Full Press Release Details
Bioventus Inc. Reports Fourth Quarter and Full Year 2020 Financial Results; Introduces Full Year 2021
DURHAM, NC March 25, 2021 Bioventus Inc. (Nasdaq: BVS) ( Bioventus or the
Company ), a global leader in innovations for active healing, today reported financial results for the fourth quarter and year ended December 31, 2020. This press release presents historical results, for the periods presented, of
Bioventus, LLC, the predecessor of Bioventus Inc. for financial reporting purposes.
Fourth Quarter 2020 Financial Results Summary:
2020 Financial Results Summary:
Fourth Quarter 2020 and Recent Highlights:
Bioventus finished 2020 with improved momentum in our overall business with second half net sales increasing 3% year-over-year, and fourth quarter net
sales increasing 15% on a quarter-over-quarter basis, as we continued to rebound from the global pandemic, stated Ken Reali, Chief Executive Officer of Bioventus. We are proud of the strong operating and financial performance we
delivered in 2020, despite the unprecedented challenges presented by the external environment. We believe this performance is a direct result of our results oriented culture at Bioventus and the focus by our team on our mission to make a difference
by helping patients resume and enjoy active lives.
Mr. Reali continued: The substantial improvements in our execution and operating
achievements that we delivered in 2020 have continued in 2021. We have significantly enhanced our balance sheet and financial condition with the net proceeds raised in our IPO in February and believe we are well positioned to execute our growth
strategy going forward. We introduced financial guidance for 2021 that reflects revenue growth in the range of 12% to 16% year-over-year, fueled primarily by anticipated strong global growth in sales of our leading portfolio of PMA-approved therapies for OA joint pain and our portfolio of clinically efficacious and cost effective bone graft substitutes and continuing to build on our minimally invasive fracture treatment franchise.
Importantly, we look forward to potential acceleration in our multi-year growth profile fueled by continued progress in our clinical, product development and new product pipeline and our pursuit of in-organic
business development opportunities that are accretive to our long-term growth profile and leverage our significant customer presence across orthopedics, broaden our portfolio and increase our global footprint.
Presentation & Initial Public Offering:
Fourth Quarter 2020 Financial Results:
following table represents net sales by geographic region, and by vertical, for the three months ended December 31, 2020 and December 31, 2019, respectively:
| Three Months Ended December 31, | Change | |||||||||||||||
| ($ thousands, except for percentage) | 2020 | 2019 | $ | % | ||||||||||||
| By Geographic Region: | ||||||||||||||||
| U.S. | $ | 89,675 | $ | 86,844 | $ | 2,831 | 3.3 | % | ||||||||
| International | 8,916 | 10,710 | (1,794 | ) | (16.8 | %) | ||||||||||
| Net Sales | $ | 98,591 | $ | 97,554 | $ | 1,037 | 1.1 | % | ||||||||
| By Vertical: | ||||||||||||||||
| OA joint pain treatment and joint preservation | $ | 52,246 | $ | 54,459 | $ | (2,213 | ) | (4.1 | %) | |||||||
| Minimally invasive fracture treatment | 27,191 | 26,755 | 436 | 1.6 | % | |||||||||||
| Bone graft substitutes | 19,154 | 16,340 | 2,814 | 17.2 | % | |||||||||||
| Net Sales | $ | 98,591 | $ | 97,554 | $ | 1,037 | 1.1 | % |
Net sales of $98.6 million, compared to $97.6 million for the fourth quarter of 2019, an increase of
$1.0 million, or 1%, year-over-year. The increase in net sales, by geography, was driven by an increase of $2.8 million, or 3%, year-over-year, in U.S. net sales, partially offset by a decrease of $1.8 million, or 17%, year-over-year,
in international net sales. International net sales for the fourth quarter ended December 31, 2020 declined 19% year-over-year on a constant currency basis. The increase in net sales, by vertical, was driven by an increase of $2.8 million,
or 17%, year-over-year, in bone graft substitutes sales and an increase of $0.4 million, or 2%, year-over-year, in minimally invasive fracture treatment sales, partially offset by a decrease of $2.2 million, or 4%, year-over-year, in OA
joint pain treatment and joint preservation sales.
