Bioventus Reports Second Quarter Financial Results
Bioventus (Nasdaq: BVS) reported strong Q2 2024 financial results, with revenue increasing 10.3% to $151.2 million and organic growth of 13.9%. The company saw double-digit growth in Pain Treatments and Surgical Solutions. Despite a net loss of $32.1 million due to a non-cash impairment charge, Adjusted EBITDA grew 22.4% to $34.5 million. Gross margin expanded by 350 basis points, and cash from operations increased 40.5% to $15.2 million.
Based on strong performance, Bioventus raised its full-year 2024 guidance, now expecting net sales of $557-567 million, Adjusted EBITDA of $104-107 million, and Non-GAAP EPS of $0.36-0.42. The company is focusing on executing strategic priorities, including potential divestiture of its Advanced Rehabilitation Business to reduce debt and focus on core operations.
Bioventus (Nasdaq: BVS) ha riportato solidi risultati finanziari per il secondo trimestre del 2024, con un aumento dei ricavi del 10,3% a 151,2 milioni di dollari e una crescita organica del 13,9%. L'azienda ha registrato una crescita a due cifre nei trattamenti per il dolore e nelle soluzioni chirurgiche. Nonostante una perdita netta di 32,1 milioni di dollari a causa di una rettifica non monetaria, l'EBITDA rettificato è aumentato del 22,4% a 34,5 milioni di dollari. Il margine lordo è aumentato di 350 punti base e il patrimonio netto operativo è incrementato del 40,5% a 15,2 milioni di dollari.
In base alle solide performance, Bioventus ha rivisto le sue previsioni per l'intero anno 2024, prevedendo ora vendite nette di 557-567 milioni di dollari, EBITDA rettificato di 104-107 milioni di dollari e un EPS Non-GAAP di 0,36-0,42 dollari. L'azienda si sta concentrando sull'esecuzione delle priorità strategiche, incluso un potenziale disinvestimento dalla sua attività di Riabilitazione Avanzata per ridurre il debito e concentrarsi sulle operazioni principali.
Bioventus (Nasdaq: BVS) reportó sólidos resultados financieros para el segundo trimestre de 2024, con un incremento del 10.3% en ingresos, alcanzando los 151.2 millones de dólares y un crecimiento orgánico del 13.9%. La compañía registró crecimiento de dos dígitos en los Tratamientos del Dolor y Soluciones Quirúrgicas. A pesar de una pérdida neta de 32.1 millones de dólares debido a un cargo por deterioro no monetario, el EBITDA ajustado creció un 22.4% a 34.5 millones de dólares. El margen bruto se expandió en 350 puntos básicos y el flujo de caja de las operaciones aumentó un 40.5% a 15.2 millones de dólares.
Basándose en un sólido desempeño, Bioventus aumentó sus previsiones para el año completo 2024, esperando ahora ventas netas de 557-567 millones de dólares, EBITDA ajustado de 104-107 millones de dólares, y EPS No-GAAP de 0.36-0.42. La compañía se está enfocando en la ejecución de prioridades estratégicas, incluido un posible desinversión de su negocio de Rehabilitación Avanzada para reducir la deuda y concentrarse en las operaciones centrales.
Bioventus (Nasdaq: BVS)는 2024년 2분기 강력한 재무 결과를 보고했으며, 수익이 10.3% 증가하여 1억 5,120만 달러에 달했습니다 그리고 유기적인 성장률은 13.9%에 달했습니다. 이 회사는 통증 치료 및 외과 솔루션에서 두 자릿수 성장을 기록했습니다. 비현금 손상 charges에도 불구하고 3,210만 달러의 순손실이 있었지만, 조정된 EBITDA는 22.4% 증가하여 3,450만 달러에 달했습니다. 총 마진은 350 베이시스 포인트 증가했고, 운영에서의 현금흐름은 40.5% 증가하여 1,520만 달러가 되었습니다.
강력한 성과를 기반으로 Bioventus는 2024년 연간 전망을 상향 조정했습니다, 이제 순 매출은 5억 5,700만에서 5억 6,700만 달러로 예상하고, 조정된 EBITDA는 1억 4백만에서 1억 7백만 달러, 비 GAAP EPS는 0.36-0.42 달러로 설정했습니다. 이 회사는 부채를 줄이고 핵심 운영에 집중하기 위해 고급 재활 사업의 가능성 있는 매각 등 전략적 우선 사항 실행에 집중하고 있습니다.
