Orthopediatrics Corp. · NASDAQ:KIDS
Orthopediatrics — Investor Presentation (March 2018)
23 slides from Orthopediatrics's investor presentation, Mar 19, 2018
Slide 1: OrthoPediatrics Corp. March 2018
OrthoPediatrics Corp. March 2018 Mark Throdahl, CEO Fred Hite, CFO
Slide 2: Disclaimer: Forward-Looking Statements
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 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 20,000 patients in 2017 24 surgical systems; 3,000 SKUs; strong pipeline 69 direct employees; 75 focused FTE sales reps Global sales organization focused on pediatric orthopedic surgeons in 37 countries 25 issued patents; 25 pending patents Only non-founding Chief Medical Officer in
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 $46 million sales in 2017 22% revenue growth in 2017 No dependency on one product family Growth across all products Comparable gross margins on all products 2017 Revenue by Segment 7 2017 Revenue by Product Family 72% 3% 25% Sports Medicine/ Other Trauma & Deformity Scol
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 Develop novel technologies
Slide 9: New Systems in 2017
9 5 New Systems in 2017 2017 Product Launches FIREFLY® Pedicle Screw Navigation Guides (complementary to RESPONSE Spine System) Trauma & Deformity Scoliosis RESPONSE 5.5mm and 5.5/6.0 Systems 2017 Product Launches Titanium PediPlates® System (expands physeal tethering offering) Clavicle Plate System
Slide 10: New Surgical Systems in 2018
10 From 24 to 29 Surgical Systems in 2018 2018 Product Launches PediPlate PediNail Intramedullary Nail System Osteogenesis Imperfecta Nail System PediNail Intramedullary Nail System (expands into adolescent cases) BandLoc 4.5/4.75/5.0mm System BandLoc 5.5/6.0mm Sublaminar Banding System Trauma & Def
Slide 11: New Systems in Development
New Systems in Development 11 Signed LOI on pediatric implant Formed task force of leading tethering surgeons Emerging procedure with adult lumbar fixation product Allows intervention in patients as young as 10 Reversible, non-fusion procedure Signed LOI on working prototype active intramedullary na
Slide 12: 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 12 Growing Rods
Slide 13: Global Sales Coverage
Global Sales Coverage United States 77% of 2017 Revenue 33 Sales Agencies, most of which are exclusive International 23% of 2017 Revenue 2 Sales Agencies + 31 Stocking Distributors Sales in 37 countries + the United States Current customers in every major children’s hospital in the United States Int
Slide 14: 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 14
Slide 15: 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 16: Financial Review
Financial Review
Slide 17: Consistent 20+% Revenue Growth
$9.3 $13.3 $15.8 $18.4 $24.9 $28.8 $34.9 $0.9 $2.8 $3.9 $5.3 $6.1 $8.5 $10.7 $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 Consistent 20+% Revenue Growth 17 $45.6
Slide 18: Category Revenue Summary
$19.3 $22.5 $26.8 $32.8 $3.6 $7.4 $9.4 $11.6 $0.8 $1.1 $1.1 $1.2 $0 $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 2014 2015 2016 2017 R ev enu e ( $ in Mi lli on s) Trauma & Deformity Scoliosis Sports Medicine/Other Category Revenue Summary 18
Slide 19: Revenue Seasonality
Revenue Seasonality 2016 2017 Seasonality Drives Stronger Performance in Summer Months and Holiday Periods 19 21% 26% 27% 26% 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 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 20: Income Statement Summary
Income Statement Summary 20 ($ in Millions) Year Ended December 31 2014 2015 2016 2017 Revenue $23.7 $31.0 $37.3 $45.6 Growth % 21% 31% 20% 22% Gross Profit $16.6 $21.6 $26.4 $34.5 Margin % 70% 70% 71% 76% Operating Expenses $23.7 $28.2 $32.5 $40.9 Operating Loss ($7.1) ($6.6) ($6.1) ($6.5) Net Loss
Slide 21: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation 21 Year Ended December 31 ($ in Millions) 2016 2017 Net Loss ($6.6) ($8.9) Interest expense 1.5 2.5 Other expense (income) (1.0) (0.0) Depreciation and amortization 1.9 2.4 Stock-based compensation 1.2 1.4 Accelerated vesting of restricted stock - 2.0 Public company co
Slide 22: Balance Sheet
Balance Sheet 22 Assets Liabilities Cash $42.6 Accounts Payable $5.5 Accounts Receivable 5.6 Debt 25.5 Inventory 20.5 Accrued Expenses 2.9 PP&E (net) 10.4 All Other Liabilities 1.0 Intangibles 2.3 Paid In Capital 150.4 All Other 0.9 Accumulated Deficit (103.1) Total Assets $82.3 Total Liabilities /
Slide 23: Summary
Summary Surgeon relationships and clinical education Attractive growth and margin profile Robust organic growth opportunities Broadest, most innovative product offering 23