NASDAQ:BTMD biote Q4 2023 Earnings Report $3.35 -0.02 (-0.56%) Closing price 03:59 PM EasternExtended Trading$3.87 +0.52 (+15.49%) As of 07:55 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast biote EPS ResultsActual EPS$0.14Consensus EPS $0.08Beat/MissBeat by +$0.06One Year Ago EPSN/Abiote Revenue ResultsActual Revenue$45.70 millionExpected Revenue$45.50 millionBeat/MissBeat by +$200.00 thousandYoY Revenue GrowthN/Abiote Announcement DetailsQuarterQ4 2023Date3/12/2024TimeN/AConference Call DateTuesday, March 12, 2024Conference Call Time5:00PM ETUpcoming Earningsbiote's Q2 2025 earnings is scheduled for Wednesday, May 7, 2025Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfilePowered by biote Q4 2023 Earnings Call TranscriptProvided by QuartrMarch 12, 2024 ShareLink copied to clipboard.There are 9 speakers on the call. Operator00:00:00Good afternoon, and welcome to the BioTE Fourth Quarter and Full Year 2023 Earnings Conference Call. All participants will be in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Simon Sarevitsky, IR Representative from Advisory Partners. Please go ahead. Speaker 100:00:43Thank you for joining us today. This evening, Bharti published financial results for the quarter full year ended December 31, 2023. This news release is available in the Investor Relations section of the company's website. Terry Weber, Chief Executive Officer and Bob Peterson, Chief Financial Officer will host today's call. Before we get started, I would like to remind everyone that management will make statements during this call that include forward looking statements regarding, among other things, the company's financial results, future performance and growth opportunities, business outlook, strategies, goals, research and development, manufacturing and commercialization activities, regulatory process operations, the impact of macroeconomic business, results of operations, financial conditions and other matters. Speaker 100:01:25These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainties, some of which are beyond the company's control. Actual results could differ materially from expectations reflected in any forward looking statements. These statements are subject to risks, uncertainties and assumptions that are based on management's current expectations as of today. Bioterror undertakes no obligation to update them in the future. Speaker 100:01:47Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date. For a discussion of risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC's website and the Investor Relations section of our website as well as risks and other important factors discussed in the earnings release. Management will also refer to adjusted EBITDA, which is a non GAAP financial measure to provide additional information to investors. A reconciliation of the non GAAP to GAAP measure is provided in our earnings release, with the primary differences being stock based compensation, fair value adjustments to certain liabilities, transaction related expenses and other non operating expenses. Please refer to our Q4 and full year 2020 earnings release for a reconciliation of adjusted EBITDA to net income, the closest comparable GAAP measure. Speaker 100:02:35I will now turn the call over to Terri Weber. Speaker 200:02:38Thank you, Simon, and thank you all for joining us. On the call with me today is Bob Peterson, our Chief Financial Officer, who will review our financial results and discuss our outlook for 2024. Mark Bier, our Executive Chairman, is also on today's call to help you answer your questions during the Q and A session following our prepared remarks. 2023 was a pivotal year for BIO T, in which we achieved significant strategic progress and built a solid foundation for continued growth in the years ahead. Among our accomplishments this year, we added new talent to our leadership team and made key investments to strengthen our capabilities at the corporate level. Speaker 200:03:21We also optimized our sales territories to more efficiently manage our growing nationwide practitioner network. We remain focused on our core hormone optimization business, leveraging our strengths in training and education to further expand our practitioner network. As we continue to evolve to meet patient and customer needs, we substantially broadened our addressable market opportunity with the launch of 2 strategic initiatives. 1st, to address the large and underserved opportunity in men's health, we began working in close partnership with certain BOT providers to expand their treatment programs for men. We also partnered with key opinion leaders to promote awareness of the benefits of hormone optimization in men. Speaker 200:04:13Additionally, we've expanded and enhanced our hormone optimization practice to encompass evidence based wellness therapeutics. Over the past 6 months, we successfully trialed a range of complementary wellness therapies delivered via our proprietary technology platforms. By providing complementary wellness therapies, Biotie is further enhancing patient health, while expanding 4th quarter 2023 adjusted EBITDA increased by approximately 3% compared to the Q4 of 2022. Similar to our performance in the Q3 of 2023, 4th quarter procedure revenue increased by 6 0.6%, reflecting a consistent demand for our core hormone therapies. I'm pleased with the initial success of our sales optimization strategy, which is helping to drive more consistent rates of procedure revenue growth among our top tier providers. Speaker 200:05:25We are also working to more rapidly onboard new Biot certified practitioners by offering a variety of training modalities, including both in person and online options. Consistent with our expectations, 4th quarter Nutraceuticals revenue decreased, primarily driven by 1 of our larger distributors exiting the business during the quarter. As we transition the products previously sold by this distributor to our own online storefront, we anticipate our nutraceuticals business will resume year over year revenue growth starting in the second half of twenty twenty four. In 2023, Biot reported consolidated revenue growth of 12.4%, which included procedure revenue growth of 9.3%. Throughout the year, we maintained strong profit margins, enabling us to achieve double digit growth in adjusted EBITDA for the year. Speaker 200:06:29Further underscoring our focus on driving profitable growth, we generated approximately $27,000,000 in operating cash flow for 2023. Following our successful commercial trial of complementary wellness therapies, I'm pleased to report that in February, we launched BioTRx, our new hormone and therapeutic wellness offerings. We believe BioTRx is a game changer for BioTE, significantly strengthening our competitive position. With the launch of BioTRx, we're transforming into a single source provider of evidence based hormone and therapeutic wellness products. We are now addressing both our patients' and our practitioners' needs across a range of wellness categories, including weight loss, body compositions, sexual health and preventive wellness. Speaker 200:07:27We are taking a phased approach to the rollout of BioTRx, ensuring that we provide our practitioners with consistent access to an expanded range of wellness therapeutics. To start, we've introduced approximately 10 new wellness therapeutic products. Our sales force is excited and energized to offer these products, which are among the most requested therapies by both our patients and our