Bioventus (Nasdaq: BVS) a annoncé de solides résultats financiers pour le deuxième trimestre 2024, avec une augmentation des revenus de 10,3% à 151,2 millions de dollars et une croissance organique de 13,9%. L'entreprise a enregistré une croissance à deux chiffres dans les traitements de la douleur et les solutions chirurgicales. Malgré une perte nette de 32,1 millions de dollars due à une charge de dépréciation non monétaire, l'EBITDA ajusté a augmenté de 22,4% pour atteindre 34,5 millions de dollars. La marge brute s'est élargie de 350 points de base et les flux de trésorerie d'exploitation ont augmenté de 40,5% à 15,2 millions de dollars.
En raison de cette solide performance, Bioventus a relevé ses prévisions pour l'année complète 2024, s'attendant désormais à des ventes nettes de 557 à 567 millions de dollars, un EBITDA ajusté de 104 à 107 millions de dollars et un BPA Non-GAAP de 0,36 à 0,42 dollar. L'entreprise se concentre sur l'exécution de priorités stratégiques, y compris une éventuelle cession de son activité de réhabilitation avancée pour réduire sa dette et se concentrer sur ses opérations principales.
Bioventus (Nasdaq: BVS) meldete starke finanzielle Ergebnisse für das zweite Quartal 2024, mit einem Umsatzanstieg von 10,3% auf 151,2 Millionen USD und einem organischen Wachstum von 13,9%. Das Unternehmen verzeichnete Zuwächse im zweistelligen Bereich bei Schmerzbehandlungen und chirurgischen Lösungen. Trotz eines Nettoverlusts von 32,1 Millionen USD aufgrund einer nicht zahlungswirksamen Wertminderung wuchs das bereinigte EBITDA um 22,4% auf 34,5 Millionen USD. Die Bruttomarge verbesserte sich um 350 Basispunkte und der operative Cashflow stieg um 40,5% auf 15,2 Millionen USD.
Basierend auf den starken Leistungen hat Bioventus seine Gesamtprognose für 2024 angehoben und erwartet jetzt Nettoumsätze von 557-567 Millionen USD, ein bereinigtes EBITDA von 104-107 Millionen USD und ein Non-GAAP EPS von 0,36-0,42 USD. Das Unternehmen konzentriert sich auf die Umsetzung strategischer Prioritäten, einschließlich einer möglichen Veräusserung seines Geschäftsbereichs für fortgeschrittene Rehabilitation zur Reduzierung von Schulden und zur Fokussierung auf die Kernaktivitäten.
- Revenue increased 10.3% to $151.2 million, with organic growth of 13.9%
- Adjusted EBITDA grew 22.4% to $34.5 million
- Gross margin expanded by 350 basis points
- Cash from operations increased 40.5% to $15.2 million
- Full-year 2024 guidance raised for net sales, Adjusted EBITDA, and Non-GAAP EPS
- Double-digit growth in Pain Treatments and Surgical Solutions segments
- FDA clearance received for OSTEOAMP Cannula, opening growth opportunities in Minimally Invasive Spine Procedure market
- Net loss from continuing operations of $32.1 million, compared to $4.7 million loss in prior-year period
- $31.9 million non-cash intangible asset impairment charge related to potential divestiture of Advanced Rehabilitation Business
- Restorative Therapies segment experienced revenue decline in both U.S. (-8.6%) and International (-10.8%) markets
Insights
Bioventus's Q2 results demonstrate strong performance and improved financial health. Revenue growth of 10.3% (13.9% organic) shows robust market demand, particularly in Pain Treatments and Surgical Solutions. The 350 bps gross margin expansion and 22.4% increase in Adjusted EBITDA to
However, the
The raised full-year guidance is a positive signal, with projected revenue of
Bioventus's performance in Pain Treatments and Surgical Solutions is particularly noteworthy. The 17.2% growth in U.S. Pain Treatments and 18.6% growth in U.S. Surgical Solutions indicate strong market positioning and product adoption. The FDA clearance for OSTEOAMP Cannula opens up opportunities in the lucrative Minimally Invasive Spine Procedure market, potentially driving future growth.
