Business Segments and Geographic Data

6 Months Ended

Jun. 30, 2014

Business Segments and Geographic Data [Abstract]

Business Segments and Geographic Data

Note 14

Business Segments and Geographic Data:

Following the acquisition of LCA-Vision, the Company’s business was aligned into four operating segments 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. The Clinics segment generates revenues from services performed and products sold in our vision centers. 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 June 30, 2014 (unaudited)

	Consumer			Physician Recurring			Professional			Clinics			Total
Revenues	$	28,453		$	8,607		$	1,917		$	13,143		$	52,120
Costs of revenues		3,983			3,425			1,361			8,883			17,652
Gross profit		24,470			5,182			556			4,260			34,468
Gross profit %		86.0	%		60.2	%		29.0	%		32.4	%		66.1	%
Allocated operating expenses:
Engineering and product development		305			257			161			-			723
Selling and marketing expenses		23,223			4,268			274			2,655			30,420
Unallocated operating expenses		-			-			-			-			11,452
		23,528			4,525			435			2,655			42,595
Income (loss) from operations		942			657			121			1,605			(8,127	)
Interest  and other financing expense, net		-			-			-			-			(175	)
Net income (loss) before taxes	$	942		$	657		$	121		$	1,605		$	( 8,302	)

Three Months Ended June 30, 2013 (unaudited)

	Consumer			Physician Recurring			Professional			Clinics		Total
Revenues	$	48,673		$	7,376		$	2,016		$	-	$	58,065
Costs of revenues		7,174			3,014			1,202			-		11,390
Gross profit		41,499			4,362			814			-		46,675
Gross profit %		85.3	%		59.1	%		40.4	%		N/A		80.4	%
Allocated operating expenses:
Engineering and product development		279			317			218			-		814
Selling and marketing expenses		26,703			3,233			532			-		30,468
Unallocated operating expenses		-			-			-			-		6,268
		26,982			3,550			750			-		37,550
Income from operations		14,517			812			64			-		9,125
Interest and other financing expense, net		-			-			-			-		(134	)
Net income before taxes	$	14,517		$	812		$	64		$	-	$	8,991

Six Months Ended June 30, 2014 (unaudited)

	Consumer			Physician Recurring			Professional			Clinics			Total
Revenues	$	69,323		$	15,826		$	3,903		$	13,143		$	102,195
Costs of revenues		10,233			6,255			2,626			8,883			27,997
Gross profit		59,090			9,571			1,277			4,260			74,198
Gross profit %		85.2	%		60.5	%		32.7	%		32.4	%		72.6	%
Allocated operating expenses:
Engineering and product development		592			567			359			-			1,518
Selling and marketing expenses		50,381			8,279			731			2,655			62,046
Unallocated operating expenses		-			-			-			-			19,039
		50,973			8,846			1,090			2,655			82,603
Income from operations		8,117			725			187			1,605			(8,405	)
Interest and other financing expense, net		-			-			-			-			(321	)
Net income (loss)before taxes	$	8,117		$	725		$	187		$	1,605		$	(8,726	)

Six Months Ended June 30, 2013 (unaudited)

	Consumer			Physician Recurring			Professional			Clinics		Total
Revenues	$	97,733			13,331		$	4,217		$	-	$	115,281
Costs of revenues		14,691			5,945			2,620			-		23,256
Gross profit		83,042			7,386			1,597			-		92,025
Gross profit %		85.0	%		55.4	%		37.9	%		N/A		79.8	%
Allocated operating expenses:
Engineering and product development		497			641			449			-		1,587
Selling and marketing expenses		52,334			6,407			1,053			-		59,794
Unallocated operating expenses		-			-			-			-		11,927
		52,831			7,048			1,502			-		73,308
Income from operations		30,211			338			95			-		18,717
Interest  and other financing expense, net		-			-			-			-		(3	)
Net income before taxes	$	30,211		$	338		$	95		$	-	$	18,714

For the three and six months ended June 30, 2014 and 2013 (unaudited), net revenues by geographic area were as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
North America 1	$	41,803	$	42,033	$	81,776	$	86,932
Asia Pacific 2		2,638		9,440		5,015		15,202
Europe (including Israel)		7,084		5,861		14,492		11,494
South America		595		731		912		1,653
	$	52,120	$	58,065	$	102,195	$	115,281
1 United States	$	38,612	$	37,329	$	73,379	$	75,336
1 Canada	$	3,191	$	4,704	$	8,397	$	11,596
2  Japan	$	290	$	7,452	$	988	$	11,715

As of June 30, 2014 and December 31, 2013, long-lived assets by geographic area were as follows:

	June 30, 2014		December 31, 2013
	(unaudited)
North America	$	27,859	$	9,119
Asia Pacific		4		-
Europe (including Israel)		1,270		1,370
South America		5		-
	$	29,138	$	10,489

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