Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Feb. 22, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | OFIX | ||
Entity Registrant Name | ORTHOFIX MEDICAL INC. | ||
Entity Central Index Key | 884,624 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 19,061,192 | ||
Entity Public Float | $ 1,050.4 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 69,623 | $ 81,157 |
Restricted cash | 2,566 | |
Trade accounts receivable, less allowances of $7,463 and $8,405 at December 31, 2018 and 2017, respectively | 77,747 | 63,437 |
Inventories | 76,847 | 81,330 |
Prepaid expenses and other current assets | 17,856 | 25,877 |
Total current assets | 244,639 | 251,801 |
Property, plant and equipment, net | 42,835 | 45,139 |
Patents and other intangible assets, net | 51,897 | 10,461 |
Goodwill | 72,401 | 53,565 |
Deferred income taxes | 33,228 | 23,315 |
Other long-term assets | 21,641 | 21,073 |
Total assets | 466,641 | 405,354 |
Current liabilities | ||
Trade accounts payable | 17,989 | 18,111 |
Other current liabilities | 67,919 | 61,295 |
Total current liabilities | 85,908 | 79,406 |
Other long-term liabilities | 45,336 | 29,340 |
Total liabilities | 131,244 | 108,746 |
Contingencies (Note 13) | ||
Shareholders’ equity | ||
Common shares $0.10 par value; 50,000,000 shares authorized; 18,579,688 and 18,278,833 issued and outstanding as of December 31, 2018 and 2017, respectively | 1,858 | 1,828 |
Additional paid-in capital | 243,165 | 220,591 |
Retained earnings | 87,078 | 70,402 |
Accumulated other comprehensive income | 3,296 | 3,787 |
Total shareholders’ equity | 335,397 | 296,608 |
Total liabilities and shareholders’ equity | $ 466,641 | $ 405,354 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 7,463 | $ 8,405 |
Common shares, par value | $ 0.10 | $ 0.10 |
Common shares, authorized | 50,000,000 | 50,000,000 |
Common shares, issued | 18,579,688 | 18,278,833 |
Common shares, outstanding | 18,579,688 | 18,278,833 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | |||
Net sales | $ 453,042 | $ 433,823 | $ 409,788 |
Cost of sales | 96,628 | 93,037 | 87,853 |
Gross profit | 356,414 | 340,786 | 321,935 |
Sales and marketing | 205,527 | 198,370 | 181,287 |
General and administrative | 84,506 | 71,905 | 76,409 |
Research and development | 33,218 | 29,700 | 28,803 |
Changes in fair value of contingent consideration | 3,069 | ||
Charges related to U.S. Government resolutions (Note 13) | 14,369 | ||
Operating income | 30,094 | 40,811 | 21,067 |
Interest income (expense), net | (828) | (416) | 763 |
Other expense, net | (6,381) | (4,004) | (2,806) |
Income before income taxes | 22,885 | 36,391 | 19,024 |
Income tax expense | (9,074) | (29,100) | (15,527) |
Net income from continuing operations | 13,811 | 7,291 | 3,497 |
Discontinued operations (Note 13) | |||
Loss from discontinued operations | (1,759) | (638) | |
Income tax benefit | 691 | 197 | |
Net loss from discontinued operations | (1,068) | (441) | |
Net income | $ 13,811 | $ 6,223 | $ 3,056 |
Net income per common share—basic | |||
Net income from continuing operations | $ 0.73 | $ 0.40 | $ 0.19 |
Net loss from discontinued operations | (0.06) | (0.02) | |
Net income per common share—basic | 0.73 | 0.34 | 0.17 |
Net income per common share—diluted | |||
Net income from continuing operations | 0.72 | 0.39 | 0.19 |
Net loss from discontinued operations | (0.05) | (0.02) | |
Net income per common share—diluted | $ 0.72 | $ 0.34 | $ 0.17 |
Weighted average number of common shares: | |||
Basic | 18,494,002 | 18,117,405 | 18,144,019 |
Diluted | 18,911,610 | 18,498,745 | 18,463,161 |
Other comprehensive income (loss), before tax | |||
Unrealized gain (loss) on derivative instrument | $ (360) | ||
Unrealized gain (loss) on debt security | $ 1,770 | $ 3,830 | (1,744) |
Reclassification adjustment for loss on debt security in net income | 5,585 | 2,727 | |
Currency translation adjustment | (1,823) | 4,552 | (726) |
Other comprehensive income (loss) before tax | (53) | 13,967 | (103) |
Income tax expense related to items of other comprehensive income (loss) | (438) | (3,600) | (245) |
Other comprehensive income (loss), net of tax | (491) | 10,367 | (348) |
Comprehensive income | $ 13,320 | $ 16,590 | $ 2,708 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Shares [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Beginning Balance at Dec. 31, 2015 | $ 290,311 | $ 1,866 | $ 232,126 | $ 62,551 | $ (6,232) |
Balance, Shares at Dec. 31, 2015 | 18,659,696 | ||||
Cumulative effect adjustment from adoption | ASU 2016-09 [Member] | 604 | 2,032 | (1,428) | ||
Net income | 3,056 | 3,056 | |||
Other comprehensive income (loss), net of tax | (348) | (348) | |||
Share-based compensation | 15,966 | 15,966 | |||
Common shares issued | 17,313 | $ 71 | 17,242 | ||
Common shares issued, Shares | 713,140 | ||||
Retirement of repurchased common stock | $ (63,425) | $ (154) | (63,271) | ||
Retirement of repurchased common stock, Shares | (1,544,681) | (1,544,681) | |||
Ending Balance at Dec. 31, 2016 | $ 263,477 | $ 1,783 | 204,095 | 64,179 | (6,580) |
Balance, Shares at Dec. 31, 2016 | 17,828,155 | ||||
Net income | 6,223 | 6,223 | |||
Other comprehensive income (loss), net of tax | 10,367 | 10,367 | |||
Share-based compensation | 12,557 | 12,557 | |||
Common shares issued | 3,984 | $ 45 | 3,939 | ||
Common shares issued, Shares | 450,678 | ||||
Ending Balance at Dec. 31, 2017 | $ 296,608 | $ 1,828 | 220,591 | 70,402 | 3,787 |
Balance, Shares at Dec. 31, 2017 | 18,278,833 | 18,278,833 | |||
Cumulative effect adjustment from adoption | ASU 2016-16 [Member] | $ (1,900) | ||||
Ending Balance (ASU 2014-09 [Member]) at Jan. 01, 2018 | 301,369 | ||||
Beginning Balance at Dec. 31, 2017 | $ 296,608 | $ 1,828 | 220,591 | 70,402 | 3,787 |
Balance, Shares at Dec. 31, 2017 | 18,278,833 | 18,278,833 | |||
Cumulative effect adjustment from adoption | ASU 2014-09 [Member] | $ 4,761 | 4,761 | |||
Cumulative effect adjustment from adoption | ASU 2016-16 [Member] | (1,896) | (1,896) | |||
Net income | 13,811 | 13,811 | |||
Other comprehensive income (loss), net of tax | (491) | (491) | |||
Share-based compensation | 18,930 | 18,930 | |||
Common shares issued | 3,674 | $ 30 | 3,644 | ||
Common shares issued, Shares | 300,855 | ||||
Ending Balance at Dec. 31, 2018 | $ 335,397 | $ 1,858 | $ 243,165 | $ 87,078 | $ 3,296 |
Balance, Shares at Dec. 31, 2018 | 18,579,688 | 18,579,688 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities | |||
Net income | $ 13,811 | $ 6,223 | $ 3,056 |
Adjustments to reconcile net income to net cash from operating activities | |||
Depreciation and amortization | 18,659 | 20,124 | 20,841 |
Amortization of debt costs and other assets | 1,024 | 1,712 | 1,569 |
Provision for doubtful accounts | (599) | 1,639 | 1,117 |
Deferred income taxes | (2,661) | 21,286 | 10,460 |
Share-based compensation | 18,930 | 12,557 | 15,966 |
Other-than-temporary impairment on debt securities | 5,585 | 2,727 | |
Loss on valuation of equity securities | 3,050 | ||
Changes in fair value of contingent consideration | 3,069 | ||
Other | 1,633 | 1,398 | 1,061 |
Changes in operating assets and liabilities, net of effects of acquisitions | |||
Trade accounts receivable | (3,706) | (6,562) | 392 |
Inventories | 9,698 | (15,645) | (5,284) |
Prepaid expenses and other current assets | (1,127) | (6,352) | 701 |
Trade accounts payable | (170) | 2,324 | (1,771) |
Other current liabilities | (7,563) | (11,412) | 6,537 |
Other long-term assets and liabilities | (4,130) | 6,095 | 1,704 |
Net cash from operating activities | 49,918 | 38,972 | 59,076 |
Cash flows from investing activities | |||
Acquisition of business, net of cash acquired | (44,294) | ||
Capital expenditures for property, plant and equipment | (13,592) | (14,665) | (16,432) |
Capital expenditures for intangible assets | (1,664) | (2,283) | (1,902) |
Asset acquisitions and other investments | (1,448) | ||
Other investing activities | 474 | (3,613) | |
Net cash from investing activities | (60,998) | (16,474) | (21,947) |
Cash flows from financing activities | |||
Proceeds from issuance of common shares | 7,100 | 7,783 | 19,720 |
Payments related to withholdings for share-based compensation | (3,425) | (3,800) | (2,407) |
Payment of debt issuance costs and other financing activities | (682) | (445) | |
Repurchase and retirement of common shares | (63,425) | ||
Net cash from financing activities | 2,993 | 3,538 | (46,112) |
Effect of exchange rate changes on cash and restricted cash | (881) | 1,180 | (739) |
Net change in cash, cash equivalents, and restricted cash | (8,968) | 27,216 | (9,722) |
Cash, cash equivalents, and restricted cash at the beginning of the year | 81,157 | 53,941 | 63,663 |
Cash, cash equivalents, and restricted cash at the end of the year | 72,189 | 81,157 | 53,941 |
Components of cash, cash equivalents, and restricted cash at the end of the year | |||
Cash and cash equivalents | 69,623 | 81,157 | 39,572 |
Restricted cash | 2,566 | 14,369 | |
Cash, cash equivalents, and restricted cash at the end of the year | 72,189 | $ 81,157 | $ 53,941 |
Noncash investing activities: | |||
Purchase of intangible assets | 2,015 | ||
Contingent consideration recognized at acquisition date | $ 25,491 |
Business and basis of consolida
Business and basis of consolidation | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Business and basis of consolidation | Business and basis of consolidation Orthofix Medical Inc. (previously Orthofix International N.V.) and its subsidiaries (the “Company”) is a global medical device company focused on musculoskeletal products and therapies. The Company’s mission is to improve patients’ lives by providing superior reconstruction and regenerative musculoskeletal solutions to physicians worldwide. Headquartered in Lewisville, Texas, the Company has four reporting segments: Bone Growth Therapies (formerly referred to as BioStim), Spinal Implants (formerly referred to as Spine Fixation), Biologics, and Orthofix Extremities (formerly referred to as Extremity Fixation). Orthofix products are widely distributed via the Company's sales representatives and distributors. On July 31, 2018, the Company completed a change in its jurisdiction of organization from Curaçao to the State of Delaware (the “Domestication”) in accordance with the conversion procedures of Articles 304 and 305 of Book 2 of the Curaçao Civil Code and the domestication procedures of Section 388 of Delaware General Corporation Law. The Company’s shareholders approved and authorized the Domestication at the Company’s 2018 Annual General Meeting of Shareholders held on July 17, 2018 (the “Annual General Meeting”) by the affirmative vote of shareholders representing an absolute majority of the outstanding common shares of the Company as of the record date for the Annual General Meeting. Upon the effectiveness of the Domestication, each common share of Orthofix International N.V. was automatically converted into one share of common stock of Orthofix Medical Inc. This transaction was accounted for as a transfer of assets and liabilities between entities under common control similar to a pooling of interest. As a result, the assets and liabilities were carried forward at their historical carrying amounts. The Company’s common stock continues to be traded on the Nasdaq Global Select Market under the symbol “OFIX.” The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant accounting policies | 1. Significant accounting policies The preparation of financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate these estimates, including those related to contractual allowances, doubtful accounts, inventories, goodwill, fair value measurements, litigation and contingent liabilities, income taxes, and share-based compensation. We base our estimates on historical experience, future expectations and other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates. Information on our accounting policies and methods used in the preparation of our consolidated financial statements are included, where applicable, in their respective footnotes that follow. Significant Accounting Policy Footnote Reference Recently adopted accounting standards and recently issued accounting pronouncements 2 Acquisition of Spinal Kinetics, Inc. 3 Inventories 4 Property, plant and equipment 5 Patents and other intangible assets 6 Goodwill 7 Investments 8 Long-term debt 10 Fair value measurements 11 Commitments 12 Contingencies 13 Shareholders' equity 14 Revenue recognition and accounts receivable 15 Business segment information 16 Share-based compensation 17 Defined contribution plans and deferred compensation 18 Income taxes 19 Earnings per share 20 The following is a discussion of accounting policies and methods used in our consolidated financial statements that are not presented within other footnotes. Prior period reclassifications Amounts previously reported in the consolidated statements of income and comprehensive income as SEC / FCPA matters and related costs have been reclassified to general and administrative expenses to conform with current period presentation, resulting in a decrease of general and administrative expense of $2.5 million for the year ended December 31, 2017 and an increase in general and administrative expense of $2.0 million for the year ended December 31, 2016. Market risk In the ordinary course of business, the Company is exposed to the impact of changes in interest rates and foreign currency fluctuations. The Company’s objective is to limit the impact of such movements on earnings and cash flows. In order to achieve this objective, the Company seeks to balance its non-U.S. Dollar denominated income and expenditures. The financial statements for operations outside the United States are generally maintained in their local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. Dollars at year end exchange rates and revenue and expense items are translated at weighted average rates of exchange prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income component of shareholders’ equity. Transactional foreign currency gains and losses, including those generated from intercompany operations, are included in other expense, net and were a loss of $3.3 million, gain of $1.9 million, and loss of less than $0.1 million for the years ended December 31, 2018, 2017 and 2016, respectively. Financial instruments and concentration of credit risk Financial instruments that could subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable. Generally, cash is held at large financial institutions and cash equivalents consist of highly liquid money market funds. The Company performs ongoing credit evaluations of customers, generally does not require collateral, and maintains a reserve for potential credit losses. The Company believes that a concentration of credit risk related to the accounts receivable is limited because customers are geographically dispersed and end users are diversified across several industries. Net sales to our customers based in Europe were approximately $69 million in 2018, which results in a substantial portion of our trade accounts receivable balance as of December 31, 2018. It is at least reasonably possible that changes in global economic conditions and/or local operating and economic conditions in the regions these distributors operate, or other factors, could affect the future realization of these accounts receivable balances. Cash, cash equivalents and restricted cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. In 2018, restricted cash related to a court order affecting the Company’s local bank accounts for its office in São Paulo, Brazil, as part of an investigation of more than 30 companies, which resulted in the freezing of approximately $2.6 million of the Company’s cash. As such, the Company reclassified this cash balance to restricted cash. Refer to Note 13 for further discussion of this matter. Research and development costs, including in-process research and development (“IPR&D”) costs Expenditures related to the collaborative arrangement with MTF Biologics (“MTF”) are expensed based on the terms of the related agreement. No expenditures were incurred for the year ended December 31, 2018 under the collaborative arrangement with MTF and expenditures totaled $0.9 million and $1.3 million for the years ended December 31, 2017 and 2016, respectively. Expenditures for research and development are expensed as incurred. As part of the Spinal Kinetics Inc. acquisition in 2018, the Company recognized $26.8 million of IPR&D costs within patents and other intangible assets, net and recorded additional costs to further develop this acquired IPR&D . See Note 3 for further details. Acquired IPR&D represents the fair value assigned to acquired research and development assets that have not reached technological feasibility. The value assigned to acquired IPR&D is determined by estimating the costs to develop the acquired technology into commercially viable products, estimating the resulting revenues from the projects and discounting the net cash flows to present value. The revenues and costs projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success of developing the asset. Additionally, the estimated revenues consider the relevant market sizes and growth factors, expected trends in technology and the nature and expected timing of new product introductions by the Company and its competitors. The rates utilized to discount the net cash flows to their present value are commensurate with the stage of development of the project and uncertainties in the economic estimates used in the projections. Any future costs to further develop the IPR&D subsequent to acquisition are recorded to research and development expense as incurred. See Note 6 for additional policy discussion related to amortization and impairment testing for IPR&D. |
Recently adopted accounting sta
Recently adopted accounting standards and recently issued accounting pronouncements | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Changes And Error Corrections [Abstract] | |
Recently adopted accounting standards and recently issued accounting pronouncements | 2. Recently adopted accounting standards and recently issued accounting pronouncements Adoption of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09. Topic 606 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition Adoption of ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10), and ASU 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10) In January 2016, the FASB issued ASU 2016-01, which was then further clarified in ASU 2018-03, in February 2018. This guidance requires entities to generally measure equity investments at fair value and recognize any changes in fair value in net income. However, for certain equity investments that do not have readily determinable fair values, the new guidance allows companies to measure these investments using a new measurement alternative, which values the investments at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The Company prospectively adopted both ASU 2016-01 and ASU 2018-03 during the first quarter of 2018 now uses the new measurement alternative for the Company’s equity investments in Bone Biologics, Inc. (“Bone Biologics”), which have historically been held at cost. This resulted in an increase in the previously recorded value of the Company’s equity investments in Bone Biologics, which was recorded within other current assets or other long-term assets and other income, of $ 1.6 million, or $ 0.09 per share before taxes, during the three months ended March 31, 2018. During the three months ended September 30, 2018, Bone Biologics completed a series of equity financing activities, which provided a new observable price change in an orderly transaction. As a result, the Company determined its investment to be impaired and recorded a charge of $ 4.4 million in other expense, net, during the third quarter of 2018. See Note 11 for further details. Adoption of ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued ASU 2016-16, which reduces diversity in practice of accounting for intra-entity transfers of assets, particularly for intra-entity transfers of intellectual property. The new standard states an entity should recognize the income tax consequences of an intra-entity transfer when the transfer occurs, as opposed to historical U.S. GAAP guidance which prohibited the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset had been sold to an outside party. During the third and fourth quarters of 2017, the Company executed two intra-entity asset transfers that resulted in prepaid income taxes of $8.6 million. The Company adopted this new standard using a modified retrospective approach as of January 1, 2018, which resulted in a reduction of prepaid income taxes of $8.6 million and an increase in deferred tax assets of $6.7 million, with these changes offset by an adjustment to the Company's retained earnings of $1.9 million. Adoption of this guidance did not have a material impact to the Company’s consolidated statements of income and comprehensive income or to its consolidated statements of cash flows. Adoption of ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In November 2016, the FASB issued ASU 2016-18, which reduces diversity in classification and presentation of restricted cash, including transfers between cash and restricted cash, on the statement of cash flows. The Company adopted this standard as of January 1, 2018 using a retrospective transition approach. Adoption of this ASU resulted in an increase in net cash from operating activities of $2.5 million for the year ended December 31, 2018, a decrease in net cash from operating activities of $14.4 million for the year ended December 31, 2017, and an increase in net cash from operating activities of $14.4 million for the year ended December 31, 2016. Adoption of ASU 2017-01, Business Combinations (Topic 805) In January 2017, the FASB issued ASU 2017-01, which clarifies the definition of a business. This amendment states that when substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, that the set of assets acquired is not a business, which will likely result in more acquisitions being accounted for as asset acquisitions rather than business combinations. Based upon this guidance, which the Company adopted as of January 1, 2018, the Company accounted for certain transactions during 2018 totaling $3.4 million as asset acquisitions, recognized within patents and other intangible assets, net, rather than business combinations, as the sets of assets acquired did not meet the definition of a business. Recently issued accounting standards Topic Description of Guidance Effective Date Status of Company's Evaluation Leases (ASU 2016-02 and other related updates) Requires a lessee to recognize lease assets and lease liabilities for leases classified as operating leases. Applied using a modified retrospective approach. An entity can choose to apply the provisions at the beginning of the earliest comparative period presented in the financial statements or at the beginning of the period of adoption. The Company expects to apply the provisions at the beginning of the period of adoption, January 1, 2019. January 1, 2019 The Company established a cross-functional implementation team to analyze the impact of the standard on the Company's population of leases and to evaluate the Company's current accounting policies relating to leases. The Company has evaluated the impact of this ASU, which will result in current operating leases being reflected on the consolidated balance sheet. The Company expects to recognize lease assets and lease liabilities of approximately $20 million as of January 1, 2019. The Company does not expect material impacts to its consolidated statements of income and comprehensive income or to the consolidated statements of cash flows. Additionally, this guidance will materially change the Company's disclosures, requiring the Company to provide users more quantitative and qualitative information about the Company's leases, any significant judgments required in applying the ASU, and amounts recognized within the consolidated financial statements related to the Company's leases. Goodwill (ASU 2017-04) Eliminates Step 2 of the current goodwill impairment test, which requires a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment loss will instead be measured at the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the recorded amount of goodwill. Applied on a prospective basis, with early adoption permitted. January 1, 2020 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. However, the Company does not expect this ASU to have a significant impact on its financial statements or disclosures. Comprehensive income (ASU 2018-02) Allows entities to reclassify from accumulated other comprehensive income to retained earnings stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Tax Act"). Applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. January 1, 2019 The Company anticipates adopting this ASU on January 1, 2019. The adoption will result in an increase to accumulated other comprehensive income and a decrease in retained earnings of $0.9 million. Fair value measurement (ASU 2018-13) Eliminates certain disclosures, such as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and adds new disclosure requirements for Level 3 measurements. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively. January 1, 2020 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. Implementation costs in a cloud computing arrangement that is a service contract (ASU 2018-15) Aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. Applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. January 1, 2020 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. |
Acquisition of Spinal Kinetics,
