BVS - Earnings call transcript Q3 2024

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Operator

Good day, and welcome to the Bioventus Third Quarter 2024 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Dave Crawford. Please go ahead.

David Crawford

morning, thanks good joining and Danielle, everyone, for and us. Thanks, you my Call. Bioventus pleasure is to to Conference It Earnings welcome the Quarter XXXX Third

guidance. me updated and begin of results his CEO; with President provide an Vice Rob detail our morning our XXXX progress. remarks and Mark and XXXX And on priorities will President will Singleton, quarter Senior continued discuss With and Rob CFO. financial update this our our are third and Claypoole, Mark

finish with the today's section call will call is of bioventus.com. for We The presentation the Q&A. website, available Investors on our

begin, that the like and that our are company's Factors we cause XX, differ the to could with inherent of those remind in statements XXXX, the filings remarks of the on uncertainties time time everyone made may involve current expectations in the actual company's the including results to filings Before year Form that and the Risk company's described including I from the would for other such risks updated based management be materially XX-K forward-looking with uncertainties today indicated, Item from SEC. XA December factors and contain and ended to risks SEC,

reliance are made. as statements, of You upon the place not cautioned which to undue date forward-looking any speak only

future to information, may it new revise or update forward-looking by commitment or the voluntarily result applicable statements, as no of required Although do as laws. undertakes so time, from otherwise, to company securities whether a except time events

refer are comparable U.S. our those Investors or in disclosures measures of that of accordance available also section financial the accordance reconciliations measures non-GAAP certain the website GAAP with non-GAAP most measures at not financial and are calculated GAAP. and press earnings on presented to generally definitions release in calculated the to and bioventus.com. references about or as accounting with or to adjusted accepted will call these measures principles include We generally This in financial

turn Rob. I'll call Now the over to

Robert Claypoole

Dave. today. morning, for and our everyone, Good you, thanks joining call Thank

across As a and and result a of we geographies, strong we team another successful quarter, to and execution delivered our forward completing look all functions Bioventus transformational XXXX. by strong

diverse We to growth expansion deliver years acceleration improved revenue in and our market above and us execution sustain ahead. margin momentum position growth, cash our believe and portfolio, flow strategy the

Let's XX% the look quarter. of take revenue start priorities priority, This revenue straight we introduced the growth, respect third the marks first our a double-digit growth, performance improving With year: in accelerating at enhancing the and of our growth. across accelerating X profitability liquidity revenue growth the of at fourth position. to delivered organic our I quarter

a businesses, our just Given pleased are execution highlights across share raise for our our our full previous year of revenue. all expectations. revenue strong I'll to the the we guidance end high of to regarding the few

year-over-year growth Starting of exceeded across Ultrasonics our with Bone in the the our the as for respect Solutions, continues number and momentum we we selling Surgical double-digit to highest both Graft disposable saw accelerated and for growth the to gain strategy generators third With our Ultrasonics, expectations, blades sold year. our quarter Substitutes.

growth focus the sustained standard the in care. double-digit as our the general line penetrating mentioned our surgery significant also surgery, benefits we plan We're awareness of and of business past, years spine drive billion build remains making across To growth versus internationally. spine, while to and growth general opportunity we $X extensions. Longer our neurosurgery on about practices, about by have are to medical the strategic investments ahead. BoneScalpel in Ultrasonics end, we and ultrasonic to establishing increased in augment as drive excited Today, by the neuro current enhance penetrating As the roughly this early neXus surgery. stages market surgery effectiveness our seek with of focus our scale education expanding we and and are we strategic commercial potential portfolio the and to term, --

knee growth by the significant once business accounts Throughout with in enhancing osteoarthritis, again regional team augment quarter, IDN With our customers. DUROLANE, commercial HA delivered between led this our field double-digit we large third respect have to the demand single-injection execution and collaboration to HA our team year, the team concentrated our our on for therapy. for corporate and sales

new expand as us share. continue secure we intense gain our footprint Our focus market to accounts helping is and

team, opportunities clinical are we our private forward, geographic our above-market and dedicated payer in commercial robust coverage confident expansion. to differentiation, for ability growth with Looking drive sustained

to Moving Exogen.

