Form 8-K - Current report
08 Mai 2024 - 10:01PM
Edgar (US Regulatory)
false 0001531978 0001531978 2024-05-08 2024-05-08
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 8, 2024
Paragon 28, Inc.
(Exact name of Registrant as Specified in Its Charter)
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Delaware |
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001-40902 |
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27-3170186 |
(State or Other Jurisdiction of Incorporation) |
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(Commission File Number) |
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(IRS Employer Identification No.) |
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14445 Grasslands Drive Englewood, Colorado |
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80112 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s Telephone Number, Including Area Code: (720) 912-1332
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, $0.01 par value |
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FNA |
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The New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 |
Results of Operations and Financial Condition. |
On May 8, 2024, Paragon 28, Inc. (the “Company”) issued a press release announcing certain financial results for the first quarter ended March 31, 2024. A copy of the Company’s press release is furnished as Exhibit 99.1 hereto.
The information in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Section 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in Item 2.02 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as expressly set forth by specific reference in such a filing.
Item 7.01 |
Regulation FD Disclosure. |
On May 8, 2024, the Company posted a presentation to its website relating to the Company’s quarterly discussion of its financial profile, market strategy, products and recent developments. A copy of the presentation is attached as Exhibit 99.2 to this Current Report on Form 8-K.
The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section or Section 11 and 12(a)(2) of the Securities Act of 1933, as amended. The information contained in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.2, shall not be incorporated by reference into any filing with the U.S. Securities and Exchange Commission made by the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except as expressly set forth by specific reference in such a filing.
Item 9.01 |
Financial Statements and Exhibits. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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PARAGON 28, INC. |
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Date: May 8, 2024 |
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By: |
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/s/ Robert S. McCormack |
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General Counsel & Corporate Secretary |
Exhibit 99.1
Paragon 28 Reports First Quarter 2024 Financial Results
and Reaffirms 2024 Net Revenue Guidance
ENGLEWOOD, CO., May 8, 2024 Paragon 28, Inc. (NYSE: FNA) (Paragon 28 or Company), a leading medical device company
exclusively focused on the foot and ankle orthopedic market, today reported financial results for the quarter ended March 31, 2024, and reaffirmed its 2024 net revenue guidance.
First Quarter 2024 Financial Results
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Consolidated net revenue for the first quarter of 2024 was a record $61.1 million, representing 17.4%
reported and constant currency growth over the first quarter of 2023. Foreign currency impact on first quarter 2024 reported net revenue growth was not material. |
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U.S. net revenue for the first quarter of 2024 was $51.1 million, representing growth of 13.5% over the
first quarter of 2023. |
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International net revenue for the first quarter of 2024 was a record $10.0 million, representing 42.2% and
42.5% reported and constant currency growth, respectively, over the first quarter of 2023. |
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Gross profit margin was 80.0% for the first quarter of 2024 compared to 82.9% in the first quarter of 2023.
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Operating expenses were $61.8 million for the first quarter of 2024, an increase of 21.5%, compared to
$50.9 million for the first quarter of 2023. |
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Net loss was $15.2 million for the first quarter of 2024, compared to net loss of $9.1 million for the
first quarter of 2023. |
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Adjusted EBITDA was a $5.5 million loss for the first quarter of 2024, a $4.1 million decrease,
compared to a $1.4 million loss in the first quarter of 2023. |
We are off to a strong start in 2024 and continue to see
increased surgeon activity in the U.S. and Internationally. Our commercial channel continues to expand across all geographies, and we see a tremendous amount of excitement for the new products we have introduced this year, said Albert DaCosta,
Chairman and Chief Executive Officer. Our focus on innovation and education across all foot and ankle segments has set us up well for continued sustainable growth.
2024 Net Revenue Guidance
The Company reaffirms its
prior 2024 net revenue guidance, and expects net revenue to be $249 million to $259 million, representing 15.1% and 19.7% reported growth compared to 2023.
The Companys 2024 net revenue guidance assumes foreign currency translation rates remain consistent with current foreign currency translation rates.
