Xtant Medical Holdings Inc (XTNT) 2025 Q2 法說會逐字稿

Good morning, everyone, and welcome to the Xtant Medical second quarter 2025 financial results.(Operator Instructions) Please note this conference being recorded.

各位早安，歡迎收聽Xtant Medical 2025年第二季財務業績報告。 （操作說明）請注意，本次會議將被錄影。

I will now turn the conference over to your host, Kevin Gardner of LifeSci Advisors. The floor is yours.

現在我將把會議交給主持人，LifeSci Advisors 的 Kevin Gardner。現在輪到你發言了。

Thank you, operator, and welcome to Xtant Medical's second quarter 2025 and financial results call. Joining me today are Sean Browne, President and Chief Executive Officer; and Scott Neils, Chief Financial Officer. Today's call is being webcast and will be posted on the company's website for playback.

謝謝接線員，歡迎參加 Xtant Medical 2025 年第二季財務業績電話會議。今天與我一同出席的有總裁兼執行長肖恩·布朗和財務長史考特·尼爾斯。今天的電話會議將進行網路直播，並將發佈在公司網站上供回放。

During the course of this call, management may make certain forward-looking statements regarding future events and the company's expected future performance. 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. Such 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 the Form 10-K filed with the SEC and in subsequent SEC reports and press releases.

在本次電話會議期間，管理層可能會就未來事件和公司預期未來業績發表一些前瞻性聲明。這些前瞻性陳述反映了 Xtant 目前對現有趨勢和資訊的看法，可以透過諸如預期、計劃、將、可能、預計、相信、應該、打算等詞語以及其他具有類似含義的詞語來識別。此類前瞻性陳述並非對未來業績的保證，並且涉及風險和不確定性，包括公司向美國證券交易委員會提交的 10-K 表格年度報告的「風險因素」部分以及隨後向美國證券交易委員會提交的報告和新聞稿中提到的風險和不確定性。

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. Note that our Form 8-K filed with our financial results press release provides a detailed narrative that describes our use of such measures. For the benefit of those of you who may be listening to a replay, this call was held and recorded on August 12 at approximately 8:30 AM Eastern Time. The company declines any obligation to update its forward-looking statements except as required by applicable law.

實際結果可能與實際情況有重大差異。本公司財務業績新聞稿和今天的討論中包含一些非GAAP財務指標。請參閱我們新聞稿中出現的非GAAP與GAAP財務報表調節表，該表也可在我們的網站上查閱。請注意，我們在財務業績新聞稿中提交的 8-K 表格提供了詳細的說明，描述了我們對這些措施的使用情況。為了方便可能正在收聽重播的各位，本次通話於美國東部時間 8 月 12 日上午 8:30 左右舉行並錄音。除適用法律要求外，本公司不承擔更新其前瞻性聲明的任何義務。

Now I'd like to turn the call over to Xtant Medical's President and CEO, Sean Browne.

現在我想把電話交給 Xtant Medical 的總裁兼執行長 Sean Browne。

Thank you, Kevin, and good morning, everyone. I will cover a few of our second quarter financial and operational highlights in a moment, but I would like to begin this morning with a recap of our recent announcement that we entered into an agreement to sell certain noncore Coflex interlaminar stabilization implant assets and OUS entities of Paradigm Spine to Companion Spine, French-American company, fully dedicated to posterior dynamic stabilization and motion preservation.

謝謝你，凱文，大家早安。稍後我將介紹我們第二季度的一些財務和營運亮點，但今天早上我想先回顧一下我們最近宣布的一項消息：我們已達成協議，將 Paradigm Spine 的某些非核心 Coflex 椎板間穩定植入物資產和 OUS 實體出售給 Companion Spine，這是一家專注於後路動態穩定和運動保留的法美合資公司。

Companion Spine is a portfolio company of the Viscogliosi Brothers, the family-owned investment firm specializing in the neuromuscular cell space. The proceeds of the transaction are expected to total approximately $19.2 million, consisting of $11 million in cash, and $8.2 million in short-term seller financing in the form of an unsecured promissory note to be issued by Companion Spine to Xtant.

