Bioventus Announces Fourth Quarter and Full Year 2023 Financial Results
- Accelerated fourth-quarter sales growth of 7.6% with organic growth of 14.3%.
- Rob Claypoole appointed as President and CEO, bringing over 20 years of leadership experience.
- Fourth-quarter 2023 revenue reached $135.4 million, a 7.6% increase compared to the prior year.
- Full-year 2023 revenue was $512.3 million, with a net loss of $121.2 million.
- Bioventus aims for net sales of $520-535 million and adjusted EBITDA of $89-94 million for 2024.
- None.
Insights
The reported accelerated fourth quarter sales growth of 7.6% and organic growth of 14.3% by Bioventus Inc. indicates a robust performance in a competitive medical device industry. This growth is particularly noteworthy in the Pain Treatments and Surgical Solutions segments, where there has been more than 20% growth. Such figures are likely to resonate positively with investors, as they suggest a strong demand for the company's products and an effective business strategy in these areas.
From a market perspective, the strategic divestiture of the Wound Business could be seen as a move to streamline the company's portfolio and concentrate on its core competencies. This may result in a more focused business approach and potentially better financial performance in the long term. The reduction of debt obligations by $23.2 million and the amendment of the Credit and Guaranty Agreement to provide additional covenant flexibility are also significant. These actions could lead to a healthier balance sheet and potentially lower financial risk for the company and its investors.
The improvement in adjusted EBITDA by 28.1% for the fourth quarter and 29.5% for the full year, alongside disciplined cost management and corporate restructuring, demonstrates Bioventus' commitment to operational efficiency and profitability. Adjusted EBITDA is a key metric used by investors to assess a company's operating performance without the impact of non-operational costs such as interest, taxes and certain non-cash expenses. The positive trend in this metric may indicate an improving operational efficiency and profitability, which could be a favorable sign for potential investors.
Furthermore, the full-year 2024 financial guidance projecting net sales of $520 million to $535 million and adjusted EBITDA of $89 million to $94 million provides a clear outlook for stakeholders. However, it is crucial to note that the company has not provided U.S. GAAP financial measures other than net sales due to the unpredictability of certain expenses. This lack of GAAP guidance might introduce some uncertainty regarding the company's future financials and investors should consider this when evaluating the company's prospects.
The increase in revenue for Bioventus' Pain Treatments and Surgical Solutions indicates not only a growing market demand but also potentially reflects the success of the company's research and development efforts in these areas. In the medical device industry, innovation and the ability to meet clinical needs are critical drivers of growth. The organic growth reported suggests that the company's product offerings are well-received by the healthcare market, which could be attributed to the effectiveness and competitive edge of their technologies.
Additionally, the Medicare reimbursement methodology change implemented in July 2022 and its management by Bioventus underscores the importance of regulatory and reimbursement landscapes in the medical device sector. Companies that navigate these changes successfully can maintain or even improve their market position. The ability to manage pricing impact under such regulatory changes is a testament to Bioventus' strategic agility and could be a sign of strong management capable of adapting to industry challenges.
- Accelerated fourth quarter sales growth to
7.6% , organic growth* of14.3% - Appointed Rob Claypoole as President and Chief Executive Officer, bringing more than 20 years of leadership experience in the global medical device industry
- Provides full-year 2024 financial guidance reflecting enhanced revenue growth and improved execution
DURHAM, N.C., March 12, 2024 (GLOBE NEWSWIRE) -- Bioventus Inc. (Nasdaq: BVS) (“Bioventus” or the “Company”), a global leader in innovations for active healing, today announced fourth quarter and full-year financial results for the year ended December 31, 2023, and provided its financial guidance for full-year 2024.
“We returned to revenue growth, significantly improved adjusted EBITDA, and further enhanced our liquidity position as a result of our team’s strong execution in the fourth quarter of 2023,” commented Rob Claypoole, Bioventus’ President and Chief Executive Officer. “After immersing myself in the business over the last two months, it’s clear to me that Bioventus has a solid foundation of market-leading products and compelling growth prospects. Going forward, we remain committed to unlocking our full potential to help patients and create value for shareholders.”
