Bioventus Reports Third Quarter Financial Results
Q3 Revenue Advanced by 15.0%, Fourth Straight Quarter of Double Digit Organic* Growth
Q3 Gross Margin Expanded 200 bps
Q3 Cash from Operations of $10.3 million, an Increase of $18.6 million Compared to Previous Year
DURHAM, N.C., Nov. 05, 2024 (GLOBE NEWSWIRE) -- Bioventus Inc. (NASDAQ:BVS) ("Bioventus" or the "Company"), a global leader in innovations for active healing, today reported financial results for the three and nine months ended September 28, 2024.
"We delivered strong financial results in the third quarter, including double-digit organic growth and significantly increased cash flow," said Rob Claypoole, Bioventus President and Chief Executive Officer. "We remain focused on successfully executing on our strategic priorities to accelerate revenue growth, enhance profitability, and reduce our leverage to increase shareholder value."
Third Quarter 2024 Financial Results:
For the third quarter, worldwide revenue of $139.0 million increased 15.0% compared to the prior-year period driven by double digit growth in Pain Treatments and Surgical Solutions.
Net Loss from continuing operations was $5.4 million, compared to a net loss from continuing operations of $8.8 million in the prior-year period.
Adjusted EBITDA* from continuing operations of $23.6 million advanced 8.4% compared to the prior year Adjusted EBITDA* of $21.7 million, due to strong revenue growth.
Loss per share of Class A common stock from continuing operations was $0.07 in the third quarter, compared to a loss of $0.12 in the prior-year period. Non-GAAP earnings per share of Class A common stock from continuing operations* was $0.06 in the third quarter, compared to $0.05 in the prior-year period.
Revenue By Business
The following table represents net sales by geographic region, and by business, for the three months ended September 28, 2024 and September 30, 2023:
Three Months Ended
Change as Reported
Constant Currency* Change
(in thousands, except for percentage)
September 28, 2024
September 30, 2023
$
%
%
U.S.
Pain Treatments
$
56,306
$
48,416
$
7,890
16.3
%
16.3
%
Restorative Therapies(a)
25,448
23,105
2,343
10.1
%
10.1
%
Surgical Solutions(a)
41,155
34,706
6,449
18.6
%
18.6
%
Total U.S. net sales
122,909
106,227
16,682
15.7
%
15.7
%
International
Pain Treatments
6,821
5,274
1,547
29.3
%
29.7
%
Restorative Therapies(a)
4,489
5,223
(734
)
(14.1
%)
(13.7
%)
Surgical Solutions(a)
4,745
4,070
675
16.6
%
16.9
%
Total International net sales
16,055
14,567
1,488
10.2
%
10.6
%
Total net sales
$
138,964
$
120,794
$
18,170
15.0
%
15.1
%
(a)
Sales from the SonicOne product were reclassified from Restorative Therapies to Surgical Solutions on a prospective and retrospective basis during the first quarter of 2024 as SonicOne's ability to remove devitalized or necrotic tissue and fiber deposits more closely aligns with Surgical Solutions' soft tissue management. SonicOne revenue reclassified for the three months ended September 30, 2023 totaled $1,750 and $65 for the U.S. and International reporting segments, respectively.
Recent Business Highlights
Bioventus continues to advance its strategic priorities with key achievements, including the following:
Delivered four consecutive quarters of double-digit revenue growth in Pain Treatments and Surgical Solutions, which contributed to an 8.4% increase in Adjusted EBITDA*
Reached an agreement to divest the Company's Advanced Rehabilitation Business for up to $45.0 million, which is anticipated to close near the end of 2024 or early 2025 and is expected to reduce debt and enable greater focus on execution within our remaining core businesses
2024 Financial Guidance:
For the twelve months ending December 31, 2024, the Company now expects:
Net sales of $562 million to $567 million, reflecting an increase of $2.5 million from the midpoint of previous guidance
Adjusted EBITDA* of $104 million to $107 million
Non-GAAP EPS* of $0.40 to $0.42, reflecting an increase of $0.02 from the midpoint of previous guidance
The Company does not provide U.S. GAAP financial measures, other than net sales, on a forward-looking basis, because the Company is unable to predict with reasonable certainty the impact and timing of acquisition related expenses, accounting fair-value adjustments, and certain other reconciling items without unreasonable efforts. These items are uncertain, depend on various factors, and could be material to the Company's results computed in accordance with U.S. GAAP.
