KIDS - Earnings call transcript Q2 2018

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Operator

Good day, ladies and gentlemen, and welcome to the OrthoPediatrics Corporation Second Quarter Earnings Conference Call. [Operator Instructions].

As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Tram Bui from The Ruth Group. Ma'am, you may begin.

Tram Bui

everyone, in thanks, call. and Operator, for today's participating Thanks,

Throdahl, company Officer, Officer. Joining the Mark Chief Financial me from Chief are Executive Hite, and Fred

and we risks safe statements Act forward-looking within company's comments may meaning listeners Litigation the of this to Reform laws, I'd of and of the call by statements differ including the securities the Securities conference forward-looking management These during provisions results involve Before that include will uncertainties, federal begin, harbor material like XXXX. actual made materially. caution Private

will risk For a the I discussion on its Form review to be the Exchange which quarterly and Form of March with filed factors, filed later recent encourage XXXX, and on most you today. XX-K XX, Commission company's report Securities XX-Q,

today, investors will measures, its performance. The certain non-GAAP call used supplemental provide the measures in for these discuss management useful measures financial as also information evaluating company of are which period-over-period. During operations believes

financial be measures this financial results measures non-GAAP referenced with Please or prepared and limitations non-GAAP most comparable directly as measures each on the financial financial a its OrthoPediatrics isolation not the analytical company financial earnings non-GAAP for GAAP call, has a should note release. of to considered measure have For in in GAAP. included reconciliation that as tools the substitute accordance in

conference I'd time-sensitive place after call. of by to to of that undertakes information the or reflect update that required no this contains company With like take events call is as call turn Except this content revise broadcast, live over statements to date to the Mark. date of or August of the obligation only that In said, the any addition, the X, the circumstances law, as accurate XXXX.

Mark Throdahl

provide by overview call a us financial will followed joining for second questions. operating and morning, Afterwards, review. I'll begin an results, XXXX detailed closing with call. on make remarks for our and you thank the Fred, our quarter opening of second earnings some Good conference today who I'll everyone, financial quarter's before

we worldwide segments deformity are record all to robust Domestic XX%, XX% industry report XX%. leading For second of we of from revenues XX%, and XX%, in sales execution our year-over-year up quarter in up $XX.X we of position scoliosis growth XXXX, sustainable It all can so up up representing the business sales our business. of trauma are and our a strong increase. areas that competitive This strengthening achieve performance million, proud results demonstrates that quarterly international levels. at

sales our investments half During we increased development line or representatives, in the first consigned expectations. and have in by year, exceeded that sets, and levels research are

a and ongoing in company. extensions domestic for our first that new will through our dominant growth that our year XXth traction R&D yearend. the supports to public all, our to that and X that deployed and utilization we $XX of Specifically, launches clearance our FDA expected sustain satisfy further the demand XXXX and increased orthopedics. line additional build player commitment All These to the an development our company continue future as growth. position the and our for is the The the consigned highlight to increased player and investment product of sets the let help in by full reflected our have the domestic future of pediatric we system increase overview, for in year success million consigned ever-bigger continued strong sets full surgical recent the demonstrate surgical salesforce the Concurrently, products. primary as support the company an in the in we lead $X.X systems. expand quarter million while our expanding system initiatives With me target significant drives of to

The consigned deployments. first is set

quarter million new of our and sets million first the of XXXX in realized the historical significantly initial the the during quarter an $X.X annual the additional exceeds benefits consigned $X.X we sets half from $X.X consigned The million. During deployed in combined first in million of $X.X invested this year. investment

We have constraint thus our a growth. removed to

XXXX products We recognize broad up consigned sets expect upcoming million demand for quarters. pent the continue to address updated full to we $XX these for from additional contribution target the our track an as of we in year and

in these This add reps To four sets supplemented with support sales we on broaden during expansion. reps and second additional The XX overall best sales second initiative the us our in quarter. of keeps utilization, team their consigned is the to the pediatric salesforce placement class track year.

