Form 10-Q

Large Accelerated filer

Accelerated filer

Non-Accelerated filer

¨ (Do not check if a smaller reporting company)

Smaller Reporting Company

0001193125-13-211276.txt : 20130509 0001193125-13-211276.hdr.sgml : 20130509 20130509164743 ACCESSION NUMBER: 0001193125-13-211276 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20130331 FILED AS OF DATE: 20130509 DATE AS OF CHANGE: 20130509 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ORTHOFIX INTERNATIONAL N V CENTRAL INDEX KEY: 0000884624 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19961 FILM NUMBER: 13829576 BUSINESS ADDRESS: STREET 1: 7 ABRAHAM DE VEERSTRAAT STREET 2: CURACAO CITY: NETHERLANDS ANTILLES STATE: P8 ZIP: 00000 10-Q 1 d507129d10q.htm FORM 10-Q Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

(Mark one)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2013

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number: 0-19961

ORTHOFIX INTERNATIONAL N.V.

(Exact name of registrant as specified in its charter)

Curaçao

Not applicable

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

7 Abraham de Veerstraat

Curaçao

Not applicable

(Address of principal executive offices)

(Zip Code)

599-9-4658525

(Registrant’s telephone number, including area code)

Not applicable

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” “non-accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

As of May 2, 2013, 19,453,294 shares of common stock were issued and outstanding.

Table of Contents


		Page
PART I	FINANCIAL INFORMATION		3

Item 1.	Financial Statements		3
	Condensed Consolidated Balance Sheets as of March 31, 2013 (unaudited) and December 31, 2012		3
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the three months ended March 31, 2013 and 2012 (unaudited)		4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2013 and 2012 (unaudited)		5
	Notes to Unaudited Condensed Consolidated Financial Statements		6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk		24

Item 4.	Controls and Procedures		24

PART II	OTHER INFORMATION		25

Item 1.	Legal Proceedings		25

Item 1A.	Risk Factors		25

Item 6.	Exhibits		25

SIGNATURES			26

Forward-Looking Statements

This Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, relating to our business and financial outlook, which are based on our current beliefs, assumptions, expectations, estimates, forecasts and projections. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “projects,” “intends,” “predicts,” “potential” or “continue” or other comparable terminology. These forward-looking statements are not guarantees of our future performance and involve risks, uncertainties, estimates and assumptions that are difficult to predict. Therefore, our actual outcomes and results may differ materially from those expressed in these forward-looking statements. You should not place undue reliance on any of these forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any such statement to reflect new information, the occurrence of future events or circumstances or otherwise.

The forward-looking statements in this filing do not constitute guarantees or promises of future performance. Factors that could cause or contribute to such differences may include, but are not limited to, risks relating to the expected sales of our products, including recently launched products, unanticipated expenditures, changing relationships with customers, suppliers, strategic partners and lenders, changes to and the interpretation of governmental regulations, the resolution of pending litigation matters (including our indemnification obligations with respect to certain product liability claims against, and the government investigation of, our former sports medicine global business unit) (as further described in the Legal Proceedings sections of this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2012 (the “2012 Form 10-K”)), our ongoing compliance obligations under a corporate integrity agreement with the Office of Inspector General of the Department of Health and Human Services (and related terms of probation) and a deferred prosecution agreement with the U.S. Department of Justice, risks relating to the protection of intellectual property, changes to the reimbursement policies of third parties, the impact of competitive products, changes to the competitive environment, the acceptance of new products in the market, conditions of the orthopedic industry, credit markets and the economy, corporate development and market development activities, including acquisitions or divestitures, unexpected costs or operating unit performance related to recent acquisitions, and other risks described in Item 1A under the heading Risk Factors in the 2012 Form 10-K.

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

ORTHOFIX INTERNATIONAL N.V.

Condensed Consolidated Balance Sheets


(U.S. Dollars, in thousands, except share data)	March 31, 2013			December 31, 2012
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	33,675		$	31,055
Restricted cash		29,446			21,314
Trade accounts receivable, less allowances of $18,032 and $16,188 at March 31, 2013 and December 31, 2012, respectively		132,425			150,316
Inventories		92,133			88,744
Deferred income taxes		17,363			16,959
Prepaid expenses and other current assets		32,211			32,056

Total current assets		337,253			340,444
Property, plant and equipment, net		52,402			51,362
Patents and other intangible assets, net		6,765			6,880
Goodwill		72,607			74,388
Deferred income taxes		20,200			19,904
Other long-term assets		14,153			11,303

Total assets	$	503,380		$	504,281

Liabilities and shareholders’ equity
Current liabilities:
Trade accounts payable	$	14,230		$	21,812
Other current liabilities		51,295			46,985

Total current liabilities		65,525			68,797
Long-term debt		20,000			20,000
Deferred income taxes		11,460			11,456
Other long-term liabilities		4,227			4,930

Total liabilities		101,212			105,183
Contingencies (Note 16)
Shareholders’ equity:
Common shares $0.10 par value; 50,000,000 shares authorized; 19,453,294 and 19,339,329 issued and outstanding as of March 31, 2013 and December 31, 2012, respectively		1,945			1,934
Additional paid-in capital		250,186			246,111
Retained earnings		150,665			148,549
Accumulated other comprehensive income		(628	)		2,504

Total shareholders’ equity		402,168			399,098

Total liabilities and shareholders’ equity	$	503,380		$	504,281

The accompanying notes form an integral part of these condensed consolidated financial statements.

ORTHOFIX INTERNATIONAL N.V.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

For the three months ended March 31, 2013 and 2012


(Unaudited, U.S. Dollars, in thousands, except share and per share data)	Three Months Ended March 31,
	2013			2012
Product sales	$	88,358		$	104,820
Marketing service fees		11,896			11,222

Net sales		100,254			116,042
Cost of sales		22,699			21,940

Gross profit		77,555			94,102
Operating expenses
Sales and marketing		48,839			49,521
General and administrative		18,788			14,570
Research and development		5,400			7,050
Amortization of intangible assets		504			530

		73,531			71,671

Operating income		4,024			22,431
Other income and expense
Interest expense, net		(560	)		(2,221	)
Other income (expense)		4,764			(631	)

		4,204			(2,852	)

Income before income taxes		8,228			19,579
Income tax expense		(3,320	)		(7,363	)

Net income from continuing operations, net of tax		4,908			12,216

Discontinued operations (Note 15)
Loss from discontinued operations		(4,432	)		(506	)
Income tax benefit		1,640			306

Net loss from discontinued operations, net of tax		(2,792	)		(200	)

Net income	$	2,116		$	12,016

Net income (loss) per common share- basic:
Net income from continuing operations, net of tax	$	0.25		$	0.65
Net loss from discontinued operations, net of tax		(0.14	)		(0.01	)

Net income per common share- basic	$	0.11		$	0.64

Net income per common share- diluted:
Net income from continuing operations, net of tax	$	0.25		$	0.64
Net loss from discontinued operations, net of tax		(0.14	)		(0.01	)

Net income per common share- diluted	$	0.11		$	0.63

Weighted average number of common shares:
Basic		19,431,093			18,675,694
Diluted		19,691,141			19,116,195

Comprehensive (loss) income	$	(1,016	)	$	14,726

The accompanying notes form an integral part of these condensed consolidated financial statements.

ORTHOFIX INTERNATIONAL N.V.

Condensed Consolidated Statements of Cash Flows

For the three months ended March 31, 2013 and 2012


	Three Months Ended March 31,
(Unaudited, U.S. Dollars, in thousands)	2013			2012
Cash flows from operating activities:
Net income	$	2,116		$	12,016
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		4,995			5,667
Amortization of debt costs		180			296
Provision for doubtful accounts		3,227			3,154
Deferred income taxes		(744	)		(828	)
Share-based compensation		1,943			1,480
Provision for inventory obsolescence		896			649
Excess income tax benefit on employee stock-based awards		(78	)		(242	)
Income tax benefit on employee stock-based awards		563			1,013
Other		(345	)		1,117
Change in operating assets and liabilities:
Trade accounts receivable		13,779			(11,943	)
Inventories		(5,126	)		732
Escrow receivable		—			41,537
Prepaid expenses and other current assets		(179	)		6,559
Trade accounts payable		(7,242	)		(3,103	)
Other current liabilities		4,478			(4,787	)
Long-term assets		(2,266	)		(1,405	)
Long-term liabilities		(743	)		(2,798	)

Net cash provided by operating activities		15,454			49,114

Cash flows from investing activities:
Capital expenditures for property, plant and equipment		(6,029	)		(6,372	)
Capital expenditures for intangible assets		(439	)		(151	)

Net cash used in investing activities		(6,468	)		(6,523	)

Cash flows from financing activities:
Net proceeds from issuance of common shares		2,143			6,641
Repayments of long-term debt		—			(3,750	)
(Repayment of) proceeds from bank borrowings, net		(15	)		69
Changes in restricted cash		(8,141	)		(32,271	)
Excess income tax benefit on employee stock-based awards		78			242

Net cash used in financing activities		(5,935	)		(29,069	)
Effect of exchange rate changes on cash		(431	)		324

Net increase in cash and cash equivalents		2,620			13,846
Cash and cash equivalents at the beginning of the period		31,055			33,207

Cash and cash equivalents at the end of the period	$	33,675		$	47,053

The accompanying notes form an integral part of these condensed consolidated financial statements.

ORTHFIX INTERNATIONAL N.V.

Notes to the Unaudited Condensed Consolidated Financial Statements

1. Summary of significant accounting policies

(a) Basis of presentation

The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S., have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The balance sheet at December 31, 2012 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements. For further information, refer to the Consolidated Financial Statements and Notes thereto of the Company’s Annual Report on Form 10-K, for the fiscal year ended December 31, 2012. The notes to the unaudited condensed consolidated financial statements are presented on a continuing operations basis unless otherwise noted.

(b) Reclassifications

The Company has reclassified certain line items to conform to the current year presentation. The reclassifications have no effect on previously reported net earnings or shareholders’ equity.

(c) Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates including those related to the resolution of U.S. government matters, contractual allowances, doubtful accounts, inventories, taxes, shared-based compensation, and potential goodwill and intangible asset impairment. Actual results could differ from these estimates.

(d) Foreign Currency Translation

The financial statements for operations outside the United States are generally maintained in their local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. dollars at year end exchange rates and revenue and expense items are translated at weighted average rates of exchange prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income component of shareholders’ equity.

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

2. Inventories

Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess or obsolete items. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first in, first out method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Texas, standard costs, which approximates actual cost, is used to value inventory. Standard costs are reviewed annually by management, or more often in the event circumstances indicate a change in cost has occurred. The valuation of work-in-process, finished products, field inventory and consignment inventory includes the cost of materials, labor and production costs. Field inventory represents immediately saleable finished products inventory that is in the possession of the Company’s direct sales representatives. Consignment inventory represents immediately saleable finished products located at third party customers, such as distributors and hospitals.


(US$ in thousands)	March 31, 2013		December 31, 2012
Raw materials	$	6,354	$	8,470
Work-in-process		7,401		7,886
Finished products		42,834		36,675
Field inventory		29,891		29,363
Consignment inventory		5,653		6,350

	$	92,133	$	88,744

3. Patents and other intangible assets


(US$ in thousands)	March 31, 2013			December 31, 2012
Cost
Patents	$	37,992		$	37,695
Trademarks — definite lived		679			657

		38,671			38,352
Accumulated amortization
Patents		(31,452	)		(31,045	)
Trademarks — definite lived		(454	)		(427	)

		(31,906	)		(31,472	)

Patents and other intangible assets, net	$	6,765		$	6,880

4. Goodwill

The following table presents the changes in the net carrying value of goodwill:


(US$ in thousands)	Total
At December 31, 2012	$	74,388
Foreign currency		(1,781	)

At March 31, 2013	$	72,607

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

5. Bank borrowings

Borrowings under lines of credit consist of borrowings in Euros used to fund international operations. There were no borrowings under such facilities at March 31, 2013 and $0.1 million at December 31, 2012. The weighted average interest rates on borrowings under the line of credit at December 31, 2012 was 3.70%.

The Company had an unused available line of credit of €5.8 million ($7.4 million) and €5.8 million ($7.6 million) at March 31, 2013 and December 31, 2012, respectively, in its Italian line of credit. This line of credit provides the Company the option to borrow amounts in Italy at rates which are determined at the time of borrowing. This line of credit is unsecured.

6. Long-term debt

On August 30, 2010, the Company’s wholly-owned U.S. holding company, Orthofix Holdings, Inc. (“Orthofix Holdings”) entered into a Credit Agreement (the “Credit Agreement”) with certain domestic direct and indirect subsidiaries of the Company (the “Guarantors”), JPMorgan Chase Bank, N.A., as Administrative Agent, RBS Citizens, N.A., as Syndication Agent, and certain lender parties thereto.

The Credit Agreement provides for a five year, $200.0 million secured revolving credit facility (the “Revolving Credit Facility”), and a five year, $100.0 million secured term loan facility (the “Term Loan Facility”, and together with the Revolving Credit Facility, the “Credit Facilities”). Orthofix Holdings has the ability to increase the amount of the Credit Facilities by an aggregate amount of up to $50.0 million upon satisfaction of certain conditions.

In May 2012, the Company used a portion of the proceeds from the sale of Breg, Inc. (“Breg”) (see Note 15) to repay in full the remaining $87.5 million balance on the Term Loan Facility and pay down $57.5 million of amounts outstanding under the Revolving Credit Facility. This use of proceeds was required by the lenders’ consent dated April 23, 2012 to the Credit Agreement. As a result of the sale of Breg, Breg ceased to be a subsidiary of the Company and, therefore, Breg was released as a credit party under the Credit Agreement. Additionally, the Company paid $20 million in June 2012 and $20 million in September 2012 to reduce amounts outstanding under the Revolving Credit Facility. As a result, at December 31, 2012, the Term Loan Facility had been repaid in full and there was $20 million outstanding under the Revolving Credit Facility as of March 31, 2013 and December 31, 2012. Borrowings under the Credit Facilities bear interest at a floating rate, which is, at Orthofix Holdings’ option, either the London Inter-Bank Offered Rate (“LIBOR”) plus an applicable margin or a base rate (as defined in the Credit Agreement) plus an applicable margin (in each case subject to adjustment based on financial ratios). Such applicable margin will be up to 3.25% for LIBOR borrowings and up to 2.25% for base rate borrowings depending upon a measurement of the consolidated leverage ratio with respect to the immediately preceding four fiscal quarters. As of March 31, 2013 and December 31, 2012, the entire Revolving Credit Facility was at the LIBOR rate plus a margin of 2.50%. The effective interest rate on the Credit Facilities as of March 31, 2013 and December 31, 2012 was 2.7%.

Outstanding balances on the Revolving Credit Facility are due on August 30, 2015.

Borrowings under the Revolving Credit Facility, which may be made in the future, will be used for working capital, capital expenditures and other general corporate purposes of Orthofix Holdings and its subsidiaries. The Guarantors have guaranteed repayment of Orthofix Holdings’ obligations under the Credit Agreement. The obligations of Orthofix Holdings and each of the Guarantors with respect to the Credit Facilities are secured by a pledge of substantially all of the assets of Orthofix Holdings and each of the Guarantors.

The Credit Agreement, as amended, requires Orthofix Holdings and the Company to comply with coverage ratios on a consolidated basis and contains affirmative and negative covenants, including limitations on additional debt, liens, investments and acquisitions. The Credit Agreement, as amended, also includes events of default customary for facilities of this type. Upon the occurrence of an event of default, all outstanding loans may be accelerated and/or the lenders’ commitments terminated. The Company was in compliance with the affirmative and negative covenants at March 31, 2013 and there were no events of default.

Certain subsidiaries of the Company have restrictions on their ability to pay dividends or make intercompany loan advances pursuant to the Company’s Credit Facilities. The net assets of Orthofix Holdings and its subsidiaries are restricted for distributions to the parent company. Domestic subsidiaries of the Company, as parties to the credit agreement, have access to these net assets for operational purposes.

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

The amount of restricted net assets of Orthofix Holdings and its subsidiaries as of March 31, 2013 and December 31, 2012 is $256 million and $247.4 million, respectively. In addition, the Credit Agreement restricts the Company and subsidiaries that are not parties to the Credit Facilities from access to cash held by Orthofix Holdings, Inc. and its subsidiaries. All of the Company’s subsidiaries that are parties to the Credit Agreement have access to this cash for operational and debt repayment purposes. The amount of restricted cash of the Company as of March 31, 2013 and December 31, 2012 was $29.4 million and $21.3 million, respectively.

In conjunction with obtaining the Credit Facilities and the Credit Agreement, as amended, the Company incurred debt issuance costs of $5 million. These costs are being amortized using the effective interest method over the life of the Credit Facilities. In conjunction with the Term Loan Facility repayment in May 2012, the Company wrote off $0.8 million of related debt issuance costs. As of March 31, 2013 and December 31, 2012, debt issuance costs, net of accumulated amortization, related to the Credit Agreement were $1.6 million and $1.8 million, respectively.

7. Derivative instruments

The tables below disclose the types of derivative instruments the Company owns, the classifications and fair values of these instruments within the balance sheet, and the amount of gain (loss) recognized in other comprehensive income (loss) or net income (loss).


(US$ in thousands) As of March 31, 2013	Fair value: favorable (unfavorable)		Balance sheet location
Cross-currency swap	$	1,598		Other long-term assets

As of December 31, 2012
Cross-currency swap	$	305		Other long-term assets


	Three Months Ended March 31,
(US$ in thousands)	2013			2012
Cross-currency swap unrealized gain (loss) recorded in other comprehensive income (loss), net of taxes	$	(318	)	$	509

Cross-currency swap

On September 30, 2010, the Company entered into a cross-currency swap agreement (the “replacement swap agreement”) with JPMorgan Chase Bank and Royal Bank of Scotland PLC (the “counterparties”) to manage its cash flows related to foreign currency exposure for a portion of the Company’s intercompany receivable of a U.S. dollar functional currency subsidiary that is denominated in Euro.

Under the terms of the swap agreement, the Company pays Euros based on a €28.7 million notional value and a fixed rate of 5.00% and receives U.S. dollars based on a notional value of $39 million and a fixed rate of 4.635%. The expiration date is December 30, 2016, the date upon which the underlying intercompany debt, to which the swap agreement applies, matures. The swap agreement is designated as a cash flow hedge and therefore the Company recognized an unrealized gain (loss) on the change in fair value, net of tax, within other comprehensive income (loss).

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

8. Fair value measurements

Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Non-financial assets and liabilities of the Company measured at fair value include any long-lived assets or equity method investments that are impaired in a currently reported period. The authoritative guidance also describes three levels of inputs that may be used to measure fair value:

Level 1 —

quoted prices in active markets for identical assets and liabilities

Level 2 —

observable inputs other than quoted prices in active markets for identical assets and liabilities

Level 3 —

unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions

As of March 31, 2013, the Company’s financial instruments included cash equivalents, restricted cash, accounts receivable, short-term bank borrowings, accounts payable, long-term secured debt, and a cross currency derivative contract. Cash equivalents consist of short-term, highly liquid, income-producing investments, all of which have original maturities of 90 days or less, including money market funds. The carrying value of restricted cash, accounts receivable, short-term bank borrowings and accounts payable approximate fair value due to the short-term maturities of these instruments. The Company’s credit facilities carry a floating rate of interest, and therefore, the carrying value is considered to approximate the fair value.

The Company’s cross-currency derivative instrument is the only financial instrument recorded at fair value on a recurring basis. This instrument consists of an over-the-counter contract, which is not traded on a public exchange. The fair value of the swap contract is determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, the Company has categorized the swap contract as a Level 2 derivative financial instrument. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. The Company has consistently applied these valuation techniques in all periods presented.

The fair value of the Company’s financial assets and liabilities on a recurring basis were as follows:


(US$ in thousands)	Balance March 31, 2013		Level 1		Level 2		Level 3
Derivative financial instruments
Cash flow hedges
Cross-currency hedge	$	1,598	$	—	$	1,598	$	—

(US$ in thousands)	Balance December 31, 2012		Level 1		Level 2		Level 3
Derivative financial instruments
Cash flow hedges
Cross currency hedge	$	305	$	—	$	305	$	—

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

9. Comprehensive income (loss)

Accumulated other comprehensive income is comprised of foreign currency translation adjustments and the effective portion of the gain (loss) on the Company’s cross-currency swap, which is designated and accounted for as a cash flow hedge. The components of and changes in accumulated other comprehensive income were as follows:


(US$ in thousands)	Foreign Currency Translation Adjustments			Fair Value of Cross-Currency Swap			Accumulated Other Comprehensive Income
Balance at December 31, 2012	$	2,373		$	131		$	2,504
Unrealized gain on cross-currency swap, net of tax of $187		—			(318	)		(318	)
Foreign currency translation adjustment (1)		(2,814	)		—			(2,814	)

Balance at March 31, 2013	$	(441	)	$	(187	)	$	(628	)

(1)	As the cash generally remains permanently invested in the non-U.S. dollar denominated foreign subsidiaries, no deferred taxes are recognized on the related foreign currency translation adjustment.

10. Earnings per share

For the three months ended March 31, 2013 and 2012, there were no adjustments to net income for purposes of calculating basic and diluted net income available to common shareholders. The following is a reconciliation of the weighted average shares used in the basic and diluted net income per common share computations.


