Bioventus Launches OSTEOAMP® SELECT Flowable Nationwide
DURHAM, NC – July 13, 2021 – Bioventus Inc. (Nasdaq: BVS) (“Bioventus” or the “Company”), a global leader in innovations for active healing, is launching OSTEOAMP SELECT Flowable, a flowable allograft bone graft substitute solution developed for a variety of patient procedures including lumbar spine fusion, cervical spine fusion and foot & ankle fusion.
Introduced in a limited release in select US markets beginning in March 2021,OSTEOAMP SELECT Flowable is 100 percent allograft with no synthetic carrier added, yet still based on the unique OSTEOAMP process designed to retain a wide array of essential growth factors.1* Its versatile handling is designed to satisfy the need for a flowable allograft product with cohesive properties, making it an attractive option for minimally invasive surgery (MIS), expandable cages and 3D-printed cages.
“Spine, trauma and foot & ankle surgeons are looking for allograft options that handle well for a variety of procedures,” said Dr. Larry Boyd, Vice President, Product Development, Bioventus. “Developed by our team in collaboration with our tissue bank partner, OSTEOAMP SELECT Flowable comes ready-to-use, and is designed to be delivered in a range of methods, and to provide excellent retention characteristics at the grafting site. It is terminally sterilized and processed using advanced procedures designed to comply with the highest standards for tissue banking, including comprehensive donor screening and extensive microbiological testing.”
"OSTEOAMP SELECT Flowable has been an ideal product for a variety of my minimally invasive interbody fusions, particularly with expandable cage technology, where I need a graft that handles efficiently to navigate tight spaces,” said Dr. Paul Kim, Carolina Neurosurgery & Spine Associates. “I have used various formats of OSTEOAMP for years and have seen firsthand the successful patient outcomes it can help provide.”
“A differentiated allograft product with the handling characteristics like OSTEOAMP SELECT Flowable is an asset for a spine surgeon who uses 3D printed cages where grafting can be challenging,” said Dr. Safdar Khan, Ohio State University. “I was impressed to see how the flowable product filled a cage with a tight, porous structure so well and stayed in place during implantation.”
OSTEOAMP SELECT Flowable comes in three sizes from 2.5 to 10 cc and is available nationwide. To learn more, visit www.bioventussurgical.com
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 treatment & joint preservation, restorative therapies and bone graft substitutes. 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.
OSTEOAMP, Bioventus and the Bioventus logo are registered trademarks of Bioventus LLC.
*In vitro performance may not be predictive of performance in humans.
References:
- Tidwell JL., Seaman SA, Vanderploeg EJ, Tom S. In vitro and in vivo characterization of OSTEOAMP allogenic morphogentic proteins. Data on file. Bioventus white paper, 2017.
Summary of Indications for Use
OSTEOAMP may be used in situations where an autograft is appropriate. It should be restricted to homologous use for the repair, replacement, or reconstruction of musculoskeletal defects. Please see instructions for use for a complete list of indications, contraindications, warnings, and precautions on the product label, at www.bioventussurgical.com or by calling 1-800-637-4391.
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 the expected benefits, clinical development and market opportunities of OSTEOAMP SELECT Flowable. 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 actual results to differ materially from those contemplated in this press release include, but are not limited to, statements about the adverse impacts on our business as a result of the COVID-19 pandemic; our dependence on a limited number of products; our ability to develop, acquire and commercialize new products, line extensions or expanded indications; the continued and future acceptance of our existing portfolio of products and any new products, line extensions or expanded indications by physicians, patients, third-party payers and others in the medical community; our ability to differentiate the hyaluronic acid (“HA”) viscosupplementation therapies we own or distribute from alternative therapies for the treatment of osteoarthritic; the proposed down-classification of non-invasive bone growth stimulators, including our Exogen system, by the U.S. Food and Drug Administration (“FDA”); our ability to achieve and maintain adequate levels of coverage and/or reimbursement for our products, the procedures using our products, or any future products we may seek to commercialize; our ability to complete acquisitions or successfully integrate new businesses, products or technologies in a cost-effective and non-disruptive manner; competition against other companies; the negative impact on our ability to market our HA products due to the reclassification of HA products from medical devices to drugs in the United States by the FDA; our ability to attract, retain and motivate our senior management and qualified personnel; our ability to continue to research, develop and manufacture our products if our facilities are damaged or become inoperable; failure to comply with the extensive government regulations related to our products and operations; enforcement actions if we engage in improper claims submission practices or in improper marketing or promotion of our products; the FDA regulatory process and our ability to obtain and maintain required regulatory clearances and approvals; failure to comply with the government regulations that apply to our human cells, tissues and cellular or tissue-based products; the clinical studies of any of our future products that do not product results necessary to support regulatory clearance or approval in the United States or elsewhere; and the other risks identified in the Risk Factors section of the Company’s public filings with the Securities and Exchange Commission (“SEC”), including Bioventus’ Annual Report on Form 10-K for the period ended December 31, 2020, 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 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 from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business.
Media Contact:
Thomas Hill
[email protected]
Investor Inquiries:
Mike Piccinino, CFA, IRC
Westwicke/ICR
[email protected]
Bioventus Invests in Vaporox
Ultrasonic Technology to Heal Diabetic Foot Ulcers
DURHAM, NC – June 24, 2021 – Bioventus Inc. (Nasdaq: BVS) (“Bioventus” or the “Company”), a global leader in innovations for active healing, has completed a minority investment in Vaporox, Inc., a developer of a highly innovative diabetic foot ulcer (“DFU”) wound healing therapy.
Founded in 2016, Vaporox is based in Denver, Colorado and has developed a patented, ultrasonic technology, Vaporous Hyperoxia Therapy™ (“VHT”), that has demonstrated the ability to heal approximately 85% of DFUs that were unresponsive to the current standard of care. DFUs represent a tremendous cost to the health care system and are one of the most common and severe complications associated with diabetes.
Foot and ankle surgeons are the leading specialty treating the over two million DFUs in the United States. Bioventus, through its peripheral nerve stimulation device, StimRouter®, and its ultrasound bone healing system, EXOGEN®, offers a wide range of products to foot and ankle surgeons and has a significant direct sales force focused on this specialty.
“The investment in Vaporox represents an attractive valuation entry point and allows us to take a phased approach to a potential acquisition,” said Chris Yamamoto, Senior Vice President of Business Development & Strategy for Bioventus. “We see a significant opportunity ahead of Bioventus to consolidate highly strategic assets that we expect will ultimately drive accretive revenue growth to our business.”
Yamamoto will serve on the Board of Vaporox. Terms of the investment were not disclosed and the transaction is not material to Bioventus.
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 treatment & joint preservation, restorative therapies and bone graft substitutes. 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, the Bioventus logo and EXOGEN are registered trademarks of Bioventus LLC. StimRouter is a registered trademark of Bioness Inc.
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 the expected benefits, clinical development and market opportunities of Vaporox, Bioventus’s acquisition strategy and any future acquisition of additional equity of Vaporox. 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 actual results to differ materially from those contemplated in this press release include, but are not limited to, our ability to recognize the benefits of our investments; our ability to complete acquisitions or successfully integrate new businesses, products or technologies in a cost-effective and non-disruptive manner; the adverse impacts on our business as a result of the COVID-19 pandemic; our dependence on a limited number of products; our ability to develop, acquire and commercialize new products, line extensions or expanded indications; the continued and future acceptance of our existing portfolio of products and any new products, line extensions or expanded indications by physicians, patients, third-party payers and others in the medical community; our ability to differentiate the hyaluronic acid (“HA”) viscosupplementation therapies we own or distribute from alternative therapies for the treatment of osteoarthritic; the proposed down-classification of non-invasive bone growth stimulators, including our Exogen system, by the U.S. Food and Drug Administration (“FDA”); our ability to achieve and maintain adequate levels of coverage and/or reimbursement for our products, the procedures using our products, or any future products we may seek to commercialize; competition against other companies; the negative impact on our ability to market our HA products due to the reclassification of HA products from medical devices to drugs in the United States by the FDA; our ability to attract, retain and motivate our senior management and qualified personnel; our ability to continue to research, develop and manufacture our products if our facilities are damaged or become inoperable; failure to comply with the extensive government regulations related to our products and operations; enforcement actions if we engage in improper claims submission practices or in improper marketing or promotion of our products; the FDA regulatory process and our ability to obtain and maintain required regulatory clearances and approvals; failure to comply with the government regulations that apply to our human cells, tissues and cellular or tissue-based products; the clinical studies of any of our future products that do not product results necessary to support regulatory clearance or approval in the United States or elsewhere; and the other risks identified in the Risk Factors section of the Company’s public filings with the Securities and Exchange Commission (“SEC”), including Bioventus’ Annual Report on Form 10-K for the period ended December 31, 2020, 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 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 from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business.
Media Contact:
Thomas Hill
[email protected]
Investor Inquiries:
Mike Piccinino, CFA, IRC
Westwicke/ICR
[email protected]
Bioventus to Release Second Quarter of Fiscal Year 2021 Financial Results on August 10, 2021
DURHAM, NC – June 16, 2021 – Bioventus Inc. (Nasdaq: BVS) (“Bioventus” or the “Company”), a global leader in innovations for active healing, today announced that second quarter of fiscal year 2021 financial results will be released after the market closes on Tuesday, August 10, 2021.
Management will host a conference call to discuss its financial results and provide a business update, with a question and answer session, at 5:00 p.m. Eastern Time on August 10, 2021. Those who would like to participate may dial 844-945-2085 (442-268-1266 for international callers) and provide access code 1650599. 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 10, 2022.
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 treatment & joint preservation, restorative therapies and bone graft substitutes. 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.
Investor Inquiries:
Mike Piccinino, CFA, IRC
Westwicke/ICR
[email protected]
Media Contact:
Thomas Hill
[email protected]
Bioventus Study Shows Novel Placental Tissue Biologic Candidate Inhibited Inflammatory and Catabolic Responses In Vitro
Demonstrated Significant Reduction of Pain and Cartilage Degeneration in Rat Osteoarthritis Model
DURHAM, NC – May 25, 2021 – Bioventus Inc. (Nasdaq: BVS) (“Bioventus” or the “Company”), a global leader in innovations for active healing, announced human placental tissue, prepared as a particulate composition, termed PTP-001, was shown to contain an array of beneficial growth factors, cytokines and anti-inflammatory molecules, which significantly reduced pain and cartilage degeneration in a rat osteoarthritis (OA) model. These findings were published on May 19, 2021 in Osteoarthritis and Cartilage available at https://www.oarsijournal.com/article/S1063-4584(21)00734-2/fulltext.
The in vivo activity of PTP‐001 on joint pain and histopathology was evaluated in a rat model of OA that was induced surgically by destabilization of the medial meniscus. In the model, PTP‐001 significantly reduced pain responses throughout six weeks post‐dosing as compared to a saline treatment. The magnitude and duration of pain reduction following a single intra-articular treatment with PTP‐001 was comparable to that observed for animals treated with a corticosteroid (active control). For rats that received two doses of PTP‐001, administered two weeks apart, significant reductions in cartilage degeneration scores were also observed.
“We believe that PTP‐001 represents a promising biologic candidate for osteoarthritis, with a multi‐modal potential mechanism of action that may contribute to symptom management and disease modification,” said Carl Flannery Senior Director, Scientific Affairs, Bioventus. “We will continue with further research and development of PTP‐001, as we believe it represents a novel approach for the treatment of OA, and potentially other musculoskeletal conditions with unmet clinical need.”
Authors of this study include: Carl R. Flannery, Ph.D., Bioventus; Scott A. Seaman, Ph.D., Bioventus; Kelly E. Buddin B.S., Bioventus; Michael A. Nasert, B.A., MTF Biologics; Eric J. Semler, Ph.D., MTF Biologics; Kathryn L. Kelley, B.S.; University of North Carolina, Chapel Hill; Marc Long, Ph.D., MTF Biologics; Jacob Favret, B.S., Bolder BioPATH; Alessandra Pavesio, M.S., Bioventus; and Richard F. Loeser, M.D., University of North Carolina, Chapel Hill.
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 treatment & joint preservation, restorative therapies and bone graft substitutes.. 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.
