OrthoPediatrics Corp (KIDS) 2024 Q3 法說會逐字稿

Good morning and welcome to OrthoPediatrics Corporation's Third Quarter 2024 Earnings Conference Call. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of today's call.

早上好，歡迎參加 OrthoPediatrics Corporation 2024 年第三季財報電話會議。此時，所有參與者都處於只聽模式。我們將在今天的電話會議結束時安排問答環節。

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. Please go ahead.

謹此提醒，本次通話將會被錄音以供重播。現在我想將電話轉給吉爾馬丁集團的 Trip Taylor，請其發表一些介紹性意見。請繼續。

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. Before we begin today, let me remind you that the company's remarks include forward-looking statements within the meaning of federal securities laws including the safe Harbor provisions of private securities litigation reform Act of 1995. These forward-looking statements are subject to numerous risks and uncertainties and the company's actual results may differ materially for a discussion of risk factors. I encourage you to review the company's most recent annual report on Form 10-K which was filed with the SEC on March 8, 2024. During the call today, management will also discuss certain non-GAAP financial measures which are supplemental measures of performance. The company believes these measures provide useful information for investors in evaluating its operations period over period for each non-GAAP financial measure referenced on this call. The company has included a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures in its Earnings release. Please note that the non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for orthopediatric's financial results prepared in accordance with GAAP.

感謝您參加今天的電話會議，公司總裁兼執行長 David Bailey 以及營運長和財務長 Fred Hite。在今天開始之前，讓我提醒您，該公司的言論包括聯邦證券法含義內的前瞻性陳述，包括 1995 年私人證券訴訟改革法案的安全港條款。這些前瞻性陳述受到許多風險和不確定性的影響，公司的實際結果可能因討論風險因素而產生重大差異。我鼓勵您查看該公司於 2024 年 3 月 8 日向 SEC 提交的 10-K 表格中的最新年度報告。在今天的電話會議上，管理階層還將討論某些非公認會計準則財務指標，這些指標是績效的補充指標。該公司認為，這些指標為投資者評估本次​​電話會議中引用的每項非公認會計準則財務指標的營運週期提供了有用的資訊。該公司在其收益報告中納入了非公認會計原則財務指標與最直接可比較的公認會計原則財務指標的調節表。請注意，非公認會計準則財務指標作為分析工具有其局限性，不應單獨考慮或取代根據公認會計準則編制的骨科財務結果。

In addition, the content of this conference call contains time sensitive information that is accurate only as of the date of this live broadcast. Today, November 7, 2024. Accepted as required by law, the company undertakes no obligation to revise or update any statements to reflect events or circumstances taking place after the date of this call. With that. I would like to turn the call over to David Bailey, President and Chief Executive Officer.

此外，本次電話會議的內容包含時間敏感訊息，僅截至本次直播之日準確。今天，2024 年 11 月 7 日。根據法律要求，本公司不承擔修改或更新任何聲明以反映本次電話會議之後發生的事件或情況的義務。就這樣。我想將電話轉給總裁兼執行長戴維貝利 (David Bailey)。

Thanks, Trip. Good morning, everyone. Thank you for joining us on our Third Quarter 2024 conference call.

謝謝，特里普。大家早安。感謝您參加我們的 2024 年第三季電話會議。

As always, we are extremely proud to open our call by reporting that we helped over 33,000 kids in the third quarter of 2024. A 50% increase year-over-year and another record high for OrthoPediatrics having held over 100,000 Children so far this year and over 1 million since our inception, we've continued to deliver on our calls while expanding our reach and positively impacting the lives of more-and-more children Worldwide. This has and will always be our foundation and remains the best measure of our success.

像往常一樣，我們非常自豪地在電話會議中宣布，我們在 2024 年第三季幫助了超過 33,000 名兒童。同比增長50%，OrthoPediatrics 創下新高，今年迄今已收治了超過100,000 名兒童，自成立以來已收治了超過100 萬名兒童，我們繼續響應我們的號召，同時擴大我們的覆蓋範圍，對人們的生活產生正面影響全世界越來越多的兒童。這已經並將永遠是我們的基礎，並且仍然是衡量我們成功的最佳標準。

At our recent Investor Day held early in September. We provided a deeper look into our business dedicating time to each business segment and how we plan to deliver value and support our call now and in the future. We clearly articulated our three year plan to deliver top line revenue growth in the high T and greater than 20% for OPSB produce substantial EBITDA while improving EBITDA margin and become cash flow break even in 2026. Our strong Q3 performance represents yet another successful step forward in our plan as we continue to execute and further enhance OrthoPediatrics, unique and differentiated profile. To that end OrthoPediatrics, strong performance continued in the third quarter of 2024 as we delivered record revenue of $54.6 million representing global growth of 37% from the same period in 2023.

在我們最近於九月初舉行的投資者日上。我們更深入地了解了我們的業務，為每個業務部門投入了時間，以及我們計劃如何在現在和未來提供價值並支持我們的呼籲。我們明確闡述了我們的三年計劃，以實現高 T 的頂線收入增長，使 OPSB 產生可觀的 EBITDA 超過 20%，同時提高 EBITDA 利潤率，並在 2026 年實現現金流收支平衡。我們強勁的第三季業績代表我們的計畫又向前邁出了成功的一步，因為我們將繼續執行並進一步增強骨科、獨特和差異化的形象。為此，骨質兒科在 2024 年第三季持續保持強勁表現，我們實現了創紀錄的 5,460 萬美元收入，較 2023 年同期全球成長 37%。

As has been our long history, we continue to take share across the entire business and saw strong performances from both T&D and scoliosis with growth bolstered in both businesses by OPSB looking at the over-all macro environment. We believe we are finally in a normalized surgical environment with only the possible transient impacts of seasonal viruses such as COVID, RSV or flu and we expect to continue as normal into the future. Like other companies, we experienced an impact from a hurricane at the end of September resulting in case cancellation. And then again, we were affected in early October by hurricane Milton. However, given our healthy volumes throughout the quarter, the impact on Q3 was marginal and October trends have been have remained favorable.

