Organogenesis Holdings Inc. Reports Third Quarter 2024 Financial Results
Organogenesis Holdings (NASDAQ: ORGO) reported Q3 2024 financial results with net revenue of $115.2 million, up 6% from Q3 2023. Advanced Wound Care revenue increased 7% to $108.0 million, while Surgical & Sports Medicine revenue grew 1% to $7.2 million. Net income reached $12.3 million ($0.09 per share), up from $3.2 million in Q3 2023. Adjusted EBITDA was $13.4 million, down from $16.0 million year-over-year. The company updated its FY2024 guidance, expecting net revenue between $455-480 million, representing 5-11% growth, with projected net loss between $12.3-0.6 million.
Organogenesis Holdings (NASDAQ: ORGO) ha riportato i risultati finanziari del terzo trimestre 2024 con un fatturato netto di 115,2 milioni di dollari, in aumento del 6% rispetto al terzo trimestre 2023. I ricavi nel settore della Cura Avanzata delle Ferite sono aumentati del 7% a 108,0 milioni di dollari, mentre i ricavi della Medicina Chirurgica e Sportiva sono cresciuti dell'1% a 7,2 milioni di dollari. L'utile netto ha raggiunto 12,3 milioni di dollari (0,09 dollari per azione), in aumento rispetto ai 3,2 milioni di dollari del terzo trimestre 2023. L'EBITDA rettificato è stato di 13,4 milioni di dollari, in calo rispetto ai 16,0 milioni di dollari dell'anno precedente. L'azienda ha aggiornato le previsioni per l'anno fiscale 2024, prevedendo un fatturato netto compreso tra 455 e 480 milioni di dollari, rappresentando una crescita del 5-11%, con una perdita netta prevista compresa tra 12,3 e 0,6 milioni di dollari.
Organogenesis Holdings (NASDAQ: ORGO) reportó los resultados financieros del tercer trimestre de 2024 con ingresos netos de 115,2 millones de dólares, un aumento del 6% en comparación con el tercer trimestre de 2023. Los ingresos por Cuidado Avanzado de Heridas aumentaron un 7% a 108,0 millones de dólares, mientras que los ingresos de Medicina Quirúrgica y Deportiva crecieron un 1% a 7,2 millones de dólares. La ganancia neta alcanzó los 12,3 millones de dólares (0,09 dólares por acción), un aumento desde los 3,2 millones de dólares en el tercer trimestre de 2023. El EBITDA ajustado fue de 13,4 millones de dólares, una disminución de los 16,0 millones de dólares del año anterior. La compañía actualizó su guía para el año fiscal 2024, esperando ingresos netos entre 455 y 480 millones de dólares, representando un crecimiento del 5-11%, con una pérdida neta proyectada entre 12,3 y 0,6 millones de dólares.
Organogenesis Holdings (NASDAQ: ORGO)는 2024년 3분기 재무 결과를 발표하였으며, 순 수익은 1억 1,520만 달러로 2023년 3분기 대비 6% 증가했습니다. 고급 상처 치료 부문에서의 수익은 7% 증가한 1억 0,800만 달러에 달했으며, 외과 및 스포츠 의학 부문에서는 1% 증가한 720만 달러를 기록했습니다. 순이익은 1,230만 달러(주당 0.09달러)로, 2023년 3분기의 320만 달러에서 증가했습니다. 조정된 EBITDA는 1,340만 달러로, 전년 대비 1,600만 달러에서 감소했습니다. 회사는 2024 회계연도 전망을 업데이트하여, 순수익이 4억 5,500만 달러에서 4억 8,000만 달러 사이에 이를 것으로 예상하며, 이는 5-11%의 성장에 해당하며, 예상 순손실은 1,230만 달러에서 60만 달러 사이로 전망하고 있습니다.
