ORGO 8-K
Organogenesis Holdings Inc. (ORGO)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act: |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On August 5, 2025, Organogenesis Holdings Inc. (the “Company”) entered into a Fourth Amendment to the Credit Agreement dated August 6, 2021 (the Credit Agreement, as amended, the “Credit Agreement,” and the Fourth Amendment to the Credit Agreement, the “Fourth Amendment”), by and among the Company, as borrower, and its subsidiaries, Organogenesis Inc. and Prime Merger Sub, LLC, as guarantors, and Silicon Valley Bank, as Administrative Agent, and the several other lenders from time to time party thereto. The Fourth Amendment amended Section 7.1(a) of the Credit Agreement to provide that, so long as there are no swingline loans or revolving loans outstanding, the consolidated fixed charge coverage ratio covenant shall not be tested for the fiscal quarter ending June 30, 2025. Notwithstanding this testing accommodation for the quarter ended June 30, 2025, the covenant is deemed to be in effect for purposes of any transaction contemplated by the Credit Agreement that requires pro forma compliance with the consolidated fixed charge coverage ratio or the financial covenants generally and would preclude the Company from any additional borrowing under the Credit Agreement unless waived or further amended.
The Fourth Amendment also requires the Company, its subsidiary guarantors, the Administrative Agent and certain of the lenders prior to September 30, 2025 to enter into an agreement to reset certain financial covenants or implement new financial covenants and implement other modifications to the Credit Agreement and related documents, on terms and conditions reasonably acceptable to the Administrative Agent and such lenders. The lenders shall have no further obligation to make revolving extensions of credit under the Credit Agreement until such an agreement has been executed, and the failure of the Company to enter into such an agreement shall constitute an event of default under the Credit Agreement. Notwithstanding this obligation, the Company has the right to terminate the Credit Agreement for its convenience prior to such date, and it expects that the cash on hand and other components of working capital as of June 30, 2025, plus net cash flows from product sales will be sufficient to fund the Company’s operating expenses, capital expenditure requirements and debt service payments for at least 12 months beyond the filing date of the Company’s Form 10-Q for the quarter ended June 30, 2025.
The foregoing description of the Fourth Amendment is not complete and is qualified in its entirety by reference to the Fourth Amendment, which is attached to this Current Report on Form 8-K as Exhibit 10.1 and incorporated herein by reference.
Item 2.02 Results of Operations and Financial Condition.
On August 7, 2025, the Company announced via press release its results for the fiscal second quarter ended June 30, 2025. A copy of the Company’s press release is hereby furnished to the Commission and incorporated herein by reference as Exhibit 99.1.
The information in the press release attached as Exhibit 99.1 is intended to be furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
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Description |
10.1 |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Organogenesis Holdings Inc. |
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By: |
/s/ Lori Freedman |
Name: |
Lori Freedman |
Title: |
Chief Administrative and Legal Officer |
Date: August 7, 2025
Exhibit 10.1
Execution Version
FOURTH AMENDMENT TO
CREDIT AGREEMENT
This Fourth Amendment to Credit Agreement (this “Amendment”) dated and effective as of August 5, 2025 (the “Fourth Amendment Effective Date”) by and among ORGANOGENESIS HOLDINGS INC., a Delaware corporation (the “Borrower”), the several banks and other financial institutions or entities party hereto constituting the Required Lenders (as defined in the Credit Agreement referred to below), and Silicon Valley Bank, a division of First-Citizens Bank & Trust Company (“SVB”), as the Administrative Agent (in such capacity, the “Administrative Agent”).
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders party thereto, the Administrative Agent, and SVB, as the Issuing Lender and the Swingline Lender, are parties to that certain Credit Agreement dated as of August 6, 2021 (as amended, modified, supplemented or restated and in effect from time to time, the “Credit Agreement”); and
WHEREAS, the Borrower has requested that the Required Lenders agree to modify and amend certain terms and conditions of the Credit Agreement, subject to the terms and conditions contained herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
“(a) Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated Fixed Charge Coverage Ratio as at the last day of any period of four (4) consecutive fiscal quarters of the Group Members, commencing with the fiscal quarter ending September 30, 2021, to be less than 1.25:1.00; provided, that, so long as no Swingline Loans or Revolving Loans are outstanding, the foregoing Consolidated Fixed Charge Coverage Ratio covenant shall not be tested for the fiscal quarter ending June 30, 2025 for purposes of this Section 7.1(a), but shall be deemed to be in effect for purposes of any transaction contemplated by this Agreement that requires pro forma compliance with this Section 7.1(a) or the financial covenants generally.”
