8-K
false 0001819253 0001819253 2024-03-12 2024-03-12

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): March 12, 2024

 

 

biote Corp.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-40128   85-1791125

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

1875 W. Walnut Hill Ln #100

Irving, Texas 75038

(Address of principal executive offices, including zip code)

(844) 604-1246

(Registrant’s telephone number, including area code)

 

(Former name or former address, if changed since last report)

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading
Symbols

 

Name of each exchange

on which registered

Class A common stock, par value $0.0001 per share   BTMD   The Nasdaq Stock Market LLC

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencements communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

 

 

 


Item 2.02

Results of Operations and Financial Condition.

On March 12, 2024, biote Corp., a Delaware corporation (the “Company”) issued a press release to report the Company’s financial results for the fiscal year and quarter ended December 31, 2023. The full text of the press release issued in connection with the announcement is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Item 2.02 and the attached Exhibit 99.1 are being furnished and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall they be deemed to be incorporated by reference in any filing made by the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits.

 

Exhibit

No.

   Description
99.1    Press Release, dated March 12, 2024.
104    Cover Page Interactive Data File (embedded within the Inline XBRL document).


SIGNATURE

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

biote Corp.
By:  

/s/ Teresa S. Weber

Name:   Teresa S. Weber
Title:   Chief Executive Officer

Date: March 12, 2024

EX-99.1

Exhibit 99.1

 

LOGO

Biote Reports Fourth Quarter and Full Year 2023 Financial Results

Grew practitioner network to over 7,100 from 6,400 in 2022

Launched BioteRx, our new hormone and therapeutic wellness offerings

Enhancing shareholder value with agreement to repurchase 18.4M founders’ shares in addition to a

separate $20M share repurchase program

Reaffirms 2024 financial guidance, with an acceleration in second half growth

IRVING, TX – March 12, 2024 - 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 fourth quarter and full year ended December 31, 2023.

Fourth Quarter 2023 Financial Highlights

(All financial result comparisons made are against the prior-year period)

 

   

Revenue of $45.7 million, a 2.7% increase and in line with pre-released financial guidance

 

   

Procedure revenue of $34.9 million, up 6.6%

 

   

Gross profit margin of 69.4%, a more than 400-basis point increase

 

   

Net income of $12.1 million, representing net income margin of 26.4%, and diluted earnings per share attributable to biote Corp. stockholders of $0.18, compared to net income of $12.8 million, representing net income margin of 28.8%, and diluted earnings per share attributable to biote Corp. stockholders of $0.18

 

   

Adjusted EBITDA1 of $13.6 million, a 3.5% increase and in line with pre-released financial guidance

 

   

Adjusted EBITDA margin1 of 29.7%

Full Year 2023 Financial Highlights

(All financial result comparisons made are against the prior year)

 

   

Revenue of $185.4 million, a 12.4% increase

 

   

Procedure revenue of $141.0 million, up 9.3%

 

   

Gross profit margin of 68.8%, an approximately 190-basis point increase

 

   

Net loss of $(2.8) million, representing net loss margin of (1.5)%, and diluted earnings per share attributable to biote Corp. stockholders of $0.13 per diluted share compared to net income of $1.3 million, representing net income margin of 0.8%, and diluted loss per share attributable to biote Corp. shareholders of $(0.12) per diluted share

 

   

Adjusted EBITDA1 of $55.3 million, a 10.2% increase

 

   

Adjusted EBITDA margin1 of 29.8%

 

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.


“Fourth quarter procedure revenue increased approximately 6.6%, reflecting stability for our hormone optimization therapies,” said Terry Weber, Biote Chief Executive Officer. “Over the year, we also continued to expand our nationwide network, growing the net number of Biote-certified practitioners to more than 7,100.

“This past month, we were pleased to reach a settlement with Dr. Gary S. Donovitz, Biote’s founder, to resolve protracted and costly litigation. Under the terms of the agreement, Biote will repurchase all of his outstanding shares and paired interests over three years at an average price of $4.17 per share. We believe this repurchase will be accretive to shareholder value. In addition, we recently announced that our board of directors approved a separate stock repurchase program for up to $20 million of our Class A common stock.

