BTMD - Earnings call transcript Q1 2024

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Operator

Good day, and welcome to the Biote First Quarter 2024 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Szymon Serowiecki, IR representative from AdvisIRy Partners. Please go ahead.

Szymon Serowiecki

Thank you for joining us today. financial the published XX, ended Biote XXXX. afternoon, results quarter for March This is Investor on the news available This release the company's Relations website. of section Officer, Terry host Executive Officer; Bob Chief Weber, and today's Financial call. Peterson, will

started, get goals, conditions statements expectations guarantees operations, and growth business, development, among opportunities, performance the matters. of make Actual company's some that other commercialization expectations call no management's relied and representative beyond management current this and variety the company's Biote operations, we impact views conditions results remind are financial subject to business everyone performance. I'd update macroeconomic financial activities, Before statements on materially statements. regulatory of of not subsequent the statements forward-looking from and strategies, are uncertainties on and which Therefore, as results in upon differ subject statements that future. the include of business control. that These of them any things, forward-looking outlook, be as will date. are to regarding, assumptions future like process company's based reflected These undertakes should uncertainties, a statements to the of manufacturing and could risks, obligation are any They these to other are future of as to not of results, today. risks in

adjusted being measure on provide expenses to factors certain non-GAAP SEC's other provided of release. Management nonoperating the factors important a value risks turn important earnings compensation, to additional XXXX actual information Weber. and of other the release that earnings of with first the in non-GAAP primary will financial net and and of in of to our closest Investor to liabilities, SEC please is EBITDA risks For measure transaction-related other to to our the stock-based as Relations well GAAP the website refer release is call our differences as the also affect discussion quarter income, fair to refer available adjusted could Reconciliation investors. which refer now website reconciliation Terry a earnings results, to EBITDA, for Please and our expenses. discussed the measure. I'll filings section over a GAAP comparable adjustments our

Teresa Weber

Thank joining and you, Szymon, all thank you for us.

answer our first the expanding Chief Financial greatly who call and of financial will call remarks. Biote is following Q&A suite consistent Bob today's launched in our opportunities. BioteRx, and successfully new growth complementary long-term solid our our Beer, our Chairman, session generated you on performance Executive On review results Marc our the evidence-based wellness financial me with hormone prepared expectations. during today the with for quarter, outlook our also Peterson, delivering We questions is discuss XXXX. results our help to Officer, products,

we remarks. expected definitive million We we also accretive settlement Bob share. efficiency closed manufacturing reach that Biote's to through $X.XX by provide prove than more value his Donovitz information will will Dr. in planned shareholder more an of per repurchase XX this shares to on of price repurchase impact average the at the of agreement held Asteria financial costly our a our pleased closed, strategic quarter were and with of capabilities. Shortly our enhances ends and believe the acquisition first Health, after settlement This transaction litigation founder. a agreement strengthens

months. procedure an Now have of EBITDA XX%. excess revenue in quarter stable sales expected Adjusted added decrease included EBITDA new X.X%, of our revenue X.X%, a remained was a reflecting let's our results. by decline we Consistent transition revenue past X%, partially growth contribution of XX.X% growth Revenue primarily in due procedure clinics and top-tier to increased our of to nutraceutical our the Procedure we from dietary offset revenue adjusted XX of an supplement growth, driven that quarter and with generated as revenue we turn fourth e-commerce increased in first to clinics business. margin compared XXXX. in outpacing from the expectations,

of market of in the our our our Following nutraceutical of fourth larger continue storefront. nutraceutical of one we transition distributors exit XXXX, sales portion online the own from quarter a to to the

part the which profile business eliminating will are long of overall As resellers, run. nutraceuticals anticipate the margin this third-party in our transition, unauthorized we of we enhance

starting of therapeutic new foremost health the our nutraceuticals competitors in by for wellness channel. In inventory and as practitioner outcomes suite half distribution We loss. XXXX patients. further resume in existing positive on preventative BioteRx to BioteRx evidence-based launched build expect solutions. BioteRx, wellness, wellness in needs we hormone and also health represents of the our our and from from milestone become and separates of the as our a patient therapies. growth provider year-over-year will practitioners business areas, evolution we weight aging is solution key February, revenue cleared sexual healthy a Biote second It successfully our complete promote including with addresses to providing leadership

