Good afternoon, ladies and gentlemen, and welcome to the First Quarter 2022 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 of the Company’s most recent annual report. 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 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 and 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 first quarter 2022 earnings conference call. I am joined on the call today by Dave Francisco, our Chief Financial Officer. Let me start with a brief agenda of what we will cover during our prepared remarks. I'll start with a high level review of our first quarter revenue results. I'll then provide a review of some of the recent operating highlights. And after my opening remarks, Dave will provide you with a more in-depth review of our first quarter financial results, our balance sheet and financial condition at the end of the first quarter and the guidance for 2022 that we reaffirmed in today's press release. Then we'll open up the floor for questions. Beginning with the review of our results. In Q1, we reported net revenue of $98.1 million, a decrease of 4% year-over-year, driven by flat growth in sales of our Advanced Wound Care products and a 39% decrease in the sale of our Surgical & Sports Medicine products. As expected, the decline in Surgical & Sports Medicine reflects the headwinds for our ReNu and NuCel products following the expiration of the FDA enforcement grace period that ended on May 31 of last year. Excluding net revenues from these products, total net revenue increased 1% year-over-year on an adjusted basis in the first quarter. First quarter sales results came in above the high-end of the growth expectation range we provided on our fourth quarter conference call. Both Advanced Wound Care and Surgical & Sports Medicine exceeded our expectations, driven primarily by continued strength of our PuraPly franchise. Despite the challenging start to the quarter, the team executed well as our growth strategy and competitive advantages continue to yield results for the company. The strength of our expanded sales force, the benefits of our comprehensive and differentiated portfolio of products and leveraging multiple channels, new product introductions, and brand loyalty in the market. Let me update you on the progress of each one of these areas in Q1. Our commercial team, including 340 direct sales representatives, continue to broaden penetration across the country and expand awareness of the benefits of our advanced modalities. We believe our direct commercial team continues to represent a key competitive advantage for Organogenesis. Second, our broad and highly differentiated portfolio of products is another key competitive advantage for us. Sales of PuraPly products increased 29% year-over-year exceeding our expectations. Our strategy to introduce new products and line extensions has enabled access to multiple sites of care and physician specialties and continues to drive strong demand for the PuraPly brand. Sales of our amniotic products declined 32% year-over-year and declined 22% on an adjusted basis excluding the sales of ReNu and NuCel in the prior year period. These results were largely in line with our expectation and reflect the impact of Omicron on our national launch of Affinity. We continue to expect that portfolio of highly differentiated amniotic products to be the largest contributor to our company's net revenue growth for fiscal year 2022. The midpoint of our full-year revenue range continues to assume amniotic growth of approximately 12% year-over-year in 2022. Lastly, in our PMA and other products, net revenue declined 14% year-over-year in the first quarter, driven by the expected impact of the suspension of Dermagraft manufacturing as part of our multi-year plan to consolidate manufacturing at our campus in Canton. Third, we continue to make progress in diversifying our revenue across physician specialties and sites of care supported by targeted product development and commercial strategies to win in these key channels. With respect to the overall operating environment in the first quarter, as discussed on our Q4 call, our first quarter results were impacted by rising Omicron case counts, which impacted patient consultations, treatment and elective procedures, staffing shortages, increased restrictions and limitations on access, challenged our ability to engage with new customers, particularly with the introduction of our new technologies. Additionally, we faced incremental headwinds in January, as we discussed, as our own employees were impacted by the virus. Importantly, as we discussed on our