Companion Spine 是 Viscogliosi Brothers 的投資組合公司，Viscogliosi Brothers 是一家家族擁有的投資公司，專門從事神經肌肉細胞領域的投資。預計該交易的收益總額約為 1,920 萬美元，其中包括 1,100 萬美元現金，以及 820 萬美元的短期賣方融資，該融資將以 Companion Spine 向 Xtant 發行的無擔保本票的形式提供。

The promissory note will mature on December 31, 2025. Upon closing the transaction, we anticipate to occur during the third quarter of 2025, we intend to use the proceeds to reduce long-term debt and provide additional cash liquidity. The sale of these noncore assets will allow us to focus resource on driving growth in our biologics platform. Given the performance of the business and the proceeds of this transaction, we do not expect to require additional capital to fund operations.

該本票將於2025年12月31日到期。預計交易將於 2025 年第三季完成，屆時我們將利用所得款項減少長期債務並提供額外的現金流動性。出售這些非核心資產將使我們能夠集中資源，推動生物製劑平台的發展。鑑於公司業績和本次交易所得，我們預計不需要額外資金來支持營運。

Now let's turn to Q2 2025 highlights. 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. First, our total revenue for the quarter was $35.4 million, which represents growth nearly 18% versus the second quarter of 2024. Notably, our second quarter 2025 revenue includes nearly $5 million in licensing revenue pursuant to the license agreement for Q-Codes and the SimpliMax Dual Layer Amniotic Membrane that we announced in the third quarter of last year.

現在讓我們來看看 2025 年第二季的亮點。我很高興地報告，我們取得了強勁的財務和營運表現。Scott 稍後會詳細介紹財務狀況，但我想先簡單提幾個重點。首先，本季總營收為 3,540 萬美元，與 2024 年第二季相比成長了近 18%。值得注意的是，我們 2025 年第二季的收入包括近 500 萬美元的授權收入，這筆收入來自去年第三季宣布的 Q-Codes 和 SimpliMax 雙層羊膜的授權協議。

As we indicated last quarter, CMS has extended the local coverage determination for skin substitutes to December 31, 2025, which opens the door for additional royalty income and cash generation during the second half of 2025. Biologics also turned another solid quarter, growing more than 20% over the second quarter of 2024, demonstrating that our sharpened focus on this core part of our business, including recent product launches is having the anticipated positive effect on our results.

正如我們上個季度所指出的，CMS 已將皮膚替代品的本地覆蓋範圍決定延長至 2025 年 12 月 31 日，這為 2025 年下半年帶來額外的特許權使用費收入和現金流打開了大門。生物製劑業務也取得了又一個穩健的季度業績，比 2024 年第二季度增長超過 20%，這表明我們對這一核心業務的重視，包括最近推出的產品，正在對我們的業績產生預期的積極影響。

Building on our first quarter results, we again achieved a positive adjusted EBITDA, net income and cash flow from operations for the second quarter, reflecting both our strong top line performance and greater contribution from higher-margin biologics, as well as our ongoing focus on prudent expense management and driving operating leverage in our business. As for new product launches, the second quarter was also particularly active for us in terms of new biologic product introductions.

繼第一季業績之後，我們第二季再次實現了調整後 EBITDA、淨收入和經營活動現金流為正，這既反映了我們強勁的營收表現，也反映了高利潤率生物製劑的更大貢獻，以及我們持續專注於審慎的費用管理和提高業務的經營槓桿作用。至於新產品上市方面，第二季我們在推出新的生物製品方面也格外活躍。

Recall that during the first quarter, we achieved a significant milestone by becoming the first fully vertically integrated biologics company to manufacture all of our products in-house. This gives us control over our supply chain, ensuring the highest product quality while also driving improved gross margins and at the same time, delivering an enhanced customer experience.