practitioner rollout to therapy. of focused wellness and therapeutics. hormone efficacious phased expanded have our wellness been year. Patient positive, has and on To offerings date, formulary our expand response hormone the attractive ahead. formulations products what that our We further believe hormone the provide for of alternatives with therapeutic new opportunity to practitioners new additional BioteRx, including introduced later in market range and an years continue we're we products, we've is ensuring As Biote in pellet to consistent highlighting the XX to plan we access

clinical treatment including formulated needs. provides patients' individual unique valuable offering that to BioteRx recommendations tools decision practitioners, resources, For will proprietary and a system support be

receive our wellness medical formulary to expanded a from patients, single provider. hormone enables treatments BioteRx and For conveniently them

to advances closed objectives licenses additional compounded key Health's Health, bio-identical remain is the Asteria strategic aspects. In expanding we addition launch of to our The BioteRx, integration believe of in Asteria following of first states. We Asteria Health already we in underway, also on successful of a manufacturer hormones, the our quarter. focused and Asteria acquisition our

we our over strengthening chain, to of the generate supply product control through enabling us enhancements First, our vertical integration are manufacturing.

productivity we manufacturing. integration, achieving also gains towards work driving pellet on are focused vertical our we full in As

are gaining manufacturing range us and we and the will by we develop we expertise high-quality medications. lab competitive open wide innovation wellness of this our processing XXX(B) us Second, plan formulations, the innovative is This pharmacokinetic will compounded to our and backed of studies. hormone the for to therapeutic an forefront where year, innovation. Biote products, strengthen Biote, believe a initiative of position provide Later research on exciting enabling we center, keep own which in

and as discuss the are the the call enhancements, training outlook as especially and provide a optimize and time, efficiency to our improve and remains competitive new serves education of process. program evolve differentiator, aim our over we Biote to start-up laying interactive both both in Through hormone to the we onboarding to enhance now and ramp streamline extend Our results therapeutic At introduced and XXXX. method for financial training a practitioners. groundwork commitment revenue new for from accelerate more for position leadership immersive designed turn and the our cost key to our training our to education. I'll recently a these our advanced Start and continuing Bob clinics, existing and didactic we into and for experience solutions. To practitioners, provider we integral the Quick wellness growth single-source same new

Robert Peterson

afternoon, and Terry, everyone. you, Thank good

larger First quarter with X.X% by in decreased X.X% revenue the when Nutraceuticals XXXX. rate year-over-year performance XXXX. during as period, increased million same of of exiting of Procedure revenue our grew to distributors result the prior the a as quarter to quarter the fourth company's consistent compared expected, year $XX.X of in revenue fourth XX.X% quarter growth from XXXX. the business primarily a nutraceuticals we one

XXXX. call, the of last the quarter's in begin previously we noted end products to by quarter distribution the this I second of distributor expect As delivered by managing of

basis XX.X% sales gross mix margin profit I increase this due quarter margin product by points XXX expanded gross nutraceutical cost favorably earlier. to impacted in that lower to mentioned would was profit management. quarter's approximately by note as effective and First

were as we million in first we consolidated to expect, in As nutraceutical to gross anticipate resumed costs quarter profit second $XX.X historical Selling, million sales should margin the administrative $XX.X growth XXXX. the of revert and levels. general compared half

quarter compares of product to improved $XX.X sales, XX.X% to in million quarter year quarter, of compared driven liability. Adjusted loss year due in loss to change with of This quarter EBITDA the of $XX.X first mix impact business, first expenses adjusted margin to expenses by inclusive transaction litigation M&A-related liability. margin a This profitability EBITDA settlements net margin in due the Adjusted was compares EBITDA revenue SG&A of an which increased and million, EBITDA in earnout to income and prior the XXXX. million included first and with of compensation, management loss fair margins ongoing an million earnout to net million a effective $X.X expenses unrelated million the the to other the million of $XX.X of growth, period. in $XX.X the adjusted million XXXX. Operating was expenses. quarter due of XX.X%. gross and fair compared profit prior adjusted in a the share-based higher would $X.X Excluding value EBITDA $XX.X the million of change operating was $XX.X the have $XX.X XXXX, of in value a been of primarily the and the improved Net to loss and

in of cash First was positive XXXX primarily flow quarter related was margins. approximately to million. The cash QX operating $X.X flow better

company's XX, tranche company Also Donovitz Under As average the share, April the with time the beneficially of Donovitz The the at on that over Terry of first XX, has agreed shares next Dr. years. Biote's by unvested on a $XX.X Donovitz, Biote were shares remaining X shares repurchased to an $X.XX Dr. time reached at the Dr. will million terms settlement is per with XX.X Biote by million XXXX, all the repurchased noted, canceling repurchase owned to S. settlement, settlement. earnout in the Gary the the XXXX. the be million pursuant the of of at of owned beneficially price for the founder. X.X of being definitive settlement settlement, all April shares litigation