practitioners. In January, we announced the purchase of Asteria Health, a manufacturer of compounded bio identical hormones. We expect to close this acquisition by the end of March. Speaker 200:08:08We also recently announced a settlement agreement with Doctor. Gary Donovitz, Biotis' founder, to repurchase all $18,400,000 of his outstanding shares and paired interest at an average price of $4.17 per share. We believe these repurchases will be accretive to shareholder value. The settlement with Doctor. Donovitz also resolves legal claims between Doctor. Speaker 200:08:35Donovitz and BioTE eliminating the costs and distraction of protracted litigation. Before I turn the call to Bob, I'd like to express my gratitude to the entire BioTE team for their dedication over the past year. Biot has achieved significant progress against our strategic objectives, and we enter 2024 with a solid foundation to grow upon. I'm proud of what we've accomplished and look forward to updating you on our continued progress throughout the year. I will now turn the call over to Bob to discuss our financial results and provide our outlook for 2024. Speaker 300:09:16Thank you, Terry. It is great to be here and I look forward to meeting all of you in the months ahead. Biot generated full year 2023 revenue of $185,400,000 and adjusted EBITDA of $55,300,000 representing growth of 12.4 percent and 10.2%, respectively, from 2022. The increases were driven by growth in both procedure revenue and nutraceutical revenue. 4th quarter revenue increased 2.7% year over year to $45,700,000 Procedure revenue grew 6.6 percent, but was partially offset by a 14.6% decline in nutraceutical revenue. Speaker 300:10:02The decline in nutraceutical revenue was primarily driven by 1 of Biotis' larger distributors opting to exit the nutraceutical business during the Q4. We expect to begin direct to patient distribution of the products previously delivered by this distributor by the end of the Q2 2024. 4th quarter gross profit margin expanded 403 basis points to 69.4 percent due to product mix and effective cost management. Selling, general and administrative costs were $26,200,000 compared to $21,800,000 in the Q4 of 2022. Excluding the impact of share based compensation, litigation expenses and settlements unrelated to ongoing business, transactions and M and A related expenses and other, SG and A expenses would have been $19,600,000 in the Q4 of 2023. Speaker 300:11:06Operating income was $5,500,000 compared to $7,300,000 in the prior year quarter, as higher revenue and gross profit were more than offset by higher expenses primarily for professional services. Net income in the quarter was $12,100,000 inclusive of a $5,400,000 gain due to a change in the fair value of the earn out liability. This compares to net income of $12,800,000 in the Q4 of 2022, which includes a $6,900,000 net change in the fair value of the earn out liability. Adjusted EBITDA was $13,600,000 with an adjusted EBITDA margin of 29.7%. This compares to adjusted EBITDA of $13,100,000 with an adjusted EBITDA margin of 29.5% in the prior year period. Speaker 300:12:07Adjusted EBITDA and adjusted EBITDA margins increased primarily due to higher sales, product mix and improved profitability compared to Q4 of 2022. 4th quarter operating cash flow was approximately $7,000,000 and totaled $26,900,000 for the full year. As Terry noted, this past month, we reached a settlement agreement with Biotis founder to resolve outstanding litigation and repurchase all of his shares and paired interests. Supported by our solid balance sheet and cash flow, we are well positioned execute on the share repurchase, which will occur over a period of 3 years on fixed terms. We believe this is an effective use of our cash and will be accretive to shareholder value. Speaker 300:13:03Separately, we recently announced a $20,000,000 share repurchase program, further reflecting our commitment to enhancing long term shareholder value. We began to execute against this program early in February. Turning to our financial outlook for fiscal 2024, we expect to achieve revenue of $200,000,000 to $204,000,000 and adjusted EBITDA of $60,000,000 to $63,000,000 As we look at the cadence of revenue and adjusted EBITDA for the year, we expect our financial performance to be weighted towards the second half of the year. Total revenue growth in the first half of twenty twenty four is expected to be impacted by the transition in the nutraceutical distribution channel and timing of seasonal promotions. Now I'll turn the call back to Teri for her closing comments. Speaker 200:13:57Thank you, Bob. Biot remains committed to enhancing patient health while delivering profitable growth for our stakeholders. As we look ahead to 2024 and beyond, we are confident BIO T remains well positioned to become the leading single source provider of evidence based therapeutic wellness solutions. Our addressable market is substantial, and we have only just begun to tap into the growth opportunity in front of us. With that, I'd like to open the call for questions. Speaker 200:14:32Operator, please begin the question and answer session. Operator00:14:37We will now begin the question and answer Our first question today comes from Les Zieluski of Truist. Please go ahead. Speaker 400:15:14Good evening. Thank you for taking my questions. I'll start here on the guidance. Can you just walk us through some of the puts and takes around the guidance that you narrowed down? And how comfortable are you on that range? Speaker 400:15:26And then separately, what would you say is the right size of the sales force? And how has been the geographic expansion and international expansion trending? Speaker 200:15:38So I'll have Bob answer the first half of the question, Les, and then I'll take the second half. Speaker 300:15:43Hey, Les, how are you? Look, as we look at the guidance, I would say, we've evaluated the business plan and we've given our position, I think we're in a solid place for both core procedure business and Nutris to drive revenue growth in the second half. So I feel comfortable with these plans and they're baked into our guidance. I would say when we look at 2024 procedure revenue growth, we definitely think it will mimic the first half as we said earlier in the prepared remarks. As we look at Nutra guidance, I mean, I think the big thing that we want to do is make sure that we can take over that Amazon distribution channel by the end of the first half. Speaker 300:16:33And then we can potentially will return to growth in the second half. And I think selling at retail instead of wholesale will help the business. As we look at the core business, I think our core providers remain strong and stable. We believe that the margin we should see some margin accretion in the back half given Asteri integration in the second half, and we expect to see continued growth in our practitioner network. I think, Teri, do you want to take the second half? Speaker 200:17:06Yes, I'll take the second half on our sales force optimization. So we've been making progress on that sales force optimization going into the new space, which we're calling used to call white space, but we're going into green space here. So that's been strong progress. We have found that we are bringing doctors into our training at a faster rate. And this new team, little bit more So that's where we feel that focus on that sales optimization is working. Speaker 200:17:39We've also hired key talent in that area and we've