正如我們悠久的歷史一樣，我們繼續在整個業務中佔據份額，並看到 T&D 和脊椎側彎業務的強勁表現，從整體宏觀環境來看，OPSB 推動了這兩項業務的成長。我們相信，我們最終處於正常化的手術環境中，只有季節性病毒（例如新冠肺炎、呼吸道合胞病毒或流感）可能產生的短暫影響，​​我們預計未來將繼續保持正常狀態。與其他公司一樣，我們在 9 月底經歷了颶風的影響，導致案件被取消。十月初，我們再次受到颶風米爾頓的影響。然而，鑑於我們整個季度的健康銷售，對第三季的影響很小，十月份的趨勢仍然有利。

That said through the first three quarters, we have successfully executed our strategy as we continue to deliver more positive results, strong results coupled with our overall bullish outlook and the multiple growth levers that remain ahead of us compel us to raise our full year 2024 guidance to reflect this momentum, we raise our expectation for full year 2024 revenue range of $202 to $204 million representing year-over-year growth of 36% to 37%.

也就是說，在前三個季度，我們已經成功執行了我們的策略，我們繼續交付更積極的業績，強勁的業績加上我們整體看漲的前景，以及我們面前的多重成長槓桿迫使我們提高2024 年全年指引為了反映這一勢頭，我們將 2024 年全年營收預期上調至 202 美元至 2.04 億美元，年增 36% 至 37%。

We expect to extend our improve, adjusted and reduce cash usage as we enter the final months of 2024. Now moving to our revenue segment in the Third Quarter of 2024 we generated total trauma and deformity revenue of $37.6 million representing growth of 31% compared to the prior year period. The results within our T&D business continue to be driven by significant market share gains across several products as well as the addition of Boston OMP revenue. This quarter's performance was highlighted by both trauma and OPSB products including PNP Tibia, DF2, Cannulated screws and Boston OMP signals within the T&D business. Prior set deployments, most notably from the aforementioned products. In addition to continued share gain across the entire product portfolio, continue to drive our growth. And we believe the utilization of those sets will continue to increase. During the Quarter, we launched more sets of PNP Tibia which surgeons are adopting at a remarkable rate and we are working hard to ensure that we deploy sets to meet rapidly rising demand.

進入 2024 年最後幾個月，我們預計將擴大改進、調整和減少現金使用。現在轉向我們的收入部分，2024 年第三季我們的創傷和畸形總收入為 3,760 萬美元，比去年同期成長 31%。我們的 T&D 業務業績繼續受到多種產品市場份額大幅增長以及波士頓 OMP 收入增加的推動。T&D 業務中的創傷和 OPSB 產品（包括 PNP 脛骨、DF2、空心螺絲和波士頓 OMP 訊號）凸顯了本季度的業績。先前設定的部署，尤其是來自上述產品的部署。除了整個產品組合的份額持續成長之外，還繼續推動我們的成長。我們相信這些設備的利用率將持續增加。在本季度，我們推出了更多套 PNP 脛骨，外科醫生正在以驚人的速度採用這些套，我們正在努力確保我們部署套來滿足快速增長的需求。

Thus far, we've executed the PNP Tibia launch exceptionally well and anticipate this will be a solid growth driver for the next several quarters and beyond. Overall, we're seeing the impact of set deployments from 2023 in 2024 and expect further contributions in the future surrounding PediatricOrthopedic surgeons with all the technology they need to provide optimal care is a key focus of ours. Currently, we have 42 different trauma and deformity systems that have been launched over the last several years and our pipeline remains robust.

到目前為止，我們已經非常順利地執行了 PNP Tibia 的推出，並預計這將成為未來幾季及以後的堅實成長動力。總體而言，我們看到了 2023 年至 2024 年設備部署的影響，並期望未來為小兒骨科醫生提供進一步的貢獻，提供他們提供最佳護理所需的所有技術，這是我們的重點。目前，我們在過去幾年中推出了 42 種不同的創傷和畸形系統，我們的產品線仍然強勁。

We focused on ensuring that the products we bring to market are high quality and address major unmet needs.

我們專注於確保我們推向市場的產品具有高品質並滿足主要的未滿足需求。

PNP Tibia and Special DF2 are great representations of products that provide a unique life changing impact for our patients. We are very proud of what we see in terms of clinical outcomes and new treatment paradigms and the success we've seen throughout the launch is further validation for these products.

PNP Tibia 和 Special DF2 是為我們的患者提供獨特的改變生活影響的產品的絕佳代表。我們對臨床結果和新治療範例感到非常自豪，我們在整個發布過程中看到的成功是對這些產品的進一步驗證。

DF2 recently received an additional FDA indication approval for post surgical braces which will continue to expand its demand. PNP Tibia has now been in the US market for a few quarters and the demand continues to exceed our expectations.

DF2 最近獲得了 FDA 對術後支架的額外適應症批准，這將繼續擴大其需求。PNP 脛骨現已進入美國市場數個季度，需求持續超出我們的預期。

And although earlier in the full market release timeline, we believe DF2 is poised to continue rapid growth for several years as we continue to ramp surgeon access on the R&D front, we're excited about our projects on the surgical side of our T&D business. In particular, the development of our pediatric plating platform or P3 is progressing according to plan with the first of the series, our P3 hip system plated for launch in the first half of next year. This system is specifically for pediatric and adolescent hip fractures and deformities and there's no other product like it today as such, it represents an opportunity to grow with a new indication.

儘管在完整市場發佈時間表的早期，我們相信隨著我們繼續增加研發方面的外科醫生准入，DF2 將在未來幾年內繼續快速增長，但我們對 T&D 業務的外科方面的項目感到興奮。特別是，我們的兒科電鍍平台或 P3 的開發正在按計劃進行，該系列的第一個產品是我們的 P3 髖關節系統，將於明年上半年推出。該系統專門針對兒童和青少年髖部骨折和畸形，目前還沒有其他類似的產品，它代表了一個新適應症的成長機會。

We believe this will be a world class system with a significant opportunity to fill a major unmet need in the market and spawn further share taking opportunities for us within the plating franchise.