Ms. Weber continued, “As consumers prioritize their health and well-being, we continue to effectively address the large and underserved market for hormone optimization. In February, we began the phased launch of our new BioteRx hormone and therapeutic wellness products in the areas of body composition, sexual health and preventive wellness. Initial provider feedback has been positive, strengthening our conviction in the growth opportunity in front of us. We remain focused on accelerating the number of Biote-certified practitioners and further expanding our evidence-based product offerings to promote positive health outcomes for our patients.”

2023 Fourth Quarter Financial Review

(All financial result comparisons made are against the prior-year period unless otherwise noted)

Revenue for the fourth quarter of 2023 was $45.7 million, an increase of 2.7% from $44.5 million for the fourth 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 14.6%. As expected, fourth quarter dietary supplement revenue decreased, primarily as a result of one of the Company’s larger dietary supplement distributors exiting the nutraceutical business during the quarter.

Gross profit margin for the fourth quarter of 2023 was 69.4% compared to 65.3% for the fourth quarter of 2022. The increase in gross profit margin was primarily due to product mix and effective cost management.

Operating income for the fourth quarter of 2023 was $5.5 million, compared to $7.3 million for the fourth quarter of 2022. Operating income in the fourth quarter of 2023 decreased as growth in revenue and improved gross profit were more than offset by higher expenses, primarily for professional services.

Net income for the fourth quarter of 2023 was $12.1 million, representing a margin of 26.4%, and diluted earnings per share attributable to biote Corp. stockholders of $0.18, compared to net income of $12.8 million, representing a margin of 28.8%, and diluted earnings per share attributable to biote Corp. stockholders of $0.18, for the fourth quarter of 2022. Net income for the fourth quarter of 2023 and 2022 included a gain of $5.4 million and $6.9 million, respectively, due to a change in the fair value of the earnout liability. Additionally, net income for the fourth quarter of 2022 included a gain of $0.6 million due to a change in the fair value of the warrant liability.

Adjusted EBITDA for the fourth quarter of 2023 was $13.6 million, with an Adjusted EBITDA margin of 29.7%, compared to Adjusted EBITDA of $13.1 million, with an Adjusted EBITDA margin of 29.5% for the fourth quarter of 2022.


2023 Full Year Financial Review

(All financial result comparisons made are against the prior year unless otherwise noted)

Revenue for 2023 was $185.4 million, an increase of 12.4% from $165.0 million in 2022. The increase was driven by growth in both procedure revenue and dietary supplements revenue.

Gross profit margin for 2023 was 68.8% compared to 66.9% for 2022. The increase in gross profit margin was primarily due to product mix and effective cost management.

Operating income for 2023 was $28.7 million, compared to an operating loss of $(60.7) million for 2022. Operating income in 2023 included $9.1 million in stock compensation expense, $8.5 million in legal and settlements expense unrelated to on-going business and $6.1 million in transaction-related, merger and acquisition and other costs. Excluding these costs, operating income would have been $52.4 million in 2023. Operating loss in 2022 included $82.2 million in stock compensation expense, $4.2 million in legal and settlements expense unrelated to on-going business and $22.3 million in transaction-related and other costs. Excluding these costs, operating income would have been $48.0 million in 2022.

Net loss for 2023 was $(2.8) million, representing a margin of (1.5)%, and diluted earnings per share attributable to biote Corp. stockholders of $0.13, compared to net income of $1.3 million, representing net income margin of 0.8%, and diluted loss per share attributable to biote Corp. shareholders of $(0.12) in 2022.

Adjusted EBITDA for 2023 was $55.3 million, with an Adjusted EBITDA margin of 29.8% compared to Adjusted EBITDA of $50.1 million, with an Adjusted EBITDA margin of 30.4% for 2022.

2024 Financial Outlook

“As we continue to execute on our strategy, we are forecasting solid financial performance in 2024, with an expectation for stronger revenue growth in the back half of the year.” concluded Ms. Weber.

