Biote Reports Second Quarter 2023 Financial Results
Solid Second Quarter Revenue Growth
Continued Progress to Optimize Capital Structure and Enhance Share Liquidity
Expansive Strategic Approach Targeting Therapeutic Wellness and Men’s Health Categories
Second Quarter 2023 Financial Highlights
(All financial result comparisons made are against the prior year period)
-
Revenue of
$49.3 million , a 19.1% increase - Gross profit margin of 67.9%, a 60-basis point increase
-
Net loss of
$(13.1) million and GAAP loss per share of$(0.25) , compared to a net loss of$(21.3) million and GAAP loss per share of$(0.34) -
Adjusted EBITDA of
$14.5 million , a 10.6% increase
“Biote continued to broaden awareness of the benefits of hormone replacement therapy while delivering solid financial performance in our second quarter,” said
“To more effectively address the growing opportunities in today’s dynamic preventative health market, we continue to expand our strategic approach, encompassing a broader range of hormone and wellness therapies. For example, we are currently trialing an expanded suite of requested products from our top providers in response to growing patient demand for wellness products that are complementary to our existing therapies. Ultimately, we aim to become a leading platform provider of evidence-based therapeutic wellness solutions.”
2023 Second Quarter Financial Review
(All financial result comparisons made are against the prior year period unless otherwise noted)
Revenue for the second quarter of 2023 was
Gross profit margin for the second quarter of 2023 was 67.9% compared to 67.3% for the second quarter of 2022. The increase in gross profit margin reflected continued effective cost management.
Operating income for the second quarter of 2023 was
Net loss for the second quarter of 2023 was
Adjusted EBITDA for the second quarter of 2023 was
2023 Financial Outlook
“Biote continues to drive profitable growth as we strengthen our capabilities, broaden our suite of product offerings and focus on therapeutic wellness solutions. Due to temporary inefficiencies resulting from the realignment and expansion of our sales geographies and evolving market dynamics, we anticipate a more moderate pace of growth in the second half of 2023 as compared to our prior forecast. As a result, we now forecast 2023 revenue and Adjusted EBITDA will likely be toward the lower end of our guidance range,” concluded
_____________________________
|
1 Please see the “Reconciliations of Adjusted EBITDA” table below for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure, net income, and additional information about Adjusted EBITDA. |
|
($ in millions) |
2023 |
|
Revenue |
|
|
Adjusted EBITDA |
|
Conference Call:
Discussion of Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results,
We present Adjusted EBITDA 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 provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider it 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 does not reflect cash capital expenditure requirements for such replacements of our assets;
- Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and
- Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us.
In addition, Adjusted EBITDA is 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 alongside other financial performance measures, including net income and our other GAAP results.
