OrthoPediatrics Corp. (NASDAQ:KIDS) Q1 2020 Earnings Conference Call May 6, 2020 8:00 AM ET Company Participants Tram Bui - Investor Relations Mark Throdahl - President and Chief Executive Officer Fred Hite - Chief Financial Officer David Bailey - Executive Vice President Conference Call Participants Rick Wise - Stifel Matthew O’Brien - Piper Sandler Ryan Zimmerman - BTIG Kaila Krum - SunTrust Mike Matson - Needham & Company Dave Turkaly - JMP Securities Operator Ladies and gentlemen, thank you for standing ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The unaudited Q1 2020 financial statements report a net loss of **$4.9 million**, a decrease in total assets to **$174.2 million**, and detail recent acquisitions of Telos Partners and Apifix Ltd [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Condensed Consolidated Balance Sheets (in thousands) | | March 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | **Total current assets** | $115,121 | $128,058 | | **Total assets** | $174,199 | $182,154 | | **Total current liabilities** | $13,832 | $13,663 | | **Total liabilities** | $34,932 | $39,793 | | **Total stockholders' equity** | $139,267 | $142,361 | - Cash decreased from **$70.8 million** at the end of 2019 to **$53.6 million** as of March 31, 2020[13](index=13&type=chunk) - Inventories increased to **$44.0 million** from **$38.0 million** at the end of 2019[13](index=13&type=chunk) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Condensed Consolidated Statements of Operations (in thousands) | | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | **Net revenue** | $16,356 | $14,656 | | **Gross profit** | $12,213 | $10,655 | | **Total operating expenses** | $16,710 | $13,372 | | **Operating loss** | $(4,497) | $(2,717) | | **Net loss** | $(4,945) | $(3,020) | | **Net loss per share** | $(0.30) | $(0.21) | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Condensed Consolidated Statements of Cash Flows (in thousands) | | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(6,956) | $(3,471) | | **Net cash used in investing activities** | $(5,623) | $(4,982) | | **Net cash (used in) provided by financing activities** | $(4,530) | $536 | | **NET DECREASE IN CASH** | $(17,086) | $(7,917) | | **Cash and restricted cash, end of period** | $54,941 | $52,774 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail business operations, key accounting policies, the **$3.5 million** Telos Partners acquisition, and the subsequent **$39 million** Apifix Ltd. acquisition - On March 9, 2020, the company purchased Telos Partners, LLC, a regulatory consulting firm, for **$3.5 million** in total consideration, consisting of cash and common stock[28](index=28&type=chunk)[79](index=79&type=chunk) - On April 1, 2020, subsequent to the quarter end, the company acquired Apifix Ltd. for **934,768 shares** of common stock (approx. **$37.0 million**) and **$2.0 million** in cash, with additional future payments contingent on milestones and revenue performance[129](index=129&type=chunk) Revenue by Category (in thousands) | Product sales by category: | 2020 | 2019 | | :--- | :--- | :--- | | Trauma and deformity | $12,210 | $10,017 | | Scoliosis | $3,711 | $4,258 | | Sports medicine/other | $435 | $381 | | **Total** | **$16,356** | **$14,656** | Revenue by Geography (in thousands) | Product sales by geographic location: | 2020 | 2019 | | :--- | :--- | :--- | | U.S. | $13,384 | $10,267 | | International | $2,972 | $4,389 | | **Total** | **$16,356** | **$14,656** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2020 performance, noting a **12% net revenue growth** to **$16.4 million** despite COVID-19 impacts, leading to a **$4.9 million net loss** Summary of Operations (in thousands) | | Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | Increase (Decrease) | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net revenue** | $16,356 | $14,656 | $1,700 | 12% | | **Cost of revenue** | $4,143 | $4,001 | $142 | 4% | | **Sales and marketing expenses** | $7,564 | $6,547 | $1,017 | 16% | | **General and administrative expenses** | $7,881 | $5,612 | $2,269 | 40% | | **Net loss** | $(4,945) | $(3,020) | $1,925 | 64% | - The COVID-19 pandemic has led to a reduction in revenue due to global delays in elective surgeries. To mitigate supply risks, the company increased certain inventory levels during the quarter[145](index=145&type=chunk)[146](index=146&type=chunk) - Net revenue growth of **12%** was primarily driven by a **$2.2 million (22%) increase** in Trauma and Deformity sales, offset by a **$0.5 million (13%) reduction** in Scoliosis sales[152](index=152&type=chunk) - General and administrative expenses increased by **40%** primarily due to increased resources to support business growth, higher quality and regulatory expenses, and increased stock compensation and legal expenses[155](index=155&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a "smaller reporting company," the company is exempt from providing market risk disclosures - As a "smaller reporting company," OrthoPediatrics Corp. is not required to provide the information for this item[174](index=174&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - Management concluded that as of March 31, 2020, the company's disclosure controls and procedures were effective[177](index=177&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[179](index=179&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=35&type=section&id=Item%201.