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 the expected benefits, clinical development and market opportunities of PTP-001. 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 actual results to differ materially from those contemplated in this press release include, but are not limited to, statements about the adverse impacts on our business as a result of the COVID-19 pandemic; our dependence on a limited number of products; our ability to develop, acquire and commercialize new products, line extensions or expanded indications; the continued and future acceptance of our existing portfolio of products and any new products, line extensions or expanded indications by physicians, patients, third-party payers and others in the medical community; our ability to differentiate the hyaluronic acid (“HA”) viscosupplementation therapies we own or distribute from alternative therapies for the treatment of osteoarthritic; the proposed down-classification of non-invasive bone growth stimulators, including our Exogen system, by the U.S. Food and Drug Administration (“FDA”); our ability to achieve and maintain adequate levels of coverage and/or reimbursement for our products, the procedures using our products, or any future products we may seek to commercialize; our ability to complete acquisitions or successfully integrate new businesses, products or technologies in a cost-effective and non-disruptive manner; competition against other companies; the negative impact on our ability to market our HA products due to the reclassification of HA products from medical devices to drugs in the United States by the FDA; our ability to attract, retain and motivate our senior management and qualified personnel; our ability to continue to research, develop and manufacture our products if our facilities are damaged or become inoperable; failure to comply with the extensive government regulations related to our products and operations; enforcement actions if we engage in improper claims submission practices or in improper marketing or promotion of our products; the FDA regulatory process and our ability to obtain and maintain required regulatory clearances and approvals; failure to comply with the government regulations that apply to our human cells, tissues and cellular or tissue-based products; the clinical studies of any of our future products that do not product results necessary to support regulatory clearance or approval in the United States or elsewhere; and the other risks identified in the Risk Factors section of the Company’s public filings with the Securities and Exchange Commission (“SEC”), including Bioventus’ Annual Report on Form 10-K for the period ended December 31, 2020, 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 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 from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business.
Media Contact:
Thomas Hill
[email protected]
Investor Inquiries:
Mike Piccinino, CFA, IRC
Westwicke/ICR
[email protected]
Bioventus Senior Management to Present at Upcoming Investor Conferences
DURHAM, NC – May 17, 2021 – Senior management of Bioventus Inc. (Nasdaq: BVS) (“Bioventus” or the “Company”), a global leader in innovations for active healing, will present at the Canaccord Genuity Virtual Musculoskeletal Conference on Thursday, May 20 at 8:30 a.m. ET and the Goldman Sachs 42nd Annual Global Healthcare Conference on Wednesday, June 9 at 11:20 a.m. ET. Both events are virtual conferences.
Presentation materials from the events will be available in the investor relations section on the Bioventus website at https://www.bioventus.com prior to the start of each presentation. In addition, a live audio webcast of the Company’s presentation at each event will be available under the investor relations section of the Bioventus website and links to a replay of these events may be accessed via the investor relations section for at least 30 days.
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 osteoarthritis, surgical and non-surgical bone healing. With the recent acquisition of Bioness, Inc., Bioventus expanded product offerings now include products for acute and chronic pain, central nervous system disorders including stroke and orthopedic injuries. 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, www.bioness.com and follow the Company on LinkedIn and Twitter. Bioventus and the Bioventus logo are registered trademarks of Bioventus LLC.
Media Contact:
Thomas Hill
[email protected]
Investor Inquiries:
Mike Piccinino, CFA, IRC
Westwicke/ICR
[email protected]
Bioventus Inc. Reports First Quarter Results; Updates Full Year 2021 Financial Guidance
DURHAM, NC – May 12, 2021 – Bioventus Inc. (Nasdaq: BVS) ("Bioventus" or "the Company"), a global leader in innovations for active healing, today reported financial results for three months ended April 3, 2021. This press release presents historical results, for the periods presented, of Bioventus Inc., including Bioventus LLC, the predecessor of Bioventus Inc. for financial reporting purposes.
First Quarter 2021 Summary:
- Net Sales of $81.8 million, up $3.1 million, or 4.0%, year-over-year.
- Net Income of $24.5 million, up $14.0 million, or 133.9%, year-over-year.
- Adjusted EBITDA* of $11.1 million, down $3.2 million, or 22.3% year-over-year, driven primarily by public company costs and higher selling expenses related to the better than expected sales.
- Non-GAAP net income* of $35.4 million, up $17.3 million, or 95.3%, year-over-year.
- Completed acquisition of Bioness, a global leader in neuromodulation and advanced rehabilitation medical devices on March 30, 2021.
- Raises full year 2021 revenue guidance by $4 million from $394 million to $406 million (up approximately 23% to 26% year-over-year).
“Bioventus delivered better-than-expected first quarter revenue results, driven primarily by accelerating U.S. sales growth trends as we moved through the quarter, culminating with nearly 30% year-over-year growth in March,” stated Ken Reali, Chief Executive Officer of Bioventus.
Mr. Reali continued: “We were also pleased to announce an important strategic acquisition at the end of the first quarter and welcome the Bioness organization to our Bioventus team. Bioness is a recognized leader in neuromodulation through its innovative peripheral nerve stimulation (PNS) therapy, and advanced rehabilitation medical devices. Our acquisition of Bioness significantly expands our total addressable market as their medical devices currently address a global market opportunity in excess of $8 billion. We view the Bioness acquisition as an attractive strategic addition in multiple ways including being accretive to our long-term growth profile, leveraging our significant customer presence across orthopedics, broadening our portfolio and increasing our global footprint.
"We have updated our revenue guidance for 2021, driven by our results in the first quarter. Our updated guidance reflects total Company revenue growth in the range of 23% to 26% year-over-year, fueled primarily by anticipated strong organic growth* in the range of 13% to 16% year-over-year and contributions from our acquisition of Bioness for the remaining nine months of 2021. We have significantly enhanced our balance sheet and financial condition with the net proceeds raised in our IPO in February and believe we are well positioned to execute our strategy to accelerate our multi-year growth profile with continued progress in our clinical, product development and new product pipeline and our pursuit of in-organic business development opportunities.”
Presentation, Initial Public Offering & Acquisition:
- This press release presents historical results, for the periods presented, of Bioventus Inc., including Bioventus LLC, the predecessor of Bioventus Inc. for financial reporting purposes.
- On February 16, 2021, the Company successfully closed its initial public offering (“IPO”) of common stock at a price to the public of $13.00 per share. The Company issued 9,200,000 shares of Class A common stock, which included 1,200,000 shares sold to the underwriters pursuant to their over-allotment option, and received net proceeds of approximately $111.2 million, after underwriter discounts and commissions.
- Accordingly, historical results do not purport to reflect what the results of operations of Bioventus Inc. would have been had the IPO and related transactions occurred prior to such periods. For example, these historical results do not reflect the attribution of net income to non-controlling interest or the provision for corporate income taxes on the income attributable to Bioventus Inc. that the Company expects to recognize in future periods.
- On March 30, 2021, the Company announced the acquisition of Bioness, a global leader in neuromodulation and rehabilitation medical devices through its innovative peripheral nerve stimulation (“PNS”) therapy and premium rehabilitation solutions, for $45 million in up-front consideration, with up to $65 million of contingent consideration related to the achievement of certain key milestones. The acquisition includes the entire portfolio of Bioness products as well as its research and development pipeline. Under the merger agreement, Bioness has become a wholly-owned subsidiary of Bioventus, and all Bioness employees have become employees of Bioventus. The up-front consideration is being funded exclusively through the use of cash on hand.
First Quarter 2021 Financial Results:
The following table represents net sales by geographic region, and by vertical, for the three months ended April 3, 2021 and March 28, 2020, respectively:
| Three Months Ended | Change | ||||||||||||
| ($ thousands, except for percentage) | April 3, 2021 | March 28, 2020 | $ | % | |||||||||
| By Geographic Region: | |||||||||||||
| U.S. | $ | 74,538 | $ | 71,970 | 2,568 | 3.6 | % | ||||||
| International | 7,240 | 6,675 | 565 | 8.5 | % | ||||||||
| Net Sales | 81,778 | 78,645 | 3,133 | 4.0 | % | ||||||||
| By Vertical:[1] | |||||||||||||
| Pain Treatments and Joint Preservation | $ | 41,530 | $ | 41,283 | 247 | 0.6 | % | ||||||
| Restorative Therapies | 21,821 | 23,465 | (1,644) | (7.0 | %) | ||||||||
| Bone Graft Substitutes | 18,427 | 13,897 | 4,530 | 32.6 | % | ||||||||
| Net Sales | 81,778 | 78,645 | 3,133 | 4.0 | % | ||||||||
Net sales of $81.8 million compared to $78.6 million for the first quarter of 2020, an increase of $3.1 million, or 4.0%, year-over-year. The increase in net sales, by geography, was driven by an increase of $2.6 million, or 3.6%, year-over-year, in U.S. net sales and an increase of $0.6 million, or 8.5%, year-over-year, in international net sales. International net sales for the first quarter of 2021 increased 2.5% year-over-year on a constant currency basis.
The increase in net sales, by vertical, was driven by an increase of $4.5 million, or 32.6%, year-over-year, in Bone Graft Substitute sales and by an increase of $0.2 million, or 0.6%, year-over-year, in Pain Treatment and Joint Preservation sales, partially offset by a decrease of $1.6 million, or 7.0%, year-over-year, in Restorative Therapies sales.
Gross profit was $59.6 million, or 72.8% of net sales, compared to $57.2 million, or 72.8% of net sales, for the first quarter of 2020, an increase of $2.3 million, or 4.1%, year-over-year. Non-GAAP gross profit*[2] was $64.8 million, or 79.2% of net sales, compared to $62.5 million, or 79.5% of net sales, for the first quarter of 2020, an increase of $2.2 million, or 3.6%, year-over-year.
Gross profit increased primarily due to the increase in net sales. Gross margin remained consistent with the prior year comparable period.
Operating income was $22.0 million, compared to $13.0 million for the first quarter of 2020, an increase of $9.0 million, or 69.4%, year-over-year. Operating margin was 26.9% of net sales, compared to 16.5% of net sales for the first quarter of 2020. Non-GAAP operating income* was $32.9 million, compared to $20.6 million for the first quarter of 2020, an increase of $12.2 million, or 59.3%, year-over-year. Non-GAAP operating margin was 40.2% of net sales, compared to 26.2% of net sales for the first quarter of 2020.
Total other income was $2.5 million, compared to total other expense of $2.5 million for the first quarter of 2020, a change of $4.9 million, or 199.7%, year-over-year, primarily due to the settlement of the equity participation right (EPR), repaid in conjunction with the IPO related transactions. Income tax impact was nominal in the first quarter of 2020 and 2021.
Net Income was $24.5 million, compared to $10.5 million, for the first quarter of 2020, an increase of $14.0 million, or 133.9%, year-over-year.
Adjusted EBITDA was $11.1 million, compared to $14.2 million for the first quarter of 2020, a decrease of $3.2 million, or 22.3%, year-over-year.
Non-GAAP net income* was $35.4 million, compared to $18.1 million, for the first quarter of 2020, an increase of $17.3 million, or 95.3%, year-over-year.
As of April 3, 2021, the Company had $124.2 million in cash and cash equivalents and $184.7 million in debt obligations, compared to $86.8 million in cash and cash equivalents and $188.4 million in debt obligations as of December 31, 2020.
Updated full Year 2021 Financial Guidance:
For the twelve months ending December 31, 2021, the Company now expects:
- Net sales of $394 million to $406 million, up approximately 23% to 26% year-over-year. The full year 2021 net sales guidance range is comprised of:
- Net sales from legacy Bioventus Inc. of $364 million to $374 million, representing Organic Revenue Growth* in the range of approximately 13% to 16% year-over-year, and,
- Net sales from the acquisition of Bioness Inc., following the closing date of March 30, 2021, of approximately $30 million to $32 million.
- Net income of $12.0 million to $19.2 million, compared to net income of $14.7 million for the twelve months ended December 31, 2020. The full year 2021 net income guidance range is comprised of:
- Net income from legacy Bioventus, Inc. of $33.8 million to $38.2 million and,
- Net loss from the acquisition of Bioness, Inc., following the closing date of March 30, 2021, of approximately ($21.8) million to ($19.0) million.
