Revenue recognition and accounts receivable

3 Months Ended

Mar. 31, 2023

Revenue Recognition And Accounts Receivable [Abstract]

Revenue recognition and accounts receivable

10. Revenue recognition and accounts receivable

Revenue Recognition

The Company has two reporting segments, which consist of Global Spine and Global Orthopedics. Within the Global Spine reporting segment, there are three product categories: Bone Growth Therapies, Spinal Implants and Enabling Technologies, and Biologics.

The table below presents net sales by major product category by reporting segment:

	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2023		2022		Change
Bone Growth Therapies	$	47,714	$	41,948		13.7	%
Spinal Implants and Enabling Technologies		60,862		26,615		128.7	%
Biologics		40,630		14,092		188.3	%
Global Spine		149,206		82,655		80.5	%
Global Orthopedics		25,998		23,763		9.4	%
Net sales	$	175,204	$	106,418		64.6	%

Product Sales and Marketing Service Fees

The table below presents product sales and marketing service fees, which are both components of net sales:

	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2023		2022
Product sales	$	162,248	$	92,608
Marketing service fees		12,956		13,810
Net sales	$	175,204	$	106,418

Product sales primarily consist of the sale of bone growth therapies devices, spinal implants and enabling technologies products, and orthopedics products. Marketing service fees are received from MTF Biologics based on total sales of biologics tissues and relate solely to the Global Spine reporting segment. We partner with MTF Biologics to provide certain allograft solutions (HCT/Ps) for various spine, orthopedic and other bone repair needs, with this partnership allowing us to exclusively market certain biologic offerings.

Accounts receivable and related allowances

The following table provides a detail of changes in the Company’s allowance for expected credit losses for the three months ended March 31, 2023 and 2022:

	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2023			2022
Allowance for expected credit losses beginning balance	$	6,419		$	4,944
Addition resulting from the Merger with SeaSpine		137			-
Current period provision for expected credit losses		208			600
Write-offs charged against the allowance and other		(126	)		(104	)
Effect of changes in foreign exchange rates		53			(51	)
Allowance for expected credit losses ending balance	$	6,691		$	5,389