Please standby. Good afternoon, ladies and gentlemen and welcome to the Second Quarter 2021 Earnings Conference Call for Organogenesis Holdings, Inc. At this time, all participants have been placed in a listen-only mode. Please note that this conference call is being recorded and that the recording will be available on the company’s website for replay shortly. Before we begin, I would like to remind everyone that our remarks today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that could cause actual results to differ materially from those indicated, including the risks and uncertainties described in the company’s filings with the Securities and Exchange Commission, including Item 1A, risk factors on the company’s most recent annual and quarterly reports. You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Although it may voluntarily do so from time to time, the company undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the applicable securities laws. This call will also include references to certain financial measures that are not calculated in accordance with generally accepted accounting principles, or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the investor relations portion of our website. I would now like to turn the call over to Mr. Gary S. Gillheeney, Sr., Organogenesis Holdings’ President and Chief Executive Officer. Please go ahead, sir.

Thank you, operator and welcome everyone to Organogenesis Holdings’ second quarter 2021 earnings conference call. I’m joined on the call today by Dave Francisco, our Chief Financial Officer. Let me start with a brief agenda of what we’ll cover during our prepared remarks. I’ll start with an overview of our revenue performance in the second quarter, including a discussion of the key drivers of the strong growth and improving profitability our team delivered in Q2. After my opening remarks, Dave will provide you with a more in-depth review of our second quarter financial results and the revised guidance for 2021 that we published in this afternoon’s press release, and then we’ll open it up for questions. Let me begin with a review of our second quarter revenue performance. I am pleased to report that we delivered another quarter of strong financial performance while continuing to make excellent progress against our strategic priorities. During the second quarter, we reported revenue growth of 79% year-over-year to $123.2 million. Our growth in the period was driven by an 87% growth in our sale of certain of our Advanced Wound Care products with strong contributions from our amniotic portfolio in the PuraPly brand. In Surgical & Sports Medicine, we grew revenue by 27% year-over-year. Despite the expected headwinds from our ReNu and NuCel product lines following the expiration of the FDA’s enforcement grace period for those products that ended on May 31 of this year. To be clear, our strong second quarter growth is not just a reflection of an easy comparison from the prior year, where we also grew revenue 6%. Our second quarter total revenue results represent growth of 90% over the second quarter of 2019, driven primarily by 102% growth in the sale of our Advanced Wound Care products. Importantly, both of these rates reflect the sequential acceleration in the growth trends over 2019, which we view as strong evidence that our business continues to perform well. Our better-than-expected performance in Q2 reflects our ongoing execution against the pillars of growth and our strategy which include leveraging our comprehensive portfolio of products, diversifying our revenue sources across multiple sites of care and physician specialties, and leveraging our broad and growing commercial reach. Let me provide more color on how each of these long-term drivers of growth contributed to the strong revenue performance in the second quarter. Regarding the strength of our portfolio, sales of our amniotic products were once again the largest contributor to our year-over-year growth in the second quarter. We’re pleased with the strong demand for these products given their high degree of efficacy that clinicians and their patients truly value in the market. Additionally, sales of our PuraPly products increased 32% in the period representing the third consecutive quarter of double-digit growth after coming off