Organogenesis Holdings (NASDAQ: ORGO) a publié ses résultats financiers pour le troisième trimestre 2024, avec un revenu net de 115,2 millions de dollars, en hausse de 6 % par rapport au troisième trimestre 2023. Les revenus du secteur des Soins Avancés des Plaies ont augmenté de 7 % pour atteindre 108,0 millions de dollars, tandis que les revenus de la Médecine Chirurgicale et Sportive ont crû de 1 % pour atteindre 7,2 millions de dollars. Le revenu net s'est élevé à 12,3 millions de dollars (0,09 dollar par action), en hausse par rapport aux 3,2 millions de dollars du troisième trimestre 2023. L'EBITDA ajusté était de 13,4 millions de dollars, en baisse par rapport aux 16,0 millions de dollars de l'année précédente. L'entreprise a mis à jour ses prévisions pour l'exercice 2024, s'attendant à un revenu net compris entre 455 et 480 millions de dollars, représentant une croissance de 5 à 11 %, avec une perte nette projetée entre 12,3 et 0,6 millions de dollars.
Organogenesis Holdings (NASDAQ: ORGO) hat die finanziellen Ergebnisse für das 3. Quartal 2024 veröffentlicht, mit einem Umsatz von 115,2 Millionen Dollar, was einem Anstieg von 6% im Vergleich zum 3. Quartal 2023 entspricht. Der Umsatz im Bereich der fortgeschrittenen Wundversorgung stieg um 7% auf 108,0 Millionen Dollar, während der Umsatz im Bereich der chirurgischen und Sportmedizin um 1% auf 7,2 Millionen Dollar wuchs. Der Nettogewinn betrug 12,3 Millionen Dollar (0,09 Dollar pro Aktie), im Vergleich zu 3,2 Millionen Dollar im 3. Quartal 2023. Das bereinigte EBITDA belief sich auf 13,4 Millionen Dollar, gegenüber 16,0 Millionen Dollar im Vorjahr. Das Unternehmen aktualisierte die Prognose für das Geschäftsjahr 2024 und erwartet einen Nettoumsatz zwischen 455 und 480 Millionen Dollar, was einem Wachstum von 5-11% entspricht, mit einer prognostizierten Nettoposition zwischen 12,3 und 0,6 Millionen Dollar Verlust.
- Net revenue increased 6% YoY to $115.2M in Q3 2024
- Advanced Wound Care revenue grew 7% to $108.0M
- Net income increased significantly to $12.3M from $3.2M YoY
- Gross profit margin improved to 77% from 76% YoY
- Adjusted EBITDA decreased 16% to $13.4M from $16.0M YoY
- Operating income declined 22% to $6.2M from $8.1M YoY
- Operating expenses increased 10% to $82.1M YoY
- Company projects net loss between $12.3M and $0.6M for FY2024
Insights
Q3 2024 shows mixed financial performance with notable highlights. Net revenue increased
The balance sheet remains solid with
The company's market positioning remains strong despite challenges. Advanced Wound Care segment continues to be the primary growth driver, contributing
Operating expenses increased
CANTON, Mass., Nov. 12, 2024 (GLOBE NEWSWIRE) -- 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 30, 2024.
Third Quarter 2024 Financial Results Summary:
- Net revenue of
$115.2 million for the third quarter of 2024, an increase of$6.6 million compared to net revenue of$108.5 million for the third quarter of 2023. Net revenue for the third quarter of 2024 consists of:- Net revenue from Advanced Wound Care products of
$108.0 million , an increase of7% from the third quarter of 2023. - Net revenue from Surgical & Sports Medicine products of
$7.2 million , an increase of1% from the third quarter of 2023.
- Net revenue from Advanced Wound Care products of
- Net income of
$12.3 million for the third quarter of 2024, compared to net income of$3.2 million for the third quarter of 2023, an increase in net income of$9.1 million . - Adjusted net income of
$12.9 million for the third quarter of 2024, compared to adjusted net income of$5.3 million for the third quarter of 2023, an increase in adjusted net income of$7.6 million . - Adjusted EBITDA of
$13.4 million for the third quarter of 2024, compared to Adjusted EBITDA of$16.0 million for the third quarter of 2023, a decrease of$2.6 million .
“Our third quarter results underscore the strength of our portfolio and brand equity as customers select Organogenesis as their trusted partner while they navigate this complex market,” said Gary S. Gillheeney, Sr., President, Chief Executive Officer and Chair of the Board for Organogenesis. “We continue to work with policy and lawmakers to craft a solution that addresses spending while ensuring access to safe and effective therapies for all patients, particularly those who are most vulnerable. We believe a resolution is on the horizon.”