Turning with million $XXX $XX and million. financial previously $XXX XXXX. reported to fiscal to revenue million $XX of reaffirm for guidance of EBITDA adjusted our to We million outlook

year, year. cadence to of and nutraceuticals the of the channel for the for be of Total promotions. distribution the revenue by second the performance in our and timing XXXX transition half look of As revenue be to weighted the adjusted expect towards at first EBITDA expected half we seasonal we growth is financial impacted the

the her Terry turn back I'll for call closing comments. Now to

Teresa Weber

first objectives. progress against generated substantial financial Biote achieved and strategic Bob. you, Thank our solid quarter in performance the

our expanding With We the Asteria to capabilities. and the comprehensive of acquisition, the successful wellness delivering their a aging closure on are launch of by we approach practitioners and therapeutic to BioteRx aging evidence-based and solutions remain focused patients. healthy Health and strengthening both providing

the open session. for to Operator, like question-and-answer questions. the I'd Now please call begin

Operator

[Operator from Truist Instructions] The first question Les Sec. with comes Sulewski

Leszek Sulewski

X.X% to the the to on your investments Or little give comment additional just that you new Terry, guess can investments QX, have would existing expect would now perhaps new your if out your new then a market to create you And little would you looking us give you be from us of to a essentially XXX preliminary what on feedback how has versus are clinics, capital And on that stage is that the you you color third to give to rolled out that us then new clinics? And on from bit second roll at that? -- would X getting integration feedback create procedure growth first months then could space? question your some contributed growth bit Asteria in this you that? clinics? And in XX and more expect providers of the top demand? sense when one sort then I of products looking acquisition on of And to products of perhaps a that data based you're have a what with the you're be much there.

Teresa Weber

Great.

with the year-over-year the growth start I'll that's X.X%. talking first procedure So question about

had As we the XXXX of first of to reflect the back talked was about, half half going XXXX.

rate. majority to our or percentage, the we those we've into indexing at to practices and as growth from moving looking continued of clinics. then talked And did have top-tier grow. The second that We've before, we to grow to is clinics higher tier it top is new is, existing to continuing usually the and their clinics So were those very them we're that continue a pleased then grow clinics. with about onboard stable as encouraged -- at ability tier. And by

are Quick since practitioners And really to they training. my in that highly those program training. that is quick has as that than remarks, start since a referred We us better coming up to XXXX to end optimization it Start performing go I I've to here practitioners as giving have they qualified been from well-indexed hormone back give

So solid quarter, consistent performance on it we're to expectations. pleased and with our this and have balance

that had you The second question on was BioteRx.

in like XX they mid-February the those very were those launched the response the products -- from February the has and positive initial delivery providers, new results. additional products but other hormone not access from and products patients. consistent that have just both been -- So fact the quick XXX the and providers can very with with really They have us, the both and pelleting

onboarded response good well XXX with first that on products. the So

provider attendance to. at the XX we launching second phase on at at large over products, up new then being the the well roll have out in that positively those ended people that very really training meeting, new in XXX then second they're of BioteRx responded providers and We looking will a phase plus focusing look of leading so to this XXX

you know, over got we've as X,XXX providers. So

ensuring will will then questions products this Bob. really So that have GLP-Xs. I rollout over to give Asteria through like for the be And popular especially 'XX, access, consistent systematic we those

Robert Peterson

to thinking I When be operation amount put investments don't get that -- us Looking capabilities that at the the capital up I to bit I the in. a think of at we're take. about expanding see this look and of Asteria a and investments and significant the machinery operation, the we capital-light in interim. we nature a design we a little operation, of spending running is a strategic and from don't primary going see perspective

at really Asteria. think have focus the So I that's that we

Operator

TD question Kim comes Jonna from Your next with Cowen.