market in sales US are our our to of We products committed they the execution and behind providing June, and reps sales distributors that the These order in fully revenue service an compare XXXX, agencies, over mirrors are same today consistent time the selling in XX the stocking XX% dedicated of world reps conjunction our position market of period. XX force leading international growth to orthopedics. the to international our to reps two pediatric XX sales with driving position. increase Our and outstanding everywhere support remain sales expansion in in

products. new The third initiative is

following offerings, FEMUR, drive surgical of needs of pediatric in for XX In received new that the surgeons substantial orthopedic potential patients. orthopedic and and expansion PediNail implant years will positive our how the us system, Platform, product. children another anatomy including launch uniformly nailing our on of demonstrates as expansion platform, the and have next be of addition track to distinct launched can clearance experience the existing our small XXX(k) for new is as pediatric features franchise. May. the well two pediatric the our system. corrections. supporting We early on additional one which we The RESPONSE ability pediatric of to to both stature in significant Pediatric banding which These expand of also year, challenges nailing step treat Nailing for of second their adolescents, suggests systems additional our and product sales an are salesforce optimized intermedullary ever first enables adoption This and to FDA, system line submitted polyester scoliosis two injuries FDA system, and this system our the half will spinal represents introductions feedback BandLoc, treat remain July the the to was to meet the traumatic extensions unique sublaminar have for of of in used It deformities. in we pediatric XXth products, our improvements This both deformity specific system and the this

bone osteogenesis We provide our options the are development improved which nail known of will to condition treat progressing system as dramatically brittle imperfecta surgeons pediatric disease. difficult with

are we the working addition, first In pediatric system. ever foot also on

surgery, development As and we needs the scoliosis our continuous deformity pediatric unmet solutions launched try every existing projects. in any of OrthoPediatrics confirms as an word in we that aggressive virtually about believe continue to will of longer our the in company new term market. cadence into trauma relative follow insurmountable achieve to surgical grid that customers introductions of product that we two well to as might consistent fill lead growth The our improvements provide in us innovative products. system A ability with have ever

in implants have program company capabilities the results. from area. our We and partnership that seen impressive are with results making The active produced also very deep on growing spinal satisfactory tangible has technical this has progress tethering

fourth growth, the when While will company's is support. too initiative these reach significantly it's might $XXX to to and The they say confident that market, education contribute sales systems the our surgical the even early new approach we mark. clinical are million society as

relationship charity through continuing with and our care. the by to America financial Research commitment in including access level Pediatric developing the whose to support the surgical demonstrated by OrthoPediatrics annual in countries European is May. look public We surgical status Foundation in we which with in whose World meeting attended instruments recently increase Orthopaedic of to we societies Society and for entire forward Our orthopedics to pediatric Education pediatric received the our Project Paediatric support clinical March. field Orthopaedic advancing continued to for strengthened meeting association We attended children & orthopedic our highest Pediatric April, education of our programs the of Society North provide implants,

the and pose only cases to to have to colleagues Finally, questions orthopedic we company social are a the post surgeons allows world. media around that their platform

platform During DocMatter the second follow quarter, the number of exceeded XXX. surgeons who OrthoPediatrics

date and issue at Before contest vigorous Appeal our the Board, to Patent update two earlier or petitions Inter Office's United this & Fred, of February to this second proceedings. litigation federal IPR the one the a patents of both of XX, on & matter. we or June, Review I PTAB, XXXX, IPRs, KXM defense set of turn I'd lawsuit. to filed of the petitions XXXX, patented challenge the expect subject additional patentability in for lawsuit. federal court PTAB stay month, the of moved has XXXX XXXX early IPR to these the the issue the in and lawsuit IPRs. The federal the we the the call that this to Accordingly, instituted to in Partes In stay pending Moreover, order July OrthoPediatrics provide KXM on outcome late XX, July, patentability States trial Patent like file with over the later Trademark PTAB year Trial The in the an both

we others, as view particularly strong. among our these case For reasons,

Although a call on welcome Fred? turn lawsuit settlement. without the defend of constructive is against we Fred claims believe review I'll us, the our vigorously the asserted merit and for a negotiated financial we to results. continue that KXM to we'll over now discussions

