KIDS - Earnings call 3 2023 | OrthoPediatrics Corp.

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Operator

Good morning, and welcome to the OrthoPediatrics Corporation Third Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Trip Taylor, from the Gilmartin Group for a few introductory comments.

Philip Taylor

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

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

today. Form a with most recent company's discussion review to the filed of For be report risk XX-Q, on you the will factors, SEC I encourage which quarterly

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

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

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

David Bailey

XXXX quarter you Good us morning, our joining conference third Trip. and call. thank for Thanks, everyone, on

helping that XXXX, I'd in children XX,XXX inception, remains best record calls, OrthoPediatrics. a of the have And XXX,XXX start highlighting measure the third all As like nearly to kids, success. of over earnings children helped begin we our for more since new quarter helped we we by

another record revenue and like the of of situation continue, time. unimaginable to million. this XX quarter million, and one adjusted $X.X a In of to we $XX OP representing of company produced regardless third acknowledge continue quarterly in generated tirelessly EBITDA of Israel, the I growth who to support through XXXX our I'd quarter record third Before of compared colleagues XX% XXXX,

progress We proud strong continued profitability balancing the towards of flow sooner. with we're achieving revenue making, are and growth cash progress breakeven improving

where to continues inpatient business surgery taking Our by remain share Children's suppressed. volumes environment market an in grow Hospitals

As expected, remain staffing see to we continue factors efficiency incremental headwind. improvements, these and yet a

strong, and nature growth from that abnormal key million are we we continued businesses growth a U.S. to QX few positive were a During American international quarter, due procedural $XXX full diverse of for very lower decline strong few the With in extremely growth in patterns XXXX Therefore, and ordering in QX. reiterating due tough guidance easing as scoliosis international international. and XX% the representing our accounts our trajectory in October offset quarter, distributors in year a $XXX of indicates said, and performances Scolio performance T&D comparable that to to South revenue headwinds and extremely large scoliosis business revenue million, in our trauma are of an XX%. continued by deformity an benefited from the to

set in EBITDA we to $X million. year raising are $X as we continue million of to We million And to full $X deployment from million our estimate $X guidance to $XX million now company usage. growth and a solid profile similar continued From focus XXXX, we annual cash further foundation of on profitability improve EBITDA and we while strategy, our and rock advancement expect this start early expanding rapidly continuing publication, and company an new data care, of growth legacy believe expansion, launches, is newly well for we formed positive international drivers product growth, and success. for in reduce deployment. several health set normalization long-term ApiFix a positioned markets, Pega a With of bracing the need product continued in increased specialty organic digital place, OPSB, plethora this business, sales

that we impacted recent acute also balance the current strategy noise execute almost to capital. enables long-term from to address from are that GLP-Xs market Importantly, resulting implications we our and sheet extremely in equity financial hypothesized recent entirely patients children, remain sector's an conditions. without months. position congenital or injuries like additional and us has in valuations the are OrthoPediatrics I the are strong conditions the confident would directly treat

We any do business we impact opportunity. our expect market impact current experienced have nor on future not any our to

impacts. not downstream is business exposed Our GLP to

taking revenue for continued Femur cannulated and from XXXX, $XX.X strong of saw products, more Revenue screws we Pega share international highlighted our SB. of in growth sales as as as OP total [Indiscernible] trauma deeply limited deployed. products, we their accounts period. by months performances we just with the the a better expected, fantastic our full Pega the and of agencies complete performance segments. portfolio Pega beginning. continued well The sets trauma Growth and of year XX% product and few transition growth Pedi network and quarter PNP in prior growth to of the than this and and record stocking remained growth U.S. the anticipate Moving was quarter penetrate and relaunch third U.S., strong again, In of Sales international was to had we entire million, globally, portfolio. representing many ever by revenue generated across product with led the quarter Trauma to the which to deformity our persist compared distribution

third time, the the of transition. first as all international distribution completed significantly nearly in we grew have the quarter Pega For revenue

