QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||
☒ | Smaller reporting company | |||||||||||||
Emerging Growth Company |
BIOVENTUS INC. | ||||||||
TABLE OF CONTENTS | ||||||||
Consolidated Condensed Statements of Operations and Comprehensive (Loss) Income for the three and nine months ended October 1, 2022 and October 2, 2021 | ||||||||
Consolidated Condensed Balance Sheets as of October 1, 2022 and December 31, 2021 | ||||||||
Consolidated Condensed Statements of Changes in Stockholders’ and Members’ Equity for the three and nine months ended October 1, 2022 and October 2, 2021 | ||||||||
Consolidated Condensed Statements of Cash Flows for the nine months ended October 1, 2022 and October 2, 2021 | ||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales (including depreciation and amortization of $ | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Selling, general and administrative expense | |||||||||||||||||||||||
Research and development expense | |||||||||||||||||||||||
Restructuring costs | |||||||||||||||||||||||
Change in fair value of contingent consideration | |||||||||||||||||||||||
Depreciation and amortization | |||||||||||||||||||||||
Impairment of goodwill | |||||||||||||||||||||||
Impairment of variable interest entity assets | |||||||||||||||||||||||
Operating (loss) income | ( | ( | ( | ||||||||||||||||||||
Interest expense, net | |||||||||||||||||||||||
Other (income) expense | ( | ( | |||||||||||||||||||||
Other (income) expense | ( | ( | |||||||||||||||||||||
(Loss) income before income taxes | ( | ( | ( | ||||||||||||||||||||
Income tax (benefit) expense, net | ( | ( | ( | ||||||||||||||||||||
Net (loss) income | ( | ( | ( | ||||||||||||||||||||
Loss attributable to noncontrolling interest | |||||||||||||||||||||||
Net (loss) income attributable to Bioventus Inc. | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Net (loss) income | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Other comprehensive loss, net of tax | |||||||||||||||||||||||
Change in foreign currency translation adjustments | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive loss | ( | ( | ( | ||||||||||||||||||||
Comprehensive loss attributable to noncontrolling interest | |||||||||||||||||||||||
Comprehensive (loss) income attributable to Bioventus Inc. | $ | ( | $ | ( | $ | ( | $ | ||||||||||||||||
Loss per share of Class A common stock, basic and diluted(1): | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted-average shares of Class A common stock outstanding, basic and diluted(1): | |||||||||||||||||||||||
October 1, 2022 | December 31, 2021 | ||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, net | |||||||||||
Inventory | |||||||||||
Prepaid and other current assets | |||||||||||
Total current assets | |||||||||||
Restricted cash, less current portion | |||||||||||
Property and equipment, net | |||||||||||
Goodwill | |||||||||||
Intangible assets, net | |||||||||||
Operating lease assets | |||||||||||
Deferred tax assets | |||||||||||
Investment and other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Stockholders' Equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Accrued equity-based compensation | |||||||||||
Current portion of long-term debt | |||||||||||
Current portion of deferred consideration | |||||||||||
Other current liabilities | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, less current portion | |||||||||||
Deferred income taxes | |||||||||||
Deferred consideration | |||||||||||
Contingent consideration | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 11) | |||||||||||
Stockholders’ Equity: | |||||||||||
Preferred stock, $ | |||||||||||
Class A common stock, $ December 31, 2021, December 31, 2021, respectively | |||||||||||
Class B common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated deficit | ( | ( | |||||||||
Accumulated other comprehensive (loss) income | ( | ||||||||||
Total stockholders’ equity attributable to Bioventus Inc. | |||||||||||
Noncontrolling interest | |||||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended October 1, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Class A Common Stock | Class B Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated other comprehensive (loss) income | Accumulated Deficit | Non- controlling interest | Total Stockholders' equity | |||||||||||||||||||||||||||||||||||||||
Balance at July 2, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||
Issuance of Class A common stock for equity plans | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Net (loss) income | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Equity based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Deconsolidation of noncontrolling interest | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Translation adjustment | — | — | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||
Balance at October 1, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ |
Three Months Ended October 2, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
Class A Common Stock | Class B Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated other comprehensive (loss) income | Accumulated Deficit | Non- controlling interest | Total Stockholders' equity | |||||||||||||||||||||||||||||||||||||||
Balance at July 3, 2021 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
Effect of Organizational Transactions | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Issuance of Class A common stock for equity plans | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Distribution to Controlling LLC Owner | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Equity based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Translation adjustment | — | — | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||
Balance at October 2, 2021 | $ | $ | $ | $ | $ | ( | $ | $ |
Nine Months Ended October 1, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
Class A Common Stock | Class B Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated other comprehensive (loss) income | Accumulated Deficit | Non- controlling interest | Total Stockholders' equity | |||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||
Issuance of Class A common stock for equity plans | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||
Equity based compensation | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
Deconsolidation of noncontrolling interest | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
Tax withholdings on equity compensation awards | — | — | — | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||
Translation adjustment | — | — | — | — | — | ( | — | ( | ( | ||||||||||||||||||||||||||||||||||||||
Balance at October 1, 2022 | $ | $ | $ | $ | ( | $ | ( | $ | $ |
Nine Months Ended October 2, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Class A Common Stock | Class B Common Stock | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Members’ Equity | Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated other comprehensive (loss) income | Accumulated Deficit | Non- controlling Interest | Total Stockholders' and Members’ Equity | ||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2020 | $ | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Prior to Organizational Transactions: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Refund from members | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | ( | — | — | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | — | — | — | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||
Effect of Organizational Transactions | ( | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent to Organizational Transactions: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Initial public offering, net of offering costs | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of Class A common stock for equity plans | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Distribution to Continuing LLC Owner | — | — | — | — | — | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||
Deconsolidation of variable interest entity | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Equity based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance at October 2, 2021 | $ | $ | $ | $ | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended | |||||||||||
October 1, 2022 | October 2, 2021 | ||||||||||
Operating activities: | |||||||||||
Net (loss) income | $ | ( | $ | ||||||||
Adjustments to reconcile net (loss) income to net cash from operating activities: | |||||||||||
Depreciation and amortization | |||||||||||
Provision (recovery) for expected credit losses | ( | ||||||||||
Equity-based compensation from 2021 Stock Incentive Plan | |||||||||||
Profits interest plan, liability-classified and other equity awards compensation | ( | ||||||||||
Change in fair value of contingent consideration | |||||||||||
Change in fair value of interest rate swap | ( | ( | |||||||||
Deferred income taxes | ( | ( | |||||||||
Change in fair value of Equity Participation Rights | ( | ||||||||||
Impairment of goodwill | |||||||||||
Impairments related to variable interest entity | |||||||||||
Revaluation gain on previously held equity interest in CartiHeal | ( | ||||||||||
Unrealized loss on foreign currency fluctuations | |||||||||||
Other, net | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ( | |||||||||
Inventories | ( | ||||||||||
Accounts payable and accrued expenses | ( | ||||||||||
Other current and noncurrent assets and liabilities | ( | ||||||||||
Net cash from operating activities | ( | ||||||||||
Investing activities: | |||||||||||
Acquisition of CartiHeal, net of cash acquired | ( | ||||||||||
Acquisition of Bioness, net of cash acquired | ( | ||||||||||
Purchase of property and equipment | ( | ( | |||||||||
Investments and acquisition of distribution rights | ( | ( | |||||||||
Other | ( | ||||||||||
Net cash from investing activities | ( | ( | |||||||||
Financing activities: | |||||||||||
Proceeds from issuance of Class A common stock sold in initial public offering, net of underwriting discounts and offering costs | |||||||||||
Proceeds from issuance of Class A and B common stock | |||||||||||
Tax withholdings on equity-based compensation | ( | ||||||||||
Borrowing on revolver | |||||||||||
Payment on revolver | ( | ||||||||||
Proceeds from the issuance of long-term debt, net of issuance costs | |||||||||||
Payments on long-term debt | ( | ( | |||||||||
Distributions to members | ( | ||||||||||
Other, net | ( | ( | |||||||||
Net cash from financing activities | |||||||||||
Effect of exchange rate changes on cash | ( | ( | |||||||||
Net change in cash, cash equivalents and restricted cash | ( | ||||||||||
Cash, cash equivalents and restricted cash at the beginning of the period | |||||||||||
Cash, cash equivalents and restricted cash at the end of the period | $ | $ | |||||||||
Supplemental disclosure of noncash investing and financing activities | |||||||||||
Accrued member distributions | $ | $ | |||||||||
Accounts payable for purchase of property, plant and equipment | $ | $ | |||||||||
October 1, 2022 | December 31, 2021 | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Current | |||||||||||
Noncurrent | |||||||||||
$ | $ |
October 1, 2022 | December 31, 2021 | ||||||||||
Accounts receivable | $ | $ | |||||||||
Less: Allowance for credit losses | ( | ( | |||||||||
$ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | ||||||||||||||||||||
Beginning balance | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(Provision) recovery | ( | ( | ( | ||||||||||||||||||||
Write-offs | |||||||||||||||||||||||
Recoveries | ( | ( | ( | ( | |||||||||||||||||||
Ending balance | $ | ( | $ | ( | $ | ( | $ | ( |
October 1, 2022 | December 31, 2021 | ||||||||||
Raw materials and supplies | $ | $ | |||||||||
Finished goods | |||||||||||
Gross | |||||||||||
Excess and obsolete reserves | ( | ( | |||||||||
$ | $ |
October 1, 2022 | December 31, 2021 | ||||||||||
Prepaid taxes | $ | $ | |||||||||
Prepaid and other current assets | |||||||||||
$ | $ |
U.S. | International | Consolidated | |||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ||||||||||||||
Additions | |||||||||||||||||
Deconsolidation of noncontrolling interest | ( | ( | |||||||||||||||
Purchase accounting adjustments | ( | ( | |||||||||||||||
Impairment of goodwill | ( | ( | |||||||||||||||
Balance at October 1, 2022 | $ | $ | $ |
October 1, 2022 | December 31, 2021 | ||||||||||
Gross-to-net deductions | $ | $ | |||||||||
Bonus and commission | |||||||||||
Compensation and benefits | |||||||||||
Income and other taxes | |||||||||||
Other liabilities | |||||||||||
$ | $ |
Cash consideration | $ | ||||
Transaction related costs | |||||
Subtotal of cash at closing | |||||
Deferred Amount | |||||
Sales Milestone | |||||
Fair value of previously held equity interest(a) | |||||
Total consideration | $ |
Fair value of consideration | $ | ||||
Assets acquired and liabilities assumed: | |||||
Cash and cash equivalents and restricted cash | |||||
Inventory | |||||
Prepaid and other current assets | |||||
Property and equipment | |||||
Intangibles | |||||
Investment and other assets | |||||
Accounts payable | ( | ||||
Accrued liabilities | ( | ||||
Other current liabilities | ( | ||||
Deferred income taxes | ( | ||||
Other liabilities | ( | ||||
Net assets acquired | |||||
Resulting goodwill | $ |
Useful Life | Fair Value | ||||||||||
Intellectual Property - US Segment | $ | ||||||||||
Intellectual Property - International Segment | |||||||||||
$ |
Common Shares | Price per Share(a) | Amount | |||||||||||||||
Cash | $ | ||||||||||||||||
Bioventus Class A shares | $ | ||||||||||||||||
Value of Misonix options settled in Bioventus options | |||||||||||||||||
Merger consideration | |||||||||||||||||
Other cash consideration | |||||||||||||||||
Total Misonix consideration | $ |
Fair value of consideration | $ | ||||
Assets acquired and liabilities assumed: | |||||
Cash and cash equivalents | |||||
Accounts receivable | |||||
Inventory | |||||
Prepaid and other current assets | |||||
Property and equipment, net | |||||
Intangible assets | |||||
Operating lease assets | |||||
Deferred tax assets | |||||
Other assets | |||||
Accounts payable and accrued liabilities | ( | ||||
Other current liabilities | ( | ||||
Deferred income taxes | ( | ||||
Other liabilities | ( | ||||
Net assets acquired | |||||
Resulting goodwill | $ |
Useful Life (in years) | Fair Value | ||||||||||
