SAN FRANCISCO, Jan. 13, 2021 (GLOBE NEWSWIRE) -- Hagens Berman urges OrthoPediatrics Corp. (NASDAQ: KIDS) investors to submit their losses now.  

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OrthoPediatrics Corp. (KIDS) Investigation:

The investigation concerns whether OrthoPediatrics artificially inflated revenues and overstated inventory.

In past quarters, OrthoPediatrics touted its “consistent 20% plus growth rate,” which in turn has allowed the Company to maintain a valuation at 11 times annual revenues. In doing so, OrthoPediatrics affirmed that it complied with GAAP, including by only recognizing revenue on products consigned to its distributors “when products are used in procedures.”

But on Dec. 2, 2020, OrthoPediatrics’ growth story came into question when Culper Research published a scathing report concluding: (1) OrthoPediatrics “has engaged in a channel stuffing scheme that has systematically and significantly overstated revenues,” (2) “[w]e believe that the Company has abused its ability to book revenues upon shipment by selling and shipping excess product directly to its distributors, many of whom are exclusive to the Company,” and (3) “distributors have been induced to buy excess product directly from the Company in exchange for (a) equity-based awards, (b) the opportunity to return product and/or (c) product discounts or increased commission schedules.”

Culper published a follow up report on Dec. 14, 2020, reiterating its belief “that OrthoPediatrics is a structurally broken business which has relied on nefarious tactics to inflate its reported revenues.”

Then, on Dec. 31, 2020 OrthoPediatrics announced the SEC commenced a review of the company on Dec. 15, 2020.

Most recently, on Jan. 13, 2021, Culper published its letter to OrthoPediatrics’ auditor (Deloitte & Touche) stating, in part, “[w]e believe OrthoPediatrics has failed to record proper inventory write-downs and/or establish reserves for product obsolescence.”

“We’re focused on investor losses and whether OrthoPediatrics cooked its books,” said Reed Kathrein, the Hagens Berman partner leading the investigation.

If you are an OrthoPediatrics investor, click here to discuss your legal rights with Hagens Berman.

Whistleblowers: Persons with non-public information regarding OrthoPediatrics should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email KIDS@hbsslaw.com.

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Contact:
Reed Kathrein, 844-916-0895