Business segment information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Business segment information

15. Business segment information

We manage our business by our four SBUs: BioStim, Biologics, Extremity Fixation, and Spine Fixation. These SBUs represent the operating segments for which our Chief Executive Officer, who is also Chief Operating Decision Maker (the “CODM”), reviews financial information and makes resource allocation decisions among business units. The primary metric used by the CODM 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. Accordingly, our reporting segment information has been prepared based on our four SBUs.

BioStim

The BioStim SBU manufactures, distributes, and provides support services of market leading bone growth stimulator devices that enhance bone fusion. These Class III medical devices are indicated as an adjunctive, noninvasive treatment to improve fusion success rates in cervical and lumbar spine as well as a therapeutic treatment for non-spine fractures that have not healed (non-unions). This SBU uses distributors and sales representatives to sell its devices to hospitals, healthcare providers, and patients, primarily in the U.S.

Biologics

The Biologics SBU provides a portfolio of regenerative products and tissue forms that allow physicians to successfully treat a variety of spinal and orthopedic conditions. This SBU specializes in the marketing of the Company’s exclusive regeneration tissue forms. Biologics markets its tissues through a network of distributors and independent sales representatives to supply to hospitals, doctors, and other healthcare providers, primarily in the U.S. Our partnership with MTF allows us to exclusively market our Trinity Evolution and Trinity ELITE tissue forms for musculoskeletal defects to enhance bony fusion.

Extremity Fixation

The Extremity Fixation SBU offers products and solutions that allow physicians to successfully treat a variety of orthopedic conditions unrelated to the spine. This SBU specializes in the design, development, and marketing of the Company’s orthopedic products used in fracture repair, deformity correction and bone reconstruction procedures. Extremity Fixation distributes its products through a network of distributors and sales representatives to sell orthopedic products to hospitals, doctors, and other health providers, globally.

Spine Fixation

The Spine Fixation SBU specializes in the design, development and marketing of a broad portfolio of implant products used in surgical procedures of the spine. Spine Fixation distributes its products through a network of distributors and sales representatives to sell spine 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 within the four SBUs.

The table below presents net sales by reporting segment:

	Year Ended December 31,
	2016					2015					2014
(U.S. Dollars, in thousands)	Net Sales		Percent of Total Net Sales			Net Sales		Percent of Total Net Sales			Net Sales		Percent of Total Net Sales
BioStim	$	176,561		43.1	%	$	164,955		41.6	%	$	154,676		38.5	%
Biologics		57,912		14.1	%		59,832		15.1	%		55,881		13.9	%
Extremity Fixation		102,683		25.1	%		96,034		24.2	%		109,678		27.3	%
Spine Fixation		72,632		17.7	%		75,668		19.1	%		82,042		20.4	%
Net sales	$	409,788		100.0	%	$	396,489		100.0	%	$	402,277		100.0	%

The following table presents net margin by reporting segment:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2016			2015			2014
BioStim	$	75,469		$	67,878		$	66,096
Biologics		26,891			27,226			26,629
Extremity Fixation		30,526			29,493			31,586
Spine Fixation		8,650			8,547			14,243
Corporate		(888	)		(1,260	)		(1,736	)
Net margin	$	140,648		$	131,884		$	136,818
General and administrative		74,404			87,157			79,074
Research and development		28,803			26,389			24,994
Restatements and related costs		2,005			9,083			15,614
Charges related to U.S. Government resolutions		14,369			—			—
Operating income	$	21,067		$	9,255		$	17,136

The following table presents depreciation and amortization by reporting segment:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2016		2015		2014
BioStim	$	2,754	$	2,933	$	1,623
Biologics		1,011		1,157		1,161
Extremity Fixation		5,742		6,636		8,442
Spine Fixation		8,118		10,050		11,711
Corporate		3,216		147		(59	)
Total	$	20,841	$	20,923	$	22,878

Geographical information

The following data includes net sales by geographic destination:

(U.S. Dollars, in thousands)	2016		2015		2014
U.S.	$	316,873	$	305,505	$	294,682
Italy		16,664		15,655		19,573
United Kingdom		10,362		11,376		11,402
Brazil		11,334		13,512		19,633
Others		54,555		50,441		56,987
Net sales	$	409,788	$	396,489	$	402,277

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

(U.S. Dollars, in thousands)	2016		2015
U.S.	$	38,398	$	42,534
Italy		7,013		6,015
United Kingdom		617		998
Brazil		769		1,036
Others		2,119		1,723
Total	$	48,916	$	52,306