Procedure revenue growth and strengthened
profitability drive solid financial performance
Phased launch of BioteRx remains on
track
Reaffirms 2024 financial guidance, with an
acceleration in second half growth
Biote (NASDAQ: BTMD), a leading solutions provider in preventive
health care through the delivery of personalized hormone
optimization and therapeutic wellness, today announced financial
results for the first quarter ended March 31, 2024.
First Quarter 2024 Financial
Highlights (All financial result comparisons made are
against the prior-year period)
- Revenue of $46.8 million, up 4.4%
- Procedure revenue of $37.4 million, up 6.6%
- Gross profit margin of 71.4%, an approximately 240-basis point
increase
- Net loss of $(5.8) million, representing net loss margin of
(12.4)%, and basic and diluted loss per share attributable to biote
Corp. stockholders of $(0.06), compared to net loss of $(21.4)
million, representing net loss margin of (47.8)%, and basic and
diluted loss per share attributable to biote Corp. stockholders of
$(0.39)
- Adjusted EBITDA1 of $14.2 million, an 8.0% increase
- Adjusted EBITDA margin1 of 30.2%, a 100-basis point
increase
“Procedure revenue increased 6.6% in the first quarter,
reflecting stable demand from established clinics within our
nationwide network. We are focused on driving accelerated revenue
growth in the second half of 2024 by continuing to expand our
geographic presence and strengthening our relationships with
existing practitioners. Additionally, we are enhancing our
on-boarding and training programs to facilitate adoption of the
Biote Method,” said Terry Weber, Biote Chief Executive Officer.
“The phased launch of BioteRx, our new suite of hormone and
evidence-based wellness therapies that launched in February, is
progressing well, with both patients and practitioners responding
favorably to our enhanced offerings. Over the course of 2024, we
plan to continue to expand BioteRx throughout our network,
increasing our engagement with practitioners and promoting positive
health outcomes for our growing patient population.”
Ms. Weber continued, “As previously announced, on March 18th, we
closed the acquisition of Asteria Health, a manufacturer of
compounded bioidentical hormones. We have begun to integrate
Asteria Health into our operations, with a goal of achieving full
vertical integration of our pellet manufacturing. We believe this
strategic acquisition strengthens our competitive position and
provides deep expertise in 503(B) manufacturing, enabling Biote to
develop innovative wellness therapies that complement our existing
hormone offerings.”
____________________ 1 Adjusted EBITDA and
Adjusted EBITDA margin are non-GAAP financial measures. Please see
“Discussion of non-GAAP Financial Measures” for additional
information on non-GAAP financial measures and a reconciliation to
the most comparable GAAP measure.
2024 First Quarter Financial Review
(All financial result comparisons made are against the
prior-year period unless otherwise noted)
Revenue for the first quarter of 2024 was $46.8 million, an
increase of 4.4% from $44.8 million for the first quarter of 2023.
The increase in revenue was driven by procedure revenue growth of
6.6%, partially offset by a decline in dietary supplement revenue
of 11.3%, primarily as a result of one of the Company’s larger
dietary supplement distributors exiting the nutraceutical business
during the fourth quarter of 2023.
Gross profit margin for the first quarter of 2024 was 71.4%
compared to 69.1% for the first quarter of 2023. The increase in
gross profit margin was primarily due to product mix and effective
cost management.
Operating income for the first quarter of 2024 was $10.4
million, compared to $7.9 million for the first quarter of 2023.
Operating income in the first quarter of 2024 increased due
primarily to improved gross profit.
Net loss for the first quarter of 2024 was $(5.8) million,
representing a net loss margin of (12.4)%, and diluted loss per
share attributable to biote Corp. stockholders of $(0.06), compared
to net loss of $(21.4) million, representing a net loss margin of
(47.8)%, and diluted loss per share attributable to biote Corp.
stockholders of $(0.39), for the first quarter of 2023. Net loss
for the first quarter of 2024 and 2023 included a loss of $12.1
million and $25.4 million, respectively, due to a change in the
fair value of the earnout liability. Additionally, net loss for the
first quarter of 2023 included a loss of $1.6 million due to a
change in the fair value of the warrant liability.
Adjusted EBITDA for the first quarter of 2024 was $14.2 million,
with an Adjusted EBITDA margin of 30.2%. In the first quarter of
2023, Adjusted EBITDA was $13.1 million, with an Adjusted EBITDA
margin of 29.2%. The increases in Adjusted EBITDA and Adjusted
EBITDA margin were primarily due to growth in revenue and improved
gross profit margin.
