Bioventus Inc. (NASDAQ:BVS) Q4 2024 Earnings Conference Call March 11, 2025 8:30 AM ET Company Participants Dave Crawford - Investor Relations Rob Claypoole - President & Chief Executive Officer Mark Singleton - Senior Vice President & Chief Financial Officer Conference Call Participants Chase Knickerbocker - Craig-Hallum Caitlin Cronin - Canaccord Genuity Operator Good morning and welcome to the Bioventus Fourth Quarter 2024 Earnings Conference Call. All participants will be in listen-only mode. [Operator ...

On Tuesday, Bioventus Inc. BVS reported fourth-quarter adjusted EPS of 15 cents, up from 7 cents, beating the consensus of 8 cents.The medical device company reported sales of $153.6 million, up 13.5% year over year, beating the consensus of $145.2 million, driven by double-digit growth in pain treatments and surgical solutions.Pain treatment sales increased 18.7% to $62.8 million, Surgical Solutions sales increased 16.8% to $46.43 million and Restorative Therapies sales fell marginally by 0.6% to $25.95 mi ...

Core Insights - Bioventus (BVS) reported quarterly earnings of $0.15 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, and showing an increase from $0.07 per share a year ago, resulting in an earnings surprise of 66.67% [1] - The company achieved revenues of $153.64 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 5.04% and increasing from $135.42 million year-over-year [2] - Bioventus has outperformed consensus EPS estimates three times over the last four quarters and has topped revenue estimates four times in the same period [2] Earnings Outlook - The sustainability of Bioventus' stock price movement will depend on management's commentary during the earnings call and future earnings expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $127.33 million, and for the current fiscal year, it is $0.46 on revenues of $552.49 million [7] Industry Context - The Medical - Drugs industry, to which Bioventus belongs, is currently ranked in the top 50% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of Bioventus' stock may also be influenced by the overall industry outlook and trends in earnings estimate revisions [5][8]

