Fourth Quarter 2023 Financial Results Summary:
- Net revenue of
$99.7 million for the fourth quarter of 2023, a decrease of 14% compared to net revenue of$115.5 million for the fourth quarter of 2022. Net revenue for the fourth quarter of 2023 consists of:- Net revenue from Advanced Wound Care products of
$93.2 million , a decrease of 14% from the fourth quarter of 2022. - Net revenue from Surgical & Sports Medicine products of
$6.5 million , a decrease of 3% from the fourth quarter of 2022.
- Net revenue from Advanced Wound Care products of
- Net loss of
$0.6 million for the fourth quarter of 2023, compared to net income of$7.5 million for the fourth quarter of 2022, a decrease of$8.1 million . - Adjusted net income1 of
$1.9 million for the fourth quarter of 2023, compared to adjusted net income of$8.9 million for the fourth quarter of 2022, a decrease of$7.0 million . - Adjusted EBITDA of
$7.5 million for the fourth quarter of 2023, compared to Adjusted EBITDA of$14.1 million for the fourth quarter of 2022, a decrease of$6.6 million .
Fiscal Year 2023 Financial Results Summary:
- Net revenue of
$433.1 million for the year endedDecember 31, 2023 , a decrease of 4% compared to net revenue of$450.9 million for the year endedDecember 31, 2022 . Net revenue for the year endedDecember 31, 2023 consists of:- Net revenue from Advanced Wound Care products of
$405.5 million , a decrease of 4% year-over-year. - Net revenue from Surgical & Sports Medicine products of
$27.6 million , a decrease of 4% year-over-year.
- Net revenue from Advanced Wound Care products of
- Net income of
$4.9 million for the year endedDecember 31, 2023 , compared to net income of$15.5 million for the year endedDecember 31, 2022 , a decrease of$10.5 million . - Adjusted net income1 of
$12.7 million for the year endedDecember 31, 2023 , compared to an adjusted net income of$26.2 million for the year endedDecember 31, 2022 , a decrease of$13.5 million . - Adjusted EBITDA of
$42.6 million for the year endedDecember 31, 2023 , compared to an adjusted EBITDA of$49.3 million for the year endedDecember 31, 2022 , a decrease of$6.7 million .
“We are building positive momentum with the many commercial support programs implemented to enhance existing customer relationships and regain lost accounts in a uniquely challenging operating environment”, said
1Defined as GAAP net income adjusted to exclude the effect of amortization, restructuring charges, LCD legal fees and sales retention, write-off of certain assets, facility construction project pause, GPO settlement fee and the resulting income taxes on these items.
Fourth Quarter 2023 Financial Results:
Three Month Ended | Change | |||||||||||||||
2023 | 2022 | $ | % | |||||||||||||
(in thousands, except for percentages) | ||||||||||||||||
Advanced Wound Care | $ | 93,165 | $ | 108,836 | $ | (15,671 | ) | (14 | %) | |||||||
Surgical & Sports Medicine | 6,486 | 6,680 | (194 | ) | (3 | %) | ||||||||||
Net revenue | $ | 99,651 | $ | 115,516 | $ | (15,865 | ) | (14 | %) |
Net revenue for the fourth quarter of 2023 was
Gross profit for the fourth quarter of 2023 was
Operating expenses for the fourth quarter of 2023 were
Operating loss for the fourth quarter of 2023 was
Total other expense, net, for the fourth quarter of 2023 was
Net loss for the fourth quarter of 2023 was
Adjusted net income was
Adjusted EBITDA was
As of
Fiscal Year 2023 Results
The following table represents net revenue by product grouping for the year ended
Year Ended | Change | |||||||||||||||
2023 | 2022 | $ | % | |||||||||||||
(in thousands, except for percentages) | ||||||||||||||||
Advanced Wound Care | $ | 405,514 | $ | 422,231 | $ | (16,717 | ) | (4 | %) | |||||||
Surgical & Sports Medicine | 27,626 | 28,662 | (1,036 | ) | (4 | %) | ||||||||||
Net revenue | $ | 433,140 | $ | 450,893 | $ | (17,753 | ) | (4 | %) |
Net revenue for the year ended
Gross profit for the year ended
Operating expenses for the year ended
Operating income for the year ended
Total other expense, net, for the year ended
Net income of
Adjusted net income for the year ended
Adjusted EBITDA of
Fiscal Year 2024 Guidance:
For the year ending
- Net revenue between
$445.0 million and$470.0 million , an increase of approximately 3% to 9% year-over-year, as compared to net revenue of$433.1 million for the year endedDecember 31, 2023 .- The 2024 net revenue guidance range assumes:
- Net revenue from Advanced Wound Care products between
$415.0 million and$435.0 million , an increase of approximately 2% to 7% year-over-year as compared to net revenue of$405.5 million for the year endedDecember 31, 2023 . - Net revenue from Surgical & Sports Medicine products between
$30.0 million and$35.0 million , an increase of approximately 9% to 27% year-over-year as compared to net revenue of$27.6 million for the year endedDecember 31, 2023 .
