Orthopediatrics Corp. · NASDAQ:KIDS
Orthopediatrics — Investor Presentation (August 2018)
24 slides from Orthopediatrics's investor presentation, Aug 22, 2018
Slide 1: OrthoPediatrics Corp.
OrthoPediatrics Corp. Mark Throdahl, CEO August 2018 Fred Hite, CFO
Slide 2: Disclaimer: Forward-Looking Statements
Disclaimer Forward-Looking Statements This presentation includes "forward-looking statements" within the meaning of U.S. federal securities laws. You can identify forward-looking statements by the use of words such as "may," "might," "will," "should," "expect," "plan," "anticipate," "could," "believ
Slide 3: Highlights
Highlights Large Market Proprietary Technology Scalable Business Orthopedic company focused exclusively on pediatric orthopedics Protected market opportunity: $1.1 billion U.S., $2.5 billion globally in 2016 High U.S. procedure concentration: <300 hospitals and ~1,200 surgeons Focused call point: pe
Slide 4: OP Today: A Company Built on a Cause
OP Today A Company Built on a CAUSE Cause Company Snapshot Improving the lives of children Treated 20,000 patients in 2017 with orthopedic conditions 25 surgical systems; 3,500 SKUs; strong pipeline 75 direct employees; 88 focused FTE sales reps Global sales organization focused on pediatric orthope
Slide 5: Our Key Idea: Children Are Not Small Adults
Our Key Idea Children Are Not Small Adults Superior Clinical Outcomes OP’s Market Impact Re-Purposed Adult Plate OP’s Solution Address orthopedic industry’s lack of focus on product development, clinical education, and sales presence Implants and instruments avoid complications of re-purposed adult
Slide 6: Large and Focused Market
Large and Focused Market OP’S $2.5 Billion Current Addressable Global Market $1.1 Billion U.S. Addressable Market High Concentration of Pediatric Trauma & Deformity and Scoliosis Procedures 3,157 U.S. Sports Hospitals Smart Medicine Implants $116M $299M 38% Procedures Scoliosis (%) $285M 62% Trauma
Slide 7: Product Line Diversification
Product Line Diversification 2017 Revenue by Segment $46 million sales in 2017 Scoliosis 22% revenue growth in 2017 25% No dependency on one product family Sports 3% Trauma & Medicine/ 72% Growth across all products Other Deformity Comparable gross margins on all products 2017 Revenue by Product Fam
Slide 8: A Proven Strategy Since 2011
A Proven Strategy Since 2011 Sales Focus on Teaching Deploy Expand Expand Clinical Institutions and Instrument Addressable Education High Volume Sets Procedures Programs Hospitals Goals Accelerate sales growth Develop novel technologies 8
Slide 9: New Systems Launched in 2017
New Systems Launched in 2017 Trauma & Deformity 2017 Product Launches Titanium Clavicle Plate System Wrist Fusion Plate PediPlates® System (first pediatric specific System PediPlate Physeal Tethering (expands physeal system) (first pediatric specific System tethering offering) system) Scoliosis 2017
Slide 10: Expected New Systems in 2018
5 Expected New Systems in 2018 Trauma & Deformity 2018 Expected Product Launches FDA cleared May’18 PediNail Intramedullary PediPlate PediNail Intramedullary Osteogenesis PediFoot Nail System Nail System Imperfecta (first pediatric (expands into adolescent system) cases) Nail System Scoliosis 2018 E
Slide 11: Leading Edge Systems in Development
Leading Edge Systems in Development Smart Implants Spinal Tethering Proof of concept model expected August 2018 Emerging procedure with off-label use of adult lumbar fixation product Embodiments in intramedullary nailing and Allows intervention in patients as young as 10 scoliosis Reversible, non-fu
Slide 12: Strong Pipeline Expanding Our Addressable Market
Strong Pipeline Expanding Our Addressable Market CMF Clavicle Demonstrated ability to Proximal Rib expand portfolio to full Humerus Spine array of pediatric surgeries Elbow Growing Rods Hand & Wrist OP Today OP Tomorrow Now Under Development Pelvis Hip & Long Bone Sports Medicine Foot & Ankle 12
Slide 13: Global Sales Coverage
Global Sales Coverage United States International 77% of 2017 23% of 2017 Revenue Revenue 33 Sales Agencies, 2 Sales Agencies most of which are + 35 Stocking exclusive* Distributors* Direct in UK, IRE, AUS, NZ * Data as of 2Q 2018 Currently selling in 38 countries and the United States Current custo
Slide 14: Barriers to Entry
Barriers to Entry New Competitors Would Face Formidable Obstacles Product breadth Surgeon relationships Sales and distribution network Clinical education programs Pediatric brand equity Reputation with pediatric orthopedic societies Dynamic culture “The ship has sailed.” 14
Slide 15: What Does Category Leadership Mean?
