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 31, 2023.
First Quarter 2023 Financial Results
Summary:
- Net revenue of $107.6 million for the first quarter of 2023, an
increase of $10.5 million compared to net revenue of $97.1 million
for the first quarter of 2022. Net revenue for the first quarter of
2023 consists of:
- Net revenue from Advanced Wound Care products of $100.9
million, an increase of 12% from the first quarter of 2022.
- Net revenue from Surgical & Sports Medicine products of
$6.7 million, a decrease of 4% from the first quarter of 2022.
- Net loss of $3.0 million for the first quarter of 2023,
compared to a net loss of $0.9 million for the first quarter of
2022, an increase of $2.1 million.
- Adjusted net loss1 of $0.7 million for the first quarter of
2023, compared to an adjusted net income of $1.0 million for the
first quarter of 2022, a decrease of $1.6 million.
- Adjusted EBITDA of $3.8 million for the first quarter of 2023,
compared to Adjusted EBITDA of $5.0 million for the first quarter
of 2022, a decrease of $1.2 million.
“First quarter sales came in above the high-end of the guidance
range we provided on our fourth quarter earnings call,” said Gary
S. Gillheeney, Sr., President, Chief Executive Officer and Chair of
the Board of Organogenesis. “Sales of Advanced Wound Care products
drove the majority of the upside in the quarter, exceeding the
high-end of our expectations in both the hospital outpatient and
physician office settings. As expected, we leveraged our
diversified portfolio and leadership position in Wound Care Centers
and physician offices across the U.S. to deliver strong growth in
Q1.
Mr. Gillheeney, Sr. continued: “We are proud of the team’s
execution in Q1 and believe our ability to deliver results above
the high-end of our guidance range represents another clear
illustration that we have the right strategy to maximize our
competitive position in the Advanced Wound Care market. We have
increased our financial guidance as a result of the
stronger-than-expected first quarter results and look forward to
continued progress in 2023. We will continue to be a leader in the
Advanced Wound Care space while improving our competitive positions
in the Surgical & Sports Medicine and burn markets as we
deliver on our mission to provide integrated healing solutions that
substantially improve patient outcomes and lower the overall cost
of care. We remain committed to educating the public on the
benefits of the use of skin substitutes and improving access to
clinically efficacious treatment options."
1Defined as GAAP net income (loss) adjusted to exclude the
effect of amortization, restructuring charges, GPO settlement fee
and the resulting income taxes on these items.
First Quarter 2023 Financial
Results:
|
Three Months EndedMarch 31, |
|
|
Change |
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
|
(in
thousands, except for percentages) |
|
Advanced Wound
Care |
$ |
100,917 |
|
|
$ |
90,090 |
|
|
$ |
10,827 |
|
|
|
12 |
% |
Surgical & Sports Medicine |
|
6,725 |
|
|
|
7,027 |
|
|
|
(302 |
) |
|
|
(4 |
%) |
Net revenue |
$ |
107,642 |
|
|
$ |
97,117 |
|
|
$ |
10,525 |
|
|
|
11 |
% |
Net revenue for the first quarter of 2023 was $107.6 million,
compared to $97.1 million for the first quarter of 2022, an
increase of $10.5 million, or 11%. The increase in net revenue was
driven by an increase of $10.8 million, or 12% in Advanced
Wound Care products partially offset by a decrease of $0.3 million,
or 4% in net revenue of Surgical & Sports Medicine
products.
Gross profit for the first quarter of 2023 was $81.0 million, or
75% of net revenue, compared to $72.0 million, or 74% of net
revenue for the first quarter of 2022, an increase of $9.0 million,
or 12%.
Operating expenses for the first quarter of 2023 were $85.0
million compared to $72.2 million for the first quarter of 2022, an
increase of $12.9 million, or 18%. R&D expense was $11.2
million for the first quarter of 2023, compared to $8.6 million in
the first quarter of 2022, an increase of $2.6 million, or 30%.
Selling, general and administrative expenses were $73.8 million for
the first quarter of 2023, compared to $63.6 million in the first
quarter of 2022, an increase of $10.3 million, or 16%.
