Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bioventus Inc (BVS, Financial) achieved a 14% organic revenue growth in the second quarter, marking the third consecutive quarter of double-digit growth.
- The company reported its highest adjusted EBITDA to date at over $34 million, with a 224-basis point increase in adjusted EBITDA margin.
- The Surgical Solutions segment saw a 16% revenue increase, driven by strong performance in Ultrasonics and Bone Graft Substitutes.
- The Pain Treatments segment experienced a 17% revenue increase, supported by strong demand for Durolane and effective commercial execution.
- Bioventus Inc (BVS) improved its liquidity position by reducing its net leverage ratio and increasing cash flow, with expectations to reduce the ratio below 3x by the end of 2025.
Negative Points
- The Restorative Therapies segment experienced a 9% decline in sales, primarily due to the divestiture of the Wound Business.
- The company plans to divest its Advanced Rehabilitation business, which may impact its focus and resources on core businesses.
- Despite strong performance, the company anticipates a step down in adjusted EBITDA and margins in the second half of the year due to strategic investments.
- The International segment only grew by 4%, with growth expected to accelerate in the latter half of the year due to previous shipment delays.
- Operating expenses increased by nearly $10 million compared to the prior year, driven by higher sales commissions and increased headcount.
Q & A Highlights
Q: What led to the decision to divest the Advanced Rehabilitation business?
A: Robert Claypoole, President and CEO, explained that the decision was driven by the desire to place the business in an environment that allows for higher focus and prioritization. This move will enable Bioventus to concentrate on its core businesses, accelerate profitable revenue growth, and enhance liquidity. Mark Singleton, CFO, added that from a financial perspective, the divestiture is immaterial but will help reduce debt levels.
Q: What were the main drivers of the strong performance in the Pain Treatments segment?
A: Mark Singleton, CFO, attributed the strong performance to continued execution by the sales team, particularly with Durolane, which is clinically differentiated. The growth was primarily driven by volume rather than pricing, with the team effectively selling around contract positions and expanding into new areas like the VA.
Q: Can you elaborate on the performance of the Surgical Solutions segment, particularly BGS and Ultrasonics?
A: Mark Singleton, CFO, noted that both Ultrasonics and Bone Graft Substitutes (BGS) showed strong performance. Ultrasonics doubled the number of generators sold, indicating future growth in disposables. BGS benefited from improved performance by legacy distributors and the addition of new distributors, despite supply challenges.
Q: How is Bioventus planning to sustain growth in the second half of the year?
A: Robert Claypoole, President and CEO, mentioned that the company expects to continue driving double-digit growth in both revenue and EBITDA. Mark Singleton, CFO, added that the company plans to invest in R&D, medical education, and commercial execution to fuel growth in the medium and long term.
Q: What is the status of the TalisMann and peripheral nerve business?
A: Robert Claypoole, President and CEO, stated that while there is excitement about the TalisMann technology, no significant impact is expected this year as it is still undergoing FDA clearance. The company sees potential for both market share growth and category expansion with this technology.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