internationally the trajectory revenue XXXX. a U.S. and become major this to in expect We driver growth follow

femur. well system, more PND Initial its the received Beyond leading system scheduled. gone several the trauma market we is Tibia revenue performance, pediatric beta rigid have a are to first launched surgeries Nailing extremely modeled and of after have largest which excited are Tibia FDA kind the PNP and our product, approval and

launch increasing using result customers PMP in a for have more to quarters. our strategy. of of XXXX of Tibia the Throughout our continue QX of market conversion seen we execution as continued many number a products start XXXX, account and of key We full expect of an

additional the entirely years. places claim even position if on The in strengthened This sustainable have the the products high-technology way, business Further, less our we focus exiting deformity, years. is well was certain growth. T&D to on share in deliver coming limb the pediatric driver next are acquisition. on trauma the Pega the to seat by to pipeline us X and dominant not new players robust the We positioned believe placing across continue space

OrthoPediatrics specialty business, OP SB, bracing continues business, nonsurgical T&D the well. or perform to Within extremely our

XX anticipate call, it base we are in a opportunity As grow we started we ago. mentioned who strategy SB countless the build and several executing OP characteristics on we service, needs clinical witnessed coming we our that already are in opportunity the when unmet to competition. no years. OP rapidly to further same see SB support an concentrated opportunities OP very education in to years successfully many and There a customer innovate, We focused the QX aggressively of and

new conditions, products goal Beyond all our further all they orthopedic brand and our with across surrounding children it of with with entire of expansion, and MDO been our bombarded we it continue need of builds surgical Since as April loyalty prioritize the portfolio. ideas our part that, of we of for opportunities product to treat fits and customers in have strategy. acquisition with partnership XXXX, nonsurgical and opportunities to which the

in Ponseti Warsaw the optimal a second Ponseti the bar anticipate for the was upon Internally, femur DFX launch a anticipated we product announced Dr. launched cruiser and designed in the Levity [Indiscernible] The many much Plus quarter, hands-free with the acquisition executed distribution in release releasing the an Children's rehabilitation. to the new the called ARA the walking this team team currently early QX, brace, Further, treat in clubfoot disorders for hip and development, a in the limited XXXX. Wenger their Orthopedics Dennis with Mubarak a exclusive Medical palsy, of RHINO few and and Hospital After in Levity is organic asset infants we Iowa launch orthopedic in first been brace supports fracture Scott productive. children. our Earlier next The For move and through Cruiser one-of-a-kind and production month, weeks. supplier product cerebral to the surgeons, popularized at allowing both in the of reinforces full in San by the launch recently pediatric new Diego. and has agreement global OrthoPediatrics capabilities device the and within patients the that recently expect coming completed experience early with release, is product weeks. developed example, earlier products MDO MDO scaling we Rady of muscles legendary very

Beyond can build several launches capital-efficient coming space we will there more a our this the and that business more years. these in $XXX in product partnerships, million be thesis supporting

consigned As revenue. on returns requiring with Orthex, capital along or by OP as we strong while SB, and have obligation other high products very key previously, generating inventory produced said such low ApiFix no

we As bolster prospects. diminishing we a growth deployment our grow OP SB, see need for capital we will while

X demand was major for users Irregular but response U.S. in difficult reverse large an scoliosis few placements. strength of into visibility, schedules all and continued patterns key and performing U.S. America users users, lower continued from Based late business. fourth in transition year the previous largest strategy of the a in largely and international has due on to we the Growth both expect few ordering as $XX.X in of this first-time of response both scoliosis new QX. domestic representing to by distributors Surgery in our the and revenue scheduling period, of compared X%, strengthened quarter. the onboarding to prior and headwinds throughout offset ongoing third volume cases million, of driven third by from surgeonâ€™s grew quarter quarter In ApiFix, our to Moving and several respectively. South ApiFix, grew new quarter to comps ApiFix domestic only driven new increased quarter XXXX. XX% locations started of sites usage quarter products. Despite promoting was and growth than XD stocking and the procedural several the normal by strong accounts. a difficult slowdown revenue fourth practice the we third in comps a and generated combined a global X% XX%, continuation of few of XXXX, international of and amongst in the

the driving rate IRB of positive the approval and more of performance and related ApiFix we users. potential to For surgeons an from access to requests to more the increased longer-term ApiFix, publications seek device seeing recent are are new

coming the in to see expect quarter. data from we the registry Additionally, X-year published U.S.

