KIDS - Earnings call transcript Q1 2022

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Operator

Welcome to the Q1 2022 OrthoPediatrics Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session. [Operator Instructions] And now would like to turn the call over to Matt Basco. Matt, you may begin.

Matt Bacso

today's joining for you call. Thank the With and Financial David President are Executive me Officer. Officer; and from Chief Operating and Bailey, Chief company Fred Hite,

actual Before Private federal statements numerous securities that may including the These remind results forward-looking we forward-looking provisions are within Reform laws, let risks of Act Harbor and remarks XXXX. the statements of to company's the Litigation materially. and include you meaning the Safe begin today, Securities subject company's the differ uncertainties me of

discussion of on review associated to demand respond the a company's the XX-K have this risk For and others, factors, annual to to be will which the the with pandemic the the most recent including, related XXXX. risks filed of on Form impacts products Xrd, with ability among the challenges, company's COVID-XX, report march SEC I the company's you may on encourage

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

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

to date by XXXX. this David place call. this required reflect law, circumstances President taking of that, broadcast, only to and would over Executive of turn of as addition, the as statements events call revise live no company time-sensitive undertakes accurate I Bailey, or is after any to Xth, to May like this the Chief the Officer. contains update obligation call With or the the In content information on that today date Except

David Bailey

We us. safe well. for everyone thank and morning Thanks Matt. hope and you you joining Good are

an As in I'll that in like call, all now on MD Since to more X,XXX over the total, children first provide we Doing children the right of than shortly. thing has including the earnings which children for when XXXX. highlight of start accomplishments XXX,XXX more OrthoPediatrics Orthopedics, I'd detail quarter helped we is helped growth inception, always headwinds of rebounded first compared first priority. million, representing revenues in we given of $XX.X our Despite challenging generate in meaningful allowed remain will to February, and extremely COVID X% top In January revenue the we us quarter environment. the March, of solid XXXX, quarter to growth generated the XXXX. which

our delivered revenue to rate of and to the well segments. generated Systems. of Moving new growth as revenue strong $XX.X business SCFE non-elective January prior surgeon Despite quarter first Femur representing of deformity increasing in PNP quarterly of we our trauma XX% million, of our In led trauma period. Cannulated and our high by and Omicron compared February, adoption XXXX, year impact growth System, as Screws the

the In continued deployment Cannulated and continued in European increases balance deployment. Orthex specifically. trend key and surgeon strong continue in the Specifically expect to saw both at Pediatric to expect early PNP agency and Femur throughout customer Annual from we Internationally, we from to distributors. growth benefit interest PNP XXXX positive the Society noticeable systems April, Orthopedic record States, see adoption. supported United stocking and XXth and surgical preference Screws from and After Denmark set set showcasing additional in beyond, we by Femur this of

million, to generated which in X% growth and the of representing quarter prior contribute Additionally, we external of of compared beyond. nicely should key international balance we a launch the are In and more $X PNP planning year to XXXX, the in robust XXXX first systems growth period. Femur markets, of the scoliosis fixation revenue

the due procedures of to Given international distributors more slightly non-fusion modestly the surgical by nature our variant. of to franchise, to within fusion continues a scoliosis compared year we in our while unfavorably Omicron headwinds same meaningful core elective users experienced said revenue declined domestic prior period, of to ApiFix the be continued revenue stocking onboarding system. the scoliosis reacting part the geographic first international new driven increased flagship RESPONSE our business perspective, of early and That our scoliosis the quarter. From system

growth franchise Given to adoption surgeon of view response added users combined XXXX. the XXXX, new number consistent as ApiFix in we the growing growing in tailwinds of and

speak quarter device first and medical industry, trends Next, COVID. being the to to I first of macro that the have entire impacted specifically, the the the some want system experienced in healthcare