Webcast and Conference Call Information
Paragon 28
will host a conference call to discuss first quarter 2024 financial results on Wednesday, May 8, 2024, at 2:30 p.m. Mountain Time / 4:30 p.m. Eastern Time. Investors interested in listening to the conference call may do so by dialing (833-470-1428) for domestic callers or (404-975-4839) for international callers, using
conference ID: 483904. Live audio of the webcast will be available on the Investors section of the companys website at ir.paragon28.com. The webcast will be archived and available for replay for at least 90 days after the event.
About Paragon 28, Inc.
Based in Englewood, CO., Paragon 28, is a leading medical device company exclusively focused on the foot and ankle orthopedic market and is dedicated to
improving patient lives. From the onset, Paragon 28® has provided innovative orthopedic solutions, procedural approaches and instrumentation that cover a wide range of foot and ankle ailments
including fracture fixation, forefoot, ankle, progressive collapsing foot deformity (PCFD) or flatfoot, Charcot foot and orthobiologics. The Company designs products with both the patient and surgeon in mind, with the goal of improving outcomes,
reducing ailment recurrence and complication rates, and making the procedures simpler, consistent, and reproducible.
Forward Looking Statements
Except for the historical information contained herein, the matters set forth in this press release are forward-looking statements within the meaning
of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including, but not limited to: Paragon 28s potential to shape a better future for foot and ankle patients, its estimated net revenue for full
year 2024. You are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements are only predictions based on our current expectations, estimates, and assumptions, valid only as of the date they are made, and
subject to risks and uncertainties, some of which we are not currently aware. Forward-looking statements should not be read as a guarantee of future performance or results and may not necessarily be accurate
indications of the times at, or by, which such performance or results will be achieved. These forward-looking statements are based on Paragon 28s current expectations and inherently involve significant
risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward-looking statements as a result of these risks and uncertainties. For a further
description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to Paragon 28s business in general, see Paragon 28s current and
future reports filed with the Securities and Exchange Commission (the SEC), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as updated periodically with
its other filings with the SEC. These forward-looking statements are made as of the date of this press release, and Paragon 28 assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ
from those projected in the forward-looking statements, except as required by law.
Use of Non-GAAP Financial
Measures and Their Limitations
In addition to our results and measures of performance determined in accordance with U.S. GAAP presented in this press
release, we believe that certain non-GAAP financial measures are useful in evaluating and comparing our financial and operational performance over multiple periods, identifying trends affecting our business,
formulating business plans, and making strategic decisions.
Adjusted EBITDA is a key performance measure that our management uses to assess our financial
performance and is also used for internal planning and forecasting purposes. We define Adjusted EBITDA as earnings (loss) before interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation expense,
employee stock purchase plan expense, non-recurring expenses, and certain other non-cash expenses.
We believe that Adjusted EBITDA, together with a reconciliation to net income, helps identify underlying trends in our business and helps investors make
comparisons between our company and other companies that may have different capital structures, tax rates, or different forms of employee compensation. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others
in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to a key financial metric used by our management in its
financial and operational decision-making. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider these measures in isolation or as a substitute for analysis of our financial results as reported under U.S.
GAAP. Some of these potential limitations include:
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other companies, including companies in our industry which have similar business arrangements, may report
Adjusted EBITDA, or similarly titled measures but calculate them differently, which reduces their usefulness as comparative measures; |
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although depreciation and amortization expenses are non-cash charges, the
assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditures for such replacements or for new capital expenditure requirements; |
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Adjusted EBITDA also does not reflect changes in, or cash requirements for, our working capital needs or the
potentially dilutive impact of stock-based compensation; and |
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Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or
principal payments on our debt that we may incur. |
Additionally, we report revenue growth on a constant-currency basis in order to
facilitate period-to-period comparisons of results without regard to the impact of fluctuating foreign currency exchange rates. The term foreign currency exchange rates
refers to the exchange rates used to translate the companys operating results for all countries where the functional currency is not the U.S. dollar into U.S. dollars. Because we are a global company, foreign currency exchange rates used for
translation may have a significant effect on our reported results. References to revenue growth on a constant-currency basis means without the impact of foreign currency exchange rate fluctuations.