Intellectual property | $ | ||||||||||
Customer relationships | |||||||||||
$ |
Nine Months Ended | Nine Months Ended | ||||||||||
October 1, 2022 | October 2, 2021 | ||||||||||
Net sales | $ | $ | |||||||||
Net loss | $ | ( | $ | ( |
October 1, 2022 | December 31, 2021 | ||||||||||
Amended Term Loan due October 2026 ( | $ | $ | |||||||||
Less: | |||||||||||
Current portion of long-term debt | ( | ( | |||||||||
Unamortized debt issuance cost | ( | ( | |||||||||
Unamortized discount | ( | ( | |||||||||
$ | $ |
Remainder of 2022 | $ | ||||
2023 and 2024 | $ | ||||
2025 and 2026 | $ |
October 1, 2022 | December 31, 2021 | ||||||||||||||||||||||||||||||||||
Total | Level 2 | Level 3 | Total | Level 2 | Level 3 | ||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Interest rate swap | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Deferred Amount - Current | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||
Deferred Amount - Long Term | |||||||||||||||||||||||||||||||||||
CartiHeal contingent consideration- Sales Milestone | |||||||||||||||||||||||||||||||||||
Bioness contingent consideration | |||||||||||||||||||||||||||||||||||
Total liabilities: | $ | $ | $ | $ | $ | $ |
Valuation Technique | Unobservable inputs | Range | |||||||||||||||
CartiHeal Deferred Amount | Discounted cash flow | Payment discount rate | |||||||||||||||
Payment Period | 2022 - 2027 | ||||||||||||||||
CartiHeal contingent consideration - Sales Milestone | Discounted cash flow | Payment discount rate | |||||||||||||||
Payment Period | 2022 - 2029 | ||||||||||||||||
Bioness contingent consideration | Discounted cash flow | Payment discount rate | |||||||||||||||
Payment period | 2024 - 2025 |
Number of units | Weighted-average grant-date fair value per unit | ||||||||||
Unvested at December 31, 2021 | $ | ||||||||||
Granted | |||||||||||
Vested | ( | ||||||||||
Forfeited or canceled | ( | ||||||||||
Unvested at October 1, 2022 | $ |
Risk-free interest rate | |||||
Expected dividend yield | % | ||||
Expected stock price volatility | |||||
Expected life of stock options (years) |
Number of options | Weighted-average exercise price | Weighted average remaining contractual term | Aggregate intrinsic value | ||||||||||||||||||||
Outstanding at December 31, 2021 | $ | ||||||||||||||||||||||
Granted | |||||||||||||||||||||||
Exercised | ( | ||||||||||||||||||||||
Forfeited or canceled | ( | ||||||||||||||||||||||
Outstanding at October 1, 2022 | $ | ||||||||||||||||||||||
Exercisable and vested at October 1, 2022 | $ | $ |
October 1, 2022 | December 31, 2021 | ||||||||||||||||||||||
LLC Interests | Ownership % | LLC Interests | Ownership % | ||||||||||||||||||||
Number of LLC Interests owned | |||||||||||||||||||||||
Bioventus Inc. | % | % | |||||||||||||||||||||
Continuing LLC Owner | % | % | |||||||||||||||||||||
Total | % | % |
Three Months Ended | |||||||||||||||||||||||
October 1, 2022 | October 2, 2021 | Nine Months Ended October 1, 2022 | February 16, 2021 through October 2, 2021 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss attributable to noncontrolling interests | |||||||||||||||||||||||
Net loss attributable to Bioventus Inc. Class A common stockholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Weighted-average shares of Class A common stock outstanding - basic and diluted | |||||||||||||||||||||||
Net loss per share of Class A common stock, basic and diluted | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended | |||||||||||||||||||||||
October 1, 2022 | October 2, 2021 | Nine Months Ended October 1, 2022 | February 16, 2021 through October 2, 2021 | ||||||||||||||||||||
LLC Interests held by Continuing LLC Owner(a) | |||||||||||||||||||||||
Stock options | |||||||||||||||||||||||
RSUs | |||||||||||||||||||||||
Unvested shares of Class A common stock | |||||||||||||||||||||||
Total |
Employee severance and temporary labor costs | Other charges | Total | |||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ||||||||||||||
Expenses incurred | |||||||||||||||||
Payments made | ( | ( | ( | ||||||||||||||
Balance at October 1, 2022 | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | ||||||||||||||||||||
Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
Short-term lease cost(a) | |||||||||||||||||||||||
Total lease cost | $ | $ | $ | $ |
Nine Months Ended | |||||||||||
October 1, 2022 | October 2, 2021 | ||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
Right-of-use assets obtained in exchange for operating lease obligations | $ | $ | |||||||||
October 1, 2022 | December 31, 2021 | ||||||||||
Operating lease assets | $ | $ | |||||||||
Operating lease liabilities- current | $ | $ | |||||||||
Operating lease liabilities- noncurrent | |||||||||||
Total operating lease liabilities | $ | $ | |||||||||
Weighted average remaining lease term (years) | |||||||||||
Weighted average remaining lease term (years) for operating leases | |||||||||||
Weighted average discount rate for operating leases | % | % | |||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | ||||||||||||||||||||
U.S. | |||||||||||||||||||||||
Pain Treatments | $ | $ | $ | $ | |||||||||||||||||||
Restorative Therapies | |||||||||||||||||||||||
Surgical Solutions | |||||||||||||||||||||||
Total U.S. net sales | |||||||||||||||||||||||
International | |||||||||||||||||||||||
Pain Treatments | |||||||||||||||||||||||
Restorative Therapies | |||||||||||||||||||||||
Surgical Solutions | |||||||||||||||||||||||
Total International net sales | |||||||||||||||||||||||
Total net sales | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | ||||||||||||||||||||
Segment adjusted EBITDA | |||||||||||||||||||||||
U.S. | $ | $ | $ | $ | |||||||||||||||||||
International | |||||||||||||||||||||||
Interest expense, net | ( | ( | ( | ( | |||||||||||||||||||
Depreciation and amortization | ( | ( | ( | ( | |||||||||||||||||||
Acquisition and related costs | ( | ( | ( | ( | |||||||||||||||||||
Remeasurement gain on equity method investment | |||||||||||||||||||||||
Restructuring and succession charges | ( | ( | ( | ( | |||||||||||||||||||
Equity compensation | ( | ( | ( | ||||||||||||||||||||
Equity loss in unconsolidated investments | ( | ( | ( | ( | |||||||||||||||||||
Foreign currency impact | ( | ( | ( | ||||||||||||||||||||
Impairment of goodwill | ( | ( | |||||||||||||||||||||
Impairments related to variable interest entity | ( | ||||||||||||||||||||||
Other items | ( | ( | ( | ( | |||||||||||||||||||
(Loss) income before income taxes | $ | ( | $ | ( | $ | ( | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | ||||||||||||||||||||
Net sales | $ | 128,662 | $ | 108,890 | $ | 386,283 | $ | 300,484 | |||||||||||||||
Net (loss) income | $ | (145,698) | $ | (2,269) | $ | (168,518) | $ | 11,479 | |||||||||||||||
Adjusted EBITDA(1) | $ | 21,039 | $ | 21,315 | $ | 51,081 | $ | 52,272 | |||||||||||||||
Loss per share - basic and diluted | $ | (1.76) | $ | (0.03) | $ | (2.07) | $ | (0.15) |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | ||||||||||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Cost of sales (including depreciation and amortization) | 34.3 | % | 27.4 | % | 33.5 | % | 28.5 | % | |||||||||||||||
Gross profit | 65.7 | % | 72.6 | % | 66.5 | % | 71.5 | % | |||||||||||||||
Selling, general and administrative expense | 61.6 | % | 64.0 | % | 66.0 | % | 57.7 | % | |||||||||||||||
Research and development expense | 4.5 | % | 5.7 | % | 5.0 | % | 4.0 | % | |||||||||||||||
Restructuring costs | 0.4 | % | 1.7 | % | 0.6 | % | 0.6 | % | |||||||||||||||
Change in fair value of contingent consideration | 2.4 | % | 0.6 | % | 1.0 | % | 0.4 | % | |||||||||||||||
Depreciation and amortization | 5.8 | % | 1.7 | % | 3.5 | % | 1.9 | % | |||||||||||||||
Impairment of goodwill | 147.0 | % | — | % | 49.0 | % | — | % | |||||||||||||||
Impairment of variable interest entity assets | — | % | — | % | — | % | 1.9 | % | |||||||||||||||
Operating (loss) income | (156.0 | %) | (1.1 | %) | (58.6 | %) | 5.0 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
(in thousands) | October 1, 2022 | October 2, 2021 | October 1, 2022 | October 2, 2021 | |||||||||||||||||||
Net (loss) income | $ | (145,698) | $ | (2,269) | $ | (168,518) | $ | 11,479 | |||||||||||||||
Interest expense, net | 9,894 | 1,347 | 10,922 | 152 | |||||||||||||||||||
Income tax expense (benefit) | (41,779) | (882) | (45,667) | 759 | |||||||||||||||||||
Depreciation and amortization(a) | 18,780 | 8,522 | 43,643 | 23,185 | |||||||||||||||||||
Acquisition and related costs(b) | 6,319 | 5,914 | 20,292 | 14,044 | |||||||||||||||||||
Remeasurement gain on equity method investment(c) | (23,709) | — | (23,709) | — | |||||||||||||||||||
Restructuring and succession charges(d) | 575 | 1,798 | 2,847 | 2,142 | |||||||||||||||||||
Equity compensation(e) | 4,648 | 5,938 | 14,153 | (10,621) | |||||||||||||||||||
Equity loss in unconsolidated investments(f) | 322 | 419 | 1,003 | 1,320 | |||||||||||||||||||
Foreign currency impact(g) | 581 | 17 | 1,122 | (47) | |||||||||||||||||||
Impairment of goodwill(h) | 189,197 | — | 189,197 | — | |||||||||||||||||||
Impairments related to variable interest entity(i) | — | — | — | 7,043 | |||||||||||||||||||
Other items(j) | 1,909 | 511 | 5,796 | 2,816 | |||||||||||||||||||
Adjusted EBITDA | $ | 21,039 | $ | 21,315 | $ | 51,081 | $ | 52,272 |
Three Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
U.S. | |||||||||||||||||||||||
Pain Treatments | $ | 47,010 | $ | 55,963 | (8,953) | (16.0 | %) | ||||||||||||||||
Restorative Therapies | 38,096 | 25,634 | 12,462 | 48.6 | % | ||||||||||||||||||
Surgical Solutions | 31,182 | 17,565 | 13,617 | 77.5 | % | ||||||||||||||||||
Total U.S. net sales | 116,288 | 99,162 | 17,126 | 17.3 | % | ||||||||||||||||||
International | |||||||||||||||||||||||
Pain Treatments | $ | 5,090 | $ | 4,672 | 418 | 8.9 | % | ||||||||||||||||
Restorative Therapies | 4,047 | 4,841 | (794) | (16.4 | %) | ||||||||||||||||||
Surgical Solutions | 3,237 | 215 | 3,022 | NM | |||||||||||||||||||
Total International net sales | 12,374 | 9,728 | 2,646 | 27.2 | % | ||||||||||||||||||
Total net sales | $ | 128,662 | $ | 108,890 | $ | 19,772 | 18.2 | % |
Nine Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
U.S. | |||||||||||||||||||||||
Pain Treatments | $ | 152,939 | $ | 144,879 | $ | 8,060 | 5.6 | % | |||||||||||||||
Restorative Therapies | 102,475 | 71,489 | 30,986 | 43.3 | % | ||||||||||||||||||
Surgical Solutions | 91,265 | 56,014 | 35,251 | 62.9 | % | ||||||||||||||||||
Total U.S. net sales | 346,679 | 272,382 | 74,297 | 27.3 | % | ||||||||||||||||||
International | |||||||||||||||||||||||
Pain Treatments | 15,128 | 13,990 | 1,138 | 8.1 | % | ||||||||||||||||||
Restorative Therapies | 13,930 | 13,318 | 612 | 4.6 | % | ||||||||||||||||||
Surgical Solutions | 10,546 | 794 | 9,752 | NM | |||||||||||||||||||
Total International net sales | 39,604 | 28,102 | 11,502 | 40.9 | % | ||||||||||||||||||
Total net sales | $ | 386,283 | $ | 300,484 | $ | 85,799 | 28.6 | % |
Three Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
U.S. | $ | 76,624 | $ | 72,571 | $ | 4,053 | 5.6 | % | |||||||||||||||
International | 7,911 | 6,498 | 1,413 | 21.7 | % | ||||||||||||||||||
Total | $ | 84,535 | $ | 79,069 | $ | 5,466 | 6.9 | % |
Three Months Ended | |||||||||||||||||
October 1, 2022 | October 2, 2021 | Change | |||||||||||||||
U.S. | 65.9 | % | 73.2 | % | (7.3 | %) | |||||||||||
International | 63.9 | % | 66.8 | % | (2.9 | %) | |||||||||||
Total | 65.7 | % | 72.6 | % | (6.9 | %) |
Nine Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
U.S. | $ | 231,571 | $ | 196,000 | $ | 35,571 | 18.1 | % | |||||||||||||||
International | 25,320 | 18,938 | 6,382 | 33.7 | % | ||||||||||||||||||
Total | $ | 256,891 | $ | 214,938 | $ | 41,953 | 19.5 | % |
Nine Months Ended | |||||||||||||||||
October 1, 2022 | October 2, 2021 | Change | |||||||||||||||
U.S. | 66.8 | % | 72.0 | % | (5.3 | %) | |||||||||||
International | 63.9 | % | 67.4 | % | (3.5 | %) | |||||||||||
Total | 66.5 | % | 71.5 | % | (5.0 | %) |
Three Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Selling, general and administrative expense | $ | 79,194 | $ | 69,636 | $ | 9,558 | 13.7 | % |
Nine Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Selling, general and administrative expense | $ | 254,938 | $ | 173,372 | $ | 81,566 | 47.0 | % |
Three Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Research and development expense | $ | 5,840 | $ | 6,153 | $ | (313) | (5.1 | %) |
Nine Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Research and development expense | $ | 19,134 | $ | 11,936 | $ | 7,198 | 60.3 | % |
Three Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Change in fair value of contingent consideration | $ | 3,142 | $ | 651 | $ | 2,491 | NM |
Nine Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Change in fair value of contingent consideration | $ | 3,684 | $ | 1,292 | $ | 2,392 | 185.1 | % |
Three Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Depreciation and amortization | $ | 7,442 | $ | 1,878 | $ | 5,564 | NM |
Nine Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Depreciation and amortization | $ | 13,392 | $ | 5,655 | $ | 7,737 | 136.8 | % |
Three Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Interest expense, net | $ | 9,894 | $ | 1,347 | $ | 8,547 | NM | ||||||||||||||||
Other (income) expense | $ | (23,272) | $ | 757 | $ | (24,029) | NM |
Nine Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Interest expense, net | $ | 10,922 | $ | 152 | $ | 10,770 | NM | ||||||||||||||||
Other (income) expense | $ | (22,350) | $ | 2,821 | $ | (25,171) | NM |
Three Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Income tax expense (benefit) | $ | (41,779) | $ | (882) | $ | (40,897) | NM | ||||||||||||||||
Effective tax rate | 22.3 | % | 28.0 | % | (5.7) | % |
Nine Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Income tax (benefit) expense | $ | (45,667) | $ | 759 | $ | (46,426) | NM | ||||||||||||||||
Effective tax rate | 21.3 | % | 6.2 | % | 15.1 | % |
Three Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Continuing LLC Owner | $ | 37,341 | $ | 1,198 | $ | 36,143 | NM | ||||||||||||||||
Other noncontrolling interest | 112 | — | 112 | NM | |||||||||||||||||||
Total | $ | 37,453 | $ | 1,198 | $ | 36,255 |
Nine Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Continuing LLC Owner | $ | 41,297 | $ | 2,595 | $ | 38,702 | 1491.4 | % | |||||||||||||||
Other noncontrolling interest | 447 | 5,665 | (5,218) | (92.1 | %) | ||||||||||||||||||