Operating loss for the first quarter of 2023 was $4.0 million,
compared to an operating loss of $0.1 million for the first quarter
of 2022, a decrease of $3.9 million.
Total other expense, net, for the first quarter of 2023 was $0.6
million, compared to $0.7 million for the first quarter of 2022, a
decrease of $0.1 million.
Net loss for the first quarter of 2023 was $3.0 million, or
$(0.02) per share, compared to a net loss of $0.9 million, or
$(0.01) per share, for the first quarter of 2022, an increase of
$2.1 million, or $(0.01) per share.
Adjusted net loss of $0.7 million for the first quarter of 2023,
compared to adjusted net income of $1.0 million for the first
quarter of 2022, a decrease of $1.6 million.
Adjusted EBITDA was $3.8 million for the first quarter of 2023,
compared to $5.0 million for the first quarter of 2022, a decrease
of $1.2 million.
As of March 31, 2023, the Company had $89.4 million in cash,
cash equivalents and restricted cash and $69.9 million in debt
obligations, compared to $103.3 million in cash, cash equivalents
and restricted cash and $70.8 million in debt obligations as of
December 31, 2022.
Fiscal Year 2023 Guidance:
For the year ending December 31, 2023, the Company expects:
- Net revenue between $454 million and $466 million, representing
an increase of approximately 1% to 3% year-over-year, as compared
to net revenue of $450.9 million for the year ended December 31,
2022.
- The 2023 net revenue guidance range assumes:
- Net revenue from Advanced Wound Care products between $424
million and $432 million, an increase of 0% to 2% year-over-year as
compared to net revenue of $422.2 million for the year ended
December 31, 2022.
- Net revenue from Surgical & Sports Medicine products
between $30 million and $34 million, an increase of approximately
5% to 19% year-over-year as compared to net revenue of $28.7
million for the year ended December 31, 2022.
- Net income between $3 million and $11 million and adjusted net
income between $8 million and $16 million.
- EBITDA between $28 million and $39 million and Adjusted EBITDA
between $38 million and $49 million.
First Quarter Earnings Conference
Call:
Financial results for the first fiscal quarter of 2023 will be
reported after the market closes on Wednesday, May 10th. Management
will host a conference call at 5:00 p.m. Eastern Time on May 10th
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. A live webcast of the call will also be
provided on the investor relations section of the Company's website
at investors.organogenesis.com.
For those unable to participate, the webcast will be archived at
investors.organogenesis.com for approximately one year.
ORGANOGENESIS HOLDINGS INC. |
UNAUDITED
CONSOLIDATED BALANCE SHEETS |
(amounts in
thousands, except share and per share data) |
|
|
|
|
|
|
|
March 31, |
|
|
December 31, |
|
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
88,694 |
|
|
$ |
102,478 |
|
Restricted cash |
|
721 |
|
|
|
812 |
|
Accounts receivable, net |
|
92,021 |
|
|
|
89,450 |
|
Inventory, net |
|
25,539 |
|
|
|
24,783 |
|
Prepaid expenses and other current assets |
|
9,847 |
|
|
|
5,086 |
|
Total current assets |
|
216,822 |
|
|
|
222,609 |
|
Property and equipment, net |
|
106,637 |
|
|
|
102,463 |
|
Intangible assets, net |
|
19,560 |
|
|
|
20,789 |
|
