Bioventus Inc. (Nasdaq: BVS) ("Bioventus" or the "Company"), a
global leader in innovations for active healing, today reported
financial results for the three and nine months ended
September 28, 2024.
“We delivered strong financial results in the third
quarter, including double-digit organic growth and significantly
increased cash flow,” said Rob Claypoole, Bioventus President and
Chief Executive Officer. "We remain focused on successfully
executing on our strategic priorities to accelerate revenue growth,
enhance profitability, and reduce our leverage to increase
shareholder value.”
Third Quarter 2024 Financial
Results:
For the third quarter, worldwide revenue of $139.0
million increased 15.0% compared to the prior-year period driven by
double digit growth in Pain Treatments and Surgical Solutions.
Net Loss from continuing operations was $5.4
million, compared to a net loss from continuing operations of $8.8
million in the prior-year period.
Adjusted EBITDA* from continuing operations of
$23.6 million advanced 8.4% compared to the prior year Adjusted
EBITDA* of $21.7 million, due to strong revenue growth.
Loss per share of Class A common stock from
continuing operations was $0.07 in the third quarter, compared to a
loss of $0.12 in the prior-year period. Non-GAAP earnings per share
of Class A common stock from continuing operations* was $0.06 in
the third quarter, compared to $0.05 in the prior-year period.
Revenue By Business
The following table represents net sales by
geographic region, and by business, for the three months ended
September 28, 2024 and September 30, 2023:
| |
Three Months Ended |
|
Change as Reported |
|
Constant Currency* Change |
| (in
thousands, except for percentage) |
September 28, 2024 |
|
September 30, 2023 |
|
$ |
|
% |
|
% |
| U.S. |
|
|
|
|
|
|
|
|
|
|
Pain Treatments |
$ |
56,306 |
|
$ |
48,416 |
|
$ |
7,890 |
|
|
16.3 |
% |
|
16.3 |
% |
|
Restorative Therapies(a) |
|
25,448 |
|
|
23,105 |
|
|
2,343 |
|
|
10.1 |
% |
|
10.1 |
% |
|
Surgical Solutions(a) |
|
41,155 |
|
|
34,706 |
|
|
6,449 |
|
|
18.6 |
% |
|
18.6 |
% |
|
Total U.S. net sales |
|
122,909 |
|
|
106,227 |
|
|
16,682 |
|
|
15.7 |
% |
|
15.7 |
% |
|
International |
|
|
|
|
|
|
|
|
|
|
Pain Treatments |
|
6,821 |
|
|
5,274 |
|
|
1,547 |
|
|
29.3 |
% |
|
29.7 |
% |
|
Restorative Therapies(a) |
|
4,489 |
|
|
5,223 |
|
|
(734 |
) |
|
(14.1 |
%) |
|
(13.7 |
%) |
|
Surgical Solutions(a) |
|
4,745 |
|
|
4,070 |
|
|
675 |
|
|
16.6 |
% |
|
16.9 |
% |
|
Total International net sales |
|
16,055 |
|
|
14,567 |
|
|
1,488 |
|
|
10.2 |
% |
|
10.6 |
% |
|
Total net sales |
$ |
138,964 |
|
$ |
120,794 |
|
$ |
18,170 |
|
|
15.0 |
% |
|
15.1 |
% |
|
|
(a) |
|
Sales from the SonicOne product were reclassified from Restorative
Therapies to Surgical Solutions on a prospective and retrospective
basis during the first quarter of 2024 as SonicOne's ability to
remove devitalized or necrotic tissue and fiber deposits more
closely aligns with Surgical Solutions' soft tissue management.
SonicOne revenue reclassified for the three months ended
September 30, 2023 totaled $1,750 and $65 for the U.S. and
International reporting segments, respectively. |
|
|
Recent Business Highlights
Bioventus continues to advance its strategic
priorities with key achievements, including the following:
-
Delivered four consecutive quarters of double-digit revenue growth
in Pain Treatments and Surgical Solutions, which contributed to an
8.4% increase in Adjusted EBITDA*
-
Reached an agreement to divest the Company's Advanced
Rehabilitation Business for up to $45.0 million, which is
anticipated to close near the end of 2024 or early 2025 and is
expected to reduce debt and enable greater focus on execution
within our remaining core businesses
2024 Financial Guidance:
For the twelve months ending December 31,
2024, the Company now expects:
- Net
sales of $562 million to $567 million, reflecting an increase of
$2.5 million from the midpoint of previous guidance
-
Adjusted EBITDA* of $104 million to $107 million
-
Non-GAAP EPS* of $0.40 to $0.42, reflecting an increase of $0.02
from the midpoint of previous guidance
The Company does not provide U.S. GAAP financial
measures, other than net sales, on a forward-looking basis, because
the Company is unable to predict with reasonable certainty the
impact and timing of acquisition related expenses, accounting
fair-value adjustments, and certain other reconciling items without
unreasonable efforts. These items are uncertain, depend on various
factors, and could be material to the Company’s results computed in
accordance with U.S. GAAP.
About Bioventus
Bioventus delivers clinically proven,
cost-effective products that help people heal quickly and safely.
Its mission is to make a difference by helping patients resume and
enjoy active lives. The Innovations for Active Healing from
Bioventus include offerings for Pain Treatments, Restorative
Therapies and Surgical Solutions. Built on a commitment to high
quality standards, evidence-based medicine and strong ethical
behavior, Bioventus is a trusted partner for physicians worldwide.
For more information, visit www.bioventus.com and follow the
Company on LinkedIn and Twitter. Bioventus and the Bioventus logo
are registered trademarks of Bioventus LLC.
Third Quarter 2024 Earnings Conference
Call:
Management will host a conference call to discuss
the Company’s financial results and provide a business update, with
a question and answer session, at 8:30 a.m. Eastern Time on
November 5, 2024. Those who would like to participate may dial
1-833-636-0497 (domestic and international) and refer to Bioventus
Inc.
A live webcast of the call and any accompanying
materials will also be provided on the investor relations section
of the Company's website at https://ir.bioventus.com/.
The webcast will be archived on the Company’s
website at https://ir.bioventus.com/ and available for replay until
November 4, 2025.