Fred Hite

$X.X Thanks, our was in new XX% XXXX. representing to up million, revenue. million at total the of increased compared compared representing million period year, for XXXX increase million, second quarter to XX% period to quarter XX% revenue same record the when of total period same in the the in the was revenue revenue. last million to of $X.X second last XXXX XX% of XXXX in the $XX.X Mark. second million a $X.X a $XX.X Total in U.S. of $XX.X XX% year, revenue quarter compared in same International

increase increase revenue revenue million XX% period same by a breakdown second second product in was the deformity follows. sales the $X.X in a Scoliosis a compared XXXX last Our the product revenue strong to to same in million, XX% was in adoption, $X.X supplemented the growing quarter U.S. XXXX the and by category compared and period when year. customer in million as second year, competency Trauma acceptance $X.X driven of $X.X last was million, with quarter quarter of

other a of all Nearly driven to our of XXXX representing in medicine/all sports be revenue in XX% $XXX,XXX growth last second revenue by was volumes. $XXX,XXX, about decrease to year. period compared the increased unit Lastly, the quarter same continues

sales. XXXX in the in the was and margin XX% the $XX.X international million million $X.X in Sales compared when XXXX. compared an profit XXXX to quarter and of million gross of Moving XX% to marketing of to was to in Gross XX% same continued to set last in second down benefit $X.X increase $X.X compared quarter year. were by XXXX period of million second of statement, administrative quarter the the second country expenses XX% the XX% $X.X of the quarter increased second million, second in General the offset XXXX increase expenses income of in $X.X during reflecting in quarter second of the period year. compared XXXX, the quarter conversions international million, same a partially XXXX our last

quarter calculation. Second company restricted nonrecurring all accelerated stock, from G&A being million vesting expense $XXX,XXX well as professional a of which as higher EBITDA of increase $XXX,XXX excluded public XXXX fees, costs, are in our adjusted included $X.X in unusually

was period attributable positive expense the of revenue in $XXX,XXX the Net for Net resulting a continued second The expense same items, balance was period from second increase $X.X and loss XXXX the second of And by the an an increase in XXXX of in million pipeline. $XXX,XXX additional to year. was product period second same associated versus interest the was second XX% the by to G&A net to the per in product quarter quarter the Total $X.X year. development to accelerate investment of our in $XXX,XXX loss planned The increase in our XXXX increased was experienced compared primarily due compared operating loss on the of last last $X.X incremental $X.X increase when versus our personnel, prior share quarter XX% projects $XXX,XXX development year. launches, and decrease year. of in $X.X XX% compared EBITDA in XXXX interest grew and primarily compared stockholders approximately the IPO. future was quarter $X.XX and these Research the Excluding million decrease in in $XXX,XXX, the to underlying quarter discussed. second of year. the million million of $X.XX significant of XXXX. margin. to income quarter expenses net of a increased diluted gross the expenses XXXX. as XXXX million XXXX the the million, result operating in was of for to expenses And compared second share in loss per million related interest XXXX, Adjusted same the the same driven to XXXX expense quarter common in diluted in compared period and just were loss a the to quarter second second of in basic quarter as a of of to $X.X The last share the operating and the X% to second $XX.X last per basic cash was quarter

property balance the million, product-specific year equipment of an normal in quarter to Turning XXXX, quarter XX, XXXX reflects March during of purchases to Ireland deployed XXXX. an X% as million $XX.X $XX.X million that sets, of $X.X consigned the deployment of during during Net million and XXXX. XX, our This last our agency same of conversion to than instruments, distributor because Kingdom including sheet, second second implants. of Set as the decrease United the during the and trays, the and million the balance of compared and higher year. compares $X.X period model. June were million compared $X of $X.X the last to cash to quarter was stocking cases And second was

balances revolving in was As million, the is of line of including facility, under which XXXX. June total those March $X.X net XX, million as XX, XXXX, outstanding $XX.X debt credit with