The decline in Restorative Therapies (
The company's ability to deliver double-digit organic growth for three consecutive quarters in a challenging healthcare environment is impressive. This consistent performance, combined with margin improvements, suggests Bioventus is effectively executing its strategic priorities and adapting to market demands.
- Q2 Revenue Advanced by
10.3% , Organic Growth* by13.9% - Q2 Gross Margin Expanded 350 bps and Adjusted Gross Margin* 180 bps
- Cash from Operations of
$15.2 million Increased40.5% - Raising Full-Year 2024 Financial Guidance Reflecting Enhanced Revenue Growth and Strong Execution of Strategic Priorities
DURHAM, N.C., Aug. 06, 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 six months ended June 29, 2024.
“The Bioventus team delivered strong financial results in the second quarter, including double-digit organic growth for the third consecutive quarter and a significant increase in profitability,” said Rob Claypoole, Bioventus President and Chief Executive Officer. "We are pleased to raise our financial guidance for full-year 2024 as we remain focused on successfully executing on our strategic priorities to create shareholder value.”
Second Quarter 2024 Financial Results:
For the second quarter, worldwide revenue of
Net Loss from continuing operations was
Adjusted EBITDA* from continuing operations of
Loss per share of Class A common stock from continuing operations was
Revenue By Business
The following table represents net sales by geographic region, and by business, for the three months ended June 29, 2024 and July 1, 2023:
| Three Months Ended | Change as Reported | Constant Currency* Change | |||||||||||||
| (in thousands, except for percentage) | June 29, 2024 | July 1, 2023 | $ | % | % | ||||||||||
| U.S. | |||||||||||||||
| Pain Treatments | $ | 65,194 | $ | 55,617 | $ | 9,577 | 17.2 | % | 17.2 | % | |||||
| Restorative Therapies(a) | 27,435 | 30,012 | (2,577 | ) | (8.6 | %) | (8.6 | %) | |||||||
| Surgical Solutions(a) | 41,780 | 35,218 | 6,562 | 18.6 | % | 18.6 | % | ||||||||
| Total U.S. net sales | 134,409 | 120,847 | 13,562 | 11.2 | % | 11.2 | % | ||||||||
| International | |||||||||||||||
| Pain Treatments | 7,066 | 6,024 | 1,042 | 17.3 | % | 18.5 | % | ||||||||
| Restorative Therapies(a) | 4,185 | 4,690 | (505 | ) | (10.8 | %) | (9.4 | %) | |||||||
| Surgical Solutions(a) | 5,557 | 5,508 | 49 | 0.9 | % | 1.3 | % | ||||||||
| Total International net sales | 16,808 | 16,222 | 586 | 3.6 | % | 4.6 | % | ||||||||
| Total net sales | $ | 151,217 | $ | 137,069 | $ | 14,148 | 10.3 | % | 10.4 | % | |||||
(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 its abilities 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 July 1, 2023 totaled
Recent Business Highlights
Bioventus continues to advance its strategic priorities with key achievements, including the following:
- Delivering strong double-digit revenue growth in Pain Treatments and Surgical Solutions, which contributed to a
22.4% increase in Adjusted EBITDA* - Enhancing the Company's liquidity position through an increase in Adjusted EBITDA* and
$8 million debt reduction. - Receiving FDA clearance for the OSTEOAMP Cannula creating opportunities for growth in the Minimally Invasive Spine Procedure market
- Pursuing the divestiture of Advanced Rehabilitation, which is expected to reduce debt and enable greater focus on execution within our remaining core business
2024 Financial Guidance:
Based on strong execution and momentum through the first half of 2024, Bioventus is raising financial guidance for the full-year 2024. The Company now expects:
- Net sales of
$557 million to$567 million , reflecting an increase of$19.5 million from the midpoint of previous guidance - Adjusted EBITDA* of
$104 million to$107 million , reflecting an increase of$9 million from the midpoint of previous guidance - Non-GAAP EPS* of
$0.36 t o$0.42 , reflecting an increase of$0.10 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.
*See below under “Use of Non-GAAP Financial Measures” for more details.
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.
