Organogenesis Holdings Inc. (Nasdaq: ORGO), a leading regenerative
medicine company focused on the development, manufacture, and
commercialization of product solutions for the Advanced Wound Care
and Surgical & Sports Medicine markets, today reported
financial results for the first quarter ended March 31st,
2024.
First Quarter 2024 Financial Results
Summary:
- Net revenue of $110.0 million for the first quarter of 2024, an
increase of $2.3 million compared to net revenue of $107.6 million
for the first quarter of 2023. Net revenue for the first quarter of
2024 consists of:
- Net revenue from Advanced Wound Care products of $103.9
million, an increase of 3% from the first quarter of 2023.
- Net revenue from Surgical & Sports Medicine products of
$6.1 million, a decrease of 9% from the first quarter of 2023.
- Net loss of $2.1 million for the first quarter of 2024,
compared to a net loss of $3.0 million for the first quarter of
2023, a decrease in net loss of $0.9 million.
- Adjusted net loss1 of $1.4 million for the first quarter of
2024, compared to an adjusted net loss of $0.7 million for the
first quarter of 2023, an increase in adjusted net loss of $0.8
million.
- Adjusted EBITDA of $2.6 million for the first quarter of 2024,
compared to Adjusted EBITDA of $3.8 million for the first quarter
of 2023, a decrease of $1.2 million.
"We delivered a strong start to 2024 with first
quarter revenue exceeding the high-end of our revenue guidance,"
said Gary S. Gillheeney, Sr., President and Chief Executive Officer
of Organogenesis. “Our commercial team executed well in navigating
the challenging operating environment and driving solid momentum in
the quarter.”
Mr. Gillheeney, Sr. continued: “As a market
leader, I’m confident that the MACs prioritization of demonstrated
clinical efficacy will strengthen our competitive position over the
long term. Additionally, we continue to achieve milestones in our
ReNu program, which we believe will provide clinically meaningful
benefits to the millions of patients suffering from knee OA
symptoms. I am very pleased with the advancements we have made as a
company and extremely optimistic about our expansion opportunities
in a significant new addressable market that has the potential to
transform Organogenesis and to provide integrated healing solutions
that substantially improve outcomes while lowering the overall cost
of care.”
First Quarter 2024 Financial
Results:
|
|
Three Months
Ended March 31, |
|
|
Change |
|
|
|
2024 |
|
|
2023 |
|
|
$ |
|
|
% |
|
|
|
(in
thousands, except for percentages) |
|
Advanced Wound Care |
|
$ |
103,864 |
|
|
$ |
100,917 |
|
|
$ |
2,947 |
|
|
|
3 |
% |
Surgical & Sports Medicine |
|
|
6,112 |
|
|
|
6,725 |
|
|
|
(613 |
) |
|
|
(9 |
%) |
Net revenue |
|
$ |
109,976 |
|
|
$ |
107,642 |
|
|
$ |
2,334 |
|
|
|
2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue for the first quarter of 2024 was
$110.0 million, compared to $107.6 million for the first quarter of
2023, an increase of $2.3 million, or 2%. The increase in net
revenue was driven by an increase of $2.9 million, or 3%, in net
revenue for Advanced Wound Care products partially offset by a
decrease of $0.6 million, or 9%, in net revenue for Surgical &
Sports Medicine products.
Gross profit for the first quarter of 2024 was
$81.3 million, or 74% of net revenue, compared to $81.0 million, or
75% of net revenue for the first quarter of 2023, an increase of
$0.2 million, or less than 1%.
Operating expenses for the first quarter of 2024
were $85.1 million compared to $85.0 million for the first quarter
of 2023, an increase of $0.1 million, or less than 1%. R&D
expense was $12.8 million for the first quarter of 2024, compared
to $11.2 million for the first quarter of 2023, an increase of $1.6
million, or 14%. Selling, general and administrative expenses were
$72.3 million for the first quarter of 2024, compared to $73.8
million for the first quarter of 2023, a decrease of $1.5 million,
or 2%.
Operating loss for the first quarter of 2024 was
$3.9 million, compared to an operating loss of $4.0 million for the
first quarter of 2023, a decrease in operating loss of $0.1
million, or 3%.
Total other expense, net, for the first quarter of
2024 was $0.5 million, compared to $0.6 million for the first
quarter of 2023, a decrease of $0.1 million, or 22%.
Net loss for the first quarter of 2024 was $2.1
million, or $(0.02) per share, compared to net loss of $3.0
million, or $(0.02) per share, for the first quarter of 2023, a
decrease in net loss of $0.9 million, or $0.01 per share.