closing me now call turn Let remarks. the Mark back for to

Mark Throdahl

we continued to and the airspeed. is public Thanks, that This since In OrthoPediatrics announced that row the results have second going in expectations. Fred. fourth time quarter, gain exceed October altitude a last

everything IPO done the would we said process. have We during we do

the in sales We to driven in the This acceleration quarter XXXX second to successes have quarter has XX% accelerated from fourth in of and the business. quarter. growth growth sustained first again XX% third growth of been everywhere by quarterly the quarter, the accelerated XX% XXXX, XX% in across

for the We of continue market to can strengthen company the our results, to aggressive all right be consistently, our and topline deliver strategic execute position sustained, investments growth. We our leadership solidify so by poised is record orthopedics. to making in proud organization's ability to pediatric

our year year half guidance trajectory revenue our from degree range beat $XX set the expectations, the full we'll XX% raising and a and investment to for of are our any Given XX% first which with to to we growth take growth million that, full consigned XXXX. revenue year questions. increasing deployed we $XX And to million target

Operator

of Rick the from comes question Wise first line with Our Instructions] [Operator Stifel.

open. Your line is now

Rick Wise

on to Mark. great I Fred. on just guidance. It's start But on morning, Congratulations quarter. Good for Drew Rick. wanted another morning, Good

your you've to growth. range raised XX% to So XX%

the clearly the appreciating year in on some back are how more sets not like reflecting reps, catalysts that adding full we more of your and about half, new You've in systems think the you that exceeded like guidance, in first range field just we do launching, incremental what and mentioned, half?

Mark Throdahl

right Drew, I largest in we think, our are now quarter.

also are sales for fully sets. well And as the fact more many you aware orthopedic reps company, are just conservative and that guidance. to or hiring is regard quarter managing biggest view And beyond a deploying the on with functioning The there parts pretty more moving our of third Fred the I aware, are company. are

from we that remain with raising guarded to expectations. so regard standpoint, And

to hand, we We I other beat where conservative we think continue are issue. with but to this on aspire now them, on to the are regard

Now, general coherent to with who I'll of Fred give more background, that may turn answer. a kind

Fred Hite

exactly right. that's No,

business domestic fourth confident second pretty that feel some grew and quarter, as the sales. first business, second the of in than our growing set obviously domestic XX% international But continue did include mentioned, increase. get we the we quarter, we're the an During not and have implied faster with the ourselves, about and we of taking actual ahead slow guidance. third and to results that increase that so in But do to we'll we as want this quarter it that's drive

Rick Wise

available Got stature been haven't And spine it. on could your and But growth, instruments that but also just coming account to in scoliosis continues our drivers some small help us going opening accounts, yet new growth the is growth approved exiting accounts Is more it spine? sustainable since the frame conversions? be forward, from instruments, growth. expectations. how Just what above especially that really rate, lead to incremental for at kind just it are systems there is of

Mark Throdahl

growth very be have treatment to winner. the real last might absolutely add that being in it is conversions, has has scoliosis. the the small right, terms that that are impact it tremendous has with adjunct account interesting the system. proven for offering in the product you're to success, XXXX existing this to success. XXXX we RESPONSE dramatic is be yes, really is also Oh a be It And accounts, stature at nice I companion Drew, to incremental the at proven enabling RESPONSE But carried to a growth very bullish of system very full new of that proven system. because a of and will a provide system FIREFLY facilitating product by regard of it us

Rick Wise

your $XX making the for to in Then get remind it. pathway all breakeven? the still to the Fred, timing and your can And us and business? capital do given you're that just you investments to just have and million lastly you sufficient breakeven of of with just revolver, you Got cash just profitability

Fred Hite

And is that then income We're we to make that as then as be And all cash hand adjusted answer net to plan after hurdle, continuing expense we that and breakeven, to income in the of happening have business. on to very positive our EBITDA, the next have operating see side so EBITDA Yes, so pleased us. the eventually within for XXXX, In with last definitely was interest year, positive. and that. the that's a of the adjusted yes, we'll is balance sets seeing be consigned able we'll pleased do. goal. next that's we milestone big we're breakeven very the so both cover invest to investments in We well get R&D our

Operator

Thank you.

question from the Zimmerman line next Our Ryan with of comes BTIG.