As to each and every Claim released hereunder, each Loan Party expressly waives all rights afforded by Section 1542 of the Civil Code of the State of California (“Section 1542”) and any similar statute or regulation in any other applicable jurisdiction (including the State of New York). Section 1542 states as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.
[Signature pages follow]
In Witness Whereof, the parties hereto have caused this Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.
BORROWER:
ORGANOGENESIS HOLDINGS INC.
By: /s/ David C. Francisco
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[Signature Page to Fourth Amendment to Credit Agreement]
ADMINISTRATIVE AGENT AND LENDER:
First-Citizens Bank & Trust Company
By: /s/ Megan Wood
Name: Megan Wood
Title: Vice President II
[Signature Page to Fourth Amendment to Credit Agreement]
LENDER:
CITIZENS BANK N.A.
By: /s/ Luis Gutierrez
Name: Luis Gutierrez
Title: Senior Vice President
LENDER:
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Robert Novak
Name: Robert Novak
Title: Senior Vice President
[Signature Page to Fourth Amendment to Credit Agreement]
CONSENT AND REAFFIRMATION
Each Guarantor hereby (i) acknowledges receipt of a copy of the foregoing Fourth Amendment to Credit Agreement (the "Fourth Amendment"; capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement as amended by the Fourth Amendment); (ii) consents to the Borrower's execution and delivery of the Fourth Amendment; (iii) affirms that nothing contained in the Fourth Amendment shall modify in any respect whatsoever any Loan Document to which it is a party except as expressly set forth therein; (iv) ratifies, affirms, acknowledges and agrees that each of the Loan Documents to which such Guarantor is a party represents the valid, enforceable and collectible obligations of such Guarantor; and (v) expressly acknowledges and consents to the Borrower releasing all “Claims” on its behalf. Each Guarantor hereby agrees that the Fourth Amendment in no way acts as a release or relinquishment of the Liens and rights securing payments of the Obligations. The guarantee, Liens and rights securing payment of the Obligations (including as amended by the Fourth Amendment) are hereby ratified and confirmed by each Guarantor in all respects. Although each Guarantor has been informed of the matters set forth herein and has acknowledged and agreed to same, such Guarantor understands that neither the Administrative Agent nor any Lender has any obligation to inform such Guarantor of such matters in the future or to seek such Guarantor's acknowledgment or agreement to future amendments, waivers or consents, and nothing herein shall create such a duty.
ORGANOGENESIS INC.
By: /s/ David C. Francisco
Name: David C. Francisco
Title: CFO
PRIME MERGER SUB, LLC
By: /s/ David C. Francisco
Name: David C. Francisco
Title: CFO
[Signature Page to Consent and Reaffirmation of Fourth Amendment to Credit Agreement]
Exhibit 99.1
FOR IMMEDIATE RELEASE
Organogenesis Holdings Inc. Reports Second Quarter 2025 Financial Results
CANTON, Mass., (August 7, 2025) -- 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 second quarter ended June 30, 2025.
Second Quarter 2025 Financial Results Summary:
“I’m pleased with the team’s performance in the second quarter and our focus on helping customers navigate a disrupted environment; looking ahead, the policy changes expected in 2026 will be a watershed moment for the industry, bringing stability and creating opportunities to serve even more patients,” said Gary S. Gillheeney, Sr., President, Chief Executive Officer and Chair of the Board for Organogenesis. “We believe we are well-positioned to continue to be a leader in the industry with our comprehensive portfolio, including products from all FDA classifications and offer greater access to PMA products. Additionally, we remain confident in the transformational potential of ReNu for knee OA and look forward to sharing top line data from our second phase three study this September.”
Second Quarter 2025 Financial Results:
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Three Months Ended June 30, |
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Change |
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2025 |
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2024 |
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$ |
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% |
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(in thousands, except for percentages) |
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Advanced Wound Care |
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$ |
92,696 |
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$ |
123,237 |
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$ |
(30,541 |
) |
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(25 |
%) |
Surgical & Sports Medicine |
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8,083 |
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6,997 |
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1,086 |
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16 |
% |
Net product revenue |
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$ |
100,779 |
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$ |
130,234 |
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$ |
(29,455 |
) |
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(23 |
%) |
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Six Months Ended June 30, |
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Change |
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2025 |
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2024 |
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$ |
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% |
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(in thousands, except for percentages) |
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Advanced Wound Care |
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$ |
172,623 |
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$ |
227,101 |
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$ |
(54,478 |
) |
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(24 |
%) |
Surgical & Sports Medicine |
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14,849 |
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13,109 |
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1,740 |
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13 |
% |
Net product revenue |
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$ |
187,472 |
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$ |
240,210 |
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$ |
(52,738 |
) |
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(22 |
%) |
Net product revenue for the second quarter of 2025 was $100.8 million, compared to $130.2 million for the second quarter of 2024, a decrease of $29.5 million, or 23%. The decrease in net product revenue was driven by a decrease of $30.5 million, or 25%, in net product revenue for Advanced Wound Care products partially offset by an increase of $1.1 million, or 16%, in net product revenue for Surgical & Sports Medicine products.
