Business segment information

3 Months Ended

Mar. 31, 2018

Segment Reporting [Abstract]

Business segment information

8. Business segment information

The table below present net sales, which includes product sales and marketing service fees, by reporting segment:

	Three Months Ended March 31,
(U.S. Dollars, in thousands)	2018		2017		Change
BioStim	$	46,163	$	44,539		3.6	%
Extremity Fixation		27,504		23,945		14.9	%
Spine Fixation		20,707		19,267		7.5	%
Biologics		14,335		14,987		-4.4	%
Net sales	$	108,709	$	102,738		5.8	%

The primary metric used in managing the Company is non-GAAP net margin, which is an internal metric that the Company defines as gross profit less sales and marketing expense. The table below presents non-GAAP net margin by reporting segment:

	Three Months Ended March 31,
(U.S. Dollars, in thousands)	2018			2017
BioStim	$	18,946		$	17,133
Extremity Fixation		8,158			6,412
Spine Fixation		1,261			2,007
Biologics		6,080			6,171
Corporate		(151	)		(98	)
Non-GAAP net margin	$	34,294		$	31,625
General and administrative		19,484			18,282
Research and development		6,937			7,424
Operating income	$	7,873		$	5,919
Interest income (expense), net		(183	)		45
Other income (expense), net		2,912			(4,348	)
Income before income taxes	$	10,602		$	1,616

Geographical information

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

	Three Months Ended March 31,
(U.S. Dollars, in thousands)	2018		2017
BioStim
U.S.	$	46,137	$	44,539
International		26		—
Total BioStim		46,163		44,539
Extremity Fixation
U.S.		6,916		6,579
International		20,588		17,366
Total Extremity Fixation		27,504		23,945
Spine Fixation
U.S.		17,579		16,035
International		3,128		3,232
Total Spine Fixation		20,707		19,267
Biologics
U.S.		14,322		14,963
International		13		24
Total Biologics		14,335		14,987
Consolidated
U.S.		84,954		82,116
International		23,755		20,622
Net sales	$	108,709	$	102,738