	Three Months Ended March 31,
	2013		2012
Weighted average common shares-basic		19,431,093		18,675,694
Effect of dilutive securities:
Unexercised stock options net of treasury share repurchase		260,048		440,501

Weighted average common shares-diluted		19,691,141		19,116,195

Options to purchase shares of common stock with exercise prices in excess of the average market price of common shares are not included in the computation of diluted earnings per share. There were 973,037 and 714,686 outstanding options not included in the diluted earnings per share computation for the three months ended March 31, 2013 and 2012, respectively, because the inclusion of these options was anti-dilutive.

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

11. Share-based compensation

All share-based compensation costs are measured at the grant date, based on the estimated fair value of the award, and are recognized as expense in the condensed consolidated statements of operations over the requisite service period.

The following table shows the detail of share-based compensation by line item in the condensed consolidated statements of operations:


	Three Months Ended March 31,
(US$ in thousands)	2013		2012
Cost of sales	$	287	$	176
Sales and marketing		436		445
General and administrative		1,175		770
Research and development		45		42

Total	$	1,943	$	1,433

For the three months ended March 31, 2013 and 2012, there were no performance requirements for share-based compensation awarded to employees. In March 2013, the Company granted options to its newly-appointed Chief Executive Officer, which vesting is based on achieving certain market prices for the Company’s common stock.

During the three months ended March 31, 2013 and 2012, there were 113,965 and 262,713 shares, respectively, of common stock issued related to stock purchase plan issuances, stock option exercises and the vesting of restricted stock awards.

12. Other income (expense)

The following table shows the detail of other income (expense):


	Three Months Ended March 31,
(US$ in thousands)	2013			2012
Gain related to demutualization of a mutual insurance company (1)	$	4,406		$	—
Transactional foreign currency exchange gains (losses)		623			(470	)
Other		(265	)		(161	)

Total	$	4,764		$	(631	)

(1)	In the first quarter of 2013, the Company received $4.4 million of cash related to the demutualization of a mutual insurance company, in which the company was an eligible member to share in such proceeds.

13. Income taxes

The Company recognized a $3.3 million and $7.4 million provision for income tax which reflects an effective tax rate of 40.4% and 37.6% on pre-tax income for the three months ended March 31, 2013 and 2012, respectively. Excluding the impact of various discrete charges, the effective tax rate on continuing operations was 37% for the first three months of 2013 and 2012. The principal factors affecting the Company’s effective tax rate was the Company’s mix of earnings among various tax jurisdictions, state taxes and current period losses in certain jurisdictions for which the Company does not currently provide a tax benefit.

On January 2, 2013, the American Taxpayer Relief Act of 2012 (“Act”) was enacted. The Act provides tax relief for businesses by reinstating certain tax benefits and credits retroactively to January 1, 2012. There are several provisions of the Act that impact the Company, most notably the extension of the Research and Development credit. Income tax accounting rules require tax law changes to be recognized in the period of enactment; as such, the associated tax benefits of the Act was recognized in the Company’s provision for income taxes in the first quarter of 2013.

As of March 31, 2013 and December 31, 2012, the Company’s gross unrecognized tax benefit was $0.7 million and $1.0 million, respectively. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. In March 2013 the Company settled a $0.9 million liability that had been previously accrued as of December 31, 2012. The entire amount of unrecognized tax benefits, including interest, would favorably impact the Company’s effective tax rate if recognized. As of March 31, 2013, the Company does not expect the amount of unrecognized tax benefits to change significantly over the next twelve months.

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

14. Business segment information

The Company’s segment information (as provided below) has been prepared based on the Company’s two global business units (“GBU”) reporting segments, Spine and Orthopedics. The accounting policies of the segments are the same as those described in the business segment information found in Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2012.

The table below presents external net sales by GBU reporting segment. Net sales include product sales and marketing service fees. Marketing service fees, which are recorded on a net basis, are comprised of sales of Trinity Evolution ^® in spine and orthopedic applications.


	External Net Sales by GBU
	Three Months Ended March 31,
(US$ in thousands)	2013		2012		Reported Decline			Constant Currency Decline
Spine
Spine Repair Implants and Regenerative Biologics	$	34,297	$	35,757		(4	)%		(4	)%
Spine Regenerative Stimulation		32,029		39,271		(18	)%		(18	)%

Total Spine		66,326		75,028		(12	)%		(12	)%

Orthopedics		33,928		41,014		(17	)%		(16	)%

Total Net Sales	$	100,254	$	116,042		(14	)%		(13	)%

The table below presents operating income (loss) by GBU reporting segment:


Operating Income (Loss) by GBU	Three Months Ended March 31,
(US$ in thousands)	2013			2012
Spine	$	11,845		$	21,566

Orthopedics		958			4,979
Corporate (1)		(8,779	)		(4,114	)

Total	$	4,024		$	22,431

(1)	For the three months ended March 31, 2013, the operating loss for Corporate included $3.6 million of management succession charges.

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

15. Sale of Breg and Disposition of Sports Medicine GBU

On April 23, 2012, the Company’s subsidiary Orthofix Holdings and Breg entered into a stock purchase agreement (the “SPA”) with Breg Acquisition Corp. (“Buyer”), a newly formed affiliate of Water Street Healthcare Partners II, L.P., pursuant to which Buyer agreed to acquire from Orthofix Holdings all the outstanding shares of Breg, subject to the terms and conditions contained therein (the “Transaction”). Under the terms of the SPA, upon closing of the sale, Orthofix Holdings and the Company agreed to indemnify Buyer with respect to certain specified matters, including the government investigation and product liability matters regarding a previously owned infusion pump product line, and pre-closing sales of cold therapy units and certain post-closing sales of cold therapy units. (See “Matters Related to the Company’s former Breg Subsidiary and Possible Indemnification Obligations under Note 16.) On May 24, 2012 (the “Closing Date”), Orthofix Holdings completed the sale of all of the outstanding shares of Breg for $157.5 million in cash. After adjustments for working capital and indebtedness in accordance with the terms of the SPA, Orthofix Holdings used $145 million of the net proceeds to prepay outstanding Company indebtedness, as required by a lender consent received in connection with the Company’s existing Credit Agreement. As a result of the closing of this Transaction, Breg ceased to be a subsidiary of the Company and, therefore, Breg was released as a credit party under the Credit Agreement. The Company also agreed to enter into certain transition arrangements at the closing, including a transition services agreement pursuant to which the Company agreed to continue to provide administrative operational support for a period of up to twelve months. As a result of the sale of Breg, the Company completed its exit from the Sports Medicine GBU, of which Breg was a significant component.

The portion of indemnification related to post closing claims related to post-closing sales of cold therapy has created a guarantee under Accounting Standards Codification ASC 460 — Guarantees and the fair value of the liability has been recorded under the initial recognition criteria in the amount of $2 million at the Closing Date of the transaction. The Company will amortize the fair value of the noncontingent liability ratably over the period of indemnification which is three years. The Company’s obligations under this guarantee were approximately $1.4 million and $1.6 million as of March 31, 2013 and December 31, 2012, respectively.

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

Gain on Sale of Discontinued Operations

The following table presents the value of the asset disposition, proceeds received, net of various working capital adjustments and indebtedness and net gain on sale of Breg as shown in the condensed consolidated statement of operations for the year ended December 31, 2012.


(US$ in thousands)	Total
Cash proceeds	$	157,500
Less:
Working Capital		(7,093	)
Transaction related expenses		(4,276	)
Fair Value of Indemnification		(2,000	)
Tangible assets		(8,309	)
Intangible assets		(28,164	)
Goodwill		(106,200	)

Gain on sale of Breg		1,458
Income tax expense		(113	)

Gain on sale of Breg, net of taxes	$	1,345

The Sports Medicine GBU contributed $27.1 million of net sales in the three months ended March 31, 2012. The Sports Medicine GBU had $0.4 million of operating loss in the three months ended March 31, 2012. The financial information above includes the financial results of Breg operations up to the date of sale.

Included in discontinued operations for the three months ended March 31, 2013 is $4 million of expense related to the Company’s indemnification of certain specified matters described above.

The Company’s consolidated financial statements and related footnote disclosures reflect the Sports Medicine GBU as discontinued operations. Income (loss) associated with the Sports Medicine GBU, net of applicable income taxes is shown as income (loss) from discontinued operations for all periods presented in accordance with ASC 205-20 Discontinued Operations.

Notes to the Unaudited Condensed Consolidated Financial Statements (continued)

16. Contingencies

The Company is a party to certain outstanding legal proceedings, investigations and claims. These matters are described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Material recent developments regarding such matters are described below.

The Company believes that it is unlikely that the outcome of any or all of these matters will have a material adverse effect on the Company and its subsidiaries as a whole, notwithstanding that the unfavorable resolution of any matter may have a material effect on the Company’s net earnings (if any) in any particular quarter. However, the Company cannot predict with any certainty the final outcome of any legal proceedings, investigations or claims made against it or its subsidiaries described in the paragraphs below, and there can be no assurance that the ultimate resolution of any such matter will not have a material adverse impact on the Company’s consolidated financial position, results of operations, or cash flows.

The Company records accruals for certain of its outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal proceedings, investigations and claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable. When a loss contingency is not both probable and reasonably estimable, the Company does not accrue the loss. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses a reasonable estimate of the possible loss or range of loss, if such reasonable estimate can be made. If the Company cannot make a reasonable estimate of the possible loss, or range of loss, then that is disclosed.

The assessments of whether a loss is probable or a reasonable possibility, and whether the loss or range of loss is reasonably estimable, often involve a series of complex judgments about future events. Among the factors that the Company considers in this assessment are the nature of existing legal proceedings, investigations and claims, the asserted or possible damages or loss contingency (if reasonably estimable), the progress of the matter, existing law and precedent, the opinions or views of legal counsel and other advisers, the involvement of the U.S. Government and its agencies in such proceedings, the Company’s experience in similar matters and the experience of other companies, the facts available to the Company at the time of assessment, and how the Company intends to respond, or has responded, to the proceeding, investigation or claim. The Company’s assessment of these factors may change over time as individual proceedings, investigations or claims progress. For matters where the Company is not currently able to reasonably estimate a range of reasonably possible loss, the factors that have contributed to this determination include the following: (i) the damages sought are indeterminate, or an investigation has not manifested itself in a filed civil or criminal complaint, (ii) the matters are in the early stages, (iii) the matters involve novel or unsettled legal theories or a large or uncertain number of actual or potential cases or parties, and/or (iv) discussions with the government or other parties in matters that may be expected ultimately to be resolved through negotiation and settlement have not reached the point where the Company believes a reasonable estimate of loss, or range of loss, can be made. In such instances, the Company believes that there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss, fine, penalty or business impact, if any.

In addition to the matters specifically identified in the paragraphs below, in the normal course of our business, the Company is involved in various lawsuits from time to time and may be subject to certain other contingencies. To the extent losses related to these contingencies are both probable and reasonably estimable, the Company accrues appropriate amounts in the accompanying financial statements and provides disclosures as to the possible range of loss in excess of the amount accrued, if such range is reasonably estimable. The Company believes losses are individually and collectively immaterial as to a possible loss and range of loss.

17. Subsequent Event

On May 8, 2013, the Company announced that its Board of Directors has authorized a share repurchase program in an amount up to $50 million. Repurchases are expected to consist primarily of open market transactions at prevailing market prices in accordance with the guidelines specified under Rule 10b-18 of the Securities Exchange Act of 1934, as amended, though the Company may also make repurchases through block trades or privately negotiated transactions. The Company expects that repurchases will begin on or about May 10, 2013. Repurchases are expected to be made from cash on hand, cash generated from operations, and additional borrowings. The timing of the transactions and the aggregate number of shares of common stock that will be repurchased under the repurchase program will depend on a variety of factors, including market conditions and the prices at which the securities are repurchased. The Company may discontinue repurchases without prior notice at any time if it determines additional repurchases are not warranted.

Litigation Matter Updates:

Matters Related to the Company’s Former Breg Subsidiary and Possible Indemnification Obligations

On May 24, 2012, the Company sold Breg, Inc. (“Breg”) to an affiliate of Water Street Healthcare Partners II, L.P. (“Water Street”) pursuant to a stock purchase agreement (the “Breg SPA”). Under the terms of the Breg SPA, upon closing of the sale, the Company and its subsidiary, Orthofix Holdings, Inc., agreed to indemnify Water Street and Breg with respect to certain specified matters, including (i) the government investigation and product liability matters regarding the previously owned infusion pump product line described below, and (ii) pre-closing sales of cold therapy units and certain post-closing sales of cold therapy units. The Company has established an accrual of $4.2 million for its indemnification obligations in connection with the July 2012 verdict described in the paragraph below, however, actual liability in this case could be higher or lower than the amount accrued. The Company has not established any accrual in connection with its other indemnification obligations under the Breg SPA, and currently cannot reasonably estimate the possible loss, or range of loss, in connection with such obligations (including with respect to the matters described in the paragraphs below).

Breg was engaged in the manufacturing and sale of local infusion pumps for pain management from 1999 to 2008. Since 2008, numerous product liability cases have been filed in the United States alleging that the local anesthetic, when dispensed by such infusion pumps inside a joint, causes a rare arthritic condition called “chondrolysis.” The Company believes that meritorious defenses exist to these claims and Breg is vigorously defending these cases. One of the Company’s insurance carriers previously asserted to the Company that certain potential losses related to this matter are not covered by its insurance coverage. The Company subsequently went into arbitration with this carrier, and on January 22, 2013, the Company obtained a binding arbitration award providing that such carrier is obligated to reimburse the Company for defense expenses, settlements, and judgments under certain policies. The Company currently estimates that it is entitled to reimbursement of approximately $13 million for past losses incurred, as well as up to $15 million in potential future coverage for pending products liability matters.

On or about August 2, 2010, Breg received a HIPAA subpoena issued by the Department of Justice (“DOJ”). The subpoena seeks documents from the Company and its subsidiaries for the period of January 1, 2000 through the date of the subpoena. The Company believes that document production in response to the subpoena is completed as of July 2012. DOJ has informed the Company that it is investigating possible criminal and civil violations of federal law related to Breg’s sale, marketing and labeling of local infusion pumps for pain management, prior to Breg’s divestiture of this product line in 2008. The Company is currently cooperating with the U.S. Government in connection with this matter.

On January 27, 2012, the Company was orally notified by a U.S. Government official that a civil investigation of Breg was pending in connection with this matter. On January 18, 2013, the Company was served with a qui tam complaint filed in the United States District Court for the Western District of Missouri against the Company (as the former owner of Breg), Stryker Corporation, I-Flow Corporation and DJO Incorporated, which contains allegations relating to the marketing and promotion of Breg’s former infusion pump products. The Company is vigorously defending this matter.

At the time of its divestiture by the Company, Breg was engaged and had been engaged in the manufacturing and sales of motorized cold therapy units used to reduce pain and swelling. Several domestic product liability cases have been filed in recent years, mostly in California state court, alleging that the use of cold therapy causes skin and/or nerve injury and seeking damages on behalf of individual plaintiffs who were allegedly injured by such units. The majority of these cases are at an early stage and no conclusion can be drawn at the present time regarding their potential outcome. However, the Company believes that meritorious defenses exist to these claims. In July 2012, a jury in one case related to a motorized cold therapy unit previously sold by Breg returned a verdict providing for approximately $2.1 million in compensatory damages to the plaintiff against Breg and $7 million in exemplary damages. The case remains subject to appeal. The Company believes that the damages are without merit; however, the ultimate outcome is uncertain. The Company previously established an accrual of $4.2 million for both compensatory damages and exemplary damages for its indemnification obligations in connection with this July 2012 verdict; however, actual liability in this case could be higher or lower than the amount accrued.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis addresses the results of our operations which are based upon the consolidated financial statements included herein, which have been prepared in accordance with US GAAP, for the three months ended March 31, 2013 compared to the three months ended March 31, 2012. These discussions should be read in conjunction with our historical consolidated financial statements and related notes thereto and the other financial information included in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

General Overview

We are a diversified, global medical device company focused on developing and delivering innovative repair and regenerative solutions to the spine and orthopedic markets. Our products are designed to address the lifelong bone-and-joint health needs of patients of all ages, helping them achieve a more active and mobile lifestyle. We design, develop, manufacture, market and distribute medical equipment used principally by musculoskeletal medical specialists for orthopedic applications. Our main products are invasive and minimally invasive spinal implant products and related human cellular and tissue based products (“HCT/P products”), non-invasive regenerative stimulation products used to enhance bone growth and the success rate of spinal fusions and to treat non-union fractures, external and internal fixation devices used in fracture repair, limb lengthening and bone reconstruction. Our products also include bone cement and devices for removal of bone cement used to fix artificial implants.

We have administrative and training facilities in the United States (“U.S.”), Brazil and Italy and manufacturing facilities in the U.S., the United Kingdom, and Italy. The Spine global business unit (“GBU”) directly distributes products in the U.S. The orthopedics GBU directly distributes products in the U.S., the United Kingdom, Italy, Germany, Switzerland, Austria, France, Belgium, Brazil and Puerto Rico. In several of these and other markets we also distribute our products through independent distributors.

Our condensed consolidated financial statements include the financial results of our Company and our wholly-owned and majority-owned subsidiaries and entities over which we have control. All intercompany accounts and transactions are eliminated in consolidation.

Our reporting currency is the U.S. Dollar. All balance sheet accounts, except shareholders’ equity, are translated at period-end exchange rates and revenue and expense items are translated at weighted average rates of exchange prevailing during the period. Gains and losses resulting from foreign currency transactions are included in other income and expense. Gains and losses resulting from the translation of foreign currency financial statements are recorded in the accumulated other comprehensive income component of shareholders’ equity.

Our financial condition, results of operations and cash flows are not significantly impacted by seasonality trends. However, sales associated with products for elective procedures appear to be influenced by the somewhat lower volume of such procedures performed in the late summer. In addition, we do not believe our operations will be significantly affected by inflation. However, in the ordinary course of business, we are exposed to the impact of changes in interest rates and foreign currency fluctuations. Our objective is to limit the impact of such movements on earnings and cash flows. In order to achieve this objective, we seek to balance non-dollar denominated income and expenditures. During the period, we have used derivative instruments to hedge foreign currency fluctuation exposures. See Item 3, Quantitative and Qualitative Disclosures About Market Risk.

We manage our business by our two global business units (“GBU’s”), which are comprised of Spine and Orthopedics, supported by our Corporate activities. These GBUs represent the current segments in which our Chief Operating Decision Maker reviews financial information and makes resource allocation decisions among business units. Accordingly, our segment information (as provided below) has been prepared based on our two GBU reporting segments. Corporate activities not necessarily identifiable within the two GBUs are recorded as part of Corporate.

Spine

Spine provides a portfolio of repair and regenerative products that allow physicians to successfully treat a variety of spinal conditions. This global business unit specializes in the design, development and marketing of our spine repair products along with regenerative stimulation and biologics products used in spine applications. Spine distributes its products through a network of distributors, sales representatives and affiliates. This global business unit uses both direct and distributor sales representatives to sell spine products to hospitals, doctors and other healthcare providers, globally.

Orthopedics

Orthopedics provides a portfolio of repair and regenerative products that allow physicians to successfully treat a variety of orthopedic conditions unrelated to spine. This global business unit specializes in the design, development and marketing of our orthopedic repair products along with regenerative stimulation and biologics products used in orthopedic applications. Orthopedics distributes its products through a network of distributors, sales representatives and affiliates. This global business unit uses both direct and distributor sales representatives to sell orthopedics products to hospitals, doctors and other healthcare providers, globally.

Corporate

Corporate activities are comprised of the operating expenses of Orthofix International N.V. and its holding company subsidiaries, along with activities not necessarily identifiable with the two GBUs.

GBU Revenues

The following table displays net sales by GBU for the three months ended March 31, 2013 and 2012.

The table below presents external net sales by GBU reporting segment:


	External Net Sales by GBU
	Three Months Ended March 31,
(US$ in thousands)	2013		2012		Reported Decline			Constant Currency Decline
Spine
Spine Repair Implants and Regenerative Biologics	$	34,297	$	35,757		(4	)%		(4	)%
Spine Regenerative Stimulation		32,029		39,271		(18	)%		(18	)%

Total Spine		66,326		75,028		(12	)%		(12	)%
Orthopedics		33,928		41,014		(17	)%		(16	)%

Total Net sales	$	100,254	$	116,042		(14	)%		(13	)%

Note: Spine Repair Implants and Regenerative Biologics includes $9.4 million and $8.7 million of marketing service fees in the three months ended March 31, 2013 and 2012, respectively. Orthopedics includes $2.5 million of marketing service fees in the three months ended March 31, 2013 and 2012.

The following table presents certain items in our condensed consolidated statements of operations as a percent of total net sales for the periods indicated:


	Three Months Ended March 31,
	2013 (%)		2012 (%)
Product sales		88		90
Marketing service fees		12		10
Net sales		100		100
Cost of sales		23		19
Gross profit		77		81
Operating expenses:
Sales and marketing		49		43
General and administrative		19		13
Research and development		5		6
Amortization of intangible assets		1		0
Operating income		4		19
Net income		2		10

Three Months Ended March 31, 2013 Compared to Three Months Ended March 31, 2012

Net sales decreased $15.7 million to $100.3 million in the first quarter of 2013 compared to $116 million for the same period last year. The impact of foreign currency decreased sales by $0.7 million during the first quarter of 2013 when compared to the first quarter of 2012. Net sales include product sales and marketing service fees which is comprised of sales of Trinity Evolution ^® in spine and orthopedic applications.