Acquisition of Spinal Kinetics, Inc. | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisition of Spinal Kinetics, Inc. | 3. Acquisition of Spinal Kinetics, Inc. On March 15, 2018, the Company entered into a definitive merger agreement (the “Merger Agreement”) to acquire 100% of the outstanding stock of Spinal Kinetics Inc. (“Spinal Kinetics”), a privately held developer and manufacturer of artificial cervical and lumbar discs, to strengthen the Company’s product portfolio and fill a strategic gap in the Spinal Implants business. On April 30, 2018 (the “Acquisition Date”), the Company completed the acquisition and all outstanding shares of Spinal Kinetics’ capital stock were converted into the right to receive at the closing an aggregate of $45.0 million in net cash, subject to certain adjustments, plus potential milestone payments of up to $60.0 million in cash. The Company made the closing payments from cash on hand on April 30, 2018. The fair value of the consideration transferred was $76.6 million, which consisted of the following: (U.S. Dollars, in thousands) As of April 30, 2018 Adjustments As of December 31, 2018 Fair value of consideration transferred Cash paid $ 50,564 $ 545 $ 51,109 Contingent consideration 25,491 — 25,491 Total fair value of consideration transferred $ 76,055 $ 545 $ 76,600 The contingent consideration consists of potential future milestone payments of up to $60.0 million in cash. The milestone payments include (i) up to $15.0 million if the U.S. Food and Drug Administration (the “FDA”) grants approval of Spinal Kinetics’ M6-C artificial cervical disc (the “FDA Milestone”) and (ii) revenue-based milestone payments of up to $45.0 million in connection with future sales of the M6-C artificial cervical disc and the M6-L artificial lumbar disc. Milestones must be achieved within five years of the Acquisition Date to trigger applicable payments. The fair value of the contingent consideration arrangement at the Acquisition Date was $25.5 million and increased to $28.6 million as of December 31, 2018; however, the actual amount ultimately paid could be higher or lower than the fair value of the contingent consideration. The increase in fair value of $3.1 million was recorded in changes in fair value of contingent consideration. For additional discussion regarding the valuation of the contingent consideration, see Note 11. The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed. A final determination of the allocation of the purchase price to assets acquired and liabilities assumed has not been made and the following should be considered preliminary. The final determination is subject to completion of the Company’s valuation of the acquired deferred income taxes and tax attributes, including net operating loss carryforwards, which is expected to be completed within one year from the Acquisition Date. (U.S. Dollars, in thousands) As of April 30, 2018 Adjustments As of December 31, 2018 Assigned Useful Life Assets acquired Cash and cash equivalents $ 6,785 $ — $ 6,785 Restricted cash 30 — 30 Accounts receivable 1,705 — 1,705 Inventories 8,175 — 8,175 Prepaid expenses and other current assets 315 — 315 Property, plant and equipment 2,285 — 2,285 Other long-term assets 320 — 320 Developed technology 12,400 — 12,400 10 years In-process research and development ("IPR&D") 26,800 — 26,800 Indefinite Tradename 100 — 100 2 years Deferred income taxes 3,483 (1,109 ) 2,374 Total identifiable assets acquired $ 62,398 $ (1,109 ) $ 61,289 Liabilities assumed Accounts payable $ 351 $ — $ 351 Other current liabilities 2,873 — 2,873 Other long-term liabilities 301 — 301 Total liabilities assumed 3,525 — 3,525 Goodwill 17,182 1,654 18,836 Total fair value of consideration transferred $ 76,055 $ 545 $ 76,600 The purchase price exceeded the fair value of the net tangible and identifiable intangible assets acquired from Spinal Kinetics. As a result, the Company recorded goodwill in connection with the acquisition. Specifically, the goodwill includes the assembled workforce and synergies associated with the combined entity and is not expected to be deductible for tax purposes. The $18.8 million of goodwill recognized was assigned to the Spinal Implants reporting segment. The IPR&D intangible asset is considered an indefinite-lived asset until the completion or abandonment of the associated research and development efforts. Accordingly, during the development period after the acquisition, this asset is not amortized but, instead, is subject to impairment review and testing provisions. Upon completion of the IPR&D project, which occurred on February 6, 2019, the Company began to amortize this intangible. The Company recognized $3.3 million and $0.8 million of acquisition related costs that were expensed during the years ended December 31, 2018 and 2017, respectively. These costs are included in the consolidated statements of income and comprehensive income within general and administrative expenses. The following table presents the unaudited pro forma results for the years ended December 31, 2018 and 2017, which combines the historical results of operations of the Company and Spinal Kinetics as though the companies had been combined as of January 1, 2017. The unaudited pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at such time. (U.S. Dollars, in thousands) 2018 2017 (unaudited) (unaudited) Net sales $ 457,960 $ 448,277 Net income (loss) from continuing operations 16,157 (1,492 ) |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete or impaired items, which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Texas, standard costs, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed annually by management, or more often in the event circumstances indicate a change in cost has occurred. Work-in-process, finished products, field inventory and consignment inventory include material, labor and production overhead costs. Field inventory represents immediately saleable finished products inventory that is in the possession of the Company’s independent sales representatives or located at third party customers, such as distributors and hospitals. Prior to the adoption of ASU 2014-09, or for all periods presented prior to January 1, 2018, deferred cost of sales resulted from certain transactions where the Company had shipped product or performed services for which all revenue recognition criteria had not yet been met. Once all revenue recognition criteria had been met, the revenue and associated cost of sales were recognized. Subsequent to the adoption of ASU 2014-09, the Company no longer has transactions which result in the recognition of deferred cost of sales. See Notes 2 and 15 for further discussion of the Company’s adoption of ASU 2014-09. December 31, (U.S. Dollars, in thousands) 2018 2017 Raw materials $ 8,463 $ 6,067 Work-in-process 13,478 12,487 Finished products 18,244 11,244 Field / consignment inventory 36,662 49,197 Deferred cost of sales — 2,335 Inventories $ 76,847 $ 81,330 The Company adjusts the value of its inventory to the extent management determines that the cost cannot be recovered due to obsolescence or other factors. In order to make these determinations, management uses estimates of future demand and sales prices for each product to determine the appropriate inventory reserves and to make corresponding adjustments to the carrying value of these inventories to reflect the lower of cost or market value. |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Property, plant and equipment | 5. Property, plant and equipment Property, plant and equipment is stated at cost less accumulated depreciation, or when acquired as part of a business combination, at estimated fair value. Costs include all expenditures necessary to place the asset in service, generally including freight and sales and use taxes. Property, plant and equipment includes instrumentation held by customers, which is generally used to facilitate the implantation of the Company’s products. Years Buildings 25 to 33 Plant and equipment 1 to 10 Instrumentation 3 to 4 Computer software 3 to 7 Furniture and fixtures 4 to 8 The Company evaluates the useful lives of these assets on an annual basis. Depreciation is computed on a straight-line basis over the useful lives of the assets. Depreciation of leasehold improvements is computed over the shorter of the lease term or the useful life of the asset. Total depreciation expense was Expenditures for maintenance and repairs and minor renewals and improvements, which do not extend the lives of the respective assets, are expensed as incurred. All other expenditures for renewals and improvements are capitalized. The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in earnings. Fully depreciated assets remain in the accounts until retired from service. December 31, (U.S. Dollars, in thousands) 2018 2017 Cost Buildings $ 3,746 $ 3,725 Plant and equipment 45,744 47,588 Instrumentation 75,542 75,818 Computer software 47,322 48,604 Furniture and fixtures 6,599 7,605 Construction in progress 2,909 769 181,862 184,109 Accumulated depreciation (139,027 ) (138,970 ) Property, plant and equipment, net $ 42,835 $ 45,139 The Company capitalizes system development costs related to its internal use software during the application development stage. Costs related to preliminary project activities and post implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, generally three to seven years. Long-lived assets are evaluated for impairment whenever events or changes in circumstances have occurred that would indicate impairment. For purposes of the evaluation, the Company groups its long-lived assets with other assets and liabilities at the lowest level of identifiable cash flows if the asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset group, the Company will write the carrying value down to the fair value in the period identified. The Company generally determines fair value of long-lived assets as the present value of estimated future cash flows. In determining the estimated future cash flows associated with the assets, the Company uses estimates and assumptions about future revenue contributions, cost structures and remaining useful lives of the asset group. The use of alternative assumptions, including estimated cash flows, discount rates, and alternative estimated remaining useful lives could result in different calculations of impairment. |
Patents and other intangible as
Patents and other intangible assets | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Patents and other intangible assets | 6. Patents and other intangible assets Patents and other intangible assets are recorded at cost, or when acquired as a part of a business combination, at estimated fair value. These assets are amortized on a straight-line basis over the useful lives of the assets. December 31, (U.S. Dollars, in thousands) Weighted Average Amortization Period 2018 2017 Cost Patents 10 years $ 39,085 $ 38,621 Developed technology 10 years 12,400 — IPR&D Indefinite 26,800 — License and other 7 years 14,654 10,276 Trademarks—finite lived 9 years 840 533 9 years 93,779 49,430 Accumulated amortization Patents $ (35,016 ) $ (34,151 ) Developed technology (827 ) — IPR&D — — License and other (5,744 ) (4,625 ) Trademarks—finite lived (295 ) (193 ) (41,882 ) (38,969 ) Patents and other intangible assets, net $ 51,897 $ 10,461 Intangible assets related to IPR&D projects are considered to be indefinite-lived until the completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they will not be amortized but will be tested for impairment. Impairment testing is performed at least annually or when a triggering event occurs that could indicate a potential impairment. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are deemed finite-lived and are amortized over a period that best reflects the economic benefits provided by these assets. In February 2019, the Company obtained FDA approval of the M6-C artificial cervical disc. As such, amortization of the IPR&D intangible asset attributable to these research and development activities will commence starting in February 2019, for which the Company expects to use a 10 year amortization period. Amortization expense for intangible assets was (U.S. Dollars, in thousands) Amortization 2019 $ 6,604 2020 6,205 2021 6,146 2022 6,138 2023 5,495 Thereafter 21,309 Total $ 51,897 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill | 7. Goodwill The Company tests goodwill at least annually for impairment. The Company tests more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings or cash flows, or the development of a material adverse change in the business climate. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. At the beginning of the fourth quarters of 2018 and 2017, the Company performed a qualitative assessment for its annual goodwill impairment analysis, which did not result in impairment. This qualitative analysis considers all relevant factors specific to the reporting units, including macroeconomic conditions, industry and market considerations, overall financial performance, and relevant entity-specific events. The following table presents the net carrying value of goodwill, and a rollforward of such balances from December 31, 2017, by reportable segment: (U.S. Dollars, in thousands) December 31, 2017 Spinal Kinetics Acquisition December 31, 2018 Bone Growth Therapies $ 42,678 $ — $ 42,678 Spinal Implants — 18,836 18,836 Biologics 10,887 — 10,887 Orthofix Extremities — — — Goodwill $ 53,565 $ 18,836 $ 72,401 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2018 | |
Investments Debt And Equity Securities [Abstract] | |
Investments | 8. Investments Debt security On March 2015, Company Option Agreement (the “Option Agreement”) with eNeura, Inc. (“eNeura”), privately technology company devices treatment migraines. The Option Agreement provided the Company an exclusive acquire eNeura (the “Option”) during 18-month following grant the Option, which expired in September 2016 without the Company exercising the option. consideration for the Option, (i) Company non-refundable $0.3 million fee eNeura, and the Company loaned eNeura Convertible Promissory Note “eNeura Note”) that was issued Company. The principal of the eNeura Note $15.0 million interest accrues at The eNeura Note will mature March 4, The investment is recorded in other long-term assets as an available for sale debt security at fair value and interest is recorded in interest income; however, the Company discontinued recognition of interest income on the eNeura Note in the first quarter of 2017. The eNeura Note is collateralized by eNeura’s intellectual property in the event of default or nonpayment. In the event the Company were to obtain eNeura’s intellectual property, the Company believes the value of such intellectual property equals or exceeds the value of the eNeura Note. Refer to Note 11 for additional discussion regarding the valuation of this debt security. Currently, the Company does not expect to collect the complete principal and interest on March 4, 2019 and is in negotiations with eNeura to possibly extend and/or modify other terms of the eNeura Note. Any significant changes to the term of the eNeura Note, including extending the due date, could have a material impact on the fair value of the security. Equity investment and warrants As of December 31, 2018, the Company holds common stock of Bone Biologics and warrants to purchase approximately 13 thousand shares at a weighted average exercise price of $14.32 per share (after adjusting the shares and exercise price for a reverse stock split executed by Bone Biologics in 2018). Under the terms of the warrant purchase agreements, the warrants to purchase common stock in Bone Biologics are exercisable over a seven year period, which expires in 2020, and are transferable by the holder to other parties. These instruments are recorded within other long-term assets. Prior to 2018, these instruments were accounted for at cost as the fair value of these instruments was not readily determinable. Effective January 1, 2018, the Company is required to measure these equity investments at fair value and recognize any changes in fair value in net income as a result of adopting ASU 2016-01 (see Note 2). Under this guidance, the Company has elected to account for these investments using a new measurement alternative, which values the investments at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. During the first quarter of 2018, the Company purchased an additional 25,000 shares of Bone Biologics common stock, after giving effect to a reverse stock split by Bone Biolgics subsequent to the purchase, for $ 0.5 million. During the three months ended September 30, 2018, Bone Biologics executed a series of equity financing activities which significantly diluted the Company’s ownership interest in the outstanding stock. After considering the new observable prices in these equity financing activities, and after giving consideration to other matters disclosed by Bone Biologics, the Company determined this investment was impaired and recorded an impairment charge of $ 4.4 million relating to its investments in Bone Biologics. These changes are included in other expense, net. Refer to Note 11 for additional discussion regarding the valuation of this investment. |
Other current liabilities
Other current liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Payables And Accruals [Abstract] | |
Other current liabilities | 9. Other current liabilities December 31, (U.S. Dollars, in thousands) 2018 2017 Accrued expenses $ 6,206 $ 6,984 Salaries, bonuses, commissions and related taxes payable 21,608 24,635 Accrued distributor commissions 10,073 9,192 Accrued legal and settlement expenses 4,196 7,673 Contingent consideration liability 13,600 — Non-income taxes payable 3,638 3,180 Other payables 8,598 9,631 Other current liabilities $ 67,919 $ 61,295 Orthofix Extremities restructuring plan In December 2016, the Company approved and initiated a planned restructuring, which primarily affects the Orthofix Extremities reporting segment, to streamline costs, improve operational performance, and wind down a non-core business. The Orthofix Extremities restructuring plan consisted of primarily severance charges, professional fees and the write-down of certain assets. The Company incurred total pre-tax expense of approximately $3.2 million in connection with this restructuring activity, largely within cost of sales and operating expenses. In 2016, the Company incurred expenses of $2.0 million, including $0.4 million of inventory write-down charges, and made payments of $0.1 million, resulting in an accrual of $1.5 million as of December 31, 2016. In 2017, the Company incurred costs of $1.3 million and made payments of $2.1 million, resulting in an accrual of $0.7 million as of December 31, 2017. In 2018, the Company made adjustments of $0.1 million to decrease the accrual and payments of $0.5 million, resulting in a remaining accrual of $0.1 million as of December 31, 2018 within other current liabilities. U.S. restructuring plan In September 2017, the Company approved and executed an additional restructuring plan, which primarily affected the entity’s corporate shared services in the U.S. to streamline costs and to improve operational performance. The U.S. restructuring plan consisted primarily of severance charges. The Company incurred total pre-tax expense of approximately $1.7 million in connection with this restructuring activity, all of which was recognized in 2017, within cost of sales and operating expenses. Payments were made in 2017 of $0.6 million, resulting in an accrual of $1.1 million as of December 31, 2017 in other current liabilities related to the planned restructuring and made further payments of $1.1 million in 2018 to complete the U.S. restructuring plan. |
Long-term debt
Long-term debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-term debt | 10. Long-term debt On August 31, 2015, the Company, through its subsidiaries Orthofix Holdings, Inc. and Victory Medical Limited (collectively the “Borrowers”), entered into a Credit Agreement (the “Credit Agreement”) with JPMorgan Chase, N.A., as Administrative Agent, and certain lenders party thereto. The Credit Agreement provides for a five year $125 million secured revolving credit facility (the “Facility”). The Credit Agreement has a maturity date of August 31, 2020. As of December 31, 2018, the Company has no borrowings outstanding under the Credit Agreement. Borrowings under the Credit Agreement may be used for, among other things, working capital and other general corporate purposes (including share repurchases, permitted acquisitions and permitted payments of dividends and other distributions) of the Company and certain of its subsidiaries. The Facility is generally available in U.S. Dollars with up to $50 million of the Facility also available to be borrowed in Euros and British Pounds (together with U.S. Dollars, the “Agreed Currencies”). The Credit Agreement further permits up to $25 million of the Facility to be utilized for the issuance of letters of credit in the Agreed Currencies. The Borrowers have the ability to increase the amount of the Facility by an aggregate amount of up to $50 million (which increase may take the form of one or more increases to the revolving credit commitments and/or the issuance of one or more new Term A loans) upon satisfaction of certain conditions precedent and receipt of additional commitments by one or more existing or new lenders. Borrowings under the Facility bear interest at a floating rate, which is, at the Borrowers’ option, either LIBOR plus an applicable margin ranging from 1.75% to 2.5% or a base rate plus an applicable margin ranging from 0.75% to 1.5% (in each case subject to adjustment based on the Company’s total leverage ratio). An unused commitment fee ranging from 0.25% to 0.4% (subject to adjustment based on the Company’s total leverage ratio) is payable quarterly in arrears based on the daily amount of the undrawn portion of each lender’s revolving credit commitment under the Facility. Fees are payable on outstanding letters of credit at a rate equal to the applicable margin for LIBOR loans, plus certain customary fees payable solely to the issuer of the letter of credit. The Company and certain of its subsidiaries (collectively, the “Guarantors”) are required to guarantee the repayment of the Borrowers’ obligations under the Credit Agreement. The obligations of the Borrowers and each of the Guarantors with respect to the Credit Agreement are secured by a pledge of substantially all of the tangible and intangible personal property of the Borrowers and each of the Guarantors, including accounts receivable, deposit accounts, intellectual property, investment property, inventory, equipment and equity interests in their subsidiaries. The Credit Agreement contains customary affirmative and negative covenants, including limitations on the Company’s and its subsidiaries’ ability to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, repay subordinated indebtedness and enter into affiliate transactions. In addition, the Credit Agreement contains financial covenants requiring the Company on a consolidated basis to maintain, as of the last day of any fiscal quarter, a total leverage ratio of not more than 3.0 to 1.0 and an interest coverage ratio of at least 3.0 to 1.0. The Company is in compliance with all required financial covenants as of December 31, 2018. The Credit Agreement also includes events of default customary for facilities of this type, and upon the occurrence of such events of default, subject to customary cure rights, all outstanding loans under the Facility may be accelerated and/or the lenders’ commitments terminated. In conjunction with obtaining the Facility, the Company incurred debt issuance costs of $1.8 million which are being amortized over the life of the Facility. The debt issuance costs are included in other long-term assets, net of accumulated amortization. As of December 31, 2018 and 2017, debt issuance costs, net of accumulated amortization, were $0.6 million and $1.0 million, respectively. Debt issuance costs amortized or expensed related to the Facility and the Amendment totaled $0.4 million, $1.0 million, and $0.4 million for the years ended December 31, 2018, 2017, and 2016, respectively. On December 8, 2017, the Company amended the Credit Agreement to add the Company’s subsidiary, Orthofix International B.V., as a Borrower, Guarantor, and a loan party. In addition, two of the Company’s subsidiaries, Orthofix Limited and Orthofix II B.V. were also added as Guarantors and loan parties. On July 31, 2018, the Company amended and restated the Credit Agreement pursuant to a First Amended and Restated Credit Agreement (“Amended Credit Agreement”). The Amended Credit Agreement is substantially the same as the previous Credit Agreement, except for certain amendments to, among other things, (i) effectuate the Domestication of the Company from a Curaçao company to a Delaware corporation, (ii) limit the pledge by the Company and each domestic subsidiary of the Company of equity interests in their respective first tier foreign subsidiaries to 65% of the voting interests in such foreign subsidiaries, (iii) limit the guarantee and joint and several obligations of each subsidiary guarantor that is a foreign subsidiary so that such foreign subsidiary guarantors are only providing guarantees, or are jointly and severally obligated, for obligations of other foreign subsidiaries, and (iv) limit the secured obligations that are secured by collateral provided by subsidiary guarantors that are foreign subsidiaries to secured obligations of foreign subsidiaries. The Company has an unused available line of credit of €5.8 million ($6.7 million and $7.0 million) at December 31, 2018 and 2017, respectively, in its Italian line of credit. This unsecured line of credit provides the Company the option to borrow amounts in Italy at interest rates determined at the time of borrowing. The Company paid cash related to interest of $0.8 million, $0.8 million, and $0.7 million for the years ended December 31, 2018, 2017, and 2016, respectively. |
Fair value measurements
Fair value measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements | 11. Fair value measurements Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Non-financial assets and liabilities of the Company measured at fair value include any long-lived assets that are impaired in a currently reported period or equity securities measured at observable prices in orderly transactions. The authoritative guidance also describes three levels of inputs that may be used to measure fair value: Level 1: quoted prices in active markets for identical assets and liabilities Level 2: observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3: unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions The Company’s financial instruments include cash equivalents, restricted cash, collective trust funds, treasury securities, trade accounts receivable, accounts payable, long-term secured debt, equity warrants, equity securities, available for sale debt securities, contingent consideration and deferred compensation plan liabilities. The carrying value of cash equivalents, restricted cash, trade accounts receivable and accounts payable approximate fair value due to the short-term maturities of these instruments. The Company’s credit facilities carry a floating rate of interest, and therefore, the carrying value of long-term debt is considered to approximate the fair value. The Company’s collective trust funds, treasury securities, equity warrants, equity securities, debt security, contingent consideration, and deferred compensation plan liabilities are the only financial instruments recorded at fair value on a recurring basis as follows: (U.S. Dollars, in thousands) Balance December 31, 2018 Level 1 Level 2 Level 3 Assets Treasury securities $ 490 $ 490 $ — $ — Equity warrants — — — — Equity securities 219 — 219 — Debt security 17,820 — — 17,820 Total $ 18,529 $ 490 $ 219 $ 17,820 Liabilities Contingent consideration $ (28,560 ) $ — $ — $ (28,560 ) Deferred compensation plan (1,275 ) — (1,275 ) — Total $ (29,835 ) $ — $ (1,275 ) $ (28,560 ) (U.S. Dollars, in thousands) Balance December 31, 2017 Level 1 Level 2 Level 3 Assets Collective trust funds $ 100 $ — $ 100 $ — Treasury securities 556 556 — — Debt security 16,050 — — 16,050 Total $ 16,706 $ 556 $ 100 $ 16,050 Liabilities Deferred compensation plan $ (1,379 ) $ — $ (1,379 ) $ — Total $ (1,379 ) $ — $ (1,379 ) $ — The fair value of treasury securities are determined based on quoted prices in active markets for identical assets, therefore, the Company has categorized these instruments as Level 1 financial instruments. The fair value of the Company’s collective trust funds, equity warrants, equity securities, and deferred compensation plan liabilities are determined based on inputs that are readily available in public markets or can be derived from information available in publicly quoted markets; therefore, the Company has categorized these instruments as Level 2 financial instruments. Equity Warrants and Securities The Company holds investments in common stock and warrants to purchase shares of common stock of Bone Biologics. The Company’s common stock investments are recorded within other long-term assets while the warrants’ value was reduced to zero in 2018. Prior to this reduction in value, the warrants were recorded within other current assets or other long-term assets, dependent upon the expiration date. Prior to 2018, these instruments were accounted for at cost as the fair value of these instruments was not readily determinable. Effective January 1, 2018, the Company is required to measure these equity investments at fair value and recognize any changes in fair value in net income as a result of adopting ASU 2016-01. However, for certain equity investments that do not have readily determinable fair values, the new guidance allows entities to choose to measure these investments using a new measurement alternative, which values the investments at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The changes in valuation of these securities for the years ended December 31, 2018 and 2017 are shown below: (U.S. Dollars, in thousands) 2018 2017 2016 Equity securities and warrants at January 1 $ 2,768 $ 2,768 $ 2,768 Impact of adoption of ASU 2016-01 recognized in other income 1,629 — — Purchase of additional common stock 500 — — Fair value adjustments, expirations, and impairments recognized in other expense (4,678 ) — — Equity securities and warrants at December 31 $ 219 $ 2,768 $ 2,768 Debt Security The Company holds a debt security of eNeura, Inc., a privately held medical technology company that is developing devices for the treatment of migraines. The debt security matures on March 4, 2019 . The fair value of the debt security, including accrued interest, is based upon significant unobservable inputs, including the use of a discounted cash flows model, requiring the Company to develop its own assumptions; therefore, the Company has categorized this asset as a Level 3 financial asset. Some of the more significant unobservable inputs used in the fair value measurement of the debt security are the estimated likelihood of conversion to equity and the discount rate. Holding other inputs constant, changes in these assumptions could result in a significant change in the fair value of the debt security. As of December 31, 2018, the Company reassessed its estimate of fair value based on current financial information and other assumptions, resulting in a fair value of $17.8 million, a net increase of $1.8 million during 2018, which the Company recorded in other comprehensive income as an unrealized gain on debt securities. This compares to an amortized cost basis of $9.0 million. The Company evaluates any declines in fair value, if any, each quarter to determine if impairments are other-than-temporary. Based upon the Company’s best estimate of the amount it expected to recover at the time, the Company recorded an other-than-temporary impairments of $5.6 million in 2017 and $2.7 million in 2016. These other-than-temporary impairments were reclassified from accumulated other comprehensive loss and included within other expense, net. The following table provides a reconciliation of the beginning and ending balances for debt securities measured at fair value using significant unobservable inputs (Level 3): (U.S. Dollars, in thousands) 2018 2017 Balance at January 1 $ 16,050 $ 12,220 Accrued interest income — — Gains (losses) recorded for the period Recognized in net income — (5,585 ) Recognized in other comprehensive income 1,770 9,415 Balance at December 31 $ 17,820 $ 16,050 Currently, the Company does not expect to collect the complete principal and interest on March 4, 2019 and is in negotiations with eNeura to possibly extend and/or modify other terms of the eNeura Note. Any significant changes to the term of the eNeura Note, including extending the due date, could have a material impact on the fair value of the security. Contingent Consideration The contingent consideration consists of potential future milestone payments of up to $60.0 million in cash associated with the Spinal Kinetics acquisition. The milestone payments include (i) up to $15.0 million if the FDA grants approval of Spinal Kinetics’ M6-C artificial cervical disc (the “FDA Milestone”) and (ii) revenue-based milestone payments of up to $45.0 million in connection with future sales of the M6-C artificial cervical disc and the M6-L artificial lumbar disc. Milestones must be achieved within five years of April 30, 2018 to trigger applicable payments. Approximately $13.6 million of this liability is included within other current liabilities and $15.0 million is included within other long-term liabilities. The Company estimated the fair value of the contingent consideration attributable to the FDA Milestone using a probability-weighted discounted cash flow model. This fair value is based on significant inputs not observable in the market and thus represents a Level 3 measurement. The key assumptions in applying the probability-weighted discounted cash flow model include the Company’s estimation of the probability and timing of obtaining FDA approval for the M6-C artificial cervical disc. The Company’s expectation as of December 31, 2018, was to obtain approval from the FDA mid-2019. Significant changes in these assumptions could result in a significantly higher or lower fair value. The Company estimated the fair value of the potential future revenue-based milestone payments using a Monte Carlo simulation. This fair value measurement is based on significant inputs that are unobservable in the market, and thus represents a Level 3 measurement. The key assumptions in applying the Monte Carlo valuation model include the Company’s forecasted future revenues for Spinal Kinetics products, discount rate applied, and assumptions for potential volatility of the Company’s forecasted revenue. Significant changes in these assumptions could result in a significantly higher or lower fair value. The following table provides a reconciliation of the beginning and ending balances for the contingent consideration measured at fair value using significant unobservable inputs (Level 3): (U.S. Dollars, in thousands) 2018 Contingent consideration at January 1 $ — Acquisition date fair value 25,491 Increase in fair value recognized in operating expenses 3,069 Contingent consideration at December 31 $ 28,560 On February 6, 2019, the Company obtained FDA approval of the M6-C artificial cervical disc for patients suffering from cervical disease degeneration. This approval triggered the Company’s payment obligation of $15.0 million of contingent consideration. The Company has accrued a liability of $13.6 million within other current liabilities as of December 31, 2018, and paid the $15.0 million FDA Milestone payment on February 14, 2019. The difference of $1.4 million between the payment and the accrued liability as of December 31, 2018, will be recognized as an operating expense during the first quarter of 2019. |