Fourth Quarter 2023 Financial Results
For the fourth quarter, worldwide revenue totaled
The Company also reported a fourth quarter net loss from continuing operations of
Loss per share of Class A common stock from continuing operations was
Full-Year 2023 Financial Results
Bioventus’ full-year 2023 worldwide revenue totaled
The Company also reported a full-year 2023 net loss from continuing operations of
Loss per share of Class A common stock from continuing operations was
Revenue By Business
The following tables represent net sales by geographic region and by business, for the three and twelve months of 2023 and 2022, respectively:
| Three Months Ended | Change as Reported | Constant Currency* Change | |||||||||||||
| December 31, 2023 | December 31, 2022 | $ | % | % | |||||||||||
| U.S. | |||||||||||||||
| Pain Treatments | $ | 52,926 | $ | 41,891 | $ | 11,035 | 26.3 | % | |||||||
| Restorative Therapies | 27,664 | 31,739 | (4,075 | ) | (12.8 | %) | |||||||||
| Surgical Solutions | 38,218 | 34,942 | 3,276 | 9.4 | % | ||||||||||
| Total U.S. net sales | 118,808 | 108,572 | 10,236 | 9.4 | % | ||||||||||
| International | |||||||||||||||
| Pain Treatments | 6,218 | 6,367 | (149 | ) | (2.3 | %) | (6.3 | %) | |||||||
| Restorative Therapies | 4,546 | 6,490 | (1,944 | ) | (30.0 | %) | (31.4 | %) | |||||||
| Surgical Solutions | 5,851 | 4,405 | 1,446 | 32.8 | % | 32.9 | % | ||||||||
| Total International net sales | 16,615 | 17,262 | (647 | ) | (3.7 | %) | (6.0 | %) | |||||||
| Total net sales | $ | 135,423 | $ | 125,834 | $ | 9,589 | 7.6 | % | 7.3 | % | |||||
| Year Ended | Change as Reported | Constant Currency* Change | |||||||||||||
| December 31, 2023 | December 31, 2022 | $ | % | % | |||||||||||
| U.S. | |||||||||||||||
| Pain Treatments | $ | 197,954 | $ | 194,830 | $ | 3,124 | 1.6 | % | |||||||
| Restorative Therapies | 116,851 | 134,214 | (17,363 | ) | (12.9 | %) | |||||||||
| Surgical Solutions | 135,055 | 126,207 | 8,848 | 7.0 | % | ||||||||||
| Total U.S. net sales | 449,860 | 455,251 | (5,391 | ) | (1.2 | %) | |||||||||
| International | |||||||||||||||
| Pain Treatments | 22,847 | 21,495 | 1,352 | 6.3 | % | 5.3 | % | ||||||||
| Restorative Therapies | 20,222 | 20,420 | (198 | ) | (1.0 | %) | (0.7 | %) | |||||||
| Surgical Solutions | 19,416 | 14,951 | 4,465 | 29.9 | % | 30.3 | % | ||||||||
| Total International net sales | 62,485 | 56,866 | 5,619 | 9.9 | % | 9.7 | % | ||||||||
| Total net sales | $ | 512,345 | $ | 512,117 | $ | 228 | — | % | — | % | |||||
2023 Business Highlights
Bioventus continues to advance its strategic priorities with key achievements in 2023 that included the following:
- Driving improved execution and disciplined cost management throughout the year that resulted in a
29.5% increase in adjusted EBITDA for 2023. Revenue performance included double-digit volume growth in Pain Treatments and managing the pricing impact following a Medicare reimbursement methodology change implemented in July 2022. - Simplifying its portfolio, enabling greater focus on execution, and enhancing liquidity through the divestiture of its Wound Business in the second quarter of 2023.
- Enhancing its liquidity position and significantly reducing its total net leverage ratio from the end of last year through reducing its debt obligations by
$23.2 million and accelerating EBITDA. - Amending its Credit and Guaranty Agreement in early January 2024 with enhanced terms to provide additional covenant flexibility expected through the third quarter 2025.
2024 Financial Guidance
Bioventus introduced its financial guidance for full-year 2024. The Company expects:
- Net sales of
$520 million to$535 million - Adjusted EBITDA* of
$89 million to$94 million - Non-GAAP EPS* of
$0.12 t o$0.20
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.