 

($ in millions)    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, March 12, 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 Fourth Quarter 2023 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 potential that our acquisition of Asteria Health is not consummated; 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 the Biote’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2023 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)

 

     December 31,
2023
    December 31,
2022
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 89,002     $ 79,231  

Accounts receivable, net

     6,809       6,948  

Inventory, net

     17,307       11,183  

Other current assets

     9,225       3,816  
  

 

 

   

 

 

 

Total current assets

     122,343       101,178  

Property and equipment, net

     1,218       1,504  

Capitalized software, net

     4,973       5,073  

Operating lease right-of-use assets

     1,877       2,052  

Deferred tax asset

     24,884       1,838  
  

 

 

   

 

 

 

Total assets

   $ 155,295     $ 111,645  
  

 

 

   

 

 

 

Liabilities and Stockholders’ Deficit

    

Current liabilities:

    

Accounts payable

   $ 4,155     $ 4,112  

Accrued expenses

     8,497       6,274  

Term loan, current

     6,250       6,250  

Deferred revenue, current

     3,002       1,965  

Operating lease liabilities, current

     311       165  
  

 

 

   

 

 

 

Total current liabilities

     22,215       18,766  

Term loan, net of current portion

     106,630       112,086  

Deferred revenue, net of current portion

     1,322       926  

Operating lease liabilities, net of current portion

     1,680       1,927  

TRA liability

     18,894       —   

Warrant liability

     —        4,104  

Earnout liability

     41,100       32,110  
  

 

 

   

 

 

 

Total liabilities

     191,841       169,919  

Commitments and contingencies

    

Stockholders’ Deficit

    

Preferred stock, $0.0001 par value, 10,000,000 shares authorized; no shares issued or outstanding as of December 31, 2023 and December 31, 2022

     —        —   

Class A common stock, $0.0001 par value, 600,000,000 shares authorized; 35,842,383 and 11,242,887 shares issued, 34,254,883 and 9,655,387 shares outstanding as of December 31, 2023 and December 31, 2022, respectively

     3       1  

Class V voting stock, $0.0001 par value, 100,000,000 shares authorized; 38,819,066 and 58,565,824 shares issued, 28,819,066 and 48,565,824 shares outstanding as of December 31, 2023 and December 31, 2022, respectively

     3       5  

Additional paid-in capital

     —        —   

Accumulated deficit

     (29,391     (44,460

Accumulated other comprehensive loss

     (12     (5
  

 

 

   

 

 

 

biote Corp.’s stockholders’ deficit

     (29,397     (44,459

Noncontrolling interest

     (7,149     (13,815
  

 

 

   

 

 

 

Total stockholders’ deficit

     (36,546     (58,274
  

 

 

   

 

 

 

Total liabilities and stockholders’ deficit

   $ 155,295     $ 111,645  
  

 

 

   

 

 

 


Biote Corp.

Consolidated Statements of Operations

(In Thousands, except per share values)

(Unaudited)

 

     Three Months Ended December 31,     Year Ended December 31,  
     2023     2022     2023     2022  

Revenue:

        

Product revenue

   $ 44,935     $ 44,012     $ 182,573     $ 163,133  

Service revenue

     768       473       2,787       1,824  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

     45,703       44,485       185,360       164,957  

Cost of revenue

        

Cost of products

     13,157       14,599       54,246       51,990  

Cost of services

     848       825       3,631       2,585  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenue

     14,005       15,424       57,877       54,575  

Selling, general and administrative

     26,190       21,758       98,826       171,104  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) from operations

     5,508       7,303       28,657       (60,722

Other income (expense), net:

        

Interest expense, net

     (1,542     (1,569     (6,363     (4,047

Gain (loss) from change in fair value of warrant liability

     —        575       (13,411     5,127  

Gain (loss) from change in fair value of earnout liability

     5,370       6,930       (8,990     61,770  

Loss from extinguishment of debt

     —        —        —        (445

Other income (expense)

     (2     6       (16     29  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total other income (expense), net

