Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 01, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
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 | 19,745,269 | |
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 | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 82,710 | $ 96,291 |
Restricted cash | 505 | 530 |
Accounts receivable, net of allowances of $4,928 and $4,848, respectively | 68,971 | 72,423 |
Inventories | 84,678 | 84,635 |
Prepaid expenses and other current assets | 23,348 | 16,500 |
Total current assets | 260,212 | 270,379 |
Property, plant, and equipment, net | 58,784 | 63,613 |
Intangible assets, net | 54,794 | 60,517 |
Goodwill | 83,357 | 84,018 |
Deferred income taxes | 22,745 | 25,042 |
Other long-term assets | 20,503 | 22,292 |
Total assets | 500,395 | 525,861 |
Current liabilities | ||
Accounts payable | 19,437 | 23,118 |
Current portion of finance lease liability | 2,570 | 510 |
Other current liabilities | 57,997 | 80,271 |
Total current liabilities | 80,004 | 103,899 |
Long-term portion of finance lease liability | 20,044 | 22,338 |
Other long-term liabilities | 35,514 | 42,760 |
Total liabilities | 135,562 | 168,997 |
Contingencies (Note 8) | ||
Shareholders’ equity | ||
Common shares $0.10 par value; 50,000,000 shares authorized; 19,741,410 and 19,423,874 issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 1,974 | 1,942 |
Additional paid-in capital | 307,783 | 292,291 |
Retained earnings | 53,812 | 59,379 |
Accumulated other comprehensive income | 1,264 | 3,252 |
Total shareholders’ equity | 364,833 | 356,864 |
Total liabilities and shareholders’ equity | $ 500,395 | $ 525,861 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement Of Financial Position [Abstract] | ||
Trade accounts receivable, allowance for doubtful accounts | $ 4,928 | $ 4,848 |
Common shares, par value | $ 0.10 | $ 0.10 |
Common shares, authorized | 50,000,000 | 50,000,000 |
Common shares, issued | 19,741,410 | 19,423,874 |
Common shares, outstanding | 19,741,410 | 19,423,874 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 112,428 | $ 110,985 | $ 339,415 | $ 288,943 |
Cost of sales | 28,307 | 26,243 | 81,660 | 72,818 |
Gross profit | 84,121 | 84,742 | 257,755 | 216,125 |
Sales and marketing | 56,097 | 52,926 | 164,220 | 150,718 |
General and administrative | 16,312 | 16,541 | 51,091 | 49,453 |
Research and development | 12,360 | 9,962 | 36,378 | 28,691 |
Acquisition-related amortization and remeasurement (Note 12) | (335) | 1,138 | 5,028 | (2,766) |
Operating income (loss) | (313) | 4,175 | 1,038 | (9,971) |
Interest expense, net | (433) | (731) | (1,400) | (2,055) |
Other income (expense), net | (1,789) | 1,817 | (3,528) | 6,088 |
Income (loss) before income taxes | (2,535) | 5,261 | (3,890) | (5,938) |
Income tax benefit (expense) | 364 | (607) | (1,677) | 17,833 |
Net income (loss) | $ (2,171) | $ 4,654 | $ (5,567) | $ 11,895 |
Net income (loss) per common share: | ||||
Basic | $ (0.11) | $ 0.24 | $ (0.28) | $ 0.62 |
Diluted | $ (0.11) | $ 0.24 | $ (0.28) | $ 0.61 |
Weighted average number of common shares: | ||||
Basic | 19,769,823 | 19,335,718 | 19,633,782 | 19,217,057 |
Diluted | 19,769,823 | 19,398,567 | 19,633,782 | 19,319,302 |
Other comprehensive income (loss), before tax | ||||
Unrealized gain (loss) on debt securities | $ 513 | $ (115) | ||
Currency translation adjustment | (719) | $ 2,275 | (1,901) | $ 2,048 |
Other comprehensive income (loss), before tax | (206) | 2,275 | (2,016) | 2,048 |
Income tax benefit (expense) related to other comprehensive income (loss) | (128) | 28 | ||
Other comprehensive income (loss), net of tax | (334) | 2,275 | (1,988) | 2,048 |
Comprehensive income (loss) | $ (2,505) | $ 6,929 | $ (7,555) | $ 13,943 |
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, 2019 | $ 327,631 | $ 1,902 | $ 271,019 | $ 57,749 | $ (3,039) |
Balance, Shares at Dec. 31, 2019 | 19,022,619 | ||||
Cumulative effect adjustment from adoption | ASU 2016-13 [Member] | (887) | (887) | |||
Net income (loss) | 25,665 | 25,665 | |||
Other comprehensive income (loss), net of tax | (1,711) | (1,711) | |||
Share-based compensation expense | 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 | ||||
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 | ||||
Net income (loss) | 11,895 | ||||
Other comprehensive income (loss), net of tax | 2,048 | ||||
Ending Balance at Sep. 30, 2020 | 354,896 | $ 1,927 | 285,203 | 68,757 | (991) |
Balance, Shares at Sep. 30, 2020 | 19,267,420 | ||||
Beginning Balance at Mar. 31, 2020 | 355,369 | $ 1,906 | 275,686 | 82,527 | (4,750) |
Balance, Shares at Mar. 31, 2020 | 19,056,178 | ||||
Net income (loss) | (18,424) | (18,424) | |||
Other comprehensive income (loss), net of tax | 1,484 | 1,484 | |||
Share-based compensation expense | 4,699 | 4,699 | |||
Common shares issued, net | 1,917 | $ 15 | 1,902 | ||
Common shares issued, net, Shares | 152,885 | ||||
Ending Balance at Jun. 30, 2020 | 345,045 | $ 1,921 | 282,287 | 64,103 | (3,266) |
Balance, Shares at Jun. 30, 2020 | 19,209,063 | ||||
Net income (loss) | 4,654 | 4,654 | |||
Other comprehensive income (loss), net of tax | 2,275 | 2,275 | |||
Share-based compensation expense | 3,841 | 3,841 | |||
Common shares issued, net | (919) | $ 6 | (925) | ||
Common shares issued, net, Shares | 58,357 | ||||
Ending Balance at Sep. 30, 2020 | 354,896 | $ 1,927 | 285,203 | 68,757 | (991) |
Balance, Shares at Sep. 30, 2020 | 19,267,420 | ||||
Beginning Balance at Dec. 31, 2020 | $ 356,864 | $ 1,942 | 292,291 | 59,379 | 3,252 |
Balance, Shares at Dec. 31, 2020 | 19,423,874 | 19,423,874 | |||
Net income (loss) | $ (5,816) | (5,816) | |||
Other comprehensive income (loss), net of tax | (1,573) | (1,573) | |||
Share-based compensation expense | 3,721 | 3,721 | |||
Common shares issued, net | 1,622 | $ 5 | 1,617 | ||
Common shares issued, net, Shares | 50,510 | ||||
Ending Balance at Mar. 31, 2021 | 354,818 | $ 1,947 | 297,629 | 53,563 | 1,679 |
Balance, Shares at Mar. 31, 2021 | 19,474,384 | ||||
Beginning Balance at Dec. 31, 2020 | $ 356,864 | $ 1,942 | 292,291 | 59,379 | 3,252 |
Balance, Shares at Dec. 31, 2020 | 19,423,874 | 19,423,874 | |||
Net income (loss) | $ (5,567) | ||||
Other comprehensive income (loss), net of tax | (1,988) | ||||
Ending Balance at Sep. 30, 2021 | $ 364,833 | $ 1,974 | 307,783 | 53,812 | 1,264 |
Balance, Shares at Sep. 30, 2021 | 19,741,410 | 19,741,410 | |||
Beginning Balance at Mar. 31, 2021 | $ 354,818 | $ 1,947 | 297,629 | 53,563 | 1,679 |
Balance, Shares at Mar. 31, 2021 | 19,474,384 | ||||
Net income (loss) | 2,420 | 2,420 | |||
Other comprehensive income (loss), net of tax | (81) | (81) | |||
Share-based compensation expense | 3,907 | 3,907 | |||
Common shares issued, net | 1,220 | $ 20 | 1,200 | ||
Common shares issued, net, Shares | 194,745 | ||||
Ending Balance at Jun. 30, 2021 | 362,284 | $ 1,967 | 302,736 | 55,983 | 1,598 |
Balance, Shares at Jun. 30, 2021 | 19,669,129 | ||||
Net income (loss) | (2,171) | (2,171) | |||
Other comprehensive income (loss), net of tax | (334) | (334) | |||
Share-based compensation expense | 3,842 | 3,842 | |||
Common shares issued, net | 1,212 | $ 7 | 1,205 | ||
Common shares issued, net, Shares | 72,281 | ||||
Ending Balance at Sep. 30, 2021 | $ 364,833 | $ 1,974 | $ 307,783 | $ 53,812 | $ 1,264 |
Balance, Shares at Sep. 30, 2021 | 19,741,410 | 19,741,410 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities | ||
Net income (loss) | $ (5,567) | $ 11,895 |
Adjustments to reconcile net income (loss) to net cash from operating activities | ||
Depreciation and amortization | 22,153 | 22,299 |
Amortization of operating lease assets, debt costs, and other assets | 2,645 | 2,811 |
Provision for expected credit losses | 376 | 945 |
Deferred income taxes | 2,228 | (2,471) |
Share-based compensation expense | 11,470 | 12,399 |
Interest and (gain) loss on valuation of investment securities | (305) | 219 |
Change in fair value of contingent consideration | (2,375) | (7,600) |
Other | 743 | (1,798) |
Changes in operating assets and liabilities, net of effects of acquisitions | ||
Accounts receivable | 2,729 | 11,551 |
Inventories | (866) | 246 |
Prepaid expenses and other current assets | (6,987) | 2,453 |
Accounts payable | (2,983) | (3,106) |
Other current liabilities | (3,951) | 5,742 |
Contract liability (Note 10) | (5,951) | 13,851 |
Payment of contingent consideration | (6,595) | |
Other long-term assets and liabilities | (68) | (17,455) |
Net cash from operating activities | 6,696 | 51,981 |
Cash flows from investing activities | ||
Acquisition of a business | (18,000) | |