pass-through status in the fourth quarter of last year. This strong growth further validates the clinical utility of our brand and our strategic positioning of the product family with new SKUs as well as additional clinical data, sites of care, and physician specialties. We are proud of the unique customer value proposition our portfolio offers through the combination of our PuraPly brand, which is the only skin substitute with a broad spectrum antimicrobial agent, our amniotic portfolio, with the only fresh amniotic membrane on the market, and our PMA approved products for both VLUs and DFUs. Secondly, we continue to diversify our revenue by expanding into new physician specialties and multiple sites of care to better position the company for sustainable long-term growth. Regarding physician specialties, we have widened our scope and therefore expanded our therapeutic wound targeting where we believe our advanced modalities are well positioned to win. Additionally, we have been continuing our efforts to further penetrate the office channel with offerings and further leveraging our channel expansion through our acquisition of CPN Bioscience, which we have recently rebranded as Organogenesis Physician Solutions or OPS. Consequently, we continue to expand the number of customer accounts in the office channel and we are experiencing increased utilization of our products from our existing customers. Lastly, with respect to enhancing our commercial reach, we continue to make significant investments to grow our sales force and believe our team of 325 direct representatives represents a key competitive advantage for Organogenesis in the market. With respect to the overall operating environment in the second quarter, we continue to see improving trends across our served markets. With the backdrop of these improving trends, coupled with our operational improvements in the quarter, including adding 35 new sales representatives in Q2, increasing available product of our amniotic portfolio, and continuing to grow active accounts, the business is well-positioned to continue to execute and grow going forward. However, we are closely monitoring the potential impact to demand from the recent COVID surge in key areas of the country. Nevertheless, our commercial strategy has resulted in broader diversification of our revenue, which has resulted in less exposure to the acute care and outpatient settings, which continue to face the most COVID-related headwinds. In summary, we are very pleased with our revenue performance in the second quarter where we reported 79% revenue growth. Our highly differentiated competitive advantage has allowed us to continue to gain market share and deliver another strong quarter. We’re also pleased with a significant improvement in profitability in Q2 as evidenced by the impressive growth in adjusted EBITDA, which increased nearly $25 million year-over-year and more than $9 million quarter-over-quarter. Our second quarter adjusted EBITDA margin improved more than 20 percentage points year-over-year to 20.4% of net revenue. These financial results continue to reflect the underlying profitability potential of our business in the years to come. Additionally, as you may have seen in a separate press release this afternoon, we closed on the refinancing of our bank facilities, which significantly lowers our cost of capital, provides greater liquidity, and therefore, financial flexibility, as well as further validates the momentum behind our strengthening financial profile. Before I turn the call over to Dave, just to recap some of the key takeaways for the quarter: we delivered another quarter of outstanding financial performance with strong revenue growth and significantly improved profitability. We’ve made great progress towards our long-term strategic initiatives by increasing the sites of care, launching new products, entering new sales channels, with our portfolio in our team capitalizing on improving operating environments contributing to gaining market share and expanding the market for our products. With that, let me turn the call over to Dave for a review of our financial results for the second quarter, our balance sheet and financial condition as of quarter end, and a review of the 2021 financial guidance we updated in this afternoon’s press release.