During the second quarter of 2025, the Company received a grant from a governmental agency and recorded $0.2 million in grant income.
Gross profit for the second quarter of 2025 was $73.1 million, or 73% of net product revenue, compared to $101.0 million, or 78% of net product revenue for the second quarter of 2024, a decrease of $27.9 million, or 28%.
Operating expenses for the second quarter of 2025 were $113.6 million compared to $144.1 million for the second quarter of 2024, a decrease of $30.5 million, or 21%. Cost of goods sold was $27.6 million for the second quarter of 2025, compared to $29.2 million for the second quarter of 2024, a decrease of $1.6 million, or 5%. R&D expense was $10.4 million for the second quarter of 2025, compared to $15.6 million for the second quarter of 2024, a decrease of $5.2 million, or 33%. Selling, general and administrative expenses were $73.8 million for the second quarter of 2025, compared to $76.5 million for the second quarter of 2024, a decrease of $2.7 million, or 4%. For the three months ended June 30, 2025 and 2024, the Company recorded impairment and write-down expenses of $1.7 million and $22.8 million, respectively.
Operating loss for the second quarter of 2025 was $12.6 million, compared to an operating loss of $13.9 million for the second quarter of 2024, a decrease in operating loss of $1.3 million.
Total other income (expense), net, for the second quarter of 2025 was $0.7 million income, compared to $(0.6) million expense for the second quarter of 2024, a change of $1.4 million.
Net loss for the second quarter of 2025 was $9.4 million, or $(0.10) per share, compared to a net loss of $17.0 million, or $(0.13) per share, for the second quarter of 2024, a decrease in net loss of $7.7 million, or $0.03 per share.
Adjusted net loss was $(7.5) million for the second quarter of 2025, compared to adjusted net income of $0.2 million for the second quarter of 2024, a change of $7.7 million.
Adjusted EBITDA loss was $(3.6) million for the second quarter of 2025, compared to Adjusted EBITDA income of $15.6 million for the second quarter of 2024, a change of $19.3 million.
Non-GAAP operating loss was $(10.0) million for the second quarter of 2025, compared to non-GAAP operating income of $9.7 million for the second quarter of 2024, a change of $19.7 million.
As of June 30, 2025, the Company had $73.7 million in cash, cash equivalents and restricted cash and no outstanding debt obligations, compared to $136.2 million in cash, cash equivalents and restricted cash and no outstanding debt obligations as of December 31, 2024.
First Half 2025 Financial Results:
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Six Months Ended June 30, |
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Change |
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2025 |
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2024 |
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$ |
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% |
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(in thousands, except for percentages) |
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Advanced Wound Care |
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$ |
172,623 |
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$ |
227,101 |
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$ |
(54,478 |
) |
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(24 |
%) |
Surgical & Sports Medicine |
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14,849 |
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13,109 |
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1,740 |
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13 |
% |
Net product revenue |
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$ |
187,472 |
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$ |
240,210 |
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|
$ |
(52,738 |
) |
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|
(22 |
%) |
Net product revenue for the six months ended June 30, 2025 was $187.5 million, compared to $240.2 million for the six months ended June 30, 2024, a decrease of $52.7 million, or 22%. The decrease in net product revenue was driven by a decrease of $54.5 million, or 24%, in net product revenue for Advanced Wound Care products partially offset by an increase of $1.7 million, or 13%, in net product revenue for Surgical & Sports Medicine products.
Gross profit for the six months ended June 30, 2025 was $136.1 million, or 73% of net product revenue, compared to $182.3 million, or 76% of net product revenue for six months ended June 30, 2024, a decrease of $46.2 million, or 25%.
Operating expenses for the six months ended June 30, 2025 were $227.0 million compared to $258.0 million for the six months ended June 30, 2024, a decrease of $30.9 million, or 12%. Cost of goods sold was $51.4 million for the six months ended June 30, 2025, compared to $57.9 million for the six months ended June 30, 2024, a decrease of $6.5 million, or 11%. R&D expense was $21.0 million for the six months ended June 30, 2025, compared to $28.4 million for the six months ended June 30, 2024, a decrease of $7.4 million, or 26%. Selling, general and administrative expenses were $146.3 million for the six months ended June 30, 2025, compared to $148.9 million for the six months ended June 30, 2024, a decrease of $2.5 million, or 2%. For the six months ended June 30, 2025 and 2024, the Company recorded impairment and write down expenses of $8.3 million and $22.8 million, respectively.