About
Forward-Looking Statements
Except for historical information contained herein, 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; 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 foregoing factors and the other risks and uncertainties described in the “Risk Factors” section of Biote’s Quarterly Report on Form 10-Q for the quarter ended
Financial Tables
|
Consolidated Balance Sheets (In Thousands) (Unaudited) |
||||||||
|
2023 |
2022 |
|||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents |
$ |
68,480 |
|
$ |
79,231 |
|
||
| Short-term investment |
|
20,000 |
|
|
— |
|
||
| Accounts receivable, net |
|
8,336 |
|
|
6,948 |
|
||
| Inventory, net |
|
7,396 |
|
|
11,183 |
|
||
| Other current assets |
|
7,898 |
|
|
3,816 |
|
||
| Total current assets |
|
112,110 |
|
|
101,178 |
|
||
| Property and equipment, net |
|
1,062 |
|
|
1,504 |
|
||
| Capitalized software, net |
|
5,733 |
|
|
5,073 |
|
||
| Operating lease right-of-use assets |
|
1,915 |
|
|
2,052 |
|
||
| Deferred tax asset |
|
18,232 |
|
|
1,838 |
|
||
| Total assets |
$ |
139,052 |
|
$ |
111,645 |
|
||
| Liabilities and Stockholders’ Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable |
$ |
7,468 |
|
$ |
4,112 |
|
||
| Accrued expenses |
|
5,426 |
|
|
6,274 |
|
||
| Term loan, current |
|
6,250 |
|
|
6,250 |
|
||
| Deferred revenue, current |
|
2,310 |
|
|
1,965 |
|
||
| Operating lease liabilities, current |
|
280 |
|
|
165 |
|
||
| Total current liabilities |
|
21,734 |
|
|
18,766 |
|
||
| Term loan, net of current portion |
|
109,352 |
|
|
112,086 |
|
||
| Deferred revenue, net of current portion |
|
1,071 |
|
|
926 |
|
||
| Operating lease liabilities, net of current portion |
|
1,781 |
|
|
1,927 |
|
||
| TRA liability |
|
14,432 |
|
|
— |
|
||
| Warrant liability |
|
— |
|
|
4,104 |
|
||
| Earnout liability |
|
63,920 |
|
|
32,110 |
|
||
| Total liabilities |
|
212,290 |
|
|
169,919 |
|
||
| Commitments and contingencies (See Note 18) | ||||||||
| Stockholders’ Deficit | ||||||||
| Preferred stock, |
|
— |
|
|
— |
|
||
| Class A common stock, |
|
3 |
|
|
1 |
|
||
| Class B common stock, |
|
— |
|
|
— |
|
||
| Class V voting stock, |
|
3 |
|
|
5 |
|
||
| Additional paid-in capital |
|
— |
|
|
— |
|
||
| Accumulated deficit |
|
(46,393 |
) |
|
(44,460 |
) |
||
| Accumulated other comprehensive loss |
|
(18 |
) |
|
(5 |
) |
||
| biote Corp.’s stockholders’ deficit |
|
(46,405 |
) |
|
(44,459 |
) |
||
| Noncontrolling interest |
|
(26,833 |
) |
|
(13,815 |
) |
||
| Total stockholders’ deficit |
|
(73,238 |
) |
|
(58,274 |
) |
||
| Total liabilities and stockholders’ deficit |
$ |
139,052 |
|
$ |
111,645 |
|
||
|
Consolidated Statements of Operations (In Thousands, except per share values) (Unaudited) |
||||||||||||||||
| Three Months Ended |
Six Months Ended |
|||||||||||||||
|
2023 |
2022 |
2023 |
2022 |
|||||||||||||
| Revenue: | ||||||||||||||||
| Product revenue |
$ |
48,652 |
|
$ |
40,789 |
|
$ |
92,807 |
|
$ |
77,547 |
|
||||
| Service revenue |
|
605 |
|
|
570 |
|
|
1,293 |
|
|
955 |
|
||||
| Total revenue |
|
49,257 |
|
|
41,359 |
|
|
94,100 |
|
|
78,502 |
|
||||
| Cost of revenue (excluding depreciation and amortization included in selling, general and administrative, below) | ||||||||||||||||
| Cost of products |
|
14,992 |
|
|
12,984 |
|
|
28,019 |
|
|
24,641 |
|
||||