The company believes disclosure of constant-currency revenue growth rates is helpful to investors because it facilitates period-to-period comparisons. However, constant-currency revenue growth rates are non-GAAP financial measures and are not meant to be considered as an alternative or
substitute for comparable measures prepared in accordance with GAAP. Constant-currency growth has no standardized meaning prescribed by GAAP and should be read in conjunction with our consolidated financial statements prepared in accordance with
GAAP. We calculate constant-currency growth rates by translating local currency amounts in the current period at actual foreign exchange rates for the prior period.
Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to other
GAAP-based financial measures.
Investor Contact:
Matt Brinckman
Senior Vice President, Strategy and Investor
Relations
mbrinckman@paragon28.com
PARAGON 28, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, unaudited)
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March 31, 2024 |
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December 31, 2023 |
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ASSETS |
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Current assets: |
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Cash |
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$ |
58,222 |
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$ |
75,639 |
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Trade receivables, net of allowance for doubtful accounts of $1,701 and $1,339,
respectively |
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40,262 |
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37,323 |
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Inventories, net |
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104,298 |
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98,062 |
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Income taxes receivable |
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597 |
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794 |
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Other current assets |
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4,013 |
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3,997 |
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Total current assets |
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207,392 |
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215,815 |
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Property and equipment, net |
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75,701 |
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74,122 |
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Intangible assets, net |
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21,458 |
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21,674 |
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Goodwill |
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25,465 |
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25,465 |
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Deferred income taxes |
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678 |
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705 |
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Other assets |
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3,900 |
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2,918 |
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Total assets |
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$ |
334,594 |
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$ |
340,699 |
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LIABILITIES & STOCKHOLDERS EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
29,224 |
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$ |
21,696 |
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Accrued expenses |
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26,823 |
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27,781 |
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Other current liabilities |
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909 |
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883 |
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Current maturities of long-term debt |
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640 |
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640 |
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Income taxes payable |
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450 |
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243 |
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Total current liabilities |
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58,046 |
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51,243 |
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Long-term liabilities: |
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Long-term debt net, less current maturities |
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109,847 |
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109,799 |
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Other long-term liabilities |
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1,356 |
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1,048 |
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Deferred income taxes |
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231 |
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233 |
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Income taxes payable |
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638 |
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635 |
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Total liabilities |
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170,118 |
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162,958 |
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Stockholders equity: |
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Common stock, $0.01 par value, 300,000,000 shares authorized; 83,858,930 and 83,738,974 shares
issued, and 82,945,411 and 82,825,455 shares outstanding as of March 31, 2024 and December 31, 2023, respectively |
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828 |
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827 |
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Additional paid in capital |
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301,459 |
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298,394 |
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Accumulated deficit |
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(130,864 |
) |
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(115,630 |
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Accumulated other comprehensive loss |
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(965 |
) |
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132 |
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Treasury stock, at cost; 913,519 shares as of March 31, 2024 and December 31,
2023 |
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(5,982 |
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(5,982 |
) |
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Total stockholders equity |
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164,476 |
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177,741 |
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Total liabilities & stockholders equity |
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$ |
334,594 |
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$ |
340,699 |
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PARAGON 28, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, unaudited)
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Three Months Ended March 31, |
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2024 |
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2023 |
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Net revenue |
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$ |
61,082 |
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$ |
52,036 |
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Cost of goods sold |
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12,186 |
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8,906 |
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Gross profit |
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48,896 |
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43,130 |
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Operating expenses: |
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Research and development costs |
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7,584 |
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7,049 |
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Selling, general, and administrative |
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54,215 |
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43,820 |
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Total operating expenses |
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61,799 |
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50,869 |
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Operating loss |
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(12,903 |
) |
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(7,739 |
) |
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Other income (expense): |
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Other income (expense), net |
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515 |
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(179 |
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Interest expense, net |
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(2,622 |
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(1,205 |
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Total other expense, net |
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(2,107 |
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(1,384 |
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Loss before income taxes |
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(15,010 |
) |
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(9,123 |
) |
Income tax expense (benefit) |
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224 |
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(71 |
) |
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Net loss |