Q4 call, we noted that we have seen material improvement in our business trends after the challenging January period, and the operating environment continues to show measured improvement in March as expected. Our 2022 guidance continues to assume that we'll see steady improvement in the COVID-related headwinds as we move through the second quarter in a more favorable operating environment over the second half of 2022. We remain confident in our full-year 2022 guidance expectations, which calls for net revenue in the range of $485 million to $515 million, representing growth of 4% to 10% year-over-year on a reported basis and growth of 6% to 13% on an adjusted basis. We continue to expect stronger growth trends in the second half of 2022, driven by a combination of increasing contributions from our new products returned to a more normalized operating environment assuming we continue to see progress improvements in the COVID-related headwinds and an easier comparison related to the ReNu and NuCel not contributing to prior year sales beginning on June 1, 2021. Now, before I turn the call over to Dave, I want to share some of my thoughts on a few operating highlights of note. First, Organogenesis was a leading sponsor at the 2022 Symposium on Advanced Wound Care or SAWC in the spring in their conference in Arizona. This was the first live presence at the SAWC Spring Conference in three years and our team was excited to make the most out of this valuable opportunity to engage with over 1,300 wound care experts, health professionals, and other attendees. I am pleased with our team's focus on maximizing the opportunity to highlight the strong body of clinical evidence that supports our differentiated product portfolio and the Organogenesis brand. At the conference, healthcare professionals across many specialties also shared their use of our products and the success they've had with our portfolio in their clinical practices. A speaker program led by a leading plastic surgeon who spoke on the benefits of controlling wound environment with PuraPly AM and the innovative wound healing properties of our Affinity. A CME Symposium featuring a multispecialty panel discussion with key opinion leaders investigating how randomized controlled trials based on real-world evidence translates to evaluating wound care therapies. And a symposium led by two prominent physicians discussing how they use patient indicators to determine appropriate cost of treatment for chronic wounds. We also made significant progress in our ongoing Phase III clinical trial of ReNu for the treatment of knee osteoarthritis in Q1 notwithstanding COVID-related challenges. Our clinical team was able to complete enrollment of 50% of the patients needed for the trial and added investigational sites in Q1. As a result, we remain on track to complete enrollment in the first interim analysis of data for 50% of the enrolled patients by the end of the year. In addition, two new general publications regarding the use of ReNu were released in Q1 further bolstering our position as an evidence-based leader and building on the 25 publications for our product portfolio over the last three years. The ReNu publications provided preliminary evidence for the product's utility for the treatment of cartilage defects in osteoarthritis. During the quarter, we also were notified that two important manuscripts for our PuraPly antimicrobial product for the management of chronic wounds were accepted for publication this summer. Lastly, I'd like to highlight our recent announcement of the appointments of Michele Korfin and Gilberto Quintero to the company's Board of Directors effective May 3, 2022. Michele and Gilberto bring significant experience built over their respective careers, working for companies ranging in size and scale across the healthcare industry. I look forward to their leadership and experience from a broad set of leadership roles, including operation, clinical development, quality, compliance, and regulatory affairs. Michele and Gilberto represent further enhancement to our Board of Directors, a priority for Organogenesis as evidenced by the five new independent directors we've added over the last two years. The breadth of experience and diversity of talent that our Board of Directors has is notable, and their strategic insight will be extremely valuable going forward. With that, let me turn the call over to Dave for a review of our financial results in the first quarter, our balance sheet and financial condition as of quarter-end and a review of the 2022 financial guidance we reaffirmed in today's press release.