Operating loss for the six months ended June 30, 2025 was $39.3 million, compared to an operating loss of $17.7 million for the six months ended June 30, 2024, an increase in operating loss of $21.6 million.
Total other income (expense), net, for the six months ended June 30, 2025 was $1.7 million income, compared to $(1.1) million expense for the six months ended June 30, 2024, a change of $2.8 million.
Net loss for the six months ended June 30, 2025 was $28.2 million, or $(0.27) per share, compared to a net loss of $19.1 million, or $(0.14) per share, for the six months ended June 30, 2024, an increase in net loss of $9.1 million, or $(0.13) per share.
Adjusted net loss was $20.9 million for the six months ended June 30, 2025, compared to adjusted net loss of $1.2 million for the six months ended June 30, 2024, an increase in adjusted net loss of $19.7 million.
Adjusted EBITDA loss was $(16.2) million for the six months ended June 30, 2025, compared to adjusted EBITDA income of $18.2 million for the six months ended June 30, 2024, a change of $34.4 million.
Non-GAAP operating loss was $(29.3) million for the six months ended June 30, 2025, compared to non-GAAP operating income of $6.8 million for the six months ended June 30, 2024, a change of $36.1 million.
As of June 30, 2025, the Company had $73.7 million in cash, cash equivalents and restricted cash and no outstanding debt obligations, compared to $136.2 million in cash, cash equivalents and restricted cash and no outstanding debt obligations as of December 31, 2024.
Fiscal Year 2025 Guidance:
For the year ending December 31, 2025 the Company is updating its prior revenue guidance and updating its profitability guidance and expects:
Second Quarter Earnings Conference Call:
Management will host a conference call at 5:00 p.m. Eastern Time on August 7th to discuss the results of the quarter, and to provide a corporate update with a question and answer session. Those who would like to participate may access the live webcast here, or access the teleconference by dialing 800-715-9871 (646-307-1963 for international callers) and providing access code: 634899. The live webcast can also be accessed via the company’s website at investors.organogenesis.com. The webcast will be archived on the company website for approximately one year.
ORGANOGENESIS HOLDINGS INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(amounts in thousands, except share and per share data)
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June 30, |
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December 31, |
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2025 |
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2024 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
73,076 |
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$ |
135,571 |
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Restricted cash |
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659 |
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580 |
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Accounts receivable, net |
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120,382 |
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109,861 |
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Inventories, net |
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33,042 |
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|
26,219 |
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Asset held for sale (Note 6) |
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5,287 |
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— |
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Prepaid expenses and other current assets |
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27,777 |
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13,710 |
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Total current assets |
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260,223 |
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285,941 |
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Property and equipment, net |
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75,607 |
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|
89,128 |
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Intangible assets, net |
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10,785 |
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|
12,468 |
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Goodwill |
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|
28,772 |
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|
28,772 |
|
Operating lease right-of-use assets, net |
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35,257 |
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|
|
37,110 |
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Deferred tax asset, net |
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41,754 |
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|