Product Development and Regulatory Approvals - The company plans to expand its United States clinical indications for low-intensity pulse ultrasound in fracture care, particularly for high-risk patients[23]. - The company aims to strengthen its market share in Knee Osteoarthritis (KOA) by increasing healthcare provider awareness of its single injection product, Durolane, and expanding its treatment regimen offerings[23]. - The TalisMann Pulse Generator and Receiver, an accessory to the StimRouter PNS system, is expected to receive FDA market clearance in Q4 2024, enhancing treatment options for chronic peripheral nerve pain[32]. - The neXus Ultrasonic Surgical System integrates multiple surgical applications into a single platform, improving efficiency and control for surgeons[34]. - The company received FDA approval for the cannula-based delivery system for OSTEOAMP in Q2 2024, targeting minimally invasive spine surgeries[41]. - SIGNAFUSE, a synthetic bone graft, received FDA clearance for expanded indications in 2023, expected to drive product growth in spinal procedures[42]. - The company is focused on expanding its Surgical Solutions portfolio by developing product extensions on platforms like neXus, OSTEOAMP, and SIGNAFUSE to meet market demand[45]. - EXOGEN, an ultrasound bone stimulation system, has been sold commercially for over 30 years and is FDA-approved for treating established nonunion fractures and certain fresh fractures[47]. Market Strategy and International Expansion - The company intends to strategically grow its international markets by focusing on regions with the greatest growth opportunities and selectively pursuing new market opportunities[23]. - The company is focused on strategic partnerships and internal development to broaden its product portfolio within key market segments[24]. Financial Performance - Net sales for 2024 reached $573,280, an increase of 11.9% compared to $512,345 in 2023[479]. - Gross profit improved to $388,226 in 2024, up from $328,193 in 2023, reflecting a gross margin increase[479]. - Operating loss narrowed to $(11,979) in 2024 from $(81,725) in 2023, indicating improved operational efficiency[479]. - Net loss attributable to Bioventus Inc. was $(33,542) in 2024, a significant reduction from $(156,230) in 2023[479]. - Total assets decreased to $727,956 in 2024 from $810,910 in 2023, primarily due to a reduction in intangible assets[480]. - Cash and cash equivalents increased to $41,582 in 2024, up from $36,964 in 2023, indicating improved liquidity[480]. - Total liabilities decreased to $542,352 in 2024 from $589,792 in 2023, reflecting a reduction in long-term debt[480]. - Research and development expenses remained stable at $13,639 in 2024 compared to $13,446 in 2023, indicating continued investment in innovation[479]. - The company generated $38,795,000 in net cash from operating activities for continuing operations in 2024, up from $17,513,000 in 2023[483]. - The company reported impairments of assets totaling $36,357,000 in 2024, a decrease from $78,615,000 in 2023[483]. Compliance and Regulatory Environment - The medical device industry is highly competitive, with key factors including product features, clinical evidence, and reimbursement coverage[49]. - The company competes with major players like Medtronic and Johnson & Johnson in its Surgical Solutions products[51]. - The PMA process requires extensive data, including preclinical studies and human clinical trials, to demonstrate device safety and effectiveness[74]. - The FDA has 180 days to complete its review of a PMA, although actual review times can extend to several years[75]. - The FDA may approve a PMA with post-approval conditions, including long-term follow-up data collection from patients[76]. - Manufacturers must comply with stringent QSR requirements during all aspects of the design and manufacturing process[77]. - International sales of medical devices require compliance with varying foreign government regulations and may involve different approval timelines[87]. - The EU Medical Devices Regulation (MDR) became effective on May 26, 2021, replacing the previous EU Medical Devices Directive[89]. - The transition period for certain medical devices under the MDR has been extended until December 31, 2027, or December 31, 2028, depending on the device classification[95]. - Compliance with the essential requirements of the MDR involves a conformity assessment procedure, typically requiring the intervention of a notified body[91]. - Non-compliance with the MDR can lead to civil or criminal penalties, including product recalls and distribution cessation[103]. Corporate Governance and Management - Robert E. Claypoole joined Bioventus as President and CEO in January 2024, previously managing a $1.2 billion business at Mölnlycke Health Care[131]. - Mark L. Singleton has been the CFO since March 2022, with prior experience at Teleflex and Lenovo, focusing on financial strategy[132]. - The company had approximately 930 employees as of December 31, 2024, with none covered by collective bargaining agreements[126]. - The company has established a Diversity, Equity, and Inclusion Council to foster a culture that drives diversity and supports employee development[128]. Risk Management and Financial Instruments - The company is exposed to foreign currency risks as it bills most direct sales outside the U.S. in local currencies, with expectations of increased foreign currency sales in the future[468]. - Bioventus does not currently have foreign currency hedges but may use forward contracts or derivatives for foreign exchange risk management in the future[468]. - The company does not enter into derivatives for trading or speculative purposes but may use them to manage exposures to interest rates and foreign currencies[466]. Legal and Compliance Issues - The company is subject to the Foreign Corrupt Practices Act, which prohibits payments to foreign officials to obtain business advantages, potentially leading to substantial fines and legal sanctions[116]. - The company must comply with various federal, state, and foreign laws regarding the collection and protection of health-related personal information, with potential penalties for non-compliance[118]. - Companies must ensure that all marketing claims are substantiated and comply with FDA regulations to avoid penalties[86]. - The company is subject to civil monetary penalties for prohibited conduct, including offering remuneration to influence healthcare decisions[110]. Accounting and Reporting - The financial statements for the years ended December 31, 2024, and 2023 present the company's financial position fairly in accordance with U.S. GAAP[474]. - The company plans to adopt new accounting standards that will enhance segment reporting disclosures effective for fiscal years beginning after December 15, 2023[496].