Third Quarter 2024 Financial Results:
| Three Months Ended September 30, | Change | |||||||||||||||
| 2024 | 2023 | $ | % | |||||||||||||
| (in thousands, except for percentages) | ||||||||||||||||
| Advanced Wound Care | $ | 107,953 | $ | 101,357 | $ | 6,596 | ||||||||||
| Surgical & Sports Medicine | 7,224 | 7,174 | 50 | |||||||||||||
| Net revenue | $ | 115,177 | $ | 108,531 | $ | 6,646 | ||||||||||
Net revenue for the third quarter of 2024 was
Gross profit for the third quarter of 2024 was
Operating expenses for the third quarter of 2024 were
Operating income for the third quarter of 2024 was
Total other expense, net, for the third quarter of 2024 was
Net income for the third quarter of 2024 was
Adjusted EBITDA was
Adjusted net income was
Non-GAAP operating income was
As of September 30, 2024, the Company had
Nine Months ended September 30, 2024, Financial Results:
| Nine Months Ended September 30, | Change | |||||||||||||||
| 2024 | 2023 | $ | % | |||||||||||||
| (in thousands, except for percentages) | ||||||||||||||||
| Advanced Wound Care | $ | 335,054 | $ | 312,349 | $ | 22,705 | ||||||||||
| Surgical & Sports Medicine | 20,333 | 21,140 | (807 | ) | ( | |||||||||||
| Net revenue | $ | 355,387 | $ | 333,489 | $ | 21,898 | ||||||||||
Net revenue for the nine months ended September 30, 2024 was
Gross profit for the nine months ended September 30, 2024 was
Operating expenses for the nine months ended September 30, 2024 were
Operating loss for the nine months ended September 30, 2024 was
Total other expense, net, for the nine months ended September 30, 2024 was
Net loss for the nine months ended September 30, 2024 was
Adjusted EBITDA was
Adjusted net income was
Non-GAAP operating income was
As of September 30, 2024, the Company had
Fiscal Year 2024 Guidance:
For the year ending December 31, 2024 the Company is updating its prior revenue guidance and updating its profitability guidance and expects:
- Net revenue between
$455.0 million and$480.0 million , representing an increase of approximately5% to11% year-over-year, as compared to net revenue of$433.1 million for the year ended December 31, 2023.- The 2024 net revenue guidance range assumes:
- Net revenue from Advanced Wound Care products between
$429.0 million and$452.0 million , an increase of6% to11% 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
$26.0 million and$28.0 million , a decrease of7% to0% year-over-year as compared to net revenue of$27.6 million for the year ended December 31, 2023.
- Net revenue from Advanced Wound Care products between
- The 2024 net revenue guidance range assumes:
- Net loss between
$12.3 million and$0.6 million and adjusted net income between$6.7 million and$18.4 million . - EBITDA between
$(1.3) million and$14.4 million and Adjusted EBITDA between$31.7 million and$47.4 million .
Third Quarter Earnings Conference Call:
Management will host a conference call at 5:00 p.m. Eastern Time on November 12th to discuss the results of the quarter, and provide a corporate update with a question and answer session. To access the live webcast or to register to obtain a unique pin number and telephone dial-in to access the live teleconference, visit the ‘Investors’ section of the Company’s website (investors.organogenesis.com). The webcast will be archived on the Company’s website for approximately one year.