About Bioventus
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 Pain Treatments, Restorative Therapies and Surgical Solutions. 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.
Third Quarter 2024 Earnings Conference Call:
Management will host a conference call to discuss the Company's financial results and provide a business update, with a question and answer session, at 8:30 a.m. Eastern Time on November 5, 2024. Those who would like to participate may dial 1-833-636-0497 (domestic and international) and refer to Bioventus Inc.
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 November 4, 2025.
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 future financial results and liquidity; the impact of the planned divestiture of our Advanced Rehabilitation Business on our financial condition and operations; our business strategy, position and operations; and expected sales trends, opportunities, market position and growth. 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. Important factors that may cause actual results to differ materially from current expectations include, among other things: the dilution of our Class A common stockholders upon an exchange of the outstanding common membership interests in Bioventus LLC could adversely affect the market price of our Class A common stock and the resale of such shares could cause the market price of our Class A common stock to fall; we might not realize some or all of the benefits expected to result from the planned divestiture of our Advanced Rehabilitation Business; we might not meet certain of our debt covenants under our Credit and Guaranty Agreement and might be required to repay our indebtedness on an accelerated basis; there are restrictions on operations and other costs associated with our indebtedness; any identified material weakness could adversely affect our ability to report our results of operations and financial condition accurately and in a timely manner;we might not be able to complete acquisitions or successfully integrate new businesses, products or technologies in a cost-effective and non-disruptive manner; our cash is maintained at financial institutions, often in balance that exceed federally insured limits; we are subject to securities class action litigation and may be subject to similar or other litigation in the future, which will require significant management time and attention, result in significant legal expenses or costs not covered by our insurers, and may result in unfavorable outcomes; our ability to maintain our competitive position depends on our ability to attract, retain and motivate our senior management team and highly qualified personnel; we are highly dependent on a limited number of products; our long-term growth depends on our ability to develop, acquire and commercialize new products, line extensions or expanded indications; we may be unable to successfully commercialize newly developed or acquired products or therapies in the United States; demand for our existing portfolio of products and any new products, line extensions or expanded indications depends on the continued and future acceptance of our products by physicians, patients, third-party payers and others in the medical community; the proposed down classification of non-invasive bone growth stimulators, including our Exogen system, by the U.S. Food and Drug Administration ("FDA") could increase future competition for bone growth stimulators and otherwise adversely affect the Company's sales of Exogen; failure to achieve and maintain adequate levels of coverage and/or reimbursement for our products or future products, the procedures using our products, such as our hyaluronic acid ("HA") viscosupplements, or future products we may seek to commercialize; pricing pressure and other competitive factors; governments outside the United States might not provide coverage or reimbursement of our products; we compete and may compete in the future against other companies, some of which have longer operating histories, more established products or greater resources than we do; if our HA products are reclassified from medical devices to drugs in the United States by the FDA, it could negatively impact our ability to market these products and may require that we conduct costly additional clinical studies to support current or future indications for use of those products; our failure to properly manage our anticipated growth and strengthen our brands; risks related to product liability claims; fluctuations in demand for our products; issues relating to the supply of our products, potential supply chain disruptions, and the increased cost of parts and components used to manufacture our products due to inflation; our reliance on a limited number of third-party manufacturers to manufacture certain of our products; if our facilities are damaged or become inoperable, we will be unable to continue to research, develop and manufacture certain of our products; economic, political, regulatory and other risks related to international sales, manufacturing and operations; failure to maintain contractual relationships; security breaches, unauthorized access to or disclosure of information, cyberattacks, or other incidents or the perception that confidential information in our or our vendors' or service providers' possession or control is not secure; failure of key information technology and communications systems, process or sites; risks related to our future capital needs; failure to comply with extensive governmental regulation relevant to us and our products; we may be subject to enforcement action if we engage in improper claims submission practices and resulting audits or denials of our claims by government agencies could reduce our net sales or profits; the FDA regulatory process is expensive, time-consuming and uncertain, and the failure to obtain and maintain required regulatory clearances and approvals could prevent us from commercializing our products; if clinical studies of our future product candidates do not produce results necessary to support regulatory clearance or approval in the United States or elsewhere, we will be unable to expand the indications for or commercialize these products; unstable political or economic conditions; legislative or regulatory reforms; our business might experience adverse impacts due to public health outbreaks; risks related to intellectual property matters; and other the other risks identified in our Annual Report on Form 10-K for the year ended December 31, 2023, 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 https://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.
