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 third quarter ended September 30th, 2023.
Third Quarter 2023 Financial Results
Summary:
- Net revenue of $108.5 million for the third quarter of 2023, a
decrease of $8.3 million compared to net revenue of $116.9 million
for the third quarter of 2022. Net revenue for the third quarter of
2023 consists of:
- Net revenue from Advanced Wound Care products of $101.4
million, a decrease of 7% from the third quarter of 2022.
- Net revenue from Surgical & Sports Medicine products of
$7.2 million, a decrease of 2% from the third quarter of 2022.
- Net income of $3.2 million for the third quarter of 2023,
compared to net income of $0.2 million for the third quarter of
2022, an increase of $3.0 million.
- Adjusted net income1 of $5.3 million for the third quarter of
2023, compared to an adjusted net income of $5.1 million for the
third quarter of 2022, an increase of $0.2 million.
- Adjusted EBITDA of $16.0 million for the third quarter of 2023,
compared to Adjusted EBITDA of $11.6 million for the third quarter
of 2022, an increase of $4.4 million.
"Our third quarter revenue results were impacted by the
LCD-related issues discussed on our second quarter call," said Gary
S. Gillheeney, Sr., President and Chief Executive Officer of
Organogenesis. “Notably, despite the revenue impact, we delivered
significant improvements in our operating profitability and
generated strong adjusted EBITDA and cash flow compared to the
prior year period.”
Mr. Gillheeney, Sr. continued: “While we are
pleased that the LCDs were withdrawn, we continue to navigate
through the challenging environment created by their proposed
adoption. We have reintroduced our 2023 financial guidance which
reflects the impacts of business disruption in the third quarter,
as well as our recovery activities throughout the end of the year.
We expect to continue to build momentum as we close out 2023 and
remain confident that we are well positioned for growth with our
broad portfolio of products across all sites of care as we 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 (loss) adjusted to
exclude the effect of amortization, restructuring charges, LCD
legal fees and sales retention, write off of certain assets,
facility construction project pause costs, GPO settlement fee and
the resulting income taxes on these items.
Third Quarter 2023 Financial
Results:
|
|
Three Months
Ended September 30, |
|
|
Change |
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
|
(in
thousands, except for percentages) |
Advanced Wound Care |
|
$ |
101,357 |
|
|
$ |
109,514 |
|
|
$ |
(8,157 |
) |
|
|
(7%) |
Surgical & Sports Medicine |
|
|
7,174 |
|
|
|
7,345 |
|
|
|
(171 |
) |
|
|
(2%) |
Net revenue |
|
$ |
108,531 |
|
|
$ |
116,859 |
|
|
$ |
(8,328 |
) |
|
|
(7%) |
Net revenue for the third quarter of 2023 was
$108.5 million, compared to $116.9 million for the third quarter of
2022, a decrease of $8.3 million, or 7%. The decrease in net
revenue was driven by a decrease of $8.2 million, or 7% in net
revenue for Advanced Wound Care products and a decrease of $0.2
million, or 2%, in net revenue for Surgical & Sports Medicine
products.
Gross profit for the third quarter of 2023 was
$82.7 million, or 76% of net revenue, compared to $90.7 million, or
78% of net revenue for the third quarter of 2022, a decrease of
$7.9 million, or 9%.
Operating expenses for the third quarter of 2023
were $74.7 million compared to $88.9 million for the third quarter
of 2022, a decrease of $14.2 million, or 16%. R&D expense was
$10.5 million for the third quarter of 2023, compared to $9.6
million for the third quarter of 2022, an increase of $0.9 million,
or 9%. Selling, general and administrative expenses were $64.2
million for the third quarter of 2023, compared to $79.3 million
for the third quarter of 2022, a decrease of $15.1 million, or
19%.
Operating income for the third quarter of 2023 was
$8.1 million, compared to operating income of $1.8 million for the
third quarter of 2022, an increase of $6.3 million, or 352%.
Total other expense, net, for the third quarter of
2023 was $0.4 million, compared to $0.6 million for the third
quarter of 2022, a decrease of $0.2 million, or 27%.
