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Business segment information | 12 Months Ended
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Dec. 31, 2023
Segment Reporting [Abstract] |
Business segment information | 16. Business segment information The Company's operations are managed through two reporting segments: Global Spine and Global Orthopedics. These reporting segments represent the operating segments for which the Chief Executive Officer, who is also the CODM, reviews financial information and makes resource allocation decisions among businesses. The primary metric used by the CODM in managing the Company is adjusted earnings before interest, tax, depreciation, and amortization (“adjusted EBITDA”, a non-GAAP financial measure). Adjusted EBITDA represents earnings before interest income (expense), income taxes, depreciation, and amortization, and excludes the impact of share-based compensation, gains and losses related to changes in foreign exchange rates, charges related to the SeaSpine merger and other strategic investments, acquisition-related fair value adjustments, gains and/or losses on investments, litigation and investigation charges, charges related to initial compliance with regulations set forth by the European Union Medical Device Regulation, gains and/or losses related to the realized effects the COVID-19 pandemic has had on the Company's business operations, and succession charges. Corporate activities are comprised of operating expenses not directly identifiable within the two reporting segments, such as human resources, finance, legal, and information technology functions. The Company neither discretely allocates assets, other than goodwill, to its operating segments nor evaluates the operating segments using discrete asset information. Global Spine The Global Spine reporting segment offers two primary product categories: (i) Bone Growth Therapies and (ii) Spinal Implants, Biologics, and Enabling Technologies. The Bone Growth Therapies product category manufactures, distributes, sells, and provides support services for market leading devices used adjunctively in high-risk spinal fusion procedures and to treat both nonunion and acute fractures in the orthopedic space. 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 acute and nonunion fractures. This product category uses distributors and a direct sales channel to sell its devices to hospitals, healthcare providers, and patients, in the U.S. Spinal Implants, Biologics, and Enabling Technologies is comprised of (i) a broad portfolio of spine fixation and motion preservation implant products used in surgical procedures of the spine, (ii) one of the most comprehensive biologics portfolios in both the demineralized bone matrix and cellular allograft market segments, and (iii) image-guided surgical solutions to facilitate degenerative, minimally invasive, and complex surgical procedures. Spinal Implants, Biologics, and Enabling Technologies products are sold through a network of distributors and sales representatives to hospitals and healthcare providers on a global basis for Spinal Implants and Enabling Technologies, and primarily within the U.S. for Biologics. Global Orthopedics The Global Orthopedics reporting segment offers products and solutions for limb deformity correction and complex limb reconstruction with a focus on use in trauma, adult and pediatric limb reconstruction, and foot and ankle procedures. This reporting segment specializes in the design, development, and marketing of external and internal fixation orthopedic products that are coupled with enabling digital technologies to serve the complete patient treatment pathway. We sell these products through a global network of distributors and sales representatives to hospitals, healthcare organizations, and healthcare providers. 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, |
|  | 2023 |  |  | 2022 |  |  | 2021 |
(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 |  | $ | 212,530 |  |  |  | 28.5 | % |  | $ | 187,247 |  |  |  | 40.7 | % |  | $ | 187,448 |  |  |  | 40.4 | %
Spinal Implants, Biologics, and Enabling Technologies |  |  | 418,789 |  |  |  | 56.1 | % |  |  | 165,927 |  |  |  | 36.0 | % |  |  | 171,515 |  |  |  | 36.9 | %
Global Spine |  |  | 631,319 |  |  |  | 84.6 | % |  |  | 353,174 |  |  |  | 76.7 | % |  |  | 358,963 |  |  |  | 77.3 | %
Global Orthopedics |  |  | 115,322 |  |  |  | 15.4 | % |  |  | 107,539 |  |  |  | 23.3 | % |  |  | 105,516 |  |  |  | 22.7 | %
Net sales |  | $ | 746,641 |  |  |  | 100.0 | % |  | $ | 460,713 |  |  |  | 100.0 | % |  | $ | 464,479 |  |  |  | 100.0 | %
The following table presents adjusted EBITDA, the primary metric used in managing the Company, by reporting segment:
|  | Year Ended December 31, |
(U.S. Dollars, in thousands) |  | 2023 |  |  | 2022 |  |  | 2021 |
Adjusted EBITDA by reporting segment |  |  |  |  |  |  |  |  |
Global Spine |  | $ | 91,115 |  |  | $ | 62,692 |  |  | $ | 71,086 |
Global Orthopedics |  |  | 442 |  |  |  | 5,267 |  |  |  | 9,260 |