Total | $ | 41,744 | $ | 8,260 | $ | 33,484 |
Three Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
U.S. | $ | 19,543 | $ | 19,782 | $ | (239) | (1.2 | %) | |||||||||||||||
International | $ | 1,496 | $ | 1,533 | $ | (37) | (2.4) | % |
Nine Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
U.S. | $ | 43,467 | $ | 46,929 | $ | (3,462) | (7.4 | %) | |||||||||||||||
International | $ | 7,614 | $ | 5,343 | $ | 2,271 | 42.5 | % |
Nine Months Ended | Change | ||||||||||||||||||||||
(in thousands, except for percentage) | October 1, 2022 | October 2, 2021 | $ | % | |||||||||||||||||||
Net cash from operating activities | $ | (18,781) | $ | 9,874 | $ | (28,655) | NM | ||||||||||||||||
Net cash from investing activities | (113,033) | (62,482) | (50,551) | 80.9 | % | ||||||||||||||||||
Net cash from financing activities | 67,514 | 97,063 | (29,549) | (30.4 | %) | ||||||||||||||||||
Effect of exchange rate changes on cash | (531) | (377) | (154) | 40.8 | % | ||||||||||||||||||
Net change in cash, cash equivalents and restricted cash | $ | (64,831) | $ | 44,078 | $ | (108,909) | NM |
Remainder of 2022 | 2023 and thereafter | Total | |||||||||||||||
Long-term debt(a) | $ | 2,000 | $ | 78,000 | $ | 80,000 | |||||||||||
Interest payments on long-term debt obligations(a) | 6,800 | 76,039 | 82,839 | ||||||||||||||
Deferred Amount(b) | — | 215,000 | 215,000 | ||||||||||||||
Interest on Deferred Amount(b) | — | 43,599 | 43,599 | ||||||||||||||
$ | 8,800 | $ | 412,638 | $ | 421,438 |
Exhibit No. | Description | Form | File No. | Exhibit | Filing Date | ` | Filed / Furnished Herewith | |||||||||||||||||||||||||||||||
10.1 | 8-K | 001-37844 | 10.1 | 7/12/2022 | ||||||||||||||||||||||||||||||||||
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101.INS | Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | *** | ||||||||||||||||||||||||||||||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document | *** | ||||||||||||||||||||||||||||||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | *** | ||||||||||||||||||||||||||||||||||||
101.DEF | Inline XBRL Extension Definition Linkbase Document | *** | ||||||||||||||||||||||||||||||||||||
101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | *** | ||||||||||||||||||||||||||||||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | *** | ||||||||||||||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | *** |
BIOVENTUS INC. | ||||||||
November 21, 2022 | /s/ Mark L. Singleton | |||||||
Date | Mark L. Singleton | |||||||
Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) |
/s/ | Kenneth M. Reali | |||||||||||||
Name: | Kenneth M. Reali | |||||||||||||
Title: | Chief Executive Officer and Director (Principal Executive Officer) |
/s/ | Mark L. Singleton | |||||||||||||
Name: | Mark L. Singleton | |||||||||||||
Title: | Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
/s/ | Kenneth M. Reali | |||||||||||||
Name: | Kenneth M. Reali | |||||||||||||
Title: | Chief Executive Officer and Director (Principal Executive Officer) | |||||||||||||
/s/ | Mark L. Singleton | |||||||||||||
Name: | Mark L. Singleton | |||||||||||||
Title: | Senior Vice President and Chief Financial Officer (Principal Financial Officer) |
Consolidated condensed statements of operations and comprehensive (loss) income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
Oct. 01, 2022 |
Oct. 02, 2021 |
|||
Income Statement [Abstract] | ||||||
Net sales | $ 128,662 | $ 108,890 | $ 386,283 | $ 300,484 | ||
Cost of sales (including depreciation and amortization of $11,331, $6,637, $30,233 and $17,491, respectively) | 44,127 | 29,821 | 129,392 | 85,546 | ||
Gross profit | 84,535 | 79,069 | 256,891 | 214,938 | ||
Selling, general and administrative expense | 79,194 | 69,636 | 254,938 | 173,372 | ||
Research and development expense | 5,840 | 6,153 | 19,134 | 11,936 | ||
Restructuring costs | 575 | 1,798 | 2,159 | 1,798 | ||
Change in fair value of contingent consideration | 3,142 | 651 | 3,684 | 1,292 | ||
Depreciation and amortization | 7,442 | 1,878 | 13,392 | 5,655 | ||
Impairment of goodwill | 189,197 | 0 | 189,197 | 0 | ||
Impairment of variable interest entity assets | 0 | 0 | 0 | 5,674 | ||
Operating (loss) income | (200,855) | (1,047) | (225,613) | 15,211 | ||
Interest expense, net | 9,894 | 1,347 | 10,922 | 152 | ||
Other (income) expense | (23,272) | 757 | (22,350) | 2,821 | ||
Other (income) expense | (13,378) | 2,104 | (11,428) | 2,973 | ||
(Loss) income before income taxes | (187,477) | (3,151) | (214,185) | 12,238 | ||
Income tax (benefit) expense, net | (41,779) | (882) | (45,667) | 759 | ||
Net (loss) income | (145,698) | (2,269) | (168,518) | 11,479 | ||
Loss attributable to noncontrolling interest | 37,453 | 1,198 | 41,744 | 8,260 | ||
Net (loss) income attributable to Bioventus Inc. | (108,245) | (1,071) | (126,774) | 19,739 | ||
Change in foreign currency translation adjustments | (723) | (366) | (1,912) | (1,225) | ||
Comprehensive loss | (146,421) | (2,635) | (170,430) | 10,254 | ||
Comprehensive loss attributable to noncontrolling interest | 37,600 | 1,300 | 42,137 | 8,182 | ||
Comprehensive (loss) income attributable to Bioventus Inc. | $ (108,821) | $ (1,335) | $ (128,293) | $ 18,436 | ||
Loss per share of Class A common stock | ||||||
Basic (in dollars per share) | [1] | $ (1.76) | $ (0.03) | $ (2.07) | $ (0.15) | |
Diluted (in dollars per share) | [1] | $ (1.76) | $ (0.03) | $ (2.07) | $ (0.15) | |
Weighted-average shares of Class A common stock outstanding | ||||||
Basic (in shares) | [1] | 61,674,254 | 41,837,581 | 61,208,941 | 41,816,706 | |
Diluted (in shares) | [1] | 61,674,254 | 41,837,581 | 61,208,941 | 41,816,706 | |
|
Consolidated condensed statements of operations and comprehensive (loss) income (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Income Statement [Abstract] | ||||
Depreciation and amortization | $ 11,331 | $ 6,637 | $ 30,233 | $ 17,491 |
Consolidated condensed balance sheets (Parenthetical) - $ / shares |
Oct. 01, 2022 |
Dec. 31, 2021 |
---|---|---|
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common Class A | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, shares outstanding (in shares) | 61,777,875 | 59,548,504 |
Common stock, shares issued (in shares) | 61,777,875 | 59,548,504 |
Common Class B | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares outstanding (in shares) | 15,786,737 | 15,786,737 |
Common stock, shares issued (in shares) | 15,786,737 | 15,786,737 |
Organization |
9 Months Ended |
---|---|
Oct. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization The Company Bioventus Inc. (together with its subsidiaries, the Company) was formed as a Delaware corporation for the purpose of facilitating an initial public offering (IPO) and other related transactions in order to carry on the business of Bioventus LLC and its subsidiaries (BV LLC). Bioventus Inc. functions as a holding company with no direct operations, material assets or liabilities other than the equity interest in BV LLC. BV LLC is a limited liability company formed under the laws of the state of Delaware on November 23, 2011 and operates as a partnership. BV LLC commenced operations in May 2012. The Company is focused on developing and commercializing clinically differentiated, cost efficient and minimally invasive treatments that engage and enhance the body’s natural healing processes. The Company is headquartered in Durham, North Carolina and has approximately 1,160 employees. Initial Public Offering On February 16, 2021, the Company closed an IPO of 9,200,000 shares of Class A common stock at a public offering price of $13.00 per share, which includes 1,200,000 shares issued pursuant to the underwriters' over-allotment option. The Company received $111,228 in proceeds, net of underwriting discounts and commissions of $8,372, which was used to purchase newly-issued membership interests from BV LLC at a price per interest equal to the IPO price of $13.00. The Company also incurred offering expenses totaling $4,778 in addition to the underwriting discounts and commissions. Offering expenses of $1,327 were paid in 2020 and $3,451 were paid in 2021. The Company is the sole managing member of, has a majority economic interest in, has the sole voting interest in, and controls the management of BV LLC. As a result, the Company consolidates the financial results of BV LLC and reports a non-controlling interest for the interest not held by the Company. IPO Transactions In connection with the IPO, the Company completed the following transactions (Transactions). •Amended and restated the limited liability company agreement of BV LLC (BV LLC Agreement), to, among other things, (i) provide for a new single class of common membership interests in BV LLC (LLC Interests); (ii) exchange all of the existing membership interests in BV LLC (Original BV LLC Owners) for new LLC Interests; and (iii) appoint Bioventus Inc. as the sole managing member of BV LLC. Refer to Note 7. Stockholders’ equity for further information. •Amended and restated the Bioventus Inc. certificate of incorporation to, among other things, (i) provide for an increase in the authorized shares of Class A common stock; (ii) provide for Class B common stock with voting rights but no economic interest, which shares were issued to the Original BV LLC Owners on a one-for-one basis with the number of LLC Interests they owned; and (iii) provide for undesignated preferred stock. Refer to Note 7. Stockholders’ equity for further information. •Acquired, by merger, ten entities that were Original BV LLC Owners (Former LLC Owners), for which the Company issued 31,838,589 shares of Class A common stock as merger consideration (IPO Mergers). The only assets held by the Former LLC Owners were 31,838,589 LLC Interests and a corresponding number of shares of Class B common stock. Upon consummation of the IPO Mergers, the 31,838,589 shares of Class B common stock were canceled, and the Company recognized the 31,838,589 LLC Interests at carrying value, as the IPO Mergers are considered to be a recapitalization transaction. The financial statements for periods prior to the IPO and Transactions have been adjusted to combine the previously separate entities for presentation purposes. Prior to the Transactions, Bioventus Inc. had no operations. Interim periods The Company reports quarterly interim periods on a 13-week basis within a standard calendar year. Each annual reporting period begins on January 1 and ends on December 31. Each quarter ends on the Saturday closest to calendar quarter-end, with the exception of the fourth quarter, which ends on December 31. The 13-week quarterly periods for fiscal year 2022 end on April 2, July 2 and October 1. Comparable periods for 2021 ended on April 3, July 3 and October 2. The fourth and first quarters may vary in length depending on the calendar year. Unaudited interim financial information The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, they do not include all information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of the Company’s financial condition and results of operations have been included. Operating results for the periods presented are not necessarily indicative of the results that may be expected for the full year. As such, the information included in this report should be read in conjunction with the Company’s 2021 Annual Report on Form 10-K. The consolidated balance sheet at December 31, 2021 has been derived from the audited consolidated financial statements of the Company, but does not include all the disclosures required by U.S. GAAP. Going Concern The accompanying unaudited consolidated financial statements have been prepared under the going concern basis of accounting, which presumes that the Company’s liquidation is not imminent; however, based on the Company’s current financial position and liquidity sources, including current cash balances, and forecasted future cash flows, the Company is at risk of not being able to make the two initial Deferred Payments for the CartiHeal transaction, each in the principal sum of $50 million, due under the terms of the amended Option and Equity Purchase Agreement no later than July 2023 and September 2023, respectively, which may result in a cross default under the Amendment No. 3 to the Credit and Guaranty Agreement entered into with the Company’s lenders at the time of the CartiHeal transaction. In addition, should the Company fail to meet certain financial thresholds established in the Credit Agreement, the Company may be at risk of violating certain of its financial covenants under that agreement. If any of the financial covenants are not met, or if the Company is otherwise deemed to be in default of its other obligations under that agreement, the aggregate outstanding principal amounts become due and payable to our lenders. Considering current liquidity sources, the Company would not be able to make the Deferred Payments due in connection with the CartiHeal transaction or repay the Company’s total outstanding debt balance in the event of a default. These conditions and events raise substantial doubt about the Company’s ability to continue as a going concern. In light of this, the Company is actively pursuing plans to mitigate these conditions and events, such as considering various cost cutting measures, exploring divestiture opportunities for non-core assets, considering seeking temporary covenant waivers from our lenders, and pursuing strategic options with respect to the CartiHeal transaction such as attempting to renegotiate the timing of the CartiHeal Deferred Payments or exiting that agreement by transferring back to the former CartiHeal owners all of the share capital, intellectual property and other assets of CartiHeal acquired in the transaction pursuant to the escrow and pledge agreements entered into as part of the CartiHeal acquisition if such measures fail; however, there can be no assurances that it is probable these plans will be successfully implemented or that they will successfully mitigate these conditions and events. Therefore, these plans do not alleviate the substantial doubt about the Company’s ability to continue as a going concern. Recent accounting pronouncements The Company has elected to comply with non-accelerated public company filer effective dates of adoption. Therefore, the required effective dates for adopting new or revised accounting standards are generally earlier than when emerging growth companies are required to adopt.