- Non-GAAP net income* of $59.7 million to $65.2 million, compared to $47.4 million for the twelve months ended December 31, 2020. The full year 2021 non-GAAP net income attributable to Bioventus Inc. guidance range is comprised of:
- Non-GAAP net income from legacy Bioventus Inc. of $69.0 million to $71.7 million, and,
- Non-GAAP net loss from the acquisition of Bioness, Inc., following the closing date of March 30, 2021, of approximately ($9.3) million to ($6.5) million.
- The Company continues to expect the acquisition of Bioness to have a positive contribution to non-GAAP net income, which excludes purchase accounting and transaction costs, by the end of year one post-closing.
- Adjusted EBITDA* of $73.9 million to $80.9 million, compared to $72.4 million for the twelve months ended December 31, 2020. The full year 2021 Adjusted EBITDA guidance range is comprised of:
- Adjusted EBITDA from legacy Bioventus, Inc. of $81.2 million to $85.4 million and,
- Adjusted EBITDA loss from the acquisition of Bioness, Inc., following the closing date of March 30, 2021, of approximately ($7.3) million to ($4.5) million.
* See below under “Use of Non-GAAP Financial Measures” for more information
First Quarter 2021 Earnings Conference Call:* See below under “Use of Non-GAAP Financial Measures” for more information
Management will host a conference call to discuss its financial results and provide a business update, with a question and answer session, at 5:00 p.m. Eastern Time on May 12, 2021. Those who would like to participate may dial 844-945-2085 (442-268-1266 for international callers) and provide access code 8976184.
A live webcast of the call and supporting presentation are available 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 May 12, 2022.
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 osteoarthritis, surgical and non-surgical bone healing. With the recent acquisition of Bioness, Inc., Bioventus expanded product offerings now include products for acute and chronic pain, central nervous system disorders including stroke and orthopedic injuries. 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, www.bioness.com and follow the Company on LinkedIn and Twitter. Bioventus and the Bioventus logo are registered trademarks of Bioventus LLC.
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 business strategy, position and operations; expected sales trends, opportunities and growth; the ongoing COVID-19 pandemic; the expected benefits and impact of Bioventus’ products, including in certain regions, and biologic drug candidates; and the Company’s financial guidance and expected financial performance. 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 actual results to differ materially from those contemplated in this press release include, but are not limited to, statements about the adverse impacts on our business as a result of the COVID-19 pandemic; our dependence on a limited number of products; our ability to develop, acquire and commercialize new products, line extensions or expanded indications; the continued and future acceptance of our existing portfolio of products and any new products, line extensions or expanded indications by physicians, patients, third-party payers and others in the medical community; our ability to differentiate the hyaluronic acid (“HA”) viscosupplementation therapies we own or distribute from alternative therapies for the treatment of osteoarthritic; the proposed down-classification of non-invasive bone growth stimulators, including our Exogen system, by the U.S. Food and Drug Administration ("FDA"); our ability to achieve and maintain adequate levels of coverage and/or reimbursement for our products, the procedures using our products, or any future products we may seek to commercialize, including any potential changes by Centers for Medicare and Medicaid Services in the manner in which our HA viscosupplementation products are reimbursed, our ability to complete acquisitions or successfully integrate new businesses, products or technologies in a cost-effective and non-disruptive manner; competition against other companies; the negative impact on our ability to market our HA products due to the reclassification of HA products from medical devices to drugs in the United States by the FDA; our ability to attract, retain and motivate our senior management and qualified personnel; our ability to continue to research, develop and manufacture our products if our facilities are damaged or become inoperable; failure to comply with the extensive government regulations related to our products and operations; enforcement actions if we engage in improper claims submission practices or in improper marketing or promotion of our products; the FDA regulatory process and our ability to obtain and maintain required regulatory clearances and approvals; failure to comply with the government regulations that apply to our human cells, tissues and cellular or tissue-based products; the clinical studies of any of our future products that do not produce results necessary to support regulatory clearance or approval in the United States or elsewhere; and the other risks identified in the Risk Factors section of the Company’s public filings with the Securities and Exchange Commission (“SEC”), including Bioventus’ Annual Report on Form 10-K for the year ended December 31, 2020, 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 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 condensed balance sheets
As of April 3, 2021 and December 31, 2020
(Amounts in thousands, except share and per share data) (unaudited)
| April 3, 2021 |
December 31, 2020 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 124,247 | $ | 86,839 | |||
| Restricted cash | 5,207 | — | |||||
| Accounts receivable, net | 89,472 | 88,283 | |||||
| Inventory | 39,808 | 29,120 | |||||
| Prepaid and other current assets | 11,987 | 7,552 | |||||
| Total current assets | 270,721 | 211,794 | |||||
| Property and equipment, net | 8,084 | 6,879 | |||||
| Goodwill | 53,529 | 49,800 | |||||
| Intangible assets, net | 271,042 | 191,650 | |||||
| Operating lease assets | 18,060 | 14,961 | |||||
| Deferred tax assets | 481 | — | |||||
| Investment and other assets | 21,158 | 19,382 | |||||
| Total assets | $ | 643,075 | 494,466 | ||||
| Liabilities and Members’ Equity | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 10,283 | $ | 4,422 | |||
| Accrued liabilities | 89,651 | 88,187 | |||||
| Accrued equity-based compensation | 10,875 | 11,054 | |||||
| Current portion of long-term debt | 15,000 | 15,000 | |||||
| Current portion of contingent consideration | 13,057 | — | |||||
| Other current liabilities | 10,161 | 3,926 | |||||
| Total current liabilities | 149,027 | 122,589 | |||||
| Long-term debt, less current portion | 169,731 | 173,378 | |||||
| Accrued equity-based compensation, less current portion | — | 29,249 | |||||
| Deferred tax liability | 48,963 | 3,362 | |||||
| Long-term contingent consideration, less current portion | 29,943 | — | |||||
| Other long-term liabilities | 25,129 | 21,728 | |||||
| Total liabilities | 422,793 | 350,306 | |||||
| Commitments and contingencies | |||||||
| Members' equity | — | 144,160 | |||||
| Preferred stock, $0.001 par value, 10,000,000 shares authorized, 0 shares issued | — | ||||||
| Class A common stock, $0.001 par value, 250,000,000 shares authorized,
41,038,589 shares issued and outstanding |
41 | — | |||||
| Class B common stock, $0.001 par value, 50,000,000 shares authorized,
15,786,737 shares issued and outstanding |
16 | — | |||||
| Additional paid-in capital | 142,923 | — | |||||
| Accumulated deficit | (1,041) | — | |||||
| Accumulated other comprehensive income | 451 | — | |||||
| Total stockholders’ equity attributable to Bioventus Inc. and members’ equity | 142,390 | 144,160 | |||||
| Noncontrolling interest | 77,892 | — | |||||
| Total stockholders’ and members’ equity | $ | 220,282 | $ | 144,160 | |||
| Total liabilities and stockholders’ and members’ equity | $ | 643,075 | $ | 494,466 | |||
BIOVENTUS INC.
Consolidated condensed statements of operations and comprehensive income
(Amounts in thousands, except share and per share data, unaudited)
| Three Months Ended | |||||||
| April 3, 2021 | March 28, 2020 | ||||||
| Net sales | $ | 81,778 | $ | 78,645 | |||
| Cost of sales (including depreciation and amortization of $5,236 and $5,307, respectively) | 22,222 | 21,409 | |||||
| Gross profit | 59,556 | 57,236 | |||||
| Selling, general and administrative expense | 34,686 | 40,276 | |||||
| Research and development expense | 947 | 2,146 | |||||
| Depreciation and amortization | 1,925 | 1,825 | |||||
| Operating income | 21,998 | 12,989 | |||||
| Interest (income) expense | (2,876) | 2,381 | |||||
| Other expense | 419 | 83 | |||||
| Other (income) expense | (2,457) | 2,464 | |||||
| Income before income taxes | 24,455 | 10,525 | |||||
| Income tax (benefit) expense | (73) | 39 | |||||
| Net income | 24,528 | 10,486 | |||||
| Loss attributable to noncontrolling interest | 408 | 458 | |||||
| Net income attributable to Bioventus Inc. | 24,936 | 10,944 | |||||
| Change in foreign currency translation adjustments | (1,156) | (469) | |||||
| Comprehensive income | $ | 23,780 | $ | 10,475 | |||
| Loss per share of Class A common stock(1): | |||||||
| Basic and diluted | $ | (0.02) | |||||
| Weighted-average shares of Class A common stock outstanding(1): | |||||||
| Basic and diluted | 41,797,882 | ||||||
| (1) Represents net income per share of Class A common stock and weighted-average shares of Class A common stock outstanding for the period from February 16, 2021 through April 3, 2021, the period following Bioventus Inc.'s initial public offering and related transactions described in Note 1. Organization and Note 7. Earnings per share within the Notes to the Unaudited Condensed Consolidated Financial Statements in the Company’s Quarterly Report on Form 10-Q for the quarter ended April 3, 2021. | |||||||
BIOVENTUS INC.
Consolidated condensed statements of cash flows
(Amounts in thousands, unaudited)
| Three Months Ended | |||||||
| April 3, 2021 | March 28, 2020 | ||||||
| Operating activities: | |||||||
| Net income | $ | 24,528 | $ | 10,486 | |||
| Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: | |||||||
| Depreciation and amortization | 7,184 | 7,265 | |||||
| Equity-based compensation | (22,412) | (7,026) | |||||
| Change in fair value of Equity Participation Rights unit | (2,774) | (788) | |||||
| Change in fair value of interest rate swap | (1,565) | 1,068 | |||||
| Other, net | 666 | 545 | |||||
| Changes in working capital | (23,669) | 6,141 | |||||
| Net cash from operating activities | (18,042) | 17,691 | |||||
| Investing activities: | |||||||
| Purchase of Bioness, Inc, net of cash acquired | (45,791) | — | |||||
| Purchase of property and equipment | (1,370) | (299) | |||||
| Other | 513 | (152) | |||||
| Net cash from investing activities | (46,648) | (451) | |||||
| Financing activities: | |||||||
| Proceeds from issuance of Class A common stock sold in initial
public offering, net of underwriting discounts and offering costs |
110,410 | — | |||||
| Proceeds from issuance of Class B common stock | 16 | — | |||||
| Borrowing on revolver | — | 49,000 | |||||
| Payments on long-term debt | (3,750) | — | |||||
| Other, net | 850 | (218) | |||||
| Net cash from financing activities | 107,526 | 48,782 | |||||
| Effect of exchange rate changes on cash | (221) | (260) | |||||
| Net change in cash and cash equivalents | 42,615 | 65,762 | |||||
| Cash, cash equivalents and restricted cash at the
beginning of the period |
86,839 | 64,520 | |||||
| Cash, cash equivalents and restricted cash at the
end of the period |
$ | 129,454 | $ | 130,282 | |||
Use of Non-GAAP Financial Measures
Net Sales and International Net Sales Growth on a Constant Currency Basis
Net Sales and International Net Sales Growth on a Constant Currency Basis is a non-GAAP measure, which is 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.
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” to refer to the financial performance metric of comparing the stated period organic revenue with the reported revenue of the corresponding period in the prior year. The Company believes that these non-GAAP financial measures, when taken together with our GAAP financial measures, allows 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 Expense, Non-GAAP Operating Margin, Non-GAAP Net Income, and Non-GAAP Earnings per share of Class A Common Stock.
We present Adjusted EBITDA, Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Income, Non-GAAP Operating Expense, 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 financial reporting, because we believe these measures are useful indicators of our operating performance.
We define Adjusted EBITDA as net income (loss) from continuing operations before depreciation and amortization, provision of income taxes and interest expense, 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 equity compensation, succession and transition charges, restructuring costs, foreign currency impact, acquisitions, equity loss in unconsolidated investments and other non-recurring costs. See the table below for a reconciliation of net income 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 frequently use it 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 believe that these non-GAAP financial measures are useful to better understand the long term recurring 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. We define Non-GAAP Gross Margin as the calculated ratio of Non-GAAP Gross Profit to net sales. See the table below for a reconciliation of gross profit and gross margin to Non-GAAP Gross Profit and 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 included in the cost of goods sold, amortization in operating expenses, succession and transition charges and other non-recurring costs. Non-GAAP Operating Margin is defined as defined as Non-GAAP Operating Income divided by net sales. See the table below for a reconciliation of Operating Income and operating margin to Non-GAAP Operating Income and Non-GAAP Operating Margin.
