UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
______________________
Date of Report (Date of earliest event reported): March 4, 2020
| OrthoPediatrics Corp. | ||
| (Exact name of registrant as specified in its charter) | ||
| Delaware | ||
| (State or other jurisdiction of incorporation) | ||
| 001-38242 | 26-1761833 | ||||
| (Commission File Number) | (I.R.S. Employer Identification Number) | ||||
| 2850 Frontier Drive Warsaw, Indiana | 46582 | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
Registrant’s telephone number, including area code: (574) 268-6379
| Not Applicable | ||
| (Former name or former address, if changed since last report) | ||
Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
| Common Stock, $0.00025 par value per share | KIDS | Nasdaq Global Market | ||||||||||||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | ||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 under the Securities Act (17 CFR 230.405) or Rule 12b-2 under the Exchange Act (17 CFR 240.12b-2).
Emerging growth company [X]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act [X]
Item 2.02. Results of Operations and Financial Condition.
On March 4, 2020, OrthoPediatrics Corp. issued a press release announcing its earnings for the quarter and year ended December 31, 2019 and making other disclosures. The press release (including the accompanying unaudited condensed consolidated financial statements as of and for the quarter and year ended December 31, 2019, and other financial data) is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.
The information in this Item 2.02, including the information incorporated by reference herein from Exhibit 99.1, is furnished pursuant to Item 2.02 of Form 8-K and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
| (d) | Exhibits | |||||||
| Exhibit No. | Description | |||||||
* * * * * *
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| OrthoPediatrics Corp. | ||||||||
| Date: March 4, 2020 | By: | /s/ Daniel J. Gerritzen | ||||||
| Daniel J. Gerritzen, General Counsel and Secretary | ||||||||
- 2 -
OrthoPediatrics Corp. Reports Fourth Quarter and Full Year 2019 Financial Results
Consecutive year of record annual revenue with 26.0% year-over-year growth to $72.6 million
Full year 2020 revenue growth guidance in the range of 22% to 24%
WARSAW, Indiana, March 4, 2020 — OrthoPediatrics Corp. (“OrthoPediatrics” or the “Company”) (Nasdaq:KIDS), a company focused exclusively on advancing the field of pediatric orthopedics, announced today its financial results for the fourth quarter and full year ended December 31, 2019.
Fourth Quarter / Full Year 2019 & Recent Highlights
•Increased total revenue to $19.0 million for fourth quarter 2019, up 30.1% from $14.6 million in fourth quarter 2018, driving consecutive year of annual record setting revenue of $72.6 million for full year 2019, up from $57.6 million or 26.0% year-over-year
•Generated Adjusted EBITDA of ($1.1) million for full year 2019, up from ($3.5) million in full year 2018
•Increased the domestic sales organization to 167 consultants, up 27.5% from fourth quarter 2018
•Deployed $18.2 million of consignment sets for full year 2019, up 51.7% compared to $12.0 million in the same period prior year
•Launched PediFoot Deformity Correction System and QuickPack™ bone graft substitute in fourth quarter 2019 and expanded product portfolio offering to 33 surgical systems in 2019, up 27% from 26 in the fourth quarter 2018
•Strengthened cash position with $60 million in net proceeds from follow-on offering in December 2019
•Divested assets related to the adult product offering of our subsidiary, Vilex in Tennessee, Inc., in December 2019 and fully repaid debt facility used to finance the original acquisition
•Provided full year 2020 revenue guidance of growth in the range of 22%-24% and investment in consignment sets to be in a range of $19-$21 million
Mark Throdahl, President and Chief Executive Officer of OrthoPediatrics, commented, “We are excited to report another record year of outperformance with 26% annual revenue growth that reflects systematic execution of all our growth initiatives. During the fourth quarter, we continued to see strength across our entire business with Trauma and Deformity growing 34%, Scoliosis growing 21%, and Sports Medicine/Other growing 18%. We are pleased with our initial integration of Orthex and recent product launches, including PediFoot and QuickPack™ during the fourth quarter, and look forward to deeper penetration of the external fixation market and increased utilization of our product portfolio. We remain optimistic about the long-term contributions from the synergies unique to our product offering and will continue acquiring new technologies and introducing new systems to enhance our leadership position.”