Revenue Performance - Fourth quarter 2024 worldwide revenue reached $153.6 million, a 13.5% increase year-over-year, driven by double-digit growth in Pain Treatments and Surgical Solutions[3] - Full-year 2024 worldwide revenue totaled $573.3 million, reflecting an 11.9% increase compared to the previous year, with organic growth of 14.4%[6] - The company expects full-year 2025 revenue guidance of $560 million to $570 million, reflecting organic growth of approximately 6.1% to 8.0%[19] - Net sales for the three months ended December 31, 2024, were $153,642,000, representing a 13.5% increase from $135,423,000 in the same period of 2023[28] Profitability and Earnings - Adjusted EBITDA for the fourth quarter was $28.3 million, up 28.3% from $22.0 million in the prior year, due to strong revenue growth and gross margin expansion[4] - Full-year 2024 net loss from continuing operations improved to $43.8 million, compared to a net loss of $121.2 million in the prior year[7] - Non-GAAP earnings per share for 2025 is projected to be between $0.64 and $0.68, representing an increase of 30.6% to 38.8%[19] - The company reported a net loss of $318,000 for the three months ended December 31, 2024, compared to a net loss of $7,656,000 in the same period of 2023, showing an improvement of 95.9%[28] - The company reported a loss per share of Class A common stock from continuing operations of $0.00 for the three months ended December 31, 2024, compared to a loss of $0.10 in the same period of 2023[28] Cash Flow and Operations - Fourth quarter cash from operations increased by 86.3% to $19.3 million[10] - Cash and cash equivalents at the end of the period were $41,582,000, an increase from $36,964,000 at the end of 2023, representing a growth of 12.0%[30] - Operating income for the three months ended December 31, 2024, was $7,988,000, compared to $1,165,000 in the same period of 2023, marking a significant increase[28] Expenses and Liabilities - Research and development expenses for the year ended December 31, 2024, were $13,639,000, slightly up from $13,446,000 in 2023[28] - The company’s total liabilities decreased to $542,352,000 as of December 31, 2024, down from $589,792,000 in 2023, a reduction of 8.0%[25] - The company incurred $13.802 million in shareholder litigation costs during the year ended December 31, 2024[54] - The company faced a significant impairment of assets totaling $36.357 million during the year ended December 31, 2024[54] Gross Profit and Margins - Adjusted gross margin for the fourth quarter expanded by 230 basis points[10] - For the three months ended December 31, 2024, the reported GAAP gross profit was $102.656 million, with a gross margin of 66.8%[51] - The non-GAAP gross profit for the same period was $113.286 million, resulting in a non-GAAP gross margin of 73.7%[51] - For the year ended December 31, 2024, the reported GAAP gross profit was $388.226 million, with a gross margin of 67.7%[54] - The non-GAAP measure for the year ended December 31, 2024, showed a gross profit of $430.108 million, leading to a non-GAAP gross margin of 75.0%[54] Strategic Actions - The company divested its Advanced Rehabilitation Business in the fourth quarter, receiving $24.7 million in proceeds[19] - The Company experienced a decrease in interest expense, net, from $40.676 million in 2023 to $38.792 million in 2024, indicating improved financial management[45] - The company incurred strategic transaction costs totaling $4.8 million, including divestiture costs of $1.1 million related to Advanced Rehabilitation[58] Non-GAAP Financial Measures - The Company highlighted the importance of non-GAAP financial measures for evaluating long-term performance trends and facilitating comparisons with peers[34] - The Company’s Non-GAAP Net Income from continuing operations was adjusted for various costs, including $13.802 million in shareholder litigation costs for the year ended December 31, 2024[39] - The Company’s Non-GAAP Operating Income for the year ended December 31, 2024, was adjusted to exclude $36.357 million in asset impairment charges, compared to $78.615 million in 2023[45]

Core Insights - Bioventus Inc. reported strong financial results for Q4 and full-year 2024, indicating a transformational year for the company with expectations for continued growth in 2025 [2][3][6] Financial Performance - Q4 2024 worldwide revenue reached $153.6 million, a 13.5% increase year-over-year, driven by growth in Pain Treatments and Surgical Solutions [3][10] - Full-year 2024 revenue totaled $573.3 million, an 11.9% increase compared to 2023, with organic growth of 14.4% [6][12] - Adjusted EBITDA for Q4 2024 was $28.3 million, up 28.3% from $22.0 million in the previous year, attributed to revenue growth and margin expansion [4][10] - The company reported a net loss from continuing operations of $0.3 million in Q4 2024, significantly improved from a loss of $7.7 million in Q4 2023 [4][5] Revenue Breakdown - In Q4 2024, U.S. Pain Treatments generated $62.8 million, an 18.7% increase, while Surgical Solutions saw a 16.8% increase to $46.4 million [9] - For the full year, U.S. Pain Treatments revenue was $234.9 million, up 18.7%, and Surgical Solutions revenue was $167.7 million, an 18.2% increase [12] Strategic Initiatives - The company divested its Advanced Rehabilitation Business in Q4 2024, receiving $24.7 million in proceeds, which is expected to enhance focus on core growth areas [14] - Bioventus aims to achieve net sales of $560 million to $570 million in 2025, reflecting organic growth of approximately 6.1% to 8.0% [13][22] Operational Highlights - The company achieved five consecutive quarters of double-digit revenue growth in Pain Treatments and Surgical Solutions [14] - Cash from operations in Q4 2024 was $19.3 million, an increase of 86.3% compared to the previous year [10][28]

