Organogenesis Holdings Inc. Reports Second Quarter and First Half 2020 Financial Results CANTON, Mass. (

Organogenesis Holdings Inc. Reports Second Quarter and First Half 2020 Financial Results

CANTON, Mass. (August 10, 2020) 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 three and six months ended June 30, 2020.

Second Quarter 2020 Financial Summary:

Second Quarter 2020 and Recent

We delivered second quarter revenue growth of 6%, which was well ahead of expectations and exceeded

the high-end of our preliminary revenue range announced on July 15th, said Gary S. Gillheeney, Sr., President and Chief Executive Officer of

Organogenesis. Our second quarter results reflect the dedication of our employees to the patients we serve and strong execution against our commercial strategy while adapting to the challenges of the pandemic. During the second quarter, we

grew our customer base, drove customer and clinician adoption deeper into existing accounts and leveraged the strong demand for our PuraPly and amnion products, particularly in the office channel.

Mr. Gillheeney, Sr. continued: Despite the challenging operating environment caused by the COVID-19 pandemic, we believe the fundamentals of our business, and strategy, remain strong and that we are well positioned to deliver strong operating and financial performance over the balance of 2020. As such, we

are reinstating formal financial guidance reflecting our expectations for total revenue growth of 5% to 6% in 2020. Notably, this total revenue guidance is consistent with the projections we made during our fourth quarter earnings report in early

March, before the COVID-19 pandemic. We are proud of Organogenesis resilience in the face of unprecedented challenges, and believe it is a direct result of our team s hard work and commitment to

delivering on our mission to provide integrated healing solutions that substantially improve medical outcomes while lowering the overall cost of care.

Net Revenue Summary:

The following table sets

forth net revenue by product grouping for the three months ended June 30, 2020 and June 30, 2019, respectively:

Second Quarter 2020 Results:

Net revenue for the second quarter of 2020 was $69.0 million, compared to $64.9 million for the second quarter of 2019, an increase of

$4.0 million, or 6%. The increase in net revenue was driven by a $4.5 million increase, or 8%, in net revenue of Advanced Wound Care products, offset partially by a $0.5 million decrease, or 5%, in net revenue of Surgical &

Sports Medicine products, compared to the second quarter of 2019. The increase in Advanced Wound Care net revenue was primarily due to the expansion of the sales force and penetration of existing and new customer accounts. The decrease in

Surgical & Sports Medicine net revenue was primarily due to the postponing or cancellation of medical procedures as a result of COVID-19. Net revenue from the sale of PuraPly products for the second

quarter of 2020 was $28.5 million, compared to $29.7 million for the second quarter of 2019, a decrease of $1.2 million, or 4%. Net revenue from the sale of PuraPly products represented approximately 41% of net revenue in the second

quarter of 2020, as compared to 46% of net revenue in the second quarter of 2019.

Gross profit for the second quarter of 2020 was $48.9 million, or

71% of net revenue, compared to $45.5 million, or 70% of net revenue, for the second quarter of 2019, an increase of $3.4 million, or 8%. The increase in gross profit resulted from increased sales volumes, primarily strength in our

Advanced Wound Care products, and changes in product mix.

Operating expenses for the second quarter of 2020 were $51.2 million, compared to

$52.8 million for the second quarter of 2019, a decrease of $1.7 million, or 3%. R&D expense was $4.7 million for the second quarter of 2020, compared to $3.9 million in the second quarter of 2019, an increase of

$0.8 million, or 21%. The increase in R&D expense was driven by additional headcount and continued investment in clinical programs and our product pipeline. Selling, general and administrative expenses were $46.5 million, compared to

$49.0 million in the second quarter of 2019, a decrease of $2.5 million, or 5%. The decrease in selling, general and administrative expenses is primarily due to reduced travel and marketing programs amid

COVID-19 related travel restrictions, a decrease in

amortization associated with intangible assets and a decrease in legal, consulting fees and other costs associated with the ongoing operations of our business. The decrease in SG&A expenses

was offset partially by an increase in expenses due to additional headcount, primarily in our direct sales force.

Operating loss for the second quarter

of 2020 was $2.3 million, compared to an operating loss of $7.3 million for the second quarter of 2019, a decrease of $5.1 million, or 69%, primarily due to higher revenue and gross profit and lower SG&A expenses, compared to the

Total other expenses, net, for the second quarter of 2020 were $2.9 million, compared to $2.3 million for the second quarter

of 2019, an increase of $0.6 million, or 25%. The increase was driven primarily by higher interest expense related to increased borrowings compared to the prior year period.

Net loss for the second quarter of 2020 was $5.2 million, or $0.05 per share, compared to a net loss of $9.6 million, or $0.11 per share, for the

second quarter of 2019, a decrease of $4.5 million, or 46%.