Thanks, Gary. I’ll begin with a review of our second quarter financial results unless otherwise specified all growth rates referenced during my prepared remarks are on a year-over-year basis. As Gary mentioned, we delivered another excellent quarter. Net revenue for the second quarter of 2021 was $123.2 million, up 79%. Our Advanced Wound Care revenue for the second quarter of 2021 was $111.4 million, up 87% with strong contributions to growth from all product groupings. Revenue from Surgical & Sports Medicine products for the second quarter of 2021 was $11.8 million, up 27% with strong year-over-year contributions to growth from the amniotic portfolio, which more than offset the impact related to the expiration of the FDA enforcement grace period for ReNu and NuCel products on May 31. Revenue from PuraPly products for the second quarter of 2021 was $37.6 million, up 32%. As Gary indicated earlier, we are pleased with the continued strong performance from the PuraPly brand. Net sales have increased 29% year-over-year over the first six months of 2021. Regarding our commercial footprint, we ended our quarter with 325 direct sales reps and believe we are well-positioned to achieve our goal of ending the year with over 340 direct sales representatives, compared to 290 as of March 31, 2021. Gross profit for the second quarter of 2021 was $93.3 million or approximately 76% of revenue, compared to 71% last year, an increase of approximately 480 basis points year-over-year and up approximately 60 basis points quarter-over-quarter. The increase in gross profit resulted primarily from increased sales volume, as well as a shift in product mix to our higher gross margin products. Operating expenses for the second quarter of 2021 were $69.7 million compared to $51.2 million last year, an increase of $18.5 million or 36%. The increase in operating expenses in the second quarter of 2021 was driven by a $15.8 million increase in selling, general and administrative expenses, and a $2.7 million increase in research and development costs compared to the prior year period. The year-over-year increase in selling, general and administrative expense was primarily due to a $10.2 million increase related to additional headcount, primarily in our direct sales force, increased sales commissions due to increased sales, a $4.2 million increase in marketing and travel expenses as compared to the low prior year comparable amid COVID-related travel restrictions in the second quarter of 2020, as well as a $3.3 million increase in volume-related and other expenses. Second quarter 2021 selling, general and administrative expenses included two items that did not impact prior year period results, a $0.9 million restructuring cost associated with the closing of our La Jolla office and a $2.8 million non-cash benefit related to the change in the fair value of the earn-out liability in connection with the CPN acquisition. The year-over-year increase in R&D expense was primarily driven by an increase in clinical study and related costs necessary to seek regulatory approvals for certain of our products. Operating income for the second quarter of 2021 was $23.6 million, compared to an operating loss of $2.3 million last year, an increase of $25.8 million. The second quarter GAAP operating margin was 19.1% of net revenue. Excluding the restructuring charge and the change in the fair value of the earn-out, the operating margin was 17.6% in the second quarter of 2021, representing a year-over-year improvement in operating margin of approximately 20 percentage points. Total other expenses for the second quarter of 2021 were $2.4 million, compared to $2.9 million last year, a decrease of $0.5 million or 16%, driven primarily by lower interest expense related to lower average borrowings compared to the prior year period. Net income for the second quarter of 2021 was $20.7 million or $0.15 per share, compared to a net loss of $5.2 million or $0.05 per share last year, an increase of $25.9 million or $0.20 per share. Adjusted EBITDA of $25.1 million for the second quarter of 2021 compared to adjusted EBITDA of $0.3 million last year, an increase of $24.9 million. As Gary mentioned, adjusted EBITDA margin for the quarter was approximately 20% of net revenue. We have provided a full reconciliation of our adjusted EBITDA results in our earnings release issued this afternoon. Turning to the balance sheet as of June 30, 2021, the company had $90.3 million in cash and restricted cash and $83.5 million in debt obligations, of which $13.7 million were capital lease obligations. This compared to $84.8 million in cash and restricted cash and $84.8 million in debt obligations, of which $15.1 million were capital lease obligations as of December 31, 2021. As detailed in our press release in 8-K on August 9, 2021, we secured a new credit agreement with SVB, the lead agent, and we’re pleased to expand our banking partnerships with Bank of America, PNC and Citizens Bank. The agreement provides for a credit facility in the aggregate amount of $200 million, consisting of a $75 million term loan and a $125 million revolving credit facility. The new facility reduces our borrowing costs and enhances our financial flexibility, which, along with our improving profitability profile and related cash flow generation, has