Legal Notice Regarding Forward-Looking
Statements
This press release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements contained in this press release
that do not relate to matters of historical fact should be
considered forward-looking statements, including, without
limitation, statements concerning our future financial results and
liquidity; the impact of the planned divestiture of our Advanced
Rehabilitation Business on our financial condition and operations;
our business strategy, position and operations; and expected sales
trends, opportunities, market position and growth. In some cases,
you can identify forward-looking statements by terminology such as
“aim,” “anticipate,” “assume,” “believe,” “contemplate,”
“continue,” “could,” “due,” “estimate,” “expect,” “goal,” “intend,”
“may,” “objective,” “plan,” “predict,” “potential,” “positioned,”
“seek,” “should,” “target,” “will,” “would” and other similar
expressions that are predictions of or indicate future events and
future trends, or the negative of these terms or other comparable
terminology, although not all forward-looking statements contain
these words.
Forward-looking statements are inherently subject
to risks and uncertainties, some of which cannot be predicted or
quantified. Important factors that may cause actual results to
differ materially from current expectations include, among other
things: the dilution of our Class A common stockholders upon an
exchange of the outstanding common membership interests in
Bioventus LLC could adversely affect the market price of our Class
A common stock and the resale of such shares could cause the market
price of our Class A common stock to fall; we might not realize
some or all of the benefits expected to result from the planned
divestiture of our Advanced Rehabilitation Business; we might not
meet certain of our debt covenants under our Credit and Guaranty
Agreement and might be required to repay our indebtedness on an
accelerated basis; there are restrictions on operations and other
costs associated with our indebtedness; any identified material
weakness could adversely affect our ability to report our results
of operations and financial condition accurately and in a timely
manner;we might not be able to complete acquisitions or
successfully integrate new businesses, products or technologies in
a cost-effective and non-disruptive manner; our cash is maintained
at financial institutions, often in balance that exceed federally
insured limits; we are subject to securities class action
litigation and may be subject to similar or other litigation in the
future, which will require significant management time and
attention, result in significant legal expenses or costs not
covered by our insurers, and may result in unfavorable outcomes;
our ability to maintain our competitive position depends on our
ability to attract, retain and motivate our senior management team
and highly qualified personnel; we are highly dependent on a
limited number of products; our long-term growth depends on our
ability to develop, acquire and commercialize new products, line
extensions or expanded indications; we may be unable to
successfully commercialize newly developed or acquired products or
therapies in the United States; demand for our existing portfolio
of products and any new products, line extensions or expanded
indications depends on the continued and future acceptance of our
products by physicians, patients, third-party payers and others in
the medical community; the proposed down classification of
non-invasive bone growth stimulators, including our Exogen system,
by the U.S. Food and Drug Administration (“FDA”) could increase
future competition for bone growth stimulators and otherwise
adversely affect the Company’s sales of Exogen; failure to achieve
and maintain adequate levels of coverage and/or reimbursement for
our products or future products, the procedures using our products,
such as our hyaluronic acid (“HA”) viscosupplements, or future
products we may seek to commercialize; pricing pressure and other
competitive factors; governments outside the United States might
not provide coverage or reimbursement of our products; we compete
and may compete in the future against other companies, some of
which have longer operating histories, more established products or
greater resources than we do; if our HA products are reclassified
from medical devices to drugs in the United States by the FDA, it
could negatively impact our ability to market these products and
may require that we conduct costly additional clinical studies to
support current or future indications for use of those products;
our failure to properly manage our anticipated growth and
strengthen our brands; risks related to product liability claims;
fluctuations in demand for our products; issues relating to the
supply of our products, potential supply chain disruptions, and the
increased cost of parts and components used to manufacture our
products due to inflation; our reliance on a limited number of
third-party manufacturers to manufacture certain of our products;
if our facilities are damaged or become inoperable, we will be
unable to continue to research, develop and manufacture certain of
our products; economic, political, regulatory and other risks
related to international sales, manufacturing and operations;
failure to maintain contractual relationships; security breaches,
unauthorized access to or disclosure of information, cyberattacks,
or other incidents or the perception that confidential information
in our or our vendors’ or service providers’ possession or control
is not secure; failure of key information technology and
communications systems, process or sites; risks related to our
future capital needs; failure to comply with extensive governmental
regulation relevant to us and our products; we may be subject to
enforcement action if we engage in improper claims submission
practices and resulting audits or denials of our claims by
government agencies could reduce our net sales or profits; the FDA
regulatory process is expensive, time-consuming and uncertain, and
the failure to obtain and maintain required regulatory clearances
and approvals could prevent us from commercializing our products;
if clinical studies of our future product candidates do not produce
results necessary to support regulatory clearance or approval in
the United States or elsewhere, we will be unable to expand the
indications for or commercialize these products; unstable political
or economic conditions; legislative or regulatory reforms; our
business might experience adverse impacts due to public health
outbreaks; risks related to intellectual property matters; and
other the other risks identified in our Annual Report on Form 10-K
for the year ended December 31, 2023, as such factors may be
updated from time to time in Bioventus’ other filings with the SEC
which are accessible on the SEC’s website at www.sec.gov and the
Investor Relations page of Bioventus’ website at
https://ir.bioventus.com. Except to the extent required by law, the
Company undertakes no obligation to update or review any estimate,
projection, or forward-looking statement. Actual results may differ
materially from those set forth in the forward-looking
statements.