Sales

Net sales in our Spine global business unit decreased to $66.3 million in the first quarter of 2013 compared to $75.0 million for the same period last year, a decrease of $8.7 million. The decrease in Spine’s net sales was made up of an 18% (or $7.2 million) decrease in sales of Regenerative Stimulation products used in spine applications and a 4% (or $1.5 million) decrease in sales of Repair Implants and Regenerative Biologics products when compared to the same period in the prior year. The decrease in sales of Regenerative Stimulation products used in spine applications was primarily a result of residual effects of distribution disruptions and higher than ordinary mix of wholesale revenue in the first quarter of 2012. The decrease in sales of Repair Implants and Regenerative Biologics products was primarily due to weakness in international markets as well as pricing pressures in the U.S. This decline was partially offset by the growth from the ongoing rollout of the FORZA Spinal Spacer System and the increased adoption of Trinity Evolution ^® in spine fusion applications which led to a 7% increase in sales of Trinity Evolution ^® in the first quarter of 2013.

Net sales in our Orthopedics global business unit decreased 17% (or 16% on a constant currency basis) to $33.9 million in the first quarter of 2013 compared to $41 million for the same period last year. This decrease was primarily due to continuing challenges in Brazil in Orthopedics Repair, which has been impacted by increased competition and product delays due to the strike at the country’s regulatory agency; a 24% decrease of Physio-Stim^® Regenerative Stimulation sales mainly in the US and in France (where we stopped receiving reimbursement on this product); and poor macroeconomic conditions in Europe.

Gross Profit — Our gross profit decreased $16.5 million to $77.6 million in the first quarter of 2013, compared to $94.1 million for the same period last year. Gross profit as a percent of net sales in the first quarter of 2013 was 77% compared to 81% for the same period last year. The decrease in the gross profit margin is primarily a result of an unfavorable product and geographical sales mix relating to the decrease in our stimulation sales both in Spine and Orthopedics, impacts from pricing challenges in our Spine Implants business and an increase in depreciation expense related to new product launches in our Spine Implants business that took place in the third and fourth quarters of 2012.

Sales and Marketing Expense — Sales and marketing expense, which includes commissions certain royalties and the bad debt provision, generally increase and decrease in relation to sales. Sales and marketing expense decreased $0.7 million, to $48.8 million in the first quarter of 2013 compared to $49.5 million in the first quarter of 2012. As a percent of net sales, sales and marketing expense was 49% and 43% in the first quarter of 2013 and 2012, respectively. The increase as a percent of sales was driven primarily by the impact of lower sales on non-variable sales and marketing expense, which included the non-variable component of the bad debt provision and commission costs associated with our sales force mix. From time to time the bad debt provision is impacted by a change in reserves based on management’s assessment of recent economic conditions on certain customer accounts receivable balances.

General and Administrative Expense — General and administrative expense increased $4.2 million, or 29%, in the first quarter of 2013 to $18.8 million compared to $14.6 million in the first quarter of 2012. The first quarter of 2013 included $3.6 million of senior management succession charges. Excluding these succession charges, general and administrative expense as a percent of net sales was 15% in the first quarter of 2013 compared to 13% for the same period last year. This increase as a percent of sales was driven primarily by the impact of lower sales on non-variable general and administrative expense and to a lesser extent the impact of the medical device excise tax (effective January 1, 2013) which we record in general and administrative expense.

Research and Development Expense — Research and development expense decreased $1.7 million in the first quarter of 2013 to $5.4 million compared to $7.1 million for the same period last year. As a percent of sales, research and development expense was 5% in the first quarter of 2013 compared to 6% for the same period last year. The decrease in research and development expenses in the first quarter of 2013 compared to the same period in the prior year was due to our strategic investment with Musculoskeletal Transplant Foundation (“MTF”) of $1 million in the 2012 period on the development and commercialization of the next generation cell-based bone growth technology and timing of spending related to our ongoing research, development and clinical activities.

Amortization of Intangible Assets — Amortization of intangible assets was $0.5 million in the first quarter of 2013 and 2012.

Interest Expense, net — Interest expense, net was $0.6 million for the first quarter of 2013 compared to $2.2 million for the same period last year, primarily as the result of a lower year over year outstanding debt balance and to a lesser extent lower interest rates.

Other Income (Expense) — Other income (expense) was $4.8 million and $(0.6) million for the first quarters of 2013 and 2012, respectively. The fluctuation is mainly attributable to our receipt of $4.4 million cash related to the demutualization of a mutual insurance company in which we were an eligible member to share in such proceeds. Other income (expense) also includes the effect of foreign exchange. Several of our foreign subsidiaries hold trade payables or receivables in currencies (most notably the U.S. Dollar) other than their functional (local) currency which results in foreign exchange gains or losses when there is relative movement between those currencies.

Income Tax Expense —Our worldwide effective tax rate was 40.4% and 37.6% during the first quarters of 2013 and 2012, respectively. When adjusted for various discrete items, the effective tax rate for the first quarter of 2013 and 2012 was 37%. These rates are affected by the mix of earnings among various tax jurisdictions and losses incurred in a number of foreign jurisdictions, for which we do not currently recognize a tax benefit. We do not believe that it is more likely than not that we will generate sufficient future income in these jurisdictions to allow for the utilization of these losses before their expiration.

Net Income — Net income for the first quarter of 2013 was $2.1 million, or $0.11 per basic and $0.11 per diluted share, compared to net income of $12 million, or $0.64 per basic and $0.63 per diluted share for the same period last year.

Liquidity and Capital Resources

Cash and cash equivalents including Restricted Cash at March 31, 2013 were $63.1 million, of which $29.4 million was subject to certain restrictions under the senior secured credit agreement described below. This compares to cash and cash equivalents of $52.4 million at December 31, 2012, of which $21.3 million was subject to certain restrictions under the senior secured credit agreement discussed below.

Net cash provided by operating activities was $15.5 million and $49.1 million for the three months ended March 31, 2013 and 2012, respectively. Net cash provided by operating activities is comprised of net income, non-cash items (including depreciation and amortization, provision for doubtful accounts, provision for inventory obsolescence, share-based compensation and deferred income taxes) and changes in working capital. Net income decreased $9.9 million to net income of $2.1 million for the three months ended March 31, 2013 from a net income of $12 million for the comparable period in the prior year. Non-cash items for the three months ended March 31, 2013 decreased $1.7 million to $10.6 million compared to non-cash items of $12.3 million in the same period of 2012. Working capital accounts provided $2.7 million and $24.8 million of cash for the three months ended March 31, 2013 and 2012, respectively. For the three months ended March 31, 2012, working capital accounts were impacted by $41.5 million in cash we received from the Blackstone escrow fund which was recorded in Restricted Cash in accordance with the credit facility. Overall performance indicators for our two primary working capital accounts, accounts receivable and inventory reflect day’s sales in receivables of 119 days at March 31, 2013 and 112 days at March 31, 2012, and inventory turns of 0.9 times as of March 31, 2013 and 1.1 times as of March 31, 2012.

Net cash used by investing activities was $6.5 million for the three months ended March 31, 2013 and 2012 for capital expenditures.

Net cash used in financing activities was $5.9 million for the three months ended March 31, 2013 compared to $29.1 million for the three months ended March 31, 2012. During the three months ended March 31, 2013, we made no repayments on our revolving debt as compared to $3.8 million during the three months ended March 31, 2012. Our restricted cash balance usage of $32.3 million in the three months ended March 31, 2012 primarily related to the cash received from the Blackstone escrow fund which was recorded in Restricted Cash in accordance with the credit facility. Our restricted cash balance usage was $8.1 million in the three months ended March 31, 2013. During the three months ended March 31, 2013 and 2012, we received proceeds of $2.1 million and $6.6 million, respectively, from the issuance of 113,965 shares and 262,713 shares, respectively, of our common stock related to stock purchase plan issuances, stock option exercises and the vesting of restricted stock awards.

On August 30, 2010, our wholly-owned U.S. holding company, Orthofix Holdings, Inc. (“Orthofix Holdings”) entered into a Credit Agreement (the “Credit Agreement”) with certain of our domestic direct and indirect subsidiaries (the “Guarantors”), JPMorgan Chase Bank, N.A., as Administrative Agent, RBS Citizens, N.A., as Syndication Agent, and certain lender parties thereto.

In May 2012, we used a portion of the proceeds from the sale of Breg, Inc. to repay the $87.5 million remaining balance on the Term Loan Facility and pay down $57.5 million of amounts outstanding under the Revolving Credit Facility. This use of proceeds was required by the lenders’ consent dated April 23, 2012 to the Credit Agreement. Additionally, we paid $20 million in June 2012 and $20 million in September 2012 to reduce amounts outstanding under the Revolving Credit Facility.

As of March 31, 2013, the Term Loan Facility had been repaid in full and there was $20 million outstanding under the Revolving Credit Facility. Borrowings under the Credit Facilities bear interest at a floating rate, which is, at Orthofix Holdings’ option, either the London Inter-Bank Offered Rate (“LIBOR”) plus an applicable margin or a base rate (as defined in the Credit Agreement) plus an applicable margin (in each case subject to adjustment based on financial ratios). Such applicable margin will be up to 3.25% for LIBOR borrowings and up to 2.25% for base rate borrowings depending upon a measurement of the consolidated leverage ratio with respect to the immediately preceding four fiscal quarters. As of March 31, 2013 and December 31, 2012, the entire Revolving Credit Facility was at the LIBOR rate plus a margin of 2.50%. The effective interest rate on the Credit Facilities at March 31, 2013 and December 31, 2012 was 2.7%.

Outstanding balances on the Revolving Credit Facility are due on August 30, 2015.

The Credit Agreement as amended requires us and Orthofix Holdings to comply with coverage ratios on a consolidated basis and contains affirmative and negative covenants, including limitations on additional debt, liens, investments and acquisitions. We believe we were in compliance with the affirmative and negative covenants at March 31, 2013 and there were no events of default.

Certain of our subsidiaries have restrictions on their ability to pay dividends or make intercompany loan advances pursuant to the Credit Facilities. The net assets of Orthofix Holdings and its subsidiaries are restricted for distributions to the parent company. Our domestic subsidiaries, as parties to the Credit Agreement, have access to these net assets for operational purposes. The amount of restricted net assets of Orthofix Holdings and its subsidiaries as of March 31, 2013 and December 31, 2012 was $256 million and $247.4 million, respectively. In addition, the Credit Agreement restricts us and our subsidiaries that are not parties to the Credit Facilities from access to cash held by Orthofix Holdings and its subsidiaries. The amount of restricted cash as of March 31, 2013 and December 31, 2012 was $29.4 million and $21.3 million, respectively.

At March 31, 2013, we had no outstanding bank borrowings and unused available line of credit of approximately €5.8 million ($7.4 million) under the line of credit established in Italy to finance the working capital of our Italian operations. The terms of the line of credit give us the option to borrow amounts in Italy at rates determined at the time of borrowing.

On May 8, 2013, we announced that our Board of Directors has authorized a share repurchase program in an amount up to $50 million. Repurchases are expected to consist primarily of open market transactions at prevailing market prices in accordance with the guidelines specified under Rule 10b-18 of the Securities Exchange Act of 1934, as amended, though we may also make repurchases through block trades or privately negotiated transactions. We expect that repurchases will begin on or about May 10, 2013. Repurchases are expected to be made from cash on hand, cash generated from operations, and additional borrowings. The timing of the transactions and the aggregate number of shares of common stock that will be repurchased under the repurchase program will depend on a variety of factors, including market conditions and the prices at which the securities are repurchased. We may discontinue repurchases without prior notice at any time if we determine additional repurchases are not warranted.

We believe that current cash balances together with projected cash flows from operating activities, the availability of the $180 million revolving credit facility, the available Italian line of credit and our debt capacity are sufficient to cover anticipated working capital and capital expenditure needs including research and development costs over the next twelve months.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to certain market risks as part of our ongoing business operations. Primary exposures include changes in interest rates and foreign currency fluctuations. These exposures can vary sales, cost of sales, costs of operations and the cost of financing and yields on cash and short-term investments. We use derivative financial instruments, where appropriate, to manage these risks. However, our risk management policy does not allow us to hedge positions we do not hold nor do we enter into derivative or other financial investments for trading or speculative purposes. As of March 31, 2013, we had a currency swap in place to minimize foreign currency exchange risk related to a €28.7 million ($36.8 million translated at the March 31, 2013 foreign exchange rate) intercompany note. As of March 31, 2013 the fair value of the currency swap was approximately $1.6 million and is recorded in other long-term assets.

We are exposed to interest rate risk in connection with our Term Loan facility and Revolving Credit Facility, which bear interest at floating rates based on LIBOR plus an applicable borrowing margin or at a base rate (as defined in the Credit Agreement) plus an applicable borrowing margin. Therefore, interest rate changes generally do not affect the fair market value of the debt, but do impact future earnings and cash flows, assuming other factors are held constant.

As of March 31, 2013, $20 million of the Revolving Credit Facility is at the LIBOR rate plus a margin of 2.50%. The margin is adjusted based upon the measurement of the consolidated leverage ratio of our Company and our subsidiaries with respect to the immediately preceding four fiscal quarters. As of March 31, 2013, our effective interest rate on our Credit Facilities was 2.7%. Based on the balance outstanding under the Credit Facilities as of March 31, 2013, an immediate change of one percentage point in the applicable interest rate on the Revolving Credit Facility would cause a change in interest expense of approximately $0.2 million annually.

Our foreign currency exposure results from fluctuating currency exchange rates, primarily the U.S. Dollar against the Euro, Great Britain Pound, Mexican Peso and Brazilian Real. We are subject to cost of goods currency exposure when we produce products in foreign currencies such as the Euro or Great Britain Pound and sell those products in U.S. Dollars. We are subject to transactional currency exposures when foreign subsidiaries (or the Company itself) enter into transactions denominated in a currency other than their functional currency. As of March 31, 2013, we had an un-hedged intercompany receivable denominated in Euro of approximately €23.2 million ($29.7 million). We recorded a foreign currency loss during the three months ended March 31, 2013 of $0.3 million related to this un-hedged long-term intercompany note in accumulated other comprehensive income during 2013, which resulted from the strengthening of the U.S. dollar against the Euro during the period. For the three months ended March 31, 2013, we recorded a foreign currency gain of $0.6 million on the statement of operations resulting from gains and losses in foreign currency transactions.

We also are subject to currency exposure from translating the results of our global operations into the U.S. dollar at exchange rates that have fluctuated during the period. As we continue to distribute and manufacture our products in selected foreign countries, we expect that future sales and costs associated with our activities in these markets will continue to be denominated in the applicable foreign currencies, which could cause currency fluctuations to materially impact our operating results.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our President and Chief Executive Officer and our Chief Financial Officer we performed an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a — 15(e) or 15d — 15 (e)) as of the end of the period covered by this Form 10-Q. Based upon that evaluation, our President and Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Form 10-Q, our disclosure controls and procedures were effective.

Changes in Internal Control over Financial Reporting

There have not been any changes in our internal control over financial reporting during the fiscal quarter ended March 31, 2013 that have materially affected or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

See Note 16 Contingencies to our unaudited condensed consolidated financial statements contained in Item 1, Financial Statements, of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1 A . Risk Factors

There have been no material changes to our risk factors from the factors discussed in Part I, Item 1A. Risk Factors in our Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2012.

Item 6. Exhibits


10.1		Employment Agreement, entered into as of January 7, 2013, by and between Orthofix Inc. and Emily Buxton (filed as an exhibit to the Company’s current report on Form 8-K filed January 11, 2013 and incorporated herein by reference).

10.2		Letter Agreement, dated March 12, 2013, between Orthofix Inc., Orthofix International N.V. and Robert S. Vaters (filed as an exhibit to the Company’s current report on Form 8-K filed March 13, 2013 and incorporated herein by reference).

10.3		Employment Agreement, effective as of March 13, 2013, by and between Orthofix Inc. and Bradley R. Mason (filed as an exhibit to the Company’s current report on Form 8-K filed March 13, 2013 and incorporated herein by reference).

10.4		Inducement Grant Non-Qualified Stock Option Agreement, dated March 13, 2013, between Orthofix International N.V. and Bradley R. Mason (filed as an exhibit to the Company’s current report on Form 8-K filed March 13, 2013 and incorporated herein by reference).

10.5		Restricted Stock Grant Agreement under the Orthofix International N.V. 2012 Long-Term Incentive Plan, dated March 13, 2013, between Orthofix International N.V. and Bradley R. Mason (filed as an exhibit to the Company’s current report on Form 8-K filed March 13, 2013 and incorporated herein by reference).

31.1*		Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer.

31.2*		Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer.

32.1*		Section 1350 Certification of Chief Executive Officer.

32.2*		Section 1350 Certification of Chief Financial Officer.

101*		The following materials from the Orthofix International N.V. Quarterly Report on Form 10-Q for the quarter ended March 31, 2013 formatted in Extensible Business Reporting Language (“XBRL”): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Income (Loss), (iii) Condensed Consolidated Statements of Cash Flows and (iv) related notes, detail tagged.

*	Filed herewith.

Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. This exhibit has been filed separately with the Secretary of the Commission without redactions pursuant to our Application Requesting Confidential Treatment under the Securities Exchange Act of 1934.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	ORTHOFIX INTERNATIONAL N.V.

Date: May 9, 2013	By:	/s/ Bradley R. Mason
		Name: Bradley R. Mason
		Title: President and Chief Executive Officer

Date: May 9, 2013	By:	/s/ Emily V. Buxton
		Name: Emily V. Buxton
		Title: Chief Financial Officer

EX-31.1 2 d507129dex311.htm EX-31.1 EX-31.1

Exhibit 31.1

CERTIFICATION

I, Bradley R. Mason, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Orthofix International N.V.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has material affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

EX-31.2 3 d507129dex312.htm EX-31.2 EX-31.2

Exhibit 31.2

CERTIFICATION

I, Emily V. Buxton, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Orthofix International N.V.;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

5.	The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

EX-32.1 4 d507129dex321.htm EX-32.1 EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Orthofix International N.V. (“Orthofix”) on Form 10-Q for the period ended March 31, 2013 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Bradley R. Mason, Chief Executive Officer and President of Orthofix, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Orthofix.

EX-32.2 5 d507129dex322.htm EX-32.2 EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Orthofix International N.V. (“Orthofix”) on Form 10-Q for the period ended March 31, 2013 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, I, Emily V. Buxton, Chief Financial Officer of Orthofix certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of Orthofix.