ORGANOGENESIS HOLDINGS INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share and per share data)
| September 30, | December 31, | |||||||
| 2024 | 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 94,340 | $ | 103,840 | ||||
| Restricted cash | 586 | 498 | ||||||
| Accounts receivable, net | 101,272 | 81,999 | ||||||
| Inventories, net | 27,036 | 28,253 | ||||||
| Prepaid expenses and other current assets | 15,275 | 10,454 | ||||||
| Total current assets | 238,509 | 225,044 | ||||||
| Property and equipment, net | 89,868 | 116,228 | ||||||
| Intangible assets, net | 13,302 | 15,871 | ||||||
| Goodwill | 28,772 | 28,772 | ||||||
| Operating lease right-of-use assets, net | 34,943 | 40,118 | ||||||
| Deferred tax asset, net | 35,889 | 28,002 | ||||||
| Other assets | 5,013 | 5,990 | ||||||
| Total assets | $ | 446,296 | $ | 460,025 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Current portion of term loan | $ | 5,964 | $ | 5,486 | ||||
| Current portion of finance lease obligations | 1,147 | 1,081 | ||||||
| Current portion of operating lease obligations - related party | 6,172 | 8,413 | ||||||
| Current portion of operating lease obligations | 3,926 | 4,731 | ||||||
| Accounts payable | 23,971 | 30,724 | ||||||
| Accrued expenses and other current liabilities | 36,101 | 30,074 | ||||||
| Total current liabilities | 77,281 | 80,509 | ||||||
| Term loan, net of current portion | 56,153 | 60,745 | ||||||
| Finance lease obligations, net of current portion | 1,019 | 1,888 | ||||||
| Operating lease obligations, net of current portion - related party | 9,217 | 11,954 | ||||||
| Operating lease obligations, net of current portion | 22,785 | 25,053 | ||||||
| Other liabilities | 1,294 | 1,213 | ||||||
| Total liabilities | 167,749 | 181,362 | ||||||
| Commitments and contingencies (Note 15) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, | — | — | ||||||
| Common stock, | 13 | 13 | ||||||
| Additional paid-in capital | 326,317 | 319,621 | ||||||
| Accumulated deficit | (47,783 | ) | (40,971 | ) | ||||
| Total stockholders’ equity | 278,547 | 278,663 | ||||||
| Total liabilities and stockholders’ equity | $ | 446,296 | $ | 460,025 | ||||
ORGANOGENESIS HOLDINGS INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(amounts in thousands, except share and per share data)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| Net revenue | $ | 115,177 | $ | 108,531 | $ | 355,387 | $ | 333,489 | ||||||||
| Cost of goods sold | 26,796 | 25,789 | 84,690 | 78,712 | ||||||||||||
| Gross profit | 88,381 | 82,742 | 270,697 | 254,777 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Selling, general and administrative | 71,795 | 64,222 | 220,657 | 208,373 | ||||||||||||
| Research and development | 10,344 | 10,470 | 38,741 | 32,610 | ||||||||||||
| Impairment of property and construction | — | — | 18,842 | — | ||||||||||||
| Write down of capitalized internal-use software costs | — | — | 3,959 | — | ||||||||||||
| Total operating expenses | 82,139 | 74,692 | 282,199 | 240,983 | ||||||||||||
| Income (loss) from operations | 6,242 | 8,050 | (11,502 | ) | 13,794 | |||||||||||
| Other expense, net: | ||||||||||||||||
| Interest expense, net | (471 | ) | (444 | ) | (1,605 | ) | (1,688 | ) | ||||||||
| Other income, net | 52 | 31 | 47 | 82 | ||||||||||||
| Total other expense, net | (419 | ) | (413 | ) | (1,558 | ) | (1,606 | ) | ||||||||
| Net income (loss) before income taxes | 5,823 | 7,637 | (13,060 | ) | 12,188 | |||||||||||
| Income tax benefit (expense) | 6,508 | (4,470 | ) | 6,248 | (6,675 | ) | ||||||||||
| Net income (loss) and comprehensive income (loss) | $ | 12,331 | $ | 3,167 | $ | (6,812 | ) | $ | 5,513 | |||||||
| Net income (loss) per share: | ||||||||||||||||
| Basic | $ | 0.09 | $ | 0.02 | $ | (0.05 | ) | $ | 0.04 | |||||||
| Diluted | $ | 0.09 | $ | 0.02 | $ | (0.05 | ) | $ | 0.04 | |||||||
| Weighted-average common shares outstanding | ||||||||||||||||
| Basic | 132,575,301 | 131,312,483 | 132,342,203 | 131,230,882 | ||||||||||||
| Diluted | 133,926,755 | 133,417,721 | 132,342,203 | 132,790,296 | ||||||||||||
ORGANOGENESIS HOLDINGS INC.
