Organogenesis Holdings, Inc. (NASDAQ:ORGO) Q2 2024 Earnings Conference Call August 8, 2024 5:00 PM ET Company Participants Gary Gillheeney - President, Chief Executive Officer & Chair Dave Francisco - Chief Financial Officer Conference Call Participants Ryan Zimmerman - BTIG Brooks O'Neill - Lake Street Drew Ranieri - Morgan Stanley Matthew Park - Cantor Fitzgerald Operator Please stand by. Welcome ladies and gentlemen to the Second Quarter 2024 Earnings Conference Call for Organogenesis Holdings Inc. At th ...

Financial Performance - Net revenue for Q2 2024 was $130.2 million, an increase of $12.9 million or 11% compared to Q2 2023 revenue of $117.3 million[3] - The company reported a net loss of $17.0 million for Q2 2024, a decrease of $22.4 million compared to net income of $5.3 million in Q2 2023[3] - Adjusted net income for Q2 2024 was $0.2 million, down from $6.1 million in Q2 2023, representing a 97% decrease[8] - For the first half of 2024, net revenue was $240.2 million, a 7% increase from $225.0 million in the first half of 2023[9] - The company expects 2024 net revenue guidance between $445.0 million and $470.0 million, representing a year-over-year increase of approximately 3% to 9%[12] - Net revenue for the three months ended June 30, 2024, was $130,234,000, representing an increase from $117,316,000 in the same period of 2023, a growth of approximately 11.6%[15] - Gross profit for the six months ended June 30, 2024, was $182,316,000, compared to $172,035,000 for the same period in 2023, reflecting a year-over-year increase of about 6.0%[15] - The company reported a net loss of $17,043,000 for the three months ended June 30, 2024, compared to a net income of $5,316,000 in the same period of 2023[15] - Net income for June 2024 was a loss of $19,143 thousand, compared to a profit of $2,347 thousand in June 2023[16] Operating Expenses - Operating expenses for Q2 2024 were $114.9 million, an increase of 41% from $81.3 million in Q2 2023[7] - Total operating expenses for the three months ended June 30, 2024, were $114,928,000, up from $81,255,000 in the prior year, indicating a significant increase of approximately 41.3%[15] - R&D expenses rose to $15.6 million in Q2 2024, a 42% increase from $10.9 million in Q2 2023[7] - Total depreciation and amortization expenses increased to $6,438 thousand in June 2024 from $4,922 thousand in June 2023[16] Cash and Liquidity - The company had $90.5 million in cash and cash equivalents as of June 30, 2024, down from $104.3 million at the end of 2023[9] - Cash and cash equivalents decreased to $89,902,000 as of June 30, 2024, from $103,840,000 at the end of 2023, a decline of about 13.4%[14] - Cash flows from operating activities resulted in a net cash used of $5,424 thousand for June 2024, down from a net cash provided of $3,569 thousand in June 2023[16] - Cash paid for interest was $2,744 thousand in June 2024, compared to $2,608 thousand in June 2023[16] - Cash, cash equivalents, and restricted cash at the end of the period were $90,477 thousand, up from $89,508 thousand at the end of June 2023[16] - The company used $4,102 thousand in investing activities for purchases of property and equipment in June 2024, down from $15,061 thousand in June 2023[16] Assets and Liabilities - Accounts receivable increased to $105,945,000 as of June 30, 2024, compared to $81,999,000 at the end of 2023, representing a rise of approximately 29.2%[14] - Total current liabilities rose to $85,727,000 as of June 30, 2024, compared to $80,509,000 at the end of 2023, an increase of about 6.8%[14] - The accumulated deficit increased to $(60,114,000) as of June 30, 2024, from $(40,971,000) at the end of 2023, indicating a worsening of approximately 46.8%[14] - Total assets decreased to $443,163,000 as of June 30, 2024, from $460,025,000 at the end of 2023, a decline of approximately 3.7%[14] Impairments and Provisions - The company reported a significant impairment of $18,842 thousand related to a purchased building and associated unfinished construction work[19] - The company has incurred impairment charges of $19,000 related to buildings and improvements, and $4,000 for write-downs of capitalized software costs[21] - The company recorded a provision for credit losses of $2,032 thousand in June 2024, compared to $190 thousand in June 2023[16] Future Outlook and Risks - The company faces significant competition and rapid technological changes that could impact its business and financial condition[23] - The company is focused on expanding its product offerings in the advanced wound care and surgical & sports medicine markets[24] - The company has outlined risks related to changes in coverage and reimbursement levels for its products, which could affect future revenue[23] - The company is working on obtaining regulatory approval for new products, including ReNu, which is critical for its commercialization strategy[23] - The company has incurred losses in the current and prior periods and may continue to do so in the future[23] Adjusted Metrics - Adjusted EBITDA for Q2 2024 was $15.6 million, a slight increase of $0.2 million or 1% from $15.4 million in Q2 2023[8] - Adjusted EBITDA for the three months ended June 30, 2024, was $15,649 thousand, compared to $15,403 thousand for the same period in 2023[18] - Non-GAAP operating income for the six months ended June 30, 2024, was $6,792 thousand, compared to $9,985 thousand for the same period in 2023[20] - Adjusted EBITDA for the year is projected to be $16,000, while for the first half of 2024, it is projected at $35,000[21] - The company expects an adjusted net income (loss) of $(8,000) for the year ending December 31, 2024, compared to an adjusted net income of $7,000 for the first half of 2024[22]

On track to submit ReNu BLA by the end of 2025 Enrollment in second Phase 3 complete; significantly ahead of expectations Subgroup analysis demonstrated most severe (KL4) subjects responded comparably to moderate (KL3) CANTON, Mass., Aug. 08, 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 and Sports Medicine markets, today ...

Company Overview - Organogenesis Holdings Inc. is 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 [3]. Financial Results Announcement - The company will report its second quarter of fiscal year 2024 financial results after the market closes on Thursday, August 8th [1]. - A conference call will be hosted by management at 5:00 p.m. Eastern Time on August 8th to discuss the quarterly results and provide a corporate update, including a question and answer session [2]. Access Information - Participants can access the live webcast through the provided link or by dialing (800) 715-9871 with access code 6679912 [2]. - The live webcast will also be available on the company's website and archived for approximately one year [2].

CANTON, Mass., June 06, 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 announced that management will participate in the Truist Securities MedTech Conference, which is being held at the InterContinental Boston in Boston, MA on Tuesday, June 18th. Management will participate in 1x1 meetings. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q 85 Dan Road Canton, MA 02021 (Address of principal executive offices) (Zip Code) (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 001-37906 ORGANOGENESIS HOLDINGS INC. (Exact Name of Registrant as Specified in Its Cha ...

Exhibit 99.1 FOR IMMEDIATE RELEASE Organogenesis Holdings Inc. Reports First Quarter 2024 Financial Results CANTON, Mass., (May 9, 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 first quarter ended March 31st, 2024. First Quarter 2024 Financial Results Summary: "We deliver ...

