Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 04, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | OFIX | |
Entity Registrant Name | ORTHOFIX MEDICAL INC. | |
Entity Central Index Key | 0000884624 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 19,202,587 | |
Entity File Number | 0-19961 | |
Entity Tax Identification Number | 98-1340767 | |
Entity Address, Address Line One | 3451 Plano Parkway | |
Entity Address, City or Town | Lewisville | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75056 | |
City Area Code | 214 | |
Local Phone Number | 937-2000 | |
Entity Incorporation, State or Country Code | DE | |
Title of 12(b) Security | Common stock, $0.10 par value per share | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets | ||
Cash and cash equivalents | $ 57,739 | $ 69,719 |
Restricted cash | 529 | 684 |
Accounts receivable, net of allowances of $5,591 and $3,987, respectively | 77,798 | 86,805 |
Inventories | 82,744 | 82,397 |
Prepaid expenses and other current assets | 21,185 | 20,948 |
Total current assets | 239,995 | 260,553 |
Property, plant and equipment, net | 64,836 | 62,727 |
Intangible assets, net | 58,770 | 54,139 |
Goodwill | 82,646 | 71,177 |
Deferred income taxes | 36,133 | 35,117 |
Other long-term assets | 11,110 | 11,907 |
Total assets | 493,490 | 495,620 |
Current liabilities | ||
Accounts payable | 19,641 | 19,886 |
Current portion of finance lease liability | 357 | 323 |
Other current liabilities | 45,963 | 64,674 |
Total current liabilities | 65,961 | 84,883 |
Long-term portion of finance lease liability | 22,471 | 20,648 |
Other long-term liabilities | 49,689 | 62,458 |
Total liabilities | 138,121 | 167,989 |
Contingencies (Note 9) | ||
Shareholders’ equity | ||
Common shares $0.10 par value; 50,000,000 shares authorized; 19,056,178 and 19,022,619 issued and outstanding as of March 31, 2020 and December 31, 2019, respectively | 1,906 | 1,902 |
Additional paid-in capital | 275,686 | 271,019 |
Retained earnings | 82,527 | 57,749 |
Accumulated other comprehensive loss | (4,750) | (3,039) |
Total shareholders’ equity | 355,369 | 327,631 |
Total liabilities and shareholders’ equity | $ 493,490 | $ 495,620 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Trade accounts receivable, allowance for doubtful accounts | $ 5,591 | $ 3,987 |
Common shares, par value | $ 0.10 | $ 0.10 |
Common shares, authorized | 50,000,000 | 50,000,000 |
Common shares, issued | 19,056,178 | 19,022,619 |
Common shares, outstanding | 19,056,178 | 19,022,619 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net sales | $ 104,823 | $ 109,112 |
Cost of sales | 23,409 | 23,708 |
Gross profit | 81,414 | 85,404 |
Sales and marketing | 54,313 | 53,694 |
General and administrative | 17,865 | 20,472 |
Research and development | 9,964 | 9,229 |
Acquisition-related amortization and remeasurement (Note 13) | (7,582) | 6,457 |
Operating income (loss) | 6,854 | (4,448) |
Interest expense, net | (423) | (257) |
Other expense, net | (798) | (404) |
Income (loss) before income taxes | 5,633 | (5,109) |
Income tax benefit | 20,032 | 6,006 |
Net income | $ 25,665 | $ 897 |
Net income per common share: | ||
Basic | $ 1.33 | $ 0.05 |
Diluted | $ 1.32 | $ 0.05 |
Weighted average number of common shares: | ||
Basic | 19,143,934 | 18,750,184 |
Diluted | 19,299,820 | 19,191,146 |
Other comprehensive loss, before tax | ||
Unrealized loss on debt security | $ (2,593) | |
Currency translation adjustment | $ (1,711) | (449) |
Other comprehensive loss before tax | (1,711) | (3,042) |
Income tax related to other comprehensive loss | 641 | |
Other comprehensive loss, net of tax | (1,711) | (2,401) |
Comprehensive income (loss) | $ 23,954 | $ (1,504) |
Condensed Consolidated Statem_2
Condensed 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, 2018 | $ 335,397 | $ 1,858 | $ 243,165 | $ 87,078 | $ 3,296 |
Balance, Shares at Dec. 31, 2018 | 18,579,688 | ||||
Cumulative effect adjustment from adoption | ASU 2018-02 [Member] | (938) | 938 | |||
Cumulative effect adjustment from adoption | ASU 2016-02 [Member] | 71 | 71 | |||
Net income | 897 | 897 | |||
Other comprehensive loss, net of tax | (2,401) | (2,401) | |||
Share-based compensation | 5,685 | 5,685 | |||
Common shares issued, net | 4,033 | $ 21 | 4,012 | ||
Common shares issued, net, Shares | 211,081 | ||||
Ending Balance at Mar. 31, 2019 | 343,682 | $ 1,879 | 252,862 | 87,108 | 1,833 |
Balance, Shares at Mar. 31, 2019 | 18,790,769 | ||||
Beginning Balance at Dec. 31, 2019 | $ 327,631 | $ 1,902 | 271,019 | 57,749 | (3,039) |
Balance, Shares at Dec. 31, 2019 | 19,022,619 | 19,022,619 | |||
Cumulative effect adjustment from adoption | ASU 2016-13 [Member] | $ (887) | (887) | |||
Net income | 25,665 | 25,665 | |||
Other comprehensive loss, net of tax | (1,711) | (1,711) | |||
Share-based compensation | 3,859 | 3,859 | |||
Common shares issued, net | 812 | $ 4 | 808 | ||
Common shares issued, net, Shares | 33,559 | ||||
Ending Balance at Mar. 31, 2020 | $ 355,369 | $ 1,906 | $ 275,686 | $ 82,527 | $ (4,750) |
Balance, Shares at Mar. 31, 2020 | 19,056,178 | 19,056,178 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities | ||
Net income | $ 25,665 | $ 897 |
Adjustments to reconcile net income to net cash from operating activities | ||
Depreciation and amortization | 6,327 | 5,727 |
Amortization of operating lease assets, debt costs, and other assets | 1,005 | 773 |
Provision for expected credit losses | 679 | 46 |
Deferred income taxes | (1,027) | (1,582) |
Share-based compensation | 3,859 | 5,685 |
Interest and loss on valuation of investment securities | 219 | (593) |
Change in fair value of contingent consideration | (9,000) | 5,400 |
Other | (744) | 586 |
Changes in operating assets and liabilities, net of effects of acquisitions | ||
Accounts receivable | 6,712 | (2,027) |
Inventories | (848) | (2,477) |
Prepaid expenses and other current assets | (496) | 1,427 |
Accounts payable | 28 | 1,883 |
Other current liabilities | (1,333) | (12,439) |
Payment of contingent consideration | (1,340) | |
Other long-term assets and liabilities | (18,582) | (3,005) |
Net cash from operating activities | 12,464 | (1,039) |
Cash flows from investing activities | ||
Acquisition of a business | (18,000) | |
Capital expenditures for property, plant and equipment | (4,285) | (4,643) |
Capital expenditures for intangible assets | (659) | (273) |
Asset acquisitions and other investments | (1,240) | (6,400) |
Net cash from investing activities | (24,184) | (11,316) |
Cash flows from financing activities | ||
Proceeds from issuance of common shares | 948 | 6,331 |
Payments related to withholdings for share-based compensation | (136) | (2,298) |
Payment of contingent consideration | (13,660) | |
Payments related to finance lease obligation | (92) | (99) |
Other financing activities | (405) | (670) |
Net cash from financing activities | 315 | (10,396) |
Effect of exchange rate changes on cash | (730) | (230) |
Net change in cash, cash equivalents, and restricted cash | (12,135) | (22,981) |
Cash, cash equivalents, and restricted cash at the beginning of period | 70,403 | 72,189 |
Cash, cash equivalents, and restricted cash at the end of period | 58,268 | 49,208 |
Components of cash, cash equivalents and restricted cash at the end of period | ||
Cash and cash equivalents | 57,739 | 46,668 |
Restricted cash | 529 | 2,540 |
Cash, cash equivalents, and restricted cash at the end of period | $ 58,268 | $ 49,208 |
Business, basis of presentation
Business, basis of presentation, and COVID-19 update | 3 Months Ended |
Mar. 31, 2020 | |
Organization Consolidation And Presentation Of Financial Statements And Unusual Or Infrequent Items Disclosure [Abstract] | |
Business, basis of presentation, and COVID-19 update | 1. Business, basis of presentation, and COVID-19 update Description of the Business Orthofix Medical Inc., together with its subsidiaries (the “Company” or “Orthofix”) 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, Orthofix’s spine and orthopedic extremities products are distributed in more than 70 countries via the Company's sales representatives and distributors. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair statement have been included. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Form 10-K for the year ended December 31, 2019. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates, including those related to revenue recognition; contractual allowances; allowance for expected credit losses; inventories; valuation of intangible assets; goodwill; fair value measurements, including contingent consideration; litigation and contingent liabilities; tax matters; and share-based compensation. Actual results could differ from these estimates. COVID-19 Update In March 2020, the World Health Organization categorized Coronavirus Disease 2019 ("COVID-19") as a pandemic, and the President of the United States declared the COVID-19 outbreak a national emergency. The Company remains focused on protecting the health and wellbeing of its employees, partners, patients, and the communities in which it operates while assuring the continuity of its business operations. The Company's condensed consolidated financial statements reflect estimates and assumptions made by management that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expenses during the reporting periods presented. The impact of COVID-19 on the Company’s business is highly uncertain and difficult to predict, as information surrounding the pandemic is rapidly evolving. Although the President of the United States has recently announced a plan to ease social distancing and quarantine measures, with other countries, such as Italy, announcing similar plans, there are still many unknowns and risks, such as the rate at which and timing of when elective surgical procedures will resume, the impact to capital markets and the possibility