Orthopediatrics Corp. Files 2023 Annual Report on Form 10-K

TL;DR

<b>Orthopediatrics Corp. has filed its 2023 10-K report detailing its fiscal year performance and financial standing.</b>

AI Summary

ORTHOPEDIATRICS CORP (KIDS) filed a Annual Report (10-K) with the SEC on March 8, 2024. Orthopediatrics Corp. filed its 2023 Form 10-K on March 8, 2024. The filing covers the fiscal year ending December 31, 2023. The company's principal executive offices are located at 2850 Frontier Drive, Warsaw, Indiana. The SIC code for the company is 3841 (Surgical & Medical Instruments & Apparatus). The filing includes financial data for the fiscal years 2023, 2022, and 2021.

Why It Matters

For investors and stakeholders tracking ORTHOPEDIATRICS CORP, this filing contains several important signals. This 10-K filing provides a comprehensive overview of Orthopediatrics Corp.'s financial health, operational performance, and strategic initiatives for the fiscal year 2023, crucial for investors to assess the company's trajectory. The detailed financial statements and risk factors within this report are essential for stakeholders to understand the company's market position, potential challenges, and future outlook in the pediatric orthopedic device sector.

Risk Assessment

Risk Level: medium — ORTHOPEDIATRICS CORP shows moderate risk based on this filing. The company operates in the medical device industry, which is subject to stringent regulatory oversight and competitive pressures, as indicated by its SIC code and the nature of its business.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to assess Orthopediatrics Corp.'s performance and future prospects.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-03-08 — Filing Date (Date of submission)
• 3841 — SIC Code (Industry classification)

Key Players & Entities

• ORTHOPEDIATRICS CORP (company) — Filer name
• KIDS (company) — Ticker symbol
• 2850 FRONTIER DRIVE, WARSAW, IN 46582 (company) — Business address
• 3841 (company) — Standard Industrial Classification
• 2023-12-31 (date) — Fiscal year end
• 2024-03-08 (date) — Filing date

FAQ

Industry Context

Orthopediatrics Corp. operates within the surgical and medical instruments and apparatus industry, specifically focusing on pediatric orthopedic devices.

Regulatory Implications

The company is subject to the reporting requirements of the Securities Exchange Act of 1934, as evidenced by its 10-K filing.

What Investors Should Do

1. Analyze the financial statements for revenue trends and profitability.
2. Review the business description for strategic initiatives and market focus.
3. Examine any disclosed risk factors for potential challenges.

Key Dates

• 2024-03-08: 10-K Filing — Annual report submission for fiscal year 2023
• 2023-12-31: Fiscal Year End — End date of the reporting period

Year-Over-Year Comparison

This is the initial filing analyzed for the fiscal year 2023.

Key Financial Figures

• $0.00025 — ange on which registered Common Stock, $0.00025 par value per share KIDS Nasdaq Global
• $50 million — time, which provides the Company with a $50 million line of credit and a $30 million term l
• $30 million — with a $50 million line of credit and a $30 million term loan Devise Ortho Devise Ortho, I
• $50.0 million — 023), which provided the Company with a $50.0 million revolving credit facility Structure Me
• $139.3 million — we raised net proceeds of approximately $139.3 million from a public offering of (a) 1,091,250
• $4.3 million — oceeds reflect the Company's payment of $4.3 million in underwriting discounts and commissio
• $0.3 million — erwriting discounts and commissions and $0.3 million in other offering costs. A portion of t
• $31 million — of the net proceeds were used to repay $31 million of borrowings previously outstanding un
• $80 million — to expire on January 1, 2024 with a new $80 million credit agreement with MidCap Financial
• $438.7 m — ompany had consolidated total assets of $438.7 million, consolidated total liabilities o
• $61.7 million — lion, consolidated total liabilities of $61.7 million and stockholders' equity of $377.0 mill
• $377.0 million — 1.7 million and stockholders' equity of $377.0 million. As of December 31, 2023, the Company a
• $3.9 billion — et that we currently serve represents a $3.9 billion opportunity globally, including over $1
• $1.7 billion — on opportunity globally, including over $1.7 billion in the United States. Historically, t
• $10.2 million — ve grown our revenue from approximately $10.2 million for the year ended December 31, 2011 to

Filing Documents

• kids-20231231.htm (10-K) — 1900KB
• exhibit45descriptionofcapi.htm (EX-4.5) — 30KB
• exhibit211subsidiariesofor.htm (EX-21.1) — 10KB
• deloitteconsent-filing2023.htm (EX-23.1) — 2KB
• exhibit24-poa2023.htm (EX-24.1) — 11KB
• exhibit311-ceocertificatio.htm (EX-31.1) — 9KB
• exhibit312-cfocertificatio.htm (EX-31.2) — 9KB
• exhibit321-ceocertificatio.htm (EX-32.1) — 4KB
• exhbit322-cfocertification.htm (EX-32.2) — 4KB
• exhibit97clawbackpolicy.htm (EX-97) — 29KB
• 0001425450-24-000013.txt (&nbsp;) — 10116KB
• kids-20231231.xsd (EX-101.SCH) — 71KB
• kids-20231231_cal.xml (EX-101.CAL) — 112KB
• kids-20231231_def.xml (EX-101.DEF) — 426KB
• kids-20231231_lab.xml (EX-101.LAB) — 769KB
• kids-20231231_pre.xml (EX-101.PRE) — 630KB
• kids-20231231_htm.xml (XML) — 1336KB