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
(amounts in thousands, except share and per share data)
| Nine Months Ended September 30, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net income (loss) | $ | (6,812 | ) | $ | 5,513 | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 10,008 | 7,466 | ||||||
| Amortization of intangible assets | 2,569 | 3,688 | ||||||
| Reduction in the carrying value of right-of-use assets | 6,377 | 5,964 | ||||||
| Non-cash interest expense | 313 | 321 | ||||||
| Deferred interest expense | 274 | 367 | ||||||
| Provision recorded for credit losses | 3,723 | 1,320 | ||||||
| Deferred tax benefit | (7,887 | ) | — | |||||
| Loss on disposal of property and equipment | 444 | 104 | ||||||
| Adjustment for excess and obsolete inventories | 5,884 | 4,351 | ||||||
| Stock-based compensation | 7,687 | 6,630 | ||||||
| Impairment of property and construction (Note 6) | 18,842 | — | ||||||
| Write down of capitalized internal-use software costs (Note 6) | 3,959 | — | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (22,996 | ) | (1,761 | ) | ||||
| Inventories | (5,749 | ) | (7,473 | ) | ||||
| Prepaid expenses and other current assets and other assets | (4,052 | ) | (4,491 | ) | ||||
| Operating leases | (9,253 | ) | (6,282 | ) | ||||
| Accounts payable | (6,022 | ) | (3,661 | ) | ||||
| Accrued expenses and other current liabilities | 5,882 | 8,179 | ||||||
| Other liabilities | 80 | 68 | ||||||
| Net cash provided by operating activities | 3,271 | 20,303 | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | (6,671 | ) | (21,040 | ) | ||||
| Net cash used in investing activities | (6,671 | ) | (21,040 | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments of term loan under the 2021 Credit Agreement | (4,219 | ) | (3,281 | ) | ||||
| Principal repayments of finance lease obligations | (804 | ) | (114 | ) | ||||
| Payments of withholding taxes in connection with RSUs vesting | (1,173 | ) | (333 | ) | ||||
| Proceeds from the exercise of stock options | 184 | — | ||||||
| Net cash used in financing activities | (6,012 | ) | (3,728 | ) | ||||
| Change in cash, cash equivalents and restricted cash | (9,412 | ) | (4,465 | ) | ||||
| Cash, cash equivalents, and restricted cash, beginning of period | 104,338 | 103,290 | ||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 94,926 | $ | 98,825 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Cash paid for interest | $ | 4,105 | $ | 3,896 | ||||
| Cash paid for income taxes | $ | 5,493 | $ | 3,021 | ||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Cumulative effect adjustment for adoption of ASU No. 2016-13 | $ | — | $ | 615 | ||||
| Change in purchases of property and equipment included in accounts payable and accrued expenses and other current liabilities | $ | (222 | ) | $ | 4,146 | |||
| Right-of-use assets obtained through operating lease obligations | $ | 1,201 | $ | 5,138 | ||||
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, Adjusted net income, and non-GAAP operating income to evaluate our operating performance and trends and make planning decisions. Our management believes Adjusted EBITDA, Adjusted net income, and non-GAAP operating 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, Adjusted net income, and non-GAAP operating 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.
Adjusted EBITDA
Adjusted EBITDA consists of GAAP net income (loss) excluding: (i) interest expense, net, (ii) income tax benefit (expense), (iii) depreciation and amortization, (iv) amortization of intangible assets, (v) stock-based compensation expense, (vi) restructuring charges, (vii) legal fees related to the issued and subsequently withdrawn local coverage determinations (LCDs), (viii) compensation expenses related to retention for sales employees impacted by the issued and subsequently withdrawn LCDs, (ix) impairment of a purchased building and improvements and (x) write-down of capitalized software costs.
The following table presents a reconciliation of GAAP net income (loss) to non-GAAP EBITDA and non-GAAP Adjusted EBITDA, for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited, in thousands) | ||||||||||||||||
| Net income (loss) | $ | 12,331 | $ | 3,167 | $ | (6,812 | ) | $ | 5,513 | |||||||
| Interest expense, net | 471 | 444 | 1,605 | 1,688 | ||||||||||||
| Income tax benefit (expense) | (6,508 | ) | 4,470 | (6,248 | ) | 6,675 | ||||||||||
| Depreciation and amortization | 3,570 | 2,544 | 10,008 | 7,466 | ||||||||||||
| Amortization of intangible assets | 834 | 1,229 | 2,569 | 3,688 | ||||||||||||
| EBITDA | 10,698 | 11,854 | 1,122 | 25,030 | ||||||||||||
| Stock-based compensation expense | 2,712 | 2,417 | 7,687 | 6,630 | ||||||||||||
| Restructuring charge (1) | — | 95 | — | 1,878 | ||||||||||||
| Legal fees (2) | — | 1,182 | — | 1,182 | ||||||||||||
| Sales retention (3) | — | 422 | — | 422 | ||||||||||||
| Impairment of building and improvements (4) | — | — | 18,842 | — | ||||||||||||
| Write-down of capitalized software costs (5) | — | — | 3,959 | — | ||||||||||||
| Adjusted EBITDA | $ | 13,410 | $ | 15,970 | $ | 31,610 | $ | 35,142 | ||||||||
- Amount reflects 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 issued and subsequently withdrawn LCDs.