As of June 30, 2020, the Company had $40.5 million in cash and

$115.3 million in debt obligations, of which $16.3 million were capital lease obligations, compared to $60.2 million in cash and $100.6 million in debt obligations, of which $17.5 million were capital lease obligations as of

First Half 2020 Results:

The following table sets forth net revenue by product grouping for the six months ended June 30, 2020 and June 30, 2019, respectively:

Net revenue for the six months ended June 30, 2020 was $130.7 million, compared to $122.1 million for the first

six months of 2019, an increase of $8.6 million, or 7%. The increase in net revenue was driven by a $8.0 million increase, or 8%, in net revenue of Advanced Wound Care products and a $0.7 million increase, or 3%, in net revenue of

Surgical & Sports Medicine products compared to the prior year. Net revenue of PuraPly products for the six months ended June 30, 2020 were $61.0 million, compared to $55.1 million for the first six months of 2019, an

increase of $5.9 million, or 11%. Net revenue of PuraPly products represented approximately 47% of net revenue for the six months ended June 30, 2020, compared to 45% for the first six months of 2019.

Gross profit for the six months ended June 30, 2020 was $91.9 million or 70% of net revenue, compared to $85.6 million, or 70% of net revenue,

for the first six months of 2019, an increase of $6.2 million, or 7%. The largest contributors to the increase in gross margin from the year earlier period were increased sales volumes of our Advanced Wound Care and Surgical & Sports

Operating expenses for the six months ended June 30, 2020 were $109.2 million, compared to

$105.1 million for the first six months of 2019, an increase of $4.1 million, or 4%. The increase in operating expenses in 2020 was driven primarily by higher R&D expense which was $10.1 million, compared to $7.2 million for

the first six months of 2019, an increase of $2.8 million, or 39%, and, to a lesser extent, higher selling, general and administrative expenses which increased to $99.1 million, compared to $97.9 million for the first six months of

2019, an increase of $1.3 million, or 1%. The increase in R&D was driven by additional headcount and continued investment in clinical programs and our product pipeline. The increase in selling, general and administrative expenses is

primarily due to additional headcount, primarily in our direct sales force, a cancellation fee for certain product development and consulting agreements, and an increase in credit card processing fees due to increased collections.

Operating loss for the six months ended June 30, 2020 was $17.3 million, compared to an operating loss of $19.4 million for the first six

months of 2019, a decrease of $2.1 million, or 11%. Total other expenses for the six months ended June 30, 2020 were $4.1 million, compared to $5.8 million for the first six months of 2019, a decrease of $1.7 million, or

30%. The decrease in total other expenses for the six months ended June 30, 2020 was driven primarily by a gain of $1.3 million on the settlement of deferred acquisition consideration for the six months ended June 30, 2020, and a

$1.9 million non-cash loss on the extinguishment of debt related to the write-off of unamortized debt discount upon repayment of the master lease agreement as well

as early payment penalties for the six months ended June 2019, which did not impact results in the current period. The decrease in total other expenses for the six months ended June 30, 2020 was partially offset by an increase in interest

expense of $1.5 million related to increased borrowings compared to the prior year period.

Net loss the six months ended June 30, 2020 was

$21.5 million, or $0.21 per share, compared to a net loss of $25.3 million, or $0.28 per share, for the first six months of 2019.

Year 2020 Revenue Guidance:

The Company is reinstating its fiscal year 2020 revenue guidance, originally issued on March 9, 2020.

For the twelve months ending December 31, 2020, the Company now expects:

Second Quarter 2020 Earnings Conference Call:

Financial results for the second fiscal quarter of 2020 will be reported after the market closes on Monday, August 10, 2020. Management will host a

conference call at 5:00 p.m. Eastern Time on August 10 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 dial 866-795-3142 (409-937-8908 for international callers) and provide access code 4153175. 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, a replay of the

call will be available for two weeks at 855-859-2056 (404-537-3406 for international

callers); access code 4153175. The webcast will be archived at investors.organogenesis.com.

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 for fiscal 2020 and the breakdown of such revenue in both its Advanced Wound Care and Surgical & Sports Medicine categories as well

as the estimated revenue contribution of its PuraPly products. 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 Company has incurred significant losses since inception and anticipates that it will incur substantial losses for the foreseeable future; (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 impact of any changes to the reimbursement levels for the Company s products and the impact to the Company of the loss of

preferred pass through status for PuraPly AM and PuraPly on October 1, 2020; (7) the Company s ability to maintain compliance with applicable Nasdaq listing standards; (8) changes in applicable laws or regulations;

(9) the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors; (10) the Company s ability to complete the relaunch of Affinity and to maintain production in sufficient

quantities to meet demand; (11) the COVID-19 pandemic and its impact, if any, on the Company s fiscal condition and results of operations; 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, 2019 and subsequent periodic reports

filed with the SEC. 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.

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