Second 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 August 6, 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 August 5, 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 potential divestiture of our Advanced Rehabilitation Business 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. 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: 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 potential divestiture of our Advanced Rehabilitation 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 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 debt and 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; 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 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 sheets As of June 29, 2024 and December 31, 2023 (Amounts in thousands, except share amounts) (unaudited) | |||||||
| June 29, 2024 | December 31, 2023 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 31,994 | $ | 36,964 | |||
| Accounts receivable, net | 137,305 | 122,789 | |||||
| Inventory | 87,606 | 91,333 | |||||
| Prepaid and other current assets | 23,570 | 16,913 | |||||
| Assets held for sale | 28,408 | — | |||||
| Total current assets | 308,883 | 267,999 | |||||
| Property and equipment, net | 31,938 | 36,605 | |||||
| Goodwill | 7,462 | 7,462 | |||||
| Intangible assets, net | 424,552 | 482,350 | |||||
| Operating lease assets | 10,366 | 13,353 | |||||
| Deferred tax assets | 6,884 | — | |||||
| Investment and other assets | 2,088 | 3,141 | |||||
| Total assets | $ | 792,173 | $ | 810,910 | |||
| Liabilities and Stockholders’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 24,437 | $ | 23,038 | |||
| Accrued liabilities | 139,978 | 119,795 | |||||
| Current portion of long-term debt | 38,566 | 27,848 | |||||
| Current portion of contingent consideration | 18,745 | — | |||||
| Other current liabilities | 3,829 | 4,816 | |||||
| Liabilities held for sale | 5,908 | — | |||||
| Total current liabilities | 231,463 | 175,497 | |||||
| Long-term debt, less current portion | 344,716 | 366,998 | |||||
| Deferred income taxes | — | 1,213 | |||||
| Contingent consideration | — | 18,150 | |||||
| Other long-term liabilities | 26,932 | 27,934 | |||||
| Total liabilities | 603,111 | 589,792 | |||||
| Stockholders’ Equity: | |||||||
| Preferred stock, | |||||||
| Class A common stock, | 65 | 63 | |||||
| Class B common stock, | 16 | 16 | |||||
| Additional paid-in capital | 500,969 | 494,254 | |||||
| Accumulated deficit | (350,098 | ) | (321,536 | ) | |||
| Accumulated other comprehensive (loss) income | (17 | ) | 794 | ||||
| Total stockholders’ equity attributable to Bioventus Inc. | 150,935 | 173,591 | |||||
| Noncontrolling interest | 38,127 | 47,527 | |||||
| Total stockholders’ equity | 189,062 | 221,118 | |||||
| Total liabilities and stockholders’ equity | $ | 792,173 | $ | 810,910 | |||
| BIOVENTUS INC. Consolidated statements of operations and comprehensive loss (Amounts in thousands, except share and per share data, unaudited) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | ||||||||||||
| Net sales | $ | 151,217 | $ | 137,069 | $ | 280,674 | $ | 256,128 | |||||||
| Cost of sales (including depreciation and amortization of | 47,578 | 47,946 | 88,655 | 93,086 | |||||||||||
| Gross profit | 103,639 | 89,123 | 192,019 | 163,042 | |||||||||||
| Selling, general and administrative expense | 94,785 | 74,844 | 173,191 | 155,702 | |||||||||||
| Research and development expense | 3,988 | 3,398 | 6,585 | 7,169 | |||||||||||
| Restructuring costs | — | 620 | — | 937 | |||||||||||
| Change in fair value of contingent consideration | 300 | 240 | 595 | 527 | |||||||||||
| Depreciation and amortization | 2,064 | 2,294 | 3,819 | 4,423 | |||||||||||
| Impairments of assets | 31,870 | — | 31,870 | 78,615 | |||||||||||
| Loss on disposals | — | 977 | — | 977 | |||||||||||
| Operating (loss) income | (29,368 | ) | 6,750 | (24,041 | ) | (85,308 | ) | ||||||||