As impacted stated with earnings we previous call on XXXX on in entered Omicron associated procedure which the negatively elective March, quarter of headwinds variant, experiencing January and first our February. early the meaningful volume

see due at elective of disruptions cancellations to pockets scheduling Although compared and February. staffing and much improving, level the to continue challenges, to is COVID case lower environment January operating albeit, a we

surgeries, that do have not go away. permanently it's this elective note situation This brings these While that second important is to cases deferred elective to and point. me delta Omicron my temporary and

in we issues. flattered for gives progress balance recapture staffing will to our due a strong quarter deliver products more the While cases believe year. compared mid-XX% backlog second procedure expect growth and believe of remain has be demand tremendous shortage the through XXXX, confidence which since the the environment we we XXXX, the favorable to of and cases for the of us said, as elective we increased full XXXX to underlying hospital XXXX, That continued September deferred

global increasing chain Lastly the supply and a inflationary with associated risk. disruption is

not inflation it on small we major seeing by several is to we're inflation historically certain disruptions of worsens, high inflation or and chain if customers, delay Furthermore, we a in to suppliers sets. have offset do. While which mostly increased environment, lead-times, able of supply our in see be to extended we to pockets quantities modest any price are anticipate Since been confidence will that surgical our increases we current our with expect starting small do set to have Based impacted regarding be isolated instrument margins may degree from weeks. XXXX. not systems, the costs to deployments we implants gross

vast our raw materials, made products stainless the to specific majority from are our of Regarding limiting steel, titanium. exposure

with update also global source a exposure Orthopedics. Orthopedics are provide with inventory MDO XX a proud and Based in starting of MD approximately MD Iowa, I'll pediatric significantly reduces children say Mr. correct Dr. exclusively now partnership supply Wayland, We renowned John with system a custom-fit globally. over sell of founded company of and through we Orthopedics Ponseti, was materials a pediatric our strategic our bracing countries treatment to focused all clubfoot. domestically, of developed surgeon. to Ignacio congenital key on bracing orthopedic in deformity, an XX% few MD to globally is a which on clubfoot initiatives, acquisition which the the Mitchell contracts. specialty they

MDO's unique surgeon our the distribution solution. the In treatment become strength clubfoot to dissemination the which of and system of fact, our relationships integrated, brand of network, Once take recognized has technique, Ponseti the advantage correct of combined innovative and fully we'll globally supported with increase this bracing adoption clubfoot. to scale gold standard

plan unique to innovative address the the needs orthopedic develop MDO we maintain within the to that non-operative capabilities bracing leverage for solution large products organization will market. this its on several new focus specialty the treatment While of also pediatric unmet of clubfoot,

new of a Specifically, MDO several rapid allowing business, serve within and company launch and as will development platform trauma OrthoPediatrics' specialty products. for bracing correction deformity

Lastly, minimal OrthoPediatrics' an the pediatric orthopedic inventory. very specialty has it non-surgical attractive by Qith deployment requires capital for consignment expands care bracing involving for addressable XX% an market pediatric $XXX characteristics estimated financial total Orthopedics then estimated MD market of and treatment, OP, million. orthopedic

rapid PediFlex treat with U.S. of in announced nails product for late options flexible March, new full a in of provides when to new planned with launch a fractures System we later system children. Advanced this Speaking global intramedullary This new Interlocking additional using development, our year. launch surgeons limited Clamp

evolves Drive these Unlike three with a clearance number existed nailing millimeters, are system. use associated parts Drive our complex fixation Rail that to years, unwanted Orthex, for While offered Rail, prevent a In FDA system lower to to corrective instability customizable nail is traditional in features in and the and Unique integrated perform and fracture this flexible from of multi-plainer designed the and contains steps fractures components is new needed system specifically received an system, cases. Drive millimeters multiple are which The manage to flexible fixation problems extremity external half orthopedic of we for pediatrics. Rail, simplify unilateral nailing procedures. migration. external ranging surgical and and with has to a April, over XX this clamps designed pediatric care four sizes, innovation in additional

be we believe progress that fixation Accelerating indications key utilized XXXX serving our welcomed Drive in We top with to substantial can XXXX entire Orthex Drive will new our be to at the priorities continue addition, one a and In complement development Rail external product system the Rail of portfolio. time. is the in addition areas. system same multiple make and several and

for Femur extensions brand, bone including We're to pre-op growing pediatric out competency inter-operative dedicate a rapidly software pediatric correction expanding rare first and planning specific nailing PNP plan launch development tibia it nail iron disease. deformity we're our developing software our to to and the building treat Specifically, a platform, system and to surgery. ever

in mentioned systems, As development accelerate other provide Orthopedics, we to the key detail of MD future. which non-surgical with will connection previously, in plan the more

the several response key solutions system. scoliosis on our focus to franchise, multiple Regarding we're and within of onset unique instrument addition address Spine early Fusion updates scoliosis increasing the

our to progress to approvals. great enrolling with made continue we've Turning add registry and commercial IRB sites in patients ApiFix,

encouraging. approximately reaching were Preliminary months with results with follow-up As XX ever our April, two-year than ApiFix XX follow-up remain first patient of U.S. very patients this there greater June.

