BTMD - Earnings call transcript Q2 2024

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Operator

Good day, and welcome to the Biote Second Quarter 2024 Earnings conference call. [Operator Instructions] I would now like to turn the conference over to Szymon Serowiecki, Investor Relations.

Szymon Serowiecki

Thank you for joining us today. This afternoon, Biote published special results for the second quarter ended June 30, 2024. This release is available in the Investor Relations section of the company's website. Officer; call. Peterson, Executive will Financial Chief this host Webber, and Chief Bob Officer, Terry

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

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

Teresa Weber

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

growth. Peterson, with review financial who prepared highlighted growth Officer, half me our your discuss revenue by strategic a start. This today call on optimizing top-tier financial and the Financial performance reflected improvement Beer, on Chairman, on new with Biote is new expanding In the for of added our program. following in procedure clinics XXXX. in Bob to in our XX% call clinics is we answer achieving success our XXXX, the quarter, more practitioner today's first results focus start Chief session new increase approximately Q&A generated On our driving basis help will significant our and Executive accounts, our to sequential our growth a clinic second year-over-year solid questions quick during also from network Marc remarks. our the outlook quick

into translates by the success quick status over that that found have generated clinic stronger achieved We start early performance clinics time.

our work practices. wellness result, a and hormone new closely we continue their optimize therapeutic with to of launch to As the providers

annual in and teaching and top to hormone and gross opportunities. engagement XXX practitioners. to progress spent adjusted our key even represents We BioteRx strengthen selectively as we enrolled. advanced with with X.X and unique with platform XXX conference the network these These approach continues well our with remain concepts practitioners wellness days strategic EBITDA our our on increased growth BioteRx approximately wellness. and clinics XXXX profit our achieve investments track provider therapeutic therapeutic phased solid investments, market. launch of long-term our we differentiated we to financial We also achieved The over investments enhance a to initiatives now Even guidance. our where believe sales marketing We care in across included

In portfolio of training our resources, separates technical to educational support, products and addition an competitors. advanced expanded comprehensive believe with supports a range which we tools, BioteRx and us of treatments, from practitioners

the will several Biote our next major the approach method, enhancements Over to several expanding we weeks, science-based care. to introduce

these deliver medicine will higher Biote enhancements, holistic With to patients. even of personalized we're practitioners their confident enable that for an level

spectrometry panels and for addresses broaden treatments proprietary our use accuracy. our lab outcomes to technology, health analysis. while greater our software we expand We testing enable practitioners to and chromatography advantages will to capabilities we'll utilize functionality that dosing precise sensitivity even more new These range of better further wellness the patients. precision testing decision-making, care. additional lab panels blood First, latest to To liquid enhance sample mass update with will for deliver a wider individualized patient more provide providing and delivers clinical

management, patient patient's For to decision algorithms updated a software example, health needs. continuously our enhanced features ongoing evolving clinical adapting for support

are across our broadening We therapeutic also offerings categories. key BioteRx

We conditions. products and and areas our new will and value enabling comprehensive more complement composition, patient in sexual autoimmune These hormone thyroid non-pellet existing of our new introduce optimization proposition body offerings care. the elevating wellness, therapies,

Finally, support for with and and techniques insertion. delivery we for will procedures, tools bolster trocar including our pellet for a pellet practitioners enhanced further new new

spectrum business. our level a integration pleased been The continues of operations we're Biote broad the with feedback wellness. Health education always, from hearing that of smoothly. to and who into provide the value and continue therapeutic unmatched We've an Health of positive training, hormone to Asteria to practitioners Asteria will our capabilities progress covering our As adds

cost we process, states as well additional expanding As manufacturing as we continue efficiencies. to on long-term driving integration Asteria licenses remain focused Health's the

Bob deliver significant outstanding provide second quarter our remarks. Biote XXXX During financial eliminate to to advancing to X track we the litigation litigation These progress and with and in and continues through associated provide repurchases. shareholders. the the value shareholder build to in share agreements Bob were In with turn our information make summary, results now large to quarter, second XXXX. for on strategic we will pleased guidance. discuss objectives, more conclude solid time his our financial outlook long-term I'll call over our expense remain and

Robert Peterson

Thank and Total flat first quarter increasing revenue Terry, good and with from X.X%, of essentially XXXX. X.X% year-over-year expectations. growth quarter in you, growth everyone. consistent increased the revenue was reported Procedure the sequentially the million, $XX.X our second in rate afternoon,

