8-K
False000166118100016611812024-02-292024-02-29

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported):February 29, 2024

ORGANOGENESIS HOLDINGS INC.

(Exact Name of Registrant as specified in its charter)

Delaware

001-37906

98-1329150

(State or Other Jurisdiction

of Incorporation)

(Commission

File Number)

(IRS Employer

Identification No.)

85 Dan Road

Canton, MA

02021

(Address of principal executive offices)

(Zip Code)

(781) 575-0775

(Registrant’s telephone number, including area code)

Not Applicable

(Registrant’s name or former address, if change since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange on which registered

Class A Common Stock, $0.0001 par value

 

ORGO

 

Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐

 


Item 2.02 Results of Operations and Financial Condition.

On February 29, 2024, the Company announced via press release its results for the fiscal fourth quarter and year ended December 31, 2023. A copy of the Company’s press release is hereby furnished to the Commission and incorporated herein by reference as Exhibit 99.1.

The information in the press release attached as Exhibit 99.1 is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit

No.

Description

99.1

 

Press Release dated February 29, 2024

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Organogenesis Holdings Inc.

By:

/s/ Lori Freedman

Name:

Lori Freedman

Title:

Chief Administrative and Legal Officer

 

Date: February 29, 2024

 


EX-99.1

Exhibit 99.1

 

https://cdn.kscope.io/3ca325eb6f1c639678c2a9910237da6f-img36819578_0.jpg

 

FOR IMMEDIATE RELEASE

 

Organogenesis Holdings Inc. Reports Fourth Quarter 2023 and Fiscal Year 2023 Financial Results; Introduces Fiscal Year 2024 Guidance

 

CANTON, Mass., (February 29, 2024) – 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 fourth quarter and the year ended December 31, 2023.

 

Fourth Quarter 2023 Financial Results Summary:

 

Net revenue of $99.7 million for the fourth quarter of 2023, a decrease of 14% compared to net revenue of $115.5 million for the fourth quarter of 2022. Net revenue for the fourth quarter of 2023 consists of:
o
Net revenue from Advanced Wound Care products of $93.2 million, a decrease of 14% from the fourth quarter of 2022.
o
Net revenue from Surgical & Sports Medicine products of $6.5 million, a decrease of 3% from the fourth quarter of 2022.
Net loss of $0.6 million for the fourth quarter of 2023, compared to net income of $7.5 million for the fourth quarter of 2022, a decrease of $8.1 million.
Adjusted net income1 of $1.9 million for the fourth quarter of 2023, compared to adjusted net income of $8.9 million for the fourth quarter of 2022, a decrease of $7.0 million.
Adjusted EBITDA of $7.5 million for the fourth quarter of 2023, compared to Adjusted EBITDA of $14.1 million for the fourth quarter of 2022, a decrease of $6.6 million.

 

Fiscal Year 2023 Financial Results Summary:

 

Net revenue of $433.1 million for the year ended December 31, 2023, a decrease of 4% compared to net revenue of $450.9 million for the year ended December 31, 2022. Net revenue for the year ended December 31, 2023 consists of:
o
Net revenue from Advanced Wound Care products of $405.5 million, a decrease of 4% year-over-year.
o
Net revenue from Surgical & Sports Medicine products of $27.6 million, a decrease of 4% year-over-year.
Net income of $4.9 million for the year ended December 31, 2023, compared to net income of $15.5 million for the year ended December 31, 2022, a decrease of $10.5 million.
Adjusted net income1 of $12.7 million for the year ended December 31, 2023, compared to an adjusted net income of $26.2 million for the year ended December 31, 2022, a decrease of $13.5 million.
Adjusted EBITDA of $42.6 million for the year ended December 31, 2023, compared to an adjusted EBITDA of $49.3 million for the year ended December 31, 2022, a decrease of $6.7 million.

 

“We are building positive momentum with the many commercial support programs implemented to enhance existing customer relationships and regain lost accounts in a uniquely challenging operating environment”, said

 


 

Gary S. Gillheeney, Sr., President and Chief Executive Officer of Organogenesis. "Despite the expected operating environment challenges, we delivered revenues within the lower end of our guidance. Looking ahead to 2024, we expect to return to revenue growth through continued demonstration of value to our customers and new product launches in both our Advanced Wound Care and Surgical & Sports Medicine markets broadening our portfolio of differentiated treatment options.”