We define Non-GAAP Operating Expense 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 amortization in operating expenses, succession and transition charges and other non-recurring costs. See the table below for a reconciliation of Operating Expenses to Non-GAAP Operating Expenses.
We define Non-GAAP Net Income as Net 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 included in the cost of goods sold, amortization in operating expenses, succession and transition charges, restructuring costs and other non-recurring costs. See the table below for a reconciliation of Net Income to Non-GAAP Net Income.
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 included in the cost of goods sold, amortization in operating expenses, succession and transition charges, restructuring costs and other non-recurring costs, 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.
Reconciliation of Net Income to Adjusted EBITDA (unaudited)
| Three Months Ended | |||||||
| ($, thousands) | April 3, 2021 | March 28, 2020 | |||||
| Net income | 24,528 | 10,486 | |||||
| Depreciation and amortization(a) | 7,184 | 7,265 | |||||
| Income tax (benefit) expense | (73) | 39 | |||||
| Interest (income) expense | (2,876) | 2,381 | |||||
| Equity compensation(b) | (22,412) | (7,026) | |||||
| Succession and transition charges(c) | 157 | 773 | |||||
| Foreign currency impact(d) | (52) | 86 | |||||
| Acquisition costs(e) | 3,196 | — | |||||
| Equity loss in unconsolidated investments(f) | 469 | — | |||||
| Other non-recurring costs(g) | 949 | 242 | |||||
| Adjusted EBITDA | $ | 11,070 | $ | 14,246 | |||
- Includes for the three months ended April 3, 2021 and March 28, 2020, respectively, depreciation and amortization of $5.2 million and $5.3 million, in cost of sales and $1.9 million and $1.8 million, presented in the consolidated statements of operations and comprehensive income (loss) with the balance in research and development.
- Equity-based compensation (income) expense for the three months ended April 3, 2021 resulted from awards granted under the Company’s current equity based compensation plan (2021 Plan) and compensation costs as well as the change in fair market value for the BV LLC Phantom Profits Interest Plan (Phantom Plan), prior to its termination in conjunction with the IPO. Equity compensation expenses for the three months ended March 28, 2020 represents compensation as well as the change in fair market value resulting from the Company’s management incentive plan and Phantom Plan.
- Primarily represents costs related to the CEO transition.
- Foreign currency impact represents realized and unrealized gains and losses from fluctuations in foreign currency and is included within other (income) loss in the consolidated statements of operations and comprehensive income.
- Primarily represents costs incurred as a result of the Bioness Acquisition.
- Represents CartiHeal equity investment losses.
- Other non-recurring costs primarily includes charges associated with potential strategic transactions, such as potential acquisitions and preparing to become a public company, primarily accounting and legal fees.
| Three Months Ended | |||||||
| ($, thousands) | April 3, 2021 | March 28, 2020 | |||||
| Net income | $ | 24,528 | $ | 10,486 | |||
| Depreciation & amortization included in cost of goods sold | 5,236 | 5,307 | |||||
| Amortization included in operating expenses | 1,331 | 1,559 | |||||
| Succession and transition charges (a) | 157 | 773 | |||||
| Acquisition costs(b) | 3,196 | — | |||||
| Other non-recurring items(c) | 949 | — | |||||
| Non-GAAP Net income | $ | 35,397 | $ | 18,125 | |||
Reconciliation of Net Income to Non-GAAP Net income (unaudited)
(a) Primarily represents costs related to the CEO transition.
(b) Costs related to the Bioness acquisition.
(c) Other non-recurring primarily consists of charges associated with potential strategic transactions, such as potential acquisitions.
Reconciliation of Loss per share of Class A Common Stock to Non-GAAP Earnings per share of Class A Common Stock (unaudited)
| February 16, 2021 through April 3, 2021 | |||
| Weighted average Class A Common Stock outstanding, basic & diluted | 41,797,882 | ||
| Loss per share of Class A Common Stock (basic & diluted) | $ | (0.02) | |
| Depreciation and amortization included in cost of goods sold | 0.08 | ||
| Amortization included in operating expenses | 0.02 | ||
| Succession and transition charges(a) | — | ||
| Acquisition costs(b) | 0.05 | ||
| Other non-recurring items(c) | 0.01 | ||
| Non-GAAP Earnings per share of Class A Common Stock (basic & diluted) | $ | 0.15 | |
- Primarily represents costs related to the CEO transition.
- Costs related to the Bioness acquisition.
(c) Other non-recurring primarily consists of charges associated with potential strategic transactions, such as potential acquisitions.
Reconciliation of Gross Profit to Non-GAAP Gross Profit and Gross Margin to Non-GAAP Gross Margin (unaudited)
| Three Months Ended | Twelve Months Ended | |||||||
| ($, thousands) | April 3, 2021 | March 28, 2020 | December 31, 2020 | |||||
| Gross Profit | 59,556 | 57,236 | 233,519 | |||||
| Gross Margin | 72.8 | % | 72.8 | % | 72.7 | % | ||
| Depreciation and Amortization included in cost of goods sold | 5,236 | 5,307 | 21,169 | |||||
| Non-GAAP Gross Profit | 64,792 | 62,543 | 254,688 | |||||
| Non-GAAP Gross Margin | 79.2 | % | 79.5 | % | 79.3 | % | ||
Reconciliation of Operating Income to Non-GAAP Operating Income and Operating Margin to Non-GAAP Operating Margin (unaudited)
| Three Months Ended | |||||
| ($, thousands) | April 3, 2021 | March 28, 2020 | |||
| Operating Income | 21,998 | 12,989 | |||
| Operating Margin | 26.9 | % | 16.5 | % | |
| Depreciation and Amortization included in cost of goods sold | 5,236 | 5,307 | |||
| Amortization included in operating expenses | 1,331 | 1,559 | |||
| Succession and transition charges (a) | 157 | 773 | |||
| Acquisition costs (b) | 3,196 | — | |||
| Other non-recurring items (c) | 949 | — | |||
| Non-GAAP Operating Income | 32,867 | 20,628 | |||
| Non-GAAP Operating Margin | 40.2 | % | 26.2 | % | |
- Primarily represents costs related to the CEO transition.
- Costs related to the Bioness acquisition.
(c) Other non-recurring items primarily consists of charges associated with potential strategic transactions, such as potential acquisitions.
Reconciliation of Operating Expenses to Non-GAAP Operating Expenses (unaudited)
| Three Months Ended | |||||
| ($, thousands) | April 3, 2021 | March 28, 2020 | |||
| Operating Expenses | 37,558 | 44,247 | |||
| Amortization included in operating expenses | 1,331 | 1,559 | |||
| Succession and transition charges (a) | 157 | 773 | |||
| Acquisition costs (b) | 3,196 | — | |||
| Other non-recurring items (c) | 949 | — | |||
| Non-GAAP Operating Expenses | 31,925 | 41,915 | |||
- Primarily represents costs related to the CEO transition.
- Costs related to the Bioness acquisition.
(c) Other non-recurring items primarily consists of charges associated with potential strategic transactions, such as potential acquisitions.
Reconciliation of Guidance Range for Gross Profit to Non-GAAP Gross Profit and Gross Margin to Non-GAAP Gross Margin for the twelve months ending December 31, 2021
| ($, thousands) | 2021 Guidance
Low |
2021 Guidance
High |
Twelve
Months Ended December 31, 2020 |
|||||
| Net Sales | 394,000 | 406,000 | 321,161 | |||||
| Cost of Sales | 116,847 | 118,012 | 87,642 | |||||
| Gross Profit | 277,153 | 287,988 | 233,519 | |||||
| Gross Margin | 70.3 | % | 70.9 | % | 72.7 | % | ||
| Depreciation and Amortization included in
cost of goods sold |
29,500 | 29,000 | 21,169 | |||||
| Non-GAAP Gross Profit | 306,653 | 316,988 | 254,688 | |||||
| Non-GAAP Gross Margin | 77.8 | % | 78.1 | % | 79.3 | % | ||
Reconciliation of Guidance Range for Net Income to Non-GAAP Net Income for the twelve months ending December 31, 2021
| ($, thousands) | 2021 Guidance
Low |
2021 Guidance
High |
Twelve
Months Ended December 31, 2020 |
|||||
| Net income | 12,000 | 19,200 | 14,722 | |||||
| Depreciation and Amortization included in
cost of goods sold |
29,500 | 29,000 | 21,168 | |||||
| Amortization included in operating expenses | 7,500 | 7,300 | 5,868 | |||||
| COVID-19 expense | — | — | 576 | |||||
| COVID-19 income | — | — | (4,699) | |||||
| Succession and transition charges | — | — | 5,609 | |||||
| Restructuring costs (acquisition related) | 2,500 | 2,500 | 563 | |||||
| Acquisition costs | 3,200 | 3,200 | — | |||||
| Other non-recurring costs (a) | 5,000 | 4,000 | 3,590 | |||||
| Non-GAAP Net income | 59,700 | 65,200 | 47,397 | |||||
- Represents anticipated charges in connection with potential strategic investments.
Reconciliation of Guidance Range for Net Income to Adjusted EBITDA
for the twelve months ending December 31, 2021
| ($, thousands) | 2021 Guidance
Low |
2021 Guidance
High |
Twelve
Months Ended December 31, 2020 |
|||||
| Net Income | 12,000 | 19,200 | 14,722 | |||||
| Depreciation and amortization | 40,000 | 39,000 | 28,643 | |||||
| Income tax expense | 9,500 | 10,800 | 1,192 | |||||
| Interest expense | 3,900 | 3,400 | 9,751 | |||||
| Equity compensation | (3,700) | (2,700) | 10,103 | |||||
| COVID-19 benefits, net | — | — | (4,123) | |||||
| Succession and transition charges | — | — | 5,609 | |||||
| Restructuring costs | 2,500 | 2,500 | 563 | |||||
| Foreign currency impact | — | — | (117) | |||||
| Equity loss in unconsolidated investments | 1,500 | 1,500 | 467 | |||||
| Acquisition costs | 3,200 | 3,200 | — | |||||
| Other non-recurring costs (a) | 5,000 | 4,000 | 5,633 | |||||
| Adjusted EBITDA | 73,900 | 80,900 | 72,443 | |||||
- Represents anticipated charges in connection with potential strategic investments.
Investor Inquiries:
Mike Piccinino, CFA, IRC
Westwicke/ICR
[email protected]
Press and Media Inquiries:
Thomas Hill
Bioventus
[email protected]
[1] As a result of the Bioness, Inc. (Bioness) acquisition we have updated and renamed our verticals as follows:
- Pain Treatments and Joint Preservation includes the legacy Osteoarthritis (OA) Joint Pain Treatment and Joint Preservation products, plus the Bioness Peripheral Nerve Stimulation products.
- Restorative Therapies includes the legacy Minimally Invasive Fracture Treatments, plus the Bioness Rehabilitation products.
- Bone Graft Substitutes remains unchanged.
[2] * See below under “Use of Non-GAAP Financial Measures” for a definition and reconciliation of this measure.
Bioventus Announces First Commercial Shipment of the Bioness® Integrated Therapy System (BITS) Balance System
Fourteen Facilities Across the US Receive Multidisciplinary Therapy Solution
VALENCIA, CA – April 27, 2021 – Bioventus Inc. (Nasdaq: BVS) (“Bioventus” or the “Company”), a global leader in innovations for active healing, announced the first commercial shipments of the Bioness Integrated Therapy System (BITS) for Balance. BITS® Balance accelerates the value of the BITS platform by adding over 40 new programs and assessments, leveraging proprietary motion sensing technology on any easy to use, adjustable balance platform. From independent physical therapy practices, to regional medical centers, and national providers, the technology will aid clinicians in challenging, assessing, and tracking patients’ balance, stability, and strength, ultimately maximizing therapy outcomes.
