Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 01, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | OFIX | ||
Entity Registrant Name | ORTHOFIX MEDICAL INC. | ||
Entity Central Index Key | 0000884624 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Common Stock, Shares Outstanding | 37,406,644 | ||
Entity Public Float | $ 663.4 | ||
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, $0.10 par value | ||
Security Exchange Name | NASDAQ | ||
Document Annual Report | true | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | false | ||
Document Transition Report | false | ||
Auditor Firm ID | 42 | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Location | Dallas, Texas | ||
Documents Incorporated by Reference | Certain sections of the registrant’s definitive proxy statement to be filed with the Commission in connection with the Orthofix Medical Inc. 2024 Annual Meeting of Shareholders are incorporated by reference in Part III of this Annual Report. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 33,107 | $ 50,700 |
Restricted cash | 4,650 | |
Accounts receivable, net of allowances of $7,130 and $6,419, respectively | 128,098 | 82,857 |
Inventories | 222,166 | 100,150 |
Prepaid expenses and other current assets | 32,422 | 22,283 |
Total current assets | 420,443 | 255,990 |
Property, plant and equipment net | 159,060 | 58,229 |
Intangible assets, net | 117,490 | 47,388 |
Goodwill | 194,934 | 71,317 |
Other long-term assets | 33,388 | 25,705 |
Total assets | 925,315 | 458,629 |
Current liabilities | ||
Accounts payable | 58,357 | 27,598 |
Current portion of long-term debt | 1,250 | |
Current portion of finance lease liability | 708 | 652 |
Other current liabilities | 104,908 | 55,374 |
Total current liabilities | 165,223 | 83,624 |
Long-term debt | 93,107 | |
Long-term portion of finance lease liability | 18,532 | 19,239 |
Other long-term liabilities | 49,723 | 18,906 |
Total liabilities | 326,585 | 121,769 |
Contingencies (Note 13) | ||
Shareholders’ equity | ||
Common shares $0.10 par value; 100,000 shares authorized; 37,165 and 20,162 issued and outstanding as of December 31, 2023 and 2022, respectively | 3,717 | 2,016 |
Additional paid-in capital | 746,450 | 334,969 |
Retained earnings (accumulated deficit) | (150,144) | 1,251 |
Accumulated other comprehensive loss | (1,293) | (1,376) |
Total shareholders’ equity | 598,730 | 336,860 |
Total liabilities and shareholders’ equity | $ 925,315 | $ 458,629 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowance for doubtful accounts | $ 7,130 | $ 6,419 |
Common shares, par value | $ 0.10 | $ 0.10 |
Common shares, authorized | 100,000,000 | 100,000,000 |
Common shares, issued | 37,165,000 | 20,162,000 |
Common shares, outstanding | 37,165,000 | 20,162,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Net sales | $ 746,641 | $ 460,713 | $ 464,479 |
Cost of sales | 260,368 | 123,544 | 114,914 |
Gross profit | 486,273 | 337,169 | 349,565 |
Sales and marketing | 385,736 | 228,810 | 221,318 |
General and administrative | 144,659 | 79,966 | 69,353 |
Research and development | 80,231 | 49,065 | 49,621 |
Acquisition-related amortization and remeasurement (Note 17) | 14,757 | (7,404) | 17,588 |
Operating loss | (139,110) | (13,268) | (8,315) |
Interest expense, net | (8,631) | (1,288) | (1,837) |
Other expense, net | (938) | (3,150) | (3,343) |
Income (loss) before income taxes | (148,679) | (17,706) | (13,495) |
Income tax expense | (2,716) | (2,043) | (24,884) |
Net loss | $ (151,395) | $ (19,749) | $ (38,379) |
Net loss per common share: | |||
Basic | $ (4.12) | $ (0.98) | $ (1.95) |
Diluted | $ (4.12) | $ (0.98) | $ (1.95) |
Weighted average number of common shares: | |||
Basic | 36,729,258 | 20,053,548 | 19,690,593 |
Diluted | 36,729,258 | 20,053,548 | 19,690,593 |
Other comprehensive income (loss), before tax | |||
Unrealized gain (loss) on debt securities | $ (1,334) | $ 395 | $ (942) |
Currency translation adjustment | 1,417 | (1,771) | (2,544) |
Other comprehensive income (loss), before tax | 83 | (1,376) | (3,486) |
Income tax benefit (expense) related to items of other comprehensive income (loss) | 234 | ||
Other comprehensive income (loss), net of tax | 83 | (1,376) | (3,252) |
Comprehensive loss | $ (151,312) | $ (21,125) | $ (41,631) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Shares [Member] | Additional Paid-in Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Beginning Balance at Dec. 31, 2020 | $ 356,864 | $ 1,942 | $ 292,291 | $ 59,379 | $ 3,252 |
Balance, Shares at Dec. 31, 2020 | 19,424 | ||||
Net loss | (38,379) | (38,379) | |||
Other comprehensive income (loss), net of tax | (3,252) | (3,252) | |||
Share-based compensation expense | 15,432 | 15,432 | |||
Common shares issued, net | 6,269 | $ 41 | 6,228 | ||
Common shares issued, net, Shares | 413 | ||||
Ending Balance at Dec. 31, 2021 | 336,934 | $ 1,983 | 313,951 | 21,000 | |
Balance, Shares at Dec. 31, 2021 | 19,837 | ||||
Net loss | (19,749) | (19,749) | |||
Other comprehensive income (loss), net of tax | (1,376) | (1,376) | |||
Share-based compensation expense | 18,443 | 18,443 | |||
Common shares issued, net | 2,608 | $ 33 | 2,575 | ||
Common shares issued, net, Shares | 325 | ||||
Ending Balance at Dec. 31, 2022 | $ 336,860 | $ 2,016 | 334,969 | 1,251 | (1,376) |
Balance, Shares at Dec. 31, 2022 | 20,162,000 | 20,162 | |||
Net loss | $ (151,395) | (151,395) | |||
Other comprehensive income (loss), net of tax | 83 | 83 | |||
Share-based compensation expense | 35,707 | 35,707 | |||
Common shares issued in connection with SeaSpine merger | 376,745 | $ 1,605 | 375,140 | ||
Common shares issued in connection with SeaSpine merger, Shares | 16,047 | ||||
Common shares issued, net | 730 | $ 96 | 634 | ||
Common shares issued, net, Shares | 956 | ||||
Ending Balance at Dec. 31, 2023 | $ 598,730 | $ 3,717 | $ 746,450 | $ (150,144) | $ (1,293) |
Balance, Shares at Dec. 31, 2023 | 37,165,000 | 37,165 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities | ||||
Net loss | $ (151,395) | $ (19,749) | $ (38,379) | |
Adjustments to reconcile net loss to net cash from operating activities | ||||
Depreciation and amortization | 53,063 | 29,019 | 29,599 | |
Inventory reserve expenses | 27,576 | 14,907 | 10,826 | |
Amortization of inventory fair value step up | 36,044 | |||
Impairment of goodwill | 11,756 | |||
Amortization of operating lease assets, debt costs, and other assets | 7,498 | 3,056 | 3,496 | |
Provision for expected credit losses | 820 | 2,095 | 444 | |
Deferred income taxes | 579 | 314 | 24,482 | |
Share-based compensation expense | 35,707 | 18,443 | 15,432 | |
Interest and (gain) loss on the valuation of investment securities | 596 | (308) | (1,146) | |
Change in fair value of contingent consideration | (2,700) | (17,200) | (3,575) | |
Other | 423 | 2,027 | 1,064 | |
Changes in operating assets and liabilities, net of effects of acquisitions | ||||
Accounts receivable | (10,411) | (6,735) | (7,049) | |
Inventories | (58,051) | (33,040) | (10,207) | |
Prepaid expenses and other current assets | 1,760 | (874) | (2,834) | |
Accounts payable | 8,642 | 2,282 | 4,253 | |
Other current liabilities | 4,069 | 627 | 1,013 | |
Contract liability (Note 15) | (4,791) | (9,060) | $ 13,900 | |
Payment of contingent consideration | (6,595) | |||
Other long-term assets and liabilities | 27 | (1,611) | (5,045) | |
Net cash from operating activities | (45,753) | (11,538) | 18,475 | |
Cash flows from investing activities | ||||
Capital expenditures for property, plant and equipment | (60,256) | (21,364) | (17,785) | |
Capital expenditures for intangible assets | (1,794) | (1,796) | (1,807) | |
Contingent consideration payments related to asset acquisitions | (1,500) | |||
Purchase of investment securities | (2,171) | |||
Cash acquired in SeaSpine merger | 29,419 | |||
Other investing activities | (500) | 126 | (1,250) | |
Net cash from investing activities | (33,131) | (24,534) | (23,013) | |
Cash flows from financing activities | ||||
Proceeds from credit facilities | 174,500 | |||
Repayment of borrowings from credit facilities | (79,000) | |||
Payment of debt acquired from SeaSpine merger | (26,899) | |||
Proceeds from issuance of common shares | 5,127 | 4,337 | 8,824 | |
Payments related to withholdings for share-based compensation | (4,397) | (1,729) | (2,555) | |
Payment of contingent consideration | (1,000) | (8,405) | ||
Payments related to finance lease obligation | (652) | (2,594) | (537) | |
Payment of debt issuance costs and other financing activities | (2,357) | (92) | (948) | |
Net cash from financing activities | 65,322 | (78) | (3,621) | |
Effect of exchange rate changes on cash and restricted cash | 619 | (997) | (815) | |
Net change in cash, cash equivalents, and restricted cash | (12,943) | (37,147) | (8,974) | |
Cash, cash equivalents, and restricted cash at the beginning of the year | 50,700 | 87,847 | 96,821 | |
Cash, cash equivalents, and restricted cash at the end of the year | 37,757 | 50,700 | 87,847 | 96,821 |
Components of cash, cash equivalents, and restricted cash at the end of the year | ||||
Cash and cash equivalents | 33,107 | 50,700 | 87,847 | |
Restricted cash | 4,650 | |||
Cash, cash equivalents, and restricted cash at the end of the year | $ 37,757 | $ 50,700 | $ 87,847 | $ 96,821 |
Business and basis of presentat
Business and basis of presentation | 12 Months Ended |
Dec. 31, 2023 | |
Organization Consolidation And Presentation Of Financial Statements And Unusual Or Infrequent Items Disclosure [Abstract] | |
Business and basis of presentation | 1. Business and basis of presentation Description of the Business Orthofix Medical Inc. and its Subsidiaries (the “Company” or "Orthofix") merged with SeaSpine Holdings Corporation ("SeaSpine") in January 2023 to form a leading global spine and orthopedics company with a comprehensive portfolio of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions, and a leading surgical navigation system. Its products are distributed in more than 60 countries worldwide. The Company is headquartered in Lewisville, Texas, where it conducts general business, product development, medical education and manufacturing, and has primary offices in Carlsbad, CA, with a focus on spine and biologics product innovation and surgeon education, and Verona, Italy, with an emphasis on product innovation, production, and medical education for orthopedics. The combined company’s global research and development, commercial and manufacturing footprint also includes facilities and offices in Irvine, CA, Toronto, Canada, Sunnyvale, CA, Wayne, PA, Olive Branch, MS, Maidenhead, UK, Munich, Germany, Paris, France, and São Paulo, Brazil. The merger with SeaSpine was completed on January 5, 2023, with SeaSpine continuing as a wholly-owned subsidiary of Orthofix following the transaction. For additional discussion of the merger with SeaSpine, see Note 4. The shares of common stock of Orthofix, as the corporate parent entity in the combined company structure, continue to trade on NASDAQ under the symbol "OFIX". Basis of Presentation The consolidated financial statements include the financial statements of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions are eliminated in consolidation. Information on our accounting policies and methods used in the preparation of our consolidated financial statements are included, where applicable, in the respective footnotes that follow. Footnote Footnote Reference Business and basis of presentation 1 Significant accounting policies 2 Recently adopted accounting standards and recently issued accounting pronouncements 3 Mergers and acquisitions 4 Inventories 5 Property, plant, and equipment 6 Intangible assets 7 Goodwill 8 Leases 9 Other current liabilities 10 Indebtedness 11 Fair value measurements and investments 12 Commitments and contingencies 13 Shareholders' equity 14 Revenue recognition and accounts receivable 15 Business segment information 16 Acquisition-related amortization and remeasurement 17 Share-based compensation 18 Defined contribution plans and deferred compensation 19 Income taxes 20 Earnings per share 21 Changes in Presentation of Consolidated Financial Statements Certain prior year balances have been reclassified in the consolidated financial statements to conform to current period presentation. |
Significant accounting policies
Significant accounting policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Significant accounting policies | 2. Significant accounting policies The preparation of financial statements in conformity with United States generally accepted accounting principles (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, we evaluate these estimates, including those related to contractual allowances, allowances for expected credit losses, inventories, valuation of intangible assets, goodwill, fair value measurements (including fair value measurements associated with business combinations and/or asset acquisitions), litigation and contingent liabilities, income taxes, and share-based compensation. We base our estimates on historical experience, future expectations, and other relevant assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The following is a discussion of accounting policies and methods used in our consolidated financial statements that are not presented within other footnotes. Market risk In the ordinary course of business, the Company is exposed to the impact of changes in interest rates and foreign currency fluctuations. The Company’s objective is to limit the impact of such movements on earnings and cash flows. In order to achieve this objective, the Company seeks to balance its non-U.S. Dollar denominated income and expenditures. The financial statements for operations outside the U.S. are generally maintained in their respective local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. Dollars at year end exchange rates, and revenue and expense items are translated at average exchange rates prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income (loss) component of shareholders’ equity. Transactional foreign currency gains and losses, including those generated from intercompany operations, are included in other income (expense), net and was a gain of $ 1.6 million, a loss of $ 3.3 million, and a loss of $ 4.0 million for the years ended December 31, 2023, 2022, and 2021 , respectively. Financial instruments and concentration of credit risk Financial instruments that could subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, and accounts receivable. Generally, cash is held at large financial institutions and cash equivalents consist of highly liquid money market funds. The Company performs ongoing credit evaluations of customers, generally does not require collateral, and maintains a reserve for expected credit losses. The Company believes that a concentration of credit risk related to accounts receivable is limited because customers are geographically dispersed and end users are diversified. Cash, cash equivalents, and restricted cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. In November 2023, following the termination of the Second Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, and certain lender parties thereto, Bank of America required collateral of approximately $ 4.7 million of the Company’s cash as a banking service obligation. This cash has been reclassified to restricted cash as of December 31, 2023. Investing activities that did not result in cash receipts or cash payments during the years ended December 31, 2023, 2022, and 2021 consisted of the following, which were not included within cash from investing activities in the Company’s consolidated statements of cash flows: (U.S. Dollars, in thousands) 2023 2022 2021 Supplemental disclosure of cash flow information: Noncash investing activities: Intangible assets acquired in asset acquisitions $ — $ 2,000 $ — Advertising costs Advertising costs are expensed as incurred. Advertising costs are included within sales and marketing expense and totaled $ 0.5 million for each of the years ended December 31, 2023, 2022, and 2021 , respectively. Research and development costs, including collaborative arrangements Expenditures for research and development are expensed as incurred. Expenditures related to the Company’s collaborative arrangement with MTF Biologics (“MTF”) are expensed based on the terms of the related agreement. The Company recognized $ 0.8 million, less than $ 0.1 million, and $ 0.8 million in research and development expense for the years ended December 31, 2023, 2022, and 2021, respectively. In October 2020, the Company and Neo Medical SA, a privately held Swiss-based company developing a new generation of products for spinal surgery (“Neo Medical”), entered into a co-development agreement covering the parties’ joint development of single use instruments for cervical spine procedures. In connection with this agreement, the Company is responsible for the payment of variable costs associated with the development of the specified products. Research and development expenses incurred under this collaborative arrangement totaled $ 0.1 million, $ 0.5 million, and $ 0.6 million for the years ended December 31, 2023, 2022, and 2021 , respectively. |
Recently adopted accounting sta
Recently adopted accounting standards and recently issued accounting pronouncements | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently adopted accounting standards and recently issued accounting pronouncements | 3. Recently adopted accounting standards and recently issued accounting pronouncements Recently Adopted Accounting Standards Adoption of Accounting Standards Update (“ASU”) 2021-10—Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-10, which aims to increase the transparency of government assistance by requiring entities to provide information about the nature of the transaction, terms and conditions associated with the transaction, and financial statement line items affected by the transaction. The Company voluntarily elected to early adopt this standard for the year ended December 31, 2021, on a prospective basis. Adoption of this standard did not have a significant impact to the existing disclosures made in relation to government assistance received by the Company in 2020 as part of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). Adoption of ASU 2019-12, Simplifying the accounting for income taxes In December 2019, the FASB issued ASU 2019-12, which reduces the complexity of accounting for income taxes by eliminating certain exceptions to the general principles in Accounting Standards Codification ("ASC") 740, Income Taxes . Additionally, the ASU simplifies U.S. 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. The Company adopted this ASU effective January 1, 2021 , with certain provisions applied retrospectively and other provisions applied prospectively. Adoption of this ASU did not have a material impact to the Company’s consolidated balance sheet, statements of operations, or cash flows. Adoption of ASU 2020-04, Reference Rate Reform (Topic 848) In March 2020, the FASB issued ASU 2020-04, which provided temporary optional guidance to ease the potential financial reporting burden of the expected market transition away from the London Inter-Bank Offered Rate. The new guidance provided 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 consolidated balance sheet, statements of operations, or cash flows. Adoption of ASU 2021-08, Accounting for Contract Assets and Contract Liabilities with Contracts with Customers In October 2021, the FASB issued ASU 2021-08, which aims to address diversity in practice and inconsistency related to the accounting for acquired revenue contracts with customers in a business combination. The amendments require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. Adoption of this standard resulted in the recognition of $ 2.2 million in contract liabilities associated with acquired revenue contracts as a result of the Company’s merger with SeaSpine, which closed on January 5, 2023. Recently Issued Accounting Pronouncements Topic Description of Guidance Effective Date Status of Company's Evaluation Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (ASU 2022-03) Clarifies the guidance in Topic 820, Fair Value Measurement , when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively. January 1, 2024 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements, but does not expect this ASU to have a material impact on disclosures within the Company's consolidated financial statements. Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative (ASU 2023-06) Adds interim and annual disclosure requirements to a variety of subtopics in the Accounting Standards Codification, including those focusing on accounting changes, earnings per share, debt and repurchase agreements. The guidance will be applied prospectively. The effective date will be the date when the SEC's removal of the related disclosure requirement becomes effective, with early adoption prohibited. Various The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. Improvements to Reportable Segment Disclosures (ASU 2023-07) Improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. Provisions are to be applied retrospectively to all prior periods presented in financial statements. January 1, 2024 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements; however, the Company expects to disclose additional information in regards to its reportable segments as a result of this ASU, including (i) significant segment expenses regularly provided to the Company's chief operating decision maker ("CODM"), (ii) disclosure of other segment items by reportable segment, and (iii) disclosure of the title and position of the Company's CODM, among other disclosure requirements. Improvements to Income Tax Disclosures (ASU 2023-09) Enhance the transparency and decision usefulness of income tax disclosures to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and January 1, 2025 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. |
Mergers and Acquisitions
Mergers and Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Mergers and Acquisitions | 4. Mergers and acquisitions Merger with SeaSpine On January 5, 2023, the Company and SeaSpine completed an all-stock merger of equals (the "Merger") to create a leading global spine and orthopedics company with highly complementary portfolios of biologics, innovative spinal hardware, bone growth therapies, specialized orthopedic solutions, and a leading surgical navigation system. As a result of the Merger, each share of SeaSpine common stock issued and outstanding immediately prior to the closing of the Merger was converted into the right to receive 0.4163 shares of Orthofix common stock. The Merger is being accounted for as an acquisition of SeaSpine by Orthofix under the acquisition method of accounting for business combinations in accordance with U.S. GAAP. Therefore, Orthofix is treated as the acquirer for accounting purposes. In identifying the acquirer, Orthofix and SeaSpine considered the structure of the transaction and other actions contemplated by the merger agreement (the "Merger Agreement"), relative outstanding share ownership, market values, the composition of the combined company's Board of Directors, and the relative size of Orthofix and SeaSpine. Under the acquisition method of accounting, the assets and liabilities of SeaSpine and its subsidiaries have been recorded at their respective fair values as of the acquisition date. The total estimated fair value of consideration associated with the Merger as of the acquisition date was comprised of: (U.S. Dollars, in thousands, except shares and price per share) Share Consideration: Orthofix common shares to be issued in exchange for SeaSpine common shares 16,047,315 Orthofix closing price per share as of January 4, 2023 $ 22.76 Estimated fair value of shares issued in exchange for SeaSpine common shares $ 365,237 Estimated fair value of Orthofix stock options and RSUs issued in exchange for outstanding SeaSpine equity awards 11,508 Total estimated fair value of consideration $ 376,745 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The Company finalized its valuation of assets acquired and liabilities assumed during the fourth quarter of 2023. Certain acquired assets and liabilities assumed were valued utilizing Level 3 inputs and assumptions. (U.S. Dollars, in thousands) Previously Reported Adjustments Final Acquisition Date Fair Value Assigned Useful Life Assets acquired: Current assets Cash and cash equivalents $ 29,419 $ — $ 29,419 Accounts receivable, net 35,313 — 35,313 Inventories 132,636 — 132,636 Prepaid expenses and other current assets 4,590 — 4,590 Total current assets 201,958 — 201,958 Property, plant, and equipment, net 68,863 — 68,863 Customer relationships 33,100 — 33,100 13 years Developed technology 47,200 — 47,200 6 - 8 years In-process research and development ("IPR&D") 5,750 — 5,750 Indefinite Other long-term assets 20,501 — 20,501 Total identifiable assets acquired $ 377,372 $ — $ 377,372 Liabilities assumed : Current liabilities Accounts payable $ 21,602 $ — $ 21,602 Other current liabilities 43,344 177 43,521 Total current liabilities 64,946 177 65,123 Long-term borrowings under SeaSpine credit facility 26,298 — 26,298 Other long-term liabilities 32,833 ( 10 ) 32,823 Total liabilities assumed 124,077 167 124,244 Net identifiable assets acquired $ 253,295 $ ( 167 ) $ 253,128 Total fair value of consideration transferred 376,745 — 376,745 Residual goodwill $ 123,450 $ 167 $ 123,617 The purchase price exceeded the fair value of the net tangible and identifiable intangible assets acquired in the Merger. As of December 31, 2023 , the Company recorded goodwill totaling $ 123.6 million, which was assigned to the Global Spine reporting segment. Specifically, the goodwill includes the assembled workforce and synergies associated with the combined entity. The goodwill is not deductible for tax purposes. The Company recognized $ 9.9 million in direct acquisition-related costs, which exclude integration-related activities, that were expensed during the year ended December 31, 2023 . These costs are included in the consolidated statements of operations and comprehensive income (loss), primarily within general and administrative expenses. The Company's results of operations included $ 258.9 million of net sales from SeaSpine for the year ended December 31, 2023 , and a net loss attributable to SeaSpine of $ 84.0 million for the year ended December 31, 2023. Unaudited Pro Forma Financial Information Due to the Merger closing on January 5, 2023, all SeaSpine financial results for fiscal year 2023, except for the first four days of January, are included in Orthofix's consolidated statement of operations and comprehensive loss. The following unaudited pro forma financial information for the year ended December 31, 2023, is based on the Company's historical consolidated financial statements adjusted to reflect as if the Merger closed as of January 1, 2022. The unaudited pro-forma information makes certain adjustments to depreciation and amortization expense to reflect the fair value recognized in the purchase price allocation and to remove one-time transaction-related costs. The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the Merger closed as of January 1, 2022. For the Year Ended December 31, (U.S. Dollars, in millions) 2023 2022 Net sales $ 746.6 $ 698.2 Net loss $ ( 116.4 ) $ ( 129.2 ) Integration and Restructuring Activities The Company has incurred significant integration and restructuring costs in connection with the Merger. The following table summarizes integration costs incurred for the year ended December 31, 2023, and 2022. For the Year Ended December 31, (U.S. Dollars, in millions) 2023 2022 Compensation-related integration costs $ 17.7 $ — International spine restructuring 1.3 — Fee paid to financial advisor to the Merger 5.5 — Professional fees / consulting fees 5.8 — Product rationalization charges 6.0 — Other costs to complete 1.4 — Total $ 37.7 $ — In the first quarter of 2023, the Company approved and initiated certain restructuring activities to streamline costs and to better align talent with operational needs following the consummation of the Merger. This program was expanded in the third quarter of 2023 to include further restructuring activities related to the Company's international spine business. The Company expects to incur total pre-tax expenses of approximately $ 18.2 million associated with the restructuring activities, which will be recognized within operating expenses. The table below provides a summary of restructuring costs incurred during the period and the resulting liabilities as of December 31, 2023, which are recognized within other current liabilities. (U.S. Dollars, in millions) Balance as of Charges Incurred Payments Made / Currency Translation Adjustment Balance as of U.S. Severance costs $ — $ 11.2 $ ( 10.2 ) $ 1.0 U.S. Retention costs — 5.3 ( 0.3 ) 5.0 U.S. Payroll taxes — 0.7 ( 0.4 ) 0.3 International spine restructuring severance — 1.0 ( 0.3 ) 0.7 Total $ — $ 18.2 $ ( 11.2 ) $ 7.0 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. Inventories Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete, or impaired items, which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facilities in Texas and California, standard cost, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed by management, at least annually or more often, in the event circumstances indicate a change in cost has occurred. Work-in-process and finished products include material, labor, and production overhead costs. Field and consignment inventory, which represents immediately saleable finished products inventory that is in the possession of the Company’s independent sales representatives or located at third-party customers, such as distributors and hospitals, is included within finished products. December 31, (U.S. Dollars, in thousands) 2023 2022 Raw materials $ 28,390 $ 17,035 Work-in-process 53,510 19,243 Finished products 140,266 63,872 Inventories $ 222,166 $ 100,150 The Company adjusts the value of its inventory to the extent management determines that the cost cannot be recovered due to obsolescence or other factors. In order to make these determinations, management uses estimates of future demand for each product to determine the appropriate inventory reserves and to make corresponding adjustments to the carrying value of these inventories to reflect the lower of cost or estimated net realizable value. |