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Balance sheet information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance sheet information | Balance sheet information Cash, cash equivalents and restricted cash A summary of cash and cash equivalents and restricted cash is as follows:
As of December 31, 2021, current restricted cash consisted of an escrow deposit with a financial institution for the purpose of paying a Paycheck Protection Program loan acquired as part of a business combination. This loan was forgiven during the second quarter of 2022. As of December 31, 2021, noncurrent restricted cash consisted of an escrow deposit with a financial institution for the acquisition of CartiHeal (2009) Ltd. Refer to Note 3. Acquisitions and investments for further information. Accounts receivable, net Accounts receivable, net are amounts billed and currently due from customers. The Company records the amounts due net of allowance for credit losses. Collection of the consideration that the Company expects to receive typically occurs within 30 to 90 days of billing. The Company applies the practical expedient for contracts with payment terms of one year or less which does not consider the effects of the time value of money. Occasionally, the Company enters into payment agreements with patients that allow payment terms beyond one year. In those cases, the financing component is not deemed significant to the contract. Accounts receivable, net of allowances, consisted of the following as of:
Due to the short-term nature of its receivables, the estimate of expected credit losses is based on aging of the account receivable balances. The allowance is adjusted on a specific identification basis for certain accounts as well as pooling of accounts with similar characteristics. The Company has a diverse customer base with no single customer representing ten percent or more of sales. The Company has one customer representing approximately 11.6% of the accounts receivable balance as of October 1, 2022. Historically, the Company’s reserves have been adequate to cover credit losses. Changes in credit losses were as follows:
Inventory Inventory consisted of the following as of:
Prepaid and other current assets Prepaid and other current assets consisted of the following as of:
Goodwill Goodwill is evaluated for impairment annually or more frequently if events or changes in circumstances indicate that goodwill might be impaired. The Company assesses goodwill impairment by applying a quantitative impairment analysis comparing the carrying value of the Company’s reporting units to their respective fair values. A goodwill impairment exists if the carrying value of the reporting unit exceeds its fair value. The Company has two reporting units and assesses impairment based upon qualitative factors and if necessary, quantitative factors. A reporting unit's fair value is determined using the income approach and discounted cash flow models by utilizing Level 3 inputs and assumptions such as future cash flows, discount rates, long-term growth rates, market value and income tax considerations. Specifically, the value of each reporting unit is determined on a stand-alone basis from the perspective of a market participant and represents the price estimated to be received in a sale of the reporting unit in an orderly transaction between market participants at the measurement date. On November 8, 2022, due to a significant decline in the Company’s Class A common stock, circumstances became evident that a possible goodwill impairment existed as of the balance sheet date. The Company concluded that the carrying value of the U.S. reporting unit exceeded its fair value. The Company recorded preliminary non-cash goodwill impairment charges of $189,197 within the U.S. reporting unit for both the three and nine months ended October 1, 2022. The impairment was recorded within impairment of goodwill on the consolidated condensed statements of operations and comprehensive (loss) income. Changes in the carrying amounts of goodwill by reportable segment during the nine months ended October 1, 2022 are as follows:
Additions were the result of the acquisition of CartiHeal (2009) Ltd. and purchase accounting adjustments stem from changes in the preliminary fair values of assets acquired and liabilities assumed in previous acquisitions. Refer to Note 3. Acquisitions and investments for further details concerning acquisitions and fair value changes. There were no accumulated goodwill impairment losses as of December 31, 2021. Accrued liabilities Accrued liabilities consisted of the following as of:
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Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions and investments | Acquisitions and investments CartiHeal (2009) Ltd On July 12, 2022, the Company completed the acquisition of 100% of the remaining shares in CartiHeal (2009) Ltd. (CartiHeal), a privately held company headquartered in Israel and the developer of the proprietary Agili-C implant for the treatment of joint surface lesions in traumatic and osteoarthritic joints. The Company previously held an equity interest in CartiHeal’s fully diluted shares with a carrying value of $15,768 and $16,771 as of July 12, 2022 and December 31, 2021, respectively. Net equity losses associated with CartiHeal for the three months ended October 1, 2022 and October 2, 2021 and the nine months ended October 1, 2022 and October 2, 2021, totaled $322, $419, $1,003 and $1,320, respectively, which are included in other (income) expense on the consolidated condensed statements of operations and comprehensive (loss) income. The Company acquired CartiHeal (CartiHeal Acquisition) for an aggregate purchase price of approximately $315,000 and an additional $135,000, becoming payable after closing upon the achievement of a certain sales milestone (Sales Milestone, or CartiHeal Contingent Consideration). The Company paid $100,000 of the aggregate purchase price upon closing consisting of a $50,000 deposit held in trust and $50,000 from a financing arrangement (Refer to Note 4. Financial instruments for further information regarding financing arrangements). The Company also paid approximately $8,622 of CartiHeal’s transaction-related fees and expenses and deferred $215,000 (Deferred Amount) of the aggregate purchase price otherwise due at closing. The Deferred Amount will be paid in five tranches commencing in 2023 and ending no later than 2027 as follows: •$50,000 due upon the earliest to occur — the publication in a peer-reviewed orthopedic journal of an article that presents the results of the pivotal clinical trial (First Paper Milestone) or July 1, 2023; •$50,000 due upon the earliest to occur — the implantation of Agili-C devices in 100 patients in the United States or September 1, 2023; •$25,000 due upon the earliest to occur — the publication in a peer-reviewed orthopedic journal of an article that presents any new or additional clinical data subsequent to the First Paper Milestone with respect to Agili-C (Second Paper Milestone) or January 1, 2025; •$25,000 due upon the earliest to occur — the publication in a peer-reviewed orthopedic journal of an article that presents any new or additional clinical data subsequent to the First and Second Paper Milestone with respect to Agili-C or January 1, 2026; and •$65,000 due upon the earliest to occur — obtaining a U.S. Category 1 Current Procedural Terminology (CPT) code from Centers for Medicare and Medicaid Services (CMS) for Agili-C or January 1, 2027. Pursuant to the CartiHeal Amendment (as defined below), the Company will pay interest on each tranche of the Deferred Amount at a rate of 8.0% annually, until such tranche is paid. The Sales Milestone will be payable upon the achievement of $75,000 in trailing twelve month sales pursuant to the CartiHeal Amendment. The Company had entered into an Option and Equity Purchase Agreement with CartiHeal (Option Agreement) in January 2020 and subsequent amendment in June 2022 (CartiHeal Amendment). The Option Agreement provided the Company with an exclusive option to acquire 100% of CartiHeal’s shares (Call Option), and provided CartiHeal with a put option that would require the Company to purchase 100% of CartiHeal’s shares under certain conditions. In August 2021, CartiHeal achieved pivotal clinical trial success, as defined in the Option Agreement, for the Agili-C implant. In order to preserve the Company’s Call Option, in accordance with the Option Agreement and upon approval of the Company’s Board of Directors (BOD), the Company deposited $50,000 into escrow in August 2021 for the potential acquisition of CartiHeal, which was included in restricted cash on the consolidated balance sheets at December 31, 2021. The fair value of consideration for the CartiHeal Acquisition is comprised of the following:
(a) Remeasurement of the Company’s equity method investment in CartiHeal, net of equity losses as a result of the purchase. The remeasurement included a gain of $23,709 calculated as the difference between the fair value and the carrying value of the Company’s investment in CartiHeal at the acquisition date and was recognized in other income for three and nine months ended on the consolidated condensed statements of operations and comprehensive (loss) income. The fair value was based upon: (i) the consideration transferred to members owning 89.97% of CartiHeal’s fully diluted shares; (ii) calculating the value of CartiHeal’s fully diluted shares based upon the transferred consideration; and (iii) applying the calculated value to the Company’s 10.03% ownership in CartiHeal’s fully diluted shares at the acquisition date. The Company accounted for the CartiHeal Acquisition using the acquisition method of accounting whereby the total purchase price was preliminary allocated to tangible and intangible assets acquired and liabilities assumed based on respective fair values. The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date:
As of October 1, 2022, the purchase price allocation for the CartiHeal Acquisition was preliminary in nature and subject to completion. Adjustments to the current fair value estimates in the above table may occur as the process conducted for various valuations and assessments is finalized, including intangible assets, tax liabilities and other working capital accounts. Nearly 100% of the goodwill represents estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized and is attributable to expected revenue growth in new markets. The goodwill is not expected to be deductible for tax purposes and $55,295 and $6,599 was allocated to the U.S. and International reporting units, respectively. The Company incurred $1,307 and $3,976 in acquisition costs related to CartiHeal during the three and nine months ended October 1, 2022, respectively. CartiHeal’s intangibles consists of the following:
The estimated fair value of the acquired CartiHeal intangibles was determined using an income approach, a valuation technique that estimates the fair value of an asset based on market participant expectations of the cash flows that an asset would generate over its remaining useful life. The determination of the useful lives was based upon consideration of market participant assumptions and transaction specific factors. The aggregate amortization expense related to acquired intangible assets is $6,178 for the remainder of 2022 and $24,713 annually for the years 2023 through 2026. Misonix, Inc. On October 29, 2021, in order to broaden its portfolio, the Company acquired 100% of the capital stock of Misonix, Inc. (Misonix) in a cash-and-stock transaction (the Misonix Acquisition). Misonix manufactures minimally invasive surgical ultrasonic medical devices used for precise bone sculpting, removal of soft and hard tumors and tissue debridement, primarily in the areas of neurosurgery, orthopedic surgery, plastic surgery, wound care and maxillo-facial surgery. Misonix also exclusively distributes skin allografts and wound care products used to support healing of wounds. The fair value of the consideration for the Misonix Acquisition comprised the following:
(a)Closing price of the Company’s Class A common stock as of October 28, 2021. The Company accounted for the Misonix Acquisition using the acquisition method of accounting whereby the total purchase price was preliminarily allocated to tangible and intangible assets acquired and liabilities assumed based on respective fair values. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date:
Nearly 100% of the goodwill represents the estimated future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. The factors contributing to the recognition of goodwill are based on several strategic and synergistic benefits that are expected to be realized from the Misonix Acquisition. The goodwill is not tax deductible and was allocated to the U.S. reporting unit for purposes of the evaluation for any future goodwill impairment. Changes in the preliminary purchase price allocation during the six months ended July 2, 2022 related to a deferred tax asset recognition of $6,448 and a reduction in inventory and property and equipment, net of $1,292 and 291, respectively. The following table summarizes the preliminary fair values of identifiable intangible assets and their useful lives:
The preliminary fair value of the Misonix intellectual property was determined using a variation of the income approach or the multi-period excess earnings method, with projected earnings discounted at a rate of 12.0%. The preliminary fair value of the customer relationship asset was determined using the income approach or the profit-split method, with projected cash flow discounted at a rate of 12.0%. The determination of the useful lives was based upon consideration of market participant assumptions and transaction specific factors. Bioness, Inc. On March 30, 2021, the Company acquired 100% of the capital stock of Bioness, Inc. (Bioness Acquisition) for $48,933 in cash and future contingent consideration payments. Bioness, Inc. (Bioness) is a global leader in neuromodulation and advanced rehabilitation medical devices through its innovative peripheral nerve stimulation therapy and premium advanced rehabilitation solutions. Contingent consideration is comprised of future earn-out payments contingent upon the achievement of certain research and development projects as well as sales milestones related to Bioness products. The Bioness Acquisition Agreement includes maximum earn-out payments of $65,000 as follows: •$15,000 for obtaining FDA approval for U.S. commercial distribution of a certain product for certain indications on or before June 30, 2022; •$20,000 for meeting net sales targets for certain implantable products over a three year period ending on June 30, 2025 at the latest; •Up to $10,000 for meeting net sales milestones for certain implantable products over a three year period ending on June 30, 2025 at the latest; and •$20,000 for maintaining Centers for Medicare & Medicaid Services coverage and reimbursement for certain products at specified levels as of December 31, 2024. In December 2021, it became clear that the $15,000 FDA approval milestone would not be met, therefore, was assigned no value and was recorded as a measurement period adjustment. As of December 31, 2021, the maximum contingent earn-out payment decreased to $50,000 as a result. Consolidated Pro Forma Results The results of operations of Bioness, acquired March 30, 2021, Misonix, acquired October 29, 2021 and CartiHeal, acquired July 12, 2022, have been included in the accompanying consolidated financial statements since their respective acquisition dates. Net losses of CartiHeal included in the nine months ended October 1, 2022 since the acquisition date were $6,812. There are no net sales attributable to CartiHeal in the nine months ended October 1, 2022. Revenue and earnings for the operations of Bioness, Misonix and CartiHeal as if the companies were acquired on January 1, 2021, are as follows:
The historical consolidated financial information of the Company, Misonix and Bioness have been adjusted in the pro forma information to give effect to pro forma events that are (1) directly attributable to both the Misonix and Bioness acquisitions, (2) factually supportable and (3) expected to have a continuing impact on the combined results. The unaudited pro forma results include adjustments to reflect the inventory step-up amortization, the incremental intangible asset amortization to be incurred based on the valuations of the assets acquired, transaction costs that would have been incurred in the prior period, vesting of equity-based compensation that was accelerated due to the Misonix Acquisition, adjustments to financing costs to reflect the new capital structure as well as the income tax effect and the noncontrolling interest impact of these adjustments. These pro forma amounts are not necessarily indicative of the results that would have been obtained if the acquisitions had occurred prior to the beginning of the period presented or that may occur in the future, and do not reflect future synergies, integration costs, or other such costs or savings. Investments VIE The Company had a fully diluted 8.8% ownership of Harbor Medtech Inc.’s (Harbor) Series C Preferred Stock and an exclusive Collaboration Agreement with Harbor, which resulted in the consolidation of Harbor. The Company terminated the Collaboration Agreement on June 8, 2021, which resulted in the deconsolidation of Harbor and the recognition of a $5,674 impairment of Harbor’s long-lived assets. The impairment was recorded within impairment of variable entity assets for the nine months ended October 2, 2021 in the consolidated condensed statements of operations and comprehensive (loss) income, of which $5,176 was attributable to the non-controlling interest. An additional impairment of $1,369, representing the Company’s remaining investment balance in Harbor, was recorded within other (income) expense for the nine months ended October 2, 2021 in the consolidated condensed statements of operations and comprehensive (loss) income. The Company continues to have license rights to certain technology obtained from Harbor and is continuing product development initiated under the Collaboration Agreement.