of local and global economic recession. Any resulting economic disruption could have a material impact on our business. In addition, the long-term impact of COVID-19 on the Company’s business will depend on many factors, including, but not limited to, the duration and severity of the pandemic and the impact it has on our partners, patients and communities in which we operate, all of which are uncertain. The Company’s future results of operations and liquidity will be materially impacted due to the decrease in elective surgical procedures and could be further impacted by delays in payments from customers, supply chain interruptions, extended "shelter in place" orders or advisories, facility closures or other reasons related to the pandemic. As of the date of issuance of these condensed consolidated financial statements, the extent to which COVID-19 could materially impact the Company’s financial conditions, liquidity or results of operations is uncertain. These matters are further described in Part II, Item 1A of this Form 10-Q under heading Risk Factors On March 27, 2020, the President of the United States signed into federal law the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), which is aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the COVID-19 pandemic and generally supporting the U.S. economy. consolidated financial statements for the three months ended March 31, 2020 as a result of a beneficial rate difference on the pote ntial federal loss carryback. The Company is in the process of analyzing provisions related to certain payroll tax credits to determine the financial impact on our condensed consolidated financial statements impacts of the various provisions of the CARES Act to the condensed consolidated financial statements. For additional discussion, see Notes 15 and 17. |
Recently adopted accounting sta
Recently adopted accounting standards and recently issued accounting pronouncements | 3 Months Ended |
Mar. 31, 2020 | |
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”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent Amendments In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13 (which was then further clarified in subsequent ASUs), which requires that credit losses for certain types of financial instruments, including trade accounting receivables, be estimated based on expected credit losses among other changes. Effective January 1, 2020, the Company adopted ASU 2016-13 using a modified retrospective approach. Therefore, results for reporting periods after January 1, 2020 are presented under Topic 326, while prior period amounts are not adjusted and continue to be reported in accordance with the historical accounting guidance. See Note 11 for additional discussion of the Company’s adoption of Topic 326 and its resulting accounting policies. Adoption of ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, which eliminates Step 2 of the previous goodwill impairment test, which required a hypothetical purchase price allocation to measure goodwill impairment. Under ASU 2017-04, a goodwill impairment loss will now be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the recorded amount of goodwill. The Company adopted this ASU effective January 1, 2020 on a prospective basis. Adoption of this ASU did not impact the Company’s condensed consolidated balance sheet, statements of income, or cash flows, but is expected to impact the measurement of any future goodwill impairment. Adoption of ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, which eliminates certain disclosures, such as the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and adds new disclosure requirements for Level 3 measurements. The Company adopted this ASU effective January 1, 2020, with certain provisions of the ASU applied retrospectively and other provisions provided prospectively. Adoption of this ASU did not impact the Company’s condensed consolidated balance sheet, statements of income, or cash flows; however, adoption of the ASU did result in modified disclosures in Note 8. Adoption of ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU 2018-15, which 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 was not affected by the amendments in this update. The Company adopted this ASU effective January 1, 2020 on a prospective basis. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of income, or cash flows, but is expected to impact future cloud computing arrangements. Adoption of ASU 2020-04, Reference Rate Reform (Topic 848) In March 2020, the FASB issued ASU 2020-04, which provides temporary optional guidance to ease the potential financial reporting burden of the expected market transition away from LIBOR. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications, hedge accounting, and other transactions affected by reference rate reform if certain criteria are met through December 31, 2022. The Company adopted this ASU effective March 12, 2020, the effective date of the ASU, on a prospective basis. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of income, or cash flows, but is expected to impact the future borrowing rate used for the Company’s secured revolving credit facility. Recently issued accounting pronouncements Topic Description of Guidance Effective Date Status of Company's Evaluation Simplifying the accounting for income taxes (ASU 2019-12) Reduces the complexity of accounting for income taxes by eliminating certain exceptions to the general principles in ASC 740, Income Taxes. Additionally, the ASU simplifies GAAP by amending the requirements related to the accounting for "hybrid" tax regimes and also adding the requirement to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination and when it should be considered a separate transaction. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively. January 1, 2021 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | 3. Acquisitions FITBONE Asset Purchase Agreement On February 3, 2020, the Company, through a wholly owned subsidiary, entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Wittenstein SE (“Wittenstein”), a privately-held German-based company, to acquire assets associated with the FITBONE intramedullary lengthening system for limb lengthening of the femur and tibia bones. Under the terms of the Purchase Agreement, as consideration for the acquired assets, the Company paid $18 million in cash consideration and entered into a manufacturing supply contract with Wittenstein. The Company has accounted for this acquisition as a business combination. The acquisition was completed on March 26, 2020. The following table summarizes the preliminary estimated fair values of assets acquired and liabilities assumed at the acquisition date. A final determination of the allocation of the purchase price to assets acquired and liabilities assumed has not been made and is subject to completion of the Company’s valuation of the assets acquired and liabilities assumed, which may take up to one year. (U.S. Dollars, in thousands) Fair Value Balance Sheet Classification Assigned Useful Life Assets acquired Inventories $ 528 Inventories Developed technology 4,500 Intangible assets, net 8 years Customer relationships 800 Intangible assets, net 15 years Trade name 600 Intangible assets, net 15 years In-process research and development ("IPR&D") 440 Intangible assets, net Indefinite Total identifiable assets acquired 6,868 Goodwill 11,132 Total fair value of consideration transferred $ 18,000 The Company recorded goodwill of $11.1 million in connection with the acquisition, which was assigned to the Global Extremities reporting segment. Specifically, goodwill includes synergies associated with the purchase of the acquired assets and is expected to be deductible for tax purposes. 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, the Company will determine the useful life of the asset and begin amortization. In addition, the Company also entered into a Contract Manufacturing and Supply Agreement (“CMSA”) with Wittenstein for an initial term of up to two years to manufacture the FITBONE product line. The Company is accounting for the CMSA as a finance lease. See Note 5 for further discussion of the recognized finance lease. The Company recognized $0.4 million and $0.3 million of acquisition related costs that were expensed during the three months ended March 31, 2020 and 2019, respectively. These costs are included in the condensed consolidated statements of income and comprehensive income (loss) within general and administrative expenses. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories Inventories were as follows: (U.S. Dollars, in thousands) March 31, 2020 December 31, 2019 Raw materials $ 7,479 $ 9,587 Work-in-process 10,618 14,027 Finished products 35,242 20,712 Field/consignment 29,405 38,071 Inventories $ 82,744 $ 82,397 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | 5. Leases A summary of the Company’s lease portfolio as of March 31, 2020 and December 31, 2019 is presented in the table below: (U.S. Dollars, in thousands, except lease term and discount rate) Classification March 31, 2020 December 31, 2019 Right-of-use assets ("ROU assets") Operating leases Other long-term assets $ 5,530 $ 5,798 Finance leases Property, plant and equipment, net 21,911 20,207 Total ROU assets 27,441 26,005 Lease Liabilities Current Operating leases Other current liabilities 1,902 1,875 Finance leases Current portion of finance lease liability 357 323 Long-term Operating leases Other long-term liabilities 3,786 4,084 Finance leases Long-term portion of finance lease liability 22,471 20,648 Total lease liabilities $ 28,516 $ 26,930 Supplemental cash flow information related to leases was as follows: (U.S. Dollars, in thousands) Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,059 $ 950 Operating cash flows from finance leases 229 222 Financing cash flows from finance leases 92 99 ROU assets obtained in exchange for lease obligations Operating leases 275 200 Finance leases 1,949 21,179 Wittenstein Contract Manufacturing and Supply Agreement In March 2020, the Company entered into a CMSA with Wittenstein for an initial term of two years to manufacture the FITBONE product line. As consideration for the CMSA, the Company will pay $2.0 million to Wittenstein if certain conditions are met in r elation to the prompt delivery of manufactured products. The Company is accounting for the CMSA as a finance lease as the Company has the right to direct the use of and to obtain substantially all of the economic benefits of the dedicated equipment used to manufacture the products and has the option to obtain title and possession of the equipment at the conclusion of the CMSA. As a result, the Company recognized both a lease finance liability and a related ROU asset of $ 1.9 million as of the commenceme nt date of the CMSA . |