Fourth Quarter 2023 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 March 12, 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 March 11, 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 our recent amendment to our Credit and Guaranty Agreement on our financial condition, operations, and liquidity; 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. Factors that could cause our actual results to differ materially from those contemplated in this press release include, but are not limited to the risk that if we are unable to meet our current operating projections or secure other sources of liquidity, substantial doubt about our ability to continue as a going concern may arise; the risk that we might not meet certain of our debt covenants under our Credit and Guaranty Agreement and might be required to repay our indebtedness; risks associated with the disposition of our Wound Business and expected impacts on our business; restrictions on operations and other costs associated with our indebtedness; our ability to complete acquisitions or successfully integrate new businesses, products or technologies in a cost-effective and non-disruptive manner; we maintain cash 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 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; the reclassification of our HA products from medical devices to drugs in the United States by the FDA 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 debt and future capital needs; the risk that new material weaknesses could adversely affect our ability to report our results of operations and financial condition accurately and in timely manner; 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; legislative or regulatory reforms; our business may continue to experience adverse impacts as a result of the COVID-19 pandemic or similar epidemics; risks related to intellectual property matters; and 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 sheets As of December 31, 2023 and December 31, 2022 (Amounts in thousands, except share amounts) (unaudited) | |||||||
| December 31, 2023 | December 31, 2022 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 36,964 | $ | 30,186 | |||
| Accounts receivable, net | 122,789 | 136,295 | |||||
| Inventory | 91,333 | 84,766 | |||||
| Prepaid and other current assets | 16,913 | 18,551 | |||||
| Current assets attributable to discontinued operations | — | 2,777 | |||||
| Total current assets | 267,999 | 272,575 | |||||
| Property and equipment, net | 36,605 | 27,456 | |||||
| Goodwill | 7,462 | 7,462 | |||||
| Intangible assets, net | 482,350 | 639,851 | |||||
| Operating lease assets | 13,353 | 16,690 | |||||
| Investment and other assets | 3,141 | 2,621 | |||||
| Long-term assets attributable to discontinued operations | — | 405,994 | |||||
| Total assets | $ | 810,910 | $ | 1,372,649 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 23,038 | $ | 36,697 | |||
| Accrued liabilities | 119,795 | 111,570 | |||||
| Current portion of long-term debt | 27,848 | 33,056 | |||||
| Other current liabilities | 4,816 | 3,607 | |||||
| Current liabilities attributable to discontinued operations | — | 119,087 | |||||
| Total current liabilities | 175,497 | 304,017 | |||||
| Long-term debt, less current portion | 366,998 | 385,010 | |||||
| Deferred income taxes | 1,213 | 2,248 | |||||
| Contingent consideration | 18,150 | 17,431 | |||||
| Other long-term liabilities | 27,934 | 22,810 | |||||
| Long-term liabilities attributable to discontinued operations | — | 228,911 | |||||
| Total liabilities | 589,792 | 960,427 | |||||
| Stockholders’ Equity: | |||||||
| Preferred stock, | |||||||
| Class A common stock, | 63 | 62 | |||||
| Class B common stock, | 16 | 16 | |||||
| Additional paid-in capital | 494,254 | 490,576 | |||||
| Accumulated deficit | (321,536 | ) | (165,306 | ) | |||
| Accumulated other comprehensive income (loss) | 794 | (110 | ) | ||||
| Total stockholders’ equity attributable to Bioventus Inc. | 173,591 | 325,238 | |||||
| Noncontrolling interest | 47,527 | 86,984 | |||||
| Total stockholders’ equity | 221,118 | 412,222 | |||||
| Total liabilities and stockholders’ equity | $ | 810,910 | $ | 1,372,649 | |||
| BIOVENTUS INC. Consolidated statements of operations and comprehensive loss (Amounts in thousands, except share and per share data) (unaudited) | |||||||||||||||
| Three Months Ended(1) | Year Ended | ||||||||||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||||||||
| Net sales | $ | 135,423 | $ | 125,834 | $ | 512,345 | $ | 512,117 | |||||||
| Cost of sales (including depreciation and amortization of and | 49,122 | 51,645 | 184,152 | 181,037 | |||||||||||
| Gross profit | 86,301 | 74,189 | 328,193 | 331,080 | |||||||||||
| Selling, general and administrative expense | 78,357 | 77,435 | 303,879 | 332,134 | |||||||||||
| Research and development expense | 3,262 | 5,946 | 13,446 | 23,854 | |||||||||||
| Restructuring costs | (71 | ) | 4,620 | 840 | 6,779 | ||||||||||
| Change in fair value of contingent consideration | 290 | 282 | 719 | 1,102 | |||||||||||
| Depreciation and amortization | 2,102 | 1,543 | 8,842 | 9,748 | |||||||||||
| Impairment of assets | — | — | 78,615 | — | |||||||||||
| Impairment of goodwill | — | — | — | 124,697 | |||||||||||
| Loss on disposals | 1,196 | — | 3,577 | — | |||||||||||
| Operating income (loss) | 1,165 | (15,637 | ) | (81,725 | ) | (167,234 | ) | ||||||||
| Interest expense, net | 10,280 | 7,389 | 40,676 | 12,021 | |||||||||||
| Other (income) expense | (709 | ) | 9,414 | (1,290 | ) | 9,770 | |||||||||
| Other expense | 9,571 | 16,803 | 39,386 | 21,791 | |||||||||||
| Loss before income taxes | (8,406 | ) | (32,440 | ) | (121,111 | ) | (189,025 | ) | |||||||
| Income tax (benefit) expense, net | (750 | ) | 2,975 | 85 | (44,374 | ) | |||||||||
| Net loss from continuing operations | (7,656 | ) | (35,415 | ) | (121,196 | ) | (144,651 | ) | |||||||
| Loss from discontinued operations, net of tax | — | (9,458 | ) | (74,429 | ) | (68,740 | ) | ||||||||
| Net loss | (7,656 | ) | (44,873 | ) | (195,625 | ) | (213,391 | ) | |||||||
| Loss attributable to noncontrolling interest - continuing operations | 1,560 | 11,069 | 24,458 | 40,732 | |||||||||||
| Loss attributable to noncontrolling interest - discontinued operations | — | 1,874 | 14,937 | 13,955 | |||||||||||
| Net loss attributable to Bioventus Inc. | $ | (6,096 | ) | $ | (31,930 | ) | $ | (156,230 | ) | $ | (158,704 | ) | |||
| Loss per share of Class A common stock: | |||||||||||||||
| Basic and Diluted from continuing operations | $ | (0.10 | ) | $ | (0.40 | ) | $ | (1.54 | ) | $ | (1.70 | ) | |||
| Basic and Diluted from discontinued operations | — | (0.12 | ) | (0.95 | ) | (0.89 | ) | ||||||||
| Loss per share of Class A common stock | $ | (0.10 | ) | $ | (0.52 | ) | $ | (2.49 | ) | $ | (2.59 | ) | |||
| Weighted-average shares of Class A common stock outstanding: | |||||||||||||||
| Basic and diluted | 63,101,172 | 61,931,586 | 62,647,554 | 61,389,107 | |||||||||||
(1) The three months ended December 31, 2023 and 2022 covered the periods beginning October 1, 2023 and October 2, 2022, respectively.