Property, plant and equipment
Property, plant and equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, plant and equipment | 6. Property, plant, and equipment Property, plant, and equipment is stated at cost or estimated fair value when acquired as part of a business combination, less accumulated depreciation . Costs include all expenditures necessary to place the asset in service, generally including freight and sales and use taxes. Property, plant, and equipment also includes instrumentation held by customers, which is generally used to facilitate the implantation of the Company’s products. The useful lives of these assets are generally as follows: Years Buildings 25 to 33 Plant and equipment 1 to 10 Instrumentation 3 to 4 Computer software 3 to 7 Furniture and fixtures 4 to 8 The Company evaluates the useful lives of these assets on an annual basis. Depreciation is computed on a straight-line basis over the useful lives of the assets. Depreciation of leasehold improvements is computed over the shorter of the lease term or the useful life of the asset. Total depreciation expense was $ 34.2 million, $ 19.6 million, and $ 20.2 million for the years ended December 31, 2023, 2022, and 2021, respectively. Expenditures for maintenance and repairs and minor renewals and improvements, which do not extend the lives of the respective assets, are expensed as incurred. All other expenditures for renewals and improvements are capitalized. The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in earnings. Fully depreciated assets remain in the accounts until retired from service. December 31, (U.S. Dollars, in thousands) 2023 2022 Cost Buildings $ 4,103 $ 3,867 Plant and equipment 70,252 48,358 Instrumentation 154,192 92,607 Computer software 43,040 40,685 Furniture and fixtures 11,010 7,917 Construction in progress 41,751 4,515 Finance lease assets 23,337 23,276 Property, plant, and equipment, gross 347,685 221,225 Accumulated depreciation ( 188,625 ) ( 162,996 ) Property, plant, and equipment, net $ 159,060 $ 58,229 The Company capitalizes system development costs related to internal-use software during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which generally ranges from three to seven years . Long-lived assets are evaluated for impairment annually or whenever events or changes in circumstances have occurred that would indicate impairment. For purposes of the evaluation, the Company groups its long-lived assets with other assets and liabilities at the lowest level of identifiable cash flows if the asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset group, the Company will write the carrying value down to fair value in the period identified. The Company generally determines fair value of long-lived assets as the present value of estimated future cash flows. In determining the estimated future cash flows associated with the assets, the Company uses estimates and assumptions about future revenue contributions, cost structures, and remaining useful lives of the asset group. The use of alternative assumptions, including estimated cash flows, discount rates, and alternative estimated remaining useful lives could result in different calculations of impairment. |
Intangible assets
Intangible assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible assets | 7. Intangible assets Intangible assets are recorded at cost, or when acquired as a part of a business combination, at estimated fair value, less accumulated amortization. These assets are amortized on a straight-line basis over the useful lives of the assets, which the Company believes is materially consistent with the pattern of economic benefit provided by the assets. December 31, (U.S. Dollars, in thousands) Weighted Average Amortization Period 2023 2022 Cost Developed technology 7.9 years $ 92,416 $ 43,699 Patents 10.0 years 43,262 40,108 IPR&D Indefinite 4,674 300 Customer relationships 12.1 years 49,197 15,572 License and other 9.6 years 24,584 23,295 Trademarks—finite lived 10.0 years 1,797 1,875 9.5 years 215,930 124,849 Accumulated amortization Developed technology $ ( 28,898 ) $ ( 17,830 ) Patents ( 40,494 ) ( 37,506 ) Customer relationships ( 11,988 ) ( 6,938 ) License and other ( 16,240 ) ( 14,386 ) Trademarks—finite lived ( 820 ) ( 801 ) ( 98,440 ) ( 77,461 ) Intangible assets, net $ 117,490 $ 47,388 Acquired IPR&D represents the fair value assigned to acquired research and development assets that have not reached technological feasibility. In a business combination, the fair value assigned to acquired IPR&D is determined by estimating the remaining costs to develop the acquired technology into commercially viable products, estimating the resulting revenues from the projects, and discounting the net cash flows to present value. The revenue and cost projections used to value acquired IPR&D are, as applicable, reduced based on the probability of success of developing the asset. Additionally, estimated revenues consider the relevant market sizes and growth factors, expected trends in technology, and the nature and expected timing of new product introductions by the Company and its competitors. The rates utilized to discount the net cash flows to their present value are commensurate with the stage of development of the project and uncertainties in the economic estimates used in the projections. Any future costs to further develop the IPR&D subsequent to acquisition are recorded to research and development expense as incurred. IPR&D assets are considered to be indefinite-lived assets until the completion or abandonment of the associated research and development efforts. During the period the assets are considered indefinite-lived, they are not amortized but tested for impairment. Impairment testing is performed at least annually or when a triggering event occurs that could indicate a potential impairment. If and when development is complete, which generally occurs when regulatory approval to market a product is obtained, the associated assets are reclassified to developed technology and are amortized over an assigned useful life that best reflects the economic benefits provided by these assets. Amortization expense for intangible assets was $ 18.9 million, $ 9.4 million, and $ 9.4 million for the years ended December 31, 2023, December 31, 2022, and 2021, respectively. Future amortization expense for intangible assets is estimated as follows: (U.S. Dollars, in thousands) Amortization 2024 $ 20,948 2025 19,849 2026 18,810 2027 18,426 2028 14,890 Thereafter 19,893 Total finite-lived intangible assets, net $ 112,816 Indefinite-lived intangible assets, net 4,674 Intangible assets, net $ 117,490 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | 8. Goodwill The Company tests goodwill at least annually for impairment. The Company tests more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings, or cash flows, or the development of a material adverse change in the business climate. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. The following table presents the net carrying value of goodwill as of December 31, 2023, and 2022, and a rollforward of such balances from December 31, 2022, by reportable segment: (U.S. Dollars, in thousands) Balance as of Goodwill Acquired in the Merger with SeaSpine Impairment Currency translation adjustment Balance as of Global Spine - Gross $ 71,317 $ 123,617 $ — $ — $ 194,934 Global Spine - Accumulated Impairment Loss — — — — $ — Global Spine - Net $ 71,317 $ 123,617 $ — $ — $ 194,934 Global Orthopedics - Gross $ 11,130 $ — $ — $ 347 $ 11,477 Global Orthopedics - Accumulated Impairment Loss ( 11,130 ) — — ( 347 ) $ ( 11,477 ) Global Orthopedics - Net $ — $ — $ — $ — $ — Goodwill, net of accumulated impairment losses $ 71,317 $ 123,617 $ — $ — $ 194,934 In the fourth quarter of 2021, the Company performed a quantitative assessment of its goodwill. The Company estimated the fair value of each reporting unit using a weighted average of fair value derived from both an income approach and a market approach (all Level 3 fair value measurements). Upon estimating the fair value of each of its reporting units, the Company determined its Global Orthopedics reporting unit’s fair value was less than its carrying value of net assets. This resulted in recording a full impairment of the Global Orthopedics goodwill of $ 11.8 million, which was reflected within Acquisition-related amortization and remeasurement. The assessment concluded there were no indicators of impairment for the Global Spine goodwill. In the fourth quarter of 2022, the Company performed a qualitative assessment for its annual goodwill impairment analysis, which did not result in an impairment charge. This qualitative analysis considered all relevant factors specific to the reporting units, including macroeconomic conditions, industry and market considerations, overall financial performance, and relevant entity-specific events. In the third quarter of 2023, the Company announced the termination of its former President and Chief Executive Officer, former Chief Financial Officer, and former Chief Legal Officer, from their respective roles. Immediately following the announcement, the Company’s market capitalization decreased by approximately 30 %, indicating that an impairment may exist. As a result, the Company performed an interim quantitative assessment of its goodwill as of September 30, 2023. The Company estimated the fair value of each reporting unit using a weighted average of the fair value derived from both an income approach and a market approach (all Level 3 fair value measurements). Upon performing its assessment, the Company determined its Global Spine reporting unit's fair value exceed its carrying value of net assets as of September 30, 2023. In the fourth quarter of 2023, the Company performed a qualitative assessment for its annual goodwill impairment analysis, which did not result in an impairment charge. This qualitative analysis considered all relevant factors specific to the reporting units, including macroeconomic conditions, industry and market considerations, overall financial performance, and relevant entity-specific events. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | 9. Leases The Company determines if a contractual arrangement qualifies as a lease at inception. The Company’s leases primarily relate to facilities, vehicles, equipment, and certain contract manufacturing agreements. Lease assets represent the Company’s right to use an underlying asset for the lease term, while lease liabilities represent the obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company’s incremental borrowing rate is used as a discount rate, based on the information available at the commencement date, in determining the present value of lease payments. Lease assets also include the impact of any prepayments made and are reduced by the impact of any lease incentives. The Company does not recognize lease liabilities or lease assets on the balance sheet for short-term leases (leases with a lease term of twelve months or less as of the commencement date). Rather, any short-term lease payments are recognized as an expense on a straight-line basis over the lease term. The current period short-term lease expense reasonably reflects the Company's short-term lease commitments. For all classifications of leases, the Company combines lease and non-lease components to account for them as a single lease component. Variable lease payments are excluded from the lease liability and recognized in the period in which the obligation is incurred. Additionally, lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. A summary of the Company’s lease portfolio as of December 31, 2023, and 2022, is presented in the table below: (U.S. Dollars, in thousands, except lease term and discount rate) Classification December 31, 2023 December 31, 2022 Assets Operating leases Other long-term assets $ 19,869 $ 6,788 Finance leases Property, plant and equipment, net 16,345 17,360 Total lease assets $ 36,214 $ 24,148 Liabilities Current Operating leases Other current liabilities $ 3,477 $ 1,638 Finance leases Current portion of finance lease liability 708 652 Long-term Operating leases Other long-term liabilities 17,125 5,376 Finance leases Long-term portion of finance lease liability 18,532 19,239 Total lease liabilities $ 39,842 $ 26,905 Weighted Average Remaining Lease Term Operating leases 6.2 years 4.5 years Finance leases 16.6 years 17.6 years Weighted Average Discount Rate Operating leases 7.3 % 4.0 % Finance leases 4.4 % 4.4 % The components of lease costs were as follows: (U.S. Dollars, in thousands) For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 Finance lease costs: Amortization of right-of-use assets $ 1,013 $ 1,238 $ 2,049 Interest on finance lease liabilities 857 890 933 Operating lease costs 5,015 2,126 2,234 Short-term lease costs 313 152 213 Variable lease costs 1,883 932 815 Total lease costs $ 9,081 $ 5,338 $ 6,244 Supplemental cash flow information related to leases was as follows: (U.S. Dollars, in thousands) For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 7,682 $ 3,805 $ 4,627 Operating cash flows from finance leases 857 885 907 Financing cash flows from finance leases 652 2,594 537 Right-of-use assets obtained in exchange for lease obligations Operating leases 16,688 5,603 589 Finance leases — — 149 A summary of the Company’s remaining lease liabilities as of December 31, 2023, is included below: (U.S. Dollars, in thousands) Operating Finance 2024 $ 4,861 $ 1,538 2025 4,788 1,543 2026 4,607 1,562 2027 3,441 1,593 2028 1,785 1,624 Thereafter 6,766 19,396 Total undiscounted value of lease liabilities 26,248 27,256 Less: Interest ( 5,646 ) ( 8,016 ) Present value of lease liabilities $ 20,602 $ 19,240 Current portion of lease liabilities $ 3,477 $ 708 Long-term portion of lease liabilities 17,125 18,532 Total lease liabilities $ 20,602 $ 19,240 |
Other current liabilities
Other current liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Other current liabilities | 10. Other current liabilities December 31, (U.S. Dollars, in thousands) 2023 2022 Accrued expenses $ 12,189 $ 9,611 Salaries, bonuses, employee commissions, and related taxes payable 38,826 18,531 Accrued distributor commissions 22,602 10,483 Accrued litigation and investigation costs 12,077 3,891 Short-term operating lease liability 3,477 1,638 Non-income taxes payable 7,585 6,586 Other payables 8,152 4,634 Other current liabilities $ 104,908 $ 55,374 |
Indebtedness
Indebtedness | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Indebtedness | 11. Indebtedness The carrying values of the Company’s outstanding debt obligations as of December 31, 2023, and 2022, were as follows: December 31, (U.S. Dollars, in thousands) 2023 2022 Initial Term Loan Principal amount $ 100,000 $ — Unamortized original debt discount ( 4,331 ) — Unamortized debt issuance costs and lenders fees ( 1,312 ) — Total indebtedness from initial term loan 94,357 — Revolving Credit Facilities Principal amount outstanding — — Total indebtedness outstanding $ 94,357 $ — Current portion of long-term debt $ 1,250 $ — Long-term debt 93,107 — Total indebtedness outstanding $ 94,357 $ — The Company paid cash related to interest of $ 5.8 million, $ 1.4 million, and $ 1.5 million for the years ended December 31, 2023, 2022, and 2021, respectively. Financing Agreement On November 6, 2023, the Company, as borrower, and certain subsidiaries of the Company as guarantors, entered into a Financing Agreement (the “Financing Agreement”) with Blue Torch Finance LLC, as administrative agent and collateral agent (the “Agent”), and certain lenders party thereto. The Financing Agreement provides for a $ 100.0 million senior secured term loan (the “Initial Term Loan”), a $ 25.0 million senior secured delayed draw term loan facility (the “Delayed Draw Term Loan”) which, subject to certain conditions specified in the Financing Agreement, may be drawn on or prior to March 30, 2024, and a $ 25.0 million senior secured revolving credit facility (the “Revolving Credit Facility,” and together with the Initial Term Loan and the Delayed Draw Term Loan, the “Credit Facilities”), each of which mature on November 6, 2027 . In connection with entering into the Financing Agreement, the Company repaid in full amounts outstanding and terminated all commitments under the Company’s prior $ 175 million senior secured revolving credit facility evidenced by that certain Second Amended and Restated Credit Agreement, dated as of October 25, 2019, among the Company, certain subsidiaries of the Company as borrowers and guarantors, JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (as amended, supplemented or otherwise modified, the “Prior Credit Agreement”). The Initial Term Loan was fully funded on the effective date of November 6, 2023. As of December 31, 2023 , the Company had no t made any borrowings under the Delayed Draw Term Loan or the Revolving Credit Facility. However, on January 10, 2024, the Company borrowed $ 15.0 million under the Revolving Credit Facility, which remains outstanding as of the date of this filing. Borrowings under the Financing Agreement were and may be used for, among other things, the repayment in full of the Prior Credit Agreement, working capital and other general corporate purposes of the Company. Borrowings under the Credit Facilities bear interest at a floating rate, which will be, at the Company’s option, either the three-month SOFR rate (subject to a floor of 3.00 % and a credit spread adjustment of 0.26161 %) (the “Adjusted Term SOFR Rate”) plus an applicable margin of 7.25 %, or a base rate plus an applicable margin of 6.25 % . A revolving unused line fee of 2.00 % is payable monthly in arrears based on the average amount of the undrawn portion of each lender’s revolving credit commitments under the Revolving Credit Facility for the preceding month. A delayed draw unused fee equal to the Adjusted Term SOFR Rate plus a margin of 1.00 % is payable monthly in arrears based on the average amount of the undrawn portion of each lender’s delayed draw term loan commitments in respect of the Delayed Draw Term Loan for the preceding month. Certain of the Company’s existing and future material subsidiaries (collectively, the “Guarantors”) are required to guarantee the repayment of the Company’s obligations under the Financing Agreement. The obligations of the Company and each of the Guarantors with respect to the Financing Agreement are secured by a pledge of substantially all assets of the Company and each of the Guarantors, including, without limitation, accounts receivables, deposit accounts, intellectual property, investment property, inventory, equipment and equity interests in their respective subsidiaries. The Financing Agreement contains customary affirmative and negative covenants, including limitations on the Company’s and its subsidiaries ability to incur additional debt, grant or permit additional liens, make investments and acquisitions, merge or consolidate with others, dispose of assets, pay dividends and distributions, pay subordinated indebtedness, and enter into affiliate transactions. In addition, the Financing Agreement contains financial covenants requiring the Company to maintain a minimum level of liquidity at all times, a maximum consolidated leverage ratio (measured on a quarterly basis), and a minimum asset coverage ratio (measured on a monthly basis). The Financing Agreement also includes events of default customary for facilities of this type and upon the occurrence of such events of default, subject to customary cure rights, all outstanding loans under the Credit Facilities may be accelerated and/or the lenders’ commitments terminated. The Financing Agreement contains customary representations and warranties of the Company and the Guarantors. These representations and warranties have been made solely for the benefit of the Agent and the lenders party to the Financing Agreement and such representations and warranties should not be relied on by any other person, including investors. In addition, such representations and warranties (i) have been qualified by disclosures made to the Agent and the lenders in connection with the agreement, (ii) are subject to the materiality standards contained in the agreement which may differ from what may be viewed as material by investors and (iii) were made only as of the date of the agreement or such other date as is specified in the agreement. In conjunction with obtaining the Financing Agreement, the Company paid $ 2.0 million in debt issuance costs and lenders fees. These costs have been allocated amongst each of the Initial Term Loan, Delayed Draw Term Loan, and Revolving Credit Facility and are being amortized over the life of the Financing Agreement. Capitalized debt issuance costs attributable to the Delayed Draw Term Loan and Revolving Credit Facility are included in other long-term assets, net of accumulated amortization, whereas capitalized debt issuance costs associated with the Initial Term Loan are recognized as a direct reduction of the outstanding indebtedness. As of December 31, 2023, and December 31, 2022 , debt issuance costs associated with all credit facilities (whether the Financing Agreement or the Prior Credit Agreement), net of accumulated amortization, were $ 1.9 million and $ 0.7 million, respectively. Debt issuance costs amortized or expensed totaled $ 1.3 million, $ 0.4 million, and $ 0.4 million for each of the years ended December 31, 2023, 2022, and 2021, respectively . Prior Credit Agreement As disclosed above, on October 25, 2019, the Company, and certain of its wholly-owned subsidiaries (collectively with the Company, the “Borrowers”), as borrowers, and certain material subsidiaries of the Company as guarantors, entered into the Prior Credit Agreement with JPMorgan Chase Bank, N.A. (“JPMorgan”), as Administrative Agent, and certain lender parties thereto. The Prior Credit Agreement provided for a $ 300.0 million secured revolving credit facility, amending and restating the revolving credit facility that previously existed with such lenders. The Prior Credit Agreement had a maturity date of October 25, 2024 . On March 1, 2023, the Amended Credit Agreement and the Facility were amended to replace London Inter-Bank Offered Rate ("LIBOR")-based pricing with Secured Overnight Financing Rate ("SOFR")-based pricing. On June 13, 2023, the Company entered into a Limited Consent, Limited Waiver and Second Amendment to the Original Credit Agreement (the "Consent and Amendment"). Under the terms of the Consent and Amendment, the parties agreed to reduce the size of the secured revolving credit facility, off of which certain fees are based, from $ 300.0 million to $ 175.0 million, and to increase the applicable interest rate in certain circumstances. On January 3, 2023, the Company borrowed $ 30.0 million for working capital purposes, including to fund certain Merger-related expenses, under the Prior Credit Agreement. Subsequently, the Company borrowed an additional $ 49.0 million to fund working capital needs whereby, as of the effective date of the Financing Agreement, the Company had $ 79.0 million in principal amount of borrowings outstanding under the Prior Credit Agreement. In connection with entering into the Financing Agreement, the Company repaid in full all amounts outstanding and terminated all commitments under the Prior Credit Agreement. Italian Line of Credit The Company has an unused available Italian line of credit of € 5.5 million ($ 6.1 million and $ 5.9 million) at December 31, 2023, and 2022 , respectively. This unsecured line of credit provides the Company the option to borrow amounts in Italy at interest rates determined at the time of borrowing. |
Fair value measurements and inv
Fair value measurements and investments | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements And Investment Disclosure [Abstract] | |
Fair value measurements and investments | 12. Fair value measurements and investments Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Non-financial assets and liabilities of the Company measured at fair value include any long-lived assets that are impaired in a currently reported period or equity securities measured at observable prices in orderly transactions. The authoritative guidance also describes three levels of inputs that may be used to measure fair value: Level 1: quoted prices in active markets for identical assets and liabilities Level 2: observable inputs other than quoted prices in active markets for identical assets and liabilities Level 3: unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions The Company’s financial instruments include cash equivalents, accounts receivable, accounts payable, long-term secured debt, available for sale debt securities, equity securities, contingent consideration, and deferred compensation plan liabilities. The carrying value of cash equivalents, accounts receivable, and accounts payable approximate fair value due to the short-term maturities of these instruments. The Company’s secured term loan carries a floating rate of interest; therefore, the carrying value of long-term debt is considered to approximate the fair value. The Company’s available for sale debt securities, equity securities, contingent consideration, and deferred compensation plan liabilities are the only financial instruments recorded at fair value on a recurring basis as follows: (U.S. Dollars, in thousands) Level 1 Level 2 Level 3 Balance Assets Neo Medical convertible loan agreement $ — $ — $ 6,760 $ 6,760 Neo Medical preferred equity securities — 4,951 — 4,951 Bone Biologics equity securities — — — — Other investments — — 1,309 1,309 Total $ — $ 4,951 $ 8,069 $ 13,020 Liabilities Lattus contingent consideration $ — $ — $ ( 8,500 ) $ ( 8,500 ) Spinal Kinetics contingent consideration — — — — Deferred compensation plan — ( 1,674 ) — ( 1,674 ) Total $ — $ ( 1,674 ) $ — $ ( 10,174 ) (U.S. Dollars, in thousands) Level 1 Level 2 Level 3 Balance Assets Neo Medical convertible loan agreements $ — $ — $ 7,140 $ 7,140 Neo Medical preferred equity securities — 6,084 — 6,084 Bone Biologics equity securities — — — — Other Investments — — 1,726 1,726 Total $ — $ 6,084 $ 7,140 $ 14,950 Liabilities Spinal Kinetics contingent consideration $ — $ — $ — $ — Deferred compensation plan — ( 1,515 ) — ( 1,515 ) Total $ — $ ( 1,515 ) $ — $ ( 1,515 ) The fair value of the Company’s deferred compensation plan liabilities is determined based on inputs that are readily available in public markets or that can be derived from information available in publicly quoted markets; therefore, the Company has categorized this liability as a Level 2 financial instrument. Neo Medical Convertible Loan Agreements and Equity Investment On October 1, 2020, the Company purchased shares of Neo Medical’s preferred stock for consideration of $ 5.0 million and entered into a Convertible Loan Agreement (the “Convertible Loan”) pursuant to which Orthofix loaned Neo Medical CHF 4.6 million, or $ 5.0 million at the date of issuance. The Convertible Loan bears interest at 8.0 %, with interest due semi-annually. At each interest payment date, the borrower may elect to capitalize any interest due to the then outstanding principal balance of the loan. The Convertible Loan matures on October 1, 2024 . 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 may be convertible by either party into shares of Neo Medical’s preferred stock. The Company may convert the loan at its own election at any time prior to the full repayment or settlement of the Convertible Loan. Neo Medical may elect to convert the loan only in the event of a qualified financing event, as defined within the agreement. The price per share at which the loan converts is dependent upon (i) the party electing conversion and (ii) Neo Medical’s price per share in its most recent fundraising activities at the time of conversion, as specified within the agreement. In October 2021, the Company entered into an additional Convertible Loan Agreement (the “Additional Convertible Loan”), pursuant to which the Company loaned Neo Medical an additional CHF 0.6 million ($ 0.7 million as of the issuance date). In January 2022, the Company elected to convert the Additional Convertible Loan into shares of Neo Medical’s preferred stock. 