Commitments
Commitments | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments | 12. Commitments Leases The Company has entered into operating leases for facilities and equipment. These leases are non-cancellable and typically do not contain renewal options, except for certain facility leases. Certain leases contain rent escalation clauses for which the Company recognizes the expense on a straight-line basis. Rent expense under the Company’s operating leases for the years ended December 31, 2018, 2017 and 2016 was approximately Future minimum lease payments under operating leases as of December 31, 2018 are as follows: (U.S. Dollars, in thousands) 2019 $ 3,330 2020 2,729 2021 2,946 2022 2,818 2023 1,727 Thereafter 11,372 Total $ 24,922 In January 2019, subsequent to the adoption of ASU 2016-02, the Company entered into an amendment for its corporate headquarters lease. As a result of this amendment, the classification of the lease changed from an operating lease to a finance lease resulting in an increase in both the lease liability and lease asset of approximately $8 million during the first quarter of 2019. Inventory purchase commitments The Company had inventory purchase commitments with third-party manufacturers for $0.1 million and $1.9 million as of December 31, 2018, and 2017, respectively. |
Contingencies
Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 13. Contingencies The Company records accruals for certain outstanding legal proceedings, investigations or claims when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company evaluates, on a quarterly basis, developments in legal proceedings, investigations and claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable. When a loss contingency is not both probable and reasonably estimable, the Company does not accrue the loss. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses a reasonable estimate of the possible loss or range of loss, if such reasonable estimate can be made. If the Company cannot make a reasonable estimate of the possible loss, or range of loss, then that is disclosed. In addition, legal fees and other directly related costs are expensed as incurred. In addition to the matters described in the paragraphs below, in the normal course of its business, the Company is involved in various lawsuits from time to time and may be subject to certain other contingencies. The Company believes any losses related to these matters are individually and collectively immaterial as to a possible loss and range of loss. January 2017 SEC Settlements In January 2017, the U.S. Securities and Exchange Commission (the “SEC”) approved the Company’s offers of settlement in connection with the SEC’s investigations of accounting matters leading to the Company’s prior restatement of financial statements and the Company’s review of improper payments with respect to its subsidiary in Brazil. Both investigations were initiated in 2013 and involved matters self-reported to the SEC by the Company. The settlements approved by the SEC resolved these two matters, and included payments totaling $14.4 million by the Company to the SEC of amounts previously accrued and funded into escrow by the Company during 2016. In connection with the Brazil-related settlement, the Company agreed to retain an independent compliance consultant for one year to review and test the Company’s compliance program related to the U.S. Foreign Corrupt Practices Act. The Company’s engagement with its independent compliance consultant began in the first quarter of 2017 and concluded in the first quarter of 2018. In addition, in the fourth quarter of 2017 the Company received a favorable insurance settlement of approximately $6 million associated with prior costs incurred related to these matters, which the Company has recognized within general and administrative expenses. Discontinued Operations – Matters Related to Breg and Possible Indemnification Obligations On May 24, 2012, the Company sold Breg, Inc. (“Breg”), a former subsidiary of the Company, to an affiliate of Water Street Healthcare Partners II, L.P. (“Water Street”). Under the terms of the agreement, the Company indemnified Water Street and Breg with respect to certain specified matters. At the time of its divestiture by the Company, Breg was engaged in the manufacturing and sales of motorized cold therapy units used to reduce pain and swelling. Several domestic product liability cases were filed, mostly in California state court. In September 2014, the Company entered into a master settlement agreement resolving then pending pre-close cold therapy claims. In May 2018, Breg settled and resolved a post-close cold therapy claim in California state court. Pursuant to the Company’s indemnification obligations to Breg, the Company was obligated to make a final payment to its insurer in the amount of $1.7 million, which was the remaining balance on the Company’s self-insured retention in its liability insurance policy, to help fund the Breg settlement. Charges incurred as a result of this indemnification are reflected as discontinued operations in our consolidated statements of income and comprehensive income. Following the May 2018 settlement, the Company does not expect any additional charges related to this discontinued operation. Italian Medical Device Payback (“IMDP”) In 2015, the Italian Parliament introduced rules for entities that supply goods and services to the Italian National Healthcare System. The healthcare law is expected to impact the business and financial reporting of companies operating in the medical technology sector that sell medical devices in Italy. A key provision of the law is a ‘payback’ measure, requiring companies selling medical devices in Italy to make payments to the Italian government if medical device expenditures exceed regional maximum ceilings. Companies are required to make payments equal to a percentage of expenditures exceeding maximum regional caps. There is considerable uncertainty about how the law will operate and what the exact timeline is for finalization. The Company’s current assessment of the IMDP involves significant judgment regarding the expected scope and actual implementation terms of the measure as the latter have not been clarified to date by Italian authorities. The Company accounts for the estimated cost of the IMDP as sales and marketing expense and recorded expense of €0.9 million ($1.0 million), €0.8 million ($0.9 million), and €0.8 million ($0.9 million) for the years ended December 31, 2018, 2017, and 2016, respectively. As of December 31, 2018, the Company has accrued €3.2 million ($3.7 million) related to the IMDP, which it has classified within other long-term liabilities; however, the actual liability could be higher or lower than the amount accrued once the law has been clarified by the Italian authorities. Brazil In July 2018, the Federal Prosecution Service in Rio de Janeiro and representatives from the Brazilian antitrust authority inspected the offices of more than 30 companies, including the Company’s office in São Paulo, as part of an investigation into tender irregularities in the medical device industry. Before doing so, the authorities obtained a court order affecting the Company’s (and other companies’) local bank accounts resulting in the freezing of approximately $2.6 million of the Company’s cash, which the Company reclassified to restricted cash. The Company contests the underlying basis for the order. Based on information known to date, the Company does not believe that the Brazilian authorities’ investigation will result in a material loss to the Company. |
Shareholder's equity
Shareholder's equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders Equity Note [Abstract] | |
Shareholders' equity | 14. Shareholders’ equity Dividends The Company has not paid dividends to holders of its common stock in the past. Certain subsidiaries of the Company have restrictions on their ability to pay dividends in certain circumstances pursuant to the Amended Credit Agreement. In the event that the Company decides to pay a dividend to holders of its common stock in the future with dividends received from its subsidiaries, the Company may, based on prevailing rates of taxation, be required to pay additional withholding and income tax on such amounts received from its subsidiaries. Share Repurchase Plan In August 2015, the Company’s Board of Directors authorized a share repurchase plan, authorizing the purchase of up to $75 million of the Company’s common stock. The Company completed the share repurchase plan in 2016. Under the program, common shares repurchased consisted of open market transactions at prevailing market prices in accordance with the guidelines specified under Rule 10b-18 of the Exchange Act, as amended. Repurchases were made from cash on hand and cash generated from operations. For the year ended December 31, 2016, the Company repurchased 1,544,681 shares of common stock for $63.4 million with an average price per share of $41.06, which were all retired upon repurchase. Accumulated Other Comprehensive Income Accumulated other comprehensive income is comprised of foreign currency translation adjustments and the unrealized gains (losses) on the Company’s debt security. The components of and changes in accumulated other comprehensive income are as follows: (U.S. Dollars, in thousands) Currency Translation Adjustments Debt Security Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2016 $ (5,115 ) $ (1,465 ) $ (6,580 ) Other comprehensive income 4,552 3,830 8,382 Income taxes — (1,475 ) (1,475 ) Reclassification adjustments to: Other expense, net — 5,585 5,585 Income taxes — (2,125 ) (2,125 ) Balance at December 31, 2017 $ (563 ) $ 4,350 $ 3,787 Other comprehensive income (loss) (1,823 ) 1,770 (53 ) Income taxes — (438 ) (438 ) Balance at December 31, 2018 $ (2,386 ) $ 5,682 $ 3,296 |
Revenue recognition and account
Revenue recognition and accounts receivable | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition And Accounts Receivable [Abstract] | |
Revenue recognition and accounts receivable | 15. Revenue recognition and accounts receivable Adoption of ASU 2014-09, “Revenue from Contracts with Customers” Effective January 1, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The Company recorded a net increase to opening retained earnings of $4.8 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606 as presented in the table below. (U.S. Dollars, in thousands) December 31, 2017 Impact of Adoption of Topic 606 January 1, 2018 Assets Current assets Cash and cash equivalents $ 81,157 $ — $ 81,157 Accounts receivable, net 63,437 8,648 72,085 Inventories 81,330 (2,338 ) 78,992 Prepaid expenses and other current assets 25,877 — 25,877 Total current assets 251,801 6,310 258,111 Deferred income taxes 23,315 (1,549 ) 21,766 Other long-term assets 130,238 — 130,238 Total assets $ 405,354 $ 4,761 $ 410,115 Liabilities and shareholders' equity Total liabilities $ 108,746 $ — $ 108,746 Shareholders' equity Common shares 1,828 — 1,828 Additional paid-in capital 220,591 — 220,591 Retained earnings 70,402 4,761 75,163 Accumulated other comprehensive income 3,787 3,787 Total shareholders' equity 296,608 4,761 301,369 Total liabilities and shareholders' equity $ 405,354 $ 4,761 $ 410,115 The impact primarily related to an increase in trade accounts receivable, net, from the Company’s stocking distributors, for which revenue was historically recognized when cash payment was received, and the recognition of previously deferred cost of sales for certain stocking distributor transactions, which were historically included within inventory. Adoption of Topic 606 had no impact on the consolidated statement of cash flows. The table below presents the impact to the Company’s consolidated statement of income for the year ended December 31, 2018 as a result of the adoption of Topic 606. Year Ended December 31, 2018 (U.S. Dollars, in thousands) Based on historical accounting under Topic 605 Impact of adoption As reported under Topic 606 Net sales $ 445,343 $ 7,699 $ 453,042 Cost of sales 95,145 1,483 96,628 Gross profit 350,198 6,216 356,414 Sales and marketing 205,538 (11 ) 205,527 Other operating expenses 120,793 — 120,793 Operating income $ 23,867 $ 6,227 $ 30,094 Income tax expense (7,656 ) (1,418 ) (9,074 ) Net income from continuing operations $ 9,002 $ 4,809 $ 13,811 Net income from continuing operations per common share—basic $ 0.48 $ 0.25 $ 0.73 Net income from continuing operations per common share—diluted $ 0.47 $ 0.25 $ 0.72 Revenue Recognition Under Topic 606 The Company accounts for a contract when there is approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable. The Company’s contracts may contain one or more performance obligations. If a contract contains more than one performance obligation, the Company allocates the total transaction price to each of the performance obligations based upon the observable standalone selling price of the promised goods or services underlying each performance obligation. The Company recognizes revenue when control of the promised goods or services is transferred to the customer, which typically occurs at a point in time upon shipment, delivery, or utilization, in an amount that reflects the consideration which the Company expects to be entitled in exchange for the promised goods or services. The amount the Company expects to be entitled to in exchange for the goods or services reflects any fixed amount stated per the contract and estimates for any variable consideration, such as discounts, to the extent that is it probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Bone Growth Therapies Bone Growth Therapies revenue is largely attributable to the U.S. and is comprised of third-party payor transactions and wholesale revenue. The largest portion of Bone Growth Therapies revenue is derived from third-party payors. This includes commercial insurance carriers, health maintenance organizations, preferred provider organizations and governmental payors such as Medicare, in connection with the sale of the Company’s stimulation products. Revenue is recognized when the stimulation product is fitted to and accepted by the patient and all applicable documents that are required by the third-party payor have been obtained. Amounts paid by these third-party payors are generally based on fixed or allowable reimbursement rates. These revenues are recorded at the expected or preauthorized reimbursement rates, net of any contractual allowances or adjustments. Certain billings are subject to review by the third-party payors and may be subject to adjustment. Adoption of Topic 606 had an immaterial impact to the Bone Growth Therapies reporting segment. Wholesale revenue is related to the sale of the Company’s bone growth stimulators directly to durable medical equipment suppliers. Wholesale revenues are typically recognized upon shipment and receipt of a confirming purchase order, which is when the customer obtains control of the promised goods. Biologics Biologics revenue is largely attributable to the U.S. and is primarily related to a collaborative arrangement with MTF, which extends through July 28, 2027, through which the Company markets tissue for bone repair and reconstruction under the brand names Trinity Evolution and Trinity ELITE. Under the terms of the agreement, MTF sources the tissue, processes it to create the bone growth matrix, packages and delivers it to the customer in accordance with orders received from the Company. The Company has exclusive global marketing rights for the Trinity Evolution and Trinity ELITE tissues as well as non-exclusive marketing rights for other products, and receives marketing fees from MTF based on total sales. MTF is considered the primary obligor in these arrangements and therefore the Company recognizes these marketing service fees on a net basis within net sales upon shipment of the product to the customer. Adoption of Topic 606 had an immaterial impact to the Biologics reporting segment. Spinal Implants and Orthofix Extremities Orthofix Extremities and Spinal Implants products are distributed world-wide, with U.S. sales largely comprised of commercial sales and international sales derived from commercial sales and through stocking distributor arrangements. Commercial revenue is largely related to the sale of the Company’s Spinal Implants and Orthofix Extremities products to hospital customers. The customer obtains control and revenues are recognized when these products have been utilized and a confirming purchase order has been received from the hospital. Certain revenues within the Spinal Implants and Orthofix Extremities reporting segments are derived from stocking distributors, who purchase the Company’s products and then re-sell them directly to customers, such as hospitals. For revenue from stocking distributor arrangements, subsequent to the adoption of Topic 606 effective January 1, 2018, the Company recognizes revenue upon shipment and receipt of a confirming purchase order, which is when the distributor obtains control of the promised goods. The transaction price with stocking distributors is estimated based upon the Company’s historical collection experience with the stocking distributor. To derive this estimate, the Company analyzes twelve months of historical invoices by stocking distributor and the subsequent collections on those invoices, for a period of up to 24 months subsequent to the invoice date. This percentage, which is specific to each stocking distributor, is then used to calculate the transaction price. Cost of sales is also recorded upon transfer of control of the product to the customer. Prior to the adoption of Topic 606, or for all periods presented prior to January 1, 2018, the Company recognized revenue from stocking distributor arrangements once the product was delivered to the end customer (the “sell-through method”). Because the Company did not have reliable information about when its distributors sold the product through to end customers, the Company used cash collection from distributors as a basis for revenue recognition under the sell-through method. Although in many cases the Company was legally entitled to the accounts receivable at the time of shipment, the Company did not recognize accounts receivables or any corresponding deferred revenues at the time of shipment associated with stocking distributor transactions for which revenue was recognized on the sell-through method. The Company also considered whether to match the related cost of sales with revenue or to recognize cost of sales upon shipment. In making this assessment, the Company considered the financial viability of its stocking distributors based on their creditworthiness to determine if collectability of amounts sufficient to realize the costs of the products shipped was reasonably assured at the time of shipment to these stocking distributors. In instances where the stocking distributor was determined to be financially viable, the Company deferred the costs of sales until the revenue was recognized. Product Sales and Marketing Service Fees The table below presents net sales, which includes product sales and marketing service fees, for each of the years ended December 31, 2018, 2017, and 2016. For the year ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 Product sales $ 395,589 $ 373,538 $ 355,652 Marketing service fees 57,453 60,285 54,136 Net sales $ 453,042 $ 433,823 $ 409,788 Product sales primarily consist of bone growth stimulation devices and internal and external fixation products. Marketing service fees are received from MTF based on total sales of biologics tissues and relates solely to the Biologics reporting segment. Marketing service fees received from MTF were Revenues exclude any value added or other local taxes, intercompany sales and trade discounts. Shipping and handling costs for products shipped to customers are included in cost of sales, and were Trade Accounts Receivable and Allowances Payment terms vary by the type and location of the Company’s customers and the products or services offered. The term between invoicing and when payment is due is not significant. Accounts receivable are analyzed on a quarterly basis to assess the adequacy of both reserves for doubtful accounts and contractual allowances. Revisions in allowances for doubtful accounts estimates are recorded as an adjustment to bad debt expense within sales and marketing expenses. Revisions to contractual allowances are recorded as an adjustment to net sales. The Company’s estimates are periodically tested against actual collection experience. The Company will generally sell receivables from certain Italian hospitals each year. During 2018, 2017, and 2016 the Company sold €9.8 million, €9.8 million, and €10.0 million ($11.5 million, $11.2 million, and $11.1 million) of receivables, respectively. The estimated related fee for 2018, 2017, and 2016 was $0.3 million, $0.3 million and $0.4 million, respectively, which is recorded as interest expense. Trade accounts receivables sold without recourse are removed from the balance sheet at the time of sale. Other Contract Assets The Company’s contract assets, excluding trade accounts receivable (“other contract assets”), largely consist of payments made to certain distributors to obtain contracts, gain access to customers in certain territories, and to provide the benefit of the exclusive distribution of the Company’s products. Other contract assets are included in other long-term assets and were $1.9 million and $1.0 million as of December 31, 2018 and 2017, respectively. Other contract assets are amortized on a straight-line basis over the term of the related contract. There were no changes to such treatment as a result of adoption of Topic 606. No impairments were incurred for other contract assets in 2018 or 2017. Further, the Company has applied the practical expedient allowed within the guidance to expense sales commissions when incurred as the amortization period would be for one year or less. |
Business segment information