PART I [Business Overview](index=4&type=section&id=Item%201.%20Business) Organogenesis is a leading regenerative medicine company specializing in Advanced Wound Care and Surgical & Sports Medicine, driving growth through its product portfolio, clinical data, and regulatory approvals [Company Overview](index=4&type=section&id=Overview) Organogenesis is a leading regenerative medicine company focused on Advanced Wound Care and Surgical & Sports Medicine markets, aiming to improve patient outcomes and lower care costs - Organogenesis is a leading regenerative medicine company focused on Advanced Wound Care and Surgical & Sports Medicine markets, aiming to improve patient outcomes and lower care costs[17](index=17&type=chunk) - The company's product portfolio includes solutions with Premarket Application (PMA) approval or 510(k) clearance from the FDA, providing a strong competitive advantage[18](index=18&type=chunk) - For the year ended December 31, 2023, the company generated **$433.1 million** in revenue and incurred **$314.1 million** in operating expenses[21](index=21&type=chunk) [Competitive Strengths](index=4&type=section&id=Competitive%20Strengths) The company leads in regenerative medicine technology with strong brand recognition, well-positioned in large, growing global markets - The company is a leader in regenerative medicine technology with strong brand recognition for flagship products like Apligraf, Dermagraft, and PuraPly AM, as well as placental-based products such as NuShield, Affinity, and Novachor[22](index=22&type=chunk) - Organogenesis is well-positioned in large, attractive, and growing global markets, including Advanced Wound Care and Surgical & Sports Medicine, driven by favorable demographics and increasing comorbidities[22](index=22&type=chunk)[23](index=23&type=chunk) [Our Business Strategy](index=6&type=section&id=Our%20Business%20Strategy) Key strategies include market penetration, comprehensive product offerings, leveraging clinical data, and robust customer support - Key strategies include driving penetration in the Advanced Wound Care market, offering a comprehensive suite of products, leveraging a large body of clinical data and FDA-approved products, and maintaining robust relationships across the continuum of care[24](index=24&type=chunk) - The company also focuses on differentiated in-house customer support, established and scalable regulatory, manufacturing, and commercial infrastructure, and extensive executive management experience in regenerative medicine[24](index=24&type=chunk) [Industry Overview](index=8&type=section&id=Industry%20Overview) The company targets difficult-to-heal wounds and musculoskeletal injuries within a large, growing market driven by demographics - The company focuses on difficult-to-heal wounds and musculoskeletal injuries, with an estimated addressable market of approximately **$25 billion** in 2021, split between Advanced Wound Care (**$10 billion**) and Surgical & Sports Medicine (**$15 billion**)[27](index=27&type=chunk) - Key growth drivers for these markets include favorable global demographics, an aging population, increased incidence of comorbidities (e.g., diabetes, obesity), and growing acceptance of advanced technologies[29](index=29&type=chunk) [Advanced Wound Care Market](index=10&type=section&id=Advanced%20Wound%20Care%20Market) Chronic wounds pose a significant burden, with biologics being the fastest-growing segment in the **$10 billion** global market - Chronic wounds (VLUs, DFUs, Pressure Ulcers, Surgical Wounds) represent a significant burden on public health and healthcare costs, often stalling in the inflammatory phase due to factors like biofilm and disrupted cell signaling[30](index=30&type=chunk)[31](index=31&type=chunk)[33](index=33&type=chunk) - The global Advanced Wound Care market was estimated at **$10 billion** in 2021, with biologics (including skin substitutes) being the fastest-growing segment, projected to reach **$2 billion** by 2026[36](index=36&type=chunk)[38](index=38&type=chunk) - Skin substitutes, such as Apligraf and Dermagraft, have demonstrated improved healing rates and lower overall costs compared to traditional therapies, with Medicare treatment costs for DFUs being significantly lower[39](index=39&type=chunk) [Surgical & Sports Medicine Market](index=14&type=section&id=Surgical%20%26%20Sports%20Medicine%20Market) The **$15 billion** Surgical & Sports Medicine market is driven by common injuries and prevalent degenerative conditions with **6%** CAGR - The immediate addressable Surgical & Sports Medicine market is estimated at **$15 billion**, with a CAGR of approximately **6%** through 2028, encompassing surgical/acute wounds, tendon/ligament injuries, and chronic inflammatory/degenerative conditions[43](index=43&type=chunk)[48](index=48&type=chunk) - Tendon and ligament injuries are common, with high re-rupture rates, and regenerative tissue scaffolds are used to support healing[45](index=45&type=chunk) - Chronic inflammatory and degenerative conditions like osteoarthritis (OA) are increasingly prevalent, with the global market for treatments exceeding **$3.8 billion** in 2020[47](index=47&type=chunk) [Our Products](index=17&type=section&id=Our%20Products) The company offers a broad portfolio of cellular and acellular wound care products for Advanced Wound Care and Surgical & Sports Medicine - The company offers a broad portfolio of cellular and acellular wound care products for Advanced Wound Care, treating chronic wounds like VLUs, DFUs, and pressure ulcers[55](index=55&type=chunk) - In Surgical & Sports Medicine, products support healing of surgical/acute wounds and musculoskeletal injuries, including tendon repair and chronic degenerative conditions like OA[70](index=70&type=chunk) [Advanced Wound Care Products](index=17&type=section&id=Advanced%20Wound%20Care) The Advanced Wound Care portfolio addresses various wound types and healing phases, with PuraPly AM controlling biofilm - The Advanced Wound Care portfolio includes Affinity, Novachor, Apligraf, Dermagraft, NuShield, PuraPly AM, and CYGNUS Dual, addressing various wound types and healing phases[59](index=59&type=chunk)[60](index=60&type=chunk) - PuraPly AM is used early in the healing process as an antimicrobial barrier to control biofilm, which is present in at least **78%** of chronic wounds[57](index=57&type=chunk) [Affinity & Novachor](index=20&type=section&id=Af%20inity%20%26%20Novachor) Affinity and Novachor are fresh, viable cell-containing placental allografts, stored hypothermically for chronic and acute wounds - Affinity (launched 2014) and Novachor (launched 2021) are fresh, viable cell-containing amnion and chorion placental allografts, stored hypothermically via the proprietary AlloFresh process, for chronic and acute wounds[62](index=62&type=chunk) [Apligraf](index=20&type=section&id=Apligraf) Apligraf is a bioengineered bi-layered skin substitute with PMA approval for venous leg ulcers and diabetic foot ulcers - Apligraf, launched in 1998, is a bioengineered bi-layered skin substitute with PMA approval for both venous leg ulcers (VLUs) and diabetic foot ulcers (DFUs), and is a leading product for VLU treatment[63](index=63&type=chunk) [Dermagraft](index=20&type=section&id=Dermagraft) Dermagraft manufacturing and sales were suspended in Q4 2021 and Q2 2022, respectively, pending a manufacturing transition for cost savings - Dermagraft, launched in 2001 and acquired in 2014, is a dermal substitute with PMA approval for DFUs, but its manufacturing was suspended in Q4 2021 and sales in Q2 2022, pending a transition to a new manufacturing facility or third-party manufacturer[64](index=64&type=chunk) [NuShield](index=20&type=section&id=NuShield) NuShield is a dehydrated placental allograft and surgical barrier, providing a protective ECM scaffold with a five-year shelf life - NuShield is a dehydrated placental allograft and surgical barrier, processed with the proprietary LayerLoc process, providing a protective barrier and ECM scaffold for chronic and acute wounds, with a five-year shelf life at room temperature[65](index=65&type=chunk) [PuraPly Antimicrobial](index=20&type=section&id=PuraPly%20Antimicrobial) PuraPly AM is an antimicrobial barrier skin substitute cleared for managing various wound types, including partial/full-thickness wounds - PuraPly AM, launched in 2016, is an antimicrobial barrier skin substitute made of purified porcine collagen matrix embedded with broad-spectrum PHMB, cleared for managing various wound types including partial/full-thickness, pressure, venous, diabetic, and surgical wounds[66](index=66&type=chunk) [CYGNUS Dual](index=22&type=section&id=CYGNUS%20Dual) CYGNUS Dual is a dual-layered amniotic tissue graft with a five-year shelf life, maintaining inherent extracellular matrices and growth factors - CYGNUS Dual is a dual-layered amniotic tissue graft with a five-year shelf life at room temperature, manufactured to maintain inherent levels of key extracellular matrices, carbohydrates, growth factors, and cytokines[68](index=68&type=chunk) [Surgical & Sports Medicine Products](index=23&type=section&id=Surgical%20%26%20Sports%20Medicine) The Surgical & Sports Medicine suite targets surgical wounds and musculoskeletal injuries with products like PuraForce and PuraPly MZ - The Surgical & Sports Medicine product suite includes NuShield, Affinity, Novachor, PuraPly AM, PuraForce, and PuraPly MZ, targeting surgical/acute wounds and musculoskeletal injuries[70](index=70&type=chunk) - PuraForce is a bioengineered porcine collagen surgical matrix for soft tissue reinforcement, indicated for all tendons in the body[70](index=70&type=chunk) - PuraPly MZ is a micronized particulate version of PuraPly, allowing application in powder or gel form for deep and tunneling wounds in surgical settings[70](index=70&type=chunk) [NuShield, Affinity, Novachor, PuraPly AM, PuraPly SX, PuraForce, and PuraPly MZ](index=25&type=section&id=NuShield%2C%20Af%20inity%2C%20Novachor%2C%20PuraPly%20AM%2C%20PuraPly%20SX%2C%20PuraForce%2C%20and%20PuraPly%20MZ) These products are marketed for surgical and orthopedic applications, serving as barriers, placental allografts, or antimicrobial solutions - NuShield is marketed for surgical and orthopedic applications as a barrier to support soft tissue repairs, particularly in difficult-to-heal locations[72](index=72&type=chunk) - Affinity and Novachor are marketed as placental allografts for acute surgical wounds, while PuraPly AM and PuraPly SX serve as antimicrobial barriers in surgical settings[72](index=72&type=chunk) - PuraForce is a bioengineered porcine collagen surgical matrix for soft tissue reinforcement, and PuraPly MZ is a micronized particulate for managing open surgical wounds[72](index=72&type=chunk) [Product Pipeline](index=25&type=section&id=Product%20Pipeline) The company maintains a robust product pipeline for