BTMD.NASDAQBiote CORP
10-Q: biote Corp. Reports Q1 2025 Results: Revenue Up, Net Income Positive Amidst Legal Settlements and Executive Transition
Sentiment:
Quarterly Report
biote Corp. reports a revenue increase and a return to net income profitability for Q1 2025, while navigating legal challenges and a CEO transition.
Better than expectedThe company achieved a net income of $15.8 million for Q1 2025, a significant turnaround from the net loss of $5.7 million in Q1 2024.
Summary
- biote Corp. reported a 4.7% increase in revenue for the three months ended March 31, 2025, reaching $49.0 million compared to $46.8 million in the same period of 2024.
- The company achieved a net income of $15.8 million for Q1 2025, a significant turnaround from the net loss of $5.7 million in Q1 2024.
- Adjusted EBITDA for Q1 2025 was $13.8 million, slightly lower than the $14.2 million reported for Q1 2024.
- Product revenue increased slightly to $47.0 million, driven by dietary supplement sales, while service revenue rose to $1.97 million.
- The company incurred $3.5 million in legal settlement payments during the quarter.
- Bret Christensen was appointed as the new CEO on February 1, 2025, succeeding Teresa S. Weber.
- The company is addressing a previously reported material weakness in internal control over financial reporting.
- The company repurchased approximately 4.1 million of combined Class A common units of BioTE Holdings, LLC and Class V voting stock of Biote for $15.1 million on April 23, 2025.
Sentiment
Score: 7
Explanation: The document presents a mixed sentiment. While revenue increased and the company returned to profitability, ongoing legal challenges and the need to remediate internal control weaknesses temper the positive outlook. The CEO transition adds an element of uncertainty.
Positives
- The company achieved a net income of $15.8 million for Q1 2025, a significant turnaround from the net loss of $5.7 million in Q1 2024.
- Revenue increased by 4.7% to $49.0 million in Q1 2025, driven by dietary supplement and service revenue growth.
- Cost of revenue decreased $0.8 million, to $12.6 million, or 6.3%, compared to the three months ended March 31, 2024.
- The Dallas 5th District Court of Appeals reversed the temporary injunction in the Cindy Latch case, and it is no longer in place.
Negatives
- Selling, general and administrative expense for the three months ended March 31, 2025 increased $3.8 million to $26.7 million, or 16.4%, compared to the three months ended March 31, 2024.
- The company is addressing a previously reported material weakness in internal control over financial reporting.
- The company incurred $3.5 million in legal settlement payments during the quarter.
Risks
- The company is involved in ongoing litigation, including disputes over misappropriation of name, image, and likeness.
- The company is working to remediate a previously reported material weakness in internal control over financial reporting.
- International trade policies, including tariffs, sanctions and trade barriers may adversely affect our business, financial condition, results of operations and prospects.
Future Outlook
The company believes its current cash position, anticipated cash generated from operations, and capacity under its revolving loans are sufficient to fund operations and debt service obligations for at least the next 12 months. The company is focused on vertical integration through strategic transactions.
Management Comments
- By virtue of our historical performance over the past 13 years, we believe that our business model has been successful, remains differentiated, and is well positioned for future growth.
Industry Context
The company operates in the hormone optimization and dietary supplement market, which is subject to regulatory oversight and competition. The company's strategy includes increasing the number of Biote-certified practitioners, growing the practice of existing practitioners, and increasing sales of Biote-branded dietary supplements.
Comparison to Industry Standards
- The document does not contain specific comparisons to industry standards or benchmarks.
- Without more information, it is difficult to assess the company's performance relative to its peers.
- Comparable companies in the hormone replacement therapy and dietary supplement industries include firms like Thorne HealthTech, Inc. and Hologic, Inc., but a detailed comparison would require further analysis of their financial results and market positions.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chief Executive Officer | Teresa S. Weber | Bret Christensen | February 1, 2025 | Transition |
Corporate Governance
| Change Type | Description | Effective Date | Impact Assessment |
|---|---|---|---|
| Non-Employee Director Compensation Policy | Details annual cash and equity compensation for non-employee directors. | January 1, 2025 | Sets compensation structure for board members. |
Legal Proceedings
- The company is involved in ongoing litigation with Right Value Drug Stores, LLC, Cindy Latch, and Gary S. Donovitz.
- A lawsuit was filed in the Delaware Court of Chancery against Haymaker Sponsor III, LLC, the Company's outside legal counsel, and certain Company executive officers and directors by two trusts.
Related Party Transactions
- The Company entered into a consulting agreement with Ms. Teresa S. Weber, which provides that Ms. Weber will serve as a strategic advisor to the Company and its Board of Directors for up to one year.
- The Company purchases dietary supplements inventories from a vendor in which the Companys founder holds a minority interest.
Stakeholder Impact
- Shareholders may be impacted by the company's financial performance, legal proceedings, and management changes.
- Employees may be affected by the organizational restructuring plan.
- Customers (Biote-certified practitioners) may be impacted by changes in the company's supply chain and service offerings.
