Full Press Release Details
Biote Reports First Quarter 2023 Financial Results
New Initiative Targets Long-term Growth Opportunity in Men s Health
Company Launches Warrant Exchange Offer and Consent Solicitation
Maintains 2023 Financial Guidance
IRVING, TX May 9, 2023 Biote (NASDAQ: BTMD), a leading solutions provider in preventive health care through the delivery of
personalized hormone therapy, today announced financial results for the first quarter ended March 31, 2023.
First Quarter 2023 Financial
Highlights, year-over-year:
Biote generated solid financial performance in the first quarter of 2023, driven by an approximately 21% increase in revenue, as we continued to
effectively serve patients who wish to age healthfully and feel their best, said Terry Weber, Biote Chief Executive Officer. Overall, our first quarter results underscore the continued strong profitability of our capital-light business
model that is designed to enhance patient health outcomes and deliver economic value for practitioners.
During the quarter, we launched a new
initiative to accelerate our expansion into the large and growing men s health market. Approximately 20 million men over age 45 suffer from low testosterone, yet only a small percentage currently receive treatment for this condition. To
better address this significant unmet medical need, we are strengthening our focus on serving men s healthcare practitioners throughout the United States. This strategic initiative aligns with our enduring mission to be the leading provider of
hormone replacement education, resources and support.
Ms. Weber continued, Consistent with our efforts to enhance shareholder value, we remain
committed to improving our capital structure. To this end, we are announcing today a warrant exchange offer and consent solicitation, aimed at reducing the potential dilutive impact of outstanding warrants.
2023 First Quarter Financial Review
first quarter of 2023 was $44.8 million, an increase of 20.7% from $37.1 million for the first quarter of 2022. The increase was driven by procedure revenue growth of 13.8% and dietary supplement revenue growth of 46.0%.
Gross profit margin for the first quarter of 2023 was 69.1% compared to 66.9% for the first quarter of 2022. The increase in gross profit margin reflected
effective cost management.
Operating income for the first quarter of 2023 was $7.9 million, a decrease of 19.3% from $9.8 million in the first
quarter of 2022. The decrease in operating income was due to higher SG&A expense, which included $2.2 million in stock compensation expense and other non-recurring expenses of $2.5 million, as
well as higher marketing and selling expenses to support strategic expansion in new geographic markets.
Net loss for the first quarter of 2023 was
$(21.4) million, or $(0.39) per share, compared to net income of $9.4 million for the first quarter of 2022. Net income decreased as the result of lower operating income, increased interest expense and a net change in the fair value adjustments
to warrant and earnout liabilities of $27.0 million in the first quarter.
Adjusted EBITDA for the first quarter of 2023 was $13.1 million
compared to $11.7 million for the first quarter of 2022. The 12.4% increase in Adjusted EBITDA was driven by the growth in revenue and improved gross profit, partially offset by increased operating expenses to support our growth and geographic
Warrant Exchange Offer
Today, the company launched an exchange offer (the Offer ) and consent solicitation (the Consent Solicitation ) relating to its
outstanding warrants to acquire shares of Class A Common Stock (the Warrants ). Pursuant to the offering, each warrant holder whose Warrants are exchanged will receive 0.23 shares of our Class A Common Stock for each warrant.
Parties representing approximately 19.4% of the publicly traded Warrants and approximately 59.3% of the privately held Warrants have agreed to tender their Warrants in the Offer.
The Offer and Consent Solicitation are being made pursuant to a registration statement on Form S-4 (the
Prospectus/Offer to Exchange ), dated May 9, 2023, and Schedule TO, dated May 9, 2023 (the Schedule TO ), each of which have been filed with the U.S. Securities and Exchange Commission (the SEC ) and more
fully set forth the terms and conditions of the Offer and Consent Solicitation.
