Business segment information

12 Months Ended

Dec. 31, 2020

Segment Reporting [Abstract]

Business segment information

16. Business segment information

The Company changed its reportable business segments in 2019 to align with changes in how the Company manages its business, reviews operating performance and allocates resources.  Following this change, 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 segments.

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,
	2020					2019					2018
(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	$	171,396		42.2	%	$	197,181		42.9	%	$	195,252		43.1	%
Spinal Implants		94,857		23.3	%		94,544		20.6	%		91,658		20.2	%
Biologics		55,482		13.6	%		65,496		14.2	%		59,684		13.2	%
Global Spine		321,735		79.1	%		357,221		77.7	%		346,594		76.5	%
Global Extremities		84,827		20.9	%		102,734		22.3	%		106,448		23.5	%
Net sales	$	406,562		100.0	%	$	459,955		100.0	%	$	453,042		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)	2020			2019			2018
Global Spine	$	63,036		$	39,528		$	76,545
Global Extremities		(4,993	)		7,496			9,453
Corporate		(25,382	)		(49,252	)		(43,626	)
Total EBITDA		32,661			(2,228	)		42,372
Depreciation and amortization		(30,546	)		(24,699	)		(18,659	)
Interest expense, net		(2,483	)		(122	)		(828	)
Income (loss) before income taxes	$	(368	)	$	(27,049	)	$	22,885

The following table presents depreciation and amortization by reporting segment:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2020		2019		2018
Global Spine	$	18,362	$	14,329	$	9,512
Global Extremities		7,896		5,575		5,342
Corporate		4,288		4,795		3,805
Total	$	30,546	$	24,699	$	18,659

Geographical information

The following data includes net sales by geographic destination:

	Year Ended December 31,
(U.S. Dollars, in thousands)	2020		2019		2018
U.S.	$	327,280	$	361,939	$	355,353
Italy		18,733		19,560		19,331
Germany		11,940		12,688		11,606
United Kingdom		7,147		10,090		8,731
Brazil		2,347		7,685		7,120
Others		39,115		47,993		50,901
Net sales	$	406,562	$	459,955	$	453,042

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)	2020		2019		2018
Global Spine
U.S.	$	304,595	$	335,410	$	326,994
International		17,140		21,811		19,600
Total Global Spine		321,735		357,221		346,594
Global Extremities
U.S.	$	22,685		26,529		28,359
International		62,142		76,205		78,089
Total Global Extremities		84,827		102,734		106,448
Consolidated
U.S.		327,280		361,939		355,353
International		79,282		98,016		97,689
Net sales	$	406,562	$	459,955	$	453,042

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

(U.S. Dollars, in thousands)	2020		2019
U.S.	$	47,646	$	51,278
Italy		10,503		7,937
Germany		2,516		849
United Kingdom		1,540		1,082
Brazil		163		141
Others		1,245		1,440
Total	$	63,613	$	62,727