $25 $6 million inventory was $40 $7 million, and we had $5 $7 million available under our revolving credit facilities as at the end of the quarter as a reminder, our cash balance as of the end of the third quarter does not take into account the anticipated remaining proceeds from the pending sale of certain assets to companion.

Start to if you would like to remove your question from Nicky So anyone using speaker equipment, it might be necessary to pick up your handset before pressing Keith please wait a moment whilst please poll for questions. Thank you.

Thank you very much. Our first question is coming from Ryan Zimmerman of <unk> Ryan Your line is live.

Spine that we anticipate closing by year end that Sean discussed earlier.

Operator, you May now open the line for questions.

Thank you and good.

Thank you very much we are now opening the floor for questions.

Good morning, everyone.

Hi.

So I appreciate it.

Commentary and everything.

If you would like to ask a question. Please press star one on your phone keypad now.

I wanted to start.

Sean you talked about making some investments in the commercial organization and be good just to.

Time will indicate that Youll Linus Nicki.

Press Star two if you would like to remove your question from Nicky.

Do you want to get more feet on the street I mean is this refilling the pipeline maybe talk to us a little about kind of a little more color on kind of what that means.

One using speaker equipment, it might be necessary to pick up your handset before pressing the keys. Please wait amendment, whilst the poll for questions. Thank you.

And then my second question I'll, just ask upfront.

Thank you very much. Our first question is coming from Ryan Zimmerman of B T. I G. Ryan Your line is live.

There's a lot of moving parts as we go into next year, I know youre not guiding to 2006, but maybe.

Maybe any early thoughts broad strokes around kind of.

Thank you and good morning, everyone.

Where you think the ortho biologics business can grow when we strip out some of the other piece of that.

So appreciate the commentary and everything maybe I wanted to start a sean either he talked about making some investments in the commercial organization, who would be good.

<unk> thanks for taking the question.

Sure I'll give us I'll start off with the profitability question well a profitability question a sales question Scott the profitability. So last year really in the second half of the year, we started making decisions on how do we conserve cash because we knew that we were going to have.

Just to you know knows.

You want to get more feet on the street I mean is this a refilling the pipeline.

For us a little about kind of a little more color on kind of what that means and then my second question I'll just ask upfront. There's you know there's a lot of moving parts as we go into next year I know, you're not guiding that 26, but maybe any early thoughts you know broad strokes around kind of you know that where you think the ortho.

A lot of revenue coming in from the Q codes, we knew that we were going to have actually a very good year just operationally.

In the fourth quarter of last year, we dramatically cut back the business overall, you can see in our Opex expense with the idea of being profitable as part of that we reduced.

It's business can grow you know when we strip out some of the other pieces that you know may be influx. Thanks for taking the question.

A fair number of our commercial <unk>.

Not necessarily overly highly performing assets and so over the course of the last really quarter. We've now been replacing a lot of those spots in areas that make more sense.

Sure I'll give us I'll start off with the profitability question well that's really a question of sales question Scott the profitability. So last year, it's really the second half of the year, we started making decisions on how do we conserve cash because we knew that we were going to have.

And so just to give you the scale to which we're doing so we have roughly four reps that were selling the <unk> branded products today, we've upped that and we will by the end of the year will be at eight so we'll double that and then again in 2026, we expect to add probably four more. So so this is a fixable problem problem, but are fixable.

A lot of revenue coming in from the Q codes, we knew that we were gonna have actually a very good year just operationally.

So in the fourth quarter of last year, we dramatically cut back the business overall, you can see at our Opex expense with the idea of being profitable as part of that we reduced.

Opportunity for us and so I feel really good about where we're going and even what I'm seeing from from just having those new assets out in the field already so so it is something that was.

You know a fair number of our commercial.

Not necessarily overly highly performing assets and so over the course of the last really quarter. We've now been replacing a lot of those spots in areas that make more sense.

Somewhat predicted are predictable when we made those decisions.

Last year in the beginning of this year.

To give you some guidance with respect to 20 <unk> as you mentioned.

And so just to give you the scale to which we're doing so we had roughly four reps that were selling the <unk> branded products today, we've upset and will by the end of the year will be at eight so we'll double that and then again in 2026, we expect to add probably four more. So so this is a fixable problem our problem, but it fixed up a lot.

We are not going to be giving full guidance until really the year complete because there's a lot going on a lot of good things and so so if I were to give you. Some general guidance, we do expect still to be in the low double digits with respect to our overall ortho biologics growth and then as for the hardware we are still working through some things right.

