Orthopediatrics Corp. · NASDAQ:KIDS
Orthopediatrics — Investor Presentation (August 2023)
33 slides from Orthopediatrics's investor presentation, Aug 7, 2023
Slide 1: 2023 Investor Presentation
2023 Investor Presentation www.OrthoPediatrics.com
Slide 2: Disclaimer: Forward-Looking Statements
22 0 2 3 / / Disclaimer Forward-Looking Statements All statements, other than statements of historical facts, contained in this quarterly report, including statements regarding our business, operations and financial performance and condition, as well as our plans, objectives and expectations for our
Slide 3: ~670,000 pediatric patients treated since inception
32 0 2 3 / / pediatric patients treated since inception ~ 670,000 OrthoPediatrics was founded on the cause of impacting the lives of children with orthopedic conditions 1 1 Includes patients treated by MD Orthopaedics (MDO) as well as Pega Medical since inception
Slide 4: Historical Challenges of Pediatric Orthopedics
01 Children’s unique clinical conditions Existing solutions are re-purposed from adult implants Limited development of new technologies No specialized sales force in Pediatric Orthopedics Limited industry support of clinical education 02 03 04 05 42 0 2 3 / / Historical Challenges of Pediatric Ortho
Slide 5: OrthoPediatrics Solution
52 0 2 3 / / OrthoPediatrics Solution 01 02 03 04 05 Product development focused exclusively on pediatric patients Broadest pediatric specific portfolio in the industry Delivering first in market novel surgical solutions Only global commercial channel to market Leading provider of surgeon clinical e
Slide 6: Total Addressable Market – $3.9B
62 0 2 3 / / Total Addressable Market – $3.9B Competitive Dynamics $609M Surgical Implants $334M Scoliosis Fusion $75M Scoliosis Non-Fusion $303M Specialty Bracing $249M Sports Medicine $162M Smart Implants Large incumbents repurpose adult implants Require specialized sales force Lack of focus on pe
Slide 7: Only Focused Pediatric Orthopedic Company
72 0 2 3 / / Only Focused Pediatric Orthopedic Company Consistent 20%+ Growth Since Inception 1 Excluding COVID-impacted 2020 50 unique pediatric systems Consistent cadence of innovative product launches Expanding suite of enabling technologies Internal R&D, acquisitions, and partnerships Only globa
Slide 8: Strategic Pillars
82 0 2 3 / / Strategic Pillars 02 Provide a broad product portfolio uniquely designed to treat children, surround pediatric orthopedic surgeons covering their needs 04 Expand addressable market through aggressive investment in R&D and select M&A opportunities 05 Train next generation of pediatric or
Slide 9: Focus on High-Volume Children's Hospitals
92 0 2 3 / / Comments ~1,520 Fellowship Trained Pediatric Surgeons Majority of Pediatric Centers are Teaching Hospitals Centers Treat Most Complex Pediatric Conditions 01 02 03 $378M Surgical Implants $207M Scoliosis Fusion $68M Scoliosis Non-Fusion $197M Specialty Bracing $82M Sports Medicine 300 U
Slide 10: Broad Product Portfolio: Pre-IPO
102 0 2 3 / / Pre-IPO Transitioned from Early Entry to Clinically Significant Cannulated Screws Response 5.5/6.0mm Fusion System PediPlate Physeal Tethering Hip Systems LCB / LPF ACL System BandLoc 5.5/6.0mm Banding Clavicle Plating System PediFlexPediLoc Femur PediLoc Tibia PediFragLocking Proximal
Slide 11: Accelerating Sales Growth Post-IPO
112 0 2 3 / / Accelerating Sales Growth Post-IPO Through Strategic Investment and Innovation $37.3 $45.6 $57.6 $72.6 $71.1 $98.0 $122.3 2016 2017 2018 2019 2020 2021 2022 Total Revenue ($M) 2016 2022 CAGR U.S. Independent Sales Consultants 90 197 14% Instrument Set Deployments $7M $20M 20% Unique Pe
