Orthopediatrics Corp. · NASDAQ:KIDS
Orthopediatrics — Investor Presentation (November 2022)
31 slides from Orthopediatrics's investor presentation, Nov 1, 2022
Slide 1: 2022 Investor Presentation
2022 Investor Presentation www.OrthoPediatrics.com
Slide 2: Disclaimer
22 0 2 2 / / 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," "co
Slide 3: 610,000+ pediatric patients treated since inception
32 0 2 2 / / pediatric patients treated since inception 610,000+ OrthoPediatrics was founded on the cause of impacting the lives of children with orthopedic conditions 1 (1) Includes patients treated by MD Orthopaedics (MDO)
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 2 / / Historical Challenges of Pediatric Ortho
Slide 5: OrthoPediatrics Solution
52 0 2 2 / / 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 Addressable Market – $3.9B
62 0 2 2 / / Total Addressable Market – $3.9B 1 Management’s Mar 2022 updates to IMS data from 2016 Competitive Dynamics $609M Trauma & Deformity $315M Scoliosis Fusion $200M Scoliosis Non-Fusion $270M Specialty Bracing $187M Sports Medicine $140M Smart Implants Large incumbents repurpose adult impl
Slide 7: Only Focused Pediatric Orthopedic Company
72 0 2 2 / / Only Focused Pediatric Orthopedic Company Consistent 20%+ Growth Since Inception (1) Includes MDO (2) Excluding COVID-impacted 2020 46 unique surgical systems Consistent cadence of innovative product launches Expanding suite of enabling technologies Internal R&D, acquisitions, and partn
Slide 8: Strategic Pillars
82 0 2 2 / / 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: Current Target Market – $2.1B
92 0 2 2 / / 1 Management’s Mar 2022 updates to IMS data from 2016 Comments ~1,400 Fellowship Trained Pediatric Surgeons Majority of Pediatric Centers are Teaching Hospitals Centers Treat Most Complex Pediatric Conditions 01 02 03 $378M Trauma & Deformity $195M Scoliosis Fusion $180M Scoliosis Non-F
Slide 10: Broad Product Portfolio: Pre-IPO
102 0 2 2 / / 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
112 0 2 2 / / Accelerating Sales Growth Post-IPO Through Strategic Investment and Innovation $37.3 $45.6 $57.6 $72.6 $71.1 $98.0 2016 2017 2018 2019 2020* 2021 Total Revenue ($M) 2016 2021 CAGR U.S. Independent Sales Consultants 90 190 16% Instrument Set Deployments $7M $14M 15% Unique Surgical Syst
Slide 12: Post-IPO moved from Clinically Significant to Disruptive
122 0 2 2 / / 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 2 / / Strategic Acquisitions & Partnerships Partnership Acquisition 202020192017 2022 04 Expand Market with M&A 2021 Gold Standard in Club Foot Bracing 2022
Slide 14: MD Orthopaedics Acquisition
142 0 2 2 / / 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 15: Pega Medical Acquisition
152 0 2 2 / / 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 16: ApiFix and Orthex
162 0 2 2 / / 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 17: FireFly Navigation Guides and 7D Surgical
172 0 2 2 / / 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 18: 7D Real World Experience
182 0 2 2 / / 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 19: Physician Education and Awareness
192 0 2 2 / / 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 20: Catalysts & Pipeline
202 0 2 2 / / Catalysts & Pipeline Enabling Technologies Scoliosis • Orthex surgical software • Firefly patient-specific planning/guides • 7D spinal interoperative navigation • PediPortal app • Advancing non-fusion treatment • Early-onset scoliosis innovations • Innovation in highly-complex fusion •
Slide 21: Trauma & Deformity and Scoliosis Growth
212 0 2 2 / / Trauma & Deformity +13% CAGR 14 26 2016 2021 $26.8 $65.8 2016 2021 Surgical Systems Revenue +19% CAGR Scoliosis >2X Growth 3 8 2016 2021 $9.3 $28.0 2016 2021 Surgical Systems Revenue >3.2X Growth 2021 Revenue by Product Family Trauma & Deformity Scoliosis Sports Medicine67% of Revenue
Slide 22: Strong History of Y/Y Growth
222 0 2 2 / / $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 $124.5 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Strong History of Y/Y Growth ($M) 400% 137% 44% 58% 22% 21% 31% 20% 22% 26% 26% -2% 38% U.S. International (1) Impacted by
Slide 23: Category Revenue Summary
232 0 2 2 / / $19.3 $22.5 $26.8 $32.8 $39.7 $49.4 $47.7 $65.8 $3.6 $7.4 $9.4 $11.6 $16.7 $21.5 $20.7 $28.0 $0.8 $1.1 $1.1 $1.2 $1.2 $1.7 $2.7 $4.2 $0 $20 $40 $60 $80 $100 $120 2014 2015 2016 2017 2018 2019 2020 2021 R ev en u e ( $ in M ill io n s) Trauma & Deformity Scoliosis Sports Medicine/Other
Slide 24: Revenue Seasonality
242 0 2 2 / / Revenue Seasonality 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% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q R ev e n u e a s % o f To ta l Y e ar 2018 2019 2020 2021
Slide 25: Income Statement Summary
252 0 2 2 / / Income Statement Summary ($ in Millions) 1 Net loss per share attributable to common stockholders – basic and diluted FY 2018 FY 2019 FY 2020 FY 2021 Revenue $57.6 $72.6 $71.1 $98.0 Growth % 26% 26% (2%) 38% Gross profit $42.7 $54.6 $55.0 $73.4 Margin % 74% 75% 77% 75% Operating expens
Slide 26: Organic Revenue Reconciliation
262 0 2 2 / / Organic Revenue Reconciliation Three Months Ended September 30, Product Sales by geography 2022 2021 As reported: U.S. $26.6 $19.4 International $8.4 $5.7 Less impact from acquisitions: U.S. $2.3 - International $2.1 - Organic revenue: U.S. $24.3 $19.4 International $6.3 $5.7 Total Org
Slide 27: Adjusted EBITDA Reconciliation
272 0 2 2 / / Adjusted EBITDA Reconciliation Three Months Ended September 30, 2022 2021 Net loss $18.5 ($2.2) Interest expense, net $0.7 $0.5 Other income $0.9 ($0.3) Provision for income tax (benefit) ($4.1) ($0.3) Depreciation and amortization $3.3 $2.7 Trademark impairment $3.6 - Stock-based comp
Slide 28: Adjusted EPS Reconciliation
282 0 2 2 / / Adjusted EPS Reconciliation Three Months Ended September 30, 2022 2021 Earnings (loss) per share, diluted (GAAP) $0.87 ($0.11) Accretion of interest attributable to acquisition installment payments $0.02 $0.03 Fair value adjustment of contingent consideration ($1.12) ($0.07) Trademark
Slide 29: Balance Sheet
292 0 2 2 / / Balance Sheet Assets Cash & short-term investments $121.6 Account receivable $26.2 Inventory (net) $74.0 Other current assets $2.8 Total Current Assets $224.6 PP&E (net) $36.3 Intangibles and goodwill $169.2 Total Assets $430.1 Liabilities Accounts payable $10.9 Debt $0.9 Accrued comp.
Slide 30: Investment Summary
302 0 2 2 / / 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 31: Contact
2850 Frontier Drive Warsaw, IN 465852 ph: 574.268.6379 or 877.268.6339 fax: 574.268.6302 www.OrthoPediatrics.com2 0 2 2 / /
Orthopediatrics — Investor Presentation (November 2022) on 6ix