Gross profit was $73.5 million, or 74.5% of net sales, compared to $73.4 million, or 75.3%
of net sales, for the fourth quarter of 2019, an increase of 0.1%, year-over-year. Non-GAAP gross profit* was $78.6 million, or 79.7% of net sales, compared to $78.7 million, or 80.7% of net sales,
for the fourth quarter of 2019, a decrease of $0.1 million, or 0.1%, year-over-year.
Operating income was $5.9 million, compared to $13.7 million for the fourth quarter of 2019, a
decrease of $7.8 million, or 57%, year-over-year. Operating margin was 6.0% of net sales, compared to 14% of net sales for the fourth quarter of 2019. Non-GAAP operating income* was $17.0 million,
compared to $21.0 million for the fourth quarter of 2019, a decrease of $3.9 million, or 19%, year-over-year. Non-GAAP operating margin3 was 17.3%
of net sales, compared to 21.5% of net sales for the fourth quarter of 2019.
Total other expense was $2.8 million, compared to $7.5 million for
the fourth quarter of 2019, a decrease of $4.7 million, or 63%, year-over-year, primarily due to decreased debt interest resulting from refinancing our debt in December 2019 as well as the decline in interest rates. Income tax expense was
$0.9 million, compared to $0.9 million in the fourth quarter of 2019.
Net income from continuing operations was $2.3 million, or $0.46 per
common unit, compared to $5.3 million, or $1.08 per common unit, for the fourth quarter of 2019, a decrease of $3.1 million, or 58%, year-over-year.
Adjusted EBITDA was $28.2 million, compared to $30.7 million for the fourth quarter of 2019, a decrease of $2.6 million, or 8%, year-over-year.
Net income attributable to common unit holders was $0.5 million, or $0.10 per common unit, compared to $2.5 million, or $0.52 per common unit,
for the fourth quarter of 2019, a decrease of $2.0 million, or 80%, year-over-year.
attributable to common unit holders was $11.4 million, or $2.32 per common unit, compared to $9.8 million, or $2.00 per common unit, for the fourth quarter of 2019, an increase of $1.6 million, or 16%, year-over-year.
As of December 31, 2020, the Company had $86.8 million in cash and cash equivalents and $188.4 million in debt obligations, compared to
$64.5 million in cash and cash equivalents and $198.0 million in debt obligations as of December 31, 2019.
Full Year 2020 Financial Results:
The following table represents net sales by geographic region, and by vertical, for the twelve months ended December 31, 2020 and December 31, 2019,
| Twelve Months Ended December | Change | |||||||||||||||
| ($ thousands, except for percentage) | 2020 | 2019 | $ | % | ||||||||||||
| By Geographic Region: | ||||||||||||||||
| U.S. | $ | 293,697 | $ | 305,072 | $ | (11,375 | ) | (3.7 | %) | |||||||
| International | 27,464 | 35,069 | (7,605 | ) | (21.7 | %) | ||||||||||
| Net Sales | $ | 321,161 | $ | 340,141 | $ | (18,980 | ) | (5.6 | %) | |||||||
| By Vertical: | ||||||||||||||||
| OA joint pain treatment and joint preservation | $ | 171,178 | $ | 182,082 | $ | (10,904 | ) | (6.0 | %) | |||||||
| Minimally invasive fracture treatment | 88,624 | 103,504 | (14,880 | ) | (14.4 | %) | ||||||||||
| Bone graft substitutes | 61,359 | 54,555 | 6,804 | 12.5 | % | |||||||||||
| Net Sales | $ | 321,161 | $ | 340,141 | $ | (18,980 | ) | (5.6 | %) |
Net sales of $321.2 million, compared to $340.1 million for the year ended December 31, 2019, a decrease of
$19.0 million, or 6%, year-over-year. The decrease in net sales, by geography, was driven by a decrease of $11.4 million, or 4%, year-over-year, in U.S. net sales and a decrease of $7.6 million, or 22%, year-over-year, in
international net sales. International sales for the year ended December 31, 2020 declined 22% year-over-year on a constant currency basis. The decrease in net sales, by vertical, was driven by a decrease of $14.9 million, or 14%,
year-over-year, in minimally invasive fracture treatment sales, a decrease of $10.9 million, or 6%, year-over-year, in OA joint pain treatment and joint preservation sales, partially offset by an increase of $6.8 million, or 12%,
year-over-year, in bone graft substitutes sales.
