UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Mark One)
For the Quarterly Period Ended
OR
Commission File Number
(Exact Name of Registrant as Specified in Its Charter)
(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
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(Address of principal executive offices) |
(Zip Code) |
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(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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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 provided pursuant to Section 13(a) of the Exchange Act ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The number of shares of the registrant’s Class A common stock outstanding as of August 1, 2023 was
Organogenesis Holdings Inc.
Quarterly Report on Form 10-Q
For the Quarterly Period Ended June 30, 2023
Table of Contents
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4 |
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Item 1. |
4 |
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4 |
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5 |
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6 |
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7 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3. |
30 |
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Item 4. |
31 |
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32 |
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Item 1. |
32 |
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Item 1A |
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Item 2. |
33 |
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Item 3. |
33 |
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Item 4. |
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Item 5. |
33 |
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Item 6. |
34 |
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35 |
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2
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (this “Form 10-Q”) contains forward-looking statements. These statements may relate to, but are not limited to, expectations of our future results of operations, business strategies and operations, financing plans, potential growth opportunities, potential market opportunities and the effects of competition, as well as assumptions relating to the foregoing. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. These risks and other factors include, but are not limited to, those listed under “Risk Factors.” In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “intend,” “potential,” “might,” “would,” “continue” or the negative of these terms or other comparable terminology. These forward-looking statements are based on our management’s current expectations, estimates, forecasts and projections about our business and the industry in which we operate and our management’s beliefs and assumptions. These forward-looking statements are not guarantees of future performance or development and involve known and unknown risks, uncertainties and other factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this Form 10-Q may turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under “Risk Factors” and discussed elsewhere in this Form 10-Q and in “Part I, Item 1A—Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022. These forward-looking statements speak only as of the date of this Form 10-Q. Except as required by law, we assume no obligation to update or revise these forward-looking statements for any reason, even if new information becomes available in the future. You should, however, review the factors and risks we describe in the reports we will file from time to time with the U.S. Securities and Exchange Commission (the “SEC”) after the date of this Form 10-Q.
As used herein, except as otherwise indicated by context, references to “we,” “us,” “our,” “the Company,” “Organogenesis” and “ORGO” will refer to Organogenesis Holdings Inc. and its subsidiaries.
3
PART I—FINANCIAL INFORMATION
Item 1. Unaudited Condensed Consolidated Financial Statements.
ORGANOGENESIS HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(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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2023 |
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2022 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Restricted cash |
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Accounts receivable, net |
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Inventory, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Intangible assets, net |
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Goodwill |
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Operating lease right-of-use assets, net |
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Deferred tax asset, net |
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Other assets |
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Total assets |
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$ |
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$ |
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Current portion of term loan, net of debt issuance costs |
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$ |
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$ |
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Current portion of finance lease obligations |
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- |
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Current portion of operating lease obligations |
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Accounts payable |
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Accrued expenses and other current liabilities |
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Total current liabilities |
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Term loan, net of current portion and debt issuance costs |
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Finance lease obligations, net of current portion |
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- |
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Operating lease obligations, net of current portion |
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Other liabilities |
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Total liabilities |
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Stockholders’ equity: |
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Preferred stock, $ |
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
ORGANOGENESIS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(amounts in thousands, except share and per share data)
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Three Months Ended |
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Six Months Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Net revenue |
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$ |
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$ |
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$ |
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$ |
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Cost of goods sold |
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Gross profit |
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Operating expenses: |
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Selling, general and administrative |
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Research and development |
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Total operating expenses |
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Income from operations |
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Other expense, net: |
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Interest expense |
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( |
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Other income (expense), net |
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( |
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( |
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Total other expense, net |
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( |
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( |
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( |
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Net income before income taxes |
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Income tax expense |
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( |
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( |
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( |
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Net income |
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$ |
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$ |
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$ |
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$ |
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Net income, per share: |
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Basic |
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$ |
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$ |
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$ |
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$ |
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Diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted-average common shares outstanding |
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Basic |
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Diluted |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
ORGANOGENESIS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(unaudited)
(amounts in thousands, except share data)
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Three and Six Months Ended June 30, 2023 |
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Additional |
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Common Stock |
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Paid-in |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Deficit |
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Stockholders’ Equity |
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Balance as of March 31, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
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Vesting of RSUs, net of shares surrendered to pay taxes |
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- |
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( |
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- |
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( |
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Stock-based compensation expense |
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- |
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- |
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- |
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Net income |
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- |
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- |
