Note 10 - Segment Information

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

NOTE 10 — SEGMENT INFORMATION

During the three and six month periods ended June 30, 2014, the Company acquired Hi-Tech and as a result, underwent a change in the organizational and reporting structure of the Company's reportable segments, establishing two reporting segments that each report to the Chief Operating Decision Maker (CODM), as defined in ASC Topic 280, Segment Reporting, and Chief Executive Officer (CEO), Raj Rai. Our performance will be assessed and resources will be allocated by the CODM based on the following two reportable segments:

- Prescription Pharmaceuticals

- Consumer Health

Prior to the realignment the Company managed the business as three distinct reporting segments; Ophthalmics, Hospital Drugs and Injectables, and Contract Services.

The changes combine operations that have a similar product type, serve comparable customers and address similar business issues and industry dynamics. The new segment reporting structure provides shareholders and other users of our financial statements with more useful information about our segments.

			Current Segments
			Prescription Pharmaceuticals	Consumer Health
Former Segments	Akorn	Ophthalmics	X	X (a)
		Hospital Drugs and Injectables	X
		Contract Services	X
	Hi-Tech	Generic Pharmaceuticals  (“Hi-Tech Generic”)	X
		OTC Branded Pharmaceuticals  (“HCP”)		X (b)
		Prescription Brands (“ECR”)	X (c)

(a)   Represents the previous acquisition of Advanced Vision Research, Inc./TheraTears

(b)   Represents the previous Hi-Tech reportable segment HCP (“Health Care Products”)

(c)   Represents the previous Hi-Tech reportable segment ECR which was divested during the three and six month periods ended June 30, 2014 and whose results have been included within discontinued operations.

The Consumer Health segment manufactures, markets and distributes a line of branded OTC dry eye treatment products, a portfolio of private label OTC ophthalmic products and other consumer health products. The Prescription Pharmaceuticals segment manufactures, markets and distributes general and disease specific ophthalmic drugs and injectable pharmaceuticals, primarily in niche markets, as well as certain antidotes, antiallergics, anti-infectives, vaccines, and controlled substances for pain management and anesthesia, in various dosage forms.  The Prescription Pharmaceuticals segment also includes the operating results of the Company’s subsidiary in India – Akorn India Private Limited.

Financial information about the Company’s reportable segments is based upon internal financial reports that aggregate certain operating information. The Company’s CEO oversees operational assessments and resource allocations based upon the results of the Company’s reportable segments, which have available and discrete financial information.
 

Selected financial info by reporting segment is presented below (in thousands). The Company has restated prior periods including the three and six month periods ended June 30, 2013 to reflect the strategic realignment described above.

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenues:
Prescription Pharmaceuticals	$	136,231		$	67,362		$	218,079		$	132,508
Consumer Health		14,518			9,650			23,292			18,358
Total revenues		150,749			77,012			241,371			150,866
Gross Profit:
Prescription Pharmaceuticals		68,012			36,743			113,296			70,766
Consumer Health		8,659			5,349			13,031			10,471
Total gross profit		76,671			42,092			126,327			81,237
Operating expenses		60,408			19,841			86,624			40,397
Operating income		16,263			22,251			39,703			40,840
Other (expense)		(1,951	)		(2,269	)		(9,699	)		(4,601	)
Income from continuing operations before income taxes	$	14,312		$	19,982		$	30,004		$	36,239

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 revenue and gross profit level has been minimal. The Company does not identify total assets by segment for internal purposes, as the Company’s CODM does not assess performance, make strategic decisions, or allocate resources based on assets.