Other current liabilities
Other current liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Payables And Accruals [Abstract] | |
Other current liabilities | 6. Other current liabilities In December 2019, the Company approved and initiated a targeted restructuring plan in the U.S. to streamline costs and to better align talent with the Company’s strategic initiatives. The plan consists primarily of the realignment of certain personnel, representing an extremely limited number of positions, which will require severance payments. As of December 31, 2019, the Company recorded a liability of $3.2 million in connection with this activity, all of which was recognized in 2019 within general and administrative expenses. During the first quarter of 2020, the Company recorded an additional accrual of $1.2 million associated with the departure of a former executive officer. As of March 31, 2020, the Company had a liability of $4.4 million associated with this restructuring plan. |
Long-term debt
Long-term debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Long-term debt | 7. Long-term debt As of March 31, 2020, the Company had no borrowings under its five year $300 million secured revolving credit facility. In addition, the Company had no borrowings on its €5.5 million ($6.1 million) available lines of credit in Italy. The Company was in compliance with all required financial covenants as of March 31, 2020. As a precautionary measure, to increase the Company’s cash position and preserve financial flexibility in view of the current uncertainty resulting from the COVID-19 pandemic, the Company subsequently completed a borrowing of $100.0 million under its secured revolving credit facility on April 16, 2020. |
Fair value measurements and inv
Fair value measurements and investments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements And Investment Disclosure [Abstract] | |
Fair value measurements and investments | 8. Fair value measurements and investments The fair value of the Company’s financial assets and liabilities measured on a recurring basis were as follows: March 31, 2020 December 31, 2019 (U.S. Dollars, in thousands) Level 1 Level 2 Level 3 Total Total Assets Bone Biologics equity securities $ — $ — $ — $ — $ 219 Total $ — $ — $ — $ — $ 219 Liabilities Contingent consideration $ — $ — $ (33,700 ) $ (33,700 ) $ (42,700 ) Deferred compensation plan — (1,235 ) — (1,235 ) (1,255 ) Total $ — $ (1,235 ) $ (33,700 ) $ (34,935 ) $ (43,955 ) Contingent Consideration The Company recognized a contingent consideration obligation in connection with the acquisition of Spinal Kinetics in 2018. The contingent consideration consists of potential future milestone payments of up to $60.0 million in cash. The milestone payments included (i) up to $15.0 million upon U.S. Food and Drug Administration (“FDA”) approval of the 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 acquired artificial discs. Milestones must be achieved within five years of April 30, 2018 to trigger applicable payments. In February 2019, the FDA Milestone was achieved and paid. The estimated fair value of the remaining contingent consideration was $33.7 million as of March 31, 2020. The estimated fair value reflects assumptions made by management as of March 31, 2020, including the impact of COVID-19 on significant unobservable assumptions, such as the expected timing and volume of elective procedures and the impact of these procedures on future revenues. However, as the impact of COVID-19 on the Company’s business is highly uncertain and difficult to predict, and as information surrounding the pandemic is rapidly evolving, the actual amount ultimately paid could be higher or lower than the fair value of the remaining contingent consideration. As of March 31, 2020, the Company has classified the full balance of the remaining $33.7 million within other long-term liabilities. Any changes in fair value are recorded as an operating expense and included within acquisition-related amortization and remeasurement. 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) 2020 2019 Contingent consideration at January 1 $ 42,700 $ 28,560 Increase (decrease) in fair value recognized in acquisition-related amortization and remeasurement (9,000 ) 5,400 Payment made — (15,000 ) Contingent consideration at March 31 $ 33,700 $ 18,960 The $9.0 million decrease in fair value in 2020 is primarily attributable to a change in management’s forecast of future net sales of artificial discs because of uncertainty in the market and the economy from the impact of COVID-19. The Company estimated the fair value of the remaining potential future revenue-based milestone payments using a Monte Carlo simulation and a discounted cash flow model. 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 valuation model include the Company’s forecasted future revenues for Spinal Kinetics products, the expected timing of payment, applicable discount rates 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 range of key assumptions used within the valuation as of March 31, 2020. (U.S. Dollars, in thousands) Fair Value as of March 31, 2020 Valuation Technique Unobservable inputs Range Contingent consideration $ 33,700 Discounted cash flow Revenue discount rate 5.0% - 5.3% Payment discount rate 6.7% - 7.0% Projected year of payment 2021 - 2022 eNeura Debt Security and Warrant Until October of 2019, the Company held a debt security and a related warrant to purchase common stock of eNeura, Inc. (“eNeura”), a privately held medical technology company that is developing devices for the treatment of migraines. On October 25, 2019, the Company and eNeura settled the debt security for a $4.0 million cash payment and agreed to transfer the warrant to eNeura. The following table provides a reconciliation of the beginning and ending balances for the eNeura debt security and warrant measured and reflected in the condensed consolidated balance sheets at fair value using significant unobservable inputs (Level 3) prior to the settlement discussed above: (U.S. Dollars, in thousands) 2020 2019 eNeura debt security and Warrant at January 1 $ — $ 17,820 Gains or losses recorded for the period Recognized in other comprehensive income (loss) — (2,593 ) Change in classification of debt security to held to maturity — (15,227 ) Issuance of Warrant as consideration for extension — 491 eNeura debt security and Warrant at March 31 $ — $ 491 |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 9. Contingencies In addition to the matters described 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. 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. This 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 $0.4 million and $0.3 million for the three months ended March 31, 2020 and 2019, respectively. As of March 31, 2020, the Company has accrued $5.2 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 September 2019, in relation to an ongoing legal dispute with a former Brazilian distributor, approximately $0.5 million (based upon foreign exchange rates as of March 31, 2020) of the Company’s cash in Brazil was frozen upon request to satisfy a judgment. Although the Company is appealing the judgment, this cash has been reclassified to restricted cash. As of March 31, 2020, the Company has an accrual of $1.3 million related to this matter. |
Accumulated other comprehensive
Accumulated other comprehensive loss | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Accumulated other comprehensive loss | 10. Accumulated other comprehensive loss The components of and changes in accumulated other comprehensive loss were as follows: (U.S. Dollars, in thousands) Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance at December 31, 2019 $ (3,039 ) $ (3,039 ) Other comprehensive loss (1,711 ) (1,711 ) Income taxes — — Balance at March 31, 2020 $ (4,750 ) $ (4,750 ) |
Revenue recognition and account
Revenue recognition and accounts receivable | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition And Accounts Receivable [Abstract] | |