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. The table below presents a reconciliation of the carrying value of the Company’s investment in Neo Medical preferred equity securities for the years ended December 31, 2023, and 2022: (U.S. Dollars, in thousands) 2023 2022 Fair value of Neo Medical preferred equity securities at January 1 $ 6,084 $ 5,413 Conversion of loan into preferred equity securities — 671 Foreign currency remeasurement recognized in other income, net 388 — Unrealized loss recognized in other income (expense), net ( 1,521 ) — Fair value of Neo Medical preferred equity securities at December 31 $ 4,951 $ 6,084 Cumulative unrealized gain (loss) on Neo Medical preferred equity securities ( 720 ) 413 The Convertible Loan is recorded in other current assets as an available for sale debt security as of December 31, 2023, while as of December 31, 2022, this balance was classified within other long-term assets. The Convertible Loan is recorded at fair value, with applicable interest recorded in interest income. The fair value of the Convertible Loan is based upon significant unobservable inputs, including the use of option-pricing models, Monte Carlo simulations for certain periods, and a probability-weighted discounted cash flows model, requiring the Company to develop its own assumptions. Therefore, the Company has categorized this asset as a Level 3 financial asset. Some of the more significant unobservable inputs used in the fair value measurement of the Convertible Loan include applicable discount rates, implied volatility, the likelihood and projected timing of repayment or conversion, 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. Impairment resulting from credit losses is recognized within the statement of income, while impairment resulting from other factors is recognized within other comprehensive income (loss). As of December 31, 2023 , the Company has recognized $ 0.3 million in credit losses related to the Convertible Loan. The following table provides a reconciliation of the beginning and ending balances of the Convertible Loan(s), measured at fair value using significant unobservable inputs (Level 3): (U.S. Dollars, in thousands) 2023 2022 Fair value of Neo Medical Convertible Loans at January 1 $ 7,140 $ 7,148 Additions — — Interest recognized in interest income, net 496 436 Foreign currency remeasurement recognized in other income (expense), net 617 ( 67 ) Unrealized gain (loss) recognized in other comprehensive income (loss) ( 1,233 ) 294 Expected credit loss recognized in other income (expense), net ( 260 ) — Conversion of Additional Convertible Loan into preferred equity securities — ( 671 ) Fair value of Neo Medical Convertible Loans at December 31 $ 6,760 $ 7,140 Contractual value of Neo Medical Convertible Loans at December 31 $ 7,020 $ 5,907 Allowance for credit loss recognized in other income (expense), net ( 260 ) — Amortized cost basis of Neo Medical Convertible Loans at December 31 $ 6,760 $ 5,907 The following table provides quantitative information related to certain key assumptions utilized within the valuation of the Convertible Loan as of December 31, 2023: (U.S. Dollars, in thousands) Fair Value as of December 31, 2023 Unobservable inputs Estimate Neo Medical Convertible Loan $ 6,760 Cost of equity discount rate 19.3 % Present value factor 15.3 % Implied volatility 81.1 % Bone Biologics Equity Securities Until August of 2022, the Company held an investment in common stock of Bone Biologics Inc. (“Bone Biologics”), a developer of orthobiologic products. Prior to 2021, the equity securities were considered an investment that did not have a readily determinable fair value as Bone Biologics had very limited trading volumes. As such, the Company measured the investments at cost, less any impairments, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. In 2021, Bone Biologics completed a public offering of units, with each unit consisting of one share of common stock and one warrant to purchase common shares. As a result, Bone Biologics’ common stock became actively traded on the NASDAQ (ticker BBLG). The Company concluded the investment represented a Level 1 fair value measurement subsequent to the public offering as the common shares subsequently had quoted prices in active markets for identical assets. As such, the Company recorded the investment at fair value, with changes in fair value recorded within other income (expense), net, subsequent to the public offering. The following table presents the changes in fair value recognized for each of the years ended December 31, 2023, 2022, and 2021: (U.S. Dollars, in thousands) 2023 2022 2021 Bone Biologics equity securities at January 1 $ — $ 309 $ — Fair value adjustments and impairments recognized in other income (expense), net — ( 183 ) 309 Proceeds from the disposition of equity securities — ( 126 ) — Bone Biologics equity securities at December 31 $ — $ — $ 309 Other investments Other investments represent other assets and investments recorded at fair value that are not deemed to be material for disclosure on an individual basis. The fair value of these assets is based upon significant unobservable inputs, such as probability-weighted discounted cash flows models, requiring the Company to develop its own assumptions. Therefore, the Company has categorized these assets as Level 3 financial assets. This balance is classified within other current assets as of December 31, 2023, and was classified in other long-term assets as of December 31, 2022. Spinal Kinetics Contingent Consideration The Company recognized a contingent consideration obligation in connection with the acquisition of Spinal Kinetics in 2018. The fair value of the remaining Spinal Kinetics contingent consideration, attributable to a revenue-based milestone, was concluded to be zero as the Company did not achieve the milestone prior to April 30, 2023, the end of the measurement period for achieving such milestone. 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) 2023 2022 Spinal Kinetics contingent consideration at January 1 $ — $ 17,200 Decrease in fair value recognized in acquisition-related amortization and remeasurement — ( 17,200 ) Payment made — — Spinal Kinetics contingent consideration at December 31 $ — $ — Lattus Contingent Consideration In connection with the Merger, the Company assumed a contingent consideration obligation under a purchase agreement between SeaSpine and Lattus Spine LLC ("Lattus") executed in December 2022. Under the terms of the agreement, the Company may be required to make installment payments at certain dates based on future net sales of certain products (the "Lateral Products"). The estimated fair value of the Lattus contingent consideration is determined using a Monte Carlo simulation and a discounted cash flow model requiring significant inputs which are not observable in the market. The significant inputs include assumptions related to the timing and probability of certain product launch dates, estimated future sales of Lateral Products, revenue risk-adjusted discount rate, revenue volatility, and discount rates matched to the timing of payments. The following table provides a reconciliation of the beginning and ending balances for the Lattus contingent consideration measured at estimated fair value using significant unobservable inputs (Level 3): (U.S. Dollars, in thousands) 2023 2022 Lattus contingent consideration estimated fair value at January 5 $ 11,200 $ — Decrease in fair value recognized in acquisition-related amortization and remeasurement ( 2,700 ) — Lattus contingent consideration estimated fair value at December 31 $ 8,500 $ — The following table provides quantitative information related to certain key assumptions utilized within the valuation as of December 31, 2023: (U.S. Dollars, in thousands) Fair Value as of Unobservable inputs Estimate Lattus Contingent Consideration $ 8,500 Counterparty discount rate 14.0 % Revenue risk-adjusted discount rate 6.5 % |
Commitments and contingencies
Commitments and contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and contingencies | 13. Commitments and contingencies Contingencies policy The Company records accruals for certain outstanding legal proceedings, investigations, or claims when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company evaluates developments in legal proceedings, investigations, and claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable on a quarterly basis. When a loss contingency is not both probable and reasonably estimable, the Company does not accrue the loss. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses a reasonable estimate of the possible loss or range of loss, if such reasonable estimate can be made. If the Company cannot make a reasonable estimate of the possible loss, or range of loss, then that is disclosed. In addition, legal fees and other directly related costs are expensed as incurred. In addition to the matters described in the paragraphs below, in the normal course of its business, the Company is involved in various lawsuits from time to time and may be subject to certain other contingencies. The Company believes any losses related to these matters are individually and collectively immaterial as to a possible loss and range of loss. Arbitration claims with former executives In September 2023, the Company’s Board of Directors terminated the employment of Keith Valentine, John Bostjancic and Patrick Keran, who had served respectively as the Company’s President and Chief Executive Officer, Chief Financial Officer and Chief Legal Officer. The Board’s decision followed an investigation conducted by independent outside legal counsel and directed and overseen by the Company’s independent directors. As a result of the investigation, the Board determined that each of these executives engaged in repeated inappropriate and offensive conduct that violated multiple code of conduct requirements and was inconsistent with the Company’s values and culture. The Company notified each of Messrs. Valentine, Bostjancic and Keran that their respective terminations were being made for “Cause,” as defined in applicable employment-related agreements (including each executive’s respective Change in Control and Severance Agreement, dated June 19, 2023). The Company also notified each of Messrs. Valentine, Bostjancic and Keran that it did not believe it was required to make any further payments to them, other than payment of salary through September 12, 2023. The Board also requested that Mr. Valentine resign as a director, which he did in October 2023. In January 2024, the Company received written notices of arbitration claims from counsel to Messrs. Valentine, Bostjancic and Keran. Each of the arbitration claims asserts that the respective former executive was wrongfully terminated for “Cause” because the former executive’s conduct did not meet the contractually applicable definition of “Cause.” The claims seek relief for, among other things, alleged breach of contract, defamation, false light invasion of privacy, deceit, as well as indemnification and advancement for attorneys’ fees. The three former executives seek severance payments, as well as the value of forfeited equity grants, under applicable change in control and severance agreements and further damages as a result of purported defamatory statements. The Company disagrees with many of the assertions contained in the written notices of arbitration claims and intends to vigorously defend the asserted claims. Due in part to the preliminary nature of this matter, the Company currently cannot reasonably estimate a possible loss, or range of loss, that may arise from the arbitration claims. 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. In the third quarter of 2022, the Italian Ministry of Health provided guidelines to the Italian regions and provinces on seeking payback of expenditure overruns relating to the years ended December 31, 2015, through December 31, 2018. Since receiving the guidelines, several regions and provinces have requested payment from affected medical device companies, including the Company. The Company has taken legal action to dispute the legality of such measures. The Company accounts for the estimated cost of the IMDP as sales and marketing expense and periodically reassesses the liability based upon current facts and circumstances. As a result, the Company recorded expense of $ 1.3 million for the year ended December 31, 2023, expense of $ 1.2 million for the year ended December 31, 2022, and a benefit of $ 1.2 million for the year ended December 31, 2021, as a result of certain temporary relief provided by the Italian National Healthcare System in response to the COVID-19 pandemic. As of December 31, 2023 , the Company has accrued $ 7.6 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 all legal proceedings are resolved and upon further clarification of the IMDP by the Italian authorities for more recent fiscal years. Commitments The Company is party to certain agreements with distributor partners that provide the Company with an option to purchase, and/or an option for those partners to require the Company to purchase, the distribution business of those partners at specified future dates. At such time, the Company or distributor may (in certain cases, subject to satisfying certain conditions) submit written notice to the other of its intention to exercise its rights and initiate or require the purchase. Upon the receipt of the written notice, the Company and the distributor will work in good faith to consummate the purchase. Under certain of these agreements, the purchase price would be paid in shares of the Company's common stock whereas for others, the purchase price can be paid in cash or shares at the Company’s option. Based on the closing price of the Company's common stock as of December 31, 2023 , assuming all criteria are met and that the options under all the relevant agreements were exercised, the estimated total number of shares the Company would issue under these agreements was approximately 1.6 million shares for agreements that must be settled in shares of the Company’s stock. The Company has received notification from one such distributor, who has notified the Company of its decision to exercise its buyout option. The Company is currently in negotiations with this distributor in regard to the consummation of the potential acquisition. |
Shareholder's equity
Shareholder's equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Shareholders' equity | 14. Shareholders’ equity Dividends The Company has not historically paid dividends to holders of its common stock. Certain subsidiaries of the Company have restrictions on their ability to pay dividends in certain circumstances pursuant to the Financing Agreement. In the event that the Company decides to pay a dividend to holders of its common stock in the future with dividends received from its subsidiaries, the Company may, based on prevailing rates of taxation, be required to pay additional withholding and income tax on such amounts received from its subsidiaries. Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) is comprised of foreign currency translation adjustments and unrealized gains (losses) on available for sale debt securities. The Company’s policy is to release income tax effects related to items recognized within accumulated other comprehensive income (loss) using a portfolio approach. The components of and changes in accumulated other comprehensive income (loss) are as follows: (U.S. Dollars, in thousands) Currency Neo Medical Convertible Loans Other Investments Accumulated Other Balance at December 31, 2020 $ 1,833 $ 1,419 $ — $ 3,252 Other comprehensive loss ( 2,544 ) ( 942 ) — ( 3,486 ) Income taxes — 234 — 234 Balance at December 31, 2021 $ ( 711 ) $ 711 $ — $ — Other comprehensive income (loss) ( 1,771 ) 294 101 ( 1,376 ) Income taxes — — — — Balance at December 31, 2022 $ ( 2,482 ) $ 1,005 $ 101 $ ( 1,376 ) Other comprehensive income (loss) 1,417 ( 1,233 ) ( 101 ) 83 Income taxes — — — — Balance at December 31, 2023 $ ( 1,065 ) $ ( 228 ) $ — $ ( 1,293 ) |
Revenue recognition and account
Revenue recognition and accounts receivable | 12 Months Ended |
Dec. 31, 2023 | |
Revenue Recognition And Accounts Receivable [Abstract] | |
Revenue recognition and accounts receivable | 15. Revenue recognition and accounts receivable Revenue Recognition The Company accounts for a contract when there is (i) approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, (v) and collectability of consideration is probable. The Company’s contracts may contain one or more performance obligations. If a contract contains more than one performance obligation, the Company allocates the total transaction price to each of the performance obligations based upon the observable standalone selling price of the promised goods or services underlying each performance obligation. The Company recognizes revenue when control of the promised goods or services is transferred to the customer, which typically occurs at a point in time upon shipment, delivery, or utilization, in an amount that reflects the consideration which the Company expects to be entitled to in exchange for the promised goods or services. The consideration for goods or services reflects any fixed amount stated per the contract and estimates for any variable consideration, such as discounts, to the extent that is it probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The following sections discuss the Company’s revenue recognition policies by significant product category: Bone Growth Therapies Bone Growth Therapies revenue is largely attributable to the U.S. and is comprised of third-party payor transactions and wholesale revenue. The largest portion of Bone Growth Therapies revenue is derived from third-party payors. This includes commercial insurance carriers, health maintenance organizations, preferred provider organizations, and governmental payors, such as Medicare. Revenue is recognized when the product is fitted to and accepted by the patient and all applicable documents required by the third-party payor have been obtained. Amounts paid by third-party payors are generally based on fixed or allowable reimbursement rates. These revenues are recorded at the expected or preauthorized reimbursement rates, net of any contractual allowances or adjustments. Certain billings are subject to review by the third-party payors and may be subject to adjustment. Wholesale revenue is related to the sale of the Company’s bone growth stimulators directly to durable medical equipment suppliers. Wholesale revenues are typically recognized upon shipment and receipt of a confirming purchase order, which is when the customer obtains control of the promised goods. Biologics Biologics revenue is largely attributable to the U.S. and is mostly processed from within our Irvine facility. In addition, we have a long standing collaborative arrangement with MTF that provides exclusive global marketing rights to MTF’s Trinity and FiberFuse product families. Per the terms of the agreement, MTF sources the tissue, processes it to create the allografts, packages, and delivers the tissue to the customer. The Company received marketing fees from MTF based on sales of products covered under the collaborative arrangement. MTF is considered the principal in these arrangements; therefore, the Company recognizes marketing service fees on a net basis within net sales upon shipment of the product to the customer and receipt of a confirming purchase order. Spinal Implants and Global Orthopedics Spinal Implants and Global Orthopedics products are distributed world-wide, with U.S. sales largely comprised of commercial sales and international sales derived from both commercial sales and stocking distributor arrangements. Commercial revenue is largely related to the sale of the Company’s Spinal Implants and Global Orthopedics products to hospital customers. The customer obtains control and revenues are recognized when these products have been utilized and a confirming purchase order has been received from the hospital. Other revenues within the Spinal Implants and Global Orthopedics product categories are derived from stocking distributors, who purchase the Company’s products and then re-sell them directly to customers, such as hospitals. For stocking distributor arrangements, it is the Company’s policy to recognize revenue upon shipment and receipt of a confirming purchase order, which is when the distributor obtains control of the promised goods. The transaction price for revenue recognition is estimated based upon the Company’s historical collection experience with the stocking distributor. Product Sales and Marketing Service Fees The table below presents net sales, which includes product sales and marketing service fees, for each of the years ended December 31, 2023, 2022, and 2021. For the year ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Product sales $ 693,345 $ 405,437 $ 409,554 Marketing service fees 53,296 55,276 54,925 Net sales $ 746,641 $ 460,713 $ 464,479 Marketing service fees are received from MTF based on total sales of biologics tissues and relates solely to the Biologics product category within the Global Spine reporting segment, whereas product sales primarily consist of the sale of Bone Growth Therapies, Spinal Implants, non-MTF sourced Biologics, Enabling Technologies, and Global Orthopedics products. Marketing service fees received from MTF were $ 53.3 million, or approximately 32 % of total Biologics revenues, for the year ended December 31, 2023. As MTF is the single supplier for certain allografts in the Company’s Biologics portfolio, derived from deceased donors for their bone grafts and living donors for their amnion grafts, any event or circumstance that would impact MTF’s continued access to donors or the Company’s ability to market these tissues may adversely impact the Company’s financial results. Revenues exclude any value added or other local taxes, intercompany sales, and trade discounts. Shipping and handling costs for products shipped to customers are included in cost of sales, and were $ 9.5 million, $ 4.2 million, and $ 3.5 million for the years ended December 31, 2023, 2022, and 2021, respectively. Accounts receivable and related allowances Payment terms vary by the type and location of the Company’s customers and the products or services offered. The term between invoicing and when payment is due is not significant. T he 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 certain assumptions and judgments. The determination of the contractual life of accounts receivable, the aging of outstanding 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 years ended December 31, 2023, and 2022: For the year ended December 31, (U.S. Dollars, in thousands) 2023 2022 Allowance for expected credit losses beginning balance $ 6,419 $ 4,944 Addition resulting from the Merger with SeaSpine 137 — Current period provision for expected credit losses 820 2,095 Write-offs charged against the allowance and other ( 381 ) ( 450 ) Effect of changes in foreign exchange rates 135 ( 170 ) Allowance for expected credit losses ending balance $ 7,130 $ 6,419 The Company will generally sell receivables from certain Italian public hospitals each year to accelerate cash collections. During 2023, 2022, and 2021 , the Company sold € 9.2 million, € 9.2 million, and € 8.4 million ($ 10.0 million, $ 9.6 million, and $ 9.9 million) of receivables, respectively. The related fees for 2023, 2022, and 2021 , were $ 0.4 million, $ 0.3 million, and $ 0.2 million, respectively, which were recorded as interest expense. Accounts receivables sold without recourse are removed from the balance sheet at the time of sale. Contract Liabilities The Company’s contract liabilities largely related to a prepayment of $ 13.9 million received in 2020 from the Centers for Medicare and Medicaid Services ("CMS") as part of the Accelerated and Advance Payment Program of the CARES Act. On October 1, 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 Program’s recoupment terms for providers and suppliers that received funds from the program. In April 2021, Medicare began to recoup 25 % of Medicare payments otherwise owed to the provider or supplier for submitted claims. Recoupment then increased to 50 % of Medicare payments in March 2022. Thus, during these time periods, rather than receiving the full amount of payment for newly submitted claims, the Company’s outstanding balance under the Accelerated and Advance Payment Program was reduced by the recoupment amount until the full balance had been repaid. The following table provides a detail of changes in the Company’s contract liability associated with the Accelerated and Advanced Payment Program for the years ended December 31, 2023, and 2022: For the Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 Contract liability beginning balance $ — $ 4,791 Recoupment recognized in net sales — ( 4,791 ) Contract liability ending balance $ — $ — Other Contract Assets The Company’s contract assets, excluding accounts receivable (“Other Contract Assets”), largely consist of payments made to certain distributors to obtain contracts, gain access to customers in certain territories, and to provide the benefit of the exclusive distribution of the Company’s products. Other Contract Assets are included in other long-term assets and totaled $ 0.3 million and $ 1.1 million as of December 31, 2023, and 2022, respectively. Other Contract Assets are amortized on a straight-line basis over the term of the related contract. For the year ended December 31, 2023 , the Company recorded $ 0.4 million in impairment charges related to the termination of certain distribution agreements. No impairments were incurred for other contract assets 2022 . Further, the Company applies the practical expedient to expense sales commissions when incurred, as the applicable amortization period would be for one year or less. |
Business segment information
Business segment information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Business segment information | 16. Business segment information The Company's operations are managed through two reporting segments: Global Spine and Global Orthopedics. These reporting segments represent the operating segments for which the Chief Executive Officer, who is also the CODM, reviews financial information and makes resource allocation decisions among businesses. The primary metric used by the CODM in managing the Company is adjusted earnings before interest, tax, depreciation, and amortization (“adjusted EBITDA”, a non-GAAP financial measure). Adjusted EBITDA represents earnings before interest income (expense), income taxes, depreciation, and amortization, and excludes the impact of share-based compensation, gains and losses related to changes in foreign exchange rates, charges related to the SeaSpine merger and other strategic investments, acquisition-related fair value adjustments, gains and/or losses on investments, litigation and investigation charges, charges related to initial compliance with regulations set forth by the European Union Medical Device Regulation, gains and/or losses related to the realized effects the COVID-19 pandemic has had on the Company's business operations, and succession charges. Corporate activities are comprised of operating expenses not directly identifiable within the two reporting segments, such as human resources, finance, legal, and information technology functions. The Company neither discretely allocates assets, other than goodwill, to its operating segments nor evaluates the operating segments using discrete asset information. Global Spine The Global Spine reporting segment offers two primary product categories: (i) Bone Growth Therapies and (ii) Spinal Implants, Biologics, and Enabling Technologies. The Bone Growth Therapies product category manufactures, distributes, sells, and provides support services for market leading devices used adjunctively in high-risk spinal fusion procedures and to treat both nonunion and acute fractures in the orthopedic space. These Class III medical devices are indicated as an adjunctive, noninvasive treatment to improve fusion success rates in the cervical and lumbar spine as well as a therapeutic treatment for non-spine acute and nonunion fractures. This product category uses distributors and a direct sales channel to sell its devices to hospitals, healthcare providers, and patients, in the U.S. Spinal Implants, Biologics, and Enabling Technologies is comprised of (i) a broad portfolio of spine fixation and motion preservation implant products used in surgical procedures of the spine, (ii) one of the most comprehensive biologics portfolios in both the demineralized bone matrix and cellular allograft market segments, and (iii) image-guided surgical solutions to facilitate degenerative, minimally invasive, and complex surgical procedures. Spinal Implants, Biologics, and Enabling Technologies products are sold through a network of distributors and sales representatives to hospitals and healthcare providers on a global basis for Spinal Implants and Enabling Technologies, and primarily within the U.S. for Biologics. Global Orthopedics The Global Orthopedics reporting segment offers products and solutions for limb deformity correction and complex limb reconstruction with a focus on use in trauma, adult and pediatric limb reconstruction, and foot and ankle procedures. This reporting segment specializes in the design, development, and marketing of external and internal fixation orthopedic products that are coupled with enabling digital technologies to serve the complete patient treatment pathway. We sell these products through a global network of distributors and sales representatives to hospitals, healthcare organizations, and healthcare providers. Corporate Corporate activities are comprised of the operating expenses and activities of the Company not necessarily identifiable within the two reporting segments. The table below presents net sales by major product category by reporting segment: Year Ended December 31, 2023 2022 2021 (U.S. Dollars, in thousands) Net Sales Percent of Net Sales Percent of Net Sales Percent of Bone Growth Therapies $ 212,530 28.5 % $ 187,247 40.7 % $ 187,448 40.4 % Spinal Implants, Biologics, and Enabling Technologies 418,789 56.1 % 165,927 36.0 % 171,515 36.9 % Global Spine 631,319 84.6 % 353,174 76.7 % 358,963 77.3 % Global Orthopedics 115,322 15.4 % 107,539 23.3 % 105,516 22.7 % Net sales $ 746,641 100.0 % $ 460,713 100.0 % $ 464,479 100.0 % The following table presents adjusted EBITDA, the primary metric used in managing the Company, by reporting segment: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Adjusted EBITDA by reporting segment Global Spine $ 91,115 $ 62,692 $ 71,086 Global Orthopedics 442 5,267 9,260 Corporate ( 45,272 ) ( 19,406 ) ( 19,084 ) Consolidated adjusted EBITDA $ 46,285 $ 48,553 $ 61,262 Reconciling items: Interest expense, net $ 8,631 $ 1,288 $ 1,837 Depreciation and amortization 53,063 29,019 41,355 Share-based compensation expense 35,707 18,443 15,432 Foreign exchange impact ( 1,581 ) 3,291 3,981 SeaSpine merger-related costs 36,623 12,010 — Strategic investments 2,272 4,018 5,700 Acquisition-related fair value adjustments 33,393 ( 15,595 ) ( 2,014 ) (Gain) loss on investments 1,781 187 ( 644 ) Litigation and investigation costs 14,453 803 33 Medical device regulation 9,446 10,261 8,018 Business interruption - COVID-19 — 2,387 320 Succession charges 1,176 147 739 Loss before income taxes $ ( 148,679 ) $ ( 17,706 ) $ ( 13,495 ) The following table presents depreciation and amortization by reporting segment: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Global Spine $ 41,213 $ 18,213 $ 17,548 Global Orthopedics 7,158 6,696 8,233 Corporate 4,692 4,110 3,818 Total $ 53,063 $ 29,019 $ 29,599 Geographical information The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Global Spine U.S. $ 591,937 $ 332,846 $ 337,455 International 39,382 20,328 21,508 Total Global Spine 631,319 353,174 358,963 Global Orthopedics U.S. $ 28,892 25,997 24,490 International 86,430 81,542 81,026 Total Global Orthopedics 115,322 107,539 105,516 Consolidated U.S. 620,829 358,843 361,945 International 125,812 101,870 102,534 Net sales $ 746,641 $ 460,713 $ 464,479 The following data includes net sales by geographic destination: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 U.S. $ 620,829 $ 358,843 $ 361,945 Italy 20,060 19,098 20,187 Germany 11,467 11,569 13,716 United Kingdom 10,910 10,171 10,552 France 11,096 10,377 10,475 Brazil 6,452 5,668 5,108 Others 65,827 44,987 42,496 Net sales $ 746,641 $ 460,713 $ 464,479 The following data includes property, plant, and equipment by geographic area: (U.S. Dollars, in thousands) 2023 2022 U.S. $ 142,727 $ 44,802 Italy 10,187 8,535 Germany 3,030 3,115 Others 3,116 1,777 Total $ 159,060 $ 58,229 |