| Interest expense, net | 9,924 | 10,587 | 20,263 | 20,281 | |||||||||||
| Other expense (income) | 159 | 513 | 222 | (1,075 | ) | ||||||||||
| Other expense | 10,083 | 11,100 | 20,485 | 19,206 | |||||||||||
| Loss before income taxes | (39,451 | ) | (4,350 | ) | (44,526 | ) | (104,514 | ) | |||||||
| Income tax (benefit) expense, net | (7,339 | ) | 381 | (6,432 | ) | 235 | |||||||||
| Net loss from continuing operations | (32,112 | ) | (4,731 | ) | (38,094 | ) | (104,749 | ) | |||||||
| Loss from discontinued operations, net of tax | — | — | — | (74,429 | ) | ||||||||||
| Net loss | (32,112 | ) | (4,731 | ) | (38,094 | ) | (179,178 | ) | |||||||
| Loss attributable to noncontrolling interest - continuing operations | 8,120 | 1,050 | 9,532 | 21,410 | |||||||||||
| Loss attributable to noncontrolling interest - discontinued operations | — | — | — | 14,937 | |||||||||||
| Net loss attributable to Bioventus Inc. | $ | (23,992 | ) | $ | (3,681 | ) | $ | (28,562 | ) | $ | (142,831 | ) | |||
| Loss per share of Class A common stock from continuing operations, basic and diluted: | $ | (0.37 | ) | $ | (0.06 | ) | $ | (0.45 | ) | $ | (1.34 | ) | |||
| Loss per share of Class A common stock from discontinued operations, basic and diluted: | — | — | — | (0.95 | ) | ||||||||||
| Loss per share of Class A common stock, basic and diluted | $ | (0.37 | ) | $ | (0.06 | ) | $ | (0.45 | ) | $ | (2.29 | ) | |||
| Weighted-average shares of Class A common stock outstanding: | |||||||||||||||
| Basic and diluted | 64,056,759 | 62,551,285 | 63,720,342 | 62,338,018 | |||||||||||
| BIOVENTUS INC. Consolidated condensed statements of cash flows (Amounts in thousands, unaudited) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | ||||||||||||
| Operating activities: | |||||||||||||||
| Net loss | $ | (32,112 | ) | $ | (4,731 | ) | $ | (38,094 | ) | $ | (179,178 | ) | |||
| Less: Loss from discontinued operations, net of tax | — | — | — | (74,429 | ) | ||||||||||
| Loss from continuing operations | (32,112 | ) | (4,731 | ) | (38,094 | ) | (104,749 | ) | |||||||
| Adjustments to reconcile net loss to net cash from operating activities: | |||||||||||||||
| Depreciation and amortization | 13,090 | 14,600 | 24,875 | 31,073 | |||||||||||
| Equity-based compensation | 3,672 | (2,732 | ) | 6,263 | (886 | ) | |||||||||
| Change in fair value of contingent consideration | 300 | 240 | 595 | 527 | |||||||||||
| Impairment of assets | 31,870 | — | 31,870 | 78,615 | |||||||||||
| Deferred income taxes | (8,179 | ) | (876 | ) | (8,098 | ) | (3,540 | ) | |||||||
| Unrealized loss on foreign currency | 159 | (146 | ) | 536 | 601 | ||||||||||
| Loss on disposals | — | 977 | — | 977 | |||||||||||
| Other, net | 819 | 476 | 424 | 1,779 | |||||||||||
| Changes in working capital | 5,543 | 2,987 | (9,214 | ) | 11,057 | ||||||||||
| Net cash from operating activities - continuing operations | 15,162 | 10,795 | 9,157 | 15,454 | |||||||||||
| Net cash from operating activities - discontinued operations | — | — | — | (2,169 | ) | ||||||||||
| Net cash from operating activities | 15,162 | 10,795 | 9,157 | 13,285 | |||||||||||
| Investing activities: | |||||||||||||||
| Proceeds from sale of a business | — | 34,897 | — | 34,897 | |||||||||||
| Purchase of property and equipment | (77 | ) | (1,397 | ) | (368 | ) | (4,957 | ) | |||||||
| Investments and acquisition of distribution rights | — | — | (709 | ) | — | ||||||||||
| Net cash from investing activities - continuing operations | (77 | ) | 33,500 | (1,077 | ) | 29,940 | |||||||||
| Net cash from investing activities - discontinued operations | — | — | — | (11,506 | ) | ||||||||||
| Net cash from investing activities | (77 | ) | 33,500 | (1,077 | ) | 18,434 | |||||||||
| Financing activities: | |||||||||||||||
| Proceeds from issuance of Class A common stock | 609 | 139 | 786 | 223 | |||||||||||