Your line is now open.

Ryan Zimmerman

or Thanks Great. certainly taking sets begin, given on the could would sets for instrument to is spending there want strong quarter, And this strong million suggest I that on interest satisfy the field. for be in Congrats this the you there are need more for year, year? that distributor the questions. it base guys. additional more $XX your sets does

Fred Hite

Yes, the our as never mentioned million, investment seen million of we've $XX or we've this to a now the year before. in $XX that level new $X.X past, is million compared

it our then we're is slow, that. adjusting taking part in to The product we later is new fulfill new So we're legacy continue demand, systems, our coming of with both year. anticipated but and launches have that kind it and this launches our demand we'll continued also product as necessary, as encouraging

salesforce as arises as the can to and continue appropriate field. with growth we to demand out going that that we're and we in the as So fund see support

Ryan Zimmerman

this you Very expectations? X relative is how that Fred. know your salesforce, questions around historically we ask tracking and for distributors reps, at a reps to just that that. on opportunities you stated then as One, concentrated of matter? as you. want Then to add them new couple response, you But about very you a you fair, be for to the I I base, appreciate so should think reps customer greenfield want how quarter. had potentially Thank add XX. you've that added or

Mark Throdahl

good very Ryan. question, a That's

is accentuated XX% each these that United the grown the salesforce revenue to the we in selling of scales year, mirrors XX part sales growth, has the fact of a of the think size can that XX% which the I last agencies, that through reasons organization one States, itself over are demand New California reps. Massachusetts. a the mid-Atlantic recognize the given exactly terms how demand with then enormous. in We of Like more states New greenfield York, fact Jersey penetration are up adding within some keep which given the anticipate find of they opportunities, to and southern by that the of Connecticut geographic or in and and deeper area, how

reps concentrated to very like the have rather accounts opening of these focusing sort we which potential. Idaho enormous further penetrate long are Boise, opportunities to think sales new than on greenfield continue So that, places a and runway that I up potential. And have in

Ryan Zimmerman

again quarter, Congrats the Appreciate commentary. on guys. the strong

Mark Throdahl

Ryan. Thanks,

You It had night. a fantastic really headline last was great.

Operator

Thank you.

line Matthew the of with from comes question next O'Brien Piper Our Jaffray.

is now Your open. line

Matthew O'Brien

that I levels are for on were saying this taking set the sets Good morning, there? revenue. that this on just $X of I'd Are up trauma going per question, that's getting then the hear some in about But tracking for the you've you the been a point? that and you've much kind closer questions. if seeing bump basis year, about know, the for you're new deployed within seen that earlier Fred, to you $X thanks to historical the And sets at velocity or love so deformity. that deployment year. spine of into

Mark Throdahl

with Fred perhaps that Well, I'll can then more provide start specifics. and

think, we board. sets I for the experiencing demand are across Matt, strong

trauma As as deformity Fred as as mentioned both a minute products, well ago, and as legacy scoliosis. new both systems well with

product. you sets. this create to XX% that significant by But scoliosis pressure anticipate, As additional it's means might no however in does growth for restricted

before of months million the change the that the of now much I in quarter, that And no are we in it in to deployed see seeing we've real we quarter. of X think years some are to and we the requiring in utilized. pattern fully need first sets observed $X.X was also fact that that XX for recall late

$X you about little in just want we're seeing impact now would more returns the sets Fred, bit those estimate? a to the actually, new results. on QX of comment So

Fred Hite

to segments, States. Mark's point, outside see as size business really encouraging demand our for it's a well board, across all product to the as across the Yes, the United

significant So new to more stature Kingdom product March, the we those launches year. do later particularly the in And funding system, small and that's deployed some there's and in we demand, as more in going the second have this sets locations coming, some these plans well. Australia, there quarter, require additional to with United

the Regarding we new on deployed a utilization, sets basis. the track results weekly