Advanced Wound Care and Surgical & Sports Medicine, deepening its portfolio - The company has a robust product pipeline for both Advanced Wound Care and Surgical & Sports Medicine markets, aiming to deepen its portfolio and address additional clinical applications[73](index=73&type=chunk) - Pipeline efforts include line extensions for PuraPly and PuraPly AM, expansion of the placental portfolio, and development of smaller Apligraf and Dermagraft sizes[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - Key pipeline products include FortiShield (510(k) cleared for second-degree burns), TransCyte (PMA approved for deep burns, awaiting manufacturing), and ReNu (cryopreserved amniotic suspension in Phase III for knee OA, RMAT designated, commercial distribution suspended pending BLA approval)[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) [PuraPly and PuraPlyAM Line Extensions](index=25&type=section&id=PuraPly%20and%20PuraPlyAM%20Line%20Extensions) The PuraPly portfolio is developing line extensions to leverage existing collagen matrix expertise for additional sites of care - The PuraPly portfolio is developing line extensions to leverage existing collagen matrix expertise and meet the specific needs of additional sites of care[73](index=73&type=chunk) [Placental Portfolio Expansion](index=25&type=section&id=Placental%20Portfolio%20Expansion) The R&D team is developing larger placental grafts and assessing in-licensing or acquisition opportunities to expand the portfolio - The R&D team is developing larger placental grafts to meet the needs of advanced wound care and surgical wound markets, and is also assessing in-licensing or acquisition opportunities[74](index=74&type=chunk) [Apligraf and Dermagraft Line Extensions](index=26&type=section&id=Apligraf%20and%20Dermagraft%20Line%20Extensions) Development projects are underway to create smaller Apligraf and Dermagraft sizes for optimal clinical utilization on smaller wounds - Two development projects are underway to create additional smaller sizes of Apligraf and Dermagraft to optimize clinical utilization for smaller wounds like DFUs, requiring significant development and FDA PMA Supplement approval[75](index=75&type=chunk) [FortiShield](index=26&type=section&id=FortiShield) FortiShield, a biosynthetic wound matrix, received 510(k) clearance in May 2023 for temporary protective covering, primarily for second-degree burns - FortiShield, a biosynthetic wound matrix, received 510(k) clearance in May 2023 for use as a temporary protective covering and moist wound healing environment, primarily for second-degree burns[76](index=76&type=chunk) [TransCyte](index=26&type=section&id=TransCyte) TransCyte, a bioengineered tissue scaffold, has PMA approval for deep second- and third-degree burns, awaiting manufacturing for full launch - TransCyte, a bioengineered tissue scaffold, has PMA approval for deep second- and third-degree burns, offering bioactive dermal components and pain relief, with full launch dependent on manufacturing capabilities[77](index=77&type=chunk) [ReNu](index=26&type=section&id=ReNu) ReNu, a cryopreserved amniotic suspension, is in clinical studies for knee OA, received RMAT designation, but commercial distribution is suspended - ReNu, a cryopreserved amniotic suspension, is undergoing clinical studies to support BLA approval for managing knee osteoarthritis symptoms, having received RMAT designation from the FDA[78](index=78&type=chunk) - Commercial distribution of ReNu was suspended on May 31, 2021, following the end of the FDA's enforcement grace period for certain 361 HCT/Ps[78](index=78&type=chunk) [Ongoing Clinical Studies](index=26&type=section&id=Ongoing%20Clinical%20Studies) The company actively invests in generating robust clinical and real-world outcomes data for its products to enhance sales and reimbursement - The company is actively investing in generating robust clinical and real-world outcomes data for its Advanced Wound Care and Surgical & Sports Medicine products to enhance sales and reimbursement[79](index=79&type=chunk) [Advanced Wound Care Studies](index=27&type=section&id=Advanced%20Wound%20Care) Advanced Wound Care Clinical Studies Status | Product | Wound Type | Design | Completion Date | Data Presentation Date | | :------------------ | :--------- | :------------------------------------------ | :-------------- | :--------------------- | | Organogenesis PuraPlyAM | DFU | CEA, NetHealth EMR Database of PPAM vs Theraskin (NI) | Q1 2020 | Q2 2020 ISPOR, Q1 2024 Accepted for Publication | | Organogenesis PuraPlyAM | DFU | HEOR-CEA, Medicare Claims, PPAM vs SOC | Q4 2022 | Q4 2021-SAWC Fall, Q2 2023-SAWC Spring | | Organogenesis Apliara | PRI | CEA, NetHealth EMR Database of Apligraf vs Primatrix | Q4 2019 | Q3 2020 SAWC Spring, Published Q1 2024 | | Organogenesis Apliara | PRI | CEA, NetHealth EMR Database of Apligraf vs Epifix | Q1 2020 | Q2 2020 ISPOR | | Organogenesis NuShield | DFU | Prospective Multicenter RCT, NuShield vs SOC | Q1 2023 | Q3 2024 | | Organogenesis NuShield | DFU | HEOR-CEA, Medicare Claims, NuShield vs SOC | Q4 2022 | Q2 2023-SAWC Spring | | Organogenesis Affinity | VLU | Prospective, Multicenter RCT Affinity vs SOC | Q1 2025 | Q4 2025 | | Organogenesis Affinity | DFU | HEOR-CEA, Medicare Claims, Affinity vs SOC | Q4 2022 | Q2 2023-SAWC Spring | [Sports Medicine Studies](index=27&type=section&id=Sports%20Medicine) Sports Medicine Clinical Studies Status | Product | Indication | Design | Completion Date | Estimated Data Presentation Date | | :---------------- | :--------- | :------------------------------------------------------------------------------------------------- | :-------------- | :------------------------------- | | Organogenesis ReNu | Knee OA | A Phase 3 Prospective, Multicenter, Double-Blind, Randomized, Placebo-Controlled Study (N=474) | Q1 2024 | Q3 2024 | | Organogenesis ReNu | Knee OA | A Phase 3 Prospective, Multicenter, Double-Blind, Randomized, Placebo-Controlled Study (N=474) | Q4 2025 | Q3 2026 | [Selected Published Clinical Studies](index=28&type=section&id=Selected%20Published%20Clinical%20Studies) Published studies demonstrate the efficacy of various products, including PuraPly AM, Affinity, NuShield, ReNu, Apligraf, and Dermagraft, in wound closure, pain reduction, and improved healing rates - Published studies demonstrate the efficacy of PuraPly AM in achieving wound closure and reduction in area/depth/volume for various acute and chronic wounds[83](index=83&type=chunk)[84](index=84&type=chunk)[85](index=85&type=chunk)[86](index=86&type=chunk) - A randomized controlled clinical trial showed Affinity achieved **60%** wound closure in DFUs at **12 weeks**, significantly higher than standard of care (p=0.04)[87](index=87&type=chunk) - Clinical experience with NuShield for **50 wounds** (VLUs, DFUs, others) showed **90%** achieved **60-100%** wound closure, with a median time to closure of **102 days**[89](index=89&type=chunk) - A **200-patient** RCT for knee OA showed ReNu significantly reduced pain and improved responder rates compared to hyaluronic acid or saline at **12 months**[90](index=90&type=chunk)[91](index=91&type=chunk) - FDA-approved products Apligraf and Dermagraft have extensive clinical evidence, with Apligraf showing **56%** DFU closure at **12 weeks** vs. **38%** for conventional therapy (p=.0042) and reduced amputations[97](index=97&type=chunk)[98](index=98&type=chunk) - Dermagraft's pivotal trial showed a **64%** increase in **100%** DFU closure at **12 weeks** compared to conventional therapy and a significant reduction in amputations[110](index=110&type=chunk)[111](index=111&type=chunk) [Platform Technologies](index=34&type=section&id=Platform%20Technologies) The company's R&D capabilities are built on four core platform technologies: Bioengineered Cultured Cellular Products, Collagen Biomaterial, Placental-Based, and Antimicrobial - The company's R&D capabilities are built on four core platform technologies: Bioengineered Cultured Cellular Products (e.g., Apligraf, Dermagraft), Collagen Biomaterial Technology (e.g., PuraPly family), Placental-Based Products (e.g., Affinity, NuShield with AlloFresh and LayerLoc processes), and Antimicrobial Technology (PHMB for PuraPly AM)[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) [Commercial Infrastructure](index=36&type=section&id=Commercial%20Infrastructure) The company leverages a direct sales force, independent agencies, in-house customer support, and internal/outsourced manufacturing, with international expansion plans - The company employs approximately **260** direct sales representatives for Advanced Wound Care and utilizes a mix of direct sales and **160** independent agencies for Surgical & Sports Medicine, with plans for international expansion[120](index=120&type=chunk)[121](index=121&type=chunk) - In-house customer support services, including reimbursement, medical, and technical support through the 'Circle of Care' program, strengthen customer relationships[122](index=122&type=chunk) - Manufacturing is internal for non-placental products and outsourced for placental products, with robust internal compliance processes and FDA/AATB registrations[125](index=125&type=chunk)[126](index=126&type=chunk) - In November 2023, the company entered a trademark license and manufacturing agreement with Vivex Biologics, Inc. to sell CYGNUS Dual and Matrix products, involving upfront fees, milestone payments, and royalties[129](index=129&type=chunk) [Reimbursement](index=38&type=section&id=Reimbursement) Customer reimbursement relies on government and private payers, with Medicare payments often bundled, and policy changes, such as potential bundling for skin substitutes, posing revenue risks - Customer reimbursement for products relies on government programs (Medicare, Medicaid) and private payers, with Medicare payments often bundled for hospital/ASC settings and separate (ASP+6%) for physician offices[130](index=130&type=chunk)[134](index=134&type=chunk) - While most private payers cover Apligraf and Dermagraft, many do not cover other products like PuraPly, PuraPly AM, Novachor, and NuShield[133](index=133&type=chunk) - Medicare's proposed policy to stop separate payments for skin substitutes in physician offices (2024/2025) was not finalized in 2023 but could be reconsidered, potentially impacting revenue[136](index=136&type=chunk)[143](index=143&type=chunk) - Three MACs withdrew LCDs in September 2023 that would have eliminated coverage for five commercially marketed products, but new restrictive LCDs could be issued in the future[150](index=150&type=chunk) [Competition](index=43&type=section&id=Competition) The company operates in highly competitive markets characterized by rapid technological change, with success dependent on product efficacy, price, and support - The company operates in highly competitive markets characterized by rapid