Acquisition-Related Amortizatio
Acquisition-Related Amortization and Remeasurement | 12 Months Ended |
Dec. 31, 2023 | |
Acquisition Related Amortization And Remeasurement [Abstract] | |
Acquisition-Related Amortization and Remeasurement | 17. Acquisition-related amortization and remeasurement Acquisition-related amortization and remeasurement consists of (i) the remeasurement of any related contingent consideration arrangement, (ii) amortization related to intangible assets acquired through business combinations or asset acquisitions, (iii) recognized costs associated with acquired IPR&D assets, which are recognized immediately upon acquisition, and (iv) impairments of goodwill related to previously recognized business combinations. Components of acquisition-related amortization and remeasurement for the years ended December 31, 2023, 2022, and 2021, respectively, are as follows: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Changes in fair value of contingent consideration $ ( 2,700 ) $ ( 17,200 ) $ ( 3,575 ) Amortization of acquired intangibles 17,408 8,196 7,907 Acquired IPR&D 49 1,600 1,500 Impairment of Global Orthopedics goodwill — — 11,756 Total $ 14,757 $ ( 7,404 ) $ 17,588 Legion Innovations, LLC Asset Acquisition On December 29, 2022, the Company entered into a technology assignment and royalty agreement with Legion Innovations, LLC, a U.S.-based medical device technology company, whereby the Company acquired intellectual property rights to certain assets. As consideration, the Company agreed to pay $ 0.2 million in January 2023, with additional payments contingent upon reaching future commercialization and revenue-based milestones. The Company accounted for this transaction as an asset acquisition. As the transaction was 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 $ 0.2 million initial payment was accrued as of December 31, 2022, and was recognized as acquired IPR&D costs, which was then immediately expensed. IGEA S.p.A Asset Acquisition In April 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 2021, which was recognized as acquired IPR&D costs within acquisition-related amortization and remeasurement. The Company accounted for this transaction as an asset acquisition. As the transaction was classified as an asset acquisition, the value of the consideration associated with the contingent milestones are be recognized at the time that applicable contingencies are resolved and consideration is paid or becomes payable. The License Agreement also includes certain minimum purchase requirements. In May 2022, the Company achieved FDA approval pertaining to the acquired technology, triggering a contingent consideration milestone obligation of $ 3.5 million. Of this amount, $ 1.5 million was paid in 2022 and $ 1.0 million was paid in 2023. The remaining $ 1.0 million is accrued within other current liabilities as of December 31, 2023 . |
Share-based compensation
Share-based compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based compensation | 18. Share-based compensation At December 31, 2023, and 2022, the Company had stock option and award plans, and a stock purchase plan. Merger with SeaSpine Pursuant to the Merger Agreement, the equity awards of SeaSpine (including stock options and restricted stock units) outstanding as of immediately prior to the closing of the Merger were converted into equity awards denominated in shares of Orthofix common stock. The Company issued options to purchase 1.9 million shares of Orthofix common stock and 0.5 million shares of time-based vesting restricted stock in connection with the conversion of such awards. The estimated fair value of the portion of the SeaSpine equity awards for which the required service period had been completed at the time of the closing of the Merger was treated as purchase consideration. The remaining estimated fair value is recorded as compensation expense over the remainder of the service period associated with the awards. In addition, as part of the Merger, the Board of Directors determined to treat the transaction as a “Change in Control” under applicable agreements and equity plans. Thus, in January 2023, all outstanding and previously granted performance-based and market-based restricted stock units were converted to time-based restricted stock units. 2012 Long Term Incentive Plan The Board of Directors adopted the Amended and Restated 2012 Long-Term Incentive Plan (the “2012 LTIP”) on April 23, 2018, which was subsequently approved by shareholder ratification. The 2012 LTIP provides for the grant of options to purchase shares of the Company’s common stock, stock awards (including restricted stock, unrestricted stock, and stock units), stock appreciation rights, performance-based awards, and other equity-based awards. All of the Company’s employees and the employees of the Company’s subsidiaries and affiliates are eligible and may receive awards under the 2012 LTIP. In addition, the Company’s non-employee directors, consultants, and advisors who perform services for the Company and its subsidiaries and affiliates may receive awards under the 2012 LTIP. Awards granted under the 2012 LTIP expire no later than ten years after the date of grant. At December 31, 2023 , the Company reserves a total of 11.3 million shares of common stock for issuance pursuant to the 2012 LTIP, subject to certain adjustments set forth in the 2012 LTIP. At December 31, 2023 , there were 1.6 million options outstanding under the 2012 LTIP, of which 0.7 million were exercisable. In addition, there were 1.6 million restricted stock units outstanding, some of which contain performance-based vesting conditions, under the 2012 LTIP as of December 31, 2023. SeaSpine 2015 Plan Pursuant to the Merger Agreement, the Company assumed awards outstanding under the SeaSpine Holdings Corporation Amended and Restated 2015 Incentive Award Plan Award Plan (the “SeaSpine 2015 Plan”). The SeaSpine 2015 Plan provides for the grant of options to purchase shares of the Company’s common stock, stock awards (including restricted stock, unrestricted stock, and stock units), stock appreciation rights, performance-based awards and other equity-based awards. All of the Company’s employees and the employees of the Company’s subsidiaries and affiliates are eligible and may receive awards under the SeaSpine 2015 Plan. In addition, the Company’s non-employee directors, consultants, and advisors who perform services for the Company and its subsidiaries and affiliates may receive awards under the SeaSpine 2015 Plan. At December 31, 2023, the Company reserves a total of 3.0 million shares of common stock for issuance pursuant to the SeaSpine 2015 Plan, subject to certain adjustments set forth in the SeaSpine 2015 Plan. At December 31, 2023, there were 1.0 million options outstanding under the SeaSpine 2015 Plan, of which 0.9 million were exercisable. In addition, there were 0.2 million restricted stock units outstanding, some of which contain performance-based vesting conditions, under the SeaSpine 2015 Plan as of December 31, 2023. Inducement Plans In August 2019, the Company appointed a new President of Global Spine, who was then subsequently promoted to President and Chief Executive Officer, a position held until the closing of the merger with SeaSpine on January 5, 2023. As an inducement to accept employment with the Company, the individual was awarded a grant of stock options to acquire up to less than 51 thousand shares of common stock and an award of 15 thousand restricted stock units. As of December 31, 2023 , there were 51 thousand options outstanding under this inducement, all of which were exercisable. Pursuant to the Merger Agreement, the Company assumed awards outstanding under the SeaSpine 2018 Employment Inducement Incentive Award Plan and the SeaSpine 2020 Employment Inducement Incentive Award Plan. As of December 31, 2023 , there were 0.3 million options outstanding under these inducements, 0.2 million of which were exercisable, and 17 thousand unvested restricted stock units outstanding. In January 2023, the Company granted options to acquire up to 0.9 million shares of common stock and awarded 0.5 million restricted stock units to SeaSpine employees as an inducement to continue employment with the Company. As of December 31, 2023 , there were 0.3 million options outstanding under this inducement, none of which were exercisable, and 0.2 million unvested restricted stock units outstanding. Stock Purchase Plan The Second Amended and Restated Stock Purchase Plan, as Amended (the “Stock Purchase Plan”) provides for the issuance of shares of the Company’s common stock to eligible employees and directors of the Company and its subsidiaries that elect to participate in the plan and acquire shares of common stock through payroll deductions (including executive officers). During each purchase period, eligible employees may designate between 1 % and 25 % of their compensation to be deducted for the purchase of common stock under the plan (or such other percentage in order to comply with regulations applicable to employees domiciled in or resident of a member state of the European Union). For eligible directors, the designated percentage will be applied to an amount equal to his or her director compensation paid in cash for the current plan period. The purchase price of the shares under the plan is equal to 85 % of the fair market value on the first day of the plan period or, if lower, on the last day of the plan period. Due to the compensatory nature of such plan, the Company records the related share-based compensation expense in the consolidated statement of operations. Compensation expense is estimated using the Black-Scholes valuation model, with such value recognized as expense over the plan period. As of December 31, 2023 , the aggregate number of shares reserved for issuance under the Stock Purchase Plan is 3.6 million. As of December 31, 2023 , a total of 2.8 million shares had been issued pursuant to the Stock Purchase Plan. Share-Based Compensation Expense Share-based compensation expense is recorded in the same line of the consolidated statements of operations as the employee’s cash compensation. The following tables present the detail of share-based compensation expense by line item in the consolidated statements of income as well as by award type, for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Cost of sales $ 1,901 $ 826 $ 779 Sales and marketing 8,174 3,865 3,385 General and administrative 21,743 12,917 10,289 Research and development 3,889 835 979 Total $ 35,707 $ 18,443 $ 15,432 Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Stock options $ 6,130 $ 1,114 $ 1,893 Time-based restricted stock awards and stock units 27,290 9,452 7,437 Performance-based / Market-based restricted stock units 227 6,425 4,414 Stock purchase plan 2,060 1,452 1,688 Total $ 35,707 $ 18,443 $ 15,432 The income tax benefit related to this expense was $ 5.8 million, $ 3.3 million, and $ 3.1 million for the years ended December 31, 2023, 2022, and 2021, respectively. Stock Options The fair value of time-based stock options is determined using the Black-Scholes valuation model, with such value recognized as expense over the service period, which is typically three to four years, net of actual forfeitures. A summary of the Company’s assumptions used in determining the fair value of the stock options granted during each of the years ended December 31, 2023, 2022, and 2021, is shown in the following table. The Company did not grant any time-based stock options in 2022. Year Ended December 31, 2023 2022 2021 Assumptions: Expected term (in years) 6.0 — 6.0 Expected volatility 36.8 % – 42.3 % — 34.4 % – 34.8 % Risk free interest rate 3.38 % – 4.61 % — 0.83 % – 1.25 % Dividend yield — — — Weighted average grant date fair value $ 8.43 $ — $ 12.33 The expected term of the options granted is estimated based on a number of factors, including the vesting and expiration terms of the award, historical employee exercise behavior for both options that are currently outstanding and options that have been exercised or are expired, and an employee’s average length of service. Expected volatility is based on the historical volatility of the Company’s common stock. The risk-free interest rate is determined based upon a constant U.S. Treasury security rate with a contractual life that approximates the expected term of the option. Summaries of the status of the Company’s stock option plans as of December 31, 2023, and 2022, and changes during the year ended December 31, 2023, are presented below: (In thousands) Options Weighted Weighted Outstanding at December 31, 2022 1,299 $ 39.29 Assumed SeaSpine awards 1,890 $ 36.05 Granted 1,837 $ 19.92 Exercised - $ - Forfeited or expired ( 1,803 ) $ 31.62 Outstanding at December 31, 2023 3,223 $ 30.64 4.97 Vested and expected to vest at December 31, 2023 3,223 $ 30.64 4.97 Exercisable at December 31, 2023 1,828 $ 36.78 2.68 As of December 31, 2023 , the unamortized compensation expense relating to options granted and expected to be recognized was $ 4.8 million. This amount is expected to be recognized through December 2027 over a weighted average period of approximately 1.2 years. The total intrinsic value of options exercised was $ 0.0 million, $ 0.0 million, and $ 0.6 million for the years ended December 31, 2023, 2022, and 2021, respectively. For the year ended December 31, 2023 , we did no t receive any cash from stock option exercises, and thus did no t realize any tax benefit for the tax deductions from stock option exercises. The aggregate intrinsic value of options outstanding and options exercisable as of December 31, 2023 , is calculated as the difference between the exercise price of the underlying options and the market price of the Company’s common stock for options that had exercise prices lower than $ 13.48 , the closing price of the Company’s stock on December 31, 2023 . The aggregate intrinsic value of options outstanding was $ 0.1 million as of December 31, 2023 . The aggregate intrinsic value of options exercisable was $ 0.0 million as of that date. Time-based Restricted Stock Awards and Stock Units Compensation expense for time-based restricted stock awards and stock units, which represents the fair value of the stock measured at the market price at the date of grant, is recognized on a straight-line basis over the vesting period, which is typically three to four years , net of actual forfeitures. The aggregate fair value of time-based restricted stock awards and stock units that vested during the years ended December 31, 2023, 2022, and 2021 , was $ 17.2 million, $ 5.2 million, and $ 9.0 million, respectively. Unamortized compensation expense related to time-based restricted stock awards and stock units amounted to $ 22.6 million at December 31, 2023 . This amount is expected to be recognized through December 2026 over a weighted average period of approximately 1.6 years. The aggregate intrinsic value of time-based restricted stock awards and stock units outstanding was $ 27.5 million as of December 31, 2023. Performance-based and Market-based Restricted Stock Units Certain of the Company's outstanding restricted stock units contain performance-based vested conditions or market-based vesting conditions. As previously discussed, all outstanding performance-based and market-based restricted stock units were converted to time-based restricted stock units in January 2023 upon completion of the Merger based on the Board of Directors' determination to treat the transaction as a "Change in Control" under applicable agreements and equity plans. The fair value of performance-based restricted stock units is calculated based upon the closing stock price at the date of grant. Such value is recognized as expense over the requisite service period beginning in the period in which they are deemed probable to vest, net of actual forfeitures. Vesting probability is assessed based upon forecasted financial metrics or applicable milestones associated with the applicable grant. The fair value of market-based restricted stock units is determined at the date of the grant using the Monte Carlo valuation methodology, with any discounts for post-vesting restrictions estimated using the Chaffe Model. The Monte Carlo methodology incorporates into the valuation the possibility that the market condition may not be satisfied. Such value is recognized on a straight-line basis over the vesting period, net of actual forfeitures. The fair value of performance-based and/or market-based restricted stock units that vested and settled during the years ended December 31, 2023, 2022, and 2021 , totaled $ 0.0 million, $ 0.0 million, and $ 0.0 million, respectively. Unamortized compensation expense for performance-based and/or market-based restricted stock units totaled less than $ 0.1 million at December 31, 2023 , and is expected to be recognized over a weighted average period of approximately 1.0 years. The aggregate intrinsic value of performance-based restricted stock units outstanding was $ 0.1 million as of December 31, 2023. A summary of the status of our time-based and performance-based and/or market-based restricted stock units as of December 31, 2023, and 2022, and changes during the year ended December 31, 2023, are presented below: Time-based Restricted Stock Performance-based and/or Market-based (In thousands) Shares Weighted Shares Weighted Outstanding at December 31, 2022 847 $ 34.18 516 $ 40.29 Assumed SeaSpine awards 490 $ 22.76 — $ — Conversion of performance-based and market-based stock units to time-based stock units 516 $ 40.29 ( 516 ) $ 40.29 Granted 1,496 $ 18.51 13 $ 20.10 Vested and settled ( 749 ) $ 29.04 ( 4 ) $ 22.76 Cancelled ( 560 ) $ 21.12 — $ — Outstanding at December 31, 2023 2,040 $ 26.96 9 $ 22.69 |
Defined Contribution Plans and
Defined Contribution Plans and deferred compensation | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Defined contribution plans and deferred compensation | 19. Defined contribution plans and deferred compensation Defined Contribution Plans Orthofix sponsors a defined contribution plan (the “401(k) Plan”) covering substantially all full-time U.S. employees. The 401(k) Plan allows participants to contribute up to 80 % of their pre-tax compensation, subject to certain limitations, with the Company matching 100 % of the first 2 % of the employee’s base compensation and 50 % of the next 4 % of the employee’s base compensation if contributed to the 401(k) Plan. During the years ended December 31, 2023, 2022, and 2021 , expenses incurred relating to the 401(k) Plan, including matching contributions, were approximately $ 4.6 million, $ 3.3 million, and $ 2.8 million, respectively. The Company also operates defined contribution plans for its international employees meeting minimum service requirements. The Company’s expenses for such contributions during each of the years ended December 31, 2023, 2022, and 2021 , were $ 1.1 million, $ 1.1 million, and $ 1.2 million, respectively. Effective February 1, 2024, Orthofix amended the 401(k) Plan to allow participants to contribute up to 90 % of their pre-tax compensation, subject to certain limitations, with the Company matching 100 % of the first 4 % of the employee's base compensation. Deferred Compensation Plans Under Italian Law, our Italian subsidiary accrues deferred compensation on behalf of its employees, which is paid on termination of employment. The accrual for deferred compensation is based on a percentage of the employee’s current annual remuneration plus an annual charge. Deferred compensation is also accrued for the leaving indemnity payable to agents in case of dismissal, which is regulated by a national contract and is equal to approximately 4 % of total commissions earned from the Company. The Company’s relations with its Italian employees, who represent 14 % of total employees at December 31, 2023, are governed by the provisions of a National Collective Labor Agreement setting forth mandatory minimum standards for labor relations in the metal mechanic workers industry. The Company is not a party to any other collective bargaining agreement. The balance in other long-term liabilities as of December 31, 2023, and 2022 was $ 1.7 million and $ 1.5 million, respectively, and represents the amount that would be payable if all the employees and agents had terminated employment at that date. |
Income taxes
Income taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income taxes | 20. Income taxes Income (loss) before provision for income taxes consisted of the following: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 U.S. $ ( 154,794 ) $ ( 22,318 ) $ ( 5,987 ) Non-U.S. 6,115 4,612 ( 7,508 ) Income (loss) before income taxes $ ( 148,679 ) $ ( 17,706 ) $ ( 13,495 ) The provision for income taxes consists of the following: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 U.S. Current $ 17 $ 1,151 $ ( 607 ) Deferred 1,160 67 24,292 1,177 1,218 23,685 Non-U.S. Current 2,120 578 1,009 Deferred ( 581 ) 247 190 1,539 825 1,199 Income tax expense (benefit) $ 2,716 $ 2,043 $ 24,884 The differences between the income tax provision at the U.S. federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2023, 2022, and 2021, consist of the following: 2023 2022 2021 (U.S. Dollars, in thousands, except percentages) Amount Percent Amount Percent Amount Percent Statutory U.S. federal income tax rate $ ( 31,222 ) 21.0 % $ ( 3,718 ) 21.0 % $ ( 2,834 ) 21.0 % State taxes, net of U.S. federal benefit ( 3,452 ) 2.3 ( 1,312 ) 7.4 ( 24 ) 0.2 Foreign rate differential, including withholding taxes ( 738 ) 0.5 475 ( 2.7 ) 480 ( 3.6 ) Valuation allowances, net 28,322 ( 19.0 ) 7,638 ( 43.1 ) 27,819 ( 206.1 ) Foreign income inclusions, net 2,333 ( 1.6 ) 1,018 ( 5.7 ) — — Research credits ( 1,219 ) 0.8 ( 750 ) 4.2 ( 537 ) 4.0 Unrecognized tax benefits, net of settlements 71 — ( 599 ) 3.4 ( 1,363 ) 10.1 Equity compensation 4,210 ( 2.8 ) 1,441 ( 8.1 ) 1,091 ( 8.1 ) Executive compensation 3,030 ( 2.0 ) 697 ( 3.9 ) 456 ( 3.4 ) Contingent consideration — — ( 3,316 ) 18.7 ( 640 ) 4.7 Other, net 1,381 ( 0.9 ) 469 ( 2.6 ) 436 ( 3.2 ) Income tax expense (benefit) /effective rate $ 2,716 ( 1.8 )% $ 2,043 ( 11.5 )% $ 24,884 ( 184.4 )% The Company paid (received or was refunded) cash relating to taxes totaling $ 0.9 million, ($ 0.9 ) million, and $ 4.8 million for the years ended December 31, 2023, 2022, and 2021, respectively. The Company’s deferred tax assets and liabilities are as follows: December 31, (U.S. Dollars, in thousands) 2023 2022 Intangible assets and goodwill $ — $ 5,807 Inventories and related reserves 33,122 17,819 Deferred revenue and cost of goods sold 4,409 3,642 Other accruals and reserves 5,382 2,756 Accrued compensation 14,861 8,795 Provision for expected credit losses 1,821 1,253 Accrued interest 1,227 — Net operating loss and tax credit carryforwards 123,210 40,676 Research and development capitalization 15,174 4,353 Lease liabilities 9,632 6,440 Other, net 5,429 3,767 Total deferred tax assets 214,267 95,308 Valuation allowance ( 200,192 ) ( 83,797 ) Deferred tax asset, net of valuation allowance $ 14,075 $ 11,511 Intangible assets and goodwill $ ( 1,662 ) $ — Withholding taxes ( 10 ) ( 10 ) Property, plant, and equipment ( 5,737 ) ( 5,516 ) Right-of-use lease assets ( 8,755 ) ( 5,771 ) Deferred tax liability $ ( 16,164 ) $ ( 11,297 ) Net deferred tax assets (liabilities) $ ( 2,089 ) $ 214 Reported as: Deferred income tax assets (classified within other long-term assets) $ 2,081 $ 1,470 Deferred income tax liabilities (classified within other long-term liabilities) ( 4,170 ) ( 1,256 ) Net deferred tax assets (liabilities) $ ( 2,089 ) $ 214 The Company historically presented deferred income tax assets as a separate and discrete line item on its consolidated balance sheet; however, as the significance of the asset has decreased as a result of the recognition of valuation allowances, the Company has reclassified this balance to be included within other long-term assets. Deferred income tax liabilities is included in Other Long Term Liabilities. The Company accounts for income taxes using the asset and liability method, under which deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and income tax basis of assets and liabilities, and for operating losses and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the years in which those items are expected to be realized. Tax law and rate changes are recorded in the period such changes are enacted. The Company establishes a valuation allowance when it is more likely than not that certain deferred tax assets will not be realized in the foreseeable future. The valuation allowance is primarily attributable to net operating loss carryforwards and temporary differences in domestic and certain foreign jurisdictions. The net increase in the valuation allowance of $ 116.4 million during the year principally relates to the existing valuation allowance against the SeaSpine deferred tax assets at the time of the merger. The remaining activity is related to recognizing a full valuation allowance against the net deferred tax asset within the Company’s U.S. and Italy operations. The Company considered many factors when assessing the likelihood of future realization of these deferred tax assets, including recent cumulative losses experienced by the subsidiary, expectations of future taxable income or loss, the carryforward periods available to the Company for tax reporting purposes, and other relevant factors. That increase was partially offset by a decrease of valuation allowances on net operating loss carryforwards in other foreign jurisdictions due to expiration, statutory rate changes, and changes regarding the realizability of net deferred tax assets. It is reasonably possible that the valuation allowance will increase in 2024 due to further losses in certain jurisdictions, offset by decreases related to the expiration of foreign net operating losses. The Company has federal net operating loss carryforwards of $ 331.7 million and federal research and development credits of $ 4.7 million, including amounts from the acquisitions of SeaSpine and Spinal Kinetics. The increase in the current year is primarily related to U.S. Federal net operating loss carryforwards belonging to SeaSpine at the time of the Merger as well as research and development credit carryforwards. These federal carryforwards are subject to limitation under the provisions of Internal Revenue Code Section 382 and will begin to expire in 2026 . The Company has state net operating loss carryforwards of approximately $ 221.4 million, principally related to California, Illinois, Michigan, and New York. Of this amount, $ 157.9 relates to SeaSpine and $ 20.6 million relates to Spinal Kinetics. The increase in state net operating loss carryforwards is primarily due to existing losses acquired from SeaSpine. The SeaSpine state losses begin to expire in 2024 and the Spinal Kinetics state losses begin to expire in 2027 . These carryforwards are subject to limitation under various provisions implemented by each specific state jurisdiction. Additionally, the Company has net operating loss carryforwards in various foreign jurisdictions of approximately $ 129.0 million, which mainly relate to the Company’s Netherlands, Brazil, and Canada operations. The majority of the foreign net operating losses do not expire. The Company also has research and development credits in Canada of $ 0.9 million which begin to expire in 2041 . Unremitted foreign earnings were $ 33.6 million as of December 31, 2023. The Company’s investment in foreign subsidiaries continues to be indefinite in nature; however, the Company may periodically repatriate a portion of these earnings to the extent that it does not incur significant additional tax liability. Quantification of the deferred tax liability, if any, associated with indefinitely reinvested earnings of foreign subsidiaries is not practicable. The Company records a benefit for uncertain tax positions when the weight of available evidence indicates that it is more likely than not, based on an evaluation of the technical merits, that the tax position will be sustained on audit. The tax benefit is measured as the largest amount that is more than 50 % likely to be realized upon settlement. The Company re-evaluates income tax positions periodically to consider changes in facts or circumstances such as changes in or interpretations of tax law, effectively settled issues under audit, and new audit activity. The Company includes interest and any applicable penalties related to income tax issues as part of income tax expense in its consolidated financial statements. The Company’s unrecognized tax benefit was $ 3.0 million and $ 1.7 million for the years ended December 31, 2023, and 2022 , respectively. The Company recorded net interest and penalties expense (benefit) on unrecognized tax benefits of $ 0.2 million, $ 0.1 million, and $( 0.4 ) million for the years ended December 31, 2023, 2022, and 2021 , respectively, and had approximately $1 .1 million and $ 0.9 million accrued for payment of interest and penalties as of December 31, 2023, and 2022 , respectively. Approximately $ 0.4 million would unfavorably impact the Company’s effective tax rate if recognized. The Company believes it is reasonably possible that, in the next 12 months, the amount of unrecognized tax benefits, exclusive of interest and penalties, related to the resolution of federal, state, and foreign matters could be reduced by $ 1.2 million as audits close and statutes expire. A reconciliation of the gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2023, and 2022, is shown below: (U.S. Dollars, in thousands) 2023 2022 Balance as of January 1, $ 1,743 $ 3,462 Additions for current year tax positions 416 46 Increases for prior year tax positions 815 16 Settlements of prior year tax positions — ( 144 ) Expiration of statutes — ( 1,637 ) Balance as of December 31, $ 2,974 $ 1,743 The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction and in certain state and foreign jurisdictions, including Italy, as well as other jurisdictions where the Company maintains operations. The statute of limitations with respect to federal and state tax filings is closed for years prior to 2019. The statute of limitations with respect to the major foreign tax filing jurisdictions is closed for years prior to 2018. The Company cannot reasonably determine if any state and local or foreign examinations will have a material impact on its financial statements and cannot predict the timing regarding the resolution of these tax examinations. |