Risk Factors

Item 1A. Risk Factors 31

Unresolved Staff Comments

Item 1B. Unresolved Staff Comments 69

Cybersecurity

Item 1C. Cybersecurity 69

Properties

Item 2. Properties 70

Legal Proceedings

Item 3. Legal Proceedings 70

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 70 PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 71

[Reserved]

Item 6. [Reserved] 71

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 72

Quantitative and Qualitative Disclosure about Market Risk

Item 7A. Quantitative and Qualitative Disclosure about Market Risk 82

Financial Statements and Supplementary Data

Item 8. Financial Statements and Supplementary Data 83

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 118

Controls and Procedures

Item 9A. Controls and Procedures 118

Other Information

Item 9B. Other Information 119

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections PART III

Directors, Executive Officers and Corporate Governance

Item 10. Directors, Executive Officers and Corporate Governance 120

Executive Compensation

Item 11. Executive Compensation 120

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 120

Certain Relationships, Related Transactions and Director Independence

Item 13. Certain Relationships, Related Transactions and Director Independence 120

Principal Accountant Fees and Services

Item 14. Principal Accountant Fees and Services 120 PART IV

Exhibits and Financial Statement Schedules

Item 15. Exhibits and Financial Statement Schedules 121

Form 10-K Summary

Item 16. Form 10-K Summary 123 3 Glossary of Acronyms and Defined Terms ACL Anterior cruciate ligament ApiFix The combination of ApiFix, Ltd and ApiFix, Inc., which were acquired by the Company April 1, 2020 Approved Body An approved body under UK medical Device Regulations Band-Lok Band-Lok, LLC, which sold certain intellectual property assets to the Company on June 10, 2020 CE Mark Conformite Europeene Mark used for medical devices in the EEA; a product with such a mark is referred to herein as a "CE-Marked" product. CME Continuing medical education CMS Centers for Medicare and Medicaid Services Company OrthoPediatrics Corp. Credit Agreement Credit, Security and Guaranty Agreement with MidCap Financial Trust, as amended from time to time, which provides the Company with a $50 million line of credit and a $30 million term loan Devise Ortho Devise Ortho, Inc. which sold certain assets and intellectual property to the Company on October 20, 2021 DHHS U.S. Department of Health and Human Services EEA European Economic Area EU European Union Exchange Act U.S. Securities Exchange Act of 1934 FDA U.S. Food and Drug Administration FDASIA Food and Drug Administration Safety and Innovation Act FDCA Federal Food, Drug and Cosmetic Act FERA Fraud Enforcement Recovery Act of 2009 Foundation The Foundation for Advancing Pediatric Orthopedics GAAP U.S. Generally Accepted Accounting Principles GDPR EU General Data Protection Regulation HCP Healthcare providers HDE Humanitarian Device Exemption under FDA regulation HIPAA Health Insurance Portability and Accountability Act of 1996 IPO Company's initial public offering of its common stock on October 11, 2017 IRB Institutional Review Board utilized by the FDA LLD Limb length discrepancies MDD Medical Devices Directive MD Ortho or MDO MD Orthopaedics, which was acquired by the Company on April 1, 2022 MDR EU's Medical Device Regulation MHRA Medicines and Healthcare products Regulatory Agency of th

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS The Company from time to time includes forward-looking statements in its oral and written communication. The Company may include forward-looking statements in filings with the SEC, such as its Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q, in other written materials and oral statements made by senior management to analysts, investors, representatives of the media and others. All statements other than statements of historical facts contained in this report, including statements regarding our future results of operations and financial position, business strategy, current and prospective products, product approvals, research and development costs, prospective collaborations, timing and likelihood of success, plans and objectives of management for future operations and future results of anticipated products, are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. The Company intends these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and the Company is including this statement for purposes of these safe harbor provisions. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and result

BUSINESS

ITEM 1. BUSINESS GENERAL OrthoPediatrics Corp. (the "Company") is a Delaware corporation, headquartered in Warsaw, Indiana, and organized in November 2007. The Company's Common Stock is traded on the Nasdaq Global Market under the symbol KIDS. OrthoPediatrics Corp. is a medical device company committed to designing, developing and marketing anatomically appropriate implants, instruments and specialized braces for children with orthopedic conditions, giving pediatric orthopedic surgeons and caregivers the ability to treat children with technologies specifically designed to meet their needs. Initially organized as an Indiana limited liability company on August 31, 2006, OrthoPediatrics Corp. was converted to a Delaware corporation on November 30, 2007. We sell our specialized products, including PediLoc , PediPlates , Cannulated Screws, PediFlex TM nail, PediNail TM , PediLoc Tibia, ACL Reconstruction System, Locking Cannulated Blade, Locking Proximal Femur, Spica Tables, RESPONSE TM Spine, BandLoc TM , Pediatric Nailing Platform | Femur, Devise Rail, Orthex , The Fassier-Duval Telescopic Intramedullary System , SLIM TM Nail, The GAP Nail TM , The Free Gliding SCFE Screw System TM , GIRO Growth Modulation System, PNP Tibia System, ApiFix Mid-C System and Mitchell Ponseti specialized bracing products to various hospitals and medical facilities throughout the United States and various international markets. We currently use a contract manufacturing model for the manufacturing of implants and related surgical instrumentation while our clubfoot orthopedic products are manufactured in house. The Company began selling its products in the United States in 2008 and internationally in 2011. In 2017, we expanded operations and established legal entities in the United Kingdom (UK), Australia and New Zealand, permitting us to sell under an agency model directly to local hospitals in these countries. We began selling direct to Canada in September 2018, Belgium and the Nether

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View this 10-K filing on SEC EDGAR