Adjusted net loss of $1.4 million for the first
quarter of 2024, compared to adjusted net loss of $0.7 million for
the first quarter of 2023, an increase in adjusted net loss of $0.8
million, or 115%.
Adjusted EBITDA was $2.6 million for the first
quarter of 2024, compared to $3.8 million for the first quarter of
2023, a decrease of $1.2 million, or 32%.
As of March 31, 2024, the Company had $89.3
million in cash, cash equivalents and restricted cash and $64.9
million in debt obligations, compared to $104.3 million in cash,
cash equivalents and restricted cash and $66.2 million in debt
obligations as of December 31, 2023.
Fiscal Year 2024 Guidance:
For the year ending December 31, 2024 the
Company is reaffirming its prior guidance for fiscal year 2024 and
expects:
- Net revenue between $445.0 million and $470.0 million,
representing an increase of approximately 3% to 9% year-over-year,
as compared to net revenue of $433.1 million for the year ended
December 31, 2023.
- The 2024 net revenue guidance range assumes:
- Net revenue from Advanced Wound Care products between $415.0
million and $435.0 million, an increase of 2% to 7% year-over-year
as compared to net revenue of $405.5 million for the year ended
December 31, 2023.
- Net revenue from Surgical & Sports Medicine products
between $30.0 million and $35.0 million, an increase of 9% to 27%
year-over-year as compared to net revenue of $27.6 million for the
year ended December 31, 2023.
- Net (loss) income between ($10.6) million and $4.6 million and
adjusted net (loss) income between ($8.1) million and $7.1
million.
- EBITDA between $5.8 million and $25.0 million and Adjusted
EBITDA between $15.8 million and $35.0 million.
First Quarter Earnings Conference
Call:
Management will host a conference call at 5:00
p.m. Eastern Time on May 9th to discuss the results of the quarter,
and provide a corporate update with a question and answer session.
Those who would like to participate may access the live webcast
here or access the teleconference here. The live webcast can also
be accessed via the company's website at
investors.organogenesis.com. The webcast will be archived on the
company website for approximately one year.
|
ORGANOGENESIS HOLDINGS INC. UNAUDITED
CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share and per share
data) |
|
|
|
March 31, |
|
|
December 31, |
|
|
|
2024 |
|
|
2023 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
88,626 |
|
|
$ |
103,840 |
|
Restricted cash |
|
|
720 |
|
|
|
498 |
|
Accounts receivable, net |
|
|
96,148 |
|
|
|
81,999 |
|
Inventories, net |
|
|
27,694 |
|
|
|
28,253 |
|
Prepaid expenses and other current assets |
|
|
13,979 |
|
|
|
10,454 |
|
Total current assets |
|
|
227,167 |
|
|
|
225,044 |
|
Property and equipment, net |
|
|
114,245 |
|
|
|
116,228 |
|
Intangible assets, net |
|
|
14,970 |
|
|
|
15,871 |
|
Goodwill |
|
|
28,772 |
|
|
|
28,772 |
|
Operating lease right-of-use assets, net |
|
|
38,616 |
|
|
|
40,118 |
|
Deferred tax asset, net |
|
|
28,002 |
|
|
|
28,002 |
|
Other assets |
|
|
6,709 |
|
|
|
5,990 |
|
Total assets |
|
$ |
458,481 |
|
|
$ |
460,025 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Current portion of term loan |
|
$ |
5,489 |
|
|
$ |
5,486 |
|
Current portion of finance lease obligations |
|
|
1,103 |
|
|
|
1,081 |
|
Current portion of operating lease obligations - related party |
|
|
8,543 |
|
|
|
8,413 |
|
Current portion of operating lease obligations |
|
|
4,675 |
|
|
|
4,731 |
|
Accounts payable |
|
|
23,230 |
|
|
|
30,724 |
|
Accrued expenses and other current liabilities |
|
|
39,759 |
|
|
|
30,074 |
|
Total current liabilities |
|
|
82,799 |
|
|
|
80,509 |
|
Term loan, net of current portion |
|
|
59,371 |
|
|
|
60,745 |
|
Finance lease obligations, net of current portion |
|
|
1,604 |
|
|
|
1,888 |
|
