Business Segments and Geographic Data

9 Months Ended

Sep. 30, 2013

Business Segment and Geographic Data [Abstract]

Business Segment and Geographic Data

Note 11

Business Segments and Geographic Data:

The Company organized its business into three operating segments to better align its organization based upon the Company’s management structure, products and services offered, markets served and types of customers, as follows: The Consumer segment derives its revenues from the design, development, manufacturing and selling of long-term hair reduction and acne consumer products. The Physician Recurring segment derives its revenues from the XTRAC procedures performed by dermatologists, the sales of skincare products, the sales of surgical disposables and accessories to hospitals and surgery centers, and on the repair, maintenance and replacement parts on our various products. The Professional segment generates revenues from the sale of equipment, such as lasers, medical and esthetic light and heat-based products and LED products. Management reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance.

Unallocated operating expenses include costs that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Unallocated assets include cash and cash equivalents, prepaid expenses and deposits.

The following tables reflect results of operations from our business segments for the periods indicated below:

Three Months Ended September 30, 2013

	CONSUMER			PHYSICIAN RECURRING			PROFESSIONAL			TOTAL
Revenues	$	36,910		$	7,359		$	1,624		$	45,893
Costs of revenues		4,730			3,272			1,064			9,066
Gross profit		32,180			4,087			560			36,827
Gross profit %		87.2	%		55.5	%		34.5	%		80.2	%
Allocated operating expenses:
Engineering and product development		279			341			185			805
Selling and marketing expenses		26,958			3,370			645			30,973
Unallocated operating expenses		-			-			-			5,972
		27,237			3,711			830			37,750
Operating profit (loss)		4,943			376			(270	)		(923	)
Interest and other financing expense, net		-			-			-			473
Income (loss) before income tax expense	$	4,943		$	376		$	( 270	)	$	( 450	)

Three Months Ended September 30, 2012

	CONSUMER			PHYSICIAN RECURRING			PROFESSIONAL			TOTAL
Revenues	$	49,638		$	5,121		$	1,922		$	56,681
Costs of revenues		7,366			2,811			1,104			11,281
Gross profit		42,272			2,310			818			45,400
Gross profit %		85.2	%		45.1	%		42.6	%		80.1	%
Allocated operating expenses:
Engineering and product development		165			278			185			628
Selling and marketing expenses		24,980			2,575			730			28,285
Unallocated operating expenses		-			-			-			6,231
		25,145			2,853			915			35,144
Operating profit (loss)		17,127			(543	)		(97	)		10,256
Interest and other financing expense, net		-			-			-			(231	)
Income (loss) before income tax expense	$	17,127		$	( 543	)	$	( 97	)	$	10,025

Nine Months Ended September 30, 2013

	CONSUMER			PHYSICIAN RECURRING			PROFESSIONAL			TOTAL
Revenues	$	134,643			20,690		$	5,841		$	161,174
Costs of revenues		19,422			9,217			3,683			32,322
Gross profit		115,221			11,473			2,158			128,852
Gross profit %		85.6	%		55.5	%		36.9	%		79.9	%
Allocated operating expenses:
Engineering and product development		775			982			635			2,392
Selling and marketing expenses		79,293			9,777			1,697			90,767
Unallocated operating expenses		-			-			-			17,899
		80,068			10,759			2,332			111,058
Operating profit (loss)		35,153			714			(174	)		17,794
Interest  and other financing income, net		-			-			-			470
Income (loss) before income tax expense	$	35,153		$	714		$	( 174	)	$	18,264

Nine Months Ended September 30, 2012

	CONSUMER			PHYSICIAN RECURRING			PROFESSIONAL			TOTAL
Revenues	$	142,303		$	15,467		$	8,090		$	165,860
Costs of revenues		22,307			8,095			4,468			34,870
Gross profit		119,996			7,372			3,622			130,990
Gross profit %		84.3	%		47.7	%		44.8	%		79.0	%
Allocated operating expenses:
Engineering and product development		642			863			641			2,146
Selling and marketing expenses		74,673			7,526			2,989			85,188
Unallocated operating expenses		-			-			-			22,593
		75,315			8,389			3,630			109,927
Operating profit (loss)		44,681			(1,017	)		( 8	)		21,063
Interest and other financing expense, net		-			-			-			(862	)
Income before income tax expense	$	44,681		$	( 1,017	)	$	( 8	)	$	20,201

For the three and nine months ended September 30, 2013 and 2012, net revenues by geographic area were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
North America 1	$	35,239	$	38,888	$	122,170	$	121,524
Asia Pacific 2		1,778		9,533		16,980		23,306
Europe (including Israel)		8,083		7,170		19,577		18,623
South America		793		1,090		2,447		2,407
	$	45,893	$	56,681	$	161,174	$	165,860
1 United States	$	30,287	$	31,380	$	98,832	$	101,473
2  Japan	$	205	$	8,144	$	11,455	$	18,318

As of September 30, 2013 and December 31, 2012, long-lived assets by geographic area were as follows:

	September 30, 2013		December 31, 2012
	(unaudited)
North America	$	8,701	$	5,772
Asia Pacific		-		-
Europe (including Israel)		1,300		987
South America		-		-
	$	10,001	$	6,759

The Company discusses segmental details in its Management Discussion and Analysis found elsewhere in this Quarterly Report on Form 10-Q.