technological change, with success dependent on product efficacy, ease of use, price, reimbursement, and customer support[154](index=154&type=chunk) - Key competitors include Arthrex, Bioventus Inc., Integra LifeSciences, MiMedx Group, Smith & Nephew, 3M, Coloplast, DePuy Synthes, and Zimmer Biomet Holdings[156](index=156&type=chunk) [Intellectual Property](index=44&type=section&id=Intellectual%20Property) The company relies on trademarks, trade secrets, and patents to protect its technology, holding **36** issued patents globally, though key products like Apligraf, Dermagraft, and NuShield are not patent-covered - The company relies on trademarks, trade secrets, patents, and other intellectual property rights to protect its technology and competitive position[159](index=159&type=chunk) - As of December 31, 2023, the company owned **36** issued patents globally (**15** U.S.) and **19** pending patent applications (**9** U.S.), with many issued patents expected to expire between 2027 and 2042[160](index=160&type=chunk) - Key products like Apligraf, Dermagraft, and NuShield are not covered by the company's issued patents or pending patent applications[160](index=160&type=chunk) [Government Regulation](index=45&type=section&id=Government%20Regulation) Products are subject to extensive FDA regulation, requiring 510(k) clearance or PMA approval, and compliance with various healthcare fraud and abuse laws - Products are subject to extensive FDA regulation under the PHSA or FDCA, requiring 510(k) clearance or PMA approval, and compliance with Quality System Regulation (QSR) for devices and cGMP for biologics[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) - Certain human cells, tissues, and cellular and tissue-based products (HCT/Ps) like Affinity and NuShield are regulated under Section 361 of the PHSA, exempting them from premarket review if minimally manipulated and for homologous use, though the FDA could disagree[170](index=170&type=chunk) - The company's ReNu product received Regenerative Medicine Advance Therapy (RMAT) designation for knee OA, which can expedite development but does not guarantee marketing approval[181](index=181&type=chunk) - Advertising, marketing, and promotional activities are subject to FDA oversight, prohibiting off-label promotion, and the company is subject to federal and state healthcare fraud and abuse laws, including the Anti-Kickback Statute and False Claims Act[182](index=182&type=chunk)[185](index=185&type=chunk) [Seasonality](index=51&type=section&id=Seasonality) Revenues typically show seasonality, with the fourth quarter being strongest due to hospital budget cycles and deductible satisfaction - Revenues typically show seasonality, with the fourth quarter being strongest due to hospital budget cycles and deductible satisfaction, and the first quarter usually having lower revenues[191](index=191&type=chunk) [Human Capital Resources](index=51&type=section&id=Human%20Capital%20Resources) As of December 31, 2023, the company had approximately **862** full-time employees, focusing on diversity, competitive compensation, and professional development - As of December 31, 2023, the company had approximately **862** full-time employees worldwide, none represented by a collective bargaining agreement, and maintains good employee relations[192](index=192&type=chunk) - The company focuses on diversity, open communication, competitive compensation and benefits (no increase in healthcare contributions for **8 years**), professional development, and employee health, well-being, and safety[193](index=193&type=chunk)[194](index=194&type=chunk)[197](index=197&type=chunk) [Available Information](index=53&type=section&id=Available%20Information) The company makes its SEC filings, including annual and quarterly reports, available free of charge through its website's 'Investors' section - The company makes its SEC filings, including annual and quarterly reports, available free of charge through the 'Investors' section of its website, www.organogenesis.com[195](index=195&type=chunk) Key Financials (Year Ended December 31, 2023) | Metric | Amount (Millions) | | :----------------- | :---------------- | | Revenue | $433.1 | | Operating Expenses | $314.1 | [Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) The company faces numerous risks, including fluctuating operating results, potential future losses, and substantial uncertainty regarding product coverage and reimbursement [Summary of Risk Factors](index=53&type=section&id=Summary%20of%20Risk%20Factors) The company faces risks from fluctuating operating results, uncertain reimbursement, material weaknesses in internal controls, and intense competition - The company's operating results may fluctuate significantly, and it may incur future losses despite recent net income[198](index=198&type=chunk) - Coverage and adequate reimbursement for products from government and private payers are uncertain and subject to policy changes, including potential bundling of payments for skin substitutes[198](index=198&type=chunk) - A material weakness in internal control over financial reporting has been identified, and disclosure controls and procedures are not effective[198](index=198&type=chunk) - The company faces significant competition, rapid technological change, and challenges in convincing physicians to adopt its products[200](index=200&type=chunk) [Risks Related to Organogenesis and its business](index=55&type=section&id=Risks%20Related%20to%20Organogenesis%20and%20its%20business) Operating results fluctuate, internal control weaknesses persist, supply chain dependence is high, and acquisitions and IT disruptions pose substantial risks - Operating results are subject to significant fluctuations due to competitive product introductions, reimbursement changes, and economic conditions[203](index=203&type=chunk)[204](index=204&type=chunk) - The company has identified a material weakness in internal control over financial reporting related to IT general controls and segregation of duties, impacting financial reporting accuracy[207](index=207&type=chunk)[208](index=208&type=chunk) - Dependence on a limited group of suppliers for components and human tissue, along with manufacturing disruptions (e.g., Dermagraft suspension), poses risks to product supply and sales[225](index=225&type=chunk)[228](index=228&type=chunk) - Expansion through acquisitions (like NuTech Medical and CPN Biosciences) or licensing agreements (like Vivex Biologics) entails risks such as dilution, debt, integration challenges, and failure to realize anticipated benefits[235](index=235&type=chunk)[237](index=237&type=chunk) - Significant disruptions of information technology systems or breaches of information security could adversely affect operations, customer service, and expose the company to liabilities[240](index=240&type=chunk)[244](index=244&type=chunk) [Risks Related to Regulation of Our Products and Other Government Regulations](index=70&type=section&id=Risks%20Related%20to%20Regulation%20of%20Our%20Products%20and%20Other%20Government%20Regulations) The company faces regulatory risks including potential refunds for discarded products, clinical trial delays, HCT/P reclassification, and non-compliance with fraud and abuse laws - The Infrastructure Investment and Jobs Act requires manufacturers to pay a refund for discarded single-use products, potentially leading to material rebates for Apligraf, Dermagraft, and PuraPly if the current exemption is rescinded[260](index=260&type=chunk) - Substantial delays or difficulties in clinical trials, including those for ReNu, could impair the ability to generate revenues from product sales and regulatory approvals[261](index=261&type=chunk)[264](index=264&type=chunk) - The FDA may determine that certain HCT/Ps (Affinity, Novachor, NuShield) do not qualify for regulation solely under Section 361 of the PHSA, requiring premarket approval or clearance and disrupting marketing[277](index=277&type=chunk)[280](index=280&type=chunk) - The company is subject to federal, state, and foreign healthcare fraud and abuse laws (e.g., Anti-Kickback Statute, False Claims Act), with non-compliance potentially leading to substantial penalties and exclusion from government programs[297](index=297&type=chunk)[298](index=298&type=chunk)[303](index=303&type=chunk) [Risks Related to Reimbursement for our Products](index=85&type=section&id=Risks%20Related%20to%20Reimbursement%20for%20our%20Products) Reimbursement rates and coverage are uncertain and subject to change, with Medicare's bundled payment policies and cost-containment efforts creating pricing pressure - Reimbursement rates and coverage for products from government and private insurance are subject to change, potentially reducing revenue and market acceptance[316](index=316&type=chunk)[318](index=318&type=chunk) - Medicare's bundled payment policy in hospital outpatient settings incentivizes the use of cheaper competitor products, potentially impacting the company's market share[320](index=320&type=chunk) - The withdrawal of Local Coverage Determinations (LCDs) by three MACs in September 2023, which would have eliminated coverage for certain products, provides temporary relief, but new restrictive LCDs could be adopted in the future[329](index=329&type=chunk) - Cost-containment efforts by customers, Group Purchasing Organizations (GPOs), and Integrated Delivery Networks (IDNs) create pricing pressure and may limit the company's ability to secure contracts[330](index=330&type=chunk) [Risks Related to Our Intellectual Property](index=89&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property) Intellectual property protection may be inadequate, key products are not patent-covered, trade secret reliance is risky, and litigation poses significant costs - The company's patents and other intellectual property rights may not adequately protect its products, with key products like Apligraf, Dermagraft, and NuShield not covered by current patents[331](index=331&type=chunk)[335](index=335&type=chunk) - Reliance on trade secrets and know-how is risky, as these are difficult to protect and may be independently developed by competitors[333](index=333&type=chunk)[343](index=343&type=chunk) - Pending and future intellectual property litigation is costly, disruptive, and could result in significant damages or injunctions preventing product sales[337](index=337&type=chunk) - Changes in U.S. patent law, including the Leahy-Smith America Invents Act and Supreme Court rulings, could diminish the value of patents and impair the ability to protect products[347](index=347&type=chunk)[348](index=348&type=chunk) [Risks Related to Our Indebtedness](index=95&type=section&id=Risks%20Related%20to%20Our%20Indebtedness) The company's substantial indebtedness of **$66.6 million** as of December 31, 2023, and restrictive covenants in its credit agreements, could materially