|
|
|
BIOVENTUS INC.Consolidated balance
sheetsAs of September 28, 2024 and
December 31, 2023(Amounts in thousands,
except share amounts) (unaudited) |
|
|
|
|
September 28, 2024 |
|
December 31, 2023 |
|
Assets |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
43,074 |
|
|
$ |
36,964 |
|
|
Accounts receivable, net |
|
121,925 |
|
|
|
122,789 |
|
|
Inventory |
|
90,032 |
|
|
|
91,333 |
|
|
Prepaid and other current assets |
|
16,923 |
|
|
|
16,913 |
|
|
Assets held for sale |
|
26,734 |
|
|
|
— |
|
|
Total current assets |
|
298,688 |
|
|
|
267,999 |
|
|
Property and equipment, net |
|
29,425 |
|
|
|
36,605 |
|
|
Goodwill |
|
7,462 |
|
|
|
7,462 |
|
|
Intangible assets, net |
|
414,809 |
|
|
|
482,350 |
|
|
Operating lease assets |
|
9,779 |
|
|
|
13,353 |
|
|
Deferred tax assets |
|
7,396 |
|
|
|
— |
|
|
Investment and other assets |
|
1,933 |
|
|
|
3,141 |
|
|
Total assets |
$ |
769,492 |
|
|
$ |
810,910 |
|
|
Liabilities and Stockholders’ Equity |
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
16,849 |
|
|
$ |
23,038 |
|
|
Accrued liabilities |
|
128,697 |
|
|
|
119,795 |
|
|
Current portion of long-term debt |
|
38,566 |
|
|
|
27,848 |
|
|
Current portion of contingent consideration |
|
19,228 |
|
|
|
— |
|
|
Other current liabilities |
|
3,918 |
|
|
|
4,816 |
|
|
Liabilities held for sale |
|
4,234 |
|
|
|
— |
|
|
Total current liabilities |
|
211,492 |
|
|
|
175,497 |
|
|
Long-term debt, less current portion |
|
345,021 |
|
|
|
366,998 |
|
|
Deferred income taxes |
|
— |
|
|
|
1,213 |
|
|
Contingent consideration |
|
— |
|
|
|
18,150 |
|
|
Other long-term liabilities |
|
26,146 |
|
|
|
27,934 |
|
|
Total liabilities |
|
582,659 |
|
|
|
589,792 |
|
|
Stockholders’ Equity: |
|
|
|
|
Preferred stock, $0.001 par value, 10,000,000 shares authorized, 0
shares issued |
|
|
|
|
Class A common stock, $0.001 par value, 250,000,000 shares
authorized as of September 28, 2024 and December 31,
2023, 65,337,432 and 63,267,436 shares issued and outstanding as of
September 28, 2024 and December 31, 2023,
respectively |
|
65 |
|
|
|
63 |
|
|
Class B common stock, $0.001 par value, 50,000,000 shares
authorized, 15,786,737 shares issued and outstanding as of
September 28, 2024 and December 31, 2023 |
|
16 |
|
|
|
16 |
|
|
Additional paid-in capital |
|
503,134 |
|
|
|
494,254 |
|
|
Accumulated deficit |
|
(354,922 |
) |
|
|
(321,536 |
) |
|
Accumulated other comprehensive income |
|
445 |
|
|
|
794 |
|
|
Total stockholders’ equity attributable to Bioventus Inc. |
|
148,738 |
|
|
|
173,591 |
|
|
Noncontrolling interest |
|
38,095 |
|
|
|
47,527 |
|
|
Total stockholders’ equity |
|
186,833 |
|
|
|
221,118 |
|
|
Total liabilities and stockholders’ equity |
$ |
769,492 |
|
|
$ |
810,910 |
|
|
|
|
|
|
BIOVENTUS INC.Consolidated statements of
operations and comprehensive loss(Amounts in
thousands, except share and per share data,
unaudited) |
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 28, 2024 |
|
September 30, 2023 |
|
September 28, 2024 |
|
September 30, 2023 |
|
Net sales |
$ |
138,964 |
|
|
$ |
120,794 |
|
|
$ |
419,638 |
|
|
$ |
376,922 |
|
|
Cost of sales (including depreciation and amortization of $10,206,
$11,506, $31,252 and $38,146, respectively) |
|
45,413 |
|
|
|
41,944 |
|
|
|
134,068 |
|
|
|
135,030 |
|
|
Gross profit |
|
93,551 |
|
|
|
78,850 |
|
|
|
285,570 |
|
|
|
241,892 |
|
|
Selling, general and administrative expense |
|
81,090 |
|
|
|
69,820 |
|
|
|
254,281 |
|
|
|
225,522 |
|
|
Research and development expense |
|
3,808 |
|
|
|
3,015 |
|
|
|
10,393 |
|
|
|
10,184 |
|
|
Restructuring costs |
|
— |
|
|
|
(26 |
) |
|
|
— |
|
|
|
911 |
|
|
Change in fair value of contingent consideration |
|
483 |
|
|
|
(98 |
) |
|
|
1,078 |
|
|
|
429 |
|
|
Depreciation and amortization |
|
2,065 |
|
|
|
2,317 |
|
|
|
5,884 |
|
|
|
6,740 |
|
|
Impairments of assets |
|
2,031 |
|
|
|
— |
|
|
|
33,901 |
|
|
|
78,615 |
|
|
Loss on disposals |
|
— |
|
|
|
1,404 |
|
|
|
— |
|
|
|
2,381 |
|
|
Operating income (loss) |
|
4,074 |
|
|
|
2,418 |
|
|
|
(19,967 |
) |
|
|
(82,890 |
) |
|
Interest expense, net |
|
9,532 |
|
|
|
10,115 |
|
|
|
29,795 |
|
|
|
30,396 |
|
|
Other (income) expense |
|
(626 |
) |
|
|
494 |
|
|
|
(404 |
) |
|
|
(581 |
) |
|
Other expense |
|
8,906 |
|
|
|
10,609 |
|
|
|
29,391 |
|
|
|
29,815 |
|
|
Loss before income taxes |
|
(4,832 |
) |
|
|
(8,191 |
) |
|
|
(49,358 |
) |
|
|
(112,705 |
) |
|
Income tax expense (benefit), net |
|
589 |
|
|
|
600 |
|
|
|
(5,843 |
) |
|
|
835 |
|
|
Net loss from continuing operations |
|
(5,421 |
) |
|
|
(8,791 |
) |
|
|
(43,515 |
) |
|
|
(113,540 |
) |
|
Loss from discontinued operations, net of tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(74,429 |
) |
|
Net loss |
|
(5,421 |
) |
|
|
(8,791 |
) |
|
|
(43,515 |
) |
|
|
(187,969 |
) |
|
Loss attributable to noncontrolling interest - continuing
operations |
|
597 |
|
|
|
1,488 |
|
|
|
10,129 |
|
|
|
22,898 |
|
|
Loss attributable to noncontrolling interest - discontinued
operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
14,937 |
|
|
Net loss attributable to Bioventus Inc. |
$ |
(4,824 |
) |
|
$ |
(7,303 |
) |
|
$ |
(33,386 |
) |
|
$ |
(150,134 |
) |
| |
|
|
|
|
|
|
|
|
Loss per share of Class A common stock from continuing operations,
basic and diluted: |
$ |