Second quarter was our across and driven network top-tier procedure clinics. growth from revenue growth our broad-based by primarily

the benefited from past new growth performance clinics months. Our also XX over XX% approximately in

procedure As our quick of Terry streams. have newly clinics accelerates mentioned added implemented many program that these previously, new revenue successfully start

the a significant seasonal revenue products year-over-year business our in e-commerce delivered lapped time transition Consistent second quarter expected, the XX.X% of last began decreased key of previously our and distributor our former dietary we As supplement managing of end the quarter. several second promotion line, distribution from at quarter. we year's second as continued with

inventory our overall continue prior expect distributor, of resume to revenue down second certain we we the work nutraceuticals year-over-year to this nutraceutical in of year. growth from While half

profit inventory a margin basis step-up gross profit the in $X.X a XXXX. Health. from to quarter increase XX.X%, XXXX of quarter of Gross second XXX in Asteria million point the value acquisition of of related included quarter was Second million the second $XX.X

profit in profit Excluding margin this cost inventory improvement have reflected gross would margin mix The quarter product gross effective management. year-over-year second XXXX been XX.X%. and revaluation,

with growth revert including levels As profit expenses were expectations, in to expected, and annual sales as strategic we half. year-over-year Consistent selling, second million anticipate sales administrative provider compared in to resuming million $XX.X the Operating primarily investments second due our the will the of planned quarter our marketing, historical consolidated nutraceutical margin prior and gross costs $XX.X in XXXX. increased year event. from to general

second of liability was of million liability. of net a million $X.X This loss $XX.X earnout earnout which due included $XX.X result, the an in second $XX.X fair quarter. million, value in due the and inclusive liability. $XX.X operating the fair compared a of to a the million loss fair As the was in loss quarter income net year quarter to a a the million $X.X prior value million in value quarter due of second of in loss to warrant loss the compares Net change to the change million net change $X.X to the XXXX, in

marketing year investments with prior expansion. from to expand Largely offerings EBITDA period. of XX.X% adjusted top and the due selectively our million providers, geographic our second XX.X% of adjusted our of decreased these to XX.X%. an second further year strengthen During in the wellness margin an and margin sales to increased prior $XX.X compares EBITDA quarter, adjusted with engagement EBITDA the we therapeutic quarter EBITDA our $XX.X in with to investments, adjusted This million

half. half While anticipate the moderate our we investments year in as we first to our with growth make to operating will expenses overall compared second aligned of this continue the strategy,

was flow million. cash operating quarter Second $XX.X approximately

tranches, consideration. second of As share next X for shareholders from cancellation announced, X additional shares has Donovitz the cash the and the the repurchased quarter Under million, the tranche quarter the of concert at over XXXX of litigation repurchased in Dr. settlements, quarter. agreed Donovitz include These of XXXX. of $XX.X terms million Terry the share $XX $XX.X and were the of repurchases for the significant Biote the second Gary cash down the end June, equivalents repurchase for Biote settlements release repurchases, of end first $XX.X to these with years. concluded from previously the of because and first Subsequently, Marci remaining first noted large and at earn-out repurchase as April. first million Biote shares million. in no Biote the XX.X from After million during shares these Largely shares

to cash our continue discipline. maintaining share funding operating while will manage we to forward, settlement-related allocation Moving repurchases assist prudently our capital flow

Turning of reflects return EBITDA reported for XXXX with procedure sales expectations We to high financial improving million. second $XX a and the adjusted year-over-year XXXX. revenue million of level, growth guidance to in revenue reiterate to our to half guidance million our $XX outlook previously fiscal in $XXX At nutraceutical sales. growth and $XXX million for a our our

we and performance from operating the be XXXX factors: practitioner new the including our one, improving contribution top-tier growth driven starts. to growing the half our continued implementing side, compared continued half the second clinics; existing expected from the growth a clinics expenses clinics, by three, X Strengthening relative the as first in half of expansion to is network; to On in half. quick first of revenue two, expense procedure in second moderation anticipate

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

Teresa Weber

Biote are performance for on our track achieve second we the Thank quarter, in generated objectives year. strategic to financial and you, and financial Bob. solid the

We across add plans progressively new serve patients roll capabilities to continue and our practitioners. with to both network better out to BioteRx