Corporate |  |  | (45,272 | ) |  |  | (19,406 | ) |  |  | (19,084 | )
Consolidated adjusted EBITDA |  | $ | 46,285 |  |  | $ | 48,553 |  |  | $ | 61,262 |
Reconciling items: |  |  |  |  |  |  |  |  |
Interest expense, net |  | $ | 8,631 |  |  | $ | 1,288 |  |  | $ | 1,837 |
Depreciation and amortization |  |  | 53,063 |  |  |  | 29,019 |  |  |  | 41,355 |
Share-based compensation expense |  |  | 35,707 |  |  |  | 18,443 |  |  |  | 15,432 |
Foreign exchange impact |  |  | (1,581 | ) |  |  | 3,291 |  |  |  | 3,981 |
SeaSpine merger-related costs |  |  | 36,623 |  |  |  | 12,010 |  |  |  | — |
Strategic investments |  |  | 2,272 |  |  |  | 4,018 |  |  |  | 5,700 |
Acquisition-related fair value adjustments |  |  | 33,393 |  |  |  | (15,595 | ) |  |  | (2,014 | )
(Gain) loss on investments |  |  | 1,781 |  |  |  | 187 |  |  |  | (644 | )
Litigation and investigation costs |  |  | 14,453 |  |  |  | 803 |  |  |  | 33 |
Medical device regulation |  |  | 9,446 |  |  |  | 10,261 |  |  |  | 8,018 |
Business interruption - COVID-19 |  |  | — |  |  |  | 2,387 |  |  |  | 320 |
Succession charges |  |  | 1,176 |  |  |  | 147 |  |  |  | 739 |
Loss before income taxes |  | $ | (148,679 | ) |  | $ | (17,706 | ) |  | $ | (13,495 | )
The following table presents depreciation and amortization by reporting segment:
|  | Year Ended December 31, |
(U.S. Dollars, in thousands) |  | 2023 |  |  | 2022 |  |  | 2021 |
Global Spine |  | $ | 41,213 |  |  | $ | 18,213 |  |  | $ | 17,548 |
Global Orthopedics |  |  | 7,158 |  |  |  | 6,696 |  |  |  | 8,233 |
Corporate |  |  | 4,692 |  |  |  | 4,110 |  |  |  | 3,818 |
Total |  | $ | 53,063 |  |  | $ | 29,019 |  |  | $ | 29,599 |
Geographical information 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) |  | 2023 |  |  | 2022 |  |  | 2021 |
Global Spine |  |  |  |  |  |  |  |  |
U.S. |  | $ | 591,937 |  |  | $ | 332,846 |  |  | $ | 337,455 |
International |  |  | 39,382 |  |  |  | 20,328 |  |  |  | 21,508 |
Total Global Spine |  |  | 631,319 |  |  |  | 353,174 |  |  |  | 358,963 |
Global Orthopedics |  |  |  |  |  |  |  |  |
U.S. |  | $ | 28,892 |  |  |  | 25,997 |  |  |  | 24,490 |
International |  |  | 86,430 |  |  |  | 81,542 |  |  |  | 81,026 |
Total Global Orthopedics |  |  | 115,322 |  |  |  | 107,539 |  |  |  | 105,516 |
Consolidated |  |  |  |  |  |  |  |  |
U.S. |  |  | 620,829 |  |  |  | 358,843 |  |  |  | 361,945 |
International |  |  | 125,812 |  |  |  | 101,870 |  |  |  | 102,534 |
Net sales |  | $ | 746,641 |  |  | $ | 460,713 |  |  | $ | 464,479 |
The following data includes net sales by geographic destination:
|  | Year Ended December 31, |
(U.S. Dollars, in thousands) |  | 2023 |  |  | 2022 |  |  | 2021 |
U.S. |  | $ | 620,829 |  |  | $ | 358,843 |  |  | $ | 361,945 |
Italy |  |  | 20,060 |  |  |  | 19,098 |  |  |  | 20,187 |
Germany |  |  | 11,467 |  |  |  | 11,569 |  |  |  | 13,716 |
United Kingdom |  |  | 10,910 |  |  |  | 10,171 |  |  |  | 10,552 |
France |  |  | 11,096 |  |  |  | 10,377 |  |  |  | 10,475 |
Brazil |  |  | 6,452 |  |  |  | 5,668 |  |  |  | 5,108 |
Others |  |  | 65,827 |  |  |  | 44,987 |  |  |  | 42,496 |
Net sales |  | $ | 746,641 |  |  | $ | 460,713 |  |  | $ | 464,479 |
The following data includes property, plant, and equipment by geographic area:
(U.S. Dollars, in thousands) |  | 2023 |  |  | 2022 |
U.S. |  | $ | 142,727 |  |  | $ | 44,802 |
Italy |  |  | 10,187 |  |  |  | 8,535 |
Germany |  |  | 3,030 |  |  |  | 3,115 |
Others |  |  | 3,116 |  |  |  | 1,777 |
Total |  | $ | 159,060 |  |  | $ | 58,229 |

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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://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 22 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-22 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 15 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-15 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 31 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-31 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 42 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-42 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 40 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-40 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//280/tableOfContent Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 26 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-26 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 34 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-34 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 41 -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-41 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 21 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-21 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Topic 280 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 32 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482810/280-10-50-32 + Details
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