| Cost of services |
|
836 |
|
|
553 |
|
|
1,686 |
|
|
1,173 |
|
||||
| Cost of revenue |
|
15,828 |
|
|
13,537 |
|
|
29,705 |
|
|
25,814 |
|
||||
| Selling, general and administrative |
|
25,760 |
|
|
113,425 |
|
|
48,845 |
|
|
128,528 |
|
||||
| Income (loss) from operations |
|
7,669 |
|
|
(85,603 |
) |
|
15,550 |
|
|
(75,840 |
) |
||||
| Other income (expense), net: | ||||||||||||||||
| Interest expense |
|
(2,547 |
) |
|
(794 |
) |
|
(4,973 |
) |
|
(1,153 |
) |
||||
| Gain (loss) from change in fair value of warrant liability |
|
(11,793 |
) |
|
3,399 |
|
|
(13,411 |
) |
|
3,399 |
|
||||
| Gain (loss) from change in fair value of earnout liability |
|
(6,400 |
) |
|
61,680 |
|
|
(31,810 |
) |
|
61,680 |
|
||||
| Loss from extinguishment of debt |
|
— |
|
|
(445 |
) |
|
— |
|
|
(445 |
) |
||||
| Other income |
|
898 |
|
|
88 |
|
|
1,671 |
|
|
98 |
|
||||
| Total other income (expense), net |
|
(19,842 |
) |
|
63,928 |
|
|
(48,523 |
) |
|
63,579 |
|
||||
| Loss before provision for income taxes |
|
(12,173 |
) |
|
(21,675 |
) |
|
(32,973 |
) |
|
(12,261 |
) |
||||
| Income tax expense (benefit) |
|
922 |
|
|
(346 |
) |
|
1,552 |
|
|
(282 |
) |
||||
| Net loss |
|
(13,095 |
) |
|
(21,329 |
) |
|
(34,525 |
) |
|
(11,979 |
) |
||||
| Less: Net loss attributable to noncontrolling interest |
|
(7,952 |
) |
|
(18,723 |
) |
|
(22,577 |
) |
|
(9,373 |
) |
||||
| Net loss attributable to biote Corp. stockholders |
|
(5,143 |
) |
|
(2,606 |
) |
|
(11,948 |
) |
|
(2,606 |
) |
||||
| Other comprehensive income (loss): | ||||||||||||||||
| Foreign currency translation adjustments |
|
— |
|
|
(5 |
) |
|
— |
|
|
1 |
|
||||
| Other comprehensive income (loss) |
|
— |
|
|
(5 |
) |
|
— |
|
|
1 |
|
||||
| Comprehensive loss |
$ |
(13,095 |
) |
$ |
(21,334 |
) |
$ |
(34,525 |
) |
$ |
(11,978 |
) |
||||
| Net loss per common share | ||||||||||||||||
| Basic |
$ |
(0.25 |
) |
$ |
(0.34 |
) |
$ |
(0.62 |
) |
$ |
(0.34 |
) |
||||
| Diluted |
$ |
(0.25 |
) |
$ |
(0.34 |
) |
$ |
(0.62 |
) |
$ |
(0.34 |
) |
||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic |
|
20,704,866 |
|
|
7,574,271 |
|
|
19,153,574 |
|
|
7,574,271 |
|
||||
| Diluted |
|
20,704,866 |
|
|
7,574,271 |
|
|
19,153,574 |
|
|
7,574,271 |
|
||||
|
Consolidated Statements of Cash Flows (In Thousands) (Unaudited) |
||||||||
| Six Months Ended |
||||||||
|
2023 |
2022 |
|||||||
| Operating Activities | ||||||||
| Net loss |
$ |
(34,525 |
) |
$ |
(11,979 |
) |
||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization |
|
1,068 |
|
|
1,064 |
|
||
| Bad debt expense |
|
766 |
|
|
60 |
|
||
| Amortization of debt issuance costs |
|
391 |
|
|
188 |
|
||
| Provision for obsolete inventory |
|
(155 |
) |
|
20 |
|
||
| Non-cash lease expense |
|
137 |
|
|
116 |
|
||
| Shares issued in settlement of litigation |
|
1,199 |
|
|
— |
|
||
| Non-cash sponsor share transfers |
|
— |
|
|
7,216 |
|
||
| Share-based compensation expense |
|
4,817 |
|
|
79,270 |
|
||
| (Gain) loss from change in fair value of warrant liability |
|
13,411 |
|
|
(3,399 |
) |
||
| (Gain) loss from change in fair value of earnout liability |
|
31,810 |
|
|
(61,680 |
) |
||
| Loss from extinguishment of debt |
|
— |
|
|
445 |
|
||
| Deferred income taxes |
|
236 |
|
|
(598 |
) |
||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable |
|
(2,154 |
) |
|
(1,652 |
) |
||
| Inventory |
|
3,942 |
|
|