(0.07 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.52 |
) |
|
$ |
(1.45 |
) |
|
Loss per share of Class A common stock from discontinued
operations, basic and diluted: |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.95 |
) |
|
Loss per share of Class A common stock, basic and diluted |
$ |
(0.07 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.52 |
) |
|
$ |
(2.40 |
) |
|
Weighted-average shares of Class A common stock outstanding: |
|
|
|
|
|
|
|
|
Basic and diluted |
|
65,258,427 |
|
|
|
62,824,318 |
|
|
|
64,234,922 |
|
|
|
62,494,686 |
|
| |
|
|
|
|
|
|
|
| |
|
BIOVENTUS INC.Consolidated condensed
statements of cash flows(Amounts in thousands,
unaudited) |
| |
| |
Three Months Ended |
|
Nine Months Ended |
|
|
September 28, 2024 |
|
September 30, 2023 |
|
September 28, 2024 |
|
September 30, 2023 |
|
Operating activities: |
|
|
|
|
|
|
|
|
Net loss |
$ |
(5,421 |
) |
|
$ |
(8,791 |
) |
|
$ |
(43,515 |
) |
|
$ |
(187,969 |
) |
|
Less: Loss from discontinued operations, net of tax |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(74,429 |
) |
|
Loss from continuing operations |
|
(5,421 |
) |
|
|
(8,791 |
) |
|
|
(43,515 |
) |
|
|
(113,540 |
) |
|
Adjustments to reconcile net loss to net cash from operating
activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
12,275 |
|
|
|
13,827 |
|
|
|
37,150 |
|
|
|
44,900 |
|
|
Equity-based compensation |
|
2,064 |
|
|
|
1,833 |
|
|
|
8,327 |
|
|
|
947 |
|
|
Change in fair value of contingent consideration |
|
483 |
|
|
|
(98 |
) |
|
|
1,078 |
|
|
|
429 |
|
|
Impairment of assets |
|
2,031 |
|
|
|
— |
|
|
|
33,901 |
|
|
|
78,615 |
|
|
Deferred income taxes |
|
(511 |
) |
|
|
— |
|
|
|
(8,609 |
) |
|
|
(3,540 |
) |
|
Unrealized loss on foreign currency |
|
(669 |
) |
|
|
796 |
|
|
|
(133 |
) |
|
|
1,397 |
|
|
Loss on disposals |
|
— |
|
|
|
1,404 |
|
|
|
— |
|
|
|
2,381 |
|
|
Other, net |
|
522 |
|
|
|
(1,073 |
) |
|
|
946 |
|
|
|
706 |
|
|
Changes in working capital |
|
(458 |
) |
|
|
(16,213 |
) |
|
|
(9,672 |
) |
|
|
(5,156 |
) |
|
Net cash from operating activities - continuing operations |
|
10,316 |
|
|
|
(8,315 |
) |
|
|
19,473 |
|
|
|
7,139 |
|
|
Net cash from operating activities - discontinued operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,169 |
) |
|
Net cash from operating activities |
|
10,316 |
|
|
|
(8,315 |
) |
|
|
19,473 |
|
|
|
4,970 |
|
|
Investing activities: |
|
|
|
|
|
|
|
|
Proceeds from sale of a business |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
34,897 |
|
|
Purchase of property and equipment |
|
(64 |
) |
|
|
(2,036 |
) |
|
|
(432 |
) |
|
|
(6,993 |
) |
|
Investments and acquisition of distribution rights |
|
— |
|
|
|
— |
|
|
|
(709 |
) |
|
|
— |
|
|
Net cash from investing activities - continuing operations |
|
(64 |
) |
|
|
(2,036 |
) |
|
|
(1,141 |
) |
|
|
27,904 |
|
|
Net cash from investing activities - discontinued operations |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(11,506 |
) |
|
Net cash from investing activities |
|
(64 |
) |
|
|
(2,036 |
) |
|
|
(1,141 |
) |
|
|
16,398 |
|
|
Financing activities: |
|
|
|
|
|
|
|
|
Proceeds from issuance of Class A common stock |
|
553 |
|
|
|
397 |
|
|
|
1,339 |
|
|
|
620 |
|
|
Borrowing on revolver |
|
— |
|
|
|
15,000 |
|
|
|
— |
|
|
|
64,000 |
|
|
Payment on revolver |
|
— |
|
|
|
(7,000 |
) |
|
|
— |
|
|
|
(49,000 |
) |
|
Debt refinancing costs |
|
— |
|
|
|
— |
|
|
|
(1,180 |
) |
|
|
(3,661 |
) |
|
Payments on long-term debt |
|
— |
|
|
|
— |
|
|
|
(11,320 |
) |
|
|
(38,264 |
) |
|
Other, net |
|
(191 |
) |
|
|
(168 |
) |
|
|
(564 |
) |
|
|
(334 |
) |
|
Net cash from financing activities |
|
362 |
|
|
|
8,229 |
|
|
|
(11,725 |
) |
|
|
(26,639 |
) |
|
Effect of exchange rate changes on cash |
|
466 |
|
|
|
(440 |
) |
|
|
(497 |
) |
|
|
261 |
|
|
Net change in cash, cash equivalents and restricted
cash |
|
11,080 |
|
|
|
(2,562 |
) |
|
|
6,110 |
|
|
|
(5,010 |
) |
|
Cash, cash equivalents and restricted cash at the beginning
of the period |
|
31,994 |
|
|
|
29,389 |
|
|
|
36,964 |
|
|
|
31,837 |
|
|
Cash, cash equivalents and restricted cash at the end of
the period |
$ |
43,074 |
|
|
$ |
26,827 |
|
|
$ |
43,074 |
|
|
$ |
26,827 |
|
|
|
Use of Non-GAAP Financial
Measures
Organic Revenue Growth
The Company defines the term “organic revenue” as
revenue in the stated period excluding the impact from business
acquisitions and divestitures. The Company uses the related term
“organic revenue growth” or "organic growth" to refer to the
financial performance metric of comparing the stated period's
organic revenue with the comparable reported revenue of the
corresponding period in the prior year. The Company believes that
these non-GAAP financial measures, when taken together with GAAP
financial measures, allow the Company and its investors to better
measure the Company’s performance and evaluate long-term
performance trends. Organic revenue growth also facilitates easier
comparisons of the Company’s performance with prior and future
periods and relative comparisons to its peers. The Company excludes
the effect of acquisitions and divestitures because these
activities can have a significant impact on the Company's reported
results, which the Company believes makes comparisons of long-term
performance trends difficult for management and investors.