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$ |
(15,234 |
) |
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$ |
(9,052 |
) |
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PARAGON 28, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands, unaudited)
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Three Months Ended March 31, |
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2024 |
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2023 |
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Cash flows from operating activities |
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Net loss |
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$ |
(15,234 |
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$ |
(9,052 |
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Adjustments to reconcile net loss to net cash used in operating activities: |
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Depreciation and amortization |
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4,258 |
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3,117 |
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Provision for excess and obsolete inventories |
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471 |
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293 |
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Stock-based compensation |
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3,088 |
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3,182 |
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Change in fair value |
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(519 |
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80 |
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Other |
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(785 |
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100 |
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Changes in other assets and liabilities, net of acquisitions: |
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Accounts receivable |
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(3,099 |
) |
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|
441 |
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Inventories |
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(7,044 |
) |
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(8,435 |
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Accounts payable |
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7,441 |
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5,592 |
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Accrued expenses |
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194 |
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(877 |
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Accrued legal settlement |
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(9,000 |
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Income tax receivable/payable |
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398 |
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132 |
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Other assets and liabilities |
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(162 |
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367 |
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Net cash used in operating activities |
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(10,993 |
) |
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(14,060 |
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Cash flows from investing activities |
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Purchases of property and equipment |
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(5,817 |
) |
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(7,521 |
) |
Proceeds from sale of property and equipment |
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292 |
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223 |
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Purchases of intangible assets |
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(253 |
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(254 |
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Net cash used in investing activities |
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(5,778 |
) |
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(7,552 |
) |
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Cash flows from financing activities |
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Payments on long-term debt |
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(160 |
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(197 |
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Payments of debt issuance costs |
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(7 |
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Proceeds from issuance of common stock, net of issuance costs |
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68,449 |
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Options exercised |
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298 |
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1,622 |
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RSU vesting, taxes paid |
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(400 |
) |
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Payments on earnout liability |
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(1,000 |
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(500 |
) |
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Net cash (used in) provided by financing activities |
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(1,262 |
) |
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69,367 |
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Effect of exchange rate changes on cash |
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616 |
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(340 |
) |
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Net (decrease) increase in cash |
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(17,417 |
) |
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47,415 |
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Cash at beginning of period |
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75,639 |
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|
38,468 |
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Cash at end of period |
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$ |
58,222 |
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$ |
85,883 |
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PARAGON 28, INC. AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO NON-GAAP ADJUSTED EBITDA
(in thousands, unaudited)
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Three Months Ended March 31, |
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2024 |
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2023 |
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(in thousands) |
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Net loss |
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$ |
(15,234 |
) |
|
$ |
(9,052 |
) |
Interest expense, net |
|
|
2,622 |
|
|
|
1,205 |
|
Income tax expense (benefit) |
|
|
224 |
|
|
|
(71 |
) |
Depreciation and amortization expense |
|
|
4,258 |
|
|
|
3,117 |
|
Stock based compensation expense |
|
|
3,088 |
|
|
|
3,182 |
|
Employee stock purchase plan expense |
|
|
80 |
|
|
|
122 |
|
Change in fair value (1) |
|
|
(519 |
) |
|
|
80 |
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
(5,481 |
) |
|
$ |
(1,417 |
) |
|
|
|
|
|
|
|
|
|
(1) |
Represents non-cash change in the fair value of our interest rate swap
contract for the three months ended March 31, 2024 and earnout liabilities for the three months ended March 31, 2023 |
PARAGON 28, INC. AND SUBSIDIARIES
Constant-Currency Revenue Growth
(in thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
|
|
Change |
|
|
|
2024 |
|
|
2023 |
|
|
% |
|
Total Consolidated Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
As Reported |
|
$ |
61,082 |
|
|
$ |
52,036 |
|
|
|
17.4 |
% |
Impact of foreign currency exchange rates |
|
|
23 |
|
|
|
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant-currency net revenues |
|
$ |
61,105 |
|
|
$ |
52,036 |
|
|
|
17.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total International Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
As Reported |
|
$ |
10,031 |
|
|
$ |
7,055 |
|
|
|
42.2 |
% |
Impact of foreign currency exchange rates |
|
|
23 |
|
|
|
|
|
|
|
* |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Constant-currency net revenues |
|
$ |
10,054 |
|
|
$ |
7,055 |
|
|
|
42.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
1Q 2024 Earnings Update May 8, 2024
Exhibit 99.2
Forward Looking Statements Except for
the historical information contained herein, the matters set forth in this presentation are forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including, but not
limited to: Paragon 28’s potential to shape a better future for foot and ankle patients and its estimated net revenue for full year 2024. You are cautioned not to place undue reliance on these forward-looking statements. Forward-looking
statements are only predictions based on our current expectations, estimates, and assumptions, valid only as of the date they are made, and subject to risks and uncertainties, some of which we are not currently aware. Forward‐looking
statements should not be read as a guarantee of future performance or results and may not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. These forward‐looking statements are
based on Paragon 28’s current expectations and inherently involve significant risks and uncertainties. Actual results and the timing of events could differ materially from those anticipated in such forward‐looking statements as a result
of these risks and uncertainties. These risks and uncertainties are described more fully in the section titled “Risk Factors” in Paragon 28’s filings with the Securities and Exchange Commission (the “SEC”), including
Paragon 28’s annual report on Form 10-K filed with the SEC on February 29, 2024. Paragon 28 does not undertake any obligation to update forward‐looking statements and expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward‐looking statements contained herein. These forward-looking statements should not be relied upon as representing Paragon 28’s views as of any date subsequent to the date of this presentation.