BIOVENTUS INC.Consolidated balance sheetsAs of September 28, 2024 and December 31, 2023(Amounts in thousands, except share amounts) (unaudited)
September 28, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents
$
43,074
$
36,964
Accounts receivable, net
121,925
122,789
Inventory
90,032
91,333
Prepaid and other current assets
16,923
16,913
Assets held for sale
26,734
—
Total current assets
298,688
267,999
Property and equipment, net
29,425
36,605
Goodwill
7,462
7,462
Intangible assets, net
414,809
482,350
Operating lease assets
9,779
13,353
Deferred tax assets
7,396
—
Investment and other assets
1,933
3,141
Total assets
$
769,492
$
810,910
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$
16,849
$
23,038
Accrued liabilities
128,697
119,795
Current portion of long-term debt
38,566
27,848
Current portion of contingent consideration
19,228
—
Other current liabilities
3,918
4,816
Liabilities held for sale
4,234
—
Total current liabilities
211,492
175,497
Long-term debt, less current portion
345,021
366,998
Deferred income taxes
—
1,213
Contingent consideration
—
18,150
Other long-term liabilities
26,146
27,934
Total liabilities
582,659
589,792
Stockholders' Equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized, 0 shares issued
Class A common stock, $0.001 par value, 250,000,000 shares authorized as of September 28, 2024 and December 31, 2023, 65,337,432 and 63,267,436 shares issued and outstanding as of September 28, 2024 and December 31, 2023, respectively
65
63
Class B common stock, $0.001 par value, 50,000,000 shares authorized, 15,786,737 shares issued and outstanding as of September 28, 2024 and December 31, 2023
16
16
Additional paid-in capital
503,134
494,254
Accumulated deficit
(354,922
)
(321,536
)
Accumulated other comprehensive income
445
794
Total stockholders' equity attributable to Bioventus Inc.
148,738
173,591
Noncontrolling interest
38,095
47,527
Total stockholders' equity
186,833
221,118
Total liabilities and stockholders' equity
$
769,492
$
810,910
BIOVENTUS INC.Consolidated statements of operations and comprehensive loss(Amounts in thousands, except share and per share data, unaudited)
Three Months Ended
Nine Months Ended
September 28, 2024
September 30, 2023
September 28, 2024
September 30, 2023
Net sales
$
138,964
$
120,794
$
419,638
$
376,922
Cost of sales (including depreciation and amortization of $10,206, $11,506, $31,252 and $38,146, respectively)
45,413
41,944
134,068
135,030
Gross profit
93,551
78,850
285,570
241,892
Selling, general and administrative expense
81,090
69,820
254,281
225,522
Research and development expense
3,808
3,015
10,393
10,184
Restructuring costs
—
(26
)
—
911
Change in fair value of contingent consideration
483
(98
)
1,078
429
Depreciation and amortization
2,065
2,317
5,884
6,740
Impairments of assets
2,031
—
33,901
78,615
Loss on disposals
—
1,404
—
2,381
Operating income (loss)
4,074
2,418
(19,967
)
(82,890
)
Interest expense, net
9,532
10,115
29,795
30,396
Other (income) expense
(626
)
494
(404
)
(581
)
Other expense
8,906
10,609
29,391
29,815
Loss before income taxes
(4,832
)
(8,191
)
(49,358
)
(112,705
)
Income tax expense (benefit), net
589
600
(5,843
)
835
Net loss from continuing operations
(5,421
)
(8,791
)
(43,515
)
(113,540
)
Loss from discontinued operations, net of tax
—
—
