Orthopediatrics Corp. · NASDAQ:KIDS
Orthopediatrics — Investor Presentation (2023)
32 slides from Orthopediatrics's investor presentation, 2023
Slide 1: 2023 Investor Presentation
2023 Investor Presentation www.OrthoPediatrics.com
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: Founded on the cause of impacting children with orthopedic conditions
OrthoPediatrics was founded on the cause of impacting the lives of children with orthopedic conditions 630,000+ pediatric patients treated since inception 1 2023 // 3 1 Includes patients treated by MD Orthopaedics (MDO) as well as Pega Medical since inception
Slide 4: Historical Challenges of Pediatric Orthopedics
Historical Challenges of Pediatric Orthopedics Re-Purposed Adult Plate Screws through growth plate 01 Children’s unique clinical conditions 02 Existing solutions are re-purposed from adult implants 03 Limited development of new technologies 04 No specialized sales force in Pediatric Orthopedics 05 L
Slide 5: OrthoPediatrics Solution
OrthoPediatrics Solution PediLoc Femur Screws parallel to growth plate 01 Product development focused exclusively on pediatric patients 02 Broadest pediatric specific portfolio in the industry 03 Delivering first in market novel surgical solutions 04 Only global commercial channel to market 05 Leadi
Slide 6: U.S. Addressable Market
Total Addressable Market – $3.9B U.S. Addressable Market1 — $1.7B Competitive Dynamics $162M Smart Implants 01 Large incumbents repurpose adult implants $249M 02 Require specialized sales force Sports Medicine $609M Trauma & Deformity 03 Lack of focus on pediatric conditions $303M Specialty Bracing
Slide 7: Only Focused Pediatric Orthopedic Company
Only Focused Pediatric Orthopedic Company 46 unique pediatric systems Innovative Consistent cadence of innovative product launches Technology Expanding suite of enabling technologies Internal R&D, acquisitions, and partnerships Only global sales & distribution channel Consistent Commercial Serve 100
Slide 8: Strategic Pillars
Strategic Pillars Laser focus on high-volume Children’s Hospitals that treat majority of 01 pediatric patients 02 Provide a broad product portfolio uniquely designed to treat children, surround pediatric orthopedic surgeons covering their needs 03 Deploy instrument sets and provide unparalleled sale
Slide 9: U.S. Current Target Market
01 Focus on High-Vol Children’s Hospitals Current Target Market – $2.1B U.S. Current Target Market1 — $0.9B $82M Sports Medicine $197M Specialty 300 $378M Bracing U.S. Pediatric Trauma & Centers conduct Deformity ~62% of T&D and Comments Scoliosis $68M procedures 01 ~1,400 Fellowship Trained Pediatr
Slide 10: Broad Product Portfolio
02 Broad Product Portfolio Pre-IPO Transitioned from Early Entry to Clinically Significant PediPlate Response BandLoc Clavicle Cannulated Physeal PediNail Hip Systems ACL 5.5/6.0mm 5.5/6.0mm Plating Screws Tethering System LCB / LPF System Fusion System Banding System 2008 2009 2012 2013 2014 2015 2
Slide 11: Accelerating Sales Growth Post-IPO
03 Expand Instr. Sets & Sales Personnel Accelerating Sales Growth Post-IPO Through Strategic Investment and Innovation Total Revenue ($M) +21.9% $122.3 CAGR 2016 2022 CAGR $98.0 U.S. Independent Sales Consultants 90 197 14% Instrument Set Deployments $7M $20M 20% $72.6 $71.1 Unique Pediatric Systems
Slide 12: Expand Market with R&D
04 Expand Market with R&D Post-IPO moved from Clinically Significant to Disruptive FireFly 7D MD Ortho Intraoperative PonsetiTM Drive Rail Patient PNP Orthex Navigation Specialty External Fixation Specific Wrist Pediatric External Enabling Clubfoot System Navigation Fusion Nailing Fixation PediFoot
Slide 13: Expand Market with M&A
04 Expand Market with M&A Strategic Acquisitions & Partnerships Gold Standard in Club Foot Bracing 2017 2019 2020 2021 2022 2022 Partnership Acquisition 2023 // 13
Slide 14: MD Orthopaedics
04 Expand Market with M&A Acquired Innovative Technologies 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% success rate • Casting is use
Slide 15: Pega Medical
04 Expand Market with M&A Acquired Innovative Technologies 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 growth •
Slide 16: Orthex and ApiFix
04 Expand Market with M&A Acquired Innovative Technologies Orthex • Disruptive software complements ex-fix Acquired software-based and non-fusion frame technologies • Expands addressable market Significant sales synergies with legacy portfolio • Serve 85% of procedures, up from 65% • Significantly s
Slide 17: Enabling Technology Partnerships
04 Expand Market with M&A Enabling Technology Partnerships FIREFLY® Pedicle Screw FireFly 7D Surgical Navigation Guides S2/Alar Intraoperative Navigation Unique patient specific 3D printed bone models and drill guides, can be used with any Spinal Deformity Correction system. Eliminates Radiation exp
