Business segment information

3 Months Ended

Mar. 31, 2025

Segment Reporting [Abstract]

Business segment information

10. Business segment information

The Company's operations are managed through two reporting segments: Global Spine and Global Orthopedics. These reporting segments represent the operating segments for which the President and Chief Executive Officer, who is also the Chief Operating Decision Maker ("CODM"), reviews financial information and makes resource allocation decisions among businesses. The primary metric used by the CODM in managing the Company is adjusted earnings before interest, tax, depreciation, and amortization ("adjusted EBITDA", a non-GAAP financial measure). Adjusted EBITDA represents earnings before interest income (expense), income taxes, depreciation, and amortization, and excludes the impact of share-based compensation, gains and losses related to changes in foreign exchange rates, charges related to the SeaSpine Merger and other strategic investments, acquisition-related fair value adjustments, gains and/or losses on investments, litigation and investigation charges, charges related to initial compliance with regulations set forth by the European Union Medical Device Regulation, and succession charges.

Corporate activities are comprised of operating expenses not directly identifiable within the two reporting segments, such as human resources, finance, legal, and information technology functions. The Company neither discretely allocates assets, other than goodwill, to its operating segments nor evaluates the operating segments using discrete asset information.

Global Spine

The Global Spine reporting segment offers two primary product categories: (i) Bone Growth Therapies and (ii) Spinal Implants, Biologics, and Enabling Technologies.

The Bone Growth Therapies product category manufactures, distributes, sells, and provides support services for market-leading bone growth stimulation devices that enhance bone fusion. These Class III medical devices are indicated as an adjunctive, noninvasive treatment to improve fusion success rates in the cervical and lumbar spine as well as a therapeutic treatment for non-spinal, appendicular fractures, treating both fresh or nonunion fractures. These products are sold almost exclusively in the U.S., using distributors and direct sales representatives to provide our devices to healthcare providers and their patients.

Spinal Implants, Biologics, and Enabling Technologies comprises (i) a broad portfolio of spine fixation implant products used in surgical procedures of the spine, (ii) one of the most comprehensive biologics portfolios in both the demineralized bone matrix and cellular allograft market segments, and (iii) image-guided surgical solutions to facilitate degenerative, minimally invasive, and complex surgical procedures. Spinal Implants, Biologics, and Enabling Technologies products are sold through a network of distributors and sales representatives to hospitals and healthcare providers on a global basis for Spinal Implants and Enabling Technologies, and primarily within the U.S. for Biologics.

Global Orthopedics

The Global Orthopedics reporting segment offers products and solutions for the underserved limb reconstruction market that encompasses four pillars: deformity correction, limb lengthening, complex fracture management, and limb preservation. This reporting segment specializes in the design, development, and marketing of external and internal fixation orthopedic products that are coupled with enabling digital technologies to serve the complete patient treatment pathway. The Company sells these products worldwide through a global network of distributors and sales representatives to hospitals, healthcare organizations, and healthcare providers.

The following table presents adjusted EBITDA, the primary metric used in managing the Company, by reporting segment:

	Three Months Ended March 31, 2025
(U.S. Dollars, in thousands)	Global Spine		Global Orthopedics			Total
Segment revenues	$	163,836	$	29,810		$	193,646
Less:
Non-GAAP Cost of sales		44,587		11,871			56,458
Non-GAAP Sales, general, and administrative		92,538		17,920			110,458
Non-GAAP Research and development		11,623		2,853			14,476
Other segment expenses (benefits)		4,444		(175	)		4,269
Add:
Non-GAAP Depreciation, amortization, and share-based compensation expense		8,872		2,632			11,504
Segment Adjusted EBITDA	$	19,516	$	(27	)	$	19,489
Reconciling items:
Corporate operating expenses						$	8,058
Interest expense, net							4,506
Depreciation and amortization							34,431
Share-based compensation expense							6,469
Foreign exchange impact							(1,044	)
SeaSpine merger-related costs							1,130
Restructuring costs and impairments related to M6 product lines							12,126
Strategic investments							3,514
Acquisition-related fair value adjustments							(610	)
Litigation and investigation costs							3,042
Loss before income taxes						$	(52,133	)

	Three Months Ended March 31, 2024
(U.S. Dollars, in thousands)	Global Spine		Global Orthopedics			Total
Segment Revenues	$	161,293	$	27,315		$	188,608
Less:
Non-GAAP Cost of sales		44,854		10,846			55,700
Non-GAAP Sales, general, and administrative		91,813		18,146			109,959
Non-GAAP Research and development		15,946		3,312			19,258
Other segment expenses (benefits)		32		(107	)		(75	)
Add:
Non-GAAP Depreciation, amortization, and share-based compensation expense		11,241		3,391			14,632
Segment Adjusted EBITDA	$	19,889	$	(1,491	)	$	18,398
Reconciling items:
Corporate operating expenses						$	10,733
Interest expense, net							4,558
Depreciation and amortization							14,862
Share-based compensation expense							8,800
Foreign exchange impact							1,588
SeaSpine merger-related costs							4,479
Strategic investments							120
Acquisition-related fair value adjustments							4,217
Interest and loss on investments							(260	)
Litigation and investigation costs							2,260
Succession charges							2,210
Loss before income taxes						$	(35,169	)

The following table presents depreciation and amortization by reporting segment:

	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2025		2024
Global Spine	$	31,902	$	11,929
Global Orthopedics		1,936		2,207
Corporate		593		726
Total	$	34,431	$	14,862

Geographical information

The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company:

	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2025		2024
Global Spine
U.S.	$	152,703	$	151,865
International		11,133		9,428
Total Global Spine		163,836		161,293
Global Orthopedics
U.S.		8,978		8,154
International		20,832		19,161
Total Global Orthopedics		29,810		27,315
Consolidated
U.S.		161,681		160,019
International		31,965		28,589
Net sales	$	193,646	$	188,608

The following data includes net sales by geographic area:

	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2025		2024
U.S.	$	161,681	$	160,019
Italy		5,053		5,002
France		2,625		2,516
United Kingdom		3,037		2,631
Germany		2,208		2,105
Brazil		1,135		1,528
Others		17,907		14,807
Net Sales	$	193,646	$	188,608

The following data includes property, plant, and equipment by geographic area:

(U.S. Dollars, in thousands)	March 31, 2025		December 31, 2024
	(Unaudited)
U.S.	$	116,396	$	125,541
Italy		9,514		9,472
Germany		1,784		1,904
Others		2,999		2,887
Total	$	130,693	$	139,804