“This improvement to BITS Balance will further aid patients in their rehabilitation journey, and make it easier for therapists to provide exceptional care,” said John Nosenzo, Chief Commercial Officer, Bioventus. “Our dedicated clinical partners all have the same goal in mind, to improve patient outcomes.”
New research continues to amplify the increased need for rehabilitation, bringing it to the forefront of patient care. According to a recent study published in American Physical Therapy Association, one in three people worldwide had a condition that rehabilitation could have helped, from both a cognitive and physical level.1 It is important to note that with each patient and case, the situation is unique and the needs are particular. BITS Balance was designed to create personalized training sessions for every level of mobility, and reduce the time needed to administer tests and analyze results, saving valuable time, while providing critical insight on patient outcomes and progression.
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 osteoarthritis, surgical and non-surgical bone healing. With the recent acquisition of Bioness, Inc., Bioventus expanded product offerings now include products for acute and chronic pain, central nervous system disorders including stroke and orthopedic injuries. 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, www.bioness.com and follow the Company on LinkedIn and Twitter.
Bioventus and the Bioventus logo are registered trademarks of Bioventus LLC. BITS®, Bioness®, are trademarks of Bioness Inc.
Individual results may vary. Patients are advised to consult with a qualified healthcare professional to determine if this product is right for them. Important Safety Information and Risks: For Indications for Use, Warnings, Precautions, and other safety information please refer to www.bionesstherapy.com/safety. Also available in the BITS Clinician's Guide online HERE.
- Cieza A, Causey K, Kamenov K, et al. Global estimates of the need for rehabilitation based on the Global Burden of Disease study 2019: a systematic analysis for the Global Burden of Disease Study 2019. The Lancet. 2030; DOI: https://doi.org/10.1016/S0140-6736(20)32340-0
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 the expected benefits and market opportunities of the BITS Balance system, . 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 actual results to differ materially from those contemplated in this press release include, but are not limited to, statements about the adverse impacts on our business as a result of the COVID-19 pandemic; our dependence on a limited number of products; our ability to develop, acquire and commercialize new products, line extensions or expanded indications; the continued and future acceptance of our existing portfolio of products and any new products, line extensions or expanded indications by physicians, patients, third-party payers and others in the medical community; our ability to differentiate the hyaluronic acid (“HA”) viscosupplementation therapies we own or distribute from alternative therapies for the treatment of osteoarthritic; the proposed down-classification of non-invasive bone growth stimulators, including our Exogen system, by the U.S. Food and Drug Administration (“FDA”); our ability to achieve and maintain adequate levels of coverage and/or reimbursement for our products, the procedures using our products, or any future products we may seek to commercialize; our ability to complete acquisitions or successfully integrate new businesses, products or technologies in a cost-effective and non-disruptive manner; competition against other companies; the negative impact on our ability to market our HA products due to the reclassification of HA products from medical devices to drugs in the United States by the FDA; our ability to attract, retain and motivate our senior management and qualified personnel; our ability to continue to research, develop and manufacture our products if our facilities are damaged or become inoperable; failure to comply with the extensive government regulations related to our products and operations; enforcement actions if we engage in improper claims submission practices or in improper marketing or promotion of our products; the FDA regulatory process and our ability to obtain and maintain required regulatory clearances and approvals; failure to comply with the government regulations that apply to our human cells, tissues and cellular or tissue-based products; the clinical studies of any of our future products that do not product results necessary to support regulatory clearance or approval in the United States or elsewhere; and the other risks identified in the Risk Factors section of the Company’s public filings with the Securities and Exchange Commission (“SEC”), including Bioventus’ Annual Report on Form 10-K for the period ended December 31, 2020, 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 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 from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business.
Media Contact:
Thomas Hill
[email protected]
Investor Inquiries:
Mike Piccinino, CFA, IRC
Westwicke/ICR
[email protected]
Bioventus to Release First Quarter of Fiscal Year 2021 Financial Results on May 12, 2021
DURHAM, NC - April 12, 2021 - Bioventus Inc. (Nasdaq: BVS) (“Bioventus” or the “Company”), a global leader in innovations for active healing, today announced that first quarter of fiscal year 2021 financial results will be released after the market closes on Wednesday, May 12, 2021.
Management will host a conference call to discuss its financial results and provide a business update, with a question and answer session, at 5:00 p.m. Eastern Time on May 12, 2021. Those who would like to participate may dial 844-945-2085 (442-268-1266 for international callers) and provide access code 8976184. 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 May 12, 2022.
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 osteoarthritis, surgical and non-surgical bone healing. With the recent acquisition of Bioness,Inc, Bioventus expanded product offerings with the Bioness products include offerings for acute and chronic pain, central nervous system disorders including stroke and orthopedic injuries. 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, www.bioness.com and follow the company on LinkedIn and Twitter. Bioventus and the Bioventus logo are registered trademarks of Bioventus LLC.
Media Contact: Thomas Hill [email protected] Investor Inquiries: Mike Piccinino, CFA, IRC Westwicke/ICR [email protected]
Bioventus Acquires Bioness, Inc.
DURHAM, NC – March 30, 2021 – Bioventus Inc. (Nasdaq: BVS) (“Bioventus” or the “Company”), a global leader in innovations for active healing, has acquired Bioness, Inc. (“Bioness”), a global leader in neuromodulation and rehabilitation medical devices through its innovative peripheral nerve stimulation (“PNS”) therapy and premium rehabilitation solutions, for $45 million in up-front consideration, with up to $65 million of contingent consideration related to the achievement of certain key milestones. The acquisition includes the entire portfolio of Bioness products as well as its research and development pipeline. Under the merger agreement, Bioness has become a wholly-owned subsidiary of Bioventus, and all Bioness employees have become employees of Bioventus. The up-front consideration is being funded exclusively through the use of cash on hand.
The acquisition of Bioness is directly aligned with Bioventus’ mission of helping patients regain active lifestyles, and the strategy of accretive revenue growth through acquisitions that leverage the Company’s existing infrastructure. Bioness, based in Valencia, California, was founded by the Al Mann Foundation in 2004 with the mission of helping improve lives and restore function for those living with peripheral pain and neurological deficit. The total addressable market for medical devices currently marketed by Bioness is estimated to be more than $8 billion.
“Bioness has developed groundbreaking and best in class technologies, and we are excited about the opportunity for Bioventus to further Bioness’ vision of improving the lives of patients,” said Ken Reali, CEO of Bioventus. “We aim to accelerate Bioness’ revenue growth by leveraging our existing global network of approximately 300 sales representatives calling on orthopedic, pain and podiatric physicians as well as expanding market access and reimbursement processing capabilities. Most importantly, we welcome the Bioness team of dedicated employees to Bioventus and look forward to working with them to further market adoption.”
Bioness is a category leader in rehabilitation solutions globally with the broadest portfolio of offerings, including proprietary electrical stimulation exoskeletal devices for both the upper and lower extremities, robotic gait and fall safety systems, and high-tech, interactive software learning and recovery assessment platforms. These products play an essential role in helping patients regain mobility due to stroke, traumatic brain injury, multiple sclerosis and osteoarthritis, and are used by physical or occupational therapists in a clinical setting or by the patient at home, with the guidance of a clinician through telemedicine.
Bioness’ StimRouter® PNS System is an emerging therapy for patients suffering from pain after surgery on an extremity, which affects over 16 million patients each year globally. The PNS market is experiencing significant growth, largely driven by a lack of effective alternatives and a desire to reduce opioid usage. StimRouter has been implanted in over 3,000 patients since 2017 and is sold in more than 10 countries, including the United States. Bioness’ patent protected PNS technology is ideally suited to treat pain in the periphery, and StimRouter is the only PNS device backed by a randomized control trial.
In 2020, Bioness generated approximately $40 million in revenue and had loss from operations of approximately $14.0 million. Bioventus expects the acquisition to be accretive to Bioventus’ revenue, enhance its multi-year revenue growth profile, and have a positive contribution to net income (excluding purchase accounting and transaction costs) by the end of year one post-close. The Company expects full year net sales for the twelve months ending December 31, 2021 to be between $390 to $402 million, including Bioness’ anticipated net sales from the date of the acquisition.
About Bioness
Bioness is a leading provider of innovative technologies helping people regain mobility and independence. Bioness solutions include implantable and external neuromodulation systems, robotic systems and software based therapy programs providing functional and therapeutic benefits for individuals affected by pain, central nervous system disorders and orthopedic injuries. Currently, Bioness offers six medical devices within its commercial portfolio, which are distributed and sold on five continents and in over 40 countries worldwide. Bioness innovations have been implemented in many of the most prestigious and well-respected institutions around the globe with 17 of the top 20 rehabilitation hospitals in the United States currently using one or more Bioness solutions. For more information, visit www.bioness.com.
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 osteoarthritis, surgical and non-surgical bone healing. 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.
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 business strategy, operations and market opportunities, financial guidance and expected financial performance and condition of Bioness and the Company, including as a result of the acquisition of Bioness, and estimated total addressable market for Bioness medical devices. 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 actual results to differ materially from those contemplated in this press release include, but are not limited to, statements about the adverse impacts on our business as a result of the COVID-19 pandemic; our dependence on a limited number of products; our ability to develop, acquire and commercialize new products, line extensions or expanded indications; the continued and future acceptance of our existing portfolio of products and any new products, line extensions or expanded indications by physicians, patients, third-party payers and others in the medical community; our ability to differentiate the hyaluronic acid (“HA”) viscosupplementation therapies we own or distribute from alternative therapies for the treatment of osteoarthritic; the proposed down-classification of non-invasive bone growth stimulators, including our Exogen system, by the U.S. Food and Drug Administration (“FDA”); our ability to achieve and maintain adequate levels of coverage and/or reimbursement for our products, the procedures using our products, or any future products we may seek to commercialize; our ability to complete acquisitions or successfully integrate new businesses, products or technologies in a cost-effective and non-disruptive manner; competition against other companies; the negative impact on our ability to market our HA products due to the reclassification of HA products from medical devices to drugs in the United States by the FDA; our ability to attract, retain and motivate our senior management and qualified personnel; our ability to continue to research, develop and manufacture our products if our facilities are damaged or become inoperable; failure to comply with the extensive government regulations related to our products and operations; enforcement actions if we engage in improper claims submission practices or in improper marketing or promotion of our products; the FDA regulatory process and our ability to obtain and maintain required regulatory clearances and approvals; failure to comply with the government regulations that apply to our human cells, tissues and cellular or tissue-based products; the clinical studies of any of our future products that do not product results necessary to support regulatory clearance or approval in the United States or elsewhere; and the other risks identified in the Risk Factors section of the Company’s public filings with the Securities and Exchange Commission (“SEC”), including Bioventus’ Annual Report on Form 10-K for the period ended December 31, 2020, 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 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 from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business.
Media Contact:
Thomas Hill
[email protected]
Investor Inquiries:
Mike Piccinino, CFA, IRC
Westwicke/ICR
[email protected]
Bioventus Inc. Reports Fourth Quarter and Full Year 2020 Financial Results; Introduces Full Year 2021 Financial Guidance
DURHAM, NC – March 25, 2021 – Bioventus Inc. (Nasdaq: BVS) (“Bioventus” or the “Company”), a global leader in innovations for active healing, today reported financial results for the fourth quarter and year ended December 31, 2020. This press release presents historical results, for the periods presented, of Bioventus, LLC, the predecessor of Bioventus Inc. for financial reporting purposes.
Fourth Quarter 2020 Financial Results Summary:
- Net sales of $98.6 million, up $1.0 million, or 1%, year-over-year.
- Net sales, by geography, is based upon:
- U.S. net sales of $89.7 million, up $2.8 million, or 3%, year-over-year.
- International net sales of $8.9 million, down $1.8 million, or 17%, year-over-year. International net sales declined 19% year-over-year on a constant currency basis.*
- Net sales, by vertical, is based upon:
- Net sales of osteoarthritic (OA) joint pain treatment and joint preservation products of $52.2 million, down $2.2 million, or 4%, year-over-year.
- Net sales of minimally invasive fracture treatment products of $27.2 million, up $0.4 million, or 2%, year-over-year.