Business segment information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Business segment information | 16. Business segment information We manage our business by our four reporting segments: Bone Growth Therapies, Spinal Implants, Biologics, and Orthofix Extremities. These reporting segments represent the operating segments for which our 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 non-GAAP net margin, an internal metric that the Company defines as gross profit less sales and marketing expense. The Company neither discretely allocates assets, other than goodwill, to its operating segments nor evaluates the operating segments using discrete asset information. Accordingly, our reporting segment information has been prepared based on our four reporting segments. Bone Growth Therapies The Bone Growth Therapies reporting segment 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 cervical and lumbar spine as well as a therapeutic treatment for non-spine fractures that have not healed (non-unions). This reporting segment uses distributors and sales representatives to sell its devices to hospitals, healthcare providers, and patients, primarily in the U.S. Spinal Implants The Spinal Implants reporting segment designs, develops and markets a broad portfolio of motion preservation and 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. Biologics The Biologics reporting segment provides a portfolio of regenerative products and tissue forms that allow physicians to successfully treat a variety of spinal and orthopedic conditions. This reporting segment 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 employed and independent sales representatives. Our partnership with MTF allows us to exclusively market the Trinity Evolution and Trinity ELITE tissue forms for musculoskeletal defects to enhance bony fusion. Orthofix Extremities The Orthofix 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. Orthofix 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 four reporting segments. The table below presents net sales by reporting segment: Year Ended December 31, 2018 2017 2016 (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 $ 195,252 43.1 % $ 185,900 42.9 % $ 176,561 43.1 % Spinal Implants 91,658 20.2 % 81,957 18.9 % 72,632 17.7 % Biologics 59,684 13.2 % 62,724 14.4 % 57,912 14.1 % Orthofix Extremities 106,448 23.5 % 103,242 23.8 % 102,683 25.1 % Net sales $ 453,042 100.0 % $ 433,823 100.0 % $ 409,788 100.0 % The following table presents Non-GAAP net margin, and internal metric that the Company defines as gross profit less sales and marketing expense, by reporting segment: Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 Bone Growth Therapies $ 86,252 $ 77,369 $ 75,469 Spinal Implants 7,628 8,730 8,650 Biologics 26,298 25,692 26,891 Orthofix Extremities 31,391 31,071 30,526 Corporate (682 ) (446 ) (888 ) Non-GAAP net margin $ 150,887 $ 142,416 $ 140,648 General and administrative 84,506 71,905 76,409 Research and development 33,218 29,700 28,803 Changes in fair value of contingent consideration 3,069 — — Charges related to U.S. Government resolutions — — 14,369 Operating income $ 30,094 $ 40,811 $ 21,067 Interest income (expense), net (828 ) (416 ) 763 Other expense, net (6,381 ) (4,004 ) (2,806 ) Income before income taxes $ 22,885 $ 36,391 $ 19,024 The following table presents depreciation and amortization by reporting segment: Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 Bone Growth Therapies $ 1,770 $ 2,133 $ 2,754 Spinal Implants 7,294 6,949 8,118 Biologics 448 752 1,011 Orthofix Extremities 5,342 6,040 5,742 Corporate 3,805 4,250 3,216 Total $ 18,659 $ 20,124 $ 20,841 Geographical information The following data includes net sales by geographic destination: (U.S. Dollars, in thousands) 2018 2017 2016 U.S. $ 355,353 $ 345,145 $ 316,873 Italy 19,331 17,059 16,664 Germany 11,606 7,063 6,448 United Kingdom 8,731 8,725 10,362 Brazil 7,120 10,356 11,334 Others 50,901 45,475 48,107 Net sales $ 453,042 $ 433,823 $ 409,788 The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company: (U.S. Dollars, in thousands) 2018 2017 2016 Bone Growth Therapies U.S. $ 195,189 $ 185,853 $ 176,510 International 63 47 51 Total Bone Growth Therapies 195,252 185,900 176,561 Spinal Implants U.S. 72,137 69,704 57,772 International 19,521 12,253 14,860 Total Spinal Implants 91,658 81,957 72,632 Biologics U.S. 59,668 62,670 57,574 International 16 54 338 Total Biologics 59,684 62,724 57,912 Orthofix Extremities U.S. 28,359 26,918 25,017 International 78,089 76,324 77,666 Total Orthofix Extremities 106,448 103,242 102,683 Consolidated U.S. 355,353 345,145 316,873 International 97,689 88,678 92,915 Net sales $ 453,042 $ 433,823 $ 409,788 The following data includes property, plant and equipment by geographic area: (U.S. Dollars, in thousands) 2018 2017 U.S. $ 31,344 $ 34,008 Italy 7,732 7,658 Germany 861 933 United Kingdom 896 382 Brazil 191 475 Others 1,811 1,683 Total $ 42,835 $ 45,139 |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-based compensation | 17. Share-based compensation At December 31, 2018, and 2017, the Company had stock option and award plans, and a stock purchase plan. 2012 Long Term Incentive Plan The Board of Directors adopted the Amended and Restated 2012 Long-Term Incentive Plan (the “2012 LTIP”) on April 13, 2012, subject to shareholder approval, which was subsequently provided by shareholder ratification. The 2012 LTIP provides for the grant of options to purchase shares of the Company’s common stock, stock awards (including restricted stock, unrestricted stock, and stock units), stock appreciation rights, performance-based awards and other equity-based awards. All of the Company’s employees and the employees of the Company’s subsidiaries and affiliates are eligible and may receive awards under the 2012 LTIP. In addition, the Company’s non-employee directors and consultants and advisors who perform services for the Company and the Company’s subsidiaries and affiliates may receive awards under the 2012 LTIP. Incentive share options; however, are only available to the Company’s employees. Awards granted under the 2012 LTIP expire no later than ten years after the date of grant. At December 31, 2018, the Company reserves a total of 4,750,000 shares of common stock for issuance pursuant to the 2012 LTIP, subject to certain adjustments set forth in the 2012 LTIP. At December 31, 2018, there were 971,763 options outstanding under the 2012 LTIP, of which 520,748 were exercisable. In addition, there were 339,452 shares of unvested restricted stock outstanding, some of which contain performance-based vesting conditions, and 371,676 restricted stock units outstanding, some of which contain performance-based or market-based vesting conditions, under the 2012 LTIP as of December 31, 2018. 2004 Long Term Incentive Plan The 2004 Long Term Incentive Plan (the “2004 LTIP”) reserved 3.1 million shares for issuance, subject to certain adjustments set forth in the 2004 LTIP. At December 31, 2018, there were 25,500 options outstanding under the 2004 LTIP, all of which were exercisable; in addition, there were no shares of unvested restricted stock outstanding. Inducement Plan for Spinal Kinetics Employees The Inducement Plan for Spinal Kinetics Employees (the “Spinal Kinetics Inducement Plan”) reserved 51,705 shares for issuance to employees of Spinal Kinetics as an inducement material to the individual’s entering into and continuing employment with the Company. At December 31, 2018, there were 28,624 options outstanding under the Spinal Kinetics Inducement Plan, none of which were exercisable; in addition, there were 19,914 shares of unvested restricted stock outstanding. Stock Purchase Plan The Second Amended and Restated Stock Purchase Plan, as Amended (the “Stock Purchase Plan”) provides for the issuance of shares of the Company’s common stock to eligible employees and directors of the Company and its subsidiaries that elect to participate in the plan and acquire shares of common stock through payroll deductions (including executive officers). During each purchase period, eligible employees may designate between 1% and 25% of their compensation to be deducted for the purchase of common stock under the plan (or such other percentage in order to comply with regulations applicable to Employees domiciled in or resident of a member state of the European Union). For eligible directors, the designated percentage will be applied to an amount equal to his or her annual or other director compensation paid in cash for the current plan year. The purchase price of the shares under the plan is equal to 85% of the fair market value on the first day of the plan year (which is a calendar year, running from January 1 to December 31) or, if lower, on the last day of the plan year. Due to the compensatory nature of such plan, the Company records the related share-based compensation in the consolidated statement of income. As of December 31, 2018, the aggregate number of shares reserved for issuance under the Stock Purchase Plan is 2,350,000. As of December 31, 2018, 1,628,045 shares had been issued. Share-Based Compensation Expense Share-based compensation expense is recorded in the same line of the consolidated statements of income as the employee’s cash compensation. The following tables present the detail of share-based compensation by line item in the consolidated statements of income as well as by award type, for the years ended December 31, 2018, 2017 and 2016: Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 Cost of sales $ 522 $ 486 $ 553 Sales and marketing 1,802 1,471 1,230 General and administrative 15,197 9,671 13,132 Research and development 1,409 929 1,051 Total $ 18,930 $ 12,557 $ 15,966 Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 Stock options $ 3,061 $ 2,388 $ 2,021 Time-based restricted stock awards and stock units 7,265 5,540 6,016 Performance-based restricted stock awards and stock units 1,998 462 5,716 Market-based restricted stock units 5,256 2,904 948 Stock purchase plan 1,350 1,263 1,265 Total $ 18,930 $ 12,557 $ 15,966 The income tax benefit related to this expense was $3.8 million, $3.4 million, and $4.3 million for the years ended December 31, 2018, 2017, and 2016, respectively. Stock Options The fair value of time-based stock options is determined using the Black-Scholes valuation model, with such value recognized as expense over the service period, which is typically four years, net of actual forfeitures. The fair value of market-based stock options is determined at the date of the grant using the Monte Carlo valuation methodology, with such value recognized as expense over the requisite service period adjusted for forfeitures as they occur. The Monte Carlo methodology incorporates into the valuation the possibility that the market condition may not be satisfied. A summary of the Company’s assumptions used in determining the fair value of the stock options granted during the year is shown in the following table. Year Ended December 31, 2018 2017 2016 Assumptions: Expected term (in years) 4.5 4.5 4.5 Expected volatility 28.7% – 30.1% 31.2 % 30.6% – 32.3% Risk free interest rate 2.55% – 2.79% 1.93 % 1.07% – 1.92% Dividend yield — — — Weighted average grant date fair value $ 16.28 $ 13.32 $ 11.79 The expected term of the options granted is estimated based on a number of factors, including the vesting and expiration terms of the award, historical employee exercise behavior for both options that are currently outstanding and options that have been exercised or are expired, and an employee’s average length of service. Expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate is determined based upon a constant U.S. Treasury security rate with a contractual life that approximates the expected term of the option award. Expected volatility is estimated based on the historical volatility of the Company’s stock. Summaries of the status of the Company’s stock option plans as of December 31, 2018 and 2017 and changes during the year ended December 31, 2018 are presented below: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at December 31, 2017 1,086,822 $ 37.47 Granted 231,548 $ 57.66 Exercised (100,821 ) $ 27.80 Forfeited (41,662 ) $ 48.80 Outstanding at December 31, 2018 1,175,887 $ 41.87 6.61 Vested and expected to vest at December 31, 2018 1,175,887 $ 41.87 6.61 Exercisable at December 31, 2018 696,248 $ 36.67 5.36 As of December 31, 2018, the unamortized compensation expense relating to options granted and expected to be recognized was $3.0 million. This amount is expected to be recognized through April 2022 or over a weighted average period of approximately 1.4 years. The total intrinsic value of options exercised was $3.2 million, $2.2 million and $4.3 million for the years ended December 31, 2018, 2017 and 2016, respectively. For the year ended December 31, 2018 we received $2.8 million in cash from stock option exercises, with the tax benefit realized for the tax deductions from these exercises of $0.8 million.The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2018 is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for the shares that had exercise prices that were lower than the $52.49 closing price of the Company’s stock on December 31, 2018. The aggregate intrinsic value of options outstanding was $13.6 million, $18.7 million and $3.3 million for the years ended December 31, 2018, 2017, and 2016, respectively. The aggregate intrinsic value of options exercisable was $11.0 million, $12.4 million and $2.2 million for the years ended December 31, 2018, 2017 and 2016, respectively. Time-based Restricted Stock Awards and Stock Units During the year ended December 31, 2018, the Company granted to employees and non-employee directors 172,108 shares of time-based restricted stock awards or stock units, which vest at various dates through December 2022. The compensation expense, which represents the fair value of the stock measured at the market price at the date of grant, is recognized on a straight-line basis over the vesting period, which is typically four years, net of actual forfeitures. Since 2017, the annual grant to non-employee directors has been made in the form of one-year vesting restricted stock units with deferred delivery (“DSUs”), whereby shares are not settled until after the director ceases service as a director. As at December 31, 2018 there are 27,982 DSUs outstanding that are vested but not settled. The aggregate fair value of time-based restricted stock awards and stock units that vested during the years ended December 31, 2018, 2017 and 2016 was $8.0 million, $7.3 million and $7.2 million, respectively. Unamortized compensation expense related to time-based restricted stock awards and stock units amounted to $12.2 million at December 31, 2018, and is expected to be recognized over a weighted average period of approximately 2.4 years. The aggregate intrinsic value of time-based restricted stock awards and stock units outstanding was $18.8 million, $17.8 million and $13.0 million for the years ended December 31, 2018, 2017 and 2016, respectively. Performance-based Restricted Stock Awards and Stock Units The Company’s performance-based restricted stock awards and stock units contain performance-based vesting conditions. The fair value of performance-based restricted stock awards and stock units is calculated based upon the closing stock price at the date of grant. Such value is recognized as expense over the derived requisite service period beginning in the period in which they are deemed probable to vest, net of actual forfeitures. Vesting probability is assessed based upon forecasted earnings and financial results. During the years ended December 31, 2018, 2017, or 2016, the Company did not grant any performance-based restricted stock awards or stock units to employees. During the year ended December 31, 2015, the Company granted to employees 110,660 shares of performance-based restricted stock awards, which vest based upon the achievement of certain earnings or return on invested capital targets as of and for any of the years ended December 31, 2016, 2017, or 2018. Approximately $0.4 million, $0.5 million and $5.7 million of compensation expense has been recorded for the years ended December 31, 2018, 2017 and 2016, respectively, associated with these performance-based restricted stock awards. The fair value of performance-based restricted stock awards that vested during the year ended December 31, 2017, was $4.9 million. No performance-based restricted stock awards vested during the years ended December 31, 2018 or 2016. No unamortized compensation expense related to performance-based restricted stock awards remains as of December 31, 2018. The aggregate intrinsic value of performance-based restricted stock awards outstanding was $2.9 million, $3.0 million and $7.0 million for the years ended December 31, 2018, 2017, and 2016, respectively. During the year ended December 31, 2015, the Company also granted 55,330 shares of performance-based restricted stock units to employees, which vest based upon the achievement of certain earnings or return on invested capital targets for the year ended December 31, 2018. Approximately $1.6 million of compensation expense has been recognized for the year ended December 31, 2018, associated with these 2015 performance-based restricted stock units. The Company did not record any compensation expense for the years ended December 31, 2017 or 2016 related to these 2015 performance-based restricted stock units as the requisite service period had not yet begun. No unamortized compensation expense related to these 2015 performance-based restricted stock units remains as of December 31, 2018. The aggregate intrinsic value of performance-based restricted stock units outstanding was $2.5 million, $3.0 million, and $2.0 million for the years ended December 31, 2018, 2017, and 2016, respectively. Market-based Restricted Stock Units The Company’s market-based restricted stock units contain market-based vesting conditions. The fair value of market-based restricted stock units is determined at the date of the grant using the Monte Carlo valuation methodology, with any discounts for post-vesting restrictions estimated using the Chaffe Model. The Monte Carlo methodology incorporates into the valuation the possibility that the market condition may not be satisfied. Such value is recognized on a straight-line basis over the vesting period, net of actual forfeitures. During the years ended December 31, 2018, 2017 and 2016, the Company granted 97,420, 94,902 and 96,245 shares, respectively, of market-based restricted stock units to executive officers and certain employees. The awards, if the market conditions are achieved, will be settled in shares of common stock, with one share of common stock issued per restricted stock unit if targets are achieved at the 100% level. Awards may be achieved at a minimum level of 50% and a maximum of 200%. The market conditions for the 2018, 2017, and 2016 awards are based on the Company’s stock achieving certain total shareholder return targets relative to specified index companies during a 3-year A summary of the status of our time-based, performance-based and market-based restricted stock awards and stock units as of December 31, 2018 and 2017 and changes during the year ended December 31, 2018 are presented below: Time-based Restricted Stock Awards and Stock Units Performance-based Restricted Stock Awards and Stock Units Market-based Restricted Stock Units Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2017 325,874 $ 42.44 109,880 $ 33.12 187,314 $ 51.99 Granted 172,108 $ 57.18 — $ — 97,420 $ 68.38 Vested and settled (112,249 ) $ 40.08 — $ — — $ — Cancelled (28,141 ) $ 48.84 (7,725 ) $ 33.12 (13,439 ) $ 60.83 Outstanding at December 31, 2018 357,592 $ 49.77 102,155 $ 33.12 271,295 $ 57.44 |
Defined Contribution Plans and
Defined Contribution Plans and deferred compensation | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Defined contribution plans and deferred compensation | 18. Defined contribution plans and deferred compensation Defined Contribution Plans Orthofix Inc. sponsors a defined contribution plan (the “401(k) Plan”) covering substantially all full time U.S. employees. The 401(k) Plan allows participants to contribute up to 80% of their pre-tax compensation, subject to certain limitations, with the Company matching 100% of the first 2% of the employee’s base compensation and 50% of the next 4% of the employee’s base compensation if contributed to the 401(k) Plan. During the years ended December 31, 2018, 2017 and 2016, expenses incurred relating to the 401(k) Plan, including matching contributions, were approximately The Company also operates defined contribution pension plans for its international employees meeting minimum service requirements. The Company’s expenses for such pension contributions during each of the years ended December 31, 2018, 2017 and 2016 were $1.1 million, $1.1 million and $1.0 million, respectively. Deferred Compensation Plans Under Italian Law, our Italian subsidiary accrues, on behalf of its employees, deferred compensation, which is paid on termination of employment. The accrual for deferred compensation is based on a percentage of the employee’s current annual remuneration plus an annual charge. Deferred compensation is also accrued for the leaving indemnity payable to agents in case of dismissal, which is regulated by a national contract and is equal to approximately 3.5% of total commissions earned from the Company. The Company’s relations with its Italian employees, who represent 19.6% of total employees at December 31, 2018, are governed by the provisions of a National Collective Labor Agreement setting forth mandatory minimum standards for labor relations in the metal mechanic workers industry. The Company is not a party to any other collective bargaining agreement. There were $0.1 million in deferred compensation payments made in 2018, $0.2 million in 2017, and $0.1 million in 2016. The balance in other long-term liabilities as of December 31, 2018 and 2017 was $1.3 million and $1.4 million, respectively, and represents the amount which would be payable if all the employees and agents had terminated employment at that date. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 19. Income taxes Income (loss) from continuing operations before provision for income taxes consisted of the following: Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 U.S. $ 28,642 $ 27,774 $ 23,006 Non-U.S. (5,757 ) 8,617 (3,982 ) Income before income taxes $ 22,885 $ 36,391 $ 19,024 The provision for income taxes on continuing operations consists of the following: Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 U.S. Current $ 9,480 $ 3,620 $ 558 Deferred (3,430 ) 20,222 9,296 6,050 23,842 9,854 Non-U.S. Current 2,255 4,062 4,509 Deferred 769 1,196 1,164 3,024 5,258 5,673 Income tax expense $ 9,074 $ 29,100 $ 15,527 The differences between the income tax provision at the U.S. federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2018, 2017, and 2016 consist of the following: 2018 2017 1 2016 1 (U.S. Dollars, in thousands, except percentages) Amount Percent Amount Percent Amount Percent Statutory U.S. federal income tax rate $ 4,806 21.0 % $ 12,737 35.0 % $ 6,658 35.0 % State taxes, net of U.S. federal benefit 1,038 4.5 1,598 4.4 395 2.1 Foreign rate differential, including withholding taxes 784 3.4 (3,849 ) (10.6 ) (805 ) (4.2 ) Charges related to U.S. Government resolutions — — — — 2,050 10.8 Valuation allowances, net 4,116 18.0 3,548 9.7 6,149 32.3 Change in estimate on compensation expenses — — — — (2,151 ) (11.3 ) Italian subsidiary intangible asset (230 ) (1.0 ) (381 ) (1.0 ) (1,477 ) (7.8 ) Change of intention for foreign earnings — — — — 1,300 6.8 Domestic manufacturing deduction — — (818 ) (2.2 ) — — Unrecognized tax benefits, net of settlements 81 0.4 6,002 16.5 3,049 16.0 Impact of the Tax Act (560 ) (2.4 ) 8,347 22.9 — — Equity compensation (1,646 ) (7.2 ) 272 0.7 334 1.8 Contingent consideration 528 2.3 — — — — Other, net 157 0.7 1,644 4.5 25 0.1 Income tax expense/effective rate $ 9,074 39.7 % $ 29,100 80.0 % $ 15,527 81.6 % 1 On December 22, 2017, the Tax Act was signed into law making significant changes to the Internal Revenue Code. Changes include, but are not limited to, a U.S. corporate rate decrease from 35% to 21% effective for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system, and a one-time transition tax on the mandatory deemed repatriation of cumulative foreign earnings as of December 31, 2017. The Company calculated its best estimate of the impact of the Tax Act in the 2017 income tax provision in accordance with its understanding of the Tax Act and guidance available as of the date of this filing. As a result, the Company recorded $8.3 million of additional income tax expense in the fourth quarter of 2017, the period in which the legislation was enacted. The provisional amount related to the remeasurement of certain deferred tax assets and liabilities, based on the rates at which they are expected to reverse in the future was $8.6 million. The provisional amount related to the one-time transition tax on the mandatory deemed repatriation of foreign earnings was zero. The Company also recorded a benefit of $0.3 million related to an income tax liability recorded in 2016 related to repatriation of earnings from our subsidiary in Puerto Rico. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the Tax Act. In accordance with SAB 118, we determined that the $8.6 million of the deferred tax expense recorded in connection with the remeasurement of certain deferred tax assets and liabilities and the zero transition tax on the mandatory deemed repatriation of foreign earnings was a provisional amount and a reasonable estimate at December 31, 2017. A more detailed analysis of the Company’s deferred tax assets and liabilities and its historical foreign earnings as well as potential correlative adjustments was completed in 2018, which resulted in an additional benefit of $0.6 million in the first quarter of 2018 and minimal adjustments in the fourth quarter of 2018. As of December 31, 2018, the Company has completed its accounting for the tax effects of enactment of the Tax Act. In January 2018, the FASB released guidance on the accounting for tax on the global intangible low taxed income (“GILTI”) provisions of the Tax Act. The GILTI provisions impose a tax on foreign income in excess of deemed return on tangible assets of foreign corporations. The guidance indicated that either accounting for deferred taxes related to GILTI inclusion or to treat any taxes on GILTI inclusion as a period cost are both acceptable methods subject to an accounting policy election. The Company has made a policy election to treat any taxes on GILTI inclusion as a period cost. The Company paid cash relating to taxes totaling $15.6 million, $3.3 million, and $4.4 million for the years ended December 31, 2018, 2017, and 2016, respectively. During 2016, the Company revised its estimate relating to the deductibility of certain compensation expenses. This change in estimate reduced income tax expense and increased net income from continuing operations by $2.4 million and increased earnings per share by $0.13 for the year ended December 31, 2016. The Company’s deferred tax assets and liabilities are as follows: December 31, (U.S. Dollars, in thousands) 2018 2017 Intangible assets and goodwill $ 1,682 $ 2,271 Inventories and related reserves 12,151 11,298 Deferred revenue and cost of goods sold 4,652 6,816 Other accruals and reserves 2,799 2,336 Accrued compensation 8,317 4,054 Allowance for doubtful accounts 2,346 2,617 Net operating loss and tax credit carryforwards 52,664 43,296 Other, net 2,200 1,748 86,811 74,436 Valuation allowance (49,014 ) (46,271 ) Deferred tax asset $ 37,797 $ 28,165 Withholding taxes — (381 ) Property, plant and equipment (4,569 ) (4,469 ) Deferred tax liability (4,569 ) (4,850 ) Net deferred tax assets $ 33,228 $ 23,315 The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and income tax basis of assets and liabilities, and for operating losses and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the years in which those items are expected to be realized. Tax law and rate changes are recorded in the period such changes are enacted. The Company establishes a valuation allowance when it is more likely than not that certain deferred tax assets will not be realized in the foreseeable future. The valuation allowance is primarily attributable to net operating loss carryforwards and temporary differences in certain foreign jurisdictions. The net increase in the valuation allowance of $2.7 million during the year principally relates to the increase of valuation allowances on net operating loss carryforwards in foreign jurisdictions. The Company has federal net operating loss carryforwards of $24.4 million and research and development credits of $1.6 million as a result of the acquisition of Spinal Kinetics. These carryforwards are subject to limitation under the provisions of Section 382 and will begin to expire in 2026. The Company has state net operating loss carryforwards of approximately $49.0 million, of which $35.2 million relates to Spinal Kinetics and begins to expire in 2019. Additionally, the Company has net operating loss carryforwards in various foreign jurisdictions of approximately $159.5 million that begin to expire in 2019, the majority of which relate to the Company’s Netherlands and Brazil operations. During 2016, the Company changed its intention related to unremitted foreign earnings in its Puerto Rico subsidiary and certain United Kingdom subsidiaries. As a result of the change in intention, the Company recorded $1.3 million of income tax expense for the remitted and unremitted earnings in each of these subsidiaries. During the first quarter of 2017, the Company changed its intention related to unremitted foreign earnings in its Seychelles subsidiary. The tax impact was minimal. Prior to the Domestication, as an entity incorporated in Curaçao, “foreign earnings” referred to both U.S. and non-U.S. earnings. As a result of the Domestication, only income sourced outside of the U.S. is considered unremitted foreign earnings. Unremitted foreign earnings decreased from $335.7 million at December 31, 2017 to $50.4 million at December 31, 2018. The substantial decrease is due to the elimination of US accumulated earnings and other impacts as a result of the Domestication. As a result of the 2017 Tax Act, current year earnings have been deemed to be repatriated. The Company’s investment in foreign subsidiaries continues to be indefinite in nature; however, the Company may periodically repatriate a portion of these earnings to the extent that it does not incur additional tax liability. The Company records a benefit for uncertain tax positions when the weight of available evidence indicates that it is more likely than not, based on an evaluation of the technical merits, that the tax position will be sustained on audit. The tax benefit is measured as the largest amount that is more than 50% likely to be realized upon settlement. The Company re-evaluates income tax positions periodically to consider changes in facts or circumstances such as changes in or interpretations of tax law, effectively settled issues under audit, and new audit activity. The Company includes interest and any applicable penalties related to income tax issues as part of income tax expense in its consolidated financial statements. The Company’s unrecognized tax benefit was $21.4 million and $22.5 million for the years ended December 31, 2018 and 2017, respectively. The Company recorded net interest and penalties on unrecognized tax benefits of $1.4 million, $2.3 million, and $2.1 million for the years ended December 31, 2018, 2017, and 2016, respectively, and had approximately $6.7 million and $5.3 million accrued for payment of interest and penalties as of December 31, 2018 and 2017, respectively. The entire amount of unrecognized tax benefits, including interest, would favorably impact the Company’s effective tax rate if recognized. The Company believes it is reasonably possible that, in the next 12 months, the amount of unrecognized tax benefits related to the resolution of federal, state and foreign matters could be reduced by $3.3 million to $3.8 million as audits close and statutes expire. A reconciliation of the gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2018, 2017, and 2016 follows: (U.S. Dollars, in thousands) 2018 2017 Balance as of January 1, $ 23,676 $ 19,400 Additions for current year tax positions 170 787 Increases for prior year tax positions 1,653 3,498 Settlements of prior year tax positions (1,499 ) — Expiration of statutes (2,649 ) (9 ) Balance as of December 31, $ 21,351 $ 23,676 The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in certain state and foreign jurisdictions, including Italy and the United Kingdom. The statute of limitations with respect to federal and state tax filings is closed for years prior to 2014. The statute of limitations with respect to the major foreign tax filing jurisdictions is closed for years prior to 2014. During the third quarter of 2015, the Internal Revenue Service commenced an examination of the Company’s federal income tax return for 2012. The Company concluded this examination in the first quarter of 2018 with no material impact to the financial statements. In October 2016, the Company was notified of an examination of its federal income tax return for 2013 and in December 2017, the examination for 2013 was concluded with no change. In November 2017, the Company was notified of an examination of its federal income tax return for 2015. In February 2019, the Company reached an agreement and concluded this examination. As a result, the Company expects to recognize a benefit of approximately $2.0 million during 2019. The Company cannot reasonably determine if any state and local tax or foreign examinations, will have a material impact on its financial statements and cannot predict the timing regarding resolution of these tax examinations. |