Capital expenditures for property, plant and equipment | (11,560) | (11,625) |
Capital expenditures for intangible assets | (1,221) | (1,079) |
Purchase of investment securities | (5,000) | |
Asset acquisitions and other investments | (1,250) | (7,240) |
Net cash from investing activities | (14,031) | (42,944) |
Cash flows from financing activities | ||
Proceeds from revolving credit facility | 100,000 | |
Repayment of revolving credit facility | (100,000) | |
Proceeds from issuance of common shares | 6,238 | 3,839 |
Payments related to withholdings for share-based compensation | (2,184) | (2,029) |
Payments related to finance lease obligation | (395) | (204) |
Payment of contingent consideration | (8,405) | |
Other financing activities | (927) | (1,023) |
Net cash from financing activities | (5,673) | 583 |
Effect of exchange rate changes on cash | (598) | 277 |
Net change in cash, cash equivalents, and restricted cash | (13,606) | 9,897 |
Cash, cash equivalents, and restricted cash at the beginning of period | 96,821 | 70,403 |
Cash, cash equivalents, and restricted cash at the end of period | 83,215 | 80,300 |
Components of cash, cash equivalents, and restricted cash at the end of period | ||
Cash and cash equivalents | 82,710 | 79,810 |
Restricted cash | 505 | 490 |
Cash, cash equivalents, and restricted cash at the end of period | $ 83,215 | 80,300 |
Noncash investing activities - Purchase of intangible assets | $ 1,575 |
Business, basis of presentation
Business, basis of presentation, and CARES Act | 9 Months Ended |
Sep. 30, 2021 | |
Organization Consolidation And Presentation Of Financial Statements And Unusual Or Infrequent Items Disclosure [Abstract] | |
Business, basis of presentation, and CARES Act | 1. Business, basis of presentation, and CARES Act Description of the Business Orthofix Medical Inc. and its subsidiaries (the “Company”) is a global medical device company with a spine and orthopedics focus. The Company’s mission is to deliver innovative, quality-driven solutions while partnering with health care professionals to improve patient mobility. Headquartered in Lewisville, Texas, Orthofix’s spine and orthopedic products are distributed in more than 60 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, 2020. 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; allowances 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. Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) The global Coronavirus Disease 2019 ("COVID-19") pandemic has significantly affected the Company’s hospital and physician customers, patients, communities, employees, and business operations. The pandemic has led to the cancellation or deferral of elective surgeries and procedures within certain hospitals, ambulatory surgery centers, and other medical facilities; restrictions on travel; the implementation of physical distancing measures; and the temporary or permanent closure of certain businesses. In March 2020, the CARES Act entered into federal law, which was aimed at providing emergency assistance and health care for individuals, families, and businesses affected by the COVID-19 pandemic and to provide general support to the U.S. economy. In April 2020, the Company received $13.9 million in funds from the Centers for Medicare & Medicaid Services (“CMS”) Accelerated and Advance Payment Program. For discussion of the Company’s accounting for these funds, see Note 10. In addition, as part of the CARES Act, the Company was permitted to defer all employer social security payroll tax payments through December 31, 2020, such that 50% of the payroll taxes would be deferred until December 31, 2021, with the remaining 50% deferred until December 31, 2022. As of December 31, 2020, the Company had deferred $0.6 million in social security payroll tax payments under this program. All of these deferred tax payments were then repaid in January 2021. As of September 30, 2021, the Company has no deferred balance associated with this program. Consolidated Appropriations Act of 2021 (the “Consolidated Appropriations Act”) On December 27, 2020, the Consolidated Appropriations Act entered into federal law. The Consolidated Appropriations Act did not have a material impact to the Company’s income tax provision for the three and nine months ended September 30, 2021. American Rescue Plan Act of 2021 (the “American Rescue Plan”) On March 11, 2021, the American Rescue Plan entered into federal law. The American Rescue Plan, among other things, included provisions related to the deduction of executive compensation beginning in 2027. The American Rescue Plan had no impact to the Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2021. |
Recently adopted accounting sta
Recently adopted accounting standards and recently issued accounting pronouncements | 9 Months Ended |
Sep. 30, 2021 | |
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”) 2019-12, Simplifying the accounting for income taxes In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU 2019-12, which reduces the complexity of accounting for income taxes by eliminating certain exceptions to the general principles in ASC 740, Income Taxes |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | 3. Acquisitions On February 2, 2021, the Company entered into a technology assignment and royalty agreement with a medical device technology company partially owned and controlled by the wife of President and Chief Executive Officer, Jon Serbousek, whereby the Company acquired the intellectual property rights to certain assets for consideration of up to $10.0 million. Consideration was comprised of $1.0 million due at signing and $9.0 million in contingent consideration, dependent upon multiple milestones, such as receipt of 510(k) clearance and the attainment of certain net sales targets. The Company accounted for this transaction as an asset acquisition. As the transaction is classified as an asset acquisition, the value of the consideration associated with the contingent milestones will be recognized at the time that applicable contingencies are resolved and consideration is paid or becomes payable. The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the acquisition date: (U.S. Dollars, in thousands) Fair Value Fair Value of Consideration Transferred Cash paid $ 1,000 Total fair value of consideration transferred $ 1,000 Fair value of assets acquired In-process research and development costs, recognized within Acquisition-related amortization and remeasurement $ 1,000 Total fair value of assets acquired $ 1,000 In addition, the Company is obligated to pay a royalty of 2% to 4% on net sales, commencing upon commercialization of the acquired assets. The transaction was approved by the Company’s Audit and Finance Committee, with the Audit and Finance Committee directly supervising the negotiations of the transaction. Mr. Serbousek was excluded from such discussions and did not participate in the negotiation or evaluation of the transaction. Mr. Serbousek also continues to be excluded from the oversight of the Company’s development and commercialization activities in relation to the acquired technology and all other matters relating to the relationship between the Company and the counterparty. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories Inventories were as follows: (U.S. Dollars, in thousands) September 30, 2021 December 31, 2020 Raw materials $ 7,992 $ 8,442 Work-in-process 14,977 12,149 Finished products 17,164 29,142 Field/consignment 44,545 34,902 Inventories $ 84,678 $ 84,635 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Leases | 5. Leases A summary of the Company’s lease portfolio as of September 30, 2021 and December 31, 2020 is presented in the table below: (U.S. Dollars, in thousands) Classification September 30, 2021 December 31, 2020 Right-of-use assets ("ROU assets") Operating leases Other long-term assets $ 3,571 $ 4,840 Finance leases Property, plant and equipment, net 19,114 20,552 Total ROU assets $ 22,685 $ 25,392 Lease Liabilities Current Operating leases Other current liabilities $ 2,002 $ 2,092 Finance leases Current portion of finance lease liability 2,570 510 Long-term Operating leases Other long-term liabilities 1,713 2,946 Finance leases Long-term portion of finance lease liability 20,044 22,338 Total lease liabilities $ 26,329 $ 27,886 Supplemental cash flow information related to leases was as follows: (U.S. Dollars, in thousands) Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 3,469 $ 3,170 Operating cash flows from finance leases 680 458 Financing cash flows from finance leases 395 204 ROU assets obtained in exchange for lease obligations Operating leases 460 619 Finance leases 149 1,949 |