Subsequent Event
On April 23, 2024, Biote reached a definitive settlement in the
Company’s litigation with Dr. Gary S. Donovitz, Biote’s founder.
Under the terms of this settlement, Biote has agreed to repurchase
all the 18.4 million shares beneficially owned by Dr. Donovitz at
the time of the settlement at an average price of $4.17 per share,
with the first tranche of shares having been repurchased for $32.2
million on April 26, 2024. The remaining shares will be repurchased
over the next three years. Also pursuant to the settlement, the
Company is cancelling all 3.9 million unvested earnout shares that
were beneficially owned by Dr. Donovitz at the time of
settlement.
2024 Financial Outlook
“Based on our solid first quarter financial performance and our
expectations for stronger revenue growth in the second half of the
year, we reaffirm our 2024 financial guidance,” concluded Ms.
Weber.
($ in millions)
Previously Reported 2024 Guidance Ranges
Revenue
$200-$204
Adjusted EBITDA1
$60-$63
The Company’s 2024 financial guidance includes: (i) procedure
revenue growth in the first half of 2024 similar to that of the
second half of 2023 with improved growth in the back half of 2024;
(ii) a return to nutraceutical revenue growth in the second half of
2024; (iii) expected modest contributions from new therapeutic
wellness products; and (iv) a second-half margin contribution from
the anticipated impact of the acquisition of Asteria Health.
First half 2024 consolidated year-on-year revenue growth is
expected to be in the low-single digits, with significant
improvement expected in the second half of 2024. Total revenue
growth in the first half of 2024 is expected to be impacted by the
transition in the nutraceutical distribution channel and timing of
seasonal promotions.
____________________ 1 Please see
“Forward-Looking Non-GAAP Financial Measures" below for additional
information about forward-looking Adjusted EBITDA.
Conference Call:
Biote management will host a conference call to review these
results and provide a business update beginning at 5:00 p.m. ET on
Tuesday, May 7, 2024. To access the conference call by telephone,
please dial (844) 481-2820 (U.S toll-free) or (412) 317-0679
(International). To access a live webcast of the call, interested
parties may use the following link: Biote First Quarter 2024
Earnings Conference Call. A replay of the webcast will be available
on the Events page of the Biote Investor Relations website, at
ir.biote.com, shortly after the event concludes.
Discussion of Non-GAAP Financial Measures
To provide investors with additional information regarding our
financial results, Biote has disclosed Adjusted EBITDA, a non-GAAP
financial measure that it calculates as net income before interest,
taxes and depreciation and amortization, further adjusted to
exclude stock-based compensation, litigation expenses, legal
settlements, transaction-related expenses, merger and acquisition
expenses, fair value adjustments to certain equity instruments
classified as liabilities and other expenses. Below we have
provided a reconciliation of Adjusted EBITDA to net income, the
most directly comparable GAAP financial measure.
We present Adjusted EBITDA and Adjusted EBITDA margin because it
is a key measure used by our management to evaluate our operating
performance, generate future operating plans and determine payments
under compensation programs. Accordingly, we believe that Adjusted
EBITDA and Adjusted EBITDA margin provide useful information to
investors and others in understanding and evaluating our operating
results in the same manner as our management.
Adjusted EBITDA and Adjusted EBITDA margin have limitations as
analytical tools, and you should not consider them in isolation or
as a substitute for analysis of our results as reported under GAAP.
Some of these limitations are as follows:
- Although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA and Adjusted EBITDA margin do
not reflect cash capital expenditure requirements for such
replacements of our assets;
- Adjusted EBITDA and Adjusted EBITDA margin do not reflect
changes in, or cash requirements for, our working capital needs;
and
- Adjusted EBITDA and Adjusted EBITDA margin do not reflect tax
payments that may represent a reduction in cash available to
us.
In addition, Adjusted EBITDA and Adjusted EBITDA margin are
subject to inherent limitations as it reflects the exercise of
judgment by Biote’s management about which expenses are excluded or
included. A reconciliation is provided in the financial statement
tables included below in this press release for each non-GAAP
financial measure to the most directly comparable financial measure
stated in accordance with GAAP. Because of these limitations, you
should consider Adjusted EBITDA and Adjusted EBITDA margin
alongside other financial performance measures, including net
income and our other GAAP results.