Net income from continuing operations was $14.7 million, or $3.00 per common unit, compared to
$8.1 million, or $1.66 per common unit, for the year ended December 31, 2019, an increase of $6.6 million, or 81%, year-over-year.
Adjusted EBITDA was $72.4 million, compared to $79.2 million for the year ended December 31, 2019, a decrease of $6.7 million, or 9%,
Net income attributable to common unit holders was $4.4 million, or $0.89 per common unit, compared to a Net loss attributable to
common unit holders of ($0.7 million), or ($0.13) per common unit, for the year ended December 31, 2019, an increase of $5.0 million year-over-year.
Non-GAAP net income attributable to common unit holders was $37.1 million, or $7.56 per common unit, compared to
$28.6 million, or $5.84 per common unit, for the year ended December 31, 2019, an increase of $8.4 million, year-over-year.
Year 2021 Financial Guidance:
For the twelve months ending December 31, 2021, the Company expects:
Fourth Quarter 2020 Earnings Conference Call:
Management will host a conference call to discuss its financial results and provide a business update, with a question and answer session, at 5:00 p.m. Eastern
Time on March 25, 2021. Those who would like to participate may dial 844-945-2085
(442-268-1266 for international callers) and provide access code 2158468. A live webcast of the call and any accompanying materials will also be provided on the investor
relations section of the Company s website at https://ir.bioventus.com/.
The webcast will be archived on the Company s website
at https://ir.bioventus.com/ and available for replay until March 25, 2022.
Bioventus delivers clinically proven, cost-effective products that help people heal quickly and safely. Its mission is to make a difference by helping patients
resume and enjoy active lives. The Innovations For Active Healing from Bioventus include offerings for osteoarthritis, surgical and non-surgical bone healing. Built on a commitment to high quality standards,
evidence-based medicine and strong ethical behavior, Bioventus is a trusted partner for physicians worldwide. For more information, visit www.bioventus.com and follow the company on LinkedIn and Twitter. Bioventus and the Bioventus logo are
registered trademarks of Bioventus LLC.
Legal Notice Regarding Forward-Looking Statements
This press release contains 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. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements, including, without limitation, statements concerning
our business strategy, position and operations; expected tax treatment, sales trends, opportunities and growth; the ongoing COVID-19 pandemic; the expected benefits and impact of Bioventus products,
including in certain regions, and biologic drug candidates; and the Company s financial guidance and expected financial performance. In some cases, you can identify forward-looking statements by terminology such as aim,
anticipate, assume, believe, contemplate, continue, could, due, estimate, expect, goal, intend, may,
objective, plan, predict, potential, positioned, seek, should, target, will, would and other similar expressions that are
predictions of or indicate future events and future trends, or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. Forward-looking statements are inherently subject to risks
and uncertainties, some of which cannot be predicted or quantified. Factors that could cause actual results to differ materially from those contemplated in this press release include, but are not limited to, statements about the adverse impacts on
our business as a result of the COVID-19 pandemic; our dependence on a limited number of products; our ability to develop, acquire and commercialize new products, line extensions or expanded indications; the
continued and future acceptance of our existing portfolio of products and any new products, line extensions or expanded indications by physicians, patients, third-party payers and others in the medical community; our ability to differentiate the