Mr. Gillheeney, Sr. continued: “We continue to make progress with the ReNu program, which we believe, represents a significant value driver by addressing a critical unmet need in treating the symptoms of knee osteoarthritis. We remain confident in the long-term opportunity for Organogenesis and expect to continue to lead in our space with highly innovative products that deliver on our mission to provide integrated healing solutions that substantially improve outcomes while lowering the overall cost of care.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1Defined as GAAP net income adjusted to exclude the effect of amortization, restructuring charges, LCD legal fees and sales retention, write-off of certain assets, facility construction project pause, GPO settlement fee and the resulting income taxes on these items.

 

 

 


 

Fourth Quarter 2023 Financial Results:


 

 

 

Three Month Ended December 31,

 

 

Change

 

 

 

2023

 

 

2022

 

 

$

 

 

%

 

 

 

(in thousands, except for percentages)

 

 

 

 

 

 

 

Advanced Wound Care

 

$

93,165

 

 

$

108,836

 

 

$

(15,671

)

 

 

(14

%)

Surgical & Sports Medicine

 

 

6,486

 

 

 

6,680

 

 

 

(194

)

 

 

(3

%)

Net revenue

 

$

99,651

 

 

$

115,516

 

 

$

(15,865

)

 

 

(14

%)

 

Net revenue for the fourth quarter of 2023 was $99.7 million, compared to $115.5 million for the fourth quarter of 2022, a decrease of $15.9 million, or 14%. The decrease in net revenue was driven by a decrease of $15.7 million, or 14% in net revenue of Advanced Wound Care products and a decrease of $0.2 million, or 3% in net revenue of Surgical & Sports Medicine products.

 

Gross profit for the fourth quarter of 2023 was $71.9 million, or 72% of net revenue, compared to $88.4 million or 77% of net revenue, for the fourth quarter of 2022, a decrease of $16.5 million, or 19%.

 

Operating expenses for the fourth quarter of 2023 were $73.2 million, compared to $79.7 million for the fourth quarter of 2022, a decrease of $6.5 million, or 8%. R&D expenses were $11.8 million for the fourth quarter of 2023, compared to $11.4 million in the fourth quarter of 2022, an increase of $0.4 million, or 3%. Selling, general and administrative expenses were $61.4 million, compared to $68.3 million in the fourth quarter of 2022, a decrease of $6.9 million, or 10%.

 

Operating loss for the fourth quarter of 2023 was $1.3 million, compared to operating income of $8.7 million for the fourth quarter of 2022, a decrease of $10.0 million.

 

Total other expense, net, for the fourth quarter of 2023 was $0.5 million, compared to other income, net of less than $0.1 million for the fourth quarter of 2022, a decrease of approximately $0.6 million.

 

Net loss for the fourth quarter of 2023 was $0.6 million, or $(0.00) per share, compared to net income of $7.5 million, or $0.06 per share, for the fourth quarter of 2022, a decrease of $8.1 million, or $0.06 per share.

Adjusted net income was $1.9 million for the fourth quarter of 2023, compared to adjusted net income of $8.9 million for the fourth quarter of 2022, a decrease of $7.0 million, or 78%.

 

Adjusted EBITDA was $7.5 million for the fourth quarter of 2023, compared to $14.1 million for the fourth quarter of 2022, a decrease of $6.6 million, or 47%.

 

As of December 31, 2023, the Company had $104.3 million in cash, cash equivalents and restricted cash and $66.2 million in term loan debt obligations, compared to $103.3 million in cash, cash equivalents and restricted cash and $70.8 million in term loan debt obligations, as of December 31, 2022.

 

 

 


 

Fiscal Year 2023 Results

The following table represents net revenue by product grouping for the year ended December 31, 2023 and December 31, 2022, respectively:

 

 

Year Ended December 31,

 

 

Change

 

 

 

2023

 

 

2022

 

 

$

 

 

%

 

 

 

(in thousands, except for percentages)

 

 

 

 

 

 

 

Advanced Wound Care

 

$

405,514

 

 

$

422,231

 

 

$

(16,717

)

 

 

(4

%)

Surgical & Sports Medicine

 

 

27,626

 

 

 

28,662

 

 

 

(1,036

)

 

 

(4

%)

Net revenue

 

$

433,140

 

 

$

450,893

 

 

$

(17,753

)

 

 

(4

%)

 

Net revenue for the year ended December 31, 2023 was $433.1 million, compared to $450.9 million for the year ended December 31, 2022, a decrease of $17.8 million, or 4%. The decrease in net revenue was driven by a decrease of $16.7 million, or 4% in net revenue of Advanced Wound Care products and a decrease of $1.0 million, or 4% in net revenue of Surgical & Sports Medicine products.