我們相信，這將是一個世界級的系統，有一個重要的機會來滿足市場上未滿足的主要需求，並為我們在電鍍特許經營範圍內帶來進一步的搶佔機會。

Overall T&D continues to be a strong performer for us as we leverage our scale cash or market share and bring new products to market that fill unmet needs to drive growth. As discussed in detail at our investor day in September within the orthopediatrics, non surgical specialty racing business or OPSB. We have created a clearly defined strategy that will drive growth and positively impact profitability. Our strategy to take OPSU to the next phase over the coming years and expand the OPSB footprint utilizes a three fold approach.

總體而言，T&D 對我們來說仍然表現強勁，因為我們利用規模現金或市場份額，向市場推出新產品，滿足未滿足的需求，從而推動成長。正如我們在 9 月的投資者日上在骨科、非手術專業賽車業務或 OPSB 中詳細討論的那樣。我們制定了明確的策略，將推動成長並對獲利能力產生積極影響。我們在未來幾年內將 OPSU 推向下一階段並擴大 OPSB 足跡的策略採用了三重方法。

Number one growing market share with existing products in our existing clinics. Number two accelerating R&D by launching 4 to 5 new products per year and number three aggressive territory expansion.

我們現有診所的現有產品的市佔率不斷增長第一。第二名是透過每年推出 4 到 5 個新產品來加速研發，第三名是積極擴張領土。

Regarding the first, currently we serve nine target markets across the US. The target market is defined as a greater metro area across those target markets. We estimate we currently have about 15% to 20% share of the PediatricOrthopedic market. On average, increasing market share within existing clinics represents the easiest way of growth as we work to push from 15% to 50% market share. We've expanded our OPSB specific sales force and with their hard work, we have already begun to see early returns from that investment on the R&D front while it's very early and these projects do take time. We will be launching several additional products this year, both from our own organic product development and through strategic partnership.

關於第一個問題，目前我們為美國九個目標市場提供服務。目標市場被定義為這些目標市場中較大的都會區。我們估計我們目前在兒科骨科市場佔有約 15% 至 20% 的份額。平均而言，增加現有診所的市佔率是最簡單的成長方式，因為我們努力將市場佔有率從 15% 提高到 50%。我們擴大了 OPSB 特定銷售隊伍，在他們的辛勤工作下，我們已經開始看到研發方面投資的早期回報，儘管現在還為時過早，而且這些項目確實需要時間。今年我們將透過我們自己的有機產品開發和策略合作夥伴關係推出幾種其他產品。

While these products won't have a material impact in Q4, they will be growth providers in 2025 with respect to territory expansion. We are happy to report that since the Investor day, we have already made progress on this front early in the fourth quarter, we closed the acquisition of a small clinic in Florida that allows for aggressive Greenfield expansion in this new and important territory. Additionally, we're working on multiple Greenfield expansion opportunities that we expect will be complete.

雖然這些產品不會在第四季度產生實質影響，但它們將在 2025 年成為領土擴張的成長提供者。我們很高興地報告，自投資者日以來，我們已經在第四季度初在這方面取得了進展，我們完成了對佛羅裡達州一家小型診所的收購，這使得我們能夠在這個新的重要領域進行積極的綠地擴張。此外，我們正在研究多個綠地擴張機會，預計這些機會將會完成。

While all components of this strategy are critical, we believe territory expansion will be the largest driver of growth, especially as we look to 2025. And we look forward to providing updates on this in the near future.

雖然這項策略的所有組成部分都很重要，但我們相信領土擴張將是成長的最大驅動力，特別是展望 2025 年。我們期待在不久的將來提供這方面的更新。

We recognize the huge potential with an OPSB to drive our patient impact, potential for treating more patients with capital, efficient growth and early traction. With our strategy suggests that we are on track with our plans to execute for the remainder of 2024. And for the next several years, moving to the soil in the third quarter of 2024 we generated scoliosis revenue of $15.6 million representing global growth of 52% compared to the prior year.

我們認識到 OPSB 在推動患者影響方面的巨大潛力，透過資本、高效增長和早期牽引來治療更多患者的潛力。我們的策略表明，我們正在按計劃執行 2024 年剩餘時間。在接下來的幾年裡，我們在 2024 年第三季轉向土壤，脊椎側彎收入達到 1,560 萬美元，與前一年相比，全球成長了 52%。

The global growth and scoliosis rebound. This quarter was driven by strong case scheduling. Continue chairing the opening of some new large key accounts and the onboarding of several new users along with strong international growth as well as the addition of Boston O&P revenue.

全球成長和脊椎側彎反彈。本季是由強勁的案件安排推動的。繼續主持一些新的大型關鍵客戶的開設和一些新用戶的加入，以及強勁的國際成長以及波士頓 O&P 收入的增加。

More specifically, we saw continued adoption of our response find system in the US and abroad. Strong international revenue, surgeon adoption at large key accounts of our first EOS product response rhythm to it and strong strategy sales in place.

更具體地說，我們看到我們的回應查找系統在美國和國外持續採用。強勁的國際收入、外科醫生在大型關鍵客戶中採用我們的第一個 EOS 產品對其的反應節奏以及強大的策略銷售到位。

Further, we are benefiting from the synergies with the OPSB and scoliosis bracing products from Boston OMP, which contributed to the strong growth quarter.

此外，我們還受益於與 Boston OMP 的 OPSB 和脊椎側彎支撐產品的協同效應，這促成了本季的強勁成長。

Scoliosis's scheduling was robust for the balance of the summer and has extended into the fall despite case cancellations due to weather in the Southeast International. Scoliosis was strong due to solid revenues in our direct markets where we're seeing new users come on board and strong ordering from our LATAM stocking distributors looking at a few core products. In the Third Quarter, we had multiple placements and sales 70 units that will positively impact revenue. In 2025 70 unit placements are critical in driving account conversions in locations where we have both place and gold unit.