Asteria time. manufacturing over opportunities growth our We to which Health, efficiency improves also for integrate continue new offers and

focused remain on for enhanced significant have profitable the we questions. share concluding we become shareholder on by And the provider growth the terms. please therapeutic question-and-answer long-term as Finally, driving to to single-source to value open solutions. I'd committing Operator, leading and begin of repurchases now We call strive evidence-based session. litigations wellness favorable like outstanding

Operator

We and will Instructions] Les Our question question Sulewski now with answer session. Truist from Securities. begin comes [Operator the first

Leszek Sulewski

from much program in list. list? And you your drug around now be So compounded that weight with regulations your there's heard available shortage maybe have -- Terry, a longer GLP-Xs perhaps the hear that no shortage GLP-X the there limitations off commentary didn't guess of ban loss follow-up. will strategy? does highlight or And do a brand are strategy. FDA just I I place the your the Can Essentially, some you how impact confirm how I if if on and puts either coming presentations of we've

Teresa Weber

break So into it the pieces. I'll

give GLP are the to our context and ones. let of framework BioteRx for a So you used me a

of by has it full have we the therapeutic a that It wellness both the GLP-Xs. compounders of products, the in shortage because Semaglutide the and And launched are -- therapeutic produced it of being because which So the both this complement includes BioteRx. Tirzepatide list. wellness includes the

products us, of it's with a that for at Biote. that lot So of a shop allow a formula piece other one-stop

therapeutic on just product those on easily platform the products. of very and performance a short part that allows delivered SLAs. So we to providers order wellness, have a the It's couple of it's piece a

this. concerned well. working So platform about The adoption. we're a not There's lot is of

happened So even proceeding what's well on about that week we products. very and can these X a it's talk this little bit

shortage if it's following the now, before can criteria compounders the FDA right the the the why look drug from shortage and a So manufacture, removing you shortage and considers list. list, at

total the the on manufacturer can the and to whether of demand, the First, is meet amount you able both that last demand on of national national even historical year formulations. the report within

the that safety it drugs. stock manufacturer part can verify second for has whether The built is enough the

have there's other a as that or type availability also if shortage. You under considerations drug still to have patients of the the prescribers whether or

determines and may demand in of their Mounjaro, demand in different at their leading levels levels. demand quoted, drugs as that goes in they products intermittent out process of that better has off increases both supply it's probably supply. that in Zepbound FDA. and listened that the tightness balance, only Lilly the drug and Novartis certain expect a come supply disruptions the the shortage -- companies whether for are that a Semaglutide, they the and person recordings audience periodic is from if So these announced and dosage Lilly difficulty and and branded such into the quite there'll of while Novo earnings had long X supply and produced Tirzepatide address our Eli both fact And it the dosage has result be they

this, certainly they the to for treatment. starter treatment that their restricting U.S. we announced as Novartis, market who looks Novo when patients they'll So supplies if, continue doses this look start continue at the can of ensure it in

So time, of many period and there's shortage these for drugs will estimation in remain a our on options.

GLP-X being we drugs space speak. in are developed New the as

that us, be to supply. about an and make do to our we're We for shortage. sure to ones easy in consistent access will want on our just compounders the allowed that get are doctors So model. not a it And it concerned

remind -- other not you why So big well get the us. that, which given paid fee the for therapeutic hope accessing also platform I've platform, for and offers that offers as we our I'll our platform is tech some that you insights concern I a into in a formulations wellness.

long-term therapeutic So our this focus. wellness of is just part

Leszek Sulewski

on maybe build Asteria Perhaps in the some just sense, facility. to that on

that question many in is we You I compounded spa operate production still can add kind are what how be mentioned I works? percentage guess that your When a of then to GLP-X. expect operational? medical then the line the setting? in before, you're last to at And on Is And a virtual looking physicians the of setting? guess, my

Teresa Weber

X questions, there. Good questions

one, number on So Asteria.

at our we focused meet after that other making very in manufacturing products. We all are we're the integration, need the expanding to looking GLP-X can on production Asteria sure and our space we're

I'd So for to manufacturer that that looking and be XXXX impact.

real Your to quick. second question that want you repeat

Leszek Sulewski

medical Has and percentage in physicians spa of the -- number setting in virtual.

Teresa Weber

setting. spa medical the So

usually internist setting their all who So our have practitioners in the of practice next arm medical an spa wellness has an OB/GYN They're traditional supervising a or practitioners. an to practice.

allows So all of less I have it's supervisor And a practitioners way that, that's end, structured that to they that on us but certainly say have few they're virtual have very their -- than And have really very virtual a component with we would practitioners. XX%. clinics. good the practice,

just don't, group. any we service this So at completely point, virtual

Operator

question next TD with comes Jungwon the And from Kim Cowen.