| BIOVENTUS INC. Consolidated condensed statements of cash flows (Amounts in thousands) (unaudited) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||||||||
| Operating activities: | |||||||||||||||
| Net loss | $ | (7,656 | ) | $ | (44,873 | ) | $ | (195,625 | ) | $ | (213,391 | ) | |||
| Less: Loss from discontinued operations, net of tax | — | (9,458 | ) | (74,429 | ) | (68,740 | ) | ||||||||
| Loss from continuing operations | (7,656 | ) | (35,415 | ) | (121,196 | ) | (144,651 | ) | |||||||
| Adjustments to reconcile net loss to net cash from operating activities: | |||||||||||||||
| Depreciation and amortization | 12,465 | 16,942 | 57,365 | 55,398 | |||||||||||
| Equity-based compensation | 1,775 | 3,432 | 2,722 | 17,585 | |||||||||||
| Change in fair value of contingent consideration | 290 | 282 | 719 | 1,102 | |||||||||||
| Change in fair value of interest rate swap | — | 22 | — | (6,396 | ) | ||||||||||
| Impairments of assets | — | 10,285 | 78,615 | 134,982 | |||||||||||
| Loss on disposals | 1,196 | — | 3,577 | — | |||||||||||
| Deferred income taxes | 1,163 | 2,169 | (2,377 | ) | (46,658 | ) | |||||||||
| Unrealized (gain) loss on foreign currency fluctuations | (732 | ) | (543 | ) | 665 | 1,383 | |||||||||
| Other, net | (102 | ) | 1,538 | 604 | 5,578 | ||||||||||
| Changes in working capital | 1,975 | 7,803 | (3,181 | ) | (29,730 | ) | |||||||||
| Net cash from operating activities - continuing operations | 10,374 | 6,515 | 17,513 | (11,407 | ) | ||||||||||
| Net cash from operating activities - discontinued operations | — | (1,271 | ) | (2,169 | ) | (2,130 | ) | ||||||||
| Net cash from operating activities | 10,374 | 5,244 | 15,344 | (13,537 | ) | ||||||||||
| Investing activities: | |||||||||||||||
| Proceeds from sale of a business | (222 | ) | — | 34,675 | — | ||||||||||
| Purchase of property and equipment | (369 | ) | (3,403 | ) | (7,362 | ) | (10,042 | ) | |||||||
| Investments and acquisition of distribution rights | — | — | — | (1,478 | ) | ||||||||||
| Other | — | — | — | (75 | ) | ||||||||||
| Net cash from investing activities - continuing operations | (591 | ) | (3,403 | ) | 27,313 | (11,595 | ) | ||||||||
| Net cash from investing activities - discontinued operations | — | — | (11,506 | ) | (104,841 | ) | |||||||||
| Net cash from investing activities | (591 | ) | (3,403 | ) | 15,807 | (116,436 | ) | ||||||||
| Financing activities: | |||||||||||||||
| Proceeds from issuance of Class A and B common stock | 158 | 1,083 | 778 | 5,822 | |||||||||||
| Tax withholdings on equity-based compensation | — | — | — | (3,352 | ) | ||||||||||
| Borrowing on revolver | — | — | 64,000 | 25,000 | |||||||||||
| Payment on revolver | — | — | (49,000 | ) | (25,000 | ) | |||||||||
| Debt financing costs | — | — | (3,661 | ) | — | ||||||||||
| Proceeds from the issuance of long-term debt, net of issuance costs | — | — | — | 79,659 | |||||||||||
| Payments on long-term debt | — | (6,510 | ) | (38,264 | ) | (20,038 | ) | ||||||||
| Other, net | (172 | ) | (11 | ) | (506 | ) | (15 | ) | |||||||
| Net cash from financing activities | (14 | ) | (5,438 | ) | (26,653 | ) | 62,076 | ||||||||
| Effect of exchange rate changes on cash | 368 | 1,052 | 629 | 521 | |||||||||||
| Net change in cash, cash equivalents and restricted cash | 10,137 | (2,545 | ) | 5,127 | (67,376 | ) | |||||||||
| Cash, cash equivalents and restricted cash at the beginning of the period | 26,827 | 34,382 | 31,837 | 99,213 | |||||||||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | 36,964 | $ | 31,837 | $ | 36,964 | $ | 31,837 | |||||||
Use of Non-GAAP Financial Measures
Organic Revenue Growth
The Company defines the term “organic revenue” as revenue in the stated period excluding the impact from business acquisitions and divestitures. The Company uses the related term “organic revenue growth” or "organic growth" to refer to the financial performance metric of comparing the stated period's organic revenue with the comparable reported revenue of the corresponding period in the prior year. The Company believes that these non-GAAP financial measures, when taken together with GAAP financial measures, allow the Company and its investors to better measure the Company’s performance and evaluate long-term performance trends. Organic revenue growth also facilitates easier comparisons of the Company’s performance with prior and future periods and relative comparisons to its peers. The Company excludes the effect of acquisitions and divestitures because these activities can have a significant impact on the Company's reported results, which the Company believes makes comparisons of long-term performance trends difficult for management and investors.