Paragon 28’s results for the quarter ended March 31, 2024 are not necessarily indicative of our operating results for any future periods.
Non-GAAP Financial Measures In
addition to our results and measures of performance determined in accordance with U.S. GAAP presented in this press release, we believe that certain non-GAAP financial measures are useful in evaluating and comparing our financial and operational
performance over multiple periods, identifying trends affecting our business, formulating business plans and making strategic decisions. Adjusted EBITDA is a key performance measure that our management uses to assess our financial performance
and is also used for internal planning and forecasting purposes. We define Adjusted EBITDA as earnings (loss) before interest expense, income tax expense (benefit), depreciation and amortization, stock-based compensation expense, employee stock
purchase plan expense, non-recurring expenses and certain other non-cash expenses. We believe that Adjusted EBITDA, together with a reconciliation to net income, helps identify underlying trends in our business and helps investors make
comparisons between our company and other companies that may have different capital structures, tax rates, or different forms of employee compensation. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others
in understanding and evaluating our operating results, enhancing the overall understanding of our past performance and future prospects, and allowing for greater transparency with respect to a key financial metric used by our management in its
financial and operational decision-making. Our use of Adjusted EBITDA has limitations as an analytical tool, and you should not consider these measures in isolation or as a substitute for analysis of our financial results as reported under U.S.
GAAP. Some of these potential limitations include: other companies, including companies in our industry which have similar business arrangements, may report Adjusted EBITDA, or similarly titled measures but calculate them differently, which reduces
their usefulness as comparative measures; although depreciation and amortization expenses are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital
expenditures for such replacements or for new capital expenditure requirements; Adjusted EBITDA also does not reflect changes in, or cash requirements for, our working capital needs or the potentially dilutive impact of stock-based compensation; and
Adjusted EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on our debt that we may incur. Additionally, we report revenue growth on a constant-currency basis in order
to facilitate period-to-period comparisons of results without regard to the impact of fluctuating foreign currency exchange rates. The term foreign currency exchange rates refers to the exchange rates used to translate the company's operating
results for all countries where the functional currency is not the U.S. dollar into U.S. dollars. Because we are a global company, foreign currency exchange rates used for translation may have a significant effect on our reported results. References
to revenue growth on a constant-currency basis means without the impact of foreign currency exchange rate fluctuations. The company believes disclosure of constant-currency revenue growth rates is helpful to investors because it facilitates
period-to-period comparisons. However, constant-currency revenue growth rates are non-GAAP financial measures and are not meant to be considered as an alternative or substitute for comparable measures prepared in accordance with GAAP.
Constant-currency growth has no standardized meaning prescribed by GAAP and should be read in conjunction with the consolidated financial statements prepared in accordance with GAAP. We calculate constant-currency growth rates by translating local
currency amounts in the current period at actual foreign exchange rates for the prior period. Because of these and other limitations, you should consider our non-GAAP measures only as supplemental to other GAAP-based financial measures.