39,462 |
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Other assets |
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|
8,730 |
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|
|
5,005 |
|
Total assets |
|
$ |
461,128 |
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|
$ |
497,886 |
|
Liabilities, Redeemable Convertible Preferred Stock, and Stockholders’ Equity |
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|
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Current liabilities: |
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|
|
|
|
||
Current portion of finance lease obligations |
|
$ |
1,217 |
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|
$ |
1,170 |
|
Current portion of operating lease obligations - related party |
|
|
3,755 |
|
|
|
3,671 |
|
Current portion of operating lease obligations |
|
|
4,796 |
|
|
|
4,272 |
|
Accounts payable |
|
|
29,723 |
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|
|
28,911 |
|
Accrued expenses and other current liabilities |
|
|
26,348 |
|
|
|
39,453 |
|
Total current liabilities |
|
|
65,839 |
|
|
|
77,477 |
|
Finance lease obligations, net of current portion |
|
|
98 |
|
|
|
718 |
|
Operating lease obligations, net of current portion - related party |
|
|
6,385 |
|
|
|
8,283 |
|
Operating lease obligations, net of current portion |
|
|
24,565 |
|
|
|
25,198 |
|
Other liabilities |
|
|
3,022 |
|
|
|
894 |
|
Total liabilities |
|
|
99,909 |
|
|
|
112,570 |
|
Commitments and contingencies (Note 15) |
|
|
|
|
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|
||
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||
Series A redeemable convertible preferred stock, $0.0001 par value; 130,000 shares authorized, issued and outstanding at June 30, 2025 and December 31, 2024; liquidation preference of $136,694 and $131,387 at June 30, 2025 and December 31, 2024, respectively. |
|
|
127,977 |
|
|
|
122,419 |
|
|
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Preferred stock, $0.0001 par value; 870,000 shares authorized; none issued or outstanding |
|
|
— |
|
|
|
— |
|
Common stock, $0.0001 par value; 400,000,000 shares authorized; 127,582,084 and 126,458,784 shares issued; 126,853,536 and 125,730,236 shares outstanding at June 30, 2025 and December 31, 2024, respectively. |
|
|
13 |
|
|
|
13 |
|
Additional paid-in capital |
|
|
301,574 |
|
|
|
302,994 |
|
Accumulated deficit |
|
|
(68,345 |
) |
|
|
(40,110 |
) |
Total stockholders’ equity |
|
|
233,242 |
|
|
|
262,897 |
|
Total liabilities, redeemable convertible preferred stock, and stockholders' equity |
|
$ |
461,128 |
|
|
$ |
497,886 |
|
ORGANOGENESIS HOLDINGS INC. UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(amounts in thousands, except share and per share data)
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2025 |
|
|
2024 |
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|
2025 |
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|
2024 |
|
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Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net product revenue |
|
$ |
100,779 |
|
|
$ |
130,234 |
|
|
$ |
187,472 |
|
|
$ |
240,210 |
|
Grant income |
|
|
226 |
|
|
|
— |
|
|
|
226 |
|
|
|
— |
|
Total revenue |
|
|
101,005 |
|
|
|
130,234 |
|
|
|
187,698 |
|
|
|
240,210 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of goods sold |
|
|
27,630 |
|
|
|
29,198 |
|
|
|
51,353 |
|
|
|
57,894 |
|
Selling, general and administrative |
|
|
73,810 |
|
|
|
76,540 |
|
|
|
146,319 |
|
|
|
148,862 |
|
Research and development |
|
|
10,395 |
|
|
|
15,587 |
|
|
|
21,035 |
|
|
|
28,397 |
|
Write-down to fair value for asset held for sale |
|
|
1,746 |
|
|
|
— |
|
|
|
8,313 |
|
|
|
— |
|
Impairment of property and construction |
|
|
— |
|
|
|
18,842 |
|
|
|
— |
|
|
|
18,842 |
|
Write-down of capitalized internal-use software costs |
|
|
— |
|
|
|
3,959 |
|
|
|
— |
|
|
|
3,959 |
|
Total operating expenses |
|
|
113,581 |
|
|
|
144,126 |
|
|
|
227,020 |
|
|
|
257,954 |
|
Loss from operations |
|
|
(12,576 |
) |
|
|
(13,892 |
) |
|
|
(39,322 |
) |
|
|
(17,744 |
) |
Other income (expense), net: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest income (expense), net |
|
|
669 |
|
|
|
(620 |
) |
|
|
1,630 |
|
|
|
(1,134 |
) |
Other income (expense), net |
|
|
73 |
|
|
|
(28 |
) |
|
|
75 |
|
|
|
(5 |
) |
Total other income (expense), net |
|
|
742 |
|
|
|
(648 |
) |
|
|
1,705 |
|
|
|
(1,139 |
) |
Net loss before income taxes |
|
|
(11,834 |
) |
|
|
(14,540 |
) |
|
|
(37,617 |
) |
|
|
(18,883 |
) |
Income tax benefit (expense) |
|
|
2,442 |
|
|
|
(2,503 |
) |
|
|
9,382 |
|
|
|
(260 |
) |
Net loss and comprehensive loss |
|
|
(9,392 |
) |
|
|
(17,043 |
) |
|
|
(28,235 |
) |
|
|
(19,143 |
) |
Accretion of redeemable convertible preferred stock to redemption value |
|
|
(129 |
) |
|
|
— |
|
|
|
(250 |
) |
|
|
— |
|
Cumulative dividend on redeemable convertible preferred stock |
|
|
(2,681 |
) |
|
|
— |
|
|
|
(5,308 |
) |
|
|
— |
|