Core Insights - Bioventus Inc. reported strong financial results for Q4 and full-year 2024, highlighting a transformational year with significant revenue growth and improved profitability [2][3][6] Financial Performance - Q4 2024 worldwide revenue reached $153.6 million, marking a 13.5% increase year-over-year, driven by growth in Pain Treatments and Surgical Solutions [3][10] - Full-year 2024 revenue totaled $573.3 million, an 11.9% increase compared to the previous year, with organic growth of 14.4% [6][12] - The net loss from continuing operations for Q4 2024 was $0.3 million, a significant improvement from a loss of $7.7 million in Q4 2023 [4][8] - Adjusted EBITDA for Q4 2024 was $28.3 million, up 28.3% from $22.0 million in the prior year [4][10] Revenue Breakdown - In Q4 2024, U.S. net sales for Pain Treatments were $62.8 million, an 18.7% increase, while Surgical Solutions net sales were $46.4 million, up 16.8% [9] - International net sales for Q4 2024 totaled $18.4 million, reflecting a 10.9% increase [11] Strategic Initiatives - The company divested its Advanced Rehabilitation Business in Q4 2024, receiving $24.7 million in proceeds, which is expected to enhance focus on core growth areas [14] - Bioventus aims to continue above-market revenue growth in 2025, projecting net sales between $560 million and $570 million, reflecting organic growth of approximately 6.1% to 8.0% [13][22] Operational Highlights - The company achieved five consecutive quarters of double-digit revenue growth in Pain Treatments and Surgical Solutions [14] - Cash from operations in Q4 2024 was $19.3 million, an increase of 86.3% compared to the previous year [10]

Core Viewpoint - Bioventus Inc. will report its financial results for the fourth quarter of fiscal year 2024 on March 11, 2025, and will host a conference call to discuss these results and provide a business update [1]. Group 1: Financial Reporting - The financial results for the fourth quarter of fiscal year 2024 will be announced before the market opens on March 11, 2025 [1]. - A conference call will be held at 8:30 a.m. Eastern Time on the same day to discuss the results [1]. Group 2: Conference Call Participation - Participants can join the conference call by dialing 1-833-636-0497 and referencing the Bioventus Inc. Conference Call [2]. - A live webcast of the call will be available on the Company's Investor Relations website, with an archive for replay until March 10, 2026 [2]. Group 3: Company Overview - Bioventus is a global leader in innovations for active healing, providing clinically proven and cost-effective products that aid in quick and safe healing [3]. - The Company focuses on Pain Treatments, Restorative Therapies, and Surgical Solutions, emphasizing high quality standards and evidence-based medicine [3].

Group 1 - Bioventus Inc. will present at the 43rd Annual J.P. Morgan Healthcare Conference on January 15, 2025, at 10:30 a.m. PT [1] - The presentation will include a live Q&A session and will be accessible on the Investors section of the Bioventus website until February 15, 2025 [1] Group 2 - Bioventus focuses on delivering clinically proven, cost-effective products aimed at helping patients heal quickly and safely [2] - The company's mission is to assist patients in resuming and enjoying active lives through its Innovations for Active Healing, which include Pain Treatments, Restorative Therapies, and Surgical Solutions [2] - Bioventus is committed to high quality standards, evidence-based medicine, and strong ethical behavior, positioning itself as a trusted partner for physicians globally [2]

Company Overview - Bioventus Inc. (BVS) has completed the divestiture of its Advanced Rehabilitation business from its subsidiary, Bioness, to private equity firm Accelmed Partners, which was announced in October 2024 [1] - The divestiture is expected to reduce Bioventus' annual revenues by approximately $50 million and annual adjusted EBITDA by approximately $6 million [1] Financial Impact - The divestiture is anticipated to enhance liquidity for Bioventus through the receipt of approximately $20 million in net closing proceeds [2] - Bioventus currently has a market capitalization of $694.9 million and an earnings yield of 4.3%, which is favorable compared to the industry's negative yield [4] Market Sentiment - Following the announcement of the divestiture, shares of Bioventus gained nearly 1.2% until the previous day's closing [3] - Historically, Bioventus has experienced significant synergies from its acquisitions and divestitures, leading to a positive market sentiment around this announcement [3] Industry Prospects - The global medical rehabilitation services market was estimated at $254.82 billion in 2023 and is expected to grow at a CAGR of approximately 6.1% from 2024 to 2030, driven by increasing patients with neurological, musculoskeletal, and cardiologic conditions [7] - The divestiture is seen as a significant milestone for Accelmed and is expected to allow Bioventus to streamline its business [8] Recent Developments - In November 2024, Bioventus reported a solid uptick in overall revenues driven by strength in Pain Treatments and Surgical Solutions [9] - Over the past year, Bioventus shares have gained 110.1%, outperforming the industry, which saw a decline of 7.8% [10]