surgeons ApiFix, to customers, to inquiries Given the onboarding accelerated from in key we of clinical success receive leading new inbound quarters. hospital positive of an early recent continue

for surgeon Program. impartial Additionally, by panel committed of of our platform. medical to adolescent dedication Medal passion ApiFix along Excellence embodies who path Being with Gold strong Navigation for experts, the an was Design treatment Surgical from Transitioning Medical demand with scoliosis. judged providing a idiopathic Award are XD the the and award XXXX children strategic our we're this company, partners device to the seeing partnerships, new awarded

the going evaluations Multiple unit more numerous and and committees regarding in providing capital coming fourth through details that are we look year. of to quarter first our purchasing forward new, are XXXX value customers, the performed including of the many quarter working we've through In first placements. Specifically, this agreements. analysis months, currently

that leverage our to and us portfolio XD of outcomes, increased drive a pull-through allow to continue engagement, improve our entire will patient sales platform We view other transformative products. product as surgeon to

helping Annual time was train pediatric the we were orthopedic carried Director, next in XXst, and out execution Lastly, April, we care XXXX, health diamond meet Denmark, led was our we a EPOS particularly Dr. were surgeons. as the generation than a of XXth we're through Meeting sponsor event, March particularly it able for with only proud Surgeon XX of more Medical professionals. surgeons. hosted exciting we at Year-to-date This Scott the Hoffinger. of OP's events training the where European to by Symposium where hundreds first In since

Spine a in we're training International the at held meeting. surgeon Sponsor Miami, an Meeting we Florida, ApiFix Techniques, Additionally, where or Advanced of IMAS, Gold

we education making to our pediatric summary, market advancing our investments the believe the never stronger cause of orthopedics. been clinical proactively ensure and are necessary long-term and non-commercial to as in orthopedics. field have of pediatric leader commitment we dedication signals success to to business us the fundamentals the true entire our In our Our keeps

We've are of control. and a the that creative in strategy. approaches periodic headwinds controlling what mantra environment to our we affect team, environment. over taking As you can the to management execute this neutralize utilizing been the years by adopted and for healthcare We recognize steps dynamic we've challenges two the continued these deploying operating

However, as The we stride. customers, too forward word and important. is success. won't and a company, we Circumstances our dictate in our tackling do challenges the are moving

I'll that, Fred? results. Fred turn more our We call financial to over have to detail on kids the With to help. provide

Fred Hite

Dave. Thanks

Germany, the increase was the as onboarding quarter compared first United of quarter offset new million the our partially the to the the year impacted U.S. first compared Omicron revenue and quarter $XX.X by quarter, first system cancellations million, quarter was representing revenue led the strong Kingdom. XXXX, driven as stronger the of growth prior first of X% compared the and by Screw strong primarily of to driven quarter the In year compared the saw material PNP $XX.X elective Our volume. the quarter million the of increased earlier our rate of high the of the growth XXXX. revenue Similar PNP systems. deformity by by quarter, deformity particularly increased X% impact the year XXXX in This the in in That of $X The was was Omicron case Femur we XXXX, agency XX% $XX.X Growth million by to quarter was unfavorable prior adoption the of of was primarily and procedure's performance scoliosis we the our business. and Orthex. by of worldwide first quarter. of In within and to the system Australia, primarily increased in $X.X was offset in XX% generated In primarily sales. XXXX. period. million, when non-elective of first U.S. in driven Growth our adoption period. the X% an March trauma driven system, Femur impact in said, first from of SCFE was revenue In Growth primarily the total period, of quarter surgeon quarter well users. international XXXX, early trauma by early quarter by driven revenue and growth Cannulated response to prior which trauma

was medicine, prior quarter compared of sports X% in Finally, which revenue the period. the first declined other XXXX year to $XXX,XXX,