     3,826       5,942       (28,780     62,434  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before provision for income taxes

     9,334       13,245       (123     1,712  

Income tax (benefit) expense

     (2,744     436       2,682       388  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     12,078       12,809       (2,805     1,324  

Less: Net income (loss) attributable to noncontrolling interest

     4,344       11,187       (6,121     2,293  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to biote Corp. stockholders

   $ 7,734     $ 1,622     $ 3,316     $ (969
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss):

        

Foreign currency translation adjustments

     —        (1     8       (1
  

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss)

     —        (1     8       (1
  

 

 

   

 

 

   

 

 

   

 

 

 

Comprehensive income (loss)

   $ 12,078     $ 12,808     $ (2,797   $ 1,323  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per common share

        

Basic

   $ 0.23     $ 0.19     $ 0.13     $ (0.12

Diluted

   $ 0.18     $ 0.18     $ 0.13     $ (0.12

Weighted average common shares outstanding

        

Basic

     33,982,258       8,703,533       25,709,343       8,059,371  

Diluted

     63,352,513       58,750,051       25,709,343       8,059,371  


Biote Corp.

Consolidated Statements of Cash Flows

(In Thousands)

(Unaudited)

 

     Year Ended December 31,  
     2023     2022  

Operating Activities

    

Net income (loss)

   $ (2,805   $ 1,324  

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

    

Depreciation and amortization

     2,994       2,199  

Bad debt expense (recoveries)

     663       (155

Amortization of debt issuance costs

     794       589  

Write-off of capitalized software

     313       —   

(Benefit from) provision for obsolete inventory

     (26     140  

Non-cash lease expense

     499       240  

Shares issued in settlement of litigation

     1,199       —   

Non-cash sponsor share transfers

     —        7,216  

Non-cash fees under SEPA

     —        119  

Share-based compensation expense

     9,057       82,180  

(Gain) loss from change in fair value of warrant liability

     13,411       (5,127

(Gain) loss from change in fair value of earnout liability

     8,990       (61,770

Loss from extinguishment of debt

     —        445  

Deferred income taxes

     721       (743

Changes in operating assets and liabilities:

    

Accounts receivable

     (505     (1,562

Inventory

     (6,098     (1,708

Other current assets

     (5,418     (2,284

Accounts payable

     (165     416  

Deferred revenue

     1,433       384  

Accrued expenses

     2,223       (30,841

Operating lease liabilities

     (397     (219
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     26,883       (9,157

Investing Activities

    

Purchases of property and equipment

     (359     (333

Purchases of capitalized software

     (2,354     (1,505
  

 

 

   

 

 

 

Net cash used in investing activities

     (2,713     (1,838

Financing Activities

    

Proceeds from the business combination

     —        12,282  

Principal repayments on term loan

     (6,250     (4,375

Borrowings on term loan

     —        125,000  

Extinguishment of Bank of America term loan

     —        (36,250

Debt issuance costs

     —        (4,036

Settlement of phantom equity rights

     —        (7,250

Settlement of RSUs

     —        (424

Proceeds from exercise of stock options

     420       —   

Issuance of stock under purchase plan

     144       —   

Distributions

     (8,694     (12,886

Capitalized transaction costs

     —        (8,341

Proceeds from issuance of shares under SEPA

     —        442  

SEPA transaction costs

     —        (702
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (14,380     63,460  

Effect of exchange rate changes on cash and cash equivalents

     (19     —   
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     9,771       52,465  

Cash and cash equivalents at beginning of period

     79,231       26,766  
  

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 89,002     $ 79,231  
  

 

 

   

 

 

 

Supplemental Disclosure of Cash Flow Information

    

Cash paid for interest

   $ 9,476     $ 4,426  

Cash paid for income taxes

   $ 4,426     $ 282  

Non-cash investing and financing activities

    

Capital expenditures and capitalized software included in accounts payable

   $ 208     $ 49  

Non-cash SEPA transaction costs

   $ —      $ 119  


Biote Corp.