Jungwon Kim

this around That would Just expansion point helpful. and takes and products curious, how any your outside also [indiscernible] it typically of market. pipeline long color markets product new get the core at to new be in

Teresa Weber

So I repeat question. out. it missed your gapped the first of you because part, Could Jonna, that

Jungwon Kim

core fast was sure. then, your -- around R&D expect expansion question outside asking pace and of just you markets how of an was How basis? this we And yes, the Yes, that innovation. I should at second annual about on point. the

Teresa Weber

well. our question, is first going expansion The geographic very

we're really uptake a the go So we've on seen real pockets training markets and to of and good new into to their that practice. new those ability providers bringing start

really optimization So you know we've in and got a highly experienced sales of force, practices. index the would the best certainly they've hormone in successful very that those able capable having to hormone been providers U.S., be

you on try second products. we was question had to the So second more And through go the those we XX those to you'll new see rest new the in able well expansion and innovation be as and go 'XX well, markets. And I'll year. of the results on markets going develop. is And give those it year some expect of of half color the then to some geographically as on into

think we country need products this for a therapeutic I wellness, wellness on have healthy these in So these aging. real

are a developing So in wonderful access to those doctor, medicine we're to Saltiel, process we formulator, available. is We've are excellent products. those have is we Doreen looking and all and I that XX those a got And discussed. -- products innovation functional in very that at going have and categories we're those well. What doctor certainly, new providing ensure think states we I products or we

delivery that more like limited Some the and new getting consistent on those are California products. states access but

overnight. and encouraged, effectively. It's moving So not we're it's

Operator

from Gajrawala Kaumil Your with next comes Jefferies. question

Kaumil Gajrawala

to ones? the driver growth? the could much the growth heard, procedure clinics? out follow maybe up ever of earlier new from broken sense was you have come make the is has a growth I -- of the me or Just how one on primary I of sure that of give you questions Can on Or -- existing the

Teresa Weber

business their procedure, our continuing of that that growth would X And clinics. I year-over-year is One are that amount primary growth categories. expand is increased We're the there top-tier their optimization. procedure So and hormone in to say existing clinic. X.X% in

The -- new move second clinics numbers, second-tier provide but into next as we've top to the a then tier. And and exact over provide clinics that those months. is the I base that don't XX they them always, to targeting give said, build

So them their increasing we're engaged you'll bringing XX that the quicker, first more clinics and to acceleration gets second in that procedures training the program really see half in of that Start as days. Quick in year

and existing business So you'll X performing well. lesser with those grow is they're to working clinics see them and new a our the really or -- their that degree then but X/X on greater from to clinics

Kaumil Gajrawala

Got How Okay. pace? think gave adds the on the better, quarter But don't clinic it. past? same this new I worse, number. in is a versus you

Robert Peterson

new customers we how one's see you on can But I I We higher can we're that focused customer Terry customer and we've the Biote at typically say start into in I adds. -- targeting as better growth, little than the typically no earlier, new don't the on who never we're indexing. to tell can you seeing a said we as we're bit specifics give and that as a bringing been in know, hormone new customer you, And we one look as more -- quality, tell coming business. And door. in new thing

you, So that a And XXXX new our coming an proving I we're pretty is since to off contributor be as to of of effective. Quick big of which can Terry best years customers. Start program, said, from our perspective one tell onboarding is

Kaumil Gajrawala

a what about such, should how might should Great. the products, just time evolving the new integration margin of will the between -- there's BioteRx below your like should X business revenue -- with -- term, over line? maybe longer the as is How think -- and look there big is about what structure? And how different and vertical the with P&L Okay. addition we be thinking the actually, look we business the

Teresa Weber

Yes, the the Bob about new and Asteria. pass margins products, then in to talk it to I'll

it you look We're yet. at those transaction if those a I very think products we're that getting I actually at manufacturing not contribution in a look fee. would XXXX, nominal products on new

So point, That at future, be XXX(B). will but we a this fee. have in it's transaction a our acquired

it it what one-stop does, though, So us shop. gives that

Our hormone providers they are and GLP-Xs doing optimization. doing are

training I GLP-Xs. new doing already a at providers, doing Well fact, GLP-Xs. of were X/X matter a last how were over XXX Friday, many As asked

testosterone core that of lean the and works So GLP-Xs be testosterone our mass, of conversation in that with how really effect the business few next core loss believe side we the will muscle years. to over

in So provider we becomes X So this only going going type I to is use wellness right? teach you're sets see of on same therapeutic what critical we as the expand and of you how that educate a category products, providers to BioteRx those both to years ago. think not did

these that's comes integration. let OB/GYNs, of expected in. And Biote their providers, the Your then really where comment family practice Bob side and all how understand effects. everyone's to I'll on the products And to navigate

Robert Peterson

on I think, you Terry, it. And Yes. hit

doing plan we're as But executing that some right now, longer fully to to we at year. Asteria look what think have at when to point, -- be of isn't really When would yet. integrated. fee sight have be to it going we be think great our into I of don't line term, point this at transaction it material and do the with to you