continue the set strategy Turning to first set our of we execute in deployment. quarter, deployment, to

for increased were the primarily and to was opportunity first We in and quarter of to margin of in of $X.X in the quarter legal XXXX. primarily XX% favorable driven of the million quarter continued to for addition the XX.X% XXXX. $XX to quarter of quarter services. with of and The provides of profit of expenses professional The in by commission X% increased of consigned was first in first and primarily XXXX. line the reported compared to to resources increase the support expansion quarter our million were of expenses. $XX.X million personnel $XX.X first of $XX.X on Sales on cash demand prior XXXX in Other to first quarter cash expenses and sets restricted adjustment XXXX both key million ended other distributors. million as in stocking and million in gross countries continue and agencies, the quarter of expenses quarter XX first for million loss XXXX first expenses driven of Specifically $X.X outside for to and in business in the the sales million metrics few quarter year $X.X beyond. in in increased compared Touching of was $X.X that us the XXXX. credit. sets EBITDA demand more to to XXXX. X% gross first well contingent $X.X U.S. The period. compared million was the a fulfill XXXX, the of million as The compared the in by General the domestically by price our operating quarter XX.X% $X.X the first million a and briefly administrative The expenses the XXXX XXXX and of variances, primarily set $XX.X purchase to of or considerations. We $XXX,XXX XXXX. increase in we to have $X.X due margin or of million available and loss $X.X international through is the change increase sales first decrease or quarter fair Total scoliosis first of an million increased million from marketing first the continue $X.X value the adjusted sales of international in the other driven fewer our converted agency

guidance, environmental, these our that central value. OrthoPediatrics' believe of increasing I on seriously increasingly its of date philosophy on very responsibility ESG. are critical governance like enough social, Board areas comment and shareholder financial Directors management and to our and business topic and to to popular providing Before XXXX the would takes

lead working an moving use currently We report ESG internal is and which I on created that metrics and have to on team, forward. determining which

and actions section to in ESG in forward to are updates We putting place of look each providing improve periodic future. the

Finally, turning to for outlook XXXX. our

portfolio, backlog Our business addition from pending base, international surgeon procedures including approvals. will product growing an and continue of several key expanded to benefit partnerships, strategic active fundamental increasing of tailwinds, the deferred and

assumptions year. a scheduling is outlook levels on case the normalized sensitive and recovery, XXXX procedure anticipates Our elective increasing which steadily global to highly throughout

For to MD guidance XX% and year-over-year roughly This million $XXX from between annual to revenue million range growth of annual XXXX, contribution revenue $XXX representing we million, Orthopedics. now expect $X XX%. between assumes

between Lastly, in year-over-year million annual by driven systems, increase legacy product This Intra-Operative we demand sets $XX million plan is as growth for deploy and and consignment $XX well to as introduction of new XD new between systems, XXXX, pent-up systems. of XX%. XX% Navigation representing

expect In full turn Dave point, this EBITDA for adjusted call milestone comments. of generate for At addition, back to year the several our the XXXX, over crossing for closing of to a I'll business. dollars million we major

David Bailey

Thank you, Fred.

for who OrthoPediatrics make pillars, conclude strategic to like upcoming our I'd many what which call With questions. the and of orthopedic you excited future each to back to key the progress I'd forward suffer conferences. and at we of line for in over continue the to that, we're from the our on and turn look interest improving open meeting to are investor updating thanking their to the like you We holds. operator believe of we on to by conditions, future progress about children everyone lives

Operator

Instructions] from O'Brien will Matthew first we session. question Sandler. our from now is you. Piper [Operator question-and-answer begin Thank And the

Matthew O'Brien

Morning, can $X $X off anyway, of numbers is questions. about beat thanks $X million by start up that for MD or with taking I little QX took the and think bit guidance? million you our the in for we versus million You majority Fred, year did but about the by it a total. Ortho,

seems number from there call if I able ever anything or Is issue to specifically? the don't being staffing get not know something So, taking down to a so core out to like perspective you're cases call product full it's the a year out? slightly.

Fred Hite

what quarter business. to core the first say would we our and confirming in similar guidance I therefore, are the of underlying that No, came we expected

Matthew O'Brien

a basis? it. Okay, year full on Got

Fred Hite

That’s right.

