Mr. Gillheeney, Sr. continued: “We continue to make progress with the ReNu program, which we believe, represents a significant value driver by addressing a critical unmet need in treating the symptoms of knee osteoarthritis. We remain confident in the long-term opportunity for Organogenesis and expect to continue to lead in our space with highly innovative products that deliver on our mission to provide integrated healing solutions that substantially improve outcomes while lowering the overall cost of care.”

¹Defined as GAAP net income adjusted to exclude the effect of amortization, restructuring charges, LCD legal fees and sales retention, write-off of certain assets, facility construction project pause, GPO settlement fee and the resulting income taxes on these items.

Fourth Quarter 2023 Financial Results:

Net revenue for the fourth quarter of 2023 was $99.7 million, compared to $115.5 million for the fourth quarter of 2022, a decrease of $15.9 million, or 14%. The decrease in net revenue was driven by a decrease of $15.7 million, or 14% in net revenue of Advanced Wound Care products and a decrease of $0.2 million, or 3% in net revenue of Surgical & Sports Medicine products.

Gross profit for the fourth quarter of 2023 was $71.9 million, or 72% of net revenue, compared to $88.4 million or 77% of net revenue, for the fourth quarter of 2022, a decrease of $16.5 million, or 19%.

Operating expenses for the fourth quarter of 2023 were $73.2 million, compared to $79.7 million for the fourth quarter of 2022, a decrease of $6.5 million, or 8%. R&D expenses were $11.8 million for the fourth quarter of 2023, compared to $11.4 million in the fourth quarter of 2022, an increase of $0.4 million, or 3%. Selling, general and administrative expenses were $61.4 million, compared to $68.3 million in the fourth quarter of 2022, a decrease of $6.9 million, or 10%.

Operating loss for the fourth quarter of 2023 was $1.3 million, compared to operating income of $8.7 million for the fourth quarter of 2022, a decrease of $10.0 million.

Total other expense, net, for the fourth quarter of 2023 was $0.5 million, compared to other income, net of less than $0.1 million for the fourth quarter of 2022, a decrease of approximately $0.6 million.

Net loss for the fourth quarter of 2023 was $0.6 million, or $(0.00) per share, compared to net income of $7.5 million, or $0.06 per share, for the fourth quarter of 2022, a decrease of $8.1 million, or $0.06 per share.

Adjusted net income was $1.9 million for the fourth quarter of 2023, compared to adjusted net income of $8.9 million for the fourth quarter of 2022, a decrease of $7.0 million, or 78%.

Adjusted EBITDA was $7.5 million for the fourth quarter of 2023, compared to $14.1 million for the fourth quarter of 2022, a decrease of $6.6 million, or 47%.

As of December 31, 2023, the Company had $104.3 million in cash, cash equivalents and restricted cash and $66.2 million in term loan debt obligations, compared to $103.3 million in cash, cash equivalents and restricted cash and $70.8 million in term loan debt obligations, as of December 31, 2022.

Fiscal Year 2023 Results
The following table represents net revenue by product grouping for the year ended December 31, 2023 and December 31, 2022, respectively:

Net revenue for the year ended December 31, 2023 was $433.1 million, compared to $450.9 million for the year ended December 31, 2022, a decrease of $17.8 million, or 4%. The decrease in net revenue was driven by a decrease of $16.7 million, or 4% in net revenue of Advanced Wound Care products and a decrease of $1.0 million, or 4% in net revenue of Surgical & Sports Medicine products.

Gross profit for the year ended December 31, 2023 is $326.7 million, or 75% of net revenue, compared to $345.9 million, or 77% of net revenue, for the year ended December 31, 2022, a decrease of $19.2 million, or 6%.

Operating expenses for the year ended December 31, 2023 were $314.1 million, compared to $323.6 million for the year ended December 31, 2022, a decrease of $9.4 million, or 3%. R&D expenses were $44.4 million for the year ended December 31, 2023, compared to $39.8 million for year ended December 31, 2022, an increase of $4.6 million, or 12%. Selling, general and administrative expenses were $269.8 million for year ended December 31, 2023, compared to $283.8 million year ended December 31, 2022, a decrease of $14.1 million, or 5%.

Operating income for the year ended December 31, 2023 was $12.5 million, compared to an operating income of $22.3 million for the year ended December 31, 2022, a decrease of $9.8 million.

Total other expense, net, for the year ended December 31, 2023 was $2.1 million, compared to $2.0 million for the year ended December 31, 2022, a decrease of $0.1 million.

Net income of $4.9 million for the year ended December 31, 2023 or $0.04 per share, compared to net income of $15.5 million, or $0.12 per share for the year ended December 31, 2022, a decrease of $10.5 million, or $0.08 per share.

Adjusted net income for the year ended December 31, 2023 was $12.7 million., compared to $26.2 million for the year ended December 31, 2022, a decrease of $13.5 million, or 52%.

Adjusted EBITDA of $42.6 million for the year ended December 31, 2023, compared to Adjusted EBITDA of $49.3 million for the year ended December 31, 2022, a decrease of $6.7 million, or 14%.

Fiscal Year 2024 Guidance:

For the year ending December 31, 2024, the Company expects:

• Net revenue between $445.0 million and $470.0 million, an increase of approximately 3% to 9% year-over-year, as compared to net revenue of $433.1 million for the year ended December 31, 2023.