Long-term debt
Long-term debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Long-term debt | 6. Long-term debt As of September 30, 2021, the Company had no borrowings outstanding under the secured revolving credit facility and was in compliance with all required financial covenants. In addition, the Company had no borrowings on its €5.5 million ($6.4 million) available lines of credit in Italy as of September 30, 2021. |
Fair value measurements and inv
Fair value measurements and investments | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Measurements And Investment Disclosure [Abstract] | |
Fair value measurements and investments | 7. Fair value measurements and investments The fair value measurements of the Company’s financial assets and liabilities measured on a recurring basis were as follows: September 30, 2021 December 31, 2020 (U.S. Dollars, in thousands) Level 1 Level 2 Level 3 Total Total Assets Neo Medical preferred equity securities $ — $ 5,000 $ — $ 5,000 $ 5,000 Neo Medical convertible loan agreement — — 7,080 7,080 7,160 Bone Biologics equity securities — — — — — Total $ — $ 5,000 $ 7,080 $ 12,080 $ 12,160 Liabilities Spinal Kinetics contingent consideration $ — $ — $ (18,400 ) $ (18,400 ) $ (35,400 ) Other contingent consideration — — — — (375 ) Deferred compensation plan — (1,405 ) — (1,405 ) (1,441 ) Total $ — $ (1,405 ) $ (18,400 ) $ (19,805 ) $ (37,216 ) Neo Medical Equity Investment and Convertible Loan Agreement On October 1, 2020, the Company purchased preferred shares of Neo Medical SA, a privately held Swiss-based Medtech company (“Neo Medical”), for consideration of $5.0 million and entered into a Convertible Loan Agreement pursuant to which Orthofix loaned Neo Medical CHF 4.6 million (the “Convertible Loan”). The equity securities are recorded in other long-term assets and are considered an investment that does not have a readily determinable fair value. As such, the Company measures this investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer. As of September 30, 2021, the carrying value of this investment remained at $5.0 million. The Convertible Loan matures on October 1, 2024; however, if a change in control of Neo Medical occurs prior to the maturity date, the Convertible Loan shall become immediately due upon such event. The Convertible Loan is recorded in other long-term assets as an available for sale debt security at fair value, with applicable interest recorded in interest income. Some of the more significant unobservable inputs used in the fair value measurement of the Convertible Loan include applicable discount rates, implied volatility, the likelihood and projected timing of repayment or conversion, the probability and amount of subsequent capital raises by Neo Medical in order to fund the business, and projected cash flows in support of the estimated enterprise value of Neo Medical. Holding other inputs constant, changes in these assumptions could result in a significant change in the fair value of the Convertible Loan. If the amortized cost of the Convertible Loan exceeds its estimated fair value, the security is deemed to be impaired, and must be evaluated for the recognition of credit losses. As of September 30, 2021, the Company has not recognized any credit losses related to the Convertible Loan. The following table provides a reconciliation of the beginning and ending balances of the Convertible Loan, measured at fair value using significant unobservable inputs (Level 3): (U.S. Dollars, in thousands) 2021 2020 Fair value of Neo Medical Convertible Loan at January 1 $ 7,160 $ — Interest recognized in interest income, net 305 — Foreign currency remeasurement recognized in other expense, net (270 ) — Unrealized loss recognized in other comprehensive income (loss) (115 ) — Fair value of Neo Medical Convertible Loan at September 30 7,080 — Amortized cost basis of Neo Medical Convertible Loan at September 30 5,314 — The following table provides quantitative information related to certain key assumptions utilized within the valuation as of September 30, 2021: (U.S. Dollars, in thousands) Fair Value as of September 30, 2021 Unobservable inputs Estimate Neo Medical Convertible Loan $ 7,080 Cost of equity discount rate 21.6 % Implied volatility 90.4 % Contingent Consideration The Company recognized a contingent consideration obligation in connection with the acquisition of Spinal Kinetics in 2018. The Spinal Kinetics contingent consideration consisted of potential future milestone payments of up to $60.0 million in cash. The milestone payments included (i) $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. The FDA Milestone was achieved and paid in 2019. A second milestone payment, totaling $15.0 million, was achieved in the first quarter of 2021 and paid in the second quarter of 2021 upon meeting certain net sales targets. The estimated fair value of the remaining Spinal Kinetics contingent consideration was $18.4 million as of September 30, 2021. The estimated fair value reflects assumptions made by management as of September 30, 2021, such as the expected timing and volume of elective procedures and the impact of these procedures on future revenues. However, the actual amount ultimately paid could be higher or lower than the fair value of the remaining contingent consideration (ultimate payment will either be $30.0 million or the liability will be reversed if the milestone is not met within the required timeline). As of September 30, 2021, the Company has classified the remaining contingent consideration liability within other long-term liabilities. Any changes in fair value are recorded as an operating expense within acquisition-related amortization and remeasurement. The following table provides a reconciliation of the beginning and ending balances for the Spinal Kinetics contingent consideration measured at estimated fair value using significant unobservable inputs (Level 3): (U.S. Dollars, in thousands) 2021 2020 Spinal Kinetics contingent consideration estimated fair value at January 1 $ 35,400 $ 42,700 Decrease in fair value recognized in acquisition-related amortization and remeasurement (2,000 ) (7,600 ) Payment made (15,000 ) — Spinal Kinetics contingent consideration estimated fair value at September 30 $ 18,400 $ 35,100 The Company estimated the fair value of the remaining potential future revenue-based milestone payment 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 September 30, 2021. (U.S. Dollars, in thousands) Fair Value as of September 30, 2021 Valuation Technique Unobservable inputs Range Spinal Kinetics contingent consideration $ 18,400 Discounted cash flow Revenue discount rate 6.5% - 6.7% Payment discount rate 3.9% - 4.0% Projected year of achievement 2022 |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments And Contingencies Disclosure [Abstract] | |
Contingencies | 8. 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. A key provision of the law is a ‘payback’ measure, requiring medical device companies 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 periodically reassesses this liability based upon current facts and circumstances. As a result, the Company recorded expense of $0.6 million and $1.1 million for the three and nine months ended September 30, 2021 and expense of $0.4 million and $1.1 million for the three and nine months ended September 30, 2020, respectively. As of September 30, 2021, the Company has accrued $7.7 million related to the IMDP, which it has classified within other long-term liabilities; however, the actual liability could be higher or lower than the amount accrued once the law has been clarified by the Italian authorities. Brazil In 2019, in relation to an ongoing legal dispute with a former Brazilian distributor, approximately $0.5 million (based upon foreign exchange rates as of September 30, 2021) 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 September 30, 2021, the Company has an accrual of $0.8 million related to this matter, which is classified within other current liabilities. |
Accumulated other comprehensive
Accumulated other comprehensive income (loss) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Accumulated other comprehensive income (loss) | 9. Accumulated other comprehensive income (loss) The components of and changes in accumulated other comprehensive income (loss) were as follows: (U.S. Dollars, in thousands) Currency Translation Adjustments Neo Medical Convertible Loan Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2020 $ 1,833 $ 1,419 $ 3,252 Other comprehensive loss (1,901 ) (115 ) (2,016 ) Income taxes — 28 28 Balance at September 30, 2021 $ (68 ) $ 1,332 $ 1,264 |
