INDUSTRY SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2013

INDUSTRY SEGMENT INFORMATION [Abstract]

INDUSTRY SEGMENT INFORMATION

NOTE 11 — INDUSTRY SEGMENT INFORMATION

During the three and six month periods ended June 30, 2013 and June 30, 2012, the Company reported results for three segments:

-   Ophthalmic

-   Hospital Drugs & Injectables

-   Contract Services

 The ophthalmic segment manufactures, markets and distributes diagnostic and therapeutic pharmaceuticals, as well as a line of branded OTC dry eye treatment products and a portfolio of  private label OTC opthalmic products. The hospital drugs & injectables segment manufactures, markets and distributes drugs and injectable pharmaceuticals, primarily in niche markets, as well as certain vaccines.  The contract services segment manufactures products for third party pharmaceutical and biotechnology customers based on their specifications.  The contract services segment also includes the operating results of the Company's subsidiary in India – Akorn India Private Limited ("AIPL") – as its principal current business activity involves the manufacture of drugs on contract for other drug companies.

The Financial information about th Company's reportable segments is based upon internal financial reports that aggregate certain operating information. The Company's chief operating decision maker, as defined in ASC Topic 280, Segment Reporting, is its chief executive officer ("CEO"). The Company's CEO oversees operational assessments and resource allocations based upon the results of the Company's reportable segments, all of which have available discrete financial information.

Selected financial information by industry segment is presented below (in thousands).

	Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012
Revenues:
Hospital Drugs & Injectables	$	42,599		$	30,284		$	83,033		$	57,660
Ophthalmic		28,490			25,150			54,195			46,961
Contract Services		5,923			7,853			13,638			10,383
Total revenues	$	77,012		$	63,287		$	150,866		$	115,004
Gross Profit:
Hospital Drugs & Injectables		25,096		$	18,813		$	47,910		$	35,854
Ophthalmic		15,545			14,513			30,261			27,232
Contract Services		1,451			2,401			3,066			3,542
Total gross profit		42,092			35,727			81,237			66,628
Operating expenses		19,842			16,951			40,397			40,190
Operating income		22,251			18,776			40,840			26,438
Other (expense) income, net		(2,269	)		(2,405	)		(4,601	)		(4,825	)
Income before income taxes	$	19,982		$	16,371		$	36,239		$	21,613

The Company manages its business segments to the gross profit level and manages its operating and other costs on a company-wide basis. Inter-segment activity at the gross profit level has been minimal. The Company does not identify total assets by segment for internal purposes, as certain of the Company's manufacturing and warehouse facilities support more than one segment.