- Net sales of bone graft substitutes products of $19.2 million, up $2.8 million, or 17%, year-over-year.
- Net income from continuing operations of $2.3 million, down $3.1 million, or 58%, year-over-year.
- Adjusted EBITDA* was $28.2 million, down $2.6 million, or 8% year-over-year.
- Net income attributable to common unit holders of $0.5 million, down $2.0 million, or 80%, year-over-year.
- Non-GAAP net income attributable to common unit holders* of $11.4 million, up $1.6 million, or 16%, year-over-year.
- Net sales, by geography, is based upon:
Full Year 2020 Financial Results Summary:
- Net sales of $321.2 million, down $19.0 million, or 6%, year-over-year.
- Net sales, by vertical, is based upon:
- Net sales of OA joint pain treatment and joint preservation products of $171.2 million, down $10.9 million, or 6.0%, year-over-year.
- Net sales of minimally invasive fracture treatment products of $88.6 million, down $14.9 million, or 14%, year-over-year.
- Net sales of bone graft substitutes products of $61.4 million, up $6.8 million, or 12%, year-over-year.
- Net income from continuing operations of $14.7 million, up $6.6 million, or 81%, year-over-year.
- Adjusted EBITDA of $72.4 million, down $6.7 million, or 9% year-over-year.
- Net income (loss) attributable to common unit holders of $4.4 million, up $5.0 million, year-over-year.
- Non-GAAP net income attributable to common unit holders of $37.1 million, up $8.4 million, year-over-year.
- Net sales, by vertical, is based upon:
Fourth Quarter 2020 and Recent Highlights:
- On November 10, 2020, the Company announced that beginning January 1, 2021, Bioventus will gain preferred access through the CVS Caremark Formulary, to DUROLANE®, GELSYN-3® and SUPARTZ FX®, for the treatment of knee OA pain.
- On November 16, 2020, the Company announced the appointment of Chris Yamamoto as Senior Vice President of Business Development and Strategy. Yamamoto is responsible for developing a business development growth strategy for the Company that is accretive to the company’s current organic growth and executing deals that will drive long-term value and further the Company’s mission of helping patients regain active lifestyles.
- On November 18, 2020, the Company announced that it received authorization to proceed under its investigational new drug application from the U.S. Food and Drug Administration (the “FDA”), allowing it to proceed to clinical trials of PTP-001. PTP-001 (commercial trade name MOTYS™) is a placental tissue particulate comprised of amnion, chorion and umbilical cord from full-term, healthy births and is provided sterile in micronized form. Bioventus plans to evaluate the safety and efficacy of PTP-001 to treat osteoarthritis of the knee through an open-label, dose-escalation study. Further, on March 11, 2021, the Company announced that the first patients had been enrolled and dosed in its Phase 1 open-label, dose-escalation study of MOTYS (PTP-001) with Dr. Shailesh Patel, M.D. at Coastal Carolina Research Center, South Carolina.
- On January 19, 2021, the Company announced the appointment of Miguel O. Beltrán-Delgado as Senior Vice President of Operations. Beltrán-Delgado is responsible for continual improvement of operations including driving productivity while continuing to meet evolving quality standards, reducing cycle times and optimizing the Company’s manufacturing and supply chain footprint.
- On March 4, 2021, the Company announced the appointment of Larry Chen as Managing Director of China and Asia Pacific. Based in Shenzhen, China, he is responsible for significantly increasing penetration of Bioventus products across key Asia Pacific markets, with a focus on China.
“Bioventus finished 2020 with improved momentum in our overall business with second half net sales increasing 3% year-over-year, and fourth quarter net sales increasing 15% on a quarter-over-quarter basis, as we continued to rebound from the global pandemic,” stated Ken Reali, Chief Executive Officer of Bioventus. “We are proud of the strong operating and financial performance we delivered in 2020, despite the unprecedented challenges presented by the external environment. We believe this performance is a direct result of our results oriented culture at Bioventus and the focus by our team on our mission to make a difference by helping patients resume and enjoy active lives.”
Mr. Reali continued: “The substantial improvements in our execution and operating achievements that we delivered in 2020 have continued in 2021. We have significantly enhanced our balance sheet and financial condition with the net proceeds raised in our IPO in February and believe we are well positioned to execute our growth strategy going forward. We introduced financial guidance for 2021 that reflects revenue growth in the range of 12% to 16% year-over-year, fueled primarily by anticipated strong global growth in sales of our leading portfolio of PMA-approved therapies for OA joint pain and our portfolio of clinically efficacious and cost effective bone graft substitutes and continuing to build on our minimally invasive fracture treatment franchise. Importantly, we look forward to potential acceleration in our multi-year growth profile fueled by continued progress in our clinical, product development and new product pipeline and our pursuit of in-organic business development opportunities that are accretive to our long-term growth profile and leverage our significant customer presence across orthopedics, broaden our portfolio and increase our global footprint.”
Presentation & Initial Public Offering:
- This press release presents historical results, for the periods presented, of Bioventus, LLC, the predecessor of Bioventus Inc. for financial reporting purposes.
- The financial results of Bioventus Inc. have not been included in this press release as it had no material assets or liabilities and no material business transactions or activities during the periods presented.
- On February 16, 2021, the Company successfully closed its initial public offering ("IPO") of common stock at a price to the public of $13.00 per share. The Company issued 9,200,000 shares of Class A common stock, which included 1,200,000 shares sold to the underwriters pursuant to their over-allotment option, and received net proceeds of approximately $111.2 million, after underwriter discounts and commissions.
- Accordingly, these historical results do not purport to reflect what the results of operations of Bioventus Inc. would have been had the IPO and related transactions occurred prior to such periods. For example, these historical results reference LLC common units and not common stock, and do not reflect the attribution of net income to non-controlling interest or the provision for corporate income taxes on the income attributable to Bioventus Inc. that the Company expects to recognize in future periods.
Fourth Quarter 2020 Financial Results:
The following table represents net sales by geographic region, and by vertical, for the three months ended December 31, 2020 and December 31, 2019, respectively:
| Three Months Ended December 31, | Change | ||||||
| ($ thousands, except for percentage) | 2020 | 2019 | $ | % | |||
| By Geographic Region: | |||||||
| U.S. | $ 89,675 | $ 86,844 | $ 2,831 | 3.3% | |||
| International | 8,916 | 10,710 | (1,794) | (16.8%) | |||
| Net Sales | $ 98,591 | $ 97,554 | $ 1,037 | 1.1% | |||
| By Vertical: | |||||||
| OA joint pain treatment and joint preservation | $ 52,246 | $ 54,459 | $ (2,213) | (4.1%) | |||
| Minimally invasive fracture treatment | 27,191 | 26,755 | 436 | 1.6% | |||
| Bone graft substitutes | 19,154 | 16,340 | 2,814 | 17.2% | |||
| Net Sales | $ 98,591 | $ 97,554 | $ 1,037 | 1.1% | |||
Net sales of $98.6 million, compared to $97.6 million for the fourth quarter of 2019, an increase of $1.0 million, or 1%, year-over-year. The increase in net sales, by geography, was driven by an increase of $2.8 million, or 3%, year-over-year, in U.S. net sales, partially offset by a decrease of $1.8 million, or 17%, year-over-year, in international net sales. International net sales for the fourth quarter ended December 31, 2020 declined 19% year-over-year on a constant currency basis. The increase in net sales, by vertical, was driven by an increase of $2.8 million, or 17%, year-over-year, in bone graft substitutes sales and an increase of $0.4 million, or 2%, year-over-year, in minimally invasive fracture treatment sales, partially offset by a decrease of $2.2 million, or 4%, year-over-year, in OA joint pain treatment and joint preservation sales.
Gross profit was $73.5 million, or 74.5% of net sales, compared to $73.4 million, or 75.3% of net sales, for the fourth quarter of 2019, an increase of 0.1%, year-over-year. Non-GAAP gross profit* was $78.6 million, or 79.7% of net sales, compared to $78.7 million, or 80.7% of net sales, for the fourth quarter of 2019, a decrease of $0.1 million, or 0.1%, year-over-year.
Operating income was $5.9 million, compared to $13.7 million for the fourth quarter of 2019, a decrease of $7.8 million, or 57%, year-over-year. Operating margin was 6.0% of net sales, compared to 14% of net sales for the fourth quarter of 2019. Non-GAAP operating income* was $17.0 million, compared to $21.0 million for the fourth quarter of 2019, a decrease of $3.9 million, or 19%, year-over-year. Non-GAAP operating margin* was 17.3% of net sales, compared to 21.5% of net sales for the fourth quarter of 2019.
Total other expense was $2.8 million, compared to $7.5 million for the fourth quarter of 2019, a decrease of $4.7 million, or 63%, year-over-year, primarily due to decreased debt interest resulting from refinancing our debt in December 2019 as well as the decline in interest rates. Income tax expense was $0.9 million, compared to $0.9 million in the fourth quarter of 2019.
Net income from continuing operations was $2.3 million, or $0.46 per common unit, compared to $5.3 million, or $1.08 per common unit, for the fourth quarter of 2019, a decrease of $3.1 million, or 58%, year-over-year.
Adjusted EBITDA was $28.2 million, compared to $30.7 million for the fourth quarter of 2019, a decrease of $2.6 million, or 8%, year-over-year.
Net income attributable to common unit holders was $0.5 million, or $0.10 per common unit, compared to $2.5 million, or $0.52 per common unit, for the fourth quarter of 2019, a decrease of $2.0 million, or 80%, year-over-year.
Non-GAAP net income attributable to common unit holders was $11.4 million, or $2.32 per common unit, compared to $9.8 million, or $2.00 per common unit, for the fourth quarter of 2019, an increase of $1.6 million, or 16%, year-over-year.
As of December 31, 2020, the Company had $86.8 million in cash and cash equivalents and $188.4 million in debt obligations, compared to $64.5 million in cash and cash equivalents and $198.0 million in debt obligations as of December 31, 2019.
Full Year 2020 Financial Results:
The following table represents net sales by geographic region, and by vertical, for the twelve months ended December 31, 2020 and December 31, 2019, respectively:
| Twelve Months Ended December 31, | Change | ||||||
| ($ thousands, except for percentage) | 2020 | 2019 | $ | % | |||
| By Geographic Region: | |||||||
| U.S. | $ 293,697 | $ 305,072 | $ (11,375) | (3.7%) | |||
| International | 27,464 | 35,069 | (7,605) | (21.7%) | |||
| Net Sales | $ 321,161 | $ 340,141 | $ (18,980) | (5.6%) | |||
| By Vertical: | |||||||
| OA joint pain treatment and joint preservation | $ 171,178 | $ 182,082 | $ (10,904) | (6.0%) | |||
| Minimally invasive fracture treatment | 88,624 | 103,504 | (14,880) | (14.4%) | |||
| Bone graft substitutes | 61,359 | 54,555 | 6,804 | 12.5% | |||
| Net Sales | $ 321,161 | $ 340,141 | $ (18,980) | (5.6%) | |||
Net sales of $321.2 million, compared to $340.1 million for the year ended December 31, 2019, a decrease of $19.0 million, or 6%, year-over-year. The decrease in net sales, by geography, was driven by a decrease of $11.4 million, or 4%, year-over-year, in U.S. net sales and a decrease of $7.6 million, or 22%, year-over-year, in international net sales. International sales for the year ended December 31, 2020 declined 22% year-over-year on a constant currency basis. The decrease in net sales, by vertical, was driven by a decrease of $14.9 million, or 14%, year-over-year, in minimally invasive fracture treatment sales, a decrease of $10.9 million, or 6%, year-over-year, in OA joint pain treatment and joint preservation sales, partially offset by an increase of $6.8 million, or 12%, year-over-year, in bone graft substitutes sales.
Net income from continuing operations was $14.7 million, or $3.00 per common unit, compared to $8.1 million, or $1.66 per common unit, for the year ended December 31, 2019, an increase of $6.6 million, or 81%, year-over-year.
Adjusted EBITDA was $72.4 million, compared to $79.2 million for the year ended December 31, 2019, a decrease of $6.7 million, or 9%, year-over-year.