Revenue recognition and account
Revenue recognition and accounts receivable | 9 Months Ended |
Sep. 30, 2021 | |
Revenue Recognition And Accounts Receivable [Abstract] | |
Revenue recognition and accounts receivable | 10. Revenue recognition and accounts receivable Revenue Recognition The Company has two reporting segments, which consist of Global Spine and Global Orthopedics. 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 September 30, (U.S. Dollars, in thousands) 2021 2020 Change Bone Growth Therapies $ 45,168 $ 47,066 -4.0 % Spinal Implants 28,151 25,505 10.4 % Biologics 12,806 15,245 -16.0 % Global Spine 86,125 87,816 -1.9 % Global Orthopedics 26,303 23,169 13.5 % Net sales $ 112,428 $ 110,985 1.3 % Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 Change Bone Growth Therapies $ 137,821 $ 120,888 14.0 % Spinal Implants 83,943 67,025 25.2 % Biologics 41,351 40,319 2.6 % Global Spine 263,115 228,232 15.3 % Global Orthopedics 76,300 60,711 25.7 % Net sales $ 339,415 $ 288,943 17.5 % 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 September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Product sales $ 100,004 $ 96,305 $ 299,214 $ 250,161 Marketing service fees 12,424 14,680 40,201 38,782 Net sales $ 112,428 $ 110,985 $ 339,415 $ 288,943 Product sales primarily consist of the sale of bone growth therapies devices, motion preservation products, spine fixation products, and orthopedics 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. Accounts receivable and related allowances The following table provides a detail of changes in the Company’s allowance for expected credit losses for the three and nine months ended September 30, 2021 and 2020: (U.S. Dollars, in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Allowance for expected credit losses beginning balance $ 4,471 $ 6,364 $ 4,848 $ 3,987 Impact of adoption of ASU 2016-13 — — — 1,120 Current period provision (recovery) for expected credit losses 590 (619 ) 376 945 Write-offs charged against the allowance and other (54 ) (309 ) (134 ) (647 ) Effect of changes in foreign exchange rates (79 ) 88 (162 ) 119 Allowance for expected credit losses ending balance $ 4,928 $ 5,524 $ 4,928 $ 5,524 Contract Liabilities The Company’s contract liabilities largely relate to a prepayment of $13.9 million received in April 2020 from the CMS as part of the Accelerated and Advance Payment Program of the CARES Act. In October 2020, the President of the United States signed the “Continuing Appropriations Act, 2021 and Other Extensions Act,” which relaxed a number of the Medicare Accelerated and Advance Payment Programs recoupment terms for providers and suppliers that received funds from the program. Starting in April 2021, Medicare began to recoup 25% of Medicare payments otherwise owed to the provider or supplier for submitted claims. After 11 months, recoupment will increase to 50% for another 6 months. Thus, during these time periods, rather than receiving the full amount of payment for newly submitted claims, the Company’s outstanding accelerated / advance payment balance will be reduced by the recoupment amount until the full balance has been repaid. As of September 30, 2021, the balance of the contract liability associated with the Accelerated and Advance Payment Program of the CARES Act totaled $7.9 million. The Company has classified the entire balance of this contract liability within other current liabilities based upon the Company’s estimates of when such funds will be recouped. The following table provides a detail of changes in the Company’s contract liability associated with the Accelerated and Advanced Payment Program for the three and nine months ended September 30, 2021 and 2020: (U.S. Dollars, in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Contract liability beginning balance $ 10,971 $ 13,851 $ 13,851 $ — Additions — — — 13,851 Recoupment recognized in net sales (3,071 ) — (5,951 ) — Contract liability ending balance $ 7,900 $ 13,851 $ 7,900 $ 13,851 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 $1.7 million and $2.0 million as of September 30, 2021 and December 31, 2020, respectively. |
Business segment information
Business segment information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Business segment information | 11. Business segment information The Company has two reporting segments: Global Spine and Global Orthopedics. The primary metric used in managing the Company is earnings before interest, tax, depreciation, and amortization (“EBITDA”). Corporate activities are comprised of operating expenses and activities not directly 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 September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Global Spine $ 13,908 $ 19,960 $ 44,835 $ 38,670 Global Orthopedics (196 ) 1,258 (650 ) (3,995 ) Corporate (8,663 ) (6,196 ) (24,522 ) (16,259 ) Total EBITDA $ 5,049 $ 15,022 $ 19,663 $ 18,416 Depreciation and amortization (7,151 ) (9,030 ) (22,153 ) (22,299 ) Interest expense, net (433 ) (731 ) (1,400 ) (2,055 ) Income (loss) before income taxes $ (2,535 ) $ 5,261 $ (3,890 ) $ (5,938 ) Geographical information The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company: Three Months Ended September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Global Spine U.S. $ 79,983 $ 83,477 $ 246,815 $ 215,819 International 6,142 4,339 16,300 12,413 Total Global Spine 86,125 87,816 263,115 228,232 Global Orthopedics U.S. 6,010 6,356 17,757 16,439 International 20,293 16,813 58,543 44,272 Total Global Orthopedics 26,303 23,169 76,300 60,711 Consolidated U.S. 85,993 89,833 264,572 232,258 International 26,435 21,152 74,843 56,685 Net sales $ 112,428 $ 110,985 $ 339,415 $ 288,943 |
Acquisition-Related Amortizatio
Acquisition-Related Amortization and Remeasurement | 9 Months Ended |
Sep. 30, 2021 | |
Acquisition Related Amortization And Remeasurement [Abstract] | |
Acquisition-Related Amortization and Remeasurement | 12. Acquisition-related amortization and remeasurement Acquisition-related amortization and remeasurement consists of (i) amortization related to intangible assets acquired through business combinations or asset acquisitions, (ii) the remeasurement of any related contingent consideration arrangements, and (iii) recognized costs associated with acquired in-process research and development (“IPR&D”) assets, which are recognized immediately upon acquisition. Components of acquisition-related amortization and remeasurement are as follows: Three Months Ended September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Changes in fair value of contingent consideration $ (2,300 ) $ (700 ) $ (2,375 ) $ (7,600 ) Amortization of acquired intangibles 1,965 1,838 5,903 4,834 Acquired IPR&D — — 1,500 — Total $ (335 ) $ 1,138 $ 5,028 $ (2,766 ) On April 7, 2021, the Company entered into an Exclusive License and Distribution Agreement (the “License Agreement”) with IGEA S.p.A (“IGEA”), an Italian manufacturer and distributor of bone and cartilage stimulation systems. As consideration for the License Agreement, the Company agreed to pay up to $4.0 million, with certain payments contingent upon reaching an FDA milestone. Of this amount, $0.5 million was paid in the second quarter of 2021, which was recognized as acquired IPR&D costs within acquisition-related amortization and remeasurement. The License Agreement also includes certain minimum purchase requirements. |
Share-based compensation
Share-based compensation | 9 Months Ended |