Revenue recognition and accounts receivable | 11. Revenue recognition and accounts receivable Revenue Recognition The Company has two reporting segments, which consist of Global Spine and Global Extremities. Within the Global Spine reporting segment there are three product categories: Bone Growth Therapies, Spinal Implants and Biologics. The table below presents net sales by major product category by reporting segment: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Change Bone Growth Therapies $ 45,443 $ 47,283 -3.9 % Spinal Implants 22,926 22,903 0.1 % Biologics 13,949 15,732 -11.3 % Global Spine 82,318 85,918 -4.2 % Global Extremities 22,505 23,194 -3.0 % Net sales $ 104,823 $ 109,112 -3.9 % Product Sales and Marketing Service Fees The table below presents product sales and marketing service fees, which are both components of net sales: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Product sales $ 91,421 $ 93,934 Marketing service fees 13,402 15,178 Net sales $ 104,823 $ 109,112 Product sales primarily consist of the sale of bone growth therapies devices and internal and external fixation products. Marketing service fees are received from MTF Biologics based on total sales of biologics tissues and relate solely to the Global Spine reporting segment. 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. Adoption of ASU 2016-13 As discussed in Note 2, the Company adopted ASU No. 2016-13 - Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments, using the modified retrospective approach. Adoption of the new standard resulted in an increase to the Company’s allowance for expected credit losses of $1.1 million, an increase in deferred income tax assets of $0.2 million, and a decrease in retained earnings of $0.9 million as of January 1, 2020. The net impact of adoption to the Company’s balance sheet as of January 1, 2020 is presented in the table below. The standard did not have a material impact to the Company’s condensed consolidated statements of income or cash flows. (U.S. Dollars, in thousands) December 31, 2019 Impact of Adoption of ASC 326 January 1, 2020 Assets Current assets Cash, cash equivalents, and restricted cash $ 70,403 $ — $ 70,403 Accounts receivable, net 86,805 (1,120 ) 85,685 Inventories 82,397 — 82,397 Prepaid expenses and other current assets 20,948 — 20,948 Total current assets 260,553 (1,120 ) 259,433 Deferred income taxes 35,117 233 35,350 Other long-term assets 199,950 — 199,950 Total assets $ 495,620 $ (887 ) $ 494,733 Liabilities and shareholders’ equity Total liabilities $ 167,989 $ — $ 167,989 Shareholders’ equity Common shares $ 1,902 $ — $ 1,902 Additional paid-in capital 271,019 — 271,019 Retained earnings 57,749 (887 ) 56,862 Accumulated other comprehensive loss (3,039 ) — (3,039 ) Total shareholders’ equity 327,631 (887 ) 326,744 Total liabilities and shareholders’ equity $ 495,620 $ (887 ) $ 494,733 Accounts receivable and related allowances Subsequent to the adoption of ASU 2016-13, the Company’s allowance for expected credit losses represents the portion of the receivable’s amortized cost basis that an entity does not expect to collect over the receivable’s contractual life, considering past events, current conditions, and reasonable and supportable forecasts of future economic conditions. The process for estimating the ultimate collection of accounts receivable involves significant assumptions and judgments. The determination of the contractual life of accounts receivables, as well as the historical collections, write-offs, and payor reimbursement experience over the estimated contractual lives of such receivables, are integral parts of the estimation process related to reserves for expected credit losses and the establishment of contractual allowances. Accounts receivable are analyzed on a quarterly basis to assess the adequacy of both reserves for expected credit losses and contractual allowances. Revisions in allowances for expected credit loss 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. These estimates are periodically tested against actual collection experience. In addition, the Company analyzes its receivables by geography and by customer type, where appropriate, in developing estimates for expected credit losses. The following table provides a detail of changes in the Company’s allowance for expected credit losses for the three months ended March 31, 2020: (U.S. Dollars, in thousands) 2020 Allowance for expected credit losses at December 31, 2019 $ 3,987 Impact of adoption of ASU 2016-13 1,120 Current period provision for expected credit losses 679 Writeoffs charged against the allowance and other (114 ) Effect of changes in foreign exchange rates (81 ) Allowance for expected credit losses at March 31, 2020 $ 5,591 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 Orthofix products. Other Contract Assets are included in other long-term assets or other current assets, dependent upon the original term of the related agreement, and totaled $3.3 million and $3.7 million as of March 31, 2020, and December 31, 2019, respectively. |
Business segment information
Business segment information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Business segment information | 12. Business segment information The Company has two reporting segments: Global Spine and Global Extremities. The primary metric used in managing the Company is earnings before interest, tax, depreciation, and amortization (“EBITDA”). Corporate activities are comprised of the operating expenses and activities of the Company not necessarily identifiable within the two reporting segments, such as human resources, finance, legal, and information technology functions. The table below presents EBITDA by reporting segment: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Global Spine $ 22,417 $ 10,575 Global Extremities (1,894 ) (173 ) Corporate (8,140 ) (9,527 ) Total EBITDA $ 12,383 $ 875 Depreciation and amortization (6,327 ) (5,727 ) Interest expense, net (423 ) (257 ) Income (loss) before income taxes $ 5,633 $ (5,109 ) Geographical information The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Global Spine U.S. $ 77,106 $ 79,526 International 5,212 6,392 Total Global Spine 82,318 85,918 Global Extremities U.S. 6,043 6,598 International 16,462 16,596 Total Global Extremities 22,505 23,194 Consolidated U.S. 83,149 86,124 International 21,674 22,988 Net sales $ 104,823 $ 109,112 |
Acquisition-Related Amortizatio
Acquisition-Related Amortization and Remeasurement | 3 Months Ended |
Mar. 31, 2020 | |
Acquisition Related Amortization And Remeasurement [Abstract] | |
Acquisition-Related Amortization and Remeasurement | 13. Acquisition-related amortization and remeasurement Acquisition-related amortization and remeasurement consists of amortization related to intangible assets acquired through business combinations or asset acquisitions and the remeasurement of any related contingent consideration arrangement. Components of acquisition-related amortization and remeasurement are as follows: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Changes in fair value of contingent consideration $ (9,000 ) $ 5,400 Amortization of acquired intangibles 1,418 1,057 Total $ (7,582 ) $ 6,457 |
Share-based compensation
Share-based compensation | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-based compensation | 14. Share-based compensation Components of share-based compensation expense are as follows: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Cost of sales $ 181 $ 187 Sales and marketing 696 610 General and administrative 2,530 4,564 Research and development 452 324 Total $ 3,859 $ 5,685 Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Stock options $ 304 $ 2,112 Time-based restricted stock awards and units 2,421 1,706 Market-based restricted stock units 670 1,347 Stock purchase plan 464 520 Total $ 3,859 $ 5,685 During the three months ended March 31, 2020 and 2019, the Company issued 33,559 and 211,081 shares, respectively, of common stock related to stock purchase plan issuances, stock option exercises and the vesting of restricted stock awards and units. |
Income taxes
Income taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 15. Income taxes Income tax provisions for interim periods are based on an estimated annual income tax rate, adjusted for discrete tax items. As a result, the Company’s interim effective tax rates may vary significantly from the statutory tax rate and the annual effective tax rate. For the three months ended March 31, 2020 and 2019, the effective tax rate was (355.6%) and 117.6%, respectively. The primary factors affecting the Company’s effective tax rate for the three months ended March 31, 2020, were statute expirations related to unrecognized tax benefits, financial benefits not recognized for tax purposes, primarily related to the remeasurement of contingent consideration, anticipated benefits related to provisions of the CARES Act, and limits on executive compensation. The CARES Act, among other things, includes income tax provisions relating to net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, and technical corrections to tax depreciation methods for qualified improvement property. As a result of the anticipated impacts of the Act, the Company recognized a net benefit of $3.0 million in the first quarter of 2020. During the first quarter, the statute of limitations expired related to certain unrecognized tax benefits, which resulted in the recognition of a net benefit of $17.8 million. 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 $0.2 million to $0.7 million as audits close and statutes expire. |
Earnings per share ("EPS")