Operator

with MK. George ROTH from comes Kelly question next Your

George Kelly

your quickly to maybe to curious to hormone core that of just how asked. already have But I'm Asteria, that with the start a some production shift been follow-up questions expect pellet facility. you So on

Robert Peterson

starting question. just And seeing been a we it's a date, -- going have to parts running. pace we've good working everything are still running. hit bit to We second think may strategic slower the talked in the you, diligently and half. uptake No, up I closing is on to the line the place. the ground -- when would And -- up executed past. all I we want the tell quite I hit as really strong to you we the get QX in we a see we range little When obviously, be think deliver really are ground in in about

I little based closing the think George? caused a just answer the Does of a question, in the bit on slowdown that beginning QX. has your of late start

George Kelly

will does. It vast fair the it Is internally? year-end, by majority produced be say, your to of business pellet

Teresa Weber

of Bob the license of licenses. at that say is the I is trying thing looking as but say or other George, control state state only their states we licenses, and a don't vast mandate yes, what California from about, what is when the schedule you talking by majority think timing we're convert I'd end to that the some own year, we're the

Robert Peterson

go And another keep to ahead. sorry, just -- thing, George,

George Kelly

No, go ahead, Bob. I interrupted.

Robert Peterson

The existing bit within the the no. say -- converting no, would due lag only a the bleed be there process, other start conversion as inventory little No, also down a will I of thing is, of to we clinic.

inventory So there as Terry start new could clear when licensure, we on on are maybe be they to slight will factor on we'll to as mentioned, watch that another be people down over-indexed have take obtain they have how state bleed That inventory. but delay closely. very -- who for

George Kelly

next on that versus that's and procedure X.X% half, you've is as back mostly that X revenue Or then really you driven X again sort reported think products is to is core Okay. by of find kind topic in are beyond half do and the X starting acceleration bottom? And kind its you've to the the new of look you your products? that just consecutive momentum half more curious, 'XX it to of now story? a for That's the new relates and the business of talked your then And guidance expectations quarters, to growth growth. commentary I wanted about -- to helpful. I'm cover

Teresa Weber

multiple George. of can kind we that think ways, I answer

market. understand in growth from procedure come and definitely, consistent as very as if well X. revenue with QX is So in And understand QX we're going I QX feel as and providers to was the expectations, that competitive where we and confident feel performance our that those we our we

to plans very and that that about you at So point individual X and have a little QX. for place although -- bit them looking of some we've and And we the got Bob I'll with programs. and in really comfortable QX solid QX formulas talk and

Robert Peterson

of Yes, parts would guidance. And more And is depth. just that George, question. pieces, factored high and our sure. hit into we piece I X say into on kind dive good side. I the from any them following in the Terry. of And I'll procedure the big points X then can the But you heard

earlier. heard absolutely from is You on our me mission The growth for heightened critical top-tier us. focus

these performing have are we in We the that and second to seeing expect well, play through half.

just them, middle but mentioned Starts to the into be won't we that we with newer go more need pretty Quick is key commented, we portfolio. really internal their in in a a I've that think that's the area, expand items for And think to we into growing we'll there. One the really do be people I that's And sales great I us we've or may it. sales would drive really perform. didn't new earlier, get as I seen much and think start do journey, this can too force to just and that's drive cycle drive Additionally, life data with too mentioned and the have are within mentioned, us, to there The mention. uptick key because battle customers. And it existing our solid -- tested how real of top already I to those our because dive opportunities other much and it's our I we this how tiers, leveraging customers we've force better and Terry -- echo their we that into I of but do

older is continue And be as -- to there. And the especially not sales we're will force, base, you the need very that nutras on only the be continue from to I And prior Amazon call the those may other talked our our and look should at pace -- up acclimated prior that second if that's we side of to up growth our we're we that to to from some then of make nutras, of into and in on penetration, get about real would in because existing customers even expand seeing is that uptake newer good and the seeing customers that nutras. accretive. focus we've equation a bring can we and as and good conversion know half, finally, that running, distributor which do that customer

Operator

to it ] for That's back [ conference the I session. our closing remarks. for would question-and-answer like over any turn

Teresa Weber

all like you we're forward We updating say of for therapeutic thank wellness the on us. you positive the and I'd optimization and goes to hormone on, seeing look to interest joining our throughout to as you year real on the impact U.S. the

forward looking So you. to our next call. Thank

Robert Peterson

Thank you.

biote (BTMD) 7 May 242024 Q1 Earnings call transcript