回想一下，在第一季度，我們取得了一項重大里程碑式的成就，成為第一家完全垂直整合的生物製藥公司，所有產品均由我們自主生產。這使我們能夠控制供應鏈，確保最高的產品質量，同時提高毛利率，並提升客戶體驗。

In May, we announced the commercial launch of OsteoFactor Pro, a naturally occurring cocktail of allogenic growth factors engineered to improve bone healing and support surgical success across orthopedic and spine procedures.

5 月，我們宣布正式推出 OsteoFactor Pro，這是一種天然存在的同種異體生長因子混合物，旨在改善骨骼癒合，並支持骨科和脊椎手術的成功。

OsteoFactor Pro is an off-the-shelf, ready-to-use solution that is designed to integrate seamlessly with synthetic allograft or autograft scaffolds and provide surgeons with exceptional versatility and biologic performance to support a wide range of bone regeneration approaches. Notably, the launch of this growth factor product, Xtant now offer solutions across all five major orthobiologic categories: demineralized bone matrix, cellular allografts, synthetics, structural allografts and now growth factors.

OsteoFactor Pro 是現成的即用型解決方案，旨在與合成同種異體移植或自體移植支架無縫集成，並為外科醫生提供卓越的多功能性和生物學性能，以支援各種骨再生方法。值得注意的是，隨著這種生長因子產品的推出，Xtant 現在為所有五大骨科生物學類別提供解決方案：脫礦骨基質、細胞同種異體移植、合成材料、結構同種異體移植以及現在的生長因子。

Also during the second quarter, we took a major step forward in bone grafting technology with the launch of Trivium, a premium demineralized bone matrix with three synergistic elements designed to deliver exceptional performance in structure, handling and biological activity. This advanced composition creates an ideal environment for healing and regeneration. Early feedback from surgeons has been encouraging. And since DBM comprises greater than 60% of our biologics business, this favorable reception demonstrates the success execution of our go-forward strategy.

同樣在第二季度，我們透過推出 Trivium，在骨移植技術領域取得了重大進展。 Trivium 是一種優質脫礦骨基質，含有三種協同成分，旨在提供卓越的結構、操作和生物活性。這種先進的配方為癒合和再生創造了理想的環境。外科醫生的初步回饋令人鼓舞。由於 DBM 占我們生物製劑業務的 60% 以上，因此這項積極反響顯示我們前進策略的成功執行。

OsteoFactor Pro and Trivium are just two examples where we develop next-generation biologics products in-house, allowing us to capture higher revenue and margins, while in parallel, delivering superior patient outcomes.

OsteoFactor Pro 和 Trivium 只是我們自主研發下一代生物製劑的兩個例子，這使我們能夠獲得更高的收入和利潤，同時也能為患者帶來更佳的治療效果。

Okay. On to revenue guidance. As we indicated last quarter, 2025 is all about advancing towards self-sustainability, emphasizing our organic revenue growth, profitability and cash generation. With new products launched, targeted growth opportunities, recent cost-cutting initiatives and the planned sale of certain noncore assets, we are on a path to restoring the business to a sustainably profitable and cash-generating position as reflected in our second quarter results.

好的。接下來是營收預期。正如我們上個季度所指出的，2025 年的重點是朝著自給自足的方向邁進，強調我們的有機收入成長、獲利能力和現金流。隨著新產品的推出、有針對性的成長機會、近期成本削減措施以及計劃出售某些非核心資產，我們正走在恢復業務可持續盈利和現金流的道路上，這體現在我們第二季度的業績中。

We are experiencing heightened levels of licensing revenue from the previously noted Q-Code and amniotic membrane agreements, which have enhanced our revenue performance to date and we anticipate should continue to do so through at least the remainder of this year. Reflecting these licensing contributions as well as our current outlook for product revenue, we are raising our full year 2025 revenue guidance to a range of $131 million to $135 million, which represents growth of approximately 11% to 15% over the company's 2024 revenue. This compares to prior revenue guidance of $127 million to $131 million, representing 8% to 11% growth.

