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 of 7% from the third quarter of 2023.
- Net revenue from Surgical & Sports Medicine products of $7.2 million, an increase of 1% from the third quarter of 2023.
- 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.
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 | 7% | |||||||||
| Surgical & Sports Medicine | 7,224 | 7,174 | 50 | 1% | ||||||||||||
| Net revenue | $ | 115,177 | $ | 108,531 | $ | 6,646 | 6% | |||||||||
Net revenue for the third quarter of 2024 was $115.2 million, compared to $108.5 million for the third quarter of 2023, an increase of $6.6 million, or 6%. The increase in net revenue was driven by an increase of $6.6 million, or 7%, in net revenue for Advanced Wound Care products, and an increase of $0.1 million, or 1%, in net revenue for Surgical & Sports Medicine products.
Gross profit for the third quarter of 2024 was $88.4 million, or 77% of net revenue, compared to $82.7 million, or 76% of net revenue for the third quarter of 2023, an increase of $5.6 million, or 7%.
Operating expenses for the third quarter of 2024 were $82.1 million compared to $74.7 million for the third quarter of 2023, an increase of $7.4 million, or 10%. R&D expense was $10.3 million for the third quarter of 2024, compared to $10.5 million for the third quarter of 2023, a decrease of $0.2 million, or 2%. Selling, general and administrative expenses were $71.8 million for the third quarter of 2024, compared to $64.2 million for the third quarter of 2023, an increase of $7.6 million, or 12%.
Operating income for the third quarter of 2024 was $6.2 million, compared to $8.1 million for the third quarter of 2023, a decrease of $1.8 million, or 22%.
Total other expense, net, for the third quarter of 2024 was $0.4 million, relatively consistent with $0.4 million for the third quarter of 2023.
Net income for the third quarter of 2024 was $12.3 million, or $0.09 per share, compared to $3.2 million, or $0.02 per share, for the third quarter of 2023, an increase of $9.1 million, or $0.07 per share.
Adjusted EBITDA was $13.4 million for the third quarter of 2024, compared to $16.0 million for the third quarter of 2023, a decrease of $2.6 million, or 16%.
Adjusted net income was $12.9 million for the third quarter of 2024, compared to $5.3 million for the third quarter of 2023, an increase of $7.6 million, or 143%.
Non-GAAP operating income was $7.1 million for the third quarter of 2024, compared to $11.0 million for the third quarter of 2023, a decrease of $3.9 million, or 35%.
As of September 30, 2024, the Company had $94.9 million in cash, cash equivalents and restricted cash and $62.1 million in net debt obligations, compared to $104.3 million in cash, cash equivalents and restricted cash and $66.2 million in net debt obligations as of December 31, 2023.
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 | 7% | |||||||||
| Surgical & Sports Medicine | 20,333 | 21,140 | (807 | ) | (4%) | |||||||||||
| Net revenue | $ | 355,387 | $ | 333,489 | $ | 21,898 | 7% | |||||||||
Net revenue for the nine months ended September 30, 2024 was $355.4 million, compared to $333.5 million for the nine months ended September 30, 2023, an increase of $21.9 million, or 7%. The increase in net revenue was driven by an increase of $22.7 million, or 7%, in net revenue for Advanced Wound Care products partially offset 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, 2024 was $270.7 million, or 76% of net revenue, compared to $254.8 million, or 76% of net revenue for nine months ended September 30, 2023, an increase of $15.9 million, or 6%.
Operating expenses for the nine months ended September 30, 2024 were $282.2 million compared to $241.0 million for the nine months ended September 30, 2023, an increase of $41.2 million or 17%. R&D expense was $38.7 million for the nine months ended September 30, 2024, compared to $32.6 million for the nine months ended September 30, 2023, an increase of $6.1 million, or 19%. Selling, general and administrative expenses were $220.7 million for the nine months ended September 30, 2024, compared to $208.4 million for the nine months ended September 30, 2023, an increase of $12.3 million, or 6%. For the nine months ended September 30, 2024, the Company recorded impairment and write down expenses of $18.8 million and $4.0 million, respectively.
Operating loss for the nine months ended September 30, 2024 was $11.5 million, compared to operating income of $13.8 million for the nine months ended September 30, 2023, a decrease in operating income of $25.3 million, or 183%.
Total other expense, net, for the nine months ended September 30, 2024 was $1.6 million, consistent with $1.6 million for the nine months ended September 30, 2023.
Net loss for the nine months ended September 30, 2024 was $6.8 million, or $(0.05) per share, compared to net income of $5.5 million or $0.04 per share, for the nine months ended September 30, 2023, a decrease in net income of $12.3 million, or $(0.09) per share.
Adjusted EBITDA was $31.6 million for the nine months ended September 30, 2024, compared to $35.1 million for the nine months ended September 30, 2023, a decrease of $3.5 million, or 10%.
Adjusted net income was $11.7 million for the nine months ended September 30, 2024, compared to $10.7 million for the nine months ended September 30, 2023, an increase in adjusted net income of $1.0 million, or 9%.
Non-GAAP operating income was $13.9 million for the nine months ended September 30, 2024, compared to $21.0 million for the nine months ended September 30, 2023, a decrease of $7.1 million, or 34%.
As of September 30, 2024, the Company had $94.9 million in cash, cash equivalents and restricted cash and $62.1 million in net debt obligations, compared to $104.3 million in cash, cash equivalents and restricted cash and $66.2 million in net debt obligations as of December 31, 2023.
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 approximately 5% to 11% 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 of 6% to 11% 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 of 7% to 0% year-over-year as compared to net revenue of $27.6 million for the year ended December 31, 2023.
- 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.
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, $0.0001 par value; 1,000,000 shares authorized; none issued | - | - | ||||||
| Common stock, $0.0001 par value; 400,000,000 shares authorized; 133,305,050 and 132,044,944 shares issued; 132,576,502 and 131,316,396 shares outstanding at September 30, 2024 and December 31, 2023, respectively | 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 | ||||||||||||||