Segment and Geographic Information

6 Months Ended

Jun. 30, 2012

Segment and Geographic Information [Abstract]

Segment and Geographic Information

Note 2 - Segment and Geographic Information

In accordance with ASC 280 Segment Reporting, operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions about how to allocate resources and assess performance. Our chief decision maker, as defined under the FASB's guidance, is a combination of the Chief Executive Officer and the Chief Financial Officer. In the fourth quarter of 2011, we changed the manner in which the Company's financial information is evaluated.  We now view our operations and manage our business as two segments, Professional Product segment and Consumer Product segment.

In order to be comparable to our 2012 financial statements, financial information for the three and six months ended June 30, 2011 has also been presented for our two reportable operating segments.

The table below presents the financial information for our two reportable segments.  Revenues include our professional and consumer product revenues, service revenues, royalty revenues, and other revenues.  Cost of revenues and royalties include the material, manufacturing, service, and quality control expenses related to our professional and consumer product and service revenues and the cost of royalties related to our royalty revenues.  Operating expenses include selling and marketing expenses, research and development expenses, and general and administrative expenses.

	For the three months ended June 30,
(in thousands)	2012									2011
	Professional			Consumer			Total			Professional			Consumer			Total
Revenues	$	18,770		$	900		$	19,670		$	16,265		$	-		$	16,265
Cost of revenues and royalties		7,310			776			8,086			6,334			14			6,348
Gross profit (loss)		11,460			124			11,584			9,931			(14	)		9,917
Operating expenses		11,802			1,051			12,853			13,050			928			13,978
Loss from operations	$	(342	)	$	(927	)	$	(1,269	)	$	(3,119	)	$	(942	)	$	(4,061	)

	For the six months ended June 30,
(in thousands)	2012									2011
	Professional			Consumer			Total			Professional			Consumer			Total
Revenues	$	36,791		$	1,879		$	38,670		$	34,421		$	-		$	34,421
Cost of revenues and royalties		14,591			1,611			16,202			13,717			56			13,773
Gross profit (loss)		22,200			268			22,468			20,704			(56	)		20,648
Operating expenses		24,060			1,998			26,058			25,135			1,552			26,687
Loss from operations	$	(1,860	)	$	(1,730	)	$	(3,590	)	$	(4,431	)	$	(1,608	)	$	(6,039	)

  As of June 30, 2012 and December 31, 2011, we had $166.5 million and $171.7 million, respectively, in total assets related to our Professional Product segment.  As of June 30, 2012 and December 31, 2011, we had $5.9 million and $6.3 million, respectively, in total assets related to our Consumer Product segment.

Our total revenues are attributed to geographic areas based on the location of the end customer.  The following tables present total revenues for the three and six months ended June 30, 2012 and 2011 and long-lived assets as of June 30, 2012 and December 31, 2011.

	For the three months				For the six months
	ended June 30,				ended June 30,
(in thousands)	2012		2011		2012		2011
United States	$	10,341	$	8,865	$	20,886	$	19,816
Europe		3,043		1,994		6,225		4,410
Middle East		1,819		1,077		2,642		1,992
Canada		1,231		1,452		2,988		2,303
Australia		1,231		731		1,576		1,537
Asia / Pacific Rim		759		794		1,113		1,510
Japan		745		526		1,606		1,078
South and Central America		501		826		1,634		1,775
Total Revenues	$	19,670	$	16,265	$	38,670	$	34,421

	At June 30,		At December 31,
(in thousands)	2012		2011
United States	$	36,310	$	36,550
Europe		95		107
Japan		54		57
Total Long-Lived Assets	$	36,459	$	36,714

In the fourth quarter of 2010, we launched the PaloVia® Skin Renewing Laser® - our first consumer product.  Our Consumer Product segment consists of the business activities related to the PaloVia laser. Upon launch, we were selling the PaloVia laser through retail channels with which we had no history and, as such, we were unable to estimate the customer return rates and the expected warranty accrual needed on sales of our consumer product. Therefore, we deferred all consumer product revenues from the PaloVia laser until the fourth quarter of 2011.  During the fourth quarter of 2011, we determined that we had sufficient history to be able to estimate our customer return rates and the expected warranty accrual needed on sales of our consumer product.  In the fourth quarter of 2011, we recognized $3.5 million of consumer product revenues related to the PaloVia laser.  In the three and six months ended June 30, 2012, we recognized $0.9 million and $1.9 million, respectively, of consumer product revenues.  At June 30, 2012 and December 31, 2011, we had no deferred revenue related to the PaloVia laser.  Included in our consolidated inventory balances at June 30, 2012 and December 31, 2011 is approximately $5.1 million and $5.3 million, respectively, of consumer product inventory.  At June 30, 2012 and December 31, 2011, we had $0.6 million and $0.8 million, respectively, of inventory on consignment in finished goods.