- Net revenue from Advanced Wound Care products between
- The 2024 net revenue guidance range assumes:
- Net income (loss) between
($10.6) million and$4.6 million and adjusted net income (loss) between($8.1) million and$7.1 million . - EBITDA between
$5.8 million and$25.0 million and Adjusted EBITDA between$15.8 million and$35.0 million .
Earnings Conference Call:
Financial results for the fourth fiscal quarter and year ended
For those unable to participate, the webcast will be archived at investors.organogenesis.com for approximately one year.
UNAUDITED CONSOLIDATED BALANCE SHEETS (amounts in thousands, except share and per share data) | ||||||||
2023 | 2022 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 103,840 | $ | 102,478 | ||||
Restricted cash | 498 | 812 | ||||||
Accounts receivable, net | 81,999 | 89,450 | ||||||
Inventories | 28,253 | 24,783 | ||||||
Prepaid expenses and other current assets | 10,454 | 5,086 | ||||||
Total current assets | 225,044 | 222,609 | ||||||
Property and equipment, net | 116,228 | 102,463 | ||||||
Intangible assets, net | 15,871 | 20,789 | ||||||
28,772 | 28,772 | |||||||
Operating lease right-of-use assets, net | 40,118 | 43,192 | ||||||
Deferred tax asset, net | 28,002 | 30,014 | ||||||
Other assets | 5,990 | 1,520 | ||||||
Total assets | $ | 460,025 | $ | 449,359 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Current portion of term loan | $ | 5,486 | $ | 4,538 | ||||
Current portion of finance lease obligations | 1,081 | — | ||||||
Current portion of operating lease obligations - related party | 3,140 | 3,001 | ||||||
Current portion of operating lease obligations | 10,004 | 8,707 | ||||||
Accounts payable | 30,724 | 32,330 | ||||||
Accrued expenses and other current liabilities | 30,074 | 26,447 | ||||||
Total current liabilities | 80,509 | 75,023 | ||||||
Term loan, net of current portion | 60,745 | 66,231 | ||||||
Finance lease obligations, net of current portion | 1,888 | — | ||||||
Operating lease obligations, net of current portion - related party | 17,227 | 20,367 | ||||||
Operating lease obligations, net of current portion | 19,780 | 20,947 | ||||||
Other liabilities | 1,213 | 1,122 | ||||||
Total liabilities | 181,362 | 183,690 | ||||||
Commitments and contingencies (Note 18) | ||||||||
Stockholders’ equity: | ||||||||
Preferred stock, | — | — | ||||||
Common stock, | 13 | 13 | ||||||
Additional paid-in capital | 319,621 | 310,957 | ||||||
Accumulated deficit | (40,971 | ) | (45,301 | ) | ||||
Total stockholders' equity | 278,663 | 265,669 | ||||||
Total liabilities and stockholders' equity | $ | 460,025 | $ | 449,359 |
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (amounts in thousands, except share and per share data) | ||||||||||||||||
Three Months Ended | Year Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
Net revenue | $ | 99,651 | $ | 115,516 | $ | 433,140 | $ | 450,893 | ||||||||
Cost of goods sold | 27,769 | 27,110 | 106,481 | 105,019 | ||||||||||||
Gross profit | 71,882 | 88,406 | 326,659 | 345,874 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling, general and administrative | 61,381 | 68,293 | 269,754 | 283,808 | ||||||||||||
Research and development | 11,770 | 11,395 | 44,380 | 39,762 | ||||||||||||
Total operating expenses | 73,151 | 79,688 | 314,134 | 323,570 | ||||||||||||
Loss (income) from operations | (1,269 | ) | 8,718 | 12,525 | 22,304 | |||||||||||
Other expense, net: | ||||||||||||||||