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Financial instruments |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial instruments | Financial instruments Long-term debt consisted of the following as of:
On July 11, 2022, the Company amended the Credit and Guaranty Agreement, dated as of December 6, 2019, as amended on October 29, 2021 (the Amended 2019 Credit Agreement) in conjunction with the CartiHeal Acquisition. Pursuant to the Amended 2019 Credit Agreement, an $80,000 term loan facility (Term Loan Facility) was extended to the Company to be used for: (i) the financing of the CartiHeal Acquisition; (ii) the payment of related fees and expenses; (iii) repayment of $25,000 on the Revolver; and (iv) working capital needs and general corporate purposes of the Company, including without limitation for permitted acquisitions. The Term Loan and Term Loan Facility (together, Amended Term Loan) will mature on October 29, 2026 (Maturity). The Company may elect either the secured overnight financial rate (SOFR) or base interest rate options for all borrowings as of July 12, 2022, which includes any outstanding balances under the Term Loan, Term Loan Facility and the Revolver. Initial SOFR loans and base rate loans had a margin of 3.25% and 2.25%, respectively, subsequent to July 12, 2022. The Term Loan Facility had an original issue discount of $240 and deferred financing costs of $101. Scheduled principal payments increased due to the Term Loan Facility compared to the scheduled payments in the Company’s 2021 Annual Report on Form 10-K. Additional scheduled principal payments of the Term Loan Facility, which commenced on September 30, 2022, are as follows with the final payment of $50,000 at Maturity:
The Amended 2019 Credit Agreement requires the Company to comply with financial and other covenants. The Company complied with all covenants as of October 1, 2022. The Revolver had no outstanding borrowings as of October 1, 2022 and none at December 31, 2021. The estimated fair value of the Amended Term Loan under the Amended 2019 Credit Agreement as of October 1, 2022 was $413,702. The fair value of these obligations was determined using a discounted cash flow model based on current market interest rates available to the Company. These inputs are corroborated by observable market data for similar obligations and are classified as Level 2 instruments within the fair value hierarchy. The Company enters into interest rate swap agreements to limit its exposure to changes in the variable interest rate on its long-term debt. The Company has one non-designated interest rate swap agreement and has no other active derivatives. The swap is carried at fair value on the balance sheet (Refer to Note 5. Fair value measurements) with changes in fair value recorded as interest income or expense within the consolidated condensed statements of operations and comprehensive (loss) income. Net interest income of $2,222 and $81 was recorded related to the change in fair value of the interest rate swap for the three months ended October 1, 2022 and October 2, 2021, respectively. Net interest income of $6,418 and $1,391 was recorded related to the change in fair value of the interest rate swap for the nine months ended October 1, 2022 and October 2, 2021, respectively. The notional amount of the swap totaled $100,000, or 23.4% of the Term Loan outstanding principal at October 1, 2022. The swap locked in the variable portion of the interest rate on the $100,000 notional at 0.64%.
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Fair value measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements | Fair value measurements The process for determining fair value has not changed from that described in the Company’s 2021 Annual Report on Form 10-K. There were no assets measured at fair value on a recurring basis and there were no liabilities valued at fair value using Level 1 inputs. The following table provides information for assets and liabilities measured at fair value on a recurring basis using Level 2 and Level 3 inputs:
Interest rate swap The Company values interest rate swaps using discounted cash flows. Forward curves and volatility levels are used to estimate future cash flows that are not certain. These are determined using observable market inputs when available and based on estimates when not available. The fair value of the swap was recorded in the Company’s consolidated condensed balance sheets within prepaid and other current assets. Changes in fair value are recognized as interest income or expense within the consolidated condensed statements of operations and comprehensive (loss) income. Deferred Amount The Deferred Amount resulting from the CartiHeal Acquisition was calculated based on the total amount payable on each due date for the five payment tranches including applicable interest as described in Note 3. Acquisitions and investments. Bioness & CartiHeal contingent consideration The Company initially values contingent consideration related to business combinations using a probability-weighted calculation of potential payment scenarios discounted at rates reflective of the risks associated with the expected future cash flows for certain milestones. For other milestones, the Company used a variation of the income approach where revenue was simulated in a risk-neutral framework using Geometric Brownian Motion, a stock price behavior model. Key assumptions used to estimate the fair value of contingent consideration include projected financial information, market data and the probability and timing of achieving the specific targets as discussed in Note 3. Acquisitions and investments. After the initial valuation, the Company generally uses its best estimate to measure contingent consideration at each subsequent reporting period using unobservable Level 3 inputs. Unobservable inputs A summary of unobservable Level 3 inputs utilized for the above liabilities are as follows:
Significant changes in these assumptions could result in a significantly higher or lower fair value. The contingent consideration reported in the above table resulted from the Bioness Acquisition on March 30, 2021 and the CartiHeal Acquisition on July 12, 2022. Contingent consideration is adjusted quarterly based upon the passage of time or the anticipated success or failure of achieving certain milestones. Changes in contingent consideration related to the Bioness Acquisition totaled $278 and $820 for the three and nine months ended October 1, 2022, respectively, and $651 and $1,292 for the three and nine months ended October 2, 2021, respectively, were recorded as the change in fair value of contingent consideration within the consolidated condensed statements of operations and comprehensive (loss) income. Changes in contingent consideration related to the CartiHeal Acquisition totaled $2,864 for three and nine months ended October 2, 2021. Management incentive plan (MIP) and liability-classified awards BV LLC had operated two equity-based compensation plans, the management incentive plan (MIP) and the BV LLC Phantom Profits Interest Plan (Phantom Plan and, together with the MIP, the Plans), which were terminated on February 11, 2021 in connection with the Company’s IPO. Awards granted under the MIP Plan and the 2015 Phantom Units were liability-classified and the 2012 Phantom Units were equity-classified. Prior to the IPO and during the nine months ended October 2, 2021, the Company settled the remaining 183,078 units with the sole MIP awardee for $10,802. No awards under the Plans were granted post-IPO and the Phantom Plan awards were settled 12 months following the termination. Vested awardees whose BV LLC employment terminated prior to the IPO had their awards settled in March 2022 for $10,413, which was included in accrued equity-based compensation on the consolidated balance sheets at December 31, 2021. Awardees that were active BV LLC employees at the IPO were entitled to receive an aggregate of 798,422 shares of Class A common stock. In February 2022, awardees received 538,203 shares of Class A common stock, of which 260,219 shares were withheld to satisfy employee payroll taxes.
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Equity-based compensation |
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Compensation And Employee Benefit Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity-based compensation | Equity-based compensation Terminated plans Prior to the IPO, BV LLC operated two equity-based compensation plans, the MIP and the Phantom Plan, which were terminated on February 11, 2021 in conjunction with the IPO. Prior to the Plans’ termination, during the nine months ended October 2, 2021, (i) the Company granted 90,000 Phantom Plan units; (ii) there were no MIP awards granted; (iii) 900 Phantom Plan units were forfeited; and (iv) other Phantom Units were redeemed for $479. Compensation expense related to the Phantom Plan totaled $829 for the nine months ended October 2, 2021. This amount excludes the $25,185 decrease in fair market value of accrued equity-based compensation due to adjustments to reflect the difference between the expected pricing from the pending IPO and the actual offering price, of which $1,777 was recorded in research and development expense within the consolidated condensed statements of operations and comprehensive (loss) income for the nine months ended October 2, 2021. 2021 Plan The Company operates an equity-based compensation plan (2021 Plan), which allows for the issuance of stock options (incentive and nonqualified), restricted stock, dividend equivalents, restricted stock units (RSUs), other stock-based awards, and cash awards (collectively, Awards). As of October 1, 2022, 11,873,784 shares of Class A common stock were authorized to be awarded and 2,182,935 shares were available for Awards. Equity-based compensation expense for Awards granted under the 2021 Plan for the three months ended October 1, 2022 and October 2, 2021 and the nine months ended October 1, 2022 and October 2, 2021, totaled $4,512, $5,799, $13,765 and $13,521, respectively. The expense is primarily included in selling, general and administrative expense with a nominal amount in research and development expense on the consolidated condensed statements of operations and comprehensive (loss) income based upon the classification of the employee. There were $23 and $2,313 income tax benefit related to this expense for the three and nine months ended October 1, 2022, respectively. There was no income tax benefit related to equity-based compensation expense for the three and nine months ended October 2, 2021. Restricted Stock Units During the three and nine months ended October 1, 2022, the Company granted time-based RSUs which vest at various dates through September 6, 2026. RSU compensation expense is recognized over the vesting period, which is typically between 1 and 4 years. Unamortized compensation expense related to the RSUs totaled $11,195 at October 1, 2022, and is expected to be recognized over a weighted average period of approximately 2.98 years. A summary of the RSU award activity for the nine months ended October 1, 2022 is as follows (number of units in thousands):
Stock Options During the nine months ended October 1, 2022, the Company granted time-based stock options which vest over 2 to 4 years following the date of grant and expire within 10 years. The fair value of time-based stock options is determined using the Black-Scholes valuation model, with such value recognized as expense over the service period, which is typically 2 to 4 years, net of actual forfeitures. A summary of the Company’s assumptions used in determining the fair value of the stock options granted during the nine months ended October 1, 2022 is shown in the following table.