modernized the data systems to really allow them to give actionable insights into the individual territory. So on the domestic front, we're very pleased and we'll highlight in later calls some of the progress in the new green space areas that has gone quite well, Mid Atlantic, Midwest, the West Coast. And then also, we'll talk a little bit more on that key talent. So those things are going well. In terms of the international, we see so much progress in our current in domestic and so much of that green space that we continue to focus on our domestic and Puerto Rican business. Speaker 200:18:25And then we've expanded our offerings. As we talked about with BioTRx, that sales force will be delivering that rollout this year. So we think that that domestic focus this year should be the way you really look at it. And looking, as Bob has said, to the second half of the year to begin to see that input of the new practitioners and that ramping up of new clinics. Speaker 400:18:49Very helpful. Appreciate that. One more, if I may. So when we look at the economics and the revenue split that you've shared before, how has the new wellness product offerings changed the dynamics of the economics, if at all? Speaker 200:19:08This would not be the year. 2024, it will have a marginal impact. What it really allows us to be is more competitive in our core hormone business. So I would not look for financial, I would look for competitive strength as we offer that wellness therapeutics. We rolled out that program in February. Speaker 200:19:29We're calling it BioTRx. So we've rolled it out to 100 clinics. We'll be looking to roll it through the remainder of 24 in a very methodological fashion, ensuring access and that the program works very well through our tech platforms, but look to impact in 2025 on that program. Speaker 400:19:52Excellent. Thank you. Operator00:19:55The next question is from Janna Kim with TD Cowen. Please go ahead. Speaker 500:20:00Thanks for taking my question. Just expanding a little bit on those BioTRx and also you mentioned expanding treatment in men's health. How large do you think those new initiatives can become over time and sort of the incremental benefits that can bring to the business? And then just one more question on gross margins. How should we think about gross margins for the year? Speaker 500:20:22What are some key puts and takes we should consider? Thank you. Speaker 200:20:26Yes. I'll go ahead and talk about the male market and that expansion. So as we've discussed before, it's a large market over 45,000,000 men have that experience over the age of 40. So it's got a very large TAM associated with it. This is also the under treated market. Speaker 200:20:45It's only treated only 10% to 12% of men go for any kind of treatment. So our focus on that is going to be very accretive to Biotis adding our value in terms of growing the consumer base. The other piece is that male procedures will tend to grow over time with that focus on the urologist as well as we look at different practitioners. The BioTRx and the wellness therapeutics has a very large TAM. So that is only going to expand. Speaker 200:21:19If you look at the wellness statistics, Joan, and I think you know them well is that just in the billions market And that will be something that we do at Bioty and get more specific on that impact in our business. What we see is what we've said earlier is the impact on that will be discussed more later in the year as we roll that program out. But it adds to our competitive position in both the hormone treatment and these are the treatments that the providers and patients are asking for. So the fact that we'll be the single source provider of both those therapeutic wellness products and the hormone treatment makes that one stop shop, a key competitive advantage. Speaker 300:22:05And Jonah, on the second piece that you were asking about regarding margin, I don't see any major shifts in the ratio that we have on sales that drive margin. I will say as we look at Asteria, obviously, this is a strategic and accretive acquisition. As we vertically integrate this pellet manufacturer, we will provide margin improvement over time as we shift volume to Astyria in the second half of the year. I think I believe that the vast majority of the margin benefit and thus some EBITDA benefit will be realized by the end in the second half of 2024 and as we integrate fully into by the end of 2024. So I think that is the that's probably the best guidance we can give you at this point. Speaker 500:23:02All right. Thank you so much. Operator00:23:05The next question is from George Kelly with ROTH MKM. Please go ahead. Speaker 600:23:12Hey, everybody. Thanks for taking my questions. So maybe to start, Terry, you said in your prepared remarks that you're planning to offer training both in person and online. And I'm just curious, do you offer any online training or have you historically offered any online training? And if it's new, how much of an acceleration do you think? Speaker 600:23:37Like, is it a big deal and could it really create an acceleration to onboardings? Speaker 200:23:44Good question, George. So yes, we've offered it. We actually got quite proficient during 2020 when we actually trained on these therapeutic products and other hormone products that we're rolling out. So yes, we know it works well. We've done it before. Speaker 200:23:59We had looked all through 2023 about what's the optimization on a hybrid method of online training and in person proctoring because this is a complex area. So we've had some real success with what I call a hybrid method of training and we've done complete digital. So we've been looking at the results and how do those clinics and those providers perform, what's their depth of knowledge, how do they do the procedures and then how does their clinics grow. And we found some very positive results in adding the online, especially the hybrid method And we will be expanding that. And you're right, we haven't quantified what that's going to mean, but it will allow acceleration in the second half of the year, really in terms of how many practitioners we can train and what we found to be a very efficient blended method. Speaker 600:24:55Okay. That's helpful. And then second question for me, I guess, maybe 2 questions on guidance. The first one is, your in the press release and your prepared remarks, you talked about a 2 half acceleration in procedure revenue growth. And I'm curious, is there any benefit or any kind of material benefit from your new products? Speaker 600:25:20Or is it really just driven by the hormone side of the business to that acceleration? And then the second question on guidance, back to Asteria. How much of your production do you expect to shift to Asteria by year end? I mean, and if you think beyond year end, is it are you going to produce the majority or vast majority of pellets? Speaker 200:25:46So I'll answer the first question on the acceleration of BioTRx. So what we're looking at is BioTRx really enhancing the core hormone business in 2024, especially in the second half of the year as we roll larger numbers of clinics onto it. So then they'll have that single source, but you'll still see it'll be impact on that hormone business and it'll be a modest impact on the other in terms of our other guidance. So looking at modest in 2024, but actually having a very positive impact on the hormone and the combination of the hormone and the therapeutic business in that second half of