| Borrowing on revolver | — | — | — | 49,000 | |||||||||||
| Payment on revolver | — | (22,000 | ) | — | (42,000 | ) | |||||||||
| Debt refinancing costs | — | (1,993 | ) | (1,180 | ) | (3,661 | ) | ||||||||
| Payments on long-term debt | (8,264 | ) | (38,264 | ) | (11,320 | ) | (38,264 | ) | |||||||
| Other, net | (190 | ) | (130 | ) | (373 | ) | (166 | ) | |||||||
| Net cash from financing activities | (7,845 | ) | (62,248 | ) | (12,087 | ) | (34,868 | ) | |||||||
| Effect of exchange rate changes on cash | (419 | ) | 240 | (963 | ) | 701 | |||||||||
| Net change in cash, cash equivalents and restricted cash | 6,821 | (17,713 | ) | (4,970 | ) | (2,448 | ) | ||||||||
| Cash, cash equivalents and restricted cash at the beginning of the period | 25,173 | 47,102 | 36,964 | 31,837 | |||||||||||
| Cash, cash equivalents and restricted cash at the end of the period | $ | 31,994 | $ | 29,389 | $ | 31,994 | $ | 29,389 | |||||||
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 (or Adjusted) 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, certain shareholder litigation costs, impairment of assets, restructuring and succession charges, equity compensation expense, financial restructuring costs 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, certain shareholder litigation costs, impairment of assets, restructuring and succession charges, financial restructuring costs 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, certain shareholder litigation costs, impairment of assets, restructuring and succession charges, financial restructuring costs 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, certain shareholder litigation costs, restructuring and succession charges, impairment of assets, financial restructuring costs, 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, certain shareholder litigation costs, restructuring and succession charges, impairment of assets, financial restructuring costs, 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 14. Discontinued operations in the Company's Form 10-Q for the period ended June 29, 2024, filed on August 6, 2024, for further details regarding the deconsolidation of CartiHeal.
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) Income from Continuing Operations to Adjusted EBITDA (unaudited) | |||||||||||||||||||
| Three Months Ended | Six Months Ended | Twelve Months Ended | |||||||||||||||||
| ($, thousands) | June 29, 2024 | July 1, 2023 | June 29, 2024 | July 1, 2023 | December 31, 2023 | ||||||||||||||
| Net loss from continuing operations | $ | (32,112 | ) | $ | (4,731 | ) | $ | (38,094 | ) | $ | (104,749 | ) | $ | (121,196 | ) | ||||
| Interest expense, net | 9,924 | 10,587 | 20,263 | 20,281 | 40,676 | ||||||||||||||
| Income tax (benefit) expense, net | (7,339 | ) | 381 | (6,432 | ) | 235 | 85 | ||||||||||||
| Depreciation and amortization(a) | 13,090 | 14,600 | 24,875 | 31,073 | 57,365 | ||||||||||||||
| Acquisition and related costs(b) | 300 | 1,448 | 511 | 2,623 | 5,694 | ||||||||||||||
| Shareholder litigation costs(c) | 12,502 | — | 13,670 | — | — | ||||||||||||||
| Restructuring and succession charges(d) | (40 | ) | 620 | 13 | 937 | 2,331 | |||||||||||||
| Equity compensation(e) | 3,672 | (2,732 | ) | 6,263 | (886 | ) | 2,722 | ||||||||||||
| Financial restructuring costs(f) | (5 | ) | 1,257 | 347 | 6,587 | 7,291 | |||||||||||||
| Impairment of assets(g) | 31,870 | — | 31,870 | 78,615 | 78,615 | ||||||||||||||
| Loss on disposal of a business(h) | — | 977 | — | 977 | 1,539 | ||||||||||||||
| Other items(i) | 2,590 | 5,751 | 3,789 | 9,416 | 13,740 | ||||||||||||||
| Adjusted EBITDA | $ | 34,452 | $ | 28,158 | $ | 57,075 | $ | 45,109 | $ | 88,862 | |||||||||
| (a) | Includes for the three months ended June 29, 2024 and July 1, 2023 and the six months ended June 29, 2024 and July 1, 2023, 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 as a result of certain shareholder litigation unrelated to our ongoing operations. |