Fortuity for us and so I feel really good about where we're going and even you know what I'm seeing from from just having those new assets out in the field already so so it is something that was.

But I would still say that.

Really that's that's what we can expect to see in 2026.

That's very helpful and even just the broad strokes I didn't give us.

Somewhat predicted are predictable when we made those decisions last year and in the beginning of this year to.

And what you can do.

And then <unk>.

<unk> is coming up.

To give you some guidance with respect to trying to X X as you mentioned.

What next week or this week.

We are not going to be giving full guidance until really the year complete because there's a lot going on a lot of good things and so so if I were to give you. Some general guidance, we do expect still to be in the low double digits with respect to our overall ortho biologics grows and as for the hardware, we're still working through some things right.

That's right.

Yes, that's right.

Anything you want to highlight.

For people for NASS.

Or anything.

You would say is worth checking out at the booth.

Yes, yes, thanks for asking actually the setup.

Yes.

First of all our growth factor product brand new its outstanding we're replacing another growth factor, probably youre selling previously that someone else is making for US. This is our own. This is our own product we feel really good about it we've done a great job of keeping the business that we once had and we're now starting to grow. So that's absolutely something people should check out second of all we've now Korea.

But I would still say that that.

Really that's our that's what we can expect to see about a 26 no. That's very helpful. And you know even just the broad strokes I didn't give us a sense of what you can do.

And then you know look NASA is coming up what next week or this week I should say.

<unk> added a new advanced DBM called Trivium, which is really a terrific product that we would encourage our surgeons and distributors to look at not only is the.

Right.

Yeah, that's right. So anything you want to highlight for.

Are people you know for NASS.

Or anything that.

You'd say is worth checking out of it.

The growth factor.

Yeah, Thanks for asking actually the setup of [laughter], Yes, three things first of all our growth factor product brand new its outstanding we're replacing another growth factor product that we were selling previously that someone else is making for us. This is our own. This is our own product because we're really good about it we've done a great job of keeping the business that we once had ever now.

And just basically the.

The overall characterization of the product outstanding but to handling is even better and then the third thing is what we just rolled rolled out this collagen X product, which literally can be used in almost every procedure and even procedures outside spine. So so those would be three big things that we feel really really good about and just the fact that the entire portfolio of our product lines are now thing.

It is starting to grow so that's absolutely something people should check out second of all we've now created a new advanced D. B M called Trivium, which is really a terrific product that that we would encourage our surgeons and distributors to look at not only is the the.

That we make we have a hand in where you control the supply chain, but also just in general.

We just think we can make really great products.

So please stop by and.

We'd love to give you a rundown of our really exciting portfolio.

Thanks, Sean.

The growth factor call it and just basically the overall characterization of the product outstanding but the handling is even better and then the third thing is what we just roll rollout. This college at X product, which literally can be used in almost every procedure and even procedures outside in spine. So so those would be three big things that we feel really.

Thank you Ryan.

Thank you very much.

Question is coming from Chase Knickerbocker of Craig Hallum Chase Your line is life.

Hey, good morning, Thanks for taking the questions Sean maybe just to start if you could just help me kind of dive a little bit deeper into that 3% year over year growth in ortho biologics just far as.

Good about and just the fact that the entire portfolio of our product lines are now things that we make we ever had in where you control the supply chain, but also just in general.

What what supported growth in the quarter on a year over year basis whats attracted from it.

We just think we can make really great products. So so so please stop by and.

Kind of product specific kind of basis, if we can refine that for a second sure absolutely. So the actually was 4% growth year over year.

We'd love to give you a rundown of our really exciting portfolio.

Thanks, Sean.

Thank you.

Which we had for our.

Thank you very much. Our next question is coming from Chase Knickerbocker of Craig Hallum Chase Your line is life.

And again with the areas that we're still continuing to grow very nicely.

Continued bear stem cell business.

Again, the growth businesses basically we were holding serve in that which is good because again, we released a brand new product line. The amnio product line continues to be a nice product line product growth area for us.

Hey, good morning, Thanks for taking the questions Sean maybe just to start if you could just help me kind of dive a little bit deeper into that 3% year over year growth in ortho biologics. It just as far as you know what what are supported growth in the quarter on a year over year basis, what detracted from it on a kind of.

And we realize there's going to be some changes with respect to the wound care world.

But some of and a good chunk of some of the growth that we've also seen isn't a surgical side, which shouldn't change.

