Good afternoon, ladies and gentlemen, and welcome to the Third Quarter 2019 Earnings Conference Call for Organogenesis Holdings Incorporated. At this time, all participants have been placed in listen-only mode. Please note that this conference call is being recorded and that the recording will be available on the company's website for replay shortly.Before we begin, I would like to remind everyone that our remarks today may contain forward-looking statements that are based on the current expectations of management and involve inherent risks and uncertainties that cause -- that could cause actual results to differ materially from those indicated, including the risks and uncertainties described in the company's filings with the Securities and Exchange Commission, including item 1A Risk Factors of the company's Form 10-K for the year ended December 31, 2018.You are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Although it may voluntarily do so from time to time, the company undertakes no commitment to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable securities laws.This call will also include references to certain financial measures that are not calculated in accordance with Generally Accepted Accounting Principles or GAAP. We generally refer to these as non-GAAP financial measures. Reconciliations of those non-GAAP financial measures to the most comparable measures calculated and presented in accordance with GAAP are available in the earnings press release on the Investor Relations portion of our website.I would now like to turn the call over to Mr. Gary Gillheeney, Sr. Organogenesis Holdings, President and Chief Executive Officer. Please go head, sir.

Thank you, and welcome, everyone, to Organogenesis Holdings third quarter 2019 earnings conference call. Today I'm joined on the call by Tim Cunningham, our Chief Financial Officer.Let me start with a brief agenda of what we will cover during the prepared remarks. I'll start with a high-level overview of our revenue performance during the third quarter and first nine months of 2019. After my opening remarks, Tim will provide you with a more in-depth review of our quarterly and year-to-date financial results as well as an overview of our financial guidance for 2019, which we updated today in our earnings press release.Following Tim's discussion of our financial results and outlook, I will then share some thoughts on why we believe we are well-positioned for continued strong growth in 2019 and solid long-term growth going forward. And then I will open it up for questions.Our performance during the first nine months of 2019 was very strong and our financial results to-date reflect the solid execution of our commercial strategy this year. Our total revenue increased 44% over the first nine months of 2019, our gross profit increased 66% and we reported strong improvements in profitability with our operating loss and adjusted EBITDA loss decreasing 41% and 47%, respectively year-over-year.We expect our fourth quarter results will reflect the continuation of the strong commercial momentum, we've experienced during 2019 a year in which we expect to increase our net revenue by 31% to 34% year-over-year as reflected in our full year guidance which we updated today in the press release.Turning to a quick review of our third quarter revenue performance, we reported total revenue growth of 27% year-over-year in the third quarter driven by sales of our Advanced Wound Care products of 25% and sales growth of our Surgical & Sports Medicine products…

Thank you, Gary. I will begin with a review of our third quarter financial results. Unless otherwise specified all growth rates referenced during my prepared remarks are on a year-over-year basis. Revenue for the third quarter of 2019 was $64.3 million compared to $50.8 million for the third quarter of 2018, an increase of $13.5 million or 27%.Revenue from Advanced Wound Care products for the third quarter of 2019 was $54.3 million, compared to revenue of $43.6 million for the third quarter of 2018, an increase of $10.7 million or 25%. Revenue from Advanced Wound Care products represented 85% of total revenue in the third quarter of 2019, compared to 86% of total revenue in the prior year period.The increase in Advanced Wound Care revenue was primarily attributed to additional sales personnel, PuraPly regaining pass-through reimbursement status for a two-year period effective October 1, 2018 and the continued growth in adoption of our amniotic products despite the suspension of Affinity beginning in the first quarter of 2019.Revenue from Surgical & Sports Medicine products for the third quarter of 2019 was $10 million, compared to $7.2 million for the third quarter of 2018, an increase of $2.8 million or 39%. Revenue from Surgical & Sports Medicine products represented 15% of total revenue in the third quarter of 2019 compared to 14% of total revenue in the prior year period. The increase in Surgical & Sports Medicine revenue was primarily due to the expansion of our sales force and penetration of new and existing accounts.Revenue from PuraPly products for the third quarter of 2019 was $31.8 million compared to $17.9 million for the third quarter of 2018, an increase of $13.9 million or 78%. Revenue from PuraPly products represented 49% of total revenue in the third quarter of 2019 compared to 35%…