to extremely offset on In with million of our in Moving of $XX.X year performance T&D legacy period, delivering products, international distributors revenue America. we South strong by in quarter compared third generated led international. prior $X.X the XX% to million to XXXX, sales stocking the scoliosis slow by growth,

in We sales deformity business see it and the environment. quarter rebound are surgical to the the of our particularly XXXX. a continue both model Progress a international market third and signaling in into were to fourth quarter German pleased favorably. sales and trauma International and track our scoliosis continues continuation direct normalizing to strong, on Agency in expect

commercialization health X,XXX training Conference, the the interactive a expect be order is training products August, third the and stocking a care several the OrthoPediatrics hands-on the education. the strong we company Seattle. this distributor limb and to to growth continued of with conducted were announced technology. see sponsorship September, internationally our system. children. with Scoliosis start brings using is the scoliosis. partnership This the in XXXX. XX growth whose Baltimore role and most we fixation over In quarter, We of at for device primary we Orthex premier highlighted international featured I'd the we trauma, in Society of in the us of to reaching surgeon medicine which of Then designed Alliance transition. call materially for Pega the on and events. over and that coalition Meeting, Deformity details That for OrthoPediatrics growth agency which the third like as in labs Pega final place level international serve deformity under National Limb as of for technologies tailwind in for third and similar to professionals. strategic device to thought Research quarter, Overall, gold ApiFix quarter programs of advance surgeon and the to Strategic our products innovation major In the There, and attendance devices will more Pediatric we results. the With advance Alliance took believe Adviser training provide contributed its October, OP and U.S. will Children's development years to In provide complex the of beyond exposure and external to Hospital innovators just believe and to Fred? medical fourth results had will aspects of sales the revenue quarter to come model completed limb Additionally, Xdays throughout all construction opportunities educational sessions exciting lead turn that, Fred on focus leaders financial children. pediatric quarter

Fred Hite

Dave. Thanks,

quarter continuation us a third was product primarily strong XX.X% nonsurgical and was including for by generated quarter T&D of quarter share strong million, legacy specialty global of our of record driven driven Growth the business. due the $XX.X period. global the across million with Trauma stocking distributors XX.X% quarter the XXXX. business. Deformity revenue and scoliosis growth In quarter line, million XX.X% strength and third international to prior is driven international to of year by to with to revenue In products, timing in revenue primarily third XX.X% in distributors. in ApiFix, the XXXX. quarter OP portfolio $XX.X performance, nonsurgical gains offset entire revenue new third the compared We was sales South trauma South in as year the quarter Growth quarter We increased to Pega, compared record by XXXX our in of of well revenue and strong our share Growth from the million continued driven and increased in strategy by XXXX quarter our of of increased of slower third orders was primarily by the the scoliosis Trauma performance Our U.S. by of from prior Bracing our worldwide weakness timing of sales America. compared quarter of combined portfolio from the was placements to increase the our U.S., representing SB. XX offset total third our of and was American growth as period. by Growth the Pega of of the contributions of compared Trauma the across stocking driven primarily the driven $XX.X Growth bracing specialty gains XXXX, X.X% $XX.X million, response by $XX.X set growth a XXXX. Deformity our

last was million XXXX Pega driven Finally, in XX the the the third set on million, by the as year. to in key compared well new deployments, million prior Sports which development $XX.X period same XX% significant consigned $X.X product were quarter revenue Year-to-date, sets XXXX. of $X.X third to deployment $XX.X period.Turning deployment. increase $X.X XXXX consigned few have Medicine/Other the multiple of as to in of quarter quarter year briefly decreased significant The third million in of units. to Touching compared we deployed metrics. a million was compared