Net income for the third quarter of 2023 was $3.2
million, or $0.02 per share, compared to net income of $0.2
million, or $0.00 per share, for the third quarter of 2022, an
increase of $3.0 million, or $0.02 per share.
Adjusted net income of $5.3 million for the third
quarter of 2023, compared to adjusted net income of $5.1 million
for the third quarter of 2022, an increase of $0.2 million, or
4%.
Adjusted EBITDA was $16.0 million for the third
quarter of 2023, compared to $11.6 million for the third quarter of
2022, an increase of $4.4 million, or 38%.
As of September 30th, 2023, the Company had $98.8
million in cash, cash equivalents and restricted cash and $67.6
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.
Nine Months ended September 30, 2023,
Results
The following table represents net revenue by
product grouping for the nine months ended September 30, 2023 and
September 30, 2022, respectively:
|
|
Nine Months Ended
September 30, |
|
|
Change |
|
|
2023 |
|
|
2022 |
|
|
$ |
|
|
% |
|
|
(in thousands, except for percentages) |
Advanced Wound Care |
|
$ |
312,349 |
|
|
$ |
313,395 |
|
|
$ |
(1,046 |
) |
|
|
0% |
Surgical & Sports Medicine |
|
|
21,140 |
|
|
|
21,982 |
|
|
|
(842 |
) |
|
|
(4%) |
Net revenue |
|
$ |
333,489 |
|
|
$ |
335,377 |
|
|
$ |
(1,888 |
) |
|
|
(1%) |
Net revenue for the nine months ended September
30, 2023 was $333.5 million, compared to $335.4 million for the
nine months ended September 30, 2022, a decrease of $1.9 million,
or 1%. The decrease in net revenue was driven by a decrease of $1.0
million, or less than 1%, in net revenue for Advanced Wound Care
products and by a decrease of $0.8 million, or 4% in net revenue
for Surgical & Sports Medicine products.
Gross profit for the nine months ended September
30, 2023 was $254.8 million, or 76% of net revenue, compared to
$257.5 million, or 77% of net revenue, for the nine months ended
September 30, 2022, a decrease of $2.7 million, or 1%.
Operating expenses for the nine months ended
September 30, 2023 were $241.0 million, compared to $243.9 million
for the nine months September 30, 2022, a decrease of $2.9 million,
or 1%. R&D expense was $32.6 million for the nine months ended
September 30, 2023, compared to $28.4 million in the nine months
ended September 30, 2022, an increase of $4.2 million, or 15%.
Selling, general and administrative expenses were $208.4 million
for the nine months ended September 30, 2023, compared to $215.5
million in the nine months ended September 30, 2022, a decrease of
$7.1 million, or 3%.
Operating income for the nine months ended
September 30, 2023 was $13.8 million, compared to operating income
of $13.6 million for the nine months ended September 30, 2022, an
increase of $0.2 million, or 2%.
Total other expenses, net, for the nine months
ended September 30, 2023 were $1.6 million, compared to $2.1
million for the nine months ended September 30, 2022, a decrease of
$0.5 million, or 22%.
Net income of $5.5 million for the nine months
ended September 30, 2023 or $0.04 per share, compared to net income
of $8.0 million, or $0.06 per share for the nine months ended
September 30, 2022, a decrease of $2.5 million, or $0.02, per
share.
Adjusted net income for the nine months ended
September 30, 2023 was $10.7 million compared to $17.3 million, for
the nine months ended September 30, 2022, a decrease of $6.5
million, or 38%.
Adjusted EBITDA of $35.1 million for the nine
months ended September 30, 2023, compared to an Adjusted EBITDA of
$35.2 million, for the nine months ended September 30, 2022, a
decrease of $0.1 million, or less than 1%.
Fiscal Year 2023 Guidance:
For the year ending December 31, 2023, the Company
expects:
- Net revenue between $433 million and $446 million, representing
a decrease of approximately 1% to 4% 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 $406
million and $418 million, a decrease of 1% to 4% 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 $27 million and $29 million, an approximately 6% decrease
to 0% increase year-over-year as compared to net revenue of $28.7
million for the year ended December 31, 2022.