Goodwill |
|
28,772 |
|
|
|
28,772 |
|
Operating lease right-of-use
assets, net |
|
42,839 |
|
|
|
43,192 |
|
Deferred tax asset, net |
|
30,014 |
|
|
|
30,014 |
|
Other assets |
|
1,463 |
|
|
|
1,520 |
|
Total assets |
$ |
446,107 |
|
|
$ |
449,359 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Current portion of term loan |
$ |
5,009 |
|
|
$ |
4,538 |
|
Current portion of operating lease obligations |
|
12,160 |
|
|
|
11,708 |
|
Accounts payable |
|
30,310 |
|
|
|
32,330 |
|
Accrued expenses and other current liabilities |
|
28,597 |
|
|
|
26,447 |
|
Total current liabilities |
|
76,076 |
|
|
|
75,023 |
|
Term loan, net of current
portion |
|
64,860 |
|
|
|
66,231 |
|
Operating lease obligations, net
of current portion |
|
40,325 |
|
|
|
41,314 |
|
Other liabilities |
|
1,145 |
|
|
|
1,122 |
|
Total liabilities |
|
182,406 |
|
|
|
183,690 |
|
Commitments and contingencies
(Note 18) |
|
|
|
|
|
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;
131,954,935 and 131,647,677 shares issued; 131,226,387 and
130,919,129 shares outstanding at March 31, 2023 and
December 31, 2022, respectively. |
|
13 |
|
|
|
13 |
|
Additional paid-in capital |
|
312,573 |
|
|
|
310,957 |
|
Accumulated deficit |
|
(48,885 |
) |
|
|
(45,301 |
) |
Total stockholders’ equity |
|
263,701 |
|
|
|
265,669 |
|
Total liabilities and stockholders’ equity |
$ |
446,107 |
|
|
$ |
449,359 |
|
ORGANOGENESIS HOLDINGS INC. |
UNAUDITED CONSOLIDATED |
STATEMENTS OF OPERATIONS |
(amounts in thousands, except share and per share
data) |
|
|
Three Months EndedMarch 31, |
|
|
2023 |
|
|
2022 |
|
Net revenue |
$ |
107,642 |
|
|
$ |
97,117 |
|
Cost of goods sold |
|
26,607 |
|
|
|
25,080 |
|
Gross profit |
|
81,035 |
|
|
|
72,037 |
|
Operating expenses: |
|
|
|
|
|
Selling, general and administrative |
|
73,834 |
|
|
|
63,578 |
|
Research and development |
|
11,202 |
|
|
|
8,587 |
|
Total operating expenses |
|
85,036 |
|
|
|
72,165 |
|
Loss from operations |
|
(4,001 |
) |
|
|
(128 |
) |
Other expense, net: |
|
|
|
|
|
Interest expense |
|
(649 |
) |
|
|
(737 |
) |
Other income (expense), net |
|
23 |
|
|
|
(3 |
) |
Total other expense, net |
|
(626 |
) |
|
|
(740 |
) |
Net loss before income taxes |
|
(4,627 |
) |
|
|
(868 |
) |
Income tax benefit (expense) |
|
1,658 |
|
|
|
(45 |
) |
Net loss |
$ |
(2,969 |
) |
|
$ |
(913 |
) |
|
|
|
|
|
|
Net loss, per share: |
|
|
|
|
|
Basic |
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
Diluted |
$ |
(0.02 |
) |
|
$ |
(0.01 |
) |
Weighted-average common shares
outstanding |
|
|
|
|
|
Basic |
|
131,083,841 |
|
|
|
128,788,721 |
|
Diluted |
|
131,083,841 |
|
|
|
128,788,721 |
|
ORGANOGENESIS HOLDINGS INC. |
UNAUDITED
CONSOLIDATED |
STATEMENT OF
CASH FLOWS |
(amounts in
thousands, except share and per share data) |
|
|
Three Months EndedMarch 31, |
|
|
2023 |
|
|
2022 |
|
Cash flows from operating
activities: |
|
|
|
|
|
Net loss |
$ |
(2,969 |
) |
|
$ |
(913 |
) |
Adjustments to reconcile net loss
to net cash provided by (used in) operating activities: |
|
|
|
|
|
Depreciation |
|
2,694 |
|
|
|
1,347 |
|
Amortization of intangible assets |
|
1,230 |
|
|
|
1,221 |
|
Reduction in the carrying value of right-of-use assets |
|
1,939 |
|
|
|
1,847 |
|
Non-cash interest expense |
|
107 |
|
|
|
108 |
|
Deferred interest expense |
|
122 |
|
|
|
151 |
|
