Orthopediatrics Corp. · NASDAQ:KIDS
Orthopediatrics — Conference Presentation (January 2018)
21 slides from Orthopediatrics's conference presentation, Jan 8, 2018
Slide 1: OrthoPediatrics Corp. January 2018
OrthoPediatrics Corp. January 2018 Mark Throdahl, CEO Fred Hite, CFO
Slide 2: Disclaimer
Disclaimer This presentation contains and related discussion may contain “forward-looking statements” within the meaning of U.S. federal securities laws. All statements contained in this presentation and related discussion other than statements of historical facts are forward-looking statements. For
Slide 3: Highlights
Highlights 3 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: generalists who use our entire product portfolio Broad
Slide 4: OP Today: Company Snapshot
OP Today Treated 16,000 patients in 2016 24 surgical systems; 2,700 SKUs; strong pipeline 62 direct employees; 69 focused FTE sales reps Global sales organization focused on pediatric orthopedic surgeons in 36 countries International: 31 stocking distributors; 2 sales agencies 21 issued patents; 19
Slide 5: Our Key Idea
Our Key Idea Address orthopedic industry’s lack of focus on product development, clinical education, and sales presence Implants and instruments avoid complications of re-purposed adult products Product development in collaboration with leading pediatric orthopedic surgeons Dedicated sales support a
Slide 6: Large and Focused Market
38% 62% Large and Focused Market Current products target three of the largest categories in Pediatric Orthopedics Pipeline products underway to expand addressable market Trauma & Deformity $401M OP’S $2.5 Billion Current Addressable Global Market $1.1 Billion U.S. Addressable Market Procedures (%) H
Slide 7: Product Line Diversification
Product Line Diversification 2016 Revenue Growth % by Product Family $37 million sales in 2016 20% revenue growth in 2016 No dependency on one product family Consistent growth across all products Comparable gross margins on all products 2016 Revenue by Segment 7 2016 Revenue by Product Family 72% 3%
Slide 8: A Proven Strategy Since 2011
A Proven Strategy Since 2011 8 Deploy Instrument Sets Sales Focus On Teaching Institutions and High Volume Hospitals Expand Addressable Procedures Expand Clinical Training Programs Goals Accelerate sales growth (requires consigned sets) Develop novel technologies
Slide 9: New Systems in 2017
5 New Systems in 2017 9 FIREFLY® Pedicle Screw Navigation Guides OP has exclusive distribution rights in U.S. pediatric hospitals Unique, patient-specific custom guide for screw placement Provides a 3D printed, patient-specific guide for each vertebral level Improves screw placement accuracy without
Slide 10: New Systems in 2017: Sports Medicine
Sports Medicine Medial Patella Femoral Ligament Reconstruction System Full range of instruments accommodate any technique Bioabsorbable interference screws Complements ACL Reconstruction System 10 5 New Systems in 2017
Slide 11: Strong Pipeline Expanding Our Addressable Market
Sports Medicine Strong Pipeline Expanding Our Addressable Market Spine Foot & Ankle Hip & Long Bone CMF Proximal Humerus Elbow Hand & Wrist Pelvis Clavicle Rib OP Today OP Tomorrow Now Under Development Demonstrated ability to expand portfolio to full array of pediatric surgeries 11 Growing Rods
Slide 12: Global Sales Coverage
Global Sales Coverage United States 77% of 2016 Revenue 33 Sales Agencies, most of which are exclusive International 23% of 2016 Revenue 2 Sales Agencies + 31 Stocking Distributors* Sales in 35 countries + the United States Current customers in every major children’s hospital in the United States In
Slide 13: 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 New Competitors Would Face Formidable Obstacles “The ship has sailed.” Barriers to Entry 13
Slide 14: What Does Category Leadership Mean?
What Does Category Leadership Mean? Surgeon relationships and Clinical education Relationships with surgeons who use entire portfolio Major provider of clinical education Leading supporter of surgical societies Custom instruments business Attractive growth and margin profile Consistent growth since
Slide 15: Financial Review
Financial Review
Slide 16: History of Strong Revenue Growth
$9.3 $13.3 $15.8 $18.4 $24.9 $28.8 $0.9 $2.8 $3.9 $5.3 $6.1 $8.5 $10.2 $16.1 $19.6 $23.7 $31.0 $37.3 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2011 2012 2013 2014 2015 2016 2017 R ev enu e ( $ in Mi lli on s) U.S. International FY17E History of Strong Revenue Growth 16 $45.4 - $45.6
Slide 17: Category Revenue Summary
$19.3 $22.5 $26.8 $3.6 $7.4 $9.4 $0.8 $1.1 $1.1 $0 $5 $10 $15 $20 $25 $30 $35 $40 2014 2015 2016 R ev enu e ( $ in Mi lli on s) Trauma & Deformity Complex Spine ACL Reconstruction / Other $20.2 $24.3 $6.9 $8.7 $0.8 $0.9 9M' 2016 9M' 2017 Category Revenue Summary 17
Slide 18: Revenue Seasonality
Revenue Seasonality 2015 2016 20% 25% 28% 27% 0% 5% 10% 15% 20% 25% 30% Q1 Q2 Q3 Q4 R ev e n u e as % of To ta l Y ea r Seasonality Drives Stronger Performance in Summer Months and Holiday Periods 18 22% 26% 27% 25% 0% 5% 10% 15% 20% 25% 30% Q1 Q2 Q3 Q4 R ev en u e as % o f To ta l Y e ar
Slide 19: Income Statement Summary
Income Statement Summary 19 ($ in Millions) Year Ended December 31; Nine Months Ended September 30 2014 2015 2016 9M’16 9M’17 Revenue $23.7 $31.0 $37.3 $27.9 $33.9 Growth % 21% 31% 20% NA 22% Gross Profit $16.6 $21.6 $26.4 $20.0 $25.6 Margin % 70% 70% 71% 72% 75% Operating Expenses $23.7 $28.2 $32.5
Slide 20: Balance Sheet
Balance Sheet 20 Assets Liabilities Cash $2.2 Accounts Payable $5.1 Accounts Receivable 5.7 Debt 27.5 Inventory 18.4 Accrued Expenses 2.3 PP&E (net) 9.7 All Other Liabilities 3.0 Intangibles 2.2 Paid In Capital 85.2 All Other 0.3 Accumulated Deficit (82.2) Total Assets $41.1 Total Liabilities / Equi
Slide 21: Summary
Summary Surgeon relationships and Clinical education Attractive growth and margin profile Robust organic growth opportunities Broadest, most innovative product offering 21
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