Earnings per share (EPS)
Earnings per share (EPS) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per share (EPS) | 21. Earnings per share (EPS) For periods in which non-vested restricted stock awards with nonforfeitable rights to dividends or dividend equivalents (referred to as participating securities) were outstanding, the Company used the two-class method of computing basic and diluted EPS. In other periods, the Company used the treasury stock method of computing basic and diluted EPS. Basic EPS is computed using the weighted average number of common shares outstanding during each of the respective years. Diluted EPS is computed using the weighted average number of common and common equivalent shares outstanding during each of the respective years using the more dilutive of either the treasury stock method or two-class method (if other participating securities were outstanding). The difference between basic and diluted shares, if any, largely results from common equivalent shares, which represents the dilutive effect of the assumed exercise of certain outstanding share options, the assumed vesting of restricted stock granted to employees and directors, or the satisfaction of certain necessary conditions for contingently issuable shares (see Note 18). For each of the three years ended December 31, 2023, 2022, and 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 the diluted EPS computations: Year Ended December 31, (In thousands) 2023 2022 2021 Weighted average common shares-basic 36,729 20,054 19,691 Effect of diluted securities: Unexercised stock options and employee stock purchase plan — — — Unvested time-based restricted stock units — — — Weighted average common shares-diluted 36,729 20,054 19,691 There were 6.5 million, 2.3 million and 1.7 million weighted average outstanding options, time-based restricted stock awards and stock units, performance-based stock units, and market-based stock units not included in the diluted earnings per share computation for the years ended December 31, 2023, 2022, and 2021 , respectively, because inclusion of these awards was anti-dilutive or, for performance-based stock units and market-based stock units, all necessary conditions had not been satisfied by the end of the respective period. |
Significant accounting polici_2
Significant accounting policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Market risk | Market risk In the ordinary course of business, the Company is exposed to the impact of changes in interest rates and foreign currency fluctuations. The Company’s objective is to limit the impact of such movements on earnings and cash flows. In order to achieve this objective, the Company seeks to balance its non-U.S. Dollar denominated income and expenditures. The financial statements for operations outside the U.S. are generally maintained in their respective local currency. All foreign currency denominated balance sheet accounts, except shareholders’ equity, are translated to U.S. Dollars at year end exchange rates, and revenue and expense items are translated at average exchange rates prevailing during the year. Gains and losses resulting from the translation of foreign currency are recorded in the accumulated other comprehensive income (loss) component of shareholders’ equity. Transactional foreign currency gains and losses, including those generated from intercompany operations, are included in other income (expense), net and was a gain of $ 1.6 million, a loss of $ 3.3 million, and a loss of $ 4.0 million for the years ended December 31, 2023, 2022, and 2021 , respectively. |
Financial instruments and concentration of credit risk | Financial instruments and concentration of credit risk Financial instruments that could subject the Company to a concentration of credit risk consist primarily of cash, cash equivalents, and accounts receivable. Generally, cash is held at large financial institutions and cash equivalents consist of highly liquid money market funds. The Company performs ongoing credit evaluations of customers, generally does not require collateral, and maintains a reserve for expected credit losses. The Company believes that a concentration of credit risk related to accounts receivable is limited because customers are geographically dispersed and end users are diversified. |
Cash, cash equivalents and restricted cash | Cash, cash equivalents, and restricted cash The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. In November 2023, following the termination of the Second Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as Administrative Agent, and certain lender parties thereto, Bank of America required collateral of approximately $ 4.7 million of the Company’s cash as a banking service obligation. This cash has been reclassified to restricted cash as of December 31, 2023. Investing activities that did not result in cash receipts or cash payments during the years ended December 31, 2023, 2022, and 2021 consisted of the following, which were not included within cash from investing activities in the Company’s consolidated statements of cash flows: (U.S. Dollars, in thousands) 2023 2022 2021 Supplemental disclosure of cash flow information: Noncash investing activities: Intangible assets acquired in asset acquisitions $ — $ 2,000 $ — |
Advertising costs | Advertising costs Advertising costs are expensed as incurred. Advertising costs are included within sales and marketing expense and totaled $ 0.5 million for each of the years ended December 31, 2023, 2022, and 2021 , respectively. |
Research and development costs, including collaborative arrangements | Research and development costs, including collaborative arrangements Expenditures for research and development are expensed as incurred. Expenditures related to the Company’s collaborative arrangement with MTF Biologics (“MTF”) are expensed based on the terms of the related agreement. The Company recognized $ 0.8 million, less than $ 0.1 million, and $ 0.8 million in research and development expense for the years ended December 31, 2023, 2022, and 2021, respectively. In October 2020, the Company and Neo Medical SA, a privately held Swiss-based company developing a new generation of products for spinal surgery (“Neo Medical”), entered into a co-development agreement covering the parties’ joint development of single use instruments for cervical spine procedures. In connection with this agreement, the Company is responsible for the payment of variable costs associated with the development of the specified products. Research and development expenses incurred under this collaborative arrangement totaled $ 0.1 million, $ 0.5 million, and $ 0.6 million for the years ended December 31, 2023, 2022, and 2021 , respectively. |
Recently adopted accounting standards and recently issued accounting pronouncements | Adoption of Accounting Standards Update (“ASU”) 2021-10—Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance In November 2021, the Financial Accounting Standards Board (“FASB”) issued ASU 2021-10, which aims to increase the transparency of government assistance by requiring entities to provide information about the nature of the transaction, terms and conditions associated with the transaction, and financial statement line items affected by the transaction. The Company voluntarily elected to early adopt this standard for the year ended December 31, 2021, on a prospective basis. Adoption of this standard did not have a significant impact to the existing disclosures made in relation to government assistance received by the Company in 2020 as part of the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). Adoption of ASU 2019-12, Simplifying the accounting for income taxes In December 2019, the FASB issued ASU 2019-12, which reduces the complexity of accounting for income taxes by eliminating certain exceptions to the general principles in Accounting Standards Codification ("ASC") 740, Income Taxes . Additionally, the ASU simplifies U.S. 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. The Company adopted this ASU effective January 1, 2021 , with certain provisions applied retrospectively and other provisions applied prospectively. Adoption of this ASU did not have a material impact to the Company’s consolidated balance sheet, statements of operations, or cash flows. Adoption of ASU 2020-04, Reference Rate Reform (Topic 848) In March 2020, the FASB issued ASU 2020-04, which provided temporary optional guidance to ease the potential financial reporting burden of the expected market transition away from the London Inter-Bank Offered Rate. The new guidance provided 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 consolidated balance sheet, statements of operations, or cash flows. Adoption of ASU 2021-08, Accounting for Contract Assets and Contract Liabilities with Contracts with Customers In October 2021, the FASB issued ASU 2021-08, which aims to address diversity in practice and inconsistency related to the accounting for acquired revenue contracts with customers in a business combination. The amendments require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. Adoption of this standard resulted in the recognition of $ 2.2 million in contract liabilities associated with acquired revenue contracts as a result of the Company’s merger with SeaSpine, which closed on January 5, 2023. Recently Issued Accounting Pronouncements Topic Description of Guidance Effective Date Status of Company's Evaluation Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (ASU 2022-03) Clarifies the guidance in Topic 820, Fair Value Measurement , when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions. Certain of the provisions are to be applied retrospectively with other provisions applied prospectively. January 1, 2024 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements, but does not expect this ASU to have a material impact on disclosures within the Company's consolidated financial statements. Disclosure Improvements - Codification Amendments in Response to the SEC's Disclosure Update and Simplification Initiative (ASU 2023-06) Adds interim and annual disclosure requirements to a variety of subtopics in the Accounting Standards Codification, including those focusing on accounting changes, earnings per share, debt and repurchase agreements. The guidance will be applied prospectively. The effective date will be the date when the SEC's removal of the related disclosure requirement becomes effective, with early adoption prohibited. Various The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. Improvements to Reportable Segment Disclosures (ASU 2023-07) Improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses. Provisions are to be applied retrospectively to all prior periods presented in financial statements. January 1, 2024 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements; however, the Company expects to disclose additional information in regards to its reportable segments as a result of this ASU, including (i) significant segment expenses regularly provided to the Company's chief operating decision maker ("CODM"), (ii) disclosure of other segment items by reportable segment, and (iii) disclosure of the title and position of the Company's CODM, among other disclosure requirements. Improvements to Income Tax Disclosures (ASU 2023-09) Enhance the transparency and decision usefulness of income tax disclosures to better assess how an entity’s operations and related tax risks and tax planning and operational opportunities affect its tax rate and January 1, 2025 The Company is currently evaluating the impact this ASU may have on its consolidated financial statements. |
Inventories | Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete, or impaired items, which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facilities in Texas and California, standard cost, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed by management, at least annually or more often, in the event circumstances indicate a change in cost has occurred. |
Property, plant and equipment | . Costs include all expenditures necessary to place the asset in service, generally including freight and sales and use taxes. Property, plant, and equipment also includes instrumentation held by customers, which is generally used to facilitate the implantation of the Company’s products. The Company evaluates the useful lives of these assets on an annual basis. Depreciation is computed on a straight-line basis over the useful lives of the assets. Depreciation of leasehold improvements is computed over the shorter of the lease term or the useful life of the asset. Total depreciation expense was $ 34.2 million, $ 19.6 million, and $ 20.2 million for the years ended December 31, 2023, 2022, and 2021, respectively. Expenditures for maintenance and repairs and minor renewals and improvements, which do not extend the lives of the respective assets, are expensed as incurred. All other expenditures for renewals and improvements are capitalized. The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in earnings. Fully depreciated assets remain in the accounts until retired from service. The Company capitalizes system development costs related to internal-use software during the application development stage. Costs related to preliminary project activities and post-implementation activities are expensed as incurred. Internal-use software is amortized on a straight-line basis over its estimated useful life, which generally ranges from three to seven years . Long-lived assets are evaluated for impairment annually or whenever events or changes in circumstances have occurred that would indicate impairment. For purposes of the evaluation, the Company groups its long-lived assets with other assets and liabilities at the lowest level of identifiable cash flows if the asset does not generate cash flows independent of other assets and liabilities. If the carrying value of the asset or asset group exceeds the undiscounted cash flows expected to result from the use and eventual disposition of the asset group, the Company will write the carrying value down to fair value in the period identified. The Company generally determines fair value of long-lived assets as the present value of estimated future cash flows. In determining the estimated future cash flows associated with the assets, the Company uses estimates and assumptions about future revenue contributions, cost structures, and remaining useful lives of the asset group. The use of alternative assumptions, including estimated cash flows, discount rates, and alternative estimated remaining useful lives could result in different calculations of impairment. |
Intangible assets | Intangible assets are recorded at cost, or when acquired as a part of a business combination, at estimated fair value, less accumulated amortization. These assets are amortized on a straight-line basis over the useful lives of the assets, which the Company believes is materially consistent with the pattern of economic benefit provided by the assets. |
Goodwill | The Company tests goodwill at least annually for impairment. The Company tests more frequently if indicators are present or changes in circumstances suggest that impairment may exist. These indicators include, among others, declines in sales, earnings, or cash flows, or the development of a material adverse change in the business climate. The Company assesses goodwill for impairment at the reporting unit level, which is defined as an operating segment or one level below an operating segment. |
Leases | The Company determines if a contractual arrangement qualifies as a lease at inception. The Company’s leases primarily relate to facilities, vehicles, equipment, and certain contract manufacturing agreements. Lease assets represent the Company’s right to use an underlying asset for the lease term, while lease liabilities represent the obligation to make lease payments arising from the lease. Lease assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company’s incremental borrowing rate is used as a discount rate, based on the information available at the commencement date, in determining the present value of lease payments. Lease assets also include the impact of any prepayments made and are reduced by the impact of any lease incentives. The Company does not recognize lease liabilities or lease assets on the balance sheet for short-term leases (leases with a lease term of twelve months or less as of the commencement date). Rather, any short-term lease payments are recognized as an expense on a straight-line basis over the lease term. The current period short-term lease expense reasonably reflects the Company's short-term lease commitments. For all classifications of leases, the Company combines lease and non-lease components to account for them as a single lease component. Variable lease payments are excluded from the lease liability and recognized in the period in which the obligation is incurred. Additionally, lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise the option. |
Commitments and contingencies | Contingencies policy The Company records accruals for certain outstanding legal proceedings, investigations, or claims when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. The Company evaluates developments in legal proceedings, investigations, and claims that could affect the amount of any accrual, as well as any developments that would make a loss contingency both probable and reasonably estimable on a quarterly basis. When a loss contingency is not both probable and reasonably estimable, the Company does not accrue the loss. However, if the loss (or an additional loss in excess of the accrual) is at least a reasonable possibility and material, then the Company discloses a reasonable estimate of the possible loss or range of loss, if such reasonable estimate can be made. If the Company cannot make a reasonable estimate of the possible loss, or range of loss, then that is disclosed. In addition, legal fees and other directly related costs are expensed as incurred. |
Revenue Recognition | Revenue Recognition The Company accounts for a contract when there is (i) approval and commitment from both parties, (ii) the rights of the parties are identified, (iii) payment terms are identified, (iv) the contract has commercial substance, (v) and collectability of consideration is probable. The Company’s contracts may contain one or more performance obligations. If a contract contains more than one performance obligation, the Company allocates the total transaction price to each of the performance obligations based upon the observable standalone selling price of the promised goods or services underlying each performance obligation. The Company recognizes revenue when control of the promised goods or services is transferred to the customer, which typically occurs at a point in time upon shipment, delivery, or utilization, in an amount that reflects the consideration which the Company expects to be entitled to in exchange for the promised goods or services. The consideration for goods or services reflects any fixed amount stated per the contract and estimates for any variable consideration, such as discounts, to the extent that is it probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. The following sections discuss the Company’s revenue recognition policies by significant product category: Bone Growth Therapies Bone Growth Therapies revenue is largely attributable to the U.S. and is comprised of third-party payor transactions and wholesale revenue. The largest portion of Bone Growth Therapies revenue is derived from third-party payors. This includes commercial insurance carriers, health maintenance organizations, preferred provider organizations, and governmental payors, such as Medicare. Revenue is recognized when the product is fitted to and accepted by the patient and all applicable documents required by the third-party payor have been obtained. Amounts paid by third-party payors are generally based on fixed or allowable reimbursement rates. These revenues are recorded at the expected or preauthorized reimbursement rates, net of any contractual allowances or adjustments. Certain billings are subject to review by the third-party payors and may be subject to adjustment. Wholesale revenue is related to the sale of the Company’s bone growth stimulators directly to durable medical equipment suppliers. Wholesale revenues are typically recognized upon shipment and receipt of a confirming purchase order, which is when the customer obtains control of the promised goods. Biologics Biologics revenue is largely attributable to the U.S. and is mostly processed from within our Irvine facility. In addition, we have a long standing collaborative arrangement with MTF that provides exclusive global marketing rights to MTF’s Trinity and FiberFuse product families. Per the terms of the agreement, MTF sources the tissue, processes it to create the allografts, packages, and delivers the tissue to the customer. The Company received marketing fees from MTF based on sales of products covered under the collaborative arrangement. MTF is considered the principal in these arrangements; therefore, the Company recognizes marketing service fees on a net basis within net sales upon shipment of the product to the customer and receipt of a confirming purchase order. Spinal Implants and Global Orthopedics Spinal Implants and Global Orthopedics products are distributed world-wide, with U.S. sales largely comprised of commercial sales and international sales derived from both commercial sales and stocking distributor arrangements. Commercial revenue is largely related to the sale of the Company’s Spinal Implants and Global Orthopedics products to hospital customers. The customer obtains control and revenues are recognized when these products have been utilized and a confirming purchase order has been received from the hospital. Other revenues within the Spinal Implants and Global Orthopedics product categories are derived from stocking distributors, who purchase the Company’s products and then re-sell them directly to customers, such as hospitals. For stocking distributor arrangements, it is the Company’s policy to recognize revenue upon shipment and receipt of a confirming purchase order, which is when the distributor obtains control of the promised goods. The transaction price for revenue recognition is estimated based upon the Company’s historical collection experience with the stocking distributor. Product Sales and Marketing Service Fees The table below presents net sales, which includes product sales and marketing service fees, for each of the years ended December 31, 2023, 2022, and 2021. For the year ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Product sales $ 693,345 $ 405,437 $ 409,554 Marketing service fees 53,296 55,276 54,925 Net sales $ 746,641 $ 460,713 $ 464,479 Marketing service fees are received from MTF based on total sales of biologics tissues and relates solely to the Biologics product category within the Global Spine reporting segment, whereas product sales primarily consist of the sale of Bone Growth Therapies, Spinal Implants, non-MTF sourced Biologics, Enabling Technologies, and Global Orthopedics products. Marketing service fees received from MTF were $ 53.3 million, or approximately 32 % of total Biologics revenues, for the year ended December 31, 2023. As MTF is the single supplier for certain allografts in the Company’s Biologics portfolio, derived from deceased donors for their bone grafts and living donors for their amnion grafts, any event or circumstance that would impact MTF’s continued access to donors or the Company’s ability to market these tissues may adversely impact the Company’s financial results. Revenues exclude any value added or other local taxes, intercompany sales, and trade discounts. Shipping and handling costs for products shipped to customers are included in cost of sales, and were $ 9.5 million, $ 4.2 million, and $ 3.5 million for the years ended December 31, 2023, 2022, and 2021, respectively. Accounts receivable and related allowances Payment terms vary by the type and location of the Company’s customers and the products or services offered. The term between invoicing and when payment is due is not significant. T he 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. |
Earnings Per Share | For periods in which non-vested restricted stock awards with nonforfeitable rights to dividends or dividend equivalents (referred to as participating securities) were outstanding, the Company used the two-class method of computing basic and diluted EPS. In other periods, the Company used the treasury stock method of computing basic and diluted EPS. Basic EPS is computed using the weighted average number of common shares outstanding during each of the respective years. Diluted EPS is computed using the weighted average number of common and common equivalent shares outstanding during each of the respective years using the more dilutive of either the treasury stock method or two-class method (if other participating securities were outstanding). The difference between basic and diluted shares, if any, largely results from common equivalent shares, which represents the dilutive effect of the assumed exercise of certain outstanding share options, the assumed vesting of restricted stock granted to employees and directors, or the satisfaction of certain necessary conditions for contingently issuable shares (see Note 18). |
Significant accounting polici_3
Significant accounting policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Supplemental Disclosure of Cash Flow Information | Investing activities that did not result in cash receipts or cash payments during the years ended December 31, 2023, 2022, and 2021 consisted of the following, which were not included within cash from investing activities in the Company’s consolidated statements of cash flows: (U.S. Dollars, in thousands) 2023 2022 2021 Supplemental disclosure of cash flow information: Noncash investing activities: Intangible assets acquired in asset acquisitions $ — $ 2,000 $ — |
Mergers and Acquisitions (Table
Mergers and Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combinations [Abstract] | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The Company finalized its valuation of assets acquired and liabilities assumed during the fourth quarter of 2023. Certain acquired assets and liabilities assumed were valued utilizing Level 3 inputs and assumptions. (U.S. Dollars, in thousands) Previously Reported Adjustments Final Acquisition Date Fair Value Assigned Useful Life Assets acquired: Current assets Cash and cash equivalents $ 29,419 $ — $ 29,419 Accounts receivable, net 35,313 — 35,313 Inventories 132,636 — 132,636 Prepaid expenses and other current assets 4,590 — 4,590 Total current assets 201,958 — 201,958 Property, plant, and equipment, net 68,863 — 68,863 Customer relationships 33,100 — 33,100 13 years Developed technology 47,200 — 47,200 6 - 8 years In-process research and development ("IPR&D") 5,750 — 5,750 Indefinite Other long-term assets 20,501 — 20,501 Total identifiable assets acquired $ 377,372 $ — $ 377,372 Liabilities assumed : Current liabilities Accounts payable $ 21,602 $ — $ 21,602 Other current liabilities 43,344 177 43,521 Total current liabilities 64,946 177 65,123 Long-term borrowings under SeaSpine credit facility 26,298 — 26,298 Other long-term liabilities 32,833 ( 10 ) 32,823 Total liabilities assumed 124,077 167 124,244 Net identifiable assets acquired $ 253,295 $ ( 167 ) $ 253,128 Total fair value of consideration transferred 376,745 — 376,745 Residual goodwill $ 123,450 $ 167 $ 123,617 |