Interest expense, net | (502 | ) | 30 | (2,190 | ) | (2,009 | ) | |||||||||
Other income (expense), net | (25 | ) | 6 | 57 | (13 | ) | ||||||||||
Total other expense, net | (527 | ) | 36 | (2,133 | ) | (2,022 | ) | |||||||||
Net income before income taxes | (1,796 | ) | 8,754 | 10,392 | 20,282 | |||||||||||
Income tax (expense) benefit | 1,228 | (1,268 | ) | (5,447 | ) | (4,750 | ) | |||||||||
Net (loss) income and comprehensive (loss) income | $ | (568 | ) | $ | 7,486 | $ | 4,945 | $ | 15,532 | |||||||
Net income, per share: | ||||||||||||||||
Basic | $ | (0.00 | ) | $ | 0.06 | $ | 0.04 | $ | 0.12 | |||||||
Diluted | $ | (0.00 | ) | $ | 0.06 | $ | 0.04 | $ | 0.12 | |||||||
Weighted-average common shares outstanding | ||||||||||||||||
Basic | 130,916,950 | 128,661,435 | 131,231,317 | 130,070,231 | ||||||||||||
Diluted | 131,857,509 | 133,348,995 | 132,746,727 | 132,383,152 |
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS (amounts in thousands, except share and per share data) | ||||||||||||
Year Ended | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 4,945 | $ | 15,532 | $ | 94,202 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation | 10,448 | 5,845 | 5,781 | |||||||||
Amortization of intangible assets | 4,918 | 4,883 | 4,949 | |||||||||
Amortization of operating lease right-of-use assets | 8,083 | 7,303 | 5,946 | |||||||||
Non-cash interest expense | 427 | 434 | 346 | |||||||||
Deferred interest expense | 490 | 501 | 1,493 | |||||||||
Deferred tax expense (benefit) | 2,012 | 1,980 | (31,976 | ) | ||||||||
Loss on disposal of property and equipment | 235 | 4,482 | 1,407 | |||||||||
Loss on lease termination | 559 | — | — | |||||||||
Provision recorded for credit losses | 1,297 | 1,781 | 2,999 | |||||||||
Adjustment for excess and obsolete inventories | 6,580 | 9,648 | 12,079 | |||||||||
Stock-based compensation | 8,996 | 6,552 | 3,864 | |||||||||
Loss on extinguishment of debt | — | — | 1,883 | |||||||||
Change in fair value of earnout liability | — | — | (3,985 | ) | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | 5,539 | (8,770 | ) | (28,654 | ) | |||||||
Inventories | (8,179 | ) | (9,410 | ) | (9,302 | ) | ||||||
Prepaid expenses and other current and other assets | (10,115 | ) | (378 | ) | (34 | ) | ||||||
Operating leases | (8,439 | ) | (7,006 | ) | (6,156 | ) | ||||||
Accounts payable | (108 | ) | 3,260 | 3,847 | ||||||||
Accrued expenses and other current liabilities | 3,138 | (11,850 | ) | 9,354 | ||||||||
Other liabilities | 91 | 72 | (6,065 | ) | ||||||||
Net cash provided by operating activities | 30,917 | 24,859 | 61,978 | |||||||||
Cash flows from investing activities: | ||||||||||||
Purchases of property and equipment | (24,364 | ) | (33,898 | ) | (31,220 | ) | ||||||
Net cash used in investing activities | (24,364 | ) | (33,898 | ) | (31,220 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Line of credit repayments under the 2019 Credit Agreement | — | — | (10,000 | ) | ||||||||
Term loan repayments under the 2019 Credit Agreement | — | — | (60,000 | ) | ||||||||
Proceeds from term loan under the 2021 Credit Agreement, net of debt discount and issuance cost | — | — | 73,174 | |||||||||
Term loan repayments under the 2021 Credit Agreement | (4,688 | ) | (2,813 | ) | (938 | ) | ||||||
Principal repayments of finance lease obligations | (485 | ) | (200 | ) | (2,630 | ) | ||||||
Proceeds from the exercise of stock options | — | 2,070 | 2,198 | |||||||||