and We establishing have to growth portfolio as our a in fully transitioned patient-focused business dedicated with team. very from it stabilizing business our the

Given in we commercial additional medical in enhancements, our investments education to and and renewed years ahead. by resources, to grow Exogen mid-single expect annually focus the product low digits

believe next the early us within while our liquidity. enhancing portfolio, provide will last to this year quarter. to like divestiture announced to advanced we strengthen the with up we October, beginning also a expect -- brief time, million status We further allow $XX to to totaling the earnouts we that discussed close sell I'd year. an the Next, end At core our business the this We our or $XX million. of business divestiture rehabilitation of agreement potential update for of on our transaction at near execution focus this and

Now accelerated profitability. the million prior million $X I'll second EBITDA shift to $XX by gross adjusted With focus year. of our revenue margin, growth, versus increased our our and boosting peer-leading area,

the For we margin points nearly of have XXX basis year, delivered improvement. EBITDA adjusted

points our mentioned, bottom are EBITDA -- expanding line by to our to committed basis remain committed we our margin and top EBITDA at annually. least adjusted line, XXX we previously as forward, the than faster Going growing

savings high We believe this reduce supply the drop our chain expenditures. in margin operational and ROI the initiatives invest We'll margin level we profile of bottom revenue to reallocate as improvement is line. gross sustainable improvements, on our annual acceleration, preserve higher or either capitalize with or

our to leverage cash say pleased further X.X quarter, our I'm liquidity area, generated turn reduced that to to And turns. positive approximately now ratio third major and we in operations the flow I'll net position from our position. third cash increased focus improving the our

Next in to providing in flow reduce plan year, decrease and acceleration interest expense, our costs, improvements inventory further expect a overall financial onetime cash our cash we our as material lower we position.

continue That strengthen value. concludes business improve and work update above-market priorities. advance I'm confident and liquidity growth, organization place fundamentals, our enhanced create position my taking on significant to our drive our that X across profitability the will shareholder to our our

Now I'll over Mark. turn the call to

Mark Singleton

everyone. you, and Thank morning, good Rob,

that deliver and on results business of objectives. throughout to our our our Let teams me encouraged to the progress by goals by I'm saying begin date our and

momentum Now to $XXX all year. in XX% the compared third fourth million the to results our turning Solutions for quarter. with prior maintained of strong the We consecutive double-digit growth quarter. both businesses X Treatments across for Pain and Revenue increased Surgical

$X is prior EBITDA million $XX and up X% XX% last increased to compared margin of XX XX% down adjusted basis compared an year, addition, over increase year. to was prior Adjusted In gross points. the adjusted the of million to represented Year-to-date, EBITDA year. comparable

to XX% quarter. continue Ultrasonics the performance and our revenue Bone Substitutes generate a at fourth to continue quarter, double-digit by in expect accelerated revenue Solutions closely we -- both growth, trend and the Surgical for as more Graft Looking

capacity Through growth. to product meet BGS the our additional of diligent future within have our chain supply supply work team, we secured

our business onboard in and anticipate a to term new taken impact actions growth with expect the short-term delay enhancements as do the our we we exiting slowdown adding distributors to distributors. year be However, BGS new due distributors the and in to We manage with relationships long to in we not smaller shortages quickly to earlier in this our supply chain, supply working chain. some made are

recognition by clinical strength year, differentiation execution. to of along In with team's the brand Pain XX% Treatments, and DUROLANE's increased revenue our compared commercial prior driven the

about growth forward assist from remain our sales driven impact to Shifting to consistent force to accelerated of in and We improvement growth sales team. through by sales Restorative resources Therapies, X%, our Exogen. ability demonstrated the going our drive additional execution grew optimistic

