• Revenue: $139 million, increased 15% compared to the prior year.
• Adjusted EBITDA: $24 million, increased by $2 million, representing an 8% increase compared to the prior year.
• Adjusted Gross Margin: 75%, comparable to last year, down 10 basis points.
• Surgical Solutions Revenue: Increased by 18%, with both ultrasonics and bone graft substitutes showing double-digit growth.
• Pain Treatments Revenue: Increased by 18% compared to the prior year.
• Restorative Therapy Sales: Grew 6%, driven by accelerated growth from Exogen.
• International Segment Growth: 10% increase compared to the prior year.
• Adjusted Operating Income: Increased 2% to $21 million from $20 million in the prior year.
• Adjusted Net Income: $5 million, up 10% compared to the prior year.
• Adjusted Earnings Per Share: 6 for the quarter.
• Cash on Hand: $43 million, an increase of $11 million for the quarter.
• Debt Outstanding: $384 million, with $15 million drawn on the revolving credit facility.
• Operating Cash Flow: Inflow of $10 million despite a $9 million payment for shareholder litigation.
• 2024 Net Sales Guidance: Increased to $562 million to $567 million.
• 2024 Adjusted Earnings Per Share Guidance: Increased to 40 to 42.
• 2024 Adjusted EBITDA Guidance: Unchanged, between $104 million and $107 million.

• Warning! GuruFocus has detected 10 Warning Signs with BVS.

Release Date: November 05, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Bioventus Inc (NASDAQ:BVS) reported a 15% revenue growth in the third quarter, marking the fourth consecutive quarter of double-digit organic revenue growth.
• The company raised its full-year revenue guidance to the high end of previous expectations due to strong execution across all business segments.
• Surgical solutions saw accelerated double-digit growth, particularly in ultrasonics and bone graft substitutes, with strategic investments being made to further penetrate the market.
• The HA business for knee osteoarthritis delivered double-digit growth, driven by significant demand for Dura Lane, and the company is confident in sustaining above-market growth.
• Bioventus Inc (NASDAQ:BVS) generated positive cash flow from operations in the third quarter, increased its cash position, and reduced its net leverage ratio to approximately 3.5 turns.

Negative Points

• The company anticipates a short-term slowdown in bone graft substitutes growth due to earlier actions to delay adding new distributors and exiting some relationships.
• There are unfavorable comps expected in Q4, particularly with Exogen, due to one-time favorability in the previous year.
• The company faces temporary lag effects in ramping up new distributors for bone graft substitutes, which may affect the start of 2025.
• Despite strong performance, adjusted gross margin was slightly down by 10 basis points compared to the previous year.
• Bioventus Inc (NASDAQ:BVS) is facing increased pressure from competitors in the HA market, which could impact future growth.

Q & A Highlights

Q: Can you provide more color on the 2024 guidance, particularly the implied 7% growth rate for Q4? Is there any seasonality or other factors affecting this? A: Robert Claypoole, CEO: We expect lower growth in Q4 due to unfavorable comps from last year, especially with Exogen, and a temporary slowdown in BGS growth due to earlier supply chain issues. However, we are confident in our continued momentum and expect approximately 13% top-line growth for the year.

Q: How should we think about the pain treatments business in Q4, especially with competitors noting market headwinds? A: Mark Singleton, CFO: We expect to maintain momentum in Q4, driven by volume growth and our strong position with contracts and product differentiation. We don't foresee significant changes in our performance despite competitor activities.

Q: Looking ahead to 2025, how are you thinking about growth and margin expansion? A: Robert Claypoole, CEO: While we won't provide specific guidance yet, we expect to continue our positive momentum with double-digit growth in ultrasonics and above-market growth in HA. We aim for over 100 basis points in EBITDA margin improvement and significant cash flow enhancement.

Q: Are there any concerns about competitors refocusing on their HA business, potentially impacting your market share? A: Robert Claypoole, CEO: We have no concerns. Our strong clinical differentiation, dedicated sales force, and robust payer contracts position us well. We expect to continue growing above market despite increased competitive pressure.

Q: Can you discuss the potential impact of new ultrasonic bone cutting tools in the market and your innovation plans? A: Robert Claypoole, CEO: We are early in the ultrasonic market with significant opportunities for expansion. We have a strong R&D team and plan to invest in innovation, which we'll update on in due course.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.