Provision recorded for credit losses |
|
243 |
|
|
|
40 |
|
Loss on disposal of property and equipment |
|
63 |
|
|
|
- |
|
Adjustment for excess and obsolete inventories |
|
1,407 |
|
|
|
2,205 |
|
Stock-based compensation |
|
1,914 |
|
|
|
1,303 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
Accounts receivable |
|
(3,429 |
) |
|
|
2,942 |
|
Inventory |
|
(2,163 |
) |
|
|
80 |
|
Prepaid expenses and other current assets |
|
(4,774 |
) |
|
|
(2,165 |
) |
Operating leases |
|
(2,122 |
) |
|
|
(1,751 |
) |
Accounts payable |
|
(1,390 |
) |
|
|
(1,186 |
) |
Accrued expenses and other current liabilities |
|
2,029 |
|
|
|
(3,828 |
) |
Other liabilities |
|
22 |
|
|
|
10 |
|
Net cash provided by (used in) operating activities |
|
(5,077 |
) |
|
|
1,411 |
|
Cash flows from investing
activities: |
|
|
|
|
|
Purchases of property and
equipment |
|
(7,562 |
) |
|
|
(6,672 |
) |
Net cash used in investing activities |
|
(7,562 |
) |
|
|
(6,672 |
) |
Cash flows from financing
activities: |
|
|
|
|
|
Payments of term loan under the
2021 Credit Agreement |
|
(938 |
) |
|
|
(469 |
) |
Payments of withholding taxes in
connection with RSUs vesting |
|
(298 |
) |
|
|
(488 |
) |
Proceeds from the exercise of
stock options |
|
- |
|
|
|
291 |
|
Principal repayments of finance
lease obligations |
|
- |
|
|
|
(99 |
) |
Net cash used in financing activities |
|
(1,236 |
) |
|
|
(765 |
) |
Change in cash, cash
equivalents and restricted cash |
|
(13,875 |
) |
|
|
(6,026 |
) |
Cash, cash equivalents, and
restricted cash, beginning of period |
|
103,290 |
|
|
|
114,528 |
|
Cash, cash equivalents, and
restricted cash, end of period |
$ |
89,415 |
|
|
$ |
108,502 |
|
Supplemental disclosure
of cash flow information: |
|
|
|
|
|
Cash paid for interest |
$ |
1,271 |
|
|
$ |
627 |
|
Cash paid for income taxes |
$ |
128 |
|
|
$ |
4 |
|
Supplemental disclosure
of non-cash investing and financing activities: |
|
|
|
|
|
Purchases of property and
equipment included in accounts payable and accrued expenses |
$ |
1,986 |
|
|
$ |
1,869 |
|
Right-of-use assets obtained
through operating lease obligations |
$ |
1,586 |
|
|
$ |
171 |
|
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 to evaluate our operating performance and
trends and make planning decisions. Our management believes
Adjusted EBITDA and adjusted net income 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 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 income
to non-GAAP EBITDA and non-GAAP Adjusted EBITDA, for the period
presented:
|
Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
|
(Unaudited) (in thousands) |
|
Net loss |
$ |
(2,969 |
) |
|
$ |
(913 |
) |
Interest expense, net |
|
649 |
|
|
|
737 |
|
Income tax expense (benefit) |
|
(1,658 |
) |
|
|
45 |
|
Depreciation |
|
2,694 |
|
|
|
1,347 |
|
Amortization |
|
1,230 |
|
|
|
1,221 |
|
EBITDA |
|
(54 |
) |
|
|
2,437 |
|
Stock-based compensation expense |
|
1,914 |
|
|
|
1,303 |
|
Restructuring charge (1) |
|
1,908 |
|
|
|
264 |
|
Settlement fee (2) |
|
- |
|
|
|
1,000 |
|
Adjusted EBITDA |
$ |
3,768 |
|
|
$ |
5,004 |
|
(1) Amounts reflect employee severance, retention and benefits
as well as other exit costs associated with the Company’s
restructuring activities.
(2) Amounts reflect the fee the Company paid to a GPO to settle
previously disputed GPO fees.