adversely affect its business and financial condition - As of December 31, 2023, the company had approximately **$66.6 million** in outstanding indebtedness, which could materially adversely affect its business, results of operations, and financial condition[349](index=349&type=chunk) - The 2021 Credit Agreement requires compliance with financial covenants (Consolidated Fixed Charge Coverage Ratio and Consolidated Total Net Leverage Ratio), and failure to meet these could lead to immediate debt repayment[349](index=349&type=chunk)[358](index=358&type=chunk) - The company requires significant cash to service its debt, and its ability to generate cash depends on factors beyond its control, with potential inability to refinance or restructure obligations[354](index=354&type=chunk)[355](index=355&type=chunk) - Restrictive covenants in credit agreements limit the company's ability to engage in certain activities, such as incurring additional debt, paying dividends, or making acquisitions[357](index=357&type=chunk)[358](index=358&type=chunk) [Risks Related to Our Class A Common Stock](index=98&type=section&id=Risks%20Related%20to%20Our%20Class%20A%20Common%20Stock) The Significant Stockholder Group exercises substantial control, the stock price is volatile, and company bylaws designate a specific forum for stockholder actions - The Significant Stockholder Group, owning approximately **46%** of Class A common stock as of February 26, 2024, exercises significant control over the company, potentially leading to conflicts of interest[362](index=362&type=chunk) - The company's stock price has been and is likely to remain volatile, influenced by operating results, market conditions, and potential securities class action litigation[364](index=364&type=chunk)[365](index=365&type=chunk) - Company bylaws designate the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder actions, which could limit stockholders' ability to choose a favorable judicial forum[367](index=367&type=chunk)[369](index=369&type=chunk) [General Risk Factors](index=101&type=section&id=General%20Risk%20Factors) The company faces potential liabilities from securities class action litigation, uncertain future capital needs, challenges in retaining key employees, and adverse economic changes - The company is exposed to potential liabilities and reputational risk from securities class action litigation, including an ongoing lawsuit alleging federal securities law violations[371](index=371&type=chunk)[372](index=372&type=chunk) - Future capital needs are uncertain, and the company may need to raise additional funds through equity or debt, which could result in dilution or unfavorable terms[375](index=375&type=chunk) - The company's success depends on its ability to retain key employees and attract qualified personnel, facing intense competition from companies with greater resources[376](index=376&type=chunk)[379](index=379&type=chunk) - Uncertainty and adverse changes in general economic conditions, including recent turmoil in the global banking system (e.g., SVB failure), may negatively affect business and financing availability[380](index=380&type=chunk)[381](index=381&type=chunk) [Unresolved Staff Comments](index=108&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) There are no unresolved staff comments from the SEC - The company has no unresolved staff comments[403](index=403&type=chunk) [Cybersecurity](index=108&type=section&id=Item%201C.%20Cybersecurity) The company maintains a cybersecurity infrastructure managed by its information security team for threat assessment, monitoring, and resilience - The company's information security team manages and enhances its cybersecurity infrastructure, utilizing tools like the Collective Controls Catalog for threat assessment and continuous monitoring[405](index=405&type=chunk) - Cybersecurity partners and outsourced security operations centers are leveraged to protect the company's environment, with periodic penetration testing and vulnerability assessments[407](index=407&type=chunk) - The Audit Committee of the Board of Directors provides risk management oversight, receiving quarterly updates on cybersecurity programs, vulnerability detection, and progress[408](index=408&type=chunk) [Properties](index=108&type=section&id=Item%202.%20Properties) The company's corporate headquarters is a four-building campus in Canton, Massachusetts, comprising approximately **300,000 square feet** for operations and R&D - The corporate headquarters is a **300,000 square foot** campus in Canton, Massachusetts, with leased and purchased space for manufacturing, shipping, operations, and R&D[409](index=409&type=chunk) - Three buildings in Canton are leased from entities controlled by company stockholders and directors[409](index=409&type=chunk) - Additional leased facilities include a **43,850 square foot** office, laboratory, and manufacturing space in Norwood, Massachusetts, and smaller facilities in Alabama, California, Florida, and other parts of Massachusetts[410](index=410&type=chunk)[411](index=411&type=chunk) [Legal Proceedings](index=108&type=section&id=Item%203.%20Legal%20Proceedings) The company is a defendant in a class action lawsuit alleging federal securities law violations related to false and misleading statements - A class action complaint, Somogyi v. Organogenesis Holdings Inc., et al., was filed in December 2021 and amended in October 2022, alleging federal securities law violations[412](index=412&type=chunk)[414](index=414&type=chunk) - The lawsuit claims false and misleading statements regarding revenue, sales growth, and competitive ability for Affinity and PuraPly XT products[414](index=414&type=chunk) - The company believes the claims are without merit and intends to vigorously contest them, having filed a motion to dismiss in March 2023[414](index=414&type=chunk) [Mine Safety Disclosures](index=110&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company has no disclosures related to mine safety - Mine Safety Disclosures are not applicable to the company[416](index=416&type=chunk) PART II [Market For Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=111&type=section&id=Item%205.%20Market%20For%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock is listed on Nasdaq under 'ORGO', with **131.9 million shares** outstanding, and no cash dividends paid due to growth focus and credit restrictions [Market Information](index=111&type=section&id=Market%20Information) The company's Class A common stock is listed on the Nasdaq Capital Market under the symbol 'ORGO', with **131,963,176 shares** outstanding as of February 26, 2024 - The company's Class A common stock is listed on the Nasdaq Capital Market under the symbol 'ORGO'[419](index=419&type=chunk) - As of February 26, 2024, there were **131,963,176 shares** of Class A common stock outstanding and **607** holders of record[419](index=419&type=chunk) [Dividend policy](index=111&type=section&id=Dividend%20policy) The company has never paid cash dividends and intends to retain earnings for business growth, with dividend payments restricted by its 2021 Credit Agreement - The company has never declared or paid any cash dividends on its capital stock and intends to retain all available funds and future earnings to finance business growth[420](index=420&type=chunk) - The 2021 Credit Agreement restricts the company's ability to pay cash dividends without the bank's consent[420](index=420&type=chunk) [Stock Performance Graph](index=111&type=section&id=Stock%20Performance%20Graph) The report includes a comparison of cumulative total return for the company's Class A common stock against NASDAQ indices from December 31, 2018, through December 29, 2023 - The report includes a comparison of cumulative total return for the company's Class A common stock against the NASDAQ Composite Index and the NASDAQ Biotechnology Index from December 31, 2018, through December 29, 2023[421](index=421&type=chunk) [Reserved](index=112&type=section&id=Item%206.%20Reserved) This item is reserved and contains no information - Item 6 is reserved and contains no information[425](index=425&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=113&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section details Organogenesis's financial performance, key events, revenue, expenses, liquidity, and critical accounting policies, noting a **$41.0 million** accumulated deficit as of December 31, 2023 [Overview](index=113&type=section&id=Overview) Organogenesis is a leading regenerative medicine company, reporting **$433.1 million** net revenue and **$4.9 million** net income for 2023, with a **$41.0 million** accumulated deficit - Organogenesis is a leading regenerative medicine company focused on Advanced Wound Care and Surgical & Sports Medicine, aiming to improve patient outcomes and lower care costs[428](index=428&type=chunk) - The company's product portfolio includes FDA-approved (PMA, 510(k) clearance) and pipeline products, providing a strong competitive advantage[429](index=429&type=chunk) - For the year ended December 31, 2023, the company reported net revenue of **$433.1 million** and net income of **$4.9 million**, with an accumulated deficit of **$41.0 million**[432](index=432&type=chunk) [CPN Acquisition](index=114&type=section&id=CPN%20Acquisition) Organogenesis acquired CPN Biosciences for **$19.0 million** on September 17, 2020, with the earnout liability settling at **$0** by June 30, 2022 - On September 17, 2020, Organogenesis acquired CPN Biosciences for an aggregate consideration of **$19.0 million**, consisting of cash, common stock, and a contingent earnout[433](index=433&type=chunk) - The earnout liability, initially valued at **$3.8 million**, was calculated to be **$0** as of the conclusion of the earnout period on June 30, 2022[433](index=433&type=chunk) [Dermagraft](index=114&type=section&id=Dermagraft) Dermagraft manufacturing and sales were suspended in Q4 2021 and Q2 2022, respectively, for cost savings, with customers expected to substitute Apligraf - Manufacturing of Dermagraft was suspended in Q4 2021, and sales in Q2 2022, as part of a plan to transition to a new manufacturing facility or third-party manufacturer for substantial long-term cost savings[434](index=434&type=chunk) - The company expects customers to substitute Apligraf for Dermagraft, anticipating no material impact on net revenue from the suspension[434](index=434&type=chunk) [Local Coverage Determinations](index=114&type=section&id=Local%20Coverage%20Determinations) Three MACs issued and withdrew LCDs in 2023 that would have eliminated product coverage, impacting Q3/Q4 revenue and incurring **$1.9 million** in related expenses - In August 2023, three MACs issued LCDs that would have eliminated coverage for over **130 products**, including five of the company's commercially marketed products for DFUs and VLUs, but these LCDs