Income taxes

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income taxes

13. Income taxes

Generally, income tax provisions for interim periods are based on an estimated annual income tax rate, adjusted for discrete tax items, with any changes affecting the estimated annual effective tax rate recorded in the interim period in which the change occurs. Due to the impact of losses not benefitted by the Company’s U.S. and Italian operations, the Company determined the estimated annual effective tax rate method would not provide a reliable estimate of the Company’s overall annual effective tax rate. As such, the Company has calculated the tax provision using the actual effective rate for the three and six months ended June 30, 2022. Due to the impact of temporary differences on the U.S. current tax liability without any deferred tax benefit, the actual effective rate may vary in future quarters.

For the three months ended June 30, 2022 and 2021, the effective tax rate was 18.2% and 48.2%, respectively. For the six months ended June 30, 2022 and 2021, the effective tax rate was (46.3%) and (150.6%), respectively. The primary factors affecting the Company’s effective tax rate for the three and six months ended June 30, 2022, were the changes in fair value of the Spinal Kinetics contingent consideration, which is not deductible for tax purposes, and losses not benefited in the U.S. and Italy.