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
First Quarter 2023 Financial Highlights, year-over-year:
-
Revenue of
$44.8 million 20.7% increase -
Gross profit margin of
69.1% , a 220-basis point increase -
Net loss of
$(21.4) million $(0.39) -
Adjusted EBITDA of
$13.1 million 12.4% increase1 -
Operating cash flow of
$13.0 million
“Biote generated solid financial performance in the first quarter of 2023, driven by an approximately
“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
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
Revenue for the first quarter of 2023 was
Gross profit margin for the first quarter of 2023 was
Operating income for the first quarter of 2023 was
Net loss for the first quarter of 2023 was
Adjusted EBITDA for the first quarter of 2023 was
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
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
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 |
|
|
Adjusted EBITDA |
|
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 Wednesday, May 10, 2023. To access the conference call by telephone, please dial (844) 481-2820 (
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.
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.
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
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 its expectations.
_________________________
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.
2 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.
Financial Tables
Biote Corp. Consolidated Balance Sheets (In Thousands) (Unaudited) |
||||||||
March 31, |
|
December 31, |
||||||
|
2023 |
|
|
|
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, |
|
— |
|
|
— |
|
||
| Class A common stock, |
|
2 |
|
|
1 |
|
||
| Class B common stock, |
|
— |
|
|
— |
|
||
| Class V voting stock, |
|
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 |
|
||
Biote Corp. Consolidated Statements of Operations (In Thousands, except per share values) (Unaudited) |
||||||||
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 |
|
|||||
Biote Corp. Consolidated Statements of Cash Flows (In Thousands) (Unaudited) |
||||||||
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 |
|
||
Biote Corp. Reconciliation of Adjusted EBITDA to Net (Loss) Income (In Thousands) (Unaudited) |
||||||||
Three Months Ended |
||||||||
March 31, |
||||||||
|
2023 |
|
|
|
2022 |
|
||
| Net income (loss) | $ |
(21,430 |
) |
$ |
9,350 |
|
||
| Interest expense |
|
2,426 |
|
|
359 |
|
||
| Income tax expense |
|
630 |
|
|
64 |
|
||
| Depreciation and amortization |
|
538 |
|
|
502 |
|
||
| Loss from extinguishment of debt |
|
— |
|
|
— |
|
||
| Other non-operating items |
|
(773 |
) |
|
(10 |
) |
||
| Share-based compensation expense | ` |
|
2,170 |
|
|
— |
|
|
| Transaction-related expenses |
|
— |
|
|
708 |
|
||
| Litigation and other |
|
2,518 |
|
|
691 |
|
||
| Loss from change in fair value of warrant liability |
|
1,618 |
|
|
— |
|
||
| Loss from change in fair value of earnout liability |
|
25,410 |
|
|
— |
|
||
| Adjusted EBITDA | $ |
13,107 |
|
$ |
11,664 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20230509006210/en/
Investor Relations:
Eric Prouty
AdvisIRy Partners
eric.prouty@advisiry.com
Media:
Press@biote.com
Source: Biote