Forward-Looking Non-GAAP Financial Measures
The Company does not provide a reconciliation of forward-looking
non-GAAP financial measures to their comparable GAAP financial
measures because it could not do so without unreasonable effort due
to the unavailability of certain information needed to calculate
reconciling items. For example, the Company has not included a
reconciliation of projected Adjusted EBITDA to GAAP net income
(loss), which is the most directly comparable GAAP measure, for the
periods presented in reliance on the unreasonable efforts exception
provided under Item 10(e)(1)(i)(B) of Regulation S-K. The Company’s
projected Adjusted EBITDA excludes certain items that are
inherently uncertain and difficult to predict including, but not
limited to, share-based compensation expense, income taxes, due
diligence expenses and legal expenses. Due to the variability,
complexity and limited visibility of the adjusting items that would
be excluded from projected Adjusted EBITDA in future periods,
management does not forecast them for internal use and therefore
cannot create a quantitative projected Adjusted EBITDA to GAAP net
income (loss) reconciliation for the periods presented without
unreasonable efforts. A quantitative reconciliation of projected
Adjusted EBITDA to GAAP net income (loss) for the periods presented
would imply a degree of precision and certainty as to these future
items that does not exist and could be confusing to investors. From
a qualitative perspective, it is anticipated that the differences
between projected Adjusted EBITDA to GAAP net income (loss) for the
periods presented will consist of items similar to those described
in the financial tables later in this release, including, for
example and without limitation, share-based compensation expense,
income taxes, due diligence expenses and legal expenses. The timing
and amount of any of these excluded items could significantly
impact the Company’s GAAP net income (loss) for a particular
period. When planning, forecasting and analyzing future periods,
the Company does so primarily on a non-GAAP basis without preparing
a GAAP analysis.
About Biote
Biote is transforming healthy aging through innovative,
personalized hormone optimization and therapeutic wellness
solutions delivered by Biote-certified medical providers. Biote
trains practitioners to identify and treat early indicators of
aging conditions, an underserved global market, providing
affordable symptom relief for patients and driving clinic success
for practitioners.
Forward-Looking Statements
This press release contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Some of the forward-looking statements can be identified
by the use of forward-looking words. Statements that are not
historical in nature, including the words “may,” “can,” “should,”
“will,” “estimate,” “plan,” “project,” “forecast,” “intend,”
“expect,” “hope,” “anticipate,” “believe,” “seek,” “target,”
“continue,” “could,” “might,” “ongoing,” “potential,” “predict,”
“would” and other similar expressions, are intended to identify
forward-looking statements. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. Many factors could
cause actual results or developments to differ materially from
those expressed or implied by such forward-looking statements,
including but not limited to: the success of our dietary
supplements to attain significant market acceptance among clinics,
practitioners and their patients; our customers’ reliance on
certain third parties to support the manufacturing of bio-identical
hormones for prescribers; our and our customers’ sensitivity to
regulatory, economic, environmental and competitive conditions in
certain geographic regions; our ability to increase the use by
practitioners and clinics of the Biote Method at the rate that we
anticipate or at all; our ability to grow our business; the
significant competition we face in our industry; the impact of
strategic acquisitions and the implementation of our growth
strategies; our limited operating history; our ability to protect
our intellectual property; the heavy regulatory oversight in our
industry; changes in applicable laws or regulations; the inability
to profitably expand in existing markets and into new markets; the
possibility that we may be adversely impacted by other economic,
business and/or competitive factors, including recent bank
failures; and future exchange and interest rates. The foregoing
list of factors is not exhaustive. You should carefully consider
the risks and uncertainties described in the “Risk Factors” section
of Biote’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2023, filed with the Securities and Exchange
Commission on March 15, 2024, and other documents filed by Biote
from time to time with the Securities and Exchange Commission.
These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and Biote assumes no obligation and does not intend to
update or revise these forward-looking statements, whether as a
result of new information, future events, or otherwise. Biote does
not give any assurance that it will achieve its expectations.