Product specific kind of basis, if we can refine that for a second sure absolutely. So the actually was 4% growth year over here, which we had for our and again with the areas that we're still continuing to grow very nicely.

And so those would be a couple of the areas that I would say that really helped what hurt us. This past quarter was maybe some of our old line demineralized bone products and Thats why the addition of things like fiber acts and trivium these higher and much much better.

Continue be our stem cell business or again the growth factor business is basically we were holding serve in that which is good because again, we released a brand new product line. The amnio product line continues to be a nice product line product growth area for us and we realize there's going to be some changes with respect to the wound care world.

Much higher.

Not only from a handling perspective, but from a production perspective and from again a growth factor characterization side of things.

Outstanding products, and so we really hope and we really see that those things will be helping offset maybe some of the slide that's been taking place from those old very still very good product lines, but you realize that.

But some of and a good chunk of some of the growth that we've also seen isn't a surgical side, which shouldn't change.

And so those would be a couple of the areas that I would say that really helped what hurt us this past quarter, whereas maybe some of our old line.

Osteo select.

<unk> sponge and three and then I think as just like started US those funds start in 2008 <unk> started in 2010, and I think three of them and it was 2013 2013. So these are some of the product set that we're now finding upgrades to that.

Realized oil and products and that's why the addition of things like fiber acts and Trevy These higher and much much better much.

Much higher.

L. A for our handling perspective, but from a production perspective and from again a growth factor characterization side of things. It is just outstanding products and so we really hope or we really see that those things will be helping us.

We just believe that we've really knocked it out of the park with with some of the new things and Theyre, just starting to get traction those new products.

And so matter of fact for our.

If you look at the trivium product.

That maybe some of the slide that's been taking place from those old very still very good product lines, but you realize that.

It had one of its best months, yes.

Just recently, so we're really really excited about where that's going to take us.

Osteo select Osteo sponge and Freedom, then I think I was just like started Oh no I was just fine started in like 2008, Osteo Salt life, starting in 2010, and I think three of them. It was 2013 2013. So these are some of the product set that we're now finding upgrades to.

And then just maybe on the on the.

Kind of legacy DBM side.

Was it mainly kind of white label or direct channel.

Definitely more direct channel, yes, definitely more direct channel. So as I mentioned, when we pulled those resources out of the field or at least eliminate them and really kind of reshuffling them now.

We just believe that we've really knocked it out of the park with with some of the new things and they're just starting to get traction those new products.

It hurt us I'm not going to lie it's something that debt, but we knew what we were going into those those were again, probably sub up to optimize assets. When we did it and that's part of the reason why we pulled it out et cetera profitability. The most important thing we can do right now we feel we can hold serve for most of what we have for our business and with a growing ortho biologic.

And so matter of fact for our if you look at the Trivium product you know it had one of its best months, Yes. Just recently so so we're really really excited about where that's going to take us.

Portfolio, we really feel like okay, we might come across some rocky waters, which we have and so now over the course of really the summer we started adding back those resources in more strategically.

And then just maybe on the on the kind of legacy D. V. M said was it mainly kind of white label or direct channel that Oh.

Definitely more direct channel yeah, definitely more dry shallow so as I mentioned, when we pulled those resources out of the field or at least eliminate them and really kind of reshuffling them now it hurt us and that got a lot of it's it's something that debt, but we knew what we were going into those those were again, probably sub up to optimize our assets.

Important to areas and then as I mentioned, we're going to continue to add more in 2026.

Got it.

And then.

Maybe.

Just on the.

On the annual side.

We did it and that's part of the reason why we pulled it out and said right profitability is most important thing we're going to do right now we feel we could hold serve for most of what we have for our business and with a growing our ortho biologics portfolio, we really feel like okay, we might come across some rocky waters, which we have and so now over the course of really the summer we started adding.

The changes that were announced and are in the final PFS.

Maybe just any thoughts as far as how it affects your business has really taken I enter 2026, and then just last one from me Sean as I think about call. It <unk>, probably a bigger market for similar products than then.

And then people realize just kind of speak to your plans for that even outside of spine as far as how do you plan to distribute that product into what is.

Back those resources and more strategically.

Fairly large market for those particular <unk>.

Important to areas and then as I mentioned, we're going to continue to add more in 2026.

Yes, yes.

So let's start with and so were we.

We manufacture most of the people who sell.

Got it and then maybe.

Andy aware products today are not manufacturers a matter of fact, they need a fairly high price.

On the AR on the email side you know the changes that were announced and are in the final PFS.

In order to be able to make real money.