| (d) | Costs incurred were the result of adopting restructuring plans to reduce headcount, reorganize management structure, and consolidate certain facilities. |
| (e) | Includes compensation expense resulting from awards granted under our equity-based compensation plans. The three and six months ended July 1, 2023 and year ended December 31, 2023 includes the reversal of equity compensation expenses totaling |
| (f) | Financial restructuring costs include advisory fees and debt amendment related costs. |
| (g) | Represents a non-cash impairment charge for intangible assets attributable to our Rehabilitation Business in 2024 due to our decision to divest the business. Activity in 2023 relates to the non-cash impairment charge attributable to our divested Wound Business. |
| (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 and a transformative project to redesign systems and information processing. We incurred |
Reconciliation of Other Reported GAAP Measures to Non-GAAP Measures
| Three Months Ended June 29, 2024 | Gross Profit | Operating Expenses(a) | R&D | Operating Loss | Net Loss Continuing Operations | EPS from Continuing Operations(k) | ||||||||||||||||
| Reported GAAP measure | $ | 103,639 | $ | 129,019 | $ | 3,988 | $ | (29,368 | ) | $ | (32,112 | ) | $ | (0.37 | ) | |||||||
| Reported GAAP margin | 68.5 | % | (19.4 | )% | ||||||||||||||||||
| Depreciation and amortization(b) | 11,021 | 2,064 | 5 | 13,090 | 13,090 | 0.16 | ||||||||||||||||
| Acquisition and related costs(c) | — | 300 | — | 300 | 300 | — | ||||||||||||||||
| Shareholder litigation costs(d) | — | 12,502 | — | 12,502 | 12,502 | 0.16 | ||||||||||||||||
| Restructuring and succession charges(e) | — | (40 | ) | — | (40 | ) | (40 | ) | — | |||||||||||||
| Financial restructuring costs(f) | — | (5 | ) | — | (5 | ) | (5 | ) | — | |||||||||||||
| Impairment of assets(g) | — | 31,870 | — | 31,870 | 31,870 | 0.40 | ||||||||||||||||
| Other items(i) | — | 2,385 | 205 | 2,590 | 2,590 | 0.03 | ||||||||||||||||
| Tax effect of adjusting items(j) | — | — | — | — | (13,331 | ) | (0.19 | ) | ||||||||||||||
| Non-GAAP measure | $ | 114,660 | $ | 79,943 | $ | 3,778 | $ | 30,939 | $ | 14,864 | $ | 0.19 | ||||||||||
| Non-GAAP margin | 75.8 | % | 20.5 | % | ||||||||||||||||||
| 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 July 1, 2023 | Gross Profit | Operating Expenses(a) | R&D | Operating Income | Net Loss Continuing Operations | EPS from Continuing Operations(k) | |||||||||||||||
| Reported GAAP measure | $ | 89,123 | $ | 78,975 | $ | 3,398 | $ | 6,750 | $ | (4,731 | ) | $ | (0.06 | ) | |||||||
| Reported GAAP margin | 65.0 | % | 4.9 | % | |||||||||||||||||
| Depreciation and amortization(b) | 12,301 | 2,294 | 5 | 14,600 | 14,600 | 0.19 | |||||||||||||||
| Acquisition and related costs(c) | — | 1,448 | — | 1,448 | 1,448 | 0.02 | |||||||||||||||
| Restructuring and succession charges(e) | — | 620 | — | 620 | 620 | 0.01 | |||||||||||||||
| Financial restructuring costs(f) | — | 1,257 | — | 1,257 | 1,257 | 0.02 | |||||||||||||||
| Loss on disposal of a business(h) | — | 977 | — | 977 | 977 | 0.01 | |||||||||||||||
| Other items(i) | — | 1,675 | 274 | 1,949 | 1,949 | 0.02 | |||||||||||||||
| Tax effect of adjusting items(j) | — | — | — | — | (5,234 | ) | (0.07 | ) | |||||||||||||
| Non-GAAP measure | $ | 101,424 | $ | 70,704 | $ | 3,119 | $ | 27,601 | $ | 10,886 | $ | 0.14 | |||||||||
| Non-GAAP margin | 74.0 | % | 20.1 | % | |||||||||||||||||
| 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 | ||||||||||||||||
| Six Months Ended June 29, 2024 | Gross Profit | Operating Expenses(a) | R&D | Operating Loss | Net Loss Continuing Operations | EPS from Continuing Operations(j) | |||||||||||||||
| Reported GAAP measure | $ | 192,019 | $ | 209,475 | $ | 6,585 | $ | (24,041 | ) | $ | (38,094 | ) | $ | (0.45 | ) | ||||||
| Reported GAAP margin | 68.4 | % | (8.6 | %) | |||||||||||||||||
