SEGMENT AND GEOGRAPHIC INFORMATION

3 Months Ended

Mar. 31, 2013

Segment Reporting [Abstract]

SEGMENT AND GEOGRAPHIC INFORMATION

SEGMENT AND GEOGRAPHIC INFORMATION

The Company internally manages and reports the results of its businesses to its chief operating decision maker through five reportable segments. The five reportable segments are U.S. Neurosurgery, U.S. Instruments, U.S. Extremities, U.S. Spine and Other, and International. The U.S. Neurosurgery segment sells a full line of products specifically for neurosurgery and critical care such as tissue ablation equipment, dural repair products, cerebral spinal fluid management devices, intracranial monitoring equipment, and cranial stabilization equipment. The U.S. Instruments business sells more than 60,000 instrument patterns and surgical and lighting products to hospitals, surgery centers, and dental, podiatry, and veterinary offices. The U.S. Extremities segment includes the U.S. Extremity reconstruction business, which includes such offerings as skin and wound repair, bone and joint fixation, implants in the upper and lower extremities, bone grafts and nerve and tendon repair. The U.S. Spine and Other segment includes (i) the U.S. Spine business, which focuses on spinal fusion, spinal implants, and deformity correction, together with bone graft substitutes and other related medical devices that are used to enhance the repair and regeneration of bone in various types of orthopedic surgical procedures, and (ii) the Private Label business, which sells the Company’s regenerative medicine and other products to strategic partners. The International segment sells similar products to those discussed above, but are managed through the following geographies: (i) Europe, Middle East and Africa, and (ii) Central/South America, Asia-Pacific and Canada. The Corporate and other category includes (i) various legal, finance, executive, and human resource functions, (ii) brand management, (iii) share-based compensation costs, and (iv) costs related to procurement, manufacturing operations and logistics for the Company’s entire organization.

The operating results of the various reportable segments as presented are not comparable to one another because (i) certain operating segments are more dependent than others on corporate functions for unallocated general and administrative and/or operational manufacturing functions, and (ii) the Company does not allocate certain manufacturing costs and general and administrative costs to the operating segment results.

Net sales and profit by reportable segment for the three months ended March 31, 2013 and 2012 are as follows:

	Three Months Ended March 31,
	2013			2012
	(In thousands)
Segment Net Sales
U.S. Neurosurgery	$	38,996		$	40,183
U.S. Instruments	36,948			37,994
U.S. Extremities	31,361			26,587
U.S. Spine and Other	43,548			44,810
International	45,799			46,611
Total revenues	$	196,652		$	196,185
Segment Profit
U.S. Neurosurgery	$	17,768		$	21,156
U.S. Instruments	10,084			10,067
U.S. Extremities	10,791			9,183
U.S. Spine and Other	13,213			13,533
International	12,878			17,465
Segment profit	64,734			71,404
Amortization	(3,551		)	(4,720)
Corporate and other	(61,227		)	(49,217		)
Operating (loss) income	$	(44	)	$	17,467

The segment profits for the U.S. Instruments and U.S. Extremities segments, and Corporate and Other for the three months ended March 31, 2012 have been revised.

Revenue by major product category consisted of the following:

	Three Months Ended March 31,
	2013		2012
	(In thousands)
Orthopedics	$	90,260	$	86,152
Neurosurgery	63,185		66,057
Instruments	43,207		43,976
Total Revenues	$	196,652	$	196,185

The Company attributes revenues to geographic areas based on the location of the customer. There are certain revenues that the various U.S. segments manage that are generated from non-U.S. customers and therefore are included in Europe and the Rest of World revenues below. Total revenue by major geographic area consisted of the following:

	Three Months Ended March 31,
	2013		2012
	(In thousands)
United States	$	150,019	$	148,674
Europe	23,617		23,668
Rest of World	23,016		23,843
Total Revenues	$	196,652	$	196,185