 

Gross profit for the year ended December 31, 2023 is $326.7 million, or 75% of net revenue, compared to $345.9 million, or 77% of net revenue, for the year ended December 31, 2022, a decrease of $19.2 million, or 6%.

 

Operating expenses for the year ended December 31, 2023 were $314.1 million, compared to $323.6 million for the year ended December 31, 2022, a decrease of $9.4 million, or 3%. R&D expenses were $44.4 million for the year ended December 31, 2023, compared to $39.8 million for year ended December 31, 2022, an increase of $4.6 million, or 12%. Selling, general and administrative expenses were $269.8 million for year ended December 31, 2023, compared to $283.8 million year ended December 31, 2022, a decrease of $14.1 million, or 5%.

 

Operating income for the year ended December 31, 2023 was $12.5 million, compared to an operating income of $22.3 million for the year ended December 31, 2022, a decrease of $9.8 million.

 

Total other expense, net, for the year ended December 31, 2023 was $2.1 million, compared to $2.0 million for the year ended December 31, 2022, a decrease of $0.1 million.

 

Net income of $4.9 million for the year ended December 31, 2023 or $0.04 per share, compared to net income of $15.5 million, or $0.12 per share for the year ended December 31, 2022, a decrease of $10.5 million, or $0.08 per share.

 

Adjusted net income for the year ended December 31, 2023 was $12.7 million., compared to $26.2 million for the year ended December 31, 2022, a decrease of $13.5 million, or 52%.

 

Adjusted EBITDA of $42.6 million for the year ended December 31, 2023, compared to Adjusted EBITDA of $49.3 million for the year ended December 31, 2022, a decrease of $6.7 million, or 14%.

 

 


 

Fiscal Year 2024 Guidance:

 

For the year ending December 31, 2024, the Company expects:

 

Net revenue between $445.0 million and $470.0 million, 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.
o
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 approximately 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 approximately 9% to 27% year-over-year as compared to net revenue of $27.6 million for the year ended December 31, 2023.
Net income (loss) between ($10.6) million and $4.6 million and adjusted net income (loss) 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.

 

 

Earnings Conference Call:

 

Financial results for the fourth fiscal quarter and year ended December 31, 2023 will be reported after the market closes on Thursday, February 29th. Management will host a conference call at 5:00 p.m. Eastern Time on February 29th 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)

 

 

 

December 31,

 

 

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

103,840

 

 

$

102,478

 

Restricted cash

 

 

498

 

 

 

812

 

Accounts receivable, net

 

 

81,999

 

 

 

89,450

 

Inventories

 

 

28,253

 

 

 

24,783

 

Prepaid expenses and other current assets

 

 

10,454

 

 

 

5,086

 

Total current assets

 

 

225,044

 

 

 

222,609

 

Property and equipment, net

 

 

116,228

 

 

 

102,463

 

Intangible assets, net

 

 

15,871

 

 

 

20,789

 

Goodwill

 

 

28,772

 

 

 

28,772

 

Operating lease right-of-use assets, net

 

 

40,118

 

 

 

43,192

 

Deferred tax asset, net

 

 

28,002

 

 

 

30,014

 

Other assets

 

 

5,990

 

 

 

1,520

 

Total assets

 

$

460,025

 

 

$

449,359

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Current portion of term loan

 

$

5,486

 

 

$

4,538

 

Current portion of finance lease obligations

 

 

1,081

 

 

 

 

Current portion of operating lease obligations - related party

 

 

3,140

 

 

 

3,001

 

Current portion of operating lease obligations

 

 

10,004

 

 

 

8,707

 

Accounts payable

 

 

30,724

 

 

 

32,330

 

Accrued expenses and other current liabilities

 

 

30,074

 

 

 

26,447

 

Total current liabilities

 

 

80,509

 

 

 

75,023

 

Term loan, net of current portion

 

 

60,745

 

 

 

66,231

 

Finance lease obligations, net of current portion

 

 

1,888

 

 

 

 

Operating lease obligations, net of current portion - related party

 

 

17,227

 

 

 

20,367

 

Operating lease obligations, net of current portion

 

 

19,780

 

 

 

20,947

 

Other liabilities

 

 

1,213

 

 

 

1,122

 

Total liabilities

 

 

181,362

 

 

 

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; 132,044,944 and 131,647,677 shares issued; 131,316,396 and 130,919,129 shares outstanding at December 31, 2023 and 2022, respectively.