| 2850 Frontier Drive Warsaw, Indiana 46582 www.orthopediatrics.com |  |  |  |  | TOLL-FREE PHONE FAX | 877.268.6339 574.268.6379 574.269.3692 | ||||||||||||||||||||||||||||||||
| TRAUMA & DEFORMITY | SCOLIOSIS | SPORTS MEDICINE | CLINICAL EDUCATION | |||||||||||||||||||||||||||||||||||
Mr. Throdahl continued, “As we look ahead to 2020, we are confident in our ability to continue to execute on our growth initiatives that will support full year 2020 revenue guidance of 22% to 24%. We believe investing $19-$21 million in consigned sets for 2020 will allow us to focus on deploying capital-efficient systems and begin realizing the revenue impact from the full roll-out of our recent product launches. We appreciate the support of our shareholders that helped us close a $60 million capital raise that provides the Company financial flexibility to support our growth initiatives. We are pleased our commitment to pediatric-specific surgical solutions has allowed us to change the lives of over 165 thousand children since our inception, and we remain dedicated to driving increased value for all our stakeholders.”
Fourth Quarter and Full Year 2019 Financial Results
Total revenue for the fourth quarter of 2019 was $19.0 million, a 30.1% increase compared to $14.6 million for the same period last year. U.S. revenue for the fourth quarter of 2019 was $14.2 million, a 29.5% increase compared to $10.9 million for the same period last year, representing 74.7% of total revenue. International revenue for the fourth quarter of 2019 was $4.8 million, a 31.8% increase compared to $3.6 million for the same period last year, representing 25.3% of total revenue.
Total revenue for 2019 was $72.6 million, a 26.0% increase compared to $57.6 million for 2018. Our U.S. revenue for 2019 was $55.1 million, a 26.7% increase compared to $43.5 million for 2018, representing 75.9% of total revenue. Our international revenue for 2019 was $17.5 million, a 24.1% increase compared to $14.1 million for 2018, representing 24.1% of total revenue.
Trauma and Deformity revenue for the fourth quarter of 2019 was $13.6 million, a 34.3% increase compared to $10.2 million for the same period last year. Scoliosis revenue was $4.9 million, a 20.7% increase compared to $4.1 million for the fourth quarter of 2018. Sports Medicine/other revenue for the fourth quarter of 2019 was $430 thousand, a 17.8% increase compared to $365 thousand for the same period last year.
Trauma and Deformity revenue for 2019 was $49.4 million, a 24.4% increase compared to $39.7 million for 2018. Scoliosis revenue for 2019 was $21.5 million, a 28.9% increase compared to $16.7 million for 2018. Sports medicine/other revenue for 2019 was $1.7 million, a 41.1% increase compared to $1.2 million in 2018.
Gross profit for the fourth quarter of 2019 was $14.5 million, a 37.4% increase compared to $10.5 million for the same period last year, and $54.6 million for 2019, a 28.0% increase compared to $42.7 million for 2018. Gross profit margin for the fourth quarter of 2019 improved to 76.2%, compared to 72.2% for the same period last year, and was 75.3% for 2019, compared to 74.2% for 2018. The increase is due to increased sales and a decrease in cost of goods sold related to the addition of sales agents in our international markets.
Total operating expenses for the fourth quarter of 2019 were $17.5 million, a 41.2% increase compared to $12.4 million for the same period last year. Full year operating expenses were $63.7 million for 2019, a 21.9% increase compared to $52.2 million for 2018. The increase in operating expenses for full year 2019 was driven by a 27.3% increase in general and administration, a 17.8% increase in sales and marketing, and a 21.5% increase in research and development. Operating loss for the fourth quarter of 2019 was ($3.0) million compared to ($1.9) million for the same period last year. Operating loss for 2019 was ($9.1) million compared to ($9.6) million for 2018.