the year, expanding more into 2025 when we fully rolled it out. And then in looking at the Asteria, I think I'll ask Bob to do that. Speaker 200:26:39He's still working on the detail. Speaker 300:26:41So as we await the closing date and we expect it to be by the end of the month, Terry said earlier, we're moving ahead with the planning that will really allow us to hit the ground running upon closing. We know that the vertical integration is a key part to our business and we expect it to be fully integrated 2024. I think the big next step is how to onboard all the licenses. And we do not believe that we will have manufacturing any manufacturing challenges. We believe that we should be fully integrated and have all the licenses set up by the end of the year for full integration. Speaker 300:27:27And given the way that that phases out, we'll drive that second half the second half volume. So that's really the way that we're looking at it. Speaker 600:27:41Understood. Thank you. Operator00:27:44The next question is from Richard Magnuson with B. Riley. Please go ahead. Speaker 700:27:49This is Richard Magnuson. I'm calling in for Jeff Van Sinderen. Thank you for taking our call. My first question here is regarding the 10 new products you're introducing. I believe you said they're being rolled out to 100 clinics. Speaker 700:28:01Are they all being offered at this point? And if not, what is the cadence there? And also how is the doctor training being managed to accommodate all these new products? Speaker 200:28:11So for those clinics, it will be that first 100 being offered to the 100. So that just began in February. So these are being onboarded through our sales staff as well as our Chief Science Officer who's providing the product training on those 10 products. These are 10 products that we've educated on before actually starting in 2020. So many of our providers are very comfortable. Speaker 200:28:39Some of the products are products that we have taught it for all 12 years. So that's where we're comfortable with that training on that product. We're providing the guidelines and then we're rolling out in a very measured way. So we've made all 10 products available to all 100 and that just began in February. So you'll need to stay tuned as we roll that piece out and grow the number of providers. Speaker 200:29:04But we're very comfortable. We're actually monetizing these products for the first time and we're pleased about that. Speaker 700:29:13Okay. And then sort of related to that, besides the GLP-1s, what are the most significant new products right now in terms of how they're being applied in application by practitioners? And are there any standouts in terms of demand by patients? Speaker 200:29:30We're just we're not giving individual discussion on those products right now and because it's a brand new program. So we'll discuss that in later dates, but we found provider acceptance on all the products and we're really looking to kind of see how they begin their ordering patterns. Having just begun this in February, this is something we'll be able to talk about a lot more in the future, but many of these products are prescribed almost to all female patients with certain attributes like progesterone, this type of thing. So we'll kind of give you more the categories or hormones, sexual wellness, the weight loss, the GLP-1s, which you're aware of and body comp. So we'll discuss those more in detail as we give more findings on those early providers. Speaker 700:30:23Thank you. Operator00:30:26The next question is from Kamil Gajrawala from Jefferies. Please go ahead. Speaker 800:30:33Hey, everybody. Can you maybe talk about from those that started in February, maybe kind of a 6 month progress report of what you learned from this sort of first cohort of folks that are franchises that came on to the Biotrx wellness plan? And then along with that, if you can maybe after that just add, how should the how will the economics evolve as more and more clinics come on to the come on board? Speaker 200:31:07So February is February as in last month. So we've just been very initial. So we won't be discussing too much on that initial because these are initial orders, initial products going through. So 1 month is too early to make comments on. So we'll talk about that later as we get in detail. Speaker 200:31:28These there's been favorable response and very good interest on the initial rollout. And as we discussed, it's going to be a modest contribution in 2024 with more meaningful in 2025. What it's really allowing is these practitioners to use our tech platform for these products that they've often had to find many different places. So what this is, is really getting that single source provider for those clinics and allowing them to see the efficiency of our platforms and our delivery. So that's exactly where you should be focused and it really adds to our competitive strength as we look at our core hormone business. Speaker 200:32:11And honestly really helping that provider who's had this onslaught of interest in weight loss and these things to be able to manage their business better. So that's where that single source provider will come over time. These are just initial orders going in less than 4 weeks ago. Speaker 800:32:31Got it. Okay. And then Bob, you made some commentary on Amazon and some shifts in distribution. Could you just maybe explain in a little more detail what that meant? Speaker 300:32:43Yes. And I think as we talked about earlier, we had some challenges with our 3rd party who was managing the Amazon relationship for us in Q4. One of the core areas that we're looking to do now is bring that in house so that we can begin to see the improvement of selling at retail as opposed to wholesale. And I think that's going to be a it gives us a little bit more control and could provide a little bit better management. So, and again, the real key here is that we're going to bring it in by the end of the first half and then really try to start scaling that in the second half of the year. Speaker 800:33:34Okay, great. Thank you. Operator00:33:37This concludes our question and answer session. I would like to turn the conference back over to Terri Weber for any closing remarks. Speaker 200:33:45Thank you for joining us on this call this afternoon. We're looking forward to updating you on our progress in the months to come. Have a good evening.Read morePowered by Conference Call Audio Live Call not available Earnings Conference Callbiote Q4 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Annual report(10-K) biote Earnings HeadlinesBiote Reports First Quarter 2025 Financial ResultsMay 7 at 4:05 PM | businesswire.comBiote Schedules First Quarter 2025 Financial Results Release and Conference CallApril 23, 2025 | businesswire.comElon’s Terrifying Warning Forces Trump To Take ActionElon Musk has avoided two major financial crises before. He pulled Tesla and SpaceX back from the brink of collapse and built two of the most valuable companies in history. Now, he's sounding the alarm about America's $36 trillion debt time bomb that could destroy the fabric of our society.As head of the Department of Government Efficiency (DOGE) under President Trump, Musk is exposing just how bad things are...May 7, 2025 | American Hartford Gold (Ad)Jefferies Reaffirms Their Buy Rating on biote (BTMD)April 9, 2025 | markets.businessinsider.combiote Corp. (BTMD): Insider Were Buying In Q1 2025April 2, 2025 | msn.comMarc Beer Buys Handful Of Shares In