shipments DUROLANE that our XX% quarter. discussed recovery the year, our in International grew business by Ultrasonics Finally, segment driven partial we to of compared and delayed prior last

income a prior expectations to nearly Moving spending strategic total return normalized to in operating our down compared by the with from a investments the million expenses areas. growth of Adjusted line increased rose year combination and in statement. $XX

bottom in the our million metrics. from Adjusted year. to net to the prior earnings $X.XX line turning the financial income Now operating quarter. totaled $XX for million $XX $X increased Adjusted prior income per to XX% were Adjusted compared X% share year. up million,

of end million We had sheet third on increase balance flow $XX the with and $XX $XX to credit and million at quarter, facility outstanding. our statement. hand, drawn of of for an revolving cash quarter. the ended debt on million cash the Shifting the of We million $XXX quarter the

and drawn as to borrowing current with fourth in cash Our a repaid we quarter. year on the expectation X revolver is end balance hand flow our free the generated the with on cash

Operating this quarter continue with operations second operations an the double-digit fourth from significant million payment in payment, generated XXXX. of cash for than consecutive to the Even the We quarter. despite flow $X we $XX from cash of increase litigation. expect during represented more and our double-digit million for settle flow cash to shareholder inflow forecast quarter the a

confident our and in we We Consistent net a -- interest messaging And with Xx net leverage leverage within perspective, well leverage we from continue net ability our quarter, covenants. compliance to remain we our to our last XXXX. liquidity during to with are below lower ratio. our reduce coverage

for of our are increasing. guidance Finally, that an X the update let provide we areas financial me XXXX

the of growth commercial guidance an solid midpoint increase the of million midpoint be based the this nearly the the expected compared revenue range our XX% million sales a of growth prior organic perspective, First, team's our to to on to $XXX we million. to expect for the represents execution now million, million $XXX plan, From of $X.X of $XXX in full range reflected at net year. guidance $XXX

expect and of prior year, to to we increase per share compared Second, for our $X.XX $X.XX. of midpoint adjusted between the $X.XX. earnings represents now This $X.XX to guidance $X.XX a be the

remains our is for million growth With reflects guidance and over XXXX for expected of midpoint respect our between $XXX to adjusted XX% guidance unchanged EBITDA, $XXX of full adjusted The EBITDA year. million. it the and

the strong line for XXXX to Operator, increase please further In finishing on for our questions. flow. year plan finalizing cash open improved our the enhance we drive and profitability closing, and focused revenue, are

Operator

[Operator Instructions].

Knickerbocker The comes from Hallum. Craig Chase question from first

Chase Knickerbocker

on implies X% just guidance, kind overall the EBITDA. revenue start rate strong I or of to growth either kind in doesn't QX, flow in Congrats that on for wanted beat on business of though, XXXX QX a here. QX a it through

kind the I've Or about? of thought surgical call Can anything on this? seasonality that out should out prepared bit would in we of in remarks about you business the of that there in in that how Is you your haven't called headwind QX? a kind color outside think little more kind we of business

Robert Claypoole

Chase, chime this is the Rob. growth to thanks mainly QX, factors. in I'll We'll X in. start And Mark driven by see invite and lower question. for

First is with from unfavorable especially year comps that for Exogen some where we onetime a had significant favorability collections in business. QX with ago,

alluded our BGS this, then agents to several up. and ago temporary effect but new of changes And you we're temporary them ramping second, we -- slower -- distributor supply we onboarding back because had a then I'm when side lag slowed growth, and seeing weeks

the -- for that business guidance. about XXX growth XX% and X.Xx year, approximately looking good the for We're momentum line the improvement in margin on X.Xx our with driving But we the line very QX point across to our basis out in feel said, and forward a top year. that continued line bottom on the

So anything to Mark, add?