%20Legal%20Proceedings) The company is vigorously defending a patent infringement lawsuit filed by K2M, Inc. regarding its RESPONSE™ spine systems - The company is defending a patent infringement lawsuit from K2M, Inc. related to its RESPONSE™ spine systems[182](index=182&type=chunk) - OrthoPediatrics denies the claims, has filed counterclaims asserting the patents are invalid and not infringed, and views its case as 'particularly strong'[182](index=182&type=chunk) [Item 1A. Risk Factors](index=35&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor highlights the significant negative impact of the COVID-19 pandemic and deferred elective surgeries on business operations - A new risk factor has been added to address the adverse impact of the COVID-19 pandemic on the business and financial results[184](index=184&type=chunk)[185](index=185&type=chunk) - The deferral of elective surgeries, where a majority of the company's products are used, has had and will continue to have a significant negative impact on the business[186](index=186&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued **36,628 shares** for the Telos Partners acquisition and repurchased **4,014 shares** in February 2020 - On March 9, 2020, the Company issued **36,628 shares** of common stock as part of the acquisition of Telos Partners, LLC[189](index=189&type=chunk) - In February 2020, the company purchased **4,014** of its own shares for a total of approximately **$187,000**[191](index=191&type=chunk)[192](index=192&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported - No defaults upon senior securities were reported[193](index=193&type=chunk) [Item 4. Mine Safety Disclosures](index=37&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures were reported - No mine safety disclosures were reported[194](index=194&type=chunk) [Item 5. Other Information](index=37&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported under this item[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed, including the Apifix Ltd. Share Purchase Agreement, corporate governance documents, and officer certifications - The exhibits filed with the report include the Share Purchase Agreement for the acquisition of ApiFix Ltd., loan agreements with Squadron, and certifications by the CEO and CFO[201](index=201&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K [Mark One] ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 001-38242 ORTHOPEDIATRICS CORP. (Exact name of registrant as specified in its charter) Delaware 26-1761833 (State or other ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number: 001-38242 OrthoPediatrics Corp. (Exact name of registrant as specified in its charter) (State or other jurisdic ...

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OrthoPediatrics Corp. October 2019 Mark Throdahl, CEO David Bailey, EVP F 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," "believe," "estimate," "project," "target," "predict," "intend," "future," "goals," "potential," "objective," "would" and other similar expressio ...

OrthoPediatrics Corp. October 2019 Mark Throdahl, CEO David Bailey, EVP F 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," "believe," "estimate," "project," "target," "predict," "intend," "future," "goals," "potential," "objective," "would" and other similar expressio ...

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) FORM 10-Q For the quarterly period ended June 30, 2019 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number: 001-38242 OrthoPediatrics Corp. (Exact name of registrant as specified in its charter) (State or other jurisdiction ...

OrthoPediatrics Corp (NASDAQ:KIDS) Q2 2019 Earnings Conference Call August 8, 2019 8:00 AM ET Company Participants Tram Bui - The Ruth Group Mark Throdahl - President, CEO & Director Fred Hite - CFO & Director Conference Call Participants Frederick Wise - Stifel, Nicolaus & Company Kevin Farshchi - Piper Jaffray Companies Anna Nussbaum - William Blair & Company Samuel Brodovsky - BTIG David Saxon - Needham & Company Jonathan Braatz - Kansas City Capital Associates Operator Good morning, ladies and gentlemen ...