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Business segment information | 6 Months Ended
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Jun. 30, 2025
Segment Reporting [Abstract] |
Business segment information | 10. 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 President and Chief Executive Officer, who is also the Chief Operating Decision Maker ("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, restructuring costs and impairments related to M6 product lines, acquisition-related fair value adjustments, gains and/or losses on investments, litigation and investigation charges, succession charges, and refunds associated with the employee retention credit established by the Coronavirus Aid, Relief, and Economic Security Act. 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 bone growth stimulation 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-spinal, appendicular fractures, treating both fresh or nonunion fractures. These products are sold almost exclusively in the U.S., using distributors and direct sales representatives to provide our devices to healthcare providers and their patients. Spinal Implants, Biologics, and Enabling Technologies comprises (i) a broad portfolio of spine fixation 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 the underserved limb reconstruction market that encompasses four pillars: deformity correction, limb lengthening, complex fracture management, and limb preservation. 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. The Company sells these products worldwide through a global network of distributors and sales representatives to hospitals, healthcare organizations, and healthcare providers. The following table presents adjusted EBITDA, the primary metric used in managing the Company, by reporting segment:
|  | Three Months Ended June 30, 2025 |  | Six Months Ended June 30, 2025 |
(U.S. Dollars, in thousands) |  | Global Spine |  |  | Global Orthopedics |  |  | Total |  | Global Spine |  |  | Global Orthopedics |  |  | Total |
Segment revenues |  | $ | 169,824 |  |  | $ | 33,297 |  |  | $ | 203,121 |  | $ | 333,660 |  |  | $ | 63,107 |  |  | $ | 396,767 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-GAAP Cost of sales |  |  | 42,811 |  |  |  | 12,266 |  |  |  | 55,077 |  |  | 87,398 |  |  |  | 24,137 |  |  |  | 111,535 |
Non-GAAP Sales, general, and administrative |  |  | 97,169 |  |  |  | 17,990 |  |  |  | 115,159 |  |  | 189,708 |  |  |  | 35,911 |  |  |  | 225,619 |
Non-GAAP Research and development |  |  | 11,761 |  |  |  | 2,674 |  |  |  | 14,435 |  |  | 23,384 |  |  |  | 5,526 |  |  |  | 28,910 |
Other segment expenses (benefits) |  |  | 2,464 |  |  |  | 6 |  |  |  | 2,470 |  |  | 6,907 |  |  |  | (169 | ) |  |  | 6,738 |
Add: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-GAAP Depreciation, amortization, and share-based compensation expense |  |  | 10,814 |  |  |  | 2,124 |  |  |  | 12,938 |  |  | 19,686 |  |  |  | 4,756 |  |  |  | 24,442 |
Segment Adjusted EBITDA |  | $ | 26,433 |  |  | $ | 2,485 |  |  | $ | 28,918 |  | $ | 45,949 |  |  | $ | 2,458 |  |  | $ | 48,407 |
Reconciling items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate operating expenses |  |  |  |  |  |  |  |  | 8,273 |  |  |  |  |  |  |  |  | 16,331 |
Interest expense, net |  |  |  |  |  |  |  |  | 3,950 |  |  |  |  |  |  |  |  | 8,456 |