我們從先前提到的 Q-Code 和羊膜協議中獲得了更高的授權收入，這提高了我們迄今為止的收入表現，我們預計這種情況至少會持續到今年年底。考慮到這些授權收入以及我們目前對產品收入的預期，我們將 2025 年全年營收預期上調至 1.31 億美元至 1.35 億美元，比公司 2024 年的營收成長約 11% 至 15%。這與先前1.27億美元至1.31億美元的營收預期相比，增幅為8%至11%。

Note that this updated outlook does not take into account the pending sale of our noncore Coflex and OUS businesses to Companion Spine. We intend to revisit this full year outlook after closing that transaction. While the decision to close that transaction and the timing thereof is not solely at our discretion, we anticipate a closing during the third quarter of 2025.

請注意，這次更新後的展望並未考慮我們即將把非核心業務 Coflex 和 OUS 賣給 Companion Spine。我們計劃在完成該交易後重新評估全年展望。雖然完成該交易的決定和時間表並非完全由我們自行決定，但我們預計將在 2025 年第三季完成交易。

For help with modeling in the interim, however, you can assume that the business being sold to Companion Spine are currently generating an annual revenue run rate for Xtant of approximately $23.5 million. Beyond the revenue effect, note that these businesses were modestly unprofitable on a stand-alone basis, so the effect of the sale on our margins and bottom line metrics is anticipated to be neutral to slightly positive.

不過，為了幫助進行過渡期的建模，您可以假設出售給 Companion Spine 的業務目前為 Xtant 產生的年收入約為 2,350 萬美元。除了收入影響之外，還要注意的是，這些業務本身盈利能力略差，因此預計此次出售對我們的利潤率和最終指標的影響將是中性到略微積極的。

With that, I will turn the call over to Scott for a more detailed review of our financial results.

接下來，我將把電話交給史考特，讓他對我們的財務表現進行更詳細的分析。

Thank you, Sean, and good morning, everyone. Total revenue for the second quarter of 2025 was $35.4 million, compared to $29.9 million for the same period in 2024. The 18% increase is attributed primarily to year-over-year growth in our biologics product family, as well as the impact of $5 million of licensing revenue during the second quarter of 2025 that Sean alluded to earlier. This increase was partially offset by a 20% or $2.7 million year-over-year decline in our hardware product family. Gross margin for the second quarter of 2025 was 68.6% compared to 62.1% for the same period in 2024. The increase year-over-year was driven by favorable sales mix and by greater scale and improved production efficiency.

謝謝你，肖恩，大家早安。2025 年第二季總營收為 3,540 萬美元，而 2024 年同期為 2,990 萬美元。18% 的成長主要歸功於我們生物製劑產品系列的同比增長，以及肖恩之前提到的 2025 年第二季度 500 萬美元許可收入的影響。這一增長被我們硬體產品系列年減 20%（即 270 萬美元）部分抵消。2025 年第二季的毛利率為 68.6%，而 2024 年同期為 62.1%。年比成長主要得益於有利的銷售組合、更大的規模以及更高的生產效率。

Second quarter 2025 operating expenses were $19.7 million compared to $21.5 million in the same period a year ago. As a percentage of total revenue, operating expenses were 55.5% compared to 71.9% in the same period a year ago. General and administrative expenses were $7.5 million for the three months ended June 30, 2025, compared to $7.7 million for the same period in 2024. This decrease is primarily attributable to reduced stock-based compensation expense.

2025 年第二季營運支出為 1,970 萬美元，而去年同期為 2,150 萬美元。營業費用佔總收入的百分比為 55.5%，去年同期為 71.9%。截至 2025 年 6 月 30 日止三個月的一般及行政費用為 750 萬美元，而 2024 年同期為 770 萬美元。這一下降主要歸因於股權激勵費用的減少。

Sales and marketing expenses were $11.6 million for the three months ended June 30, 2025, compared to $13.2 million from the same quarter last year. The decrease was primarily due to reduced commission expense of $1.5 million resulting from revenue mix and $0.7 million of reduced compensation expense related headcount, partially offset by $0.9 million of additional consulting fees during the current year period.