(217 |
) |
||
| Other current assets |
|
(4,082 |
) |
|
(5,407 |
) |
||
| Accounts payable |
|
3,295 |
|
|
3,839 |
|
||
| Deferred revenue |
|
490 |
|
|
201 |
|
||
| Accrued expenses |
|
(848 |
) |
|
(28,965 |
) |
||
| Operating lease liabilities |
|
(31 |
) |
|
(123 |
) |
||
| Net cash provided by (used in) operating activities |
|
19,767 |
|
|
(21,601 |
) |
||
| Investing Activities | ||||||||
| Purchases of short-term investments |
|
(20,000 |
) |
|
— |
|
||
| Purchases of property and equipment |
|
(67 |
) |
|
(328 |
) |
||
| Purchases of capitalized software |
|
(1,158 |
) |
|
(812 |
) |
||
| Net cash used in investing activities |
|
(21,225 |
) |
|
(1,140 |
) |
||
| Financing Activities | ||||||||
| Proceeds from the business combination |
|
— |
|
|
12,282 |
|
||
| Principal repayments on term loan |
|
(3,125 |
) |
|
(1,250 |
) |
||
| Borrowings on term loan |
|
— |
|
|
125,000 |
|
||
| Extinguishment of Bank of America term loan |
|
— |
|
|
(36,250 |
) |
||
| Debt issuance costs |
|
— |
|
|
(4,036 |
) |
||
| Proceeds from exercise of stock options |
|
420 |
|
|
— |
|
||
| Distributions |
|
(6,588 |
) |
|
(8,707 |
) |
||
| Capitalized transaction costs |
|
— |
|
|
(8,341 |
) |
||
| Net cash provided by (used in) financing activities |
|
(9,293 |
) |
|
78,698 |
|
||
| Effect of exchange rate changes on cash and cash equivalents |
|
— |
|
|
2 |
|
||
| Net increase (decrease) in cash and cash equivalents |
|
(10,751 |
) |
|
55,959 |
|
||
| Cash and cash equivalents at beginning of period |
|
79,231 |
|
|
26,766 |
|
||
| Cash and cash equivalents at end of period |
$ |
68,480 |
|
$ |
82,725 |
|
||
| Supplemental Disclosure of Cash Flow Information | ||||||||
| Cash paid for interest |
$ |
4,581 |
|
$ |
982 |
|
||
| Cash paid for income taxes |
|
4,472 |
|
|
171 |
|
||
| Non-cash investing and financing activities | ||||||||
| Capital expenditures and capitalized software included in accounts payable |
$ |
61 |
|
$ |
126 |
|
||
|
Reconciliation of Adjusted EBITDA to Net (Loss) Income (In Thousands) (Unaudited) |
||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
|
2023 |
2022 |
2023 |
2022 |
|||||||||||||
| Net loss |
$ |
(13,095 |
) |
$ |
(21,329 |
) |
$ |
(34,525 |
) |
$ |
(11,979 |
) |
||||
| Interest expense |
|
2,547 |
|
|
794 |
|
|
4,973 |
|
|
1,153 |
|
||||
| Income tax expense (benefit) |
|
922 |
|
|
(346 |
) |
|
1,552 |
|
|
(282 |
) |
||||
| Depreciation and amortization |
|
530 |
|
|
563 |
|
|
1,068 |
|
|
1,064 |
|
||||
| Loss from extinguishment of debt |
|
— |
|
|
445 |
|
|
— |
|
|
445 |
|
||||
| Other non-operating items |
|
(898 |
) |
|
(89 |
) |
|
(1,671 |
) |
|
(98 |
) |
||||
| Share-based compensation expense |
|
2,647 |
|
|
79,270 |
|
` |
|
4,817 |
|
|
79,270 |
|
|||
| Transaction-related expenses |
|
— |
|
|
18,769 |
|
|
— |
|
|
19,477 |
|
||||
| Litigation and other |
|
3,692 |
|
|
150 |
|
|
6,210 |
|
|
841 |
|
||||
| (Gain) loss from change in fair value of warrant liability |
|
11,793 |
|
|
(3,399 |
) |
|
13,411 |
|
|
(3,399 |
) |
||||
| (Gain) loss from change in fair value of earnout liability |
|
6,400 |
|
|
(61,680 |
) |
|
31,810 |
|
|
(61,680 |
) |
||||
| Adjusted EBITDA |
$ |
14,538 |
|
$ |
13,148 |
|
$ |
27,645 |
|
$ |
24,812 |
|
||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230810999398/en/
Investor Relations:
eric.prouty@advisiry.com
Media:
Press@biote.com
Source: