Solid Second Quarter Revenue Growth
Continued Progress to Optimize Capital
Structure and Enhance Share Liquidity
Expansive Strategic Approach Targeting
Therapeutic Wellness and Men’s Health Categories
Biote (NASDAQ: BTMD), a leading solutions provider in preventive
health care through the delivery of personalized hormone therapy,
today announced financial results for the second quarter ended June
30, 2023.
Second Quarter 2023 Financial
Highlights
(All financial result comparisons made are against the prior
year period)
- Revenue of $49.3 million, a 19.1% increase
- Gross profit margin of 67.9%, a 60-basis point increase
- Net loss of $(13.1) million and GAAP loss per share of $(0.25),
compared to a net loss of $(21.3) million and GAAP loss per share
of $(0.34)
- Adjusted EBITDA of $14.5 million, a 10.6% increase
“Biote continued to broaden awareness of the benefits of hormone
replacement therapy while delivering solid financial performance in
our second quarter,” said Terry Weber, Biote’s Chief Executive
Officer. “Revenue grew more than 19% over the prior-year period,
and we achieved an Adjusted EBITDA margin of 29.5% even as we
invested in strengthening our capabilities. During the quarter, we
continued to optimize our capital structure by completing a warrant
exchange offer and consent solicitation. In addition, another
secondary offering of our Class A common stock was completed during
the quarter, further enhancing the liquidity of our publicly traded
shares without diluting current holders.”
Ms. Weber continued, “Recently we formalized our commitment to
men’s hormone health with the launch of our new Men’s Health
division. We are excited about the long-term opportunity in this
large and growing addressable market, as more men seek safe and
effective treatments regardless of age.
“To more effectively address the growing opportunities in
today’s dynamic preventative health market, we continue to expand
our strategic approach, encompassing a broader range of hormone and
wellness therapies. For example, we are currently trialing an
expanded suite of requested products from our top providers in
response to growing patient demand for wellness products that are
complementary to our existing therapies. Ultimately, we aim to
become a leading platform provider of evidence-based therapeutic
wellness solutions.”
2023 Second Quarter Financial Review
(All financial result comparisons made are against the prior
year period unless otherwise noted)
Revenue for the second quarter of 2023 was $49.3 million, an
increase of 19.1% from $41.4 million for the second quarter of
2022. The increase was driven by procedure revenue growth of 9.8%
and dietary supplement revenue growth of 52.8%. Second quarter
dietary supplement revenue benefited from a successful seasonal
promotion for Biote practitioners, as well as a continued positive
response to our new direct-to-patient distribution channel.
Gross profit margin for the second quarter of 2023 was 67.9%
compared to 67.3% for the second quarter of 2022. The increase in
gross profit margin reflected continued effective cost
management.
Operating income for the second quarter of 2023 was $7.7
million, compared to a loss of $(85.6) million for the second
quarter of 2022. Operating income in the second quarter of 2023
reflected growth in revenue and improved gross profit, partially
offset by increased personnel and other expenses to build our
infrastructure. Operating loss in the second quarter of 2022 was
mainly due to transaction-related expenses of $18.8 million and
share-based compensation of $79.3 million at time of going
public.
Net loss for the second quarter of 2023 was $(13.1) million, or
$(0.25) per share, compared to net loss of $(21.3) million, or
$(0.34) per share, for the second quarter of 2022. Net loss for the
second quarter of 2023 primarily reflected a net change in the fair
value adjustments to warrant and earnout liabilities of $18.2
million. Net loss for the second quarter of 2022 was impacted by
several transaction-related items.
Adjusted EBITDA for the second quarter of 2023 was $14.5
million, with an Adjusted EBITDA Margin of 29.5%, compared to
Adjusted EBITDA of $13.1 million, with an Adjusted EBITDA Margin of
31.8%, for the second quarter of 2022. The increase in Adjusted
EBITDA was driven by the growth in revenue and improved gross
profit, partially offset by increased operating expenses to support
the Company’s growth and expansion.1
2023 Financial Outlook
“Biote continues to drive profitable growth as we strengthen our
capabilities, broaden our suite of product offerings and focus on
therapeutic wellness solutions. Due to temporary inefficiencies
resulting from the realignment and expansion of our sales
geographies and evolving market dynamics, we anticipate a more
moderate pace of growth in the second half of 2023 as compared to
our prior forecast. As a result, we now forecast 2023 revenue and
Adjusted EBITDA will likely be toward the lower end of our guidance
range,” concluded Ms. Weber.
_____________________________
1 Please see the “Reconciliations of
Adjusted EBITDA” table below for a reconciliation of Adjusted
EBITDA to the most directly comparable GAAP measure, net income,
and additional information about Adjusted EBITDA.
($ in millions)
2023
Guidance Range
Revenue
$190-$200
Adjusted EBITDA
$56-$60
Conference Call:
Terry 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 Friday,
August 11, 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 Q2 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:
- Although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements of our assets;
- Adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs; and
- Adjusted EBITDA does not reflect tax payments that may
represent a reduction in cash available to us.
In addition, Adjusted EBITDA is subject to inherent limitations
as it reflects the exercise of judgment by Biote’s management about
which expenses are excluded or included. A reconciliation is
provided in the financial statement tables included below in this
press release for each non-GAAP financial measure to the most
directly comparable financial measure stated in accordance with
GAAP. Because of these limitations, you should consider Adjusted
EBITDA alongside other financial performance measures, including
net income and our other GAAP results.
About Biote
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 Quarterly Report
on Form 10-Q for the quarter ended June 30, 2023, filed with the
SEC on August 11, 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 its expectations.
Financial Tables
Biote Corp.
Consolidated Balance Sheets
(In Thousands)
(Unaudited)
June 30, December 31,
2023
2022
Assets Current assets: Cash and cash equivalents
$
68,480
$
79,231
Short-term investment
20,000
—
Accounts receivable, net
8,336
6,948
Inventory, net
7,396
11,183
Other current assets
7,898
3,816
Total current assets
112,110
101,178
Property and equipment, net
1,062
1,504
Capitalized software, net
5,733
5,073
Operating lease right-of-use assets
1,915
2,052
Deferred tax asset
18,232
1,838
Total assets
$
139,052
$
111,645
Liabilities and Stockholders’ Deficit Current
liabilities: Accounts payable
$
7,468
$
4,112
Accrued expenses
5,426
6,274
Term loan, current
6,250
6,250
Deferred revenue, current
2,310
1,965
Operating lease liabilities, current
280
165
Total current liabilities
21,734
18,766
Term loan, net of current portion
109,352
112,086
Deferred revenue, net of current portion
1,071
926
Operating lease liabilities, net of current portion
1,781
1,927
TRA liability
14,432
—
Warrant liability
—
4,104
Earnout liability
63,920
32,110
Total liabilities
212,290
169,919
Commitments and contingencies (See Note 18) Stockholders’ Deficit
Preferred stock, $0.0001 par value, 10,000,000 shares authorized;
no shares issued or outstanding as of June 30, 2023 and December
31, 2022
—
—
Class A common stock, $0.0001 par value, 600,000,000 shares
authorized; 29,310,636 and 11,242,887 shares issued, 27,723,136 and
9,655,387 shares outstanding as of June 30, 2023 and December 31,
2022, respectively
3
1
Class B common stock, $0.0001 par value, 8,000,000 shares
authorized; no shares issued or outstanding as of June 30, 2023 and
December 31, 2022
—
—
Class V voting stock, $0.0001 par value, 100,000,000 shares
authorized; 44,819,066 and 58,565,824 shares issued, 34,819,066 and
48,565,824 shares outstanding as of June 30, 2023 and December 31,
2022, respectively
3
5
Additional paid-in capital
—
—
Accumulated deficit
(46,393
)
(44,460
)
Accumulated other comprehensive loss
(18
)
(5
)
biote Corp.’s stockholders’ deficit
(46,405
)
(44,459
)
Noncontrolling interest
(26,833
)
(13,815
)
Total stockholders’ deficit
(73,238
)
(58,274
)
Total liabilities and stockholders’ deficit
$
139,052
$
111,645
Biote Corp.
Consolidated Statements of
Operations
(In Thousands, except per share
values)
(Unaudited)
Three Months Ended June 30, Six Months Ended June
30,
2023
2022
2023
2022
Revenue: Product revenue
$
48,652
$
40,789
$
92,807
$
77,547
Service revenue
605
570
1,293
955
Total revenue
49,257
41,359
94,100
78,502
Cost of revenue (excluding depreciation and amortization included
in selling, general and administrative, below) Cost of products
14,992
12,984
28,019
24,641
Cost of services
836
553
1,686
1,173
Cost of revenue
15,828
13,537
29,705
25,814
Selling, general and administrative
25,760
113,425
48,845
128,528
Income (loss) from operations
7,669
(85,603
)
15,550
(75,840
)
Other income (expense), net: Interest expense
(2,547
)
(794
)
(4,973
)
(1,153
)
Gain (loss) from change in fair value of warrant liability
(11,793
)
3,399
(13,411
)
3,399
Gain (loss) from change in fair value of earnout liability
(6,400
)
61,680
(31,810
)
61,680
Loss from extinguishment of debt
—
(445
)
—
(445
)
Other income
898
88
1,671
98
Total other income (expense), net
(19,842
)
63,928
(48,523
)
63,579
Loss before provision for income taxes
(12,173
)
(21,675
)
(32,973
)
(12,261
)
Income tax expense (benefit)
922
(346
)
1,552
(282
)
Net loss
(13,095
)
(21,329
)
(34,525
)
(11,979
)
Less: Net loss attributable to noncontrolling interest
(7,952
)
(18,723
)
(22,577
)
(9,373
)
Net loss attributable to biote Corp. stockholders
(5,143
)
(2,606
)
(11,948
)
(2,606
)
Other comprehensive income (loss): Foreign currency
translation adjustments
—
(5
)
—
1
Other comprehensive income (loss)
—
(5
)
—
1
Comprehensive loss
$
(13,095
)
$
(21,334
)
$
(34,525
)
$
(11,978
)
Net loss per common share Basic
$
(0.25
)
$
(0.34
)
$
(0.62
)
$
(0.34
)
Diluted
$
(0.25
)
$
(0.34
)
$
(0.62
)
$
(0.34
)
Weighted average common shares outstanding Basic
20,704,866
7,574,271
19,153,574
7,574,271
Diluted
20,704,866
7,574,271
19,153,574
7,574,271
Biote Corp.