Net interest expense for the fourth quarter of 2019 was $1.3 million, compared to $0.5 million for the same period last year, and was $3.5 million for 2019 compared to $2.3 million for 2018.
| 2850 Frontier Drive Warsaw, Indiana 46582 www.orthopediatrics.com | | | | | TOLL-FREE PHONE FAX | 877.268.6339 574.268.6379 574.269.3692 | ||||||||||||||||||||||||||||||||
| TRAUMA & DEFORMITY | SCOLIOSIS | SPORTS MEDICINE | CLINICAL EDUCATION | |||||||||||||||||||||||||||||||||||
Net loss from continuing operations for the fourth quarter of 2019 was ($4.3) million, compared to ($2.5) million for the same period last year. Total net loss including discontinued operations for the fourth quarter of 2019 was ($5.4) million, or ($0.36) per basic and diluted share attributable to common stockholders, compared to ($2.5) million, or ($0.19) per basic and diluted share for the same period last year. Adjusted EBITDA for the fourth quarter of 2019 and 2018 was ($0.9) million.
Net loss from continuing operations for 2019 was ($12.7) million, compared to ($12.0) million for 2018. Total net loss including discontinued operations for the full year 2019 was ($13.7) million, or ($0.94) per basic and diluted share attributable to common stockholders for 2019, compared to ($12.0) million, or ($0.96) per basic and diluted share for 2018. Adjusted EBITDA for the full year 2019 was ($1.1) million from ($3.5) million for the full year 2018. See below for additional information and a reconciliation of non-GAAP financial information.
The weighted average number of diluted shares outstanding for the three-month period ended December 31, 2019 was 15,031,256 shares.
In the fourth quarter of 2019, we had 167 sales representatives, including representatives selling our Orthex products, up 27.5% compared to 131 in the same period of 2018.
The change in property and equipment during the fourth quarter of 2019 was $1.3 million, which compared to a reduction of $58 thousand for the same period last year, and $11.8 million for 2019, compared to $5.3 million for 2018. This investment reflects the deployment of consigned sets, which includes product specific instruments and cases and trays. Including the implants, $4.5 million of consigned sets were deployed during the fourth quarter of 2019, compared to $1.3 million during the fourth quarter of 2018.
As of December 31, 2019, cash, cash equivalents and restricted cash were $72.0 million, compared to $19.7 million as of September 30, 2019, and the Company had approximately $26.2 million in total outstanding indebtedness, which includes $5.0 million outstanding under its revolving credit facility.
Capitalization Update
On December 11, 2019, the Company completed a public offering selling 1,755,500 shares at a price of $36.50 per share, including 235,500 shares sold to the underwriters upon exercise of the option to purchase additional shares. The public offering generated net proceeds of $60 million, after deducting underwriting commissions and offering expenses payable by OrthoPediatrics.
On December 31, 2019, the Company completed the sale of substantially all of the assets related to the adult product offering of Vilex in Tennessee, Inc (“Vilex Adult Business”), as well as a license to sell the Orthex hexapod into the adult foot and ankle marketplace to Vilex LLC, an affiliate of Squadron Capital LLC (“Squadron Capital”). As consideration for the Vilex Adult Business and the Orthex license, the amount owed by OrthoPediatrics under its Term Note B payable to Squadron Capital was reduced by $25.0 million. The Company repaid in full the remaining $5.0 million of principal outstanding under the Term Note B, plus all accrued interest, on December 31, 2019, with funds received from its revolving credit facility with Squadron Capital.
Full Year 2020 Financial Guidance
OrthoPediatrics is providing financial guidance for the full year 2020, as follows:
•Revenue growth in a range of 22% to 24% year-over-year
•Consigned set investments in a range of $19.0 million to $21.0 million
| 2850 Frontier Drive Warsaw, Indiana 46582 www.orthopediatrics.com | | | | | TOLL-FREE PHONE FAX | 877.268.6339 574.268.6379 574.269.3692 | ||||||||||||||||||||||||||||||||
| TRAUMA & DEFORMITY | SCOLIOSIS | SPORTS MEDICINE | CLINICAL EDUCATION | |||||||||||||||||||||||||||||||||||
Conference Call
OrthoPediatrics will host a conference call on Thursday, March 5, 2020, at 8:00 a.m. ET to discuss the results. The dial-in numbers are (855) 289-4603 for domestic callers and (614) 999-9389 for international callers. The conference ID number is 7662677. A live webcast of the conference call will be available online from the investor relations page of the OrthoPediatrics’ corporate website at www.orthopediatrics.com.