Earnings per share ("EPS") | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per share ("EPS") | 16. 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). For the three months ended March 31, 2020 and 2019, 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 diluted EPS computations. Three Months Ended March 31, 2020 2019 Weighted average common shares-basic 19,143,934 18,750,184 Effect of dilutive securities Unexercised stock options and stock purchase plan 95,594 277,992 Unvested restricted stock awards and units 60,292 162,970 Weighted average common shares-diluted 19,299,820 19,191,146 There were 1,168,410 and 484,421 weighted average outstanding stock options and restricted stock awards and units not included in the diluted EPS computation for the three months ended March 31, 2020 and 2019, respectively, because inclusion of these awards was anti-dilutive or, for performance-based and market-based restricted stock awards and units, all necessary conditions had not been satisfied by the end of the respective period. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. Subsequent Events In April 2020, the Company received $13.9 million in funds from the Centers for Medicare & Medicaid Services (“CMS”) Accelerated and Advance Payment Program as part of the CARES Act. As part of this program, the Company was permitted to request up to 100% of the Medicare payment amounts received for the prior three-month period. Repayment of this amount is required to begin 120 days after the issuance of the payment. After the 120 day period, every claim submitted by the Company will be offset against the accelerated / advanced payment. Thus, instead of receiving payment for newly submitted claims, the Company’s outstanding accelerated / advance payment balance will be reduced by the claim payment amount. In addition, in April 2020, the Company automatically received, without request, $4.7 million in funds from the U.S. Department of Health and Human Services as part of the CARES Act Provider Relief Fund. Permanent retention of these is subject to certain qualifying criteria and the Company is currently assessing whether it qualifies to retain the funding. Other aspects of the CARES Act that the Company is evaluating include (i) the deferral of employer social security payroll tax payments and (ii) the use of the employee retention tax credit. The Company anticipates that it will defer all employer social security payroll tax payments for the remainder of the 2020 calendar year, such that 50% of the taxes is deferred until December 31, 2021, with the remaining 50% deferred until December 31, 2022. The employee retention tax credit provides an additional tax credit to employers that (i) have either fully or partially suspended operations because of government orders associated with COVID-19 or (ii) experience a substantial decline in income but continue to pay employees their wages. Further, as precautionary measures to increase the Company’s cash position and preserve financial flexibility in view of the current uncertainty resulting from the COVID-19 pandemic, the Company (i) completed a borrowing of $100.0 million under its secured revolving credit facility on April 16, 2020, (ii) initiated temporary salary reductions for U.S. employees and the Board of Directors beginning in April 2020, and (iii) suspended the Company’s 401(k) match program until September 30, 2020. |
Recently adopted accounting s_2
Recently adopted accounting standards and recently issued accounting pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Changes And Error Corrections [Abstract] | |
Recently adopted accounting standards and recently issued accounting pronouncements | Adoption of Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent Amendments In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13 (which was then further clarified in subsequent ASUs), which requires that credit losses for certain types of financial instruments, including trade accounting receivables, be estimated based on expected credit losses among other changes. Effective January 1, 2020, the Company adopted ASU 2016-13 using a modified retrospective approach. Therefore, results for reporting periods after January 1, 2020 are presented under Topic 326, while prior period amounts are not adjusted and continue to be reported in accordance with the historical accounting guidance. See Note 11 for additional discussion of the Company’s adoption of Topic 326 and its resulting accounting policies. Adoption of ASU 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, which eliminates Step 2 of the previous goodwill impairment test, which required a hypothetical purchase price allocation to measure goodwill impairment. Under ASU 2017-04, a goodwill impairment loss will now be measured as the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the recorded amount of goodwill. The Company adopted this ASU effective January 1, 2020 on a prospective basis. Adoption of this ASU did not impact the Company’s condensed consolidated balance sheet, statements of income, or cash flows, but is expected to impact the measurement of any future goodwill impairment. Adoption of ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement In August 2018, the FASB issued ASU 2018-13, which eliminates certain disclosures, such as the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and adds new disclosure requirements for Level 3 measurements. The Company adopted this ASU effective January 1, 2020, with certain provisions of the ASU applied retrospectively and other provisions provided prospectively. Adoption of this ASU did not impact the Company’s condensed consolidated balance sheet, statements of income, or cash flows; however, adoption of the ASU did result in modified disclosures in Note 8. Adoption of ASU 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract In August 2018, the FASB issued ASU 2018-15, which 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 was not affected by the amendments in this update. The Company adopted this ASU effective January 1, 2020 on a prospective basis. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of income, or cash flows, but is expected to impact future cloud computing arrangements. Adoption of ASU 2020-04, Reference Rate Reform (Topic 848) In March 2020, the FASB issued ASU 2020-04, which provides temporary optional guidance to ease the potential financial reporting burden of the expected market transition away from LIBOR. The new guidance provides optional expedients and exceptions for applying U.S. GAAP to contract modifications, hedge accounting, and other transactions affected by reference rate reform if certain criteria are met through December 31, 2022. The Company adopted this ASU effective March 12, 2020, the effective date of the ASU, on a prospective basis. Adoption of this ASU did not have a material impact to the Company’s condensed consolidated balance sheet, statements of income, or cash flows, but is expected to impact the future borrowing rate used for the Company’s secured revolving credit facility. Recently issued accounting pronouncements Topic Description of Guidance Effective Date Status of Company's Evaluation Simplifying the accounting for income taxes (ASU 2019-12) Reduces the complexity of accounting for income taxes by eliminating certain exceptions to the general principles in ASC 740, Income Taxes. Additionally, the ASU simplifies GAAP by amending the requirements related to the accounting for "hybrid" tax regimes and also adding the requirement to evaluate when a step up in the tax basis of goodwill should be considered part of the business combination and when it should be considered a separate transaction. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively. January 1, 2021 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Wittenstein [Member] | FITBONE Asset Purchase Agreement [Member] | |
Business Acquisition [Line Items] | |
Summary of Preliminary Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary estimated fair values of assets acquired and liabilities assumed at the acquisition date. A final determination of the allocation of the purchase price to assets acquired and liabilities assumed has not been made and is subject to completion of the Company’s valuation of the assets acquired and liabilities assumed, which may take up to one year. (U.S. Dollars, in thousands) Fair Value Balance Sheet Classification Assigned Useful Life Assets acquired Inventories $ 528 Inventories Developed technology 4,500 Intangible assets, net 8 years Customer relationships 800 Intangible assets, net 15 years Trade name 600 Intangible assets, net 15 years In-process research and development ("IPR&D") 440 Intangible assets, net Indefinite Total identifiable assets acquired 6,868 Goodwill 11,132 Total fair value of consideration transferred $ 18,000 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories were as follows: (U.S. Dollars, in thousands) March 31, 2020 December 31, 2019 Raw materials $ 7,479 $ 9,587 Work-in-process 10,618 14,027 Finished products 35,242 20,712 Field/consignment 29,405 38,071 Inventories $ 82,744 $ 82,397 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Summary of Lease Portfolio | A summary of the Company’s lease portfolio as of March 31, 2020 and December 31, 2019 is presented in the table below: (U.S. Dollars, in thousands, except lease term and discount rate) Classification March 31, 2020 December 31, 2019 Right-of-use assets ("ROU assets") Operating leases Other long-term assets $ 5,530 $ 5,798 Finance leases Property, plant and equipment, net 21,911 20,207 Total ROU assets 27,441 26,005 Lease Liabilities Current Operating leases Other current liabilities 1,902 1,875 Finance leases Current portion of finance lease liability 357 323 Long-term Operating leases Other long-term liabilities 3,786 4,084 Finance leases Long-term portion of finance lease liability 22,471 20,648 Total lease liabilities $ 28,516 $ 26,930 |
Summary of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: (U.S. Dollars, in thousands) Three Months Ended March 31, 2020 Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,059 $ 950 Operating cash flows from finance leases 229 222 Financing cash flows from finance leases 92 99 ROU assets obtained in exchange for lease obligations Operating leases 275 200 Finance leases 1,949 21,179 |
Fair value measurements and i_2
Fair value measurements and investments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Measurements And Investment Disclosure [Abstract] | |
Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis | The fair value of the Company’s financial assets and liabilities measured on a recurring basis were as follows: March 31, 2020 December 31, 2019 (U.S. Dollars, in thousands) Level 1 Level 2 Level 3 Total Total Assets Bone Biologics equity securities $ — $ — $ — $ — $ 219 Total $ — $ — $ — $ — $ 219 Liabilities Contingent consideration $ — $ — $ (33,700 ) $ (33,700 ) $ (42,700 ) Deferred compensation plan — (1,235 ) — (1,235 ) (1,255 ) Total $ — $ (1,235 ) $ (33,700 ) $ (34,935 ) $ (43,955 ) |
