Full Press Release Details
Biote Reports Third Quarter 2024 Financial Results
Continued Profitable Growth
Vertical integration drives gross profit margin improvement
Launch of proprietary clinical decision support software to strengthen competitive advantages
IRVING, TX November 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 third quarter ended September 30, 2024.
Third Quarter 2024 Financial Highlights
financial result comparisons made are against the prior-year period)
Biote s third quarter revenue increased 12.8% from the
prior-quarter period, driven by continued growth in procedure revenue and a strong return to growth in our dietary supplements business, said Terry Weber, Biote s Chief Executive Officer. Consistent with our strategic objectives, we
achieved a solid improvement in gross profit margin, primarily reflecting cost savings from the vertical integration of manufacturing. Even as we continued to invest in strengthening our capabilities, we generated 15.4% growth in Adjusted EBITDA as
compared to the third quarter of 2023.
Ms. Weber continued, In September 2024, we introduced several major enhancements to the Biote
Method, expanding our evidence-based approach to hormone optimization and therapeutic wellness. We believe these enhancements will enable our extensive nationwide network of Biote-certified practitioners to provide an even higher level of holistic,
personalized treatments for patients. By leveraging our proprietary patient dataset and algorithms, we believe we have further strengthened Biote s competitive advantages in the marketplace. As we implemented targeted enhancements to our
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.
clinical decision support software in the third quarter of 2024, we experienced a temporary disruption in procedure volume as practitioners adjusted to the new workflow in their offices.
Additionally, we experienced some disruption to procedure volume from hurricane-related clinic closures in several of our core states. Although we expect some residual impact from these headwinds in the fourth quarter of 2024, we anticipate
procedure revenue growth will reaccelerate in 2025.
2024 Third Quarter Financial Review
(All financial result comparisons made are against the prior-year period unless otherwise noted)
Revenue for the third quarter of 2024 was $51.4 million compared to $45.6 million for the third quarter of 2023. Procedure revenue grew 7.1%,
reflecting growth at established clinics and the addition of new clinics, partially offset by a temporary slowdown in procedure volume related to the introduction of enhanced clinical decision support software. In addition, Hurricane Helene impacted
procedure volume from clinic closures in our core states. Dietary supplement revenue grew 21.7%, benefiting from the transition of a portion of this business as we continue to drive improvements in our Amazon business.
Gross profit margin for the third quarter of 2024 was 70.5% compared to 68.9% for the third quarter of 2023. The increase in gross profit margin was primarily
due to increased vertical integration of manufacturing and effective cost management, which more than offset a revenue mix shift to dietary supplements.
Operating income for the third quarter of 2024 was $12.2 million, compared to $7.6 million for the third quarter of 2023. Operating income in the
third quarter of 2024 increased primarily due to increased sales and gross profit margin, as well as a moderation in operating expense growth.
for the third quarter of 2024 was $12.7 million and diluted earnings per share attributable to biote Corp. stockholders of $0.33, compared to net income of $19.6 million and diluted earnings per share attributable to biote Corp.
stockholders of $0.24 for the third quarter of 2023. Net income for the third quarter of 2024 and 2023 included gains of $7.2 million and $17.5 million, respectively, due to a change in the fair value of the earnout liabilities.
Adjusted EBITDA for the third quarter of 2024 was $16.2 million, with an Adjusted EBITDA margin of 31.5%. In the third quarter of 2023, Adjusted EBITDA
was $14.0 million, with an Adjusted EBITDA margin of 30.8%. The increase in 2024 third quarter Adjusted EBITDA and Adjusted EBITDA margin reflected improved sales, higher gross profit margin and effective operating cost management.
Fourth Quarter and Full Year 2024 Financial Outlook
Ms. Weber commented, Biote continues to make solid progress in driving growth in our top-tier clinics and
further expanding our practitioner network. Our quick-start program that accelerates the revenue ramp from new clinics also remains an important contributor to growth.
Ms. Weber continued, We are confident that our advanced clinical decision support software, launched toward the end of the third quarter of 2024,
represents a key competitive differentiator for Biote and further advances our commitment to enhancing patient health. Our updated software follows the latest evidence-based publications and makes recommendations across the expanded range of our
portfolio of products. Additionally, we expect our software to strengthen our providers capabilities to serve a broader range of patients.
As we continue to support our practitioners with additional workflow guidance and software training,
we expect some residual impact to procedure revenue in the fourth quarter of 2024. Additionally, both Hurricanes Helene and Milton caused extended clinic closures in several of our core states in October, temporarily impacting procedure revenue in
the fourth quarter of 2024.
As a result, we are adjusting our 2024 financial guidance to
$197-$201 million in revenue and $58-$61 million in Adjusted EBITDA1, as compared to our prior forecast of
$200-$204 million in revenue and $60-$63 million in Adjusted EBITDA1, Ms. Weber concluded.