Mark Singleton

Rob. the revenue guidance from year strong line. full growth as where agree at than Rob perspective, really I managing the we're bottom happy we're with Nothing add. line to greater growing XQ Thanks, and really said, top

Chase Knickerbocker

one when kind comes And Pain. maybe Great. QX just more it then to of on

Surgical math start benefit said calling of then should Pain. Pain price QX? business last back in we kind think kind when is the high to low of double Just just headwinds leading that the implies the Pain you comps QX, out out How And of there some kind this QX going how napkin single had of kind year? of kind You competitors in your about digit in see about some to should of market. in tougher particularly we have think we digits double one the digit, low kind in of from Are of this? --

Mark Singleton

Yes. about continuing good feel our momentum business, Pain the We QX. in

about continue focused really feel if -- results, a significant into look at on contracts, you to you with DUROLANE. our the a We our position If QX. price have volume in differentiation expect bit growth, QX little had look we we tailwind, dynamics driving of we good at those have not or the we

against to very our move in that's market significant well any the single market feel in QX really injection, and we changes competition year-to-date. as positioned the see towards the don't continues And versus performance our

Chase Knickerbocker

implies top but kind of of enter of of on us from it Great. kind about Any a of given QX? me. in If And then growth of XXXX? last the about taking early XXXX, give color kind kind line of on EBITDA think you've kind -- we you to how QX, about kind of to as Kind rate you from kind how thinking just are question start color year from as XXXX too a basis, about as of think kind margin here, kind some far of what of kind guys you're this willing of expansion.

Robert Claypoole

XXXX, year. chime In the while Chase, we of into continue positive that's overall, growth I'll course. XXXX we're expect at business. this expected. also be next multiple won't started But momentum our drivers. will like have giving invite in. the get to to we start what But we comps we And just And harder, with we Mark time, and guidance getting feel again

again, to before, with may HA, BGS above-market year expect mentioned. we Exogen I this keep seen to consistent we new until high we've mid-single-digit again, but continue growth, double level, in distributors. slightly said, with HA, Ultrasonics. said slow onboard the we've and it we've With as compared growth consistent expect low- double-digit growth to I'll what drive to So that what digits in we

the EBITDA converts year and So margin basis next that that disciplined EBITDA expansion, which business, allocation to it really combination again XXX to converts across our revenue growth why with peer-leading of as -- in gross ahead. our mentioned and deliver reaffirming years above resources is our strong points you in we're intention improvement there,

several of improved cash in our flow then all due And see factors, a we'll on that, working capital. top to of improvement nice very including

So to combination a beyond. we're forward exciting very that's us, for looking and and XXXX

Chase Knickerbocker

add me about to to and forward our really looking Yes, for in excited nothing 'XX finish XXXX.

Operator

question JPMorgan. from next from Marcus Robbie comes The

Robert Marcus

XQ. up. on first to one, And Maybe Great. Congrats a just follow nice

versus disparity in quarter. of sort the, some cause XXXX? half I'll type call fourth should of first You think of into talked beginning of transitory about we them, And about issues bleeding any in that the How this half second will growth XXXX?

Robert Claypoole

I'll start over Robbie, to Mark. this turn is Rob. it Yes. and

good really So about into we as momentum and into XXXX QX our feel well.

only factors any as carry effect In Really, we that need ramp terms could of of QX -- the into have a the sure that I mentioned XXXX. that we I temporary mentioned, to BGS and making a go for is as we next from lag one standpoint, into year. up back that

momentum that, a little the So softer. feel year. the But maybe next across very besides about start business our bit good into heading

to add there? anything Mark

Mark Singleton

add. to Nothing

Robert Marcus

should in that? than go it resolved longer we Or something is this is So expect could by on XQ? BGS

Robert Claypoole

QX. by resolve to it expect can't You

Robert Marcus

then as a And maybe Okay. follow-up.

prepared Maybe end target remind the You leverage of to any payments just net XXXX. down to getting milestones the or in talked to upcoming the of getting and about remarks, Xx in pathway debt leverage? by us Xx ultimate the

Mark Singleton

Yes.