 

 

13

 

 

 

13

 

Additional paid-in capital

 

 

319,621

 

 

 

310,957

 

Accumulated deficit

 

 

(40,971

)

 

 

(45,301

)

Total stockholders' equity

 

 

278,663

 

 

 

265,669

 

Total liabilities and stockholders' equity

 

$

460,025

 

 

$

449,359

 

 

 


 

ORGANOGENESIS HOLDINGS INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(amounts in thousands, except share and per share data)

 

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net revenue

 

$

99,651

 

 

$

115,516

 

 

$

433,140

 

 

$

450,893

 

Cost of goods sold

 

 

27,769

 

 

 

27,110

 

 

 

106,481

 

 

 

105,019

 

Gross profit

 

 

71,882

 

 

 

88,406

 

 

 

326,659

 

 

 

345,874

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general and administrative

 

 

61,381

 

 

 

68,293

 

 

 

269,754

 

 

 

283,808

 

Research and development

 

 

11,770

 

 

 

11,395

 

 

 

44,380

 

 

 

39,762

 

Total operating expenses

 

 

73,151

 

 

 

79,688

 

 

 

314,134

 

 

 

323,570

 

Loss (income) from operations

 

 

(1,269

)

 

 

8,718

 

 

 

12,525

 

 

 

22,304

 

Other expense, net:

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(502

)

 

 

30

 

 

 

(2,190

)

 

 

(2,009

)

Other income (expense), net

 

 

(25

)

 

 

6

 

 

 

57

 

 

 

(13

)

Total other expense, net

 

 

(527

)

 

 

36

 

 

 

(2,133

)

 

 

(2,022

)

Net income before income taxes

 

 

(1,796

)

 

 

8,754

 

 

 

10,392

 

 

 

20,282

 

Income tax (expense) benefit

 

 

1,228

 

 

 

(1,268

)

 

 

(5,447

)

 

 

(4,750

)

Net (loss) income and comprehensive (loss) income

 

$

(568

)

 

$

7,486

 

 

$

4,945

 

 

$

15,532

 

Net income, per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.00

)

 

$

0.06

 

 

$

0.04

 

 

$

0.12

 

Diluted

 

$

(0.00

)

 

$

0.06

 

 

$

0.04

 

 

$

0.12

 

Weighted-average common shares outstanding

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

130,916,950

 

 

 

128,661,435

 

 

 

131,231,317

 

 

 

130,070,231

 

Diluted

 

 

131,857,509

 

 

 

133,348,995

 

 

 

132,746,727

 

 

 

132,383,152

 

 

 

 


 

ORGANOGENESIS HOLDINGS INC. UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

(amounts in thousands, except share and per share data)

 

 

 

Year Ended December 31,

 

 

 

2023

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net income

 

$

4,945

 

 

$

15,532

 

 

$

94,202

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

 

Depreciation

 

 

10,448

 

 

 

5,845

 

 

 

5,781

 

Amortization of intangible assets

 

 

4,918

 

 

 

4,883

 

 

 

4,949

 

Amortization of operating lease right-of-use assets

 

 

8,083

 

 

 

7,303

 

 

 

5,946

 

Non-cash interest expense

 

 

427

 

 

 

434

 

 

 

346

 

Deferred interest expense

 

 

490

 

 

 

501

 

 

 

1,493

 

Deferred tax expense (benefit)

 

 

2,012

 

 

 

1,980

 

 

 

(31,976

)

Loss on disposal of property and equipment

 

 

235

 

 

 

4,482

 

 

 

1,407

 

Loss on lease termination

 

 

559

 

 

 

 

 

 

 

Provision recorded for credit losses

 

 

1,297

 

 

 

1,781

 

 

 

2,999

 

Adjustment for excess and obsolete inventories

 

 

6,580

 

 

 

9,648

 

 

 

12,079

 

Stock-based compensation

 

 

8,996

 

 

 

6,552

 

 

 

3,864

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

1,883

 

Change in fair value of earnout liability

 

 

 

 

 

 