Earnings per share (EPS)
Earnings per share (EPS) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings per share (EPS) | 20. Earnings per share (EPS) The Company uses the two-class method of computing basic EPS due to the existence of non-vested restricted stock awards with nonforfeitable rights to dividends or dividend equivalents (referred to as participating securities). Basic EPS is computed using the weighted average number of common shares outstanding during each of the respective years. Diluted EPS is computed using the weighted average number of common and common equivalent shares outstanding during each of the respective years using the more dilutive of either the treasury stock method or two-class method. The difference between basic and diluted shares, if any, largely results from common equivalent shares, which represents the dilutive effect of the assumed exercise of certain outstanding share options, the assumed vesting of restricted stock granted to employees and directors, or the satisfaction of certain necessary conditions for contingently issuable shares (see Note 17). For each of the three years ended December 31, 2018, no significant adjustments were made to net income for purposes of calculating basic and diluted EPS. The following is a reconciliation of the weighted average shares used in the diluted EPS computations. Year Ended December 31, 2018 2017 2016 Weighted average common shares-basic 18,494,002 18,117,405 18,144,019 Effect of diluted securities: Unexercised stock options and employee stock purchase plan 313,648 209,691 161,092 Unvested time-based restricted stock awards — 123,592 138,291 Unvested performance-based restricted stock awards 103,960 48,057 19,759 Weighted average common shares-diluted 18,911,610 18,498,745 18,463,161 There were 349,930, 418,859 and 542,555 weighted average outstanding options, restricted stock, and performance-based or market-based equity awards not included in the diluted earnings per share computation for the years ended December 31, 2018, 2017 and 2016, respectively, because inclusion of these awards was anti-dilutive or, for performance-based and market-based awards, all necessary conditions have not been satisfied by the end of the respective period. |
Quarterly financial data (unaud
Quarterly financial data (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly financial data (unaudited) | 21. Quarterly financial data (unaudited) 2018 (U.S. Dollars, in thousands, except per share data) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Net sales $ 108,709 $ 111,547 $ 111,708 $ 121,078 $ 453,042 Cost of sales 24,147 22,835 24,020 25,626 96,628 Gross profit 84,562 88,712 87,688 95,452 356,414 Operating expense 1, 2 76,692 82,797 83,781 83,050 326,320 Operating income 1, 2 7,870 5,915 3,907 12,402 30,094 Net income (loss) from continuing operations 2 5,226 925 (1,211 ) 8,871 13,811 Net income (loss) $ 5,226 $ 925 $ (1,211 ) $ 8,871 $ 13,811 Net income (loss) per common share — basic: Net income (loss) from continuing operations $ 0.28 $ 0.05 $ (0.07 ) $ 0.47 $ 0.73 Net income (loss) $ 0.28 $ 0.05 $ (0.07 ) $ 0.47 $ 0.73 Net income (loss) per common share — diluted: Net income (loss) from continuing operations $ 0.27 $ 0.05 $ (0.07 ) $ 0.46 $ 0.72 Net income (loss) $ 0.27 $ 0.05 $ (0.07 ) $ 0.46 $ 0.72 1 2 The Company reclassified less than $ 10 thousand of previously reported net income (loss) from discontinued operations during the first, second, and third quarters of 2018 to continuing operations to conform to current period presentation . 2017 (U.S. Dollars, in thousands, except per share data) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Net sales $ 102,738 $ 108,942 $ 105,247 $ 116,896 $ 433,823 Cost of sales 22,581 23,177 23,717 23,562 93,037 Gross profit 80,157 85,765 81,530 93,334 340,786 Operating expense 74,238 77,767 72,496 75,474 299,975 Operating income 5,919 7,998 9,034 17,860 40,811 Net income (loss) from continuing operations (2,308 ) 4,735 3,348 1,516 7,291 Net income (loss) $ (2,654 ) $ 3,853 $ 3,456 $ 1,568 $ 6,223 Net income (loss) per common share — basic: Net income (loss) from continuing operations $ (0.13 ) $ 0.26 $ 0.18 $ 0.08 $ 0.40 Net income (loss) $ (0.15 ) $ 0.21 $ 0.19 $ 0.09 $ 0.34 Net income (loss) per common share — diluted: Net income (loss) from continuing operations $ (0.13 ) $ 0.26 $ 0.18 $ 0.08 $ 0.39 Net income (loss) $ (0.15 ) $ 0.21 $ 0.19 $ 0.08 $ 0.34 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 22. Subsequent events Options Medical, LLC Acquisition On January 31, 2019, the Company acquired certain assets of Options Medical, LLC, (“Options Medical”) a medical device distributor based in Florida. Under the terms of the acquisition, the parties agreed to terminate the exclusive sales representative agreement, employees of Options Medical became employees of the Company and the Company acquired all customer lists and customer information related to the sale of the Company’s products. As consideration for the assets acquired, the Company paid $6.4 million and, as an inducement to enter into employment with the Company, the Company provided 25,478 restricted stock units, with a fair value of $1.4 million, to the Options Medical founder, which will vest in one-third annual increments beginning on the first anniversary of the grant date and are contingent upon continued employment. FDA Approval of M6-C Artificial Cervical Disc On February 6, 2019, the Company obtained FDA approval of the M6-C artificial cervical disc for patients suffering from cervical disease degeneration. The M6-C artificial disc was developed by Spinal Kinetics, a company acquired by the Company in April 2018. This approval triggered the Company’s payment obligation of $15.0 million of contingent consideration attributable to the Spinal Kinetics purchase price. The Company has accrued a liability of $13.6 million within other current liabilities as of December 31, 2018, and paid the $15.0 million FDA Milestone payment on February 14, 2019 from cash on hand. The difference of $1.4 million between the payment and the liability as of December 31, 2018, will be recognized as an operating expense during the first quarter of 2019. Retirement of the Company’s President and Chief Executive Officer On February 25, 2019, the Company entered into a Transition and Retirement Agreement (the “Retirement Agreement”) with the Company’s President and Chief Executive Officer, Brad Mason. Under the Retirement Agreement, the parties have agreed that Mr. Mason will continue to serve in his current role until his successor is appointed by the Board and commences employment (the “Retirement Date”). The parties have agreed that Mr. Mason will provide ongoing transition assistance to the Company pursuant to a consulting arrangement during the 12 months following the Retirement Date, and that Mr. Mason will be paid $40,000 per month for such transition consulting services. Under the Retirement Agreement, Mr. Mason will be eligible on the Retirement Date to receive full vesting acceleration of his unvested time-based equity awards, and he will continue to receive service credit under his performance based equity awards during the term of his consulting arrangement. For fiscal year 2019, in lieu of Mr. Mason’s normal annual incentive awards under the 2012 LTIP, and in recognition of the ongoing transition assistance that he has agreed to provide, the parties have agreed that he will be granted an award of restricted stock units with a grant date fair market value of $2,000,000 that will vest one year following the date of grant, subject to him continuing to provide transition consulting services through his Retirement Date. |
Significant accounting polici_2
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Prior period reclassifications | Prior period reclassifications Amounts previously reported in the consolidated statements of income and comprehensive income as SEC / FCPA matters and related costs have been reclassified to general and administrative expenses to conform with current period presentation, resulting in a decrease of general and administrative expense of $2.5 million for the year ended December 31, 2017 and an increase in general and administrative expense of $2.0 million for the year ended December 31, 2016. |
Market risk | Market risk In the ordinary course of business, the Company is exposed to the impact of changes in interest rates and foreign currency fluctuations. The Company’s objective is to limit the impact of such movements on earnings and cash flows. In order to achieve this objective, the Company seeks to balance its non-U.S. Dollar denominated income and expenditures. The financial statements for operations outside the United States are generally maintained in their local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. Dollars at year end exchange rates and revenue and expense items are translated at weighted average rates of exchange prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income component of shareholders’ equity. Transactional foreign currency gains and losses, including those generated from intercompany operations, are included in other expense, net and were a loss of $3.3 million, gain of $1.9 million, and loss of less than $0.1 million for the years ended December 31, 2018, 2017 and 2016, respectively. |
Financial instruments and concentration of credit risk | Financial instruments and concentration of credit risk Financial instruments that could subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, restricted cash, and accounts receivable. Generally, cash is held at large financial institutions and cash equivalents consist of highly liquid money market funds. The Company performs ongoing credit evaluations of customers, generally does not require collateral, and maintains a reserve for potential credit losses. The Company believes that a concentration of credit risk related to the accounts receivable is limited because customers are geographically dispersed and end users are diversified across several industries. Net sales to our customers based in Europe were approximately $69 million in 2018, which results in a substantial portion of our trade accounts receivable balance as of December 31, 2018. It is at least reasonably possible that changes in global economic conditions and/or local operating and economic conditions in the regions these distributors operate, or other factors, could affect the future realization of these accounts receivable balances. |
Cash, cash equivalents and restricted cash | Cash, cash equivalents and restricted cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. In 2018, restricted cash related to a court order affecting the Company’s local bank accounts for its office in São Paulo, Brazil, as part of an investigation of more than 30 companies, which resulted in the freezing of approximately $2.6 million of the Company’s cash. As such, the Company reclassified this cash balance to restricted cash. Refer to Note 13 for further discussion of this matter. |
Research and development costs | Research and development costs, including in-process research and development (“IPR&D”) costs Expenditures related to the collaborative arrangement with MTF Biologics (“MTF”) are expensed based on the terms of the related agreement. No expenditures were incurred for the year ended December 31, 2018 under the collaborative arrangement with MTF and expenditures totaled $0.9 million and $1.3 million for the years ended December 31, 2017 and 2016, respectively. Expenditures for research and development are expensed as incurred. As part of the Spinal Kinetics Inc. acquisition in 2018, the Company recognized $26.8 million of IPR&D costs within patents and other intangible assets, net and recorded additional costs to further develop this acquired IPR&D . See Note 3 for further details. Acquired IPR&D represents the fair value assigned to acquired research and development assets that have not reached technological feasibility. The value assigned to acquired IPR&D is determined by estimating the costs to develop the acquired technology into commercially viable products, estimating the resulting revenues from the projects and discounting the net cash flows to present value. The revenues and costs projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success of developing the asset. Additionally, the estimated revenues consider the relevant market sizes and growth factors, expected trends in technology and the nature and expected timing of new product introductions by the Company and its competitors. The rates utilized to discount the net cash flows to their present value are commensurate with the stage of development of the project and uncertainties in the economic estimates used in the projections. Any future costs to further develop the IPR&D subsequent to acquisition are recorded to research and development expense as incurred. See Note 6 for additional policy discussion related to amortization and impairment testing for IPR&D. |
Recently adopted accounting standards and recently issued accounting pronouncements | Adoption of Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (Topic 606) In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-09. Topic 606 supersedes the revenue recognition requirements in Topic 605, Revenue Recognition Adoption of ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10), and ASU 2018-03, Technical Corrections and Improvements to Financial Instruments – Overall (Subtopic 825-10) In January 2016, the FASB issued ASU 2016-01, which was then further clarified in ASU 2018-03, in February 2018. This guidance requires entities to generally measure equity investments at fair value and recognize any changes in fair value in net income. However, for certain equity investments that do not have readily determinable fair values, the new guidance allows companies to measure these investments using a new measurement alternative, which values the investments at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. The Company prospectively adopted both ASU 2016-01 and ASU 2018-03 during the first quarter of 2018 now uses the new measurement alternative for the Company’s equity investments in Bone Biologics, Inc. (“Bone Biologics”), which have historically been held at cost. This resulted in an increase in the previously recorded value of the Company’s equity investments in Bone Biologics, which was recorded within other current assets or other long-term assets and other income, of $ 1.6 million, or $ 0.09 per share before taxes, during the three months ended March 31, 2018. During the three months ended September 30, 2018, Bone Biologics completed a series of equity financing activities, which provided a new observable price change in an orderly transaction. As a result, the Company determined its investment to be impaired and recorded a charge of $ 4.4 million in other expense, net, during the third quarter of 2018. See Note 11 for further details. Adoption of ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued ASU 2016-16, which reduces diversity in practice of accounting for intra-entity transfers of assets, particularly for intra-entity transfers of intellectual property. The new standard states an entity should recognize the income tax consequences of an intra-entity transfer when the transfer occurs, as opposed to historical U.S. GAAP guidance which prohibited the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset had been sold to an outside party. During the third and fourth quarters of 2017, the Company executed two intra-entity asset transfers that resulted in prepaid income taxes of $8.6 million. The Company adopted this new standard using a modified retrospective approach as of January 1, 2018, which resulted in a reduction of prepaid income taxes of $8.6 million and an increase in deferred tax assets of $6.7 million, with these changes offset by an adjustment to the Company's retained earnings of $1.9 million. Adoption of this guidance did not have a material impact to the Company’s consolidated statements of income and comprehensive income or to its consolidated statements of cash flows. Adoption of ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash In November 2016, the FASB issued ASU 2016-18, which reduces diversity in classification and presentation of restricted cash, including transfers between cash and restricted cash, on the statement of cash flows. The Company adopted this standard as of January 1, 2018 using a retrospective transition approach. Adoption of this ASU resulted in an increase in net cash from operating activities of $2.5 million for the year ended December 31, 2018, a decrease in net cash from operating activities of $14.4 million for the year ended December 31, 2017, and an increase in net cash from operating activities of $14.4 million for the year ended December 31, 2016. Adoption of ASU 2017-01, Business Combinations (Topic 805) In January 2017, the FASB issued ASU 2017-01, which clarifies the definition of a business. This amendment states that when substantially all of the fair value of gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, that the set of assets acquired is not a business, which will likely result in more acquisitions being accounted for as asset acquisitions rather than business combinations. Based upon this guidance, which the Company adopted as of January 1, 2018, the Company accounted for certain transactions during 2018 totaling $3.4 million as asset acquisitions, recognized within patents and other intangible assets, net, rather than business combinations, as the sets of assets acquired did not meet the definition of a business. Recently issued accounting standards Topic Description of Guidance Effective Date Status of Company's Evaluation Leases (ASU 2016-02 and other related updates) Requires a lessee to recognize lease assets and lease liabilities for leases classified as operating leases. Applied using a modified retrospective approach. An entity can choose to apply the provisions at the beginning of the earliest comparative period presented in the financial statements or at the beginning of the period of adoption. The Company expects to apply the provisions at the beginning of the period of adoption, January 1, 2019. January 1, 2019 The Company established a cross-functional implementation team to analyze the impact of the standard on the Company's population of leases and to evaluate the Company's current accounting policies relating to leases. The Company has evaluated the impact of this ASU, which will result in current operating leases being reflected on the consolidated balance sheet. The Company expects to recognize lease assets and lease liabilities of approximately $20 million as of January 1, 2019. The Company does not expect material impacts to its consolidated statements of income and comprehensive income or to the consolidated statements of cash flows. Additionally, this guidance will materially change the Company's disclosures, requiring the Company to provide users more quantitative and qualitative information about the Company's leases, any significant judgments required in applying the ASU, and amounts recognized within the consolidated financial statements related to the Company's leases. Goodwill (ASU 2017-04) Eliminates Step 2 of the current goodwill impairment test, which requires a hypothetical purchase price allocation to measure goodwill impairment. A goodwill impairment loss will instead be measured at the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the recorded amount of goodwill. Applied on a prospective basis, with early adoption permitted. January 1, 2020 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. However, the Company does not expect this ASU to have a significant impact on its financial statements or disclosures. Comprehensive income (ASU 2018-02) Allows entities to reclassify from accumulated other comprehensive income to retained earnings stranded tax effects resulting from the Tax Cuts and Jobs Act (the "Tax Act"). Applied either in the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Act is recognized. January 1, 2019 The Company anticipates adopting this ASU on January 1, 2019. The adoption will result in an increase to accumulated other comprehensive income and a decrease in retained earnings of $0.9 million. Fair value measurement (ASU 2018-13) Eliminates certain disclosures, such as the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and adds new disclosure requirements for Level 3 measurements. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively. January 1, 2020 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. Implementation costs in a cloud computing arrangement that is a service contract (ASU 2018-15) Aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendments in this update. Applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. January 1, 2020 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. |
Acquisition of Spinal Kinetic_2
Acquisition of Spinal Kinetics, Inc. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Fair Value of Consideration Transferred | The fair value of the consideration transferred was $76.6 million, which consisted of the following: (U.S. Dollars, in thousands) As of April 30, 2018 Adjustments As of December 31, 2018 Fair value of consideration transferred Cash paid $ 50,564 $ 545 $ 51,109 Contingent consideration 25,491 — 25,491 Total fair value of consideration transferred $ 76,055 $ 545 $ 76,600 |
Summary of Preliminary Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary estimated fair values of the assets acquired and liabilities assumed. A final determination of the allocation of the purchase price to assets acquired and liabilities assumed has not been made and the following should be considered preliminary. The final determination is subject to completion of the Company’s valuation of the acquired deferred income taxes and tax attributes, including net operating loss carryforwards, which is expected to be completed within one year from the Acquisition Date. (U.S. Dollars, in thousands) As of April 30, 2018 Adjustments As of December 31, 2018 Assigned Useful Life Assets acquired Cash and cash equivalents $ 6,785 $ — $ 6,785 Restricted cash 30 — 30 Accounts receivable 1,705 — 1,705 Inventories 8,175 — 8,175 Prepaid expenses and other current assets 315 — 315 Property, plant and equipment 2,285 — 2,285 Other long-term assets 320 — 320 Developed technology 12,400 — 12,400 10 years In-process research and development ("IPR&D") 26,800 — 26,800 Indefinite Tradename 100 — 100 2 years Deferred income taxes 3,483 (1,109 ) 2,374 Total identifiable assets acquired $ 62,398 $ (1,109 ) $ 61,289 Liabilities assumed Accounts payable $ 351 $ — $ 351 Other current liabilities 2,873 — 2,873 Other long-term liabilities 301 — 301 Total liabilities assumed 3,525 — 3,525 Goodwill 17,182 1,654 18,836 Total fair value of consideration transferred $ 76,055 $ 545 $ 76,600 |
Summary of Unaudited Pro forma Results | The following table presents the unaudited pro forma results for the years ended December 31, 2018 and 2017, (U.S. Dollars, in thousands) 2018 2017 (unaudited) (unaudited) Net sales $ 457,960 $ 448,277 Net income (loss) from continuing operations 16,157 (1,492 ) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete or impaired items, which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at our manufacturing facility in Texas, standard costs, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed annually by management, or more often in the event circumstances indicate a change in cost has occurred. Work-in-process, finished products, field inventory and consignment inventory include material, labor and production overhead costs. Field inventory represents immediately saleable finished products inventory that is in the possession of the Company’s independent sales representatives or located at third party customers, such as distributors and hospitals. Prior to the adoption of ASU 2014-09, or for all periods presented prior to January 1, 2018, deferred cost of sales resulted from certain transactions where the Company had shipped product or performed services for which all revenue recognition criteria had not yet been met. Once all revenue recognition criteria had been met, the revenue and associated cost of sales were recognized. Subsequent to the adoption of ASU 2014-09, the Company no longer has transactions which result in the recognition of deferred cost of sales. See Notes 2 and 15 for further discussion of the Company’s adoption of ASU 2014-09. December 31, (U.S. Dollars, in thousands) 2018 2017 Raw materials $ 8,463 $ 6,067 Work-in-process 13,478 12,487 Finished products 18,244 11,244 Field / consignment inventory 36,662 49,197 Deferred cost of sales — 2,335 Inventories $ 76,847 $ 81,330 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property Plant And Equipment [Abstract] | |
Schedule of Useful Lives of Assets | The useful lives of these assets are as follows: Years Buildings 25 to 33 Plant and equipment 1 to 10 Instrumentation 3 to 4 Computer software 3 to 7 Furniture and fixtures 4 to 8 |
Schedule of Property, Plant and Equipment | The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in earnings. Fully depreciated assets remain in the accounts until retired from service. December 31, (U.S. Dollars, in thousands) 2018 2017 Cost Buildings $ 3,746 $ 3,725 Plant and equipment 45,744 47,588 Instrumentation 75,542 75,818 Computer software 47,322 48,604 Furniture and fixtures 6,599 7,605 Construction in progress 2,909 769 181,862 184,109 Accumulated depreciation (139,027 ) (138,970 ) Property, plant and equipment, net $ 42,835 $ 45,139 |
Patents and other intangible _2
Patents and other intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Patents and Other Intangible Assets | December 31, (U.S. Dollars, in thousands) Weighted Average Amortization Period 2018 2017 Cost Patents 10 years $ 39,085 $ 38,621 Developed technology 10 years 12,400 — IPR&D Indefinite 26,800 — License and other 7 years 14,654 10,276 Trademarks—finite lived 9 years 840 533 9 years 93,779 49,430 Accumulated amortization Patents $ (35,016 ) $ (34,151 ) Developed technology (827 ) — IPR&D — — License and other (5,744 ) (4,625 ) Trademarks—finite lived (295 ) (193 ) (41,882 ) (38,969 ) Patents and other intangible assets, net $ 51,897 $ 10,461 |
Schedule of Future Amortization Expense | Future amortization expense for intangible assets, including IPR&D, is estimated as follows: (U.S. Dollars, in thousands) Amortization 2019 $ 6,604 2020 6,205 2021 6,146 2022 6,138 2023 5,495 Thereafter 21,309 Total $ 51,897 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Net Carrying Amount of Goodwill | The following table presents the net carrying value of goodwill, and a rollforward of such balances from December 31, 2017, by reportable segment: (U.S. Dollars, in thousands) December 31, 2017 Spinal Kinetics Acquisition December 31, 2018 Bone Growth Therapies $ 42,678 $ — $ 42,678 Spinal Implants — 18,836 18,836 Biologics 10,887 — 10,887 Orthofix Extremities — — — Goodwill $ 53,565 $ 18,836 $ 72,401 |
Other current liabilities (Tabl
Other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables And Accruals [Abstract] | |
Summary of Other Current Liabilities | December 31, (U.S. Dollars, in thousands) 2018 2017 Accrued expenses $ 6,206 $ 6,984 Salaries, bonuses, commissions and related taxes payable 21,608 24,635 Accrued distributor commissions 10,073 9,192 Accrued legal and settlement expenses 4,196 7,673 Contingent consideration liability 13,600 — Non-income taxes payable 3,638 3,180 Other payables 8,598 9,631 Other current liabilities $ 67,919 $ 61,295 |
Fair value measurements (Tables
Fair value measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis | The Company’s collective trust funds, treasury securities, equity warrants, equity securities, debt security, contingent consideration, and deferred compensation plan liabilities are the only financial instruments recorded at fair value on a recurring basis as follows: (U.S. Dollars, in thousands) Balance December 31, 2018 Level 1 Level 2 Level 3 Assets Treasury securities $ 490 $ 490 $ — $ — Equity warrants — — — — Equity securities 219 — 219 — Debt security 17,820 — — 17,820 Total $ 18,529 $ 490 $ 219 $ 17,820 Liabilities Contingent consideration $ (28,560 ) $ — $ — $ (28,560 ) Deferred compensation plan (1,275 ) — (1,275 ) — Total $ (29,835 ) $ — $ (1,275 ) $ (28,560 ) (U.S. Dollars, in thousands) Balance December 31, 2017 Level 1 Level 2 Level 3 Assets Collective trust funds $ 100 $ — $ 100 $ — Treasury securities 556 556 — — Debt security 16,050 — — 16,050 Total $ 16,706 $ 556 $ 100 $ 16,050 Liabilities Deferred compensation plan $ (1,379 ) $ — $ (1,379 ) $ — Total $ (1,379 ) $ — $ (1,379 ) $ — |