Schedule of Estimated Fair Value of Consideration Associated with Merger | The total estimated fair value of consideration associated with the Merger as of the acquisition date was comprised of: (U.S. Dollars, in thousands, except shares and price per share) Share Consideration: Orthofix common shares to be issued in exchange for SeaSpine common shares 16,047,315 Orthofix closing price per share as of January 4, 2023 $ 22.76 Estimated fair value of shares issued in exchange for SeaSpine common shares $ 365,237 Estimated fair value of Orthofix stock options and RSUs issued in exchange for outstanding SeaSpine equity awards 11,508 Total estimated fair value of consideration $ 376,745 |
Summary of Pro Forma Financial Information | The unaudited pro forma financial information is presented for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the Merger closed as of January 1, 2022. For the Year Ended December 31, (U.S. Dollars, in millions) 2023 2022 Net sales $ 746.6 $ 698.2 Net loss $ ( 116.4 ) $ ( 129.2 ) |
Summary of Integration Costs Incurred | The following table summarizes integration costs incurred for the year ended December 31, 2023, and 2022. For the Year Ended December 31, (U.S. Dollars, in millions) 2023 2022 Compensation-related integration costs $ 17.7 $ — International spine restructuring 1.3 — Fee paid to financial advisor to the Merger 5.5 — Professional fees / consulting fees 5.8 — Product rationalization charges 6.0 — Other costs to complete 1.4 — Total $ 37.7 $ — |
Summary of Restructuring Costs | The table below provides a summary of restructuring costs incurred during the period and the resulting liabilities as of December 31, 2023, which are recognized within other current liabilities. (U.S. Dollars, in millions) Balance as of Charges Incurred Payments Made / Currency Translation Adjustment Balance as of U.S. Severance costs $ — $ 11.2 $ ( 10.2 ) $ 1.0 U.S. Retention costs — 5.3 ( 0.3 ) 5.0 U.S. Payroll taxes — 0.7 ( 0.4 ) 0.3 International spine restructuring severance — 1.0 ( 0.3 ) 0.7 Total $ — $ 18.2 $ ( 11.2 ) $ 7.0 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories are valued at the lower of cost or estimated net realizable value, after provision for excess, obsolete, or impaired items, which is reviewed and updated on a periodic basis by management. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facility in Italy, cost is determined on a weighted-average basis, which approximates the first-in, first-out (“FIFO”) method. For inventory procured or produced, whether internally or through contract manufacturing arrangements, at the Company's manufacturing facilities in Texas and California, standard cost, which approximates actual cost on the FIFO method, is used to value inventory. Standard costs are reviewed by management, at least annually or more often, in the event circumstances indicate a change in cost has occurred. Work-in-process and finished products include material, labor, and production overhead costs. Field and consignment inventory, which represents immediately saleable finished products inventory that is in the possession of the Company’s independent sales representatives or located at third-party customers, such as distributors and hospitals, is included within finished products. December 31, (U.S. Dollars, in thousands) 2023 2022 Raw materials $ 28,390 $ 17,035 Work-in-process 53,510 19,243 Finished products 140,266 63,872 Inventories $ 222,166 $ 100,150 |
Property, plant and equipment (
Property, plant and equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Useful Lives of Assets | The useful lives of these assets are generally as follows: Years Buildings 25 to 33 Plant and equipment 1 to 10 Instrumentation 3 to 4 Computer software 3 to 7 Furniture and fixtures 4 to 8 |
Schedule of Property, Plant and Equipment | The assets and related accumulated depreciation are adjusted for property retirements and disposals, with the resulting gain or loss included in earnings. Fully depreciated assets remain in the accounts until retired from service. December 31, (U.S. Dollars, in thousands) 2023 2022 Cost Buildings $ 4,103 $ 3,867 Plant and equipment 70,252 48,358 Instrumentation 154,192 92,607 Computer software 43,040 40,685 Furniture and fixtures 11,010 7,917 Construction in progress 41,751 4,515 Finance lease assets 23,337 23,276 Property, plant, and equipment, gross 347,685 221,225 Accumulated depreciation ( 188,625 ) ( 162,996 ) Property, plant, and equipment, net $ 159,060 $ 58,229 |
Intangible assets (Tables)
Intangible assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | Intangible assets are recorded at cost, or when acquired as a part of a business combination, at estimated fair value, less accumulated amortization. These assets are amortized on a straight-line basis over the useful lives of the assets, which the Company believes is materially consistent with the pattern of economic benefit provided by the assets. December 31, (U.S. Dollars, in thousands) Weighted Average Amortization Period 2023 2022 Cost Developed technology 7.9 years $ 92,416 $ 43,699 Patents 10.0 years 43,262 40,108 IPR&D Indefinite 4,674 300 Customer relationships 12.1 years 49,197 15,572 License and other 9.6 years 24,584 23,295 Trademarks—finite lived 10.0 years 1,797 1,875 9.5 years 215,930 124,849 Accumulated amortization Developed technology $ ( 28,898 ) $ ( 17,830 ) Patents ( 40,494 ) ( 37,506 ) Customer relationships ( 11,988 ) ( 6,938 ) License and other ( 16,240 ) ( 14,386 ) Trademarks—finite lived ( 820 ) ( 801 ) ( 98,440 ) ( 77,461 ) Intangible assets, net $ 117,490 $ 47,388 |
Schedule of Future Amortization Expense | Future amortization expense for intangible assets is estimated as follows: (U.S. Dollars, in thousands) Amortization 2024 $ 20,948 2025 19,849 2026 18,810 2027 18,426 2028 14,890 Thereafter 19,893 Total finite-lived intangible assets, net $ 112,816 Indefinite-lived intangible assets, net 4,674 Intangible assets, net $ 117,490 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Net Carrying Amount of Goodwill | The following table presents the net carrying value of goodwill as of December 31, 2023, and 2022, and a rollforward of such balances from December 31, 2022, by reportable segment: (U.S. Dollars, in thousands) Balance as of Goodwill Acquired in the Merger with SeaSpine Impairment Currency translation adjustment Balance as of Global Spine - Gross $ 71,317 $ 123,617 $ — $ — $ 194,934 Global Spine - Accumulated Impairment Loss — — — — $ — Global Spine - Net $ 71,317 $ 123,617 $ — $ — $ 194,934 Global Orthopedics - Gross $ 11,130 $ — $ — $ 347 $ 11,477 Global Orthopedics - Accumulated Impairment Loss ( 11,130 ) — — ( 347 ) $ ( 11,477 ) Global Orthopedics - Net $ — $ — $ — $ — $ — Goodwill, net of accumulated impairment losses $ 71,317 $ 123,617 $ — $ — $ 194,934 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Summary of Lease Portfolio | A summary of the Company’s lease portfolio as of December 31, 2023, and 2022, is presented in the table below: (U.S. Dollars, in thousands, except lease term and discount rate) Classification December 31, 2023 December 31, 2022 Assets Operating leases Other long-term assets $ 19,869 $ 6,788 Finance leases Property, plant and equipment, net 16,345 17,360 Total lease assets $ 36,214 $ 24,148 Liabilities Current Operating leases Other current liabilities $ 3,477 $ 1,638 Finance leases Current portion of finance lease liability 708 652 Long-term Operating leases Other long-term liabilities 17,125 5,376 Finance leases Long-term portion of finance lease liability 18,532 19,239 Total lease liabilities $ 39,842 $ 26,905 Weighted Average Remaining Lease Term Operating leases 6.2 years 4.5 years Finance leases 16.6 years 17.6 years Weighted Average Discount Rate Operating leases 7.3 % 4.0 % Finance leases 4.4 % 4.4 % |
Summary of Components of Lease Costs | The components of lease costs were as follows: (U.S. Dollars, in thousands) For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 Finance lease costs: Amortization of right-of-use assets $ 1,013 $ 1,238 $ 2,049 Interest on finance lease liabilities 857 890 933 Operating lease costs 5,015 2,126 2,234 Short-term lease costs 313 152 213 Variable lease costs 1,883 932 815 Total lease costs $ 9,081 $ 5,338 $ 6,244 |
Summary of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows: (U.S. Dollars, in thousands) For the Year Ended December 31, 2023 For the Year Ended December 31, 2022 For the Year Ended December 31, 2021 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 7,682 $ 3,805 $ 4,627 Operating cash flows from finance leases 857 885 907 Financing cash flows from finance leases 652 2,594 537 Right-of-use assets obtained in exchange for lease obligations Operating leases 16,688 5,603 589 Finance leases — — 149 |
Summary of Remaining Lease Liabilities | A summary of the Company’s remaining lease liabilities as of December 31, 2023, is included below: (U.S. Dollars, in thousands) Operating Finance 2024 $ 4,861 $ 1,538 2025 4,788 1,543 2026 4,607 1,562 2027 3,441 1,593 2028 1,785 1,624 Thereafter 6,766 19,396 Total undiscounted value of lease liabilities 26,248 27,256 Less: Interest ( 5,646 ) ( 8,016 ) Present value of lease liabilities $ 20,602 $ 19,240 Current portion of lease liabilities $ 3,477 $ 708 Long-term portion of lease liabilities 17,125 18,532 Total lease liabilities $ 20,602 $ 19,240 |
Other current liabilities (Tabl
Other current liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
Summary of Other Current Liabilities | December 31, (U.S. Dollars, in thousands) 2023 2022 Accrued expenses $ 12,189 $ 9,611 Salaries, bonuses, employee commissions, and related taxes payable 38,826 18,531 Accrued distributor commissions 22,602 10,483 Accrued litigation and investigation costs 12,077 3,891 Short-term operating lease liability 3,477 1,638 Non-income taxes payable 7,585 6,586 Other payables 8,152 4,634 Other current liabilities $ 104,908 $ 55,374 |
Indebtedness (Tables)
Indebtedness (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Carrying Values of Outstanding Debt Obligations | The carrying values of the Company’s outstanding debt obligations as of December 31, 2023, and 2022, were as follows: December 31, (U.S. Dollars, in thousands) 2023 2022 Initial Term Loan Principal amount $ 100,000 $ — Unamortized original debt discount ( 4,331 ) — Unamortized debt issuance costs and lenders fees ( 1,312 ) — Total indebtedness from initial term loan 94,357 — Revolving Credit Facilities Principal amount outstanding — — Total indebtedness outstanding $ 94,357 $ — Current portion of long-term debt $ 1,250 $ — Long-term debt 93,107 — Total indebtedness outstanding $ 94,357 $ — |
Fair value measurements and i_2
Fair value measurements and investments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis | The Company’s available for sale debt securities, equity securities, contingent consideration, and deferred compensation plan liabilities are the only financial instruments recorded at fair value on a recurring basis as follows: (U.S. Dollars, in thousands) Level 1 Level 2 Level 3 Balance Assets Neo Medical convertible loan agreement $ — $ — $ 6,760 $ 6,760 Neo Medical preferred equity securities — 4,951 — 4,951 Bone Biologics equity securities — — — — Other investments — — 1,309 1,309 Total $ — $ 4,951 $ 8,069 $ 13,020 Liabilities Lattus contingent consideration $ — $ — $ ( 8,500 ) $ ( 8,500 ) Spinal Kinetics contingent consideration — — — — Deferred compensation plan — ( 1,674 ) — ( 1,674 ) Total $ — $ ( 1,674 ) $ — $ ( 10,174 ) (U.S. Dollars, in thousands) Level 1 Level 2 Level 3 Balance Assets Neo Medical convertible loan agreements $ — $ — $ 7,140 $ 7,140 Neo Medical preferred equity securities — 6,084 — 6,084 Bone Biologics equity securities — — — — Other Investments — — 1,726 1,726 Total $ — $ 6,084 $ 7,140 $ 14,950 Liabilities Spinal Kinetics contingent consideration $ — $ — $ — $ — Deferred compensation plan — ( 1,515 ) — ( 1,515 ) Total $ — $ ( 1,515 ) $ — $ ( 1,515 ) |
Schedule of Reconciliation of Carrying Value of Investments in Equity Securities | The table below presents a reconciliation of the carrying value of the Company’s investment in Neo Medical preferred equity securities for the years ended December 31, 2023, and 2022: (U.S. Dollars, in thousands) 2023 2022 Fair value of Neo Medical preferred equity securities at January 1 $ 6,084 $ 5,413 Conversion of loan into preferred equity securities — 671 Foreign currency remeasurement recognized in other income, net 388 — Unrealized loss recognized in other income (expense), net ( 1,521 ) — Fair value of Neo Medical preferred equity securities at December 31 $ 4,951 $ 6,084 Cumulative unrealized gain (loss) on Neo Medical preferred equity securities ( 720 ) 413 The |
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) 2023 2022 Spinal Kinetics contingent consideration at January 1 $ — $ 17,200 Decrease in fair value recognized in acquisition-related amortization and remeasurement — ( 17,200 ) Payment made — — Spinal Kinetics contingent consideration at December 31 $ — $ — (U.S. Dollars, in thousands) 2023 2022 Lattus contingent consideration estimated fair value at January 5 $ 11,200 $ — Decrease in fair value recognized in acquisition-related amortization and remeasurement ( 2,700 ) — Lattus contingent consideration estimated fair value at December 31 $ 8,500 $ — |
Schedule of Changes in Valuation of Securities | The following table presents the changes in fair value recognized for each of the years ended December 31, 2023, 2022, and 2021: (U.S. Dollars, in thousands) 2023 2022 2021 Bone Biologics equity securities at January 1 $ — $ 309 $ — Fair value adjustments and impairments recognized in other income (expense), net — ( 183 ) 309 Proceeds from the disposition of equity securities — ( 126 ) — Bone Biologics equity securities at December 31 $ — $ — $ 309 |
Fair Value, Inputs, Level 3 [Member] | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of Reconciliation For Convertible Loans Measured At Fair Value Using Significant Unobservable Inputs | The following table provides a reconciliation of the beginning and ending balances of the Convertible Loan(s), measured at fair value using significant unobservable inputs (Level 3): (U.S. Dollars, in thousands) 2023 2022 Fair value of Neo Medical Convertible Loans at January 1 $ 7,140 $ 7,148 Additions — — Interest recognized in interest income, net 496 436 Foreign currency remeasurement recognized in other income (expense), net 617 ( 67 ) Unrealized gain (loss) recognized in other comprehensive income (loss) ( 1,233 ) 294 Expected credit loss recognized in other income (expense), net ( 260 ) — Conversion of Additional Convertible Loan into preferred equity securities — ( 671 ) Fair value of Neo Medical Convertible Loans at December 31 $ 6,760 $ 7,140 Contractual value of Neo Medical Convertible Loans at December 31 $ 7,020 $ 5,907 Allowance for credit loss recognized in other income (expense), net ( 260 ) — Amortized cost basis of Neo Medical Convertible Loans at December 31 $ 6,760 $ 5,907 |
Schedule of Changes in Valuation of Securities | The following table provides quantitative information related to certain key assumptions utilized within the valuation of the Convertible Loan as of December 31, 2023: (U.S. Dollars, in thousands) Fair Value as of December 31, 2023 Unobservable inputs Estimate Neo Medical Convertible Loan $ 6,760 Cost of equity discount rate 19.3 % Present value factor 15.3 % Implied volatility 81.1 % The following table provides quantitative information related to certain key assumptions utilized within the valuation as of December 31, 2023: (U.S. Dollars, in thousands) Fair Value as of Unobservable inputs Estimate Lattus Contingent Consideration $ 8,500 Counterparty discount rate 14.0 % Revenue risk-adjusted discount rate 6.5 % |
Shareholders' equity (Tables)
Shareholders' equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
Components of Changes in Accumulated Other Comprehensive Income (Loss) | The components of and changes in accumulated other comprehensive income (loss) are as follows: (U.S. Dollars, in thousands) Currency Neo Medical Convertible Loans Other Investments Accumulated Other Balance at December 31, 2020 $ 1,833 $ 1,419 $ — $ 3,252 Other comprehensive loss ( 2,544 ) ( 942 ) — ( 3,486 ) Income taxes — 234 — 234 Balance at December 31, 2021 $ ( 711 ) $ 711 $ — $ — Other comprehensive income (loss) ( 1,771 ) 294 101 ( 1,376 ) Income taxes — — — — Balance at December 31, 2022 $ ( 2,482 ) $ 1,005 $ 101 $ ( 1,376 ) Other comprehensive income (loss) 1,417 ( 1,233 ) ( 101 ) 83 Income taxes — — — — Balance at December 31, 2023 $ ( 1,065 ) $ ( 228 ) $ — $ ( 1,293 ) |
Revenue recognition and accou_2
Revenue recognition and accounts receivable (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue Recognition And Accounts Receivable [Abstract] | |
Schedule of Net Sales | The table below presents net sales, which includes product sales and marketing service fees, for each of the years ended December 31, 2023, 2022, and 2021. For the year ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Product sales $ 693,345 $ 405,437 $ 409,554 Marketing service fees 53,296 55,276 54,925 Net sales $ 746,641 $ 460,713 $ 464,479 |
Allowances for Expected Credit Losses | The following table provides a detail of changes in the Company’s allowance for expected credit losses for the years ended December 31, 2023, and 2022: For the year ended December 31, (U.S. Dollars, in thousands) 2023 2022 Allowance for expected credit losses beginning balance $ 6,419 $ 4,944 Addition resulting from the Merger with SeaSpine 137 — Current period provision for expected credit losses 820 2,095 Write-offs charged against the allowance and other ( 381 ) ( 450 ) Effect of changes in foreign exchange rates 135 ( 170 ) Allowance for expected credit losses ending balance $ 7,130 $ 6,419 |
Schedule of Changes in Contract Liability | The following table provides a detail of changes in the Company’s contract liability associated with the Accelerated and Advanced Payment Program for the years ended December 31, 2023, and 2022: For the Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 Contract liability beginning balance $ — $ 4,791 Recoupment recognized in net sales — ( 4,791 ) Contract liability ending balance $ — $ — |
Business segment information (T
Business segment information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [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: Year Ended December 31, 2023 2022 2021 (U.S. Dollars, in thousands) Net Sales Percent of Net Sales Percent of Net Sales Percent of Bone Growth Therapies $ 212,530 28.5 % $ 187,247 40.7 % $ 187,448 40.4 % Spinal Implants, Biologics, and Enabling Technologies 418,789 56.1 % 165,927 36.0 % 171,515 36.9 % Global Spine 631,319 84.6 % 353,174 76.7 % 358,963 77.3 % Global Orthopedics 115,322 15.4 % 107,539 23.3 % 105,516 22.7 % Net sales $ 746,641 100.0 % $ 460,713 100.0 % $ 464,479 100.0 % |
Summary of EBITDA by Reporting Segment | The following table presents adjusted EBITDA, the primary metric used in managing the Company, by reporting segment: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Adjusted EBITDA by reporting segment Global Spine $ 91,115 $ 62,692 $ 71,086 Global Orthopedics 442 5,267 9,260 Corporate ( 45,272 ) ( 19,406 ) ( 19,084 ) Consolidated adjusted EBITDA $ 46,285 $ 48,553 $ 61,262 Reconciling items: Interest expense, net $ 8,631 $ 1,288 $ 1,837 Depreciation and amortization 53,063 29,019 41,355 Share-based compensation expense 35,707 18,443 15,432 Foreign exchange impact ( 1,581 ) 3,291 3,981 SeaSpine merger-related costs 36,623 12,010 — Strategic investments 2,272 4,018 5,700 Acquisition-related fair value adjustments 33,393 ( 15,595 ) ( 2,014 ) (Gain) loss on investments 1,781 187 ( 644 ) Litigation and investigation costs 14,453 803 33 Medical device regulation 9,446 10,261 8,018 Business interruption - COVID-19 — 2,387 320 Succession charges 1,176 147 739 Loss before income taxes $ ( 148,679 ) $ ( 17,706 ) $ ( 13,495 ) |
Schedule of Depreciation and Amortization by Reporting Segment | The following table presents depreciation and amortization by reporting segment: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Global Spine $ 41,213 $ 18,213 $ 17,548 Global Orthopedics 7,158 6,696 8,233 Corporate 4,692 4,110 3,818 Total $ 53,063 $ 29,019 $ 29,599 |
Summary of Net Sales by Geographic Destination | The table below presents net sales by geographic destination for each reporting segment and for the consolidated Company: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Global Spine U.S. $ 591,937 $ 332,846 $ 337,455 International 39,382 20,328 21,508 Total Global Spine 631,319 353,174 358,963 Global Orthopedics U.S. $ 28,892 25,997 24,490 International 86,430 81,542 81,026 Total Global Orthopedics 115,322 107,539 105,516 Consolidated U.S. 620,829 358,843 361,945 International 125,812 101,870 102,534 Net sales $ 746,641 $ 460,713 $ 464,479 The following data includes net sales by geographic destination: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 U.S. $ 620,829 $ 358,843 $ 361,945 Italy 20,060 19,098 20,187 Germany 11,467 11,569 13,716 United Kingdom 10,910 10,171 10,552 France 11,096 10,377 10,475 Brazil 6,452 5,668 5,108 Others 65,827 44,987 42,496 Net sales $ 746,641 $ 460,713 $ 464,479 |
Summary of Property, Plant and Equipment of Reporting Segments by Geographic Area | The following data includes property, plant, and equipment by geographic area: (U.S. Dollars, in thousands) 2023 2022 U.S. $ 142,727 $ 44,802 Italy 10,187 8,535 Germany 3,030 3,115 Others 3,116 1,777 Total $ 159,060 $ 58,229 |
Acquisition-Related Amortizat_2
Acquisition-Related Amortization and Remeasurement (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Acquisition Related Amortization And Remeasurement [Abstract] | |
Components of Acquisition-Related Amortization and Remeasurement | ended December 31, 2023, 2022, and 2021, respectively, are as follows: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Changes in fair value of contingent consideration $ ( 2,700 ) $ ( 17,200 ) $ ( 3,575 ) Amortization of acquired intangibles 17,408 8,196 7,907 Acquired IPR&D 49 1,600 1,500 Impairment of Global Orthopedics goodwill — — 11,756 Total $ 14,757 $ ( 7,404 ) $ 17,588 |
Share-based compensation (Table
Share-based compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Share-Based Compensation by Line Item in Consolidated Statements of Income | The following tables present the detail of share-based compensation expense by line item in the consolidated statements of income as well as by award type, for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Cost of sales $ 1,901 $ 826 $ 779 Sales and marketing 8,174 3,865 3,385 General and administrative 21,743 12,917 10,289 Research and development 3,889 835 979 Total $ 35,707 $ 18,443 $ 15,432 Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 Stock options $ 6,130 $ 1,114 $ 1,893 Time-based restricted stock awards and stock units 27,290 9,452 7,437 Performance-based / Market-based restricted stock units 227 6,425 4,414 Stock purchase plan 2,060 1,452 1,688 Total $ 35,707 $ 18,443 $ 15,432 |
Schedule of Assumptions Used in Determining Fair Value of Stock Options | The fair value of time-based stock options is determined using the Black-Scholes valuation model, with such value recognized as expense over the service period, which is typically three to four years, net of actual forfeitures. A summary of the Company’s assumptions used in determining the fair value of the stock options granted during each of the years ended December 31, 2023, 2022, and 2021, is shown in the following table. The Company did not grant any time-based stock options in 2022. Year Ended December 31, 2023 2022 2021 Assumptions: Expected term (in years) 6.0 — 6.0 Expected volatility 36.8 % – 42.3 % — 34.4 % – 34.8 % Risk free interest rate 3.38 % – 4.61 % — 0.83 % – 1.25 % Dividend yield — — — Weighted average grant date fair value $ 8.43 $ — $ 12.33 |
Schedule of Stock Option Plans | Summaries of the status of the Company’s stock option plans as of December 31, 2023, and 2022, and changes during the year ended December 31, 2023, are presented below: (In thousands) Options Weighted Weighted Outstanding at December 31, 2022 1,299 $ 39.29 Assumed SeaSpine awards 1,890 $ 36.05 Granted 1,837 $ 19.92 Exercised - $ - Forfeited or expired ( 1,803 ) $ 31.62 Outstanding at December 31, 2023 3,223 $ 30.64 4.97 Vested and expected to vest at December 31, 2023 3,223 $ 30.64 4.97 Exercisable at December 31, 2023 1,828 $ 36.78 2.68 |
Schedule of Changes in Time-Based and Market-Based Restricted Stock Awards and Stock Units | A summary of the status of our time-based and performance-based and/or market-based restricted stock units as of December 31, 2023, and 2022, and changes during the year ended December 31, 2023, are presented below: Time-based Restricted Stock Performance-based and/or Market-based (In thousands) Shares Weighted Shares Weighted Outstanding at December 31, 2022 847 $ 34.18 516 $ 40.29 Assumed SeaSpine awards 490 $ 22.76 — $ — Conversion of performance-based and market-based stock units to time-based stock units 516 $ 40.29 ( 516 ) $ 40.29 Granted 1,496 $ 18.51 13 $ 20.10 Vested and settled ( 749 ) $ 29.04 ( 4 ) $ 22.76 Cancelled ( 560 ) $ 21.12 — $ — Outstanding at December 31, 2023 2,040 $ 26.96 9 $ 22.69 |
Income taxes (Tables)
Income taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (Loss) Before Provision for Income Taxes | Income (loss) before provision for income taxes consisted of the following: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 U.S. $ ( 154,794 ) $ ( 22,318 ) $ ( 5,987 ) Non-U.S. 6,115 4,612 ( 7,508 ) Income (loss) before income taxes $ ( 148,679 ) $ ( 17,706 ) $ ( 13,495 ) |
Schedule of Provision for Income Taxes | The provision for income taxes consists of the following: Year Ended December 31, (U.S. Dollars, in thousands) 2023 2022 2021 U.S. Current $ 17 $ 1,151 $ ( 607 ) Deferred 1,160 67 24,292 1,177 1,218 23,685 Non-U.S. Current 2,120 578 1,009 Deferred ( 581 ) 247 190 1,539 825 1,199 Income tax expense (benefit) $ 2,716 $ 2,043 $ 24,884 |
Schedule of Effective Income Tax Rate Reconciliation for Continuing Operations | The differences between the income tax provision at the U.S. federal statutory tax rate and the Company’s effective tax rate for the years ended December 31, 2023, 2022, and 2021, consist of the following: 2023 2022 2021 (U.S. Dollars, in thousands, except percentages) Amount Percent Amount Percent Amount Percent Statutory U.S. federal income tax rate $ ( 31,222 ) 21.0 % $ ( 3,718 ) 21.0 % $ ( 2,834 ) 21.0 % State taxes, net of U.S. federal benefit ( 3,452 ) 2.3 ( 1,312 ) 7.4 ( 24 ) 0.2 Foreign rate differential, including withholding taxes ( 738 ) 0.5 475 ( 2.7 ) 480 ( 3.6 ) Valuation allowances, net 28,322 ( 19.0 ) 7,638 ( 43.1 ) 27,819 ( 206.1 ) Foreign income inclusions, net 2,333 ( 1.6 ) 1,018 ( 5.7 ) — — Research credits ( 1,219 ) 0.8 ( 750 ) 4.2 ( 537 ) 4.0 Unrecognized tax benefits, net of settlements 71 — ( 599 ) 3.4 ( 1,363 ) 10.1 Equity compensation 4,210 ( 2.8 ) 1,441 ( 8.1 ) 1,091 ( 8.1 ) Executive compensation 3,030 ( 2.0 ) 697 ( 3.9 ) 456 ( 3.4 ) Contingent consideration — — ( 3,316 ) 18.7 ( 640 ) 4.7 Other, net 1,381 ( 0.9 ) 469 ( 2.6 ) 436 ( 3.2 ) Income tax expense (benefit) /effective rate $ 2,716 ( 1.8 )% $ 2,043 ( 11.5 )% $ 24,884 ( 184.4 )% |
Schedule of Deferred Tax Assets and Liabilities | The Company’s deferred tax assets and liabilities are as follows: December 31, (U.S. Dollars, in thousands) 2023 2022 Intangible assets and goodwill $ — $ 5,807 Inventories and related reserves 33,122 17,819 Deferred revenue and cost of goods sold 4,409 3,642 Other accruals and reserves 5,382 2,756 Accrued compensation 14,861 8,795 Provision for expected credit losses 1,821 1,253 Accrued interest 1,227 — Net operating loss and tax credit carryforwards 123,210 40,676 Research and development capitalization 15,174 4,353 Lease liabilities 9,632 6,440 Other, net 5,429 3,767 Total deferred tax assets 214,267 95,308 Valuation allowance ( 200,192 ) ( 83,797 ) Deferred tax asset, net of valuation allowance $ 14,075 $ 11,511 Intangible assets and goodwill $ ( 1,662 ) $ — Withholding taxes ( 10 ) ( 10 ) Property, plant, and equipment ( 5,737 ) ( 5,516 ) Right-of-use lease assets ( 8,755 ) ( 5,771 ) Deferred tax liability $ ( 16,164 ) $ ( 11,297 ) Net deferred tax assets (liabilities) $ ( 2,089 ) $ 214 Reported as: Deferred income tax assets (classified within other long-term assets) $ 2,081 $ 1,470 Deferred income tax liabilities (classified within other long-term liabilities) ( 4,170 ) ( 1,256 ) Net deferred tax assets (liabilities) $ ( 2,089 ) $ 214 |
Schedule of Gross Unrecognized Tax Benefits (Excluding Interest and Penalties) | A reconciliation of the gross unrecognized tax benefits (excluding interest and penalties) for the years ended December 31, 2023, and 2022, is shown below: (U.S. Dollars, in thousands) 2023 2022 Balance as of January 1, $ 1,743 $ 3,462 Additions for current year tax positions 416 46 Increases for prior year tax positions 815 16 Settlements of prior year tax positions — ( 144 ) Expiration of statutes — ( 1,637 ) Balance as of December 31, $ 2,974 $ 1,743 |
Earnings per share (EPS) (Table
Earnings per share (EPS) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of Weighted Average Shares Used in the Diluted EPS | The following is a reconciliation of the weighted average shares used in the diluted EPS computations: Year Ended December 31, (In thousands) 2023 2022 2021 Weighted average common shares-basic 36,729 20,054 19,691 Effect of diluted securities: Unexercised stock options and employee stock purchase plan — — — Unvested time-based restricted stock units — — — Weighted average common shares-diluted 36,729 20,054 19,691 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Nov. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Banking service obligation | $ 4,700,000 | |||
Advertising costs | $ 500,000 | $ 500,000 | $ 500,000 | |
Musculoskeletal Transplant Foundation ("MTF") [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Expenditures for other research and development | 800,000 | 800,000 | ||
Neo Medical SA [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Expenditures for other research and development | 100,000 | 500,000 | 600,000 | |
