OrthoPediatrics Corp. Announces Preliminary Unaudited Financial Highlights for the Fourth Quarter & Full Year 2023
OrthoPediatrics Corp. (KIDS) issues 2024 financial guidance, reporting a 21% growth in net revenue for the fourth quarter of 2023 compared to the same period in 2022. The company expects to reach a net revenue of $148.7 million for the full year of 2023, with domestic net revenue growing by 20% and international net revenue growing by 26%. OrthoPediatrics also acquired Boston O&P, with a projected $197 million to $200 million revenue for 2024.
Analyzing the preliminary unaudited net revenue figures released by OrthoPediatrics, the reported 21% growth in Q4 and 22% growth for the full year are significant indicators of the company's strong performance. The domestic and international breakdown showcases a robust expansion strategy, with international revenue growth slightly outpacing domestic growth. This suggests successful market penetration and diversified sources of revenue, which is crucial for mitigating regional economic risks.
The 2024 revenue projection of $197 million to $200 million, reflecting a 32% to 34% increase, is an aggressive target that will likely be scrutinized by investors for its feasibility. The acquisition of Boston O&P is poised to be a strategic move, potentially enhancing the company's product line and customer base. However, the real test will be in the integration of the acquisition and the realization of projected adjusted EBITDA accretion. Investors should monitor the progression of integration activities as they can significantly impact the expected revenue growth in 2025.
The new credit agreement with MidCap Financial indicates strong financial backing and liquidity, which is essential for supporting the company's growth initiatives. Nevertheless, investors should be aware of the potential increase in leverage and its implications for the company's financial health.
OrthoPediatrics' focus on pediatric orthopedics is a specialized niche in the medical device industry. The company's continued growth suggests increasing demand for pediatric orthopedic solutions, which may be driven by both demographic trends and advancements in medical technologies. The inclusion of Boston O&P's specialty braces into OrthoPediatrics' portfolio could enhance its competitive edge by offering a more comprehensive range of products.
The historical revenue of Boston O&P at approximately $25 million, when integrated with OrthoPediatrics' operations, could create synergies through cross-selling opportunities and expanded distribution networks. The acquisition's expected contribution to revenue growth and adjusted EBITDA in 2024 indicates that OrthoPediatrics is not only expanding its market share but also improving operational efficiency.
From an industry standpoint, the growth of OrthoPediatrics could reflect broader trends in the healthcare sector, such as increased investment in pediatric care and a growing focus on specialized medical services. However, the company must navigate challenges such as regulatory hurdles and reimbursement issues that are inherent in the medical device sector.
The pediatric orthopedic market is a subset of the broader orthopedic market, which has been experiencing growth due to factors like an aging population and increased incidence of musculoskeletal disorders. OrthoPediatrics' specialized focus positions it well to capitalize on market trends that favor tailored medical solutions. The company's strong growth trajectory, as evidenced by its preliminary revenue figures, indicates effective market capture.
With the acquisition of Boston O&P, OrthoPediatrics is likely to strengthen its market position in pediatric orthopedics. The strategic importance of this acquisition lies in the potential for vertical integration, where OrthoPediatrics can streamline its supply chain for specialty braces, potentially improving margins.
Investors should consider the company's revenue guidance and acquisition strategy within the context of the overall market dynamics. While the projections are promising, they must be balanced against the risks of integrating acquisitions and the possibility of market saturation or shifts in healthcare spending patterns. The company's ability to maintain its growth rate in the face of these challenges will be a key factor in its long-term success.
01/08/2024 - 08:05 AM
Issues 2024 financial guidance
WARSAW, Ind., Jan. 08, 2024 (GLOBE NEWSWIRE) -- OrthoPediatrics Corp. (“OrthoPediatrics” or the “Company”) (Nasdaq: KIDS), a company focused exclusively on advancing the field of pediatric orthopedics, today announced preliminary unaudited net revenue for the fourth quarter and full year ended December 31, 2023, and issued 2024 financial guidance.
During the fourth quarter of 2023 the Company helped nearly 20,000 children and since inception the Company has now helped over 710,000 children. Including Boston O&P, the combined organizations have helped more than 1 million kids.
Preliminary unaudited fourth quarter 2023 net revenue is expected to be $37.6 million , representing growth of 21% compared to $31.0 million in the fourth quarter of 2022. Preliminary domestic fourth quarter net revenue is expected to be $28.3 million , representing 24% growth compared to the prior year period, and international net revenue is expected to be $9.3 million , representing 13% growth compared to the prior year period.