Schedule of Changes in Valuation of Securities | The changes in valuation of these securities for the years ended December 31, 2018 and 2017 are shown below: (U.S. Dollars, in thousands) 2018 2017 2016 Equity securities and warrants at January 1 $ 2,768 $ 2,768 $ 2,768 Impact of adoption of ASU 2016-01 recognized in other income 1,629 — — Purchase of additional common stock 500 — — Fair value adjustments, expirations, and impairments recognized in other expense (4,678 ) — — Equity securities and warrants at December 31 $ 219 $ 2,768 $ 2,768 |
Schedule of Reconciliation For Contingent Consideration Measured At Fair Value Using Significant Unobservable Inputs | The following table provides a reconciliation of the beginning and ending balances for the contingent consideration measured at fair value using significant unobservable inputs (Level 3): (U.S. Dollars, in thousands) 2018 Contingent consideration at January 1 $ — Acquisition date fair value 25,491 Increase in fair value recognized in operating expenses 3,069 Contingent consideration at December 31 $ 28,560 |
Fair Value, Inputs, Level 3 [Member] | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |
Schedule of Reconciliation of Available for Sale Debt Securities | The following table provides a reconciliation of the beginning and ending balances for debt securities measured at fair value using significant unobservable inputs (Level 3): (U.S. Dollars, in thousands) 2018 2017 Balance at January 1 $ 16,050 $ 12,220 Accrued interest income — — Gains (losses) recorded for the period Recognized in net income — (5,585 ) Recognized in other comprehensive income 1,770 9,415 Balance at December 31 $ 17,820 $ 16,050 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Operating Leases | Future minimum lease payments under operating leases as of December 31, 2018 are as follows: (U.S. Dollars, in thousands) 2019 $ 3,330 2020 2,729 2021 2,946 2022 2,818 2023 1,727 Thereafter 11,372 Total $ 24,922 |
Shareholders' equity (Tables)
Shareholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders Equity Note [Abstract] | |
Components of Changes in Accumulated Other Comprehensive Income (Loss) | The components of and changes in accumulated other comprehensive income are as follows: (U.S. Dollars, in thousands) Currency Translation Adjustments Debt Security Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2016 $ (5,115 ) $ (1,465 ) $ (6,580 ) Other comprehensive income 4,552 3,830 8,382 Income taxes — (1,475 ) (1,475 ) Reclassification adjustments to: Other expense, net — 5,585 5,585 Income taxes — (2,125 ) (2,125 ) Balance at December 31, 2017 $ (563 ) $ 4,350 $ 3,787 Other comprehensive income (loss) (1,823 ) 1,770 (53 ) Income taxes — (438 ) (438 ) Balance at December 31, 2018 $ (2,386 ) $ 5,682 $ 3,296 |
Revenue recognition and accou_2
Revenue recognition and accounts receivable (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition And Accounts Receivable [Abstract] | |
Summary of Cumulative Impact of Adoption under Topic 606 | The Company recorded a net increase to opening retained earnings of $4.8 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606 as presented in the table below. (U.S. Dollars, in thousands) December 31, 2017 Impact of Adoption of Topic 606 January 1, 2018 Assets Current assets Cash and cash equivalents $ 81,157 $ — $ 81,157 Accounts receivable, net 63,437 8,648 72,085 Inventories 81,330 (2,338 ) 78,992 Prepaid expenses and other current assets 25,877 — 25,877 Total current assets 251,801 6,310 258,111 Deferred income taxes 23,315 (1,549 ) 21,766 Other long-term assets 130,238 — 130,238 Total assets $ 405,354 $ 4,761 $ 410,115 Liabilities and shareholders' equity Total liabilities $ 108,746 $ — $ 108,746 Shareholders' equity Common shares 1,828 — 1,828 Additional paid-in capital 220,591 — 220,591 Retained earnings 70,402 4,761 75,163 Accumulated other comprehensive income 3,787 3,787 Total shareholders' equity 296,608 4,761 301,369 Total liabilities and shareholders' equity $ 405,354 $ 4,761 $ 410,115 The table below presents the impact to the Company’s consolidated statement of income for the year ended December 31, 2018 as a result of the adoption of Topic 606. Year Ended December 31, 2018 (U.S. Dollars, in thousands) Based on historical accounting under Topic 605 Impact of adoption As reported under Topic 606 Net sales $ 445,343 $ 7,699 $ 453,042 Cost of sales 95,145 1,483 96,628 Gross profit 350,198 6,216 356,414 Sales and marketing 205,538 (11 ) 205,527 Other operating expenses 120,793 — 120,793 Operating income $ 23,867 $ 6,227 $ 30,094 Income tax expense (7,656 ) (1,418 ) (9,074 ) Net income from continuing operations $ 9,002 $ 4,809 $ 13,811 Net income from continuing operations per common share—basic $ 0.48 $ 0.25 $ 0.73 Net income from continuing operations per common share—diluted $ 0.47 $ 0.25 $ 0.72 |
Schedule of Net Sales | The table below presents net sales, which includes product sales and marketing service fees, for each of the years ended December 31, 2018, 2017, and 2016. For the year ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 Product sales $ 395,589 $ 373,538 $ 355,652 Marketing service fees 57,453 60,285 54,136 Net sales $ 453,042 $ 433,823 $ 409,788 |
Business segment information (T
Business segment information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule Of Net Sales by Reporting Segment | The table below presents net sales by reporting segment: Year Ended December 31, 2018 2017 2016 (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 $ 195,252 43.1 % $ 185,900 42.9 % $ 176,561 43.1 % Spinal Implants 91,658 20.2 % 81,957 18.9 % 72,632 17.7 % Biologics 59,684 13.2 % 62,724 14.4 % 57,912 14.1 % Orthofix Extremities 106,448 23.5 % 103,242 23.8 % 102,683 25.1 % Net sales $ 453,042 100.0 % $ 433,823 100.0 % $ 409,788 100.0 % |
Summary of Non-GAAP Net Margin by Reporting Segment | The following table presents Non-GAAP net margin, and internal metric that the Company defines as gross profit less sales and marketing expense, by reporting segment: Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 Bone Growth Therapies $ 86,252 $ 77,369 $ 75,469 Spinal Implants 7,628 8,730 8,650 Biologics 26,298 25,692 26,891 Orthofix Extremities 31,391 31,071 30,526 Corporate (682 ) (446 ) (888 ) Non-GAAP net margin $ 150,887 $ 142,416 $ 140,648 General and administrative 84,506 71,905 76,409 Research and development 33,218 29,700 28,803 Changes in fair value of contingent consideration 3,069 — — Charges related to U.S. Government resolutions — — 14,369 Operating income $ 30,094 $ 40,811 $ 21,067 Interest income (expense), net (828 ) (416 ) 763 Other expense, net (6,381 ) (4,004 ) (2,806 ) Income before income taxes $ 22,885 $ 36,391 $ 19,024 |
Schedule of Depreciation and Amortization by Reporting Segment | The following table presents depreciation and amortization by reporting segment: Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 Bone Growth Therapies $ 1,770 $ 2,133 $ 2,754 Spinal Implants 7,294 6,949 8,118 Biologics 448 752 1,011 Orthofix Extremities 5,342 6,040 5,742 Corporate 3,805 4,250 3,216 Total $ 18,659 $ 20,124 $ 20,841 |
Summary of Net Sales by Geographic Destination | The following data includes net sales by geographic destination: (U.S. Dollars, in thousands) 2018 2017 2016 U.S. $ 355,353 $ 345,145 $ 316,873 Italy 19,331 17,059 16,664 Germany 11,606 7,063 6,448 United Kingdom 8,731 8,725 10,362 Brazil 7,120 10,356 11,334 Others 50,901 45,475 48,107 Net sales $ 453,042 $ 433,823 $ 409,788 The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company: (U.S. Dollars, in thousands) 2018 2017 2016 Bone Growth Therapies U.S. $ 195,189 $ 185,853 $ 176,510 International 63 47 51 Total Bone Growth Therapies 195,252 185,900 176,561 Spinal Implants U.S. 72,137 69,704 57,772 International 19,521 12,253 14,860 Total Spinal Implants 91,658 81,957 72,632 Biologics U.S. 59,668 62,670 57,574 International 16 54 338 Total Biologics 59,684 62,724 57,912 Orthofix Extremities U.S. 28,359 26,918 25,017 International 78,089 76,324 77,666 Total Orthofix Extremities 106,448 103,242 102,683 Consolidated U.S. 355,353 345,145 316,873 International 97,689 88,678 92,915 Net sales $ 453,042 $ 433,823 $ 409,788 |
Summary of Property, Plant and Equipment of Reporting Segments by Geographic Area | The following data includes property, plant and equipment by geographic area: (U.S. Dollars, in thousands) 2018 2017 U.S. $ 31,344 $ 34,008 Italy 7,732 7,658 Germany 861 933 United Kingdom 896 382 Brazil 191 475 Others 1,811 1,683 Total $ 42,835 $ 45,139 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Share-Based Compensation by Line Item in Consolidated Statements of Income | The following tables present the detail of share-based compensation by line item in the consolidated statements of income as well as by award type, for the years ended December 31, 2018, 2017 and 2016: Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 Cost of sales $ 522 $ 486 $ 553 Sales and marketing 1,802 1,471 1,230 General and administrative 15,197 9,671 13,132 Research and development 1,409 929 1,051 Total $ 18,930 $ 12,557 $ 15,966 Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 Stock options $ 3,061 $ 2,388 $ 2,021 Time-based restricted stock awards and stock units 7,265 5,540 6,016 Performance-based restricted stock awards and stock units 1,998 462 5,716 Market-based restricted stock units 5,256 2,904 948 Stock purchase plan 1,350 1,263 1,265 Total $ 18,930 $ 12,557 $ 15,966 |
Schedule of Assumptions Used in Determining Fair Value of Stock Options | A summary of the Company’s assumptions used in determining the fair value of the stock options granted during the year is shown in the following table. Year Ended December 31, 2018 2017 2016 Assumptions: Expected term (in years) 4.5 4.5 4.5 Expected volatility 28.7% – 30.1% 31.2 % 30.6% – 32.3% Risk free interest rate 2.55% – 2.79% 1.93 % 1.07% – 1.92% Dividend yield — — — Weighted average grant date fair value $ 16.28 $ 13.32 $ 11.79 |
Schedule of Stock Option Plans | Summaries of the status of the Company’s stock option plans as of December 31, 2018 and 2017 and changes during the year ended December 31, 2018 are presented below: Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Outstanding at December 31, 2017 1,086,822 $ 37.47 Granted 231,548 $ 57.66 Exercised (100,821 ) $ 27.80 Forfeited (41,662 ) $ 48.80 Outstanding at December 31, 2018 1,175,887 $ 41.87 6.61 Vested and expected to vest at December 31, 2018 1,175,887 $ 41.87 6.61 Exercisable at December 31, 2018 696,248 $ 36.67 5.36 |
Schedule of Changes in Time-Based, Performance-Based and Market-Based Restricted Stock Awards and Stock Units | A summary of the status of our time-based, performance-based and market-based restricted stock awards and stock units as of December 31, 2018 and 2017 and changes during the year ended December 31, 2018 are presented below: Time-based Restricted Stock Awards and Stock Units Performance-based Restricted Stock Awards and Stock Units Market-based Restricted Stock Units Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2017 325,874 $ 42.44 109,880 $ 33.12 187,314 $ 51.99 Granted 172,108 $ 57.18 — $ — 97,420 $ 68.38 Vested and settled (112,249 ) $ 40.08 — $ — — $ — Cancelled (28,141 ) $ 48.84 (7,725 ) $ 33.12 (13,439 ) $ 60.83 Outstanding at December 31, 2018 357,592 $ 49.77 102,155 $ 33.12 271,295 $ 57.44 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (Loss) from Continuing Operations Before Provision for Income Taxes | Income (loss) from continuing operations before provision for income taxes consisted of the following: Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 U.S. $ 28,642 $ 27,774 $ 23,006 Non-U.S. (5,757 ) 8,617 (3,982 ) Income before income taxes $ 22,885 $ 36,391 $ 19,024 |
Schedule of Provision for Income Taxes on Continuing Operations | The provision for income taxes on continuing operations consists of the following: Year Ended December 31, (U.S. Dollars, in thousands) 2018 2017 2016 U.S. Current $ 9,480 $ 3,620 $ 558 Deferred (3,430 ) 20,222 9,296 6,050 23,842 9,854 Non-U.S. Current 2,255 4,062 4,509 Deferred 769 1,196 1,164 3,024 5,258 5,673 Income tax expense $ 9,074 $ 29,100 $ 15,527 |
Schedule of Effective Income Tax Rate Reconciliation for Continuing Operations | The differences between the income tax provision at the U.S. federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2018, 2017, and 2016 consist of the following: 2018 2017 1 2016 1 (U.S. Dollars, in thousands, except percentages) Amount Percent Amount Percent Amount Percent Statutory U.S. federal income tax rate $ 4,806 21.0 % $ 12,737 35.0 % $ 6,658 35.0 % State taxes, net of U.S. federal benefit 1,038 4.5 1,598 4.4 395 2.1 Foreign rate differential, including withholding taxes 784 3.4 (3,849 ) (10.6 ) (805 ) (4.2 ) Charges related to U.S. Government resolutions — — — — 2,050 10.8 Valuation allowances, net 4,116 18.0 3,548 9.7 6,149 32.3 Change in estimate on compensation expenses — — — — (2,151 ) (11.3 ) Italian subsidiary intangible asset (230 ) (1.0 ) (381 ) (1.0 ) (1,477 ) (7.8 ) Change of intention for foreign earnings — — — — 1,300 6.8 Domestic manufacturing deduction — — (818 ) (2.2 ) — — Unrecognized tax benefits, net of settlements 81 0.4 6,002 16.5 3,049 16.0 Impact of the Tax Act (560 ) (2.4 ) 8,347 22.9 — — Equity compensation (1,646 ) (7.2 ) 272 0.7 334 1.8 Contingent consideration 528 2.3 — — — — Other, net 157 0.7 1,644 4.5 25 0.1 Income tax expense/effective rate $ 9,074 39.7 % $ 29,100 80.0 % $ 15,527 81.6 % |
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred tax assets and liabilities are as follows: December 31, (U.S. Dollars, in thousands) 2018 2017 Intangible assets and goodwill $ 1,682 $ 2,271 Inventories and related reserves 12,151 11,298 Deferred revenue and cost of goods sold 4,652 6,816 Other accruals and reserves 2,799 2,336 Accrued compensation 8,317 4,054 Allowance for doubtful accounts 2,346 2,617 Net operating loss and tax credit carryforwards 52,664 43,296 Other, net 2,200 1,748 86,811 74,436 Valuation allowance (49,014 ) (46,271 ) Deferred tax asset $ 37,797 $ 28,165 Withholding taxes — (381 ) Property, plant and equipment (4,569 ) (4,469 ) Deferred tax liability (4,569 ) (4,850 ) Net deferred tax assets $ 33,228 $ 23,315 |
Schedule of Gross Unrecognized Tax Benefits (Excluding Interest and Penalties) | A reconciliation of the gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2018, 2017, and 2016 follows: (U.S. Dollars, in thousands) 2018 2017 Balance as of January 1, $ 23,676 $ 19,400 Additions for current year tax positions 170 787 Increases for prior year tax positions 1,653 3,498 Settlements of prior year tax positions (1,499 ) — Expiration of statutes (2,649 ) (9 ) Balance as of December 31, $ 21,351 $ 23,676 |
Earnings per share (EPS) (Table
Earnings per share (EPS) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Weighted Average Shares Used in the Diluted EPS | The following is a reconciliation of the weighted average shares used in the diluted EPS computations. Year Ended December 31, 2018 2017 2016 Weighted average common shares-basic 18,494,002 18,117,405 18,144,019 Effect of diluted securities: Unexercised stock options and employee stock purchase plan 313,648 209,691 161,092 Unvested time-based restricted stock awards — 123,592 138,291 Unvested performance-based restricted stock awards 103,960 48,057 19,759 Weighted average common shares-diluted 18,911,610 18,498,745 18,463,161 |
Quarterly financial data (una_2
Quarterly financial data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Information Disclosure [Abstract] | |
Condensed Consolidated Statement of Operations | 2018 (U.S. Dollars, in thousands, except per share data) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Net sales $ 108,709 $ 111,547 $ 111,708 $ 121,078 $ 453,042 Cost of sales 24,147 22,835 24,020 25,626 96,628 Gross profit 84,562 88,712 87,688 95,452 356,414 Operating expense 1, 2 76,692 82,797 83,781 83,050 326,320 Operating income 1, 2 7,870 5,915 3,907 12,402 30,094 Net income (loss) from continuing operations 2 5,226 925 (1,211 ) 8,871 13,811 Net income (loss) $ 5,226 $ 925 $ (1,211 ) $ 8,871 $ 13,811 Net income (loss) per common share — basic: Net income (loss) from continuing operations $ 0.28 $ 0.05 $ (0.07 ) $ 0.47 $ 0.73 Net income (loss) $ 0.28 $ 0.05 $ (0.07 ) $ 0.47 $ 0.73 Net income (loss) per common share — diluted: Net income (loss) from continuing operations $ 0.27 $ 0.05 $ (0.07 ) $ 0.46 $ 0.72 Net income (loss) $ 0.27 $ 0.05 $ (0.07 ) $ 0.46 $ 0.72 1 2 The Company reclassified less than $ 10 thousand of previously reported net income (loss) from discontinued operations during the first, second, and third quarters of 2018 to continuing operations to conform to current period presentation . 2017 (U.S. Dollars, in thousands, except per share data) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Year Net sales $ 102,738 $ 108,942 $ 105,247 $ 116,896 $ 433,823 Cost of sales 22,581 23,177 23,717 23,562 93,037 Gross profit 80,157 85,765 81,530 93,334 340,786 Operating expense 74,238 77,767 72,496 75,474 299,975 Operating income 5,919 7,998 9,034 17,860 40,811 Net income (loss) from continuing operations (2,308 ) 4,735 3,348 1,516 7,291 Net income (loss) $ (2,654 ) $ 3,853 $ 3,456 $ 1,568 $ 6,223 Net income (loss) per common share — basic: Net income (loss) from continuing operations $ (0.13 ) $ 0.26 $ 0.18 $ 0.08 $ 0.40 Net income (loss) $ (0.15 ) $ 0.21 $ 0.19 $ 0.09 $ 0.34 Net income (loss) per common share — diluted: Net income (loss) from continuing operations $ (0.13 ) $ 0.26 $ 0.18 $ 0.08 $ 0.39 Net income (loss) $ (0.15 ) $ 0.21 $ 0.19 $ 0.08 $ 0.34 |
Business and Basis of Consoli_2
Business and Basis of Consolidation- Additional Information (Detail) | Jul. 31, 2018 | Dec. 31, 2018Segment |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||
Number Of Reporting Units | 4 | |
Date of change in jurisdiction from Curaçao to the State of Delaware | Jul. 31, 2018 | |
Common stock conversion ratio | 1 | |
Common stock, conversion basis | Upon the effectiveness of the Domestication, each common share of Orthofix International N.V. was automatically converted into one share of common stock of Orthofix Medical Inc. This transaction was accounted for as a transfer of assets and liabilities between entities under common control similar to a pooling of interest. As a result, the assets and liabilities were carried forward at their historical carrying amounts. The Company’s common stock continues to be traded on the Nasdaq Global Select Market under the symbol “OFIX.” |
Significant Accounting Polici_3
Significant Accounting Policies - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Jul. 31, 2018 | Apr. 30, 2018 | |
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Net sales | $ 121,078,000 | $ 111,708,000 | $ 111,547,000 | $ 108,709,000 | $ 116,896,000 | $ 105,247,000 | $ 108,942,000 | $ 102,738,000 | $ 453,042,000 | $ 433,823,000 | $ 409,788,000 | ||
Freezing amount in cash resulted from court pending legal action issued | 2,600,000 | 2,600,000 | $ 2,600,000 | ||||||||||
Spinal Kinetics [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
In-process research and development costs | $ 26,800,000 | 26,800,000 | $ 26,800,000 | ||||||||||
Musculoskeletal Transplant Foundation ("MTF") [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Expenditures for other research and development | 0 | 900,000 | 1,300,000 | ||||||||||
Customers and Distributors Based in Europe [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Net sales | 69,000,000 | ||||||||||||
Maximum [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Transactional foreign currency gains and (losses), including those generated from intercompany operations | $ (3,300,000) | 1,900,000 | (100,000) | ||||||||||
General and administrative [Member] | |||||||||||||
Summary Of Significant Accounting Policies [Line Items] | |||||||||||||
Increase (decrease) of general and administrative expense | $ (2,500,000) | $ 2,000,000 |
Recently Adopted Accounting S_2
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements - Additional Information (Detail) $ / shares in Units, $ in Thousands | Jan. 01, 2019USD ($) | Jan. 01, 2018USD ($) | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)Asset | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) |
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Investment impairment charges | $ (4,678) | |||||||
Prepaid income taxes | $ 8,600 | |||||||
Number of assets transferred | Asset | 2 | |||||||
Increase (decrease) in net cash from operating activities | 49,918 | $ 38,972 | $ 59,076 | |||||
ASU 2016-01 and 2018-03 [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Impact on remeasurement of equity investments recorded within other current assets or other long term assets | $ 1,600 | |||||||
Impact on remeasurement of equity investments per share before taxes recorded within other income | $ / shares | $ 0.09 | |||||||
Investment impairment charges | $ 4,400 | |||||||
ASU 2016-16 [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
New accounting standard update, reduction in prepaid income taxes | $ 8,600 | |||||||
New accounting standard update, increase in deferred tax assets | 6,700 | |||||||
Cumulative-effect adjustment to retained earnings | $ (1,900) | (1,896) | ||||||
ASU 2016-18 [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Increase (decrease) in net cash from operating activities | 2,500 | $ (14,400) | $ 14,400 | |||||
ASU 2017-01 [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Assets Acquired Not Meeting The Definition of a Business | $ 3,400 | |||||||
ASU 2016-02 [Member] | Subsequent Event [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Operating leases assets and liabilities expected to be recognized | $ 20,000 | |||||||
ASU 2018-02 [Member] | Scenario, Forecast [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Increase to accumulated other comprehensive income and a decrease in retained earnings | $ 900 |
Acquisition of Spinal Kinetic_3
Acquisition of Spinal Kinetics, Inc. - Additional Information (Detail) - USD ($) $ in Thousands | Apr. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 15, 2018 |
Business Acquisition [Line Items] | |||||
Increase in the fair value of a contingent consideration | $ 3,069 | ||||
Goodwill | $ 72,401 | 72,401 | $ 53,565 | ||
Spinal Implants [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 18,836 | 18,836 | |||
Spinal Kinetics [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition date | Apr. 30, 2018 | ||||
Business acquisition conversion of shares into net cash subject to adjustments | $ 45,000 | ||||
Business acquisition, percentage of outstanding stock | 100.00% | ||||
Fair value of the consideration transferred | $ 76,055 | 76,600 | |||
Milestone achievement period | 5 years | ||||
Contingent consideration | $ 25,500 | 28,600 | 28,600 | ||
Goodwill | 17,182 | 18,836 | 18,836 | ||
Acquisition related costs | 3,300 | $ 800 | |||
Revenue from acquisition | 8,700 | ||||
Net loss from Acquisition | 5,800 | ||||
Spinal Kinetics [Member] | Spinal Implants [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 18,800 | 18,800 | |||
Spinal Kinetics [Member] | Operating Expense [Member] | |||||
Business Acquisition [Line Items] | |||||
Increase in the fair value of a contingent consideration | $ 3,100 | $ 1,400 | |||
Spinal Kinetics [Member] | US Food And Drug Administration [Member] | |||||
Business Acquisition [Line Items] | |||||
Future milestone payments | 15,000 | ||||
Spinal Kinetics [Member] | Revenue Milestone [Member] | |||||
Business Acquisition [Line Items] | |||||
Future milestone payments | 45,000 | ||||
Spinal Kinetics [Member] | Maximum [Member] | |||||
Business Acquisition [Line Items] | |||||
Future milestone payments | $ 60,000 |
Acquisition of Spinal Kinetic_4
Acquisition of Spinal Kinetics, Inc. - Schedule of Fair Value of Consideration Transferred (Detail) - Spinal Kinetics [Member] - USD ($) $ in Thousands | Apr. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2018 |
Fair value of consideration transferred | |||
Cash paid | $ 50,564 | $ 51,109 | |
Contingent consideration | 25,491 | $ 25,491 | 25,491 |
Total fair value of consideration transferred | $ 76,055 | $ 76,600 | |
Cash paid, Adjustments | 545 | ||
Total fair value of consideration transferred, Adjustments | $ 545 |
Acquisition of Spinal Kinetic_5
Acquisition of Spinal Kinetics, Inc. - Summary of Preliminary Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2018 | Apr. 30, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 72,401 | $ 72,401 | $ 53,565 | |
Assigned Useful Life | 9 years | |||
Spinal Kinetics [Member] | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | 6,785 | $ 6,785 | $ 6,785 | |
Restricted cash | 30 | 30 | 30 | |
Accounts receivable | 1,705 | 1,705 | 1,705 | |
Inventories | 8,175 | 8,175 | 8,175 | |
Prepaid expenses and other current assets | 315 | 315 | 315 | |
Property, plant and equipment | 2,285 | 2,285 | 2,285 | |
Other long-term assets | 320 | 320 | 320 | |
In-process research and development ("IPR&D") | 26,800 | 26,800 | 26,800 | |
Deferred income taxes | 2,374 | 2,374 | 3,483 | |
Total identifiable assets acquired | 61,289 | 61,289 | 62,398 | |
Accounts payable | 351 | 351 | 351 | |
Other current liabilities | 2,873 | 2,873 | 2,873 | |
Other long-term liabilities | 301 | 301 | 301 | |
Total liabilities assumed | 3,525 | 3,525 | 3,525 | |
Goodwill | 18,836 | 18,836 | 17,182 | |
Total fair value of consideration transferred | 76,600 | $ 76,600 | 76,055 | |
In-process research and development ("IPR&D"), Assigned Useful Life | Indefinite | |||
Deferred income taxes, Adjustments | (1,109) | |||
Total identifiable assets acquired, Adjustments | (1,109) | |||
Goodwill, Adjustments | 1,654 | |||
Total fair value of consideration transferred, Adjustments | 545 | |||
Developed Technology [Member] | ||||
Business Acquisition [Line Items] | ||||
Assigned Useful Life | 10 years | |||
Developed Technology [Member] | Spinal Kinetics [Member] | ||||
Business Acquisition [Line Items] | ||||
Finite lived intangible assets acquired | 12,400 | $ 12,400 | 12,400 | |
Assigned Useful Life | 10 years | |||
Tradename [Member] | ||||
Business Acquisition [Line Items] | ||||
Assigned Useful Life | 9 years | |||
Tradename [Member] | Spinal Kinetics [Member] | ||||
Business Acquisition [Line Items] | ||||
Finite lived intangible assets acquired | $ 100 | $ 100 | $ 100 | |
Assigned Useful Life | 2 years |
Acquisition of Spinal Kinetic_6
Acquisition of Spinal Kinetics, Inc. - Summary of Unaudited Pro forma Results (Detail) - Spinal Kinetics [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | ||
Net sales | $ 457,960 | $ 448,277 |
Net income (loss) from continuing operations | $ 16,157 | $ (1,492) |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 8,463 | $ 6,067 |
Work-in-process | 13,478 | 12,487 |
Finished products | 18,244 | 11,244 |
Field / consignment inventory | 36,662 | 49,197 |
Deferred cost of sales | 2,335 | |
Inventories | $ 76,847 | $ 81,330 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Useful Lives of the Assets (Detail) | 12 Months Ended |
Dec. 31, 2018 | |
Minimum [Member] | Buildings [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 25 years |
Minimum [Member] | Plant and equipment [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 1 year |
Minimum [Member] | Instrumentation [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 3 years |
Minimum [Member] | Computer software [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 3 years |
Minimum [Member] | Furniture and fixtures [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 4 years |
Maximum [Member] | Buildings [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 33 years |
Maximum [Member] | Plant and equipment [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 10 years |
Maximum [Member] | Instrumentation [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 4 years |
Maximum [Member] | Computer software [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 7 years |
Maximum [Member] | Furniture and fixtures [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 8 years |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Property Plant And Equipment Useful Life And Values [Abstract] | |||
Depreciation expense | $ 15.9 | $ 18.3 | $ 19 |
Property, Plant and Equipment_3
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property Plant And Equipment [Line Items] | ||
Cost | $ 181,862 | $ 184,109 |
Accumulated depreciation | (139,027) | (138,970) |
Property, plant and equipment, net | 42,835 | 45,139 |
Buildings [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 3,746 | 3,725 |
Plant and equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 45,744 | 47,588 |
Instrumentation [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 75,542 | 75,818 |
Furniture and fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 6,599 | 7,605 |
Computer software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | 47,322 | 48,604 |
Construction in progress [Member] | ||
Property Plant And Equipment [Line Items] | ||
Cost | $ 2,909 | $ 769 |
Patents and Other Intangible _3
Patents and Other Intangible Assets - Schedule of Patents and Other Intangibles Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 93,779 | $ 49,430 |