EX-101.INS 6 ofix-20130331.xml XBRL INSTANCE DOCUMENT

200000000

2000000 4200000 19453294 50000000 28700000

0.05000

39000000

0.04635

47053000

50000000

700000

-628000

65525000

32211000

20000000

7401000

20200000

150665000

503380000

33675000

6354000

5800000

7400000

132425000

92133000

18032000

14153000

29446000

11460000

503380000

19453294

1945000

31906000

14230000

72607000

51295000

101212000

6765000

17363000

42834000

52402000

256000000

19453294

5653000

337253000

0.10

900000

250186000

402168000

4227000

38671000 29891000

1598000

0.0325

0.0250

0.027

0.0225

-187000

-441000

-628000

20000000

1600000

31452000

37992000

454000

679000

1598000

33207000

50000000

1000000

2504000

68797000

32056000

20000000

7886000

19904000

148549000

504281000

31055000

8470000

7600000

5800000

150316000

88744000

16188000

11303000

0.0370

21314000

100000

11456000

504281000

19339329

1934000

31472000

21812000

74388000

46985000

105183000

6880000

16959000

36675000

51362000

247400000

19339329

6350000

340444000

0.10

900000

246111000

399098000

4930000

38352000 29363000

28164000

8309000

106200000

305000

0.0250

0.027

131000

2373000

2504000

20000000

1800000

31045000

37695000

427000

657000

305000

145000000

157500000

4200000

20000000

2100000

7000000

57500000

800000

87500000

P5Y

100000000

P5Y 1600000

113000

1458000

1345000

2000000 4276000 7093000 157500000

50000000

Q1 2013 10-Q 2013-03-31 0000884624 --12-31 OFIX ORTHOFIX INTERNATIONAL N V false Large Accelerated Filer

4764000

3400000

<div> 10. Earnings per share For the three months ended March 31, 2013 and 2012, there were no adjustments to net income for purposes of calculating basic and diluted net income available to common shareholders. The following is a reconciliation of the weighted average shares used in the basic and diluted net income per common share computations.   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="74%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2013</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Weighted average common shares-basic </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,431,093</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">18,675,694</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Effect of dilutive securities: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Unexercised stock options net of treasury share repurchase </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">260,048</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">440,501</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Weighted average common shares-diluted </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,691,141</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,116,195</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> Options to purchase shares of common stock with exercise prices in excess of the average market price of common shares are not included in the computation of diluted earnings per share. There were 973,037 and 714,686 outstanding options not included in the diluted earnings per share computation for the three months ended March 31, 2013 and 2012, respectively, because the inclusion of these options was anti-dilutive. </div>

4995000

<div> (b) Reclassifications The Company has reclassified certain line items to conform to the current year presentation. The reclassifications have no effect on previously reported net earnings or shareholders’ equity. </div>

<div> 3. Patents and other intangible assets   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="76%"></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">March 31, 2013</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">December 31, 2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cost </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Patents </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">37,992</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">37,695</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Trademarks — definite lived </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">679</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">657</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">38,671</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">38,352</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Accumulated amortization </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Patents </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(31,452</td> <td valign="bottom" nowrap="nowrap">)</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(31,045</td> <td valign="bottom" nowrap="nowrap">)</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Trademarks — definite lived </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(454</td> <td valign="bottom" nowrap="nowrap">)</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(427</td> <td valign="bottom" nowrap="nowrap">)</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(31,906</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(31,472</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Patents and other intangible assets, net </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">6,765</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">6,880</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> </div>

<div> The following table presents the value of the asset disposition, proceeds received, net of various working capital adjustments and indebtedness and net gain on sale of Breg as shown in the condensed consolidated statement of operations for the year ended December 31, 2012.   <table cellspacing="0" cellpadding="0" width="68%" border="0" style="BORDER-COLLAPSE:COLLAPSE" align="center"> <tr> <td width="86%"></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">Total</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cash proceeds </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">157,500</td> <td nowrap="nowrap" valign="bottom">  </td> </tr> <tr> <td valign="top"> Less: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Working Capital </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(7,093</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr> <td valign="top"> Transaction related expenses </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4,276</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Fair Value of Indemnification </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,000</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr> <td valign="top"> Tangible assets </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8,309</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Intangible assets </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(28,164</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr> <td valign="top"> Goodwill </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(106,200</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr style="font-size:1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Gain on sale of Breg </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,458</td> <td nowrap="nowrap" valign="bottom">  </td> </tr> <tr> <td valign="top"> Income tax expense </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(113</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr style="font-size:1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Gain on sale of Breg, net of taxes </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,345</td> <td nowrap="nowrap" valign="bottom">  </td> </tr> <tr style="font-size:1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> </div>

-0.14

<div> 17. Subsequent Event On May 8, 2013, we announced that our Board of Directors has authorized a share repurchase program in an amount up to $50 million. Repurchases are expected to consist primarily of open market transactions at prevailing market prices in accordance with the guidelines specified under Rule 10b-18 of the Securities Exchange Act of 1934, as amended, though we may also make repurchases through block trades or privately negotiated transactions. We expect that repurchases will begin on or about May 10, 2013. Repurchases are expected to be made from cash on hand, cash generated from operations, and additional borrowings. The timing of the transactions and the aggregate number of shares of common stock that will be repurchased under the repurchase program will depend on a variety of factors, including market conditions and the prices at which the securities are repurchased.  We may discontinue repurchases without prior notice at any time if we determine additional repurchases are not warranted.   Litigation Matter Updates: Matters Related to the Company’s Former Breg Subsidiary and Possible Indemnification Obligations On May 24, 2012, the Company sold Breg, Inc. (“Breg”) to an affiliate of Water Street Healthcare Partners II, L.P. (“Water Street”) pursuant to a stock purchase agreement (the “Breg SPA”). Under the terms of the Breg SPA, upon closing of the sale, the Company and its subsidiary, Orthofix Holdings, Inc., agreed to indemnify Water Street and Breg with respect to certain specified matters, including (i) the government investigation and product liability matters regarding the previously owned infusion pump product line described below, and (ii) pre-closing sales of cold therapy units and certain post-closing sales of cold therapy units. The Company has established an accrual of $4.2 million for its indemnification obligations in connection with the July 2012 verdict described in the paragraph below, however, actual liability in this case could be higher or lower than the amount accrued. The Company has not established any accrual in connection with its other indemnification obligations under the Breg SPA, and currently cannot reasonably estimate the possible loss, or range of loss, in connection with such obligations (including with respect to the matters described in the paragraphs below). Breg was engaged in the manufacturing and sale of local infusion pumps for pain management from 1999 to 2008. Since 2008, numerous product liability cases have been filed in the United States alleging that the local anesthetic, when dispensed by such infusion pumps inside a joint, causes a rare arthritic condition called “chondrolysis.” The Company believes that meritorious defenses exist to these claims and Breg is vigorously defending these cases. One of the Company’s insurance carriers previously asserted to the Company that certain potential losses related to this matter are not covered by its insurance coverage. The Company subsequently went into arbitration with this carrier, and on January 22, 2013, the Company obtained a binding arbitration award providing that such carrier is obligated to reimburse the Company for defense expenses, settlements, and judgments under certain policies. The Company currently estimates that it is entitled to reimbursement of approximately $13 million for past losses incurred, as well as up to $15 million in potential future coverage for pending products liability matters. On or about August 2, 2010, Breg received a HIPAA subpoena issued by the Department of Justice (“DOJ”). The subpoena seeks documents from the Company and its subsidiaries for the period of January 1, 2000 through the date of the subpoena. The Company believes that document production in response to the subpoena is completed as of July 2012. DOJ has informed the Company that it is investigating possible criminal and civil violations of federal law related to Breg’s sale, marketing and labeling of local infusion pumps for pain management, prior to Breg’s divestiture of this product line in 2008. The Company is currently cooperating with the U.S. Government in connection with this matter. On January 27, 2012, the Company was orally notified by a U.S. Government official that a civil investigation of Breg was pending in connection with this matter. On January 18, 2013, the Company was served with a qui tam complaint filed in the United States District Court for the Western District of Missouri against the Company (as the former owner of Breg), Stryker Corporation, I-Flow Corporation and DJO Incorporated, which contains allegations relating to the marketing and promotion of Breg’s former infusion pump products. The Company is vigorously defending this matter. At the time of its divestiture by the Company, Breg was engaged and had been engaged in the manufacturing and sales of motorized cold therapy units used to reduce pain and swelling. Several domestic product liability cases have been filed in recent years, mostly in California state court, alleging that the use of cold therapy causes skin and/or nerve injury and seeking damages on behalf of individual plaintiffs who were allegedly injured by such units. The majority of these cases are at an early stage and no conclusion can be drawn at the present time regarding their potential outcome. However, the Company believes that meritorious defenses exist to these claims. In July 2012, a jury in one case related to a motorized cold therapy unit previously sold by Breg returned a verdict providing for approximately $2.1 million in compensatory damages to the plaintiff against Breg and $7 million in exemplary damages. The case remains subject to appeal. The Company believes that the damages are without merit; however, the ultimate outcome is uncertain. The Company previously established an accrual of $4.2 million for both compensatory damages and exemplary damages for its indemnification obligations in connection with this July 2012 verdict; however, actual liability in this case could be higher or lower than the amount accrued. </div>

5400000

19431093

<div> 13. Income taxes The Company recognized a $3.3 million and $7.4 million provision for income tax which reflects an effective tax rate of 40.4% and 37.6% on pre-tax income for the three months ended March 31, 2013 and 2012, respectively. Excluding the impact of various discrete charges, the effective tax rate on continuing operations was 37% for the first three months of 2013 and 2012. The principal factors affecting the Company’s effective tax rate was the Company’s mix of earnings among various tax jurisdictions, state taxes and current period losses in certain jurisdictions for which the Company does not currently provide a tax benefit. On January 2, 2013, the American Taxpayer Relief Act of 2012 (“Act”) was enacted. The Act provides tax relief for businesses by reinstating certain tax benefits and credits retroactively to January 1, 2012. There are several provisions of the Act that impact the Company, most notably the extension of the Research and Development credit. Income tax accounting rules require tax law changes to be recognized in the period of enactment; as such, the associated tax benefits of the Act was recognized in the Company’s provision for income taxes in the first quarter of 2013. As of March 31, 2013 and December 31, 2012, the Company’s gross unrecognized tax benefit was $0.7 million and $1.0 million, respectively. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. In March 2013 the Company settled a $0.9 million liability that had been previously accrued as of December 31, 2012. The entire amount of unrecognized tax benefits, including interest, would favorably impact the Company’s effective tax rate if recognized. As of March 31, 2013, the Company does not expect the amount of unrecognized tax benefits to change significantly over the next twelve months. </div>

-0.14

-2792000

<div> 8. Fair value measurements Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Non-financial assets and liabilities of the Company measured at fair value include any long-lived assets or equity method investments that are impaired in a currently reported period. The authoritative guidance also describes three levels of inputs that may be used to measure fair value:   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="4%"> </td> <td valign="top" width="9%" align="left">Level 1 —</td> <td valign="top" align="left">quoted prices in active markets for identical assets and liabilities</td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="4%"> </td> <td valign="top" width="9%" align="left">Level 2 —</td> <td valign="top" align="left">observable inputs other than quoted prices in active markets for identical assets and liabilities</td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td width="4%"> </td> <td valign="top" width="9%" align="left">Level 3 —</td> <td valign="top" align="left">unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions</td> </tr> </table> As of March 31, 2013, the Company’s financial instruments included cash equivalents, restricted cash, accounts receivable, short-term bank borrowings, accounts payable, long-term secured debt, and a cross currency derivative contract. Cash equivalents consist of short-term, highly liquid, income-producing investments, all of which have original maturities of 90 days or less, including money market funds. The carrying value of restricted cash, accounts receivable, short-term bank borrowings and accounts payable approximate fair value due to the short-term maturities of these instruments. The Company’s credit facilities carry a floating rate of interest, and therefore, the carrying value is considered to approximate the fair value. The Company’s cross-currency derivative instrument is the only financial instrument recorded at fair value on a recurring basis. This instrument consists of an over-the-counter contract, which is not traded on a public exchange. The fair value of the swap contract is determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets. Therefore, the Company has categorized the swap contract as a Level 2 derivative financial instrument. The Company also considers counterparty credit risk and its own credit risk in its determination of all estimated fair values. The Company has consistently applied these valuation techniques in all periods presented. The fair value of the Company’s financial assets and liabilities on a recurring basis were as follows:   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr> <td width="70%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Balance March 31, 2013</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 1</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 2</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 3</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Derivative financial instruments </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Cash flow hedges </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cross-currency hedge </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,598</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,598</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td height="16"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Balance December 31, 2012</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 1</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 2</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 3</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Derivative financial instruments </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Cash flow hedges </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cross currency hedge </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">305</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">305</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—</td> </tr> </table> </div>

0.404

-13779000

8228000

<div> 2. Inventories Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess or obsolete items. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first in, first out method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Texas, standard costs, which approximates actual cost, is used to value inventory. Standard costs are reviewed annually by management, or more often in the event circumstances indicate a change in cost has occurred. The valuation of work-in-process, finished products, field inventory and consignment inventory includes the cost of materials, labor and production costs. Field inventory represents immediately saleable finished products inventory that is in the possession of the Company’s direct sales representatives. Consignment inventory represents immediately saleable finished products located at third party customers, such as distributors and hospitals.   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="76%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">March 31, 2013</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">December 31, 2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Raw materials </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">6,354</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">8,470</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Work-in-process </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,401</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,886</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Finished products </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">42,834</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">36,675</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Field inventory </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">29,891</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">29,363</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Consignment inventory </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5,653</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">6,350</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">92,133</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">88,744</td> </tr> </table> </div>

4908000

1943000

15454000

3227000

-1781000

260048

-15000

<div> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="76%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">March 31, 2013</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">December 31, 2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Raw materials </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">6,354</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">8,470</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Work-in-process </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,401</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">7,886</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Finished products </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">42,834</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">36,675</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Field inventory </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">29,891</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">29,363</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Consignment inventory </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">5,653</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">6,350</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">92,133</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">88,744</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> </div>

48839000

-6468000

<div> 7. Derivative instruments The tables below disclose the types of derivative instruments the Company owns, the classifications and fair values of these instruments within the balance sheet, and the amount of gain (loss) recognized in other comprehensive income (loss) or net income (loss).   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="56%"></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) As of March 31, 2013 </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Fair value: favorable (unfavorable)</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Balance sheet location</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cross-currency swap </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,598</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" nowrap="nowrap" align="right">Other long-term assets</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td height="16"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> As of December 31, 2012 </td> <td valign="bottom">  </td> <td valign="bottom" colspan="2">   </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cross-currency swap </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">305</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" nowrap="nowrap" align="right">Other long-term assets</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="84%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2013</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cross-currency swap unrealized gain (loss) recorded in other comprehensive income (loss), net of taxes </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(318</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">509</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> </table> Cross-currency swap On September 30, 2010, the Company entered into a cross-currency swap agreement (the “replacement swap agreement”) with JPMorgan Chase Bank and Royal Bank of Scotland PLC (the “counterparties”) to manage its cash flows related to foreign currency exposure for a portion of the Company’s intercompany receivable of a U.S. dollar functional currency subsidiary that is denominated in Euro. Under the terms of the swap agreement, the Company pays Euros based on a €28.7 million notional value and a fixed rate of 5.00% and receives U.S. dollars based on a notional value of $39 million and a fixed rate of 4.635%. The expiration date is December 30, 2016, the date upon which the underlying intercompany debt, to which the swap agreement applies, matures. The swap agreement is designated as a cash flow hedge and therefore the Company recognized an unrealized gain (loss) on the change in fair value, net of tax, within other comprehensive income (loss). </div>

439000

4024000

345000

563000

4400000

-431000

22699000

896000

0.11

5126000

-5935000

<div> 5. Bank borrowings Borrowings under lines of credit consist of borrowings in Euros used to fund international operations. There were no borrowings under such facilities at March 31, 2013 and $0.1 million at December 31, 2012. The weighted average interest rates on borrowings under the line of credit at December 31, 2012 was 3.70%. The Company had an unused available line of credit of €5.8 million ($7.4 million) and €5.8 million ($7.6 million) at March 31, 2013 and December 31, 2012, respectively, in its Italian line of credit. This line of credit provides the Company the option to borrow amounts in Italy at rates which are determined at the time of borrowing. This line of credit is unsecured. </div>

-744000

2116000

4204000

0.11

<div> The table below presents operating income (loss) by GBU reporting segment:   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="80%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap">Operating Income (Loss) by GBU</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2013</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Spine </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">11,845</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">21,566</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr> <td valign="top"> Orthopedics </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">958</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,979</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Corporate (1) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8,779</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4,114</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,024</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">22,431</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="4%" align="left">(1)</td> <td valign="top" align="left">For the three months ended March 31, 2013, the operating loss for Corporate included $3.6 million of management succession charges.</td> </tr> </table> </div>

2620000

265000

18788000

19691141

<div> 12. Other income (expense) The following table shows the detail of other income (expense):   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="83%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2013</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Gain related to demutualization of a mutual insurance company (1) </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,406</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Transactional foreign currency exchange gains (losses) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">623</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(470</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Other </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(265</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(161</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,764</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(631</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="4%" align="left">(1)</td> <td valign="top" align="left">In the first quarter of 2013, the Company received $4.4 million of cash related to the demutualization of a mutual insurance company, in which the company was an eligible member to share in such proceeds.</td> </tr> </table> </div>

<div> The fair value of the Company’s financial assets and liabilities on a recurring basis were as follows:   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr> <td width="70%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Balance March 31, 2013</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 1</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 2</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 3</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Derivative financial instruments </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Cash flow hedges </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cross-currency hedge </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,598</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,598</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap"> </td> </tr> <tr> <td height="16"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Balance December 31, 2012</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 1</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 2</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Level 3</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Derivative financial instruments </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Cash flow hedges </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cross currency hedge </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">305</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">305</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap"> </td> </tr> </table> </div>

2266000

77555000

-1016000

-8141000

<div> 15. Sale of Breg and Disposition of Sports Medicine GBU On April 23, 2012, the Company’s subsidiary Orthofix Holdings and Breg entered into a stock purchase agreement (the “SPA”) with Breg Acquisition Corp. (“Buyer”), a newly formed affiliate of Water Street Healthcare Partners II, L.P., pursuant to which Buyer agreed to acquire from Orthofix Holdings all the outstanding shares of Breg, subject to the terms and conditions contained therein (the “Transaction”). Under the terms of the SPA, upon closing of the sale, Orthofix Holdings and the Company agreed to indemnify Buyer with respect to certain specified matters, including the government investigation and product liability matters regarding a previously owned infusion pump product line, and pre-closing sales of cold therapy units and certain post-closing sales of cold therapy units. (See “Matters Related to the Company’s former Breg Subsidiary and Possible Indemnification Obligations under Note 16.) On May 24, 2012 (the “Closing Date”), Orthofix Holdings completed the sale of all of the outstanding shares of Breg for $157.5 million in cash. After adjustments for working capital and indebtedness in accordance with the terms of the SPA, Orthofix Holdings used $145 million of the net proceeds to prepay outstanding Company indebtedness, as required by a lender consent received in connection with the Company’s existing Credit Agreement. As a result of the closing of this Transaction, Breg ceased to be a subsidiary of the Company and, therefore, Breg was released as a credit party under the Credit Agreement. The Company also agreed to enter into certain transition arrangements at the closing, including a transition services agreement pursuant to which the Company agreed to continue to provide administrative operational support for a period of up to twelve months. As a result of the sale of Breg, the Company completed its exit from the Sports Medicine GBU, of which Breg was a significant component. The portion of indemnification related to post closing claims related to post-closing sales of cold therapy has created a guarantee under Accounting Standards Codification ASC 460 — Guarantees and the fair value of the liability has been recorded under the initial recognition criteria in the amount of $2 million at the Closing Date of the transaction. The Company will amortize the fair value of the noncontingent liability ratably over the period of indemnification which is three years. The Company’s obligations under this guarantee were approximately $1.4 million and $1.6 million as of March 31, 2013 and December 31, 2012, respectively. Gain on Sale of Discontinued Operations The following table presents the value of the asset disposition, proceeds received, net of various working capital adjustments and indebtedness and net gain on sale of Breg as shown in the condensed consolidated statement of operations for the year ended December 31, 2012.   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="68%" align="center"> <tr> <td width="86%"></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Total</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cash proceeds </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">157,500</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Less: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Working Capital </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(7,093</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Transaction related expenses </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4,276</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Fair Value of Indemnification </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,000</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Tangible assets </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8,309</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Intangible assets </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(28,164</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr> <td valign="top"> Goodwill </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(106,200</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Gain on sale of Breg </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,458</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Income tax expense </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(113</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Gain on sale of Breg, net of taxes </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,345</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> The Sports Medicine GBU contributed $27.1 million of net sales in the three months ended March 31, 2012. The Sports Medicine GBU had $0.4 million of operating loss in the three months ended March 31, 2012. The financial information above includes the financial results of Breg operations up to the date of sale. Included in discontinued operations for the three months ended March 31, 2013 is $4 million of expense related to the Company’s indemnification of certain specified matters described above. The Company’s consolidated financial statements and related footnote disclosures reflect the Sports Medicine GBU as discontinued operations. Income (loss) associated with the Sports Medicine GBU, net of applicable income taxes is shown as income (loss) from discontinued operations for all periods presented in accordance with ASC 205-20 Discontinued Operations. </div>

73531000

<div> The following is a reconciliation of the weighted average shares used in the basic and diluted net income per common share computations.   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="74%"></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="3%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2013</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Weighted average common shares-basic </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,431,093</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">18,675,694</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Effect of dilutive securities: </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Unexercised stock options net of treasury share repurchase </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">260,048</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">440,501</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Weighted average common shares-diluted </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,691,141</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">19,116,195</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> </div>

623000

<div> 4. Goodwill The following table presents the changes in the net carrying value of goodwill:   <table cellspacing="0" cellpadding="0" width="68%" border="0" style="BORDER-COLLAPSE:COLLAPSE" align="center"> <tr> <td width="88%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">Total</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> At December 31, 2012 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">74,388</td> <td nowrap="nowrap" valign="bottom">  </td> </tr> <tr> <td valign="top"> Foreign currency </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1,781</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr style="font-size:1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> At March 31, 2013 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">72,607</td> <td nowrap="nowrap" valign="bottom">  </td> </tr> <tr style="font-size:1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> </div>

3320000

<div> 11. Share-based compensation All share-based compensation costs are measured at the grant date, based on the estimated fair value of the award, and are recognized as expense in the condensed consolidated statements of operations over the requisite service period. The following table shows the detail of share-based compensation by line item in the condensed consolidated statements of operations:   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="82%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2013</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cost of sales </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">287</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">176</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Sales and marketing </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">436</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">445</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> General and administrative </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,175</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">770</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Research and development </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">45</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">42</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,943</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,433</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> For the three months ended March 31, 2013 and 2012, there were no performance requirements for share-based compensation awarded to employees. In March 2013, the Company granted options to its newly-appointed Chief Executive Officer, which vesting is based on achieving certain market prices for the Company’s common stock. During the three months ended March 31, 2013 and 2012, there were 113,965 and 262,713 shares, respectively, of common stock issued related to stock purchase plan issuances, stock option exercises and the vesting of restricted stock awards. </div>

