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Business segment information | 12 Months Ended
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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 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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