OrthoPediatrics’ Q2 Revenue Skyrockets 96 Percent

OrthoPediatrics Corp., has more than made up for pandemic-induced lost revenue. The company announced that its second-quarter revenue soared 96 percent compared to last year.

“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,” said David Bailey, president and CEO of OrthoPediatrics. “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.”

Total revenue for the second quarter (ended June 30) was $26.7 million, a 96 percent increase compared to $13.6 million for the same period last year, which reflected significant disruption caused by the COVID-19 pandemic in both U.S. and International markets. U.S. revenue for the second quarter of 2021 was $21.7 million, a 79 percent increase compared to $12.1 million in Q2 2020, representing 81.4 percent of total revenue. International revenue was $5 million, a 243 percent increase compared to $1.4 million for the same period last year, representing 18.6 percent of total revenue. The significant increase reflects the improvements in underlying procedure volumes in both the U.S. and international markets compared to the second quarter of 2020, in addition to the benefit of converting Germany, Austria, and Switzerland to a direct agency sales model.

Trauma and Deformity revenue was $17.9 million, a 95 percent increase compared to $9.2 million for Q2 2020, driven by strong sales in PNP, cannulated screws, and Orthex. Scoliosis revenue was $7.7 million, a 100 percent 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 was $1.1 million, a 106 percent increase compared to $500,000 for the same period last year. Growth in the quarter was driven by Telos Partners’ consulting contracts and repeat advisory business.

Gross profit was $20.4 million, a 103 percent increase compared to $10.1 million for the same period last year. Gross profit margin improved to 76.6 percent, compared to 74 percent in Q2 2020 due to a higher percentage mix of domestic and international agency sales.
 
Total operating expenses were $23.3 million, a 36 percent 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 million in the second quarter of 2020.
 
Total other expenses 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 was $3.8 million, compared to $9.4 million in Q2 2020. 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 was $1.2 million as compared to a loss of $2.3 million in Q2 2020, driven by higher revenue with controlled spending. As of June 30, cash, cash equivalents, short-term investments and restricted cash were $67.2 million compared to $78 million as of March 31. The company had no outstanding term loan obligations.

Second Quarter 2021 and Business Highlights 

• Helped a record 10,500 children in the second quarter 2021, bringing total to more than 215,000 since the inception of OrthoPediatrics
• Announced the launch of RESPONSE Neuromuscular (NM) Scoliosis System, representing the 36th surgical system launched since inception
• Announced the full commercial release of SCFE Cannulated Screw System
• Completed the first Orthex external fixation cases in Germany and the United Kingdom 

For full year 2021, the company is increasing its full year revenue guidance range to $97 to $101 million, up from $94 to $98 million, representing 36 percent to 42 percent growth over 2020 revenue. The company is seeing strong momentum in the United States, management continues to take a measured approach given the potential headwinds resulting from the COVID-19 Delta variant. Management also expects regional variability to persist in international markets as hospitals continue to work through backlogs and countries face challenges with COVID-19 surges.