6029000

100254000

<div> 16. Contingencies The Company is a party to certain outstanding legal proceedings, investigations and claims. These matters are described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Material recent developments regarding such matters are described below. The Company believes that it is unlikely that the outcome of any or all of these matters will have a material adverse effect on the Company and its subsidiaries as a whole, notwithstanding that the unfavorable resolution of any matter may have a material effect on the Company’s net earnings (if any) in any particular quarter. However, the Company cannot predict with any certainty the final outcome of any legal proceedings, investigations or claims made against it or its subsidiaries described in the paragraphs below, and there can be no assurance that the ultimate resolution of any such matter will not have a material adverse impact on the Company’s consolidated financial position, results of operations, or cash flows. The Company records accruals for certain of its outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal proceedings, investigations and claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable. When a loss contingency is not both probable and reasonably estimable, the Company does not accrue the loss. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses a reasonable estimate of the possible loss or range of loss, if such reasonable estimate can be made. If the Company cannot make a reasonable estimate of the possible loss, or range of loss, then that is disclosed. The assessments of whether a loss is probable or a reasonable possibility, and whether the loss or range of loss is reasonably estimable, often involve a series of complex judgments about future events. Among the factors that the Company considers in this assessment are the nature of existing legal proceedings, investigations and claims, the asserted or possible damages or loss contingency (if reasonably estimable), the progress of the matter, existing law and precedent, the opinions or views of legal counsel and other advisers, the involvement of the U.S. Government and its agencies in such proceedings, the Company’s experience in similar matters and the experience of other companies, the facts available to the Company at the time of assessment, and how the Company intends to respond, or has responded, to the proceeding, investigation or claim. The Company’s assessment of these factors may change over time as individual proceedings, investigations or claims progress. For matters where the Company is not currently able to reasonably estimate a range of reasonably possible loss, the factors that have contributed to this determination include the following: (i) the damages sought are indeterminate, or an investigation has not manifested itself in a filed civil or criminal complaint, (ii) the matters are in the early stages, (iii) the matters involve novel or unsettled legal theories or a large or uncertain number of actual or potential cases or parties, and/or (iv) discussions with the government or other parties in matters that may be expected ultimately to be resolved through negotiation and settlement have not reached the point where the Company believes a reasonable estimate of loss, or range of loss, can be made. In such instances, the Company believes that there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss, fine, penalty or business impact, if any. In addition to the matters specifically identified in the paragraphs below, in the normal course of our business, the Company is involved in various lawsuits from time to time and may be subject to certain other contingencies. To the extent losses related to these contingencies are both probable and reasonably estimable, the Company accrues appropriate amounts in the accompanying financial statements and provides disclosures as to the possible range of loss in excess of the amount accrued, if such range is reasonably estimable. The Company believes losses are individually and collectively immaterial as to a possible loss and range of loss. </div>

<div> 14. Business segment information The Company’s segment information (as provided below) has been prepared based on the Company’s two global business units (“GBU”) reporting segments, Spine and Orthopedics. The accounting policies of the segments are the same as those described in the business segment information found in Note 12 to the Consolidated Financial Statements included in our Annual Report on Form 10-K, as amended, for the year ended December 31, 2012. The table below presents external net sales by GBU reporting segment. Net sales include product sales and marketing service fees. Marketing service fees, which are recorded on a net basis, are comprised of sales of Trinity Evolution ® in spine and orthopedic applications.   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr> <td width="66%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="14" align="center">External Net Sales by GBU</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="14" align="center">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2013</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2012</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Reported Decline</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Constant Currency Decline</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Spine </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Spine Repair Implants and Regenerative Biologics </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">34,297</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">35,757</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4</td> <td valign="bottom" nowrap="nowrap">)%</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4</td> <td valign="bottom" nowrap="nowrap">)% </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Spine Regenerative Stimulation </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">32,029</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">39,271</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(18</td> <td valign="bottom" nowrap="nowrap">)%</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(18</td> <td valign="bottom" nowrap="nowrap">)%</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total Spine </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">66,326</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">75,028</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(12</td> <td valign="bottom" nowrap="nowrap">)%</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(12</td> <td valign="bottom" nowrap="nowrap">)%</td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Orthopedics </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">33,928</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">41,014</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(17</td> <td valign="bottom" nowrap="nowrap">)%</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(16</td> <td valign="bottom" nowrap="nowrap">)%</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total Net Sales </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">100,254</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">116,042</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(14</td> <td valign="bottom" nowrap="nowrap">)%</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(13</td> <td valign="bottom" nowrap="nowrap">)%</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> The table below presents operating income (loss) by GBU reporting segment:   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="80%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap">Operating Income (Loss) by GBU</td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2013</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Spine </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">11,845</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">21,566</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr> <td valign="top"> Orthopedics </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">958</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">4,979</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Corporate (1) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(8,779</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4,114</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,024</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">22,431</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="4%" align="left">(1)</td> <td valign="top" align="left">For the three months ended March 31, 2013, the operating loss for Corporate included $3.6 million of management succession charges.</td> </tr> </table> </div>

<div> The tables below disclose the types of derivative instruments the Company owns, the classifications and fair values of these instruments within the balance sheet, and the amount of gain (loss) recognized in other comprehensive income (loss) or net income (loss).   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="56%"></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) As of March 31, 2013 </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Fair value: favorable (unfavorable)</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Balance sheet location</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cross-currency swap </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,598</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" nowrap="nowrap" align="right">Other long-term assets</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td height="16"></td> <td height="16" colspan="4"></td> <td height="16" colspan="4"></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> As of December 31, 2012 </td> <td valign="bottom">  </td> <td valign="bottom" colspan="2">   </td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="2"> </td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cross-currency swap </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">305</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom" nowrap="nowrap" align="right">Other long-term assets</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> </table> </div>

78000

<div> 1. Summary of significant accounting policies (a) Basis of presentation The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S., have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The balance sheet at December 31, 2012 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements. For further information, refer to the Consolidated Financial Statements and Notes thereto of the Company’s Annual Report on Form 10-K, for the fiscal year ended December 31, 2012. The notes to the unaudited condensed consolidated financial statements are presented on a continuing operations basis unless otherwise noted. (b) Reclassifications The Company has reclassified certain line items to conform to the current year presentation. The reclassifications have no effect on previously reported net earnings or shareholders’ equity. (c) Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates including those related to the resolution of U.S. government matters, contractual allowances, doubtful accounts, inventories, taxes, shared-based compensation, and potential goodwill and intangible asset impairment. Actual results could differ from these estimates. (d) Foreign Currency Translation The financial statements for operations outside the United States are generally maintained in their local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. dollars at year end exchange rates and revenue and expense items are translated at weighted average rates of exchange prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income component of shareholders’ equity. </div>

0.25

504000

1943000

<div> (d) Foreign Currency Translation The financial statements for operations outside the United States are generally maintained in their local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. dollars at year end exchange rates and revenue and expense items are translated at weighted average rates of exchange prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income component of shareholders’ equity. </div>

<div> The following table shows the detail of share-based compensation by line item in the condensed consolidated statements of operations:   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="82%"></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="4%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2013</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cost of sales </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">287</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">176</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Sales and marketing </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">436</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">445</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> General and administrative </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">1,175</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">770</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Research and development </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">45</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">42</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,943</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">1,433</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> </div>

<div> (c) Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates including those related to the resolution of U.S. government matters, contractual allowances, doubtful accounts, inventories, taxes, shared-based compensation, and potential goodwill and intangible asset impairment. Actual results could differ from these estimates. </div>

4478000

-4432000

<div> <table cellspacing="0" cellpadding="0" width="76%" border="0" style="BORDER-COLLAPSE:COLLAPSE" align="center"> <tr> <td width="84%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td valign="bottom" colspan="6" align="center" style="border-bottom:1px solid #000000">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">2013</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cross-currency swap unrealized gain (loss) recorded in other comprehensive income (loss), net of taxes </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(318</td> <td nowrap="nowrap" valign="bottom">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">509</td> <td nowrap="nowrap" valign="bottom">  </td> </tr> </table> </div>

<div> 6. Long-term debt On August 30, 2010, the Company’s wholly-owned U.S. holding company, Orthofix Holdings, Inc. (“Orthofix Holdings”) entered into a Credit Agreement (the “Credit Agreement”) with certain domestic direct and indirect subsidiaries of the Company (the “Guarantors”), JPMorgan Chase Bank, N.A., as Administrative Agent, RBS Citizens, N.A., as Syndication Agent, and certain lender parties thereto. The Credit Agreement provides for a five year, $200.0 million secured revolving credit facility (the “Revolving Credit Facility”), and a five year, $100.0 million secured term loan facility (the “Term Loan Facility”, and together with the Revolving Credit Facility, the “Credit Facilities”). Orthofix Holdings has the ability to increase the amount of the Credit Facilities by an aggregate amount of up to $50.0 million upon satisfaction of certain conditions. In May 2012, the Company used a portion of the proceeds from the sale of Breg, Inc. (“Breg”) (see Note 15) to repay in full the remaining $87.5 million balance on the Term Loan Facility and pay down $57.5 million of amounts outstanding under the Revolving Credit Facility. This use of proceeds was required by the lenders’ consent dated April 23, 2012 to the Credit Agreement. As a result of the sale of Breg, Breg ceased to be a subsidiary of the Company and, therefore, Breg was released as a credit party under the Credit Agreement. Additionally, the Company paid $20 million in June 2012 and $20 million in September 2012 to reduce amounts outstanding under the Revolving Credit Facility. As a result, at December 31, 2012, the Term Loan Facility had been repaid in full and there was $20 million outstanding under the Revolving Credit Facility as of March 31, 2013 and December 31, 2012. Borrowings under the Credit Facilities bear interest at a floating rate, which is, at Orthofix Holdings’ option, either the London Inter-Bank Offered Rate (“LIBOR”) plus an applicable margin or a base rate (as defined in the Credit Agreement) plus an applicable margin (in each case subject to adjustment based on financial ratios). Such applicable margin will be up to 3.25% for LIBOR borrowings and up to 2.25% for base rate borrowings depending upon a measurement of the consolidated leverage ratio with respect to the immediately preceding four fiscal quarters. As of March 31, 2013 and December 31, 2012, the entire Revolving Credit Facility was at the LIBOR rate plus a margin of 2.50%. The effective interest rate on the Credit Facilities as of March 31, 2013 and December 31, 2012 was 2.7%. Outstanding balances on the Revolving Credit Facility are due on August 30, 2015. Borrowings under the Revolving Credit Facility, which may be made in the future, will be used for working capital, capital expenditures and other general corporate purposes of Orthofix Holdings and its subsidiaries. The Guarantors have guaranteed repayment of Orthofix Holdings’ obligations under the Credit Agreement. The obligations of Orthofix Holdings and each of the Guarantors with respect to the Credit Facilities are secured by a pledge of substantially all of the assets of Orthofix Holdings and each of the Guarantors. The Credit Agreement, as amended, requires Orthofix Holdings and the Company to comply with coverage ratios on a consolidated basis and contains affirmative and negative covenants, including limitations on additional debt, liens, investments and acquisitions. The Credit Agreement, as amended, also includes events of default customary for facilities of this type. Upon the occurrence of an event of default, all outstanding loans may be accelerated and/or the lenders’ commitments terminated. The Company was in compliance with the affirmative and negative covenants at March 31, 2013 and there were no events of default. Certain subsidiaries of the Company have restrictions on their ability to pay dividends or make intercompany loan advances pursuant to the Company’s Credit Facilities. The net assets of Orthofix Holdings and its subsidiaries are restricted for distributions to the parent company. Domestic subsidiaries of the Company, as parties to the credit agreement, have access to these net assets for operational purposes.   The amount of restricted net assets of Orthofix Holdings and its subsidiaries as of March 31, 2013 and December 31, 2012 is $256 million and $247.4 million, respectively. In addition, the Credit Agreement restricts the Company and subsidiaries that are not parties to the Credit Facilities from access to cash held by Orthofix Holdings, Inc. and its subsidiaries. All of the Company’s subsidiaries that are parties to the Credit Agreement have access to this cash for operational and debt repayment purposes. The amount of restricted cash of the Company as of March 31, 2013 and December 31, 2012 was $29.4 million and $21.3 million, respectively. In conjunction with obtaining the Credit Facilities and the Credit Agreement, as amended, the Company incurred debt issuance costs of $5 million. These costs are being amortized using the effective interest method over the life of the Credit Facilities. In conjunction with the Term Loan Facility repayment in May 2012, the Company wrote off $0.8 million of related debt issuance costs. As of March 31, 2013 and December 31, 2012, debt issuance costs, net of accumulated amortization, related to the Credit Agreement were $1.6 million and $1.8 million, respectively. </div>

<div> The components of and changes in accumulated other comprehensive income were as follows:   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="84%" align="center"> <tr> <td width="62%"></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Foreign Currency Translation Adjustments</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" nowrap="nowrap" align="center">Fair Value of Cross-Currency Swap</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Accumulated Other Comprehensive Income</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Balance at December 31, 2012 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,373</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">131</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,504</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Unrealized gain on cross-currency swap, net of tax of $187 </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(318</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(318</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Foreign currency translation adjustment (1) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,814</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,814</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Balance at March 31, 2013 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(441</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(187</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(628</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="4%" align="left">(1)</td> <td valign="top" align="left">As the cash generally remains permanently invested in the non-U.S. dollar denominated foreign subsidiaries, no deferred taxes are recognized on the related foreign currency translation adjustment.</td> </tr> </table> </div>

560000

-7242000

2143000

-743000

<div> (a) Basis of presentation The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S., have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The balance sheet at December 31, 2012 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements. For further information, refer to the Consolidated Financial Statements and Notes thereto of the Company’s Annual Report on Form 10-K, for the fiscal year ended December 31, 2012. The notes to the unaudited condensed consolidated financial statements are presented on a continuing operations basis unless otherwise noted. </div>

<div> The following table presents the changes in the net carrying value of goodwill:   <table cellspacing="0" cellpadding="0" width="68%" border="0" style="BORDER-COLLAPSE:COLLAPSE" align="center"> <tr> <td width="88%"></td> <td valign="bottom" width="6%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td valign="bottom" colspan="2" align="center" style="border-bottom:1px solid #000000">Total</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> At December 31, 2012 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">74,388</td> <td nowrap="nowrap" valign="bottom">  </td> </tr> <tr> <td valign="top"> Foreign currency </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(1,781</td> <td nowrap="nowrap" valign="bottom">) </td> </tr> <tr style="font-size:1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> At March 31, 2013 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">72,607</td> <td nowrap="nowrap" valign="bottom">  </td> </tr> <tr style="font-size:1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> </div>

<div> 9. Comprehensive income (loss) Accumulated other comprehensive income is comprised of foreign currency translation adjustments and the effective portion of the gain (loss) on the Company’s cross-currency swap, which is designated and accounted for as a cash flow hedge. The components of and changes in accumulated other comprehensive income were as follows:   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="84%" align="center"> <tr> <td width="62%"></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="9%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Foreign Currency Translation Adjustments</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" nowrap="nowrap" align="center">Fair Value of Cross-Currency Swap</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Accumulated Other Comprehensive Income</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Balance at December 31, 2012 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,373</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">131</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">2,504</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Unrealized gain on cross-currency swap, net of tax of $187 </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(318</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(318</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Foreign currency translation adjustment (1) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,814</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap"> </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(2,814</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Balance at March 31, 2013 </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(441</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(187</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(628</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="4%" align="left">(1)</td> <td valign="top" align="left">As the cash generally remains permanently invested in the non-U.S. dollar denominated foreign subsidiaries, no deferred taxes are recognized on the related foreign currency translation adjustment.</td> </tr> </table> </div>

-1640000

0.25

78000

180000

179000 11896000 <div> <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="76%"></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="7%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">March 31, 2013</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">December 31, 2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Cost </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Patents </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">37,992</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">37,695</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Trademarks — definite lived </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">679</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">657</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">38,671</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">38,352</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Accumulated amortization </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Patents </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(31,452</td> <td valign="bottom" nowrap="nowrap">)</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(31,045</td> <td valign="bottom" nowrap="nowrap">)</td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Trademarks — definite lived </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(454</td> <td valign="bottom" nowrap="nowrap">)</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(427</td> <td valign="bottom" nowrap="nowrap">)</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"></td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(31,906</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(31,472</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Patents and other intangible assets, net </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">6,765</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">6,880</td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> </div> <div> The following table shows the detail of other income (expense):   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="76%" align="center"> <tr> <td width="83%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="6" align="center">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2013</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2012</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Gain related to demutualization of a mutual insurance company (1) </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,406</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">—  </td> <td valign="bottom" nowrap="nowrap">  </td> </tr> <tr> <td valign="top"> Transactional foreign currency exchange gains (losses) </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">623</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(470</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Other </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(265</td> <td valign="bottom" nowrap="nowrap">) </td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(161</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">4,764</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom"> </td> <td valign="bottom">$</td> <td valign="bottom" align="right">(631</td> <td valign="bottom" nowrap="nowrap">) </td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table>   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="100%"> <tr> <td valign="top" width="4%" align="left">(1)</td> <td valign="top" align="left">In the first quarter of 2013, the Company received $4.4 million of cash related to the demutualization of a mutual insurance company, in which the company was an eligible member to share in such proceeds.</td> </tr> </table> </div> 88358000 113965 0.37 2 0.13 0.14 <div> The table below presents external net sales by GBU reporting segment. Net sales include product sales and marketing service fees. Marketing service fees, which are recorded on a net basis, are comprised of sales of Trinity Evolution ® in spine and orthopedic applications.   <table style="BORDER-COLLAPSE: collapse" border="0" cellspacing="0" cellpadding="0" width="92%" align="center"> <tr> <td width="66%"></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> <td valign="bottom" width="5%"></td> <td></td> <td></td> <td></td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="14" align="center">External Net Sales by GBU</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="14" align="center">Three Months Ended March 31,</td> <td valign="bottom"> </td> </tr> <tr> <td valign="bottom" nowrap="nowrap"> (US$ in thousands) </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2013</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">2012</td> <td valign="bottom"> </td> <td valign="bottom">  </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Reported Decline</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td style="BORDER-BOTTOM: #000000 1px solid" valign="bottom" colspan="2" align="center">Constant Currency Decline</td> <td valign="bottom"> </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Spine </td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"> </td> <td valign="bottom"></td> <td valign="bottom"></td> <td valign="bottom"></td> </tr> <tr> <td valign="top"> Spine Repair Implants and Regenerative Biologics </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">34,297</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">35,757</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4</td> <td valign="bottom" nowrap="nowrap">)%</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(4</td> <td valign="bottom" nowrap="nowrap">)% </td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Spine Regenerative Stimulation </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">32,029</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">39,271</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(18</td> <td valign="bottom" nowrap="nowrap">)%</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(18</td> <td valign="bottom" nowrap="nowrap">)%</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total Spine </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">66,326</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">75,028</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(12</td> <td valign="bottom" nowrap="nowrap">)%</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(12</td> <td valign="bottom" nowrap="nowrap">)%</td> </tr> <tr> <td height="8"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> <td height="8" colspan="4"></td> </tr> <tr bgcolor="#CCEEFF"> <td valign="top"> Orthopedics </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">33,928</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">41,014</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(17</td> <td valign="bottom" nowrap="nowrap">)%</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(16</td> <td valign="bottom" nowrap="nowrap">)%</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> <tr> <td valign="top"> Total Net Sales </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">100,254</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom">$</td> <td valign="bottom" align="right">116,042</td> <td valign="bottom" nowrap="nowrap">  </td> <td valign="bottom">  </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(14</td> <td valign="bottom" nowrap="nowrap">)%</td> <td valign="bottom"> </td> <td valign="bottom"> </td> <td valign="bottom" align="right">(13</td> <td valign="bottom" nowrap="nowrap">)%</td> </tr> <tr style="FONT-SIZE: 1px"> <td valign="bottom"></td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom">  </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> <td valign="bottom"> </td> <td valign="bottom">   </td> <td valign="bottom">   </td> <td> </td> </tr> </table> </div> 4406000 P3Y 1400000

