CORRECTING and REPLACING – Organogenesis Holdings Inc. Reports First Quarter 2021 Financial Results
First Quarter 2021 Financial Results Summary:
- Net revenue of
$102.6 million for the first quarter of 2021, up 66% compared to net revenue of$61.7 million for the first quarter of 2020. Net revenue is based upon:- Net revenue from Advanced Wound Care products for the first quarter of 2021 of
$90.7 million , an increase of 77% from the first quarter of 2020. - Net revenue from Surgical & Sports Medicine products for the first quarter of 2021 of
$11.8 million , an increase of 13% from the first quarter of 2020.
- Net revenue from Advanced Wound Care products for the first quarter of 2021 of
- Net revenue from the sale of PuraPly products of
$41.3 million for the first quarter of 2021, an increase of 27% from the first quarter of 2020. - Net revenue from the sale of non-PuraPly products of
$61.2 million , an increase of 109% from the first quarter of 2020. - Net income of
$9.9 million for the first quarter of 2021, compared to a net loss of$16.3 million for the first quarter of 2020, an increase of$26.3 million . - Adjusted EBITDA income of
$16.0 million for the first quarter of 2021, compared to Adjusted EBITDA loss of$10.9 million for the first quarter of 2020, an increase of$27.0 million .
First Quarter 2021 Highlights:
- On
January 11, 2021 , the Company announced that theU.S. Food and Drug Administration granted ReNu®, a cryopreserved amniotic suspension allograft for the management of symptoms associated with knee osteoarthritis, Regenerative Medicine Advanced Therapy (RMAT) designation. - On
January 14, 2021 , the Company announced that the first patient was enrolled in its pivotal Phase 3 clinical trial evaluating the safety and efficacy of ReNu®, a cryopreserved amniotic suspension allograft, for the management of symptoms associated with knee osteoarthritis. - On
February 16, 2021 , the Company announced the appointment ofDavid C. Francisco as the Company’s Chief Financial Officer, effectiveFebruary 15, 2021 . In connection with the hiring ofMr. Francisco ,Henry Hagopian will serve as the Company’s Senior Vice President of Finance and Treasurer.
“2021 is off to a strong start,” said
First Quarter 2021 Results:
The following table represents net revenue by product grouping for the three months ended
| Three Months Ended |
Change | |||||||||||||||
| 2021 | 2020 | $ | % | |||||||||||||
| (in thousands, except for percentages) | ||||||||||||||||
| Advanced Wound Care | $ | 90,708 | $ | 51,288 | $ | 39,420 | 77 | % | ||||||||
| Surgical & Sports Medicine | 11,844 | 10,444 | 1,400 | 13 | % | |||||||||||
| Net revenue | $ | 102,552 | $ | 61,732 | $ | 40,820 | 66 | % | ||||||||
Net revenue for the first quarter of 2021 was
Gross profit for the first quarter of 2021 was
Operating expenses for the first quarter of 2021 were
Operating income for the first quarter of 2021 was
Total other expenses, net, for the first quarter of 2021 were
Net income for the first quarter of 2021 was
Adjusted EBITDA of
As of
Fiscal Year 2021 Guidance:
For the twelve months ended
- Net revenue of between
$438 million and$454 million , representing an increase of approximately 29% to 34% year-over-year, as compared to net revenue of$338.3 million for the twelve months endedDecember 31, 2020 .- The 2021 net revenue guidance range assumes:
- Net revenue from Advanced Wound Care products of between
$409 million and$422 million , representing an increase of approximately 39% to 43% year-over-year as compared to net revenue of$294.6 million for the twelve months endedDecember 31, 2020 . - Net revenue from Surgical & Sports Medicine products of between
$29 million and$32 million , representing a decrease of approximately 27% to 34% year-over-year as compared to net revenue of$43.7 million for the twelve months endedDecember 31, 2020 . - Net revenue from the sale of PuraPly products of between
$179 million and$187 million , representing an increase of approximately 22% to 27% year-over-year, as compared to net revenue of$147.3 million for the twelve months endedDecember 31, 2020 .
- Net revenue from Advanced Wound Care products of between
- The 2021 net revenue guidance range assumes:
- GAAP net income positive for the twelve months ended
December 31, 2021 . - Adjusted EBITDA positive for the twelve months ended
December 31, 2021 .
First Quarter 2021 Earnings Conference Call:
Financial results will be reported after the market closes on
For those unable to participate, a replay of the call will be available for two weeks at 855-859-2056 (404-537-3406 for international callers); access code 9199306. The webcast will be archived at investors.organogenesis.com.