So we're not at every deployed, set that's of the revenue. We're $X for revenue looking at been $X of yet. deployment

mentioned, to As it time get to Mark take level. utilization that does sets these up

your to next still yet yet. our hope to So we're up working level. that to if $X at but be higher, or probably that just about question Obviously, not for the above we're if we we're we're there year, $X way later, $X

Matthew O'Brien

growth several you're in share seeing far that accounts it go as think deeper, billion year, pick XX talk these that basis per there? as then go the Can goes, range, opportunities category, next the business you're you that And as there. about less And of one points established some a I you're helpful. as maybe how be, up years. with to little a Is business of you share going there. market $X.X about an That's There market over versus what new something can X% scoli that Okay. market to forward? we kind we this seems getting it's guess

Mark Throdahl

that $XXX centers. States. market done business tightly a the United pediatric adolescent around much scoliosis the more in million procedures that's And as in You scoliosis that focused we is Matt, are view more idiopathic like know,

is it So smaller.

the however, in market the number supplier Our had at dominated larger. one a OrthoPediatrics market greater that can smooth the leading And is particularly market that become and round several out seeing in should share be approval. That then the a to account the the only full been of accelerate greater that we I the months, a that line, that product as two to think by increasing if we given not next account, said therefore with trends share see stature we companies. further system that within are leads assuming small systems. FDA to spine And at conversion past

one trend scoliosis that a the to XX% see will get growth But on remember front is I harder. lumbar the denominator That of said harder rate. is Whereas bigger got years decline and adolescent in every any the think as defending several dramatic issue, that there don't this sustaining fixation, spine condition. of in in only gets next adult and I company and by of area we So a focus scoliosis other that we've in the and course, that cervical way, bigger and products growth huge deformity.

fall So I competitor, continue to win. little its back have always of size, focused a organization that irrespective on a mantra we within our will

Fred Hite

use to the where I'd system. that, still this really able amazing product, it's in product somebody small using the to just we the XXX% share, we're growth that add have to our else's get and fact that stature surgeons that are

they to the just not like us So supplier it's convert as can choice. of

we've enables it's continued that by of very on have And continue indication well. use product and on to really they the to still FIREFLY it product approved knowing had was and the the use this us encouraging we've that acceleration future by the expand that just in as that FDA much seen the results additional also of the size. should to drive small that that stature product We're so encouraged success else's somebody

Matthew O'Brien

set even it's That's was which With $X.X sales worldwide but I considerable than just helpful. clarification Last was still numbers what room the about quarter replenishment, were international very respect what for to and set this to good, the was billion, go the up you the bit one I saw a if durable figure bolus just Because little is that? there. there market I've for versus expecting? growth can is you you smaller trying that business, taking we're versus that, out heard very, for to scoli, terms sales me, what tease out purposes, in of the and how guess to

Fred Hite

Absolutely.

some first I XX% expand, that We we international quarter second It's talked would every XXXX. to demand in we sets be grow the max sell was pent-up the business. just demand past, maybe say as their in That's and you've at additional of pent-up they in that As growth need have some released of in would single business. quarter -- did portion sets obviously incremental of the that. quarter the part the

And within in countries will serving. we as into to expand of some that the continue hospitals we're future additional that continue the

Operator

comes Margaret Kaczor And line you. question from William next Thank our the with of Blair.

open. Your is now line

Margaret Kaczor

guys. Thanks for Good taking questions. the morning,

product picture bigger a of you kind give basis having incremental we feet about sense growth instrument look forward? launches the much driven of XXXX, we us more those the street? quarter, FEMUR, maybe all, can year we of rest first think into So this should contribution at of as of guys how as by contributors sets the the And to going and how at versus was on look like

Mark Throdahl

a That's great question.