The weighted-average grant date fair value of options granted during the nine months ended October 1, 2022 was $4.57 per share. The expected term of the options granted is estimated using the simplified method. Expected volatility is based on the historical volatility of the Company’s peers common stock. The risk-free interest rate is determined based upon a constant U.S. Treasury security rate with a contractual life that approximates the expected term of the option. Unamortized compensation expense related to the options totaled $15,044 at October 1, 2022, and is expected to be recognized over a weighted average period of approximately 3.17 years. A summary of stock option activity is as follows for the nine months ended October 1, 2022 (number of options in thousands):
The aggregate intrinsic value is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s Class A common stock for options that had exercise prices lower than $7.00 per share, the closing price of the Company’s Class A common stock on September 30, 2022. Employee Stock Purchase Plan The Company operates a non-qualified Employee Stock Purchase Plan (ESPP), which provides for the issuance of shares of the Company’s Class A common stock to eligible employees of the Company that elect to participate in the plan and purchase shares of Class A common stock through payroll deductions at a discounted price. As of October 1, 2022, the aggregate number of shares reserved for issuance under the ESPP was 275,372. A total of 69,334 and 172,153 shares were issued and $136 and $388 of expense was recognized during the three and nine months ended October 1, 2022, respectively. A total of 34,640 and 58,703 shares were issued and $139 and $214 of expense was recognized during the three and nine months ended October 2, 2021.
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Stockholders’ equity |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ equity | Stockholders’ equity Amendment and restatement of certificate of incorporation On February 16, 2021, the Company amended and restated its certificate of incorporation to, among other things, provide for: (i) the authorization of 250,000,000 shares of Class A common stock with a par value of $0.001 per share; (ii) the authorization of 50,000,000 shares of Class B common stock with a par value of $0.001 per share; (iii) the authorization of 10,000,000 shares of undesignated preferred stock that may be issued from time to time by the BOD in one or more series; and (iv) the establishment of a classified BOD, divided into three classes, each of whose members will serve for staggered three-year terms. Holders of Class A and Class B common stock are entitled to one vote per share and, except as otherwise required, will vote together as a single class on all matters on which stockholders generally are entitled to vote. Holders of Class B common stock are not entitled to receive dividends and will not be entitled to receive any distributions upon the liquidation, dissolution or winding up of the Company. Shares of Class B common stock may only be issued to the extent necessary to maintain the one-to-one ratio between the number of LLC Interests and the number of shares of Class B common stock held by the Continuing LLC Owner. Shares of Class B common stock are transferable only together with an equal number of LLC Interests. Shares of Class B common stock will be canceled on a one-for-one basis upon the redemption or exchange of any outstanding LLC Interests. The Company must, at all times, maintain a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of LLC Interests owned by the Company. BV LLC recapitalization As described in Note 1. Organization, on February 16, 2021, the Company amended and restated the BV LLC Agreement to, among other things, (i) provide for the new LLC Interests; (ii) exchange all of the then-existing membership interests of the Original BV LLC Owners for new LLC Interests; and (iii) appoint Bioventus Inc. as the sole managing member of BV LLC. The BV LLC Agreement also provides that holders of LLC Interests may, from time to time, require the Company to redeem all or a portion of their LLC Interests for newly-issued shares of Class A common stock on a one-for-one basis. The Company may elect to settle any such redemption in shares of Class A common stock or in cash. The amendment also requires that the Company, at all times, maintain (i) a one-to-one ratio between the number of outstanding shares of Class A common stock and the number of LLC Interests owned by the Company and (ii) a one-to-one ratio between the number of shares of Class B common stock owned by the Continuing LLC Owner and the number of LLC Interests owned by the Continuing LLC Owner. Noncontrolling interest In connection with any redemption, the Company will receive a corresponding number of LLC Interests, increasing its ownership interest in BV LLC. Future redemptions of LLC Interests will result in a change in ownership and reduce the amount recorded as noncontrolling interest and increase additional paid-in capital. There were no redemptions during the nine months ended October 1, 2022 or during the year ended December 31, 2021. The following table summarizes the ownership interest in BV LLC as of October 1, 2022 and December 31, 2021 (number of units in thousands):
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Earnings per share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings per share | Earnings per share The following table sets forth the computation of basic and diluted loss per share of Class A common stock for the periods presented (amounts in thousands, except share and per share data):
Shares of Class B common stock do not share in the losses of the Company and are therefore not participating securities. As such, separate presentation of basic and diluted losses per share of Class B common stock under the two-class method has not been presented. The following number of weighted-average potentially dilutive shares as of October 1, 2022 and October 2, 2021 were excluded from the calculation of diluted loss per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion:
(a)Class A Shares reserved for future issuance upon redemption or exchange of LLC Interests by the Continuing LLC Owner.
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Restructuring costs |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring costs | Restructuring costs Restructuring costs are not allocated to the Company’s reportable segments as they are not part of the segment performance measures regularly reviewed by management. These charges are included in restructuring costs in the consolidated condensed statements of operations and comprehensive (loss) income. The Company adopted restructuring plans for businesses acquired to reduce headcount, reorganize management structure and consolidate certain facilities during the second half of 2021 (the 2021 Restructuring Plan) and during the first quarter of 2022 (the 2022 Restructuring Plan). The Company planned total pre-tax charges for the 2021 Restructuring Plan to be $3,500, of which $92 and $692 was recognized in the three and nine months ended October 1, 2022, respectively, and $1,798 was recorded during the three and nine months ended October 2, 2021. Expected pre-tax charges related to the 2022 Restructuring Plan is $2,300, of which $483 and $1,467 was recognized during the three and nine months ended October 1, 2022, respectively. The Company’s restructuring charges and payments for plans related to businesses recently acquired comprised of the following:
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Income taxes |
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Oct. 01, 2022 | |
Income Tax Disclosure [Abstract] | |
Income taxes | Income taxes As a result of the Transactions, Bioventus Inc. became the sole managing member of BV LLC, which is treated as a partnership for U.S. federal and most applicable state and local income tax purposes. As a partnership, BV LLC is not subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by BV LLC is passed through to and included in the taxable income or loss of its members, including the Company following the Transactions, on a pro rata basis. Bioventus Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes with respect to its allocable share of any taxable income of BV LLC following the Transactions. The Company also is subject to taxes in foreign jurisdictions. The tax provision for interim periods is determined using an estimate of the Company's annual effective tax rate, adjusted for discrete items, if any, that arise during the period. Each quarter, the Company updates its estimate of its annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period. The quarterly tax provision, and estimate of the Company's annual effective tax rate, are subject to variation due to several factors, including variability in pre-tax income (or loss), the mix of jurisdictions to which such income relates, changes in how the Company conducts business, and tax law developments. For the three months ended October 1, 2022 and October 2, 2021 and the nine months ended October 1, 2022 and October 2, 2021, the Company's effective tax rate was 22.3%, 28.0%, 21.3% and 6.2%, respectively. The decrease for the three months ended October 1, 2022 was primarily due to changes in our forecasted effective rate and a net increase in reserve for uncertain tax positions. The change for the nine months ended October 1, 2022 compared to nine months ended October 2, 2021 was primarily due to changes in our forecasted effective rate, compared to capitalized expenses resulting from the Company’s IPO in 2021. Tax Receivable Agreement The Company expects to obtain an increase in the share of the tax basis of the assets of BV LLC when LLC Interests are redeemed or exchanged by the Continuing LLC Owner and other qualifying transactions. This increase in tax basis may have the effect of reducing the amounts that the Company would otherwise pay in the future to various tax authorities. The increase in tax basis may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. On February 16, 2021, the Company entered into a tax receivable agreement (TRA) with the Continuing LLC Owner that provides for the payment by the Company to the Continuing LLC Owner of 85% of the amount of tax benefits, if any, that the Company actually realizes as a result of (i) increases in the tax basis of assets of BV LLC resulting from any redemptions or exchanges of LLC Interests or any prior sales of interests in BV LLC; and (ii) certain other tax benefits related to our making payments under the TRA. The Company will maintain a full valuation allowance against deferred tax assets related to the tax attributes generated as a result of redemptions of LLC Interests or exchanges described above until it is determined that the benefits are more-likely-than-not to be realized. As of October 1, 2022, the Continuing LLC Owner had not exchanged LLC Interests for shares of Class A common stock and therefore the Company had not recorded any liabilities under the TRA.
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Commitments and contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and contingencies | Commitments and contingencies Leases The Company leases its office facilities as well as other property, vehicles and equipment under operating leases. The Company also leases certain office equipment under nominal finance leases. The remaining lease terms range from 1 month to 6 years. The components of lease cost were as follows:
(a)Includes variable lease cost and sublease income, which are immaterial. Supplemental cash flow information and non-cash activity related to operating leases were as follows:
Supplemental balance sheet and other information related to operating leases were as follows:
Governmental and legal contingencies In the normal course of business, the Company periodically becomes involved in various claims and lawsuits, and governmental proceedings and investigations that are incidental to the business. The Company accrues a liability when a loss is considered probable and the amount can be reasonably estimated. When a material loss contingency is reasonably possible but not probable, the Company does not record a liability, but instead discloses the nature and amount of the claim, and an estimate of the possible loss or range of loss, if such an estimate can be made. Legal fees are expensed as incurred. With respect to governmental proceedings and investigations, like other companies in the industry, the Company is subject to extensive regulation by national, state and local governmental agencies in the U.S. and in other jurisdictions in which the Company and its affiliates operate. As a result, interaction with governmental agencies is ongoing. The Company’s standard practice is to cooperate with regulators and investigators in responding to inquiries. The Company is presently unable to predict the duration, scope, or result of the following matters. As such, the Company is presently unable to develop a reasonable estimate of a possible loss or range of losses, if any, related to these matters. While the Company intends to defend these matters vigorously, the outcome of such litigation or any other litigation is necessarily uncertain, are not within the Company’s complete control and might not be known for extended periods of time. In the opinion of management, the outcome of any existing claims and legal or regulatory proceedings, other than the specific matters described below, if decided adversely, is not expected to have a material adverse effect on the Company's business, financial condition, results of operations, or cash flows. Bioness Patent Litigation On June 15, 2022, the Company, through its subsidiary Bioness, filed a lawsuit in the United States District Court for the Eastern District of Virginia against Aretech, LLC (“Aretech”) alleging infringement by Aretech of various patents related the Bioness’ Vector Gait and Safety Support System®. On August 8, 2022, Aretech filed an answer to the lawsuit denying infringement and asserting various affirmative defenses and counterclaims to the Bioness complaint. Bioness filed a motion to dismiss the defendant’s counterclaims on September 28, 2022. In response to Bioness’ motion to dismiss the counterclaims, on October 19, 2022, Aretech filed an amended answer and counterclaims. The Company is currently reviewing the amendments and plan to aggressively defend its patents in the litigation. Misonix stockholder On September 15, 2021, a purported stockholder of Misonix filed an action in the United States District Court for the Eastern District of New York, captioned Stein v. Misonix, Inc., et al., Case No. 2:21-cv-05127 (E.D.N.Y.) (the Stein Complaint). The Stein Complaint named Misonix and members of its board of directors as defendants. The Stein Complaint was dismissed on April 6, 2022. On September 16, 2021, a purported stockholder of Misonix filed an action in the United States District Court for the Southern District of New York, captioned Ciccotelli v. Misonix, Inc. et al., Case No. 1:21-cv-07773 (S.D.N.Y.) (the Ciccotelli Complaint) against Misonix, members of its board of directors, the Company, and its subsidiaries, Merger Sub I and Merger Sub II, as defendants. Plaintiff voluntarily dismissed the Ciccotelli Complaint on November 10, 2021. On October 12, 2021, another purported stockholder of Misonix filed an action in the United States District Court for the Eastern District of New York, captioned Rubin v. Misonix, Inc. et al., Case No. 1:21-cv-05672 (S.D.N.Y.) (the Rubin Complaint) and on October 15, 2021, another purported stockholder of Misonix filed an action in the United States District Court for the Southern District of New York, captioned Taylor v. Misonix, Inc. et al., Case No. 1:21-cv-08513 (S.D.N.Y.) (the Taylor Complaint). The Rubin Complaint and the Taylor Complaint name Misonix and members of its board of directors as defendants. Plaintiffs voluntarily dismissed the Rubin and Taylor Complaints on January 21, 2022 and February 18, 2022, respectively. The complaints asserted claims under Section 14(a) and Section 20(a) of the Exchange Act and SEC Rule 14a-9, challenging the adequacy of disclosures in the proxy statement/prospectus filed with the SEC on September 8, 2021 or the Definitive Proxy Statement filed with the SEC on September 24, 2021, regarding Misonix and/or Bioventus’ projections and J.P. Morgan’s financial analysis. The complaints had sought, among other relief, (i) injunctive relief preventing the parties from proceeding with the merger; (ii) rescission in the event that the merger is consummated; and (iii) an award of costs, including attorneys’ and experts’ fees. Misonix former distributor On March 23, 2017, Misonix’s former distributor in China, Cicel (Beijing) Science & Technology Co., Ltd., filed a lawsuit against Misonix and certain of its officers and directors in the United States District Court for the Eastern District of New York. The complaint alleged that Misonix improperly terminated its contract with the former distributor. The complaint sought various remedies, including compensatory and punitive damages, specific performance and preliminary and post judgment injunctive relief, and asserted various causes of action, including breach of contract, unfair competition, tortious interference with contract, fraudulent inducement, and conversion. On October 7, 2017, the court granted Misonix’s motion to dismiss each of the tort claims asserted against Misonix, and also granted the individual defendants’ motion to dismiss all claims asserted against them. On January 23, 2020, the Court granted Cicel’s motion to amend its complaint, to include claims for alleged defamation and theft of trade secrets in addition to the breach of contract claim. Discovery in the matter ended on August 5, 2021. On January 20, 2022, the Court granted Misonix’s summary judgment motion on Cicel’s breach of contract and defamation claims. Cicel’s motion for reconsideration of the Court’s summary judgment ruling in Misonix’s favor was dismissed by the Court on April 29, 2022. On July 18, 2022, Cicel voluntarily dismissed the remaining claim for trade secret theft and stated its intention to appeal the Court’s January 20, 2022 ruling on the breach of contract and defamation claims to the Court of Appeals. The Company believes that it has various legal and factual defenses to these claims and intends to vigorously defend any appeal of the lower court’s summary judgment rulings in its favor. Bioness shareholder Prior to closing the Bioness Acquisition, Bioness had been named as a defendant in a lawsuit, for which the Company is indemnified under the indemnification provisions contained in the Bioness Merger Agreement. The case relates to an action brought in February 2021 in the Delaware State Court of Chancery by a former minority shareholder and director of Bioness, seeking a temporary restraining order contesting the acquisition of Bioness. While the complaint to block the Bioness acquisition was dismissed by the court, a separate action was brought against the Company under the indemnification provisions of the Bioness Certificate of Incorporation to recover attorney fees and other expenses totaling approximately $2,400 incurred by the director and shareholder in connection with the dismissed case. On August 19, 2021, the court issued a ruling granting, in part, plaintiff’s motion for summary judgment, awarding plaintiff attorney’s fees and related expenses incurred in connection with performance of the plaintiff’s directorial duties, and denying fees and expenses incurred in a non-director capacity. In its ruling, the Court’s order also directed the parties to agree upon a process that will govern the payment of and challenges to plaintiff’s payment requests and required Bioness to pay 50% of the demanded amount into escrow if more than 50% of the total invoiced amount was in dispute. Pursuant to the court’s order, to date, Bioness has paid approximately $1,200 into escrow. On November 1, 2022, at hearing before Delaware State Court of Chancery, the court ruled in favor of the former Bioness director awarding attorney’s fees in connection with the underlying pre-merger litigation and the advancement action in the amounts claimed, less approximately $50. We are currently evaluating an appeal of the court’s ruling. On February 8, 2022, the above referenced minority shareholder of Bioness filed another action in the Delaware State Court of Chancery in connection with our acquisition of Bioness. This action names the former Bioness directors, the Alfred E. Mann Trust (Trust), which was the former majority shareholder of Bioness, the trustees of the Trust and Bioventus as defendants. The complaint alleges, among other things, that the individual directors, the Trust, and the trustees breached their fiduciary duty to the plaintiff in connection with their consideration and approval of our transaction. The complaint also alleges that we aided and abetted the other defendants in breaching their fiduciary duties to the plaintiff and that we breached the Merger Agreement by failing to pay the plaintiff its pro rata share of the merger consideration. We believe that we are indemnified under the indemnification provisions contained in the Bioness Merger Agreement for these claims. On July 20, 2022, we filed a motion to dismiss all claims made against us on various grounds, as did all the other named defendants in the suit. The Court has not yet ruled on any of these motions. We also believe that there are various legal and factual defenses to the claims plaintiff made against us and intend to defend ourselves vigorously. Other matters On November 10, 2021, the Company entered into an asset purchase agreement for an HA product and made an upfront payment of $853. An additional payment of $853 was made in 2022 upon the transfer of certain seller customer data. If the Company is able to obtain a Medical Device Regulation Certification for the product, $1,707 will be paid to the seller within five days. The Company is required to pay royalties through 2026 of 5.0% on the first $569 in sales and 2.5% thereafter. On August 23, 2019, the Company was assigned a third-party license on a product currently in development and the Company is subject to a 3% royalty on certain commercial sales, or a nominal minimum amount per quarter, beginning in 2023. On May 29, 2019, the Company and the Musculoskeletal Transplant Foundation, Inc. d/b/a MTF Biologics (MTF), entered into a collaboration and development agreement to develop one or more products for orthopedic application to be commercialized by the Company and supplied by MTF (the Development Agreement). The first phase has been completed, but during the second quarter of 2022, the Company elected to discontinue the development of MOTYS, the initial product candidate under development. On October 21, 2022, the Company provided notice to MTF of termination of the Development Agreement and the related cGTP Commercial Supply Agreement with MTF for MOTYS, effective December 20, 2022. On December 9, 2016, the Company entered into an amended and restated license agreement for the exclusive U.S. distribution and commercialization rights of a single injection osteoarthritis (OA) product with the supplier of the Company’s single injection OA product for the non-U.S. market. The agreement requires the Company to meet annual minimum purchase requirements and pay royalties on net sales. Royalties related to this agreement during the three months ended October 1, 2022 and October 2, 2021 and nine months ended October 1, 2022 and October 2, 2021 totaled $3,813, $3,677, $11,228 and $9,602, respectively. These royalties are included in cost of sales within the consolidated condensed statements of operations and comprehensive (loss) income. As part of a supply agreement entered on February 9, 2016 for the Company’s three injection OA product, the Company is subject to annual minimum purchase requirements for 10 years. After the initial 10 years, the agreement will automatically renew for an additional 5 years unless terminated by the Company or the seller in accordance with the agreement. As part of a supply agreement for the Company’s five injection OA product that was amended and restated on December 22, 2020, the Company is subject to annual minimum purchase requirements for 8 years. The Company has an exclusive license agreement for bioactive bone graft putty. The Company is required to pay a royalty on all commercial sales revenue from the licensed products with a minimum annual royalty payment through 2023, the date the agreement will expire, upon the expiration of the patent held by the licensor. These royalties are included in cost of sales on the consolidated condensed statements of operations and comprehensive (loss) income. From time to time, the Company causes letters of credit (LOCs) to be issued to provide credit support for guarantees, contractual commitments and insurance policies. The fair values of the LOCs reflect the amount of the underlying obligation and are subject to fees payable to the issuers, competitively determined in the marketplace. As of October 1, 2022 and December 31, 2021, the Company had one LOC outstanding for a nominal amount. The Company currently maintains insurance for risks associated with the operation of its business, provision of professional services and ownership of property. These policies provide coverage for a variety of potential losses, including loss or damage to property, bodily injury, general commercial liability, professional errors and omissions and medical malpractice. The Company is self-insured for health insurance covering most of its employees located in the United States. The Company maintains stop-loss insurance on a “claims made” basis for expenses in excess of $200 per member per year.
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Revenue recognition |
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Revenue recognition | Revenue recognition Our policies for recognizing sales have not changed from those described in the Company’s 2021 Annual Report on Form 10-K. The Company attributes net sales to external customers to the U.S. and to all foreign countries based on the legal entity from which the sale originated. The following table presents the Company’s net sales disaggregated by major products (Vertical) within each segment as follows:
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Segments |
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segments | SegmentsThe Company’s two reportable segments are U.S. and International. The Company’s products are primarily sold to orthopedists, musculoskeletal and sports medicine physicians, podiatrists, neurosurgeons and orthopedic spine surgeons, as well as to their patients. The Company does not disclose segment information by asset as the Chief Operating Decision Maker does not review or use it to allocate resources or to assess the operating results and financial performance. Segment adjusted EBITDA is the segment profitability metric reported to the Company’s Chief Operating Decision Maker for purposes of decisions about allocation of resources to, and assessing performance of, each reportable segment. The following table presents segment adjusted EBITDA reconciled to (loss) income before income taxes:
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Subsequent events |
9 Months Ended |
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Oct. 01, 2022 | |
Subsequent Events [Abstract] | |
Subsequent events | Subsequent eventsOn October 28, 2022, the Company terminated its non-designated interest rate swap agreement and subsequently received a settlement of $7,738. |
Organization (Policies) |
9 Months Ended |
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Oct. 01, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Going ConcernThe accompanying unaudited consolidated financial statements have been prepared under the going concern basis of accounting, which presumes that the Company’s liquidation is not imminent |
Recent accounting pronouncements | Recent accounting pronouncements The Company has elected to comply with non-accelerated public company filer effective dates of adoption. Therefore, the required effective dates for adopting new or revised accounting standards are generally earlier than when emerging growth companies are required to adopt.
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Balance sheet information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Cash and Cash Equivalents | A summary of cash and cash equivalents and restricted cash is as follows:
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Schedule of Restrictions on Cash and Cash Equivalents | A summary of cash and cash equivalents and restricted cash is as follows:
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Schedule of Accounts Receivable | Accounts receivable, net of allowances, consisted of the following as of:
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Summary of Accounts Receivable, Allowance for Credit Loss | Changes in credit losses were as follows:
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Schedule of Inventory | Inventory consisted of the following as of:
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Schedule of Prepaid and Other Current Assets | Prepaid and other current assets consisted of the following as of:
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Schedule of Changes in the Carrying Amounts of Goodwill by Reportable Segment | Changes in the carrying amounts of goodwill by reportable segment during the nine months ended October 1, 2022 are as follows:
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Schedule of Accrued Liabilities | Accrued liabilities consisted of the following as of:
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Acquisitions and investments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisitions, by Acquisition | The fair value of consideration for the CartiHeal Acquisition is comprised of the following:
(a) Remeasurement of the Company’s equity method investment in CartiHeal, net of equity losses as a result of the purchase. The remeasurement included a gain of $23,709 calculated as the difference between the fair value and the carrying value of the Company’s investment in CartiHeal at the acquisition date and was recognized in other income for three and nine months ended on the consolidated condensed statements of operations and comprehensive (loss) income. The fair value was based upon: (i) the consideration transferred to members owning 89.97% of CartiHeal’s fully diluted shares; (ii) calculating the value of CartiHeal’s fully diluted shares based upon the transferred consideration; and (iii) applying the calculated value to the Company’s 10.03% ownership in CartiHeal’s fully diluted shares at the acquisition date. The fair value of the consideration for the Misonix Acquisition comprised the following:
(a)Closing price of the Company’s Class A common stock as of October 28, 2021.
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Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed at the acquisition date:
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Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | CartiHeal’s intangibles consists of the following:
The following table summarizes the preliminary fair values of identifiable intangible assets and their useful lives:
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Schedule of Business Acquisition, Pro Forma Information | Revenue and earnings for the operations of Bioness, Misonix and CartiHeal as if the companies were acquired on January 1, 2021, are as follows:
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Financial instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | Long-term debt consisted of the following as of:
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Schedule of Maturities of Long-term Debt | Additional scheduled principal payments of the Term Loan Facility, which commenced on September 30, 2022, are as follows with the final payment of $50,000 at Maturity:
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Fair value measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table provides information for assets and liabilities measured at fair value on a recurring basis using Level 2 and Level 3 inputs:
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Schedule of Fair Value Measurement Inputs and Valuation Techniques | After the initial valuation, the Company generally uses its best estimate to measure contingent consideration at each subsequent reporting period using unobservable Level 3 inputs. Unobservable inputs A summary of unobservable Level 3 inputs utilized for the above liabilities are as follows:
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Equity-based compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation And Employee Benefit Plans [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Nonvested Restricted Stock Units Activity | A summary of the RSU award activity for the nine months ended October 1, 2022 is as follows (number of units in thousands):
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | A summary of the Company’s assumptions used in determining the fair value of the stock options granted during the nine months ended October 1, 2022 is shown in the following table.