Operating lease obligations, net of current portion - related
party |
|
|
11,052 |
|
|
|
11,954 |
|
Operating lease obligations, net of current portion |
|
|
24,383 |
|
|
|
25,053 |
|
Other liabilities |
|
|
1,242 |
|
|
|
1,213 |
|
Total liabilities |
|
|
180,451 |
|
|
|
181,362 |
|
Commitments and contingencies (Note 14) |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Preferred stock, $0.0001 par value; 1,000,000 shares authorized;
none issued |
|
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value; 400,000,000 shares authorized;
133,267,888 and 132,044,944 shares issued; 132,539,340 and
131,316,396 shares outstanding at March 31, 2024 and
December 31, 2023, respectively. |
|
|
13 |
|
|
|
13 |
|
Additional paid-in capital |
|
|
321,088 |
|
|
|
319,621 |
|
Accumulated deficit |
|
|
(43,071 |
) |
|
|
(40,971 |
) |
Total stockholders’ equity |
|
|
278,030 |
|
|
|
278,663 |
|
Total liabilities and stockholders’ equity |
|
$ |
458,481 |
|
|
$ |
460,025 |
|
|
ORGANOGENESIS HOLDINGS INC.UNAUDITED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS (amounts in thousands, except share and per
share data) |
|
|
|
Three Months Ended
March 31, |
|
|
|
2024 |
|
|
2023 |
|
Net revenue |
|
$ |
109,976 |
|
|
$ |
107,642 |
|
Cost of goods sold |
|
|
28,696 |
|
|
|
26,607 |
|
Gross profit |
|
|
81,280 |
|
|
|
81,035 |
|
Operating expenses: |
|
|
|
|
|
|
Selling, general and administrative |
|
|
72,322 |
|
|
|
73,834 |
|
Research and development |
|
|
12,810 |
|
|
|
11,202 |
|
Total operating expenses |
|
|
85,132 |
|
|
|
85,036 |
|
Loss from operations |
|
|
(3,852 |
) |
|
|
(4,001 |
) |
Other expense, net: |
|
|
|
|
|
|
Interest expense, net |
|
|
(514 |
) |
|
|
(649 |
) |
Other income, net |
|
|
23 |
|
|
|
23 |
|
Total other expense, net |
|
|
(491 |
) |
|
|
(626 |
) |
Net loss before income taxes |
|
|
(4,343 |
) |
|
|
(4,627 |
) |
Income tax benefit |
|
|
2,243 |
|
|
|
1,658 |
|
Net loss and comprehensive loss |
|
$ |
(2,100 |
) |
|
$ |
(2,969 |
) |
|
|
|
|
|
|
|
Net loss, per share: |
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
Weighted-average common shares outstanding |
|
|
|
|
|
|
Basic and diluted |
|
|
131,861,772 |
|
|
|
131,083,841 |
|
|
ORGANOGENESIS HOLDINGS INC. UNAUDITED CONSOLIDATED
STATEMENT OF CASH FLOWS (amounts in thousands,
except share and per share data) |
|
|
|
Three Months Ended
March 31, |
|
|
|
2024 |
|
|
2023 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(2,100 |
) |
|
$ |
(2,969 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
Depreciation |
|
|
3,072 |
|
|
|
2,694 |
|
Amortization of intangible assets |
|
|
901 |
|
|
|
1,230 |
|
Reduction in the carrying value of right-of-use assets |
|
|
2,203 |
|
|
|
1,939 |
|
Non-cash interest expense |
|
|
105 |
|
|
|
107 |
|
Deferred interest expense |
|
|
122 |
|
|
|
122 |
|
Provision recorded for credit losses |
|
|
968 |
|
|
|
243 |
|
Loss on disposal of property and equipment |
|
|
347 |
|
|
|
63 |
|
Adjustment for excess and obsolete inventories |
|
|
2,515 |
|
|
|
1,407 |
|
Stock-based compensation |
|
|
2,407 |
|
|
|
1,914 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
(15,117 |
) |
|
|
(3,429 |
) |
Inventories |
|
|
(4,670 |
) |
|
|
(2,163 |
) |
Prepaid expenses and other current assets and other assets |
|
|
(4,315 |
) |
|
|
(4,774 |
) |
Operating leases |
|
|
(2,199 |
) |
|
|
(2,122 |
) |
Accounts payable |
|
|
(4,391 |
) |
|
|
(1,390 |
) |
Accrued expenses and other current liabilities |
|
|
9,962 |
|
|
|
2,029 |
|
Other liabilities |
|
|
28 |
|
|
|
22 |
|
Net cash used in operating activities |
|
|
(10,162 |
) |
|
|
(5,077 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(2,222 |
) |
|
|
(7,562 |
) |
Net cash used in investing activities |
|
|
(2,222 |
) |
|
|
(7,562 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
Payments of term loan under the 2021 Credit Agreement |