Net loss attributable to common stockholders |
|
$ |
(12,202 |
) |
|
$ |
(17,043 |
) |
|
$ |
(33,793 |
) |
|
$ |
(19,143 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted |
|
$ |
(0.10 |
) |
|
$ |
(0.13 |
) |
|
$ |
(0.27 |
) |
|
$ |
(0.14 |
) |
Weighted-average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic and diluted |
|
|
126,853,536 |
|
|
|
132,573,153 |
|
|
|
126,576,130 |
|
|
|
132,217,463 |
|
ORGANOGENESIS HOLDINGS INC. UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
(amounts in thousands, except share and per share data)
|
|
Six Months Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(28,235 |
) |
|
$ |
(19,143 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
7,178 |
|
|
|
6,438 |
|
Amortization of intangible assets |
|
|
1,683 |
|
|
|
1,735 |
|
Reduction in the carrying value of right-of-use assets |
|
|
4,077 |
|
|
|
4,364 |
|
Non-cash interest expense |
|
|
139 |
|
|
|
209 |
|
Deferred interest expense |
|
|
— |
|
|
|
213 |
|
Deferred tax benefit |
|
|
(2,292 |
) |
|
|
(5,689 |
) |
Provision recorded for credit losses |
|
|
3,116 |
|
|
|
2,032 |
|
Loss on disposal of property and equipment |
|
|
44 |
|
|
|
434 |
|
Adjustment for excess and obsolete inventories |
|
|
6,093 |
|
|
|
4,469 |
|
Stock-based compensation |
|
|
5,909 |
|
|
|
4,975 |
|
Write-down to fair value for asset held for sale (Note 6) |
|
|
8,313 |
|
|
|
— |
|
Impairment of property and construction (Note 6) |
|
|
— |
|
|
|
18,842 |
|
Write-down of capitalized internal-use software costs (Note 6) |
|
|
— |
|
|
|
3,959 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
(13,637 |
) |
|
|
(25,978 |
) |
Inventories |
|
|
(15,892 |
) |
|
|
(2,009 |
) |
Prepaid expenses and other current assets and other assets |
|
|
(12,942 |
) |
|
|
(436 |
) |
Operating leases |
|
|
(4,147 |
) |
|
|
(5,908 |
) |
Accounts payable |
|
|
1,637 |
|
|
|
(2,147 |
) |
Accrued expenses and other current liabilities |
|
|
(13,886 |
) |
|
|
8,162 |
|
Other liabilities |
|
|
34 |
|
|
|
54 |
|
Net cash used in operating activities |
|
|
(52,808 |
) |
|
|
(5,424 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(7,264 |
) |
|
|
(4,102 |
) |
Net cash used in investing activities |
|
|
(7,264 |
) |
|
|
(4,102 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Payments of term loan under the 2021 Credit Agreement |
|
|
— |
|
|
|
(2,813 |
) |
Payments of withholding taxes in connection with RSUs vesting |
|
|
(1,796 |
) |
|
|
(1,174 |
) |
Proceeds from the exercise of stock options |
|
|
25 |
|
|
|
180 |
|
Principal repayments of finance lease obligations |
|
|
(573 |
) |
|
|
(528 |
) |
Net cash used in financing activities |
|
|
(2,344 |
) |
|
|
(4,335 |
) |
Change in cash, cash equivalents and restricted cash |
|
|
(62,416 |
) |
|
|
(13,861 |
) |
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
136,151 |
|
|
|
104,338 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
73,735 |
|
|
$ |
90,477 |
|
Supplemental disclosure of cash flow information: |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
— |
|
|
$ |
2,744 |
|
Cash paid for income taxes |
|
$ |
3,791 |
|
|
$ |
4,796 |
|
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Accretion to redemption value and cumulative dividends on redeemable convertible preferred stock |
|
$ |
5,558 |
|
|
$ |
— |
|
Change in purchases of property and equipment included in accounts payable and accrued expenses |
|
$ |
(38 |
) |
|
$ |
709 |
|
Right-of-use assets obtained through operating lease obligations |
|
$ |
1,815 |
|
|
$ |
817 |
|
Non-GAAP Financial Measures
Our management uses financial measures that are not in accordance with generally accepted accounting principles in the United States, or GAAP, in addition to financial measures in accordance with GAAP to evaluate our operating results. These non-GAAP financial measures should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. Our management uses Adjusted EBITDA, adjusted net income (loss), and non-GAAP operating income (loss) to evaluate our operating performance and trends and make planning decisions. Our management believes Adjusted EBITDA, adjusted net income (loss) and non-GAAP operating income (loss) help identify underlying trends in our business that could otherwise be masked by the effect of the items that we exclude. Accordingly, we believe that Adjusted EBITDA, adjusted net income (loss) and non-GAAP operating income (loss) provide useful information to investors and others in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and prospects, and allowing for greater transparency with respect to key financial metrics used by our management in its financial and operational decision-making.
Adjusted EBITDA
Adjusted EBITDA consists of GAAP net loss excluding: (i) interest (income) expense, net, (ii) income tax (benefit) expense, (iii) depreciation and amortization, (iv) amortization of intangible assets, (v) stock-based compensation expense, and (vi) additional infrequently occurring adjustments described in more detail below.