Sep. 30, 2021 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Share-based compensation | 13. Share-based compensation Components of share-based compensation expense are as follows: Three Months Ended September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Cost of sales $ 200 $ 149 $ 587 $ 535 Sales and marketing 831 668 2,505 2,897 General and administrative 2,531 2,770 7,667 7,939 Research and development 280 254 711 1,028 Total $ 3,842 $ 3,841 $ 11,470 $ 12,399 Three Months Ended September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Stock options $ 382 $ 786 $ 1,441 $ 1,840 Time-based restricted stock awards and units 1,819 1,632 5,565 6,804 Market-based restricted stock units 1,212 1,049 3,162 2,529 Stock purchase plan 429 374 1,302 1,226 Total $ 3,842 $ 3,841 $ 11,470 $ 12,399 During the three months ended September 30, 2021 and 2020, the Company issued 72,281 and 58,357 shares, respectively, of common stock related to stock purchase plan issuances, stock option exercises, and the vesting of restricted stock awards and units. During the nine months ended September 30, 2021 and 2020, the Company issued 317,536 and 244,801 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 | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 14. Income taxes Generally, income tax provisions for interim periods are based on an estimated annual income tax rate, adjusted for discrete tax items, with any changes affecting the estimated annual effective tax rate recorded in the interim period in which the change occurs, including discrete items. Due to the impact of losses not benefited by the Company’s European manufacturing subsidiary and certain non-deductible financial statement expenses, the Company determined the estimated annual effective tax rate method would not provide a reliable estimate of the Company’s overall annual effective tax rate. As such, the Company has calculated the tax provision using the actual effective rate for the three and nine months ended September 30, 2021. For the three months ended September 30, 2021 and 2020, the effective tax rate was 14.4% and 11.5%, respectively. For the nine months ended September 30, 2021 and 2020, the effective tax rate was (43.1%) and 300.3%. The primary factors affecting the Company’s effective tax rate for the three and nine months ended September 30, 2021, were certain losses not benefited, the remeasurement of contingent consideration ( During the first quarter, the Company received a favorable ruling related to certain previously unrecognized tax benefits, which resulted in the recognition of a net benefit of $0.3 million for the nine months ended September 30, 2021. 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 $1.0 million to $1.5 million as audits close and statutes expire. |
Earnings per share ("EPS")
Earnings per share ("EPS") | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings per share ("EPS") | 15. 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 and nine months ended September 30, 2021, 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 September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Weighted average common shares-basic 19,769,823 19,335,718 19,633,782 19,217,057 Effect of dilutive securities Unexercised stock options and stock purchase plan — 10,607 — 41,701 Unvested restricted stock awards and units — 52,242 — 60,544 Weighted average common shares-diluted 19,769,823 19,398,567 19,633,782 19,319,302 There were 2,055,405 and 1,771,113 weighted average outstanding stock options and restricted stock awards and units not included in the diluted EPS computation for the three months ended September 30, 2021 and 2020, respectively, and 1,626,804 and 1,527,735 weighted average outstanding stock options and restricted stock awards and units not included in the diluted EPS computation for the nine months ended September 30, 2021 and 2020, 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. |
Recently adopted accounting s_2
Recently adopted accounting standards and recently issued accounting pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Changes And Error Corrections [Abstract] | |
Recently adopted accounting standards and recently issued accounting pronouncements | Adoption of Accounting Standards Update (“ASU”) 2019-12, Simplifying the accounting for income taxes Income Taxes |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combinations [Abstract] | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the acquisition date: (U.S. Dollars, in thousands) Fair Value Fair Value of Consideration Transferred Cash paid $ 1,000 Total fair value of consideration transferred $ 1,000 Fair value of assets acquired In-process research and development costs, recognized within Acquisition-related amortization and remeasurement $ 1,000 Total fair value of assets acquired $ 1,000 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories were as follows: (U.S. Dollars, in thousands) September 30, 2021 December 31, 2020 Raw materials $ 7,992 $ 8,442 Work-in-process 14,977 12,149 Finished products 17,164 29,142 Field/consignment 44,545 34,902 Inventories $ 84,678 $ 84,635 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Leases [Abstract] | |
Summary of Lease Portfolio | A summary of the Company’s lease portfolio as of September 30, 2021 and December 31, 2020 is presented in the table below: (U.S. Dollars, in thousands) Classification September 30, 2021 December 31, 2020 Right-of-use assets ("ROU assets") Operating leases Other long-term assets $ 3,571 $ 4,840 Finance leases Property, plant and equipment, net 19,114 20,552 Total ROU assets $ 22,685 $ 25,392 Lease Liabilities Current Operating leases Other current liabilities $ 2,002 $ 2,092 Finance leases Current portion of finance lease liability 2,570 510 Long-term Operating leases Other long-term liabilities 1,713 2,946 Finance leases Long-term portion of finance lease liability 20,044 22,338 Total lease liabilities $ 26,329 $ 27,886 |
Summary of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: (U.S. Dollars, in thousands) Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 3,469 $ 3,170 Operating cash flows from finance leases 680 458 Financing cash flows from finance leases 395 204 ROU assets obtained in exchange for lease obligations Operating leases 460 619 Finance leases 149 1,949 |
Fair value measurements and i_2
Fair value measurements and investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Measurements And Investment Disclosure [Abstract] | |
Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis | The fair value measurements of the Company’s financial assets and liabilities measured on a recurring basis were as follows: September 30, 2021 December 31, 2020 (U.S. Dollars, in thousands) Level 1 Level 2 Level 3 Total Total Assets Neo Medical preferred equity securities $ — $ 5,000 $ — $ 5,000 $ 5,000 Neo Medical convertible loan agreement — — 7,080 7,080 7,160 Bone Biologics equity securities — — — — — Total $ — $ 5,000 $ 7,080 $ 12,080 $ 12,160 Liabilities Spinal Kinetics contingent consideration $ — $ — $ (18,400 ) $ (18,400 ) $ (35,400 ) Other contingent consideration — — — — (375 ) Deferred compensation plan — (1,405 ) — (1,405 ) (1,441 ) Total $ — $ (1,405 ) $ (18,400 ) $ (19,805 ) $ (37,216 ) |
Schedule of Reconciliation For Convertible Loan Measured At Fair Value Using Significant Unobservable Inputs | The following table provides a reconciliation of the beginning and ending balances of the Convertible Loan, measured at fair value using significant unobservable inputs (Level 3): (U.S. Dollars, in thousands) 2021 2020 Fair value of Neo Medical Convertible Loan at January 1 $ 7,160 $ — Interest recognized in interest income, net 305 — Foreign currency remeasurement recognized in other expense, net (270 ) — Unrealized loss recognized in other comprehensive income (loss) (115 ) — Fair value of Neo Medical Convertible Loan at September 30 7,080 — Amortized cost basis of Neo Medical Convertible Loan at September 30 5,314 — |
Schedule of Changes in Valuation of Securities | The following table provides quantitative information related to certain key assumptions utilized within the valuation as of September 30, 2021: (U.S. Dollars, in thousands) Fair Value as of September 30, 2021 Unobservable inputs Estimate Neo Medical Convertible Loan $ 7,080 Cost of equity discount rate 21.6 % Implied volatility 90.4 % The following table provides a range of key assumptions used within the valuation as of September 30, 2021. (U.S. Dollars, in thousands) Fair Value as of September 30, 2021 Valuation Technique Unobservable inputs Range Spinal Kinetics contingent consideration $ 18,400 Discounted cash flow Revenue discount rate 6.5% - 6.7% Payment discount rate 3.9% - 4.0% Projected year of achievement 2022 |
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 Spinal Kinetics contingent consideration measured at estimated fair value using significant unobservable inputs (Level 3): (U.S. Dollars, in thousands) 2021 2020 Spinal Kinetics contingent consideration estimated fair value at January 1 $ 35,400 $ 42,700 Decrease in fair value recognized in acquisition-related amortization and remeasurement (2,000 ) (7,600 ) Payment made (15,000 ) — Spinal Kinetics contingent consideration estimated fair value at September 30 $ 18,400 $ 35,100 |
Accumulated other comprehensi_2