1 Please see Forward-Looking Non-GAAP Financial
Measures below for additional information about forward-looking Adjusted EBITDA.
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, November 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 Corp. Third Quarter Earnings Call. A replay of the webcast will be available on the Events page of the Biote Investor Relations website, found here, 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:
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.
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.
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 maintain and 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 the impact of hurricane and other natural disasters; and future exchange and interest rates. The foregoing list of factors is not exhaustive. You should carefully consider the foregoing factors and other risks
and uncertainties described in the Risk Factors section of Biote s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024, filed with the Securities and Exchange
Commission on August 9, 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.
Consolidated Balance Sheets (Unaudited)
| September 30, | December 31, | |||||||
| (in thousands) | 2024 | 2023 | ||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 38,225 | $ | 89,002 | ||||
| Accounts receivable, net | 8,493 | 6,809 | ||||||
| Inventory, net | 16,200 | 17,307 | ||||||
| Other current assets | 7,065 | 9,225 | ||||||
| Total current assets | 69,983 | 122,343 | ||||||
| Property and equipment, net | 5,813 | 1,218 | ||||||
| Capitalized software, net | 4,974 | 4,973 | ||||||
| Goodwill | 5,516 | |||||||
| Intangible assets, net | 5,666 | |||||||
| Operating lease right-of-use assets | 3,376 | 1,877 | ||||||
| Deferred tax asset | 5,924 | 24,884 | ||||||
| Total assets | $ | 101,252 | $ | 155,295 | ||||
| Liabilities and Stockholders Deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,374 | $ | 4,155 | ||||
| Accrued expenses | 8,185 | 8,497 | ||||||
| Term loan, current | 6,250 | 6,250 | ||||||
| Deferred revenue, current | 2,927 | 3,002 | ||||||
| Earnout liabilities, current | 100 | |||||||
| Operating lease liabilities, current | 482 | 311 | ||||||
| Share repurchase liabilities, current | 24,192 | |||||||
| Total current liabilities | 46,510 | 22,215 | ||||||
| Term loan, net of current portion | 102,548 | 106,630 | ||||||
| Revolving loans | 10,000 | |||||||
| Deferred revenue, net of current portion | 1,603 | 1,322 | ||||||
| Operating lease liabilities, net of current portion | 3,026 | 1,680 | ||||||
| Share repurchase liabilities, net of current portion | 43,610 | |||||||
| TRA liability | 4,424 | 18,894 | ||||||
| Earnout liabilities, net of current portion | 16,355 | 41,100 | ||||||
| Total liabilities | 228,076 | 191,841 | ||||||
| Commitments and contingencies | ||||||||
| Stockholders Deficit | ||||||||
| Preferred stock | ||||||||
| Class A common stock | 3 | 3 | ||||||
| Class V voting stock | 1 | 3 | ||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | (124,717 | ) | (29,391 | ) | ||||
| Accumulated other comprehensive loss | (29 | ) | (12 | ) | ||||
| Treasury stock, at cost | (5,600 | ) | ||||||
| biote Corp. s stockholders deficit | (130,342 | ) | (29,397 | ) | ||||
| Noncontrolling interest | 3,518 | (7,149 | ) | |||||
| Total stockholders deficit | (126,824 | ) | (36,546 | ) | ||||
| Total liabilities and stockholders deficit | $ | 101,252 | $ | 155,295 |
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| (in thousands, except share and per share amounts) | 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenue: | ||||||||||||||||
| Product revenue | $ | 49,806 | $ | 44,831 | $ | 143,952 | $ | 137,638 | ||||||||
| Service revenue | 1,578 | 726 | 3,405 | 2,019 | ||||||||||||
| Total revenue | 51,384 | 45,557 | 147,357 | 139,657 | ||||||||||||
| Cost of revenue | ||||||||||||||||
| Cost of products | 14,431 | 13,070 | 41,659 | 41,089 | ||||||||||||
| Cost of services | 741 | 1,097 | 2,167 | 2,783 | ||||||||||||
| Cost of revenue | 15,172 | 14,167 | 43,826 | 43,872 | ||||||||||||
| Selling, general and administrative | 24,028 | 23,791 | 74,687 | 72,636 | ||||||||||||
| Income from operations | 12,184 | 7,599 | 28,844 | 23,149 | ||||||||||||
| Other income (expense), net: | ||||||||||||||||
| Interest expense, net | (3,542 | ) | (1,530 | ) | (7,779 | ) | (4,821 | ) | ||||||||