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- |
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Balance as of June 30, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
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Balance as of December 31, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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Cumulative effect of adopting new accounting principle |
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- |
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- |
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- |
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( |
) |
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( |
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Vesting of RSUs, net of shares surrendered to pay taxes |
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- |
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( |
) |
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- |
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( |
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Stock-based compensation expense |
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- |
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- |
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- |
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Net income |
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- |
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- |
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- |
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Balance as of June 30, 2023 |
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$ |
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$ |
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$ |
( |
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$ |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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- |
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Three and Six Months Ended June 30, 2022 |
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Additional |
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Common Stock |
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Paid-in |
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Accumulated |
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Total |
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Shares |
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Amount |
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Capital |
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Deficit |
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Stockholders’ Equity |
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Balance as of March 31, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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Exercise of stock options |
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- |
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- |
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Vesting of RSUs, net of shares surrendered to pay taxes |
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- |
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( |
) |
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- |
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( |
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Issuance of common stock associated with business acquisition |
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- |
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- |
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Stock-based compensation expense |
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- |
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- |
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- |
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Net loss |
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- |
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- |
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- |
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Balance as of June 30, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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Balance as of December 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
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Exercise of stock options |
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- |
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- |
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Vesting of RSUs, net of shares surrendered to pay taxes |
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- |
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( |
) |
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- |
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( |
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Issuance of common stock associated with business acquisition |
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- |
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- |
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Stock-based compensation expense |
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- |
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- |
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- |
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Net income |
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- |
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- |
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- |
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Balance as of June 30, 2022 |
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$ |
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$ |
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$ |
( |
) |
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$ |
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The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
ORGANOGENESIS HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(amounts in thousands)
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Six Months Ended |
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2023 |
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2022 |
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Cash flows from operating activities: |
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Net Income |
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$ |
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$ |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Depreciation |
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Amortization of intangible assets |
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Reduction in the carrying value of right-of-use assets |
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Non-cash interest expense |
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Deferred interest expense |
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Provision recorded for credit losses |
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Loss on disposal of property and equipment |
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Adjustment for excess and obsolete inventories |
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Stock-based compensation |
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Changes in operating assets and liabilities: |
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Accounts receivable |
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( |
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( |
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Inventory |
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( |
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( |
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Prepaid expenses and other current assets |
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( |
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( |
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Operating leases |
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( |
) |
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( |
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Accounts payable |
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( |
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Accrued expenses and other current liabilities |
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( |
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Other liabilities |
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Net cash provided by operating activities |
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Cash flows from investing activities: |
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Purchases of property and equipment |
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( |
) |
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( |
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Net cash used in investing activities |
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( |
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( |
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Cash flows from financing activities: |
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Payments of term loan under the 2021 Credit Agreement |
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( |
) |
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( |
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Payments of withholding taxes in connection with RSUs vesting |
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( |
) |
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( |
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Proceeds from the exercise of stock options |
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- |
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Principal repayments of finance lease obligations |
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( |
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( |
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Payment of deferred acquisition consideration |
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- |
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( |
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Net cash used in financing activities |
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( |
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( |
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Change in cash, cash equivalents and restricted cash |
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( |
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( |
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Cash, cash equivalents, and restricted cash, beginning of period |
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Cash, cash equivalents, and restricted cash, end of period |
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$ |
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