OrthoPediatrics Corp.11.05.21
OrthoPediatrics Corp., a company focused exclusively on advancing the field of pediatric orthopedics, has announced its financial results for the third quarter ended September 30, 2021.
David Bailey, president & CEO of OrthoPediatrics, commented, “We are proud to report double-digit growth despite the temporary impact of COVID, RSV, and hospital staffing shortages. International growth was particularly strong indicating continued recovery of these markets. We continue to make substantive progress in advancing our key strategic initiatives, including securing enabling technologies and sponsoring multiple key clinical education events.”
The decline in revenues in the third quarter of 2021 was driven primarily by the recent spike in COVID-19 and RSV cases in children, which negatively impacted elective procedure volumes. International revenue for the third quarter of 2021 was $5.7 million, a 118% increase compared to $2.6 million for the same period last year, representing 22.8% of total revenue.
Growth in the quarter was primarily driven by a recovery in procedure volumes in EMEA and South America, improved agency sales, and increased set purchases from stocking distributors.
Trauma and Deformity revenue for the third quarter of 2021 was $16.8 million, a 12% increase compared to $15.0 million for the same period last year. Segment growth was driven by a strong international recovery, continued Trauma growth, as well as PNP, and Cannulated Screw growth. Scoliosis revenue was $7.3 million, a 11% increase compared to $6.6 million for the third quarter of 2020. Segment growth was driven primarily by a strong international recovery. Sports Medicine/other revenue for the third quarter of 2021 was $1.0 million, a 46% increase compared to $0.7 million for the same period last year driven by continued Telos revenue growth.
Gross profit for the third quarter of 2021 was $18.6 million, a 5.2% increase compared to $17.6 million for the same period last year. Gross profit margin for the third quarter of 2021 decreased to 74.0%, compared to 79.4% for the same period last year. This change was driven by a higher percentage of international revenue, including set sales, which generates a lower gross margin rate than domestic revenue.
Total operating expenses for the third quarter of 2021 were $22.2 million, a 10.2% increase compared to $20.1 million for the same period last year. The increase in operating expenses was primarily driven by increased commission expense and increased R&D costs. Operating loss for the third quarter of 2021 was ($3.6) million compared to ($2.5) million for the same period last year.
Total other expenses (income) for the third quarter of 2021 were ($1.2) million, compared to $2.0 million for the same period last year. Fair value adjustment of contingent considerations was a benefit of $1.4 million in the third quarter of 2021 compared to an expense of $0.9 million in the third quarter of 2020.
Net loss for the third quarter of 2021 was ($2.2) million, compared to ($4.5) million for the same period last year. Net loss attributable to common stockholders for the period was ($0.11) per basic and diluted share, compared to ($0.24) per basic and diluted share for the same period last year. Adjusted diluted loss per share was ($0.15) compared to ($0.15) for the same period last year.
Adjusted EBITDA for the third quarter of 2021 was $0.5 million as compared to $1.1 million for the third quarter of 2020.
As of September 30, 2021, cash, cash equivalents, short-term investments and restricted cash were $59.1 million compared to $78.0 million as of June 30, 2021. The company had no outstanding term loan obligations.
David Bailey, president & CEO of OrthoPediatrics, commented, “We are proud to report double-digit growth despite the temporary impact of COVID, RSV, and hospital staffing shortages. International growth was particularly strong indicating continued recovery of these markets. We continue to make substantive progress in advancing our key strategic initiatives, including securing enabling technologies and sponsoring multiple key clinical education events.”
Third Quarter 2021 Financial Results
Total revenue for the third quarter of 2021 was $25.1 million, a 13% increase compared to $22.2 million for the same period last year. U.S. revenue for the third quarter of 2021 was $19.4 million, a 1% decrease compared to $19.6 million for the same period last year, representing 77.2% of total revenue.The decline in revenues in the third quarter of 2021 was driven primarily by the recent spike in COVID-19 and RSV cases in children, which negatively impacted elective procedure volumes. International revenue for the third quarter of 2021 was $5.7 million, a 118% increase compared to $2.6 million for the same period last year, representing 22.8% of total revenue.
Growth in the quarter was primarily driven by a recovery in procedure volumes in EMEA and South America, improved agency sales, and increased set purchases from stocking distributors.
Trauma and Deformity revenue for the third quarter of 2021 was $16.8 million, a 12% increase compared to $15.0 million for the same period last year. Segment growth was driven by a strong international recovery, continued Trauma growth, as well as PNP, and Cannulated Screw growth. Scoliosis revenue was $7.3 million, a 11% increase compared to $6.6 million for the third quarter of 2020. Segment growth was driven primarily by a strong international recovery. Sports Medicine/other revenue for the third quarter of 2021 was $1.0 million, a 46% increase compared to $0.7 million for the same period last year driven by continued Telos revenue growth.
Gross profit for the third quarter of 2021 was $18.6 million, a 5.2% increase compared to $17.6 million for the same period last year. Gross profit margin for the third quarter of 2021 decreased to 74.0%, compared to 79.4% for the same period last year. This change was driven by a higher percentage of international revenue, including set sales, which generates a lower gross margin rate than domestic revenue.
Total operating expenses for the third quarter of 2021 were $22.2 million, a 10.2% increase compared to $20.1 million for the same period last year. The increase in operating expenses was primarily driven by increased commission expense and increased R&D costs. Operating loss for the third quarter of 2021 was ($3.6) million compared to ($2.5) million for the same period last year.
Total other expenses (income) for the third quarter of 2021 were ($1.2) million, compared to $2.0 million for the same period last year. Fair value adjustment of contingent considerations was a benefit of $1.4 million in the third quarter of 2021 compared to an expense of $0.9 million in the third quarter of 2020.
Net loss for the third quarter of 2021 was ($2.2) million, compared to ($4.5) million for the same period last year. Net loss attributable to common stockholders for the period was ($0.11) per basic and diluted share, compared to ($0.24) per basic and diluted share for the same period last year. Adjusted diluted loss per share was ($0.15) compared to ($0.15) for the same period last year.
Adjusted EBITDA for the third quarter of 2021 was $0.5 million as compared to $1.1 million for the third quarter of 2020.
As of September 30, 2021, cash, cash equivalents, short-term investments and restricted cash were $59.1 million compared to $78.0 million as of June 30, 2021. The company had no outstanding term loan obligations.