revenue driven the as quarter South quarter third Research the For compensation decrease year. third X% revenue $X.X $X.X the driven administrative of the the and that other of fewer from was quarter and for timing or of XXXX, The with the XX.X% as quarter increase incremental driven to third and marketing The primarily the with in the purchase the was primarily driven same across to short-term revenue America. $XX.X primarily General compared $X.X third-party to restricted increased by Total was in In margin of to expenses and the adjustment expenses to controls to us cash, XXXX, The expenses. sales sales $X.X million expenses as by not in third quarter This operating last period adjustment price million the growth G&A million XXXX. expenses last of were to primarily in in marketing ended $X.X million of which compared was revenue. $X.X impairment year. driven to gross organization. the year. development margin prior personnel value we the payments These third to was $X.X of support charge to amortization did driven expense variances of or well in XXXX, and the increase required in decrease the by providers. forecasted the third new in same in was the well the to benefit, expenses lower depreciation, million the of increased by favorable profit third compares period well third EBITDA we XXXX. XXXX. was value the income a X% realize expenses, the the ongoing set million cash. increased investments XXXX, addition third scoliosis intangible the a lower the which was XXXX. quarter increase related million was of in of improvement business. in reported XXXX, incremental by stock-based driven in We quarter of commission compared $XX million the XX.X% of combined additional Sales by is personnel an third million third or increased increased and third XX% million $X.X in XX.X% adjusted of increase $XX.X third We to for cost $XX.X gross in same $X.X to charge quarter for of million of as the The forecasted XXXX charges record comparison quarter including by increase to increased increase driven growth improved million as million company of and sales an and million income $XX.X period the for operations XXXX. $X.X quarter that related or by of fair the XXXX. million million as We to In third compared quarter as support related of by expenses, primarily a quarter quarter for noncash was fair to Total $X.X realized driven to quarter XXXX. recorded

We as our continue strong to to make position line of a credit. well continue to well are on to as strategy. cash on available execute us $XX the capitalized million Overall, our we

Given flow sight strength. balance us breakeven of EBITDA a cash of environment, in current our the positive tremendous strong adjusted position to economic sheet, line and places

Turning to guidance.

our representing to full of expectations reiterating be the are $XXX growth year XXXX million, million of year-over-year to We for to revenue $XXX range in XX% XX%.

we and XXXX, between $X Additionally, to $X of million to million guidance our $X million. adjusted $X now up of generate expect million in from EBITDA previous

Lastly, XX% over year-over-year later. closing sooner the of a expect call we set represents and breakeven annual the XXXX, driving business back to rather growth Dave of in focus than for $XX representing I'll to remarks. new turn million now cash now flow around deployment our on continued

David Bailey

Fred. Thanks,

so in next XXXX, front excited opportunities we we growing As about achieved back the year. on of are of us are proud all that far we've and look

profitability to positive Orthex we producing return revenue drive lies bracing portfolio require sooner and robust growth. to period business expect move less capital anticipated. in are predicted towards product that the deployment top flow including all the set specialty continue, Much our growth continued We our ApiFix, invested cash strength upcoming expansion, business profitable and growth breakeven and revenue higher with as on even the in than of trends line recent

strong open All sheet, have bright OrthoPediatrics of what profitability plans, our supported the I'd surgeon ahead. are about growth kids. our our by call more we never the excited cash and standing together for to thank Operator, long-term to like position care and In help including access all is robust The future been balance debt. innovators for closing, associates Q&A. of for OP let's pediatric partners, lies my health to in and

Operator

from [Operator is Our with first O'Brien, Instructions] question Piper Matthew Sandler.