hyaluronic acid ( HA ) viscosupplementation therapies we own or distribute from alternative therapies for the treatment of osteoarthritic; the proposed down-classification of non-invasive bone growth
stimulators, including our Exogen system, by the FDA; our ability to achieve and maintain adequate levels of coverage and/or reimbursement for our products, the procedures using our products, or any future products we may seek to commercialize; our
ability to complete acquisitions or successfully integrate new businesses, products or technologies in a cost-effective and non-disruptive manner; competition against other companies; the negative impact on
our ability to market our HA products due to the reclassification of HA products from medical devices to drugs in the United States by the FDA; our ability to attract, retain and motivate our senior management and qualified personnel; our ability to
continue to research, develop and manufacture our products if our facilities are damaged or become inoperable; failure to comply with the extensive government regulations related to our products and operations; enforcement actions if we engage in
improper claims submission practices or in improper marketing or promotion of our products; the FDA regulatory process and our ability to obtain and maintain required regulatory clearances and approvals; failure to comply with the government
regulations that apply to our human cells, tissues and cellular or tissue-based products; the clinical studies of any of our future products that do not product results necessary to support regulatory clearance or approval in the United States or
elsewhere; and the other risks identified in the Risk Factors section of the Company s public filings with the Securities and Exchange Commission ( SEC ), including Bioventus 424(b)(4) prospectus filed on February 12, 2021
in connection with the Company s initial public offering, as such factors may be updated from time to time in Bioventus other filings with the SEC, which are accessible on the SEC s website at www.sec.gov and the Investor
Relations page of Bioventus website at ir.bioventus.com. Except to the extent required by law, the Company undertakes no obligation to update or review any estimate, projection, or forward-looking statement. Actual results may differ
materially from those set forth in the forward-looking statements.
Consolidated balance sheets
December 31, 2020 and 2019
(Amounts in thousands, unaudited)
| 2020 | 2019 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 86,839 | $ | 64,520 | ||||
| Accounts receivable, net | 88,283 | 85,128 | ||||||
| Inventory | 29,120 | 27,326 | ||||||
| Prepaid and other current assets | 7,552 | 6,059 | ||||||
| Total current assets | 211,794 | 183,033 | ||||||
| Property and equipment, net | 6,879 | 4,489 | ||||||
| Goodwill | 49,800 | 49,800 | ||||||
| Intangible assets, net | 191,650 | 216,510 | ||||||
| Operating lease assets | 14,961 | 15,267 | ||||||
| Investment and other assets | 19,382 | 3,308 | ||||||
| Total assets | $ | 494,466 | $ | 472,407 | ||||
| Liabilities and Members Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 4,422 | $ | 6,440 | ||||
| Accrued liabilities | 88,187 | 52,827 | ||||||
| Accrued equity-based compensation | 11,054 | 15,547 | ||||||
| Current portion of long-term debt | 15,000 | 10,000 | ||||||
| Other current liabilities | 3,926 | 4,201 | ||||||
| Total current liabilities | 122,589 | 89,015 | ||||||
| Long-term debt, less current portion | 173,378 | 187,965 | ||||||
| Accrued equity-based compensation, less current portion | 29,249 | 25,255 | ||||||
| Deferred tax liability | 3,362 | 3,874 | ||||||
| Other long-term liabilities | 21,728 | 20,681 | ||||||
| Total liabilities | 350,306 | 326,790 | ||||||
| Commitments and contingencies | ||||||||