截至 2025 年 6 月 30 日的三個月內，銷售和行銷費用為 1,160 萬美元，而去年同期為 1,320 萬美元。下降的主要原因是收入結構變化導致佣金支出減少 150 萬美元，以及與人員編制相關的薪酬支出減少 70 萬美元，但部分被本年度新增諮詢費 90 萬美元所抵消。

Research and development expenses were $566,000 for the three months ended June 30, 2025, a decrease from $636,000 in the second quarter of 2024. Net income in the second quarter of 2025 was $3.5 million or $0.02 per share on a fully diluted basis, compared to a net loss of $3.9 million or $0.03 per share in the comparable 2024 period.

截至 2025 年 6 月 30 日止三個月，研發費用為 566,000 美元，低於 2024 年第二季的 636,000 美元。2025 年第二季淨利為 350 萬美元，即每股 0.02 美元（完全稀釋後），而 2024 年同期淨虧損為 390 萬美元，即每股 0.03 美元。

Adjusted EBITDA for the second quarter of 2025 was $6.9 million compared to an adjusted EBITDA loss of $0.6 million for the same period in 2024. 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 of inventory acquired as part of our purchase of Surgalign Holdings, hardware and biologics business in our calculation of adjusted EBITDA.

2025 年第二季調整後 EBITDA 為 690 萬美元，而 2024 年同期調整後 EBITDA 虧損為 60 萬美元。再次提醒，從 2024 年第四季開始，我們在計算調整後 EBITDA 時，不再將收購 Surgalign Holdings 硬體和生物製劑業務時獲得的庫存銷售收益的分階段扣除計入在內。

Prior periods have been recast to conform to the current calculation. The related effect on adjusted EBITDA was a reduction of $1.1 million in the second quarter of 2024 to arrive at the recast amount. As of June 30, 2025, we had $7 million of cash, cash equivalents and restricted cash.

前期數據已根據目前計算方法進行重述。由此對調整後的 EBITDA 產生的相關影響是，2024 年第二季減少了 110 萬美元，以得出重述後的金額。截至 2025 年 6 月 30 日，我們擁有 700 萬美元的現金、現金等價物和受限現金。

Net accounts receivable was $27 million. Inventory was $40.1 million, and we had $5 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 second quarter does not take into account the anticipated gross proceeds from the sale of certain assets to Companion Spine that Sean discussed earlier.

應收帳款淨額為2700萬美元。截至季末，庫存為 4,010 萬美元，我們的循環信貸額度下有 500 萬美元可用。再次提醒，截至第二季末，我們的現金餘額並未計入肖恩先前提到的向 Companion Spine 出售某些資產的預期總收益。

Operator, you may now open the line for questions.

接線員，現在可以開始接聽提問電話了。

(Operator Instructions)

（操作說明）

Chase Knickerbocker, Craig Hallum.

蔡斯·尼克博克，克雷格·哈勒姆。

Good morning, guys. Congrats on the quarter and thanks for taking the question, And maybe just first on the licensing revenue. Can you just remind us -- is that all volume-based or sales-based, royalties or kind of transfer payments? Or were there any kind of chunkier milestones within that in Q2?

各位早安。恭喜你本季業績出色，謝謝回答這個問題，或許應該先說說授權收入方面的狀況。您能否提醒我們一下—這些費用是按銷售還是按銷售額計算的？是版稅還是其他類型的轉帳付款？或者說，第二季中是否有一些更重大的里程碑事件？

No. It's pretty straightforward. It's all revenue-based. So what our partners -- whatever they sold is how we get reimbursed for that.

不。很簡單。一切都以收入為導向。所以，我們的合作夥伴──他們銷售的商品，就是我們獲得補償的方式。

Got it. And sorry if I missed this, but can you kind of just delineate a little bit as far as how we should think about that line as we go through the remainder of the year with your partner?