Accumulated amortization | (41,882) | (38,969) |
Patents and other intangible assets, net | $ 51,897 | 10,461 |
Weighted Average Amortization Period | 9 years | |
IPR&D [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 26,800 | |
Weighted Average Amortization Period | Indefinite | |
Patents [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 39,085 | 38,621 |
Accumulated amortization | $ (35,016) | (34,151) |
Weighted Average Amortization Period | 10 years | |
Developed Technology [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 12,400 | |
Accumulated amortization | $ (827) | |
Weighted Average Amortization Period | 10 years | |
Licenses and Other [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 14,654 | 10,276 |
Accumulated amortization | $ (5,744) | (4,625) |
Weighted Average Amortization Period | 7 years | |
Trademarks-Finite Lived [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 840 | 533 |
Accumulated amortization | $ (295) | $ (193) |
Weighted Average Amortization Period | 9 years |
Patents and Other Intangible _4
Patents and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Feb. 28, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite And Indefinite Lived Intangible Assets [Line Items] | ||||
Weighted Average Amortization Period | 9 years | |||
Amortization of intangible assets | $ 2.7 | $ 1.8 | $ 1.8 | |
IPR&D [Member] | Scenario, Forecast [Member] | ||||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||||
Weighted Average Amortization Period | 10 years |
Patents and Other Intangible _5
Patents and Other Intangible Assets - Schedule of Future Amortization Expense (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2,019 | $ 6,604 | |
2,020 | 6,205 | |
2,021 | 6,146 | |
2,022 | 6,138 | |
2,023 | 5,495 | |
Thereafter | 21,309 | |
Patents and other intangible assets, net | $ 51,897 | $ 10,461 |
Goodwill - Schedule of Net Carr
Goodwill - Schedule of Net Carrying Amount of Goodwill (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Goodwill [Line Items] | |
Goodwill, Beginning balance | $ 53,565 |
Goodwill, Ending balance | 72,401 |
Spinal Kinetics [Member] | |
Goodwill [Line Items] | |
Goodwill, Acquisition | 18,836 |
Goodwill, Ending balance | 18,836 |
Bone Growth Therapies [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning balance | 42,678 |
Goodwill, Ending balance | 42,678 |
Spinal Implants [Member] | |
Goodwill [Line Items] | |
Goodwill, Ending balance | 18,836 |
Spinal Implants [Member] | Spinal Kinetics [Member] | |
Goodwill [Line Items] | |
Goodwill, Acquisition | 18,836 |
Goodwill, Ending balance | 18,800 |
Biologics [Member] | |
Goodwill [Line Items] | |
Goodwill, Beginning balance | 10,887 |
Goodwill, Ending balance | $ 10,887 |
Investments - Additional Inform
Investments - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 04, 2015 | Sep. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Investments Equity Securities [Abstract] | ||||||
Purchase of common stock, value | $ 500 | $ 0 | $ 0 | |||
Investment impairment charges | $ (4,678) | |||||
Bone Biologics Inc [Member] | ||||||
Investments Equity Securities [Abstract] | ||||||
Warrants held for share purchases | 13,000 | |||||
Weighted average exercise price of warrant | $ 14.32 | |||||
Warrants exercisable period | 7 years | |||||
Warrant expiration year | 2,020 | |||||
Purchase of common stock, value | $ 500 | |||||
Bone Biologics Inc [Member] | Common Stock [Member] | ||||||
Investments Equity Securities [Abstract] | ||||||
Purchase of stock, shares | 25,000 | |||||
Bone Biologics Inc [Member] | ASU 2016-01 [Member] | CommonStock and Warrants [Member] | ||||||
Investments Equity Securities [Abstract] | ||||||
Investment impairment charges | $ 4,400 | |||||
eNeura Note [Member] | eNeura Inc [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Non-refundable fees paid | $ 300 | |||||
Accrued interest rate on promissory note | 8.00% | |||||
Maturity description of Promissory note | The eNeura Note will mature on March 4, 2019 | |||||
Debt Instrument, Maturity Date | Mar. 4, 2019 | |||||
eNeura Note [Member] | eNeura Inc [Member] | Convertible Debt Securities [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount of promissory note | $ 15,000 | |||||
eNeura Note [Member] | eNeura Inc [Member] | Preferred Stock [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Conversion price per share | $ 7.30 | |||||
eNeura Note [Member] | eNeura Inc [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Third party acquisition | 50.00% |
Other Current Liabilities - Sum
Other Current Liabilities - Summary of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Payables And Accruals [Abstract] | ||
Accrued expenses | $ 6,206 | $ 6,984 |
Salaries, bonuses, commissions and related taxes payable | 21,608 | 24,635 |
Accrued distributor commissions | 10,073 | 9,192 |
Accrued legal and settlement expenses | 4,196 | 7,673 |
Contingent consideration liability | 13,600 | |
Non-income taxes payable | 3,638 | 3,180 |
Other payables | 8,598 | 9,631 |
Other current liabilities | $ 67,919 | $ 61,295 |
Other Current Liabilities - Add
Other Current Liabilities - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Extremity Fixation Restructuring Plan [Member] | |||
Other Current Liabilities [Line Items] | |||
Pre-tax restructuring expense | $ 3.2 | ||
Restructuring costs and expenses incurred | $ 1.3 | $ 2 | |
Inventory write-down charges | 0.4 | ||
Restructuring reserve, accrual adjustment | 0.1 | ||
Accrued in other current liabilities related to restructuring | 0.7 | 1.5 | |
Payments for restructuring | 0.5 | 2.1 | $ 0.1 |
Remaining accrual other current liablities | 0.1 | ||
U.S. Restructuring Plan [Member] | |||
Other Current Liabilities [Line Items] | |||
Accrued in other current liabilities related to restructuring | 1.1 | ||
Payments for restructuring | $ 1.1 | 0.6 | |
U.S. Restructuring Plan [Member] | Operating Expense [Member] | |||
Other Current Liabilities [Line Items] | |||
Pre-tax restructuring expense | $ 1.7 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) | Aug. 31, 2015USD ($) | Aug. 30, 2015USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2018EUR (€) | Jul. 31, 2018 |
Debt Instrument [Line Items] | |||||||
Debt issuance costs incurred | $ 682,000 | $ 445,000 | |||||
Cash paid to interest | 800,000 | 800,000 | $ 700,000 | ||||
Italy [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity | $ 6,700,000 | 7,000,000 | € 5,800,000 | ||||
2015 Credit Agreement [Member] | Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument term (in years) | 5 years | ||||||
Maximum borrowing capacity | $ 125,000,000 | ||||||
Credit agreement maturity date | Aug. 31, 2020 | ||||||
Amount outstanding under lines of credit | $ 0 | ||||||
Maximum borrowing capacity available for issuance of letters of credit | 25,000,000 | ||||||
Maximum additional borrowing capacity | $ 50,000,000 | ||||||
Line of credit, leverage ratio | 3 | ||||||
Line of credit, interest coverage ratio | 300.00% | ||||||
Debt issuance costs incurred | $ 1,800,000 | ||||||
Debt issuance costs, net of accumulated amortization | 600,000 | 1,000,000 | |||||
Debt issuance costs amortized or expensed | $ 400,000 | $ 1,000,000 | $ 400,000 | ||||
2015 Credit Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity available for working capital and other general corporate purposes | $ 50,000,000 | ||||||
Line of credit facility, unused commitment fee percentage | 0.40% | ||||||
2015 Credit Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Margin on variable rate | 2.50% | ||||||
2015 Credit Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member] | Base Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Margin on variable rate | 1.50% | ||||||
2015 Credit Agreement [Member] | Revolving Credit Facility [Member] | Minimum [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Line of credit facility, unused commitment fee percentage | 0.25% | ||||||
2015 Credit Agreement [Member] | Revolving Credit Facility [Member] | Minimum [Member] | LIBOR [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Margin on variable rate | 1.75% | ||||||
2015 Credit Agreement [Member] | Revolving Credit Facility [Member] | Minimum [Member] | Base Rate [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Margin on variable rate | 0.75% | ||||||
First Amended and Restated Credit Agreement [Member] | Revolving Credit Facility [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Maximum percentage of voting interests pledged in first tier foreign subsidiaries | 65.00% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Fair Value, Inputs, Level 3 [Member] | Debt Security [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | $ 17,820 | $ 16,050 | $ 12,220 |
Fair Value, Measurements, Recurring [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | 18,529 | 16,706 | |
Contingent consideration | (28,560) | ||
Deferred compensation plan, Liabilities | (1,275) | (1,379) | |
Liabilities fair value, Total | (29,835) | (1,379) | |
Fair Value, Measurements, Recurring [Member] | Treasury Securities [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | 490 | 556 | |
Fair Value, Measurements, Recurring [Member] | Equity Securities [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | 219 | ||
Fair Value, Measurements, Recurring [Member] | Debt Security [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | 17,820 | 16,050 | |
Fair Value, Measurements, Recurring [Member] | Collective Trust Funds [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | 100 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | 490 | 556 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | Treasury Securities [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | 490 | 556 | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | 219 | 100 | |
Deferred compensation plan, Liabilities | (1,275) | (1,379) | |
Liabilities fair value, Total | (1,275) | (1,379) | |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | 219 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | Collective Trust Funds [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | 100 | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | 17,820 | 16,050 | |
Contingent consideration | (28,560) | ||
Liabilities fair value, Total | (28,560) | ||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | Debt Security [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Assets fair value | $ 17,820 | $ 16,050 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Detail) - USD ($) | Feb. 14, 2019 | Apr. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Feb. 06, 2019 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Amortized cost basis | $ 9,000,000 | $ 9,000,000 | |||||
Other-than-temporary impairment on debt securities | $ 5,585,000 | $ 2,727,000 | |||||
Changes in fair value of contingent consideration | 3,069,000 | ||||||
Spinal Kinetics [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Milestone achievement period | 5 years | ||||||
Contingent consideration | $ 25,500,000 | 28,600,000 | 28,600,000 | ||||
Spinal Kinetics [Member] | Operating Expense [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Changes in fair value of contingent consideration | 3,100,000 | 1,400,000 | |||||
Other Current Liabilities [Member] | Spinal Kinetics [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Contingent consideration | 13,600,000 | 13,600,000 | |||||
Other Long-term Liabilities [Member] | Spinal Kinetics [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Contingent consideration | 15,000,000 | 15,000,000 | |||||
Maximum [Member] | Spinal Kinetics [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Future milestone payments | 60,000,000 | ||||||
US Food And Drug Administration [Member] | Spinal Kinetics [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Future milestone payments | 15,000,000 | ||||||
US Food And Drug Administration [Member] | Spinal Kinetics [Member] | Subsequent Event [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Future milestone payments | $ 15,000,000 | ||||||
Payments obligation for contigent consideration | $ 15,000,000 | ||||||
Revenue Milestone [Member] | Spinal Kinetics [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Future milestone payments | $ 45,000,000 | ||||||
Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Fair value of debt securities | $ 17,820,000 | 17,820,000 | $ 16,050,000 | $ 12,220,000 | |||
Net increase in estimated fair value of the debt securities | 1,800,000 | ||||||
Common Stock [Member] | |||||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||||
Warrants’ value Reduced | $ 0 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Change in Valuation of Securities (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Equity securities and warrants beginning balance | $ 2,768 | $ 2,768 | $ 2,768 |
Purchase of additional common stock | 500 | 0 | 0 |
Investment impairment charges | (4,678) | ||
Equity securities and warrants ending balance | 219 | 2,768 | 2,768 |
ASU 2016-01 [Member] | |||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |||
Impact of adoption of ASU 2016-01 recognized in other income | $ 1,629 | $ 0 | $ 0 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Reconciliation of Debt Securities (Detail) - Debt Securities [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 16,050 | $ 12,220 |
Gains (losses) recorded for the period | ||
Recognized in net income | (5,585) | |
Recognized in other comprehensive income | 1,770 | 9,415 |
Ending balance | $ 17,820 | $ 16,050 |
Fair Value Measurements - Sch_4
Fair Value Measurements - Schedule of Reconciliation For Contingent Consideration Measured At Fair Value Using Significant Unobservable Inputs (Level 3) (Detail) - Fair Value, Inputs, Level 3 [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Acquisition date fair value | $ 25,491 |
Increase in fair value recognized in operating expenses | 3,069 |
Contingent consideration at December 31 | $ 28,560 |
Commitments - Additional Inform
Commitments - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Loss Contingencies [Line Items] | ||||
Rent expenses | $ 3.5 | $ 3.1 | $ 3 | |
Inventory purchase commitments with third-party | $ 0.1 | $ 1.9 | ||
Scenario, Forecast [Member] | ||||
Loss Contingencies [Line Items] | ||||
Increase in net lease liability and assets | $ 8 |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Lease Payments Under Operating Leases (Detail) $ in Thousands | Dec. 31, 2018USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,019 | $ 3,330 |
2,020 | 2,729 |
2,021 | 2,946 |
2,022 | 2,818 |
2,023 | 1,727 |
Thereafter | 11,372 |
Total | $ 24,922 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) € in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||
Jan. 31, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2017USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2016EUR (€) | Dec. 31, 2018EUR (€) | Jul. 31, 2018USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | ||||||||||
Contingencies, settlement agreement, terms | In January 2017, the U.S. Securities and Exchange Commission (the “SEC”) approved the Company’s offers of settlement in connection with the SEC’s investigations of accounting matters leading to the Company’s prior restatement of financial statements and the Company’s review of improper payments with respect to its subsidiary in Brazil. Both investigations were initiated in 2013 and involved matters self-reported to the SEC by the Company. The settlements approved by the SEC resolved these two matters, and included payments totaling $14.4 million by the Company to the SEC of amounts previously accrued and funded into escrow by the Company during 2016. In connection with the Brazil-related settlement, the Company agreed to retain an independent compliance consultant for one year to review and test the Company’s compliance program related to the U.S. Foreign Corrupt Practices Act. The Company’s engagement with its independent compliance consultant began in the first quarter of 2017 and concluded in the first quarter of 2018. In addition, in the fourth quarter of 2017 the Company received a favorable insurance settlement of approximately $6 million associated with prior costs incurred related to these matters, which the Company has recognized within general and administrative expenses. | In January 2017, the U.S. Securities and Exchange Commission (the “SEC”) approved the Company’s offers of settlement in connection with the SEC’s investigations of accounting matters leading to the Company’s prior restatement of financial statements and the Company’s review of improper payments with respect to its subsidiary in Brazil. Both investigations were initiated in 2013 and involved matters self-reported to the SEC by the Company. The settlements approved by the SEC resolved these two matters, and included payments totaling $14.4 million by the Company to the SEC of amounts previously accrued and funded into escrow by the Company during 2016. In connection with the Brazil-related settlement, the Company agreed to retain an independent compliance consultant for one year to review and test the Company’s compliance program related to the U.S. Foreign Corrupt Practices Act. The Company’s engagement with its independent compliance consultant began in the first quarter of 2017 and concluded in the first quarter of 2018. In addition, in the fourth quarter of 2017 the Company received a favorable insurance settlement of approximately $6 million associated with prior costs incurred related to these matters, which the Company has recognized within general and administrative expenses. | ||||||||
Payments for SEC settlements | $ 14.4 | |||||||||
Insurance settlements received | $ 6 | |||||||||
Discontinued operations obligated to make final payment to insurer | $ 1.7 | |||||||||
Accrued other long-term liabilities | 3.7 | € 3.2 | ||||||||
Estimated sales and marketing expense | 1 | € 0.9 | $ 0.9 | € 0.8 | $ 0.9 | € 0.8 | ||||
Freezing amount in cash resulted from court pending legal action issued | $ 2.6 | $ 2.6 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Aug. 31, 2015 | |
Stockholders Equity Note [Abstract] | ||
Share repurchase program, authorized amount | $ 75,000,000 | |
Common stock repurchased, shares | 1,544,681 | |
Common stock repurchased, amount | $ 63,425,000 | |
Common stock repurchased, price per share | $ 41.06 |
Shareholders' Equity - Componen
Shareholders' Equity - Components of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | $ 296,608 | $ 263,477 | $ 290,311 |
Other comprehensive income (loss) | (53) | 8,382 | |
Income taxes | (438) | (1,475) | |
Other expense, net | 5,585 | 2,727 | |
Income taxes | 9,074 | 29,100 | 15,527 |
Ending Balance | 335,397 | 296,608 | 263,477 |
Income taxes | (438) | (3,600) | (245) |
Reclassification Adjustments [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Other expense, net | 5,585 | ||
Income taxes | (2,125) | ||
Currency Translation Adjustments [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | (563) | (5,115) | |
Other comprehensive income (loss) | (1,823) | 4,552 | |
Ending Balance | (2,386) | (563) | (5,115) |
Debt Security [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | 4,350 | (1,465) | |
Other comprehensive income (loss) | 1,770 | 3,830 | |
Income taxes | (438) | (1,475) | |
Ending Balance | 5,682 | 4,350 | (1,465) |
Debt Security [Member] | Reclassification Adjustments [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Other expense, net | 5,585 | ||
Income taxes | (2,125) | ||
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | 3,787 | (6,580) | (6,232) |
Ending Balance | $ 3,296 | $ 3,787 | $ (6,580) |
Revenue Recognition and Accou_3
Revenue Recognition and Accounts Receivable - Additional Information (Detail) € in Millions | 3 Months Ended | 12 Months Ended | |||||||||||||
Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2018EUR (€) | Dec. 31, 2017USD ($) | Dec. 31, 2017EUR (€) | Dec. 31, 2016USD ($) | Dec. 31, 2016EUR (€) | Jan. 01, 2018USD ($) | |
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||||||||
Marketing service fees | $ 57,453,000 | $ 60,285,000 | $ 54,136,000 | ||||||||||||
Cost of sales | $ 25,626,000 | $ 24,020,000 | $ 22,835,000 | $ 24,147,000 | $ 23,562,000 | $ 23,717,000 | $ 23,177,000 | $ 22,581,000 | 96,628,000 | 93,037,000 | 87,853,000 | ||||
Sale of receivables | 11,500,000 | € 9.8 | 11,200,000 | € 9.8 | 11,100,000 | € 10 | |||||||||
Estimated related fee | 300,000 | 300,000 | 400,000 | ||||||||||||
Other Contract Assets [Member] | |||||||||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||||||||
Other contract assets impairment | 0 | 0 | |||||||||||||
Other Long-Term Assets [Member] | |||||||||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||||||||
Other contract assets | $ 1,900,000 | $ 1,000,000 | 1,900,000 | 1,000,000 | |||||||||||
Shipping and Handling Costs [Member] | |||||||||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||||||||
Cost of sales | 2,700,000 | $ 3,000,000 | $ 2,000,000 | ||||||||||||
Biologics [Member] | |||||||||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||||||||
Marketing service fees | $ 57,500,000 | ||||||||||||||
Marketing service fee as percentage of segment revenues | 96.00% | 96.00% | |||||||||||||
Topic 606 [Member] | |||||||||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||||||||
Net increase to opening retained earnings due to cumulative impact of adoption | $ 4,800,000 | ||||||||||||||
Cost of sales | $ 96,628,000 |
Revenue Recognition and Accou_4
Revenue Recognition and Accounts Receivable - Schedule of Net Increase to Opening Retained Earnings Due to Cumulative Impact of Adopting (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets | |||||
Cash and cash equivalents | $ 69,623 | $ 81,157 | $ 39,572 | ||
Accounts receivable, net | 77,747 | 63,437 | |||
Inventories | 76,847 | 81,330 | |||
Prepaid expenses and other current assets | 17,856 | 25,877 | |||
Total current assets | 244,639 | 251,801 | |||
Deferred income taxes | 33,228 | 23,315 | |||
Other long-term assets | 21,641 | 21,073 | |||
Total assets | 466,641 | 405,354 | |||
Total liabilities | 131,244 | 108,746 | |||
Shareholders' equity | |||||
Common shares | 1,858 | 1,828 | |||
Additional paid-in capital | 243,165 | 220,591 | |||
Retained earnings | 87,078 | 70,402 | |||
Accumulated other comprehensive income | 3,296 | 3,787 | |||
Total shareholders’ equity | 335,397 | 296,608 | $ 263,477 | $ 290,311 | |
Total liabilities and shareholders’ equity | $ 466,641 | 405,354 | |||
Effect before Topic 606 [Member] | |||||
Current assets | |||||
Cash and cash equivalents | 81,157 | ||||
Accounts receivable, net | 63,437 | ||||
Inventories | 81,330 | ||||
Prepaid expenses and other current assets | 25,877 | ||||
Total current assets | 251,801 | ||||
Deferred income taxes | 23,315 | ||||
Other long-term assets | 130,238 | ||||
Total assets | 405,354 | ||||
Total liabilities | 108,746 | ||||
Shareholders' equity | |||||
Common shares | 1,828 | ||||
Additional paid-in capital | 220,591 | ||||
Retained earnings | 70,402 | ||||
Accumulated other comprehensive income | 3,787 | ||||
Total shareholders’ equity | 296,608 | ||||
Total liabilities and shareholders’ equity | 405,354 | ||||
Impact of Adoption of Topic 606 | |||||
Current assets | |||||
Accounts receivable, net | 8,648 | ||||
Inventories | (2,338) | ||||
Total current assets | 6,310 | ||||
Deferred income taxes | (1,549) | ||||
Total assets | 4,761 | ||||
Shareholders' equity | |||||
Retained earnings | 4,761 | ||||
Total shareholders’ equity | 4,761 | ||||
Total liabilities and shareholders’ equity | $ 4,761 | ||||
Topic 606 [Member] | |||||
Current assets | |||||
Cash and cash equivalents | $ 81,157 | ||||
Accounts receivable, net | 72,085 | ||||
Inventories | 78,992 | ||||
Prepaid expenses and other current assets | 25,877 | ||||
Total current assets | 258,111 | ||||
Deferred income taxes | 21,766 | ||||
Other long-term assets | 130,238 | ||||
Total assets | 410,115 | ||||
Total liabilities | 108,746 | ||||
Shareholders' equity | |||||
Common shares | 1,828 | ||||
Additional paid-in capital | 220,591 | ||||
Retained earnings | 75,163 | ||||
Accumulated other comprehensive income | 3,787 | ||||
Total shareholders’ equity | 301,369 | ||||
Total liabilities and shareholders’ equity | $ 410,115 |
Revenue Recognition and Accou_5
Revenue Recognition and Accounts Receivable - Summary of Consolidated Statement of Income As Impact of Adoption (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||||
Net sales | $ 121,078 | $ 111,708 | $ 111,547 | $ 108,709 | $ 116,896 | $ 105,247 | $ 108,942 | $ 102,738 | $ 453,042 | $ 433,823 | $ 409,788 |
Cost of sales | 25,626 | 24,020 | 22,835 | 24,147 | 23,562 | 23,717 | 23,177 | 22,581 | 96,628 | 93,037 | 87,853 |
Gross profit | 95,452 | 87,688 | 88,712 | 84,562 | 93,334 | 81,530 | 85,765 | 80,157 | 356,414 | 340,786 | 321,935 |
Sales and marketing | 205,527 | 198,370 | 181,287 | ||||||||
Operating income | 12,402 | 3,907 | 5,915 | 7,870 | 17,860 | 9,034 | 7,998 | 5,919 | 30,094 | 40,811 | 21,067 |
Income tax expense | (9,074) | (29,100) | (15,527) | ||||||||
Net income from continuing operations | $ 8,871 | $ (1,211) | $ 925 | $ 5,226 | $ 1,516 | $ 3,348 | $ 4,735 | $ (2,308) | $ 13,811 | $ 7,291 | $ 3,497 |
Net income from continuing operations per common share—basic | $ 0.47 | $ (0.07) | $ 0.05 | $ 0.28 | $ 0.08 | $ 0.18 | $ 0.26 | $ (0.13) | $ 0.73 | $ 0.40 | $ 0.19 |
Net income from continuing operations per common share—diluted | $ 0.46 | $ (0.07) | $ 0.05 | $ 0.27 | $ 0.08 | $ 0.18 | $ 0.26 | $ (0.13) | $ 0.72 | $ 0.39 | $ 0.19 |
Topic 606 [Member] | |||||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||||
Net sales | $ 453,042 | ||||||||||
Cost of sales | 96,628 | ||||||||||
Gross profit | 356,414 | ||||||||||
Sales and marketing | 205,527 | ||||||||||
Other operating expenses | 120,793 | ||||||||||
Operating income | 30,094 | ||||||||||
Income tax expense | (9,074) | ||||||||||
Net income from continuing operations | $ 13,811 | ||||||||||
Net income from continuing operations per common share—basic | $ 0.73 | ||||||||||
Net income from continuing operations per common share—diluted | $ 0.72 | ||||||||||
Topic 606 [Member] | Based on Historical Accounting under Topic 605 [Member] | |||||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||||
Net sales | $ 445,343 | ||||||||||
Cost of sales | 95,145 | ||||||||||
Gross profit | 350,198 | ||||||||||
Sales and marketing | 205,538 | ||||||||||
Other operating expenses | 120,793 | ||||||||||
Operating income | 23,867 | ||||||||||
Income tax expense | (7,656) | ||||||||||
Net income from continuing operations | $ 9,002 | ||||||||||
Net income from continuing operations per common share—basic | $ 0.48 | ||||||||||
Net income from continuing operations per common share—diluted | $ 0.47 | ||||||||||
Topic 606 [Member] | Impact of Adoption of Topic 606 | |||||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||||
Net sales | $ 7,699 | ||||||||||
Cost of sales | 1,483 | ||||||||||
Gross profit | 6,216 | ||||||||||
Sales and marketing | (11) | ||||||||||
Operating income | 6,227 | ||||||||||
Income tax expense | (1,418) | ||||||||||
Net income from continuing operations | $ 4,809 | ||||||||||
Net income from continuing operations per common share—basic | $ 0.25 | ||||||||||
Net income from continuing operations per common share—diluted | $ 0.25 |
Revenue Recognition and Accou_6
Revenue Recognition and Accounts Receivable - Schedule of Net Sales (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenue Recognition [Abstract] | |||||||||||
Product sales | $ 395,589 | $ 373,538 | $ 355,652 | ||||||||
Marketing service fees | 57,453 | 60,285 | 54,136 | ||||||||
Net sales | $ 121,078 | $ 111,708 | $ 111,547 | $ 108,709 | $ 116,896 | $ 105,247 | $ 108,942 | $ 102,738 | $ 453,042 | $ 433,823 | $ 409,788 |
Business Segment Information -
Business Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 4 |
Business Segment Information _2
Business Segment Information - Schedule of Net Sales by Reporting Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | $ 121,078 | $ 111,708 | $ 111,547 | $ 108,709 | $ 116,896 | $ 105,247 | $ 108,942 | $ 102,738 | $ 453,042 | $ 433,823 | $ 409,788 |
Percent of Total Net Sales | 100.00% | 100.00% | 100.00% | ||||||||
Bone Growth Therapies [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | $ 195,252 | $ 185,900 | $ 176,561 | ||||||||
Percent of Total Net Sales | 43.10% | 42.90% | 43.10% | ||||||||
Spinal Implants [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | $ 91,658 | $ 81,957 | $ 72,632 | ||||||||
Percent of Total Net Sales | 20.20% | 18.90% | 17.70% | ||||||||
Biologics [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | $ 59,684 | $ 62,724 | $ 57,912 | ||||||||
Percent of Total Net Sales | 13.20% | 14.40% | 14.10% | ||||||||
Orthofix Extremities [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net Sales | $ 106,448 | $ 103,242 | $ 102,683 | ||||||||
Percent of Total Net Sales | 23.50% | 23.80% | 25.10% |
Business Segment Information _3
Business Segment Information - Summary of Non-GAAP Net Margin by Reporting Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||||||||
Non-GAAP net margin | $ 150,887 | $ 142,416 | $ 140,648 | ||||||||
General and administrative | 84,506 | 71,905 | 76,409 | ||||||||
Research and development | 33,218 | 29,700 | 28,803 | ||||||||