Slide 12: Post-IPO moved from Clinically Significant to Disruptive
122 0 2 3 / / Post-IPO moved from Clinically Significant to Disruptive 202020192017 2018 FireFly Patient Specific Navigation Guides 2021 DFOS Distal Femoral Osteotomy System MPFL System Wrist Fusion Plates PNP Pediatric Nailing Platform Response 4.5/5.0mm Fusion System Orthex External Fixation Syste
Slide 13: Strategic Acquisitions & Partnerships
132 0 2 3 / / Strategic Acquisitions & Partnerships Partnership Acquisition 202020192017 2022 04 Expand Market with M&A 2021 2023
Slide 14: PLAYBOOK Workflow & Care Optimization for the OR
142 0 2 3 / / PLAYBOOK Workflow & Care Optimization for the OR DIGITAL WORK INSTRUCTIONS define best practices for each user’s role throughout the entire surgical procedure DATA ANALYTICS Surgical Debrief provides real-time PERFORMANCE VISUALIZATION metrics INTERACTIVE LIVE SURGERY VIEW for remote s
Slide 15: MD Orthopaedics Acquisition
152 0 2 3 / / Terms: • Closed April 1, 2022 • $8.2M cash, $8.9M shares, $2.5M RSA MD Orthopaedics • Develops, manufactures and sells the patented Mitchell Ponseti Ankle-Foot Orthosis (AFO) to treat clubfoot • Dr. Ignacio Ponseti developed the gold standard for treating clubfoot which has >90% succes
Slide 16: Pega Medical Acquisition
162 0 2 3 / / Terms: • Closed July 5, 2022 • $31M cash, $2M stock Pega Medical • Developed the Fassier-Duval Telescopic Intramedullary Nail System (FD Nail) • FD Nail is cutting-edge implant designed to treat bone deformities in children with Osteogenesis Imperfecta without disrupting their normal g
Slide 17: ApiFix and Orthex
172 0 2 3 / / ApiFix • Disruptive non-fusion technology • Viable alternative to failed bracing & spinal fusion • Posterior, minimally invasive approach • Motion preserving capabilities • Granted FDA HDE approval Orthex • Disruptive software complements ex-fix frame • Expands addressable market • Ser
Slide 18: FIREFLY Navigation Guides and 7D Surgical
182 0 2 3 / / FIREFLY® Pedicle Screw Navigation Guides FireFly S2/Alar Unique patient specific 3D printed bone models and drill guides, can be used with any Spinal Deformity Correction system. • 99.7% screw placement accuracy • Preoperative concierge surgical planning drives intraoperative efficienc
Slide 19: 7D Real World Experience
192 0 2 3 / / 7D Real World Experience Chris Comstock, MD & Eric Wait, MD Driscoll Children’s Hospital First Pediatric Deformity Installation in US I have noticed we are seeing shorter stays for our patients with complex spinal surgeries since we have started using the 7D technology. It used to be c
Slide 20: Physician Education and Awareness
202 0 2 3 / / Physician Education and Awareness OP Hands-on sales training and support • Annually invests 3% of sales on clinical education • Conducts >300 product/training sessions per year Continuous education • Major Sponsor of the prominent pediatric orthopedic societies Market development • Fos
Slide 21: Catalysts & Pipeline
212 0 2 3 / / Catalysts & Pipeline Enabling Technologies Scoliosis • Orthex surgical software • Firefly patient-specific planning/guides • 7D spinal interoperative navigation • PediPortal app • Medtech Concepts – Acquired May 1, 2023 • Advancing non-fusion treatment • Early-onset scoliosis innovatio
Slide 22: Differentiated Pediatric Systems Driving Growth
222 0 2 3 / / Trauma & Deformity +17% CAGR 14 36 2016 2022 $26.8 $85.1 2016 2022 Pediatric Systems Revenue +21% CAGR Scoliosis >2X Growth 3 8 2016 2022 $9.3 $33.4 2016 2022 Pediatric Systems Revenue >3.6X Growth 2022 Revenue by Product Family Trauma & Deformity Scoliosis Sports Medicine70% of Revenu
