Segment Information

6 Months Ended

Jun. 30, 2017

During the three and six month periods ended June 30, 2017 and 2016, the Company reported results for the following two reportable segments:

- Prescription Pharmaceuticals

- Consumer Health

The Company’s Prescription Pharmaceuticals segment principally consists of generic and branded prescription pharmaceuticals products which span a broad range of indications as well as a variety of dosage forms including: sterile ophthalmics, injectables and inhalants, and non-sterile oral liquids, topicals and nasal sprays. The Company’s Consumer Health segment principally consists of animal health and OTC products, both branded and private label. OTC products include, but are not limited to, a suite of products for the treatment of dry eye sold under the TheraTears^® brand name.

Financial information about the Company’s reportable segments is based upon internal financial reports that aggregate certain operating information. The Company’s Chief Operating Decision Maker (“CODM”), as defined in ASC 280 - Segment Reporting, who is also the 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 information by reportable segment is presented below (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2017
Revenues, net:
Prescription Pharmaceuticals	$	182,645		$	265,015		$	420,024		$	515,764
Consumer Health	16,495			15,719			32,536			33,317
Total revenues, net	199,140			280,734			452,560			549,081

Gross Profit:
Prescription Pharmaceuticals	96,104			164,492			237,423			319,127
Consumer Health	6,863			7,281			14,676			15,663
Total gross profit	102,967			171,773			252,099			334,790

Operating expenses	88,437			79,405			162,736			154,843

Operating income	14,530			92,368			89,363			179,947
Other expenses, net	(7,780		)	(12,093		)	(17,287		)	(33,100		)

Income before income taxes	$	6,750		$	80,275		$	72,076		$	146,847

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 is minimal. The Company does not have discrete assets by segment, as certain manufacturing and warehouse facilities support more than one segment, and therefore does not report assets by segment. Financial information including revenues and gross profit from external customers by product or product line is not provided as to do so would be impracticable.