1Q 2024 Earnings Update – Table
of Contents 1Q 2024 Highlights 5 1Q 2024 Net Revenue and FY 2024 Net Revenue Guidance 6 1Q 2024 Operating Expense And Operating Cash Flow Trends 7 The Global Foot & Ankle Market 8 Continued Strong Product Launch Cadence & Pipeline
9
1Q 2024 Highlights Sustained growth in
1Q 2024 well above broader market; Reaffirmed 2024 Net Revenue guidance Net Revenue Performance & Guidance Key Operational and Financial Details Strategic Highlights Global Net Revenue (YoY Growth): 1Q: $61.1M (+17.4% reported; +17.4% CC) | One
less billing day in 1Q 2024 generating ~200 bp headwind U.S. Net Revenue (YoY Growth): 1Q: $51.1M (+13.5% reported) International Net Revenue (YoY Growth): 1Q: $10.0M (+42.2% reported; +42.5% CC) Reaffirmed Full-year 2024 Net Revenue Guidance of
$249M to $259M (+15.1% to +19.7% YoY) Growth across all 5 foot and ankle subsegments U.S. producing sales representatives increased 5.7% YoY to 261 U.S. surgeon customers increased 12.0% YoY to a record 2,275 1Q 2024 aEBITDA declined from ($1.4M) to
($5.5M) 6 full product launches in 2024 YTD in high growth forefoot, minimally invasive and soft tissue markets: Grappler® R3INFORCE™ Extraosseous Repair System, Grappler® Knotless Anchor System, Bridgeline™ Adaptive Tape,
Mister Tendon™ Harvester System, FJ200™ Power Console and Burr System, PRECISION® MIS Bunion System Limited market release and first cases completed using Bun-Yo-Matic™ Lapidus clamp system Stephen Deitsch resigned from his
position as Chief Financial Officer to pursue another opportunity; Kristina Wright appointed interim Chief Financial Officer; search for permanent successor underway
1Q 2024 Net Revenue and FY 2024 Net
Revenue Guidance 1Q 2024 Net Revenue Strong top-line performance in 1Q 2024 compared to 27.1% constant currency growth in 1Q 2023. Confidence in guidance range Reaffirmed FY 2024 Net Revenue Guidance Consolidated Growth: + 17.4% Reported + 17.4%
Constant Currency Int’l: + 42.2% Rep. + 42.5% CC U.S.: + 13.5% Rep. Low-End Mid-Point High-End Global Net Revenue $249M $254M $259M Implied YoY Growth 15.1% 17.4% 19.7% Management Commentary Normalized seasonality to continue Stabilized supply
chain environment United States: New product contributions, sales force expansion, sales force productivity gains. Customer expansion and penetration International: Continued growth in top markets of the U.K. and Australia with increasing
momentum in other markets One less billing day in 1Q24; ~200 bp headwind
The Global Foot & Ankle Market
Global Foot & Ankle Market(1) Market Sub-segments(1) Estimated 2023 Global Market(2) CAGR: 7.1% Source: iData Research and Company estimates. Source: Company filings, SmartTrak, and management estimates. Fast Growing Market with Several Key
Differentiators Paragon 28 Market Highlights Highly complex anatomy Generally active and younger patient populations Significant opportunity for innovation to drive improved outcomes Well over 100 indications with wide variety of causes
(activity-based, trauma, genetic predisposition, etc.) Well balanced portfolio spanning each sub-segment effectively 1Q 2024 growth across all sub-segments Substantial opportunity to expand footprint in U.S. and International Long runway for growth
in existing and new international markets
Continued Strong Product Launch
Cadence & Pipeline Six Full Product Launches and One Limited Market Release in 2024 YTD(1) Robust Pipeline 25+ Active Projects in Development Balanced Across Portfolio 5-10 Annual Launches Expected In Next Three Years 1st Smart28 Module Planned
for Mid-2024(3) January 5, 2024: Grappler® Knotless Anchor System January 17, 2024 (LMR)(2): Bun-Yo-Matic™ Lapidus Clamp System January 30, 2024: FJ2000™ Power Console and Burr System February 1, 2024: PRECISION® MIS Bunion
System January 5, 2024: Bridgeline™ Adaptive Tape January 26, 2024: Mister Tendon™ Harvester System Excludes simple line extensions. Includes products launched and on limited market release as of 12/31/2023. Some products span multiple
segments. “Limited market release”. Subject to regulatory clearance. March 28, 2024: Grappler® R3INFORCE™ Extraosseous Repair System
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