儘管由於東南國際機場的天氣原因取消了病例，但脊椎側彎的日程安排在整個夏季的剩餘時間內都保持強勁，並一直延續到秋季。脊椎側彎的強勁表現得益於我們直接市場的穩定收入，我們看到新用戶的加入以及我們的拉丁美洲庫存分銷商對一些核心產品的大量訂購。在第三季度，我們進行了多次投放並銷售了 70 台，這將對收入產生積極影響。到 2025 年，在我們同時擁有場所和黃金單位的地區，70 個單位安置對於推動帳戶轉換至關重要。

Those 70 units were placed in large institutions where we have a substantial opportunity to grow scoliosis revenue over the next 3 to 5 years. However, while the placements will lead to future revenue selling 70 units does carry a lower margin than the corporate average, which is reflected in our overall gross margin results.

這 70 個單位被放置在大型機構中，我們有很大機會在未來 3 到 5 年內增加脊椎側彎收入。然而，雖然配售將導致未來收入銷售 70 台，但利潤率確實低於公司平均水平，這反映在我們的整體毛利率結果中。

Now turning focus to our EOS product.

現在將焦點轉向我們的 EOS 產品。

We continue to progress with developing our EOS product portfolio as we work toward new FDA approvals and launch.

隨著我們努力獲得新的 FDA 批准和推出，我們將繼續開發我們的 EOS 產品組合。

We've been in direct discussions with the FDA regarding the approval pathway for eLLi's and Vertiglide.

我們一直在與 FDA 就 eLLi 和 Vertiglide 的批准途徑進行直接討論。

Recently, we received feedback that a five 10-K pathway may not be the likely approval path and we have already engaged with FDA to ensure we meet all the data collection requirements needed to secure an approval.

最近，我們收到回饋表示 5 個 10-K 途徑可能不是可能的批准途徑，我們已經與 FDA 合作，以確保我們符合獲得批准所需的所有資料收集要求。

But we do not believe that this impacts our opportunity. We do anticipate a slight delay in the timing of the US launch Promisingly. When we look at OUS, there are multiple international locations and surgeons being on boarded for the first procedures of vertigo in Ellie which we expect will possibly impact revenue in 2025. We anticipate upcoming cases OUS and we'll be capturing clinical data that will be leverageable in our approval process.

但我們認為這不會影響我們的機會。我們確實預計美國的發佈時間會略有延遲，這是有希望的。當我們看看 OUS 時，有多個國際地點和外科醫生正在為 Ellie 進行首次眩暈手術，我們預計這可能會影響 2025 年的收入。我們預計即將出現 OUS 病例，並且我們將捕獲可在我們的審批流程中利用的臨床數據。

Moving to International, overall international performance was strong, generating revenue of $11.9 million and delivering 12% growth year-over-year growth was primarily driven by greater than 100% of international scoliosis growth. While international trauma and deformity and OPS beat growth was somewhat muted by a difficult prior year comp due to the nearly complete conversion of OUS pega distributors in Q3 prior year that result in heavy set stocking and the addition of OPB distributors. In general, international demand across the entire T&D and Scoliosis portfolio is strong and we expect it will continue to contribute to the overall growth of the international growth in the quarter was primarily bolstered by trauma and deformity and plant products including several legacy devices, as well as very strong revenue from Scoliosis as we look ahead, we continue working hard to increase the number of Pediatric or the products available to surgeons outside of the United States. EU-MBR approval remains a large capital for growth in 2025 and beyond. And we are well positioned for approvals. We are awaiting the notified body to finalize our EU-MBR status which we expect to be completed in mid 2025. This will enable the potential launch of several new products in Europe shortly thereafter. Additionally, we are exploring further expansion opportunities for OPSB and we expect the first surgeries for Vertiglide and eLLi to come from outside of the United States. In 2025 overall, the international business is set up nicely and we believe the remainder of the year will contribute to an improved 2020 that brings us the surgery training and education. In the third quarter, we hosted 94 unique training experiences for over 1,400 health care professionals including during SRS Scoliosis Research Society which took place in Barcelona in September. Our team was well represented and highlight our expanding portfolio products, caring for kids with scoliosis.

轉向國際，整體國際業績強勁，收入達 1190 萬美元，同比增長 12%，增長主要是由超過 100% 的國際脊柱側凸增長推動的。雖然國際創傷和畸形以及 OPS 的增長因前一年的困難而減弱，因為去年第三季 OUS pega 分銷商幾乎完全轉換，導致大量庫存和 OPB 分銷商的增加。總體而言，整個T&D 和脊柱側凸產品組合的國際需求強勁，我們預計它將繼續為本季度國際增長的整體增長做出貢獻，這主要受到創傷和畸​​形以及包括多種遺留設備在內的植物產品的推動。EU-MBR 的批准仍然是 2025 年及以後成長的一大資本。我們已經做好了獲得批准的充分準備。我們正在等待公告機構最終確定我們的 EU-MBR 狀態，預計將於 2025 年中期完成。這將使數種新產品不久後有可能在歐洲推出。此外，我們正在探索 OPSB 的進一步擴張機會，我們預計 Vertiglide 和 eLLi 的首批手術將來自美國以外的地區。總體而言，2025 年國際業務發展良好，我們相信今年剩下的時間將為 2020 年的改善做出貢獻，為我們帶來手術培訓和教育。第三季度，我們為 1,400 多名醫療保健專業人員舉辦了 94 場獨特的培訓體驗，其中包括 9 月在巴塞隆納舉行的 SRS 脊椎側彎研究協會培訓。我們的團隊有很好的代表，並強調了我們不斷擴大的產品組合，照顧患有脊椎側彎的兒童。

In addition to our booth, we hosted multiple surgeon training sessions on our non fusion treatment option at the Fix for which a study was recently included in two peer review publications. It is important that we continue to provide educational opportunities within the PediatricOrthopedic community and we continue to lead industry efforts to enhance these opportunities. With that, I'd like to turn the call over to Fred to provide more detail on our financial results, Fred.

除了我們的展位之外，我們還在 Fix 舉辦了多次關於非融合治療方案的外科醫生培訓課程，其中一項研究最近被收錄在兩份同行評審出版物中。重要的是，我們繼續在兒科骨科社區內提供教育機會，並繼續引領業界努力增加這些機會。說到這裡，我想將電話轉給弗雷德，以提供有關我們財務業績的更多詳細信息，弗雷德。

Thanks, Dave.