Preliminary unaudited full year 2023 net revenue is expected to be $148.7 million , representing growth of 22% compared to $122.3 million in 2022. Preliminary full year domestic net revenue is expected to be $111.0 million , representing 20% annual growth and international net revenue is expected to be $37.7 million , representing 26% annual growth.
“Despite historically high rates of respiratory illness in the back half of the fourth quarter, we produced strong revenue growth of 21% , reflecting continued commercial and operational execution,” commented David Bailey, President & CEO of OrthoPediatrics. “OrthoPediatrics remains in its strongest strategic position of all time, supported by an expanding user base, robust product portfolio, recent acquisitions, and a growing international presence.”
Post closing of the Boston O&P acquisition on January 5, 2024, OrthoPediatrics cash and restricted cash balance is approximately $60 million . OrthoPediatrics entered into a new credit agreement with MidCap Financial, consisting of term loan and revolving loan. The term loan provides up to $30 million of capital and the revolving loan provides up to an additional $50 million , for a total consideration of $80 million . In advance of the acquisition, OrthoPediatrics drew an initial $10 million from the term loan.
2024 Financial Guidance $197 million to $200 million , including revenue contribution from Boston O&P and representing 32% to 34% growth compared to full year 2023 preliminary unaudited net revenue. The acquisition is expected to be accretive to OrthoPediatrics adjusted EBITDA in 2024 and accretive to revenue growth in 2025, following the completion of integration activities. Boston O&P’s recent annual historical revenue is approximately $25 million . Boston O&P was a customer of OrthoPediatrics, purchasing the MD Orthopedics clubfoot specialty brace as well as a supplier to OrthoPediatrics, manufacturing the recently launched DF2 brace.
The Company plans to release its fourth quarter and full year 2023 financial results and provide additional commentary on its financial outlook in March. The quarterly and annual preliminary unaudited net revenue estimates for 2023 included in this press release are prior to the completion of review and audit procedures by the Company’s independent registered public accounting firm and are therefore subject to adjustment.
Forward-Looking Statements
This press release includes "forward-looking statements" within the meaning of U.S. federal securities laws, including the statements regarding OrthoPediatrics’ preliminary net revenue for the fourth quarter ended December 31, 2023, and other statements identified by the use of words such as "may," "might," "will," "should," "expect," "plan," "anticipate," "could," "believe," "estimate," "project," "target," "predict," "intend," "future," "goals," "potential," "objective," "would" and other similar expressions. Forward-looking statements involve risks and uncertainties, many of which are beyond OrthoPediatrics’ control. Important factors could cause actual results to differ materially from those in the forward-looking statements, including, among others: the risks related to COVID-19, the continued impact such pandemic may have on the demand for our products, and our ability to respond to the related challenges; and the risks, uncertainties and factors set forth under "Risk Factors" in OrthoPediatrics’ Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 1, 2023 as updated and supplemented by our other SEC reports filed from time to time. Forward-looking statements speak only as of the date they are made. OrthoPediatrics assumes no obligation to update forward-looking statements to reflect actual results, subsequent events, or circumstances or other changes affecting such statements except to the extent required by applicable securities laws.
About OrthoPediatrics Corp.
Founded in 2006, OrthoPediatrics is an orthopedic company focused exclusively on advancing the field of pediatric orthopedics. As such it has developed the most comprehensive product offering to the pediatric orthopedic market to improve the lives of children with orthopedic conditions. OrthoPediatrics currently markets 70 systems that serve three of the largest categories within the pediatric orthopedic market. This product offering spans trauma and deformity, scoliosis, and sports medicine/other procedures. OrthoPediatrics’ global sales organization is focused exclusively on pediatric orthopedics and distributes its products in the United States and over 70 countries outside the United States. For more information, please visit www.orthopediatrics.com.
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What is the ticker symbol for OrthoPediatrics Corp.?
The ticker symbol for OrthoPediatrics Corp. is KIDS.
What is the expected net revenue growth for the fourth quarter of 2023 compared to 2022?
The expected net revenue growth for the fourth quarter of 2023 is 21% compared to the same period in 2022.
What is the projected revenue for OrthoPediatrics in 2024?
OrthoPediatrics projects a revenue range of $197 million to $200 million for 2024.
What is the expected revenue contribution from Boston O&P in 2024?
The acquisition of Boston O&P is expected to contribute to OrthoPediatrics' revenue growth in 2024.
When will OrthoPediatrics release its fourth quarter and full year 2023 financial results?
OrthoPediatrics plans to release its financial results and provide additional commentary on its financial outlook in March.