Adjusted EBITDA, Non-GAAP Gross Profit,
Non-GAAP Gross Margin, Non-GAAP Operating Income, Non-GAAP
Operating Expenses, Non-GAAP R&D, Non-GAAP Operating Margin,
Non-GAAP Net Income, and Non-GAAP Earnings per share of Class A
Common Stock
We present Adjusted EBITDA, Non-GAAP Gross Profit,
Non-GAAP (or Adjusted) Gross Margin, Non-GAAP Operating Income,
Non-GAAP Operating Expenses, Non-GAAP R&D, Non-GAAP Operating
Margin, Non-GAAP Net Income, and Non-GAAP Earnings per share of
Class A common stock, all non-GAAP financial measures, to
supplement our GAAP financial reporting because we believe these
measures are useful indicators of our operating performance.
We define Adjusted EBITDA as net loss from
continuing operations before depreciation and amortization,
provision of income taxes and interest expense, net, adjusted for
the impact of certain cash, non-cash and other items that we do not
consider in our evaluation of ongoing operating performance. These
items include acquisition and related costs, certain shareholder
litigation costs, impairment of assets, restructuring and
succession charges, equity compensation expense, financial
restructuring costs and other items. See the table below for a
reconciliation of net loss from continuing operations to Adjusted
EBITDA. Our management uses Adjusted EBITDA principally as a
measure of our operating performance and believes that Adjusted
EBITDA is useful to our investors because it is frequently used by
securities analysts, investors and other interested parties in
their evaluation of the operating performance of companies in
industries similar to ours. Our management also uses Adjusted
EBITDA for planning purposes, including the preparation of our
annual operating budget and financial projections.
Our management uses Non-GAAP Gross Profit, Non-GAAP
Gross Margin, Non-GAAP Operating Income, Non-GAAP Operating
Expense, Non-GAAP Operating Margin and Non-GAAP Net Income
principally as measures of our operating performance and believes
that these non-GAAP financial measures are useful to better
understand the long term performance of our core business and to
facilitate comparison of our results to those of peer companies.
Our management also uses these non-GAAP financial measures for
planning purposes, including the preparation of our annual
operating budget and financial projections.
We define Non-GAAP Gross Profit as gross profit,
adjusted for the impact of certain cash, non-cash and other items
that we do not consider in our evaluation of ongoing operating
performance. These items include depreciation and amortization
included in the cost of goods sold and acquisition and related
costs in the cost of goods sold. We define Non-GAAP Gross Margin as
Non-GAAP Gross Profit divided by net sales. See the table below for
a reconciliation of gross profit and gross margin to Non-GAAP Gross
Profit and Non-GAAP Gross Margin.
We define Non-GAAP Operating Income as operating
income, adjusted for the impact of certain cash, non-cash and other
items that we do not consider in our evaluation of ongoing
operating performance. These items include depreciation and
amortization, acquisition and related costs, certain shareholder
litigation costs, impairment of assets, restructuring and
succession charges, financial restructuring costs and other items.
Non-GAAP Operating Margin is defined as Non-GAAP Operating Income
divided by net sales. See the table below for a reconciliation of
operating income (loss) and operating margin to Non-GAAP Operating
Income and Non-GAAP Operating Margin.
We define Non-GAAP Operating Expenses as operating
expenses, adjusted to exclude certain cash, non-cash and other
items that we do not consider in our evaluation of ongoing
operating performance. These items include depreciation and
amortization, acquisition and related costs, certain shareholder
litigation costs, impairment of assets, restructuring and
succession charges, financial restructuring costs and other items.
See the table below for a reconciliation of operating expenses to
Non-GAAP Operating Expenses.
We define Non-GAAP R&D as research and
development, adjusted to exclude certain cash, non-cash and other
items that we do not consider in our evaluation of ongoing
operating performance. These items include depreciation and
amortization, acquisition and related costs, restructuring and
succession charges, and other items. See the table below for a
reconciliation of operating expenses to Non-GAAP R&D.
We define Non-GAAP Net Income from continuing
operations as Net Income from continuing operations, adjusted for
the impact of certain cash, non-cash and other items that we do not
consider in our evaluation of ongoing operating performance. These
items include depreciation and amortization, acquisition and
related costs, certain shareholder litigation costs, restructuring
and succession charges, impairment of assets, financial
restructuring costs, other items and the tax effect of adjusting
items. See the table below for a reconciliation of Net loss from
continuing operations to Non-GAAP Net Income from continuing
operations.
We define Non-GAAP Earnings per Class A share as
Earnings per Class A share, adjusted for the impact of certain
cash, non-cash and other items that we do not consider in our
evaluation of ongoing operating performance. These items include
depreciation and amortization, acquisition and related costs,
certain shareholder litigation costs, restructuring and succession
charges, impairment of assets, financial restructuring costs, other
items and the tax effect of adjusting items divided by weighted
average number of shares of Class A common stock outstanding during
the period. See the table below for a reconciliation of loss per
Class A share to Non-GAAP Earnings per Class A share.
Net Sales, International Net Sales Growth
and Constant Currency Basis
Net Sales, International Net Sales Growth and
Constant Currency Basis are non-GAAP measures, which are calculated
by translating current and prior year results at the same foreign
currency exchange rate. Constant currency can be presented for
numerous GAAP measures, but is most commonly used by management to
facilitate the comparison sales in foreign currencies to prior
periods and analyze net sales performance without the impact of
changes in foreign currency exchange rates.
Prior Period Recast for Discontinued
Operations
On February 27, 2023, the Company ceased to control
CartiHeal for accounting purposes, and therefore, deconsolidated
CartiHeal effective February 27, 2023. CartiHeal was part of the
Company’s International reporting segment. The Company treated the
deconsolidation of CartiHeal as a discontinued operation. Refer to
Note 14. Discontinued operations in the Company's Form 10-Q for the
period ended September 28, 2024, filed on November 5,
2024, for further details regarding the deconsolidation of
CartiHeal.
Limitations of the Usefulness of Non-GAAP
Measures
Non-GAAP financial measures have limitations as an
analytical tool and should not be considered in isolation or as a
substitute for, or as superior to, the financial information
prepared and presented in accordance with GAAP. These measures
might exclude certain normal recurring expenses. Therefore, these
measures may not provide a complete understanding of the Company's
performance and should be reviewed in conjunction with the GAAP
financial measures. Additionally, other companies might define
their non-GAAP financial measures differently than we do. Investors
are encouraged to review the reconciliation of the non-GAAP
measures provided in this press release, including in the tables
below, to their most directly comparable GAAP measures.
Additionally, the Company does not provide U.S. GAAP financial
measures on a forward-looking basis because the Company is unable
to predict with reasonable certainty the impact and timing of
acquisitions related expenses, accounting fair-value adjustments
and certain other reconciling items without unreasonable efforts.
