Orthopediatrics Corp. · NASDAQ:KIDS
Orthopediatrics — Investor Presentation (March 2019)
24 slides from Orthopediatrics's investor presentation, Mar 11, 2019
Slide 1: OrthoPediatrics Corp.
OrthoPediatrics Corp. Mark Throdahl, CEO March 2019 Fred Hite, CFO
Slide 2: Disclaimer
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 Diversified medical device 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 ~1,400 surgeons Focuse
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 >150,000 patients since inception with orthopedic conditions 26 surgical systems; 5,000+ SKUs; strong pipeline 80 direct employees; >130 focused sales reps* Global sales organization focused on pediatr
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 2018 Revenue by Segment $57.6 million sales in 2018, increasing 26% Scoliosis Well diversified sources of growth 29% All major product families supported FY 2018 26% revenue growth Sports Medicine/ Trauma & Firefly, PNP|Femur, and PediFrag were key 2% Deformity Other 69%
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 & Product Launches (2017-2018)
New Systems & Product Launches (2017-2018) Trauma & Deformity 2017 Launches 2018 Launches Titanium Clavicle Wrist Fusion PediFlex Pediatric Nailing PediPlates® Plate System Plate System Advanced Platform | FEMUR System (First pediatric (First pediatric (Expands into adolescent (Expands physeal speci
Slide 10: Upcoming New Systems & Product Launches
Upcoming New Systems & Product Launches Trauma & Deformity 2019 Expected Product Launches Development Development Development Development Complete Complete In Process In Process Osteogenesis PediFoot Imperfecta Nail PNP | TIbia Cannulated Screws (First pediatric system) System Scoliosis 2019 Product
Slide 11: 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 Knee (Sports Medicine) Foot & Ankle
Slide 12: Leading Edge Systems in Development
Leading Edge Systems in Development Smart Implants Spinal Tethering Proof of concept model developed August 2018 Emerging procedure with off-label use of adult lumbar fixation product Important milestone reached Allows intervention in patients as young as 10 Reversible, non-fusion procedure Embodime
Slide 13: Global Sales Coverage
Global Sales Coverage United States International 75% of 2018 25% of 2018 Revenue Revenue 33 Sales Agencies, 6 Sales Agencies most of which are + 35 Stocking exclusive* Distributors* Direct in UK, IRE, AUS, NZ, CAN, BE, NL * Data as of FY 2018 Currently selling to major children’s hospitals in the U
Slide 14: Competitive Landscape
Competitive Landscape 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 12 years’ clinical understanding entire portfolio New product pipeline Major provider of clinical education Pediatric Market Gateway for Lea
Slide 16: Financial Review
Financial Review
Slide 17: Consistent 20+% Revenue Growth Since Inception
Consistent 20+% Revenue Growth Since Inception $60 $57.6 $55 $50 $14.1 $45.6 $45 $40 $37.3 $10.7 $35 $31.0 $8.5 $30 $23.7 $6.1 $25 $19.6 $5.3 $43.5 Revenue ($ in Millions) ($ Revenue $20 $16.1 $3.9 $34.9 $15 $2.8 $28.8 $10.2 $24.9 $10 $7.1 $0.9 $18.4 $13.3 $15.8 $5 $3.0 $0.4 $9.3 $0.6 $6.7 $0 2008 2
Slide 18: Accelerating Growth
Accelerating Growth 30% 25% 20% 15% 28% 28% 24% 24% 25% Revenue Growth % Revenue 22% 22% 10% 21% 5% 0% 1Q 2017 2Q 2017 3Q 2017 4Q 2017 1Q 2018 2Q 2018 3Q 2018 4Q 2018 18
Slide 19: Category Revenue Summary
Category Revenue Summary $70 $60 $1.2 $50 $1.2 $16.7 $1.1 $40 $11.6 $1.1 $30 $9.4 $0.8 $7.4 $20 $3.6 $39.7 Revenue Millions) in ($ Revenue $32.8 $26.8 $22.5 $10 $19.3 $0 2014 2015 2016 2017 2018 Trauma & Deformity Scoliosis Sports Medicine/Other 19
Slide 20: Revenue Seasonality
Revenue Seasonality Seasonality Drives Stronger Performance in Summer Months and Holiday Periods 30% 27% 27% 27% 26% 25% 26% 26% 26% 25% 25% 22% 21% 21% 20% 15% 10% Revenue as % of Total Year Total of % as Revenue 5% 0% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2016 2016 2016 2016 2017 2017 2017 2017 2018
Slide 21: Income Statement Summary
Income Statement Summary ($ in Millions) FY 2015 FY 2016 FY 2017 FY 2018 Revenue $31.0 $37.3 $45.6 $57.6 Growth % 31% 20% 22% 26% Gross Profit $21.6 $26.4 $34.5 $42.7 Margin % 70% 71% 76% 74% Operating Expenses $28.2 $32.5 $40.9 $52.2 Operating Loss ($6.6) ($6.1) ($6.5) ($9.6) Net Loss ($7.9) ($6.6)
Slide 22: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in Millions) Year Ended December 31, 2017 2018 Net Loss ($8.9) ($12.0) Interest expense 2.5 2.2 Other expense (income) (0.0) 0.2 Depreciation and amortization 2.4 2.9 Stock-based compensation 1.4 1.2 Accelerated vesting of restricted stock 2.0 2.0 Public company cos
Slide 23: Balance Sheet
Balance Sheet ($ in Millions) As of December 31, 2018 Assets Liabilities Cash $60.7 Accounts Payable $4.0 Accounts Receivable 9.0 Debt 21.3 Inventory 25.7 Accrued Expenses 3.5 Other Current Assets 1.7 All Other Liabilities 1.6 PP&E (net) 12.8 Paid In Capital 197.4 Intangibles 2.2 Accumulated Deficit
Slide 24: Summary
Summary Surgeon relationships and Broadest, most innovative clinical education product offering Robust organic growth Attractive growth and opportunities margin profile 24