Jungwon Kim

of step-up And you we investments the a follow-up of like year? remainder the your that Should forward, that. this how are just a for of curious marketing the measuring there. just about just and How success Just expect to about and investment marketing spend? you've going we plan? should think similar your level quarter investments made And

Teresa Weber

Biote do to what really engage they term involvement of looks with practitioners is long us. decades to with So so these an keep though

So year our clinical software. what enhancement decision is this we invested that to support in

includes now excellent clinical decision therapeutic It of optimization. from hormone our you'll have that products not support an software, job So BioteRx. doing only wellness

growing engagement those with that's an So in investment providers.

science Now this and is innovation. new it's

had these large science X.X them going. We many of had spent where new off-site that that and key days products educating our therapeutic we so are large providers is And on the meeting that wellness so providers.

do as and large in have from X solid both as generation, a on So that are very next much was into us all of Tier very providers a the QX, largest we we but differentiated these enhancement clinics ROI our the investment competition. -- no should in that taking where well

Robert Peterson

And Jon, bit little just to add that. a to

it's just you, as higher expenditures mentioned. to and As the about other customer Terry support were QX, QX. marketing we in typically, at think it's would I data deploy, sales, when investments analytics, OpEx, Terry really mean, And Terry supporting several that of our data the of would looking in whether those to modernization engagement, tell are our that tell I planned to practitioner and spends mentioned, we're ROI you saying And is really we all as the look what continue of related to I of systems that deploy. we review expenses

Jungwon Kim

call half second guidance? changes anything your have second trends follow-up confidence notable one any versus to embedded the in is, quarter-to-date And quarter? gives in of or just just you And what inflection out you seen

Robert Peterson

improved we uptick. a that on So guidance. right procedure at revenue. our with consistent look give I don't expecting when the think we're perspective now, quarterly It from guidance, sequential was revenue, QX growth We year-to-date

first our performance as focused So the top-tier quick half we second and we're will in positive show new growth we specifically starts key growth strengthen the should to half. which, customer our with versus which the and anticipate continue second the call, on But growth half, really accounts, in improving momentum. mentioned during neutral trends,

Operator

next question from comes Jeff Van the B. Securities. Sinderen And with Riley

Jeff Van Sinderen

This Van for Sinderen. is Magnusen Richard in Jeff

mention I color licenses. you if you various First all wondering the more off, on could are with state where exactly licenses? did obtaining provide quickly was you state

Robert Peterson

the with those flux. entirety pretty good licenses, licenses relates obtaining we've of to keep forward in and continue say to work progress it's -- on constantly that our just planned, we as for look as would I progress made So it Asteria, as you And in at diligently new area. teams applying we we're

next a with whole So are we're of a half. handful to about licenses coming the halfway say and quarter approaching mark the I the over obtain quarter, looking would we that

Jeff Van Sinderen

bit to you is, migrate previously, what new platform maybe little And from they stubborn then were towards they about doctors, talked question were used to. your the a my next

Some it inventory because sources. more was they of previous had from

is, as Or felt you what that? with my depleted legacy comfortable And source sources meaningfully they Biote. the testing are of about smaller they Biote with have so lot And a you the it? us this they a we're the Or question as orders until reluctant as other tell from move can and Has far situation was away improved? that to that know? aspect

Teresa Weber

We've it's licenses been new BioteRx. new improved. coming are meaningfully doctors for in our state Yes, because adding

their product. orders. They've the of of So increasing time we've been the consistency the been adding They're seeing the quality and practitioners. delivery

what excited we've is becoming clinics about going are new all of very And us products. well. on I'm So for the BioteRx these dependent all that's their that got beginning in

So I used GLP-Xs, not shopping It's and pinning just on business platform. it's our They're better like to that but the just for GLP-Xs. because they're their learning using a not supply mix. and us

the is very So working strategy well.

