WARSAW, Indiana, March 06, 2019 (GLOBE NEWSWIRE) — OrthoPediatrics Corp. (NASDAQ:KIDS), a company exclusively focused on advancing the field of pediatric orthopedics, announced today its financial results for the fourth quarter and full year ended December 31, 2018.
Fourth Quarter / Full Year 2018 and Recent Highlights
- Reported total revenue of $14.6 million for fourth quarter 2018, up from $11.7 million or 24.7% year-over-year, respectively.
- Record setting $57.6 million for full year 2018, up from $45.6 million or 26.2% year-over-year, respectively.
- Generated adjusted EBITDA of $518 thousand for full year 2018, up from negative $58 thousand for full year 2017. (See below for additional information and a reconciliation of non-GAAP financial information.)
- Strengthened global footprint with the conversion of stocking distributors to sales agencies in Canada during 2018 and Belgium and the Netherlands at the beginning of 2019.
- Deployed $12.0 million in consignment sets and expanded product portfolio offering to 26 surgical systems in 2018.
- Bolstered cash position with $43.4 million net follow-on offering in December 2018.
- Provided full year 2019 revenue growth guidance to be in a range of 21.0% to 23.0% and investment in consignment sets to be in a range of $15.0 million to $17.0 million.
Mark Throdahl, President and Chief Executive Officer of OrthoPediatrics, commented, “We delivered another year of record performance in 2018 with 26% annual revenue growth and $12 million deployed in consignment sets. Our tenth consecutive year of 20%+ annual revenue growth was supported by increased investments in consigned sets, product innovation, ongoing conversions of international sales agencies, and clinical education. Furthermore, while increasing our investment in these four areas, we also demonstrated our initial ability to deliver positive adjusted EBITDA of $518 thousand for the full year 2018. With an expanded product portfolio of 26 surgical systems, we remain dedicated to advancing the field of pediatric orthopedics and are delighted that our accomplishments have helped approximately 150,000 children to date.”
Mr. Throdahl continued, “In addition to our revenue and profitability achievements in 2018, our strengthened balance sheet following a successful secondary raise in December positions us well for sustainable future growth. This capital supports our increased investment in consignment set deployment to a range of $15 million to $17 million for 2019 and provides us with the opportunity to welcome new technologies that could expand our product offering and growth outlook. Based on strong execution across our key initiatives, we head into 2019 feeling confident in achieving our full year 2019 revenue growth guidance of 21% to 23%.”
Fourth Quarter and Full Year 2018 Financial Results
Total revenue for the fourth quarter of 2018 was $14.6 million, a 24.7% increase compared to $11.7 million for the same period last year. U.S. revenue for the fourth quarter of 2018 was $10.9 million, a 23.9% increase compared to $8.8 million for the same period last year, representing 75.0% of total revenue. International revenue for the fourth quarter of 2018 was $3.6 million, a 27.4% increase compared to $2.9 million for the same period last year, representing 25.0% of total revenue.
Total revenue for 2018 was $57.6 million, a 26.2% increase compared to $45.6 million for 2017. Our U.S. revenue for 2018 was $43.5 million, a 24.5% increase compared to $34.9 million for 2017, representing 75.5% of total revenue. Our international revenue for 2018 was $14.1 million, a 31.6% increase compared to $10.7 million for 2017, representing 24.5% of total revenue.
Trauma and Deformity revenue for the fourth quarter of 2018 was $10.2 million, a 19.9% increase compared to $8.5 million for the same period last year. Scoliosis revenue for the fourth quarter of 2018 was $4.1 million, a 38.2% increase compared to $2.9 million for the same period last year. Sports Medicine/Other revenue for the fourth quarter of 2018 was $365 thousand, a 27.6% increase compared to $286 thousand for the same period last year.
Trauma and Deformity revenue for 2018 was $39.7 million, a 21.0% increase compared to $32.8 million for 2017. Scoliosis revenue for 2018 was $16.7 million, a 43.8% increase compared to $11.6 million for 2017. Sports medicine/other revenue for 2018 was $1.2 million, a 2.6% decrease compared to the same period in 2017.