知道了。如果我錯過了什麼，請見諒。您能否稍微解釋一下，在今年餘下的時間裡，我們該如何看待您和伴侶之間的這條界線？

Yeah. Well, we have two partners in particular. And because of the changes that are taking place in -- again, you saw the latest thing that came out from CMS. We expect that we'll probably see at least another good quarter. But after that, it's anybody's guess, quite frankly. And that's one thing I shouldn't say it's anybody's guess, but we definitely are not as confident that things will be as strong in the fourth quarter as they've been so far.

是的。嗯，我們尤其有兩個合作夥伴。由於正在發生的變化——再次強調，你們也看到了CMS最新發布的內容。我們預計至少還會有一個不錯的季度。但之後會發生什麼，坦白說，誰也說不準。還有一件事我不應該說是任何人的猜測，但我們絕對沒有信心第四季的情況會像目前那樣強勁。

Scott, do you want to add anything to that at all?

史考特，你還有什麼要補充的嗎？

Yeah. I think as we see in building out the guidance, we're anticipating approximately another $5 million during second half of 2025 in way of royalty revenue.

是的。我認為，正如我們在製定指導方針時所看到的，我們預計在 2025 年下半年還將獲得約 500 萬美元的特許權使用費收入。

Helpful, thanks guys. Maybe just on broader orthobiologics. Can you just kind of help us dig in a little bit on what portion of year-over-year growth was kind of from each of your growth drivers, call it, your new DBM products, VBM and then growth factor and Amnio? Just what kind of portion of growth is being driven by which? If you can kind of just help us dig into that line a little bit more.

很有幫助，謝謝各位。或許只針對更廣泛的骨科生物製劑。您能否幫我們詳細分析一下，您的各項成長驅動因素分別在年成長中所佔的比例，例如您的新 DBM 產品、VBM、成長因子和 Amnio？究竟哪些因素推動了成長？如果你能幫我們更深入地研究那句話就太好了。

Sure. I guess a couple of things. First of all, the new introductions, they are brand new, right? So especially with one of -- one of the product lines, the OsteoFactor Pro, that's a product line that we already sell in OsteoFactor and that would be replacing that current product line. So that in itself is our target, is to make sure that we have a complete replacement at a minimum of what we sold of that this past year.

當然。我想有兩件事。首先，這些新品都是全新的，對吧？因此，特別是對於我們的一條產品線——OsteoFactor Pro，我們已經在 OsteoFactor 中銷售，它將取代目前的產品線。因此，我們的目標是確保至少能完全取代去年售出的產品。

As for Trivium, literally a brand-new product. So we expect to see probably more positive or at least I'd say things are to be contributing more to our bottom line and our top line, really in the second half of this year. When we think about what was driving the growth for us this past quarter, you got to look at our Viable Matrix products or OsteoFactor Plus.

至於 Trivium，它確實是一款全新產品。因此，我們預計今年下半年可能會看到更積極的業績，或者至少可以說，這些業績將對我們的利潤和收入做出更大的貢獻。當我們思考上個季度推動我們成長的因素時，你必須看看我們的 Viable Matrix 產品或 OsteoFactor Plus。

Yes, we saw some OsteoFactor Pro in there as well, which helped us a lot. And then just kind of around the bend, if you looked at our DBM products and yeah, I guess those would be what else would you say, Scott?

是的，我們也看到了其中的一些 OsteoFactor Pro，這對我們幫助很大。然後，稍微轉一轉，如果你看看我們的 DBM 產品，嗯，我想那會是什麼呢，斯科特，你還能說什麼呢？

We saw growth in synthetics as well.

合成材料領域也出現了成長。

Yes, right. Synthetics as well popped up. So yes, so I would say, across the board, we saw nice growth.