The following table presents a reconciliation of GAAP net loss to non-GAAP EBITDA and non-GAAP Adjusted EBITDA, for the periods presented:
` |
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Unaudited, in thousands) |
|
|||||||||||||
Net loss |
|
$ |
(9,392 |
) |
|
$ |
(17,043 |
) |
|
$ |
(28,235 |
) |
|
$ |
(19,143 |
) |
Interest (income) expense, net |
|
|
(669 |
) |
|
|
620 |
|
|
|
(1,630 |
) |
|
|
1,134 |
|
Income tax (benefit) expense |
|
|
(2,442 |
) |
|
|
2,503 |
|
|
|
(9,382 |
) |
|
|
260 |
|
Depreciation and amortization |
|
|
3,734 |
|
|
|
3,366 |
|
|
|
7,178 |
|
|
|
6,438 |
|
Amortization of intangible assets |
|
|
841 |
|
|
|
834 |
|
|
|
1,683 |
|
|
|
1,735 |
|
EBITDA |
|
|
(7,928 |
) |
|
|
(9,720 |
) |
|
|
(30,386 |
) |
|
|
(9,576 |
) |
Stock-based compensation expense |
|
|
2,542 |
|
|
|
2,568 |
|
|
|
5,909 |
|
|
|
4,975 |
|
Write-down to fair value for asset held for sale (1) |
|
|
1,746 |
|
|
|
— |
|
|
|
8,313 |
|
|
|
— |
|
Impairment of property and construction (2) |
|
|
— |
|
|
|
18,842 |
|
|
|
— |
|
|
|
18,842 |
|
Write-down of capitalized internal-use software costs (3) |
|
|
— |
|
|
|
3,959 |
|
|
|
— |
|
|
|
3,959 |
|
Adjusted EBITDA |
|
$ |
(3,640 |
) |
|
$ |
15,649 |
|
|
$ |
(16,164 |
) |
|
$ |
18,200 |
|
(1) Amount reflects the fair value adjustment of a purchased building classified as held for sale.
(2) Amount reflects the impairment of a purchased building and associated unfinished construction work.
(3) Amount reflects the write-down of costs previously capitalized in the development of internal-use software, that the Company determined have no future value.
Adjusted Net Income (Loss)
Adjusted net income (loss) is defined as GAAP net loss plus (i) amortization of intangible assets and (ii) additional infrequently occurring adjustments described in more detail below, less the estimated tax on these adjustments.
The following table presents a reconciliation of GAAP net loss to non-GAAP adjusted net income (loss), for the periods presented:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Unaudited, in thousands) |
|
|||||||||||||
Net loss |
|
$ |
(9,392 |
) |
|
$ |
(17,043 |
) |
|
$ |
(28,235 |
) |
|
$ |
(19,143 |
) |
Amortization of intangible assets |
|
|
841 |
|
|
|
834 |
|
|
|
1,683 |
|
|
|
1,735 |
|
Write-down to fair value for asset held for sale (1) |
|
|
1,746 |
|
|
|
— |
|
|
|
8,313 |
|
|
|
— |
|
Impairment of property and construction (2) |
|
|
— |
|
|
|
18,842 |
|
|
|
— |
|
|
|
18,842 |
|
Write-down of capitalized internal-use software costs (3) |
|
|
— |
|
|
|
3,959 |
|
|
|
— |
|
|
|
3,959 |
|
Tax on above |
|
|
(698 |
) |
|
|
(6,381 |
) |
|
|
(2,699 |
) |
|
|
(6,625 |
) |
Adjusted net income (loss) |
|
$ |
(7,503 |
) |
|
$ |
211 |
|
|
$ |
(20,938 |
) |
|
$ |
(1,232 |
) |
(1) Amount reflects the fair value adjustment of a purchased building classified as held for sale.
(2) Amount reflects the impairment of a purchased building and associated unfinished construction work.
(3) Amount reflects the write-down of costs previously capitalized in the development of internal-use software, that the Company determined have no future value.
Non-GAAP Operating Income (Loss)
Non-GAAP operating income (loss) is defined as GAAP loss from operations plus (i) amortization of intangible assets and (ii) additional infrequently occurring adjustments described in more detail below.