CONSOLIDATED BALANCE SHEETS (amounts in thousands, except share and per share data) |
||||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 77,458 | $ | 84,394 | ||||
| Restricted cash | 500 | 412 | ||||||
| Accounts receivable, net | 72,003 | 56,804 | ||||||
| Inventory | 29,721 | 27,799 | ||||||
| Prepaid expenses and other current assets | 5,557 | 4,935 | ||||||
| Total current assets | 185,239 | 174,344 | ||||||
| Property and equipment, net | 62,431 | 60,068 | ||||||
| Intangible assets, net | 29,379 | 30,622 | ||||||
| 28,772 | 28,772 | |||||||
| Operating lease right-of-use assets, net | 12,706 | - | ||||||
| Deferred tax asset, net | 18 | 18 | ||||||
| Other assets | 636 | 670 | ||||||
| Total assets | $ | 319,181 | $ | 294,494 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Deferred acquisition consideration | $ | - | $ | 483 | ||||
| Current portion of term loan | 16,875 | 16,666 | ||||||
| Current portion of finance lease obligations | 3,870 | 3,619 | ||||||
| Current portion of operating lease obligations | 4,004 | - | ||||||
| Current portion of deferred rent and lease incentive obligation | - | 95 | ||||||
| Accounts payable | 23,877 | 23,381 | ||||||
| Accrued expenses and other current liabilities | 25,383 | 23,973 | ||||||
| Total current liabilities | 74,009 | 68,217 | ||||||
| Line of credit | 10,000 | 10,000 | ||||||
| Term loan, net of current portion | 42,876 | 43,044 | ||||||
| Deferred acquisition consideration, net of current portion | 1,436 | 1,436 | ||||||
| Earnout liability | 3,689 | 3,985 | ||||||
| Deferred rent and lease incentive obligation, net of current portion | - | 2,315 | ||||||
| Finance lease obligations, net of current portion | 10,516 | 11,442 | ||||||
| Operating lease obligations, net of current portion | 11,031 | - | ||||||
| Other liabilities | 8,332 | 7,971 | ||||||
| Total liabilities | 161,889 | 148,410 | ||||||
| Commitments and contingencies (Note 18) | ||||||||
| Stockholders’ equity: | ||||||||
| Total stockholders’ equity | 157,292 | 146,084 | ||||||
| Total liabilities and stockholders’ equity | $ | 319,181 | $ | 294,494 | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS (amounts in thousands, except share and per share data) |
||||||||
| Three Months Ended |
||||||||
| 2021 | 2020 | |||||||
| Net revenue | $ | 102,552 | $ | 61,732 | ||||
| Cost of goods sold | 25,495 | 18,793 | ||||||
| Gross profit | 77,057 | 42,939 | ||||||
| Operating expenses: | ||||||||
| Selling, general and administrative | 58,232 | 52,613 | ||||||
| Research and development | 6,209 | 5,410 | ||||||
| Total operating expenses | 64,441 | 58,023 | ||||||
| Income (loss) from operations | 12,616 | (15,084 | ) | |||||
| Other expense, net: | ||||||||
| Interest expense, net | (2,470 | ) | (2,510 | ) | ||||
| Gain on settlement of deferred acquisition consideration | - | 1,295 | ||||||
| Other income (expense), net | (3 | ) | 21 | |||||
| Total other expense, net | (2,473 | ) | (1,194 | ) | ||||
| Net income (loss) before income taxes | 10,143 | (16,278 | ) | |||||
| Income tax expense | (200 | ) | (35 | ) | ||||
| Net income (loss) | $ | 9,943 | $ | (16,313 | ) | |||
| Net income (loss), per share: | ||||||||
| Basic | $ | 0.08 | $ | (0.16 | ) | |||
| Diluted | $ | 0.07 | $ | (0.16 | ) | |||
| Weighted-average common shares outstanding | ||||||||
| Basic | 127,870,065 | 104,486,924 | ||||||
| Diluted | 133,451,950 | 104,486,924 | ||||||
CONSOLIDATED STATEMENT OF CASH FLOWS (amounts in thousands, except share and per share data) |
||||||||
| Three Months Ended |
||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | 9,943 | $ | (16,313 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | 1,010 | 902 | ||||||
| Amortization of intangible assets | 1,243 | 817 | ||||||
| Amortization of operating lease right-of-use assets | 1,129 | - | ||||||
| Non-cash interest expense | 72 | 46 | ||||||
| Deferred interest expense | 525 | 470 | ||||||
| Deferred rent expense and lease incentive obligation | - | 92 | ||||||
| Gain on settlement of deferred acquisition consideration | - | (1,295 | ) | |||||
| Recovery of certain notes receivable from related parties | (179 | ) | - | |||||
| Provision recorded for sales returns and doubtful accounts | 1,103 | 217 | ||||||
| Loss on disposal of property and equipment | 239 | 201 | ||||||
| Adjustment for excess and obsolete inventories | 2,290 | 769 | ||||||
| Stock-based compensation | 698 | 209 | ||||||
| Change in fair value of Earnout liability | (296 | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (16,301 | ) | 6,325 | |||||
| Inventory | (4,212 | ) | (4,287 | ) | ||||
| Prepaid expenses and other current assets | (622 | ) | (2,099 | ) | ||||