The following table presents a reconciliation of GAAP net loss
to non-GAAP adjusted net income (loss), for the periods
presented:
|
Three Months Ended March 31, |
|
|
2023 |
|
|
2022 |
|
|
(Unaudited) (in thousands) |
|
Net loss |
$ |
(2,969 |
) |
|
$ |
(913 |
) |
Amortization |
|
1,230 |
|
|
|
1,221 |
|
Restructuring charge (1) |
|
1,908 |
|
|
|
264 |
|
Settlement fee (2) |
|
- |
|
|
|
1,000 |
|
Tax on above |
|
(847 |
) |
|
|
(621 |
) |
Adjusted net income (loss) |
$ |
(678 |
) |
|
$ |
951 |
|
(1) Amounts reflect employee severance, retention and benefits
as well as other exit costs associated with the Company’s
restructuring activities.
(2) Amounts reflect the fee the Company paid to a GPO to settle
previously disputed GPO fees.
The following table presents a reconciliation of projected GAAP
net income to projected non-GAAP EBITDA and projected non-GAAP
Adjusted EBITDA included in our guidance for the year ending
December 31, 2023:
|
Year Ending December 31, |
|
|
2023L |
|
|
2023H |
|
Net
income |
$ |
3,200 |
|
|
$ |
10,900 |
|
Interest expense |
|
3,300 |
|
|
|
3,300 |
|
Income tax expense |
|
5,100 |
|
|
|
8,100 |
|
Depreciation |
|
11,500 |
|
|
|
11,500 |
|
Amortization |
|
4,900 |
|
|
|
4,900 |
|
EBITDA |
$ |
28,000 |
|
|
$ |
38,700 |
|
Stock-based compensation expense |
|
7,900 |
|
|
|
7,900 |
|
Restructuring charge |
|
2,200 |
|
|
|
2,200 |
|
Adjusted EBITDA |
$ |
38,100 |
|
|
$ |
48,800 |
|
The following table presents a reconciliation of projected GAAP
net income to projected non-GAAP adjusted net income included in
our guidance for the year ending December 31, 2023:
|
Year Ending December 31, |
|
|
2023L |
|
|
2023H |
|
Net
income |
$ |
3,200 |
|
|
$ |
10,900 |
|
Amortization |
|
4,900 |
|
|
|
4,900 |
|
Restructuring charge |
|
2,200 |
|
|
|
2,200 |
|
Tax on above |
|
(1,900 |
) |
|
|
(1,900 |
) |
Adjusted net income |
$ |
8,400 |
|
|
$ |
16,100 |
|
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,
adjusted net revenue, net income, adjusted net income, EBITDA, and
Adjusted EBITDA for fiscal 2023 and the breakdown of expected
revenue in both its Advanced Wound Care and Surgical & Sports
Medicine categories as well as the estimated revenue contribution
of its PuraPly products. 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 reimbursement
levels for the Company’s products; (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 may owe rebates
to the federal government prospectively on certain of its products
if more than a certain percentage of the product is not
administered to a patient and is discarded (wasted) by providers;
(6) the Company’s ability to raise funds to expand its business;
(7) the Company has incurred losses in prior years and may incur
losses in the future; (8) changes in applicable laws or
regulations; (9) the possibility that the Company may be adversely
affected by other economic, business, and/or competitive factors;
(10) the Company’s ability to maintain production of Affinity in
sufficient quantities to meet demand; (11) any resurgence of the
COVID-19 pandemic and its impact, if any, on the Company’s fiscal
condition and results of operations; (12) 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; 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, 2022 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 offering a
portfolio of bioactive and acellular biomaterials products in
advanced wound care and surgical biologics, including orthopedics
and spine. Organogenesis’s comprehensive portfolio is designed to
treat a variety of patients with repair and regenerative needs. For
more information, visit www.organogenesis.com.
Investor Inquiries:
ICR Westwicke
Mike Piccinino, CFA
OrganoIR@westwicke.com
Press and Media Inquiries:
Organogenesis
Ron O’Brien
robrien@organo.com
Grafico Azioni Organogenesis (NASDAQ:ORGO)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Organogenesis (NASDAQ:ORGO)
Storico
Da Set 2023 a Set 2024