|
|
(1,406 |
) |
|
|
(938 |
) |
Payments of withholding taxes in connection with RSUs vesting |
|
|
(1,120 |
) |
|
|
(298 |
) |
Proceeds from the exercise of stock options |
|
|
180 |
|
|
|
- |
|
Principal repayments of finance lease obligations |
|
|
(262 |
) |
|
|
- |
|
Net cash used in financing activities |
|
|
(2,608 |
) |
|
|
(1,236 |
) |
Change in cash, cash equivalents and restricted
cash |
|
|
(14,992 |
) |
|
|
(13,875 |
) |
Cash, cash equivalents, and restricted cash, beginning of
period |
|
|
104,338 |
|
|
|
103,290 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
89,346 |
|
|
$ |
89,415 |
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
|
|
Cash paid for interest |
|
$ |
1,375 |
|
|
$ |
1,271 |
|
Cash paid for income taxes |
|
$ |
35 |
|
|
$ |
128 |
|
Supplemental disclosure of non-cash investing and financing
activities: |
|
|
|
|
|
|
Cumulative effect adjustment for adoption of ASU No. 2016-13 (Note
2) |
|
$ |
— |
|
|
$ |
615 |
|
Purchases of property and equipment included in accounts payable
and accrued expenses |
|
$ |
786 |
|
|
$ |
1,986 |
|
Right-of-use assets obtained through operating lease
obligations |
|
$ |
701 |
|
|
$ |
1,586 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
Our management uses financial measures that are
not in accordance with generally accepted accounting principles in
the United States, or GAAP, in addition to financial measures in
accordance with GAAP to evaluate our operating results. These
non-GAAP financial measures should be considered supplemental to,
and not a substitute for, our reported financial results prepared
in accordance with GAAP. Our management uses Adjusted EBITDA and
adjusted net income (loss) to evaluate our operating performance
and trends and make planning decisions. Our management believes
Adjusted EBITDA and adjusted net income (loss) help identify
underlying trends in our business that could otherwise be masked by
the effect of the items that we exclude. Accordingly, we believe
that Adjusted EBITDA and adjusted net income (loss) provide useful
information to investors and others in understanding and evaluating
our operating results, enhancing the overall understanding of our
past performance and prospects, and allowing for greater
transparency with respect to key financial metrics used by our
management in its financial and operational decision-making.
The following table presents a reconciliation of
GAAP net loss to non-GAAP EBITDA and non-GAAP Adjusted EBITDA, for
the periods presented:
` |
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
|
|
(Unaudited,
in thousands) |
|
Net loss |
|
$ |
(2,100 |
) |
|
$ |
(2,969 |
) |
Interest expense, net |
|
|
514 |
|
|
|
649 |
|
Income tax benefit |
|
|
(2,243 |
) |
|
|
(1,658 |
) |
Depreciation |
|
|
3,072 |
|
|
|
2,694 |
|
Amortization |
|
|
901 |
|
|
|
1,230 |
|
EBITDA |
|
|
144 |
|
|
|
(54 |
) |
Stock-based compensation expense |
|
|
2,407 |
|
|
|
1,914 |
|
Restructuring charge (1) |
|
|
— |
|
|
|
1,908 |
|
Adjusted EBITDA |
|
$ |
2,551 |
|
|
$ |
3,768 |
|
(1) Amount reflects employee severance,
retention and benefits as well as other exit costs associated with
the Company’s restructuring activities.
The following table presents a reconciliation of
GAAP net loss to non-GAAP adjusted net loss, for the periods
presented:
|
|
Three Months Ended March 31, |
|
|
|
2024 |
|
|
2023 |
|
|
|
(Unaudited,
in thousands) |
|
Net loss |
|
$ |
(2,100 |
) |
|
$ |
(2,969 |
) |
Amortization |
|
|
901 |
|
|
|
1,230 |
|
Restructuring charge (1) |
|
|
— |
|
|
|
1,908 |
|
Tax on above |
|
|
(243 |
) |
|
|
(839 |
) |
Adjusted net loss |
|
$ |
(1,442 |
) |
|
$ |
(670 |
) |
(1) Amount reflects employee severance,
retention and benefits as well as other exit costs associated with
the Company’s restructuring activities.