Adjusted EBITDA, Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Income, Non-GAAP Operating Expenses, Non-GAAP R&D, Non-GAAP Operating Margin, Non-GAAP Net Income, and Non-GAAP Earnings per share of Class A Common Stock
We present Adjusted EBITDA, Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Income, Non-GAAP Operating Expenses, Non-GAAP R&D, Non-GAAP Operating Margin, Non-GAAP Net Income, and Non-GAAP Earnings per share of Class A common stock, all non-GAAP financial measures, to supplement our GAAP financial reporting, because we believe these measures are useful indicators of our operating performance.
We define Adjusted EBITDA as net loss from continuing operations before depreciation and amortization, provision of income taxes and interest expense, net, adjusted for the impact of certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include acquisition and related costs, impairment of goodwill, impairment of assets, restructuring and succession charges, equity compensation expense, financial restructuring costs, loss on disposal of a business and other items. See the table below for a reconciliation of net loss from continuing operations to Adjusted EBITDA. Our management uses Adjusted EBITDA principally as a measure of our operating performance and believes that Adjusted EBITDA is useful to our investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of the operating performance of companies in industries similar to ours. Our management also uses Adjusted EBITDA for planning purposes, including the preparation of our annual operating budget and financial projections.
Our management uses Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Income, Non-GAAP Operating Expense, Non-GAAP Operating Margin and Non-GAAP Net Income principally as measures of our operating performance and believes that these non-GAAP financial measures are useful to better understand the long term performance of our core business and to facilitate comparison of our results to those of peer companies. Our management also uses these non-GAAP financial measures for planning purposes, including the preparation of our annual operating budget and financial projections.
We define Non-GAAP Gross Profit as gross profit, adjusted for the impact of certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include depreciation and amortization included in the cost of goods sold and acquisition and related costs in the cost of goods sold. We define Non-GAAP Gross Margin as Non-GAAP Gross Profit divided by net sales. See the table below for a reconciliation of gross profit and gross margin to Non-GAAP Gross Profit and Non-GAAP Gross Margin.
We define Non-GAAP Operating Income as operating income, adjusted for the impact of certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include depreciation and amortization, acquisition and related costs, impairment of goodwill, impairment of assets, restructuring and succession charges, financial restructuring costs, loss on disposal of a business and other items. Non-GAAP Operating Margin is defined as Non-GAAP Operating Income divided by net sales. See the table below for a reconciliation of operating income (loss) and operating margin to Non-GAAP Operating Income and Non-GAAP Operating Margin.
We define Non-GAAP Operating Expenses as operating expenses, adjusted to exclude certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include depreciation and amortization, acquisition and related costs, impairments of goodwill, impairment of assets, restructuring and succession charges, financial restructuring costs, loss on disposal of a business and other items. See the table below for a reconciliation of operating expenses to Non-GAAP Operating Expenses.
We define Non-GAAP R&D as research and development, adjusted to exclude certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include depreciation and amortization, acquisition and related costs, restructuring and succession charges, and other items. See the table below for a reconciliation of operating expenses to Non-GAAP R&D.
We define Non-GAAP Net Income from continuing operations as Net Income from continuing operations, adjusted for the impact of certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include depreciation and amortization, acquisition and related costs, restructuring and succession charges, impairment of goodwill, impairment of assets, financial restructuring costs, loss on disposal of a business, other items and the tax effect of adjusting items. See the table below for a reconciliation of Net loss from continuing operations to Non-GAAP Net Income from continuing operations.
We define Non-GAAP Earnings per Class A share as Earnings per Class A share, adjusted for the impact of certain cash, non-cash and other items that we do not consider in our evaluation of ongoing operating performance. These items include depreciation and amortization, acquisition and related costs, restructuring and succession charges, impairment of goodwill, impairment of assets, financial restructuring costs, loss on disposal of a business, other items and the tax effect of adjusting items divided by weighted average number of shares of Class A common stock outstanding during the period. See the table below for a reconciliation of loss per Class A share to Non-GAAP Earnings per Class A share.