were withdrawn in September 2023[435](index=435&type=chunk) - The company incurred **$1.2 million** in legal expenses and **$0.7 million** in sales employee retention expenses related to efforts to withdraw the LCDs[435](index=435&type=chunk) - Despite the withdrawal, the LCDs impacted Q3 and Q4 2023 revenue due to shifts in customer buying patterns[435](index=435&type=chunk) [License And Manufacturing Agreement](index=114&type=section&id=License%20And%20Manufacturing%20Agreement) In November 2023, the company entered a license agreement with Vivex Biologics for CYGNUS Dual and Matrix products, including a **$5.0 million** upfront fee and **$2.5 million** milestone - In November 2023, the company entered a trademark license and manufacturing agreement with Vivex Biologics, Inc. to sell CYGNUS Dual and Matrix products[436](index=436&type=chunk) - The agreement included a **$5.0 million** upfront licensing fee and an accrued **$2.5 million** milestone payment, along with low double-digit and high single-digit royalties on net sales of Dual and Matrix, respectively[436](index=436&type=chunk) [Management's Use of Non-GAAP Measures](index=115&type=section&id=Management%27s%20Use%20of%20Non-GAAP%20Measures) Management uses Adjusted EBITDA, a non-GAAP measure, to evaluate operating performance and trends by excluding certain non-core operating items - Management uses Adjusted EBITDA, a non-GAAP financial measure, to evaluate operating performance and trends, and for planning decisions, believing it provides useful insights by excluding certain non-core operating items[438](index=438&type=chunk)[439](index=439&type=chunk) - Adjusted EBITDA is defined as net income (loss) before depreciation, amortization, interest, and income taxes, further adjusted for non-cash equity compensation, restructuring charges, asset write-offs, earnout liability changes, settlement fees, debt extinguishment loss, facility project pause, legal/consulting fees, and sales retention[439](index=439&type=chunk) [Components of Our Consolidated Results of Operations](index=115&type=section&id=Components%20of%20Our%20Consolidated%20Results%20of%20Operations) Net revenue, cost of goods sold, and operating expenses are detailed, with expected increases in market development and R&D investments - Net revenue is derived from Advanced Wound Care and Surgical & Sports Medicine products, recognized when customers obtain control, and is net of reserves for returns, discounts, and GPO rebates[442](index=442&type=chunk)[443](index=443&type=chunk) - Cost of goods sold includes personnel, product testing, quality assurance, raw materials, manufacturing, and facility costs, with gross profit affected by product mix, pricing, and operational efficiency[445](index=445&type=chunk)[446](index=446&type=chunk) - Selling, general and administrative expenses are expected to increase due to investments in market development and sales force expansion[447](index=447&type=chunk) - Research and development expenses, expensed as incurred, are expected to increase with ongoing clinical trials, product enhancements, and pipeline development[448](index=448&type=chunk) - Income taxes are accounted for using an asset and liability approach, with deferred income taxes reflecting temporary differences and valuation allowances provided when necessary[451](index=451&type=chunk)[452](index=452&type=chunk) [Results of Operations](index=118&type=section&id=Results%20of%20Operations) Consolidated Results of Operations (in thousands) | Metric | 2023 | 2022 | 2021 | | :-------------------------------------- | :-------- | :-------- | :-------- | | Net revenue | $433,140 | $450,893 | $467,359 | | Cost of goods sold | $106,481 | $105,019 | $114,199 | | Gross profit | $326,659 | $345,874 | $353,160 | | Total operating expenses | $314,134 | $323,570 | $280,942 | | Income from operations | $12,525 | $22,304 | $72,218 | | Total other expense, net | $(2,133) | $(2,022) | $(9,132) | | Net income before income taxes | $10,392 | $20,282 | $63,086 | | Income tax (expense) benefit | $(5,447) | $(4,750) | $31,116 | | Net income and comprehensive income | $4,945 | $15,532 | $94,202 | [EBITDA and Adjusted EBITDA](index=119&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) EBITDA and Adjusted EBITDA Reconciliation (in thousands) | Metric | 2023 | 2022 | 2021 | | :--------------------------- | :-------- | :-------- | :-------- | | Net income | $4,945 | $15,532 | $94,202 | | Interest expense, net | $2,190 | $2,009 | $7,236 | | Income tax expense (benefit) | $5,447 | $4,750 | $(31,116) | | Depreciation | $10,448 | $5,845 | $5,781 | | Amortization | $4,918 | $4,883 | $4,949 | | **EBITDA** | **$27,948** | **$33,019** | **$81,052** | | Stock-based compensation expense | $8,996 | $6,552 | $3,864 | | Restructuring charge | $3,796 | $2,268 | $4,704 | | Write-off of certain assets | $0 | $4,200 | $1,104 | | Change in fair value of earnout | $0 | $0 | $(3,985) | | Settlement fee | $0 | $2,600 | $700 | | Loss on extinguishment of debt | $0 | $0 | $1,883 | | Facility construction project pause | $0 | $632 | $0 | | Legal and consulting fees | $1,182 | $0 | $0 | | Sales retention | $694 | $0 | $0 | | **Adjusted EBITDA** | **$42,616** | **$49,271** | **$89,143** | [Comparison of the Years Ended December 31, 2023, 2022, and 2021](index=120&type=section&id=Comparison%20of%20the%20Years%20Ended%20December%2031%2C%202023%2C%202022%2C%20and%202021) [Revenue](index=120&type=section&id=Revenue) Net Revenue by Product Category (in thousands) | Category | 2023 | 2022 | 2021 | Change 2023 to 2022 | Change 2022 to 2021 | | :----------------------- | :-------- | :-------- | :-------- | :------------------ | :------------------ | | Advanced Wound Care | $405,514 | $422,231 | $430,237 | (4%) | (2%) | | Surgical & Sports Medicine | $27,626 | $28,662 | $37,122 | (4%) | (23%) | | **Net revenue** | **$433,140**| **$450,893**| **$467,359**| **(4%)** | **(4%)** | - Advanced Wound Care net revenue decreased by **$16.7 million (4%)** in 2023 due to changes in customer buying patterns and the impact of recently withdrawn LCDs[460](index=460&type=chunk) - Surgical & Sports Medicine net revenue decreased by **$1.0 million (4%)** in 2023, primarily due to a shift in distributor focus[461](index=461&type=chunk) - Advanced Wound Care net revenue decreased by **$8.0 million (2%)** in 2022 due to decreased sales of certain non-PuraPly products and a GPO settlement fee[462](index=462&type=chunk) - Surgical & Sports Medicine net revenue decreased by **$8.5 million (23%)** in 2022 due to the continued impact of the suspension of marketing for ReNu and NuCel products[463](index=463&type=chunk) [Cost of Goods Sold and Gross Profit](index=120&type=section&id=Cost%20of%20Goods%20Sold%20and%20Gross%20Profit) Cost of Goods Sold and Gross Profit (in thousands) | Metric | 2023 | 2022 | 2021 | Change 2023 to 2022 | Change 2022 to 2021 | | :--------------- | :-------- | :-------- | :-------- | :------------------ | :------------------ | | Cost of goods sold | $106,481 | $105,019 | $114,199 | 1% | (8%) | | Gross profit | $326,659 | $345,874 | $353,160 | (6%) | (2%) | - Cost of goods sold increased by **$1.5 million (1%)** in 2023, primarily due to product mix[464](index=464&type=chunk) - Gross profit decreased by **$19.2 million (6%)** in 2023, mainly due to a decrease in pricing for certain products and a shift in product mix[465](index=465&type=chunk) - Cost of goods sold decreased by **$9.2 million (8%)** in 2022 due to decreased sales volume in both Advanced Wound Care and Surgical & Sports Medicine products[466](index=466&type=chunk) - Gross profit decreased by **$7.3 million (2%)** in 2022, primarily from decreased sales volume and increased manufacturing-related costs, partially offset by a shift to higher gross margin products[467](index=467&type=chunk) [Selling, General and Administrative Expenses](index=121&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses) Selling, General and Administrative Expenses (in thousands) | Metric | 2023 | 2022 | 2021 | Change 2023 to 2022 | Change 2022 to 2021 | | :----------------------------------- | :-------- | :-------- | :-------- | :------------------ | :------------------ | | Selling, general and administrative | $269,754 | $283,808 | $250,200 | (5%) | 13% | - Selling, general and administrative expenses decreased by **$14.1 million (5%)** in 2023, driven by lower compensation and restructuring costs (**$6.1 million**), equipment disposal (**$4.4 million**), reduced royalties (**$1.5 million**), and decreased travel (**$3.3 million**), partially offset by increased legal and consulting fees (**$1.2 million**) related to LCDs[468](index=468&type=chunk) - These expenses increased by **$33.6 million (13%)** in 2022, primarily due to additional headcount (**$12.2 million**), increased travel and marketing (**$10.0 million**), higher legal/royalty/consulting costs (**$5.6 million**), a **$4.2 million** charge for equipment disposal, and **$0.6 million** in facility project cancellation fees[469](index=469&type=chunk) [Research and Development Expenses](index=121&type=section&id=Research%20and%20Development%20Expenses) Research and Development Expenses (in thousands) | Metric | 2023 | 2022 | 2021 | Change 2023 to 2022 | Change 2022 to 2021 | | :------------------------- | :-------- | :-------- | :-------- | :------------------ | :------------------ | | Research and development | $44,380 | $39,762 | $30,742 | 12% | 29% | - Research and development expenses increased by **$4.6 million (12%)** in 2023, driven by a **$2.2 million** increase in compensation expenses due to increased headcount and a **$2.4 million** increase in other clinical research and consulting costs for pipeline products[470](index=470&type=chunk) - These expenses increased by **$9.0 million (29%)** in 2022, primarily due to increased headcount, product costs for pipeline products, and clinical study/regulatory approval costs[471](index=471&type=chunk) [Other Expense, Net](index=122&type=section&id=Other%20Expense%2C%20Net) Other Expense, Net (in thousands) | Metric | 2023 | 2022 | 2021 | Change 2023 to 2022 | Change 2022 to 2021 | | :----------------------------- | :-------- | :-------- | :-------- | :------------------ | :------------------ | | Interest expense, net | $(2,190) | $(2,009) | $(7,236) | 9% | (72%) | | Loss on the extinguishment of debt | $0 | $0 | $(1,883) | 0% | (100%) | | Other income (expense), net | $57 | $(13) | $(13) | (538%) | 0% | | **Total other expense, net** | **$(2,133)**| **$(2,022)**| **$(9,132)**| **5%** | **(78%)** | - Total other expense, net, increased by **$0.1 million (5%)** in 2023, primarily due to increases in interest rates[472](index=472&type=chunk) - Total other expense, net, decreased by **$7.1 million (78%)** in 2022, mainly due to lower interest rates on the 2021 Credit Agreement and the **$1.9 million** loss on extinguishment of debt recorded