Maybe just any thoughts as far as how it impacts your business has really taken out into 2020 six and then just last one from me Sean as I think about call. It an ex probably a bigger market for similar products than than people realize just kind of speak to your plans for that even outside of spine as far as how do you plan to distribute that product into what is a fair.

On the other side are the very low end of the value creation. So when you think about what it cost for us to make something it's quite low.

So when the price went to $127 per square centimeter.

It's a very good et cetera, it's actually a very good price for us as somebody who can actually serve the wound care or I should say the acute care market. If you recall and if you see what's happened in that in that world.

Large market for those particular.

Yeah.

So let's start with EMEA.

So were we manufacturer and most of the people who sell.

This reimbursement opened the door for real real.

The amnio wound care products today are not manufacturers a matter of fact, they were they need a fairly high price.

Movement.

The out of hospital, the acute care or the non acute world into the acute or they see.

In order to be able to make real money are we on the other side are the very low end of the value creation. So when you think about what it costs for us to make something it's quite low and so when the price went to $127 per square centimeter. It's it's a very good sector, that's actually a very good price for.

The.

The outpatient clinics tied to the hospitals, we feel that we can do really well with the hospital contracts we have.

There are many distributors out there today, who don't have the kind of hospital contracting we do and they need it and so we think that there is an opportunity. There. So we will see what happens I mean, this is something that where we're just getting our arms around right now speaking at various people, making sure our contracting is tight but we again have a very very robust.

US as somebody who can actually serve the wound care or I should say the acute care market. If you recall if you see what's happened in that in that world.

Our contract portfolio and so it is something we're trying to leverage as we speak so that's the <unk> side and secondarily when you think about the collagen based products.

This reimbursement opened the door for real real.

The movement from the out of hospital, the acute care or the non acute world into the acute or they see.

One of the things that we acquired through the surge of line acquisition.

The the outpatient clinics tied to the hospitals, we feel that we can do really well with the hospital contracts we have.

Was a product called nanos and the basis of nano Swiss and even.

Even wider more interesting product called E matrix and that he matrix was a collagen based product that had extraordinary.

There are many distributors out there today, who don't have the kind of hospital contracting we do and they need it and so we think that there's an opportunity. There. So we will see what happens I mean, this is something that where we're just getting our arms around right now speaking at various people, making sure our contracting is tight but we again have a very very robust.

Clinical data behind it actually is the product was originally created it was created as a wound care product a matter of fact, it was going through its own PMA.

And it's a company essentially was running out of money and said, okay, let's create something that we can start generating money from.

Our contract portfolio and so it is something we're trying to leverage as we speak so that's the U S that secondarily when you think about the collagen based products.

And then they created nanos.

Taking a matrix and then putting in hydro oxy appetite with it and so it became a product that was ultimately purchased by.

One of the things that we acquired through the surge of light acquisition was a product called nanos and the basis of analysis and even a even wider more interesting product called E matrix and that he matrix was a collagen based product that had extraordinary.

One of the predecessor companies as Serge.

So we acquired <unk> matrix, which in itself has its own collagen based products. So so we see that as a really terrific platform for us moving forward because it has a number of other areas. We think that we can touch with it so.

<unk> clinical data behind it actually is the product was originally created it was created as a wound care product in a matter of fact, it was going through its own PMA.

So there's more to follow on that but it's a platform technology that we're really really excited and we've got some FDA work that we need to do but were.

And it's a company essentially was running out of money and said, okay, let's create something that we can start generating money from.

Really pretty pumped about where thats bleeding.

And then they created nanos.

So hopefully that answer your question there chase.

He was taking a matrix that had putting in hydroxyapatite with it and so it became a product that was ultimately purchased by one.

Yeah. Thanks, John I appreciate the questions guys.

Yeah.

Thank you very much while we appear to have reached the end of our question and answer session and.

One of the predecessor companies a search a lot and so we we acquired E matrix, which in itself is a solid collagen based products. So so we see that as a really terrific platform for us moving forward because there's a number of other areas. We think that we can touch with it. So so there's more to follow on that but it's a it's a platform technology that we're re.

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Really really excited and we've got some F. D. A work that we need to do but we're we're really pretty pumped about where that's leading.

So hopefully that answered your question there chase.

Yeah, I think so I appreciate the questions guys.

Okay.

Thank you very much while we pay to have reached the end of our question and answer session and thoughtful we have reached the end of the conference. So thank you very much. This does conclude today's conference and you may disconnect. Your phone lines at this time, we thank you feel participation.