- Net income between $4 million and $9 million and adjusted net
income between $11 million and $17 million.
- EBITDA between $26 million and $37 million and Adjusted EBITDA
between $40 million and $51 million.
Third Quarter Earnings Conference
Call:
Financial results for the third fiscal quarter of
2023 will be reported after the market closes on November, 9th.
Management will host a conference call at 5:00 p.m. Eastern Time on
November 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 one
year.
ORGANOGENESIS HOLDINGS INC.
UNAUDITED CONSOLIDATED BALANCE
SHEETS (amounts in thousands, except share and per
share data)
|
|
September 30, |
|
|
December 31, |
|
|
|
2023 |
|
|
2022 |
|
Assets |
|
|
|
|
|
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
98,226 |
|
|
$ |
102,478 |
|
Restricted cash |
|
|
599 |
|
|
|
812 |
|
Accounts receivable, net |
|
|
89,276 |
|
|
|
89,450 |
|
Inventory, net |
|
|
27,905 |
|
|
|
24,783 |
|
Prepaid expenses and other current assets |
|
|
9,567 |
|
|
|
5,086 |
|
Total current assets |
|
|
225,573 |
|
|
|
222,609 |
|
Property and
equipment, net |
|
|
117,503 |
|
|
|
102,463 |
|
Intangible
assets, net |
|
|
17,101 |
|
|
|
20,789 |
|
Goodwill |
|
|
28,772 |
|
|
|
28,772 |
|
Operating
lease right-of-use assets, net |
|
|
42,363 |
|
|
|
43,192 |
|
Deferred tax
asset, net |
|
|
30,014 |
|
|
|
30,014 |
|
Other
assets |
|
|
1,321 |
|
|
|
1,520 |
|
Total assets |
|
$ |
462,647 |
|
|
$ |
449,359 |
|
Liabilities and Stockholders’ Equity |
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
Current portion of term loan, net of debt issuance costs |
|
$ |
5,483 |
|
|
$ |
4,538 |
|
Current portion of finance lease obligations |
|
|
1,174 |
|
|
|
- |
|
Current portion of operating lease obligations |
|
|
13,048 |
|
|
|
11,708 |
|
Accounts payable |
|
|
26,784 |
|
|
|
32,330 |
|
Accrued expenses and other current liabilities |
|
|
34,993 |
|
|
|
26,447 |
|
Total current liabilities |
|
|
81,482 |
|
|
|
75,023 |
|
Term loan,
net of current portion and debt issuance costs |
|
|
62,117 |
|
|
|
66,231 |
|
Finance
lease obligations, net of current portion |
|
|
2,166 |
|
|
|
- |
|
Operating
lease obligations, net of current portion |
|
|
38,826 |
|
|
|
41,314 |
|
Other
liabilities |
|
|
1,191 |
|
|
|
1,122 |
|
Total liabilities |
|
|
185,782 |
|
|
|
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;
132,041,164 and 131,647,677 shares issued; 131,312,616 and
130,919,129 shares outstanding at September 30, 2023 and
December 31, 2022, respectively. |
|
|
13 |
|
|
|
13 |
|
Additional paid-in capital |
|
|
317,254 |
|
|
|
310,957 |
|
Accumulated deficit |
|
|
(40,402 |
) |
|
|
(45,301 |
) |
Total stockholders’ equity |
|
|
276,865 |
|
|
|
265,669 |
|
Total liabilities and stockholders’ equity |
|
$ |
462,647 |
|
|
$ |
449,359 |
|
ORGANOGENESIS HOLDINGS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS (amounts in thousands, except share and
per share data)
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
Net revenue |
|
$ |
108,531 |
|
|
$ |
116,859 |
|
|
$ |