Slide 18: 7D Real World Experience
04 Expand Market with M&A 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
Slide 19: Physician Education and Awareness
05 Train Next-Gen Surgeons Physician Education and Awareness As a surgeon educator, I have OP Hands-on sales training and support always appreciated and valued 01 OrthoPediatrics’ commitment to • Annually invests 3% of sales on clinical education education. • Conducts >300 product/training sessions
Slide 20: Catalysts & Pipeline
Catalysts & Pipeline • Expanding intramedullary nailing portfolio T&D • Solutions for rare bone disease • Expansion of external fixation portfolio • Advancing non-fusion treatment • Early-onset scoliosis innovations Scoliosis • Innovation in highly-complex fusion • Manual growing, rib based, etc. •
Slide 21: Differentiated Pediatric Systems Driving Growth
46 Differentiated Pediatric Systems Driving Growth Trauma & Deformity Scoliosis 2022 Revenue by Product Family Pediatric Systems Revenue Pediatric Systems Revenue 36 $85.1 8 14 $33.4 $26.8 3 $9.3 2016 2022 2016 2022 2016 2022 2016 2022 +17% CAGR +21% CAGR >2X Growth >3.6X Growth Trauma & Deformity S
Slide 22: Strong History of Y/Y Growth
Strong History of Y/Y Growth ($M) 25% $122.3 38% $98.0 26% -2% $72.6 $71.1 26% $57.6 22% 20% $45.6 31% $37.3 21% $31.0 22% $23.7 58% $19.6 44% 137% $16.1 400% $10.2 $7.1 $0.6 $3.0 1 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 U.S. International 2023 // 22 1 Impacted by
Slide 23: Revenue Summary by Category
Category Revenue Summary $140 $3.8 $120 $100 $4.2 $33.4 Revenue ($ in Millions) $80 $28.0 $1.7 $2.7 $60 $1.2 $21.5 $20.7 $1.2 $16.7 $1.1 $85.1 $0.9 $1.1 $0.9 $40 $11.6 $1.1 $9.4 $65.8 $0.9 $9.4 $10.0 $8.0 $0.8 $7.4 $49.4 $47.7 $3.6 $6.0 $20 $39.7 $23.9 $32.8 $22.5 $26.8 $22.6 $22.1 $19.3 $16.5 $0 20
Slide 24: Revenue Seasonality
Revenue Seasonality Seasonality Drives Stronger Performance in Summer Months and Holiday Periods 31% 29% 29% Revenue as % of Total Year 27% 27% 27% 27% 26% 26% 26% 25% 25% 25% 25% 23% 22% 21% 20% 19% 19% 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2018 2019 2020 2021 2022 2023 // 24
Slide 25: Income Statement Summary
Income Statement Summary ($ in Millions) FY 2020 FY 2021 FY2022 4Q 2022 4Q 2021 Revenue $71.1 $98.0 $122.3 $31.0 $24.8 Growth % (2%) 38% 25% 25% 31% Gross profit $55.0 $73.4 $90.7 $21.2 $18.1 Margin % 77% 75% 74% 69% 73% Operating expenses $81.8 $91.4 $116.1 $29.5 $23.6 Operating loss ($26.8) ($18.0
Slide 26: Organic Revenue Reconciliation
Organic Revenue Reconciliation ($ in Millions) Three Months Ended Three Months Ended December 31, December 31, Product Sales by geography 2022 2021 Product Sales by category 2022 2021 As reported: As reported: Trauma and deformity $22.1 $16.5 U.S. $22.7 $19.9 Scoliosis $8.1 $7.2 International $8.3 $
Slide 27: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation ($ in Millions) Three Months Ended Twelve Months Ended December 31, December 31, 2022 2021 2022 2021 Net income (loss) ($7.8) $0.1 $1.3 (16.3) Interest expense, net (0.1) 0.4 2.4 2.2 Other income (expense) 0.1 (0.3) 1.8 (1.1) Provision for income tax (benefit) 0.0 (0.2
Slide 28: Adjusted EPS Reconciliation
Adjusted EPS Reconciliation Three Months Ended Twelve Months Ended December 31, December 31, 2022 2021 2022 2021 Earnings (loss) per share, diluted (GAAP) ($0.35) $0.00 $0.06 ($0.84) Accretion of interest attributable to acquisition installment 0.02 0.03 0.11 0.11 payments Fair value adjustment of c
Slide 29: Balance Sheet
Balance Sheet ($ in Millions) As of December 31, 2022 Assets Liabilities Cash & short-term investments 119.8 Accounts payable 11.2 Account receivable 24.8 Debt 0.9 Inventory (net) 78.2 Accrued comp. & other liab. 18.2 Other current assets 4.0 Acquisition pay. & cont. consideration 18.8 Total Current
Slide 30: Full Year 2023 Guidance
Full Year 2023 Guidance 2023 Guidance FY2023 Revenue $146+ to $149.0 Adjusted EBITDA $3.0 to $4.0 ($ in Millions, except per share items) Assumptions FY2023 2023 Total Revenue Growth % 20% to 22% MD Ortho and Pega Medical contribution 1 $5.0 Organic Revenue Growth % 15% to 18% Set Deployment ~$25 Ad
Slide 31: Investment Summary
Investment Summary 01 Only diversified company focused exclusively on pediatric orthopedics 02 Large, underpenetrated market opportunity in pediatrics 03 Highly concentrated customer base with targeted commercial strategy 04 Broad product portfolio with innovative solutions 05 Only provider committe
Slide 32: Contact
2850 Frontier Drive Warsaw, IN 465852 ph: 574.268.6379 or 877.268.6339 fax: 574.268.6302 2023 // www.OrthoPediatrics.com