OrthoPediatrics Corp. Reports Second Quarter 2021 Financial Results
August 04, 2021 at 16:01 PM EDT
WARSAW, Ind., Aug. 04, 2021 (GLOBE NEWSWIRE) -- 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 second quarter ended June 30, 2021.
Second Quarter 2021 and Business Highlights
David Bailey, President & CEO of OrthoPediatrics, commented, “The Company’s second quarter results reflect robust growth across the entirety of our business. Together with the strong commitment of our team, this growth enabled us to help a record 10,500 children in the quarter. We believe we are well positioned to continue delivering durable, long-term, double-digit growth.” Mr. Bailey continued, “I am proud of everything we have accomplished, but we have so much more we can do to help children suffering from orthopedic conditions. We remain focused on executing our proven strategy that produces consistent results and improves lives.”
Second Quarter 2021 Financial Results
Trauma and Deformity revenue for the second quarter of 2021 was $17.9 million, a 95% increase compared to $9.2 million for the same period last year, driven by strong sales in PNP, Cannulated Screws, and Orthex. Scoliosis revenue was $7.7 million, a 100% increase compared to $3.8 million for the second quarter of 2020, reflecting increased patient volumes and growth in Response and Firefly procedures, as well as initial contribution from ApiFix. Sports Medicine/other revenue for the second quarter of 2021 was $1.1 million, a 106% increase compared to $0.5 million for the same period last year. Growth in the quarter was driven by Telos Partners’ consulting contracts and repeat advisory business.
Gross profit for the second quarter of 2021 was $20.4 million, a 103% increase compared to $10.1 million for the same period last year. Gross profit margin for the second quarter of 2021 improved to 76.6%, compared to 74.0% for the same period last year due to a higher percentage mix of domestic and international agency sales.
Total operating expenses for the second quarter of 2021 were $23.3 million, a 36% increase compared to $17.1 million for the same period last year. The increase in operating expenses was primarily driven by increased commission expense and increased depreciation and amortization costs. Operating loss for the second quarter of 2021 was ($2.8) million compared to ($7.0) million for the same period last year.
Total other expenses for the second quarter of 2021 were $1.2 million, compared to $2.4 million for the same period last year, primarily driven by lower net interest expense.
Net loss for the second quarter of 2021 was ($3.8) million, compared to ($9.4) million for the same period last year. Net loss attributable to common stockholders for the period was ($0.19) per basic and diluted share, compared to ($0.54) per basic and diluted share for the same period last year. Adjusted diluted loss per share was ($0.11) compared to ($0.44) for the same period last year.
Adjusted EBITDA for the second quarter of 2021 was $1.2 million as compared to a loss of ($2.3) million for the second quarter of 2020 driven by higher revenue with controlled spending.
As of June 30, 2021, cash, cash equivalents, short-term investments and restricted cash were $67.2 million compared to $78.0 million as of March 31, 2021. The Company had no outstanding term loan obligations.
Full Year 2021 Financial Guidance
A replay of the webcast will remain available on OrthoPediatrics’ website, www.orthopediatrics.com, until the Company releases its third quarter 2021 financial results. In addition, a telephonic replay of the call will be available until August 12, 2021. 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 6982208.
Use of Non-GAAP Financial Measures
This press release includes certain non-GAAP financial measures such as adjusted diluted earnings (loss) per share and Adjusted EBITDA, which differ from financial measures calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). Adjusted earnings (loss) per share in this press release represents diluted earnings (loss) per share on a GAAP basis, plus the accreted interest attributable to acquisition installment payables, the fair value adjustment of contingent consideration, non-recurring professional fees and accrued legal settlement costs. The fair value adjustment of contingent consideration is associated with our estimates of the value of earn-outs in connection with certain acquisitions and the non-recurring professional fees are related to our response to a previously disclosed SEC review. We believe that providing the non-GAAP diluted earnings (loss) per share excluding these expenses, as well as the GAAP measures, assists our investors because such expenses are not reflective of our ongoing operating results. Adjusted EBITDA in this release represents net loss, plus interest expense, net plus other expense, provision for income taxes (benefit), depreciation and amortization, stock-based compensation expense, fair value adjustment of contingent consideration, acquisition related costs, nonrecurring professional fees and accrued legal settlements costs. The Company believes the non-GAAP measures provided in this earnings release enable it to further and more consistently analyze the period-to-period financial performance of its core business operating performance. Management uses these metrics as a measure of the Company’s operating performance and for planning purposes, including financial projections. The Company believes these measures are useful to investors as supplemental information because they are frequently used by analysts, investors and other interested parties to evaluate companies in its industry. 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 these non-GAAP measures, 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 non-GAAP diluted earnings (loss) per share or Adjusted EBITDA should not be construed to imply that its future results will be unaffected by any such adjustments. Management compensates for these limitations by primarily relying on the Company’s GAAP results in addition to using these adjusted measures on a supplemental basis. The Company’s definition of these measures is not necessarily comparable to other similarly titled captions of other companies due to different methods of calculation. The schedules below contain reconciliations of reported GAAP diluted earnings (loss) per share to non-GAAP diluted earnings (loss) and net loss 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 36 surgical systems that serve three of the largest categories within the pediatric orthopedic market. This product 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 45 countries outside the United States. For more information, please visit www.orthopediatrics.com.