Net income attributable to common unit holders was $4.4 million, or $0.89 per common unit, compared to a Net loss attributable to common unit holders of ($0.7 million), or ($0.13) per common unit, for the year ended December 31, 2019, an increase of $5.0 million year-over-year.
Non-GAAP net income attributable to common unit holders was $37.1 million, or $7.56 per common unit, compared to $28.6 million, or $5.84 per common unit, for the year ended December 31, 2019, an increase of $8.4 million, year-over-year.
Full Year 2021 Financial Guidance:
For the twelve months ending December 31, 2021, the Company expects:
- Net sales of $360 million to $372 million.
- Net income attributable to common shareholders of $15 million to $19 million.
- Non-GAAP net income attributable to common shareholders of $43 million to $46 million.
- Adjusted EBITDA of $79 million to $83 million.
Fourth Quarter 2020 Earnings Conference Call:
Management will host a conference call to discuss its financial results and provide a business update, with a question and answer session, at 5:00 p.m. Eastern Time on March 25, 2021. Those who would like to participate may dial 844-945-2085 (442-268-1266 for international callers) and provide access code 2158468. A live webcast of the call and any accompanying materials will also be provided on the investor relations section of the Company's website at https://ir.bioventus.com/.
The webcast will be archived on the Company’s website at https://ir.bioventus.com/ and available for replay until March 25, 2022.
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 osteoarthritis, surgical and non-surgical bone healing. 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.
Legal Noitce 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 business strategy, position and operations; expected tax treatment, sales trends, opportunities and growth; the ongoing COVID-19 pandemic; the expected benefits and impact of Bioventus’ products, including in certain regions, and biologic drug candidates; and the Company’s financial guidance and expected financial performance. 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 actual results to differ materially from those contemplated in this press release include, but are not limited to, statements about the adverse impacts on our business as a result of the COVID-19 pandemic; our dependence on a limited number of products; our ability to develop, acquire and commercialize new products, line extensions or expanded indications; the continued and future acceptance of our existing portfolio of products and any new products, line extensions or expanded indications by physicians, patients, third-party payers and others in the medical community; our ability to differentiate the hyaluronic acid (“HA”) viscosupplementation therapies we own or distribute from alternative therapies for the treatment of osteoarthritic; the proposed down-classification of non-invasive bone growth stimulators, including our Exogen system, by the FDA; our ability to achieve and maintain adequate levels of coverage and/or reimbursement for our products, the procedures using our products, or any future products we may seek to commercialize; our ability to complete acquisitions or successfully integrate new businesses, products or technologies in a cost-effective and non-disruptive manner; competition against other companies; the negative impact on our ability to market our HA products due to the reclassification of HA products from medical devices to drugs in the United States by the FDA; our ability to attract, retain and motivate our senior management and qualified personnel; our ability to continue to research, develop and manufacture our products if our facilities are damaged or become inoperable; failure to comply with the extensive government regulations related to our products and operations; enforcement actions if we engage in improper claims submission practices or in improper marketing or promotion of our products; the FDA regulatory process and our ability to obtain and maintain required regulatory clearances and approvals; failure to comply with the government regulations that apply to our human cells, tissues and cellular or tissue-based products; the clinical studies of any of our future products that do not product results necessary to support regulatory clearance or approval in the United States or elsewhere; and the other risks identified in the Risk Factors section of the Company’s public filings with the Securities and Exchange Commission (“SEC”), including Bioventus’ 424(b)(4) prospectus filed on February 12, 2021 in connection with the Company’s initial public offering, 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 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 LLC
Consolidated balance sheets
December 31, 2020 and 2019
(Amounts in thousands, unaudited)
| 2020 | 2019 | ||
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 86,839 | $ 64,520 | |
| Accounts receivable, net | 88,283 | 85,128 | |
| Inventory | 29,120 | 27,326 | |
| Prepaid and other current assets | 7,552 | 6,059 | |
| Total current assets | 211,794 | 183,033 | |
| Property and equipment, net | 6,879 | 4,489 | |
| Goodwill | 49,800 | 49,800 | |
| Intangible assets, net | 191,650 | 216,510 | |
| Operating lease assets | 14,961 | 15,267 | |
| Investment and other assets | 19,382 | 3,308 | |
| Total assets | $ 494,466 | $ 472,407 | |
| Liabilities and Members’ Equity | |||
| Current liabilities: | |||
| Accounts payable | $ 4,422 | $ 6,440 | |
| Accrued liabilities | 88,187 | 52,827 | |
| Accrued equity-based compensation | 11,054 | 15,547 | |
| Current portion of long-term debt | 15,000 | 10,000 | |
| Other current liabilities | 3,926 | 4,201 | |
| Total current liabilities | 122,589 | 89,015 | |
| Long-term debt, less current portion | 173,378 | 187,965 | |
| Accrued equity-based compensation, less current portion | 29,249 | 25,255 | |
| Deferred tax liability | 3,362 | 3,874 | |
| Other long-term liabilities | 21,728 | 20,681 | |
| Total liabilities | 350,306 | 326,790 | |
| Commitments and contingencies | |||
| Members’ equity (preferred unit liquidation preference of $210,576 and $204,443 at December 31, 2020 and 2019, respectively) | 285,173 | 285,147 | |
| Accumulated other comprehensive income (loss) | 1,607 | (465) | |
| Accumulated deficit | (144,539) | (141,700) | |
| Equity attributable to unit holders | 142,241 | 142,982 | |
| Noncontrolling interest | 1,919 | 2,635 | |
| Total members’ equity | 144,160 | 145,617 | |
| Total liabilities and members’ equity | $ 494,466 | $ 472,407 |
BIOVENTUS LLC
Consolidated statements of operations and comprehensive income
(Amounts in thousands, except unit and per unit data, unaudited)
| Three Months Ended Dec 31, 2020 |
Three Months Ended Dec 31, 2019 |
Twelve Months Ended Dec 31, 2020 |
Twelve Months Ended Dec 31, 2019 |
||||
| Net sales | $ 98,591 | $ 97,554 | $ 321,161 | $ 340,141 | |||
| Cost of sales (including depreciation and amortization of $5,093, $5,249, $21,169, and $22,399 respectively) | 25,121 | 24,125 | 87,642 | 90,935 | |||
| Gross profit | 73,470 | 73,429 | 233,519 | 249,206 | |||
| Selling, general and administrative expense | 61,974 | 54,454 | 193,078 | 198,475 | |||
| Research and development expense | 2,891 | 3,144 | 11,202 | 11,055 | |||
| Restructuring costs | 563 | 35 | 563 | 575 | |||
| Depreciation and amortization | 2,134 | 2,093 | 7,439 | 7,908 | |||
| Operating income | 5,908 | 13,703 | 21,237 | 31,193 | |||
| Interest expense | 2,656 | 7,644 | 9,751 | 21,579 | |||
| Other loss (income) | 111 | (146) | (4,428) | (75) | |||
| Other expense | 2,767 | 7,498 | 5,323 | 21,504 | |||
| Income from continuing operations before income taxes | 3,141 | 6,205 | 15,914 | 9,689 | |||
| Income tax expense | 890 | 892 | 1,192 | 1,576 | |||
| Net income from continuing operations | 2,251 | 5,313 | 14,722 | 8,113 | |||
| Loss from discontinued operations, net of tax | — | 199 | — | 1,815 | |||
| Net income | 2,251 | 5,114 | 14,722 | 6,298 | |||
| Loss attributable to noncontrolling interest | 525 | 523 | 1,689 | 553 | |||
| Net income attributable to unit holders | 2,776 | 5,637 | 16,411 | 6,851 | |||
| Other comprehensive income (loss), net of tax | |||||||
| Change in prior service cost and unrecognized loss for defined benefit plan adjustment |
(54) | (78) | (54) | (78) | |||
| Change in foreign currency translation adjustments | 1,439 | 255 | 2,126 | (322) | |||
| Other comprehensive income (loss) | 1,385 | 177 | 2,072 | (400) | |||
| Comprehensive income | $ 4,161 | $ 5,814 | $ 18,483 | $ 6,451 | |||
| Net income from continuing operations attributable to unit holders | $ 2,776 | $ 5,836 | $ 16,411 | $ 8,666 | |||
| Accumulated and unpaid preferred distributions | (1,608) | (1,534) | (6,133) | (5,955) | |||
| Net income allocated to participating shareholders | (670) | (1,555) | (5,895) | (1,555) | |||
| Net income from continuing operations attributable to common unit holders | 498 | 2,747 | 4,383 | 1,156 | |||
| Loss from discontinued operations, net of tax | - | 199 | - | 1,815 | |||
| Net income (loss) attributable to common unit holders | $ 498 | $ 2,548 | $ 4,383 | $ (659) | |||
| Net income (loss) per unit attributable to common unit holders-basic and diluted | |||||||
| Net income from continuing operations | $ 0.10 | $ 0.56 | $ 0.89 | $ 0.24 | |||
| Loss from discontinued operations, net of tax | - | 0.04 | - | 0.37 | |||
| Net income (loss) attributable to common unit holders | $ 0.10 | $ 0.52 | $ 0.89 | $ (0.13) | |||
| Weighted average units used in computing basic and diluted net income (loss) per common unit | 4,900,000 | 4,900,000 | 4,900,000 | 4,900,000 |
BIOVENTUS LLC
Consolidated statements of cash flows
Years ended December 31, 2020 and 2019
(Amounts in thousands, unaudited)
| Operating activities: | |||
| Net income | $ 14,722 | $ 6,298 | |
| Net loss from discontinued operations | — | 1,815 | |
| Net income from continuing operations | 14,722 | 8,113 | |
| Adjustments to reconcile net income to net cash provided by operating activities from continuing operations: | |||
| Depreciation and amortization | 28,643 | 30,316 | |
| Payment of contingent consideration in excess of amount established in purchase accounting | — | (945) | |
| Provision for expected credit losses | 1,215 | 2,242 | |
| Profits interest plan, liability-classified and other equity awards compensation | 10,103 | 10,844 | |
| Change in fair value of Equity Participation Rights unit | 644 | 565 | |
| Change in fair value of interest rate swap | 1,599 | — | |
| Deferred income taxes | (511) | (348) | |
| Amortization of debt discount and capitalized loan fees, net | 543 | 1,583 | |
| Loss on debt retirement and modification | — | 3,352 | |
| Other, net | (67) | 395 | |
| Changes in operating assets and liabilities: | |||
| Accounts receivable | (3,941) | (14,909) | |
| Inventories | (528) | (1,427) | |
| Accounts payable and accrued expenses | 20,510 | 6,646 | |
| Other current assets and liabilities | (733) | (3,882) | |
| Net cash provided by operating activities from continuing operations | 72,199 | 42,545 | |
| Net cash used in operating activities of discontinued operations | (400) | (1,832) | |
| Net cash provided by operating activities | 71,799 | 40,713 | |
| Investing activities: | |||
| Investment and acquisition of distribution rights | (16,579) | (6,000) | |
| Acquisition of VIE | — | 430 | |
| Purchase of property and equipment | (4,093) | (2,342) | |
| Net cash used in investing activities from continuing operations | (20,672) | (7,912) | |
| Net cash provided by investing activities from discontinued operations | 172 | — | |
| Net cash used in investing activities | (20,500) | (7,912) | |
| Financing activities: | |||
| Borrowing on revolver | 49,000 | — | |
| Payment on revolver | (49,000) | — | |
| Proceeds from the issuance of long-term debt, net of issuance costs | — | 198,134 | |
| Payments on long-term debt | (10,000) | (199,500) | |
| Other financing activities | 317 | (448) | |
| Distribution to members | (19,886) | (9,137) | |
| Net cash used in financing activities | (29,569) | (10,951) | |
| Effect of exchange rate changes on cash | 589 | (104) | |
| Net change in cash and cash equivalents | 22,319 | 21,746 | |
| Cash and cash equivalents at the beginning of the period | 64,520 | 42,774 | |
| Cash and cash equivalents at the end of the period | $ 86,839 | $ 64,520 | |
Use of Non-GAAP Financial Measures
International Net Sales Growth on a Constant Currency Basis
International Net Sales Growth on a Constant Currency Basis is a non-GAAP measure, which is 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 of international net sales to prior periods and analyze net sales performance without the impact of changes in foreign currency exchange rates.