Reconciliation of Adjusted EBITDA to Net (Loss) Income

(In Thousands)

(Unaudited)

The following table presents a reconciliation of net income to Adjusted EBITDA, as well as the calculation of net income (loss) margin and Adjusted EBITDA margin, for each of the periods indicated.

 

     Three Months Ended
December 31,
    Year Ended
December 31,
 

(in thousands)

   2023     2022     2023     2022  

Net income (loss)

   $ 12,078     $ 12,809     $ (2,805   $ 1,324  

Interest expense, net

     1,542       1,569       6,363       4,047  

Income tax (benefit) expense

     (2,744     436       2,682       388  

Depreciation and amortization

     1,510       555       2,994       2,199  

Loss from extinguishment of debt(1)

     —        —        —        445  

Share-based compensation expense(2)

     1,997       2,164       9,057       82,180  

Litigation expenses-former owner(3)

     1,963       1,819       6,770       3,603  

Litigation-other(4)

     153       —        633       477  

Legal settlement (gain) loss(5)

     (200     —        1,048       88  

Transaction-related expenses(6)

     32       978       2,118       21,627  

Other expenses(7)

     525       293       1,174       646  

Merger and acquisition expenses(8)

     2,088       —        2,821       —   

(Gain) loss from change in fair value of warrant liability

     —        (575     13,411       (5,127

(Gain) loss from change in fair value of earnout liability

     (5,370     (6,930     8,990       (61,770
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 13,574     $ 13,118     $ 55,256     $ 50,127  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenue

   $ 45,703     $ 44,485     $ 185,360     $ 164,957  

Net income (loss) margin(9)

     26.4     28.8     -1.5     0.8

Adjusted EBITDA margin(10)

     29.7     29.5     29.8     30.4

 

(1)

Represents unamortized debt issuance costs of $0.4 million charged to extinguishment of debt upon full repayment of the Company’s credit agreement with Bank of America.

(2)

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.

(3)

Represents legal expenses to defend the Company against claims asserted by the Company’s former owner.

(4)

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.

(5)

Represents settlements of legal matters.

(6)

Represents transaction costs including professional services fees of $0.03 million and $1.0 million for the three and twelve months ended December 31, 2023, respectively, and legal fees of $0.9 million and filing fees of $0.2 million for the year ended December 31, 2023, each of which were incurred in connection with the filing of, and transactions contemplated by, the Company’s securities offerings. For the three and twelve months ended December 31, 2022, this amount represents transaction costs including legal fees of $0.4 million and $4.8 million, respectively, professional services fees of $0.2 million and $4.0 million, respectively and filing fees of $0.2 million and $0.4 million, respectively and consulting fees of $0.2 million, share redemption costs of $7.2 million and transaction bonuses of $4.2 million. Each of these transaction costs were incurred in connection with the Business Combination that occurred during the year ended December 31, 2022.

(7)

Represents executive severance costs of $0.5 million and $0.8 million, for the three and twelve months ended December 31, 2023, respectively, and costs related to recruiting executive level management, including the Chief Commercial Officer of $0.2 million, legal fees of $0.1 million and professional services fees of $0.1 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 $0.02 million for the year ended December 31, 2023. For the three and twelve months ended December 31, this amount represents executive severance costs of $0.1 million and $0.4


  million respectively, and private air transportation expense incurred by the Company’s previous controlling stockholder of $0.2 million, expenses related to the transition of the CEO and CFO of $0.07 million and a realized foreign currency gain of $0.03 million for the year ended December 31, 2022.
(8)

Represents professional fees of $0.5 million and $0.6 million, consulting fees of $0.1 million and $0.4 million and legal fees of $1.4 million and $1.8 million for the three and twelve months ended December 31, 2023 all of which were associated with strategic opportunities to expand the business.

(9)

Net income (loss) margin is defined as net income (loss) divided by total revenue.

(10)

Adjusted EBITDA margin is defined as adjusted EBITDA divided by total revenue.

Investor Relations:

Eric Prouty

AdvisIRy Partners

[email protected]

Media:

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