well positioned us to continue to execute our strategic growth initiatives in the years to come. Turning to a review of our 2021 revenue guidance, which we updated in our press release this afternoon. For the 12 months ending December 31, 2021, the company now expects net revenue between $456 million and $472 million, representing an increase of approximately 35% to 40% year-over-year, as compared to net revenue of $338.3 million for the 12 months ended December 31, 2020. This compares to our prior guidance range of $438 million to $454 million. The 2021 net revenue guidance assumes net revenue from Advanced Wound Care Products of between $423 million and $436 million, representing an increase of approximately 44% to 48% year-over-year. This compares to our prior guidance, which called for growth of 39% to 43% year-over-year. Net revenue from Surgical & Sports Medicine products are between $33 million and $36 million, representing a decrease of approximately 18% to 24% year-over-year. This compares to our prior guidance range, which called for a decrease of 27% to 34% year-over-year. Net revenue from the sale of PuraPly products are expected to be between $179 million and $187 million, representing an increase of approximately 22% to 27% year-over-year. This growth range is unchanged from our prior guidance. In addition to the formal revenue guidance, we’d also like to provide a few considerations for investors to bear in mind when evaluating our growth expectations for fiscal year 2021. This additional guidance is intended to help the investment community better understand the assumptions supporting our revenue expectations for 2021. First, the largest contributor to our total company net revenue growth in fiscal year 2021 will be sales of our amniotic products, which at the midpoint of our full-year total revenue range now assumes amniotic growth of approximately 68% year-over-year in 2021. This compares to our prior guidance range, which assumed growth at the midpoint of approximately 48% year-over-year. Second, we expect sales of our remaining non-PuraPly, non-amniotic products, which collectively formed the group called PMA and other, to increase at the midpoint of the range of approximately 10% year-over-year in 2021. This compares to our prior guidance range, which assumed growth at the midpoint of 20% year-over-year. Third, we expect to see steady improvements and COVID-related headwinds as we move through the second half of 2021. However, our guidance for the remainder of the year continues to reflect lower year-over-year growth in the second half of 2021 as compared to the prior year. This is primarily driven by two factors. First, given the strong performance of our Advanced Wound Care business in the second half of 2020, we expect to see our year-over-year growth trends in the second half of 2021 to moderate compared to the 56% growth from the second half of 2020. Second, as discussed in our first-quarter earnings call, we continue to expect an improving operating environment in the second half of 2021 to benefit growth trends in our Surgical & Sports Medicine business. Removing ReNu and NuCel from the market beginning June 1, 2021, represents a headwind to growth over the last seven months in 2021 of approximately $18 million and therefore a significant impact on the growth profile of the second half of 2021. As we look beyond 2021, we are continuing down the BLA pathway for ReNu, the treatment of knee osteoarthritis, and based on favorable feasibility studies, we believe this product has potential beyond BLA for additional osteoarthritis and tissue regeneration applications. Given the broad-based growth opportunities for ReNu, we are targeting our investments on ReNu and discontinued our IND efforts for NuCel. With respect to our expectations for financial performance in 2021, we continue to expect to report positive GAAP net income and positive adjusted EBITDA for the fiscal full year 2021 period. In addition to our formal financial guidance for 2021, we’re providing some consideration for modeling purposes. For the full year 2021 period, we now expect gross margins of approximately 75%. Total GAAP operating expenses to increase approximately 27% year-over-year, as compared to our prior expectation for an increase in productivity of 25% year-over-year, which reflects the incremental selling expenses related to second-quarter 2021 revenue performance as well as incremental costs related to a tight labor supply, partially offset by the benefit of the reduction in the CPN earn-out liability. Note our 2021 GAAP operating expenses include approximately $5 million of restructuring expenses related to our La Jolla, California facility, of which approximately $1.9 million occurred in the first half of 2021. Non-cash G&A of approximately $9 million, non-cash stock comp of approximately $3 million, weighted average diluted shares of approximately 134 million. We expect full-year 2021 CapEx of approximately $30 million, of which approximately two-thirds is related to growth initiatives and gross margin improvement. Finally, we expect total interest and other expenses of approximately $9 million, as the lower borrowing costs associated with the refinanced facilities will be partially offset by exit costs expensed in the third quarter of 2021.