million at So $X.X end we March. of sets of the the just launched

we so The of the have, Nailing the start started. And although did the us. a some benefit in quarter just launch PNP, launch was to That is of see for encouraging, Platform did happened. Pediatric very we it's which that significant second getting just

maybe the in But will impact impact that with years systems. to continue revenue. really X systems launched XX so over that an have said, second business launched going the no And a It on being prior had had quarter forward. we the And year. XXXX two

And some product growth of quarter. that of definitely is third a growth that comes Historically, about helping the in impact did increase our our see our of new launches. all across second in So we product launches new the periods. from of

and going And we're hope would be so in range in that in to I the second continue range still probably quarter that forward. say to

should well. And goal support of new revenue deployments new all increase products the support rate. we that required launches, the and with to as necessary growth is are our to product accelerate that As the growth that

Margaret Kaczor

doing Then this you've of Helpful. similar not faster? just know follow-up time? of half in first past, they're their the And commentary a a lot But other you but own it's to track hires number reps little early, point loosening rep leverage what sales some year, cases, hired added in bit maybe I of this guys the field. X this I kind at QX, you on they're on in what some of the of rep another sales seen terms are providing towards or productivity of pressure quarter. made know and the the the in on they just on is improvements, productivity the you've to maybe the in theoretically maybe that that

Mark Throdahl

Margaret, from it's impact what And experienced I an astute been there that you're in less the observing is sets it's of past. immediate even different evidence in any quite some don't terms have being any inevitably field. that that issues up have of lot of and for to checking logistic reps the guys in time tie supply able a the that handle in of

consistent see don't think eyes able know attract and productivity IPO The kind is sales over that one helped from of lot So several in given credibility us standpoint, Maybe of company of a that though difference is to has that It's the we that. people a the we people been last very higher trend rep. the I have more it these well. the a on. higher years, caliber

the path years for last well opposed those will we be so X faster to hiring we've that somewhat say And over productivity the reps hired new to the ago. that as been it year may

Margaret Kaczor

think Got sets change any million prior you're this for expectations, it. out me, to last relative that you year or form? incremental just And to one put that about for shape Thanks. do then you in that did in guidance $X going

Fred Hite

more or that guidance. a XXXX. be the on towards impact probably really quarter lot end the deployed Because fourth fourth will No. of which of not It's of factor will XXXX a the in quarter

Operator

comes Thank Braatz Capital our Markets. question City from Jon And next line of with the you. Kansas

now open. is line Your

Jon Braatz

Fred. follow-up morning, on This a the is of salesforce questions. sort Mark, Good

won't to XXXX, see increased into into in be that salesforce? as as same the you about expected as XXXX, salesforce think you looks see will do begin you some begin adding look the you As like the as But many salesforce has leveraging to your revenues. of year revenue will increases? some sense you the this you look of It the leveraging

Mark Throdahl

I we Well don't think do.

the will pace sales these same because country, I think we together add they sales. that our the sales less that give more the at think continue reps or guidance reps around as I we to are agencies with them, directly, managing

don't that would plan, sales be the that to again of not which an it's incentive As think their leveraged commissions, leverage, so we expense other monkeying there's on representatives can stress I important have to around issue we think are than books, with our their suicidal. be

So these on no responsive States to in it is territories as demand And to delighted P&L. each are itself the that we United United organization to a way States. scale up in has to XX our result, of throughout the allow the selling continue impact a in

Operator

at any Thank turn further now not And time. I back to showing call Mark would questions like Throdahl closing to for you. remarks. any the over am I this

Mark Throdahl

very you thank much. Well,

consistent with it's the it So execution that a in saying been everywhere and without quarter business. great strong goes

is colleagues say since expectations. this time company's we for can't a our us been do. to stress help would is growth your think that here all we've support the OrthoPediatrics. for and thank we've that and said interest fourth fair and company I for beat it you a in And is to do row finally, the thank public world also what we to I like allowing to of I would I'd around the accelerating but like

Operator

participating conclude and in you all Ladies a and Everyone, today's does program conference. wonderful thank disconnect. gentlemen, today's you. may for Thank day. you have This

OrthoPediatrics (KIDS) 12 Aug 182018 Q2 Earnings call transcript