謝謝，戴夫。

Give you more details on our financial results. I want to iterate that through continued execution. We've established OrthoPediatrics as a high quality and differentiated Asset with the ability to scale growth and increase operating leverage, which provides a clear path to cash flow positivity supported by a very strong balance sheet.

為您提供有關我們財務業績的更多詳細資訊。我想透過持續執行來重申這一點。我們已將骨兒科確立為高品質和差異化的資產，具有擴大增長和提高營運槓桿的能力，這為在非常強大的資產負債表的支持下實現現金流正向提供了一條清晰的途徑。

With that said our Third Quarter, 2024 worldwide revenue of $54.6 million increased 37% compared to the Third Quarter of 2023. Growth in the quarter was driven primarily by strong performance across global Trauma and Deformity, scoliosis and OPSB US revenue was $42.7 million a 46% increase from the third quarter of 2023 growth in the quarter was primarily driven by additional market share gains across Trauma and for scoliosis and OPSB. As well as the addition of Boston O&P revenue.

儘管如此，我們 2024 年第三季的全球營收為 5,460 萬美元，比 2023 年第三季成長了 37%。本季的成長主要得益於全球創傷和畸形、脊柱側彎和 OPSB 業務的強勁表現，美國收入為 4,270 萬美元，較 2023 年第三季度增長 46%。以及波士頓 O&P 收入的增加。

We generated total international revenue of $11.9 million representing growth of 12% compared to the third quarter of 2023. Growth in the quarter was primarily led by scoliosis revenue in the third quarter of 2024 Trauma and Deformity Global revenue of $37.6 million increased 31% compared to the prior year period. Growth is primarily driven by strong growth across numerous product lines as well as the addition of Boston O&P revenue.

我們的國際總營收為 1,190 萬美元，較 2023 年第三季成長 12%。該季度的成長主要是由 2024 年第三季脊椎側彎收入帶動的。 創傷和畸形全球收入為 3,760 萬美元，較上年同期成長 31%。成長主要得益於眾多產品線的強勁成長以及波士頓 O&P 收入的增加。

In the third quarter of 2024 scoliosis, global revenue of $15.6 million increased 52% compared to the prior year period. Growth was permanently driven by increased international scoliosis revenue. New users of our spine system response 5,560 as well as seven.

2024年第三季度，全球營收1,560萬美元，較上年同期成長52%。國際脊椎側彎收入的增加永久推動了成長。我們脊椎系統的新用戶回應 5,560 以及 7。

Finally, sports medicine, other revenue in the third quarter of 2024 was $1.3 million compared to $0.9 million in the prior year period.

最後，運動醫學，2024 年第三季的其他收入為 130 萬美元，而去年同期為 90 萬美元。

There is a sense of one $5.3 million of sets were deployed in the third quarter of 2024 compared to $3.9 million. In the third quarter of 2023 year-to-date, we have deployed $17.4 million of sets compared to $16.1 million at this time last year, touching briefly on a few key messages for the third quarter of 2024 gross profit margin was 73% compared to 77% for the third quarter of 2023. The decrease in gross profit margin was primarily driven by product mix shift including additional 70 unit sales which as capital equipment are sold at lower margins than our corporate average and increase set sales internationally as well as less favorable purchase price variant. As compared to the third quarter of 2023 total operating expense increased $10.2 million or 29% compared to the prior year period to $45.6 million. In the third quarter, 2024 the increase was primarily driven by the addition of Boston O&P substantial increases in the spend related to EU-MBR certification, increased commission expense and the incremental personnel required to support the ongoing growth of the company.

2024 年第三季部署的設備價值為 530 萬美元，而這一數字為 390 萬美元。2023 年第三季迄今，我們已部署了1,740 萬美元的設備，而去年同期為1,610 萬美元，簡要介紹了2024 年第三季毛利率為73% 的幾個關鍵信息，而去年同期為73% 。毛利率的下降主要是由於產品組合的轉變，包括額外增加 70 台銷量，作為資本設備，其銷售利潤率低於我們公司的平均水平，並增加了國際銷量以及不太有利的購買價格變體。與 2023 年第三季相比，總營運費用增加 1,020 萬美元，年增 29%，達到 4,560 萬美元。2024 年第三季度，成長的主要原因是 Boston O&P 與 EU-MBR 認證相關的支出大幅增加、佣金費用增加以及支持公司持續成長所需的人員增加。

Sales and marketing expenses increased $2.8 million or 20% compared to the prior year period to $16.8 million. In the third quarter of 2024 the increase was driven primarily by the increased sales commission expense coupled with additional employees that support OPSB sales group general and administrative expenses increased $8.3 million or 46% year-over-year to $26.3 million. In the third quarter of 2024 the increase was driven primarily by costs associated with the Boston O&P acquisition, increased depreciation and amortization over $600,000 increase in expenses related to EU-MBR certification as well as personnel and resources to support continued expansion of the business as discussed on a prior quarterly earnings call. The addition of Boston O&P includes lighter sales and marketing as well as R&D expenses.

銷售和行銷費用較上年同期增加 280 萬美元，即 20%，達到 1,680 萬美元。2024 年第三季度，這一增長主要是由於銷售佣金費用增加，以及支持 OPSB 銷售團隊的員工增加，一般和管理費用增加 830 萬美元，同比增長 46%，達到 2630 萬美元。2024 年第三季度，這一增長主要是由於與Boston O&P 收購相關的成本、與EU-MBR 認證相關的費用增加超過60 萬美元的折舊和攤銷增加以及支持業務持續擴張的人員和資源（如所討論的）在先前的季度財報電話會議上。Boston O&P 的增加包括減少銷售和行銷以及研發費用。

However, heavier G&A expenses, research and development expenses remain flat at $2.6 million in the third quarter of 2024. Due to timing of external development expenses.

然而，由於 G&A 費用增加，2024 年第三季研發費用仍持平於 260 萬美元。由於外部開發費用的時間安排。

Total, other expenses was $3.6 million for the third quarter of 2024 compared to $0.8 million of other income for the same period. Last year, the increase was driven by one time refinancing expense of $3.2 million adjusted EBIDA was $4.0 million in the third quarter of 2024. This compares to $3.6 million for the third quarter of 2023 year-to-date adjusted VAA was $5.5 million compared to $3.8 million in the prior year.