沒錯。合成材料也隨之湧現。所以，是的，我認為總體而言，我們看到了良好的成長。

Got it. And Scott, one for you and then one final one for you, Sean. Sorry to get somebody in here. But Scott, just on gross margins, kind of how we should think about it through the end of the year here, particularly, obviously, with some of that royalty revenue continuing to come in?

知道了。史考特，給你一個，肖恩，最後一個也給你。不好意思打擾一下。但是斯科特，就毛利率而言，我們應該如何看待今年年底的情況，尤其是在一些特許權使用費收入繼續流入的情況下？

And then, Sean, just on hardware, with the decision to kind of divest some of those key pieces, can you just speak to kind of your thoughts on the rest of the portfolio and kind of how you see that business progressing?

然後，肖恩，就硬體方面而言，鑑於公司決定剝離一些關鍵業務，你能否談談你對剩餘業務組合的看法，以及你如何看待該業務的未來發展？

Scott, do you want to go first?

史考特，你想先來嗎？

Yeah, I'll jump on margins. I think we see a somewhat sizable decline in H2, maybe around 5 points just as we see the effects of that royalty revenue coming down as well as some decline in the hardware growth. That will be offset to a degree with the continued sell-through of what we're doing with the vertically integrated product, namely the OsteoFactor and the Viable bone matrix but look forward to come down 4 points to 5 points in Q3 and Q4.

是的，我會抓住利潤空間。我認為下半年會出現相當大的下滑，可能下滑 5 個百分點左右，這與我們看到的特許權使用費收入下降以及硬體增長放緩的影響相吻合。垂直整合產品（即 OsteoFactor 和 Viable 骨基質）的持續銷售將在一定程度上抵消這一影響，但預計第三季和第四季將下降 4 到 5 個百分點。

And then to answer the hardware question, so yes, selling the noncore assets of both the Paradigm OUS business as well as the Coflex business. Now just one little note on both of those businesses. from a business, just running this year, running your company, that was about 16% of our total revenue, but it took up off the cuff, 40% to 50% of our time, certainly from a sales management perspective, it took up well over 50% of our sales managers time managing just even the Coflex business here domestically.

至於硬體方面的問題，是的，我們將出售 Paradigm OUS 業務和 Coflex 業務的非核心資產。現在我想就這兩項業務簡單說明一下。就今年公司營運而言，這部分業務約占我們總收入的 16%，但卻佔用了我們 40% 到 50% 的時間，尤其是在銷售管理方面，僅 Coflex 在國內的業務管理就佔用了我們銷售經理超過 50% 的時間。

So from our side, we were able to really help our business get a lot more focused. So when you think about the hardware business, our domestic hardware business is a very, very good product line. it just needs the focus and the love. And so that's one of the best things that's going to come out of this aside from reducing debt and putting cash on the balance sheet. This is going to really help our business get that domestic focus. So not only will it help our biologics business, but also our core hardware will also, I think, see a nice pickup just because, again, being able to focus like we should be. So hopefully, that answers your question, Chase.

因此，我們這邊也確實能夠幫助公司更專注於核心業務。所以，當你想到五金業時，你會發現我們的家用五金產品線非常非常好。它只需要更多的關注和投入。所以，除了減少債務和增加資產負債表上的現金之外，這算是這件事帶來的最大好處之一了。這將真正有助於我們的業務更加重視國內市場。因此，這不僅有助於我們的生物製劑業務，而且我認為，我們的核心硬體業務也會得到很好的提升，因為我們能夠像應該的那樣集中精力。希望這能解答你的疑問，Chase。

Yeah, good to see the focus on Orthobiologics for sure. Thanks guys. .

是的，很高興看到對骨科生物製劑的關注。謝謝各位。。

(Operator Instructions)

（操作說明）

Ryan Zimmerman, BTIG.

Ryan Zimmerman，BTIG。

Hi, good morning, everyone. This is Izzy on for Ryan. Thanks for taking the questions.

大家早安。這裡是伊茲替瑞恩報道。謝謝您回答問題。

Hi, Izzy, how are you?

嗨，伊茲，你好嗎？

Doing well. How are you?