These items are uncertain, depend on various factors, and could be
material to the Company’s results computed in accordance with U.S.
GAAP.
|
|
|
Reconciliation of Net (Loss) Income from Continuing
Operations to Adjusted EBITDA (unaudited) |
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
Twelve Months Ended |
|
($, thousands) |
September 28, 2024 |
|
September 30, 2023 |
|
September 28, 2024 |
|
September 30, 2023 |
|
December 31, 2023 |
|
Net loss from continuing operations |
$ |
(5,421 |
) |
|
$ |
(8,791 |
) |
|
$ |
(43,515 |
) |
|
$ |
(113,540 |
) |
|
$ |
(121,196 |
) |
|
Interest expense, net |
|
9,532 |
|
|
|
10,115 |
|
|
|
29,795 |
|
|
|
30,396 |
|
|
|
40,676 |
|
|
Income tax expense (benefit), net |
|
589 |
|
|
|
600 |
|
|
|
(5,843 |
) |
|
|
835 |
|
|
|
85 |
|
| Depreciation and
amortization(a) |
|
12,275 |
|
|
|
13,827 |
|
|
|
37,150 |
|
|
|
44,900 |
|
|
|
57,365 |
|
|
Acquisition and related costs(b) |
|
483 |
|
|
|
1,424 |
|
|
|
994 |
|
|
|
4,047 |
|
|
|
5,694 |
|
|
Shareholder litigation costs(c) |
|
50 |
|
|
|
— |
|
|
|
13,720 |
|
|
|
— |
|
|
|
— |
|
|
Restructuring and succession charges(d) |
|
54 |
|
|
|
(26 |
) |
|
|
67 |
|
|
|
911 |
|
|
|
2,331 |
|
|
Equity compensation(e) |
|
2,064 |
|
|
|
1,833 |
|
|
|
8,327 |
|
|
|
947 |
|
|
|
2,722 |
|
|
Financial restructuring costs(f) |
|
4 |
|
|
|
478 |
|
|
|
351 |
|
|
|
7,065 |
|
|
|
7,291 |
|
|
Impairment of assets(g) |
|
2,031 |
|
|
|
— |
|
|
|
33,901 |
|
|
|
78,615 |
|
|
|
78,615 |
|
| Loss on disposal of a
business(h) |
|
— |
|
|
|
340 |
|
|
|
— |
|
|
|
1,317 |
|
|
|
1,539 |
|
| Other items(i) |
|
1,896 |
|
|
|
1,935 |
|
|
|
5,685 |
|
|
|
11,351 |
|
|
|
13,740 |
|
|
Adjusted EBITDA |
$ |
23,557 |
|
|
$ |
21,735 |
|
|
$ |
80,632 |
|
|
$ |
66,844 |
|
|
$ |
88,862 |
|
|
|
|
(a) |
|
Includes for the three months ended September 28, 2024 and
September 30, 2023 and the nine months ended
September 28, 2024 and September 30, 2023, respectively,
depreciation and amortization of $10.2 million, $11.5 million,
$31.3 million and $38.1 million in cost of sales and $2.1 million,
$2.3 million, $5.9 million and $6.8 million in operating expenses
presented in the consolidated statements of operations and
comprehensive loss. |
| |
|
The year ended December 31, 2023 includes depreciation and
amortization of $48.5 million in cost of sales and $8.9 million in
operating expenses. |
| (b) |
|
Includes acquisition and
integration costs related to completed acquisitions and changes in
fair value of contingent consideration. |
| (c) |
|
Costs incurred as a result of
certain shareholder litigation unrelated to our ongoing
operations. |
| (d) |
|
Costs incurred were the result of
adopting restructuring plans to reduce headcount, reorganize
management structure, and consolidate certain facilities. |
| (e) |
|
Includes compensation expense
resulting from awards granted under our equity-based compensation
plans. The three and nine months ended September 30, 2023
includes the reversal of equity compensation expenses totaling $3.8
million related to the transition of our executive leadership. |
| (f) |
|
Financial restructuring costs
include advisory fees and debt amendment related costs. |
| (g) |
|
Represents a non-cash impairment
charge for intangible assets solely attributable to our Advanced
Rehabilitation Business in 2024 due to our decision to divest the
business. Activity in 2023 relates to the non-cash impairment
charge attributable to our divested Wound Business. |
| (h) |
|
Represents the loss on disposal
of the Wound Business. |
| (i) |
|
Other items primarily includes
charges associated with strategic transactions, including potential
acquisitions or divestitures and a transformative project to
redesign systems and information processing. Divestiture costs
related to our Advanced Rehabilitation Business, including
transactional fees, totaled $1.6 million and $3.5 million during
the three and nine months ended September 28, 2024,
respectively. Strategic transactions and transformative project
expenses amounted to $0.4 million and $1.3 million, respectively,
for the nine months ended September 28, 2024. |
| |
|
Strategic transactions and
divestiture expenses totaled $0.7 million and $4.2 million for the
nine months ended September 30, 2023. Transformative project
costs incurred amounted to $1.0 million and $3.1 million during the
three and nine months ended September 30, 2023, respectively.