The following table presents a reconciliation of GAAP net loss from operations to non-GAAP operating income (loss), for the periods presented:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2025 |
|
|
2024 |
|
|
2025 |
|
|
2024 |
|
||||
|
|
(Unaudited, in thousands) |
|
|||||||||||||
Loss from operations |
|
$ |
(12,576 |
) |
|
$ |
(13,892 |
) |
|
$ |
(39,322 |
) |
|
$ |
(17,744 |
) |
Amortization of intangible assets |
|
|
841 |
|
|
|
834 |
|
|
|
1,683 |
|
|
|
1,735 |
|
Write-down to fair value for asset held for sale (1) |
|
|
1,746 |
|
|
|
— |
|
|
|
8,313 |
|
|
|
— |
|
Impairment of property and construction (2) |
|
|
— |
|
|
|
18,842 |
|
|
|
— |
|
|
|
18,842 |
|
Write-down of capitalized internal-use software costs (3) |
|
|
— |
|
|
|
3,959 |
|
|
|
— |
|
|
|
3,959 |
|
Non-GAAP operating income (loss) |
|
$ |
(9,989 |
) |
|
$ |
9,743 |
|
|
$ |
(29,326 |
) |
|
$ |
6,792 |
|
(1) Amount reflects the fair value adjustment of a purchased building classified as held for sale.
(2) Amount reflects the impairment of a purchased building and associated unfinished construction work.
(3) Amount reflects the write-down of costs previously capitalized in the development of internal-use software, that the Company determined have no future value.
Projected EBITDA and Adjusted EBITDA
Amounts reported within the following table are presented and calculated based on underlying unrounded amounts. As a result, the sum of components may not equal corresponding totals due to rounding.
The following table presents a reconciliation of projected GAAP net income to projected non-GAAP EBITDA and projected non-GAAP Adjusted EBITDA included in our guidance for the year ending December 31, 2025:
|
|
Year Ended December 31, |
|
|||||
|
|
2025L |
|
|
2025H |
|
||
Net income (loss) |
|
$ |
(6,400 |
) |
|
$ |
16,400 |
|
Interest income |
|
|
(3,600 |
) |
|
|
(3,600 |
) |
Income tax (benefit) expense |
|
|
(1,700 |
) |
|
|
6,300 |
|
Depreciation and amortization |
|
|
14,700 |
|
|
|
14,700 |
|
Amortization of intangible assets |
|
|
3,400 |
|
|
|
3,400 |
|
EBITDA |
|
$ |
6,200 |
|
|
$ |
37,000 |
|
Stock-based compensation expense |
|
|
11,900 |
|
|
|
11,900 |
|
Write-down to fair value for asset held for sale (1) |
|
|
8,300 |
|
|
|
8,300 |
|
FDA fee |
|
|
4,600 |
|
|
|
4,600 |
|
Adjusted EBITDA |
|
$ |
31,100 |
|
|
$ |
61,900 |
|
(1) Amount reflects the fair value adjustment of a purchased building classified as held for sale.
Projected Adjusted Net Income
The following table presents a reconciliation of projected GAAP net income to projected non-GAAP adjusted net income included in our guidance for the year ending December 31, 2025:
|
|
Year Ending December 31, |
|
|||||
|
|
2025L |
|
|
2025H |
|
||
Net income (loss) |
|
$ |
(6,400 |
) |
|
$ |
16,400 |
|
Amortization of intangible assets |
|
|
3,400 |
|
|
|
3,400 |
|
Write-down to fair value for asset held for sale (1) |
|
|
8,300 |
|
|
|
8,300 |
|
FDA fee |
|
|
4,600 |
|
|
|
4,600 |
|
Tax on above |
|
|
(4,400 |
) |
|
|
(4,400 |
) |
Adjusted net income |
|
$ |
5,500 |
|
|
$ |
28,300 |
|
(1) Amount reflects the fair value adjustment of a purchased building classified as held for sale.
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 2025 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 and uncertainty of any changes to the coverage and reimbursement levels for the Company’s products (including as a result of the proposed LCDs and the CMS proposed rule related to reimbursement for skin substitute products that could each take effect as soon as January 1, 2026); (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 the current period and prior periods 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 or the occurrence of another public health emergency 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 May 31, 2021 and (b) Dermagraft in the second quarter of 2022 pending transition of manufacturing to a new manufacturing facility or a third-party manufacturer; (12) whether the Company is able to obtain regulatory approval for and successfully commercialize ReNu; and (13) other risks and uncertainties described in the Company’s filings with the Securities and Exchange Commission, including Item 1A (Risk Factors) of the Company’s Form 10-K for the year ended December 31, 2024 and its subsequently filed periodic 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 applicable securities laws.
About Organogenesis Holdings Inc.
Organogenesis Holdings Inc. is a leading regenerative medicine company focused on the development, manufacture, and commercialization of solutions for the advanced wound care and surgical and sports medicine markets. Organogenesis offers a comprehensive portfolio of innovative regenerative products to address patient needs across the continuum of care. For more information, visit www.organogenesis.com.
Investor Inquiries:
ICR Healthcare
Mike Piccinino, CFA
Press and Media Inquiries:
Organogenesis