Changes in fair value of contingent consideration | 3,069 | ||||||||||
Charges related to U.S. Government resolutions | 14,369 | ||||||||||
Operating income | $ 12,402 | $ 3,907 | $ 5,915 | $ 7,870 | $ 17,860 | $ 9,034 | $ 7,998 | $ 5,919 | 30,094 | 40,811 | 21,067 |
Interest income (expense), net | (828) | (416) | 763 | ||||||||
Other expense, net | (6,381) | (4,004) | (2,806) | ||||||||
Income before income taxes | 22,885 | 36,391 | 19,024 | ||||||||
Operating Segments [Member] | Bone Growth Therapies [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Non-GAAP net margin | 86,252 | 77,369 | 75,469 | ||||||||
Operating Segments [Member] | Spinal Implants [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Non-GAAP net margin | 7,628 | 8,730 | 8,650 | ||||||||
Operating Segments [Member] | Biologics [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Non-GAAP net margin | 26,298 | 25,692 | 26,891 | ||||||||
Operating Segments [Member] | Orthofix Extremities [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Non-GAAP net margin | 31,391 | 31,071 | 30,526 | ||||||||
Corporate, Non-Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Non-GAAP net margin | (682) | (446) | (888) | ||||||||
Material Reconciling Items [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
General and administrative | 84,506 | 71,905 | 76,409 | ||||||||
Research and development | $ 33,218 | $ 29,700 | $ 28,803 |
Business Segment Information _4
Business Segment Information - Schedule of Depreciation and Amortization by Reporting Segment (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 18,659 | $ 20,124 | $ 20,841 |
Operating Segments [Member] | Bone Growth Therapies [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 1,770 | 2,133 | 2,754 |
Operating Segments [Member] | Spinal Implants [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 7,294 | 6,949 | 8,118 |
Operating Segments [Member] | Biologics [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 448 | 752 | 1,011 |
Operating Segments [Member] | Orthofix Extremities [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 5,342 | 6,040 | 5,742 |
Corporate, Non-Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 3,805 | $ 4,250 | $ 3,216 |
Business Segment Information _5
Business Segment Information - Summary of Net Sales by Geographic Destination (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 121,078 | $ 111,708 | $ 111,547 | $ 108,709 | $ 116,896 | $ 105,247 | $ 108,942 | $ 102,738 | $ 453,042 | $ 433,823 | $ 409,788 |
U.S. [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 355,353 | 345,145 | 316,873 | ||||||||
Italy [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 19,331 | 17,059 | 16,664 | ||||||||
Germany [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 11,606 | 7,063 | 6,448 | ||||||||
United Kingdom [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 8,731 | 8,725 | 10,362 | ||||||||
Brazil [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 7,120 | 10,356 | 11,334 | ||||||||
Others [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 50,901 | $ 45,475 | $ 48,107 |
Business Segment Information _6
Business Segment Information - Summary of Net Sales by Geographic Destination for Each Reporting Unit (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 121,078 | $ 111,708 | $ 111,547 | $ 108,709 | $ 116,896 | $ 105,247 | $ 108,942 | $ 102,738 | $ 453,042 | $ 433,823 | $ 409,788 |
Bone Growth Therapies [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 195,252 | 185,900 | 176,561 | ||||||||
Spinal Implants [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 91,658 | 81,957 | 72,632 | ||||||||
Biologics [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 59,684 | 62,724 | 57,912 | ||||||||
Orthofix Extremities [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 106,448 | 103,242 | 102,683 | ||||||||
U.S. [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 355,353 | 345,145 | 316,873 | ||||||||
U.S. [Member] | Bone Growth Therapies [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 195,189 | 185,853 | 176,510 | ||||||||
U.S. [Member] | Spinal Implants [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 72,137 | 69,704 | 57,772 | ||||||||
U.S. [Member] | Biologics [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 59,668 | 62,670 | 57,574 | ||||||||
U.S. [Member] | Orthofix Extremities [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 28,359 | 26,918 | 25,017 | ||||||||
International [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 97,689 | 88,678 | 92,915 | ||||||||
International [Member] | Bone Growth Therapies [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 63 | 47 | 51 | ||||||||
International [Member] | Spinal Implants [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 19,521 | 12,253 | 14,860 | ||||||||
International [Member] | Biologics [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | 16 | 54 | 338 | ||||||||
International [Member] | Orthofix Extremities [Member] | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Net sales | $ 78,089 | $ 76,324 | $ 77,666 |
Business Segment Information _7
Business Segment Information - Summary of Property, Plant and Equipment of Reporting Segments by Geographic Area (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | $ 42,835 | $ 45,139 |
U.S. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | 31,344 | 34,008 |
Italy [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | 7,732 | 7,658 |
Germany [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | 861 | 933 |
United Kingdom [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | 896 | 382 |
Brazil [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | 191 | 475 |
Others [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property plant and equipment net | $ 1,811 | $ 1,683 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 29, 2004 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Options outstanding | 1,175,887 | 1,086,822 | |||
Options exercisable | 696,248 | ||||
Income tax benefit related to expense | $ 3,800,000 | $ 3,400,000 | $ 4,300,000 | ||
Exercised stock option amount | 2,800,000 | ||||
Realized tax benefit amount | $ 800,000 | ||||
Closing stock price | $ 52.49 | ||||
Share-based compensation | $ 18,930,000 | 12,557,000 | 15,966,000 | ||
2012 LTIP Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Award Contractual term | 10 years | ||||
Amount of shares reserved for issuance | 4,750,000 | ||||
Options outstanding | 971,763 | ||||
Options exercisable | 520,748 | ||||
2004 LTIP [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Amount of shares reserved for issuance | 3,100,000 | ||||
Spinal Kinetics Inducement Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Options outstanding | 28,624 | ||||
Options exercisable | 0 | ||||
Number of shares reserved for employees | 51,705 | ||||
Stock Purchase Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Amount of shares reserved for issuance | 2,350,000 | ||||
Maximum percentage of compensation eligible employees to be deducted for purchase of common stock | 25.00% | ||||
Purchase price of shares equivalent to fair market value | 85.00% | ||||
Shares issued under stock purchase plan | 1,628,045 | ||||
Stock Purchase Plan [Member] | Minimum [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Percentage of compensation eligible employees to be deducted for purchase of common stock | 1.00% | ||||
Restricted Stock [Member] | 2012 LTIP Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unvested restricted stock and stock units outstanding | 339,452 | ||||
Restricted Stock [Member] | Spinal Kinetics Inducement Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unvested restricted stock and stock units outstanding | 19,914 | ||||
Restricted Stock Units [Member] | 2012 LTIP Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unvested restricted stock and stock units outstanding | 371,676 | ||||
Staff Share Option Plan [Member] | 2004 LTIP [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Options outstanding | 25,500 | ||||
Unvested restricted stock and stock units outstanding | 0 | ||||
Stock Option [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Service period | 4 years | ||||
Unamortized compensation expense | $ 3,000,000 | ||||
Weighted-average period for unamortized compensation cost expected to be recognized | 1 year 4 months 24 days | ||||
Total intrinsic value of options exercised | $ 3,200,000 | 2,200,000 | 4,300,000 | ||
Aggregate intrinsic value of options outstanding | 13,600,000 | 18,700,000 | 3,300,000 | ||
Aggregate intrinsic value of options exercisable | 11,000,000 | 12,400,000 | 2,200,000 | ||
Share-based compensation | 3,061,000 | 2,388,000 | 2,021,000 | ||
Time-based Restricted Stock Awards and Stock Units [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unamortized compensation expense | $ 12,200,000 | ||||
Weighted-average period for unamortized compensation cost expected to be recognized | 2 years 4 months 24 days | ||||
Non-vested shares | 172,108 | ||||
Vesting period | 4 years | ||||
Non-vested shares, vested in period | $ 8,000,000 | 7,300,000 | 7,200,000 | ||
Aggregate intrinsic value of restricted stock outstanding | 18,800,000 | 17,800,000 | 13,000,000 | ||
Share-based compensation | $ 7,265,000 | $ 5,540,000 | $ 6,016,000 | ||
Restricted Stock Unit with Deferred Delivery (DSUs) [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period | 1 year | ||||
Awards vested but not settled | 27,982 | ||||
Performance-based Restricted Stock Awards and Stock Units [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Non-vested shares | 0 | 0 | 0 | ||
Share-based compensation | $ 1,998,000 | $ 462,000 | $ 5,716,000 | ||
Performance-based Restricted Stock Awards [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unamortized compensation expense | 0 | ||||
Non-vested shares | 110,660 | ||||
Non-vested shares, vested in period | 0 | 4,900,000 | 0 | ||
Aggregate intrinsic value of restricted stock outstanding | 2,900,000 | 3,000,000 | 7,000,000 | ||
Share-based compensation | 400,000 | 500,000 | 5,700,000 | ||
Performance-based Restricted Stock Units [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unamortized compensation expense | 0 | ||||
Non-vested shares | 55,330 | ||||
Aggregate intrinsic value of restricted stock outstanding | 2,500,000 | 3,000,000 | 2,000,000 | ||
Share-based compensation | 1,600 | $ 0 | $ 0 | ||
Market-based Restricted Stock Units [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unamortized compensation expense | $ 6,500,000 | ||||
Weighted-average period for unamortized compensation cost expected to be recognized | 1 year 4 months 24 days | ||||
Non-vested shares | 97,420 | 94,902 | 96,245 | ||
Aggregate intrinsic value of restricted stock outstanding | $ 14,200,000 | $ 10,200,000 | $ 3,500,000 | ||
Share-based compensation | $ 5,256,000 | $ 2,904,000 | $ 948,000 | ||
Common stock issued based on performance stock units | 1 | ||||
Percentage of performance to be achieved | 100.00% | ||||
Market-based Restricted Stock Units [Member] | April 2018 Grant Date [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Performance period | 3 years | ||||
Market-based Restricted Stock Units [Member] | July 2017 Grant Date [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Performance period | 3 years | ||||
Market-based Restricted Stock Units [Member] | July 2016 Grant Date [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Performance period | 3 years | ||||
Market-based Restricted Stock Units [Member] | Minimum [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Percentage of performance to be achieved | 50.00% | ||||
Market-based Restricted Stock Units [Member] | Maximum [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Percentage of performance to be achieved | 200.00% |
Share-based Compensation - Sche
Share-based Compensation - Schedule of Share-Based Compensation by Line Item in Consolidated Statements of Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | $ 18,930 | $ 12,557 | $ 15,966 |
Stock options [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 3,061 | 2,388 | 2,021 |
Time-based Restricted Stock Awards and Stock Units [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 7,265 | 5,540 | 6,016 |
Performance-based Restricted Stock Awards and Stock Units [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 1,998 | 462 | 5,716 |
Market-based Restricted Stock Units [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 5,256 | 2,904 | 948 |
Stock purchase plan [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 1,350 | 1,263 | 1,265 |
Cost of sales [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 522 | 486 | 553 |
Sales and marketing [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 1,802 | 1,471 | 1,230 |
General and administrative [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 15,197 | 9,671 | 13,132 |
Research and development [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | $ 1,409 | $ 929 | $ 1,051 |
Share-based Compensation - Sc_2
Share-based Compensation - Schedule of Assumptions Used in Determining Fair Value of Stock Options Granted (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions And Methodology [Abstract] | |||
Expected term (in years) | 4 years 6 months | 4 years 6 months | 4 years 6 months |
Expected volatility | 31.20% | ||
Expected volatility, minimum | 28.70% | 30.60% | |
Expected volatility, maximum | 30.10% | 32.30% | |
Risk free interest rate | 1.93% | ||
Risk free interest rate, minimum | 2.55% | 1.07% | |
Risk free interest rate, maximum | 2.79% | 1.92% | |
Weighted average grant date fair value | $ 16.28 | $ 13.32 | $ 11.79 |
Share-based Compensation - Sc_3
Share-based Compensation - Schedule of Stock Option Plans (Detail) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Outstanding at the beginning of the period (in shares) | shares | 1,086,822 |
Granted | shares | 231,548 |
Exercised | shares | (100,821) |
Forfeited | shares | (41,662) |
Outstanding at the end of the period (in shares) | shares | 1,175,887 |
Vested and expected to vest | shares | 1,175,887 |
Exercisable (in shares) | shares | 696,248 |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 37.47 |
Granted | $ / shares | 57.66 |
Exercised | $ / shares | 27.80 |
Forfeited | $ / shares | 48.80 |
Outstanding at the end of the period (in dollars per share) | $ / shares | 41.87 |
Vested and expected to vest | $ / shares | 41.87 |
Exercisable | $ / shares | $ 36.67 |
Options outstanding, weighted average remaining contractual term | 6 years 7 months 9 days |
Options vested and expected, weighted average remaining contractual term | 6 years 7 months 9 days |
Options exercisable, weighted average remaining contractual term | 5 years 4 months 9 days |
Share-based Compensation - Sc_4
Share-based Compensation - Schedule of Changes in Time-Based, Performance-Based and Market-Based Restricted Stock Awards and Stock Units (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Time-based Restricted Stock Awards and Stock Units [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Outstanding at December 31, 2017 | 325,874 | ||
Granted (in shares) | 172,108 | ||
Vested and settled (in shares) | (112,249) | ||
Cancelled (in shares) | (28,141) | ||
Outstanding at December 31, 2018 | 357,592 | 325,874 | |
Outstanding at December 31, 2017 | $ 42.44 | ||
Granted (in dollars per share) | 57.18 | ||
Vested and settled (in dollars per share) | 40.08 | ||
Cancelled (in dollars per share) | 48.84 | ||
Outstanding at December 31, 2018 | $ 49.77 | $ 42.44 | |
Performance-based Restricted Stock Awards and Stock Units [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Outstanding at December 31, 2017 | 109,880 | ||
Granted (in shares) | 0 | 0 | 0 |
Cancelled (in shares) | (7,725) | ||
Outstanding at December 31, 2018 | 102,155 | 109,880 | |
Outstanding at December 31, 2017 | $ 33.12 | ||
Cancelled (in dollars per share) | 33.12 | ||
Outstanding at December 31, 2018 | $ 33.12 | $ 33.12 | |
Market-based Restricted Stock Units [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Outstanding at December 31, 2017 | 187,314 | ||
Granted (in shares) | 97,420 | 94,902 | 96,245 |
Cancelled (in shares) | (13,439) | ||
Outstanding at December 31, 2018 | 271,295 | 187,314 | |
Outstanding at December 31, 2017 | $ 51.99 | ||
Granted (in dollars per share) | 68.38 | ||
Cancelled (in dollars per share) | 60.83 | ||
Outstanding at December 31, 2018 | $ 57.44 | $ 51.99 |
Defined Contribution Plans an_2
Defined Contribution Plans and Deferred Compensation - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Defined Contribution Plan Disclosure [Line Items] | |||
Expenses incurred for contribution plans | $ 1,100,000 | $ 1,100,000 | $ 1,000,000 |
Deferred compensation payments | 100,000 | 200,000 | 100,000 |
Amount of deferred compensation payable | $ 1,300,000 | 1,400,000 | |
U.S. [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Employee contribution limit per calendar year (as a percent of compensation) | 80.00% | ||
Employer match of employee contributions of first level of eligible compensation (as a percent) | 100.00% | ||
Percentage of eligible compensation, matched by employer, level one | 2.00% | ||
Employer match of employee contributions of second level of eligible compensation (as a percent) | 50.00% | ||
Percentage of eligible compensation matched by employer, level two | 4.00% | ||
Expenses incurred for contribution plans | $ 2,300,000 | $ 2,000,000 | $ 1,900,000 |
Italy [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Annual deferred compensation provision for leaving indemnity, as a percentage of total commissions earned | 3.50% | ||
Italy [Member] | Labor Force Concentration Risk [Member] | National Collective Labor Agreement [Member] | |||
Defined Contribution Plan Disclosure [Line Items] | |||
Number of employees, percentage | 19.60% |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income (Loss) from Continuing Operations Before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ 28,642 | $ 27,774 | $ 23,006 |
Non-U.S. | (5,757) | 8,617 | (3,982) |
Income before income taxes | $ 22,885 | $ 36,391 | $ 19,024 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes on Continuing Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
U.S. | |||
Current | $ 9,480 | $ 3,620 | $ 558 |
Deferred | (3,430) | 20,222 | 9,296 |
Total U.S | 6,050 | 23,842 | 9,854 |
Non-U.S. | |||
Current | 2,255 | 4,062 | 4,509 |
Deferred | 769 | 1,196 | 1,164 |
Total Non U.S | 3,024 | 5,258 | 5,673 |
Income tax expense | $ 9,074 | $ 29,100 | $ 15,527 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation for Continuing Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||||
Statutory U.S. federal income tax rate | $ 4,806 | $ 12,737 | $ 6,658 | |
State taxes, net of U.S. federal benefit | 1,038 | 1,598 | 395 | |
Foreign rate differential, including withholding taxes | 784 | (3,849) | (805) | |
Charges related to U.S. Government resolutions | 2,050 | |||
Valuation allowances, net | 4,116 | 3,548 | 6,149 | |
Change in estimate on compensation expenses | (2,151) | |||
Italian subsidiary intangible asset | (230) | (381) | (1,477) | |
Change of intention for foreign earnings | 0 | 1,300 | ||
Domestic manufacturing deduction | (818) | |||
Unrecognized tax benefits, net of settlements | 81 | 6,002 | 3,049 | |
Impact of the Tax Act | $ (600) | (560) | 8,347 | |
Equity compensation | (1,646) | 272 | 334 | |
Contingent consideration | 528 | |||
Other, net | 157 | 1,644 | 25 | |
Income tax expense | $ 9,074 | $ 29,100 | $ 15,527 | |
Statutory U.S. federal income tax rate | 21.00% | 35.00% | 35.00% | |
State taxes, net of U.S. federal benefit | 4.50% | 4.40% | 2.10% | |
Foreign rate differential, including withholding taxes | 3.40% | (10.60%) | (4.20%) | |
Charges related to U.S. Government resolutions | 10.80% | |||
Valuation allowances, net | 18.00% | 9.70% | 32.30% | |
Change in estimate on compensation expenses | (11.30%) | |||
Italian subsidiary intangible asset | (1.00%) | (1.00%) | (7.80%) | |
Change of intention for foreign earnings | 6.80% | |||
Domestic manufacturing deduction | (2.20%) | |||
Unrecognized tax benefits, net of settlements | 0.40% | 16.50% | 16.00% | |
Impact of the Tax Act | (2.40%) | 22.90% | ||
Equity compensation | (7.20%) | 0.70% | 1.80% | |
Contingent consideration | 2.30% | |||
Other, net | 0.70% | 4.50% | 0.10% | |
Income tax expense/effective rate | 39.70% | 80.00% | 81.60% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Corporate income tax rate | 21.00% | 35.00% | 35.00% | |||
Additional income tax expense benefit | $ 8,300 | |||||
Tax cuts and jobs act of 2017 change in tax rate deferred tax assets and liability expected to reserve in future | $ 8,600 | |||||
Change of intention for foreign earnings | 0 | $ 1,300 | ||||
Tax cuts and jobs act of 2017 change in provisional income tax benefit | 300 | |||||
Impact of the Tax Act | $ (600) | $ (560) | 8,347 | |||
Cash paid related to taxes | 15,600 | 3,300 | 4,400 | |||
Change in estimate, increase in net income | $ 2,400 | |||||
Change in estimate, increase in earnings per share | $ 0.13 | |||||
Net increase in valuation allowance | 2,700 | |||||
Unremitted foreign earnings | 335,700 | $ 50,400 | 335,700 | |||
Minimum percentage of income tax benefit | 50.00% | |||||
Gross unrecognized tax benefit | 22,500 | $ 21,400 | 22,500 | |||
Net interest and penalties on unrecognized tax benefits | 1,400 | 2,300 | $ 2,100 | |||
Accrued interest and penalties related to unrecognized tax benefits | $ 5,300 | 6,700 | 5,300 | |||
Income taxes | 9,074 | $ 29,100 | $ 15,527 | |||
Scenario, Forecast [Member] | ||||||
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Income taxes | $ (2,000) | |||||
Minimum [Member] | ||||||
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Decrease in unrecognized tax benefits | 3,300 | |||||
Maximum [Member] | ||||||
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Decrease in unrecognized tax benefits | 3,800 | |||||
State [Member] | ||||||
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Operating loss carry forwards, net of tax | 49,000 | |||||
State [Member] | Spinal Kinetics [Member] | ||||||
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Operating loss carry forwards, net of tax | 35,200 | |||||
Foreign Jurisdictions [Member] | ||||||
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Operating loss carry forwards, net of tax | 159,500 | |||||
Federal [Member] | ||||||
Components Of Income Tax Expense Benefit [Line Items] | ||||||
Operating loss carry forwards, net of tax | 24,400 | |||||
Research and development credits | $ 1,600 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Intangible assets and goodwill | $ 1,682 | $ 2,271 |
Inventories and related reserves | 12,151 | 11,298 |
Deferred revenue and cost of goods sold | 4,652 | 6,816 |
Other accruals and reserves | 2,799 | 2,336 |
Accrued compensation | 8,317 | 4,054 |
Allowance for doubtful accounts | 2,346 | 2,617 |
Net operating loss and tax credit carryforwards | 52,664 | 43,296 |
Other, net | 2,200 | 1,748 |
Total | 86,811 | 74,436 |
Valuation allowance | (49,014) | (46,271) |
Deferred tax asset | 37,797 | 28,165 |
Withholding taxes | 381 | |
Property, plant and equipment | (4,569) | (4,469) |
Deferred tax liability | (4,569) | (4,850) |
Net deferred tax assets | $ 33,228 | $ 23,315 |
Income Taxes - Schedule of Gros
Income Taxes - Schedule of Gross Unrecognized Tax Benefits (Excluding Interest and Penalties) (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Beginning Balance | $ 23,676 | $ 19,400 |
Additions for current year tax positions | 170 | 787 |
Increases for prior year tax positions | 1,653 | 3,498 |
Settlements of prior year tax positions | (1,499) | |
Expiration of statutes | (2,649) | (9) |
Ending Balance | $ 21,351 | $ 23,676 |
Earnings Per Share (EPS) - Sche
Earnings Per Share (EPS) - Schedule of Reconciliation of Weighted Average Shares Used in the Diluted EPS (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Line Items] | |||
Weighted average common shares-basic | 18,494,002 | 18,117,405 | 18,144,019 |
Effect of diluted securities: | |||
Weighted average common shares-diluted | 18,911,610 | 18,498,745 | 18,463,161 |
Stock Options And Employee Stock Purchase Plan [Member] | |||
Effect of diluted securities: | |||
Effect of diluted securities | 313,648 | 209,691 | 161,092 |
Time-Based Restricted Stock Awards [Member] | |||
Effect of diluted securities: | |||
Effect of diluted securities | 123,592 | 138,291 | |
Performance-based Restricted Stock Awards [Member] | |||
Effect of diluted securities: | |||
Effect of diluted securities | 103,960 | 48,057 | 19,759 |
Earnings Per Share (EPS) - Addi
Earnings Per Share (EPS) - Additional Information (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Restricted Stock And Performance Based Equity Awards [Member] | Stock options [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Outstanding awards and options not included in diluted earnings per share | 349,930 | 418,859 | 542,555 |
Quarterly Financial Data - Cond
Quarterly Financial Data - Condensed Consolidated Statement of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Net sales | $ 121,078 | $ 111,708 | $ 111,547 | $ 108,709 | $ 116,896 | $ 105,247 | $ 108,942 | $ 102,738 | $ 453,042 | $ 433,823 | $ 409,788 |
Cost of sales | 25,626 | 24,020 | 22,835 | 24,147 | 23,562 | 23,717 | 23,177 | 22,581 | 96,628 | 93,037 | 87,853 |
Gross profit | 95,452 | 87,688 | 88,712 | 84,562 | 93,334 | 81,530 | 85,765 | 80,157 | 356,414 | 340,786 | 321,935 |
Operating expense | 83,050 | 83,781 | 82,797 | 76,692 | 75,474 | 72,496 | 77,767 | 74,238 | 326,320 | 299,975 | |
Operating income | 12,402 | 3,907 | 5,915 | 7,870 | 17,860 | 9,034 | 7,998 | 5,919 | 30,094 | 40,811 | 21,067 |
Net income (loss) from continuing operations | 8,871 | (1,211) | 925 | 5,226 | 1,516 | 3,348 | 4,735 | (2,308) | 13,811 | 7,291 | 3,497 |
Net income (loss) | $ 8,871 | $ (1,211) | $ 925 | $ 5,226 | $ 1,568 | $ 3,456 | $ 3,853 | $ (2,654) | $ 13,811 | $ 6,223 | $ 3,056 |
Net income (loss) per common share — basic: | |||||||||||
Net income (loss) from continuing operations | $ 0.47 | $ (0.07) | $ 0.05 | $ 0.28 | $ 0.08 | $ 0.18 | $ 0.26 | $ (0.13) | $ 0.73 | $ 0.40 | $ 0.19 |
Net income (loss) | 0.47 | (0.07) | 0.05 | 0.28 | 0.09 | 0.19 | 0.21 | (0.15) | 0.73 | 0.34 | 0.17 |
Net income (loss) per common share — diluted: | |||||||||||
Net income (loss) from continuing operations | 0.46 | (0.07) | 0.05 | 0.27 | 0.08 | 0.18 | 0.26 | (0.13) | 0.72 | 0.39 | 0.19 |
Net income (loss) | $ 0.46 | $ (0.07) | $ 0.05 | $ 0.27 | $ 0.08 | $ 0.19 | $ 0.21 | $ (0.15) | $ 0.72 | $ 0.34 | $ 0.17 |
Quarterly Financial Data - Co_2
Quarterly Financial Data - Condensed Consolidated Statement of Operations (Parenthetical) (Detail) - USD ($) | 3 Months Ended | ||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | |
Quarterly Financial Information [Line Items] | |||
Reclassification of operating expense to change in fair value of contingent consideration | $ 1,100,000 | ||
Maximum [Member] | |||
Quarterly Financial Information [Line Items] | |||
Reclassification of net income (loss) from discontinued operations to continuing operations | $ 10,000 | $ 10,000 | $ 10,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) shares in Millions | Feb. 25, 2019 | Feb. 14, 2019 | Jan. 31, 2019 | Apr. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2018 | Feb. 06, 2019 |
Subsequent Event [Line Items] | |||||||
Changes in fair value of contingent consideration | $ 3,069,000 | ||||||
Spinal Kinetics [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Consideration for the asssets acquired | $ 76,055,000 | 76,600,000 | |||||
Contingent consideration | 25,500,000 | $ 28,600,000 | 28,600,000 | ||||
Spinal Kinetics [Member] | US Food And Drug Administration [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Future milestone payments | $ 15,000,000 | ||||||
Spinal Kinetics [Member] | Operating Expense [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Changes in fair value of contingent consideration | 3,100,000 | 1,400,000 | |||||
Other Current Liabilities [Member] | Spinal Kinetics [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Contingent consideration | $ 13,600,000 | $ 13,600,000 | |||||
Subsequent Event [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Consideration for the asssets acquired | $ 6,400,000 | ||||||
Subsequent Event [Member] | Spinal Kinetics [Member] | US Food And Drug Administration [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Future milestone payments | $ 15,000,000 | ||||||
Payments obligation for contigent consideration | $ 15,000,000 | ||||||
Subsequent Event [Member] | Options Medical Founder | |||||||
Subsequent Event [Line Items] | |||||||
Share based compensation, grant of restricted stock units | 25,478 | ||||||
Share based compensation, grant fair value of restricted stock units | $ 1,400,000 | ||||||
Share based compensation, vesting period of restricted stock units | 4 months | ||||||
Subsequent Event [Member] | President and Chief Executive Officer [Member] | Transition and Retirement Agreement [Member] | |||||||
Subsequent Event [Line Items] | |||||||
Share based compensation, vesting period of restricted stock units | 1 year | ||||||
Transition consulting services payable per month | $ 40,000 | ||||||
Share based compensation, grant date fair market value of restricted stock units | $ 2,000,000 |