A replay of the webcast will remain available on OrthoPediatrics’ website, www.orthopediatrics.com, until the Company releases its first quarter 2020 financial results. In addition, a telephonic replay of the call will be available until March 12, 2020. The replay dial-in numbers are (855) 859-2056 for domestic callers and (404) 537-3406 for international callers. Please use the replay conference ID number 7662677.
Forward-Looking Statements
This press release 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," "believe," "estimate," "project," "target," "predict," "intend," "future," "goals," "potential,” "objective," "would" and other similar expressions. Forward-looking statements involve risks and uncertainties, many of which are beyond OrthoPediatrics’ control. Important factors could cause actual results to differ materially from those in the forward-looking statements, including, among others, the risks, uncertainties and factors set forth under "Risk Factors" in OrthoPediatrics’ Annual Report on Form 10-K filed with the SEC on March 7, 2019, as updated and supplemented by our other SEC reports filed time to time. Forward-looking statements speak only as of the date they are made. OrthoPediatrics assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or circumstances or other changes affecting such statements except to the extent required by applicable securities laws.
Use of Non-GAAP Financial Measures
This press release includes the non-GAAP financial measure of Adjusted EBITDA, which differs from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Adjusted EBITDA in this release represents net loss from continuing operations, plus interest expense, net plus other expense, depreciation and amortization, stock-based compensation expense, accelerated vesting of restricted stock upon our IPO, and acquisition related costs. Adjusted EBITDA is presented because the Company believes it is a useful indicator of its operating performance. Management uses the metric as a measure of the Company’s operating performance and for planning purposes, including financial projections. The Company believes this measure is useful to investors as supplemental information because it is frequently used by analysts, investors and other interested parties to evaluate companies in its industry. The Company believes Adjusted EBITDA is useful to its management and investors as a measure of comparative operating performance from period to period. Adjusted EBITDA is a non-GAAP financial measure and should not be considered as an alternative to, or superior to, net income or loss as a measure of financial performance or cash flows from operations as a measure of liquidity, or any other performance measure derived in accordance with GAAP, and it should not be construed to imply that the Company’s future results will be unaffected by unusual or non-recurring items. In addition, the measure is not intended to be a measure of free cash flow for management’s discretionary use, as it does not reflect certain cash requirements such as debt service requirements, capital expenditures and other cash costs that may recur in the future. Adjusted EBITDA contains certain other limitations, including the failure to reflect our cash expenditures, cash requirements for working capital needs and other potential cash requirements. In evaluating Adjusted EBITDA, you should be aware that in the future the Company may incur expenses that are the same or similar to some of the adjustments in this presentation. The Company’s presentation of Adjusted EBITDA should not be construed to imply that its future results will be unaffected by any such adjustments.
| 2850 Frontier Drive Warsaw, Indiana 46582 www.orthopediatrics.com | | | | | TOLL-FREE PHONE FAX | 877.268.6339 574.268.6379 574.269.3692 | ||||||||||||||||||||||||||||||||
| TRAUMA & DEFORMITY | SCOLIOSIS | SPORTS MEDICINE | CLINICAL EDUCATION | |||||||||||||||||||||||||||||||||||
Management compensates for these limitations by primarily relying on the Company’s GAAP results in addition to using Adjusted EBITDA on a supplemental basis. The Company’s definition of this measure is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation. The schedules below contain a reconciliation of Net Loss from continuing operations to non-GAAP Adjusted EBITDA.
About OrthoPediatrics Corp.
Founded in 2006, OrthoPediatrics is an orthopedic company focused exclusively on advancing the field of pediatric orthopedics. As such it has developed the most comprehensive product offering to the pediatric orthopedic market to improve the lives of children with orthopedic conditions. OrthoPediatrics currently markets 33 surgical systems that serve three of the largest categories within the pediatric orthopedic market. This offering spans trauma and deformity, scoliosis, and sports medicine/other procedures. OrthoPediatrics’ global sales organization is focused exclusively on pediatric orthopedics and distributes its products in the United States and 43 countries outside the United States. For more information, please visit www.orthopediatrics.com.