333,489 |
|
|
$ |
335,377 |
|
Cost of
goods sold |
|
|
25,789 |
|
|
|
26,177 |
|
|
|
78,712 |
|
|
|
77,909 |
|
Gross
profit |
|
|
82,742 |
|
|
|
90,682 |
|
|
|
254,777 |
|
|
|
257,468 |
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
64,222 |
|
|
|
79,328 |
|
|
|
208,373 |
|
|
|
215,515 |
|
Research and development |
|
|
10,470 |
|
|
|
9,575 |
|
|
|
32,610 |
|
|
|
28,367 |
|
Total operating expenses |
|
|
74,692 |
|
|
|
88,903 |
|
|
|
240,983 |
|
|
|
243,882 |
|
Income from
operations |
|
|
8,050 |
|
|
|
1,779 |
|
|
|
13,794 |
|
|
|
13,586 |
|
Other
expense, net: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
|
(444 |
) |
|
|
(572 |
) |
|
|
(1,688 |
) |
|
|
(2,039 |
) |
Other income (expense), net |
|
|
31 |
|
|
|
5 |
|
|
|
82 |
|
|
|
(19 |
) |
Total other expense, net |
|
|
(413 |
) |
|
|
(567 |
) |
|
|
(1,606 |
) |
|
|
(2,058 |
) |
Net income
before income taxes |
|
|
7,637 |
|
|
|
1,212 |
|
|
|
12,188 |
|
|
|
11,528 |
|
Income tax
expense |
|
|
(4,470 |
) |
|
|
(997 |
) |
|
|
(6,675 |
) |
|
|
(3,482 |
) |
Net
income |
|
$ |
3,167 |
|
|
$ |
215 |
|
|
$ |
5,513 |
|
|
$ |
8,046 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income,
per share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.02 |
|
|
$ |
0.00 |
|
|
$ |
0.04 |
|
|
$ |
0.06 |
|
Diluted |
|
$ |
0.02 |
|
|
$ |
0.00 |
|
|
$ |
0.04 |
|
|
$ |
0.06 |
|
Weighted-average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
131,312,483 |
|
|
|
130,903,160 |
|
|
|
131,230,882 |
|
|
|
129,784,890 |
|
Diluted |
|
|
133,417,721 |
|
|
|
132,232,954 |
|
|
|
132,790,296 |
|
|
|
132,555,265 |
|
ORGANOGENESIS HOLDINGS INC. UNAUDITED
CONSOLIDATED STATEMENT OF CASH FLOWS (amounts in
thousands, except share and per share data)
|
|
Nine Months Ended
September 30, |
|
|
|
2023 |
|
|
2022 |
|
Cash
flows from operating activities: |
|
|
|
|
|
|
Net Income |
|
$ |
5,513 |
|
|
$ |
8,046 |
|
Adjustments
to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
Depreciation |
|
|
7,466 |
|
|
|
4,331 |
|
Amortization of intangible assets |
|
|
3,689 |
|
|
|
3,662 |
|
Reduction in the carrying value of right-of-use assets |
|
|
5,964 |
|
|
|
5,483 |
|
Non-cash interest expense |
|
|
321 |
|
|
|
326 |
|
Deferred interest expense |
|
|
367 |
|
|
|
428 |
|
Provision recorded for credit losses |
|
|
1,320 |
|
|
|
855 |
|
Loss on disposal of property and equipment |
|
|
104 |
|
|
|
4,412 |
|
Adjustment for excess and obsolete inventories |
|
|
4,351 |
|
|
|
7,621 |
|
Stock-based compensation |
|
|
6,630 |
|
|
|
4,697 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
(1,761 |
) |
|
|
(11,510 |
) |
Inventory |
|
|
(7,473 |
) |
|
|
(7,282 |
) |
Prepaid expenses and other current assets |
|
|
(4,491 |
) |
|
|
1 |
|
Operating leases |
|
|
(6,282 |
) |
|
|
(5,250 |
) |
Accounts payable |
|
|
(3,661 |
) |
|
|
5,261 |
|
Accrued expenses and other current liabilities |
|
|
8,179 |
|
|
|
(4,061 |
) |
Other liabilities |
|
|
68 |
|
|
|
39 |
|
Net cash provided by operating activities |
|
|
20,304 |
|
|
|
17,059 |
|
Cash
flows from investing activities: |