Consolidated Statements of Cash
Flows
(In Thousands)
(Unaudited)
Six Months Ended June 30,
2023
2022
Operating Activities Net loss
$
(34,525
)
$
(11,979
)
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: Depreciation and amortization
1,068
1,064
Bad debt expense
766
60
Amortization of debt issuance costs
391
188
Provision for obsolete inventory
(155
)
20
Non-cash lease expense
137
116
Shares issued in settlement of litigation
1,199
—
Non-cash sponsor share transfers
—
7,216
Share-based compensation expense
4,817
79,270
(Gain) loss from change in fair value of warrant liability
13,411
(3,399
)
(Gain) loss from change in fair value of earnout liability
31,810
(61,680
)
Loss from extinguishment of debt
—
445
Deferred income taxes
236
(598
)
Changes in operating assets and liabilities: Accounts receivable
(2,154
)
(1,652
)
Inventory
3,942
(217
)
Other current assets
(4,082
)
(5,407
)
Accounts payable
3,295
3,839
Deferred revenue
490
201
Accrued expenses
(848
)
(28,965
)
Operating lease liabilities
(31
)
(123
)
Net cash provided by (used in) operating activities
19,767
(21,601
)
Investing Activities Purchases of short-term investments
(20,000
)
—
Purchases of property and equipment
(67
)
(328
)
Purchases of capitalized software
(1,158
)
(812
)
Net cash used in investing activities
(21,225
)
(1,140
)
Financing Activities Proceeds from the business combination
—
12,282
Principal repayments on term loan
(3,125
)
(1,250
)
Borrowings on term loan
—
125,000
Extinguishment of Bank of America term loan
—
(36,250
)
Debt issuance costs
—
(4,036
)
Proceeds from exercise of stock options
420
—
Distributions
(6,588
)
(8,707
)
Capitalized transaction costs
—
(8,341
)
Net cash provided by (used in) financing activities
(9,293
)
78,698
Effect of exchange rate changes on cash and cash equivalents
—
2
Net increase (decrease) in cash and cash equivalents
(10,751
)
55,959
Cash and cash equivalents at beginning of period
79,231
26,766
Cash and cash equivalents at end of period
$
68,480
$
82,725
Supplemental Disclosure of Cash Flow Information Cash paid for
interest
$
4,581
$
982
Cash paid for income taxes
4,472
171
Non-cash investing and financing activities Capital expenditures
and capitalized software included in accounts payable
$
61
$
126
Biote Corp.
Reconciliation of Adjusted EBITDA
to Net (Loss) Income
(In Thousands)
(Unaudited)
Three Months Ended Six Months Ended June
30, June 30,
2023
2022
2023
2022
Net loss
$
(13,095
)
$
(21,329
)
$
(34,525
)
$
(11,979
)
Interest expense
2,547
794
4,973
1,153
Income tax expense (benefit)
922
(346
)
1,552
(282
)
Depreciation and amortization
530
563
1,068
1,064
Loss from extinguishment of debt
—
445
—
445
Other non-operating items
(898
)
(89
)
(1,671
)
(98
)
Share-based compensation expense
2,647
79,270
`
4,817
79,270
Transaction-related expenses
—
18,769
—
19,477
Litigation and other
3,692
150
6,210
841
(Gain) loss from change in fair value of warrant liability
11,793
(3,399
)
13,411
(3,399
)
(Gain) loss from change in fair value of earnout liability
6,400
(61,680
)
31,810
(61,680
)
Adjusted EBITDA
$
14,538
$
13,148
$
27,645
$
24,812
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version on businesswire.com: https://www.businesswire.com/news/home/20230810999398/en/
Investor Relations:
Eric Prouty AdvisIRy Partners eric.prouty@advisiry.com
Media: Press@biote.com
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