The Company has engaged Roth Capital Partners, LLC as financial advisor for the Offer and Consent
Solicitation. Any questions or requests for assistance concerning the Offer and Consent Solicitation may be directed to Roth Capital Partners, LLC at the following email address: rothecm@roth.com. D.F. King & Co., Inc. has been appointed as
the Information Agent for the Offer and Consent Solicitation, and Continental Stock Transfer & Trust Company has been appointed as the Exchange Agent. Requests for documents should be directed to D.F. King & Co., Inc. at (877) 732-3614 or via the following email address: btmd@dfking.com.
2023 Financial Outlook
We are maintaining our 2023 guidance as Biote remains on track for continued growth in revenue and Adjusted EBITDA. Our financial forecast assumes
stronger revenue growth and Adjusted EBITDA performance in the second half of this year as compared to the first half, as we begin to benefit from the contributions of sales personnel added at the end of 2022. We continue to invest to strengthen our
infrastructure and capabilities while further expanding our sales team, concluded Ms. Weber.
| ($ in millions) | 2023 Guidance Range | |||
| Revenue | $ | 190-$200 | ||
| Adjusted EBITDA | $ | 56-$60 |
Weber, Chief Executive Officer, and the Company s management will host a conference call to review these results and provide a business update beginning at 8:30 a.m. ET on Wednesday, May 10, 2023. 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 Q1 2023 Earnings Webcast. 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, transaction-related expenses, fair
value adjustments to certain equity instruments classified as liabilities and other non-operating costs. Below we have provided a reconciliation of net income (the most directly comparable GAAP financial
measure) to Adjusted EBITDA.
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:
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.
Important Additional Information Has Been Filed with the SEC
The Offer described in this press release commenced on May 9, 2023. On May 9, 2023, the Prospectus/Offer to Exchange and the Schedule TO, including
an offer to exchange, a letter of transmittal and related documents, were filed with the SEC by the Company. The offer to exchange the outstanding Warrants will only be made pursuant to the Prospectus/Offer to Exchange and Schedule TO, including
related documents filed as a part of the exchange offer. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROSPECTUS/OFFER TO EXCHANGE AND SCHEDULE TO FILED OR TO BE FILED WITH THE SEC CAREFULLY, AS THEY MAY BE AMENDED OR SUPPLEMENTED FROM TIME
TO TIME, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION THAT INVESTORS AND SECURITY HOLDERS SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING THE EXCHANGE OFFER, INCLUDING THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER. Investors and
security holders may obtain a free copy of these statements (when available) and other documents filed with the SEC at the website maintained by the SEC at www.sec.gov or by directing such requests to D.F. King & Co., Inc. at (877) 732-3614 or via the following email address: btmd@dfking.com. Investors and security holders may also obtain, at no charge, the documents filed or furnished to the SEC by the Company under the Investor
Relations section of Biote s website at ir.biote.com.
No Offer or Solicitation
This press release shall not constitute an offer to exchange or the solicitation of an offer to exchange or the solicitation of an offer to purchase any
securities, nor shall there be any exchange or sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. A
registration statement on Form S-4 relating to the securities to be issued in the Offer has been filed with the SEC but has not yet become effective. Such securities may not be sold nor may offers to buy be
accepted prior to the time the registration statement becomes effective. The Offer and Consent Solicitation are being made only through the Schedule TO and Prospectus / Offer to Exchange, and the complete terms and conditions of the Offer and
Consent Solicitation are set forth in the Schedule TO and Prospectus / Offer to Exchange.
None of the Company, any of its management or its board of directors, or the Information Agent, the Exchange
Agent or Roth makes any recommendation as to whether or not holders of Warrants should tender Warrants for exchange in the Offer or provide their consent pursuant to the Consent Solicitation.
Biote is transforming healthy aging through
innovative, personalized hormone optimization therapies delivered by Biote-certified medical providers. Biote trains practitioners how to identify and treat early indicators of hormone-related aging conditions, an underserved $7 billion global
market, providing affordable symptom relief for patients and driving clinic success for practitioners.