Adjusted EBITDA, Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Income, and Non-GAAP Net Income Attributable to Common Unit Holders
We present Adjusted EBITDA, Non-GAAP Gross Profit, Non-GAAP Gross Margin, Non-GAAP Operating Income, Non-GAAP Operating Expense and Non-GAAP Net Income Attributable to Common Unit Holders, all non-GAAP financial measures, to supplement our financial reporting, because we believe these measures are useful indicators of our operating performance.
We define Adjusted EBITDA as net income (loss) from continuing operations before depreciation and amortization, provision of income taxes and interest expense, 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 equity compensation, change in fair value of contingent consideration, COVID-19 benefits, succession and transition charges, loss on impairment of intangible assets, losses associated with debt refinancing, restructuring costs, foreign currency impact and other non-recurring costs. See the table below for a reconciliation of net income 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 frequently use it 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, and Non-GAAP Net Income Attributable to Common Unit Holders principally as measures of our operating performance and believe that these non-GAAP financial measures are useful to better understand the long term recurring 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. We define Non-GAAP Gross Margin as the calculated ratio of Non-GAAP Gross Profit to net sales. See the table below for a reconciliation of gross profit and gross margin to Non-GAAP Gross Profit and 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 included in the cost of goods sold, amortization in operating expenses, COVID-19 expenses, succession and transition charges, restructuring costs and other non-recurring costs. See the table below for a reconciliation of Operating Income and operating margin to Non-GAAP Operating Income and Non-GAAP Operating Margin.
We define Non-GAAP Net Income Attributable to Common Unit Holders as net income attributable to common unit holders, 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, amortization in operating expenses, COVID-19 expense and income, succession and transition charges, losses associated with debt retirement and modification, restructuring costs, and other non-recurring costs. See the table below for a reconciliation of net income attributable to common unit holders to Non-GAAP Net Income Attributable to Common Unit Holders.
Reconciliation of Net Income from continuing operations to Adjusted EBITDA (unaudited)
| ($, thousands) | Three Months Ended December 31, 2020 | Three Months Ended December 31, 2019 | Twelve Months Ended December 31, 2020 | Twelve Months Ended December 31, 2019 | |||
| Net Income from continuing operations | $ 2,251 | $ 5,313 | $ 14,722 | $ 8,113 | |||
| Depreciation and amortization (a) | 6,854 | 7,344 | 28,643 | 30,316 | |||
| Income tax expense | 890 | 892 | 1,192 | 1,576 | |||
| Interest expense | 2,656 | 7,644 | 9,751 | 21,579 | |||
| Equity compensation (b) | 9,484 | 7,592 | 10,103 | 10,844 | |||
| COVID-19 benefits, net (c) | 35 | - | (4,123) | - | |||
| Succession and transition charges (d) | 264 | - | 5,609 | - | |||
| Restructuring costs (e) | 563 | 35 | 563 | 575 | |||
| Foreign currency impact (f) | (59) | (138) | (117) | 8 | |||
| Equity loss in unconsolidated investments (g) | 467 | - | 467 | - | |||
| Other non-recurring costs (h) | 4,749 | 2,023 | 5,633 | 6,177 | |||
| Adjusted EBITDA | $ 28,154 | $ 30,705 | $ 72,443 | $ 79,188 |
(a) Includes for the years ended December 31, 2020 and 2019, depreciation and amortization of $21.2 million and $22.4 million in cost of sales and also includes $7.4 million and $7.9 million, respectively, and for the quarters ended December 31, 2020 and 2019, depreciation and amortization of $5.1 million and $5.2 million in cost of sales, and also includes $1.8 million and $2.1 million, respectively, presented in the consolidated statements of operations and comprehensive income (loss), with the balance in research and development.
(b) Represents compensation as well as the change in fair market value resulting from two equity-based compensation plans, the Management Incentive Plan and the Phantom Profits Interest Plan.
(c) Represents income resulting from the Coronavirus Aid, Relief and Economic Security (“CARES”) Act offset by additional cleaning and disinfecting expenses and contract termination fees for canceled events.
(d) Primarily represents costs related to the CEO transition.
(e) Represents costs related to a shift from direct to an indirect distribution model in our International business to improve performance. Various international subsidiaries were dissolved and or merged into other Bioventus LLC entities.
(f) Foreign currency impact represents realized and unrealized gains and losses from fluctuations in foreign currency and is included within other (income) loss in the consolidated statements of operations and comprehensive income (loss).
(g) Represents our share in the losses of CartiHeal for the year and quarter ended December 31, 2020.
(h) Other non-recurring items in 2020 includes settlement and legal costs of $1.9 million with the Office of Inspector General of the U.S. Department of Health and Human Services (“OIG”). The remaining balance in 2020 and the activity in 2019 primarily consists of charges associated with potential strategic transactions, such as potential acquisitions and preparing to become a public company, primarily accounting and legal fees.
Reconciliation of Net income attributable to common unit holders to Non-GAAP Net income attributable to common unit holders (unaudited)
| ($, thousands) | Three Months Ended December 31, 2020 |
Three Months Ended December 31, 2019 | Twelve Months Ended December 31, 2020 | Twelve Months Ended December 31, 2019 | |||
| Net income attributable to common unit holders | $ 498 | $ 2,548 | $ 4,383 | $ (659) | |||
| Depreciation & amortization included in cost of goods sold | 5,093 | 5,249 | 21,168 | 22,399 | |||
| Amortization included in operating expenses | 1,331 | 1,599 | 5,868 | 5,927 | |||
| Loss on debt retirement and modification (a) | - | 367 | - | 367 | |||
| COVID-19 expense (b) | 299 | - | 576 | - | |||
| COVID-19 income (c) | (264) | - | (4,699) | - | |||
| Succession and transition charges (d) | 264 | - | 5,609 | - | |||
| Restructuring costs (e) | 563 | 35 | 563 | 575 | |||
| Other non-recurring items (f) | 3,590 | - | 3,590 | - | |||
| Non-GAAP Net income attributable to common unit holders | $ 11,374 | $ 9,798 | $ 37,058 | $ 28,609 |
Reconciliation of Net Income attributable to common unit holders per common unit to Non-GAAP Net Income attributable to common unit holders per common unit (unaudited)
| Three Months Ended December 31, 2020 |
Three Months Ended December 31, 2019 | Twelve Months Ended December 31, 2020 | Twelve Months Ended December 31, 2019 | ||||
| Weighted average common Units used in computing basic and diluted net income per common Unit | 4,900,000 | 4,900,000 | 4,900,000 | 4,900,000 | |||
| Net income attributable to common unit holders per basic and diluted common Unit | $ 0.10 | $ 0.52 | $ 0.89 | $ (0.13) | |||
| Depreciation & amortization included in cost of goods sold | 1.04 | 1.07 | 4.32 | 4.57 | |||
| Amortization included in operating expenses | 0.27 | 0.33 | 1.20 | 1.21 | |||
| Loss on debt retirement and modification (a) | - | 0.07 | - | 0.07 | |||
| COVID-19 expense (b) | 0.06 | - | 0.12 | - | |||
| COVID-19 income (c) | (0.05) | - | (0.96) | - | |||
| Succession and transition charges (d) | 0.05 | - | 1.14 | - | |||
| Restructuring costs (e) | 0.11 | 0.01 | 0.11 | 0.12 | |||
| Other non-recurring items (f) | 0.73 | - | 0.73 | - | |||
| Non-GAAP Net income attributable to common unit holders per basic and diluted common Unit | $ 2.32 | $ 2.00 | $ 7.56 | $ 5.84 |
(a) Represents charges with our 2019 debt refinancing that were included in selling, general and administrative expense on the consolidated statements of operations and comprehensive income (loss).
(b) Additional cleaning and disinfecting expenses and contract termination fees for canceled events included in operating expenses.
(c) Represents income resulting from the CARES Act.
(d) Primarily represents costs related to the CEO transition.
(e) Represents costs related to a shift from direct to an indirect distribution model in our International business to improve performance. Various international subsidiaries were dissolved and or merged into other Bioventus LLC entities.
(f) Other non-recurring items in 2020 primarily includes settlement and legal costs of $1.9 million with the OIG.
Reconciliation of Gross Profit to Non-GAAP Gross Profit and Gross Margin to Non-GAAP Gross Margin (unaudited)
| ($, thousands) | Three Months Ended December 31, 2020 |
Three Months Ended December 31, 2019 | Twelve Months Ended December 31, 2020 | Twelve Months Ended December 31, 2019 | |||
| Gross Profit | 73,470 | 73,429 | 233,519 | 249,206 | |||
| Gross Margin | 74.5% | 75.3% | 72.7% | 73.3% | |||
| Depreciation & Amortization included in cost of goods sold | 5,093 | 5,249 | 21,168 | 22,399 | |||
| Non-GAAP Gross Profit | 78,564 | 78,678 | 254,687 | 271,605 | |||
| Non-GAAP Gross Margin | 79.7% | 80.7% | 79.3% | 79.9% |
Reconciliation of Operating Income to Non-GAAP Operating Income and Operating Margin to Non-GAAP Operating Margin (unaudited)
| ($, thousands) | Three Months Ended December 31, 2020 | Three Months Ended December 31, 2019 | Twelve Months Ended December 31, 2020 | Twelve Months Ended December 31, 2019 | |||
| Operating Income | 5,908 | 13,703 | 21,237 | 31,193 | |||
| Operating Margin | 6.0% | 14.0% | 6.6% | 9.2% | |||
| Depreciation & Amortization included in cost of goods sold | 5,093 | 5,249 | 21,168 | 22,399 | |||
| Amortization included in operating expenses | 1,331 | 1,599 | 5,868 | 5,927 | |||
| Succession and transition charges (a) | 264 | - | 5,609 | - | |||
| Restructuring costs (b) | 563 | 35 | 563 | 575 | |||
| COVID-19 expense (c) | 299 | - | 576 | - | |||
| Other non-recurring items (d) | 3,590 | 367 | 3,590 | 367 | |||
| Non-GAAP Operating Income | 17,048 | 20,953 | 58,611 | 60,462 | |||
| Non-GAAP Operating Margin | 17.3% | 21.5% | 18.2% | 17.8% |
(a) Primarily represents costs related to the CEO transition.
(b) Represents costs related to a shift from direct to an indirect distribution model in our International business to improve performance. Various international subsidiaries were dissolved and or merged into other Bioventus LLC entities.
(c) Additional cleaning and disinfecting expenses and contract termination fees for canceled events included in operating expenses.
(d) Other non-recurring items in 2020 primarily includes settlement and legal costs of $1.9 million with the OIG.
Reconciliation of Guidance Range for Net Income to Common Shareholders to Non-GAAP Net Income to Common Shareholders
for the twelve months ending December 31, 2021
| ($, thousands) | 2021 Guidance Low | 2021 Guidance High | |
| Net income attributable to common shareholders | 15,349 | 19,317 | |
| Plus: Amortization included in cost of goods sold | 22,260 | 21,260 | |
| Plus: Amortization included in operating expenses | 5,323 | 5,323 | |
| Non-GAAP Net income attributable to common shareholders | 42,932 | 45,900 |
Reconciliation of Guidance Range for Net Income from continuing operations to Adjusted EBITDA
for the twelve months ending December 31, 2021
| ($, thousands) | 2021 Guidance Low | 2021 Guidance High | |
| Net Income from continuing operations | 13,958 | 17,926 | |
| Depreciation and amortization | 30,000 | 29,000 | |
| Income tax expense | 5,162 | 6,630 | |
| Interest expense | 3,400 | 2,900 | |
| Equity compensation | 21,500 | 22,500 | |
| Other non-recurring costs (a) | 5,000 | 4,000 | |
| Adjusted EBITDA | 79,020 | 82,956 |
(a) Represents anticipated charges in connection with potential strategic investments.
Investor Inquiries:
Mike Piccinino, CFA, IRC
Westwicke/ICR
[email protected]
Press and Media Inquiries:
Bioventus
Thomas Hill
[email protected]
*See below under “Use of Non-GAAP Financial Measures” for a definition and reconciliation of this measure.