in 2021[473](index=473&type=chunk) [Income Tax (Expense) Benefit](index=122&type=section&id=Income%20Tax%20%28Expense%29%20Benefit) Income Tax (Expense) Benefit (in thousands) | Metric | 2023 | 2022 | 2021 | Change 2023 to 2022 | Change 2022 to 2021 | | :--------------------------- | :-------- | :-------- | :-------- | :------------------ | :------------------ | | Income tax (expense) benefit | $(5,447) | $(4,750) | $31,116 | 15% | (115%) | - Income tax expense for 2023 was **$5.4 million (52.4% effective tax rate)**, comprising **$3.4 million** current and **$2.0 million** deferred taxes, adjusted for state/local taxes and non-deductible expenses[474](index=474&type=chunk) - Income tax expense for 2022 was **$4.8 million (23.4% effective tax rate)**, including **$2.8 million** current and **$2.0 million** deferred taxes[475](index=475&type=chunk) - The 2021 income tax benefit of **$31.1 million** primarily resulted from the release of a **$48.3 million** valuation allowance on net U.S. deferred tax assets[475](index=475&type=chunk) [Liquidity and Capital Resources](index=122&type=section&id=Liquidity%20and%20Capital%20Resources) The company funds operations through product sales, loans, debt, and stock sales, with **$103.8 million** cash and **$125.0 million** available under its Revolving Facility as of December 31, 2023 - The company funds operations through product sales, loans, debt, and stock sales, with an accumulated deficit of **$41.0 million** and working capital of **$144.5 million** as of December 31, 2023[476](index=476&type=chunk) - Cash and cash equivalents totaled **$103.8 million** as of December 31, 2023, with **$125.0 million** available for future revolving borrowings under the 2021 Credit Agreement[476](index=476&type=chunk)[481](index=481&type=chunk) - Primary uses of cash include working capital, capital expenditures, and debt service payments, with expectations of sufficient funds for at least **12 months**[477](index=477&type=chunk)[478](index=478&type=chunk)[479](index=479&type=chunk) Consolidated Statements of Cash Flows (in thousands) | Metric | 2023 | 2022 | 2021 | | :-------------------------------------- | :-------- | :-------- | :-------- | | Net cash provided by operating activities | $30,917 | $24,859 | $61,978 | | Net cash used in investing activities | $(24,364) | $(33,898) | $(31,220) | | Net cash used in financing activities | $(5,505) | $(2,199) | $(1,036) | | Net increase (decrease) in cash and restricted cash | $1,048 | $(11,238) | $29,722 | [Cash Flows](index=124&type=section&id=Cash%20Flows) [Operating Activities](index=124&type=section&id=Operating%20Activities) Net cash provided by operating activities was **$30.9 million** in 2023, driven by net income and non-cash charges, partially offset by changes in operating assets - Net cash provided by operating activities was **$30.9 million** in 2023, **$24.9 million** in 2022, and **$62.0 million** in 2021[483](index=483&type=chunk)[484](index=484&type=chunk)[485](index=485&type=chunk) - In 2023, operating cash flow resulted from **$4.9 million** net income and **$44.0 million** in non-cash charges, partially offset by **$18.1 million** used in changes in operating assets and liabilities[483](index=483&type=chunk) [Investing Activities](index=126&type=section&id=Investing%20Activities) Net cash used in investing activities was **$24.4 million** in 2023, **$33.9 million** in 2022, and **$31.2 million** in 2021, solely for capital expenditures - Net cash used in investing activities was **$24.4 million** in 2023, **$33.9 million** in 2022, and **$31.2 million** in 2021, consisting solely of capital expenditures[488](index=488&type=chunk) [Financing Activities](index=126&type=section&id=Financing%20Activities) Net cash used in financing activities was **$5.5 million** in 2023, primarily for principal payments on the Term Loan and finance lease obligations - Net cash used in financing activities was **$5.5 million** in 2023, primarily for principal payments on the Term Loan (**$4.7 million**) and finance lease obligations (**$0.5 million**)[489](index=489&type=chunk) - In 2022, **$2.2 million** was used, mainly for term loan and finance lease obligations (**$3.0 million**) and CPN deferred acquisition consideration (**$0.6 million**), partially offset by stock awards (**$1.4 million**)[490](index=490&type=chunk) - In 2021, **$1.0 million** was used, including repayment of the 2019 Credit Agreement (**$70.0 million**) and debt extinguishment fees (**$1.6 million**), largely offset by proceeds from the 2021 Credit Agreement (**$73.2 million**)[491](index=491&type=chunk) [Indebtedness](index=126&type=section&id=Indebtedness) Cash and Outstanding Debt (in thousands) | Metric | Dec 31, 2023 | Dec 31, 2022 | | :-------------------------------------- | :----------- | :----------- | | Cash and cash equivalents | $103,840 | $102,478 | | Term loan net of debt discount and issuance cost | $66,231 | $70,769 | | Finance lease obligations | $2,969 | $0 | | **Total debt** | **$69,200** | **$70,769** | [2021 Credit Agreement](index=126&type=section&id=2021%20Credit%20Agreement) The 2021 Credit Agreement provides a **$75.0 million** Term Loan and **$125.0 million** Revolving Credit Facility, with **$66.6 million** outstanding and **$125.0 million** available - Entered in August 2021, providing a **$75.0 million** Term Loan Facility and a **$125.0 million** Revolving Credit Facility, secured by substantially all company assets[492](index=492&type=chunk) - Borrowings bear variable interest rates (SOFR Loans or ABR Loans) with an Applicable Margin based on the Total Net Leverage Ratio; the rate was **7.44%** on December 31, 2023[493](index=493&type=chunk) - The agreement requires quarterly installment payments on the Term Loan and compliance with financial covenants, including Consolidated Fixed Charge Coverage Ratio and Consolidated Total Net Leverage Ratio[494](index=494&type=chunk)[496](index=496&type=chunk) - As of December 31, 2023, the company had **$66.6 million** outstanding under the Term Loan Facility and **$125.0 million** available under the Revolving Facility, and was in compliance with all covenants[497](index=497&type=chunk) [2019 Credit Agreement](index=127&type=section&id=2019%20Credit%20Agreement) The 2019 Credit Agreement was terminated in August 2021, with a **$70.6 million** settlement payment resulting in a **$1.9 million** loss on extinguishment - The 2019 Credit Agreement, providing a **$40.0 million** term loan and **$60.0 million** revolving facility, was settled and terminated in August 2021 upon entering the 2021 Credit Agreement[498](index=498&type=chunk)[669](index=669&type=chunk) - An aggregate of **$70.6 million** was paid to settle the 2019 Credit Agreement, resulting in a **$1.9 million** loss on extinguishment of the loan in 2021[498](index=498&type=chunk)[669](index=669&type=chunk) [Critical Accounting Policies and Significant Judgments and Estimates](index=127&type=section&id=Critical%20Accounting%20Policies%20and%20Significant%20Judgments%20and%20Estimates) Key accounting policies involve significant management judgments and estimates in revenue recognition, accounts receivable, inventory, income taxes, and asset recoverability - Key accounting policies involve significant management judgments and estimates, including revenue recognition (reserves for returns, discounts, GPO rebates), accounts receivable (allowance for credit losses), and inventory (excess and obsolete reserves)[500](index=500&type=chunk)[501](index=501&type=chunk)[502](index=502&type=chunk)[503](index=503&type=chunk)[504](index=504&type=chunk) - Other critical areas include the recognition and measurement of current and deferred income tax assets and liabilities (valuation allowances, uncertain tax positions) and the assessment of recoverability for long-lived assets (property, equipment, intangibles)[505](index=505&type=chunk)[506](index=506&type=chunk)[507](index=507&type=chunk)[508](index=508&type=chunk) [Off-Balance Sheet Arrangements](index=129&type=section&id=Off-Balance%20Sheet%20Arrangements) The company did not have any off-balance sheet arrangements during the periods presented - The company did not have any off-balance sheet arrangements during the periods presented[509](index=509&type=chunk) [Recently Issued Accounting Pronouncements](index=129&type=section&id=Recently%20Issued%20Accounting%20Pronouncements) The company adopted ASU 2016-13 (Credit Losses) in 2023 and is evaluating ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Tax Disclosures) - The company adopted ASU 2016-13 (Financial Instruments—Credit Losses) on January 1, 2023, resulting in a **$615,000** net reduction to the opening balance of retained earnings[629](index=629&type=chunk)[630](index=630&type=chunk) - The company is currently evaluating the impact of ASU 2023-07 (Segment Reporting) and ASU 2023-09 (Income Tax Disclosures), effective for fiscal years beginning after December 15, 2023, and December 15, 2024, respectively[631](index=631&type=chunk)[632](index=632&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=131&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) [Fourth Quarter 2023 Financial Results Summary](index=1&type=section&id=Fourth%20Quarter%202023%20Financial%20Results%20Summary) Organogenesis reported a 14% year-over-year net revenue decline to $99.7 million in Q4 2023, resulting in a $0.6 million net loss and a 47% decrease in Adjusted EBITDA to $7.5 million Q4 2023 Key Financial Metrics (vs. Q4 2022) | Metric | Q4 2023 | Q4 2022 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Net Revenue** | **$99.7M** | **$115.5M** | **-$15.8M** | **-14%** | | - Advanced Wound Care | $93.2M | $108.8M | -$15.6M | -14% | | - Surgical & Sports Medicine | $6.5M | $6.7M | -$0.2M | -3% | | **Net (Loss) Income** | **($0.6M)** | **$7.5M** | **-$8.1M** | **-108%** | | **Adjusted Net Income** | **$1.9M** | **$8.9M** | **-$7.0M** | **-79%** | | **Adjusted EBITDA** | **$7.5M** | **$14.1M** | **-$6.6M** | **-47%** | [Fiscal Year 2023 Financial Results Summary](index=1&type=section&id=Fiscal%20Year%202023%20Financial%20Results%20Summary) For fiscal year 2023, net revenue decreased 4% to $433.1 million, with net income falling 68% to $4.9 million and Adjusted EBITDA declining 14% to $42.6 million Fiscal Year 2023 Key Financial Metrics (vs. FY 2022) | Metric | FY 2023 | FY 2022 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | **Net Revenue** | **$433.1M** | **$450.9M** | **-$17.8M** | **-4%** | | - Advanced Wound Care | $405.5M | $422.2M | -$16.7M | -4% | | - Surgical & Sports Medicine | $27.6M | $28.7M | -$1.1M | -4% | | **Net Income** | **$4.9M** | **$15.5M** | **-$10.6M** | **-68%** | | **Adjusted Net Income** | **$12.7M** | **$26.2M** | **-$13.5M** | **-52%** | | **Adjusted EBITDA** | **$42.6M** | **$49.3M** | **-$6.7M** | **-14%** | [Management Commentary](index=1&type=section&id=Management%20Commentary) [CEO