Thank you, Gary. I'll begin with a review of our first 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 were pleased with the solid start to the year, given the challenging operating environment. Net revenue for the first quarter of 2022 was $98.1 million, down 4%, and excluding ReNu and NuCel, we grew adjusted net revenue by 1%. Our Advanced Wound Care net revenue for the first quarter of 2022 was $91 million, essentially flat year-over-year. Net revenue from Surgical & Sports Medicine products for the first quarter of 2022 was $7.2 million, down 39% driven by the suspension of marketing of our ReNu and NuCel products in connection with the expiration of the FDA's enforcement grace period on May 31, 2021. Excluding sales of ReNu and NuCel in the prior year period, net revenue from Surgical & Sports Medicine products increased 17% year-over-year in Q1. Net revenue from PuraPly products for the first quarter of 2022 was $53.3 million, up 29%. Gross profit for the first quarter of 2022 was $73 million or approximately 74% of revenue compared to 75% last year. Operating expenses for the first quarter of 2022 were $72.2 million compared to $64.4 million last year, an increase of $7.7 million or 12%. The increase in operating expenses in the first quarter was driven by a $5.3 million increase in selling, general and administrative expenses and a $2.4 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 $4.1 million increase related to additional headcount, primarily in our direct sales force, and a $2 million increase related to travel and marketing programs amid the relaxed COVID-19 travel restrictions. The year-over-year increase in R&D was driven by planned step-up in clinical study spending and related costs necessary to seek regulatory approvals for certain of our products. Operating income for the first quarter of 2022 was $0.9 million compared to an operating income of $12.6 million last year, a decrease of $11.7 million. Total other expenses for the first quarter of 2022 was $0.7 million compared to $2.5 million last year, a decrease of $1.7 million or 70% primarily driven by the reduced interest rate for borrowings under the new credit agreement signed in August of 2021. Net income for the first quarter of 2022 was $0.1 million compared to net income of $9.9 million last year, a decrease of $9.8 million. Adjusted EBITDA of $5 million for the first quarter of 2022 or 5% of net revenue compared to adjusted EBITDA of $16 million or 15.6% of net revenue last year, and we provided a full reconciliation of our adjusted EBITDA results in our earnings press release issued early this afternoon. Turning to the balance sheet. As of March 31, 2022, the company had $108.5 million in cash, cash equivalents, and restricted cash and $73.1 million in total debt obligations, of which $0.1 million were capital lease obligations. This compared to $114.5 million in cash, cash equivalents, and restricted cash and $73.6 million in total debt obligations of which $0.2 million were capital lease obligations as of December 31, 2021. We also have up to $125 million available borrowings on our revolving credit facility as of March 31, 2022. Turning to a review of our 2022 net revenue guidance, which we reaffirmed in today's press release. For 12 months ending December 31, 2022, the company continues to expect net revenues between $485 million and $515 million, representing an increase of approximately 4% to 10% year-over-year. The 2022 net revenue guidance range continues to assume net revenue from Advanced Wound Care products increasing approximately 6% to 12% year-over-year. Net revenue from Surgical & Sports Medicine products decreasing approximately 9% to 19% year-over-year, and net revenue from sale of our PuraPly products increased approximately 4% to 9% year-over-year. Our 2021 revenue results include approximately $11 million in revenue attributable to our ReNu and NuCel products during the five months ended May 31, 2021, at the end of the FDA enforcement grace period. Excluding sales of ReNu and NuCel for the first five months of 2021, our 2022 revenue guidance implies growth of 6% to 13% on an adjusted basis. In terms of our profitability guidance for 2022, the company expects to generate GAAP net income of between $41.2 million and $52.7 million, adjusted net income of between $47.3 million and $58.8 million. Note the company's net income and adjusted net income guidance ranges reflect incremental operating expenses related to recently announced restructuring activities and a revised GAAP tax rate assumption for the 12 months ended December 31, 2022. We also expect EBITDA of approximately $70.3 million and $85.7 million and adjusted EBITDA of between $79.9 million and $95.3 million. In addition to our formal financial guidance for 2022, we are providing some considerations for modeling purposes. Our full-year 2021 guidance ranges assume sales of our amniotic products, which at the midpoint of our full-year net revenue range increased approximately 12% year-over-year. Sales of our non-PuraPly non-amniotic products, which collectively form the group called PMA and other, will decrease at the midpoint of the range of approximately 5% year-over-year. Gross margins of approximately 76%, total GAAP operating expenses will increase approximately 10% to 15% year-over-year compared to our prior expectation for growth in the range of 9% to 13% year-over-year, and this increase is related to incremental restructuring expenses of approximately $3.2 million related to the next phase of our Canton consolidation. Total interest and other expenses of approximately $3.5 million, GAAP tax rate of approximately 25% compared to guidance which assumed a GAAP tax rate in the low single-digits, non-cash D&A and non-cash stock comp expense of approximately $12 million and $6 million respectively, and weighted average diluted shares of approximately $134 million. We also expect 2022 CapEx to be approximately $70 million to $75 million. The quarterly cadence of capital expenditures continues to be impacted by the phase and timing of each phase of our multi-year manufacturing buildup of the Canton campus. Finally, as Gary discussed earlier, we are seeing measured improvement in the operating environment as expected. We expect our second quarter net revenue results to reflect improvement growth trends as compared to the first quarter. Specifically, we expect our Q2 net revenue to be in the range of flat to down 3% year-over-year on an as-reported basis. Note, excluding the sales of ReNu and NuCel from the prior year period, our second quarter sales expectations reflect growth of 2% to 4% year-over-year on an adjusted basis. With that operator, I'll turn the call back over to you.