Investor Contacts
The Ruth Group
Tram Bui / Emma Poalillo
(646) 536-7035 / 7024
tbui@theruthgroup.com / epoalillo@theruthgroup.com
| 2850 Frontier Drive Warsaw, Indiana 46582 www.orthopediatrics.com | | | | | TOLL-FREE PHONE FAX | 877.268.6339 574.268.6379 574.269.3692 | ||||||||||||||||||||||||||||||||
| TRAUMA & DEFORMITY | SCOLIOSIS | SPORTS MEDICINE | CLINICAL EDUCATION | |||||||||||||||||||||||||||||||||||
ORTHOPEDIATRICS CORP.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In Thousands, Except Share Data)
| December 31, 2019 | December 31, 2018 | ||||||||||||||||
| ASSETS | |||||||||||||||||
| Current assets: | |||||||||||||||||
Cash | $ | 70,777 | $ | 60,691 | |||||||||||||
| Restricted cash | 1,250 | — | |||||||||||||||
| Accounts receivable - trade, less allowance for doubtful accounts of $506 and $134, respectively | 16,003 | 8,999 | |||||||||||||||
Inventories, net | 38,000 | 25,708 | |||||||||||||||
Notes receivable | 564 | 502 | |||||||||||||||
Prepaid expenses and other current assets | 1,464 | 1,256 | |||||||||||||||
Total current assets | 128,058 | 97,156 | |||||||||||||||
| Property and equipment, net | 21,349 | 12,768 | |||||||||||||||
| Other assets: | |||||||||||||||||
| Amortizable intangible assets, net | 14,484 | 1,921 | |||||||||||||||
Goodwill | 26,183 | — | |||||||||||||||
Other intangible assets | 4,490 | 260 | |||||||||||||||
Total other assets | 45,157 | 2,181 | |||||||||||||||
| Total assets | $ | 194,564 | $ | 112,105 | |||||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||||||
| Current liabilities: | |||||||||||||||||
Accounts payable - trade | $ | 6,467 | $ | 3,971 | |||||||||||||
Accrued compensation and benefits | 4,349 | 3,552 | |||||||||||||||
Current portion of long-term debt with affiliate | 124 | 118 | |||||||||||||||
Other current liabilities | 2,723 | 1,576 | |||||||||||||||
Total current liabilities | 13,663 | 9,217 | |||||||||||||||
| Long-term liabilities: | |||||||||||||||||
Long-term debt with affiliate, net of current portion | 26,067 | 21,156 | |||||||||||||||
| Operating lease liabilities | 63 | — | |||||||||||||||
Deferred revenue | 12,410 | — | |||||||||||||||
Total long-term liabilities | 38,540 | 21,156 | |||||||||||||||
| Total liabilities | 52,203 | 30,373 | |||||||||||||||
Stockholders' equity: | |||||||||||||||||
| Common stock, $0.00025 par value; 50,000,000 shares authorized; 16,723,128 shares and 14,538,202 shares issued and outstanding as of December 31, 2019 and December 31, 2018 | 4 | 4 | |||||||||||||||
Additional paid-in capital | 271,182 | 197,442 | |||||||||||||||
Accumulated deficit | (128,822) | (115,091) | |||||||||||||||
Accumulated other comprehensive loss | (3) | (623) | |||||||||||||||
Total stockholders' equity | 142,361 | 81,732 | |||||||||||||||
| Total liabilities and stockholders' equity | $ | 194,564 | $ | 112,105 | |||||||||||||
| 2850 Frontier Drive Warsaw, Indiana 46582 www.orthopediatrics.com | | | | | TOLL-FREE PHONE FAX | 877.268.6339 574.268.6379 574.269.3692 | ||||||||||||||||||||||||||||||||
| TRAUMA & DEFORMITY | SCOLIOSIS | SPORTS MEDICINE | CLINICAL EDUCATION | |||||||||||||||||||||||||||||||||||
ORTHOPEDIATRICS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Share and Per Share Data)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
| Net revenue | $ | 18,952 | $ | 14,568 | $ | 72,552 | $ | 57,559 | |||||||||||||||
| Cost of revenue | 4,502 | 4,054 | 17,933 | 14,879 | |||||||||||||||||||
| Gross profit | 14,450 | 10,514 | 54,619 | 42,680 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