|
|
|
|
|
|
Purchases of
property and equipment |
|
|
(21,040 |
) |
|
|
(23,242 |
) |
Net cash used in investing activities |
|
|
(21,040 |
) |
|
|
(23,242 |
) |
Cash
flows from financing activities: |
|
|
|
|
|
|
Payments of
term loan under the 2021 Credit Agreement |
|
|
(3,281 |
) |
|
|
(938 |
) |
Payments of
withholding taxes in connection with RSUs vesting |
|
|
(333 |
) |
|
|
(648 |
) |
Proceeds
from the exercise of stock options |
|
|
- |
|
|
|
2,070 |
|
Principal
repayments of finance lease obligations |
|
|
(114 |
) |
|
|
(200 |
) |
Payment of
deferred acquisition consideration |
|
|
- |
|
|
|
(608 |
) |
Net cash used in financing activities |
|
|
(3,728 |
) |
|
|
(324 |
) |
Change in cash, cash equivalents and restricted
cash |
|
|
(4,465 |
) |
|
|
(6,507 |
) |
Cash, cash
equivalents, and restricted cash, beginning of period |
|
|
103,290 |
|
|
|
114,528 |
|
Cash, cash
equivalents, and restricted cash, end of period |
|
$ |
98,825 |
|
|
$ |
108,021 |
|
Supplemental disclosure of cash flow
information: |
|
|
|
|
|
|
Cash paid
for interest |
|
$ |
3,896 |
|
|
$ |
1,787 |
|
Cash paid
for income taxes |
|
$ |
3,021 |
|
|
$ |
974 |
|
Supplemental disclosure of non-cash investing and financing
activities: |
|
|
|
|
|
|
Purchases of
property and equipment included in accounts payable and accrued
expenses |
|
$ |
4,146 |
|
|
$ |
5,547 |
|
Right-of-use
assets obtained through lease obligations |
|
$ |
5,138 |
|
|
$ |
1,708 |
|
Shares
issued for deferred acquisition consideration |
|
$ |
- |
|
|
$ |
828 |
|
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 periods presented:
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
(Unaudited)
(in thousands) |
|
Net Income |
|
$ |
3,167 |
|
|
$ |
215 |
|
|
$ |
5,513 |
|
|
$ |
8,046 |
|
Interest expense, net |
|
|
444 |
|
|
|
572 |
|
|
|
1,688 |
|
|
|
2,039 |
|
Income tax expense |
|
|
4,470 |
|
|
|
997 |
|
|
|
6,675 |
|
|
|
3,482 |
|
Depreciation |
|
|
2,544 |
|
|
|
1,456 |
|
|
|
7,466 |
|
|
|
4,331 |
|
Amortization |
|
|
1,229 |
|
|
|
1,220 |
|
|
|
3,689 |
|
|
|
3,662 |
|
EBITDA |
|
|
11,854 |
|
|
|
4,460 |
|
|
|
25,031 |
|
|
|
21,560 |
|
Stock-based compensation expense |
|
|
2,417 |
|
|
|
1,702 |
|
|
|
6,630 |
|
|
|
4,697 |
|
Restructuring charge (1) |
|
|
95 |
|
|
|
611 |
|
|
|
1,878 |
|
|
|
1,518 |
|
Legal fees (2) |
|
|
1,182 |
|
|
|
- |
|
|
|
1,182 |
|
|
|
- |
|
Sales retention (3) |
|
|
422 |
|
|
|
- |
|
|
|
422 |
|
|
|
- |
|
Write-off of certain assets (4) |
|
|
- |
|
|
|
4,200 |
|
|
|
- |
|
|
|
4,200 |
|
Facility construction project pause (5) |
|
|
- |
|
|
|
632 |
|
|
|
- |
|
|
|
632 |
|
Settlement fee (6) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,600 |
|
Adjusted
EBITDA |
|
$ |
15,970 |
|
|
$ |
11,605 |
|
|
$ |
35,143 |
|
|
$ |
35,207 |
|
|
- Amounts reflect employee severance, retention and benefits as
well as other exit costs associated with the Company’s
restructuring activities.
- Amount represents the legal fees incurred related to the
recently published and withdrawn local coverage determinations, or
LCDs.