bioteMarch 20, 2025 | finance.yahoo.comSee More biote Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like biote? Sign up for Earnings360's daily newsletter to receive timely earnings updates on biote and other key companies, straight to your email. Email Address About biotebiote (NASDAQ:BTMD) operates in practice-building business within the hormone optimization space. It trains physicians and nurse practitioners in hormone optimization using bioidentical hormone replacement pellet therapy in men and women experiencing hormonal imbalance. The company offers Biote Method, a comprehensive end-to-end practice building platform that provides Biote-certified practitioners with the components developed for practitioners in the hormone optimization space comprising Biote Method education, training, and certification services; practice management software that allows Biote-certified practitioners to order, track, and manage hormone optimization product inventory and other administrative requirements; inventory management software to monitor pellet inventory; and information regarding available hormone replacement therapy products, as well as digital and point-of-care marketing support. It also sells dietary supplements under the Biote brand; and sterile pellet insertion kits that is used with hormone optimization therapies for male and female. The company was founded in 2012 and is headquartered in Irving, Texas.View biote ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Disney Stock Jumps on Earnings—Is the Magic Sustainable?Archer Stock Eyes Q1 Earnings After UAE UpdatesFord Motor Stock Rises After Earnings, But Momentum May Not Last Broadcom Stock Gets a Lift on Hyperscaler Earnings & CapEx BoostPalantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release? 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There are 9 speakers on the call. Operator00:00:00Good afternoon, and welcome to the BioTE Fourth Quarter and Full Year 2023 Earnings Conference Call. All participants will be in listen only mode. Please note this event is being recorded. I would now like to turn the conference over to Simon Sarevitsky, IR Representative from Advisory Partners. Please go ahead. Speaker 100:00:43Thank you for joining us today. This evening, Bharti published financial results for the quarter full year ended December 31, 2023. This news release is available in the Investor Relations section of the company's website. Terry Weber, Chief Executive Officer and Bob Peterson, Chief Financial Officer will host today's call. Before we get started, I would like to remind everyone that management will make statements during this call that include forward looking statements regarding, among other things, the company's financial results, future performance and growth opportunities, business outlook, strategies, goals, research and development, manufacturing and commercialization activities, regulatory process operations, the impact of macroeconomic business, results of operations, financial conditions and other matters. Speaker 100:01:25These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainties, some of which are beyond the company's control. Actual results could differ materially from expectations reflected in any forward looking statements. These statements are subject to risks, uncertainties and assumptions that are based on management's current expectations as of today. Bioterror undertakes no obligation to update them in the future. Speaker 100:01:47Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date. For a discussion of risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC's website and the Investor Relations section of our website as well as risks and other important factors discussed in the earnings release. Management will also refer to adjusted EBITDA, which is a non GAAP financial measure to provide additional information to investors. A reconciliation of the non GAAP to GAAP measure is provided in our earnings release, with the primary differences being stock based compensation, fair value adjustments to certain liabilities, transaction related expenses and other non operating expenses. Please refer to our Q4 and full year 2020 earnings release for a reconciliation of adjusted EBITDA to net income, the closest comparable GAAP measure. Speaker 100:02:35I will now turn the call over to Terri Weber. Speaker 200:02:38Thank you, Simon, and thank you all for joining us. On the call with me today is Bob Peterson, our Chief Financial Officer, who will review our financial results and discuss our outlook for 2024. Mark Bier, our Executive Chairman, is also on today's call to help you answer your questions during the Q and A session following our prepared remarks. 2023 was a pivotal year for BIO T, in which we achieved significant strategic progress and built a solid foundation for continued growth in the years ahead. Among our accomplishments this year, we added new talent to our leadership team and made key investments to strengthen our capabilities at the corporate level. Speaker 200:03:21We also optimized our sales territories to more efficiently manage our growing nationwide practitioner network. We remain focused on our core hormone optimization business, leveraging our strengths in training and education to further expand our practitioner network. As we continue to evolve to meet patient and customer needs, we substantially broadened our addressable market opportunity with the launch of 2 strategic initiatives. 1st, to address the large and underserved opportunity in men's health, we began working in close partnership with certain BOT providers to expand their treatment programs for men. We also partnered with key opinion leaders to promote awareness of the benefits of hormone optimization in men. Speaker 200:04:13Additionally, we've expanded and enhanced our hormone optimization practice to encompass evidence based wellness therapeutics. Over the past 6 months, we successfully trialed a range of complementary wellness therapies delivered via our proprietary technology platforms. By providing complementary wellness therapies, Biotie is further enhancing patient health, while expanding 4th quarter 2023 adjusted EBITDA increased by approximately 3% compared to the Q4 of 2022. Similar to our performance in the Q3 of 2023, 4th quarter procedure revenue increased by 6 0.6%, reflecting a consistent demand for our core hormone therapies. I'm pleased with the initial success of our sales optimization strategy, which is helping to drive more consistent rates of procedure revenue growth among our top tier providers. Speaker 200:05:25We are also working to more rapidly onboard new Biot certified practitioners by offering a variety of training modalities, including both in person and online options. Consistent with our expectations, 4th quarter Nutraceuticals revenue decreased, primarily driven by 1 of our larger distributors exiting the business during the quarter. As we transition the products previously sold by this distributor to our own online storefront, we anticipate our nutraceuticals business will resume year over year revenue growth starting in the second half of twenty twenty four. In 2023, Biot reported consolidated revenue growth of 12.4%, which included procedure revenue growth of 9.3%. Throughout the year, we maintained strong profit margins, enabling us to achieve double digit growth in adjusted EBITDA for the year. Speaker 200:06:29Further underscoring our focus on driving profitable growth, we generated