Sales and marketing | 8,360 | 6,558 | 31,284 | 26,563 | |||||||||||||||||||
General and administrative | 7,216 | 4,545 | 26,664 | 20,938 | |||||||||||||||||||
Research and development | 1,905 | 1,277 | 5,748 | 4,732 | |||||||||||||||||||
Total operating expenses | 17,481 | 12,380 | 63,696 | 52,233 | |||||||||||||||||||
| Operating loss | (3,031) | (1,866) | (9,077) | (9,553) | |||||||||||||||||||
| Other expenses: | |||||||||||||||||||||||
Interest expense, net | 1,306 | 533 | 3,538 | 2,255 | |||||||||||||||||||
Other expense (income) | (8) | 69 | 70 | 217 | |||||||||||||||||||
Total other expenses | 1,298 | 602 | 3,608 | 2,472 | |||||||||||||||||||
| Net loss from continuing operations | (4,329) | (2,468) | (12,685) | (12,025) | |||||||||||||||||||
| Net loss from discontinued operations, net of tax | (1,100) | — | (1,046) | — | |||||||||||||||||||
| Net loss | $ | (5,429) | $ | (2,468) | $ | (13,731) | $ | (12,025) | |||||||||||||||
| Net loss attributable to common stockholders | $ | (5,429) | $ | (2,468) | $ | (13,731) | $ | (12,025) | |||||||||||||||
| Weighted average common shares - basic and diluted | 15,031,256 | 13,010,761 | 14,624,194 | 12,567,387 | |||||||||||||||||||
| Net loss from continuing operations per share attributable to common stockholders - basic and diluted | $ | (0.29) | $ | (0.19) | $ | (0.87) | $ | (0.96) | |||||||||||||||
| Net loss from discontinued operations per share attributable to common stockholders - basic and diluted | (0.07) | — | (0.07) | — | |||||||||||||||||||
| Net loss per share attributable to common stockholders - basic and diluted | $ | (0.36) | $ | (0.19) | $ | (0.94) | $ | (0.96) | |||||||||||||||
| 2850 Frontier Drive Warsaw, Indiana 46582 www.orthopediatrics.com | | | | | TOLL-FREE PHONE FAX | 877.268.6339 574.268.6379 574.269.3692 | ||||||||||||||||||||||||||||||||
| TRAUMA & DEFORMITY | SCOLIOSIS | SPORTS MEDICINE | CLINICAL EDUCATION | |||||||||||||||||||||||||||||||||||
ORTHOPEDIATRICS CORP.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
| For the Year Ended December 31, | |||||||||||
| 2019 | 2018 | ||||||||||
| OPERATING ACTIVITIES | |||||||||||
| Net loss | $ | (13,731) | $ | (12,025) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Loss on sale of discontinued operations | 210 | — | |||||||||
Depreciation and amortization | 4,671 | 2,892 | |||||||||
Stock-based compensation | 2,603 | 3,185 | |||||||||
Changes in certain current assets and liabilities: | |||||||||||
Accounts receivable - trade | (5,820) | (3,801) | |||||||||
Inventories | (9,767) | (4,801) | |||||||||
Prepaid expenses and other current assets | (137) | (425) | |||||||||
Accounts payable - trade | 2,401 | (1,524) | |||||||||
Accrued expenses and other liabilities | 1,946 | 947 | |||||||||
Other | (1) | (31) | |||||||||
| Net cash used in operating activities - continuing operations | (17,625) | (15,583) | |||||||||
| Net cash provided by operating activities - discontinued operations | (144) | — | |||||||||
| Net cash used in operating activities | (17,769) | (15,583) | |||||||||
| INVESTING ACTIVITIES | |||||||||||
| Acquisition of Vilex, net of cash acquired | (49,836) | — | |||||||||
| Purchases of notes receivable | — | (502) | |||||||||
| Purchases of licenses | (270) | (210) | |||||||||
| Purchases of property and equipment | (11,816) | (5,253) | |||||||||
| Net cash used in investing activities | (61,922) | (5,965) | |||||||||
| FINANCING ACTIVITIES | |||||||||||