- Amount represents the compensation expenses related to
retention for those sales employees impacted by the LCDs.
- Amount reflects the disposal of certain equipment related to
the Company's Canton, Massachusetts facilities.
- Amount reflects the cancellation fees incurred in connection
with the Company's decision to pause one of its manufacturing
facility construction projects.
- Amounts reflect the fee the Company paid to a group purchasing
organization, or GPO, to settle previously disputed GPO fees.
The following table presents a reconciliation of
GAAP net income to non-GAAP adjusted net income, for the periods
presented:
|
|
Three Months Ended
September 30, |
|
|
Nine Months Ended
September 30, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
|
|
(Unaudited)
(in thousands) |
|
|
(in
thousands) |
|
Net Income |
|
$ |
3,167 |
|
|
$ |
215 |
|
|
$ |
5,513 |
|
|
$ |
8,046 |
|
Amortization |
|
|
1,229 |
|
|
|
1,220 |
|
|
|
3,689 |
|
|
|
3,662 |
|
Restructuring charge (1) |
|
|
95 |
|
|
|
611 |
|
|
|
1,878 |
|
|
|
1,518 |
|
Legal fees (2) |
|
|
1,182 |
|
|
|
- |
|
|
|
1,182 |
|
|
|
- |
|
Sales retention (3) |
|
|
422 |
|
|
|
- |
|
|
|
422 |
|
|
|
- |
|
Write-off of certain assets (4) |
|
|
- |
|
|
|
4,200 |
|
|
|
- |
|
|
|
4,200 |
|
Facility construction project pause (5) |
|
|
- |
|
|
|
632 |
|
|
|
- |
|
|
|
632 |
|
Settlement fee (6) |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,600 |
|
Tax on above |
|
|
(791 |
) |
|
|
(1,781 |
) |
|
|
(1,936 |
) |
|
|
(3,371 |
) |
Adjusted net
income |
|
$ |
5,304 |
|
|
$ |
5,097 |
|
|
$ |
10,748 |
|
|
$ |
17,287 |
|
|
- Amounts reflect employee severance, retention and benefits as
well as other exit costs associated with the Company’s
restructuring activities.
- Amount represents the legal fees incurred related to the
recently published and withdrawn LCDs.
- Amount represents the compensation expenses related to
retention for those sales employees impacted by the LCDs.
- Amount reflects the disposal of certain equipment related to
the Company's Canton, Massachusetts facilities.
- Amount reflects the cancellation fees incurred in connection
with the Company's decision to pause one of its manufacturing
facility construction projects.
- 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 |
|
$ |
4,200 |
|
|
$ |
9,300 |
|
Interest expense |
|
|
2,700 |
|
|
|
2,700 |
|
Income tax expense |
|
|
4,700 |
|
|
|
9,700 |
|
Depreciation |
|
|
9,900 |
|
|
|
9,900 |
|
Amortization |
|
|
4,900 |
|
|
|
4,900 |
|
EBITDA |
|
$ |
26,400 |
|
|
$ |
36,500 |
|
Stock-based compensation expense |
|
|
9,000 |
|
|
|
9,000 |
|
Restructuring charge |
|
|
3,400 |
|
|
|
3,400 |
|
LCD legal fees and sales retention |
|
|
1,600 |
|
|
|
1,600 |
|
Adjusted
EBITDA |
|
$ |
40,400 |
|
|
$ |
50,500 |
|
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 |
|
$ |
4,200 |
|
|
$ |
9,300 |
|
Amortization |
|
|
4,900 |
|
|
|
4,900 |
|
Restructuring charge |
|
|
3,400 |
|
|
|
3,400 |
|
LCD legal fees and sales retention |
|
|
1,600 |
|
|
|
1,600 |
|
Tax on above |
|
|
(2,700 |
) |
|
|
(2,700 |
) |
Adjusted net
income |
|
$ |
11,400 |
|
|
$ |
16,500 |
|
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
2023 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; (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 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:
ICR Westwicke
Mike Piccinino, CFA
OrganoIR@westwicke.com
Press and Media Inquiries:
Organogenesis
communications@organo.com
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