Thanks, Tim. I mean, overall, we are pleased with our operating and financial performance during the first nine months of 2019. We are focused on continuing to execute during the fourth quarter, so we can end the year on a strong note. We've updated our net revenue guidance as Tim mentioned, which assumes growth of 31% to 34% year-over-year as we drive strong adoption and utilization of our product portfolio and product solutions for Advanced Wound Care and the Surgical & Sports Medicine market.We have strong commercial strategy and continue -- and our continued success in executing this strategy will result in strong adoption and utilization of our product solutions for Advanced Wound Care and Surgical & Sports Medicine markets. In addition to strong commercial execution and our strategic growth plan also prioritizes the areas of operational progress continued development of our new product pipeline and improvement of our profitability profile.Importantly, we're committed to delivering on our mission to provide integrated healing solutions that substantially improve medical outcomes, while lowering the overall cost of care. We believe we have several unique strengths that position us well for future growth. We are a leader in the regenerative medicine space with strong brand recognition. We are well positioned in large attractive and growing markets. We have a comprehensive suite of products to address not only the clinical, but the economic needs of our patients and providers.We have a large and growing body of clinical data in a portfolio of products with FDA, PMA approvals and FDA clearances. We've established a robust and extensive customer relationships with hospitals, wound care centers, government facilities, ASCs and in physician offices to sell our broad portfolio of products.We've established the scalable regulatory manufacturing and commercial infrastructure and our executive management team has extensive experience in the regenerative medicine industry boasting over 100 years of collective experience and accomplishments in the space. We look forward to speaking with the investment community in the future and appreciate your interest in Organogenesis.And with that, I'll turn it back over to the operator. Thank you.

Thank you, sir. [Operator Instructions] And our first question will come from Matt Miksic with Credit Suisse. Your line is open.

Hey, good afternoon. This is Vik for Matt. Thank you for taking my questions. So first I want to congratulate on the great quarter. I'm just wondering if you can provide a bit more clarity on what's driving growth in PuraPly? Last quarter you called out some of the smaller sizes and additional physician specialties. Can you provide us an update on that please? And I have one follow-up. Thanks.

Sure. Well, in addition to the sizes that we offer, which expanded the portfolio to make it more attractive in certain sites of care, we have different reimbursement models in different sites of care. But more importantly, the number of accounts that were purchasing PuraPly in the past are now purchasing more PuraPly. So we've driven PuraPly deeper in the existing accounts.We also have a lot of new accounts that have never purchased PuraPly as well. And what we're seeing is accounts that only bought PuraPly have also purchased additional Organogenesis products, which is not directly related to your question, but we're seeing an expansion in all the products all driven by PuraPly. And we are seeing more sales in different physician specialties such as dermatology, plastic surgery and even a little in trauma. So, the strategy is working. The brand is expanding and the number of surgical specialties utilizing the product is expanding as well.

Great. That's super helpful. Just one follow-up if I could. With regards to your sales reps and independent agencies, it looks like it didn't really change from Q2. So, how should we think about that for the fourth quarter and going into next year? Thank you.

Sure. Great question. So, we slowed our hiring of our sales reps in Q3 because of the amniotic capacity issues we had. So, we've solved that capacity issue at the end of Q3 and we now are in the process of hiring additional reps in Q4. So, we're still guiding to have in the range of 265, 275 direct sales reps by the end of the year.

The next question will come from Ryan Zimmerman of BTIG. Your line is open.