| Proceeds from issuance of debt with affiliate | 30,000 | — | |||||||||
| Payment of revolving credit facility with affiliate | — | (4,065) | |||||||||
| Proceeds from issuance of common stock, net of issuance costs | 59,996 | 43,425 | |||||||||
| Proceeds from exercise of stock options | 1,141 | 410 | |||||||||
| Payments on mortgage notes | (118) | (113) | |||||||||
| Net cash provided by financing activities | 91,019 | 39,657 | |||||||||
| Effect of exchange rate changes on cash | 8 | — | |||||||||
| NET INCREASE IN CASH | 11,336 | 18,109 | |||||||||
| Cash, beginning of year | 60,691 | 42,582 | |||||||||
| Cash and restricted cash, end of period | $ | 72,027 | $ | 60,691 | |||||||
| Cash paid for interest | $ | 4,229 | $ | 2,255 | |||||||
| Transfer of instruments from property and equipment to inventory | $ | 1,037 | $ | 362 | |||||||
| Acquisition consideration of common shares | $ | 10,000 | $ | — | |||||||
| Intellectual property license | $ | 12,410 | $ | — | |||||||
| Divestiture consideration allocated to assets held for sale | $ | 12,590 | $ | — | |||||||
| Payment of Term Note B with revolving credit facility | $ | 5,000 | $ | — | |||||||
| 2850 Frontier Drive Warsaw, Indiana 46582 www.orthopediatrics.com | | | | | TOLL-FREE PHONE FAX | 877.268.6339 574.268.6379 574.269.3692 | ||||||||||||||||||||||||||||||||
| TRAUMA & DEFORMITY | SCOLIOSIS | SPORTS MEDICINE | CLINICAL EDUCATION | |||||||||||||||||||||||||||||||||||
ORTHOPEDIATRICS CORP.
NET REVENUE BY GEOGRAPHY AND PRODUCT CATEGORY
(Unaudited)
(In Thousands)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| Product sales by geographic location: | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
U.S. | $ | 14,155 | $ | 10,929 | $ | 55,055 | $ | 43,461 | |||||||||||||||
International | 4,797 | 3,639 | 17,497 | 14,098 | |||||||||||||||||||
Total | $ | 18,952 | $ | 14,568 | $ | 72,552 | $ | 57,559 | |||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| Product sales by category: | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Trauma and deformity | $ | 13,631 | $ | 10,150 | $ | 49,371 | $ | 39,695 | |||||||||||||||
Scoliosis | 4,891 | 4,053 | 21,485 | 16,662 | |||||||||||||||||||
Sports medicine/other | 430 | 365 | 1,696 | 1,202 | |||||||||||||||||||
Total | $ | 18,952 | $ | 14,568 | $ | 72,552 | $ | 57,559 | |||||||||||||||
ORTHOPEDIATRICS CORP.
RECONCILIATION OF NET LOSS FROM CONTINUING OPERATIONS TO NON-GAAP ADJUSTED EBITDA
(Unaudited)
(In Thousands)
| Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
| 2019 | 2018 | 2019 | 2018 | ||||||||||||||||||||
| Net loss from continuing operations | $ | (4,329) | $ | (2,468) | $ | (12,685) | $ | (12,025) | |||||||||||||||
Interest expense, net | 1,306 | 533 | 3,538 | 2,255 | |||||||||||||||||||
Other expense | (8) | 69 | 70 | 217 | |||||||||||||||||||
Depreciation and amortization | 1,405 | 715 | 4,671 | 2,892 | |||||||||||||||||||
Stock-based compensation | 707 | 287 | 2,603 | 1,199 | |||||||||||||||||||
Accelerated vesting of restricted stock upon our IPO | — | — | — | 1,986 | |||||||||||||||||||
Acquisition related costs | — | — | 737 | — | |||||||||||||||||||
| Adjusted EBITDA | $ | (919) | $ | (864) | $ | (1,066) | $ | (3,476) | |||||||||||||||
| 2850 Frontier Drive Warsaw, Indiana 46582 www.orthopediatrics.com | | | | | TOLL-FREE PHONE FAX | 877.268.6339 574.268.6379 574.269.3692 | ||||||||||||||||||||||||||||||||
| TRAUMA & DEFORMITY | SCOLIOSIS | SPORTS MEDICINE | CLINICAL EDUCATION | |||||||||||||||||||||||||||||||||||