approximately $27,000,000 in operating cash flow for 2023. Following our successful commercial trial of complementary wellness therapies, I'm pleased to report that in February, we launched BioTRx, our new hormone and therapeutic wellness offerings. We believe BioTRx is a game changer for BioTE, significantly strengthening our competitive position. With the launch of BioTRx, we're transforming into a single source provider of evidence based hormone and therapeutic wellness products. We are now addressing both our patients' and our practitioners' needs across a range of wellness categories, including weight loss, body compositions, sexual health and preventive wellness. Speaker 200:07:27We are taking a phased approach to the rollout of BioTRx, ensuring that we provide our practitioners with consistent access to an expanded range of wellness therapeutics. To start, we've introduced approximately 10 new wellness therapeutic products. Our sales force is excited and energized to offer these products, which are among the most requested therapies by both our patients and our practitioners. In January, we announced the purchase of Asteria Health, a manufacturer of compounded bio identical hormones. We expect to close this acquisition by the end of March. Speaker 200:08:08We also recently announced a settlement agreement with Doctor. Gary Donovitz, Biotis' founder, to repurchase all $18,400,000 of his outstanding shares and paired interest at an average price of $4.17 per share. We believe these repurchases will be accretive to shareholder value. The settlement with Doctor. Donovitz also resolves legal claims between Doctor. Speaker 200:08:35Donovitz and BioTE eliminating the costs and distraction of protracted litigation. Before I turn the call to Bob, I'd like to express my gratitude to the entire BioTE team for their dedication over the past year. Biot has achieved significant progress against our strategic objectives, and we enter 2024 with a solid foundation to grow upon. I'm proud of what we've accomplished and look forward to updating you on our continued progress throughout the year. I will now turn the call over to Bob to discuss our financial results and provide our outlook for 2024. Speaker 300:09:16Thank you, Terry. It is great to be here and I look forward to meeting all of you in the months ahead. Biot generated full year 2023 revenue of $185,400,000 and adjusted EBITDA of $55,300,000 representing growth of 12.4 percent and 10.2%, respectively, from 2022. The increases were driven by growth in both procedure revenue and nutraceutical revenue. 4th quarter revenue increased 2.7% year over year to $45,700,000 Procedure revenue grew 6.6 percent, but was partially offset by a 14.6% decline in nutraceutical revenue. Speaker 300:10:02The decline in nutraceutical revenue was primarily driven by 1 of Biotis' larger distributors opting to exit the nutraceutical business during the Q4. We expect to begin direct to patient distribution of the products previously delivered by this distributor by the end of the Q2 2024. 4th quarter gross profit margin expanded 403 basis points to 69.4 percent due to product mix and effective cost management. Selling, general and administrative costs were $26,200,000 compared to $21,800,000 in the Q4 of 2022. Excluding the impact of share based compensation, litigation expenses and settlements unrelated to ongoing business, transactions and M and A related expenses and other, SG and A expenses would have been $19,600,000 in the Q4 of 2023. Speaker 300:11:06Operating income was $5,500,000 compared to $7,300,000 in the prior year quarter, as higher revenue and gross profit were more than offset by higher expenses primarily for professional services. Net income in the quarter was $12,100,000 inclusive of a $5,400,000 gain due to a change in the fair value of the earn out liability. This compares to net income of $12,800,000 in the Q4 of 2022, which includes a $6,900,000 net change in the fair value of the earn out liability. Adjusted EBITDA was $13,600,000 with an adjusted EBITDA margin of 29.7%. This compares to adjusted EBITDA of $13,100,000 with an adjusted EBITDA margin of 29.5% in the prior year period. Speaker 300:12:07Adjusted EBITDA and adjusted EBITDA margins increased primarily due to higher sales, product mix and improved profitability compared to Q4 of 2022. 4th quarter operating cash flow was approximately $7,000,000 and totaled $26,900,000 for the full year. As Terry noted, this past month, we reached a settlement agreement with Biotis founder to resolve outstanding litigation and repurchase all of his shares and paired interests. Supported by our solid balance sheet and cash flow, we are well positioned execute on the share repurchase, which will occur over a period of 3 years on fixed terms. We believe this is an effective use of our cash and will be accretive to shareholder value. Speaker 300:13:03Separately, we recently announced a $20,000,000 share repurchase program, further reflecting our commitment to enhancing long term shareholder value. We began to execute against this program early in February. Turning to our financial outlook for fiscal 2024, we expect to achieve revenue of $200,000,000 to $204,000,000 and adjusted EBITDA of $60,000,000 to $63,000,000 As we look at the cadence of revenue and adjusted EBITDA for the year, we expect our financial performance to be weighted towards the second half of the year. Total revenue growth in the first half of twenty twenty four is expected to be impacted by the transition in the nutraceutical distribution channel and timing of seasonal promotions. Now I'll turn the call back to Teri for her closing comments. Speaker 200:13:57Thank you, Bob. Biot remains committed to enhancing patient health while delivering profitable growth for our stakeholders. As we look ahead to 2024 and beyond, we are confident BIO T remains well positioned to become the leading single source provider of evidence based therapeutic wellness solutions. Our addressable market is substantial, and we have only just begun to tap into the growth opportunity in front of us. With that, I'd like to open the call for questions. Speaker 200:14:32Operator, please begin the question and answer session. Operator00:14:37We will now begin the question and answer Our first question today comes from Les Zieluski of Truist. Please go ahead. Speaker 400:15:14Good evening. Thank you for taking my questions. I'll start here on the guidance. Can you just walk us through some of the puts and takes around the guidance that you narrowed down? And how comfortable are you on that range? Speaker 400:15:26And then separately, what would you say is the right size of the sales force? And how has been the geographic expansion and international expansion trending? Speaker 200:15:38So I'll have Bob answer the first half of the question, Les, and then I'll take the second half. Speaker 300:15:43Hey, Les, how are you? Look, as we look at the guidance, I would say, we've evaluated the business plan and we've given our position, I think we're in a solid place for both core procedure business and Nutris to drive revenue growth in the second half. So I feel comfortable with these plans and they're baked into our guidance. I would say when we look at 2024 procedure revenue growth, we definitely think it will mimic the first half as we said earlier in the prepared remarks. As we look at Nutra guidance, I mean, I think the big thing that we want to do is make sure that we can take over that Amazon