Net Sales, International Net Sales Growth and Constant Currency Basis
Net Sales, International Net Sales Growth and Constant Currency Basis are non-GAAP measures, which are calculated by translating current and prior year results at the same foreign currency exchange rate. Constant currency can be presented for numerous GAAP measures, but is most commonly used by management to facilitate the comparison sales in foreign currencies to prior periods and analyze net sales performance without the impact of changes in foreign currency exchange rates.
Prior Period Recast for Discontinued Operations
On February 27, 2023, the Company ceased to control CartiHeal for accounting purposes, and therefore, deconsolidated CartiHeal effective February 27, 2023. CartiHeal was part of the Company’s international reporting segment. The Company treated the deconsolidation of CartiHeal as a discontinued operation. Refer to Note 4. Acquisitions and divestitures and Note 15. Discontinued operations in the Company's Form 10-K for the period ended December 31, 2023, filed on March 12, 2024, for further details regarding the deconsolidation of CartiHeal.
The Company's prior period non-GAAP measures presented have been recast for the effect of the discontinued operations accounting.
Limitations of the Usefulness of Non-GAAP Measures
Non-GAAP financial measures have limitations as an analytical tool and should not be considered in isolation or as a substitute for, or as superior to, the financial information prepared and presented in accordance with GAAP. These measures might exclude certain normal recurring expenses. Therefore, these measures may not provide a complete understanding of the Company's performance and should be reviewed in conjunction with the GAAP financial measures. Additionally, other companies might define their non-GAAP financial measures differently than we do. Investors are encouraged to review the reconciliation of the non-GAAP measures provided in this press release, including in the tables below, to their most directly comparable GAAP measures. Additionally, the Company does not provide U.S. GAAP financial measures on a forward-looking basis because the Company is unable to predict with reasonable certainty the impact and timing of acquisitions 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.
| Reconciliation of Net Loss from Continuing Operations to Adjusted EBITDA (unaudited) | |||||||||||||||
| Three Months Ended | Years Ended | ||||||||||||||
| ($, thousands) | December 31, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | |||||||||||
| Net loss from continuing operations | $ | (7,656 | ) | $ | (35,415 | ) | $ | (121,196 | ) | $ | (144,651 | ) | |||
| Interest expense, net | 10,280 | 7,389 | 40,676 | 12,021 | |||||||||||
| Income tax (benefit) expense, net | (750 | ) | 2,975 | 85 | (44,374 | ) | |||||||||
| Depreciation and amortization(a) | 12,465 | 16,942 | 57,365 | 55,398 | |||||||||||
| Acquisition and related costs(b) | 1,647 | 4,303 | 5,694 | 21,731 | |||||||||||
| Restructuring and succession charges(c) | 1,420 | 4,606 | 2,331 | 7,453 | |||||||||||
| Equity compensation(d) | 1,775 | 3,432 | 2,722 | 17,585 | |||||||||||
| Financial restructuring costs(e) | 226 | — | 7,291 | — | |||||||||||
| Impairment of assets(f) | — | 10,285 | 78,615 | 10,285 | |||||||||||
| Impairment of goodwill(g) | — | — | — | 124,697 | |||||||||||
| Loss on disposal of a business(h) | 222 | — | 1,539 | — | |||||||||||
| Other items(i) | 2,389 | 2,669 | 13,740 | 8,465 | |||||||||||
| Adjusted EBITDA | $ | 22,018 | $ | 17,186 | $ | 88,862 | $ | 68,610 | |||||||
(a) Includes for the three months ended December 31, 2023 and December 31, 2022 and the years ended December 31, 2023 and December 31, 2022, respectively, depreciation and amortization of
(b) Includes acquisition and integration costs related to completed acquisitions, amortization of inventory step-up associated with acquired entities, loss on disposal of fixed assets related to acquired businesses, and changes in fair value of contingent consideration.
(c) Costs incurred were the result of adopting restructuring plans to reduce headcount, contract termination, reorganize management structure and consolidate certain facilities.
(d) Includes compensation expense resulting from awards granted under our equity-based compensation plans. The year ended December 31, 2023 includes the reversal of equity compensation expenses totaling
(e) Financial restructuring costs include advisory fees and debt amendment related costs.
(f) Represents a non-cash impairment charge for intangible assets attributable to our Wound Business due its divestiture during the year ended December 31, 2023. Represents asset impairment charges on Trice Medical, Inc. for the year ended December 31, 2022.
(g) Represents a non-cash impairment charge due to the decline in the Company’s market capitalization.
(h) Represents the loss on the disposal of the Wound Business.
