Segment Information

9 Months Ended

Sep. 30, 2017

During the three and nine month periods ended September 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 September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Revenues, net:
Prescription Pharmaceuticals	$	186,988		$	268,880		$	607,012		$	784,644
Consumer Health	15,440			15,215			47,976			48,532
Total revenues, net	202,428			284,095			654,988			833,176

Gross Profit:
Prescription Pharmaceuticals	91,454			163,300			328,877			482,427
Consumer Health	6,509			6,927			21,185			22,590
Total gross profit	97,963			170,227			350,062			505,017

Operating expenses	88,540			83,399			251,276			238,242

Operating income	9,423			86,828			98,786			266,775
Other expenses, net	(11,360		)	(11,614		)	(28,647		)	(44,714		)

Income (loss) before income taxes	$	(1,937	)	$	75,214		$	70,139		$	222,061

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.