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Business segment information
12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Business segment information

15.

Business segment information

The Company changed its reportable business segments, beginning with the first quarter of 2019, to align with changes in how the Company manages its business, reviews operating performance and allocates resources.  The Company now reports results under two reportable segments: Global Spine and Global Extremities. These reporting segments represent the operating segments for which the Chief Executive Officer, who is also Chief Operating Decision Maker (the “CODM”), reviews financial information and makes resource allocation decisions among businesses. The primary metric used by the CODM in managing the Company is earnings before interest, tax, depreciation, and amortization (“EBITDA”). The Company neither discretely allocates assets, other than goodwill, to its operating segments nor evaluates the operating segments using discrete asset information. Accordingly, the reporting segment information has been prepared based on these two reporting segments. Prior periods have been recast to present the change in reporting segements.

Global Spine

The Global Spine reporting segment offers three primary product categories: Bone Growth Therapies, Spinal Implants, and Biologics.

The Bone Growth Therapies product category 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 the cervical and lumbar spine as well as a therapeutic treatment for non-spine fractures that have not healed (non-unions). This product category uses distributors and sales representatives to sell its devices to hospitals, healthcare providers, and patients, primarily in the U.S.

The Spinal Implants product category designs, develops, and markets a broad portfolio of motion preservation and fixation implant products used in surgical procedures of the spine. Spinal Implants distributes its products through a network of distributors and sales representatives to sell spine products to hospitals and healthcare providers, globally.

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

Global Extremities

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

Corporate

Corporate activities are comprised of the operating expenses and activities of the Company not necessarily identifiable within the two reporting segments.

The table below presents net sales by major product category by reporting segment: 

 

 

 

Year Ended December 31,

 

 

 

2019

 

 

2018

 

 

2017

 

(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

 

Bone Growth Therapies

 

$

197,181

 

 

 

42.9

%

 

$

195,252

 

 

 

43.1

%

 

$

185,900

 

 

 

42.9

%

Spinal Implants

 

 

94,544

 

 

 

20.6

%

 

 

91,658

 

 

 

20.2

%

 

 

81,957

 

 

 

18.9

%

Biologics

 

 

65,496

 

 

 

14.2

%

 

 

59,684

 

 

 

13.2

%

 

 

62,724

 

 

 

14.4

%

Global Spine

 

 

357,221

 

 

 

77.7

%

 

 

346,594

 

 

 

76.5

%

 

 

330,581

 

 

 

76.2

%

Global Extremities

 

 

102,734

 

 

 

22.3

%

 

 

106,448

 

 

 

23.5

%

 

 

103,242

 

 

 

23.8

%

Net sales

 

$

459,955

 

 

 

100.0

%

 

$

453,042

 

 

 

100.0

%

 

$

433,823

 

 

 

100.0

%

 

The following table presents EBITDA, the primary metric used in managing the Company, by reporting segment:

 

 

 

Year Ended December 31,

 

(U.S. Dollars, in thousands)

 

2019

 

 

2018

 

 

2017

 

Global Spine

 

$

39,528

 

 

$

76,545

 

 

$

84,034

 

Global Extremities

 

 

7,496

 

 

 

9,453

 

 

 

7,143

 

Corporate

 

 

(49,252

)

 

 

(43,626

)

 

 

(34,246

)

Total EBITDA

 

 

(2,228

)

 

 

42,372

 

 

 

56,931

 

Depreciation and amortization

 

 

(24,699

)

 

 

(18,659

)

 

 

(20,124

)

Interest expense, net

 

 

(122

)

 

 

(828

)

 

 

(416

)

Income (loss) before income taxes

 

$

(27,049

)

 

$

22,885

 

 

$

36,391

 

 

The following table presents depreciation and amortization by reporting segment:

  

 

 

Year Ended December 31,

 

(U.S. Dollars, in thousands)

 

2019

 

 

2018

 

 

2017

 

Global Spine

 

$

14,329

 

 

$

9,512

 

 

$

9,834

 

Global Extremities

 

 

5,575

 

 

 

5,342

 

 

 

6,040

 

Corporate

 

 

4,795

 

 

 

3,805

 

 

 

4,250

 

Total

 

$

24,699

 

 

$

18,659

 

 

$

20,124

 

Geographical information

The following data includes net sales by geographic destination:

 

 

 

Year Ended December 31,

 

(U.S. Dollars, in thousands)

 

2019

 

 

2018

 

 

2017

 

U.S.

 

$

361,939

 

 

$

355,353

 

 

$

345,145

 

Italy

 

 

19,560

 

 

 

19,331

 

 

 

17,059

 

Germany

 

 

12,688

 

 

 

11,606

 

 

 

7,063

 

United Kingdom

 

 

10,090

 

 

 

8,731

 

 

 

8,725

 

Brazil

 

 

7,685

 

 

 

7,120

 

 

 

10,356

 

Others

 

 

47,993

 

 

 

50,901

 

 

 

45,475

 

Net sales

 

$

459,955

 

 

$

453,042

 

 

$

433,823

 

 

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

  

 

 

Year Ended December 31,

 

(U.S. Dollars, in thousands)

 

2019

 

 

2018

 

 

2017

 

Global Spine

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

335,410

 

 

$

326,994

 

 

$

318,227

 

International

 

 

21,811

 

 

 

19,600

 

 

 

12,354

 

Total Global Spine

 

 

357,221

 

 

 

346,594

 

 

 

330,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Global Extremities

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

26,529

 

 

 

28,359

 

 

 

26,918

 

International

 

 

76,205

 

 

 

78,089

 

 

 

76,324

 

Total Global Extremities

 

 

102,734

 

 

 

106,448

 

 

 

103,242

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

361,939

 

 

 

355,353

 

 

 

345,145

 

International

 

 

98,016

 

 

 

97,689

 

 

 

88,678

 

Net sales

 

$

459,955

 

 

$

453,042

 

 

$

433,823

 

 

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

 

(U.S. Dollars, in thousands)

 

2019

 

 

2018

 

U.S.

 

$

51,278

 

 

$

31,344

 

Italy

 

 

7,937

 

 

 

7,732

 

Germany

 

 

849

 

 

 

861

 

United Kingdom

 

 

1,082

 

 

 

896

 

Brazil

 

 

141

 

 

 

191

 

Others

 

 

1,440

 

 

 

1,811

 

Total

 

$

62,727

 

 

$

42,835