v3.25.1
Segment Information
 3 Months Ended
Apr. 04, 2025
Segment Reporting [Abstract]  
Segment Information Segment Information
The Company conducts its continuing operations through the Prevention & Recovery and Reconstructive operating segments, which also represent the Company’s reportable segments.

▪P&R - a leader in orthopedic solutions and recovery sciences, providing devices, software, and services across the patient care continuum from injury prevention to rehabilitation after surgery, injury, or from degenerative disease.

•Recon - an innovation market-leader positioned in the fast-growing surgical implant business, offering a comprehensive suite of reconstructive joint products for the hip, knee, shoulder, elbow, foot, ankle, and finger, and surgical productivity tools.

The Company’s management, including the chief operating decision maker, evaluates the operating results of each of its reportable segments based upon Net sales and Adjusted EBITDA, which excludes the effect of Other (income) expense, net, non-operating (gain) loss on investments, debt extinguishment charges, interest expense, net, restructuring and certain other charges, Medical Device Regulation (MDR) and other costs, strategic transaction costs, stock-based compensation, depreciation and other amortization, acquisition-related intangible asset amortization, purchase of royalty interest, insurance settlement loss (gain), goodwill impairment charges, and inventory step-up charges from the results of the Company’s operating segments.
The Company’s segment results were as follows:
Three Months Ended
April 4, 2025March 29, 2024
(In thousands)
Prevention & Recovery:
Net sales$272,584 $259,013 
Segment cost of sales128,764 127,677 
Segment research and development9,241 8,780 
Segment operating expense107,844 99,202 
Total segment expenses245,849 235,659 
Add: Depreciation4,168 4,569 
Adjusted EBITDA (non-GAAP)$30,903 $27,923 
Reconstructive:
Net sales$286,250 $257,253 
Segment cost of sales85,157 85,617 
Segment research and development19,287 14,597 
Segment operating expense138,402 124,332 
Total segment expenses242,846 224,546 
Add: Depreciation24,867 22,604 
Adjusted EBITDA (non-GAAP)$68,271 $55,311 
Total:
Net Sales$558,834 $516,266 
Adjusted EBITDA (non-GAAP) $99,174 $83,234 
(1) The following is a reconciliation of Loss from continuing operations before income taxes to Adjusted EBITDA:
Three Months Ended
April 4, 2025March 29, 2024
(In thousands)
Loss from continuing operations before income taxes (GAAP)$(57,349)$(79,245)
Restructuring and other costs (1)
3,908 12,911 
MDR and other costs (2)
3,239 4,918 
Strategic transaction costs (3)
12,054 20,837 
Stock-based compensation 7,407 6,400 
Depreciation and other amortization 29,624 27,173 
Amortization of acquired intangibles 41,812 40,931 
Purchase of royalty interest35,777 — 
Inventory step-up 12,122 5,077 
Interest expense, net 9,188 19,996 
Other (income) expense, net (4)
1,392 24,235 
Adjusted EBITDA (non-GAAP) $99,174 $83,234 
(1) Restructuring and other charges includes an immaterial expense classified as Cost of sales on the Company’s Condensed Consolidated Statements of Operations for the three months ended April 4, 2025.
(2) Primarily related to costs specific to compliance with medical device reporting regulations and other requirements of the European Union Medical Devices Regulation. These costs are classified as Selling, general and administrative expense on our Condensed Consolidated Statements of Operations.
(3) Primarily relates to integration costs associated with the Lima Acquisition.
(4) Includes the final fair value loss adjustment for the Contingent Acquisition Shares in 2025, and the fair value gain on Contingent Acquisition Shares in 2024, partially offset by a loss on the non-designated forward currency hedge for managing exchange rate risk related to the Euro-denominated purchase price of the Lima Acquisition.