| Depreciation and amortization(b) | 21,046 | 3,819 | 10 | 24,875 | 24,875 | 0.31 | |||||||||||||||
| Acquisition and related costs(c) | — | 511 | — | 511 | 511 | 0.01 | |||||||||||||||
| Shareholder litigation costs(d) | — | 13,670 | — | 13,670 | 13,670 | 0.17 | |||||||||||||||
| Restructuring and succession charges(e) | — | 13 | — | 13 | 13 | — | |||||||||||||||
| Financial restructuring costs(f) | — | 347 | — | 347 | 347 | — | |||||||||||||||
| Impairment of assets(g) | — | 31,870 | — | 31,870 | 31,870 | 0.40 | |||||||||||||||
| Other items(i) | — | 3,496 | 293 | 3,789 | 3,789 | 0.05 | |||||||||||||||
| Tax effect of adjusting items(j) | — | — | — | — | (17,037 | ) | (0.24 | ) | |||||||||||||
| Non-GAAP measure | $ | 213,065 | $ | 155,749 | $ | 6,282 | $ | 51,034 | $ | 19,944 | $ | 0.25 | |||||||||
| Non-GAAP margin | 75.9 | % | 18.2 | % | |||||||||||||||||
| Non-GAAP Gross Margin | Non-GAAP Operating Expenses | Non-GAAP R&D | Non-GAA P Operating Income | Non-GAAP Net Income Continuing Operations | Adjusted EPS Continuing Operations | ||||||||||||||||
| Six Months Ended July 1, 2023 | Gross Profit | Operating Expenses(a) | R&D | Operating Loss | Net Loss Continuing Operations | EPS from Continuing Operations(k) | |||||||||||||||
| Reported GAAP measure | $ | 163,042 | $ | 241,181 | $ | 7,169 | $ | (85,308 | ) | $ | (104,749 | ) | $ | (1.34 | ) | ||||||
| Reported GAAP margin | 63.7 | % | (33.3 | %) | |||||||||||||||||
| Depreciation and amortization(b) | 26,640 | 4,423 | 10 | 31,073 | 31,073 | 0.40 | |||||||||||||||
| Acquisition and related costs(c) | — | 2,623 | — | 2,623 | 2,623 | 0.03 | |||||||||||||||
| Restructuring and succession charges(e) | — | 937 | — | 937 | 937 | 0.01 | |||||||||||||||
| Financial restructuring costs(f) | — | 6,587 | — | 6,587 | 6,587 | 0.08 | |||||||||||||||
| Impairment of assets(g) | — | 78,615 | — | 78,615 | 78,615 | 1.01 | |||||||||||||||
| Loss on disposal of a business(h) | — | 977 | — | 977 | 977 | 0.01 | |||||||||||||||
| Other items(i) | — | 4,460 | 1,154 | 5,614 | 5,614 | 0.07 | |||||||||||||||
| Tax effect of adjusting items(j) | — | — | — | — | (27,278 | ) | (0.40 | ) | |||||||||||||
| Non-GAAP measure | $ | 189,682 | $ | 142,559 | $ | 6,005 | $ | 41,118 | $ | (5,601 | ) | $ | (0.13 | ) | |||||||
| Non-GAAP margin | 74.1 | % | 16.1 | % | |||||||||||||||||
| 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 | ||||||||||||||||
| (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 June 29, 2024 and July 1, 2023 and the six months ended June 29, 2024 and July 1, 2023, 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 as a result of certain shareholder litigation unrelated to our ongoing operations. |
| (e) | Costs incurred were the result of adopting restructuring plans to reduce headcount, reorganize management structure, and consolidate certain facilities. |
| (f) | Financial restructuring costs include advisory fees and debt amendment related costs. |
| (g) | Represents a non-cash impairment charge for intangible assets attributable to our Rehabilitation Business in 2024 due to our decision to sell the business. Activity in 2023 relates to the non-cash impairment charge attributable to our divested Wound Business. |
| (h) | Represents a non-cash impairment charge for intangible assets attributable to our Rehabilitation Business in 2024 due to our decision to sell the business. Activity in 2023 relates to the non-cash impairment charge attributable to our divested Wound Business. |
| (i) | Other items primarily includes charges associated with strategic transactions, such as potential acquisitions or divestitures and a transformative project to redesign systems and information processing. We incurred |
| (j) | The three and six months ended June 29, 2024 includes a |
| (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
FAQ
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