Next Steps
- The company plans to complete the organizational restructuring plan in the second quarter of 2025, incurring approximately $0.6 million to $0.8 million in pre-tax restructuring charges.
- Briefing is scheduled to be completed by mid-July 2025 in the Yosaki and Mioko Trusts case.
- The appeal is scheduled to be submitted to the Dallas 5th District Court of Appeals without oral argument on May 13, 2025 in the Gary S. Donovitz / NIL Litigation.
- Briefing is scheduled to be completed by mid-June 2025 in the Gary S. Donovitz / NIL Litigation.
Key Dates
| Date | Description |
|---|---|
| January 1, 2021 | Company offers participation in the BioTE Medical, LLC (BioTE Medical) 401(k) Plan |
| January 2, 2024 | Company executed an asset purchase agreement with Simpatra, LLC (Simpatra) to purchase certain intellectual property and intellectual property rights. |
| January 24, 2024 | The Companys Board of Directors approved a share repurchase program authorizing the repurchase of up to $ 20.0 million its outstanding Class A common stock. |
| January 29, 2024 | Company executed an asset purchase agreement with BioSana ID LLC (BioSana) to purchase certain assets for cash consideration of $ 0.7 million. |
| January 30, 2024 | A lawsuit was filed in the 162nd Judicial District Court of Dallas County, Texas against the Company by Right Value Drug Stores, LLC d/b/a Carie Boyds Prescription Ship n/k/a Carie Boyd Pharmaceuticals (Right Value). |
| March 18, 2024 | The Company acquired F.H. Investments Inc. (Asteria Health) a privately held 503B manufacturer of compounded bioidentical hormones. |
| April 23, 2024 | Founder advisor agreement with Dr. Gary S. Donovitz was terminated. |
| July 12, 2024 | A lawsuit was filed in the Delaware Court of Chancery against Haymaker Sponsor III, LLC, the Company's outside legal counsel, and certain Company executive officers and directors by two trusts. |
| September 11, 2024 | The Company entered into a 60-month operating lease agreement for approximately 19,076 square feet of office space in Birmingham, Alabama that will be used by Asteria Health. |
| November 1, 2024 | AnazaoHealth provided notice that it was exercising its right to terminate the Pharmacy Services Agreement (the AnazaoHealth Pharmacy Services Agreement), which we previously entered into on October 30, 2020, with such termination to be effective as of May 1, 2025. |
| November 15, 2024 | Cindy Latch, an actress / model who formerly appeared in one BioTE marketing video, filed suit against BioTE alleging misappropriation of her name, image and likeness by both BioTE and various of its approved practitioners. |
| December 13, 2024 | Dr. Gary S. Donovitz (Donovitz) filed suit against BioTE Medical alleging misappropriation of his name, image and likeness by BioTE and various of its approved practitioners. |
| December 17, 2024 | BioTE filed an action against Donovitz in Delaware Chancery Court seeking a preliminary and permanent injunction enjoining Donovitz from pursuing the December 13, 2024 Litigation in Texas. |
| January 1, 2025 | Non-Employee Director Compensation Policy effective. |
| January 30, 2025 | The Company entered into a consulting agreement with Ms. Teresa S. Weber, which provides that Ms. Weber will serve as a strategic advisor to the Company and its Board of Directors for up to one year. |
| February 1, 2025 | Bret Christensen was appointed as Chief Executive Officer. |
| February 26, 2025 | BioTE Medical entered into a Settlement Agreement (the Settlement Agreement) with Right Value. |
| March 15, 2025 | The Defendants moved to dismiss the lawsuit, and it was dismissed on March 15, 2025. |
| March 31, 2025 | End of Q1 2025 reporting period. |
| April 15, 2025 | The Plaintiffs appealed to the Delaware Supreme Court on April 15, 2025. |
| April 23, 2025 | Pursuant to a settlement agreement executed on April 24, 2024 between the Company and Dr. Gary S. Donovitz, the Company repurchased approximately 4.1 million of combined Class A common units of BioTE Holdings, LLC and Class V voting stock of Biote (together, Paired Interests) for $ 15.1 million and reduced its share repurchase liability by the same amount. |
| May 1, 2025 | The Board of Directors of the Company approved an organizational restructuring plan (the Plan) to drive improved financial performance. |
| May 1, 2025 | AnazaoHealth Pharmacy Services Agreement termination effective. |
| May 7, 2025 | As of May 7, 2025, the registrant had 33,073,277 shares of Class A common stock, $0.0001 par value per share, outstanding and 17,540,780 shares of Class V voting stock, $0.0001 par value per share, outstanding. |
| May 9, 2025 | Date of report. |
| May 13, 2025 | The appeal is scheduled to be submitted to the Dallas 5th District Court of Appeals without oral argument on May 13, 2025. |
| April 27, 2026 | Trial on the November 15 2024 Litigation is currently on the 101st Judicial District Courts two-week docket beginning on April 27, 2026. |
Keywords
biote, revenue, net income, adjusted EBITDA, legal proceedings, hormone optimization, dietary supplements, financial results, CEO transition, internal control, share repurchase
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