Matthew O'Brien

just of first maybe Dave, all, clarification.

similar XX%? line of the Just the Can space. the that's assuming people there commentary then question exiting give growth And profile real you about just is, this XX%, like is top on some how a that potentially that? specifically of more you're opportunity bigger big that hearing space? little that bit color folks And on exiting the be? it the are could of Is an

David Bailey

growth and yes, saw on kind But you're what to XXXX. I because take advent to of trajectory we have devices the right EU as about of seen more guidance Obviously, MDR is XXXX not think that in historically, comments of acquire want that have pediatric think the either we're more companies at come those in or we to providing particularly some they since moment. similar potentially our to MDR. growth their range. the What we us smaller to

that And asset so I obviously classes few guess hear when perspective, heavily in people, We from deformity product limb particular. companies different they're or other in about us know any, focused talking very you different lines if focused trauma pediatric than my on. not there's that

lesser coming maybe so position just in And deformity there that thinking sense? taking forward share will with -- in guess certain dominant be going space. space market competitors And a degree limb is and hastens to of a to in position out trauma a terms forward. our our less make our that think I particularly I devices, that our Does

Matthew O'Brien

can this little we about bit cash improvement question $X really, breakeven think number the kind There's maybe quarter progression get number to it's year. provide free you of The going a you guys. flow little the next Fred. you're a in a don't specifically quarter EBITDA versus last Makes But for think because I about then Appreciate there a the specifically. I year. of more up about know gross level color that total was margin year for really talk Can that. forward the was sense. sooner. And that? you strong about we're bit going And then million in just strong. talk that fantastic. profitability But how seasonally

Fred Hite

our with obviously, Typically, deliver ever in the higher margin saw revenue the gross pleased, the us, we show quarter, the gross strongest to see quarter volume has which margin nice for is quarter. in as which that And third as margin quarter is up Very the here third within adjusted highest delivered, line. gross does in company the the was our line the higher always year. well it EBITDA

full growing on very XX% what would So compared top pleased XX% type year volume strong profitability. for higher is quarter enabled it's the anticipate in us million gross to $X that number seeing $X.X highest. the third the guess million would in we'll year, we of range, some think increase very to when is still in the to and million with next line. We well, year goal margin, year. year. quarter probably anticipate the XX% positive and next EBITDA, the that's last as the The this the to year adjusted up to improvement adjusted X Again, I $X And EBITDA guidance similar the

a EBITDA, goal to flow it, not to to improve improvement. And that is year-over-year cash breakeven but Secondary get third is maximize show to adjusted the nice sooner.

or cash anticipated would flow less sooner to growing, as EBITDA have we months on adjusted XX even breakeven sets that that ago. we us gets So said cash XX than

Operator

And for the from moment next Stifel. our it question, Rick line comes Wise, One please. of with

Frederick Wise

mean are you exiting steady How about improve specific heard a have Are quarter. Dave, for board? do all get could the A or month-to-month the start seen to normal to things pediatric staffing the bit talk if could the improve just When across you're more, you away correctly, I but recovery? trends far volume I quarter little you several to environment. products. back from seeing about you're normal start, there, you If just I we that. fourth into as improvement? expand wanted heading as on in -- you to I usual you But costal you? lot heard Maybe

David Bailey

we're a headwind, this and certainly, mean, still I feeling Yes. is it.

you are environment going not our better. I As centers, patients know, surgery they're to inpatient, an the outpatient think where is

a remains us. this So headwind for

seeing I said the staffs we in together, as improving. are Obviously, think higher. efficiencies hospitals seeing, past, we've we're coming

come to just like probably seeing off lightning we we're we in that rooms running haven't quarter-to-quarter, position all seeing think And it's when back normal. see our we we're I'm mid-next say mean, of incremental, maybe some get month-to-month, this. thing that type running this is kind I year to get a I I their thinking of we're Rick. that. more back sure hospitals We'd that the of to not that rooms. would

normal the so like on But or of more hard within track our see in that to percentage, some pretty environment. but improving. a we the volume I that is And depresses you procedures scoliosis. specific give complex we're it XX certainly It's next to a getting a think months so back to

