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 September 30,
(U.S. Dollars, in thousands)	2019		2018		Change
Bone Growth Therapies	$	48,836	$	48,059		1.6	%
Spinal Implants		22,947		22,102		3.8	%
Biologics		16,308		14,636		11.4	%
Global Spine		88,091		84,797		3.9	%
Global Extremities		25,408		26,911		-5.6	%
Net sales	$	113,499	$	111,708		1.6	%

	Nine Months Ended September 30,
(U.S. Dollars, in thousands)	2019		2018		Change
Bone Growth Therapies	$	146,228	$	142,433		2.7	%
Spinal Implants		69,076		66,689		3.6	%
Biologics		48,784		43,639		11.8	%
Global Spine		264,088		252,761		4.5	%
Global Extremities		74,373		79,203		-6.1	%
Net sales	$	338,461	$	331,964		2.0	%

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(U.S. Dollars, in thousands)	2019		2018		2019		2018
Product sales	$	97,833	$	97,604	$	291,632	$	289,946
Marketing service fees		15,666		14,104		46,829		42,018
Net sales	$	113,499	$	111,708	$	338,461	$	331,964

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 $3.5 million and $1.9 million as of September 30, 2019, and December 31, 2018, respectively.