Good afternoon. Thanks for taking the questions. Congrats on the quarter. Maybe Gary to start on the guidance specifically within Advanced Wound Care, I’d love to get your perspective on your current manufacturing capacity within amniotics, it continues to be a positive surprise for the business. I know you were constrained a little bit there. And then my second question is around the non-PuraPly, the PMA and other products. I’d love to understand how the dynamics that were driving that performance and then the softer guidance on that category of products? Thank you.

Sure. Thank you, Ryan. Yes, we did have a nice increase in capacity in Q2 for our amniotic products. That was something we were counting on, and we focused a lot of our attention commercially on driving and expanding our Affinity sales and expanding the launch of that product as a result of that capacity. So, that was a nice bump for the quarter for us for sure. On the PMA product side, we’re still seeing growth in our non-PMA products. All our products are growing very nicely. We’re also seeing some revenue from CPN Bioscience as well, so a combination of the acquisition and our legacy products doing well. The expansion of our TRS’s as our sales representatives have also been powerful and helpful in the quarter. We expect them to continue to provide results going forward, as we’ve seen their productivity increase dramatically in the quarter as well, by selling the entire portfolio. Hopefully that answers your question?

Yes, sure. It’s not really constrained; it’s just that costs are going up. We’re seeing a change in the dynamic of new reps coming in, and it’s beyond the commercial resources as well. We’re just feeling it a bit there. Just wanted to provide a little bit of color from that standpoint.

Hi, thanks so much for taking the question. So, just one on environmental; I know you put up a really strong quarter here, so it doesn’t seem like it’s something you’re seeing widely right now. When you talk about being mindful of some of the risks related to COVID or Delta? Where are you seeing if you are seeing anything now? Where might we start to see that or help us understand how that might flow through and impact your business here in the back half? And then I had one follow-up.

Sure. We are seeing impacts, particularly in the Missouri, Alabama, and Oklahoma areas. We started to see that in the last several weeks; we’re also seeing impacts in the Texas area, particularly Houston and in Florida. Florida was primarily in the northern area that was affecting us, but now we’re seeing it coming up the West Coast and the Naples, Fort Myers area, which is an important area for us. We’re monitoring it; those areas are important to us, particularly Texas and Florida in the Advanced Wound Care side and in the Midwest, as we’re pretty strong and in the South and the Midwest. We do expect to have an impact. Fortunately for us, we’ve continued to expand our office presence, where we did not see much of an impact, and we continue to open additional channels on the surgical side. Some of those areas like trauma and some really complex wounds, limb salvage are not as susceptible to elective surgery issues you find in a COVID environment, but we’re definitely seeing the impact in the hospitals. We haven’t seen a revenue impact yet, but we are cautious about it. Those are the areas that we see things starting to get a little concerning.

Great. And if I could just add a follow-up if I could, one just on the cadence of amniotic tissue products being an important part of the back half end of the year. Is there any way you could dovetail or reconcile your comments on that related to the physician office channel? Based on some of the things you mentioned, based on the channel, the accounts that you’re adding there, and the integration of CPN is anything you can give us in terms of the magnitude or contribution to growth of that in the back half, maybe versus the rest of your business? And then I realized it’s not an operating question, but I do have to ask about the shareholder agreement that you disclosed in the 8-K, just because of all the issues related to some of the disbursements and the pressure on the stock. I’d love to get your sense about how you arrived at that? What do you think it means in terms of your plans for further capital transactions? Again, it’s a very complicated question, because it’s nothing to do with your operating results, but this is an important topic to highlight and hear out.

Sure, I’d be happy to address it. Regarding the amniotic contribution in the second half, we don’t expect to see a large contribution in Q3 for amnions; it’ll really be Q4. The reason for that, Matt, is we did get a bump in Q2 as I mentioned in capacity, but that capacity is going to remain at the same level in Q3. We won’t see another bump in capacity until Q4, and then we expect a fairly significant increase in capacity. So, we expect more of a contribution in Q4 than in Q3. Collectively, we’ll still be a strong contributor to growth. We committed to 2.5 times the capacity in 2021 versus 2020, and we definitely expect to see that. You’ve seen the results in Q2 with the increased capacity and those additional accounts; it really did drive revenue, as we expect it will in Q4. Regarding the shareholder agreement, as we stated in the 8-K our large legacy shareholders that hold over 40% of Organogenesis stock have agreed with the company, effective August 9, that they will not sell any shares of the company’s capital stock that they hold until at least March 1, 2022 unless any such sale is completed in an orderly fashion as part of an underwritten secondary public offering. The company recognized, and I wasn’t really happy with the sales; I’m sure most people weren’t. The board agreed that they recognized periodic and unexpected selling by them in the market may cause some volatility or disruption. Their entry into the lockup reflects their commitment to conduct any of these sales, at least through March of 2022, in an orderly fashion. The recognition that they could create some disruption in the market is certainly unintended and needs to be addressed.

Hey, this is Ann on for Rich, thanks for taking our questions, and congrats on the quarter. I just have a quick one on PuraPly trends. It looks like revenue took a slight step down in 2Q versus 1Q. But your guidance, which remains unchanged from the prior update, implies acceleration in the back half versus 2019 levels. I was just wondering if you could maybe talk about some of the trends that you’re seeing with this product. And then I’ll have another follow up as well.

