Orthopediatrics Corp. · NASDAQ:KIDS
Orthopediatrics — Investor Presentation (November 2018)
25 slides from Orthopediatrics's investor presentation, Nov 13, 2018
Slide 1: OrthoPediatrics Corp.
OrthoPediatrics Corp. Mark Throdahl, CEO November 2018 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 Only 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 F
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 26 surgical systems; 3,500 SKUs; strong pipeline* 75 direct employees; 86 focused FTE sales reps* Global sales organization focused on pediatric ortho
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: New Systems: 2018/1H19 Expected Product Launches
5 New Systems Trauma & Deformity 2018/1H19 Expected Product Launches FDA cleared Development Development May’18 Complete Complete PediNail Intramedullary Nail Osteogenesis PediFoot System (First pediatric system) (Expands into adolescent cases) Imperfecta Nail System Scoliosis 2018/1H19 Expected Pro
Slide 11: Additional New Products in 2018
Additional New Products in 2018 Trauma & Deformity 2018 Product Launches PediFlex Advanced PediLoc Femur Launched Q1 2018 Anticipated Q4 2018 Scoliosis 2018 Product Launches FireFly S2/Alar Launched Q3 2018 11
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 Knee (Sports Medicine) Foot & Ankle
Slide 13: 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 Embodi
Slide 14: Global Sales Coverage
Global Sales Coverage United States International 77% of 2017 23% of 2017 Revenue Revenue 33 Sales Agencies, 5 Sales Agencies most of which are + 36 Stocking exclusive* Distributors* Direct in UK, IRE, AUS, NZ, CAN * Data as of 3Q 2018 Currently selling to major children’s hospitals in the U.S. and
Slide 15: 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.” 15
Slide 16: 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 17: Financial Review
Financial Review
Slide 18: Consistent 20+% Revenue Growth Since Inception
Consistent 20+% Revenue Growth Since Inception $50 2018 Revenue Guidance of 25.0%-25.5% $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.
Slide 19: Accelerating Growth
Accelerating Growth 30% 25% 20% 15% 28% 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 3Q 2018 19
Slide 20: Category Revenue Summary
Category Revenue Summary $50 $1.2 $45 $0.8 $40 $1.1 $11.6 $0.9 $12.6 $35 $1.1 $9.4 $30 $8.7 $25 $0.8 $7.4 $20 $3.6 $29.5 $32.8 $15 Revenue Millions) in ($ Revenue $26.8 $24.3 $22.5 $10 $19.3 $5 $0 2014 2015 2016 2017 9M 2017 9M 2018 Trauma & Deformity Scoliosis Sports Medicine/Other 20
Slide 21: Revenue Seasonality
Revenue Seasonality Seasonality Drives Stronger Performance in Summer Months and Holiday Periods 2016 2017 30% 30% 27% 27% 26% 25% 26% 26% 25% 25% 22% 21% 20% 20% 15% 15% 10% 10% 5% 5% Revenue as % of Total Year of % as Total Revenue Year of % as Total Revenue 0% 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 21
Slide 22: Income Statement Summary
Income Statement Summary ($ in Millions) FY 2015 FY 2016 FY 2017 9M 2017 9M 2018 Revenue $31.0 $37.3 $45.6 $33.9 $43.0 Growth % 31% 20% 22% NA 28% Gross Profit $21.6 $26.4 $34.5 $25.6 $32.2 Margin % 70% 71% 76% 75% 75% Operating Expenses $28.2 $32.5 $40.9 $27.9 $39.9 Operating Loss ($6.6) ($6.1) ($6
Slide 23: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation Nine Months Ended September 30, ($ in Millions) 2017 2018 Net Loss ($4.1) ($9.6) Interest expense 1.9 1.7 Other expense (income) 0.0 0.1 Depreciation and amortization 1.7 2.2 Stock-based compensation 1.1 1.2 Accelerated vesting of restricted stock - 2.0 Public company
Slide 24: Balance Sheet
Balance Sheet ($ in Millions) As of September 30, 2018 Assets Liabilities Cash $24.5 Accounts Payable $5.9 Accounts Receivable 9.5 Debt 25.4 Inventory 26.9 Accrued Expenses 3.3 Other Current Assets 1.0 All Other Liabilities 1.6 PP&E (net) 12.8 Paid In Capital 153.6 Intangibles 2.3 Accumulated Defici
Slide 25: Summary
Summary Surgeon relationships and Broadest, most innovative clinical education product offering Robust organic growth Attractive growth and opportunities margin profile 25
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