We incurred $1.2 million in costs during the nine months ended
September 30, 2023 related to MOTYS. Other items for the nine
months ended September 30, 2023 also includes severance costs
totaling $2.3 million related to the transition of our executive
leadership. |
| |
|
|
|
Reconciliation of Other Reported GAAP Measures to Non-GAAP
Measures |
|
|
|
Three Months Ended September 28, 2024 |
Gross Profit |
|
Operating Expenses(a) |
|
|
R&D |
|
Operating Income |
|
Net Loss Continuing Operations |
|
EPS from Continuing
Operations(k) |
|
Reported GAAP measure |
$ |
93,551 |
|
|
$ |
85,669 |
|
|
$ |
3,808 |
|
$ |
4,074 |
|
|
$ |
(5,421 |
) |
|
$ |
(0.07 |
) |
|
Reported GAAP margin |
|
67.3 |
% |
|
|
|
|
|
|
|
2.9 |
% |
|
|
|
|
|
Depreciation and amortization(b) |
|
10,206 |
|
|
|
2,065 |
|
|
|
4 |
|
|
12,275 |
|
|
|
12,275 |
|
|
|
0.15 |
|
|
Acquisition and related costs(c) |
|
— |
|
|
|
483 |
|
|
|
— |
|
|
483 |
|
|
|
483 |
|
|
|
0.01 |
|
|
Shareholder litigation costs(d) |
|
— |
|
|
|
50 |
|
|
|
— |
|
|
50 |
|
|
|
50 |
|
|
|
— |
|
|
Restructuring and succession charges(e) |
|
— |
|
|
|
54 |
|
|
|
— |
|
|
54 |
|
|
|
54 |
|
|
|
— |
|
|
Financial restructuring costs(f) |
|
— |
|
|
|
4 |
|
|
|
— |
|
|
4 |
|
|
|
4 |
|
|
|
— |
|
|
Impairment of assets(g) |
|
— |
|
|
|
2,031 |
|
|
|
— |
|
|
2,031 |
|
|
|
2,031 |
|
|
|
0.03 |
|
|
Other items(i) |
|
— |
|
|
|
1,752 |
|
|
|
135 |
|
|
1,887 |
|
|
|
1,896 |
|
|
|
0.02 |
|
|
Tax effect of adjusting items(j) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(6,228 |
) |
|
|
(0.08 |
) |
|
Non-GAAP measure |
$ |
103,757 |
|
|
$ |
79,230 |
|
|
$ |
3,669 |
|
$ |
20,858 |
|
|
$ |
5,144 |
|
|
$ |
0.06 |
|
|
Non-GAAP margin |
|
74.7 |
% |
|
|
|
|
|
|
|
15.0 |
% |
|
|
|
|
|
|
Non-GAAP Gross Margin |
|
Non-GAAP Operating Expenses |
|
|
Non-GAAPR&D |
|
Non-GAAP Operating Income |
|
Non-GAAP Net income Continuing Operations |
|
Adjusted EPS Continuing Operations |
|
|
|
|
|
Three Months Ended September 30, 2023 |
Gross Profit |
|
Operating Expenses(a) |
|
R&D |
|
Operating Income |
|
Net Loss Continuing Operations |
|
EPS from Continuing
Operations(k) |
|
Reported GAAP measure |
$ |
78,850 |
|
|
$ |
73,417 |
|
|
$ |
3,015 |
|
$ |
2,418 |
|
|
$ |
(8,791 |
) |
|
$ |
(0.12 |
) |
|
Reported GAAP margin |
|
65.3 |
% |
|
|
|
|
|
|
2.0 |
% |
|
|
|
|
|
Depreciation and amortization(b) |
|
11,506 |
|
|
|
2,317 |
|
|
|
4 |
|
|
13,827 |
|
|
|
13,827 |
|
|
|
0.18 |
|
|
Acquisition and related costs(c) |
|
— |
|
|
|
1,424 |
|
|
|
— |
|
|
1,424 |
|
|
|
1,424 |
|
|
|
0.02 |
|
|
Restructuring and succession charges(e) |
|
— |
|
|
|
(26 |
) |
|
|
— |
|
|
(26 |
) |
|
|
(26 |
) |
|
|
— |
|
|
Financial restructuring costs(f) |
|
— |
|
|
|
478 |
|
|
|
— |
|
|
478 |
|
|
|
478 |
|
|
|
0.01 |
|
|
Loss on disposal of a business(h) |
|
— |
|
|
|
340 |
|
|
|
— |
|
|
340 |
|
|
|
340 |
|
|
|
— |
|
|
Other items(i) |
|
— |
|
|
|
1,901 |
|
|
|
34 |
|
|
1,935 |
|
|
|
1,935 |
|
|
|
0.02 |
|
|
Tax effect of adjusting items(j) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(4,512 |
) |
|
|
(0.06 |
) |
|
Non-GAAP measure |
$ |
90,356 |
|
|
$ |
66,983 |
|
|
$ |
2,977 |
|
$ |
20,396 |
|
|
$ |
4,675 |
|
|
$ |
0.05 |
|
|
Non-GAAP margin |
|
74.8 |
% |
|
|
|
|
|
|
16.9 |
% |
|
|
|
|
| |
Non-GAAP Gross Margin |
|
Non-GAAP Operating Expenses |
|
Non-GAAP R&D |
|
Non-GAAP Operating Income |
|
Non-GAAP Net income Continuing Operations |
|
Adjusted EPS Continuing Operations |
| |
|
|
|
Nine Months Ended September 28, 2024 |
Gross Profit |
|
Operating Expenses(a) |
|
|
R&D |
|
Operating Loss |
|
Net Loss Continuing Operations |
|
EPS from Continuing
Operations(k) |
|
Reported GAAP measure |
$ |
285,570 |
|
|
$ |
295,144 |
|
|
$ |
10,393 |
|
$ |
(19,967 |
) |
|
$ |
(43,515 |
) |
|
$ |
(0.52 |
) |
|
Reported GAAP margin |
|
68.1 |
% |
|
|
|
|
|
|
|
(4.8 |
%) |
|
|
|
|
|
Depreciation and amortization(b) |
|
31,252 |
|
|
|
5,884 |
|
|
|
14 |
|
|
37,150 |
|
|
|
37,150 |
|
|
|
0.47 |
|
|
Acquisition and related costs(c) |
|
— |
|
|
|
994 |
|
|
|
— |
|
|
994 |
|
|
|
994 |
|
|
|
0.01 |
|
|
Shareholder litigation costs(d) |
|
— |
|
|
|
13,720 |
|
|
|
— |
|
|
13,720 |
|
|
|
13,720 |
|
|
|
0.17 |
|
|
Restructuring and succession charges(e) |
|
— |
|
|
|
67 |
|
|
|
— |
|
|
67 |
|
|
|
67 |
|
|
|
— |
|
|
Financial restructuring costs(f) |
|
— |
|
|
|
351 |
|
|
|
— |
|
|
351 |
|
|
|
351 |
|
|
|
— |
|
|
Impairment of assets(g) |
|
— |
|
|
|
33,901 |
|
|
|
— |
|
|
33,901 |
|
|
|
33,901 |
|
|
|
0.42 |
|
|
Other items(i) |
|
— |
|
|
|
5,248 |
|
|
|
428 |
|
|
5,676 |
|
|
|
5,685 |
|
|
|
0.07 |
|
|
Tax effect of adjusting items(j) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(23,266 |
) |
|
|
(0.29 |
) |
|
Non-GAAP measure |
$ |
316,822 |
|
|
$ |
234,979 |
|
|
$ |
9,951 |
|
$ |
71,892 |
|
|
$ |
25,087 |
|
|
$ |
0.33 |
|
|
Non-GAAP margin |
|
75.5 |
% |
|
|
|
|
|
|
|
17.1 |
% |
|
|
|
|
| |
Non-GAAP Gross Margin |
|
Non-GAAP Operating Expenses |
|
|
Non-GAAP R&D |
|
Non-GAAP Operating Income |
|
Non-GAAP Net Income Continuing Operations |
|
Adjusted EPS Continuing Operations |
| |
|
|
|
Nine Months Ended September 30, 2023 |
Gross Profit |
|
Operating Expenses(a) |
|
|
R&D |
|
Operating Loss |
|