-318000

LIBOR

P90D 15000000 13000000

1175000

436000

287000

45000

-318000

-2814000

187000

-318000

-2814000

-8779000

3600000

66326000

0.12 0.12

34297000

0.04 0.04

958000

33928000

0.16 0.17

11845000

32029000

0.18 0.18

2015-08-30

5000000

973037

2016-12-30

-631000

5667000

-0.01

7050000

18675694

-0.01

-200000

0.376

11943000

19579000

12216000

1480000

49114000

3154000

440501

69000

49521000

-6523000

151000

22431000

-1117000

1013000

324000

21940000

41537000

649000

0.64

-732000

-29069000

-828000

12016000

-2852000

0.63

13846000

161000

14570000

19116195

1405000

94102000

14726000

-32271000

71671000

-470000

7363000

6372000

116042000

242000

0.64

530000

1433000

-4787000

-506000

3750000

2221000

-3103000

6641000

-2798000

-306000

0.65

242000

296000

-6559000 11222000 104820000 262713 0.37

27100000

4000000

509000

770000

445000

176000

42000

-4114000

75028000

35757000

4979000

41014000

21566000

39271000

714686

0000884624 us-gaap:StockCompensationPlanMember 2012-01-01 2012-03-31 0000884624 ofix:StimulationProductsMember 2012-01-01 2012-03-31 0000884624 ofix:SpineReportingSegmentMember 2012-01-01 2012-03-31 0000884624 ofix:OrthopedicsReportingSegmentMember 2012-01-01 2012-03-31 0000884624 ofix:ImplantsAndBiologicsProductsMember 2012-01-01 2012-03-31 0000884624 ofix:SpineMember 2012-01-01 2012-03-31 0000884624 us-gaap:UnallocatedAmountToSegmentMember 2012-01-01 2012-03-31 0000884624 us-gaap:ResearchAndDevelopmentExpenseMember 2012-01-01 2012-03-31 0000884624 us-gaap:CostOfSalesMember 2012-01-01 2012-03-31 0000884624 us-gaap:SellingAndMarketingExpenseMember 2012-01-01 2012-03-31 0000884624 us-gaap:GeneralAndAdministrativeExpenseMember 2012-01-01 2012-03-31 0000884624 us-gaap:CrossCurrencyInterestRateContractMember 2012-01-01 2012-03-31 0000884624 ofix:SportsMedicineReportingSegmentMember 2012-01-01 2012-03-31 0000884624 2012-01-01 2012-03-31 0000884624 us-gaap:SwapMember 2013-01-01 2013-03-31 0000884624 us-gaap:StockCompensationPlanMember 2013-01-01 2013-03-31 0000884624 ofix:TermLoanFacilityMember 2013-01-01 2013-03-31 0000884624 us-gaap:RevolvingCreditFacilityMember 2013-01-01 2013-03-31 0000884624 ofix:StimulationProductsMember 2013-01-01 2013-03-31 0000884624 ofix:SpineReportingSegmentMember 2013-01-01 2013-03-31 0000884624 ofix:OrthopedicsReportingSegmentMember 2013-01-01 2013-03-31 0000884624 ofix:ImplantsAndBiologicsProductsMember 2013-01-01 2013-03-31 0000884624 ofix:SpineMember 2013-01-01 2013-03-31 0000884624 us-gaap:UnallocatedAmountToSegmentMember 2013-01-01 2013-03-31 0000884624 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2013-01-01 2013-03-31 0000884624 us-gaap:AccumulatedTranslationAdjustmentMember 2013-01-01 2013-03-31 0000884624 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2013-01-01 2013-03-31 0000884624 us-gaap:ResearchAndDevelopmentExpenseMember 2013-01-01 2013-03-31 0000884624 us-gaap:CostOfSalesMember 2013-01-01 2013-03-31 0000884624 us-gaap:SellingAndMarketingExpenseMember 2013-01-01 2013-03-31 0000884624 us-gaap:GeneralAndAdministrativeExpenseMember 2013-01-01 2013-03-31 0000884624 ofix:PastDueMember 2013-01-01 2013-03-31 0000884624 us-gaap:LiabilityMember 2013-01-01 2013-03-31 0000884624 us-gaap:MaximumMember 2013-01-01 2013-03-31 0000884624 ofix:DebtInstrumentVariableRateBaseMemberofix:TermLoanFacilityMemberus-gaap:MaximumMember 2013-01-01 2013-03-31 0000884624 us-gaap:CrossCurrencyInterestRateContractMember 2013-01-01 2013-03-31 0000884624 us-gaap:SubsidiariesMemberofix:BregHoldingsLlcMember 2013-01-01 2013-03-31 0000884624 2013-01-01 2013-03-31 0000884624 us-gaap:SubsequentEventMember 2013-05-03 2013-05-08 0000884624 ofix:BregHoldingsLlcMember 2012-01-01 2012-12-31 0000884624 us-gaap:SubsidiariesMemberofix:BregHoldingsLlcMember 2012-01-01 2012-12-31 0000884624 ofix:TermLoanFacilityMember 2010-08-01 2010-08-31 0000884624 us-gaap:RevolvingCreditFacilityMember 2010-08-01 2010-08-31 0000884624 ofix:TermLoanFacilityMember 2012-05-01 2012-05-31 0000884624 us-gaap:RevolvingCreditFacilityMember 2012-05-01 2012-05-31 0000884624 ofix:LitigationRelatedToBregIncMember 2012-07-01 2012-07-31 0000884624 us-gaap:RevolvingCreditFacilityMember 2012-09-01 2012-09-30 0000884624 us-gaap:RevolvingCreditFacilityMember 2012-06-01 2012-06-30 0000884624 ofix:LitigationRelatedToBregIncMember 2012-04-25 2012-05-24 0000884624 us-gaap:SubsidiariesMemberofix:BregHoldingsLlcMember 2012-04-25 2012-05-24 0000884624 us-gaap:FairValueMeasurementsRecurringMember 2012-12-31 0000884624 ofix:TrademarksDefiniteLivedMember 2012-12-31 0000884624 us-gaap:PatentsMember 2012-12-31 0000884624 ofix:TermLoanFacilityMember 2012-12-31 0000884624 us-gaap:RevolvingCreditFacilityMember 2012-12-31 0000884624 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2012-12-31 0000884624 us-gaap:AccumulatedTranslationAdjustmentMember 2012-12-31 0000884624 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2012-12-31 0000884624 ofix:DebtInstrumentVariableRateBaseLiborMemberofix:PreviouslyExistingCreditAgreementMember 2012-12-31 0000884624 ofix:DebtInstrumentVariableRateBaseLiborMemberus-gaap:RevolvingCreditFacilityMember 2012-12-31 0000884624 us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember 2012-12-31 0000884624 us-gaap:OtherAssetsMemberus-gaap:CrossCurrencyInterestRateContractMember 2012-12-31 0000884624 ofix:BregHoldingsLlcMember 2012-12-31 0000884624 2012-12-31 0000884624 2011-12-31 0000884624 us-gaap:FairValueMeasurementsRecurringMember 2013-03-31 0000884624 ofix:TrademarksDefiniteLivedMember 2013-03-31 0000884624 us-gaap:PatentsMember 2013-03-31 0000884624 ofix:TermLoanFacilityMember 2013-03-31 0000884624 us-gaap:RevolvingCreditFacilityMember 2013-03-31 0000884624 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2013-03-31 0000884624 us-gaap:AccumulatedTranslationAdjustmentMember 2013-03-31 0000884624 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2013-03-31 0000884624 ofix:DebtInstrumentVariableRateBaseMemberus-gaap:LineOfCreditMemberus-gaap:MaximumMember 2013-03-31 0000884624 ofix:DebtInstrumentVariableRateBaseLiborMemberofix:PreviouslyExistingCreditAgreementMember 2013-03-31 0000884624 ofix:DebtInstrumentVariableRateBaseLiborMemberus-gaap:RevolvingCreditFacilityMember 2013-03-31 0000884624 ofix:DebtInstrumentVariableRateBaseLiborMemberus-gaap:LineOfCreditMemberus-gaap:MaximumMember 2013-03-31 0000884624 us-gaap:FairValueInputsLevel2Memberus-gaap:FairValueMeasurementsRecurringMember 2013-03-31 0000884624 us-gaap:OtherAssetsMemberus-gaap:CrossCurrencyInterestRateContractMember 2013-03-31 0000884624 2013-03-31 0000884624 2012-03-31 0000884624 ofix:UsDollarMemberus-gaap:CrossCurrencyInterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember 2010-09-30 0000884624 ofix:EuroMemberus-gaap:CrossCurrencyInterestRateContractMemberus-gaap:DesignatedAsHedgingInstrumentMember 2010-09-30 0000884624 us-gaap:LineOfCreditMember 2010-08-31 0000884624 2013-05-02 0000884624 2012-07-31 0000884624 us-gaap:SubsidiariesMemberofix:BregHoldingsLlcMember 2012-05-24 0000884624 us-gaap:RevolvingCreditFacilityMember 2010-08-30 iso4217:USD shares iso4217:EUR pure iso4217:USD shares ofix:Segment

EX-101.SCH 7 ofix-20130331.xsd XBRL TAXONOMY EXTENSION SCHEMA 101 - Document - Document and Entity Information link:calculationLink link:presentationLink link:definitionLink 103 - Statement - Condensed Consolidated Balance Sheets link:calculationLink link:presentationLink link:definitionLink 104 - Statement - Condensed Consolidated Balance Sheets (Parenthetical) link:calculationLink link:presentationLink link:definitionLink 105 - Statement - Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) link:calculationLink link:presentationLink link:definitionLink 106 - Statement - Condensed Consolidated Statements of Cash Flows link:calculationLink link:presentationLink link:definitionLink 107 - Disclosure - Summary of significant accounting policies link:calculationLink link:presentationLink link:definitionLink 108 - Disclosure - Inventories link:calculationLink link:presentationLink link:definitionLink 109 - Disclosure - Patents and other intangible assets link:calculationLink link:presentationLink link:definitionLink 110 - Disclosure - Goodwill link:calculationLink link:presentationLink link:definitionLink 111 - Disclosure - Bank borrowings link:calculationLink link:presentationLink link:definitionLink 112 - Disclosure - Long-term debt link:calculationLink link:presentationLink link:definitionLink 113 - Disclosure - Derivative instruments link:calculationLink link:presentationLink link:definitionLink 114 - Disclosure - Fair value measurements link:calculationLink link:presentationLink link:definitionLink 115 - Disclosure - Comprehensive income (loss) link:calculationLink link:presentationLink link:definitionLink 116 - Disclosure - Earnings per share link:calculationLink link:presentationLink link:definitionLink 117 - Disclosure - Share-based compensation link:calculationLink link:presentationLink link:definitionLink 118 - Disclosure - Other income (expense) link:calculationLink link:presentationLink link:definitionLink 119 - Disclosure - Income taxes link:calculationLink link:presentationLink link:definitionLink 120 - Disclosure - Business segment information link:calculationLink link:presentationLink link:definitionLink 121 - Disclosure - Sale of Breg and Disposition of Sports Medicine GBU link:calculationLink link:presentationLink link:definitionLink 122 - Disclosure - Contingencies link:calculationLink link:presentationLink link:definitionLink 123 - Disclosure - Subsequent Event link:calculationLink link:presentationLink link:definitionLink 124 - Disclosure - Summary of significant accounting policies (Policies) link:calculationLink link:presentationLink link:definitionLink 125 - Disclosure - Inventories (Tables) link:calculationLink link:presentationLink link:definitionLink 126 - Disclosure - Patents and other intangible assets (Tables) link:calculationLink link:presentationLink link:definitionLink 127 - Disclosure - Goodwill (Tables) link:calculationLink link:presentationLink link:definitionLink 128 - Disclosure - Derivative instruments (Tables) link:calculationLink link:presentationLink link:definitionLink 129 - Disclosure - Fair value measurements (Tables) link:calculationLink link:presentationLink link:definitionLink 130 - Disclosure - Comprehensive income (loss) (Tables) link:calculationLink link:presentationLink link:definitionLink 131 - Disclosure - Earnings per share (Tables) link:calculationLink link:presentationLink link:definitionLink 132 - Disclosure - Share-based compensation (Tables) link:calculationLink link:presentationLink link:definitionLink 133 - Disclosure - Other income (expense) (Tables) link:calculationLink link:presentationLink link:definitionLink 134 - Disclosure - Business segment information (Tables) link:calculationLink link:presentationLink link:definitionLink 135 - Disclosure - Sale of Breg and Disposition of Sports Medicine GBU (Tables) link:calculationLink link:presentationLink link:definitionLink 136 - Disclosure - Inventories - Schedule of Inventories (Detail) link:calculationLink link:presentationLink link:definitionLink 137 - Disclosure - Patents and other intangible assets - Schedule of Patents and Other Intangibles Assets (Detail) link:calculationLink link:presentationLink link:definitionLink 138 - Disclosure - Goodwill - Schedule of Changes in Net Carrying Amount of Goodwill (Detail) link:calculationLink link:presentationLink link:definitionLink 139 - Disclosure - Bank borrowings - Additional Information (Detail) link:calculationLink link:presentationLink link:definitionLink 140 - Disclosure - Long-term debt - Additional Information (Detail) link:calculationLink link:presentationLink link:definitionLink 141 - Disclosure - Derivative instruments - Schedule of Fair Values of Derivative Instruments (Detail) link:calculationLink link:presentationLink link:definitionLink 142 - Disclosure - Derivative instruments - Schedule of Gain (Loss) Recognized on Derivative Instruments (Detail) link:calculationLink link:presentationLink link:definitionLink 143 - Disclosure - Derivative instruments - Additional Information (Detail) link:calculationLink link:presentationLink link:definitionLink 144 - Disclosure - Fair Value Measurements - Additional Information (Detail) link:calculationLink link:presentationLink link:definitionLink 145 - Disclosure - Fair value measurements - Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis (Detail) link:calculationLink link:presentationLink link:definitionLink 146 - Disclosure - Comprehensive income (loss) - Schedule of Comprehensive Income (Loss) (Detail) link:calculationLink link:presentationLink link:definitionLink 147 - Disclosure - Comprehensive income (loss) - Schedule of Comprehensive Income (Loss) (Parenthetical) (Detail) link:calculationLink link:presentationLink link:definitionLink 148 - Disclosure - Earnings per share - Schedule of Reconciliation of Weighted Average Shares Used in Calculation of Basic and Diluted Earnings Per Share (Detail) link:calculationLink link:presentationLink link:definitionLink 149 - Disclosure - Earnings per share - Additional Information (Detail) link:calculationLink link:presentationLink link:definitionLink 150 - Disclosure - Share-based compensation - Schedule of Share-Based Compensation by Line Item in Consolidated Statements of Operations (Detail) link:calculationLink link:presentationLink link:definitionLink 151 - Disclosure - Share based compensation - Additional Information (Detail) link:calculationLink link:presentationLink link:definitionLink 152 - Disclosure - Other Income (Expense) - Summary of Other Income (Expenses) (Detail) link:calculationLink link:presentationLink link:definitionLink 153 - Disclosure - Other Income (Expense) - Summary of Other Income (Expenses) (Parenthetical) (Detail) link:calculationLink link:presentationLink link:definitionLink 154 - Disclosure - Income taxes - Additional Information (Detail) link:calculationLink link:presentationLink link:definitionLink 155 - Disclosure - Business Segment Information - Additional Information (Detail) link:calculationLink link:presentationLink link:definitionLink 156 - Disclosure - Business segment information - Schedule of External Net Sales by GBU Reporting Segment (Detail) link:calculationLink link:presentationLink link:definitionLink 157 - Disclosure - Business segment information - Operating Income (Loss) by GBU (Detail) link:calculationLink link:presentationLink link:definitionLink 158 - Disclosure - Business segment information - Operating Income (Loss) by GBU (Parenthetical) (Detail) link:calculationLink link:presentationLink link:definitionLink 159 - Disclosure - Sale of Breg and Disposition of Sports Medicine GBU - Additional Information (Detail) link:calculationLink link:presentationLink link:definitionLink 160 - Disclosure - Sale of Breg and Disposition of Sports Medicine GBU - Schedule of Information Related to Sale of Breg (Detail) link:calculationLink link:presentationLink link:definitionLink 161 - Disclosure - Subsequent Event - Additional Information (Detail) link:calculationLink link:presentationLink link:definitionLink EX-101.CAL 8 ofix-20130331_cal.xml XBRL TAXONOMY EXTENSION CALCULATION LINKBASE EX-101.DEF 9 ofix-20130331_def.xml XBRL TAXONOMY EXTENSION DEFINITION LINKBASE EX-101.LAB 10 ofix-20130331_lab.xml XBRL TAXONOMY EXTENSION LABEL LINKBASE Accounting Policies [Abstract] Accounting Policies [Abstract] Accounts Payable Trade Current Trade accounts payable Accounts Receivable Net Current Trade accounts receivable, less allowances of $18,032 and $16,188 at March 31, 2013 and December 31, 2012, respectively Accrued Expenses And Other Liabilities Related To Discontinued Operation Accrued Expenses And Other Liabilities Related To Discontinued Operation Accrual and related charge to discontinued operations Accumulated Net Gain Loss From Designated Or Qualifying Cash Flow Hedges [Member] Fair Value of Cross- Currency Swaps [Member] Accumulated Other Comprehensive Income Loss [Line Items] Accumulated Other Comprehensive Income Loss [Line Items] Accumulated Other Comprehensive Income Loss [Line Items] Accumulated Other Comprehensive Income Loss Net Of Tax Ending balance Beginning balance Accumulated other comprehensive income Accumulated Other Comprehensive Income Loss [Table] Accumulated Other Comprehensive Income Loss [Table] Accumulated Other Comprehensive Income Loss [Table] Accumulated Other Comprehensive Income [Member] Accumulated Other Comprehensive Income [Member] Accumulated Translation Adjustment [Member] Foreign Currency Translation Adjustments [Member] Additional Paid In Capital Common Stock Additional paid-in capital Adjustments To Reconcile Net Income Loss To Cash Provided By Used In Operating Activities [Abstract] Adjustments to reconcile net income to net cash provided by operating activities: Allocated Share Based Compensation Expense Allocated share based compensation expense Allowance For Doubtful Accounts Receivable Current Trade accounts receivable, allowances Amendment Flag Amendment Flag Amortization Of Financing Costs Amortization of debt costs Amortization Of Intangible Assets Amortization of intangible assets Amount Of Restricted Net Assets For Consolidated And Unconsolidated Subsidiaries Amount of restricted net assets Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount Outstanding options not included in diluted earnings per share Antidilutive Securities Excluded From Computation Of Earnings Per Share By Antidilutive Securities [Axis] Antidilutive Securities [Axis] Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] Antidilutive Securities Name [Domain] Antidilutive Securities, Name [Domain] Assets Total assets Assets [Abstract] Assets Assets Current Total current assets Assets Current [Abstract] Current assets: Balance Sheet Location [Axis] Balance Sheet Location [Axis] Balance Sheet Location [Domain] Balance Sheet Location [Domain] Basis Of Presentation And Significant Accounting Policies [Text Block] Basis of presentation Represents the information pertaining to Breg Holdings LLC, a wholly-owned subsidiary of the company. Breg Holdings Llc [Member] Breg Orthofix Holdings, Inc [Member] Cash And Cash Equivalents At Carrying Value Cash and cash equivalents at the end of the period Cash and cash equivalents at the beginning of the period Cash and cash equivalents Commitments And Contingencies Contingencies (Note 16) Commitments And Contingencies Disclosure [Abstract] Commitments and Contingencies Disclosure [Abstract] Commitments And Contingencies Disclosure [Text Block] Contingencies Common Stock Par Or Stated Value Per Share Common shares, par value Common Stock Shares Authorized Common shares, authorized Common Stock Shares Issued Common shares, issued Common Stock Shares Outstanding Common shares, outstanding Common Stock Value Common shares $0.10 par value; 50,000,000 shares authorized; 19,453,294 and 19,339,329 issued and outstanding as of March 31, 2013 and December 31, 2012, respectively Comparability Of Prior Year Financial Data Reclassifications Comprehensive Income Net Of Tax Comprehensive (loss) income Comprehensive Income Note [Text Block] Comprehensive income (loss) Cost Of Goods And Services Sold Cost of sales Cost Of Sales [Member] Cost of sales [Member] Cross Currency Interest Rate Contract [Member] Cross-currency swap [Member] Cumulative number of shares issued as of the balance sheet date as a result of an employee stock purchase plan. Cumulative Stock Issued Shares Employee Stock Purchase Plans Common stock issued under Employee Stock Purchase Plan (in shares) Current Fiscal Year End Date Current Fiscal Year End Date Debt Disclosure [Abstract] Debt Disclosure [Abstract] Debt Disclosure [Text Block] Bank borrowings Debt Instrument [Axis] Debt Instrument [Axis] Debt Instrument Basis Spread On Variable Rate Margin on variable rate Debt Instrument Interest Rate Effective Percentage Effective interest rate (as a Percent) Debt Instrument [Line Items] Debt Instrument [Line Items] Debt Instrument Name [Domain] Debt Instrument, Name [Domain] Debt Instrument [Table] Schedule of Long-term Debt Instruments [Table] Represents the term of the debt instrument. Debt Instrument Term Debt instrument term (in years) The London Interbank Offered Rate (LIBOR) used to calculate the variable interest rate of the debt instrument. Debt Instrument Variable Rate Base Libor [Member] LIBOR [Member] The base rate used to calculate the variable interest rate of the debt instrument. Debt Instrument Variable Rate Base [Member] Base rate [Member] Deferred Finance Costs Net Deferred debt issuance costs, net Deferred Foreign Income Tax Expense Benefit Deferred taxes recognized on related foreign currency translation adjustment. Deferred Income Tax Expense Benefit Deferred income taxes Deferred Tax Assets Net Current Deferred income taxes Deferred Tax Assets Net Noncurrent Deferred income taxes Deferred Tax Liabilities Noncurrent Deferred income taxes Demutualization By Insurance Entity Securities Issued Gross Cash Proceeds Cash related to demutualization Depreciation Depletion And Amortization Depreciation and amortization Derivative By Nature [Axis] Derivative, by Nature [Axis] Derivative Contract Type [Domain] Derivative Contract Type [Domain] Derivative Description Of Variable Rate Basis Variable rate basis Derivative Fixed Interest Rate Fixed rate (as a percent) Derivative Instrument Risk [Axis] Derivative Instrument Risk [Axis] Derivative Instruments And Hedging Activities Disclosure [Abstract] Derivative Instruments and Hedging Activities Disclosure [Abstract] Derivative Instruments And Hedging Activities Disclosure [Text Block] Derivative instruments Derivative Instruments [Line Items] Derivative Instruments [Line Items] Derivative Instruments [Line Items] Derivative Instruments [Table] Derivative Instruments [Table] Derivative Instruments [Table] Derivative Liability Fair Value Gross Asset Cross currency hedge Fair value: favorable (unfavorable) Derivative Maturity Dates Swap agreement expiration date Derivative Name [Domain] Derivative, Name [Domain] Derivative Notional Amount Notional amount Derivatives Fair Value [Line Items] Derivatives, Fair Value [Line Items] Designated As Hedging Instrument [Member] Designated as Hedging Instrument [Member] Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] Disclosure of Compensation Related Costs, Share-based Payments [Abstract] Disclosure Of Compensation Related Costs Share Based Payments [Text Block] Share-based compensation Discontinued Operation Gain Loss From Disposal Of Discontinued Operation Before Income Tax Gain on sale of Breg Discontinued Operation Gain Loss On Disposal Of Discontinued Operation Net Of Tax Gain on sale of Breg, net of taxes Discontinued Operation Income Loss From Discontinued Operation During Phase Out Period Net Of Tax Loss from discontinued operations Discontinued Operations And Disposal Groups [Abstract] Discontinued Operations and Disposal Groups [Abstract] Discontinued Operation Tax Effect Of Discontinued Operation Income tax benefit Discontinued Operation Tax Effect Of Income Loss From Disposal Of Discontinued Operation Income tax expense Disposal Group Including Discontinued Operation Goodwill Goodwill Disposal Group Including Discontinued Operation Intangible Assets Net Intangible assets Disposal Group Including Discontinued Operation Operating Income Loss Operating income (loss) Disposal Group Including Discontinued Operation Property Plant And Equipment Net Tangible assets Disposal Group Including Discontinued Operation Revenue Net sales For the disposal group, including a component of the entity (discontinued operation), represents the fair value of guarantee related to sale of discontinued operations transaction. Disposal Group Including Discontinued Operations Guarantee At Fair Value Obligations under guarantee Fair Value of Indemnification Disposal Group Including Discontinued Operations Sale Of Discontinued Operations Disposal Group Including Discontinued Operations Sale Of Discontinued Operations Cash proceeds For the disposal group, including a component of the entity (discontinued operation), represents the amount of expenses related to sale of discontinued operations transaction. Disposal Group Including Discontinued Operations Transaction Expenses Transaction related expenses For the disposal group, including a component of the entity (discontinued operation), represents the working capital related to sale of discontinued operations transaction. Disposal Group Including Discontinued Operations Working Capital Working Capital Disposal Group Not Discontinued Operation Income Statement Disclosures [Abstract] Less: Disposal Groups Including Discontinued Operations Disclosure [Text Block] Sale of Breg and Disposition of Sports Medicine GBU Disposal Groups Including Discontinued Operations Name [Domain] Disposal Groups, Including Discontinued Operations, Name [Domain] Document Document and Entity Information [Abstract] Document Document And Entity Information [Abstract] Document Documentand Entity Information [Abstract] Document Fiscal Period Focus Document Fiscal Period Focus Document Fiscal Year Focus Document Fiscal Year Focus Document Period End Date Document Period End Date Document Type Document Type Earnings Per Share [Abstract] Earnings Per Share [Abstract] Earnings Per Share Basic Net income per common share- basic Earnings Per Share Basic [Abstract] Net income (loss) per common share- basic: Earnings Per Share Diluted Net income per common share- diluted Earnings Per Share Diluted [Abstract] Net income per common share- diluted: Earnings Per Share [Text Block] Earnings per share Effective Income Tax Rate Continuing Operations Income tax effective rate (as a percent) A ratio calculated by dividing the reported amount of income tax expense attributable to continuing operations for the period by GAAP-basis pretax income from continuing operations, excluding the impact of the charges related to the U.S. Government resolutions. Effective Income Tax Rate Continuing Operations Excluding Impact Of Tax Settlement Income tax effective rate excluding the impact of the charges related to the U.S. Government resolutions (as a percent) Effect Of Exchange Rate On Cash And Cash Equivalents Continuing Operations Effect of exchange rate changes on cash Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] Employee Service Share Based Compensation Allocation Of Recognized Period Costs Report Line [Domain] Employee Service Share-based Compensation, Allocation of Recognized Period Costs, Report Line [Domain] Employee Service Share Based Compensation Tax Benefit From Compensation Expense Income tax benefit on employee stock-based awards Entity Central Index Key Entity Central Index Key Entity Common Stock Shares Outstanding Entity Common Stock, Shares Outstanding Entity [Domain] Entity [Domain] Entity Filer Category Entity Filer Category Entity Registrant Name Entity Registrant Name Equity [Abstract] Equity [Abstract] Equity Component [Domain] Equity Component [Domain] Estimated Potential Reimbursements Estimated Potential Reimbursements Estimated reimbursement Euro [Member] Euro [Member] Pay Euros [Member] Excess Tax Benefit From Share Based Compensation Financing Activities Excess income tax benefit on employee stock-based awards Excess Tax Benefit From Share Based Compensation Operating Activities Excess income tax benefit on employee stock-based awards Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Table] Fair Value Measurements, Recurring and Nonrecurring [Table] Fair Value By Fair Value Hierarchy Level [Axis] Fair Value, Hierarchy [Axis] Fair Value By Liability Class [Axis] Liability Class [Axis] Fair Value By Measurement Frequency [Axis] Measurement Frequency [Axis] Fair Value Disclosures [Abstract] Fair Value Disclosures [Abstract] Fair Value Disclosures [Text Block] Fair value measurements Fair Value Inputs Level 2 [Member] Fair Value, Inputs, Level 2 [Member] Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation By Liability Class [Domain] Fair Value by Liability Class [Domain] Fair Value Measurement Frequency [Domain] Fair Value, Measurement Frequency [Domain] Fair Value Measurements Fair Value Hierarchy [Domain] Fair Value, Measurements, Fair Value Hierarchy [Domain] Fair Value Measurements Recurring [Member] Fair Value, Measurements, Recurring [Member] Fair Values Derivatives Balance Sheet Location By Derivative Contract Type By Hedging Designation [Table] Fair Values Derivatives, Balance Sheet Location, by Derivative Contract Type [Table] Financial Instruments And Fair Value Measurements [Line Items] Financial Instruments And Fair Value Measurements [Line Items] Financial Instruments And Fair Value Measurements [Line Items] Financial Instruments And Fair Value Measurements [Table] Financial Instruments And Fair Value Measurements [Table] Financial Instruments And Fair Value Measurements [Table] Finite And Indefinite Lived Intangible Assets [Line Items] Finite And Indefinite Lived Intangible Assets [Line Items] Finite And Indefinite Lived Intangible Assets [Line Items] Finite And Indefinite Lived Intangible Assets [Table] Finite And Indefinite Lived Intangible Assets [Table] Finite And Indefinite Lived Intangible Assets [Table] Finite Lived Intangible Assets Accumulated Amortization Accumulated amortization Finite Lived Intangible Assets By Major Class [Axis] Finite-Lived Intangible Assets by Major Class [Axis] Finite Lived Intangible Assets Major Class Name [Domain] Finite-Lived Intangible Assets, Major Class Name [Domain] Foreign Currency Transaction Gain Loss Before Tax Transactional foreign currency exchange gains (losses) Foreign Currency Transactions And Translations Policy [Text Block] Foreign Currency Translation Gain On Demutualization Of Mutual Insurance Entity Gain On Demutualization Of Mutual Insurance Entity Gain related to demutualization of a mutual insurance company General And Administrative Expense General and administrative General And Administrative Expense [Member] General and administrative [Member] Goodwill Ending balance Beginning balance Goodwill Goodwill And Intangible Assets Disclosure [Abstract] Goodwill and Intangible Assets Disclosure [Abstract] Goodwill Disclosure [Text Block] Goodwill Goodwill Translation Adjustments Foreign currency Gross Profit Gross profit Represents the fair value of the liability for the freestanding or embedded guarantor's obligations under the guarantee or each group of similar guarantees. Guarantee Obligations Fair Value Fair value of liability Hedging Designation [Axis] Hedging Designation [Axis] Hedging Designation [Domain] Hedging Designation [Domain] Represents the Implants and Biologics, one of the Spine product market sector of the reporting entity. Implants And Biologics Products [Member] Spine Repair Implants and Regenerative Biologics [Member] Income Loss From Continuing Operations Net income from continuing operations, net of tax Income Loss From Continuing Operations Before Income Taxes Minority Interest And Income Loss From Equity Method Investments Income before income taxes Income Loss From Continuing Operations Per Basic Share Net income from continuing operations, net of tax Income Loss From Continuing Operations Per Diluted Share Net income from continuing operations, net of tax Income Loss From Discontinued Operations Net Of Tax Attributable To Reporting Entity Net loss from discontinued operations, net of tax Income Loss From Discontinued Operations Net Of Tax Attributable To Reporting Entity [Abstract] Discontinued operations (Note 15) Income Loss From Discontinued Operations Net Of Tax Per Basic Share Net loss from discontinued operations, net of tax Income Loss From Discontinued Operations Net Of Tax Per Diluted Share Net loss from discontinued operations, net of tax Income Statement [Abstract] Income Statement [Abstract] Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Axis] Disposal Group Name [Axis] Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items] Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Table] Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Table] Income Tax Disclosure [Abstract] Income Tax Disclosure [Abstract] Income Tax Disclosure [Text Block] Income taxes Income Tax Expense Benefit Provision for income tax Income tax expense Increase Decrease In Accounts Payable Trade accounts payable Increase Decrease In Accounts Receivable Trade accounts receivable Increase Decrease In Inventories Inventories Increase Decrease In Operating Capital [Abstract] Change in operating assets and liabilities: Increase Decrease In Other Current Liabilities Other current liabilities Increase Decrease In Other Noncurrent Assets Long-term assets Increase Decrease In Other Noncurrent Liabilities Long-term liabilities This element represents Increase (Decrease) In Prepaid Expense And Other Current Assets Increase Decrease In Prepaid Expense And Other Current Assets Prepaid expenses and other current assets Increase Decrease In Security Deposits Escrow receivable Incremental Common Shares Attributable To Share Based Payment Arrangements Unexercised stock options net of treasury share repurchase Intangible Assets Disclosure [Text Block] Patents and other intangible assets Sum of the gross carrying amounts before accumulated amortization as of the balance sheet date of all intangible assets. Intangible Assets Gross Cost Intangible Assets Net Excluding Goodwill Patents and other intangible assets, net Patents and other intangible assets, net Interest Expense Interest expense, net Inventory Disclosure [Abstract] Inventory Disclosure [Abstract] Inventory Disclosure [Text Block] Inventories EX-101.PRE 11 ofix-20130331_pre.xml XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE XML 12 R39.htm IDEA: XBRL DOCUMENT