Sure. We are happy with the 32% growth in PuraPly. As I mentioned earlier, our Affinity capacity increased dramatically in the second quarter as planned, and our commercial focus shifted dramatically to expanding the launch of our Affinity products in the geographies in which we sell it today. That was a committed effort, and that had an impact on PuraPly sales. Now that we’ve kind of got through that launch period or expanded launch period, we expect the product to continue to grow nicely in the back half of the year. That was something that we planned, which is why we reconfirmed our guidance for PuraPly and haven’t changed it at all; it was what we did expect. So, second half, we expect PuraPly to grow quite nicely.

Yes, I think you’re right, Gary. I mean, 32% of the quarter and 29% first six months of the year and holding the guidance, we feel good about the trajectory there.

Sure. We’re still expecting to launch TransCyte in 2022; it’d be more of a soft launch and a full launch at the end of 2023. Our Novachor product we’re expecting to have on the market by the end of this year, but really won’t be a contributor until 2022, but that launch is moving forward quite nicely. On the ReNu front, we are still expecting to complete the enrollment of the study by Q1 of 2022. We’re expecting that our interim analysis will be available around the end of the first quarter, beginning of the second quarter. We expect to complete the study in mid-2023 and submit for approval and hopefully get approval in mid-to-end of 2024, again, assuming one Phase 3 trial is all that is required.

Thanks. Hi, guys, congratulations on the quarter. Gary, I know it’s early days, but now that we’re past the FDA enforcement grace period, I’m wondering what you’re seeing on the ground relative to the impact on your competitors. Have you seen a big enough impact on smaller competitors, given more exposure to the impacted products, has that allowed you to take share overall? I mean, obviously, you’re going ahead in the market, but do you see that as one factor?

Yes. I think it’s a little too early to tell at this point. Obviously, we’re not selling the product. There are competitors with similar products that may still be on the market. We’re trying to figure that out right now. We don’t have enough data at this point to see what the real impact has been.

Fair enough. And then just secondly, thanks for the update on ReNu and NuCel. Can you talk a little bit more about what you’re seeing out of ReNu that’s giving you the confidence of the broader applicability of the product? And that’s why you decided to not pursue the trial on NuCel?

Yes, I think what’s important in our decision for NuCel is that we assumed it would remain on the market and would help fund that study. It’s a good product, a strong product. But without being able to sell the product and fund that study, we thought a better return would be looking at additional indications of ReNu. We do have several that we’re studying now that we’re pretty excited about. We haven’t made any final decisions, but we think the market potential for ReNu indications is significantly higher than what NuCel may be. So it’s worth the additional investment without the associated revenue compared to NuCel.

I had a couple follow-ups. Sorry, didn’t get rid of me sooner, but just a couple of questions. Dave, these EBITDA margins, you’re north of 20%, and I know you’re in a very important growth phase, and certainly the top line is the focus. But now I’d love to get your thoughts just on the EBITDA margins over time, and your ability to generate cash here. It seems like increasing, and just how you think about the use of cash. I think it’d be helpful for investors to get your perspective on that. Thanks for taking the follow-up.

Yes, sure. The back half of last year, we had a big step up in revenue and then COVID-related kind of savings. We didn’t flow a lot to the bottom line; we saw the same thing in Q1, and then had great performance in Q2. I think it illustrates the level of profitability the business has and the operating leverage potential. We still need to build out the infrastructure. It’s not just the commercial teams; it’s beyond that to really function as a high-growth company. We’re focused very much on the top line, ensuring that we continue to invest in that. That level of profitability is going to generate a lot of cash flow in the future. We’ve been talking a lot about that internally about how to deploy that capital. There was a question earlier as to whether or not we needed any more equity capital; at this stage, the answer is no. We’ll continue to look for opportunities to add to the portfolio through potential growth acquisitions. Anything to add to that, Gary?

No, well said.

We’re kindly showing no remaining questions in the queue at this time. That does conclude our conference for today. Thank you for your participation.

Thank you very much.