- Amount represents the compensation expenses related to retention for those sales employees impacted by the issued and subsequently withdrawn LCDs.
- Amount reflects the impairment of a purchased building and associated unfinished construction work.
- Amount reflects the write-down of costs previously capitalized in the development of internal-use software, that the Company determined have no future value.
Adjusted Net Income (Loss)
Adjusted Net Income (Loss) is defined as GAAP net income (loss) plus (i) amortization of intangible assets, (ii) restructuring charges, (iii) legal fees related to the issued and subsequently withdrawn LCDs, (iv) compensation expenses related to retention for sales employees impacted by the issued and subsequently withdrawn LCDs, (v) impairment of a purchased building and improvements and (vi) write-down of capitalized software costs less the estimated tax on the above.
The following table presents a reconciliation of GAAP net income (loss) to non-GAAP Adjusted net income, for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited, in thousands) | ||||||||||||||||
| Net income (loss) | $ | 12,331 | $ | 3,167 | $ | (6,812 | ) | $ | 5,513 | |||||||
| Amortization of intangible assets | 834 | 1,229 | 2,569 | 3,688 | ||||||||||||
| Restructuring charge (1) | — | 95 | — | 1,878 | ||||||||||||
| Legal fees (2) | — | 1,182 | — | 1,182 | ||||||||||||
| Sales retention (3) | — | 422 | — | 422 | ||||||||||||
| Impairment of building and improvements (4) | — | — | 18,842 | — | ||||||||||||
| Write-down of capitalized software costs (5) | — | — | 3,959 | — | ||||||||||||
| Tax on above | (225 | ) | (791 | ) | (6,850 | ) | (1,936 | ) | ||||||||
| Adjusted net income | $ | 12,940 | $ | 5,304 | $ | 11,708 | $ | 10,747 | ||||||||
- Amount reflects 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 issued and subsequently withdrawn LCDs.
- Amount represents the compensation expenses related to retention for those sales employees impacted by the issued and subsequently withdrawn LCDs.
- Amount reflects the impairment of a purchased building and associated unfinished construction work.
- Amount reflects the write-down of costs previously capitalized in the development of internal-use software, that the Company determined have no future value.
Non-GAAP Operating Income (Loss)
Non-GAAP operating income (loss) is defined as GAAP income (loss) from operations plus (i) amortization of intangible assets, (ii) restructuring charges, (iii) legal fees related to the issued and subsequently withdrawn LCDs, (iv) compensation expenses related to retention for sales employees impacted by the issued and subsequently withdrawn LCDs, (v) impairment of a purchased building and improvements and (vi) write-down of capitalized software costs.
The following table presents a reconciliation of GAAP income (loss) from operations to non-GAAP operating income, for the periods presented:
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited, in thousands) | ||||||||||||||||
| Income (loss) from operations | $ | 6,242 | $ | 8,050 | $ | (11,502 | ) | $ | 13,794 | |||||||
| Amortization of intangible assets | 834 | 1,229 | 2,569 | 3,688 | ||||||||||||
| Restructuring charge (1) | — | 95 | — | 1,878 | ||||||||||||
| Legal fees (2) | — | 1,182 | — | 1,182 | ||||||||||||
| Sales retention (3) | — | 422 | — | 422 | ||||||||||||
| Impairment of building and improvements (4) | — | — | 18,842 | — | ||||||||||||
| Write-down of capitalized software costs (5) | — | — | 3,959 | — | ||||||||||||
| Non-GAAP operating income | $ | 7,076 | $ | 10,978 | $ | 13,868 | $ | 20,964 | ||||||||
- Amount reflects 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 issued and subsequently withdrawn LCDs.