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
Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 29, 2023. 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
Consolidated Balance
| March 31, 2023 | December 31, 2022 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 87,608 | $ | 79,231 | ||||
| Accounts receivable, net | 7,646 | 6,948 | ||||||
| Inventory, net | 9,623 | 11,183 | ||||||
| Other current assets | 2,579 | 3,816 | ||||||
| Total current assets | 107,456 | 101,178 | ||||||
| Property and equipment, net | 1,307 | 1,504 | ||||||
| Capitalized software, net | 5,206 | 5,073 | ||||||
| Operating lease right-of-use assets | 1,983 | 2,052 | ||||||
| Deferred tax asset | 3,183 | 1,838 | ||||||
| Total assets | $ | 119,135 | $ | 111,645 | ||||
| Liabilities and Stockholders Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 5,063 | $ | 4,112 | ||||
| Accrued expenses | 6,252 | 6,274 | ||||||
| Term loan, current | 6,250 | 6,250 | ||||||
| Deferred revenue, current | 2,078 | 1,965 | ||||||
| Operating lease liabilities, current | 217 | 165 | ||||||
| Total current liabilities | 19,860 | 18,766 | ||||||
| Term loan, net of current portion | 110,719 | 112,086 | ||||||
| Deferred revenue, net of current portion | 1,018 | 926 | ||||||
| Operating lease liabilities, net of current portion | 1,855 | 1,927 | ||||||
| TRA liability | 6,250 | |||||||
| Warrant liability | 5,722 | 4,104 | ||||||
| Earnout liability | 57,520 | 32,110 | ||||||
| Total liabilities | 202,944 | 169,919 | ||||||
| Commitments and contingencies (See Note 18) | ||||||||
| Stockholders Deficit | ||||||||
| Preferred stock, $0.0001 par value, 10,000,000 shares authorized; no shares issued or outstanding as of March 31, 2023 and December 31, 2022 | ||||||||
| Class A common stock, $0.0001 par value, 600,000,000 shares authorized; 20,102,402 and 11,242,887 shares issued, 18,514,902 and 9,655,387 shares outstanding as of March 31, 2023 and December 31, 2022, respectively | 2 | 1 | ||||||
| Class B common stock, $0.0001 par value, 8,000,000 shares authorized; no shares issued or outstanding as of March 31, 2023 and December 31, 2022 | ||||||||
| Class V voting stock, $0.0001 par value, 100,000,000 shares authorized; 50,612,566 and 58,565,824 shares issued, 40,612,566 and 48,565,824 shares outstanding as of March 31, 2023 and December 31, 2022, respectively | 4 | 5 | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | (48,532 | ) | (44,460 | ) | ||||
| Accumulated other comprehensive loss | (12 | ) | (5 | ) | ||||
| biote Corp. s stockholders deficit | (48,538 | ) | (44,459 | ) | ||||
| Noncontrolling interest | (35,271 | ) | (13,815 | ) | ||||
| Total stockholders deficit | (83,809 | ) | (58,274 | ) | ||||
| Total liabilities and stockholders deficit | $ | 119,135 | $ | 111,645 |
Consolidated Statements of Operations
(In Thousands, except per share values)
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Revenue: | ||||||||
| Product revenue | $ | 44,155 | $ | 36,758 | ||||
| Service revenue | 688 | 385 | ||||||
| Total revenue | 44,843 | 37,143 | ||||||
| Cost of revenue (excluding depreciation and amortization included in selling, general and administrative, below) | ||||||||
| Cost of products | 13,027 | 11,657 | ||||||
| Cost of services | 850 | 620 | ||||||
| Cost of revenue | 13,877 | 12,277 | ||||||
| Selling, general and administrative | 23,085 | 15,103 | ||||||
| Income from operations | 7,881 | 9,763 | ||||||