一切順利。你好嗎？

Great.

偉大的。

So just to start out, now that manufacturing is entirely in-house. I was curious what kind of margin benefit we should expect from the production of orthobiologics for maybe the remainder of the year, but also as we start to think about 2026 and beyond.

首先，現在生產製造完全是內部完成的。我很好奇，在今年剩下的時間裡，以及當我們開始考慮 2026 年及以後時，骨科生物製劑的生產能為我們帶來怎樣的利潤收益。

I think in the second half of the year, we're probably picking up 1 point or 2 point, maybe even a hair more than that. What you'll notice, though, is that will be overshadowed by the effect of the royalty revenue coming down. So net-net, like I said, I think we see overall gross margins coming down 4 point or 5 points. But within that, you do see that pick up or that pickup will be present for the effect of that internally produced product.

我認為下半年我們可能會多得1分或2分，甚至可能更多。不過，你會注意到，版稅收入下降的影響將掩蓋這個現象。所以總的來說，就像我說的，我認為整體毛利率會下降 4 到 5 個百分點。但其中，你確實可以看到，內部生產的產品會產生某種效果，或者說，這種效果會顯現出來。

Got it. Helpful. And then of the cash you guys are picking up from the sale of Coflex and CoFix and the OUS business, what are you going to apply to the debt paydown versus just general working capital?

知道了。很有幫助。那麼，你們從出售 Coflex、CoFix 和 OUS 業務中獲得的現金，將用於償還債務還是僅用於一般營運資金？

I'll let you go ahead, Scott, fire away.

史考特，你就開始吧，儘管放手去開。

We'll split that 50, 50. So of the $19 million of change, half of that will go down pay down our long-term debt, and then we'll keep the remainder for working capital purposes

我們五五分成。因此，在這1,900萬美元的盈餘中，一半將用於償還長期債務，剩餘部分將用作營運資金。

And again, that's not reflected in our -- the statement you saw today. So if you want to add that into what we have in way of our cash plus what we see for the second half of this year, we think that we'll be in a very, very strong cash position really propelling our way through into 2026.

再次強調，這一點並沒有反映在我們──也就是你們今天看到的聲明中。所以，如果把這些加到我們現有的現金以及我們對今年下半年的預期中，我們認為我們將擁有非常非常強勁的現金儲備，這將真正推動我們順利進入 2026 年。

Got it. That's helpful. And then last one for me. How would you guys characterize the distributor dynamics when we think about the context of the changes among larger players in the company?

知道了。那很有幫助。最後，也是我最後一個問題。當我們考慮到公司內部大型企業發生變化時，你們會如何描述經銷商的動態？

Yeah. We're seeing some dynamic changes is that you've got some of the big guys that have shifted ownership and that has actually created some opportunities for guys like us. And so a lot of that is really focused more on the hardware side. And since we have such a strength in biologics, we're not seeing as big a shift for us, but the opportunities are clearly there. And so yes, so there's a lot of, I think, positive things happening in the market for guys like us. So let me put it that way.

是的。我們看到一些動態變化，一些大公司已經更換了所有權，這實際上為像我們這樣的公司創造了一些機會。因此，許多工作實際上都更側重於硬體方面。由於我們在生物製劑領域實力雄厚，所以我們並沒有看到太大的轉變，但機會顯然是存在的。所以，是的，我認為對於像我們這樣的人來說，市場上有很多積極的事情正在發生。我就這麼說吧。

Got it. Thank you for taking the questions.

知道了。感謝您回答這些問題。

Great. Thanks, Izzy.

偉大的。謝謝你，伊茲。

(Operator Instructions)

（操作說明）

Okay. We appear to have reached the end of our question-and-answer session and also the end of the call. So we'd like to thank you very much for joining us. This does conclude the conference. You may now disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.

好的。我們的問答環節和通話似乎都結束了。非常感謝您的參與。會議至此結束。現在您可以斷開電話線了，祝您有美好的一天。感謝您的參與。