Business segment information

6 Months Ended

Jun. 30, 2016

Segment Reporting [Abstract]

Business segment information

10. Business segment information

The Company has four strategic business units (“SBUs”), which are comprised of BioStim, Biologics, Extremity Fixation, and Spine Fixation supported by corporate activities. The primary metric used in managing the Company is net margin, which is defined as gross profit less sales and marketing expense. The Company neither discretely allocates assets, other than goodwill, to its operating segments nor evaluates the operating segments using discrete asset information.

The tables below present net sales for continuing operations by SBU reporting segment. Net sales include product sales and marketing service fees. Marketing service fees, which are recorded on a net basis, are comprised of fees earned for the marketing of Trinity Evolution^®, Trinity ELITE^® and Versashield™ in our Biologics segment.

	Three Months Ended June 30,
(U.S. Dollars, in thousands)	2016		2015		Reported Change
BioStim	$	44,758	$	40,703		10.0	%
Biologics		14,256		15,274		(6.7	)%
Extremity Fixation		26,817		25,594		4.8	%
Spine Fixation		18,244		19,383		(5.9	)%
Total net sales	$	104,075	$	100,954		3.1	%

	Six Months Ended June 30,
(U.S. Dollars, in thousands)	2016		2015		Reported Change
BioStim	$	85,802	$	78,403		9.4	%
Biologics		28,350		29,235		(3.0	)%
Extremity Fixation		51,526		47,409		8.7	%
Spine Fixation		37,076		35,669		3.9	%
Total net sales	$	202,754	$	190,716		6.3	%

The table below presents net margin, which is defined as gross profit less sales and marketing expense, by SBU reporting segment for the three and six months ended June 30, 2016 and 2015:

	Three Months Ended June 30,						Six Months Ended June 30,
(U.S. Dollars, in thousands)	2016			2015			2016			2015
Gross profit	$	81,560		$	79,044		$	158,103		$	149,467
Less: Sales and marketing		(46,037	)		(42,946	)		(90,853	)		(87,231	)
Total net margin	$	35,523		$	36,098		$	67,250		$	62,236
BioStim		18,577			16,787			34,988			30,800
Biologics		6,719			7,285			12,823			13,229
Extremity Fixation		8,162			9,149			15,340			16,165
Spine Fixation		2,203			3,173			4,539			2,644
Corporate		(138	)		(296	)		(440	)		(602	)
Total net margin		35,523			36,098			67,250			62,236
General and administrative		17,954			22,506			34,672			44,075
Research and development		6,792			6,451			14,428			12,296
Restatements and related costs		545			2,213			790			8,129
Charges related to U.S. Government resolutions		12,870			–			12,870			–
Operating (loss) income	$	(2,638	)	$	4,928		$	4,490		$	(2,264	)