2024 年第三季的其他支出總額為 360 萬美元，而同期其他收入為 80 萬美元。去年，這一成長是由一次性再融資費用 320 萬美元推動的，2024 年第三季調整後的 EBIDA 為 400 萬美元。相較之下，2023 年第三季截至目前調整後的 VAA 為 360 萬美元，調整後的 VAA 為 550 萬美元，而前一年為 380 萬美元。

We ended the third quarter with $78.1 million in cash, short term investments and restricted cash.

第三季末，我們擁有 7,810 萬美元的現金、短期投資和限制性現金。

We still have $25 million available to us on our new line of credit.

我們的新信貸額度仍有 2500 萬美元可用。

Turning to guidance, we are raising our expectation for the full year 2024 revenue to 202 to $204 million representing year on year growth of 36 to 37%.

至於指引，我們將 2024 年全年營收預期上調至 2.02 至 2.04 億美元，年增 36% 至 37%。

We continue to expect full year gross margins to be in the range of 74 to 75% and we continue to expect to generate between eight and $9 million of a Justin needed in 2024.

我們仍然預計全年毛利率將在 74% 至 75% 之間，我們繼續預計 2024 年賈斯汀所需的收入將在 8 至 900 萬美元之間。

Additionally, we continue to expect less than $20 million of new set deployed in 2024 and this represents our continued focus on driving the business to cash flow breakeven by 2026.

此外，我們仍預計 2024 年部署的新設備數量將少於 2,000 萬美元，這表明我們將繼續致力於推動業務在 2026 年實現現金流收支平衡。

I now turn the call back over today for closing the Marks.

現在我今天將電話轉回以關閉標記。

Thanks Fred.

謝謝弗雷德。

As we're now through three quarters of the year, we remain very bullish about our opportunity and the position we've established, we believe that over the course of the next 3 to 5 years, we will be able to build a very dominant share position and have a defined plan to achieve this.

今年已經過去了四分之三，我們仍然非常看好我們的機會和我們已經建立的地位，我們相信在未來 3 到 5 年裡，我們將能夠建立一個非常主導的市場。的計劃來實現這一目標。

We're extremely proud that we continue delivering stronger, especially within this medtech market quarter over quarter and year over year. As we further differentiate ourselves from our peers, we look to carry our strong third quarter momentum through the rest of the year and into 2025 as we continue to help more Children than ever and capture share across the entire business as we break revenue records, maintain healthy margins and leverage disciplined spending to yield double our adjusted EBITDA over the prior year and capitalize on roughly $5 million less cash used and set the plan. Operator, Let's open the call for Q&A.

我們非常自豪我們能夠繼續提供更強勁的服務，尤其是在醫療技術市場上，季度環比、年復一年。隨著我們進一步從同行中脫穎而出，我們希望在今年剩餘時間和 2025 年繼續保持第三季度的強勁勢頭，因為我們將繼續幫助比以往更多的兒童，並在打破收入記錄、保持健康的利潤率和槓桿嚴格的支出使我們調整後的EBITDA 比前一年翻一番，並利用減少約500 萬美元的現金來製定計劃。接線員，讓我們開始問答環節。

We'll now begin the question and answer session if you have dialed in and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. If you are called upon to ask a question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question and your first question comes from Matt o'brien with Piper Center. Please go ahead.

我們現在將開始問答環節，如果您已撥入並想提問，請按電話鍵盤上的星號一舉手並加入隊列。如果您想撤回問題，只需再次按星號一即可。如果您被要求提問並且正在透過裝置上的揚聲器收聽，請拿起您的聽筒並確保您的手機在提問時未處於靜音狀態，並且您的第一個問題來自 Piper Center 的 Matt O'brien。請繼續。

Excuse me. Thanks for taking the questions. Just for starters, I don't know, Fred or Dave, if you guys talked about the Boston OMP performance in the quarter specifically, but was that in line with your expectations? And did you see any, demonstrable shift between T&D and Scoliosis in terms of where you're generating that revenue?

打擾一下。感謝您提出問題。首先，我不知道 Fred 或 Dave，你們是否具體談論了波士頓 OMP 在本季度的表現，但這符合你們的預期嗎？您是否發現 T&D 和脊椎側彎之間在收入來源方面有任何明顯的轉變？

Yeah, I think we see Boston performing, you know, as we expected. And obviously, you know, because of the addition of sales channel, we're starting to already see the early early positive return as we called out of patient flow into some of those clinics. So we talked about a 15% share. We think in our nine territories at the Animals Day and our aspiration here over the next several years is to get that 50%. I think we can confidently say that the impact that the selling organization is having in driving patients and notifying our customers that, you know, we have the the services in our.

是的，我認為我們看到波士頓的表現，你知道，正如我們預期的那樣。顯然，你知道，由於銷售管道的增加，我們已經開始看到早期的正面回報，因為我們呼籲患者流入其中一些診所。所以我們討論了 15% 的份額。我們認為在我們的九個地區的動物日，我們未來幾年的願望是達到 50%。我認為我們可以自信地說，銷售組織在推動患者和通知我們的客戶方面所產生的影響，你知道，我們擁有我們的服務。

Territories is working. I wouldn't say that it's, you know, driving huge, huge amounts of that growth, but certainly is heading in the right direction. We expect that to continue. So really positive there, I think the mix is basically the same as it's been all year. So we didn't see any more scoliosis. I think you may be, you know, getting at that 52% scoliosis growth rate, obviously really, really big. It was, it was definitely not driven by overperformance on the Boston O&P side, at least on the scoliosis.

