Organogenesis (US:ORGO)2020-05-12 09:49Financial Data and Key Metrics Changes - Total revenue for Q1 2020 was $61.7 million, an increase of 8% from $57.1 million in Q1 2019 [18] - Gross profit for Q1 2020 was $42.9 million, up 7% from $40.1 million in Q1 2019, with a gross profit margin of 69.6% compared to 70.3% in the prior year [23] - Operating loss for Q1 2020 was $15.1 million, compared to a loss of $12.1 million in Q1 2019, reflecting a 24% increase in losses [30] - Net loss for Q1 2020 was $16.3 million or $0.16 per share, compared to a net loss of $15.7 million or $0.17 per share in Q1 2019 [32] Business Line Data and Key Metrics Changes - Revenue from Advanced Wound Care products was $51.3 million, a 7% increase from $47.8 million in Q1 2019, representing 83% of total revenue [19] - Revenue from Surgical & Sports Medicine products was $10.4 million, a 13% increase from $9.3 million in Q1 2019, representing 17% of total revenue [20] - Revenue from PuraPly products was $32.5 million, a 28% increase from $25.4 million in Q1 2019, accounting for approximately 53% of total revenue [21] Market Data and Key Metrics Changes - Sales through February 2020 were up 13% year-over-year, but sales declined 14% year-over-year in the second half of March due to COVID-19 disruptions [11] - Sales of Surgical & Sports Medicine products declined 52% year-over-year in April, while Advanced Wound Care products saw a 24% decline [13] Company Strategy and Development Direction - The company is focused on long-term growth and market share gain, driven by investments in the commercial team and new product launches [38] - The strategy includes expanding the office presence for PuraPly and adapting to the shift of procedures from outpatient settings to offices [64] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about recovery trends as healthcare facilities begin to reopen, but acknowledged uncertainty regarding the pace of recovery [14] - The company expects to realize $5 million to $6 million in savings in Q2 2020 due to proactive cost-saving measures [29] Other Important Information - The company withdrew its fiscal year 2020 revenue guidance due to uncertainties from the COVID-19 pandemic [36] - As of March 31, 2020, the company had $46.9 million in cash and $110 million in debt obligations [34] Q&A Session Summary Question: Insights on recovery signs across product lines and geographies - Management noted that capacity for Surgical & Sports Medicine has opened up to 80%-82%, with rural hospitals showing better performance [42] - Wound care centers are gradually reopening, with 80% now open and more than half accepting new patients [44] Question: Impact of deferred procedures on product mix - Management indicated that larger and more infected wounds are being observed, leading to expected increases in PuraPly sales [50] Question: Percentage of business related to traumatic wounds - Management stated that 45% of procedures are nonelective, with a reasonable percentage being traumatic, but specific percentages were not disclosed [53] Question: Expectations for backlog recovery - Management anticipates that about 85% of the backlog will be addressed within 4 to 5 months [55] Question: Criteria for allowing sales reps into centers - The criteria depend on regional COVID-19 experiences, with varying rates of access for sales reps [58] Question: Importance of clinical data presentations - Management expressed concern over the inability to present clinical data at conferences due to the pandemic, which may impact brand support [66]