Matthew O'Brien

is the then and doubling Dave, mentioned more interest And little Okay. the going the slow seen you know even that clinician second question you're faster some still ApiFix. potentially this go you've on of of just then could the of given number a bit year, talked done. getting I ApiFix? kind about pace and you go with onboarding but to think I Are procedures year registry on you've Thanks. this

David Bailey

the feel doubling Matt, given a pipeline In the the question. we of just I volumes this still saw QX would good of slower the little liked kind have and doubling. we of and maybe what January, pretty XXXX. beside but Yes, because in really interest as we're impact beyond, in good as February, pandemic, just number we about we clinic of the new so than for that QX were think, well customers, have that we're standing seeing, onboarding we low in

Matthew O'Brien

you. Thank it. Got

Fred Hite

Matt. Thanks

Operator

Truist from is Our Samuel Securities. next from question Brodovsky

Samuel Brodovsky

right. for the question. All taking Thanks

transition it's I integration is indication, period should non-surgical given And taking? that how we integrating different First long this salesforce? think or the one point about into we call Orthopedics how the MD is a that should on easy? and relatively think I'll a about mean, just that ask

David Bailey

Ortho's at domestic most comes Sam, sales stage, this direct. MD Yes, of

that in to see other have. similar in which or drop customers, United we integration products, which enjoying, have selling existing products talked of are that MDO the But ship fact product are the club So, in would U.S. States through that MDO We've We hospitals. within something do children's have. the into fracture number they of and to likely the of non-surgical which they to deploy a the least selling integrate And out our operating same provide the the they're that clinicians an plan, to the flip put likely and to infrastructure DFX be is we would sales don't organization utilize lot manufacture success about the the use is with that sell aggressive organization through the an a that a brace that the salesforce. room. product, channel particular that children's literally on -- hospitals, at given we

Samuel Brodovsky

the then into a backlog about here. time just just one I And being we on that's it it ask helpful. was And million -- Okay, of realized backlog think on had was sort $X.X last I'll talked, that, XXXX through all, it, to QX. I it's maybe still Or that and that year maybe? extend little be to Is said going Fred at flatter is is it bit a assumption? the QX, the think to going had

Fred Hite

backlog. of for think be experiencing just the we the right is sure staffing burned that that all any does backlog that similar quarter off it to like of all of quarter that And to would a fully issues we're the the was that what to burned say of XXXX beginning the now. off XXXX. our XXXX going we'll feel here in what anticipation and we saw at than backlog. Yes, But that quarter. because is will XXXX, take third and is absorb second not I of of it is longer, we've lot It historically be That

Samuel Brodovsky

Thanks so queue. back in I'll jump much. the

Fred Hite

Sam. Thanks

Operator

& Mike is Needham And our next from Company. question Matson from

Mike Matson

year. really the taking the your and thanks on know million. the kind in just second curious, quarter, comp, fairly about assumptions $XX anything the extra you you around like kind Yes, I questions. my through consensus guidance of steady heard I for difficult a COVID behind have a volumes But looks was I of Fred, recovery of say improvement like comments was didn't it

the people there anything for assume call or quarter? mean, kind of modeling I I second -- comfortable didn't with out, you So, things you're

Fred Hite

Yes, that's right.

correct. are You

of quarter last quarter quarter. had quarter year of and far We our and the year year in growth impact strongest started second strong the which was the of The quarter. third in XX% growth and first last our fourth slowed we the growth by seeing of in delta, last second then

definitely growth be seems but the numbers line quarter comparables, third kind to more because our see we the much expectations aggressive second at point. So, in fourth those and with in quarter of of this

Mike Matson

got Okay, question a MD you're deal. then And it. on just Orthopedics the

kind So, not the of in manage office-based braces, then an And market I your to that's kind there selling? -- they're guess my the me understand of the and expansion aspect OR capital being setting I salesforce in setting, in can then less selling of appeal the those and I wrong. Thanks. --- don't if Correct financial of more a question. perspective from think as that's are requirements, so opposed but yes, implants used they OR the

Fred Hite

this then Yes, through through there. point really done a organization so not through MDO training at current an the done and method the primarily again, domestic direct selling -- out that and training aggressive on technique, we're pulls Ponseti physicians really product ultimately, organization It's is is the selling a line. sales where really there

