biote (US:BTMD)2025-05-09 20:21PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Biote Corp.'s Q1 2025 unaudited financials report $123.4 million assets, a $84.8 million deficit, and $15.8 million net income, driven by earnout liability gain - The company revised its Q1 2024 financial statements to correct errors in noncontrolling interest calculations, which had previously overstated net loss attributable to noncontrolling interest by $2.2 million3233 Condensed Consolidated Balance Sheets Total assets were $123.4 million, liabilities decreased to $208.2 million, and stockholders' deficit improved to ($84.8) million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $41,700 | $39,342 | | Inventory, net | $13,451 | $14,845 | | Total current assets | $68,680 | $68,127 | | Total assets | $123,379 | $122,370 | | Liabilities & Stockholders' Deficit | | | | Term loan, current | $6,250 | $6,250 | | Term loan, net of current portion | $99,847 | $101,199 | | Earnout liabilities, net of current portion | $6,447 | $17,135 | | Total liabilities | $208,205 | $224,570 | | Total stockholders' deficit | ($84,826) | ($102,200) | Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) Q1 2025 revenue rose 4.7% to $49.0 million, yielding $15.8 million net income, driven by a $10.7 million earnout liability gain Q1 2025 vs. Q1 2024 Statement of Operations (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total Revenue | $48,992 | $46,804 | | Income from Operations | $9,690 | $10,427 | | Gain (loss) from change in fair value of earnout liabilities | $10,688 | ($12,089) | | Net Income (Loss) | $15,839 | ($5,726) | | Net Income (Loss) attributable to biote Corp. stockholders | $13,718 | ($4,161) | | Diluted EPS | $0.37 | ($0.12) | Condensed Consolidated Statements of Stockholders' Equity (Deficit) Stockholders' deficit improved from ($102.2) million to ($84.8) million, driven by net income and share-based compensation - The accumulated deficit decreased from ($100.3) million to ($84.3) million during Q1 2025, mainly due to the net income of $13.7 million attributable to biote Corp. stockholders19 Condensed Consolidated Statements of Cash Flows Q1 2025 operating cash flow was $6.5 million, with reduced investing and financing outflows, increasing cash by $2.4 million Q1 2025 vs. Q1 2024 Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $6,467 | $7,372 | | Net cash used in investing activities | ($1,848) | ($12,176) | | Net cash used in financing activities | ($2,257) | ($5,409) | | Net increase (decrease) in cash | $2,358 | ($10,215) | | Cash and cash equivalents at end of period | $41,700 | $78,787 | Notes to Condensed Consolidated Financial Statements Notes detail accounting policies, Asteria Health acquisition goodwill, a $5.0 million litigation settlement, and a $20.0 million share repurchase program - On March 18, 2024, the company acquired Asteria Health for a total consideration of $9.0 million, with the final purchase price allocation resulting in $5.8 million of goodwill535455 - The company settled litigation with Right Value for an aggregate amount of $5.0 million, with $3.5 million paid in February 2025 and the remaining $1.5 million due in February 2026112 - On May 1, 2025, the Board approved an organizational restructuring plan expected to incur $0.6 million to $0.8 million in pre-tax charges in Q2 2025129130 - On April 23, 2025, the company repurchased approximately 4.1 million Paired Interests from Dr. Gary S. Donovitz for $15.1 million as part of a settlement agreement131 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2025 revenue growth, cost savings, increased SG&A, strong liquidity, and Adjusted EBITDA of $13.8 million - The company's go-to-market strategy focuses on increasing the number of Biote-certified practitioners, growing their existing practices, and increasing sales of Biote-branded dietary supplements135137 - To strengthen its supply chain, the company is focusing on vertical integration, highlighted by the March 2024 acquisition of Asteria Health, a 503B manufacturer138 - On February 1, 2025, Bret Christensen was appointed as the new Chief Executive Officer, succeeding Teresa S. Weber142 Results of Operations Q1 2025 revenue grew 4.7% to $49.0 million, driven by supplements and services, with decreased cost of revenue and increased SG&A Q1 2025 vs. Q1 2024 Results of Operations (in thousands) | Line Item | Q1 2025 | Q1 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | $48,992 | $46,804 | 4.7% | | Cost of Revenue | $12,610 | $13,452 | (6.3%) | | Selling, General & Administrative | $26,692 | $22,925 | 16.4% | | Income from Operations | $9,690 | $10,427 | (7.1%) | | Net Income (Loss) | $15,839 | ($5,726) | N/A | - The increase in revenue was driven by a $1.9 million rise in dietary supplement sales and a $1.2 million increase in service revenue, offsetting a $1.3 million decline in pellet procedure revenue160 - The decrease in cost of revenue was primarily due to a 24.7% drop in the cost of pellet procedures, reflecting savings from the vertical integration of Asteria Health161 Non-GAAP Measures Adjusted EBITDA, a key non-GAAP measure, was $13.8 million for Q1 2025, slightly down from Q1 2024 Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Reconciliation Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $15,839 | ($5,726) | | Interest expense, net | $2,905 | $1,660 | | Income tax expense | $1,616 | $2,402 | | Depreciation and amortization | $857 | $750 | | Share-based compensation expense | $2,127 | $1,763 | | Litigation & other expenses | $1,096 | $1,220 | | (Gain) loss from change in fair value of earnout liabilities | ($10,688) | $12,089 | | Adjusted EBITDA | $13,752 | $14,158 | Liquidity and Capital Resources The company maintains strong liquidity with $41.7 million cash and $50.0 million available credit, sufficient for future operations - As of March 31, 2025, the company had cash and cash equivalents of $41.7 million and $50.0 million of available capacity under its Revolving Loans174 - Net cash used in investing activities decreased by $10.3 million year-over-year, primarily due to acquisition costs incurred in Q1 2024 that did not repeat180 - Net cash used in financing activities decreased by $3.2 million year-over-year, mainly because a $4.1 million share repurchase in Q1 2024 did not recur in Q1 2025181 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, biote Corp. is exempt from market risk disclosures - The company is a smaller reporting company as defined by Item 10 of Regulation S-K and is not required to provide quantitative and qualitative disclosures about market risk187 Controls and Procedures Disclosure controls were ineffective due to a material weakness in internal control over financial reporting, with remediation ongoing - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures were not effective at a reasonable assurance level189 - A material weakness persists from prior periods, specifically related to an insufficient complement of qualified accounting personnel and deficiencies in IT general controls (change management, user access, segregation of duties)190 - Remediation efforts are ongoing, including hiring more accounting staff and implementing enhanced financial close processes, but there is no assurance the weakness will be remediated in fiscal year 2025191192 PART II. OTHER INFORMATION Legal Proceedings The company is involved in ongoing legal proceedings, including a $5.0 million settlement and appeals in the Yosaki and Mioko Trusts lawsuit - The lawsuit with Right Value Drug Stores was settled for $5.0 million, with $3.5 million paid in Q1 2025 and $1.5 million due in 2026199 - A lawsuit filed by the Yosaki and Mioko Trusts was dismissed on March 15, 2025, but the plaintiffs appealed to the Delaware Supreme Court on April 15, 2025201 - The company is actively defending against lawsuits from Cindy Latch and founder Dr. Gary S. Donovitz regarding alleged misappropriation of name, image, and likeness203205 Risk Factors Supplemental risk factors highlight that international trade policies, tariffs, and sanctions could adversely impact business costs and supply chains - The company identifies a risk that international trade policies, including tariffs and sanctions, could adversely affect its business, financial condition, and results of operations208 - Specific materials sourced from overseas, such as estradiol from China and trocars from Pakistan, are mentioned as being potentially impacted by increased costs due to tariffs209 Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities occurred during the reporting period - None215 Defaults Upon Senior Securities No defaults upon senior securities were reported during the period - None216 Mine Safety Disclosures This item is not applicable to the company's operations - Not applicable217 Other Information No other information is reported for the period - None218 Exhibits This section lists exhibits filed with Form 10-Q, including required certifications and incorporated agreements - Key exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL data files219