distribution channel by the end of the first half. Speaker 300:16:33And then we can potentially will return to growth in the second half. And I think selling at retail instead of wholesale will help the business. As we look at the core business, I think our core providers remain strong and stable. We believe that the margin we should see some margin accretion in the back half given Asteri integration in the second half, and we expect to see continued growth in our practitioner network. I think, Teri, do you want to take the second half? Speaker 200:17:06Yes, I'll take the second half on our sales force optimization. So we've been making progress on that sales force optimization going into the new space, which we're calling used to call white space, but we're going into green space here. So that's been strong progress. We have found that we are bringing doctors into our training at a faster rate. And this new team, little bit more So that's where we feel that focus on that sales optimization is working. Speaker 200:17:39We've also hired key talent in that area and we've modernized the data systems to really allow them to give actionable insights into the individual territory. So on the domestic front, we're very pleased and we'll highlight in later calls some of the progress in the new green space areas that has gone quite well, Mid Atlantic, Midwest, the West Coast. And then also, we'll talk a little bit more on that key talent. So those things are going well. In terms of the international, we see so much progress in our current in domestic and so much of that green space that we continue to focus on our domestic and Puerto Rican business. Speaker 200:18:25And then we've expanded our offerings. As we talked about with BioTRx, that sales force will be delivering that rollout this year. So we think that that domestic focus this year should be the way you really look at it. And looking, as Bob has said, to the second half of the year to begin to see that input of the new practitioners and that ramping up of new clinics. Speaker 400:18:49Very helpful. Appreciate that. One more, if I may. So when we look at the economics and the revenue split that you've shared before, how has the new wellness product offerings changed the dynamics of the economics, if at all? Speaker 200:19:08This would not be the year. 2024, it will have a marginal impact. What it really allows us to be is more competitive in our core hormone business. So I would not look for financial, I would look for competitive strength as we offer that wellness therapeutics. We rolled out that program in February. Speaker 200:19:29We're calling it BioTRx. So we've rolled it out to 100 clinics. We'll be looking to roll it through the remainder of 24 in a very methodological fashion, ensuring access and that the program works very well through our tech platforms, but look to impact in 2025 on that program. Speaker 400:19:52Excellent. Thank you. Operator00:19:55The next question is from Janna Kim with TD Cowen. Please go ahead. Speaker 500:20:00Thanks for taking my question. Just expanding a little bit on those BioTRx and also you mentioned expanding treatment in men's health. How large do you think those new initiatives can become over time and sort of the incremental benefits that can bring to the business? And then just one more question on gross margins. How should we think about gross margins for the year? Speaker 500:20:22What are some key puts and takes we should consider? Thank you. Speaker 200:20:26Yes. I'll go ahead and talk about the male market and that expansion. So as we've discussed before, it's a large market over 45,000,000 men have that experience over the age of 40. So it's got a very large TAM associated with it. This is also the under treated market. Speaker 200:20:45It's only treated only 10% to 12% of men go for any kind of treatment. So our focus on that is going to be very accretive to Biotis adding our value in terms of growing the consumer base. The other piece is that male procedures will tend to grow over time with that focus on the urologist as well as we look at different practitioners. The BioTRx and the wellness therapeutics has a very large TAM. So that is only going to expand. Speaker 200:21:19If you look at the wellness statistics, Joan, and I think you know them well is that just in the billions market And that will be something that we do at Bioty and get more specific on that impact in our business. What we see is what we've said earlier is the impact on that will be discussed more later in the year as we roll that program out. But it adds to our competitive position in both the hormone treatment and these are the treatments that the providers and patients are asking for. So the fact that we'll be the single source provider of both those therapeutic wellness products and the hormone treatment makes that one stop shop, a key competitive advantage. Speaker 300:22:05And Jonah, on the second piece that you were asking about regarding margin, I don't see any major shifts in the ratio that we have on sales that drive margin. I will say as we look at Asteria, obviously, this is a strategic and accretive acquisition. As we vertically integrate this pellet manufacturer, we will provide margin improvement over time as we shift volume to Astyria in the second half of the year. I think I believe that the vast majority of the margin benefit and thus some EBITDA benefit will be realized by the end in the second half of 2024 and as we integrate fully into by the end of 2024. So I think that is the that's probably the best guidance we can give you at this point. Speaker 500:23:02All right. Thank you so much. Operator00:23:05The next question is from George Kelly with ROTH MKM. Please go ahead. Speaker 600:23:12Hey, everybody. Thanks for taking my questions. So maybe to start, Terry, you said in your prepared remarks that you're planning to offer training both in person and online. And I'm just curious, do you offer any online training or have you historically offered any online training? And if it's new, how much of an acceleration do you think? Speaker 600:23:37Like, is it a big deal and could it really create an acceleration to onboardings? Speaker 200:23:44Good question, George. So yes, we've offered it. We actually got quite proficient during 2020 when we actually trained on these therapeutic products and other hormone products that we're rolling out. So yes, we know it works well. We've done it before. Speaker 200:23:59We had looked all through 2023 about what's the optimization on a hybrid method of online training and in person proctoring because this is a complex area. So we've had some real success with what I call a hybrid method of training and we've done complete digital. So we've been looking at the results and how do those clinics and those providers perform, what's their depth of knowledge, how do they do the procedures and then how does their clinics grow. And we found some very positive results in adding the online, especially the hybrid method And we will be expanding that. And you're right, we haven't quantified what that's going to mean, but it will allow acceleration in the second half of the year, really in terms of how many practitioners we can train and what we found to be a very efficient blended method. Speaker 600:24:55Okay. That's helpful. And then second question for me, I guess, maybe 2 questions on guidance. The first one is, your in the press release and your prepared remarks, you talked about a 2 half