So, intent of short-term. U.S. for place, into sales like said, not into our on bracing. Ponseti physicians That MDO to the the training capacity volume move us it's ultimately, -- domestic will portfolio on we product aggressive current the the our the be organization, certain in be will feel see the driver integrating us we you'll selling and opportunities to organization. very train be There events, stage, probably in in selling our of of likely domestic of the technique, terms the given to ultimately next fracture at types leverage this but

acquired product that for this a a brace DFX Casting, of and MD as number use here that we on launch intraoperatively expect working integrate U.S. in into a to in the that the infrastructure is the been that, intend and and to is fact, to that opposed that from Spica and quarters And we salesforce benefit something have Orthopedics. We called year.

David Bailey

add the surgeon would doing here that for business, I this is then as procedures and the our -- same customer, prescribing for the this doing just it's the brace same exact well core is benefit that as the treating clubfoot. casting

Mike Matson

got Thank okay. Yes, I it. you.

David Bailey

Mike. Thanks

Fred Hite

Thanks Mike.

Operator

from And Instructions] Zimmerman next BTIG. question [Operator our Ryan is from

Ryan Zimmerman

taking margin what grow overall kind company of off pretty good on for accretive? bit curious impact the start with they those will a on I'm MD with just be bracing, are braces, -- in Thanks the if a And little I think to could Want you kind of, also just little morning. talk briefly. Good as questions. you about educate can Fred, that please have us that impact margins? those bit? would help but a Orthopedics margins

Fred Hite

Yes, we would right, acquired the say, you're was, I business absolutely that profitable. very

for a can generation imagine, held managed company, As you was profit. and privately it it was cash for

operating EBITDA and net And so income probably it has, definitely positive I would say, similar gross income. margins, higher contribution and margins and

helpful it. to about there's no our be it so doubt will P&L, And

of the as is other The capital. benefit, somebody mentioned, lack

in So, business we growth additional without can tremendous this deploying drive capital.

So, sets us. which this in there's consigned is business, to another no advantage

on growth future. the business, for see we're investing into P&L, the we it be that see we will return helping income of the it So, driver into additional an little bit a assets. it operating And the by the confident us helping

Ryan Zimmerman

you helpful in Fred. about very that's talking developing it, new I And Dave then, Got you're et all talking when software, competencies, XXXX, hear products cetera. about the you're

on generate positive should questions. think burn to this required this point development? you Thanks the starts achieving the specifically, business? how flow, to more for EBITDA company product for do about scale kind, existing in at you're investments the think operating company's cash and all positive And As investors life and about relative the the profitable how the cash becomes of, taking

David Bailey

orthopedic orthopedic and burn space. marketplace a years opportunities so substantial other And sub-specialties. product in to been XX orthopedics. cash thing, Fred The really continue we're launching develop that unmet let under meet story. in to in years the We're needs I'll take has in compared very Yes, large this of listen, have pediatric in the pediatric set lines to products growth invested XX but in early we to

perspective products develop that for have And some to development. P&L a of in needs kids. I for that shortage unmet blessed opportunities think be of from our feel just growth, expect that lifeblood can with of to the you along think we that's part needs meet I customers. we unmet acquisitions -- product no the that really so investing meet of we And We new continue

So, internally accelerate that development it's Fred, be now think from he'll the think desire us the our speed I years. speak from next see talking full you'll aggressively an new if capital velocity several Well, -- you We're circumstances? ahead. to able about want of again, the R&D burn pretty I product externally and to perspective, to the of to over course and

Fred Hite

Yes.

First, R&D, comment the see XX% the versus last year. in quarter just on first the of R&D grew -- quarter our you to XX%

I business addition adjusted we're quarter year, aggressively million from and you'll a have do available this excited investing be time, and higher cash of then have the only positive credit $XX $XX to the year the at of plus end but see little deployment the at. the little bit generating cash good really, first to than sets year, area last to cash, about million this going in us. MD very of burn burn generating positive be about we where boosted the to R&D feel is the the will think we'll another a line same year, We of that EBITDA at the continue From we're side, us Orthopedics by the this which cash business.

set. Orthopedics acquisition got to MD cash we've of the enough and continue support than in investing more So,

Ryan Zimmerman

Thanks for questions. the taking

Fred Hite

Thanks Ryan.