Thank you, sir. And our first question will come from Danielle Antalffy from SVB Leerink.

Hey. Good afternoon, guys. Thanks so much for taking the question. Congrats on a solid start to the year. Just a quick question on the amniotic product line and Affinity specifically, it came in a little bit below what we were thinking. I guess, number one, maybe we mismodeled it a little bit here. But any incremental color you can give on what you saw exiting the quarter and sort of how that's trended so far in April as it relates to that product line? And then secondarily, what gives you the confidence that that's going to be the primary growth contributor to the 2022 guide? And then I have one follow-up. Thanks.

Sure. So this is Gary. So Q1 for Affinity was as expected for us with the national launch. We had to relaunch the product again in Q1. So you have a rate change. We also had the issues as we discussed that everybody had with Omicron. So it was a slow start for sure. The trends that we're seeing now are very positive. We're adding new accounts in multiple sites of care for the product and the sales trends over the last four to five weeks are quite strong. So we feel that the rest of the year with the national launch and with the second half of the year, the operating environment improving that we'll be able to continue to expand the use of the product across the country.

Got it. That's helpful. Thank you for that. And then on my follow-up is on PuraPly and just a very strong PuraPly quarter and just curious why you're reiterating the guide there, given the strength in PuraPly and the confidence around Affinity improving as we move through the year? Thank you so much for taking the questions.

Thank you, Danielle. So we expect the PuraPly brand to do well. We also will have a national launch of one of our SKUs in the second half of the year. And with that, similar to what we've had with Affinity, we expect a bit of a pause as people readjust to the change in reimbursement for the product. So that's built into our guidance. That's what we expect. But we are seeing positive trends with the product in multiple sites of care.

Our next question comes from Steven Lichtman with Oppenheimer & Co.

Thank you. Hi, guys. Just wondering if you could give us an update on the commercial organization, what are your latest thoughts in terms of how much you're looking to grow both the direct reps as well as your distributor relationships this year?

Sure. So our expectation is that we will add approximately 50 new direct sales representatives. We will continue to add to our agencies, but as we continue to look at our agencies, we're also looking at the competency and where those agencies sell. So we may not see a big jump in our agencies, but we certainly may see a different group of agencies as we move forward.

Okay. Got it. And then you mentioned Gary about the long-term pipeline of course with NEO A, but maybe if you could provide an update on the sort of medium-term pipeline relative to Novachor, and on the burn products and sort of where you're at on those?

Sure. So Novachor, we have started the soft launch of Novachor as we've guided and we're in that process now. We expect to have more of a national launch though it probably still will be controlled in middle of Q3, end of Q3. But the burn product, TransCyte, we're in a clinical experience process right now reintroducing the product. We won't be able to make the product and sell the product to scale until our manufacturing facility is built out here in Canton. That won't be till the middle to the end of 2024, that's when we'll be able to make it to scale and launch it nationally.

Got it. Thanks, Gary.

Thank you. Our next question comes from Ryan Zimmerman with BTIG.

Hey. Thanks for taking the questions, Gary and Dave. Couple for me. So as I think about the Medicare part B pricing into the second quarter, Affinity held pretty steady, Apligraf and Dermagraft – more so Dermagraft was down, but I guess that really doesn't matter with the manufacturing suspension. But PuraPly was down a little bit quarter-over-quarter. I'm just wondering if you could kind of speak to the puts and takes with the ceiling rates that are set for the second quarter and your expectation from Medicare, if you will, around what could be implied as we move through the balance of the year?

So you're correct about Dermagraft, it's off the market. That's not really relevant. I think, as it relates to PuraPly, it's important that when you look there are two ASPs that you have PuraPly, which is a very insignificant component of the brand. Then you have PuraPly AM, which is more of the brand. So there's not much change in the PuraPly AM number at all. It's really the PuraPly, which doesn't include the antimicrobial component, which is insignificant as it relates to the product. So nothing significant there as it relates to PuraPly. Moving forward through the year, the ASP is basically what you sell the product for, and it'll move as and if the product pricing is different over time. So that's the expectation is it'll move with the pricing of the product.

Yes. That's fair, Gary. And to your point, I mean, PuraPly AM was only off by a percent or two quarter-to-quarter. But when you mentioned pricing moving with the product, I mean, are you expecting to institute any pricing changes this year, or should we assume that those are fairly steady?

Well, we haven't discussed them. We're not going to discuss our pricing strategy, but if there is a price movement, it'll get reflected in the ASP when filed and we will show up on those schedules.