(i) Other items primarily includes charges associated with strategic transactions, such as potential acquisitions or divestitures, projects associated with improving business capabilities/efficiencies and costs attributable to MOTYS. During the 2022 fiscal year, prior to obtaining the results from our Phase 2 trial, we elected to discontinue the development of MOTYS to focus our resources on other priorities, including the integration of our acquisitions and our expanded R&D and product development portfolio we inherited with these acquisitions. We incurred
| Reconciliation of Other Reported GAAP Measures to Non-GAAP Measures | ||||||||||||||||||||||
| Three Months Ended December 31, 2023 | Gross Profit | Operating Expenses(a) | R&D | Operating Income | Net Loss Continuing Operations | EPS from Continuing Operations(k) | ||||||||||||||||
| Reported GAAP measure | $ | 86,301 | $ | 81,874 | $ | 3,262 | $ | 1,165 | $ | (7,656 | ) | $ | (0.10 | ) | ||||||||
| Reported GAAP margin | 63.7 | % | 0.9 | % | ||||||||||||||||||
| Depreciation and amortization(b) | 10,357 | 2,102 | 6 | 12,465 | 12,465 | 0.16 | ||||||||||||||||
| Acquisition and related costs(c) | — | 1,647 | — | 1,647 | 1,647 | 0.02 | ||||||||||||||||
| Restructuring and succession charges(d) | — | 1,420 | — | 1,420 | 1,420 | 0.02 | ||||||||||||||||
| Financial restructuring costs(g) | — | 226 | — | 226 | 226 | — | ||||||||||||||||
| Loss on disposal of a business(h) | — | 222 | — | 222 | 222 | — | ||||||||||||||||
| Other items(i) | — | 2,500 | (111 | ) | 2,389 | 2,389 | 0.03 | |||||||||||||||
| Tax effect of adjusting items(j) | — | — | — | — | (4,611 | ) | (0.06 | ) | ||||||||||||||
| Non-GAAP measure | $ | 96,658 | $ | 73,757 | $ | 3,367 | $ | 19,534 | $ | 6,102 | $ | 0.07 | ||||||||||
| Non-GAAP margin | 71.4 | % | 14.4 | % | ||||||||||||||||||
| Non-GAAP Gross Margin | Non-GAAP Operating Expenses | Non-GAAP R&D | Non-GAAP Operating Income | Non-GAAP Net Income Continuing Operations | Adjusted EPS Continuing Operations | |||||||||||||||||
| Three Months Ended December 31, 2022 | Gross Profit | Operating Expenses(a) | R&D | Operating Loss | Net Loss Continuing Operations | EPS from Continuing Operations(k) | |||||||||||||||
| Reported GAAP measure | $ | 74,189 | $ | 83,880 | $ | 5,946 | $ | (15,637 | ) | $ | (35,415 | ) | $ | (0.40 | ) | ||||||
| Reported GAAP margin | 59.0 | % | (12.4 | %) | |||||||||||||||||
| Depreciation and amortization(b) | 15,389 | 1,543 | 10 | 16,942 | 16,942 | 0.22 | |||||||||||||||
| Acquisition and related costs(c) | — | 4,303 | — | 4,303 | 4,303 | 0.06 | |||||||||||||||
| Restructuring and succession charges(d) | — | 4,606 | — | 4,606 | 4,606 | 0.06 | |||||||||||||||
| Impairment of assets(e) | — | — | — | — | 10,285 | 0.13 | |||||||||||||||
| Other items(i) | — | 876 | 1,793 | 2,669 | 2,669 | 0.03 | |||||||||||||||
| Tax effect of adjusting items(j) | — | — | — | — | (9,635 | ) | (0.12 | ) | |||||||||||||
| Non-GAAP measure | $ | 89,578 | $ | 72,552 | $ | 4,143 | $ | 12,883 | $ | (6,245 | ) | $ | (0.02 | ) | |||||||
| Non-GAAP margin | 71.2 | % | 10.2 | % | |||||||||||||||||
| Non-GAAP Gross Margin | Non-GAAP Operating Expenses | Non-GAAP R&D | Non-GAAP Operating Income | Non-GAAP Net Loss Continuing Operations | Adjusted EPS Continuing Operations | ||||||||||||||||
| Year Ended December 31, 2023 | Gross Profit | Operating Expenses(a) | R&D | Operating Loss | Net Loss Continuing Operations | EPS from Continuing Operations(k) | |||||||||||||||
| Reported GAAP measure | $ | 328,193 | $ | 396,472 | $ | 13,446 | $ | (81,725 | ) | $ | (121,196 | ) | $ | (1.54 | ) | ||||||
| Reported GAAP margin | 64.1 | % | (16.0 | %) | |||||||||||||||||
| Depreciation and amortization(b) | 48,503 | 8,842 | 20 | 57,365 | 57,365 | 0.73 | |||||||||||||||
| Acquisition and related costs(c) | — | 5,694 | — | 5,694 | 5,694 | 0.07 | |||||||||||||||
| Restructuring and succession charges(d) | — | 2,331 | — | 2,331 | 2,331 | 0.03 | |||||||||||||||
| Impairment of assets(e) | — | 78,615 | — | 78,615 | 78,615 | 1.00 | |||||||||||||||
| Financial restructuring costs(g) | — | 7,291 | — | 7,291 | 7,291 | 0.09 | |||||||||||||||