Payments of withholding taxes in connection with RSUs vesting | (332 | ) | (648 | ) | (737 | ) | ||||||
Payments of deferred acquisition consideration | — | (608 | ) | (483 | ) | |||||||
Payment to extinguish debt | — | — | (1,620 | ) | ||||||||
Net cash used in financing activities | (5,505 | ) | (2,199 | ) | (1,036 | ) | ||||||
Change in cash, cash equivalents and restricted cash | 1,048 | (11,238 | ) | 29,722 | ||||||||
Cash, cash equivalents, and restricted cash, beginning of year | 103,290 | 114,528 | 84,806 | |||||||||
Cash, cash equivalents, and restricted cash, end of year | $ | 104,338 | $ | 103,290 | $ | 114,528 | ||||||
Supplemental disclosure of cash flow information: | ||||||||||||
Cash paid for interest | $ | 5,436 | $ | 2,649 | $ | 5,787 | ||||||
Cash paid for income taxes | $ | 3,052 | $ | 1,201 | $ | 607 | ||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||
Cumulative effect adjustment for adoption of ASU No. 2016-13 (Note 2) | $ | 615 | $ | — | $ | — | ||||||
Deferred acquisition consideration and earnout liability recorded for business acquisition | $ | — | $ | 828 | $ | — | ||||||
Purchases of property and equipment in accounts payable and accrued expenses | $ | 841 | $ | 1,928 | $ | 3,750 | ||||||
Right-of-use assets obtained through operating lease obligations | $ | 5,869 | $ | 1,350 | $ | 53,793 | ||||||
Right-of-use assets obtained through finance lease obligations | $ | 3,454 | $ | — | $ | — |
Non-GAAP Financial Measures
Our management uses financial measures that are not in accordance with generally accepted accounting principles in
The following table presents a reconciliation of GAAP net income to non-GAAP EBITDA and non-GAAP Adjusted EBITDA, for each of the periods presented:
Three Months Ended | Year Ended | |||||||||||||||
($, in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Net (loss) income | $ | (568 | ) | $ | 7,486 | $ | 4,945 | $ | 15,532 | |||||||
Interest expense, net | 502 | (30 | ) | 2,190 | 2,009 | |||||||||||
Income tax expense (benefit) | (1,228 | ) | 1,268 | 5,447 | 4,750 | |||||||||||
Depreciation | 2,982 | 1,514 | 10,448 | 5,845 | ||||||||||||
Amortization | 1,229 | 1,221 | 4,918 | 4,883 | ||||||||||||
EBITDA | 2,917 | 11,459 | 27,948 | 33,019 | ||||||||||||
Stock-based compensation expense | 2,366 | 1,855 | 8,996 | 6,552 | ||||||||||||
Restructuring charge (1) | 1,918 | 750 | 3,796 | 2,268 | ||||||||||||
Write-off of certain assets (2) | — | — | — | 4,200 | ||||||||||||
Settlement fee (3) | — | — | — | 2,600 | ||||||||||||
Facility construction project pause (4) | — | — | — | 632 | ||||||||||||
Legal fees (5) | — | — | 1,182 | — | ||||||||||||
Sales retention (6) | 272 | — | 694 | — | ||||||||||||
Adjusted EBITDA | $ | 7,473 | $ | 14,064 | $ | 42,616 | $ | 49,271 |
(1) Amounts reflect employee retention and benefits as well as other exit costs associated with the Company’s restructuring activities.
(2) Amount reflects the disposal of certain equipment related to the same facility.
(3) Amounts reflect the fee the Company paid to a GPO to settle previously disputed GPO fees.
(4) Amount reflects the cancellation fees incurred in connection with the Company’s decision to pause one of its manufacturing facility construction projects.
(5) Amount represents the legal fees incurred related to the recently published and withdrawn local coverage determinations, or LCDs.
(6) Amount represents the compensation expenses related to retention for those sales employees impacted by the LCDs.