Accumulated other comprehensive income (loss) (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Components of Changes in Accumulated Other Comprehensive Income (Loss) | The components of and changes in accumulated other comprehensive income (loss) were as follows: (U.S. Dollars, in thousands) Currency Translation Adjustments Neo Medical Convertible Loan Accumulated Other Comprehensive Income (Loss) Balance at December 31, 2020 $ 1,833 $ 1,419 $ 3,252 Other comprehensive loss (1,901 ) (115 ) (2,016 ) Income taxes — 28 28 Balance at September 30, 2021 $ (68 ) $ 1,332 $ 1,264 |
Revenue recognition and accou_2
Revenue recognition and accounts receivable (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue Recognition And Accounts Receivable [Abstract] | |
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 September 30, (U.S. Dollars, in thousands) 2021 2020 Change Bone Growth Therapies $ 45,168 $ 47,066 -4.0 % Spinal Implants 28,151 25,505 10.4 % Biologics 12,806 15,245 -16.0 % Global Spine 86,125 87,816 -1.9 % Global Orthopedics 26,303 23,169 13.5 % Net sales $ 112,428 $ 110,985 1.3 % Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 Change Bone Growth Therapies $ 137,821 $ 120,888 14.0 % Spinal Implants 83,943 67,025 25.2 % Biologics 41,351 40,319 2.6 % Global Spine 263,115 228,232 15.3 % Global Orthopedics 76,300 60,711 25.7 % Net sales $ 339,415 $ 288,943 17.5 % |
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 September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Product sales $ 100,004 $ 96,305 $ 299,214 $ 250,161 Marketing service fees 12,424 14,680 40,201 38,782 Net sales $ 112,428 $ 110,985 $ 339,415 $ 288,943 |
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 and nine months ended September 30, 2021 and 2020: (U.S. Dollars, in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Allowance for expected credit losses beginning balance $ 4,471 $ 6,364 $ 4,848 $ 3,987 Impact of adoption of ASU 2016-13 — — — 1,120 Current period provision (recovery) for expected credit losses 590 (619 ) 376 945 Write-offs charged against the allowance and other (54 ) (309 ) (134 ) (647 ) Effect of changes in foreign exchange rates (79 ) 88 (162 ) 119 Allowance for expected credit losses ending balance $ 4,928 $ 5,524 $ 4,928 $ 5,524 |
Schedule of Changes in Contract Liability | (U.S. Dollars, in thousands) Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Contract liability beginning balance $ 10,971 $ 13,851 $ 13,851 $ — Additions — — — 13,851 Recoupment recognized in net sales (3,071 ) — (5,951 ) — Contract liability ending balance $ 7,900 $ 13,851 $ 7,900 $ 13,851 Other Contract Assets |
Business segment information (T
Business segment information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of EBITDA by Reporting Segment | The table below presents EBITDA by reporting segment: Three Months Ended September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Global Spine $ 13,908 $ 19,960 $ 44,835 $ 38,670 Global Orthopedics (196 ) 1,258 (650 ) (3,995 ) Corporate (8,663 ) (6,196 ) (24,522 ) (16,259 ) Total EBITDA $ 5,049 $ 15,022 $ 19,663 $ 18,416 Depreciation and amortization (7,151 ) (9,030 ) (22,153 ) (22,299 ) Interest expense, net (433 ) (731 ) (1,400 ) (2,055 ) Income (loss) before income taxes $ (2,535 ) $ 5,261 $ (3,890 ) $ (5,938 ) |
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 September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Global Spine U.S. $ 79,983 $ 83,477 $ 246,815 $ 215,819 International 6,142 4,339 16,300 12,413 Total Global Spine 86,125 87,816 263,115 228,232 Global Orthopedics U.S. 6,010 6,356 17,757 16,439 International 20,293 16,813 58,543 44,272 Total Global Orthopedics 26,303 23,169 76,300 60,711 Consolidated U.S. 85,993 89,833 264,572 232,258 International 26,435 21,152 74,843 56,685 Net sales $ 112,428 $ 110,985 $ 339,415 $ 288,943 |
Acquisition-Related Amortizat_2
Acquisition-Related Amortization and Remeasurement (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Acquisition Related Amortization And Remeasurement [Abstract] | |
Schedule of Acquisition-Related Amortization and Remeasurement | Acquisition-related amortization and remeasurement consists of (i) amortization related to intangible assets acquired through business combinations or asset acquisitions, (ii) the remeasurement of any related contingent consideration arrangements, and (iii) recognized costs associated with acquired in-process research and development (“IPR&D”) assets, which are recognized immediately upon acquisition. Components of acquisition-related amortization and remeasurement are as follows: Three Months Ended September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Changes in fair value of contingent consideration $ (2,300 ) $ (700 ) $ (2,375 ) $ (7,600 ) Amortization of acquired intangibles 1,965 1,838 5,903 4,834 Acquired IPR&D — — 1,500 — Total $ (335 ) $ 1,138 $ 5,028 $ (2,766 ) |
Share-based compensation (Table
Share-based compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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 September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Cost of sales $ 200 $ 149 $ 587 $ 535 Sales and marketing 831 668 2,505 2,897 General and administrative 2,531 2,770 7,667 7,939 Research and development 280 254 711 1,028 Total $ 3,842 $ 3,841 $ 11,470 $ 12,399 Three Months Ended September 30, Nine Months Ended September 30, (U.S. Dollars, in thousands) 2021 2020 2021 2020 Stock options $ 382 $ 786 $ 1,441 $ 1,840 Time-based restricted stock awards and units 1,819 1,632 5,565 6,804 Market-based restricted stock units 1,212 1,049 3,162 2,529 Stock purchase plan 429 374 1,302 1,226 Total $ 3,842 $ 3,841 $ 11,470 $ 12,399 |
Earnings per share ("EPS") (Tab
Earnings per share ("EPS") (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
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 September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Weighted average common shares-basic 19,769,823 19,335,718 19,633,782 19,217,057 Effect of dilutive securities Unexercised stock options and stock purchase plan — 10,607 — 41,701 Unvested restricted stock awards and units — 52,242 — 60,544 Weighted average common shares-diluted 19,769,823 19,398,567 19,633,782 19,319,302 |
Business, basis of presentati_2
Business, basis of presentation, and CARES Act - Additional information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||||
Apr. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Business And Basis Of Presentation [Line Items] | |||||||
CARES Act 2020 Impact on income tax benefit (expense) | $ 0 | $ 0 | |||||
CARES Act of 2020 funds received | $ 13,900 | (5,951) | $ 13,851 | ||||
Deferred tax payments | $ 600 | ||||||
Deferred and other long-term liabilities | $ 0 | $ 0 | |||||
Scenario Forecast [Member] | |||||||
Business And Basis Of Presentation [Line Items] | |||||||
CARES Act of 2020 deferred taxes percentage | 50.00% | 50.00% |
Recently Adopted Accounting S_3
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements - Additional Information (Detail) - ASU 2019-12 [Member] | Sep. 30, 2021 |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |
Change in Accounting Principle, Accounting Standards Update, Adopted [true false] | true |
Change in Accounting Principle, Accounting Standards Update, Adoption Date | Jan. 1, 2021 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) $ in Millions | Feb. 02, 2021USD ($) |
Intellectual Property Rights [Member] | |
Business Acquisition [Line Items] | |
Consideration transferred | $ 1 |
Consideration transferred | $ 9 |
Maximum [Member] | |
Business Acquisition [Line Items] | |
Royalty percentage on net sales | 4.00% |
Maximum [Member] | Intellectual Property Rights [Member] | |
Business Acquisition [Line Items] | |
Consideration transferred | $ 10 |
Minimum [Member] | |
Business Acquisition [Line Items] | |
Royalty percentage on net sales | 2.00% |
Acquisitions - Summary of Fair
Acquisitions - Summary of Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Fair Value of Consideration Transferred | ||
Cash paid | $ 18,000 | |
Wittenstein [Member] | FITBONE Asset Purchase Agreement [Member] | ||
Fair Value of Consideration Transferred | ||
Cash paid | $ 1,000 | |
Total fair value of consideration transferred | 1,000 | |
In-process research and development costs, recognized within Acquisition-related amortization and remeasurement | 1,000 | |
Total fair value of assets acquired | $ 1,000 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 7,992 | $ 8,442 |
Work-in-process | 14,977 | 12,149 |
Finished products | 17,164 | 29,142 |
Field/consignment | 44,545 | 34,902 |
Inventories | $ 84,678 | $ 84,635 |
Leases - Summary of Lease Portf
Leases - Summary of Lease Portfolio (Detail) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Right-of-use assets ("ROU assets") | ||
Operating leases | $ 3,571 | $ 4,840 |
