Orthopediatrics Corp. · NASDAQ:KIDS
Orthopediatrics — Investor Presentation (March 2024)
36 slides from Orthopediatrics's investor presentation, Mar 11, 2024
Slide 1: 2024 Investor Presentation
2024 Investor Presentation www.OrthoPediatrics.com
Slide 2: Disclaimer: Forward-Looking Statements
22 0 2 4 / / 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: Over 1,000,000 pediatric patients treated since inception
32 0 2 4 / / pediatric patients treated since inception + 1,000,000 OrthoPediatrics was founded on the cause of impacting the lives of children with orthopedic conditions 1 1 Includes patients treated by MD Orthopaedics (MDO), Pega Medical (Pega), and Boston Orthotics & Prosthetics (Boston O&P) sinc
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 4 / / Historical Challenges of Pediatric Ortho
Slide 5: OrthoPediatrics Solution
52 0 2 4 / / 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 Global Addressable Market – $5.0B
62 0 2 4 / / Total Global Addressable Market – $5.0B Competitive Dynamics $610M Trauma & Deformity Correction Implants $350M Scoliosis Fusion Impants $80M Scoliosis Non- Fusion Implants $775M Specialty Bracing $250M Sports Medicine Implants $165M Growing Implants Large incumbents repurpose adult imp
Slide 7: Only Focused Pediatric Orthopedic Company
72 0 2 4 / / Only Focused Pediatric Orthopedic Company Consistent 20%+ Growth Since Inception 1 Excluding COVID-impacted 2020 71 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 4 / / 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 4 / / Comments ~1,520 Fellowship Trained Pediatric Surgeons Majority of Pediatric Centers are Teaching Hospitals Centers Treat Most Complex Pediatric Conditions ~80% of Pediatric Surgeons time is Non-Surgical 01 02 03 $455M Trauma, Deformity Correction & Sports Medicine Implants $280M Scolios
Slide 10: Broad Product Portfolio
102 0 2 4 / / 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 Through Strategic Investment and Innovation
112 0 2 4 / / Accelerating Sales Growth Post-IPO Through Strategic Investment and Innovation $37.3 $45.6 $57.6 $72.6 $71.1 $98.0 $122.3 $148.7 2016 2017 2018 2019 2020 2021 2022 2023 Total Revenue ($M) 2016 2023 CAGR U.S. Independent Sales Consultants 90 205 13% Instrument Set Deployments $7M $22M 1
Slide 12: Post-IPO moved from Clinically Significant to Disruptive
122 0 2 4 / / 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 4 / / Strategic Acquisitions & Partnerships Partnership Acquisition 202020192017 2022 04 Expand Market with M&A 2021 2023 2024
Slide 14: Boston Orthotics & Prosthetics Acquisition
142 0 2 4 / / Acquired Innovative Technologies Boston Orthotics & Prosthetics • Pioneered the original patient-specific, custom Boston Scoliosis Brace • Currently has 5 disease state focuses with 17 different product offerings • Custom manufacturing and fabrication center based outside of Boston, MA
Slide 15: U.S. Specialty Bracing Market
152 0 2 4 / / Comments ~80% of Pediatric Surgeons Time is Non-Surgical Same Surgeons Who Use OP Surgical Products Relationship with OP Sales Channel Surrounds the Surgeon with all the Products They Need 01 02 03 $200M Lower Limb Extremity Specialty Bracing $125M Hip / Cranial / Other Speciality Brac
Slide 16: Potential Specialty Solutions Target Market
162 0 2 4 / / Motion Assist Devices Fracture Fixation Devices Specialty Casting Spine Halo Traction, Other Specialty Solutions 300 U.S. Pediatric Centers U.S. Potential Target Market 1 — $1.0B Potential Global Target Market – $2.2B 2 0 2 4 / / 1 Management’s Estimate as of January 2024 Levity Device
Slide 17: PLAYBOOK Workflow & Care Optimization for the OR
172 0 2 4 / / 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 18: MD Orthopaedics Acquisition
182 0 2 4 / / 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 19: Pega Medical Acquisition