The following table presents a reconciliation of GAAP net income to non-GAAP adjusted net income, for each of the periods presented:
Three Months Ended | Year Ended | |||||||||||||||
($, in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||
Net (loss) income | $ | (568 | ) | $ | 7,486 | $ | 4,945 | $ | 15,532 | |||||||
Amortization | 1,229 | 1,221 | 4,918 | 4,883 | ||||||||||||
Restructuring charge (1) | 1,918 | 750 | 3,796 | 2,268 | ||||||||||||
Write-off of certain assets (2) | — | — | — | 4,200 | ||||||||||||
Settlement fee (3) | — | — | — | 2,600 | ||||||||||||
Facility construction project pause (4) | — | — | — | 632 | ||||||||||||
Legal fees (5) | — | — | 1,182 | — | ||||||||||||
Sales retention (6) | 272 | — | 694 | — | ||||||||||||
Tax on above | (923 | ) | (527 | ) | (2,859 | ) | (3,898 | ) | ||||||||
Adjusted net income | $ | 1,928 | $ | 8,930 | $ | 12,676 | $ | 26,217 |
(1) Amounts reflect employee retention and benefits as well as other exit costs associated with the Company’s restructuring activities.
(2) Amount reflects the disposal of certain equipment related to the same facility.
(3) Amounts reflect the fee the Company paid to a GPO to settle previously disputed GPO fees.
(4) Amount reflects the cancellation fees incurred in connection with the Company’s decision to pause one of its manufacturing facility construction projects.
(5) Amount represents the legal fees incurred related to the recently published and withdrawn local coverage determinations, or LCDs.
(6) Amount represents the compensation expenses related to retention for those sales employees impacted by the LCDs.
The following table presents a reconciliation of projected GAAP net income (loss) to projected non-GAAP EBITDA and projected non-GAAP Adjusted EBITDA included in our guidance for the year ending
Year Ended | ||||||||
($, in thousands) | 2024L | 2024H | ||||||
Net (loss) income | $ | (10,565 | ) | $ | 4,616 | |||
Interest expense, net | 3,000 | 2,200 | ||||||
Income tax expense (benefit) | 308 | 5,061 | ||||||
Depreciation | 9,680 | 9,680 | ||||||
Amortization | 3,400 | 3,400 | ||||||
EBITDA | 5,823 | 24,957 | ||||||
Stock-based compensation expense | 10,000 | 10,000 | ||||||
Restructuring charge | - | - | ||||||
Adjusted EBITDA | 15,823 | 34,957 |
The following table presents a reconciliation of projected GAAP net income (loss) to projected non-GAAP adjusted net income included in our guidance for the year ending
Year Ended | ||||||||
($, in thousands) | 2024L | 2024H | ||||||
Net (loss) income | $ | (10,565 | ) | $ | 4,616 | |||
Amortization | 3,400 | 3,400 | ||||||
Restructuring charge | — | — | ||||||
Tax on above | (918 | ) | (918 | ) | ||||
Adjusted net (loss) income | $ | (8,083 | ) | $ | 7,098 |
Forward-Looking Statements
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts of future events. Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include statements relating to the Company’s expected revenue, net income, adjusted net income, EBITDA, and Adjusted EBITDA for fiscal 2024 and the breakdown of expected revenue in both its Advanced Wound Care and Surgical & Sports Medicine categories. Forward-looking statements with respect to the operations of the Company, strategies, prospects, and other aspects of the business of the Company are based on current expectations that are subject to known and unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from expectations expressed or implied by such forward-looking statements. These factors include, but are not limited to: (1) the impact of any changes to the reimbursement levels for the Company’s products; (2) the Company faces significant and continuing competition, which could adversely affect its business, results of operations and financial condition; (3) rapid technological change could cause the Company’s products to become obsolete and if the Company does not enhance its product offerings through its research and development efforts, it may be unable to effectively compete; (4) to be commercially successful, the Company must convince physicians that its products are safe and effective alternatives to existing treatments and that its products should be used in their procedures; (5) the Company’s ability to raise funds to expand its business; (6) the Company has incurred losses in prior years and may incur losses in the future; (7) changes in applicable laws or regulations; (8) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (9) the Company’s ability to maintain production or obtain supply of its products in sufficient quantities to meet demand; (10) any resurgence of the COVID-19 pandemic and its impact, if any, on the Company’s fiscal condition and results of operations; (11) the impact of the suspension of commercialization of: (a) ReNu and NuCel in connection with the expiration of the FDA’s enforcement grace period for HCT/Ps on
About
Investor Inquiries: ICR WestwickeMike Piccinino , CFA OrganoIR@westwicke.com Press and Media Inquiries: OrganogenesisLori Freedman LFreedman@organo.com
Source:
2024 GlobeNewswire, Inc., source