Slide 23: Strong History of Y/Y Growth
232 0 2 3 / / $0.6 $3.0 $7.1 $10.2 $16.1 $19.6 $23.7 $31.0 $37.3 $45.6 $57.6 $72.6 $71.1 $98.0 $122.3 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Strong History of Y/Y Growth ($M) 400% 137% 44% 58% 22% 21% 31% 20% 22% 26% 26% -2% 38% U.S. International 1 25% 1 Imp
Slide 24: Category Revenue Summary
242 0 2 3 / / $19.3 $22.5 $26.8 $32.8 $39.7 $49.4 $47.7 $65.8 $85.1 $3.6 $7.4 $9.4 $11.6 $16.7 $21.5 $20.7 $28.0 $33.4 $0.8 $1.1 $1.1 $1.2 $1.2 $1.7 $2.7 $4.2 $3.8 $0 $20 $40 $60 $80 $100 $120 $140 2014 2015 2016 2017 2018 2019 2020 2021 2022 Re ve nu e ($ in M ill io ns ) Trauma & Deformity Scolios
Slide 25: Revenue Seasonality
252 0 2 3 / / Seasonality Drives Stronger Performance in Summer Months and Holiday Periods 21% 26% 27% 25% 20% 25% 29% 26% 23% 19% 31% 27% 22% 27% 26% 25% 19% 27% 29% 25% 21% 26% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q Re ve nu e as % o f T ot al Y ea r 2018 2019 2020 2021
Slide 26: Income Statement Summary
262 0 2 3 / / ($ in Millions) FY 2020 FY 2021 FY2022 Revenue $71.1 $98.0 $122.3 Growth % (2%) 38% 25% Gross profit $55.0 $73.4 $90.7 Margin % 77% 75% 74% Operating expenses $81.8 $91.4 $116.1 Operating loss ($26.8) ($18.0) ($25.4) Net (loss) income ($32.9) ($16.2) $1.3 EPS1 ($1.82) ($0.84) $0.06 2Q
Slide 27: Revenue By Geography and Product Category
272 0 2 3 / / Revenue By Geography and Product Category Three Months Ended June 30, Product Sales by geography 2023 2022 U.S. $29.6 $25.0 International $10.0 $7.9 Total Revenue $39.6 $32.9 Three Months Ended June 30, Product Sales by category 2023 2022 Trauma and deformity $27.5 $22.6 Scoliosis $10.
Slide 28: Adjusted EBITDA Reconciliation
282 0 2 3 / / Adjusted EBITDA Reconciliation Three Months Ended June 30, 2023 2022 Net loss ($2.9) ($0.3) Interest expense, net 0.3 1.2 Other income (expense) (0.3) 0.8 Provision for income tax (benefit) (0.4) (0.4) Depreciation and amortization 4.1 3.3 Stock-based compensation 3.3 1.8 Fair value ad
Slide 29: Adjusted EPS Reconciliation
292 0 2 3 / / Adjusted EPS Reconciliation Three Months Ended June 30, 2023 2022 Earnings loss per share, diluted (GAAP) ($0.13) ($0.02) Accretion of interest attributable to acquisition installment payable 0.02 0.06 Fair value adjustment of contingent consideration (0.10) (0.25) Acquisition related
Slide 30: Balance Sheet
302 0 2 3 / / Balance Sheet Assets Cash & short-term investments 94.8 Account receivable 33.8 Inventory (net) 91.0 Other current assets 3.6 Total Current Assets 223.3 PP&E (net) 40.1 Intangibles and goodwill 171.5 Total Assets 434.9 Liabilities Accounts payable 20.9 Debt 0.8 Accrued comp. & other li
Slide 31: 2023 Guidance
312 0 2 3 / / 2023 Guidance FY2023 Revenue $148.0 to $151.0 Adjusted EBITDA $3.0 to $4.0 FY2023 2023 Total Revenue Growth % 21% to 23% Set Deployment ~$25 Adjusted EPS1 ~($0.95) Assumptions ($ in Millions, except per share items) ($ in Millions, except per share items) 1 GAAP (loss) per share, dilut
Slide 32: Investment Summary
322 0 2 3 / / Investment Summary Only diversified company focused exclusively on pediatric orthopedics Large, underpenetrated market opportunity in pediatrics Highly concentrated customer base with targeted commercial strategy Broad product portfolio with innovative solutions Only provider committed
Slide 33: 2850 Frontier Drive Warsaw, IN 465852 ph: 574.268.6379 or 877.268.6339 fax: 574.268.6302 www.OrthoPediatrics.com2
2850 Frontier Drive Warsaw, IN 465852 ph: 574.268.6379 or 877.268.6339 fax: 574.268.6302 www.OrthoPediatrics.com2 0 2 3 / /
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