領土正在發揮作用。我不會說它正在推動巨大的成長，但肯定是朝著正確的方向前進。我們預計這種情況會持續下去。所以非常積極，我認為這種組合與全年基本相同。所以我們沒有看到更多的脊椎側彎。我想你知道，脊椎側彎成長率可能達到 52%，顯然非常非常大。確實，這絕對不是由波士頓 O&P 方面的過度表現驅動的，至少在脊柱側彎方面是如此。

Okay. And that kind of dovetails into the next question too. And I'm not trying to have a got you moment here, but when I, when I kind of pull out, I think what, what you did in specialty bracing in T&D it looks like things slowed down there somewhat. I don't know if that was hurricane related. I don't know if it was because all the sets weren't out there. You know, is there, is there something you can point to in terms of the T&D performance? It's a little bit lighter here in Q3 versus kind of some of the trend line that we've been seeing over the last, you know, 8 to 10 quarters. Thanks.

好的。這也與下一個問題相吻合。我並不是想在這裡吸引你，但是當我退出時，我想，你在 T&D 的專業支撐方面所做的事情看起來似乎有些放緩了。不知道是不是跟颶風有關。不知道是不是所有集都沒有的緣故。您知道，在 T&D 表現方面有什麼可以指出的嗎？與我們在過去 8 到 10 個季度看到的一些趨勢線相比，第三季的情況要輕一些。謝謝。

Yeah, might not have been obvious, but I think they've talked about that in his opening comments. So last year we opened South America in, a big way with a stocking multiple stocking distributor orders on the Pega side and that opens the market for us for future growth, but it was a one time very large order that did not repeat in the third quarter of this year. So that's probably the single biggest Delta year over year in that business.

是的，可能並不明顯，但我認為他們在他的開場評論中已經討論過這一點。因此，去年我們在南美洲大舉進軍，在 Pega 方面儲備了多個庫存分銷商訂單，這為我們未來的增長打開了市場，但這是一次非常大的訂單，第三次沒有重複。因此，這可能是該行業同比最大的達美航空。

Okay. Fred, I don't mean to push anymore. But just if, you look at even the two year stacks though Q1, of this year and Q2 of this year Q3, even if you adjust for that, it's still a deceleration. So, is there anything else to call out there again? I don't know if there was something on the CP side or cases got canceled or anything along those lines.

好的。弗雷德，我不想再催促了。但如果你看看今年第一季和今年第三季的兩年堆棧，即使你對此進行調整，它仍然是一個減速。那麼，還有什麼可以再次呼籲的嗎？我不知道CP方面是否有什麼事情或案件被取消或類似的事情。

No, man, I mean, we, we had a good quarter from our perspective. Domestic trauma especially was extremely strong. I guess domestic deformity was in line wasn't, wasn't as strong, I guess as there's some quarters in the past, but I think domestic trauma was about as strong as we have seen it. And I think when we look at the agency sales outside of the United States for our strong products was in line with what our expectations were. I think biggest issue for us is just both in Latam as well as markets in Europe when we had big conversions of, of pega distributors that falls into the Deformity section of our Deformity and Trauma business. Those are big numbers for us last year and not as big this year, obviously, but there's nothing within that business that we're at all concerned about at this stage.

不，我的意思是，從我們的角度來看，我們度過了一個不錯的季度。家庭創傷尤其嚴重。我想家庭畸形沒有那麼嚴重，我想過去有一些季度，但我認為家庭創傷與我們所看到的一樣嚴重。我認為，當我們查看美國以外的代理商銷售時，我們強大的產品符合我們的預期。我認為對我們來說最大的問題是在拉丁美洲和歐洲市場，當時我們對屬於我們畸形和創傷業務的畸形部分的 pega 分銷商進行了大規模的轉變。去年這些數字對我們來說是很大的數字，而今年顯然沒有那麼大，但現階段我們在該業務中沒有什麼值得擔心的。

Okay, got it. Thanks so much.

好的，明白了。非常感謝。

Thank you.

謝謝。

Thanks man.

謝謝夥計。

Your next question comes from Mike Matson with Needham and company. Please go ahead.

您的下一個問題來自 Mike Matson 和 Needham 等人。請繼續。

Hey guys, It's Joseph on for Mike. I guess maybe to start off. Could you maybe give us what organic growth, organic revenue growth was in the quarter and then just looking, you know, at guidance saw the raise, but just kind of curious, what's your outlook for flu? And RSV? I know you guys have talked about in the past that you really have a kind of more under control moving forward. So wondering about that and just children's hospital staffing, is that kind of still in good shape?

嘿夥計們，我是約瑟夫代替麥克。我想也許可以開始。您能否告訴我們本季度的有機增長、有機收入增長情況，然後只是看看指導意見就看到了增長，但只是有點好奇，您對流感的前景如何？還有RSV？我知道你們過去曾說過，你們確實對前進有更多的控制力。所以想知道兒童醫院的人員配置是否仍然良好？

Yeah. So First question, Organic revenue, I think we gave guidance or her comments earlier this year, the Boston acquisition, Boston O&P acquisition was about $25 million that was added in of that. Approximately 25% of that showed up in the second quarter, 25% of that showed up in the third quarter historically. And then if you split that 70% of that is on the Trauma and Deformity side and 30% of it is on the scoliosis side. And so that would give you the ability to do the math as you wish on the organic side. The second question was related to sorry, say the second question.

是的。所以第一個問題，有機收入，我認為我們今年早些時候給出了指導或她的評論，波士頓收購、波士頓 O&P 收購約為 2500 萬美元，其中包括在內。從歷史上看，其中大約 25% 出現在第二季度，其中 25% 出現在第三季度。如果你將其中的 70% 歸類為創傷和畸形一側，而 30% 歸為脊椎側彎一側。這樣你就可以按照自己的意願在有機方面進行數學計算。第二個問題與抱歉有關，請說第二個問題。

Again Yeah. Flu and RSV season. Questions and guidance and then children's hospital staffing.

