The Company has two reporting segments, which consist of Global Spine and Global Extremities. Within the Global Spine reporting segment there are three product categories: Bone Growth Therapies, Spinal Implants and Biologics.

The tables below present net sales by major product category by reporting segment:

	Three Months Ended June 30,
(U.S. Dollars, in thousands)	2019		2018		Change
Bone Growth Therapies	$	50,109	$	48,211		3.9	%
Spinal Implants		23,226		23,880		-2.7	%
Biologics		16,744		14,668		14.2	%
Global Spine		90,079		86,759		3.8	%
Global Extremities		25,771		24,788		4.0	%
Net sales	$	115,850	$	111,547		3.9	%

	Six Months Ended June 30,
(U.S. Dollars, in thousands)	2019		2018		Change
Bone Growth Therapies	$	97,392	$	94,374		3.2	%
Spinal Implants		46,129		44,587		3.5	%
Biologics		32,476		29,003		12.0	%
Global Spine		175,997		167,964		4.8	%
Global Extremities		48,965		52,292		-6.4	%
Net sales	$	224,962	$	220,256		2.1	%

The table below presents net sales, which includes product sales and marketing service fees, for the three and six months ended June 30, 2019 and 2018.

	Three Months Ended June 30,				Six Months Ended June 30,
(U.S. Dollars, in thousands)	2019		2018		2019		2018
Product sales	$	99,865	$	97,453	$	193,799	$	192,342
Marketing service fees		15,985		14,094		31,163		27,914
Net sales	$	115,850	$	111,547	$	224,962	$	220,256

Product sales primarily consist of the sale of bone growth therapy devices and internal and external fixation products. Marketing service fees are received from MTF Biologics based on total sales of biologics tissues and relate solely to the Global Spine reporting segment. Revenues exclude any value added or other local taxes, intercompany sales and trade discounts. Shipping and handling costs for products shipped to customers are included in cost of sales.

In June 2019, the Company received a payment of $1.4 million from the Administration of Medical Services of Puerto Rico, a government-owned corporation, in settlement of approximately $2.5 million of outstanding accounts receivable. This $2.5 million of outstanding accounts receivable had previously been fully reserved between the Company’s allowances for doubtful accounts and contractual allowances. As a result of this settlement, and in accordance with the Company’s policy, the Company recorded the resulting adjustment to contractual allowances of $0.4 million within net sales and the recovery of the allowance for doubtful accounts as a credit to bad debt expense of $1.0 million.

The Company’s contract assets, excluding trade accounts receivable (“other contract assets”), largely consist of payments made to certain distributors to obtain contracts, gain access to customers in certain territories, and to provide the benefit of the exclusive distribution of Orthofix products. Other contract assets are included in other long-term assets or other current assets, dependent upon the original term of the related agreement, and totaled $3.9 million and $1.9 million as of June 30, 2019, and December 31, 2018, respectively.