Okay. That's helpful. And then if I could follow-up on two other questions for you, Dave.

Sure.

The restructuring program, if you could just talk about, I understand kind of the initial hit you're taking there on the net income guidance. Adjusted EBITDA is holding steady, but what do you expect to come out of that in terms of savings over time? And if you could just talk about gross margins were a little below 76%, your guidance is calling for 76%. So what gives you that gross margin lift for the remainder of the year?

Sure. So the first one is really just a continuation of the consolidation into the Canton campus. It's taking some of the shipping and quality capabilities for the amniotic portfolio into Canton. So, it's really just increasing capacity and efficiency from that standpoint. On the gross margin side, I mean, we really came in relatively consistent with what we'd expected. And so, really it was relatively low revenue for the quarter. And so we had some negative leverage on the fixed cost and that type of thing, which will reverse itself as it goes through the year. We also had – we had another impact where we kind of had a little bit of a COVID impact that spilled over from Q4, where we did see some excess returns as well. So we sold some product in Q4 and spilled into Q1, some of the procedures were canceled and such, and so had some impact on the gross margin, which we don't expect to repeat.

Thanks for taking the questions.

Thanks, Ryan.

Thanks, Ryan.

Our next question comes from Matt Miksic from Credit Suisse.

Hey guys. Thanks for taking the question and congrats on a good start here especially given kind of the slow January and continuing challenges around Affinity. So I wanted to ask a little bit about the strength in PuraPly. And I guess it appears to be your team sort of helping to backfill some of the slowness either from discontinued products or from the sort of relaunch as you described of Affinity. I'm just wondering, I mean, that feels like upside versus maybe where you thought PuraPly would've been this quarter absent the withdrawal of those products. And I'm just wondering, how much of that is sustainable and as Affinity comes back, do you anticipate that staying or is there any reason why that needs to sort of ease again, to land you in your full-year guidance? I love to get your thoughts on that. And I had one follow-up.

Sure. I'll start. Dave, you can jump in if you'd like. So you're correct that we do have the ability from a share of voice perspective, our commercial team will shift share of voice from time-to-time when we run into certain headwinds on a particular quarter, and quarter one was COVID. So that's helpful. As we balance out share of voice throughout the year to balance off our portfolio, we expect PuraPly to come in line with our guidance. We do have, as I mentioned, one SKU that will be going away, expect it to go on the published list, and we'll have to relaunch that product in a different environment, but have the ability to launch it across the country as we do with Affinity. So all of those moving parts we've kind of built into our guidance. But the brand is still performing extremely well.

Okay. Go ahead.

I think that's right, Gary. I think we just continue to see good performance from that well-established brand. So in difficult periods, even in the January timeframe, the business performed well, so we're pleased with that portfolio.

Okay. So the portfolio including amniotic tissue products kind of gets you through your guide as you've laid out this year. And then does next year then – and maybe if you could talk a little bit about what this national relaunch could mean for the SKU and PuraPly? And I'm sorry, but I did have just one quick follow-up on Affinity, if I could.

Sure. So we expect that in the second half of the year that we would have a published rate for one of our PuraPly products. We will go through the same launch process as we did with Affinity where there'll be a little bit of pause as all of the hospitals and doctor offices readjust to whatever the rate environment is at that time. Then we have the opportunity to launch it across the country. It will take share of voice from our sales representatives as they're launching their product. That's what we're expecting. So we'll see a little bit of a decline in the back half of the year, at least in Q3, and then start to hopefully grow again in Q4.

Got it. And then just quickly on Affinity, you'd mentioned a few things, one, obviously the relaunch and you seems like you're encouraged by the new accounts and building momentum here in Q2. But then also kind of the infection trends and disease trends, I mean, is that activity levels, do you feel like that's still a factor here in the second quarter or is that behind you? And we're just dealing with execution on the relaunch and new accounts or is that still something that somehow is affecting Affinity here in Q2?

No, I think it's just – it's execution. It's really what it is now. We're kind of behind pretty much the pause that we talk about that's pretty much in our rearview mirror. We still see a little bit of that in certain pockets of the country, but it's primarily execution and launch and continuing to expand it in the surgical channel. That's an area that we're seeing some nice trends at this point.

Excellent. Okay. Well, thanks for the color.

Sure, Matt.

We are currently 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.