All right, great, thanks Gary, Tim congrats on the progress. I want to dig into guidance a little bit to start. You moved up guidance for the year about a hair about $0.5 million overall, but you did move the segments around a little bit particularly within ASC it was a little lower than previously guided and then conversely sports med -- Surgical and Sports Med went higher. And so, maybe if you could kind of just dissect the puts and takes there a little bit kind of what's driving that? And particularly what drove AWC in the quarter relative to Surgical & Sports Med where we were -- it did a little better than we were expecting? Thank you. And I have a follow-up.

Tim, do you want to handle that?

Sure. So, you're correct Ryan that, we increased the midpoint of our guidance by $500,000, which assumes 33% growth. The increase in our range at the midpoint was driven by higher surgical and modestly lower wound care. And if you dig into wound care particularly, we have previously guided that we had supply constraints in Q3 for NuShield and so exiting -- entering Q4, we've solved that.And if you recall each quarter this year, we have raised our guidance. And that's despite the Affinity headwind which we announced in January. So, we didn't change our guidance at all. We've been selling through with our product portfolio strategy to make up for the headwinds and the loss of that product rather than taking guidance down like I said we've been increasing it. So, we -- that's the major reasons for the puts and takes. And Gary is there anything I missed that you want to add?

No. Maybe just a few points, so as mentioned with the earlier question, we've slowed our hiring down in Q3 and now ramping up in Q4. So we have fewer reps than our original guidance. Tim also mentioned Affinity being off the market. And I think I mentioned this last quarter that the pressure on the annual guidance gets higher and higher as the year goes on because of the assumption of higher Affinity sales in our original guidance. So it's a combination of slowing the rep hiring down, a lot more pressure of Affinity on the rest of the portfolio and still feeling a little bit of the NuShield capacity constraints that we had in Q2 and Q3 which slowed the ramp of our sales team in Q3 and Q4. So it's a combination of those factors.

Okay. That's really helpful for the color. I appreciate that. And then, Gary you mentioned Affinity getting to scale first quarter 2020, so maybe if I could just put a little finer point on that. And not to hold you to but what does that mean? And does that mean full production? Could you have some Affinity sales early in the quarter that may not be at scale? I just want to understand what you meant by that. Thank you.

Sure. So we expect to be at full-scale in manufacturing production at the end of Q3. So, -- excuse me, it's Q1, at the end of Q1. So it's possible we could have a small amount of sales in Q1, but the real ramp will be in Q2 when all of our sales reps are trained and have access to that capacity. But it would not be any material sales in Q1.

Okay, understood. That’s helpful. I’ll hop back in queue, let someone asks. Thank you, Gary. Thank you, Tim.

Sure, Ryan. Thank you.

The next question will come from Steven Lichtman of Oppenheimer & Company. Your line is open.

Thank you. Hi, guys.

Hi, Steven.

For Surgical & Sports and the strength there this year, the sales force expansion obviously has been a component of that, but certainly there are other drivers. What would you estimate the underlying growth is for that business right now, excluding the incremental benefits of the sales force adds?

So right now, about one-third of our growth is coming from our existing agencies right now, and that additional growth is coming from additional customers and expansion of the market. So we see the growth just excluding the additional agencies in the 10% to 15% range.

Okay, great. And then just secondly on the Vizient contract, any update there on how many hospitals within that network you added in the quarter? And just overall how that opportunity is playing out for you guys?

Sure. Actually all of our GPOs are doing extremely well. So with Vizient, as you know, we now have access on our Surgical & Sports Medicine business to over 3,100 hospitals. This past quarter, we added over 100 hospitals, approximately 100 hospitals in the quarter and revenue for the Vizient customers are up about 28% for the year. So, we're very pleased and excited about what's happening not just with Vizient but with our other GPOs as well.

Great. Thanks, Gary.

You’re welcome.

[Operator Instructions] There are no further questions. That concludes our conference for today. Thank you for your participation.

Sure. Thank you.

Thank you.