又是啊。流感和 RSV 季節。問題和指導，然後是兒童醫院的人員配置。

Yeah. So on the RSB side, you know, if you look at the data out there. That's, that's published CDC. Typically it starts to pick up a little bit in October and then it spikes in November and December. And if you look at the data just in the month of October compared to October of last year, it is, lower than it was in October of last year. I think November, December and January are, are really the months that have the impact. But if you'll recall in the fourth quarter of last year, the hospital did a better job of handling the influx. So two years ago, it caught the hospitals by surprise last year. The trend was, it was still the second largest we've ever seen, but it was down 25% compared to the previous year and the hospital did a better job of handling it. So right now, what's in our guidance is we're assuming the same type of reported cases that we saw in the in the fall of last year and that the hospital is built to handle it in the same manner related to staffing yet. Yes, we think that we are now kind of behind that and that we have more normalized and we see that normalized staffing continuing in the hospitals, particularly in the US.

是的。所以在 RSB 方面，如果你看看那裡的數據，你就知道了。也就是說，這是 CDC 發布的。通常，它在 10 月開始略有回升，然後在 11 月和 12 月達到高峰。如果你看一下 10 月的數據與去年 10 月的數據相比，你會發現，它比去年 10 月的數據還要低。我認為 11 月、12 月和 1 月確實是產生影響的月份。但如果你還記得去年第四季度，醫院在處理人潮方面做得更好。所以兩年前，去年就讓醫院措手不及。趨勢是，它仍然是我們見過的第二大，但比前一年下降了 25%，而且醫院處理得更好。因此，現在，我們的指導意見是假設我們在去年秋天看到的報告病例類型相同，並且醫院的建設方式與人員配置相同，可以處理此類病例。是的，我們認為我們現在有點落後了，我們已經更加標準化，我們看到醫院的人員配置仍在繼續標準化，特別是在美國。

Okay, great makes sense. And then maybe just one on 70 you guys talked about multiple placements at larger institutions in the quarter. So you just kind of wondering if there's anything more you can talk about any more colour on you know, surgeon feedback or, in interest there and maybe what the installed base is at this point if you're willing to disclose that.

好吧，很有道理。然後，也許只有七十分之一的人談到了本季在大型機構的多次實習。所以你只是想知道是否還有什麼可以談論你所知道的更多顏色、外科醫生的反饋或感興趣的地方，如果你願意透露的話，也許目前的安裝基礎是什麼。

Yeah. So surgeon feedback has always been extremely positive on 70 I think, you know, as we told you guys, when we started this, it was, we were probably a little naive and that we hadn't been involved in a lot of capital placements, capital equipment sale at the company. And I would just say at this stage, we've learned a lot and because of the, the resources that we have now applied on the enabling technology team with people who really know how to do this and know how to do this. Well, I think it's safe to say we have a very large funnel of 70 opportunities and, you know, our expectation is that we get into a cadence where quarter to quarter, you know, we're placement, we're placing 70 units and and we're, we're getting sales of 70 units as well on certain locations. I think the install base off the top of my head, it's probably around 20. So we're still early, I would say in that process. And you know, when we, when we think about these placements, I mean, it's part of how we think about the growth, particularly in the out years. So once these units are placed, we're certainly seeing an increase in revenue for our scoliosis fusion business, particularly when they get placed and we're going through the trial. But once we, you know, we get the po we get the installment, you know, we have a pretty good line of sight into how that's going to impact scoliosis fusion with our response system for the next 3 to 5 years. And, and so it's very encouraging this quarter to see some placements, particularly in some accounts that I would say.

是的。因此，外科醫生對 70 的反饋一直非常積極，我想，你知道，正如我們告訴你們的那樣，當我們開始這項工作時，我們可能有點天真，我們沒有參與很多資本配售，公司資本設備銷售。我只想說，在這個階段，我們學到了很多東西，因為我們現在已經在支援技術團隊中應用了資源，這些團隊真正知道如何做到這一點，並且知道如何做到這一點。嗯，我認為可以肯定地說，我們有一個包含70 個機會的非常大的漏斗，而且，你知道，我們的期望是，我們進入這樣一種節奏，每個季度，你知道，我們正在安置，我們正在安置70 個單位我們在某些​​地點也銷售了 70 台。我想我的安裝基礎大概是 20 左右。所以我想說，在這個過程中，我們還處於早期階段。你知道，當我們考慮這些安置時，我的意思是，這是我們考慮成長的一部分，特別是在過去的幾年裡。因此，一旦這些裝置被放置，我們肯定會看到我們的脊椎側彎融合業務的收入增加，特別是當它們被放置並且我們正在進行試驗時。但是，一旦我們收到訂單，我們就會得到分期付款，您知道，我們對未來 3 到 5 年的反應系統將如何影響脊椎側彎融合有很好的了解。因此，本季看到一些安置是非常令人鼓舞的，特別是在我想說的一些帳戶中。

A year ago, we were, we were kind of nowhere in, at least in terms of our scoliosis fusion business. And now to know that we'll have a pretty substantial claim to the fusion business in in those accounts in 2025 and over the next 3 to 5 years, it's encouraging for us and our forecasting of their response business and our scoliosis business in general.

一年前，我們還一事無成，至少在脊椎側彎融合業務方面是如此。現在知道我們將在2025 年以及未來3 到5 年內對這些帳戶中的融合業務提出相當大的要求，這對我們以及我們對他們的響應業務和我們的脊柱側彎業務的預測都是令人鼓舞的。

Okay, perfect.

好的，完美。

Any questions and congrats on the record quarter.

如有任何問題，請祝賀創紀錄的季度。

Hey, thanks.

嘿，謝謝。

Again. If you would like to ask a question, press star, then the number one on your telephone keypad, there are no more questions. I will now turn the conference back over to David Bailey for closing remarks.

再次。如果您想提問，請按星號，然後按電話鍵盤上的數字 1，就沒有更多問題了。現在我將把會議轉交大衛貝利致閉幕詞。

Thank you. Well, once again, thank you all for joining us on our call. We have several upcoming meetings where we look forward to meeting all of you and talking further about the business and our execution of our strategy. So thank you for your time today and we look forward to seeing you soon. Take care.

謝謝。好吧，再次感謝大家加入我們的電話會議。我們即將舉行幾次會議，期待與大家見面並進一步討論業務和我們的策略執行情況。感謝您今天抽出寶貴的時間，我們期待很快見到您。小心。

Ladies and gentlemen, that concludes today's call. Thank you all for joining you. May now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝大家的加入。現在可以斷開連線。