Financial Tables
Biote Corp. Consolidated Balance
Sheets (In Thousands) (Unaudited)
March 31, December 31,
2024
2023
Assets Current assets: Cash and cash equivalents
$
78,787
$
89,002
Accounts receivable, net
8,022
6,809
Inventory, net
18,917
17,307
Other current assets
8,635
9,225
Total current assets
114,361
122,343
Property and equipment, net
2,191
1,218
Capitalized software, net
4,930
4,973
Goodwill
5,525
—
Intangible assets, net
6,015
—
Operating lease right-of-use assets
2,202
1,877
Deferred tax asset
24,884
24,884
Total assets
$
160,108
$
155,295
Liabilities and Stockholders’ Deficit Current
liabilities: Accounts payable
$
4,196
$
4,155
Accrued expenses
9,729
8,497
Term loan, current
6,250
6,250
Deferred revenue, current
2,876
3,002
Earnout liabilities, current
600
—
Operating lease liabilities, current
406
311
Total current liabilities
24,057
22,215
Term loan, net of current portion
105,270
106,630
Deferred revenue, net of current portion
1,426
1,322
Operating lease liabilities, net of current portion
1,917
1,680
TRA liability
18,894
18,894
Earnout liabilities, net of current portion
53,444
41,100
Total liabilities
205,008
191,841
Commitments and contingencies (See Note 19) Stockholders’ Deficit
Preferred stock, $0.0001 par value, 10,000,000 shares authorized;
no shares issued or outstanding as of March 31, 2024 and December
31, 2023
—
—
Class A common stock, $0.0001 par value, 600,000,000 shares
authorized; 35,651,732, and 35,842,383 shares issued, 34,064,232
and 34,254,883 shares outstanding as of March 31, 2024 and December
31, 2023, respectively
3
3
Class V voting stock, $0.0001 par value, 100,000,000 shares
authorized; 38,819,066 and 38,819,066 shares issued, 28,819,066 and
28,819,066 shares outstanding as of March 31, 2024 and December 31,
2023, respectively
3
3
Additional paid-in capital
—
—
Accumulated deficit
(31,303
)
(29,391
)
Accumulated other comprehensive loss
(14
)
(12
)
Treasury stock, at cost
(4,088
)
—
biote Corp.’s stockholders’ deficit
(35,399
)
(29,397
)
Noncontrolling interest
(9,501
)
(7,149
)
Total stockholders’ deficit
(44,900
)
(36,546
)
Total liabilities and stockholders’ deficit
$
160,108
$
155,295
Biote Corp.
Consolidated Statements of
Operations
(In Thousands, except per share
values)
(Unaudited)
Three Months Ended March 31,
2024
2023
Revenue: Product revenue
$
46,035
$
44,155
Service revenue
769
688
Total revenue
46,804
44,843
Cost of revenue Cost of products
12,802
13,027
Cost of services
565
850
Cost of revenue
13,367
13,877
Selling, general and administrative
23,010
23,085
Income from operations
10,427
7,881
Other income (expense), net: Interest expense, net
(1,660
)
(1,646
)
Loss from change in fair value of warrant liability
—
(1,618
)
Loss from change in fair value of earnout liability
(12,089
)
(25,410
)
Other income (expense)
(2
)
(7
)
Total other income (expense), net
(13,751
)
(28,681
)
Loss before provision for income taxes
(3,324
)
(20,800
)
Income tax expense
2,486
630
Net Loss
(5,810
)
(21,430
)
Less: Net loss attributable to noncontrolling interest
(3,740
)
(14,625
)
Net loss attributable to biote Corp. stockholders
$
(2,070
)
$
(6,805
)
Other comprehensive income (loss): Foreign currency
translation adjustments
(1
)
—
Other comprehensive income (loss)
(1
)
—
Comprehensive income (loss)
$
(5,811
)
$
(21,430
)
Net loss per common share Basic
$
(0.06
)
$
(0.39
)
Diluted
$
(0.06
)
$
(0.39
)
Weighted average common shares outstanding Basic
34,621,166
17,585,045
Diluted
34,621,166
17,585,045
Biote Corp.
