OrthoPediatrics(US:KIDS)2024-11-07 19:37Financial Performance - Net revenue for the three months ended September 30, 2024, was $54,573,000, representing a 36.5% increase from $39,972,000 in the same period of 2023[10] - Gross profit for the nine months ended September 30, 2024, was $113,033,000, compared to $84,539,000 for the same period in 2023, indicating a 33.8% increase[10] - Operating loss for the three months ended September 30, 2024, was $(5,566,000), compared to $(4,508,000) for the same period in 2023[10] - Net loss for the nine months ended September 30, 2024, was $(21,753,000), compared to $(14,283,000) for the same period in 2023, reflecting a 52.4% increase in losses[12] - Total operating expenses for the three months ended September 30, 2024, were $45,626,000, up from $35,461,000 in the same period of 2023, a 28.5% increase[10] - The company reported a foreign currency translation adjustment of $3,623,000 for the three months ended September 30, 2024, compared to a loss of $(3,947,000) in the same period of 2023[12] Shareholder Information - The weighted average shares outstanding for the nine months ended September 30, 2024, were 23,046,155, compared to 22,646,087 for the same period in 2023[10] - The company’s accumulated deficit as of September 30, 2024, was $(219,495,000)[14] - As of September 30, 2023, OrthoPediatrics Corp. reported an accumulated deficit of $191,051,000, increasing from $186,460,000 at June 30, 2023[16] - Total stockholders' equity as of September 30, 2023, was $374,329,000, a decrease from $380,312,000 at June 30, 2023[16] Cash Flow and Financing Activities - Cash used in operating activities for the nine months ended September 30, 2023, was $23,061,000, compared to $19,503,000 for the same period in 2022, indicating an 18% increase in cash outflow[18] - The company reported a cash balance of $53,045,000 at the end of the period, up from $33,027,000 at the beginning of the year[18] - The net cash provided by financing activities was $53,676,000 for the nine months ended September 30, 2023, compared to a net cash used of $2,086,000 for the same period in 2022[18] Acquisitions - The company completed the acquisition of Boston O&P for $20,225,000 during the nine months ended September 30, 2023[18] - The company acquired Boston Brace International, Inc. for a total consideration of $21,534, which included cash and restricted stock awards[39] - The company completed the acquisition of Rhino Pediatric Orthopedic Designs, Inc. for a total consideration of $1,024, which included cash and common stock[43] - The acquisition of Medtech Concepts LLC was valued at approximately $15,274, with $3,000 paid in cash and additional payments structured in stock and cash over four years[44][46] Product Development and Market Strategy - The company plans to continue developing and commercializing new products to enhance revenue generation capabilities[5] - The company is focused on expanding its network of third-party independent sales agencies and distributors to improve market reach[5] - OrthoPediatrics Corp. continues to focus on developing specialized orthopedic products for pediatric patients, addressing a largely neglected market segment[21] - The company operates multiple orthotic and prosthetic clinics, enhancing its service delivery in pediatric non-surgical treatments[21] Stock-Based Compensation - Stock-based compensation for the nine months ended September 30, 2023, was $9,660,000, compared to $7,779,000 for the same period in 2022, representing a 24% increase[18] - The Company has $22,247 of unrecognized compensation expense related to service-based restricted stock awards, expected to be recognized over a weighted-average period of 1.8 years[95] - Stock-based compensation expense on restricted stock was $9,660 for the nine months ended September 30, 2024, compared to $7,779 for the same period in 2023, reflecting a 24% increase[96] Debt and Financial Obligations - As of September 30, 2024, total debt of $76,859 million, significantly increased from $11,063 million as of December 31, 2023[61] - The company entered into a Term Loan Agreement on August 5, 2024, providing for an initial term loan facility of $25,000 million, with a delayed draw term loan facility of up to $25,000 million[62] - The company issued $50,000 million in aggregate principal amount of 4.75% Convertible Senior Notes due February 15, 2030, for an aggregate purchase price of $49,500 million[69] - The Company’s Level 1 financial assets included $25,017 million in Exchange Traded Mutual Funds as of September 30, 2024[58] Impairment and Asset Valuation - The company recorded an impairment charge of $985 million for the ApiFix trademark asset for the year ended December 31, 2023, reducing its carrying amount to its estimated fair value[56] - The company recorded a trademark asset of $520 and an intellectual property asset of $9,523 from the Medtech acquisition, with the latter being amortized over ten years[49] - The fair value of the ApiFix trademark asset was determined to be less than its carrying value, resulting in an impairment charge of $985 million for the year ended December 31, 2023[56] Revenue by Product Category - Total product sales for the three months ended September 30, 2024, were $54.573 million, a 36.5% increase from $39.972 million in the same period of 2023[104] - For the nine months ended September 30, 2024, total product sales reached $152.060 million, up 36.9% from $111.119 million in the prior year[104] - Trauma and deformity product sales for the three months ended September 30, 2024, were $37.642 million, a 30.7% increase from $28.806 million in 2023[106] - Scoliosis product sales for the three months ended September 30, 2024, increased by 51.5% to $15.635 million from $10.304 million in 2023[106] Accounting and Compliance - Recent accounting pronouncements from the FASB are expected to have minimal impact on the company's financial statements, focusing on disclosure improvements and segment reporting[34][35] - The company maintains a low risk of credit losses associated with accounts receivable and short-term investments, supported by a strong history of collections[33]