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) 2020 2019 Contingent consideration at January 1 $ 42,700 $ 28,560 Increase (decrease) in fair value recognized in acquisition-related amortization and remeasurement (9,000 ) 5,400 Payment made — (15,000 ) Contingent consideration at March 31 $ 33,700 $ 18,960 |
Schedule of Valuation Methodology and Unobservable Inputs for Level 3 Assets and Liabilities Measured at Fair Value | The following table provides a range of key assumptions used within the valuation as of March 31, 2020. (U.S. Dollars, in thousands) Fair Value as of March 31, 2020 Valuation Technique Unobservable inputs Range Contingent consideration $ 33,700 Discounted cash flow Revenue discount rate 5.0% - 5.3% Payment discount rate 6.7% - 7.0% Projected year of payment 2021 - 2022 |
Schedule of Held to Maturity Debt Securities and Warrant Reconciliation | The following table provides a reconciliation of the beginning and ending balances for the eNeura debt security and warrant measured and reflected in the condensed consolidated balance sheets at fair value using significant unobservable inputs (Level 3) prior to the settlement discussed above: (U.S. Dollars, in thousands) 2020 2019 eNeura debt security and Warrant at January 1 $ — $ 17,820 Gains or losses recorded for the period Recognized in other comprehensive income (loss) — (2,593 ) Change in classification of debt security to held to maturity — (15,227 ) Issuance of Warrant as consideration for extension — 491 eNeura debt security and Warrant at March 31 $ — $ 491 |
Accumulated other comprehensi_2
Accumulated other comprehensive loss (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Components of Changes in Accumulated Other Comprehensive Loss | The components of and changes in accumulated other comprehensive loss were as follows: (U.S. Dollars, in thousands) Currency Translation Adjustments Accumulated Other Comprehensive Loss Balance at December 31, 2019 $ (3,039 ) $ (3,039 ) Other comprehensive loss (1,711 ) (1,711 ) Income taxes — — Balance at March 31, 2020 $ (4,750 ) $ (4,750 ) |
Revenue recognition and accou_2
Revenue recognition and accounts receivable (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition And Accounts Receivable [Line Items] | |
Schedule of Net Sales by Major Product Category by Reporting Segment | The table below presents net sales by major product category by reporting segment: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Change Bone Growth Therapies $ 45,443 $ 47,283 -3.9 % Spinal Implants 22,926 22,903 0.1 % Biologics 13,949 15,732 -11.3 % Global Spine 82,318 85,918 -4.2 % Global Extremities 22,505 23,194 -3.0 % Net sales $ 104,823 $ 109,112 -3.9 % |
Schedule of Components Net Sales | The table below presents product sales and marketing service fees, which are both components of net sales: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Product sales $ 91,421 $ 93,934 Marketing service fees 13,402 15,178 Net sales $ 104,823 $ 109,112 |
Allowances for Expected Credit Losses | The following table provides a detail of changes in the Company’s allowance for expected credit losses for the three months ended March 31, 2020: (U.S. Dollars, in thousands) 2020 Allowance for expected credit losses at December 31, 2019 $ 3,987 Impact of adoption of ASU 2016-13 1,120 Current period provision for expected credit losses 679 Writeoffs charged against the allowance and other (114 ) Effect of changes in foreign exchange rates (81 ) Allowance for expected credit losses at March 31, 2020 $ 5,591 |
ASU 2016-13 [Member] | |
Revenue Recognition And Accounts Receivable [Line Items] | |
Schedule of Net Impact of Adoption to Balance Sheet | The net impact of adoption to the Company’s balance sheet as of January 1, 2020 is presented in the table below. The standard did not have a material impact to the Company’s condensed consolidated statements of income or cash flows. (U.S. Dollars, in thousands) December 31, 2019 Impact of Adoption of ASC 326 January 1, 2020 Assets Current assets Cash, cash equivalents, and restricted cash $ 70,403 $ — $ 70,403 Accounts receivable, net 86,805 (1,120 ) 85,685 Inventories 82,397 — 82,397 Prepaid expenses and other current assets 20,948 — 20,948 Total current assets 260,553 (1,120 ) 259,433 Deferred income taxes 35,117 233 35,350 Other long-term assets 199,950 — 199,950 Total assets $ 495,620 $ (887 ) $ 494,733 Liabilities and shareholders’ equity Total liabilities $ 167,989 $ — $ 167,989 Shareholders’ equity Common shares $ 1,902 $ — $ 1,902 Additional paid-in capital 271,019 — 271,019 Retained earnings 57,749 (887 ) 56,862 Accumulated other comprehensive loss (3,039 ) — (3,039 ) Total shareholders’ equity 327,631 (887 ) 326,744 Total liabilities and shareholders’ equity $ 495,620 $ (887 ) $ 494,733 |
Business segment information (T
Business segment information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of EBITDA by Reporting Segment | The table below presents EBITDA by reporting segment: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Global Spine $ 22,417 $ 10,575 Global Extremities (1,894 ) (173 ) Corporate (8,140 ) (9,527 ) Total EBITDA $ 12,383 $ 875 Depreciation and amortization (6,327 ) (5,727 ) Interest expense, net (423 ) (257 ) Income (loss) before income taxes $ 5,633 $ (5,109 ) |
Summary of Net Sales by Geographic Destination for each Reporting Segment | The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Global Spine U.S. $ 77,106 $ 79,526 International 5,212 6,392 Total Global Spine 82,318 85,918 Global Extremities U.S. 6,043 6,598 International 16,462 16,596 Total Global Extremities 22,505 23,194 Consolidated U.S. 83,149 86,124 International 21,674 22,988 Net sales $ 104,823 $ 109,112 |
Acquisition-Related Amortizat_2
Acquisition-Related Amortization and Remeasurement (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Acquisition Related Amortization And Remeasurement [Abstract] | |
Components of Acquisition-Related Amortization and Remeasurement | Components of acquisition-related amortization and remeasurement are as follows: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Changes in fair value of contingent consideration $ (9,000 ) $ 5,400 Amortization of acquired intangibles 1,418 1,057 Total $ (7,582 ) $ 6,457 |
Share-based compensation (Table
Share-based compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Components of Share-Based Compensation Expense | Components of share-based compensation expense are as follows: Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Cost of sales $ 181 $ 187 Sales and marketing 696 610 General and administrative 2,530 4,564 Research and development 452 324 Total $ 3,859 $ 5,685 Three Months Ended March 31, (U.S. Dollars, in thousands) 2020 2019 Stock options $ 304 $ 2,112 Time-based restricted stock awards and units 2,421 1,706 Market-based restricted stock units 670 1,347 Stock purchase plan 464 520 Total $ 3,859 $ 5,685 |
Earnings per share ("EPS") (Tab
Earnings per share ("EPS") (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Weighted Average Shares Used in Diluted EPS | The following is a reconciliation of the weighted average shares used in diluted EPS computations. Three Months Ended March 31, 2020 2019 Weighted average common shares-basic 19,143,934 18,750,184 Effect of dilutive securities Unexercised stock options and stock purchase plan 95,594 277,992 Unvested restricted stock awards and units 60,292 162,970 Weighted average common shares-diluted 19,299,820 19,191,146 |
Business, basis of presentati_2
Business, basis of presentation, and COVID-19 update - Additional information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Organization Consolidation And Presentation Of Financial Statements And Unusual Or Infrequent Items Disclosure [Abstract] | |
CARES Act income tax expenses benefit | $ (3) |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 26, 2020 | Feb. 03, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||||
Cash consideration paid for assets acquired | $ 18,000 | ||||
Goodwill | $ 82,646 | $ 71,177 | |||
Wittenstein [Member] | Contract Manufacturing and Supply Agreement ("CMSA") [Member] | FITBONE [Member] | |||||
Business Acquisition [Line Items] | |||||
Finance lease, term of contract | 2 years | ||||
Wittenstein [Member] | FITBONE Asset Purchase Agreement [Member] | |||||
Business Acquisition [Line Items] | |||||
Date of assets purchase agreement | Feb. 3, 2020 | ||||
Cash consideration paid for assets acquired | $ 18,000 | ||||
Acquisition completion date | Mar. 26, 2020 | ||||
Goodwill | $ 11,132 | ||||
Acquisition related costs | $ 400 | $ 300 | |||
Wittenstein [Member] | FITBONE Asset Purchase Agreement [Member] | Global Extremities [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 11,100 |
Acquisitions - Summary of Fair
Acquisitions - Summary of Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Mar. 26, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 82,646 | $ 71,177 | |
Wittenstein [Member] | FITBONE Asset Purchase Agreement [Member] | |||
Business Acquisition [Line Items] | |||
Inventories | $ 528 | ||
Total identifiable assets acquired | 6,868 | ||
Goodwill | 11,132 | ||
Total fair value of consideration transferred | $ 18,000 | ||
Wittenstein [Member] | FITBONE Asset Purchase Agreement [Member] | Trade Name [Member] | |||
Business Acquisition [Line Items] | |||
Assigned Useful Life | 15 years | ||
Indefinite lived intangible assets, net acquired | $ 600 | ||
Wittenstein [Member] | FITBONE Asset Purchase Agreement [Member] | In-process Research and Development ("IPR&D") [Member] | |||
Business Acquisition [Line Items] | |||
Assigned Useful Life | Indefinite | ||