Net Loss Continuing Operations |
|
EPS from Continuing
Operations(k) |
|
Reported GAAP measure |
$ |
241,892 |
|
|
$ |
314,598 |
|
|
$ |
10,184 |
|
$ |
(82,890 |
) |
|
$ |
(113,540 |
) |
|
$ |
(1.45 |
) |
|
Reported GAAP margin |
|
64.2 |
% |
|
|
|
|
|
|
|
(22.0 |
%) |
|
|
|
|
|
Depreciation and amortization(b) |
|
38,146 |
|
|
|
6,740 |
|
|
|
14 |
|
|
44,900 |
|
|
|
44,900 |
|
|
|
0.57 |
|
|
Acquisition and related costs(c) |
|
— |
|
|
|
4,047 |
|
|
|
— |
|
|
4,047 |
|
|
|
4,047 |
|
|
|
0.05 |
|
|
Restructuring and succession charges(e) |
|
— |
|
|
|
911 |
|
|
|
— |
|
|
911 |
|
|
|
911 |
|
|
|
0.01 |
|
|
Financial restructuring costs(f) |
|
— |
|
|
|
7,065 |
|
|
|
— |
|
|
7,065 |
|
|
|
7,065 |
|
|
|
0.09 |
|
|
Impairment of assets(g) |
|
— |
|
|
|
78,615 |
|
|
|
— |
|
|
78,615 |
|
|
|
78,615 |
|
|
|
1.01 |
|
|
Loss on disposal of a business(h) |
|
— |
|
|
|
1,317 |
|
|
|
— |
|
|
1,317 |
|
|
|
1,317 |
|
|
|
0.02 |
|
|
Other items(i) |
|
— |
|
|
|
6,262 |
|
|
|
1,286 |
|
|
7,548 |
|
|
|
7,548 |
|
|
|
0.10 |
|
|
Tax effect of adjusting items(j) |
|
— |
|
|
|
— |
|
|
|
— |
|
|
— |
|
|
|
(31,790 |
) |
|
|
(0.47 |
) |
|
Non-GAAP measure |
$ |
280,038 |
|
|
$ |
209,641 |
|
|
$ |
8,884 |
|
$ |
61,513 |
|
|
$ |
(927 |
) |
|
$ |
(0.07 |
) |
|
Non-GAAP margin |
|
74.3 |
% |
|
|
|
|
|
|
|
16.3 |
% |
|
|
|
|
| |
Non-GAAP Gross Margin |
|
Non-GAAP Operating Expenses |
|
|
Non-GAAP R&D |
|
Non-GAAP Operating Income |
|
Non-GAAP Net Loss Continuing Operations |
|
Adjusted EPS Continuing Operations |
|
|
|
(a) |
|
The "Reported GAAP Measure" under the "Operating Expenses" column
is a sum of all GAAP operating expense line items, excluding
research and development. |
| (b) |
|
Includes for the three months
ended September 28, 2024 and September 30, 2023 and the
nine months ended September 28, 2024 and September 30,
2023, respectively, depreciation and amortization of $10.2 million,
$11.5 million, $31.3 million and $38.1 million in cost of sales and
$2.1 million, $2.3 million, $5.9 million and $6.8 million in
operating expenses presented in the consolidated statements of
operations and comprehensive loss. |
| (c) |
|
Includes acquisition and
integration costs related to completed acquisitions and changes in
fair value of contingent consideration. |
| (d) |
|
Costs incurred as a result of
certain shareholder litigation unrelated to our ongoing
operations. |
| (e) |
|
Costs incurred were the result of
adopting restructuring plans to reduce headcount, reorganize
management structure, and consolidate certain facilities. |
| (f) |
|
Financial restructuring costs
include advisory fees and debt amendment related costs. |
| (g) |
|
Represents a non-cash impairment
charge for intangible assets solely attributable to our Advanced
Rehabilitation Business in 2024 due to our decision to divest the
business. Activity in 2023 relates to the non-cash impairment
charge attributable to our divested Wound Business. |
| (h) |
|
Represents the loss on disposal
of the Wound Business. |
| (i) |
|
Other items primarily includes
charges associated with strategic transactions, such as potential
acquisitions or divestitures and a transformative project to
redesign systems and information processing. Divestiture costs
related to our Advanced Rehabilitation Business, including
transactional fees, totaled $1.6 million and $3.5 million during
the three and nine months ended September 28, 2024,
respectively. Strategic transactions and transformative project
expenses amounted to $0.4 million and $1.3 million, respectively,
for the nine months ended September 28, 2024. |
| |
|
Strategic transactions and
divestiture expenses totaled $0.7 million and $4.2 million for the
three and nine months ended September 30, 2023, respectively.
Transformative project costs incurred amounted to $1.0 million and
$3.1 million during the three and nine months ended
September 30, 2023, respectively. We incurred $1.2 million in
costs during the nine months ended September 30, 2023 related
to MOTYS. Other items for the nine months ended September 30,
2023 also includes severance costs totaling $2.3 million related to
the transition of our executive leadership and the reversal of
equity compensation expenses totaling $3.8 million related to the
transition of our executive leadership. |
| (j) |
|
The three and nine months ended
September 28, 2024 includes a tax impact of $0.5 million and
$8.7 million, respectively, related to the impairment of assets.
The nine months ended September 30, 2023 includes a $15.3
million tax impact related to the impairment of assets. An
estimated tax impact for the remaining adjustments to Non-GAAP Net
Income (Loss) was calculated by applying a rate of 25.1% to those
adjustments for the three and nine months ended September 28,
2024 and September 30, 2023. |
| (k) |
|
Adjustments are pro-rated to
exclude the weighted average non-controlling interest ownership of
19.5% and 20.0%, respectively, for the three and three and nine
months ended September 28, 2024 and September 30,
2023. |
| |
Investor Inquiries and Media:Dave
CrawfordBioventusinvestor.relations@bioventus.com
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