v3.25.2
Business segment information
 6 Months Ended
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