Welcome to Xtant Medical's Fourth Quarter and Full Year 2019 Financial Results Conference Call. At this time, all participants are in listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to David Carey of Lazar FINN Partners. Please go ahead.

Thank you operator and welcome to Xtant Medical's fourth quarter and full year 2019 financial results call. Joining me today is Sean Browne, President and Chief Executive Officer; and Greg Jensen, Vice President, Finance and 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 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. Any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties including those noted in the Risk Factors section of the company's annual report on Form 10-K that will be filed with the SEC today. 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 the tables of 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 the replay this call was held and recorded on Thursday, March 5th at approximately 9:00 A.M. Eastern Standard 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.

Thank you, David and good morning to everyone listening. Since joining Xtant five months ago, I've been very pleased with the commitment and contributions of our team members, especially the way they fulfill on a daily basis our mission of honoring the gift of donation by allowing our patients to live as full and complete a life as possible. It is also their commitment that has allowed us to execute numerous strategic and operational initiatives during 2019 and causes me to be excited about our prospects in 2020. From my first day with the company, my focus has been to establish a culture of execution throughout the company with an emphasis on; one, achieving operational excellence; two, reengaging with our distributor network and surgeon customers; and three, developing innovative new products. With these goals in mind we have rolled out some additional organizational changes to further support our commercial efforts, which are being led by Kevin Brandt, our Chief Commercial Officer. These changes, as well as the restructuring of the commercial organization started in early 2019 by Kevin, have flattened our organization, reduced our costs, and reduced the complexity of our commercial organization. As we look to the future, we've also developed a number of marketing initiatives designed to support our sales team and make it easier for customers to do business with Xtant. These changes and initiatives should work together to increase predictability of revenues and improve our profitability. The cornerstone of our marketing initiatives is a renewed focus on our top distributors and growth-oriented distributors who have shown a commitment to sell more of our product lines. To that end, we have recently rolled out a marketing program that allocates more of our resources to support and reward these distributors as they expand their partnership with Xtant. Early…

Thanks Sean and good morning again everyone. Total revenue for the fourth quarter of 2019 was $17 million, compared to $18.3 million for the same period in 2018. For the 2019 full year, total revenue was $64.7 million compared to $72.2 million for the same period in 2018. These decreases were primarily attributed to discontinued hardware distributor arrangements and a reduced demand for certain hardware products, compared to the third quarter of 2019 revenues increased by 8% driven by a higher demand for the company's biological products. Gross margin for the fourth quarter of 2019 was 66.8% compared to 39.7% in the same period a year ago. Gross margin for the 2019 full year was 65.7% compared to 60.2% for 2018. In the fourth quarter of 2018, the company increased its inventory reserve by $4.6 million, primarily due to excess inventory in the spinal implant product line. Excluding the inventory reserve adjustment, gross profit in 2018 would have been 65.1% for the fourth quarter and 67.1% for the full year. Fourth quarter 2019 operating expenses were $11.6 million compared to $62 million in the same period a year ago. For the 2019 full year, operating expenses were $44.8 million compared to $103.6 million for the same period in 2018. As a percentage of total revenue, fourth quarter operating expenses were 68.6% lower by 2.5 percentage points compared to third quarter levels attributed primarily to higher sales in the fourth quarter. General and administrative expenses increased by $700,000 to $4.5 million in the 2019 fourth quarter compared to $3.8 million for the same period in 2018 and increased by $3.7 million to $17.9 million for 2019 full year compared to $14.3 million for the same period in 2018. These increases were primarily due to increased legal settlements, remediation expenses, the retention…

Thank you, Greg. I'm very pleased with the progress we have made to date. It is encouraging to see renewed interest from distributors, as we reengage with and focus resources on our best partners to increase the revenue predictability and profitability for Xtant. While the improvements made by our team should better position us to serve the needs of our customers, as well as the internal organization, there remains much work to be done, but we believe we are well positioned to create long-term value for patients, customers and shareholders. I look forward to providing updates on our progress on future calls. Thank you for your continued support. End of Q&A: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.