Operator

And is JMP next Turkaly Securities. our from from Dave question

Dave Turkaly

procedures any of just then it mentioned any might Maybe or our maybe on were comments you And hands of used do? we details anything around that an using curious, of a I XD morning. the you can maybe ask was kind even you sort on around? and sort today annual sort of in early, targets of basis, I Good you that can be can system, with kind for one. color it's everything wrap that know that I have but

David Bailey

line been positive. so product Yes, response has to the extremely the

company, have the we've capital for we that -- that than that sometimes so quarters the to is had this this capital anticipated to process. not, into you go the have Although it if year. we going the say as at we That opportunities recognizing -- we're purchasing takes more would stage, weeks, I product we know, equipment said, first through deployment have, line launched

number a few these number a to capital out, that allocation placements proposals we the a have next and we that that are of quarters. through over of of number have expect within We proposals committees come and committees

units think fully XXXX So, meaningful the deployed quarter XXXX growth broadly, yet. on more spoken contribution have revenue across areas we a in this has units, navigation a once And beyond. really and to on this We inter-operative those pediatric focused very orthopedics. But scoliosis are other to and for pediatrics application impact technology There more that no scoliosis. a and feel primarily get really, to every our into we solution expect we numbers where strong do see like I and is XXXX. cadence in are as we we deploying haven't

XD this of unmet needs there's to company joint our strong C and could indication part such development the procedures. only certain very for in we exploring Spine pediatric really We orthopedics, areas other deformity limb the navigate and so that arrangement And of see be surgery. complex with orthopedic was

this it's really why so And think another we reason I really, liked partnership.

Fred Hite

it, far $X we mentioned, on the spine from just had XD and set is the as think we surgeon, of for It's call million consigning anything cranial I back last as And for units not into million on Yes, anticipate deployment will $XX validated validated come field. us procedures. the system else. the today, time, that quantification about the so of

validated most So, it, of mentioned, are to we're deformity that things future. the trauma the most the scoliosis of new be and one has the but on into space Dave has the in the But -- get customers really encouraged system, that to it every we'll as used surgeon working loved is those about surgeons side. us

is our which it's to bringing what bring to growth And enabling business. technology thought would -- exactly the think, doing so it's, and I we drive incremental table customers for new do, it

Dave Turkaly

planning internally those you there. sounds you're systems have, do you develop just you move the else guess to as do buy ready like else areas but systems to -- of nav that Thank else I into and out a you There's to for want or deformity? Or -- all anything are do things And attack? future what detail. need anything maybe you. sounds need think trauma that anything to to for and a the you're in of any you might confident it obviously follow-up. are and Thank lot software like it really quick

David Bailey

know preoperative pre-planned I that as such did correction, both preoperative we be the some and The or software, planning just to treating system radiation, scoliosis. ideal we for exactly surgery we're outside approvals the cut obviously, happen, for and radiation system bullish think think deformity, do we solutions. limb to is there to need. it in well of we're to which limb to work. to ideal complex where we'd particularly both kids. get be about work suspect done more speak low We this to pediatric ultimately think will capacity could so deformity a the what the that's that side, -- the do that this. real on could that and software to intraoperative product is doing we work point the has need done intraoperative But produce marketplace is intra-operative be And navigation the we really like lot a low that of through R&D FDA make planning exacting as really needs orthopedic navigation guides, why in start on to an There's development Yes,

well orthopedics over positioned immediate on think to in that to surgeons. a certainly be But to company think It's only thing. several an the deliver pediatric able that. next deliver be probably we're the I short-term for quarters, I we're going that not can orthopedic

Dave Turkaly

much. very you Thank

Fred Hite

Thanks Dave.

Operator

have for questions. turn back further will it I over to final We no Instructions] Dave remarks. [Operator

David Bailey

appreciate the look you. to course speaking I we Thank in forward you interest OrthoPediatrics months. Great. for all Thank Thank you questions. continued and the for your Well, time. your next the several over with of you all

Operator

call. concludes for Thank you. Thank and you Ladies may disconnect. now and you participating gentlemen, that today's

OrthoPediatrics (KIDS) 7 May 222022 Q1 Earnings call transcript