| Loss from change in fair value of warrant liability | (13,411 | ) | ||||||||||||||
| Gain (loss) from change in fair value of earnout liabilities | 7,213 | 17,450 | (18,825 | ) | (14,360 | ) | ||||||||||
| Other income (expense) | (3 | ) | (4 | ) | (14 | ) | ||||||||||
| Total other income (expense), net | 3,671 | 15,917 | (26,608 | ) | (32,606 | ) | ||||||||||
| Income (loss) before provision for income taxes | 15,855 | 23,516 | 2,236 | (9,457 | ) | |||||||||||
| Income tax expense | 3,198 | 3,874 | 5,673 | 5,426 | ||||||||||||
| Net Income (loss) | 12,657 | 19,642 | (3,437 | ) | (14,883 | ) | ||||||||||
| Less: Net income (loss) attributable to noncontrolling interest | 1,955 | 12,112 | (2,891 | ) | (10,465 | ) | ||||||||||
| Net income (loss) attributable to biote Corp. stockholders | $ | 10,702 | $ | 7,530 | $ | (546 | ) | $ | (4,418 | ) | ||||||
| Other comprehensive income (loss): | ||||||||||||||||
| Foreign currency translation adjustments | (8 | ) | 8 | (10 | ) | 8 | ||||||||||
| Other comprehensive income (loss) | (8 | ) | 8 | (10 | ) | 8 | ||||||||||
| Comprehensive income (loss) | $ | 12,649 | $ | 19,650 | $ | (3,447 | ) | $ | (14,875 | ) | ||||||
| Net income (loss) per common share | ||||||||||||||||
| Basic | $ | 0.34 | $ | 0.25 | $ | (0.02 | ) | $ | (0.19 | ) | ||||||
| Diluted | $ | 0.33 | $ | 0.24 | $ | (0.02 | ) | $ | (0.19 | ) | ||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | 31,045,174 | 30,334,193 | 33,235,662 | 22,921,401 | ||||||||||||
| Diluted | 32,260,809 | 31,041,245 | 33,235,662 | 22,921,401 |
Condensed Consolidated Statements of Cash Flows (Unaudited)
| Nine Months Ended September 30, | ||||||||
| (in thousands) | 2024 | 2023 | ||||||
| Operating Activities | ||||||||
| Net loss | $ | (3,437 | ) | $ | (14,883 | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 2,436 | 1,484 | ||||||
| Bad debt expense | 911 | 624 | ||||||
| Amortization of debt issuance costs | 605 | 591 | ||||||
| Provision for obsolete inventory | 683 | (32 | ) | |||||
| Non-cash lease expense | 685 | 423 | ||||||
| Non-cash interest on share repurchase liability | 1,548 | |||||||
| Shares issued in settlement of litigation | 1,199 | |||||||
| Share-based compensation expense | 6,849 | 7,060 | ||||||
| Loss from change in fair value of warrant liability | 13,411 | |||||||
| Loss from change in fair value of earnout liabilities | 18,825 | 14,360 | ||||||
| Deferred income taxes | 2,233 | 394 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (2,550 | ) | (3,834 | ) | ||||
| Inventory | 2,179 | 137 | ||||||
| Other current assets | 2,189 | (7,118 | ) | |||||
| Accounts payable | 156 | 1,582 | ||||||
| Deferred revenue | 206 | 853 | ||||||
| Accrued expenses | 24 | 4,005 | ||||||
| Operating lease liabilities | (667 | ) | (329 | ) | ||||
| Net cash provided by operating activities | 32,875 | 19,927 | ||||||
| Investing Activities | ||||||||
| Purchases of short-term investments | (20,000 | ) | ||||||
| Purchases of property and equipment | (4,760 | ) | (518 | ) | ||||
| Purchases of capitalized software | (1,116 | ) | (1,191 | ) | ||||
| Acquisitions, net of cash acquired | (11,611 | ) | ||||||
| Net cash used in investing activities | (17,487 | ) | (21,709 | ) | ||||
| Financing Activities | ||||||||
| Repurchases of common stock | (5,599 | ) | ||||||
| Borrowings on revolving loans | 10,000 | |||||||
| Principal repayments on term loan | (4,687 | ) | (4,687 | ) | ||||
| Payments on repurchase liability | (62,162 | ) | ||||||
| Proceeds from exercise of stock options | 809 | 420 | ||||||
| Issuance of stock under purchase plan | 146 | |||||||
| Distributions | (4,656 | ) | (7,588 | ) | ||||
| Net cash used in financing activities | (66,149 | ) | (11,855 | ) | ||||
| Effect of exchange rate changes on cash and cash equivalents | (16 | ) | (19 | ) | ||||
| Net decrease in cash and cash equivalents | (50,777 | ) | (13,656 | ) | ||||
| Cash and cash equivalents at beginning of period | 89,002 | 79,231 | ||||||
| Cash and cash equivalents at end of period | $ | 38,225 | $ | 65,575 | ||||
| Supplemental Disclosure of Cash Flow Information | ||||||||
| Cash paid for interest | $ | 7,325 | $ | 7,022 | ||||
| Cash paid for income taxes | $ | 2,288 | $ | 2,789 | ||||
| Non-cash investing and financing activities | ||||||||
| Shares issued to acquire Simpatra | $ | 1,841 | $ |
Reconciliation of Adjusted EBITDA to Net Income (Loss) (Unaudited)