The following table presents a reconciliation of
projected GAAP net (loss) income to projected non-GAAP EBITDA and
projected non-GAAP Adjusted EBITDA included in our guidance for the
year ending December 31, 2024:
|
|
Year Ended December 31, |
|
|
|
2024L |
|
|
2024H |
|
Net (loss) income |
|
$ |
(10,565 |
) |
|
$ |
4,616 |
|
Interest expense, net |
|
|
3,000 |
|
|
|
2,200 |
|
Income tax expense |
|
|
308 |
|
|
|
5,061 |
|
Depreciation |
|
|
9,680 |
|
|
|
9,680 |
|
Amortization |
|
|
3,400 |
|
|
|
3,400 |
|
EBITDA |
|
$ |
5,823 |
|
|
$ |
24,957 |
|
Stock-based compensation expense |
|
|
10,000 |
|
|
|
10,000 |
|
Adjusted EBITDA |
|
$ |
15,823 |
|
|
$ |
34,957 |
|
|
|
|
|
|
|
|
|
|
The following table presents a reconciliation of
projected GAAP net (loss) income to projected non-GAAP adjusted net
(loss) income included in our guidance for the year ending
December 31, 2024:
|
|
Year Ending December 31, |
|
|
|
2024L |
|
|
2024H |
|
Net (loss) income |
|
$ |
(10,565 |
) |
|
$ |
4,616 |
|
Amortization |
|
|
3,400 |
|
|
|
3,400 |
|
Tax on above |
|
|
(918 |
) |
|
|
(918 |
) |
Adjusted net (loss) income |
|
$ |
(8,083 |
) |
|
$ |
7,098 |
|
|
|
|
|
|
|
|
|
|
Forward-Looking Statements
This release contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements relate to expectations or
forecasts of future events. Forward-looking statements may be
identified by the use of words such as “forecast,” “intend,”
“seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,”
“plan,” “outlook,” and “project” and other similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. Such forward-looking statements
include statements relating to the Company’s expected revenue, net
income, adjusted net income, EBITDA, and Adjusted EBITDA for fiscal
2024 and the breakdown of expected revenue in both its Advanced
Wound Care and Surgical & Sports Medicine categories.
Forward-looking statements with respect to the operations of the
Company, strategies, prospects, and other aspects of the business
of the Company are based on current expectations that are subject
to known and unknown risks and uncertainties, which could cause
actual results or outcomes to differ materially from expectations
expressed or implied by such forward-looking statements. These
factors include, but are not limited to: (1) the impact of any
changes to the coverage and reimbursement levels for the Company’s
products (including as a result of the recently proposed LCDs); (2)
the Company faces significant and continuing competition, which
could adversely affect its business, results of operations and
financial condition; (3) rapid technological change could cause the
Company’s products to become obsolete and if the Company does not
enhance its product offerings through its research and development
efforts, it may be unable to effectively compete; (4) to be
commercially successful, the Company must convince physicians that
its products are safe and effective alternatives to existing
treatments and that its products should be used in their
procedures; (5) the Company’s ability to raise funds to expand its
business; (6) the Company has incurred losses in the current period
and prior periods and may incur losses in the future; (7) changes
in applicable laws or regulations; (8) the possibility that the
Company may be adversely affected by other economic, business,
and/or competitive factors; (9) the Company’s ability to maintain
production or obtain supply of its products in sufficient
quantities to meet demand; (10) any resurgence of the COVID-19
pandemic and its impact, if any, on the Company’s fiscal condition
and results of operations; (11) the impact of the suspension of
commercialization of: (a) ReNu and NuCel in connection with the
expiration of the FDA’s enforcement grace period for HCT/Ps on May
31, 2021 and (b) Dermagraft in the second quarter of 2022 pending
transition of manufacturing to a new manufacturing facility or a
third-party manufacturer; (12) whether the Company is able to
obtain regulatory approval for and successfully commercialize ReNu;
and (13) other risks and uncertainties described in the Company’s
filings with the Securities and Exchange Commission, including Item
1A (Risk Factors) of the Company’s Form 10-K for the year ended
December 31, 2023 and its subsequently filed periodic reports.
You are cautioned not to place undue reliance upon any
forward-looking statements, which speak only as of the date made.
Although it may voluntarily do so from time to time, the Company
undertakes no commitment to update or revise the forward-looking
statements, whether as a result of new information, future events
or otherwise, except as required by applicable securities laws.
About Organogenesis Holdings Inc.
Organogenesis Holdings Inc. is a leading regenerative medicine
company focused on the development, manufacture, and
commercialization of solutions for the advanced wound care and
surgical and sports medicine markets. Organogenesis offers a
comprehensive portfolio of innovative regenerative products to
address patient needs across the continuum of care. For more
information, visit www.organogenesis.com.
Investor Inquiries:
Westwicke Partners
Mike Piccinino, CFA
OrganoIR@westwicke.com
443-213-0500
Press and Media Inquiries:
Organogenesis
communications@organo.com
Organogenesis (NASDAQ:ORGO)
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