Frederick Wise

scoliosis basically it the some fourth in biggest us so your maybe you X you could that the on pressures are going is with it, tie What that that of there. assume constructive confident factors excellent sites hoping current to be sort speak, factors And back better help and could you along you understand quarter large why confidence improvement it feel -- elsewhere the getting in next those the optimistic so us -- about help I are maybe scoli the Is up? equally that there? to new the performance year. you products? Is in can of on and restrain so touched I performance and But a bow was you and

David Bailey

would users, a a than thought. that on our a again, new new was ApiFix users where at total base thought. we as small relatively we it on things gives slow So way comes really isolate side to have lower the But which in in one in X% still of than actually general, positive. a to well added me think new a the that when I obviously, go little confidence a we of as side see user scoli little of kind and volumes the quarter. volume lower lot this substantial is the we When odd, million Fusion volume just look But the at growth, $XX-plus from, United side, be States, in is business bit see or we

remain that in we so XX% off. lost the impacted -- you but to we X X a And year. number comparable And was obviously, we by a the United States pretty in previous are where quarter any accounts share, volumes that growth feel substantially haven't

So that of that there lot we at are comparables have a those out don't rate.

also QX. of pretty obviously, we about second largest the into really, we we third us, have nice I to is kind season, in have And really think where gotten for going. sight, month we're so a the good start. it's a off well, obviously, big month while line scoli a have of feel And December -- we

And got has a choppy. here really into that so to the that new it's We've scoli we and QX but sight nice with see line a while, for said been users. strong of

QX. have And locations to improving moved about started scheduling part and us bit expect some in script, tailwind of become surgeons back to that those talk to gotten that's and accounts we have have of started for now said new a And cases. start scheduling a the into surgeons as the their those we we that pick in up, why of

Fred Hite

side, actually, had I driven addition third OUS of to that quarter quarter, here like third XX% this that the set internationally we have on sight in which line in looks that for was the And year, repeat the Rick, spine was over would and of sales growth the fourth not we negative by because add year. has much last improved did that, that in revenue. again, driven quarter growth, America what quarter into third South to of the the

quarter and next both the business side year confident on of the So in fourth as that well. feeling

Frederick Wise

morning. to great ask see progress cash question, this the more positive obviously, going flow one mean I the there. it's I'm to

better You're in at expected. than I

You've flow flow saying said Fred, you feel X next I years breakeven. said I that be expect you but My you like memory breakeven why the is last. wrong, within remember cash may cash

like you're better You want to progress update that? It quickly. making seems more

it I'll next X it. you X? or or is within So the let X years update

Fred Hite

We're of we years reduction years. the probably EBITDA the to now to the thinking would have based usage how in that Rick. X improvement Yes, mark opposed absolutely, as things, Historically, you are see adjusted right. on cash the it's X in business. the said in we Yes, closer next X-year and

of versus thinking what ago, sooner were XX years then. probably months a So than we it's or XX couple

Operator

for BTIG. moment line next of question, with Zimmerman, the please. One Ryan from Itâ€™s our

Ryan Zimmerman

seeing I wanted to hindered you for of disruption to speak the just the if ApiFix, spine. we from ask you from if, about what some you're state do Dave, the XXXX? I'm of scoliosis kind the surgeons' we've with U.S. and broader in other can the context of may some orthopedic kind less seen focus you think what want just consolidation and in market user the to of wondering especially -- on of options of as either or specialized guys perspective maybe about products interest that being some the of Yes. in a put in

David Bailey

we comp. locations. had was mean, I really like seeing did you surgeons I practice So that's given extremely a a think moved that this surgeon day the tough cases had and quarter, X year in last with of one what ApiFix, that we're In ApiFix. with