Depreciation and amortization |  |  |  |  |  |  |  |  | 16,871 |  |  |  |  |  |  |  |  | 51,302 |
Share-based compensation expense |  |  |  |  |  |  |  |  | 7,824 |  |  |  |  |  |  |  |  | 14,293 |
Foreign exchange impact |  |  |  |  |  |  |  |  | (2,751 | ) |  |  |  |  |  |  |  | (3,795 | )
SeaSpine merger-related costs |  |  |  |  |  |  |  |  | 4,886 |  |  |  |  |  |  |  |  | 6,016 |
Restructuring costs and impairments related to M6 product lines |  |  |  |  |  |  |  |  | 3,354 |  |  |  |  |  |  |  |  | 15,480 |
Strategic investments |  |  |  |  |  |  |  |  | 353 |  |  |  |  |  |  |  |  | 3,867 |
Acquisition-related fair value adjustments |  |  |  |  |  |  |  |  | (763 | ) |  |  |  |  |  |  |  | (1,373 | )
Interest and loss on investments |  |  |  |  |  |  |  |  | (31 | ) |  |  |  |  |  |  |  | (31 | )
Litigation and investigation costs |  |  |  |  |  |  |  |  | 4,029 |  |  |  |  |  |  |  |  | 7,071 |
Employee retention credit |  |  |  |  |  |  |  |  | (2,854 | ) |  |  |  |  |  |  |  | (2,854 | )
Loss before income taxes |  |  |  |  |  |  |  | $ | (14,223 | ) |  |  |  |  |  |  | $ | (66,356 | )
|  | Three Months Ended June 30, 2024 |  | Six Months Ended June 30, 2024 |
(U.S. Dollars, in thousands) |  | Global Spine |  |  | Global Orthopedics |  |  | Total |  | Global Spine |  |  | Global Orthopedics |  |  | Total |
Segment Revenues |  | $ | 168,034 |  |  | $ | 30,586 |  |  | $ | 198,620 |  | $ | 329,327 |  |  | $ | 57,901 |  |  | $ | 387,228 |
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-GAAP Cost of sales |  |  | 43,958 |  |  |  | 12,469 |  |  |  | 56,427 |  |  | 88,812 |  |  |  | 23,316 |  |  |  | 112,128 |
Non-GAAP Sales, general, and administrative |  |  | 92,542 |  |  |  | 19,375 |  |  |  | 111,917 |  |  | 184,354 |  |  |  | 37,522 |  |  |  | 221,876 |
Non-GAAP Research and development |  |  | 14,118 |  |  |  | 3,542 |  |  |  | 17,660 |  |  | 30,063 |  |  |  | 6,854 |  |  |  | 36,917 |
Other segment expenses (benefits) |  |  | (170 | ) |  |  | 36 |  |  |  | (134 | ) |  | (137 | ) |  |  | (72 | ) |  |  | (209 | )
Add: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-GAAP Depreciation, amortization, and share-based compensation expense |  |  | 10,102 |  |  |  | 5,015 |  |  |  | 15,117 |  |  | 21,343 |  |  |  | 8,406 |  |  |  | 29,749 |
Segment Adjusted EBITDA |  | $ | 27,688 |  |  | $ | 179 |  |  | $ | 27,867 |  | $ | 47,578 |  |  | $ | (1,313 | ) |  | $ | 46,265 |
Reconciling items: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Corporate operating expenses |  |  |  |  |  |  |  |  | 11,234 |  |  |  |  |  |  |  |  | 21,967 |
Interest expense, net |  |  |  |  |  |  |  |  | 4,943 |  |  |  |  |  |  |  |  | 9,501 |
Depreciation and amortization |  |  |  |  |  |  |  |  | 14,032 |  |  |  |  |  |  |  |  | 28,894 |
Share-based compensation expense |  |  |  |  |  |  |  |  | 9,959 |  |  |  |  |  |  |  |  | 18,759 |
Foreign exchange impact |  |  |  |  |  |  |  |  | 851 |  |  |  |  |  |  |  |  | 2,439 |
SeaSpine merger-related costs |  |  |  |  |  |  |  |  | 5,897 |  |  |  |  |  |  |  |  | 10,376 |
Strategic investments |  |  |  |  |  |  |  |  | 311 |  |  |  |  |  |  |  |  | 431 |
Acquisition-related fair value adjustments |  |  |  |  |  |  |  |  | 6,117 |  |  |  |  |  |  |  |  | 10,334 |