- Amount represents the compensation expenses related to retention for those sales employees impacted by the issued and subsequently withdrawn LCDs.
- Amount reflects the impairment of a purchased building and associated unfinished construction work.
- Amount reflects the write-down of costs previously capitalized in the development of internal-use software, that the Company determined have no future value.
Projected EBITDA and Adjusted EBITDA
[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, | ||||||||
| 2024L | 2024H | |||||||
| Net income (loss) | $ | (12,300 | ) | $ | (600 | ) | ||
| Interest expense, net | 3,000 | 3,000 | ||||||
| Income tax expense | (8,000 | ) | (4,000 | ) | ||||
| Depreciation and amortization | 13,000 | 13,000 | ||||||
| Amortization of intangible assets | 3,000 | 3,000 | ||||||
| EBITDA | $ | (1,300 | ) | $ | 14,400 | |||
| Stock-based compensation expense | 10,000 | 10,000 | ||||||
| Impairment of building and improvements | 19,000 | 19,000 | ||||||
| Write-down of capitalized software costs | 4,000 | 4,000 | ||||||
| Adjusted EBITDA | $ | 31,700 | $ | 47,400 | ||||
Projected Adjusted Net Income (Loss)
The following table presents a reconciliation of projected GAAP net loss to projected non-GAAP adjusted net income included in our guidance for the year ending December 31, 2024:
| Year Ending December 31, | |||||||||
| 2024L | 2024H | ||||||||
| Net income (loss) | $ | (12,300 | ) | $ | (600 | ) | |||
| Amortization of intangible assets | 3,000 | 3,000 | |||||||
| Impairment of building and improvements | 19,000 | 19,000 | |||||||
| Write-down of capitalized software costs | 4,000 | 4,000 | |||||||
| Tax on above | (7,000 | ) | (7,000 | ) | |||||
| Adjusted net income | $ | 6,700 | $ | 18,400 | |||||
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 (loss), Adjusted net income, EBITDA, and Adjusted EBITDA for fiscal 2024 and the breakdown of expected revenue in both its Advanced Wound Care and Surgical & Sports Medicine categories. Forward-looking statements with respect to the operations of the Company, strategies, prospects, and other aspects of the business of the Company are based on current expectations that are subject to known and unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from expectations expressed or implied by such forward-looking statements. These factors include, but are not limited to: (1) the impact of any changes to the coverage and reimbursement levels for the Company’s products (including as a result of the recently proposed LCDs); (2) the Company faces significant and continuing competition, which could adversely affect its business, results of operations and financial condition; (3) rapid technological change could cause the Company’s products to become obsolete and if the Company does not enhance its product offerings through its research and development efforts, it may be unable to effectively compete; (4) to be commercially successful, the Company must convince physicians that its products are safe and effective alternatives to existing treatments and that its products should be used in their procedures; (5) the Company’s ability to raise funds to expand its business; (6) the Company has incurred losses in the current period and prior periods and may incur losses in the future; (7) changes in applicable laws or regulations; (8) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (9) the Company’s ability to maintain production or obtain supply of its products in sufficient quantities to meet demand; (10) any resurgence of the COVID-19 pandemic and its impact, if any, on the Company’s fiscal condition and results of operations; (11) the impact of the suspension of commercialization of: (a) ReNu and NuCel in connection with the expiration of the FDA’s enforcement grace period for HCT/Ps on May 31, 2021 and (b) Dermagraft in the second quarter of 2022 pending transition of manufacturing to a new manufacturing facility or a third-party manufacturer; (12) whether the Company is able to obtain regulatory approval for and successfully commercialize ReNu; and (13) other risks and uncertainties described in the Company’s filings with the Securities and Exchange Commission, including Item 1A (Risk Factors) of the Company’s Form 10-K for the year ended December 31, 2023 and its subsequently filed periodic reports. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Although it may voluntarily do so from time to time, the Company undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.
About Organogenesis Holdings Inc.
Organogenesis Holdings Inc. is a leading regenerative medicine company focused on the development, manufacture, and commercialization of solutions for the advanced wound care and surgical and sports medicine markets. Organogenesis offers a comprehensive portfolio of innovative regenerative products to address patient needs across the continuum of care. For more information, visit www.organogenesis.com.
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