Long-term debt - Additional Information (Detail)	3 Months Ended					1 Months Ended				3 Months Ended					1 Months Ended		3 Months Ended		3 Months Ended
Long-term debt - Additional Information (Detail)	Mar. 31, 2012 USD ($)	Mar. 31, 2013 USD ($)	Mar. 31, 2013 EUR (€)	Dec. 31, 2012 USD ($)	Dec. 31, 2012 EUR (€)	Sep. 30, 2012 Revolving Credit Facility [Member] USD ($)	Jun. 30, 2012 Revolving Credit Facility [Member] USD ($)	May 31, 2012 Revolving Credit Facility [Member] USD ($)	Aug. 31, 2010 Revolving Credit Facility [Member]	Mar. 31, 2013 Revolving Credit Facility [Member] USD ($)	Dec. 31, 2012 Revolving Credit Facility [Member] USD ($)	Aug. 30, 2010 Revolving Credit Facility [Member] USD ($)	Mar. 31, 2013 Revolving Credit Facility [Member] LIBOR [Member]	Dec. 31, 2012 Revolving Credit Facility [Member] LIBOR [Member]	May 31, 2012 Term Loan Facility [Member] USD ($)	Aug. 31, 2010 Term Loan Facility [Member] USD ($)	Mar. 31, 2013 Term Loan Facility [Member] USD ($)	Dec. 31, 2012 Term Loan Facility [Member] USD ($)	Mar. 31, 2013 Term Loan Facility [Member] Base rate [Member] Maximum [Member]	Aug. 31, 2010 New Credit Agreement [Member] USD ($)	Mar. 31, 2013 New Credit Agreement [Member] LIBOR [Member] Maximum [Member]	Mar. 31, 2013 New Credit Agreement [Member] Base rate [Member] Maximum [Member]	Mar. 31, 2013 Prior Credit Agreement [Member] LIBOR [Member]	Dec. 31, 2012 Prior Credit Agreement [Member] LIBOR [Member]
Debt Instrument [Line Items]
Debt instrument term (in years)									5 years							5 years
Maximum borrowing capacity		$ 7,400,000	€ 5,800,000	$ 7,600,000	€ 5,800,000							$ 200,000,000
Maximum borrowing capacity																100,000,000
Maximum additional borrowing capacity available																				50,000,000
Repayment of debt obligation	3,750,000														87,500,000
Repayment of debt obligation						20,000,000	20,000,000	57,500,000
Amount outstanding		0		100,000						20,000,000	20,000,000
Margin on variable rate													2.50%	2.50%							3.25%	2.25%
Variable rate basis																			LIBOR
Effective interest rate (as a Percent)																							2.70%	2.70%
Revolving credit facility due date										Aug. 30, 2015
Amount of restricted net assets		256,000,000		247,400,000
Restricted cash		29,446,000		21,314,000
Debt issuance costs incurred																	5,000,000
Write-off of debt issue costs															800,000
Deferred debt issuance costs, net																	$ 1,600,000	$ 1,800,000

XML 13 R54.htm IDEA: XBRL DOCUMENT

Business Segment Information - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2013 Segment
Segment Reporting [Abstract]
Number of global business units	2

XML 14 R48.htm IDEA: XBRL DOCUMENT

Earnings per share - Additional Information (Detail) (Options to purchase common stock [Member])	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Options to purchase common stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Outstanding options not included in diluted earnings per share	973,037	714,686

Business segment information - Schedule of External Net Sales by GBU Reporting Segment (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Segment Reporting Information [Line Items]
Reported Decline (as a percent)	(14.00%)
Constant Currency Decline (as a percent)	(13.00%)
Total Net Sales	$ 100,254	$ 116,042
Spine Repair Implants and Regenerative Biologics [Member]
Segment Reporting Information [Line Items]
Reported Decline (as a percent)	(4.00%)
Constant Currency Decline (as a percent)	(4.00%)
Total Net Sales	34,297	35,757
Spine Regenerative Stimulation [Member]
Segment Reporting Information [Line Items]
Reported Decline (as a percent)	(18.00%)
Constant Currency Decline (as a percent)	(18.00%)
Total Net Sales	32,029	39,271
Spine [Member]
Segment Reporting Information [Line Items]
Reported Decline (as a percent)	(12.00%)
Constant Currency Decline (as a percent)	(12.00%)
Total Net Sales	66,326	75,028
Orthopedics [Member]
Segment Reporting Information [Line Items]
Reported Decline (as a percent)	(17.00%)
Constant Currency Decline (as a percent)	(16.00%)
Total Net Sales	$ 33,928	$ 41,014

Comprehensive income (loss) - Schedule of Comprehensive Income (Loss) (Parenthetical) (Detail) (USD $)	3 Months Ended
	Mar. 31, 2013
Accumulated Other Comprehensive Income Loss [Line Items]
Deferred taxes recognized on related foreign currency translation adjustment.	$ 0
Accumulated Other Comprehensive Income [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Unrealized gain on derivative instrument, taxes	$ 187,000

Business segment information - Operating Income (Loss) by GBU (Parenthetical) (Detail) (Corporate [Member], USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Corporate [Member]
Product Type Reporting Information [Line Items]
Senior management succession charges	$ 3.6

Share based compensation - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Common stock issued under Employee Stock Purchase Plan (in shares)	113,965	262,713

Derivative instruments - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 Swap Agreement [Member]	Sep. 30, 2010 Cross-currency swap [Member] Designated as Hedging Instrument [Member] Pay Euros [Member] EUR (€)	Sep. 30, 2010 Cross-currency swap [Member] Designated as Hedging Instrument [Member] Receive U.S. dollars [Member] USD ($)
Derivatives, Fair Value [Line Items]
Notional amount		€ 28.7	$ 39.0
Fixed rate (as a percent)		5.00%	4.635%
Swap agreement expiration date	Dec. 30, 2016

Goodwill - Schedule of Changes in Net Carrying Amount of Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Goodwill And Intangible Assets Disclosure [Abstract]
Beginning balance	$ 74,388
Foreign currency	(1,781)
Ending balance	$ 72,607

Other Income (Expense) - Summary of Other Income (Expenses) (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Other Income And Expenses [Abstract]
Cash related to demutualization	$ 4.4

Earnings per share - Schedule of Reconciliation of Weighted Average Shares Used in Calculation of Basic and Diluted Earnings Per Share (Detail)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Earnings Per Share [Abstract]
Weighted average common shares-basic	19,431,093	18,675,694
Effect of dilutive securities:
Unexercised stock options net of treasury share repurchase	260,048	440,501
Weighted average common shares-diluted	19,691,141	19,116,195

Fair Value Measurements - Additional Information (Detail) (Maximum [Member])	3 Months Ended
	Mar. 31, 2013
Maximum [Member]
Financial Instruments And Fair Value Measurements [Line Items]
Cash Equivalents Original Maturity Period	90 days

Fair value measurements - Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis (Detail) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cross currency hedge	$ 1,598	$ 305
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cross currency hedge	$ 1,598	$ 305

Derivative instruments - Schedule of Fair Values of Derivative Instruments (Detail) (Other long-term assets [Member], Cross-currency swap [Member], USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Other long-term assets [Member] \| Cross-currency swap [Member]
Derivatives, Fair Value [Line Items]
Fair value: favorable (unfavorable)	$ 1,598	$ 305

Income taxes - Additional Information (Detail) (USD $)	3 Months Ended
Income taxes - Additional Information (Detail) (USD $)	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Income Tax Disclosure [Abstract]
Provision for income tax	$ 3,320,000	$ 7,363,000
Income tax effective rate (as a percent)	40.40%	37.60%
Income tax effective rate excluding the impact of the charges related to the U.S. Government resolutions (as a percent)	37.00%	37.00%
Gross unrecognized tax benefit	700,000		1,000,000
Accrued interest and penalties related to unrecognized tax benefits	$ 900,000		$ 900,000

Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 33,675	$ 31,055
Restricted cash	29,446	21,314
Trade accounts receivable, less allowances of $18,032 and $16,188 at March 31, 2013 and December 31, 2012, respectively	132,425	150,316
Inventories	92,133	88,744
Deferred income taxes	17,363	16,959
Prepaid expenses and other current assets	32,211	32,056
Total current assets	337,253	340,444
Property, plant and equipment, net	52,402	51,362
Patents and other intangible assets, net	6,765	6,880
Goodwill	72,607	74,388
Deferred income taxes	20,200	19,904
Other long-term assets	14,153	11,303
Total assets	503,380	504,281
Current liabilities:
Trade accounts payable	14,230	21,812
Other current liabilities	51,295	46,985
Total current liabilities	65,525	68,797
Long-term debt	20,000	20,000
Deferred income taxes	11,460	11,456
Other long-term liabilities	4,227	4,930
Total liabilities	101,212	105,183
Contingencies (Note 16)
Shareholders' equity:
Common shares $0.10 par value; 50,000,000 shares authorized; 19,453,294 and 19,339,329 issued and outstanding as of March 31, 2013 and December 31, 2012, respectively	1,945	1,934
Additional paid-in capital	250,186	246,111
Retained earnings	150,665	148,549
Accumulated other comprehensive income	(628)	2,504
Total shareholders' equity	402,168	399,098
Total liabilities and shareholders' equity	$ 503,380	$ 504,281

Comprehensive income (loss) - Schedule of Comprehensive Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified			3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Mar. 31, 2013 Foreign Currency Translation Adjustments [Member]	Mar. 31, 2013 Fair Value of Cross- Currency Swaps [Member]	Mar. 31, 2013 Accumulated Other Comprehensive Income [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	$ (628)	$ 2,504	$ 2,373	$ 131	$ 2,504
Unrealized gain on cross-currency swap, net of tax				(318)	(318)
Foreign currency translation adjustment			(2,814)		(2,814)
Ending balance	$ (628)	$ 2,504	$ (441)	$ (187)	$ (628)

Summary of significant accounting policies	3 Months Ended
Summary of significant accounting policies	Mar. 31, 2013
Accounting Policies [Abstract]
Summary of significant accounting policies	1. Summary of significant accounting policies (a) Basis of presentation The accompanying Unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S.”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures, normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S., have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013. The balance sheet at December 31, 2012 has been derived from the audited financial statements at that date, but does not include all of the information and footnotes required by accounting principles generally accepted in the U.S. for complete financial statements. For further information, refer to the Consolidated Financial Statements and Notes thereto of the Company’s Annual Report on Form 10-K, for the fiscal year ended December 31, 2012. The notes to the unaudited condensed consolidated financial statements are presented on a continuing operations basis unless otherwise noted. (b) Reclassifications The Company has reclassified certain line items to conform to the current year presentation. The reclassifications have no effect on previously reported net earnings or shareholders’ equity. (c) Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates including those related to the resolution of U.S. government matters, contractual allowances, doubtful accounts, inventories, taxes, shared-based compensation, and potential goodwill and intangible asset impairment. Actual results could differ from these estimates. (d) Foreign Currency Translation The financial statements for operations outside the United States are generally maintained in their local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. dollars at year end exchange rates and revenue and expense items are translated at weighted average rates of exchange prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income component of shareholders’ equity.