So to on IRB moving historically, been and But of happening faster, IRB are a number maybe is those who I would ApiFix good them approval. ago, are approvals more on have surgeons sidelines getting encouraging. which tough see we really few towards it's in years frequency, getting grow through a And sitting a the with it the despite we're comp. front, mean,

over ApiFix the of the very way I are there. likelihood all back screws care of feel well spine, So of the to and place quarters pediatric that think who take course scoliosis surgeons in I comfortable trained the our is certainly that think several that the next of the develops

this surgeon out see ApiFix [Indiscernible] an recently to to to that so going device gain surgeons opportunity And us is every for uses some use to them. what procedures within doing on had trained to nice that and nonfusion they able need I and data see surgeon takes be takes that of we're a a with care kind XX, ApiFix And most understand lot have who of came having helping when XX literally a Germany we And every here of solutions. data maybe who And be. helping but more with care globally. is patients scoliosis year, the practice the ApiFix also their ApiFix the who spine other sites products to think think patients AIS that and take available some of fewer pediatric what going really start of that better armor I by care benefit of where we think users to that's scoliosis. we momentum, to than continue in being their have little result to I potential think are are with And I likely of as different

in product. interest that's think I driving the

a necessarily ORs that combination do is otherwise. And continue thing that to we get we've hockey don't traction. more weren't said pulling to I so stick. of we and us in be the more this this obviously, expect expect to into while ApiFix And

quarter, ApiFix fusion So lot users association when or a because in their we with of say we XD. of because their this new is with added association that of

So really probably users. data again, and as onboard in quarters, few more and stick now the ApiFix right and certainly not with hockey the to but up it right a more better gets next we see pleased the to

Ryan Zimmerman

well, And like then really Pega sounds was that going constrained.

bit sets coming the about talked of about over You more a maybe this for get to there Pega. kind months little opportunity out

OP. about at this that opportunity standpoint talk where you from longer-term you're kind how fully capacity the business kind integrated or of and or part of to in of it's of for broader about and that maybe Just think us development kind Pega now a

David Bailey

the particularly in sets United to very have out we So in States. been field, getting successful the

big the the outside we would the for what in apply a that, United strong our to you lot past. of field And and now where seen are that frankly, large what few markets. exposed We in of almost of U.K., some where particular, that have you inventory to in here see great But occurred revenue X agency expectation surgeons internationally some inventory Ryan, the that start years is United transitions our opportunity into There's in States. next us we -- is we deploying of these Germany, agency have quarters, the years, a get products an haven't over such States last been over these then as instantly, uptick representation. the because the the few to in get we markets, last

revenue. see increased increased You and there taking share

this see So strong really, really growth. of to that got expect the international we've of kind and like trajectory business really integrated now the

we for SLIM I for the years. mean the to several were in Pega of continues this example, maybe for a down portfolio. is The think nail, next some we becoming what probably are the within expect driving did for is for X of their product continue adopted profile. few is the rapidly we think that really number the different see when that that very growth number procedures States, that the grow little Here see I us to United next And and substantial to years. indication starting is a products the in acquisition, further I

be We year-over-year years. growth to So substantially one we in next while it's that's such growth year. short, of confidence into few every higher going reasons why going profile expect expect for not have XXXX. profile, this XX%, maybe XX% double than the do And the this we to

Operator

Brodovsky, the Truist next moment with question, It's Samuel of from please. Securities. for One our line

Samuel Brodovsky

some could to XQ. I'll or what the you XQ, and drive the end a the Can the implications one range. range what first pretty The year in you just to of of it low for it's wide just ask is full think levers sort end high give us

Fred Hite

absolutely, Sam. Yes,

as largest exactly come to of And December third going correction, it's a wild card, the is Dave severe scoliosis the year, earlier, the always it's right? deformity particularly never We So month and surgeries. those big our in mentioned how know in.

variance range in. December the depending So the how that comes on in does explain some of

RSV. The other is

RSV has taken last was As in this it uptick an time. It very at the summer. where year you from recall, prevalent was

And on XX that's here going a next days. always what that so to do the wildcard is in

are those really so range So of is X than environment so internal. the is wide the reasons more the anything main

Samuel Brodovsky

as just virus? levels quarter Did of you we the of of more RSV, an then was think at that impact And uptick typical all? XQ. there a do Or was of end that the sort bit about to