Gross profit for the fourth quarter of 2018 was $10.5 million, a 19.0% increase compared to $8.8 million for the same period last year, and $42.7 million for 2018, a 23.9% increase compared to $34.5 million for 2017. Gross profit margin for the fourth quarter of 2018 was 72.2%, compared to 75.6% for the same period last year, and was 74.2% for 2018, compared to 75.5% for 2017 due to an increase in international and distributed product sales.
Total operating expenses for the fourth quarter of 2018 were $12.4 million, a 5.0% decrease compared to $13.0 million for the same period last year, which included $2.0 million of expense related to the accelerated vesting of restricted stock. Full year operating expenses of $52.2 million for 2018, a 27.6% increase compared to $40.9 million for 2017. Operating expenses for both fourth quarter and full year 2018 included increased research and development expenses of 35.7% and 38.2% year-over-year, respectively, as well as increased sales and marketing expenses. Operating loss for the fourth quarter of 2018 was ($1.9) million, a 55.6% decrease in loss realized compared to ($4.2) million for the same period last year. Operating loss for 2018 was ($9.6) million, a 47.6% increase in loss realized compared to ($6.5) million for 2017.
Interest expense for the fourth quarter of 2018 was $533 thousand, a 15.8% decrease compared to $633 thousand dollars for the same period last year, and was $2.3 million for 2018, a 9.4% decrease compared to $2.5 million for 2017.
Net loss for the fourth quarter of 2018 was ($2.5) million, compared to ($4.8) million for the same period last year. Net loss per share attributable to common stockholders for the fourth quarter of 2018 was ($0.19) per basic and diluted share, compared to ($1.41) per basic and diluted share for the same period last year. Adjusted EBITDA for the fourth quarter of 2018 was negative $125 thousand as compared to negative $658 thousand for the fourth quarter of 2017.
Net loss for 2018 was ($12.0) million, compared to ($8.9) million for 2017. Net loss per share attributable to common stockholders for 2018 was ($0.96), compared to ($5.86) per basic and diluted share for 2017. Adjusted EBITDA for the full year 2018 turned to a positive $518 thousand from negative $58 thousand for the full year 2017. See below for additional information and a reconciliation of non-GAAP financial information.
The weighted average number of diluted shares outstanding for the year ended December 31, 2018 was 12,567,387 shares.
In the fourth quarter of 2018, we had more than 130 sales representatives, compared to more than 110 in 2017.
The change in property and equipment during the fourth quarter of 2018 was negative $58 thousand, as compared to $1.3 million for the same period last year, and $5.3 million for 2018, a 0.9% increase compared to $5.2 million for 2017.
As of December 31, 2018, cash and cash equivalents were $60.7 million, compared to $24.5 million as of September 30, 2018, and the Company had approximately $21.3 million in total outstanding indebtedness, with no balance outstanding under the revolving credit facility.
Capitalization Update
On December 11, 2018, the Company completed a public offering selling 1,725,000 shares at a price of $27.00 per share, including 225,000 shares sold to the underwriters upon exercise of the option to purchase additional shares. The public offering generated net proceeds of approximately $43.4 million, after deducting the underwriting discount and commissions and offering expenses payable by OrthoPediatrics.
Full Year 2019 Financial Guidance
OrthoPediatrics is providing financial guidance for the full year 2019, as follows:
- Revenue growth in a range of 21.0% to 23.0%
- Consigned set investments in a range of $15.0 million to $17.0 million
Conference Call
OrthoPediatrics will host a conference call on Thursday, March 7, 2019, at 8:00 a.m. ET to discuss its financial results. The dial-in numbers are (855) 289-4603 for domestic callers and (614) 999-9389 for international callers. The conference ID number is 7091308. 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 OrthoPediatrics releases its first quarter 2019 financial results. In addition, a telephonic replay of the conference call will be available until March 14, 2019. 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 7091308.