| Operating leases | (1,210 | ) | - | |||||
| Accounts payable | 1,842 | (1,910 | ) | |||||
| Accrued expenses and other current liabilities | 1,411 | (1,274 | ) | |||||
| Other liabilities | (164 | ) | (153 | ) | ||||
| Net cash used in operating activities | (1,479 | ) | (17,283 | ) | ||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (4,957 | ) | (4,243 | ) | ||||
| Proceeds from the repayment of notes receivable from related parties | 179 | - | ||||||
| Net cash used in investing activities | (4,778 | ) | (4,243 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from term loan | - | 10,000 | ||||||
| Payments of withholding taxes in connection with RSUs vesting | (417 | ) | - | |||||
| Proceeds from the exercise of stock options | 984 | 816 | ||||||
| Principal repayments of finance lease obligations | (675 | ) | (544 | ) | ||||
| Payment of deferred acquisition consideration | (483 | ) | (2,042 | ) | ||||
| Net cash (used in) provided by financing activities | (591 | ) | 8,230 | |||||
| Change in cash and restricted cash | (6,848 | ) | (13,296 | ) | ||||
| Cash and restricted cash, beginning of period | 84,806 | 60,370 | ||||||
| Cash and restricted cash, end of period | $ | 77,958 | $ | 47,074 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 1,937 | $ | 2,244 | ||||
| Cash paid for income taxes | $ | - | $ | - | ||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Purchases of property and equipment included in accounts payable and accrued expenses | $ | 306 | $ | 2,942 | ||||
| Right-of-use assets obtained through operating lease obligations | $ | 310 | $ | - | ||||
Non-GAAP Financial Measures
Our management uses financial measures that are not in accordance with generally accepted accounting principles in
The following is a reconciliation of GAAP net income (loss) to non-GAAP EBITDA and non-GAAP Adjusted EBITDA for each of the periods presented:
| Three Months Ended |
||||||||
| 2021 | 2020 | |||||||
| (in thousands) | ||||||||
| Net income (loss) | $ | 9,943 | $ | (16,313 | ) | |||
| Interest expense, net | 2,470 | 2,510 | ||||||
| Income tax expense | 200 | 35 | ||||||
| Depreciation | 1,010 | 902 | ||||||
| Amortization | 1,243 | 817 | ||||||
| EBITDA | 14,866 | (12,049 | ) | |||||
| Stock-based compensation expense | 698 | 209 | ||||||
| Gain on settlement of deferred acquisition consideration (1) | - | (1,295 | ) | |||||
| Recovery of certain notes receivable from related parties (2) | (179 | ) | - | |||||
| Change in fair value of Earnout (3) | (296 | ) | - | |||||
| Restructuring charge (4) | 927 | - | ||||||
| Transaction cost (5) | - | 243 | ||||||
| Cancellation fee (6) | - | 1,950 | ||||||
| Adjusted EBITDA | $ | 16,016 | $ | (10,942 | ) | |||
(1) Amount reflects the gain recognized related to the settlement of the deferred acquisition consideration dispute with the sellers of NuTech Medical in
(2) Amount reflects the collection of certain notes receivable from related parties previously reserved. See Note 19 to the unaudited financial statements included in our Form 10-Q.
(3) Amount reflects the change in the fair value of the Earnout liability in connection with the CPN acquisition. See Note 3 to the unaudited financial statements included in our Form 10-Q.
(4) Amount reflects employee retention and other benefit-related costs related to the Company’s restructuring activities. See Note 12 to the unaudited financial statements included in our Form 10-Q.
(5) Amount reflects the legal, advisory and other professional fees incurred in the three months ended
(6) Amount reflects the cancellation fee for terminating certain product development and consulting agreements the Company inherited from NuTech Medical. See Note 18 to the unaudited financial statements included in our Form 10-Q.
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 for fiscal 2021 and the breakdown of such 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 and the impact to the Company of the loss of preferred “pass through” status for PuraPly AM and PuraPly in 2020; (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 significant losses since inception 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 of Affinity in sufficient quantities to meet demand; (10) the COVID-19 pandemic and its impact, if any, on the Company’s fiscal condition and results of operations; and (11) other risks and uncertainties described in the Company’s filings with the
About
Investor Inquiries:Westwicke Partners Mike Piccinino , CFA OrganoIR@westwicke.com 443-213-0500 Press and Media Inquiries: OrganogenesisLori Freedman LFreedman@organo.com
Source: Organogenesis Holdings Inc.