Consolidated Statements of Cash
Flows
(In Thousands)
(Unaudited)
Three Months Ended March 31,
2024
2023
Operating Activities Net loss
$
(5,810
)
$
(21,430
)
Adjustments to reconcile net loss to net cash provided by operating
activities: Depreciation and amortization
750
538
Bad debt expense
161
30
Amortization of debt issuance costs
202
195
Provision for obsolete inventory
70
—
Non-cash lease expense
80
69
Shares issued in settlement of litigation
—
1,199
Share-based compensation expense
1,763
2,170
(Gain) loss from change in fair value of warrant liability
—
1,618
Loss from change in fair value of earnout liability
12,089
25,410
Deferred income taxes
—
103
Changes in operating assets and liabilities: Accounts receivable
(1,329
)
(728
)
Inventory
75
1,560
Other current assets
619
1,238
Accounts payable
(109
)
857
Deferred revenue
(22
)
205
Accrued expenses
(1,094
)
(22
)
Operating lease liabilities
(73
)
(20
)
Net cash provided by operating activities
7,372
12,992
Investing Activities Purchases of property and equipment
(704
)
(62
)
Purchases of capitalized software
(350
)
(318
)
Acquisitions, net of cash acquired
(11,122
)
—
Net cash used in investing activities
(12,176
)
(380
)
Financing Activities Repurchases of common stock
(4,088
)
—
Principal repayments on term loan
(1,562
)
(1,562
)
Proceeds from exercise of stock options
324
420
Distributions
(83
)
(3,093
)
Net cash used in financing activities
(5,409
)
(4,235
)
Effect of exchange rate changes on cash and cash equivalents
(2
)
—
Net increase (decrease) in cash and cash equivalents
(10,215
)
8,377
Cash and cash equivalents at beginning of period
89,002
79,231
Cash and cash equivalents at end of period
$
78,787
$
87,608
Supplemental Disclosure of Cash Flow Information Cash paid for
interest
$
2,230
$
2,230
Cash paid for income taxes
$
2
$
2,232
Non-cash investing and financing activities Capital expenditures
and capitalized software included in accounts payable
$
85
$
94
Shares issued to acquire Simpatra
$
1,574
$
—
Biote Corp.
Reconciliation of Adjusted EBITDA
to Net Loss
(In Thousands)
(Unaudited)
The following table presents a
reconciliation of net loss to Adjusted EBITDA, as well as the
calculation of net loss margin and Adjusted EBITDA margin, for each
of the periods indicated.
Three Months Ended March 31, (in
thousands)
2024
2023
Net Loss
$
(5,810
)
$
(21,430
)
Interest expense, net
1,660
1,646
Income tax expense
2,486
630
Depreciation and amortization
750
538
Share-based compensation expense(1)
1,763
2,170
Litigation expenses-former owner(2)
601
530
Litigation-other(3)
70
184
Legal settlement (gain) loss(4)
—
1,198
Transaction-related expenses(5)
45
324
Other expenses(6)
85
268
Merger and acquisition expenses(7)
419
21
Loss from change in fair value of warrant liability
—
1,618
Loss from change in fair value of earnout liability
12,089
25,410
Adjusted EBITDA
$
14,158
$
13,107
Total revenue
$
46,804
$
44,843
Net income (loss) margin(8)
-12.4
%
-47.8
%
Adjusted EBITDA margin(9)
30.2
%
29.2
%
(1)
Represents employee compensation expense
associated with equity-based stock awards. This includes expense
associated with equity incentive instruments including phantom
stock awards, stock options and restricted stock units.
(2)
Represents legal expenses to defend the
Company against claims asserted by the Company’s former owner.
(3)
Represents litigation expenses other than
those incurred in connection with claims asserted by the Company’s
former owner that are not related to the Company’s ongoing
business.
(4)
Represents settlements of legal
matters.
(5)
Represents transaction costs including
legal fees of $0.04 million during the three months ended March 31,
2024, and legal fees of $0.3 million and professional services fees
of $0.02 million for the three months ended March 31, 2023, each of
which were incurred in connection with the filing of, and
transactions contemplated by, the Company’s securities
offerings.
(6)
Represents executive severance costs of
$0.08 million and a realized foreign currency loss of less than
$0.01 for the three months ended March 31, 2024. For the three
months ended March 31, 2023, the amount represents executive
severance costs of $0.06 million, costs related to recruiting
executive level management, including the Chief Commercial Officer
of $0.03 million, professional services fees of $0.09 million and
legal fees of $0.08 million associated with the restatement of the
Company's financial statements for the quarters ended June 30, 2022
and September 30, 2022, and a realized foreign currency loss of
less than $0.01 million.
(7)
Represents legal fees of $0.4 million and
professional services fees of $0.1 million incurred during the
three months ended March 31, 2024 related to our recent
acquisitions. For the three months ended March 31, 2023, the amount
represents legal fees of $0.02 million associated with strategic
opportunities to expand the business.
(8)
Net loss margin is defined as net loss
divided by total revenue.
(9)
Adjusted EBITDA margin is defined as
adjusted EBITDA divided by total revenue.
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Investor Relations: Eric Prouty AdvisIRy Partners
eric.prouty@advisiry.com
Media: Press@biote.com
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