Business segment information

9 Months Ended

Sep. 30, 2019

11. Business segment information

During the first quarter of 2019, the Company changed its reporting segments from four reporting segments, previously reported as Bone Growth Therapies, Spinal Implants, Biologics, and Orthofix Extremities, to two reporting segments: Global Spine and Global Extremities. Additionally, the Company changed the performance measure used to evaluate segment performance from Non-GAAP net margin to EBITDA. These changes were made to align how the chief operating decision maker manages the business, reviews operating performance and allocates resources. The Company has revised its segment reporting to represent how the business is now managed and restated prior periods to conform to the current segment presentation. Corporate activities are comprised of the operating expenses and activities of the Company not necessarily identifiable within the two reporting segments, such as human resources, finance, legal, and information technology functions.

As part of the change in reporting segments, the Company performed a quantitative assessment of goodwill immediately prior to and subsequently following the change in reporting segments. The analysis did not result in an impairment. In addition, the net carrying value of goodwill that was previously reported under the prior reporting segments (i) Bone Growth Therapies, (ii) Spinal Implants, and (iii) Biologics has been consolidated and is now included within the Global Spine reporting segment as of September 30, 2019.

As mentioned above, the primary metric used in managing the Company is EBITDA. The table below presents EBITDA by reporting segment:

	Three Months Ended September 30,						Nine Months Ended September 30,
(U.S. Dollars, in thousands)	2019			2018			2019			2018
Global Spine	$	(6,033	)	$	15,637		$	21,065		$	53,492
Global Extremities		1,229			3,357			3,806			7,173
Corporate		(15,949	)		(15,403	)		(38,356	)		(35,097	)
Total EBITDA	$	(20,753	)	$	3,591		$	(13,485	)	$	25,568
Depreciation and amortization		(6,275	)		(4,738	)		(18,180	)		(13,661	)
Interest income (expense), net		186			(181	)		386			(615	)
Income (loss) before income taxes	$	(26,842	)	$	(1,328	)	$	(31,279	)	$	11,292

Geographical information

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

	Three Months Ended September 30,				Nine Months Ended September 30,
(U.S. Dollars, in thousands)	2019		2018		2019		2018
Global Spine
U.S.	$	82,816	$	79,502	$	246,943	$	239,262
International		5,275		5,295		17,145	$	13,499
Total Global Spine		88,091		84,797		264,088		252,761

Global Extremities
U.S.		6,636		7,254		20,078		21,193
International		18,772		19,657		54,295		58,010
Total Global Extremities		25,408		26,911		74,373		79,203

Consolidated
U.S.		89,452		86,756		267,021		260,455
International		24,047		24,952		71,440		71,509
Net sales	$	113,499	$	111,708	$	338,461	$	331,964