Interest and loss on investments |  |  |  |  |  |  |  |  | 1,813 |  |  |  |  |  |  |  |  | 1,553 |
Litigation and investigation costs |  |  |  |  |  |  |  |  | (277 | ) |  |  |  |  |  |  |  | 1,983 |
Succession charges |  |  |  |  |  |  |  |  | 5,346 |  |  |  |  |  |  |  |  | 7,556 |
Loss before income taxes |  |  |  |  |  |  |  | $ | (32,359 | ) |  |  |  |  |  |  | $ | (67,528 | )
The following table presents depreciation and amortization by reporting segment:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(Unaudited, U.S. Dollars, in thousands) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Global Spine |  | $ | 14,851 |  |  | $ | 11,044 |  |  | $ | 46,753 |  |  | $ | 22,973 |
Global Orthopedics |  |  | 1,419 |  |  |  | 2,191 |  |  |  | 3,355 |  |  |  | 4,398 |
Corporate |  |  | 601 |  |  |  | 797 |  |  |  | 1,194 |  |  |  | 1,523 |
Total |  | $ | 16,871 |  |  | $ | 14,032 |  |  | $ | 51,302 |  |  | $ | 28,894 |
Geographical information The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(Unaudited, U.S. Dollars, in thousands) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
Global Spine |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  | $ | 161,850 |  |  | $ | 159,191 |  |  | $ | 314,553 |  |  | $ | 311,056 |
International |  |  | 7,974 |  |  |  | 8,843 |  |  |  | 19,107 |  |  |  | 18,271 |
Total Global Spine |  |  | 169,824 |  |  |  | 168,034 |  |  |  | 333,660 |  |  |  | 329,327 |
Global Orthopedics |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  |  | 9,888 |  |  |  | 7,742 |  |  |  | 18,866 |  |  |  | 15,896 |
International |  |  | 23,409 |  |  |  | 22,844 |  |  |  | 44,241 |  |  |  | 42,005 |
Total Global Orthopedics |  |  | 33,297 |  |  |  | 30,586 |  |  |  | 63,107 |  |  |  | 57,901 |
Consolidated |  |  |  |  |  |  |  |  |  |  |  |
U.S. |  |  | 171,738 |  |  |  | 166,933 |  |  |  | 333,419 |  |  |  | 326,952 |
International |  |  | 31,383 |  |  |  | 31,687 |  |  |  | 63,348 |  |  |  | 60,276 |
Net sales |  | $ | 203,121 |  |  | $ | 198,620 |  |  | $ | 396,767 |  |  | $ | 387,228 |
The following data includes net sales by geographic area:
|  | Three Months Ended June 30, |  |  | Six Months Ended June 30, |
(Unaudited, U.S. Dollars, in thousands) |  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024 |
U.S. |  | $ | 171,738 |  |  | $ | 166,933 |  |  | $ | 333,419 |  |  | $ | 326,952 |
Italy |  |  | 5,646 |  |  |  | 5,257 |  |  |  | 10,699 |  |  |  | 10,259 |
France |  |  | 3,184 |  |  |  | 3,510 |  |  |  | 5,809 |  |  |  | 6,026 |
United Kingdom |  |  | 3,118 |  |  |  | 2,623 |  |  |  | 6,155 |  |  |  | 5,254 |
Germany |  |  | 2,265 |  |  |  | 2,393 |  |  |  | 4,473 |  |  |  | 4,498 |
Brazil |  |  | 988 |  |  |  | 1,708 |  |  |  | 2,123 |  |  |  | 3,236 |
Others |  |  | 16,182 |  |  |  | 16,196 |  |  |  | 34,089 |  |  |  | 31,003 |
Net Sales |  | $ | 203,121 |  |  | $ | 198,620 |  |  | $ | 396,767 |  |  | $ | 387,228 |
The following data includes property, plant, and equipment by geographic area:
(U.S. Dollars, in thousands) |  | June 30, 2025 |  |  | December 31, 2024 |
|  | (Unaudited) |  |  |  |
U.S. |  | $ | 114,012 |  |  | $ | 125,541 |
Italy |  |  | 10,085 |  |  |  | 9,472 |
Germany |  |  | 1,794 |  |  |  | 1,904 |
Others |  |  | 3,309 |  |  |  | 2,887 |
Total |  | $ | 129,200 |  |  | $ | 139,804 |

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