I Thanks, think -- Robbie.

revolver perspective, Just in mean, seen is grow just acceleration we've we acceleration pay in in going the an to things overall business. EBITDA XQ XXXX from XXXX, down in continued We good. the expect talked the to the I cash that leverage really we're flow and execution continuing and about in that

and our We a on overachievement have debt repayment amortization quarterly even EBITDA. with

just to back margin as points. our strong really our of kind down and debt seeing come business look interest that through that down, of earlier, our and about we come on in expanding talked the with driving flow repay EBITDA just to So some basis as performance execution Rob XXXX by seeing continued XXX

Operator

Genuity. next [Operator Instructions] Canaccord question from comes the from Caitlin Cronin

Caitlin Cronin

Congrats on the quarter.

for And So business stabilize U.S. focusing company. work concerns on are its that access stronger you that like share. pain the you Treatments, U.S. Chase Any partner really and HA divestitures. seems will for the your sales guys taking to Pain really it's to also it over other market establish are in earlier, mentioned in that OA products with noting look distribution competitor

every there any them? So focus by concerns for new

Robert Claypoole

Caitlin, it's Rob.

Let me start.

but there muffled externally we're at end, competitors, let concerns You're think the answer and on our if there it the from a -- hearing in what any little HA start, -- And question category was given I bit fully. I'll about is me know side? your so I

conveyed differentiation. hearing what What throughout of you're very But of there's you we clinical strong a all reflection this we concerns. I no is year. mean, to have externally

very -- contracts, with largest that our seeing the with a larger and strong commercial dedicated focused traction have dedicated and sales on it's force combination. improving payer strong accounts. also is And with we're We execution

of what So that's with you. shared all consistent with we've

we we've competitors result the a the leading. what coming of as significant driving volume will been happens always gains in that from that combination, you're And when expected and pressure years, that's increase

even the market about our our grow above strength given continue feel ability to momentum. harder, good So our comps to though get we and

Caitlin Cronin

That's helpful. in color the more other the cutting you it. that recently were coming last this compares? how just to Got market tools ultrasonic innovation on product And any bone Ultrasonic on launched line. really the And noted and then

Robert Claypoole

I'll that's the exciting in It's going and we're category, -- early what's overall that here, Yes, start. about so in it.

-- tremendous space. and organically have expand We but to through that and innovation with the additional plenty of just we're us for the through surface scratching the momentum technology world-class in and business, opportunity the includes

been over of they've that couple go last most R&D Bioventus years. is this is. the strong have -- leveraged haven't for business. we hidden that And into the with But a detail the gems team very what won't for part, on been I of one

standpoint. we'll the the R&D areas more that's from businesses be investing of So an in one

when of innovation be on you time we'll the comes. some sure update to that So

Caitlin Cronin

Got it. Awesome.

Just business into the on forward expectations next year? for going OUS

Robert Claypoole

Yes, for There's have company. the International that of more good potential a business. I've that I when than we feel really the I mentioned that's joined times probably work first think about couple required it. tremendous I I realized foundational

very I familiar said, business of that international and I'm International remain optimistic the But ahead. in businesses, growth with scaling years potential the about our

we'll we more business growth again it to scale and contributor XXXX, significant overall Bioventus the build throughout about profile. and be as a make talking So that that

Operator

for Rob closing question-and-answer back session. This concludes turn over our would to conference like the Claypoole remarks. I to

Robert Claypoole

your interest strong All shareholder for -- momentum delivered good position value. our and look in on right. improving everyone, accelerating Bioventus. business to significant our third day. to create across quarter look the and across revenue Thanks, our profitability in performance a of We X a forward our growth, and Have liquidity enhancing priorities building

Operator

The presentation. has Thank attending today's now concluded. conference you for

You may disconnect. now

Bioventus (BVS) 5 Nov 242024 Q3 Earnings call transcript