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Schedule of Stock Options Roll Forward | A summary of stock option activity is as follows for the nine months ended October 1, 2022 (number of options in thousands):
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Stockholders’ equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Other Ownership Interests | The following table summarizes the ownership interest in BV LLC as of October 1, 2022 and December 31, 2021 (number of units in thousands):
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Earnings per share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share | The following table sets forth the computation of basic and diluted loss per share of Class A common stock for the periods presented (amounts in thousands, except share and per share data):
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Schedule of Antidilutive Securities | The following number of weighted-average potentially dilutive shares as of October 1, 2022 and October 2, 2021 were excluded from the calculation of diluted loss per share because the effect of including such potentially dilutive shares would have been antidilutive upon conversion:
(a)Class A Shares reserved for future issuance upon redemption or exchange of LLC Interests by the Continuing LLC Owner.
|
Restructuring costs (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | The Company’s restructuring charges and payments for plans related to businesses recently acquired comprised of the following:
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Commitments and contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Lease, Cost | The components of lease cost were as follows:
(a)Includes variable lease cost and sublease income, which are immaterial. Supplemental cash flow information and non-cash activity related to operating leases were as follows:
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Schedule of Assets and Liabilities, Lessee | Supplemental balance sheet and other information related to operating leases were as follows:
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Revenue recognition (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disaggregation of Revenue | The following table presents the Company’s net sales disaggregated by major products (Vertical) within each segment as follows:
|
Segments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Oct. 01, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation of Operating Profit (Loss) from Segments to Consolidated | The following table presents segment adjusted EBITDA reconciled to (loss) income before income taxes:
|
Balance sheet information - Cash, cash equivalents and restricted cash (Details) - USD ($) $ in Thousands |
Oct. 01, 2022 |
Dec. 31, 2021 |
Oct. 02, 2021 |
Dec. 31, 2020 |
---|---|---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 34,359 | $ 43,933 | ||
Restricted cash | ||||
Current | 23 | 5,280 | ||
Noncurrent | 0 | 50,000 | ||
Cash, cash equivalents, and restricted cash | $ 34,382 | $ 99,213 | $ 130,917 | $ 86,839 |
Balance sheet information - Components of accounts receivable (Details) - USD ($) $ in Thousands |
Oct. 01, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts receivable | $ 138,029 | $ 128,365 |
Less: Allowance for credit losses | (5,844) | (3,402) |
Accounts receivable, net | $ 132,185 | $ 124,963 |
Balance sheet information - Components of accounts receivable (Narrative) (Details) |
9 Months Ended |
---|---|
Oct. 01, 2022 | |
Accounts Receivable | Customer | Customer One | |
Concentration Risk [Line Items] | |
Concentration risk percentage | 11.60% |
Balance sheet information - Allowance for credit loss (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | $ (5,292) | $ (3,019) | $ (3,402) | $ (3,990) |
(Provision) recovery | (1,369) | (221) | (3,874) | 138 |
Write-offs | 1,082 | 243 | 1,907 | 927 |
Recoveries | (265) | (65) | (475) | (137) |
Ending balance | $ (5,844) | $ (3,062) | $ (5,844) | $ (3,062) |
Balance sheet information - Inventory (Details) - USD ($) $ in Thousands |
Oct. 01, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials and supplies | $ 17,380 | $ 12,213 |
Finished goods | 60,812 | 50,805 |
Gross | 78,192 | 63,018 |
Excess and obsolete reserves | (1,240) | (1,330) |
Inventory, net | $ 76,952 | $ 61,688 |
Balance sheet information - Prepaid and other current assets (Details) - USD ($) $ in Thousands |
Oct. 01, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Prepaid taxes | $ 4,492 | $ 12,236 |
Prepaid and other current assets | 23,071 | 15,003 |
Prepaid and other current assets | $ 27,563 | $ 27,239 |
Balance sheet information - Goodwill (Narrative) (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2022
USD ($)
|
Oct. 02, 2021
USD ($)
|
Oct. 01, 2022
USD ($)
reporting_unit
|
Oct. 02, 2021
USD ($)
|
|
Goodwill [Line Items] | ||||
Number of reporting units | reporting_unit | 2 | |||
Impairment of goodwill | $ (189,197) | $ 0 | $ (189,197) | $ 0 |
U.S. | ||||
Goodwill [Line Items] | ||||
Impairment of goodwill | $ (189,197) | $ (189,197) |
Balance sheet information - Changes in the carrying amounts of goodwill by reportable segment (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Goodwill [Roll Forward] | ||||
Beginning balance | $ 147,623 | |||
Additions | 61,894 | |||
Deconsolidation of noncontrolling interest | (494) | |||
Purchase accounting adjustments | (4,467) | |||
Impairment of goodwill | $ (189,197) | $ 0 | (189,197) | $ 0 |
Ending balance | 15,359 | 15,359 | ||
U.S. | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 138,863 | |||
Additions | 55,295 | |||
Deconsolidation of noncontrolling interest | (494) | |||
Purchase accounting adjustments | (4,467) | |||
Impairment of goodwill | (189,197) | (189,197) | ||
Ending balance | 0 | 0 | ||
International | ||||
Goodwill [Roll Forward] | ||||
Beginning balance | 8,760 | |||
Additions | 6,599 | |||
Deconsolidation of noncontrolling interest | 0 | |||
Purchase accounting adjustments | 0 | |||
Impairment of goodwill | 0 | |||
Ending balance | $ 15,359 | $ 15,359 |
Balance sheet information - Accrued liabilities (Details) - USD ($) $ in Thousands |
Oct. 01, 2022 |
Dec. 31, 2021 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Gross-to-net deductions | $ 74,409 | $ 67,945 |
Bonus and commission | 8,464 | 23,342 |
Compensation and benefits | 10,372 | 10,665 |
Income and other taxes | 2,299 | 8,139 |
Other liabilities | 21,346 | 21,382 |
Accrued liabilities | $ 116,890 | $ 131,473 |
Acquisitions and investments - Pro forma results (Details) - Bioness, Misonix and CartiHeal - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Business Acquisition [Line Items] | ||
Net sales | $ 386,283 | $ 367,669 |
Net loss | $ (171,002) | $ (50,742) |
Financial instruments - Schedule Of Long-Term Debt (Details) - USD ($) $ in Thousands |
Oct. 01, 2022 |
Dec. 31, 2021 |
---|---|---|
Debt Instrument [Line Items] | ||
Current portion of long-term debt | $ (31,302) | $ (18,038) |
Unamortized debt issuance cost | (1,425) | (1,687) |
Unamortized discount | (1,393) | (1,381) |
Long-term debt, less current portion | 393,102 | 339,644 |
Term Loan | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 427,222 | $ 360,750 |
Effective interest rate | 5.80% |
Financial instruments - Scheduled Quarterly Principal Payments (Details) $ in Thousands |
9 Months Ended |
---|---|
Oct. 01, 2022
USD ($)
| |
Debt Disclosure [Abstract] | |
Remainder of 2022 | $ 2,000 |
2023 and 2024 | 12,000 |
2025 and 2026 | $ 16,000 |
Fair value measurements - Acquisition unobservable level 3 inputs (Details) - Level 3 - Valuation Technique, Discounted Cash Flow - Measurement Input, Discount Rate |
Oct. 01, 2022 |
---|---|
Minimum | CartiHeal Ltd | Deferred Amount | |
Business Acquisition [Line Items] | |
Payment discount rate | 0.144 |
Minimum | CartiHeal Ltd | Sales Milestone | |
Business Acquisition [Line Items] | |
Payment discount rate | 0.140 |
Minimum | Bioness contingent consideration | |
Business Acquisition [Line Items] | |
Payment discount rate | 0.064 |
Maximum | CartiHeal Ltd | Deferred Amount | |
Business Acquisition [Line Items] | |
Payment discount rate | 0.155 |
Maximum | CartiHeal Ltd | Sales Milestone | |
Business Acquisition [Line Items] | |
Payment discount rate | 0.156 |
Maximum | Bioness contingent consideration | |
Business Acquisition [Line Items] | |
Payment discount rate | 0.068 |
Equity-based compensation - Restricted stock unit activity (Details) - RSUs shares in Thousands |
9 Months Ended |
---|---|
Oct. 01, 2022
$ / shares
shares
| |
Number of units | |
Beginning balance (in shares) | shares | 1,024 |
Granted (in shares) | shares | 1,233 |
Vested (in shares) | shares | (746) |
Forfeited/canceled (in shares) | shares | (249) |
Ending balance (in shares) | shares | 1,262 |
Weighted-average grant-date fair value per unit | |
Beginning balance (in dollars per share) | $ / shares | $ 14.41 |
Granted (in dollars per share) | $ / shares | 10.79 |
Vested (in dollars per share) | $ / shares | 14.75 |
Forfeited/canceled (in dollars per share) | $ / shares | 7.09 |
Ending balance (in dollars per share) | $ / shares | $ 12.10 |
Equity-based compensation - Fair value assumptions (Details) - Stock options |
9 Months Ended |
---|---|
Oct. 01, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate, minimum | 1.80% |
Risk-free interest rate, maximum | 3.40% |
Expected dividend yield | 0.00% |
Expected stock price volatility, minimum | 33.20% |
Expected stock price volatility, maximum | 34.20% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life of stock options (years) | 6 years 3 months |
Stockholders’ equity - Noncontrolling interest (Details) - BV LLC - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Oct. 01, 2022 |
Dec. 31, 2021 |
|
Class of Stock [Line Items] | ||
LLC Interests | $ 61,778 | $ 59,548 |
Ownership % | 79.60% | 79.00% |
Continuing LLC Owner | ||
Class of Stock [Line Items] | ||
LLC Interests | $ 15,787 | $ 15,787 |
Ownership % | 20.40% | 21.00% |
Bioventus and Continuing LLC Owner | ||
Class of Stock [Line Items] | ||
LLC Interests | $ 77,565 | $ 75,335 |
Ownership % | 100.00% | 100.00% |
Earnings per share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
2 Months Ended | 3 Months Ended | 8 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Feb. 15, 2021 |
Oct. 01, 2022 |
Oct. 02, 2021 |
Oct. 02, 2021 |
Oct. 01, 2022 |
Oct. 02, 2021 |
|||||||
Numerator: | ||||||||||||
Net loss | $ 25,977 | $ (145,698) | $ (2,269) | $ (14,498) | $ (168,518) | $ 11,479 | ||||||
Net loss attributable to noncontrolling interests | 37,453 | 1,198 | 8,260 | 41,744 | $ 8,260 | |||||||
Net loss attributable to Bioventus Inc. Class A common stockholders, basic | (108,245) | (1,071) | (6,238) | (126,774) | ||||||||
Net loss attributable to Bioventus Inc. Class A common stockholders, diluted | $ (108,245) | $ (1,071) | $ (6,238) | $ (126,774) | ||||||||
Denominator: | ||||||||||||
Weighted-average shares of Class A common stock outstanding - basic (in shares) | 61,674,254 | [1] | 41,837,581 | [1] | 41,816,706 | 61,208,941 | [1] | 41,816,706 | [1] | |||
Weighted-average shares of Class A common stock outstanding - diluted (in shares) | 61,674,254 | [1] | 41,837,581 | [1] | 41,816,706 | 61,208,941 | [1] | 41,816,706 | [1] | |||
Net loss per share of Class A common stock, basic (in dollars per share) | $ (1.76) | [1] | $ (0.03) | [1] | $ (0.15) | $ (2.07) | [1] | $ (0.15) | [1] | |||
Net loss per share of Class A common stock, diluted (in dollars per share) | $ (1.76) | [1] | $ (0.03) | [1] | $ (0.15) | $ (2.07) | [1] | $ (0.15) | [1] | |||
|
Restructuring costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | $ 1,536 | |||
Expenses incurred | $ 575 | $ 1,798 | 2,159 | $ 1,798 |
Payments made | (2,710) | |||
Ending balance | 985 | 985 | ||
Employee severance and temporary labor costs | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 1,400 | |||
Expenses incurred | 2,159 | |||
Payments made | (2,574) | |||
Ending balance | 985 | 985 | ||
Other charges | ||||
Restructuring Reserve [Roll Forward] | ||||
Beginning balance | 136 | |||
Expenses incurred | 0 | |||
Payments made | (136) | |||
Ending balance | 0 | 0 | ||
Restructuring Plan of 2021 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring plan, expected costs | 3,500 | 3,500 | ||
Restructuring Reserve [Roll Forward] | ||||
Expenses incurred | 92 | $ 1,798 | 692 | $ 1,798 |
Restructuring Plan Of 2022 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring plan, expected costs | 2,300 | 2,300 | ||
Restructuring Reserve [Roll Forward] | ||||
Expenses incurred | $ 483 | $ 1,467 |
Income taxes (Details) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 22.30% | 28.00% | 21.30% | 6.20% |
Commitments and contingencies - Lease cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Oct. 01, 2022 |
Oct. 02, 2021 |
Oct. 01, 2022 |
Oct. 02, 2021 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Operating lease cost | $ 1,238 | $ 885 | $ 3,544 | $ 2,499 |
Short-term lease cost | 190 | 153 | 518 | 482 |
Total lease cost | $ 1,428 | $ 1,038 | 4,062 | 2,981 |
Operating cash flows from operating leases | 3,515 | 2,598 | ||
Right-of-use assets obtained in exchange for operating lease obligations | $ 2,494 | $ 0 |
Commitments and contingencies - Supplemental balance sheet information (Details) - USD ($) $ in Thousands |
Oct. 01, 2022 |
Dec. 31, 2021 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease assets | $ 16,304 | $ 17,186 |
Operating lease liabilities- current | 3,434 | 3,504 |
Operating lease liabilities- noncurrent | 14,157 | 15,038 |
Total operating lease liabilities | $ 17,591 | $ 18,542 |
Weighted average remaining lease term (years) for operating leases | 5 years | 5 years 7 months 6 days |
Weighted average discount rate for operating leases (in percent) | 4.60% | 4.70% |
Subsequent events (Details) $ in Thousands |
Oct. 28, 2022
USD ($)
|
---|---|
Subsequent Event | Interest Rate Swap | |
Subsequent Event [Line Items] | |
Received settlement | $ 7,738 |
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