 

 

(3,985

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

5,539

 

 

 

(8,770

)

 

 

(28,654

)

Inventories

 

 

(8,179

)

 

 

(9,410

)

 

 

(9,302

)

Prepaid expenses and other current and other assets

 

 

(10,115

)

 

 

(378

)

 

 

(34

)

Operating leases

 

 

(8,439

)

 

 

(7,006

)

 

 

(6,156

)

Accounts payable

 

 

(108

)

 

 

3,260

 

 

 

3,847

 

Accrued expenses and other current liabilities

 

 

3,138

 

 

 

(11,850

)

 

 

9,354

 

Other liabilities

 

 

91

 

 

 

72

 

 

 

(6,065

)

Net cash provided by operating activities

 

 

30,917

 

 

 

24,859

 

 

 

61,978

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(24,364

)

 

 

(33,898

)

 

 

(31,220

)

Net cash used in investing activities

 

 

(24,364

)

 

 

(33,898

)

 

 

(31,220

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Line of credit repayments under the 2019 Credit Agreement

 

 

 

 

 

 

 

 

(10,000

)

Term loan repayments under the 2019 Credit Agreement

 

 

 

 

 

 

 

 

(60,000

)

Proceeds from term loan under the 2021 Credit Agreement, net of debt discount and issuance cost

 

 

 

 

 

 

 

 

73,174

 

Term loan repayments under the 2021 Credit Agreement

 

 

(4,688

)

 

 

(2,813

)

 

 

(938

)

Principal repayments of finance lease obligations

 

 

(485

)

 

 

(200

)

 

 

(2,630

)

Proceeds from the exercise of stock options

 

 

 

 

 

2,070

 

 

 

2,198

 

Payments of withholding taxes in connection with RSUs vesting

 

 

(332

)

 

 

(648

 )

 

 

(737

)

Payments of deferred acquisition consideration

 

 

 

 

 

(608

)

 

 

(483

)

Payment to extinguish debt

 

 

 

 

 

 

 

 

(1,620

)

Net cash used in financing activities

 

 

(5,505

)

 

 

(2,199

)

 

 

(1,036

)

Change in cash, cash equivalents and restricted cash

 

 

1,048

 

 

 

(11,238

)

 

 

29,722

 

Cash, cash equivalents, and restricted cash, beginning of year

 

 

103,290

 

 

 

114,528

 

 

 

84,806

 

Cash, cash equivalents, and restricted cash, end of year

 

$

104,338

 

 

$

103,290

 

 

$

114,528

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

Cash paid for interest

 

$

5,436

 

 

$

2,649

 

 

$

5,787

 

Cash paid for income taxes

 

$

3,052

 

 

$

1,201

 

 

$

607

 

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

 

 

 

Cumulative effect adjustment for adoption of ASU No. 2016-13 (Note 2)

 

$

615

 

 

$

 

 

$

 

Deferred acquisition consideration and earnout liability recorded for business acquisition

 

$

 

 

$

828

 

 

$

 

Purchases of property and equipment in accounts payable and accrued expenses

 

$

841

 

 

$

1,928

 

 

$

3,750

 

Right-of-use assets obtained through operating lease obligations

 

$

5,869

 

 

$

1,350

 

 

$

53,793

 

Right-of-use assets obtained through finance lease obligations

 

$

3,454

 

 

$

 

 

$

 

 

 

 

 

 


 

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 each of the periods presented:

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

($, in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net (loss) income

 

$

(568

)

 

$

7,486

 

 

$

4,945

 

 

$

15,532

 

Interest expense, net

 

 

502

 

 

 

(30

 )

 

 

2,190

 

 

 

2,009

 

Income tax expense (benefit)

 

 

(1,228

 )

 

 

1,268

 

 

 

5,447

 

 

 

4,750

 

Depreciation

 

 

2,982

 

 

 

1,514

 

 

 

10,448

 

 

 

5,845

 

Amortization

 

 

1,229

 

 

 

1,221

 

 

 

4,918

 

 

 

4,883

 

EBITDA

 

 

2,917

 

 

 

11,459

 

 

 

27,948

 

 

 

33,019

 

Stock-based compensation expense

 

 

2,366

 

 

 

1,855

 

 

 

8,996

 

 

 

6,552

 

Restructuring charge (1)

 

 

1,918

 

 

 

750

 

 

 

3,796

 

 

 

2,268

 