Operator

question with Roth from Kelly next comes The Capital. George

George Kelly

on year-end? Curious And First, production how through what Asteria. is for your much your there? running expectation of is

Robert Peterson

So look the that George, about a way I licenses. bit talked this, the mean would little at state I we've

are to machinery. really capabilities up make additional machinery and probably in demand. term term now that where meet We sure I at by inventory and to a have built And and inventory installing now production needs meet producing medium from the point we to -- enough the scaled we're the we building the building we're well, perspective, a at a point think our future enough where the we've in short additional

George Kelly

the half anticipating back so guess question based So is, Asteria? meaningful gross margin of just in part that a are production on flowing that I up step next you in through the

Robert Peterson

just step this, a so we're different take as the the the at at gross piece. look and mean, So I'll bit way you X on a little let's back, of facets margin looking -- touch that I

very into you doing Number licenses. and to So focused mentioned, One, onboard be we're what smooth need get succeeding we're we're is already trying to. process that to the in you quite we facet conversion additional on in through as really and the finding of well as when imagine, process. work function Asteria And you just each strategically well. like a these is this quite working this really towards commercial was transition. Biote, that states can two ensure to phase work state we a with And teams our to access

building think good. last piece, inventory. that's which also I So on We the is that already touched

our piece Asteria important clearly, within is and strategic So an part capabilities a Biote. overall of

we'll transition, begin clinics. to and As into the we transition pellets operationalize operationally different

are as range. As guidance the start -- progress the procedures this more will the through and phased occur adjusted approach has start to pellets of this implanted enable into will of a our XXXX through a gross be to impact and we margin this, more factored financial been half year EBITDA on these second

George Kelly

the Or that to does absolute then remarks, versus the other in prepared quick more mean In what reported X the back Can moderate in the And you you versus mentioned SG&A be you you just what in back SG&A you your expect first specific, ones. that half that dollars decline half. that to half half? does first expect mean?

Robert Peterson

So look here's would at the I way it.

continue expenses and on we of Amazon we Terry customer to So remain new any to events funds to mentioned are in don't demand-generating had to new flat. like and We trainings, existing growth. that big on development But Sun, really additional in expenses We core the we're activities have activities. going But business. the customer Sea our QX. spend spend going continue that material see don't any revenue-generating expect shifts we to

that So also the really guidance. into is in moderation baked

George Kelly

to of I'm implies sort guide. the triangulate in back step-up just in fairly a into And half. it your significant trying margin EBITDA EBITDA

figure if that thing? that's -- to that? margin I what's sort there's If okay. out not, an like SG&A to And so a way get trying just thing gross to I'm know a or of is don't

Robert Peterson

our I just the kind the of as in And of going end look you, we would No, towards we're margin guiding expect we at that just would -- be say, I we're gross half, second I now, no, think I -- to would tell range. do high right moderation. historical say

So in that upper range. XXs XXs upper --

that where we're you give little of a of on kind can front. guide that going to a So bit

Operator

Gajrawala Kaumil with Jefferies. from comes question next the And

Kaumil Gajrawala

from other of couple your A some follow-ups I questions. guess, answer of,

licensing, of you you or or state states And give update can many how maybe idea any just licensed? large us the if maybe became an states are recently an left? particularly On ones where

Robert Peterson

Well, I our to would that you -- been we've up that approved are tell just existing would the continuing. And say footprint. that match fairly state in well overall, just I the licenses we

can and nearly -- the I at phases all applied think we've with states, approval they're for say I varying of process.

Kaumil Gajrawala

And to a run rate on over dollars? -- little the the were question guess a in bit is, incremental the that at rest marketing a just big of the I simply the event looking year? we're more of stepped step-up Or of last and follow-up the is the few addition in there things that a up a natural to sort event investment was

Robert Peterson

event. way, would Sun, drivers. would a Sea as say I say just a that we smaller probably as the one that, hit And the look the I There the I you've system. force, doing other practitioners, but I at Yes. our that -- largest material along mentioned, big pretty is event is optimizing items really of say there's would the combination, sales our one our engaging data are with to. improving

Teresa Weber

I one more we things look people, science of think providers Kamil, therapeutic evidence-based to wellness. to we and therapeutic taking the going is of in a much into investment are that the as all our wellness

to So in teach we are our and educators. practitioners revamping for ability program. we the their training invested Those in and educated our us, teach who

coming training new want this we step-up, and and is significant you to invite therapeutic really the people in the fall invested where I the is this a audience wellness So in that the materials strong whole experience make for process instructors, the training. interactive for education very are providers and to the it new back that our and those in really a additional

Operator

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

Teresa Weber

us Biote, and next on conference in joining in you really call. therapeutic for everyone, you, wellness our the appreciate We updating Thank to our on interest we forward look today. progress

Operator

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

You disconnect. may now

biote (BTMD) 8 Aug 242024 Q2 Earnings call transcript