Maximum [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Transactional foreign currency gains and (losses), including those generated from intercompany operations | $ 1,600,000 | (3,300,000) | $ (4,000,000) | |
Maximum [Member] | Musculoskeletal Transplant Foundation ("MTF") [Member] | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Expenditures for other research and development | $ 100,000 |
Significant accounting polici_5
Significant accounting policies - Schedule of Supplemental Disclosure of Cash Flow Information (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Noncash investing activities: | |
Intangible assets acquired in asset acquisitions | $ 2,000 |
Recently Adopted Accounting S_2
Recently Adopted Accounting Standards and Recently Issued Accounting Pronouncements - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | ||||
Contract liabilities revenue recognized | $ 2,200 | |||
Impairment of goodwill | $ 11,756 | |||
CARES Act of 2020 funds received | $ (4,791) | $ (9,060) | $ 13,900 | |
ASU 2020-04 [Member] | ||||
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 | Mar. 12, 2020 | |||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true | |||
ASU 2019-12 [Member] | ||||
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. 01, 2021 | |||
Change in Accounting Principle, Accounting Standards Update, Immaterial Effect [true false] | true |
Mergers and acquisitions - Addi
Mergers and acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jan. 05, 2023 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||
Conversion of stock, shares converted | 0.4163 | ||||
Goodwill | $ 123,617 | ||||
Net sales | 746,641 | $ 460,713 | $ 464,479 | ||
Net loss | (151,395) | (19,749) | (38,379) | ||
Pre tax expenses | $ 18,200 | 1,176 | 147 | 739 | |
Global Spine [Member] | |||||
Business Acquisition [Line Items] | |||||
Goodwill | 123,617 | ||||
Net sales | 631,319 | $ 353,174 | $ 358,963 | ||
SeaSpine Holdings Corporation [Member] | |||||
Business Acquisition [Line Items] | |||||
Direct acquisition-related costs | 9,900 | ||||
Net sales | 258,900 | ||||
Net loss | $ 84,000 |
Mergers and acquisitions - Sche
Mergers and acquisitions - Schedule of Estimated Fair Value of Consideration Associated with Merger (Detail) - SeaSpine Holdings Corporation [Member] - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Jan. 05, 2023 | Dec. 31, 2023 | |
Business Acquisition [Line Items] | ||
Orthofix common shares to be issued in exchange for SeaSpine common shares | 16,047,315 | 1,600,000 |
Orthofix closing price per share as of January 4, 2023 | $ 22.76 | |
Estimated fair value of shares issued in exchange for SeaSpine common shares | $ 365,237 | |
Estimated fair value of Orthofix stock options and RSUs issued in exchange for outstanding SeaSpine equity awards | 11,508 | |
Total estimated fair value of consideration | $ 376,745 |
Mergers and acquisitions - Summ
Mergers and acquisitions - Summary of Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Jan. 05, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Current liabilities | |||
Residual goodwill | $ 194,934 | $ 71,317 | |
Assigned Useful Life | 9 years 6 months | ||
In-Process Research and Development ("IPR&D") [Member] | |||
Current liabilities | |||
Assigned Useful Life | Indefinite | ||
Customer Relationships [Member] | |||
Current liabilities | |||
Assigned Useful Life | 12 years 1 month 6 days | ||
Developed Technology [Member] | |||
Current liabilities | |||
Assigned Useful Life | 7 years 10 months 24 days | ||
SeaSpine Holdings Corporation [Member] | |||
Current assets | |||
Cash and cash equivalents | $ 29,419 | ||
Accounts receivable, net | 35,313 | ||
Inventories | 132,636 | ||
Prepaid expenses and other current assets | 4,590 | ||
Total current assets | 201,958 | ||
Property, plant, and equipment, net | 68,863 | ||
Other long-term assets | 20,501 | ||
Total identifiable assets acquired | 377,372 | ||
Current liabilities | |||
Accounts payable | 21,602 | ||
Other current liabilities | 43,521 | ||
Total current liabilities | 65,123 | ||
Long-term borrowings under SeaSpine credit facility | 26,298 | ||
Other long-term liabilities | 32,823 | ||
Total liabilities assumed | 124,244 | ||
Net identifiable assets acquired | 253,128 | ||
Total fair value of consideration transferred | 376,745 | ||
Residual goodwill | 123,617 | ||
SeaSpine Holdings Corporation [Member] | Customer Relationships [Member] | |||
Current assets | |||
Finite lived intangible assets, net acquired | $ 33,100 | ||
Current liabilities | |||
Assigned Useful Life | 13 years | ||
SeaSpine Holdings Corporation [Member] | Developed Technology [Member] | |||
Current assets | |||
Finite lived intangible assets, net acquired | $ 47,200 | ||
SeaSpine Holdings Corporation [Member] | Developed Technology [Member] | Minimum [Member] | |||
Current liabilities | |||
Assigned Useful Life | 6 years | ||
SeaSpine Holdings Corporation [Member] | Developed Technology [Member] | Maximum [Member] | |||
Current liabilities | |||
Assigned Useful Life | 8 years | ||
SeaSpine Holdings Corporation [Member] | In Process Research and Development [Member] | |||
Current assets | |||
Finite lived intangible assets, net acquired | $ 5,750 | ||
Current liabilities | |||
Assigned Useful Life | Indefinite | ||
Previously Reported [Member] | SeaSpine Holdings Corporation [Member] | |||
Current assets | |||
Cash and cash equivalents | $ 29,419 | ||
Accounts receivable, net | 35,313 | ||
Inventories | 132,636 | ||
Prepaid expenses and other current assets | 4,590 | ||
Total current assets | 201,958 | ||
Property, plant, and equipment, net | 68,863 | ||
Other long-term assets | 20,501 | ||
Total identifiable assets acquired | 377,372 | ||
Current liabilities | |||
Accounts payable | 21,602 | ||
Other current liabilities | 43,344 | ||
Total current liabilities | 64,946 | ||
Long-term borrowings under SeaSpine credit facility | 26,298 | ||
Other long-term liabilities | 32,833 | ||
Total liabilities assumed | 124,077 | ||
Net identifiable assets acquired | 253,295 | ||
Total fair value of consideration transferred | 376,745 | ||
Residual goodwill | 123,450 | ||
Previously Reported [Member] | SeaSpine Holdings Corporation [Member] | Customer Relationships [Member] | |||
Current assets | |||
Finite lived intangible assets, net acquired | 33,100 | ||
Previously Reported [Member] | SeaSpine Holdings Corporation [Member] | Developed Technology [Member] | |||
Current assets | |||
Finite lived intangible assets, net acquired | 47,200 | ||
Previously Reported [Member] | SeaSpine Holdings Corporation [Member] | In Process Research and Development [Member] | |||
Current assets | |||
Finite lived intangible assets, net acquired | 5,750 | ||
Adjustments [Member] | SeaSpine Holdings Corporation [Member] | |||
Current liabilities | |||
Other current liabilities | 177 | ||
Total current liabilities | 177 | ||
Other long-term liabilities | (10) | ||
Total liabilities assumed | 167 | ||
Net identifiable assets acquired | (167) | ||
Residual goodwill | $ 167 |
Mergers and acquisitions - Su_2
Mergers and acquisitions - Summary of Pro Forma Financial Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Business Combinations [Abstract] | ||
Net sales | $ 746.6 | $ 698.2 |
Net loss | $ (116.4) | $ (129.2) |
Mergers and acquisitions - Su_3
Mergers and acquisitions - Summary of Integration Costs Incurred (Details) - Seaspine Holdings Corporation [Member] $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Business Acquisition [Line Items] | |
Compensation-related integration costs | $ 17.7 |
International spine restructuring | 1.3 |
Fee paid to financial advisor to the Merger | 5.5 |
Professional fees / consulting fees | 5.8 |
Product rationalization charges | 6 |
Other costs to complete | 1.4 |
Total | $ 37.7 |
Mergers and acquisitions - Su_4
Mergers and acquisitions - Summary of Restructuring Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | ||||
Charges Incurred | $ 18,200 | $ 1,176 | $ 147 | $ 739 |
Retention Costs [Member] | Seaspine Holdings Corporation [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges Incurred | 18,200 | |||
Payments Made / Currency Translation Adjustment | (11,200) | |||
Balance as of December 31, 2023 | 7,000 | |||
U.S. Severance Costs [Member] | Seaspine Holdings Corporation [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges Incurred | 11,200 | |||
Payments Made / Currency Translation Adjustment | (10,200) | |||
Balance as of December 31, 2023 | 1,000 | |||
U S Retention Costs [Member] | Seaspine Holdings Corporation [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges Incurred | 5,300 | |||
Payments Made / Currency Translation Adjustment | (300) | |||
Balance as of December 31, 2023 | 5,000 | |||
U S Payroll Taxes [Member] | Seaspine Holdings Corporation [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges Incurred | 700 | |||
Payments Made / Currency Translation Adjustment | (400) | |||
Balance as of December 31, 2023 | 300 | |||
International Spine Restructuring Severance [Member] | Seaspine Holdings Corporation [Member] | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Charges Incurred | 1,000 | |||
Payments Made / Currency Translation Adjustment | (300) | |||
Balance as of December 31, 2023 | $ 700 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 28,390 | $ 17,035 |
Work-in-process | 53,510 | 19,243 |
Finished products | 140,266 | 63,872 |
Inventories | $ 222,166 | $ 100,150 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Useful Lives of the Assets (Detail) | Dec. 31, 2023 |
Minimum [Member] | Buildings [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 25 years |
Minimum [Member] | Plant and equipment [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 1 year |
Minimum [Member] | Instrumentation [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 3 years |
Minimum [Member] | Computer software [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 3 years |
Minimum [Member] | Furniture and fixtures [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 4 years |
Maximum [Member] | Buildings [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 33 years |
Maximum [Member] | Plant and equipment [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 10 years |
Maximum [Member] | Instrumentation [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 4 years |
Maximum [Member] | Computer software [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 7 years |
Maximum [Member] | Furniture and fixtures [Member] | |
Property Plant And Equipment [Line Items] | |
Useful life, in years | 8 years |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property Plant And Equipment [Line Items] | |||
Depreciation expense | $ 34.2 | $ 19.6 | $ 20.2 |
Internal-use Software [Member] | Minimum [Member] | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful life | 3 years | ||
Internal-use Software [Member] | Maximum [Member] | |||
Property Plant And Equipment [Line Items] | |||
Estimated useful life | 7 years |
Property, Plant and Equipment_3
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 347,685 | $ 221,225 |
Accumulated depreciation | (188,625) | (162,996) |
Property, plant, and equipment, net | 159,060 | 58,229 |
Buildings [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment, gross | 4,103 | 3,867 |
Plant and equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment, gross | 70,252 | 48,358 |
Instrumentation [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment, gross | 154,192 | 92,607 |
Computer software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment, gross | 43,040 | 40,685 |
Furniture and fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment, gross | 11,010 | 7,917 |
Construction in progress [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment, gross | 41,751 | 4,515 |
Finance lease assets [Member] | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment, gross | $ 23,337 | $ 23,276 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 215,930 | $ 124,849 |
Accumulated amortization | (98,440) | (77,461) |
Intangible assets, net | $ 117,490 | 47,388 |
Weighted Average Amortization Period | 9 years 6 months | |
Patents [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 43,262 | 40,108 |
Accumulated amortization | $ (40,494) | (37,506) |
Weighted Average Amortization Period | 10 years | |
Developed Technology [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 92,416 | 43,699 |
Accumulated amortization | $ (28,898) | (17,830) |
Weighted Average Amortization Period | 7 years 10 months 24 days | |
Customer Relationships [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 49,197 | 15,572 |
Accumulated amortization | $ (11,988) | (6,938) |
Weighted Average Amortization Period | 12 years 1 month 6 days | |
Licenses and Other [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 24,584 | 23,295 |
Accumulated amortization | $ (16,240) | (14,386) |
Weighted Average Amortization Period | 9 years 7 months 6 days | |
Trademarks-Finite Lived [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 1,797 | 1,875 |
Accumulated amortization | $ (820) | (801) |
Weighted Average Amortization Period | 10 years | |
In-Process Research and Development ("IPR&D") [Member] | ||
Finite And Indefinite Lived Intangible Assets [Line Items] | ||
Cost | $ 4,674 | $ 300 |
Weighted Average Amortization Period | Indefinite |
Intangible Assets - Additional
Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite And Indefinite Lived Intangible Assets [Abstract] | |||
Amortization of intangible assets | $ 18.9 | $ 9.4 | $ 9.4 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Future Amortization Expense (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 20,948 | |
2025 | 19,849 | |
2026 | 18,810 | |
2027 | 18,426 | |
2028 | 14,890 | |
Thereafter | 19,893 | |
Total finite-lived intangible assets, net | 112,816 | |
Indefinite-lived intangible assets, net | 4,674 | |
Intangible assets, net | $ 117,490 | $ 47,388 |
Goodwill - Additional Informati
Goodwill - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2021 | |
Goodwill [Line Items] | |||
Impairment of goodwill | $ 11,756,000 | ||
Percentage of market capitalization decreased due to termination | 30% | ||
Global Orthopedics [Member] | |||
Goodwill [Line Items] | |||
Impairment of goodwill | $ 11,756,000 | ||
Global Spine [Member] | |||
Goodwill [Line Items] | |||
Impairment of goodwill | $ 0 |
Goodwill - Schedule of Net Carr
Goodwill - Schedule of Net Carrying Amount of Goodwill (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Goodwill [Line Items] | |
Goodwill, net Beginning Balance | $ 71,317 |
Goodwill acquired in the merger, net | 123,617 |
Goodwill, net Ending Balance | 194,934 |
Global Spine [Member] | |
Goodwill [Line Items] | |
Goodwill, gross Beginning balance | 71,317 |
Goodwill acquired in the merger, gross | 123,617 |
Goodwill, gross Ending balance | 194,934 |
Goodwill, net Beginning Balance | 71,317 |
Goodwill acquired in the merger, net | 123,617 |
Goodwill, net Ending Balance | 194,934 |
Global Orthopedics [Member] | |
Goodwill [Line Items] | |
Goodwill, gross Beginning balance | 11,130 |
Goodwill gross, Currency translation adjustment | 347 |
Goodwill, gross Ending balance | 11,477 |
Accumulated Impairment Loss Beginning balance | (11,130) |
Accumulated Impairment Loss, Currency translation adjustment | (347) |
Accumulated Impairment Loss Ending balance | $ (11,477) |
Leases - Summary of Lease Portf
Leases - Summary of Lease Portfolio (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Assets | ||
Operating leases | $ 19,869 | $ 6,788 |
Operating lease, right-of-use asset, statement of financial position [Extensible List] | Other long-term assets | Other long-term assets |
Finance leases | $ 16,345 | $ 17,360 |
Finance lease, right-of-use asset, statement of financial position [Extensible List] | Property, plant and equipment net | Property, plant and equipment net |
Total lease assets | $ 36,214 | $ 24,148 |
Current | ||
Operating leases | $ 3,477 | $ 1,638 |
Operating lease, liability, current, statement of financial position [Extensible List] | Other current liabilities | Other current liabilities |
Finance leases | $ 708 | $ 652 |
Long-term | ||
Operating leases | $ 17,125 | $ 5,376 |
Operating lease, liability, noncurrent, statement of financial position [Extensible List] | Other long-term liabilities | Other long-term liabilities |
Finance leases | $ 18,532 | $ 19,239 |
Total lease liabilities | $ 39,842 | $ 26,905 |
Weighted Average Remaining Lease Term | ||
Operating leases | 6 years 2 months 12 days | 4 years 6 months |
Finance leases | 16 years 7 months 6 days | 17 years 7 months 6 days |
Weighted Average Discount Rate | ||
Operating leases | 7.30% | 4% |
Finance leases | 4.40% | 4.40% |
Leases - Summary of Components
Leases - Summary of Components of Lease Costs (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finance lease costs: | |||
Amortization of right-of-use assets | $ 1,013 | $ 1,238 | $ 2,049 |
Interest on finance lease liabilities | 857 | 890 | 933 |
Operating lease costs | 5,015 | 2,126 | 2,234 |
Short-term lease costs | 313 | 152 | 213 |
Variable lease costs | 1,883 | 932 | 815 |
Total lease costs | $ 9,081 | $ 5,338 | $ 6,244 |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash paid for amounts included in the measurement of lease liabilities | |||
Operating cash flows from operating leases | $ 7,682 | $ 3,805 | $ 4,627 |
Operating cash flows from finance leases | 857 | 885 | 907 |
Financing cash flows from finance leases | 652 | 2,594 | 537 |
Right-of-use assets obtained in exchange for lease obligations | |||
Operating leases | $ 16,688 | $ 5,603 | 589 |
Finance leases | $ 149 |
Leases - Summary of Remaining L
Leases - Summary of Remaining Lease Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Operating Leases | ||
2024 | $ 4,861 | |
2025 | 4,788 | |
2026 | 4,607 | |
2027 | 3,441 | |
2028 | 1,785 | |
Thereafter | 6,766 | |
Total undiscounted value of lease liabilities | 26,248 | |
Less: Interest | (5,646) | |
Present value of lease liabilities | 20,602 | |
Current portion of lease liabilities | 3,477 | $ 1,638 |
Long-term portion of lease liabilities | 17,125 | 5,376 |
Total lease liabilities | 20,602 | |
Finance Leases | ||
2024 | 1,538 | |
2025 | 1,543 | |
2026 | 1,562 | |
2027 | 1,593 | |
2028 | 1,624 | |
Thereafter | 19,396 | |
Total undiscounted value of lease liabilities | 27,256 | |
Less: Interest | (8,016) | |
Present value of lease liabilities | 19,240 | |
Current portion of finance lease liability | 708 | 652 |
Long-term portion of finance lease liability | 18,532 | $ 19,239 |
Total lease liabilities | $ 19,240 |
Other Current Liabilities - Sum
Other Current Liabilities - Summary of Other Current Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued expenses | $ 12,189 | $ 9,611 |
Salaries, bonuses, employee commissions, and related taxes payable | 38,826 | 18,531 |
Accrued distributor commissions | 22,602 | 10,483 |
Accrued litigation and investigation costs | 12,077 | 3,891 |
Short-term operating lease liability | 3,477 | 1,638 |
Non-income taxes payable | 7,585 | 6,586 |
Other payables | 8,152 | 4,634 |
Other current liabilities | $ 104,908 | $ 55,374 |
Indebtedness - Summary of Carry
Indebtedness - Summary of Carrying Values of Outstanding Debt Obligations (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Debt Instrument [Line Items] | |
Current portion of long-term debt | $ 1,250 |
Long-term debt | 93,107 |
Total initial indebtedness outstanding | 94,357 |
Initial Term Loan [Member] | |
Debt Instrument [Line Items] | |
Principal amount outstanding | 100,000 |
Unamortized original debt discount | (4,331) |
Unamortized debt issuance costs and lenders fees | (1,312) |
Total initial indebtedness outstanding | 94,357 |
Revolving Credit Facility [Member] | |
Debt Instrument [Line Items] | |
Total initial indebtedness outstanding | $ 94,357 |
Indebtedness- Additional Inform
Indebtedness- Additional Information (Detail) | 12 Months Ended | |||||||||
Nov. 06, 2023 USD ($) | Oct. 25, 2019 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jan. 10, 2024 USD ($) | Dec. 31, 2023 EUR (€) | Jun. 13, 2023 USD ($) | Jan. 04, 2023 USD ($) | Jan. 03, 2023 USD ($) | |
Debt Instrument [Line Items] | ||||||||||
Repayment of borrowings | $ 79,000,000 | |||||||||
Debt issuance costs paid | 2,357,000 | $ 92,000 | $ 948,000 | |||||||
Cash paid to interest | 5,800,000 | 1,400,000 | 1,500,000 | |||||||
Italy [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | 6,100,000 | 5,900,000 | € 5,500,000 | |||||||
Initial Term Loan [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt issuance costs and lenders fees | $ 1,312,000 | |||||||||
Financing Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt issuance costs and lenders fees | $ 2,000,000 | |||||||||
Financing Agreement [Member] | Blue Torch Finance LLC [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Line of credit facility interest rate description | Borrowings under the Credit Facilities bear interest at a floating rate, which will be, at the Company’s option, either the three-month SOFR rate (subject to a floor of 3.00% and a credit spread adjustment of 0.26161%) (the “Adjusted Term SOFR Rate”) plus an applicable margin of 7.25%, or a base rate plus an applicable margin of 6.25% | |||||||||
Financing Agreement [Member] | Base Rate [Member] | Blue Torch Finance LLC [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 6.25% | |||||||||
Financing Agreement [Member] | Floor Rate [Member] | Blue Torch Finance LLC [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 3% | |||||||||
Financing Agreement [Member] | Credit Spread Adjustment [Member] | Blue Torch Finance LLC [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 0.26161% | |||||||||
Financing Agreement [Member] | Adjusted Term SOFR Rate [Member] | Blue Torch Finance LLC [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Interest rate | 7.25% | |||||||||
Financing Agreement [Member] | Revolving Credit Facility [Member] | Blue Torch Finance LLC [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 25,000,000 | |||||||||
Maturity date | Nov. 06, 2027 | |||||||||
Borrowings | $ 0 | |||||||||
Repayment of borrowings | $ 175,000,000 | |||||||||
Percentage of unused line fee payable | 2% | |||||||||
Financing Agreement [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member] | Blue Torch Finance LLC [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Borrowings | $ 15,000,000 | |||||||||
Financing Agreement [Member] | Initial Term Loan [Member] | Blue Torch Finance LLC [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 100,000,000 | |||||||||
Maturity date | Nov. 06, 2027 | |||||||||
Financing Agreement [Member] | Delayed Draw Term Loan [Member] | Blue Torch Finance LLC [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 25,000,000 | |||||||||
Maturity date | Nov. 06, 2027 | |||||||||
Borrowings | 0 | |||||||||
Percentage of unused line fee payable | 1% | |||||||||
Financing Agreement or Prior Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Debt issuance costs, net of accumulated amortization | 1,900,000 | 700,000 | ||||||||
Debt issuance costs amortized or expensed | $ 1,300,000 | $ 400,000 | $ 400,000 | |||||||
Prior Credit Agreement [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maturity date | Oct. 25, 2024 | |||||||||
Borrowings | $ 79,000,000 | $ 49,000,000 | $ 30,000,000 | |||||||
Prior Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||||
Debt Instrument [Line Items] | ||||||||||
Maximum borrowing capacity | $ 300,000,000 | $ 175,000,000 |
Fair Value Measurements and I_3
Fair Value Measurements and Investments - Schedule of Financial Assets and Liabilities Recorded at Fair Value on Recurring Basis (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | $ 13,020 | $ 14,950 |
Deferred compensation plan, Liabilities | (1,674) | (1,515) |
Liabilities fair value, Total | (10,174) | (1,515) |
Lattus [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities fair value, Total | (8,500) | |
Convertible Loan Agreements [Member] | Neo Medical [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 6,760 | 7,140 |
Preferred Equity Securities [Member] | Neo Medical [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 4,951 | 6,084 |
Other Investments [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 1,309 | 1,726 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 4,951 | 6,084 |
Deferred compensation plan, Liabilities | (1,674) | (1,515) |
Liabilities fair value, Total | (1,674) | (1,515) |
Fair Value, Inputs, Level 2 [Member] | Preferred Equity Securities [Member] | Neo Medical [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 4,951 | 6,084 |
Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 8,069 | 7,140 |
Fair Value, Inputs, Level 3 [Member] | Lattus [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Liabilities fair value, Total | (8,500) | |
Fair Value, Inputs, Level 3 [Member] | Convertible Loan Agreements [Member] | Neo Medical [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | 6,760 | 7,140 |
Fair Value, Inputs, Level 3 [Member] | Other Investments [Member] | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Assets fair value | $ 1,309 | $ 1,726 |
Fair Value Measurements and I_4
Fair Value Measurements and Investments - Additional Information (Detail) - Neo Medical [Member] SFr in Millions, $ in Millions | Oct. 01, 2020 USD ($) | Dec. 31, 2023 USD ($) | Oct. 31, 2021 USD ($) | Oct. 31, 2021 CHF (SFr) | Oct. 01, 2020 CHF (SFr) |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Convertible loans | $ 5 | $ 0.7 | SFr 0.6 | SFr 4.6 | |
Convertible loans interest rate | 8% | 8% | |||
Maturity date | Oct. 01, 2024 | ||||
Convertible loan credit losses | $ 0.3 | ||||
Preferred Stock [Member] | |||||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||||
Amount of Preferred stock consideration | $ 5 |
Fair Value Measurements and I_5
Fair Value Measurements and Investments - Schedule of Reconciliation of Carrying Value of Investments in Equity Securities (Detail) - Preferred Stock [Member] - Neo Medical [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Fair value of equity securities beginning balance | $ 6,084 | $ 5,413 |
Conversion of loan into preferred equity securities | 671 | |
Foreign currency remeasurement recognized in other income, net | 388 | |
Unrealized loss recognized in other income (expense), net | (1,521) | |
Fair value of equity securities Ending balance | 4,951 | 6,084 |
Cumulative unrealized gain (loss) on Neo Medical preferred equity securities | $ (720) | $ 413 |
Fair Value Measurements and I_6
Fair Value Measurements and Investments - Schedule of Reconciliation For Contingent Consideration Measured At Fair Value Using Significant Unobservable Inputs (Level 3) (Detail) - Neo Medical [Member] - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Fair value of convertible loans beginning balance | $ 7,140 | $ 7,148 |
Interest recognized in interest income, net | 496 | 436 |
Foreign currency remeasurement recognized in other income (expense), net | 617 | (67) |
Unrealized gain (loss) recognized in other comprehensive income (loss) | (1,233) | 294 |
Expected credit loss recognized in other income (expense), net | (260) | |
Conversion of Additional Convertible Loan into preferred equity securities | (671) | |
Fair value of convertible loans ending balance | 6,760 | 7,140 |
Contractual value of Neo Medical Convertible Loans at December 31 | 7,020 | 5,907 |
Allowance for credit loss recognized in other income (expense), net | (260) | |
Amortized cost basis of Neo Medical Convertible Loans at December 31 | $ 6,760 | $ 5,907 |
Fair Value Measurements and I_7
Fair Value Measurements and Investments - Schedule of Valuation Methodology and Unobservable Inputs for Level 3 Assets and Liabilities Measured at Fair Value (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Spinal Kinetics [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration estimated fair value | $ 17,200 | |
Decrease in fair value recognized in acquisition-related amortization and remeasurement | (17,200) | |
Neo Medical [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Neo Medical Convertible Loan | $ 6,760 | |
Fair value discount rate | 19.30% | |
Present value factor | 15.30% | |
Fair value implied volatility | 81.10% | |
Lattus Spine [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Consideration transferred | $ 8,500 | |
Counterparty discount rate | 14% | |
Revenue risk-adjusted discount rate | 6.50% | |
Lattus Spine [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Contingent consideration estimated fair value | $ 11,200 | |
Decrease in fair value recognized in acquisition-related amortization and remeasurement | (2,700) | |
Contingent consideration estimated fair value at December 31 | $ 8,500 | $ 11,200 |
Fair Value Measurements and I_8
Fair Value Measurements and Investments - Schedule of Change in Valuation of Securities (Detail) - Bone Biologics Inc [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Equity securities beginning balance | $ 309 | |
Fair value adjustments and impairments recognized in other income (expense), net | (183) | $ 309 |
Proceeds from the disposition of equity securities | $ (126) | |
Equity securities ending balance | $ 309 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended | |||
Jan. 05, 2023 shares | Dec. 31, 2023 USD ($) Executive shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Other Commitments [Line Items] | ||||
Number of former executives seeking severance payments | Executive | 3 | |||
Accrued other long-term liabilities | $ 7.6 | |||
Estimated sales and marketing expense (benefit) | $ 1.3 | $ 1.2 | $ (1.2) | |
SeaSpine [Member] | ||||
Other Commitments [Line Items] | ||||
Number of shares issued under acquisition | shares | 16,047,315 | 1,600,000 |
Shareholders' Equity - Componen
Shareholders' Equity - Components of Changes in Accumulated Other Comprehensive Income (Loss) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | $ 336,860 | $ 336,934 | $ 356,864 |
Ending Balance | 598,730 | 336,860 | 336,934 |
Other Investments [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | 101 | ||