| Members equity (preferred unit liquidation preference of $210,576 and $204,443 at December 31, 2020 and 2019, respectively) | 285,173 | 285,147 | ||||||
| Accumulated other comprehensive income (loss) | 1,607 | (465 | ) | |||||
| Accumulated deficit | (144,539 | ) | (141,700 | ) | ||||
| Equity attributable to unit holders | 142,241 | 142,982 | ||||||
| Noncontrolling interest | 1,919 | 2,635 | ||||||
| Total members equity | 144,160 | 145,617 | ||||||
| Total liabilities and members equity | $ | 494,466 | $ | 472,407 |
Consolidated statements of operations and comprehensive income
(Amounts in thousands, except unit and per unit data, unaudited)
| Three Months | Three Months | Twelve Months | Twelve Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2020 | Dec 31, 2019 | |||||||||||||
| Net sales | $ | 98,591 | $ | 97,554 | $ | 321,161 | $ | 340,141 | ||||||||
| Cost of sales (including depreciation and amortization of $5,093, $5,249, $21,169, and $22,399 respectively) | 25,121 | 24,125 | 87,642 | 90,935 | ||||||||||||
| Gross profit | 73,470 | 73,429 | 233,519 | 249,206 | ||||||||||||
| Selling, general and administrative expense | 61,974 | 54,454 | 193,078 | 198,475 | ||||||||||||
| Research and development expense | 2,891 | 3,144 | 11,202 | 11,055 | ||||||||||||
| Restructuring costs | 563 | 35 | 563 | 575 | ||||||||||||
| Depreciation and amortization | 2,134 | 2,093 | 7,439 | 7,908 | ||||||||||||
| Operating income | 5,908 | 13,703 | 21,237 | 31,193 | ||||||||||||
| Interest expense | 2,656 | 7,644 | 9,751 | 21,579 | ||||||||||||
| Other loss (income) | 111 | (146 | ) | (4,428 | ) | (75 | ) | |||||||||
| Other expense | 2,767 | 7,498 | 5,323 | 21,504 | ||||||||||||
| Income from continuing operations before income taxes | 3,141 | 6,205 | 15,914 | 9,689 | ||||||||||||
| Income tax expense | 890 | 892 | 1,192 | 1,576 | ||||||||||||
| Net income from continuing operations | 2,251 | 5,313 | 14,722 | 8,113 | ||||||||||||
| Loss from discontinued operations, net of tax | 199 | 1,815 | ||||||||||||||
| Net income | 2,251 | 5,114 | 14,722 | 6,298 | ||||||||||||
| Loss attributable to noncontrolling interest | 525 | 523 | 1,689 | 553 | ||||||||||||
| Net income attributable to unit holders | 2,776 | 5,637 | 16,411 | 6,851 | ||||||||||||
| Other comprehensive income (loss), net of tax | ||||||||||||||||
| Change in prior service cost and unrecognized loss for defined benefit plan adjustment | (54 | ) | (78 | ) | (54 | ) | (78 | ) | ||||||||
| Change in foreign currency translation adjustments | 1,439 | 255 | 2,126 | (322 | ) | |||||||||||
| Other comprehensive income (loss) | 1,385 | 177 | 2,072 | (400 | ) | |||||||||||
| Comprehensive income | $ | 4,161 | $ | 5,814 | $ | 18,483 | $ | 6,451 | ||||||||
| Net income from continuing operations attributable to unit holders | $ | 2,776 | $ | 5,836 | $ | 16,411 | $ | 8,666 | ||||||||
| Accumulated and unpaid preferred distributions | (1,608 | ) | (1,534 | ) | (6,133 | ) | (5,955 | ) | ||||||||
| Net income allocated to participating shareholders | (670 | ) | (1,555 | ) | (5,895 | ) | (1,555 | ) | ||||||||
| Net income from continuing operations attributable to common unit holders | 498 | 2,747 | 4,383 | 1,156 | ||||||||||||
| Loss from discontinued operations, net of tax | 199 | 1,815 | ||||||||||||||
| Net income (loss) attributable to common unit holders | $ | 498 | $ | 2,548 | $ | 4,383 | $ | (659 | ) | |||||||
| Net income (loss) per unit attributable to common unit holders-basic and diluted | ||||||||||||||||
| Net income from continuing operations | $ | 0.10 | $ | 0.56 | $ | 0.89 | $ | 0.24 | ||||||||
| Loss from discontinued operations, net of tax | 0.04 | 0.37 | ||||||||||||||
| Net income (loss) attributable to common unit holders | $ | 0.10 | $ | 0.52 | $ | 0.89 | ($ | 0.13 | ) | |||||||
| Weighted average units used in computing basic and diluted net income (loss) per common unit | 4,900,000 | 4,900,000 | 4,900,000 | 4,900,000 |