| Other income (expense), net: | ||||||||
| Interest expense | (2,426 | ) | (359 | ) | ||||
| Loss from change in fair value of warrant liability | (1,618 | ) | ||||||
| Loss from change in fair value of earnout liability | (25,410 | ) | ||||||
| Other income | 773 | 10 | ||||||
| Total other expense, net | (28,681 | ) | (349 | ) | ||||
| Income (loss) before provision for income taxes | (20,800 | ) | 9,414 | |||||
| Income tax expense | 630 | 64 | ||||||
| Net income (loss) | (21,430 | ) | 9,350 | |||||
| Less: Net loss attributable to noncontrolling interest | (14,625 | ) | ||||||
| Net loss attributable to biote Corp. stockholders | (6,805 | ) | ||||||
| Other comprehensive income: | ||||||||
| Foreign currency translation adjustments | 6 | |||||||
| Other comprehensive income | 6 | |||||||
| Comprehensive income (loss) | $ | (21,430 | ) | $ | 9,356 | |||
| Net loss per common share | ||||||||
| Basic | $ | (0.39 | ) | |||||
| Diluted | $ | (0.39 | ) | |||||
| Weighted average common shares outstanding | ||||||||
| Basic | 17,585,045 | |||||||
| Diluted | 17,585,045 |
Consolidated Statements of Cash Flows
| Three Months Ended March 31, | ||||||||
| 2023 | 2022 | |||||||
| Operating Activities | ||||||||
| Net income (loss) | $ | (21,430 | ) | $ | 9,350 | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 538 | 502 | ||||||
| Bad debt expense | 30 | 30 | ||||||
| Amortization of debt issuance costs | 195 | 55 | ||||||
| Provision for obsolete inventory | 60 | |||||||
| Non-cash lease expense | 69 | 58 | ||||||
| Shares issued in settlement of litigation | 1,199 | |||||||
| Share-based compensation expense | 2,170 | |||||||
| Loss from change in fair value of warrant liability | 1,618 | |||||||
| Loss from change in fair value of earnout liability | 25,410 | |||||||
| Deferred income taxes | 103 | |||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (728 | ) | (1,344 | ) | ||||
| Inventory | 1,560 | 377 | ||||||
| Other current assets | 1,238 | (1,445 | ) | |||||
| Accounts payable | 857 | 2,089 | ||||||
| Deferred revenue | 205 | 145 | ||||||
| Accrued expenses | (22 | ) | (2,847 | ) | ||||
| Operating lease liabilities | (20 | ) | (61 | ) | ||||
| Net cash provided by operating activities | 12,992 | 6,969 | ||||||
| Investing Activities | ||||||||
| Purchases of property and equipment | (62 | ) | (262 | ) | ||||
| Purchases of capitalized software | (318 | ) | (220 | ) | ||||
| Net cash used in investing activities | (380 | ) | (482 | ) | ||||
| Financing Activities | ||||||||
| Principal repayments on term loan | (1,562 | ) | (1,250 | ) | ||||
| Proceeds from exercise of stock options | 420 | |||||||
| Distributions | (3,093 | ) | (2,735 | ) | ||||
| Capitalized transaction costs | (1,577 | ) | ||||||
| Net cash used in financing activities | (4,235 | ) | (5,562 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | 13 | |||||||
| Net increase in cash and cash equivalents | 8,377 | 938 | ||||||
| Cash and cash equivalents at beginning of period | 79,231 | 26,766 | ||||||
| Cash and cash equivalents at end of period | $ | 87,608 | $ | 27,704 | ||||
| Supplemental Disclosure of Cash Flow Information | ||||||||
| Cash paid for interest | $ | 2,230 | $ | 304 | ||||
| Cash paid for income taxes | 2,232 | 1 | ||||||
| Non-cash investing and financing activities | ||||||||
| Capital expenditures and capitalized software included in accounts payable | $ | 94 | $ | 271 |