Operating lease, right-of-use asset, statement of financial position [Extensible List] | Other long-term assets | Other long-term assets |
Finance leases | $ 19,114 | $ 20,552 |
Finance lease, right-of-use asset, statement of financial position [Extensible List] | Property, plant, and equipment, net | Property, plant, and equipment, net |
Total ROU assets | $ 22,685 | $ 25,392 |
Current | ||
Operating leases | $ 2,002 | $ 2,092 |
Operating lease, liability, current, statement of financial position [Extensible List] | Other current liabilities | Other current liabilities |
Finance leases | $ 2,570 | $ 510 |
Long-term | ||
Operating leases | $ 1,713 | $ 2,946 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other long-term liabilities | Other long-term liabilities |
Finance leases | $ 20,044 | $ 22,338 |
Total lease liabilities | $ 26,329 | $ 27,886 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash paid for amounts included in the measurement of lease liabilities | ||
Operating cash flows from operating leases | $ 3,469 | $ 3,170 |
Operating cash flows from finance leases | 680 | 458 |
Financing cash flows from finance leases | 395 | 204 |
ROU assets obtained in exchange for lease obligations | ||
Operating leases | 460 | 619 |
Finance leases | $ 149 | $ 1,949 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) - Sep. 30, 2021 - Italy [Member] | USD ($) | EUR (€) |
Debt Instrument [Line Items] | ||
Amount outstanding under lines of credit | $ 0 | |
Maximum borrowing capacity | $ 6,400,000 | € 5,500,000 |
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 | Sep. 30, 2021 | Dec. 31, 2020 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | $ 12,080 | $ 12,160 |
Deferred compensation plan, Liabilities | (1,405) | (1,441) |
Liabilities fair value, Total | (19,805) | (37,216) |
Neo Medical [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 7,080 | 7,160 |
Spinal Kinetics [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent consideration | (18,400) | (35,400) |
Other [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent consideration | (375) | |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 5,000 | |
Deferred compensation plan, Liabilities | (1,405) | |
Liabilities fair value, Total | (1,405) | |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 7,080 | |
Liabilities fair value, Total | (18,400) | |
Fair Value, Inputs, Level 3 [Member] | Neo Medical [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 7,080 | |
Fair Value, Inputs, Level 3 [Member] | Spinal Kinetics [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Contingent consideration | (18,400) | |
Convertible Loan Agreement | Neo Medical [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 5,000 | $ 5,000 |
Convertible Loan Agreement | Fair Value, Inputs, Level 2 [Member] | Neo Medical [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | $ 5,000 |
Fair Value Measurements and I_4
Fair Value Measurements and Investments - Additional Information (Detail) - USD ($) | Oct. 01, 2020 | Apr. 30, 2018 | Sep. 30, 2021 | Jun. 30, 2021 |
Spinal Kinetics [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Milestone achievement period | 5 years | |||
Consideration transferred | $ 18,400,000 | |||
Payment for contingent consideration liability | 30,000,000 | |||
Maximum [Member] | Spinal Kinetics [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Future milestone payments | $ 60,000,000 | |||
US Food And Drug Administration [Member] | Spinal Kinetics [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Future milestone payments | 15,000,000 | |||
Revenue Milestone [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Future milestone payments | $ 15,000 | |||
Revenue Milestone [Member] | Spinal Kinetics [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Future milestone payments | $ 45,000,000 | |||
Neo Medical [Member] | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Convertible loans | $ 4,600,000 | |||
Maturity date | Oct. 1, 2024 | |||
Carrying value of investment | 5,000,000 | |||
Convertible loan credit losses | $ 0 | |||
Neo Medical [Member] | Preferred Stock | ||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||||
Amount of Preferred stock consideration | $ 5,000,000 |
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] $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Unrealized loss recognized in other comprehensive income (loss) | $ (115) |
Neo Medical [Member] | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Fair value of Convertible Loan at January 1 | 7,160 |
Interest recognized in interest income, net | 305 |
Foreign currency remeasurement recognized in other expense, net | (270) |
Fair value of Convertible Loan at September 30 | 7,080 |
Amortized cost basis of Neo Medical Convertible Loan at September 30 | $ 5,314 |
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 | 9 Months Ended | |
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | |
Spinal Kinetics [Member] | Revenue Discount Rate | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Consideration transferred | $ 18,400 | |
Spinal Kinetics [Member] | Revenue Discount Rate | Minimum [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Business combination contingent consideration liability measurement input | 6.5 | |
Spinal Kinetics [Member] | Revenue Discount Rate | Maximum [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Business combination contingent consideration liability measurement input | 6.7 | |
Spinal Kinetics [Member] | Payment Discount Rate | Minimum [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Business combination contingent consideration liability measurement input | 3.9 | |
Spinal Kinetics [Member] | Payment Discount Rate | Maximum [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Business combination contingent consideration liability measurement input | 4 | |
Spinal Kinetics [Member] | Projected Year of Achievement | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Business combination contingent consideration liability measurement period | 2022 | |
Spinal Kinetics [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Spinal Kinetics contingent consideration estimated fair value at January 1 | $ 35,400 | $ 42,700 |
Decrease in fair value recognized in acquisition-related amortization and remeasurement | (2,000) | (7,600) |
Payment made | (15,000) | |
Spinal Kinetics contingent consideration estimated fair value at September 30 | 18,400 | $ 35,100 |
Neo Medical [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Neo Medical Convertible Loan | $ 7,080 | |
Fair value implied volatility | 21.60% | |
Fair value discount rate | 90.40% |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | ||||
Accrued other long-term liabilities | $ 7.7 | $ 7.7 | ||
Estimated sales and marketing expense (benefit) | 0.6 | $ 0.4 | 1.1 | $ 1.1 |
Freezing amount in cash resulted from court pending legal action issued | 0.5 | 0.5 | ||
Accruals related court pending legal dispute | $ 0.8 | $ 0.8 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Components of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | $ 356,864 |
Ending Balance | 364,833 |
Currency Translation Adjustments [Member] | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | 1,833 |
Other comprehensive loss | (1,901) |
Ending Balance | (68) |
Neo Medical [Member] | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | 1,419 |
Other comprehensive loss | (115) |
Income taxes | 28 |
Ending Balance | 1,332 |
Accumulated Other Comprehensive Loss [Member] | |
Accumulated Other Comprehensive Income Loss [Line Items] | |
Beginning Balance | 3,252 |
Other comprehensive loss | (2,016) |
Income taxes | 28 |
Ending Balance | $ 1,264 |
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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue Recognition And Accounts Receivable [Line Items] | ||||
Net sales | $ 112,428 | $ 110,985 | $ 339,415 | $ 288,943 |
Change | 1.30% | 17.50% | ||
Bone Growth Therapies [Member] | ||||
Revenue Recognition And Accounts Receivable [Line Items] | ||||
Net sales | $ 45,168 | 47,066 | $ 137,821 | 120,888 |
Change | (4.00%) | 14.00% | ||
Spinal Implants [Member] | ||||
Revenue Recognition And Accounts Receivable [Line Items] | ||||
Net sales | $ 28,151 | 25,505 | $ 83,943 | 67,025 |
Change | 10.40% | 25.20% | ||
Biologics [Member] | ||||
Revenue Recognition And Accounts Receivable [Line Items] | ||||
Net sales | $ 12,806 | 15,245 | $ 41,351 | 40,319 |
Change | (16.00%) | 2.60% | ||
Global Spine [Member] | ||||
Revenue Recognition And Accounts Receivable [Line Items] | ||||
Net sales | $ 86,125 | 87,816 | $ 263,115 | 228,232 |