Indefinite lived intangible assets, net acquired | $ 440 | ||
Wittenstein [Member] | FITBONE Asset Purchase Agreement [Member] | Customer Relationships [Member] | |||
Business Acquisition [Line Items] | |||
Assigned Useful Life | 15 years | ||
Finite lived intangible assets, net acquired | $ 800 | ||
Wittenstein [Member] | FITBONE Asset Purchase Agreement [Member] | Developed Technology [Member] | |||
Business Acquisition [Line Items] | |||
Assigned Useful Life | 8 years | ||
Finite lived intangible assets, net acquired | $ 4,500 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 7,479 | $ 9,587 |
Work-in-process | 10,618 | 14,027 |
Finished products | 35,242 | 20,712 |
Field/consignment | 29,405 | 38,071 |
Inventories | $ 82,744 | $ 82,397 |
Leases - Summary of Lease Portf
Leases - Summary of Lease Portfolio (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Right-of-use assets ("ROU assets") | ||
Operating leases | $ 5,530 | $ 5,798 |
Operating lease, right-of-use asset, statement of financial position [Extensible List] | us-gaap:OtherAssetsNoncurrent | us-gaap:OtherAssetsNoncurrent |
Finance leases | $ 21,911 | $ 20,207 |
Finance lease, right-of-use asset, statement of financial position [Extensible List] | us-gaap:PropertyPlantAndEquipmentNet | us-gaap:PropertyPlantAndEquipmentNet |
Total ROU assets | $ 27,441 | $ 26,005 |
Current | ||
Operating leases | $ 1,902 | $ 1,875 |
Operating lease, liability, current, statement of financial position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent |
Finance leases | $ 357 | $ 323 |
Long-term | ||
Operating leases | $ 3,786 | $ 4,084 |
Operating lease, liability, noncurrent, statement of financial position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesNoncurrent |
Finance leases | $ 22,471 | $ 20,648 |
Total lease liabilities | $ 28,516 | $ 26,930 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 1,059 | $ 950 |
Operating cash flows from finance leases | 229 | 222 |
Financing cash flows from finance leases | 92 | 99 |
ROU assets obtained in exchange for lease obligations | ||
Operating leases | 275 | 200 |
Finance leases | $ 1,949 | $ 21,179 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Lessee Lease Description [Line Items] | ||
Finance lease, ROU asset | $ 21,911 | $ 20,207 |
Wittenstein [Member] | Contract Manufacturing and Supply Agreement ("CMSA") [Member] | FITBONE [Member] | ||
Lessee Lease Description [Line Items] | ||
Consideration to be paid upon conditions met in relation to prompt delivery of manufactured products | $ 2,000 | |
Finance lease, term of contract | 2 years | |
Finance lease, ROU asset | $ 1,900 | |
Finance lease, liability | $ 1,900 |
Other Current Liabilities - Add
Other Current Liabilities - Additional Information (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Restructuring plan liability, current | $ 3.2 | |
Restructuring reserve | $ 4.4 | |
Former Executive Officer [Member] | Severance Payments [Member] | ||
Restructuring plan liability, current | $ 1.2 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) | 3 Months Ended | |||
Mar. 31, 2020USD ($) | Apr. 16, 2020USD ($) | Mar. 31, 2020EUR (€) | Aug. 31, 2015USD ($) | |
Italy [Member] | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 6,100,000 | € 5,500,000 | ||
Amount outstanding under lines of credit | $ 0 | |||
Revolving Credit Facility [Member] | Subsequent Event [Member] | ||||
Debt Instrument [Line Items] | ||||
Amount outstanding under lines of credit | $ 100,000,000 | |||
2015 Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument term (in years) | 5 years | |||
Maximum borrowing capacity | $ 300,000,000 | |||
Amount outstanding under lines of credit | $ 0 |
Fair Value Measurements and I_3
Fair Value Measurements and Investments - Schedule of Financial Assets and Liabilities Measured at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | $ 219 | |
Contingent consideration | $ (33,700) | (42,700) |
Deferred compensation plan, Liabilities | (1,235) | (1,255) |
Liabilities fair value, Total | (34,935) | (43,955) |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Deferred compensation plan, Liabilities | (1,235) | |
Liabilities fair value, Total | (1,235) | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent consideration | (33,700) | |
Liabilities fair value, Total | $ (33,700) | |
Equity Securities [Member] | Bone Biologics Inc | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | $ 219 |
Fair Value Measurements and I_4
Fair Value Measurements and Investments - Additional Information (Detail) - USD ($) $ in Millions | Oct. 25, 2019 | Apr. 30, 2018 | Mar. 31, 2020 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Decrease in fair value of future net sales | $ 9 | ||
eNeura Inc [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Payments of restructured debt security | $ 4 | ||
Spinal Kinetics [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Milestone achievement period | 5 years | ||
Contingent consideration | 33.7 | ||
Spinal Kinetics [Member] | Other Long-term Liabilities [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Contingent consideration | $ 33.7 | ||
Maximum [Member] | Spinal Kinetics [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Future milestone payments | $ 60 | ||
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 | ||
Revenue Milestone [Member] | Spinal Kinetics [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Future milestone payments | $ 45 |
Fair Value Measurements and I_5
Fair Value Measurements and Investments - Schedule of Reconciliation For Contingent Consideration Measured At Fair Value Using Significant Unobservable Inputs (Level 3) (Detail) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration at January 1 | $ 42,700 | $ 28,560 |
Increase (decrease) in fair value recognized in acquisition-related amortization and remeasurement | (9,000) | 5,400 |
Payment made | (15,000) | |
Contingent consideration at March 31 | $ 33,700 | $ 18,960 |
Fair Value Measurements and I_6
Fair Value Measurements and Investments - Schedule of Valuation Methodology and Unobservable Inputs for Level 3 Assets and Liabilities Measured at Fair Value (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Revenue Discount Rate | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Contingent consideration | $ 33,700 |
Revenue Discount Rate | Minimum [Member] | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Business combination contingent consideration liability measurement input | 5 |
Revenue Discount Rate | Maximum [Member] | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Business combination contingent consideration liability measurement input | 5.3 |
Payment Discount Rate | Minimum [Member] | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Business combination contingent consideration liability measurement input | 6.7 |
Payment Discount Rate | Maximum [Member] | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Business combination contingent consideration liability measurement input | 7 |
Projected Year of Payment | Minimum [Member] | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Business combination contingent consideration liability measurement period | 2021 |
Projected Year of Payment | Maximum [Member] | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Business combination contingent consideration liability measurement period | 2022 |
Fair Value Measurements and I_7
Fair Value Measurements and Investments - Schedule of Reconciliation of Debt Security and Warrant (Detail) - eNeura Inc [Member] - Debt Security and Warrant [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 0 | $ 17,820 |
Gains or losses recorded for the period | ||
Recognized in other comprehensive income (loss) | 0 | (2,593) |
Change in classification of debt security to held to maturity | 0 | (15,227) |
Issuance of Warrant as consideration for extension | 0 | 491 |
Ending balance | $ 0 | $ 491 |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Sep. 30, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |||
Accrued other long-term liabilities | $ 5.2 | ||
Estimated sales and marketing expense | 0.4 | $ 0.3 | |
Freezing amount in cash resulted from court pending legal action issued | $ 0.5 | ||
Accruals related court pending legal dispute | $ 1.3 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss - Components of Changes in Accumulated Other Comprehensive Loss (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | $ 327,631 |
Ending Balance | 355,369 |
Currency Translation Adjustments [Member] | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | (3,039) |
Other comprehensive loss | (1,711) |
Ending Balance | (4,750) |
Accumulated Other Comprehensive Loss [Member] | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | (3,039) |
Other comprehensive loss | (1,711) |
Ending Balance | $ (4,750) |
Revenue Recognition and Accou_3
Revenue Recognition and Accounts Receivable - Schedule of Net Sales by Major Product Category by Reporting Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue Recognition And Accounts Receivable [Line Items] | ||
Net sales | $ 104,823 | $ 109,112 |
Change | (3.90%) | |
Bone Growth Therapies [Member] | ||
Revenue Recognition And Accounts Receivable [Line Items] | ||
Net sales | $ 45,443 | 47,283 |
Change | (3.90%) | |
Spinal Implants [Member] | ||
Revenue Recognition And Accounts Receivable [Line Items] | ||
Net sales | $ 22,926 | 22,903 |
Change | 0.10% | |
Biologics [Member] | ||
Revenue Recognition And Accounts Receivable [Line Items] | ||
Net sales | $ 13,949 | 15,732 |
Change | (11.30%) | |
Global Spine [Member] | ||
Revenue Recognition And Accounts Receivable [Line Items] | ||
Net sales | $ 82,318 | 85,918 |
Change | (4.20%) | |
Global Extremities [Member] | ||
Revenue Recognition And Accounts Receivable [Line Items] | ||
Net sales | $ 22,505 | $ 23,194 |
Change | (3.00%) |