Sale of Breg and Disposition of Sports Medicine GBU - Schedule of Information Related to Sale of Breg (Detail) (Breg Orthofix Holdings, Inc [Member], USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2012
Breg Orthofix Holdings, Inc [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Cash proceeds	$ 157,500
Less:
Working Capital	(7,093)
Transaction related expenses	(4,276)
Fair Value of Indemnification	(2,000)
Tangible assets	(8,309)
Intangible assets	(28,164)
Goodwill	(106,200)
Gain on sale of Breg	1,458
Income tax expense	(113)
Gain on sale of Breg, net of taxes	$ 1,345

Inventories - Schedule of Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Inventory Disclosure [Abstract]
Raw materials	$ 6,354	$ 8,470
Work-in-process	7,401	7,886
Finished products	42,834	36,675
Field inventory	29,891	29,363
Consignment inventory	5,653	6,350
Inventory, net	$ 92,133	$ 88,744

Subsequent Event	3 Months Ended
Subsequent Event	Mar. 31, 2013
Subsequent Events [Abstract]
Subsequent Event	17. Subsequent Event On May 8, 2013, we announced that our Board of Directors has authorized a share repurchase program in an amount up to $50 million. Repurchases are expected to consist primarily of open market transactions at prevailing market prices in accordance with the guidelines specified under Rule 10b-18 of the Securities Exchange Act of 1934, as amended, though we may also make repurchases through block trades or privately negotiated transactions. We expect that repurchases will begin on or about May 10, 2013. Repurchases are expected to be made from cash on hand, cash generated from operations, and additional borrowings. The timing of the transactions and the aggregate number of shares of common stock that will be repurchased under the repurchase program will depend on a variety of factors, including market conditions and the prices at which the securities are repurchased. We may discontinue repurchases without prior notice at any time if we determine additional repurchases are not warranted. Litigation Matter Updates: Matters Related to the Company’s Former Breg Subsidiary and Possible Indemnification Obligations On May 24, 2012, the Company sold Breg, Inc. (“Breg”) to an affiliate of Water Street Healthcare Partners II, L.P. (“Water Street”) pursuant to a stock purchase agreement (the “Breg SPA”). Under the terms of the Breg SPA, upon closing of the sale, the Company and its subsidiary, Orthofix Holdings, Inc., agreed to indemnify Water Street and Breg with respect to certain specified matters, including (i) the government investigation and product liability matters regarding the previously owned infusion pump product line described below, and (ii) pre-closing sales of cold therapy units and certain post-closing sales of cold therapy units. The Company has established an accrual of $4.2 million for its indemnification obligations in connection with the July 2012 verdict described in the paragraph below, however, actual liability in this case could be higher or lower than the amount accrued. The Company has not established any accrual in connection with its other indemnification obligations under the Breg SPA, and currently cannot reasonably estimate the possible loss, or range of loss, in connection with such obligations (including with respect to the matters described in the paragraphs below). Breg was engaged in the manufacturing and sale of local infusion pumps for pain management from 1999 to 2008. Since 2008, numerous product liability cases have been filed in the United States alleging that the local anesthetic, when dispensed by such infusion pumps inside a joint, causes a rare arthritic condition called “chondrolysis.” The Company believes that meritorious defenses exist to these claims and Breg is vigorously defending these cases. One of the Company’s insurance carriers previously asserted to the Company that certain potential losses related to this matter are not covered by its insurance coverage. The Company subsequently went into arbitration with this carrier, and on January 22, 2013, the Company obtained a binding arbitration award providing that such carrier is obligated to reimburse the Company for defense expenses, settlements, and judgments under certain policies. The Company currently estimates that it is entitled to reimbursement of approximately $13 million for past losses incurred, as well as up to $15 million in potential future coverage for pending products liability matters. On or about August 2, 2010, Breg received a HIPAA subpoena issued by the Department of Justice (“DOJ”). The subpoena seeks documents from the Company and its subsidiaries for the period of January 1, 2000 through the date of the subpoena. The Company believes that document production in response to the subpoena is completed as of July 2012. DOJ has informed the Company that it is investigating possible criminal and civil violations of federal law related to Breg’s sale, marketing and labeling of local infusion pumps for pain management, prior to Breg’s divestiture of this product line in 2008. The Company is currently cooperating with the U.S. Government in connection with this matter. On January 27, 2012, the Company was orally notified by a U.S. Government official that a civil investigation of Breg was pending in connection with this matter. On January 18, 2013, the Company was served with a qui tam complaint filed in the United States District Court for the Western District of Missouri against the Company (as the former owner of Breg), Stryker Corporation, I-Flow Corporation and DJO Incorporated, which contains allegations relating to the marketing and promotion of Breg’s former infusion pump products. The Company is vigorously defending this matter. At the time of its divestiture by the Company, Breg was engaged and had been engaged in the manufacturing and sales of motorized cold therapy units used to reduce pain and swelling. Several domestic product liability cases have been filed in recent years, mostly in California state court, alleging that the use of cold therapy causes skin and/or nerve injury and seeking damages on behalf of individual plaintiffs who were allegedly injured by such units. The majority of these cases are at an early stage and no conclusion can be drawn at the present time regarding their potential outcome. However, the Company believes that meritorious defenses exist to these claims. In July 2012, a jury in one case related to a motorized cold therapy unit previously sold by Breg returned a verdict providing for approximately $2.1 million in compensatory damages to the plaintiff against Breg and $7 million in exemplary damages. The case remains subject to appeal. The Company believes that the damages are without merit; however, the ultimate outcome is uncertain. The Company previously established an accrual of $4.2 million for both compensatory damages and exemplary damages for its indemnification obligations in connection with this July 2012 verdict; however, actual liability in this case could be higher or lower than the amount accrued.

Patents and other intangible assets - Schedule of Patents and Other Intangibles Assets (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Finite And Indefinite Lived Intangible Assets [Line Items]
Cost	$ 38,671	$ 38,352
Accumulated amortization	(31,906)	(31,472)
Patents and other intangible assets, net	6,765	6,880
Patents [Member]
Finite And Indefinite Lived Intangible Assets [Line Items]
Cost	37,992	37,695
Accumulated amortization	(31,452)	(31,045)
Trademarks - definite lived [Member]
Finite And Indefinite Lived Intangible Assets [Line Items]
Cost	679	657
Accumulated amortization	$ (454)	$ (427)

Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Statement Of Financial Position [Abstract]
Trade accounts receivable, allowances	$ 18,032	$ 16,188
Common shares, par value	$ 0.10	$ 0.10
Common shares, authorized	50,000,000	50,000,000
Common shares, issued	19,453,294	19,339,329
Common shares, outstanding	19,453,294	19,339,329

Document and Entity Information	3 Months Ended
Document and Entity Information	Mar. 31, 2013	May 02, 2013
Document Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Trading Symbol	OFIX
Entity Registrant Name	ORTHOFIX INTERNATIONAL N V
Entity Central Index Key	0000884624
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		19,453,294

Income taxes	3 Months Ended
Income taxes	Mar. 31, 2013
Income Tax Disclosure [Abstract]
Income taxes	13. Income taxes The Company recognized a $3.3 million and $7.4 million provision for income tax which reflects an effective tax rate of 40.4% and 37.6% on pre-tax income for the three months ended March 31, 2013 and 2012, respectively. Excluding the impact of various discrete charges, the effective tax rate on continuing operations was 37% for the first three months of 2013 and 2012. The principal factors affecting the Company’s effective tax rate was the Company’s mix of earnings among various tax jurisdictions, state taxes and current period losses in certain jurisdictions for which the Company does not currently provide a tax benefit. On January 2, 2013, the American Taxpayer Relief Act of 2012 (“Act”) was enacted. The Act provides tax relief for businesses by reinstating certain tax benefits and credits retroactively to January 1, 2012. There are several provisions of the Act that impact the Company, most notably the extension of the Research and Development credit. Income tax accounting rules require tax law changes to be recognized in the period of enactment; as such, the associated tax benefits of the Act was recognized in the Company’s provision for income taxes in the first quarter of 2013. As of March 31, 2013 and December 31, 2012, the Company’s gross unrecognized tax benefit was $0.7 million and $1.0 million, respectively. The Company recognizes potential accrued interest and penalties related to unrecognized tax benefits in income tax expense. In March 2013 the Company settled a $0.9 million liability that had been previously accrued as of December 31, 2012. The entire amount of unrecognized tax benefits, including interest, would favorably impact the Company’s effective tax rate if recognized. As of March 31, 2013, the Company does not expect the amount of unrecognized tax benefits to change significantly over the next twelve months.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Income Statement [Abstract]
Product sales	$ 88,358	$ 104,820
Marketing service fees	11,896	11,222
Net sales	100,254	116,042
Cost of sales	22,699	21,940
Gross profit	77,555	94,102
Operating expenses
Sales and marketing	48,839	49,521
General and administrative	18,788	14,570
Research and development	5,400	7,050
Amortization of intangible assets	504	530
Total operating expenses	73,531	71,671
Operating income	4,024	22,431
Other income and expense
Interest expense, net	(560)	(2,221)
Other income (expense)	4,764	(631)
Total other income (expense)	4,204	(2,852)
Income before income taxes	8,228	19,579
Income tax expense	(3,320)	(7,363)
Net income from continuing operations, net of tax	4,908	12,216
Discontinued operations (Note 15)
Loss from discontinued operations	(4,432)	(506)
Income tax benefit	1,640	306
Net loss from discontinued operations, net of tax	(2,792)	(200)
Net income	2,116	12,016
Net income (loss) per common share- basic:
Net income from continuing operations, net of tax	$ 0.25	$ 0.65
Net loss from discontinued operations, net of tax	$ (0.14)	$ (0.01)
Net income per common share- basic	$ 0.11	$ 0.64
Net income per common share- diluted:
Net income from continuing operations, net of tax	$ 0.25	$ 0.64
Net loss from discontinued operations, net of tax	$ (0.14)	$ (0.01)
Net income per common share- diluted	$ 0.11	$ 0.63
Weighted average number of common shares:
Basic	19,431,093	18,675,694
Diluted	19,691,141	19,116,195
Comprehensive (loss) income	$ (1,016)	$ 14,726

Long-term debt	3 Months Ended
Long-term debt	Mar. 31, 2013
Debt Disclosure [Abstract]
Long-term debt	6. Long-term debt On August 30, 2010, the Company’s wholly-owned U.S. holding company, Orthofix Holdings, Inc. (“Orthofix Holdings”) entered into a Credit Agreement (the “Credit Agreement”) with certain domestic direct and indirect subsidiaries of the Company (the “Guarantors”), JPMorgan Chase Bank, N.A., as Administrative Agent, RBS Citizens, N.A., as Syndication Agent, and certain lender parties thereto. The Credit Agreement provides for a five year, $200.0 million secured revolving credit facility (the “Revolving Credit Facility”), and a five year, $100.0 million secured term loan facility (the “Term Loan Facility”, and together with the Revolving Credit Facility, the “Credit Facilities”). Orthofix Holdings has the ability to increase the amount of the Credit Facilities by an aggregate amount of up to $50.0 million upon satisfaction of certain conditions. In May 2012, the Company used a portion of the proceeds from the sale of Breg, Inc. (“Breg”) (see Note 15) to repay in full the remaining $87.5 million balance on the Term Loan Facility and pay down $57.5 million of amounts outstanding under the Revolving Credit Facility. This use of proceeds was required by the lenders’ consent dated April 23, 2012 to the Credit Agreement. As a result of the sale of Breg, Breg ceased to be a subsidiary of the Company and, therefore, Breg was released as a credit party under the Credit Agreement. Additionally, the Company paid $20 million in June 2012 and $20 million in September 2012 to reduce amounts outstanding under the Revolving Credit Facility. As a result, at December 31, 2012, the Term Loan Facility had been repaid in full and there was $20 million outstanding under the Revolving Credit Facility as of March 31, 2013 and December 31, 2012. Borrowings under the Credit Facilities bear interest at a floating rate, which is, at Orthofix Holdings’ option, either the London Inter-Bank Offered Rate (“LIBOR”) plus an applicable margin or a base rate (as defined in the Credit Agreement) plus an applicable margin (in each case subject to adjustment based on financial ratios). Such applicable margin will be up to 3.25% for LIBOR borrowings and up to 2.25% for base rate borrowings depending upon a measurement of the consolidated leverage ratio with respect to the immediately preceding four fiscal quarters. As of March 31, 2013 and December 31, 2012, the entire Revolving Credit Facility was at the LIBOR rate plus a margin of 2.50%. The effective interest rate on the Credit Facilities as of March 31, 2013 and December 31, 2012 was 2.7%. Outstanding balances on the Revolving Credit Facility are due on August 30, 2015. Borrowings under the Revolving Credit Facility, which may be made in the future, will be used for working capital, capital expenditures and other general corporate purposes of Orthofix Holdings and its subsidiaries. The Guarantors have guaranteed repayment of Orthofix Holdings’ obligations under the Credit Agreement. The obligations of Orthofix Holdings and each of the Guarantors with respect to the Credit Facilities are secured by a pledge of substantially all of the assets of Orthofix Holdings and each of the Guarantors. The Credit Agreement, as amended, requires Orthofix Holdings and the Company to comply with coverage ratios on a consolidated basis and contains affirmative and negative covenants, including limitations on additional debt, liens, investments and acquisitions. The Credit Agreement, as amended, also includes events of default customary for facilities of this type. Upon the occurrence of an event of default, all outstanding loans may be accelerated and/or the lenders’ commitments terminated. The Company was in compliance with the affirmative and negative covenants at March 31, 2013 and there were no events of default. Certain subsidiaries of the Company have restrictions on their ability to pay dividends or make intercompany loan advances pursuant to the Company’s Credit Facilities. The net assets of Orthofix Holdings and its subsidiaries are restricted for distributions to the parent company. Domestic subsidiaries of the Company, as parties to the credit agreement, have access to these net assets for operational purposes. The amount of restricted net assets of Orthofix Holdings and its subsidiaries as of March 31, 2013 and December 31, 2012 is $256 million and $247.4 million, respectively. In addition, the Credit Agreement restricts the Company and subsidiaries that are not parties to the Credit Facilities from access to cash held by Orthofix Holdings, Inc. and its subsidiaries. All of the Company’s subsidiaries that are parties to the Credit Agreement have access to this cash for operational and debt repayment purposes. The amount of restricted cash of the Company as of March 31, 2013 and December 31, 2012 was $29.4 million and $21.3 million, respectively. In conjunction with obtaining the Credit Facilities and the Credit Agreement, as amended, the Company incurred debt issuance costs of $5 million. These costs are being amortized using the effective interest method over the life of the Credit Facilities. In conjunction with the Term Loan Facility repayment in May 2012, the Company wrote off $0.8 million of related debt issuance costs. As of March 31, 2013 and December 31, 2012, debt issuance costs, net of accumulated amortization, related to the Credit Agreement were $1.6 million and $1.8 million, respectively.

Subsequent Event - Additional Information (Detail) (USD $) In Millions, unless otherwise specified		0 Months Ended	1 Months Ended		3 Months Ended
	Jul. 31, 2012	May 08, 2013 Subsequent Event [Member]	Jul. 31, 2012 Litigation Related to Breg [Member]	May 24, 2012 Litigation Related to Breg [Member]	Mar. 31, 2013 Past Liability Due [Member]	Mar. 31, 2013 Future Liability [Member]
Subsequent Event [Line Items]
Share repurchase program, authorized amount		$ 50
Charges accrued in connection with litigation				4.2
Estimated reimbursement					13	15
Compensatory damages to plaintiff			2.1
Exemplary damages			7
Accrual and related charge to discontinued operations	$ 4.2

Contingencies	3 Months Ended
Contingencies	Mar. 31, 2013
Commitments And Contingencies Disclosure [Abstract]
Contingencies	16. Contingencies The Company is a party to certain outstanding legal proceedings, investigations and claims. These matters are described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Material recent developments regarding such matters are described below. The Company believes that it is unlikely that the outcome of any or all of these matters will have a material adverse effect on the Company and its subsidiaries as a whole, notwithstanding that the unfavorable resolution of any matter may have a material effect on the Company’s net earnings (if any) in any particular quarter. However, the Company cannot predict with any certainty the final outcome of any legal proceedings, investigations or claims made against it or its subsidiaries described in the paragraphs below, and there can be no assurance that the ultimate resolution of any such matter will not have a material adverse impact on the Company’s consolidated financial position, results of operations, or cash flows. The Company records accruals for certain of its outstanding legal proceedings, investigations or claims when it is probable that a liability will be incurred and the amount of the loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal proceedings, investigations and claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable. When a loss contingency is not both probable and reasonably estimable, the Company does not accrue the loss. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses a reasonable estimate of the possible loss or range of loss, if such reasonable estimate can be made. If the Company cannot make a reasonable estimate of the possible loss, or range of loss, then that is disclosed. The assessments of whether a loss is probable or a reasonable possibility, and whether the loss or range of loss is reasonably estimable, often involve a series of complex judgments about future events. Among the factors that the Company considers in this assessment are the nature of existing legal proceedings, investigations and claims, the asserted or possible damages or loss contingency (if reasonably estimable), the progress of the matter, existing law and precedent, the opinions or views of legal counsel and other advisers, the involvement of the U.S. Government and its agencies in such proceedings, the Company’s experience in similar matters and the experience of other companies, the facts available to the Company at the time of assessment, and how the Company intends to respond, or has responded, to the proceeding, investigation or claim. The Company’s assessment of these factors may change over time as individual proceedings, investigations or claims progress. For matters where the Company is not currently able to reasonably estimate a range of reasonably possible loss, the factors that have contributed to this determination include the following: (i) the damages sought are indeterminate, or an investigation has not manifested itself in a filed civil or criminal complaint, (ii) the matters are in the early stages, (iii) the matters involve novel or unsettled legal theories or a large or uncertain number of actual or potential cases or parties, and/or (iv) discussions with the government or other parties in matters that may be expected ultimately to be resolved through negotiation and settlement have not reached the point where the Company believes a reasonable estimate of loss, or range of loss, can be made. In such instances, the Company believes that there is considerable uncertainty regarding the timing or ultimate resolution of such matters, including a possible eventual loss, fine, penalty or business impact, if any. In addition to the matters specifically identified in the paragraphs below, in the normal course of our business, the Company is involved in various lawsuits from time to time and may be subject to certain other contingencies. To the extent losses related to these contingencies are both probable and reasonably estimable, the Company accrues appropriate amounts in the accompanying financial statements and provides disclosures as to the possible range of loss in excess of the amount accrued, if such range is reasonably estimable. The Company believes losses are individually and collectively immaterial as to a possible loss and range of loss.

Share-based compensation - Schedule of Share-Based Compensation by Line Item in Consolidated Statements of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	$ 1,943	$ 1,433
Cost of sales [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	287	176
Sales and marketing [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	436	445
General and administrative [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	1,175	770
Research and development [Member]
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Allocated share based compensation expense	$ 45	$ 42

Derivative instruments - Schedule of Gain (Loss) Recognized on Derivative Instruments (Detail) (Cross-currency swap [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cross-currency swap [Member]
Derivative Instruments [Line Items]
Cross-currency swap unrealized gain (loss) recorded in other comprehensive income (loss), net of taxes	$ (318)	$ 509

Condensed Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Cash flows from operating activities:
Net income	$ 2,116	$ 12,016
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,995	5,667
Amortization of debt costs	180	296
Provision for doubtful accounts	3,227	3,154
Deferred income taxes	(744)	(828)
Share-based compensation	1,943	1,480
Provision for inventory obsolescence	896	649
Excess income tax benefit on employee stock-based awards	(78)	(242)
Income tax benefit on employee stock-based awards	563	1,013
Other	(345)	1,117
Change in operating assets and liabilities:
Trade accounts receivable	13,779	(11,943)
Inventories	(5,126)	732
Escrow receivable		41,537
Prepaid expenses and other current assets	(179)	6,559
Trade accounts payable	(7,242)	(3,103)
Other current liabilities	4,478	(4,787)
Long-term assets	(2,266)	(1,405)
Long-term liabilities	(743)	(2,798)
Net cash provided by operating activities	15,454	49,114
Cash flows from investing activities:
Capital expenditures for property, plant and equipment	(6,029)	(6,372)
Capital expenditures for intangible assets	(439)	(151)
Net cash used in investing activities	(6,468)	(6,523)
Cash flows from financing activities:
Net proceeds from issuance of common shares	2,143	6,641
Repayments of long-term debt		(3,750)
(Repayment of) proceeds from bank borrowings, net	(15)	69
Changes in restricted cash	(8,141)	(32,271)
Excess income tax benefit on employee stock-based awards	78	242
Net cash used in financing activities	(5,935)	(29,069)
Effect of exchange rate changes on cash	(431)	324
Net increase in cash and cash equivalents	2,620	13,846
Cash and cash equivalents at the beginning of the period	31,055	33,207
Cash and cash equivalents at the end of the period	$ 33,675	$ 47,053

Bank borrowings	3 Months Ended
Bank borrowings	Mar. 31, 2013
Debt Disclosure [Abstract]
Bank borrowings	5. Bank borrowings Borrowings under lines of credit consist of borrowings in Euros used to fund international operations. There were no borrowings under such facilities at March 31, 2013 and $0.1 million at December 31, 2012. The weighted average interest rates on borrowings under the line of credit at December 31, 2012 was 3.70%. The Company had an unused available line of credit of €5.8 million ($7.4 million) and €5.8 million ($7.6 million) at March 31, 2013 and December 31, 2012, respectively, in its Italian line of credit. This line of credit provides the Company the option to borrow amounts in Italy at rates which are determined at the time of borrowing. This line of credit is unsecured.