acceleration in procedure revenue growth. And I'm curious, is there any benefit or any kind of material benefit from your new products? Speaker 600:25:20Or is it really just driven by the hormone side of the business to that acceleration? And then the second question on guidance, back to Asteria. How much of your production do you expect to shift to Asteria by year end? I mean, and if you think beyond year end, is it are you going to produce the majority or vast majority of pellets? Speaker 200:25:46So I'll answer the first question on the acceleration of BioTRx. So what we're looking at is BioTRx really enhancing the core hormone business in 2024, especially in the second half of the year as we roll larger numbers of clinics onto it. So then they'll have that single source, but you'll still see it'll be impact on that hormone business and it'll be a modest impact on the other in terms of our other guidance. So looking at modest in 2024, but actually having a very positive impact on the hormone and the combination of the hormone and the therapeutic business in that second half of the year, expanding more into 2025 when we fully rolled it out. And then in looking at the Asteria, I think I'll ask Bob to do that. Speaker 200:26:39He's still working on the detail. Speaker 300:26:41So as we await the closing date and we expect it to be by the end of the month, Terry said earlier, we're moving ahead with the planning that will really allow us to hit the ground running upon closing. We know that the vertical integration is a key part to our business and we expect it to be fully integrated 2024. I think the big next step is how to onboard all the licenses. And we do not believe that we will have manufacturing any manufacturing challenges. We believe that we should be fully integrated and have all the licenses set up by the end of the year for full integration. Speaker 300:27:27And given the way that that phases out, we'll drive that second half the second half volume. So that's really the way that we're looking at it. Speaker 600:27:41Understood. Thank you. Operator00:27:44The next question is from Richard Magnuson with B. Riley. Please go ahead. Speaker 700:27:49This is Richard Magnuson. I'm calling in for Jeff Van Sinderen. Thank you for taking our call. My first question here is regarding the 10 new products you're introducing. I believe you said they're being rolled out to 100 clinics. Speaker 700:28:01Are they all being offered at this point? And if not, what is the cadence there? And also how is the doctor training being managed to accommodate all these new products? Speaker 200:28:11So for those clinics, it will be that first 100 being offered to the 100. So that just began in February. So these are being onboarded through our sales staff as well as our Chief Science Officer who's providing the product training on those 10 products. These are 10 products that we've educated on before actually starting in 2020. So many of our providers are very comfortable. Speaker 200:28:39Some of the products are products that we have taught it for all 12 years. So that's where we're comfortable with that training on that product. We're providing the guidelines and then we're rolling out in a very measured way. So we've made all 10 products available to all 100 and that just began in February. So you'll need to stay tuned as we roll that piece out and grow the number of providers. Speaker 200:29:04But we're very comfortable. We're actually monetizing these products for the first time and we're pleased about that. Speaker 700:29:13Okay. And then sort of related to that, besides the GLP-1s, what are the most significant new products right now in terms of how they're being applied in application by practitioners? And are there any standouts in terms of demand by patients? Speaker 200:29:30We're just we're not giving individual discussion on those products right now and because it's a brand new program. So we'll discuss that in later dates, but we found provider acceptance on all the products and we're really looking to kind of see how they begin their ordering patterns. Having just begun this in February, this is something we'll be able to talk about a lot more in the future, but many of these products are prescribed almost to all female patients with certain attributes like progesterone, this type of thing. So we'll kind of give you more the categories or hormones, sexual wellness, the weight loss, the GLP-1s, which you're aware of and body comp. So we'll discuss those more in detail as we give more findings on those early providers. Speaker 700:30:23Thank you. Operator00:30:26The next question is from Kamil Gajrawala from Jefferies. Please go ahead. Speaker 800:30:33Hey, everybody. Can you maybe talk about from those that started in February, maybe kind of a 6 month progress report of what you learned from this sort of first cohort of folks that are franchises that came on to the Biotrx wellness plan? And then along with that, if you can maybe after that just add, how should the how will the economics evolve as more and more clinics come on to the come on board? Speaker 200:31:07So February is February as in last month. So we've just been very initial. So we won't be discussing too much on that initial because these are initial orders, initial products going through. So 1 month is too early to make comments on. So we'll talk about that later as we get in detail. Speaker 200:31:28These there's been favorable response and very good interest on the initial rollout. And as we discussed, it's going to be a modest contribution in 2024 with more meaningful in 2025. What it's really allowing is these practitioners to use our tech platform for these products that they've often had to find many different places. So what this is, is really getting that single source provider for those clinics and allowing them to see the efficiency of our platforms and our delivery. So that's exactly where you should be focused and it really adds to our competitive strength as we look at our core hormone business. Speaker 200:32:11And honestly really helping that provider who's had this onslaught of interest in weight loss and these things to be able to manage their business better. So that's where that single source provider will come over time. These are just initial orders going in less than 4 weeks ago. Speaker 800:32:31Got it. Okay. And then Bob, you made some commentary on Amazon and some shifts in distribution. Could you just maybe explain in a little more detail what that meant? Speaker 300:32:43Yes. And I think as we talked about earlier, we had some challenges with our 3rd party who was managing the Amazon relationship for us in Q4. One of the core areas that we're looking to do now is bring that in house so that we can begin to see the improvement of selling at retail as opposed to wholesale. And I think that's going to be a it gives us a little bit more control and could provide a little bit better management. So, and again, the real key here is that we're going to bring it in by the end of the first half and then really try to start scaling that in the second half of the year. Speaker 800:33:34Okay, great. Thank you. Operator00:33:37This concludes our question and answer session. I would like to turn the conference back over to Terri Weber for any closing remarks. Speaker 200:33:45Thank you for joining us on this call this afternoon. We're looking forward to updating you on our progress in the months to come. Have a good evening.Read morePowered by