Write-off of certain assets (2)

 

 

 

 

 

 

 

 

 

 

 

4,200

 

Settlement fee (3)

 

 

 

 

 

 

 

 

 

 

 

2,600

 

Facility construction project pause (4)

 

 

 

 

 

 

 

 

 

 

 

632

 

Legal fees (5)

 

 

 

 

 

 

 

 

1,182

 

 

 

 

Sales retention (6)

 

 

272

 

 

 

 

 

 

694

 

 

 

 

Adjusted EBITDA

 

$

7,473

 

 

$

14,064

 

 

$

42,616

 

 

$

49,271

 

(1)
Amounts reflect employee retention and benefits as well as other exit costs associated with the Company’s restructuring activities.
(2)
Amount reflects the disposal of certain equipment related to the same facility.
(3)
Amounts reflect the fee the Company paid to a GPO to settle previously disputed GPO fees.
(4)
Amount reflects the cancellation fees incurred in connection with the Company’s decision to pause one of its manufacturing facility construction projects.
(5)
Amount represents the legal fees incurred related to the recently published and withdrawn local coverage determinations, or LCDs.
(6)
Amount represents the compensation expenses related to retention for those sales employees impacted by the LCDs.

 

 


 

The following table presents a reconciliation of GAAP net income to non-GAAP adjusted net income, for each of the periods presented:

 

 

Three Months Ended December 31,

 

 

Year Ended December 31,

 

($, in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net (loss) income

 

$

(568

)

 

$

7,486

 

 

$

4,945

 

 

$

15,532

 

Amortization

 

 

1,229

 

 

 

1,221

 

 

 

4,918

 

 

 

4,883

 

Restructuring charge (1)

 

 

1,918

 

 

 

750

 

 

 

3,796

 

 

 

2,268

 

Write-off of certain assets (2)

 

 

 

 

 

 

 

 

 

 

 

4,200

 

Settlement fee (3)

 

 

 

 

 

 

 

 

 

 

 

2,600

 

Facility construction project pause (4)

 

 

 

 

 

 

 

 

 

 

 

632

 

Legal fees (5)

 

 

 

 

 

 

 

 

1,182

 

 

 

 

Sales retention (6)

 

 

272

 

 

 

 

 

 

694

 

 

 

 

Tax on above

 

 

(923

)

 

 

(527

)

 

 

(2,859

)

 

 

(3,898

)

Adjusted net income

 

$

1,928

 

 

$

8,930

 

 

$

12,676

 

 

$

26,217

 

(1)
Amounts reflect employee retention and benefits as well as other exit costs associated with the Company’s restructuring activities.
(2)
Amount reflects the disposal of certain equipment related to the same facility.
(3)
Amounts reflect the fee the Company paid to a GPO to settle previously disputed GPO fees.
(4)
Amount reflects the cancellation fees incurred in connection with the Company’s decision to pause one of its manufacturing facility construction projects.
(5)
Amount represents the legal fees incurred related to the recently published and withdrawn local coverage determinations, or LCDs.
(6)
Amount represents the compensation expenses related to retention for those sales employees impacted by the LCDs.

 

The following table presents a reconciliation of projected GAAP net income (loss) 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,

 

 

($, in thousands)

 

2024L

 

 

2024H

 

 

Net (loss) income

 

$

(10,565

)

 

$

4,616

 

 

Interest expense, net

 

 

3,000

 

 

 

2,200

 

 

Income tax expense (benefit)

 

 

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

 

 

Restructuring charge

 

 

-

 

 

 

-

 

 

Adjusted EBITDA

 

 

15,823

 

 

 

34,957

 

 

The following table presents a reconciliation of projected GAAP net income (loss) to projected non-GAAP adjusted net income included in our guidance for the year ending December 31, 2024:

 

 

 

Year Ended December 31,

 

($, in thousands)

 

2024L

 

 

2024H

 

Net (loss) income

 

$

(10,565

)

 

$

4,616

 

Amortization

 

 

3,400

 

 

 

3,400

 

Restructuring charge

 

 

 

 

 

 

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 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’s ability to raise funds to expand its business; (6) the Company has incurred losses in prior years 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; and (12) 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 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:
Westwicke Partners
Mike Piccinino, CFA
OrganoIR@westwicke.com
443-213-0500

 

Press and Media Inquiries:
Organogenesis

Lori Freedman

LFreedman@organo.com