Revenue Recognition and Accou_4
Revenue Recognition and Accounts Receivable - Schedule of Components of Net Sales (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue Recognition [Abstract] | ||
Product sales | $ 91,421 | $ 93,934 |
Marketing service fees | 13,402 | 15,178 |
Net sales | $ 104,823 | $ 109,112 |
Revenue Recognition and Accou_5
Revenue Recognition and Accounts Receivable - Additional Information (Detail) - USD ($) $ in Millions | Jan. 01, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Other Long-Term Assets or Other Current Assets [Member] | |||
Revenue Recognition And Accounts Receivable [Line Items] | |||
Other contract assets | $ 3.3 | $ 3.7 | |
ASU 2016-13 [Member] | |||
Revenue Recognition And Accounts Receivable [Line Items] | |||
Increase (decrease) to allowance for expected credit losses | $ 1.1 | ||
Increase (decrease) in deferred income taxes | 0.2 | ||
Decrease in retained earnings | $ (0.9) |
Revenue Recognition and Accou_6
Revenue Recognition and Accounts Receivable - Schedule of Net Impact of Adoption to Balance Sheet (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | |||||
Cash, cash equivalents, and restricted cash | $ 70,403 | ||||
Accounts receivable, net | $ 77,798 | 86,805 | |||
Inventories | 82,744 | 82,397 | |||
Prepaid expenses and other current assets | 21,185 | 20,948 | |||
Total current assets | 239,995 | 260,553 | |||
Deferred income taxes | 36,133 | 35,117 | |||
Other long-term assets | 199,950 | ||||
Total assets | 493,490 | 495,620 | |||
Liabilities and shareholders’ equity | |||||
Total liabilities | 138,121 | 167,989 | |||
Shareholders’ equity | |||||
Common shares | 1,906 | 1,902 | |||
Additional paid-in capital | 275,686 | 271,019 | |||
Retained earnings | 82,527 | 57,749 | |||
Accumulated other comprehensive loss | (4,750) | (3,039) | |||
Total shareholders’ equity | 355,369 | 327,631 | $ 343,682 | $ 335,397 | |
Total liabilities and shareholders’ equity | $ 493,490 | 495,620 | |||
ASU 2016-13 [Member] | |||||
Current assets | |||||
Cash, cash equivalents, and restricted cash | $ 70,403 | ||||
Accounts receivable, net | 85,685 | ||||
Inventories | 82,397 | ||||
Prepaid expenses and other current assets | 20,948 | ||||
Total current assets | 259,433 | ||||
Deferred income taxes | 35,350 | ||||
Other long-term assets | 199,950 | ||||
Total assets | 494,733 | ||||
Liabilities and shareholders’ equity | |||||
Total liabilities | 167,989 | ||||
Shareholders’ equity | |||||
Common shares | 1,902 | ||||
Additional paid-in capital | 271,019 | ||||
Retained earnings | 56,862 | ||||
Accumulated other comprehensive loss | (3,039) | ||||
Total shareholders’ equity | 326,744 | ||||
Total liabilities and shareholders’ equity | $ 494,733 | ||||
ASU 2016-13 [Member] | Impact of Adoption of ASC 326 [Member] | |||||
Current assets | |||||
Accounts receivable, net | (1,120) | ||||
Total current assets | (1,120) | ||||
Deferred income taxes | 233 | ||||
Total assets | (887) | ||||
Shareholders’ equity | |||||
Retained earnings | (887) | ||||
Total shareholders’ equity | (887) | ||||
Total liabilities and shareholders’ equity | $ (887) |
Revenue Recognition and Accou_7
Revenue Recognition and Accounts Receivable - Schedule of Allowance for Expected Credit Losses (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Revenue Recognition [Abstract] | |
Allowance for expected credit losses at December 31, 2019 | $ 3,987 |
Impact of adoption of ASU 2016-13 | 1,120 |
Current period provision for expected credit losses | 679 |
Writeoffs charged against the allowance and other | (114) |
Effect of changes in foreign exchange rates | (81) |
Allowance for expected credit losses at March 31, 2020 | $ 5,591 |
Business Segment Information -
Business Segment Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2020Segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 2 |
Business Segment Information _2
Business Segment Information - Summary of EBIDTA by Reporting Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Total EBITDA | $ 12,383 | $ 875 |
Depreciation and amortization | (6,327) | (5,727) |
Interest expense, net | (423) | (257) |
Income (loss) before income taxes | 5,633 | (5,109) |
Operating Segments [Member] | Global Spine [Member] | ||
Segment Reporting Information [Line Items] | ||
Total EBITDA | 22,417 | 10,575 |
Operating Segments [Member] | Global Extremities [Member] | ||
Segment Reporting Information [Line Items] | ||
Total EBITDA | (1,894) | (173) |
Corporate, Non-Segment [Member] | ||
Segment Reporting Information [Line Items] | ||
Total EBITDA | $ (8,140) | $ (9,527) |
Business Segment Information _3
Business Segment Information - Summary of Net Sales by Geographic Destination for Each Reporting Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | $ 104,823 | $ 109,112 |
Global Spine [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 82,318 | 85,918 |
Global Extremities [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 22,505 | 23,194 |
U.S. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 83,149 | 86,124 |
U.S. [Member] | Global Spine [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 77,106 | 79,526 |
U.S. [Member] | Global Extremities [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 6,043 | 6,598 |
International [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 21,674 | 22,988 |
International [Member] | Global Spine [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | 5,212 | 6,392 |
International [Member] | Global Extremities [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net sales | $ 16,462 | $ 16,596 |
Acquisition-Related Amortizat_3
Acquisition-Related Amortization and Remeasurement - Components of Acquisition-Related Amortization and Remeasurement (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Acquisition Related Amortization And Remeasurement [Abstract] | ||
Changes in fair value of contingent consideration | $ (9,000) | $ 5,400 |
Amortization of acquired intangibles | 1,418 | 1,057 |
Total | $ (7,582) | $ 6,457 |
Share-based Compensation - Sche
Share-based Compensation - Schedule of Components of Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated share based compensation expense | $ 3,859 | $ 5,685 |
Stock options [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated share based compensation expense | 304 | 2,112 |
Time-based Restricted Stock Awards and Units [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated share based compensation expense | 2,421 | 1,706 |
Market-based Restricted Stock Units [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated share based compensation expense | 670 | 1,347 |
Stock purchase plan [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated share based compensation expense | 464 | 520 |
Cost of sales [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated share based compensation expense | 181 | 187 |
Sales and marketing [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated share based compensation expense | 696 | 610 |
General and administrative [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated share based compensation expense | 2,530 | 4,564 |
Research and development [Member] | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Allocated share based compensation expense | $ 452 | $ 324 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Shares issued under stock purchase plan, stock option exercises and restricted stock awards and units | 33,559 | 211,081 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Mar. 30, 2019 | |
Components Of Income Tax Expense Benefit [Line Items] | |||
Income tax effective rate | (355.60%) | 117.60% | |
CARES Act income tax expenses benefit | $ (3,000) | ||
Income tax (benefit) | (20,032) | $ (6,006) | |
Internal Revenue Service [Member] | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Income tax (benefit) | (17,800) | ||
Minimum [Member] | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Decrease in unrecognized tax benefits | 200 | ||
Maximum [Member] | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Decrease in unrecognized tax benefits | $ 700 |
Earnings Per Share ("EPS") - Sc
Earnings Per Share ("EPS") - Schedule of Reconciliation of Weighted Average Shares Used in Diluted EPS (Detail) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Earnings Per Share [Line Items] | ||
Weighted average common shares-basic | 19,143,934 | 18,750,184 |
Effect of dilutive securities | ||
Weighted average common shares-diluted | 19,299,820 | 19,191,146 |
Stock Options And Stock Purchase Plan [Member] | ||
Effect of dilutive securities | ||
Effect of diluted securities | 95,594 | 277,992 |
Restricted Stock Units [Member] | ||
Effect of dilutive securities | ||
Effect of diluted securities | 60,292 | 162,970 |
Earnings Per Share ("EPS") - Ad
Earnings Per Share ("EPS") - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Restricted Stock Units [Member] | Outstanding Stock Options [Member] | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Weighted average outstanding options, awards and units not included in diluted earnings per share | 1,168,410 | 484,421 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | |||
Apr. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 16, 2020 | |
Scenario Forecast [Member] | ||||
Subsequent Event [Line Items] | ||||
CARES Act of 2020 deferred taxes percentage | 50.00% | 50.00% | ||
Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
CARES Act of 2020 funds received | $ 13.9 | |||
Percentage of medicare payment received for prior three-months period | 100.00% | |||
Subsequent Event [Member] | Revolving Credit Facility [Member] | ||||
Subsequent Event [Line Items] | ||||
Amount outstanding under lines of credit | $ 100 | |||
Subsequent Event [Member] | U.S. Department of Health and Human Services [Member] | ||||
Subsequent Event [Line Items] | ||||
CARES Act of 2020 funds received | $ 4.7 |