  • The 2024 net revenue guidance range assumes:

    • Net revenue from Advanced Wound Care products between $415.0 million and $435.0 million, an increase of approximately 2% to 7% year-over-year as compared to net revenue of $405.5 million for the year ended December 31, 2023.

    • Net revenue from Surgical & Sports Medicine products between $30.0 million and $35.0 million, an increase of approximately 9% to 27% year-over-year as compared to net revenue of $27.6 million for the year ended December 31, 2023.

• Net income (loss) between ($10.6) million and $4.6 million and adjusted net income (loss) between ($8.1) million and $7.1 million.

• EBITDA between $5.8 million and $25.0 million and Adjusted EBITDA between $15.8 million and $35.0 million.

Earnings Conference Call:

Financial results for the fourth fiscal quarter and year ended December 31, 2023 will be reported after the market closes on Thursday, February 29^th. Management will host a conference call at 5:00 p.m. Eastern Time on February 29^th to discuss the results of the quarter, and 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 here. A live webcast of the call will also be provided on the investor relations section of the Company's website at investors.organogenesis.com.

For those unable to participate, the webcast will be archived at investors.organogenesis.com for approximately one year.

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 and adjusted net income to evaluate our operating performance and trends and make planning decisions. Our management believes Adjusted EBITDA and adjusted net income 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 and adjusted net income 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.

The following table presents a reconciliation of GAAP net income to non-GAAP EBITDA and non-GAAP Adjusted EBITDA, for each of the periods presented:

(1) Amounts reflect employee retention and benefits as well as other exit costs associated with the Company’s restructuring activities.

(2) Amount reflects the disposal of certain equipment related to the same facility.

(3) Amounts reflect the fee the Company paid to a GPO to settle previously disputed GPO fees.

(4) Amount reflects the cancellation fees incurred in connection with the Company’s decision to pause one of its manufacturing facility construction projects.

(5) Amount represents the legal fees incurred related to the recently published and withdrawn local coverage determinations, or LCDs.

(6) Amount represents the compensation expenses related to retention for those sales employees impacted by the LCDs.

The following table presents a reconciliation of GAAP net income to non-GAAP adjusted net income, for each of the periods presented:

(1) Amounts reflect employee retention and benefits as well as other exit costs associated with the Company’s restructuring activities.

(2) Amount reflects the disposal of certain equipment related to the same facility.

(3) Amounts reflect the fee the Company paid to a GPO to settle previously disputed GPO fees.

(4) Amount reflects the cancellation fees incurred in connection with the Company’s decision to pause one of its manufacturing facility construction projects.

(5) Amount represents the legal fees incurred related to the recently published and withdrawn local coverage determinations, or LCDs.

(6) Amount represents the compensation expenses related to retention for those sales employees impacted by the LCDs.

The following table presents a reconciliation of projected GAAP net income (loss) to projected non-GAAP EBITDA and projected non-GAAP Adjusted EBITDA included in our guidance for the year ending December 31, 2024:

The following table presents a reconciliation of projected GAAP net income (loss) to projected non-GAAP adjusted net income included in our guidance for the year ending December 31, 2024:

Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations or forecasts of future events. Forward-looking statements may be identified by the use of words such as “forecast,” “intend,” “seek,” “target,” “anticipate,” “believe,” “expect,” “estimate,” “plan,” “outlook,” and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include statements relating to the Company’s expected revenue, net income, adjusted net income, EBITDA, and Adjusted EBITDA for fiscal 2024 and the breakdown of expected revenue in both its Advanced Wound Care and Surgical & Sports Medicine categories. Forward-looking statements with respect to the operations of the Company, strategies, prospects, and other aspects of the business of the Company are based on current expectations that are subject to known and unknown risks and uncertainties, which could cause actual results or outcomes to differ materially from expectations expressed or implied by such forward-looking statements. These factors include, but are not limited to: (1) the impact of any changes to the reimbursement levels for the Company’s products; (2) the Company faces significant and continuing competition, which could adversely affect its business, results of operations and financial condition; (3) rapid technological change could cause the Company’s products to become obsolete and if the Company does not enhance its product offerings through its research and development efforts, it may be unable to effectively compete; (4) to be commercially successful, the Company must convince physicians that its products are safe and effective alternatives to existing treatments and that its products should be used in their procedures; (5) the Company’s ability to raise funds to expand its business; (6) the Company has incurred losses in prior years and may incur losses in the future; (7) changes in applicable laws or regulations; (8) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (9) the Company’s ability to maintain production or obtain supply of its products in sufficient quantities to meet demand; (10) any resurgence of the COVID-19 pandemic and its impact, if any, on the Company’s fiscal condition and results of operations; (11) the impact of the suspension of commercialization of: (a) ReNu and NuCel in connection with the expiration of the FDA’s enforcement grace period for HCT/Ps on 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; and (12) 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, 2023 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 offering a portfolio of bioactive and acellular biomaterials products in advanced wound care and surgical biologics, including orthopedics and spine. Organogenesis’s comprehensive portfolio is designed to treat a variety of patients with repair and regenerative needs. For more information, visit www.organogenesis.com.

CONTACT: Investor Inquiries: ICR Westwicke Mike Piccinino, CFA OrganoIR@westwicke.com Press and Media Inquiries: Organogenesis Lori Freedman LFreedman@organo.com