Other comprehensive income (loss) | (101) | 101 | 0 |
Ending Balance | 101 | ||
Convertible Loan [Member] | Neo Medical SA [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | 1,005 | 711 | 1,419 |
Other comprehensive income (loss) | (1,233) | 294 | (942) |
Income taxes | 234 | ||
Ending Balance | (228) | 1,005 | 711 |
Currency Translation Adjustments [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | (2,482) | (711) | 1,833 |
Other comprehensive income (loss) | 1,417 | (1,771) | (2,544) |
Ending Balance | (1,065) | (2,482) | (711) |
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Accumulated Other Comprehensive Income Loss [Line Items] | |||
Beginning Balance | (1,376) | 3,252 | |
Other comprehensive income (loss) | 83 | (1,376) | (3,486) |
Income taxes | $ 234 | ||
Ending Balance | $ (1,293) | $ (1,376) |
Revenue Recognition and Accou_3
Revenue Recognition and Accounts Receivable - Schedule of Net Sales (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue Recognition [Abstract] | |||
Product sales | $ 693,345 | $ 405,437 | $ 409,554 |
Marketing service fees | 53,296 | 55,276 | 54,925 |
Net sales | $ 746,641 | $ 460,713 | $ 464,479 |
Revenue Recognition and Accou_4
Revenue Recognition and Accounts Receivable - Additional Information (Detail) € in Millions | 1 Months Ended | 12 Months Ended | |||||||
Mar. 31, 2022 | Apr. 30, 2021 | Dec. 31, 2023 USD ($) | Dec. 31, 2023 EUR (€) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Dec. 31, 2021 USD ($) | Dec. 31, 2021 EUR (€) | Dec. 31, 2020 USD ($) | |
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||
Marketing service fees | $ 53,296,000 | $ 55,276,000 | $ 54,925,000 | ||||||
Cost of sales | 260,368,000 | 123,544,000 | 114,914,000 | ||||||
Addition resulting from the Merger with SeaSpine | 137,000 | ||||||||
Sale of receivables | 10,000,000 | € 9.2 | 9,600,000 | € 9.2 | 9,900,000 | € 8.4 | |||
Related fees recorded as interest expense | 400,000 | 300,000 | 200,000 | ||||||
CARES Act of 2020 funds received | (4,791,000) | (9,060,000) | $ 13,900,000 | ||||||
Medicare recoupment | 0.50 | 0.25 | |||||||
Contract liability, total | 4,791,000 | ||||||||
Other Asset Impairment Charges | 400,000 | ||||||||
Other Contract Assets [Member] | |||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||
Other contract assets impairment | 0 | ||||||||
Other Long-Term Assets [Member] | |||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||
Other contract assets | 300,000 | 1,100,000 | |||||||
Shipping and Handling Costs [Member] | |||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||
Cost of sales | 9,500,000 | $ 4,200,000 | $ 3,500,000 | ||||||
Biologics [Member] | |||||||||
Revenue Recognition And Accounts Receivable [Line Items] | |||||||||
Marketing service fees | $ 53,300,000 | ||||||||
Marketing service fee as percentage of segment revenues | 32% | 32% |
Revenue Recognition and Accou_5
Revenue Recognition and Accounts Receivable - Schedule of Allowance for Expected Credit Losses (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for expected credit losses beginning balance | $ 6,419 | $ 4,944 |
Addition resulting from the Merger with SeaSpine | 137 | |
Current period provision for expected credit losses | 820 | 2,095 |
Write-offs charged against the allowance and other | (381) | (450) |
Effect of changes in foreign exchange rates | 135 | (170) |
Allowance for expected credit losses ending balance | $ 7,130 | $ 6,419 |
Revenue Recognition and Accou_6
Revenue Recognition and Accounts Receivable - Schedule of Changes In Contract Liability (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Revenue Recognition [Abstract] | |
Contract liability beginning balance | $ 4,791 |
Recoupment recognized in net sales | $ (4,791) |
Business Segment Information -
Business Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2023 Segment | |
Segment Reporting [Abstract] | |
Number of reporting segments | 2 |
Business Segment Information _2
Business Segment Information - Schedule of Net Sales by Major Product Category by Reporting Segment (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Net Sales | $ 746,641 | $ 460,713 | $ 464,479 |
Percent of Total Net Sales | 100% | 100% | 100% |
Bone Growth Therapies [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | $ 212,530 | $ 187,247 | $ 187,448 |
Percent of Total Net Sales | 28.50% | 40.70% | 40.40% |
Spinal Implants, Biologics, and Enabling Technologies [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | $ 418,789 | $ 165,927 | $ 171,515 |
Percent of Total Net Sales | 56.10% | 36% | 36.90% |
Global Spine [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | $ 631,319 | $ 353,174 | $ 358,963 |
Percent of Total Net Sales | 84.60% | 76.70% | 77.30% |
Global Orthopedics [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | $ 115,322 | $ 107,539 | $ 105,516 |
Percent of Total Net Sales | 15.40% | 23.30% | 22.70% |
Business Segment Information _3
Business Segment Information - Summary of EBIDTA by Reporting Segment (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | ||||
Consolidated adjusted EBITDA | $ 46,285 | $ 48,553 | $ 61,262 | |
Interest expense, net | 8,631 | 1,288 | 1,837 | |
Depreciation and amortization | 53,063 | 29,019 | 41,355 | |
Share-based compensation expense | 35,707 | 18,443 | 15,432 | |
Foreign exchange impact | (1,581) | 3,291 | 3,981 | |
SeaSpine merger-related costs | 36,623 | 12,010 | ||
Strategic investments | 2,272 | 4,018 | 5,700 | |
Acquisition-related fair value adjustments | 33,393 | (15,595) | (2,014) | |
(Gain) loss on investments | 1,781 | 187 | (644) | |
Litigation and investigation costs | 14,453 | 803 | 33 | |
Medical device regulation | 9,446 | 10,261 | 8,018 | |
Business interruption - COVID-19 | 2,387 | 320 | ||
Succession charges | $ 18,200 | 1,176 | 147 | 739 |
Income (loss) before income taxes | (148,679) | (17,706) | (13,495) | |
Operating Segments [Member] | Global Spine [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated adjusted EBITDA | 91,115 | 62,692 | 71,086 | |
Operating Segments [Member] | Global Orthopedics [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated adjusted EBITDA | 442 | 5,267 | 9,260 | |
Corporate, Non-Segment [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated adjusted EBITDA | $ (45,272) | $ (19,406) | $ (19,084) |
Business Segment Information _4
Business Segment Information - Schedule of Depreciation and Amortization by Reporting Segment (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 53,063 | $ 29,019 | $ 29,599 |
Operating Segments [Member] | Global Spine [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 41,213 | 18,213 | 17,548 |
Operating Segments [Member] | Global Orthopedics [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 7,158 | 6,696 | 8,233 |
Corporate, Non-Segment [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | $ 4,692 | $ 4,110 | $ 3,818 |
Business Segment Information _5
Business Segment Information - Summary of Net Sales by Geographic Destination for Each Reporting Segment (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 746,641 | $ 460,713 | $ 464,479 |
Global Spine [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 631,319 | 353,174 | 358,963 |
Global Orthopedics [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 115,322 | 107,539 | 105,516 |
U.S. [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 620,829 | 358,843 | 361,945 |
U.S. [Member] | Global Spine [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 591,937 | 332,846 | 337,455 |
U.S. [Member] | Global Orthopedics [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 28,892 | 25,997 | 24,490 |
International [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 125,812 | 101,870 | 102,534 |
International [Member] | Global Spine [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 39,382 | 20,328 | 21,508 |
International [Member] | Global Orthopedics [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 86,430 | $ 81,542 | $ 81,026 |
Business Segment Information _6
Business Segment Information - Summary of Net Sales by Geographic Destination (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 746,641 | $ 460,713 | $ 464,479 |
U.S. [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 620,829 | 358,843 | 361,945 |
Italy [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 20,060 | 19,098 | 20,187 |
Germany [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 11,467 | 11,569 | 13,716 |
United Kingdom [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 10,910 | 10,171 | 10,552 |
France [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 11,096 | 10,377 | 10,475 |
Brazil [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | 6,452 | 5,668 | 5,108 |
Others [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Net sales | $ 65,827 | $ 44,987 | $ 42,496 |
Business Segment Information _7
Business Segment Information - Summary of Property, Plant and Equipment of Reporting Segments by Geographic Area (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment net | $ 159,060 | $ 58,229 |
U.S. [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment net | 142,727 | 44,802 |
Italy [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment net | 10,187 | 8,535 |
Germany [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment net | 3,030 | 3,115 |
Others [Member] | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Property, plant and equipment net | $ 3,116 | $ 1,777 |
Acquisition-Related Amortizat_3
Acquisition-Related Amortization and Remeasurement - Components of Acquisition-Related Amortization and Remeasurement (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Research And Development Arrangement Contract To Perform For Others [Line Items] | |||
Changes in fair value of contingent consideration | $ (2,700) | $ (17,200) | $ (3,575) |
Amortization of acquired intangibles | 17,408 | 8,196 | 7,907 |
Acquired IPR&D | 49 | 1,600 | 1,500 |
Impairment of goodwill | 11,756 | ||
Total | $ (14,757) | $ (7,404) | 17,588 |
Global Orthopedics [Member] | |||
Research And Development Arrangement Contract To Perform For Others [Line Items] | |||
Impairment of goodwill | $ 11,756 |
Acquisition-Related Amortizat_4
Acquisition-Related Amortization and Remeasurement - Additional Information (Details) - License Agreement [Member] - USD ($) $ in Millions | 1 Months Ended | ||||
Dec. 29, 2022 | May 31, 2022 | Apr. 30, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | |
Research And Development Arrangement Contract To Perform For Others [Line Items] | |||||
Consideration agreed to pay with additional payments contingent upon reaching future commercialization and revenue-based milestones | $ 0.2 | ||||
Initial payment accrued | $ 0.2 | ||||
Contingent Payment Upon Reaching FDA Milestone | $ 4 | ||||
Amount Received for the year | $ 1.5 | $ 0.5 | |||
Contingent consideration milestone obligation | $ 3.5 | ||||
Other Current Liabilities [Member] | |||||
Research And Development Arrangement Contract To Perform For Others [Line Items] | |||||
Contingent consideration accrued | $ 1 | $ 1 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Detail) - USD ($) | 1 Months Ended | 12 Months Ended | |||
Jan. 31, 2023 | Aug. 31, 2019 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Options outstanding | 3,223,000 | 1,299,000 | |||
Options exercisable | 1,828,000 | ||||
Income tax benefit related to expense | $ 5,800,000 | $ 3,300,000 | $ 3,100,000 | ||
Exercised stock option amount | 0 | ||||
Realized tax benefit amount | $ 0 | ||||
Closing stock price | $ 13.48 | ||||
Share-based compensation | $ 35,707,000 | 18,443,000 | 15,432,000 | ||
SeaSpine [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Options outstanding | 300,000 | ||||
Options exercisable | 0 | ||||
Number of options issued in connection with conversion of awards | 1,900,000 | ||||
Number of time based RSU issued in exchange for equity awards | 500,000 | ||||
General and administrative [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Share-based compensation | $ 21,743,000 | 12,917,000 | 10,289,000 | ||
Maximum [Member] | SeaSpine [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Common stock acqure under stock option | 900,000 | ||||
Global Spine [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Options outstanding | 51,000 | ||||
Options exercisable | 51,000 | ||||
Share based compensation grants of restricted stock unit | 15,000 | ||||
Global Spine [Member] | Maximum [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Common stock acqure under stock option | 51,000 | ||||
2012 LTIP Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Award Contractual term | 10 years | ||||
Amount of shares reserved for issuance | 11,300,000 | ||||
Options outstanding | 1,600,000 | ||||
Options exercisable | 700,000 | ||||
SeaSpine 2015 Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Amount of shares reserved for issuance | 3,000,000 | ||||
Options outstanding | 1,000,000 | ||||
Options exercisable | 900,000 | ||||
Stock Purchase Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Amount of shares reserved for issuance | 3,600,000 | ||||
Maximum percentage of compensation eligible employees to be deducted for purchase of common stock | 25% | ||||
Purchase price of shares equivalent to fair market value | 85% | ||||
Shares issued under stock purchase plan | 2,800,000 | ||||
Stock Purchase Plan [Member] | Minimum [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Percentage of compensation eligible employees to be deducted for purchase of common stock | 1% | ||||
Seaspin 2018 and 2020 Employment Inducement Incentive Award Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Options outstanding | 300,000 | ||||
Options exercisable | 200,000 | ||||
Restricted Stock Units [Member] | SeaSpine [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unvested restricted stock and stock units outstanding | 200,000 | ||||
Share based compensation grants of restricted stock unit | 500,000 | ||||
Restricted Stock Units [Member] | 2012 LTIP Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unvested restricted stock and stock units outstanding | 1,600,000 | ||||
Restricted Stock Units [Member] | SeaSpine 2015 Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unvested restricted stock and stock units outstanding | 200,000 | ||||
Restricted Stock Units [Member] | Seaspin 2018 and 2020 Employment Inducement Incentive Award Plan [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unvested restricted stock and stock units outstanding | 17,000 | ||||
Market-based Restricted Stock Units [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Weighted-average period for unamortized compensation cost expected to be recognized | 1 year | ||||
Share based compensation, fair market value of restricted stock units vested | $ 0 | 0 | 0 | ||
Market-based Restricted Stock Units [Member] | Maximum [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unamortized compensation expense | 100,000 | ||||
Stock options [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Unamortized compensation expense | $ 4,800,000 | ||||
Weighted-average period for unamortized compensation cost expected to be recognized | 1 year 2 months 12 days | ||||
Total intrinsic value of options exercised | $ 0 | 0 | 600,000 | ||
Aggregate intrinsic value of options outstanding | 100,000 | ||||
Aggregate intrinsic value of options exercisable | 0 | ||||
Share-based compensation | $ 6,130,000 | 1,114,000 | 1,893,000 | ||
Time-based Restricted Stock Awards and Stock Units [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Share based compensation grants of restricted stock unit | 1,496,000 | ||||
Unamortized compensation expense | $ 22,600,000 | ||||
Weighted-average period for unamortized compensation cost expected to be recognized | 1 year 7 months 6 days | ||||
Non-vested shares, vested in period | $ 17,200,000 | 5,200,000 | 9,000,000 | ||
Aggregate intrinsic value of restricted stock outstanding | 27,500,000 | ||||
Share-based compensation | $ 27,290,000 | $ 9,452,000 | $ 7,437,000 | ||
Time-based Restricted Stock Awards and Stock Units [Member] | Maximum [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period | 4 years | ||||
Time-based Restricted Stock Awards and Stock Units [Member] | Minimum [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Vesting period | 3 years | ||||
Performance-based Restricted Stock Units [Member] | |||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||||
Aggregate intrinsic value of restricted stock outstanding | $ 100,000 |
Share-based Compensation - Sche
Share-based Compensation - Schedule of Share-Based Compensation by Line Item in Consolidated Statements of Income (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | $ 35,707 | $ 18,443 | $ 15,432 |
Outstanding Stock Options [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 6,130 | 1,114 | 1,893 |
Time-based Restricted Stock Awards and Stock Units [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 27,290 | 9,452 | 7,437 |
Performance-based / Market-based restricted stock units [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 227 | 6,425 | 4,414 |
Stock purchase plan [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 2,060 | 1,452 | 1,688 |
Cost of sales [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 1,901 | 826 | 779 |
Sales and marketing [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 8,174 | 3,865 | 3,385 |
General and administrative [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | 21,743 | 12,917 | 10,289 |
Research and development [Member] | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Allocated share based compensation expense | $ 3,889 | $ 835 | $ 979 |
Share-based Compensation - Sc_2
Share-based Compensation - Schedule of Assumptions Used in Determining Fair Value of Stock Options Granted (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2021 | |
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions and Methodology [Abstract] | ||
Expected term (in years) | 6 years | 6 years |
Expected volatility, minimum | 36.80% | 34.40% |
Expected volatility, maximum | 42.30% | 34.80% |
Risk free interest rate, minimum | 3.38% | 0.83% |
Risk free interest rate, maximum | 4.61% | 1.25% |
Weighted average grant date fair value | $ 8.43 | $ 12.33 |
Share-based Compensation - Sc_3
Share-based Compensation - Schedule of Stock Option Plans (Detail) | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Outstanding at the beginning of the period (in shares) | 1,299,000 |
Granted | 1,837,000 |
Forfeited or expired | (1,803,000) |
Outstanding at the end of the period (in shares) | 3,223,000 |
Vested and expected to vest | 3,223,000 |
Exercisable (in shares) | 1,828,000 |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 39.29 |
Granted | $ / shares | 19.92 |
Forfeited or expired | $ / shares | 31.62 |
Outstanding at the end of the period (in dollars per share) | $ / shares | 30.64 |
Vested and expected to vest | $ / shares | 30.64 |
Exercisable | $ / shares | $ 36.78 |
Options outstanding, weighted average remaining contractual term | 4 years 11 months 19 days |
Options vested and expected, weighted average remaining contractual term | 4 years 11 months 19 days |
Options exercisable, weighted average remaining contractual term | 2 years 8 months 4 days |
SeaSpine [Member] | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Assumed SeaSpine awards | 1,890,000 |
Outstanding at the end of the period (in shares) | 300,000 |
Exercisable (in shares) | 0 |
Assumed SeaSpine awards | $ / shares | $ 36.05 |
Share-based Compensation - Sc_4
Share-based Compensation - Schedule of Changes in Time-Based and Market-Based Restricted Stock Awards and Stock Units (Detail) shares in Thousands | 12 Months Ended |
Dec. 31, 2023 $ / shares shares | |
Time-based Restricted Stock Awards and Stock Units [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Outstanding at December 31, 2022 | shares | 847 |
Conversion of performance-based and market-based stock units to time-based stock units (in shares) | shares | 516 |
Granted (in shares) | shares | 1,496 |
Vested and settled (in shares) | shares | (749) |
Cancelled (in shares) | shares | (560) |
Outstanding at December 31, 2023 | shares | 2,040 |
Outstanding at December 31, 2022 | $ / shares | $ 34.18 |
Conversion of performance-based and market-based stock units to time-based stock units (in dollars per share) | $ / shares | 40.29 |
Granted (in dollars per share) | $ / shares | 18.51 |
Vested and settled (in dollars per share) | $ / shares | 29.04 |
Cancelled (in dollars per share) | $ / shares | 21.12 |
Outstanding at December 31, 2023 | $ / shares | $ 26.96 |
Time-based Restricted Stock Awards and Stock Units [Member] | SeaSpine [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Assumed SeaSpine awards (in shares) | shares | 490 |
Assumed SeaSpine awards (in dollars per share) | $ / shares | $ 22.76 |
Performance-based and/or Market-based Restricted Stock Units [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Outstanding at December 31, 2022 | shares | 516 |
Conversion of performance-based and market-based stock units to time-based stock units (in shares) | shares | (516) |
Granted (in shares) | shares | 13 |
Vested and settled (in shares) | shares | (4) |
Outstanding at December 31, 2023 | shares | 9 |
Outstanding at December 31, 2022 | $ / shares | $ 40.29 |
Conversion of performance-based and market-based stock units to time-based stock units (in dollars per share) | $ / shares | 40.29 |
Granted (in dollars per share) | $ / shares | 20.1 |
Vested and settled (in dollars per share) | $ / shares | 22.76 |
Outstanding at December 31, 2023 | $ / shares | $ 22.69 |
Defined Contribution Plans an_2
Defined Contribution Plans and Deferred Compensation - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |||
Feb. 01, 2024 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Defined Contribution Plan Disclosure [Line Items] | ||||
Amount of deferred compensation payable | $ 1.7 | $ 1.5 | ||
U.S. [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employee contribution limit per calendar year (as a percent of compensation) | 80% | |||
Employer match of employee contributions of first level of eligible compensation (as a percent) | 100% | |||
Percentage of eligible compensation, matched by employer, level one | 2% | |||
Employer match of employee contributions of second level of eligible compensation (as a percent) | 50% | |||
Percentage of eligible compensation matched by employer, level two | 4% | |||
Expenses incurred for contribution plans | $ 4.6 | 3.3 | $ 2.8 | |
Foreign Plan [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Expenses incurred for contribution plans | $ 1.1 | $ 1.1 | $ 1.2 | |
Italy [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Annual deferred compensation provision for leaving indemnity, as a percentage of total commissions earned | 4% | |||
Italy [Member] | Labor Force Concentration Risk [Member] | National Collective Labor Agreement [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Number of employees, percentage | 14% | |||
Subsequent Event [Member] | U.S. [Member] | ||||
Defined Contribution Plan Disclosure [Line Items] | ||||
Employee contribution limit per calendar year (as a percent of compensation) | 90% | |||
Employer match of employee contributions of first level of eligible compensation (as a percent) | 100% | |||
Percentage of eligible compensation, matched by employer, level one | 4% |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income (Loss) Before Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
U.S. | $ (154,794) | $ (22,318) | $ (5,987) |
Non-U.S. | 6,115 | 4,612 | (7,508) |
Income (loss) before income taxes | $ (148,679) | $ (17,706) | $ (13,495) |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
U.S. | |||
Current | $ 17 | $ 1,151 | $ (607) |
Deferred | 1,160 | 67 | 24,292 |
Total U.S | 1,177 | 1,218 | 23,685 |
Non-U.S. | |||
Current | 2,120 | 578 | 1,009 |
Deferred | (581) | 247 | 190 |
Total Non U.S | 1,539 | 825 | 1,199 |
Income tax expense (benefit) | $ 2,716 | $ 2,043 | $ 24,884 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation for Continuing Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal income tax rate | $ (31,222) | $ (3,718) | $ (2,834) |
State taxes, net of U.S. federal benefit | (3,452) | (1,312) | (24) |
Foreign rate differential, including withholding taxes | (738) | 475 | 480 |
Valuation allowances, net | 28,322 | 7,638 | 27,819 |
Foreign income inclusions, net | 2,333 | 1,018 | |
Research credits | (1,219) | (750) | (537) |
Unrecognized tax benefits, net of settlements | 71 | (599) | (1,363) |
Equity compensation | 4,210 | 1,441 | 1,091 |
Executive compensation | 3,030 | 697 | 456 |
Contingent consideration | (3,316) | (640) | |
Other, net | 1,381 | 469 | 436 |
Income tax expense (benefit) | $ 2,716 | $ 2,043 | $ 24,884 |
Statutory U.S. federal income tax rate | 21% | 21% | 21% |
State taxes, net of U.S. federal benefit | 2.30% | 7.40% | 0.20% |
Foreign rate differential, including withholding taxes | 0.50% | (2.70%) | (3.60%) |
Valuation allowances, net | (19.00%) | (43.10%) | (206.10%) |
Foreign income inclusions, net | (1.60%) | (5.70%) | |
Research credits | 0.80% | 4.20% | 4% |
Unrecognized tax benefits, net of settlements | 3.40% | 10.10% | |
Equity compensation | (2.80%) | (8.10%) | (8.10%) |
Executive compensation | (2.00%) | (3.90%) | (3.40%) |
Contingent consideration | 18.70% | 4.70% | |
Other, net | (0.90%) | (2.60%) | (3.20%) |
Income tax expense (benefit) /effective rate | (1.80%) | (11.50%) | (184.40%) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Components Of Income Tax Expense Benefit [Line Items] | |||
Tax paid (received or refunded) cash | $ 900 | $ (900) | $ 4,800 |
Unremitted foreign earnings | $ 33,600 | ||
Minimum percentage of income tax benefit | 50% | ||
Gross unrecognized tax benefit | $ 3,000 | 1,700 | |
Net interest and penalties on unrecognized tax benefits | 200 | 100 | $ (400) |
Accrued interest and penalties related to unrecognized tax benefits | 100 | 900 | |
Unrecognized tax benefits that would impact effective tax rate | 400 | ||
Unrecognized tax benefits expected reduction | $ (1,637) | ||
Decrease in unrecognized tax benefits, exclusive of interest and penalties | 1,200 | ||
SeaSpine [Member] | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Net increase in valuation allowance | 116,400 | ||
State [Member] | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Operating loss carry forwards, net of tax | 221,400 | ||
State [Member] | SeaSpine [Member] | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Operating loss carry forwards, net of tax | $ 157,900 | ||
Operating loss carryforwards, expiration year | 2024 | ||
State [Member] | Spinal Kinetics [Member] | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Operating loss carry forwards, net of tax | $ 20,600 | ||
Operating loss carryforwards, expiration year | 2027 | ||
Federal [Member] | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Operating loss carry forwards, net of tax | $ 331,700 | ||
Operating loss carryforwards, expiration year | 2026 | ||
Research and development credits | $ 4,700 | ||
Foreign Tax Authority | |||
Components Of Income Tax Expense Benefit [Line Items] | |||
Operating loss carry forwards, net of tax | $ 129,000 | ||
Operating loss carryforwards, expiration year | 2041 | ||
Research and development credits | $ 900 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax Disclosure [Abstract] | ||
Intangible assets and goodwill | $ 5,807 | |
Inventories and related reserves | $ 33,122 | 17,819 |
Deferred revenue and cost of goods sold | 4,409 | 3,642 |
Other accruals and reserves | 5,382 | 2,756 |
Accrued compensation | 14,861 | 8,795 |
Provision for expected credit losses | 1,821 | 1,253 |
Accrued interest | 1,227 | |
Net operating loss and tax credit carryforwards | 123,210 | 40,676 |
Research and development capitalization | 15,174 | 4,353 |
Lease liabilities | 9,632 | 6,440 |
Other, net | 5,429 | 3,767 |
Total deferred tax assets | 214,267 | 95,308 |
Valuation allowance | (200,192) | (83,797) |
Deferred tax asset, net of valuation allowance | 14,075 | 11,511 |
Intangible assets and goodwill | (1,662) | |
Withholding taxes | (10) | (10) |
Property, plant, and equipment | (5,737) | (5,516) |
Right-of-use lease assets | (8,755) | (5,771) |
Deferred tax liability | (16,164) | (11,297) |
Net deferred tax assets (liabilities) | (2,089) | |
Net deferred tax assets (liabilities) | 214 | |
Reported as: | ||
Deferred income taxes (classified within other long-term assets) | 2,081 | 1,470 |
Deferred income tax liabilities (classified within other long-term liabilities) | $ (4,170) | (1,256) |
Net deferred tax assets (liabilities) | $ 214 |
Income Taxes - Schedule of Gros
Income Taxes - Schedule of Gross Unrecognized Tax Benefits (Excluding Interest and Penalties) (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Beginning Balance | $ 1,743 | $ 3,462 |
Additions for current year tax positions | 416 | 46 |
Increases for prior year tax positions | 815 | 16 |
Settlements of prior year tax positions | (144) | |
Expiration of statutes | (1,637) | |
Ending Balance | $ 2,974 | $ 1,743 |
Earnings Per Share (EPS) - Sche
Earnings Per Share (EPS) - Schedule of Reconciliation of Weighted Average Shares Used in the Diluted EPS (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Line Items] | |||
Weighted average common shares-basic | 36,729,258 | 20,053,548 | 19,690,593 |
Effect of diluted securities: | |||
Weighted average common shares-diluted | 36,729,258 | 20,053,548 | 19,690,593 |
Earnings Per Share (EPS) - Addi
Earnings Per Share (EPS) - Additional Information (Detail) - shares shares in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Time Based Restricted Stock Awards And Stock Units, Performance Based Stock Units And Market Based Stock Units [Member] | Outstanding Stock Options [Member] | |||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | |||
Weighted average outstanding options, awards not included in diluted earnings per share | 6.5 | 2.3 | 1.7 |