192 0 2 4 / / 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 20: ApiFix and Orthex
202 0 2 4 / / 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 21: FireFly Navigation Guides and 7D Surgical
212 0 2 4 / / 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 22: 7D Real World Experience
222 0 2 4 / / 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 23: Physician Education and Awareness
232 0 2 4 / / 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 24: Catalysts & Pipeline
242 0 2 4 / / 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 25: 71 Differentiated Pediatric Systems Driving Growth
252 0 2 4 / / Trauma & Deformity +17% CAGR 14 41 2016 2023 $26.8 $106.8 2016 2023 Pediatric Systems Revenue +22% CAGR Scoliosis >2X Growth 3 10 2016 2023 $9.3 $37.9 2016 2023 Pediatric Systems Revenue >4X Growth 2023 Revenue by Product Family Trauma & Deformity Scoliosis Sports Medicine72% of Revenu
Slide 26: Strong History of Y/Y Growth
262 0 2 4 / / $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 $148.7 $198.5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Strong History of Y/Y Growth ($M) 400% 137% 44% 58% 22% 21% 31% 20% 22% 26% 26% -2% 38% U.S. Intern
Slide 27: Category Revenue Summary
272 0 2 4 / / $19.3 $22.5 $26.8 $32.8 $39.7 $49.4 $47.7 $65.8 $85.1 $106.8 $3.6 $7.4 $9.4 $11.6 $16.7 $21.5 $20.7 $28.0 $33.4 $37.9 $0.8 $1.1 $1.1 $1.2 $1.2 $1.7 $2.7 $4.2 $3.8 $4.0 $0 $20 $40 $60 $80 $100 $120 $140 $160 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 R ev en ue ( $ in M ill io ns
Slide 28: Revenue Seasonality
282 0 2 4 / / 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% 27% 27% 25% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q R e ve n u e a s % o f To ta l Ye ar 2018
Slide 29: Income Statement Summary
292 0 2 4 / / FY 2021 FY2022 FY2023 Revenue $98.0 $122.3 $148.7 Growth % 38% 25% 22% Gross profit $73.4 $90.7 $111.3 Margin % 75% 74% 75% Operating expenses $91.4 $116.1 $138.0 Operating loss ($18.0) ($25.4) ($26.8) Net (loss) income ($16.2) $1.3 ($21.0) EPS diluted ($0.84) $0.06 ($0.92) Income Stat
Slide 30: Revenue By Geography and Product Category
302 0 2 4 / / Revenue By Geography and Product Category Three Months Ended December 31, Product Sales by geography 2022 2023 U.S. $22.7 $28.3 International 8.3 9.3 Total Revenue $31.0 $37.6 Three Months Ended December 31, Product Sales by category 2022 2023 Trauma and deformity $22.1 $27.1 Scoliosis
Slide 31: Adjusted EBITDA Reconciliation
312 0 2 4 / / Adjusted EBITDA Reconciliation Three Months Ended December 31, 2022 2023 Net (loss) income ($7.8) ($6.7) Interest (income) expense, net (0.1) (0.3) Other (income) expense 0.1 (0.9) Provision for income taxes (benefit) 0.0 (0.2) Depreciation and amortization 3.8 5.5 Stock-based compensa
Slide 32: Adjusted EPS Reconciliation
322 0 2 4 / / Adjusted EPS Reconciliation Three Months Ended December 31, 2022 2023 Loss (income) per share, diluted (GAAP) ($0.35) ($0.29) Accretion of interest attributable to acquisition installment payable 0.02 0.01 Fair value adjustment of contingent consideration (0.02) - Trademark impairment
Slide 33: Balance Sheet
332 0 2 4 / / Balance Sheet Assets Cash, cash equivalents & short-term investments $82.3 Account receivable 34.6 Inventory (net) 105.8 Other current assets 3.8 Total Current Assets 226.5 PP&E (net) 41.0 Intangibles and goodwill 171.2 Total Assets $438.7 Liabilities Accounts payable $12.6 Debt 10.0 A
Slide 34: 2024 Guidance
342 0 2 4 / / 2024 Guidance FY2024 Revenue $197.0 to $200.0 Adjusted EBITDA $8.0 to $9.0 FY2024 2024 Total Revenue Growth % 32% to 34% Set Deployment <$20.0 Assumptions Full Year 2024 Guidance ($ in Millions)
Slide 35: Investment Summary
352 0 2 4 / / 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 36: Contact: 2850 Frontier Drive, Warsaw, IN
2850 Frontier Drive Warsaw, IN 465852 ph: 574.268.6379 or 877.268.6339 fax: 574.268.6302 www.OrthoPediatrics.com2 0 2 4 / /