Change | (1.90%) | 15.30% | ||
Global Orthopedics [Member] | ||||
Revenue Recognition And Accounts Receivable [Line Items] | ||||
Net sales | $ 26,303 | $ 23,169 | $ 76,300 | $ 60,711 |
Change | 13.50% | 25.70% |
Revenue Recognition and Accou_4
Revenue Recognition and Accounts Receivable - Schedule of Components of Net Sales (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue Recognition [Abstract] | ||||
Product sales | $ 100,004 | $ 96,305 | $ 299,214 | $ 250,161 |
Marketing service fees | 12,424 | 14,680 | 40,201 | 38,782 |
Net sales | $ 112,428 | $ 110,985 | $ 339,415 | $ 288,943 |
Revenue Recognition and Accou_5
Revenue Recognition and Accounts Receivable - Schedule of Allowance for Expected Credit Losses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue Recognition [Abstract] | ||||
Allowance for expected credit losses beginning balance | $ 4,471 | $ 6,364 | $ 4,848 | $ 3,987 |
Impact of adoption of ASU 2016-13 | 1,120 | |||
Current period provision (recovery) for expected credit losses | 590 | (619) | 376 | 945 |
Write-offs charged against the allowance and other | (54) | (309) | (134) | (647) |
Effect of changes in foreign exchange rates | (79) | 88 | (162) | 119 |
Allowance for expected credit losses ending balance | $ 4,928 | $ 5,524 | $ 4,928 | $ 5,524 |
Revenue Recognition and Accou_6
Revenue Recognition and Accounts Receivable - Additional Information (Detail) $ in Thousands | Sep. 30, 2022 | Oct. 31, 2021 | Apr. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Dec. 31, 2020USD ($) | Jun. 30, 2020USD ($) |
Revenue Recognition And Accounts Receivable [Line Items] | ||||||||
CARES Act of 2020 funds received | $ 13,900 | $ (5,951) | $ 13,851 | |||||
Frequency of recoupment | 6 months | 11 months | ||||||
Contract liability, total | 7,900 | $ 13,851 | $ 10,971 | $ 13,851 | $ 13,851 | |||
Other Long-Term Assets or Other Current Assets [Member] | ||||||||
Revenue Recognition And Accounts Receivable [Line Items] | ||||||||
Other contract assets | $ 1,700 | $ 2,000 | ||||||
Scenario Forecast [Member] | ||||||||
Revenue Recognition And Accounts Receivable [Line Items] | ||||||||
Medicare recoupment | 0.50 | |||||||
Subsequent Event | ||||||||
Revenue Recognition And Accounts Receivable [Line Items] | ||||||||
Medicare recoupment | 0.25 |
Revenue Recognition and Accou_7
Revenue Recognition and Accounts Receivable - Schedule of Changes In Contract Liability (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue Recognition [Abstract] | |||
Contract liability beginning balance | $ 10,971 | $ 13,851 | |
Additions | $ 13,851 | ||
Recoupment recognized in net sales | (3,071) | (5,951) | |
Contract liability ending balance | $ 7,900 | $ 7,900 | $ 13,851 |
Business Segment Information -
Business Segment Information - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2021Segment | |
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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Segment Reporting Information [Line Items] | ||||
Total EBITDA | $ 5,049 | $ 15,022 | $ 19,663 | $ 18,416 |
Depreciation and amortization | (7,151) | (9,030) | (22,153) | (22,299) |
Interest expense, net | (433) | (731) | (1,400) | (2,055) |
Income (loss) before income taxes | (2,535) | 5,261 | (3,890) | (5,938) |
Operating Segments [Member] | Global Spine [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total EBITDA | 13,908 | 19,960 | 44,835 | 38,670 |
Operating Segments [Member] | Global Orthopedics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total EBITDA | (196) | 1,258 | (650) | (3,995) |
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total EBITDA | $ (8,663) | $ (6,196) | $ (24,522) | $ (16,259) |
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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | $ 112,428 | $ 110,985 | $ 339,415 | $ 288,943 |
Global Spine [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | 86,125 | 87,816 | 263,115 | 228,232 |
Global Orthopedics [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | 26,303 | 23,169 | 76,300 | 60,711 |
U.S. [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | 85,993 | 89,833 | 264,572 | 232,258 |
U.S. [Member] | Global Spine [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | 79,983 | 83,477 | 246,815 | 215,819 |
U.S. [Member] | Global Orthopedics [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | 6,010 | 6,356 | 17,757 | 16,439 |
International [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | 26,435 | 21,152 | 74,843 | 56,685 |
International [Member] | Global Spine [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | 6,142 | 4,339 | 16,300 | 12,413 |
International [Member] | Global Orthopedics [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net sales | $ 20,293 | $ 16,813 | $ 58,543 | $ 44,272 |
Acquisition-Related Amortizat_3
Acquisition-Related Amortization and Remeasurement - Components of Acquisition-Related Amortization and Remeasurement (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Acquisition Related Amortization And Remeasurement [Abstract] | ||||
Changes in fair value of contingent consideration | $ (2,300) | $ (700) | $ (2,375) | $ (7,600) |
Amortization of acquired intangibles | 1,965 | 1,838 | 5,903 | 4,834 |
Acquired IPR&D | 1,500 | |||
Total | $ (335) | $ 1,138 | $ 5,028 | $ (2,766) |
Acquisition-Related Amortizat_4
Acquisition-Related Amortization and Remeasurement - Additional Information (Details) - License Agreement [Member] $ in Millions | Apr. 07, 2021USD ($) |
Research And Development Arrangement Contract To Perform For Others [Line Items] | |
Contingent Payment Upon Reaching FDA Milestone | $ 4 |
Amount Recieved In Second Quater | $ 0.5 |
Share-based Compensation - Sche
Share-based Compensation - Schedule of Components of Share-Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share based compensation expense | $ 3,842 | $ 3,841 | $ 11,470 | $ 12,399 |
Stock options [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share based compensation expense | 382 | 786 | 1,441 | 1,840 |
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 | 1,819 | 1,632 | 5,565 | 6,804 |
Market-based Restricted Stock Units [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share based compensation expense | 1,212 | 1,049 | 3,162 | 2,529 |
Stock purchase plan [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share based compensation expense | 429 | 374 | 1,302 | 1,226 |
Cost of sales [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share based compensation expense | 200 | 149 | 587 | 535 |
Sales and marketing [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share based compensation expense | 831 | 668 | 2,505 | 2,897 |
General and administrative [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share based compensation expense | 2,531 | 2,770 | 7,667 | 7,939 |
Research and development [Member] | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Allocated share based compensation expense | $ 280 | $ 254 | $ 711 | $ 1,028 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Shares issued under stock purchase plan, stock option exercises and restricted stock awards and units | 72,281 | 58,357 | 317,536 | 244,801 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Components Of Income Tax Expense Benefit [Line Items] | ||||
Income tax effective rate | 14.40% | 11.50% | (43.10%) | 300.30% |
Internal Revenue Service [Member] | ||||
Components Of Income Tax Expense Benefit [Line Items] | ||||
Income tax benefit | $ 0.3 | |||
Minimum [Member] | ||||
Components Of Income Tax Expense Benefit [Line Items] | ||||
Decrease in unrecognized tax benefits | $ 1 | 1 | ||
Maximum [Member] | ||||
Components Of Income Tax Expense Benefit [Line Items] | ||||
Decrease in unrecognized tax benefits | $ 1.5 | $ 1.5 |
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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Line Items] | ||||
Weighted average common shares-basic | 19,769,823 | 19,335,718 | 19,633,782 | 19,217,057 |
Effect of dilutive securities | ||||
Weighted average common shares-diluted | 19,769,823 | 19,398,567 | 19,633,782 | 19,319,302 |
Stock Options And Stock Purchase Plan [Member] | ||||
Effect of dilutive securities | ||||
Effect of dilutive securities | 10,607 | 41,701 | ||
Restricted Stock Units [Member] | ||||
Effect of dilutive securities | ||||
Effect of dilutive securities | 52,242 | 60,544 |
Earnings Per Share ("EPS") - Ad
Earnings Per Share ("EPS") - Additional Information (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
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 | 2,055,405 | 1,771,113 | 1,626,804 | 1,527,735 |