Fred Hite

typical it was Yes. levels. I was there, had in negatively say third major would impact right? wouldn't So the I was it the quarter. that on it in wasn't business say nonexistent It But a like the summertime. it

Samuel Brodovsky

step business drive back new I all out really cadence towards to new But into nice MDO, mean, million -- assume probably to a from going listed product think about how the the that to we Is that I we're and the product shifting going there future? And them would required forward. what's cadence that $XXX here. should take

David Bailey

I in line just SB platform the acquired to we of that that did we the and driving Orthopedics, of like was number small a that to business surgeons, what So of it has ideas. And inventors, Iowa, MDO have us said, top come at a part spawned for business. we're When pediatric or is excited. essentially MD really addition reason with really the the to specialty business team companies OP set profitability in bracing now out

expect years. over several robust we pipeline the launch course next that to have of so the we a very products And of

even robust We companies course and pipeline years. the also could that really acquire few next we the of small have over a some potential of partnerships

space. to it products, really stand-alone So were a majority brand connect saw avoid is fairly customer in a I we what the years to competition. does competition think from an limited of our to opportunity our number we kid limited there's looking And and trying when us lot the products. a unmet But where of taking why what base it's that's the products need, space, this that to partner the pediatric kids. for operating very room surrounding XX ago way a operating need of they are all all side, reminiscent, these right? surgeon niche of us products very strategy the execute helps A $XXX the the through all of in And And million customer Sam, it this with is huge the starting business, here room. surgical help the for orthopedic

like future. in R&D it's not sets consigned opportunities the these so, a the there of slower associated with take with the those pleased costs is And things. cycle faster. so strong, growing for what those or see. shortage in rapidly. lot doesn't there's very is us of to The just less, deploy capital R&D, really we're profitability is And usage, field. We're cycle deploying R&D right? capital is It no far, we very and we Obviously,

think really a of course So ultimately, about. that be this execute we just build cash I there's a that generation. this next the for large over to the few we aggressively a excited And can here profitability if lever and be lot will and stand strategy behind growth years,

Operator

One & Matson, line with our from the Mike next question, comes Company. please. Needham for of it moment And

Michael Matson

is have but I guess the international any plans, may to did I the on converting for in stocking missed it This on you Mike. guess, call, agents? one, first distributors mention Joseph guys XXXX for I

David Bailey

to we that for did you. be â€˜XX, about honest No, not â€˜XX or talk with

It's any grow major So time conversions but to just converted we've of there a no those the was we one on Germany, international of last plans for that the side. ones ago have continuing is couple years are now. right the

Michael Matson

could Maybe installed maybe we the now? how big update an is base XD? then on get And just

David Bailey

believe were I Is units quarter Installed in Fred, of me you can we have a more placed here? couple the base... or base. about help units that a installed So XX Well, couple units. right? more so.

Fred Hite

it's to right that placed, range, than it's a XX XX-ish, that sold less now. probably Yes, consigned, probably little probably units. in but Between and X

Daniel Gerritzen

currently aren't at And think are placed evaluation. or of some units stage, this consigned officially what in I form

continue process we in feel evaluating So XD really new users to the of and see good.

just now some even the really time, things, something the to We be said with have these things It's but It's we've where that in placed. we earn impact what XXXX units pleased to certainly that fantastic. think us locations pipeline for these is deep about we positively past, a of we're going expect consignment especially the take of as on it's in right were XD as is placed And outs. ideal scoliosis. technology the And XXXX, in think seeing. pediatric you

Michael Matson

your the appreciate on I quarter. comments guys'

Operator

will that, I Bailey in think participate all David for to you will final turn back we remarks. with Q&A. the it And

David Bailey

and call. the thank again, us once on available. Well, you. for you, joining Thank I Fred everybody, are always

some look to calls. you And seeing on Thank you. or forward at so upcoming we conference conferences

Operator

joining. for all you Thank

You disconnect. may now

OrthoPediatrics (KIDS) 7 Nov 232023 Q3 Earnings call transcript