What Does Category Leadership Mean? Surgeon relationships and Broadest, most innovative clinical education product offering Relationships with surgeons who use 11-year clinical understanding entire portfolio New product pipeline Major provider of clinical education Gateway to pediatric market for Le
Slide 16: Financial Review
Financial Review
Slide 17: Consistent 20+% Revenue Growth Since Inception
Consistent 20+% Revenue Growth Since Inception $50 $45.6 $45 $40 $37.3 $10.7 $35 $31.0 $8.5 $30 $6.1 $25 $23.7 $19.6 $20 $5.3 $16.1 $3.9 $34.9 Revenue ($ in Millions) ($ Revenue $15 $2.8 $28.8 $10.2 $24.9 $10 $7.1 $18.4 $0.9 $15.8 $13.3 $5 $3.0 $0.4 $9.3 $0.6 $6.7 $0 2008 2009 2010 2011 2012 2013 20
Slide 18: Accelerating Growth
Accelerating Growth 30% 25% 20% 15% 28% 24% 24% Revenue Growth % Revenue 22% 22% 10% 20% 21% 5% 0% FY 2016 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 18
Slide 19: Category Revenue Summary
Category Revenue Summary $50 $1.2 $45 $40 $1.1 $11.6 $0.6 $35 $1.1 $9.4 $30 $0.6 $7.6 $25 $0.8 $7.4 $5.4 $20 $3.6 $32.8 $15 $19.0 Revenue Millions) in ($ Revenue $26.8 $22.5 $10 $19.3 $15.6 $5 $0 2014 2015 2016 2017 1H 2017 1H 2018 Trauma & Deformity Scoliosis Sports Medicine/Other 19
Slide 20: Revenue Seasonality
Revenue Seasonality Seasonality Drives Stronger Performance in Summer Months and Holiday Periods 2016 2017 30% 30% 27% 27% 26% 25% 26% 26% 25% 25% 22% 21% 20% 20% 15% 15% 10% 10% 5% 5% Revenue as % of Total Year of % as Total Revenue Year of % as Total Revenue 0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 20
Slide 21: Income Statement Summary
Income Statement Summary ($ in Millions) FY 2014 FY 2015 FY 2016 FY 2017 1H 2017 1H 2018 Revenue $23.7 $31.0 $37.3 $45.6 $21.6 $27.2 Growth % 21% 31% 20% 22% NA 26% Gross Profit $16.6 $21.6 $26.4 $34.5 $5.4 $7.0 Margin % 70% 70% 71% 76% 75% 74% Operating Expenses $23.7 $28.2 $32.5 $40.9 $17.6 $26.7
Slide 22: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Six Months Ended June 30, ($ in Millions) 2017 2018 Net Loss ($2.6) ($7.7) Interest expense 1.1 1.1 Other expense (income) (0.1) 0.1 Depreciation and amortization 1.1 1.4 Stock-based compensation 0.7 0.6 Accelerated vesting of restricted stock - 2.0 Public company cost
Slide 23: Balance Sheet
Balance Sheet ($ in Millions) As of June 30, 2018 Assets Liabilities Cash $26.5 Accounts Payable $5.5 Accounts Receivable 9.8 Debt 25.4 Inventory 25.4 Accrued Expenses 3.2 Other Current Assets 1.1 All Other Liabilities 1.7 PP&E (net) 12.8 Paid In Capital 153.1 Intangibles 2.3 Accumulated Deficit (ne
Slide 24: Summary
Summary Surgeon relationships and Broadest, most innovative clinical education product offering Robust organic growth Attractive growth and opportunities margin profile 24
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