| Loss on disposal of a business(h) | — | 1,539 | — | 1,539 | 1,539 | 0.02 | |||||||||||||||
| Other items(i) | — | 8,761 | 1,175 | 9,936 | 9,936 | 0.13 | |||||||||||||||
| Tax effect of adjusting items(j) | — | — | — | — | (36,401 | ) | (0.51 | ) | |||||||||||||
| Non-GAAP measure | $ | 376,696 | $ | 283,399 | $ | 12,251 | $ | 81,046 | $ | 5,174 | $ | 0.02 | |||||||||
| Non-GAAP margin | 73.5 | % | 15.8 | % | |||||||||||||||||
| Non-GAAP Gross Margin | Non-GAAP Operating Expenses | Non-GAAP R&D | Non-GAAP Operating Income | Non-GAAP Net Income Continuing Operations | Adjusted EPS Continuing Operations | ||||||||||||||||
| Year Ended December 31, 2022 | Gross Profit | Operating Expenses(a) | R&D | Operating Loss | Net Loss Continuing Operations | EPS from Continuing Operations(k) | |||||||||||||||
| Reported GAAP measure | $ | 331,080 | $ | 474,460 | $ | 23,854 | $ | (167,234 | ) | $ | (144,651 | ) | $ | (1.70 | ) | ||||||
| Reported GAAP margin | 64.6 | % | (32.7 | %) | |||||||||||||||||
| Depreciation and amortization(b) | 45,622 | 9,748 | 28 | 55,398 | 55,398 | 0.72 | |||||||||||||||
| Acquisition and related costs(c) | 5,607 | 16,124 | — | 21,731 | 21,731 | 0.28 | |||||||||||||||
| Restructuring and succession charges(d) | — | 7,453 | — | 7,453 | 7,453 | 0.10 | |||||||||||||||
| Impairment of assets(e) | — | — | — | — | 10,285 | 0.13 | |||||||||||||||
| Impairment of goodwill(f) | — | 124,697 | — | 124,697 | 124,697 | 1.61 | |||||||||||||||
| Other items(i) | — | 4,130 | 4,335 | 8,465 | 8,465 | 0.11 | |||||||||||||||
| Tax effect of adjusting items(j) | — | — | — | — | (66,540 | ) | (1.04 | ) | |||||||||||||
| Non-GAAP measure | $ | 382,309 | $ | 312,308 | $ | 19,491 | $ | 50,510 | $ | 16,838 | $ | 0.21 | |||||||||
| Non-GAAP margin | 74.7 | % | 9.9 | % | |||||||||||||||||
| Non-GAAP Gross Margin | Non-GAAP Operating Expenses | Non-GAAP R&D | Non-GAAP Operating Income | Non-GAAP Net Income Continuing Operations | Adjusted EPS Continuing Operations | ||||||||||||||||
(a) The "Reported GAAP Measure" under the "Operating Expenses" column is a sum of all GAAP operating expense line items, excluding research and development.
(b) Includes for the three months ended December 31, 2023 and December 31, 2022 and the years ended December 31, 2023 and December 31, 2022, respectively, depreciation and amortization of
(c) Includes acquisition and integration costs related to completed acquisitions, amortization of inventory step-up associated with acquired entities, loss on disposal of fixed assets related to acquired businesses and changes in fair value of contingent consideration.
(d) Costs incurred were the result of adopting restructuring plans to reduce headcount, contract termination, reorganize management structure and to consolidate certain facilities.
(e) Represents a non-cash impairment charge for intangible assets attributable to our Wound Business due to our decision to divest the business in 2023. Represents asset impairment charges on Trice Medical, Inc. in 2022.
(f) Represents a non-cash impairment charge due to the decline in the Company’s market capitalization.
(g) Financial restructuring costs include advisory fees and debt amendment related costs.
(h) Represents the loss on disposal of the Wound Business.
(i) Other items primarily includes charges associated with strategic transactions, such as potential acquisitions or divestitures, projects associated with improving business capabilities/efficiencies and costs attributable to MOTYS. During the 2022 fiscal year, prior to obtaining the results from our Phase 2 trial, we elected to discontinue the development of MOTYS to focus our resources on other priorities, including the integration of our acquisitions and our expanded R&D and product development portfolio we inherited with these acquisitions. We incurred
(j) Includes
(k) Adjustments are pro-rated to exclude the weighted average non-controlling interest ownership of
Investor Inquiries and Media:
Dave Crawford
Bioventus
investor.relations@bioventus.com
*See below under “Use of Non-GAAP Financial Measures” for more details
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