Statement](index=1&type=section&id=CEO%20Statement) The CEO noted challenging conditions but expects 2024 revenue growth driven by commercial programs, new product launches, and the significant value potential of the ReNu program - The company is building momentum through commercial programs to enhance customer relationships and regain lost accounts[4](index=4&type=chunk) - Expects a return to revenue growth in 2024 through new product launches in both Advanced Wound Care and Surgical & Sports Medicine markets[5](index=5&type=chunk) - The ReNu program for treating knee osteoarthritis symptoms is considered a significant value driver for the company[5](index=5&type=chunk) [Detailed Financial Results](index=3&type=section&id=Detailed%20Financial%20Results) [Fourth Quarter 2023 Financial Results](index=3&type=section&id=Fourth%20Quarter%202023%20Financial%20Results) Q4 2023 net revenue declined 14% to $99.7 million, driven by Advanced Wound Care, leading to a gross margin contraction to 72% and a net loss of $0.6 million Q4 2023 Revenue by Segment (in thousands) | Segment | Q4 2023 | Q4 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Advanced Wound Care | $93,165 | $108,836 | $(15,671) | -14% | | Surgical & Sports Medicine | $6,486 | $6,680 | $(194) | -3% | | **Total Net Revenue** | **$99,651** | **$115,516** | **$(15,865)** | **-14%** | - Gross profit decreased by **19% to $71.9 million**, with the gross margin falling to **72%** from 77% in Q4 2022[8](index=8&type=chunk) - Operating expenses decreased by **8% to $73.2 million**, driven by a 10% reduction in selling, general and administrative expenses[9](index=9&type=chunk) - The company reported a net loss of **$0.6 million**, or **$(0.00) per share**, a significant decrease from the net income of $7.5 million, or $0.06 per share, in Q4 2022[11](index=11&type=chunk) [Fiscal Year 2023 Results](index=4&type=section&id=Fiscal%20Year%202023%20Results) Full-year 2023 net revenue decreased 4% to $433.1 million across both segments, resulting in a 44% drop in operating income and a net income of $4.9 million FY 2023 Revenue by Segment (in thousands) | Segment | FY 2023 | FY 2022 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Advanced Wound Care | $405,514 | $422,231 | $(16,717) | -4% | | Surgical & Sports Medicine | $27,626 | $28,662 | $(1,036) | -4% | | **Total Net Revenue** | **$433,140** | **$450,893** | **$(17,753)** | **-4%** | - Gross profit for FY 2023 was **$326.7 million** (**75% of net revenue**), a 6% decrease from $345.9 million (77% of net revenue) in FY 2022[14](index=14&type=chunk) - Total operating expenses decreased by **3% to $314.1 million**, with R&D expenses increasing by 12% while SG&A expenses decreased by 5%[15](index=15&type=chunk) - Net income decreased by **68% to $4.9 million** (**$0.04 per share**) for the year, compared to $15.5 million ($0.12 per share) in 2022[17](index=17&type=chunk) [Fiscal Year 2024 Guidance](index=5&type=section&id=Fiscal%20Year%202024%20Guidance) [Full Year 2024 Projections](index=5&type=section&id=Full%20Year%202024%20Projections) Organogenesis projects fiscal year 2024 net revenue between $445.0 million and $470.0 million, anticipating a net income (loss) range of ($10.6) million to $4.6 million and Adjusted EBITDA of $15.8 million to $35.0 million Fiscal Year 2024 Guidance | Metric | Guidance Range | YoY Growth (%) | | :--- | :--- | :--- | | **Net Revenue** | **$445.0M - $470.0M** | **3% to 9%** | | - Advanced Wound Care | $415.0M - $435.0M | 2% to 7% | | - Surgical & Sports Medicine | $30.0M - $35.0M | 9% to 27% | | **Net Income (Loss)** | **($10.6M) - $4.6M** | N/A | | **Adjusted Net Income (Loss)** | **($8.1M) - $7.1M** | N/A | | **EBITDA** | **$5.8M - $25.0M** | N/A | | **Adjusted EBITDA** | **$15.8M - $35.0M** | N/A | [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Balance Sheets](index=6&type=section&id=UNAUDITED%20CONSOLIDATED%20BALANCE%20SHEETS) As of December 31, 2023, total assets were $460.0 million, total liabilities $181.4 million, and total stockholders' equity $278.7 million, with cash at $103.8 million Key Balance Sheet Items (in thousands) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $103,840 | $102,478 | | Total current assets | $225,044 | $222,609 | | **Total assets** | **$460,025** | **$449,359** | | Total current liabilities | $80,509 | $75,023 | | Term loan (total) | $66,231 | $70,769 | | **Total liabilities** | **$181,362** | **$183,690** | | **Total stockholders' equity** | **$278,663** | **$265,669** | [Consolidated Statements of Operations](index=7&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Fiscal year 2023 consolidated operations show a 4% revenue decline to $433.1 million, with gross profit falling to $326.7 million, leading to a 44% drop in operating income and a 68% decrease in net income to $4.9 million FY 2023 vs FY 2022 Statement of Operations (in thousands) | Account | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net revenue | $433,140 | $450,893 | | Gross profit | $326,659 | $345,874 | | Total operating expenses | $314,134 | $323,570 | | Income from operations | $12,525 | $22,304 | | **Net income** | **$4,945** | **$15,532** | | **Diluted EPS** | **$0.04** | **$0.12** | [Consolidated Statement of Cash Flows](index=8&type=section&id=UNAUDITED%20CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) Net cash from operating activities increased to $30.9 million in FY 2023, while investing and financing activities used $24.4 million and $5.5 million respectively, resulting in a $1.0 million increase in cash to $104.3 million Cash Flow Summary (in thousands) | Activity | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $30,917 | $24,859 | | Net cash used in investing activities | $(24,364) | $(33,898) | | Net cash used in financing activities | $(5,505) | $(2,199) | | **Change in cash** | **$1,048** | **$(11,238)** | | **Cash at end of year** | **$104,338** | **$103,290** | [Non-GAAP Financial Measures](index=9&type=section&id=Non-GAAP%20Financial%20Measures) [Reconciliation of Net Income to EBITDA and Adjusted EBITDA](index=9&type=section&id=Reconciliation%20of%20GAAP%20net%20income%20to%20non-GAAP%20EBITDA%20and%20non-GAAP%20Adjusted%20EBITDA) The company reconciles GAAP net income to non-GAAP Adjusted EBITDA, which was $42.6 million in FY 2023, reflecting adjustments for items like stock-based compensation and restructuring charges Adjusted EBITDA Reconciliation Summary (in thousands) | Metric | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net (Loss) Income | $(568) | $7,486 | $4,945 | $15,532 | | EBITDA | $2,917 | $11,459 | $27,948 | $33,019 | | **Adjusted EBITDA** | **$7,473** | **$14,064** | **$42,616** | **$49,271** | [Reconciliation of Net Income to Adjusted Net Income](index=10&type=section&id=Reconciliation%20of%20GAAP%20net%20income%20to%20non-GAAP%20adjusted%20net%20income) This section details the reconciliation to non-GAAP adjusted net income, which was $12.7 million in FY 2023, after adjustments for items such as amortization and restructuring charges Adjusted Net Income Reconciliation Summary (in thousands) | Metric | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 | | :--- | :--- | :--- | :--- | :--- | | Net (Loss) Income | $(568) | $7,486 | $4,945 | $15,532 | | **Adjusted Net Income** | **$1,928** | **$8,930** | **$12,676** | **$26,217** | [Reconciliation for 2024 Guidance](index=10&type=section&id=Reconciliation%20for%202024%20Guidance) The company provides a reconciliation for its 2024 financial guidance, projecting Adjusted EBITDA between $15.8 million and $35.0 million and Adjusted Net Income (Loss) between ($8.1) million and $7.1 million 2024 Guidance Reconciliation (in thousands) | Metric | Low End (2024L) | High End (2024H) | | :--- | :--- | :--- | | Projected Net (Loss) Income | $(10,565) | $4,616 | | **Projected Adjusted EBITDA** | **$15,823** | **$34,957** | | **Projected Adjusted Net (Loss) Income** | **$(8,083)** | **$7,098** | [Other Information](index=11&type=section&id=Other%20Information) [Forward-Looking Statements](index=11&type=section&id=Forward-Looking%20Statements) This section cautions that forward-looking statements, including 2024 guidance, are subject to risks such as changes in reimbursement, competition, technological shifts, and supply chain issues - The company's financial guidance and other forward-looking statements are subject to significant risks[35](index=35&type=chunk) - Key risk factors include changes to reimbursement levels, competition, technological obsolescence, physician adoption, ability to raise funds, and supply chain issues[35](index=35&type=chunk) [About Organogenesis Holdings Inc.](index=12&type=section&id=About%20Organogenesis%20Holdings%20Inc.) Organogenesis Holdings Inc. is a regenerative medicine company focused on providing a portfolio of bioactive and acellular biomaterials for advanced wound care and surgical biologics, including orthopedics and spine applications - The company is a leading regenerative medicine firm with a product portfolio in advanced wound care and surgical biologics[36](index=36&type=chunk)

Financial Performance - Q3 2023 - Net revenue for Q3 2023 was $108.5 million, a decrease of $8.3 million or 7% compared to $116.9 million in Q3 2022[3, 20] - Advanced Wound Care product revenue decreased by $8.2 million or 7% to $101.4 million [3, 20] - Surgical & Sports Medicine product revenue decreased by $0.2 million or 2% to $7.2 million [3, 20] - Net income for Q3 2023 was $3.2 million, an increase of $3.0 million compared to $0.2 million in Q3 2022[3, 5] - Adjusted EBITDA for Q3 2023 was $16.0 million, an increase of $4.4 million or 38% compared to $11.6 million in Q3 2022[3, 5] Financial Performance - Nine Months Ended September 30, 2023 - Net revenue was $333.5 million, a decrease of $1.9 million or 1% compared to $335.4 million for the same period in 2022[6, 21] - Advanced Wound Care products decreased by $1.0 million or less than 1% to $312.3 million [6, 21] - Surgical & Sports Medicine products decreased by $0.8 million or 4% to $21.1 million [6, 21] - Net income was $5.5 million, a decrease of $2.5 million compared to $8.0 million for the same period in 2022[6] - Adjusted EBITDA was $35.1 million, a decrease of $0.1 million or less than 1% compared to $35.2 million for the same period in 2022[6] Fiscal Year 2023 Guidance - Net revenue is expected to be between $433 million and $446 million, a decrease of approximately 1% to 4% year-over-year compared to $450.9 million in 2022[7] - Advanced Wound Care products revenue is expected to be between $406 million and $418 million, a decrease of 1% to 4% year-over-year compared to $422.2 million in 2022[7] - Surgical & Sports Medicine products revenue is expected to be between $27 million and $29 million, an approximately 6% decrease to 0% increase year-over-year compared to $28.7 million in 2022[7]