SEGMENT AND GEOGRAPHIC INFORMATION

6 Months Ended

Jun. 30, 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 and six months ended June 30, 2013 and 2012 and three months ended March 31, 2013 and 2012 are as follows:

	Three Months Ended March 31,						Three Months Ended June 30,						Six Months Ended June 30,
	2013			2012			2013			2012			2013			2012
	(In thousands)
Segment Net Sales
U.S. Neurosurgery	$	38,996		$	40,183		$	41,767		$	42,324		$	80,763		$	82,507
U.S. Instruments	36,948			37,994			39,991			41,269			76,939			79,263
U.S. Extremities	31,361			26,587			33,538			32,048			64,899			58,635
U.S. Spine and Other	43,548			44,810			42,962			48,823			86,510			93,633
International	45,799			46,611			47,289			45,706			93,088			92,317
Total revenues	$	196,652		$	196,185		$	205,547		$	210,170		$	402,199		$	406,355
Segment Profit
U.S. Neurosurgery	$	16,904		$	21,156		$	19,786		$	21,890		$	36,690		$	43,046
U.S. Instruments	9,312			10,067			11,206			11,982			20,518			22,049
U.S. Extremities	10,734			9,183			13,225			13,305			23,959			22,488
U.S. Spine and Other	13,183			13,533			12,284			13,862			25,467			27,395
International	12,654			17,465			14,350			13,441			27,004			30,906
Segment profit	62,787			71,404			70,851			74,480			133,638			145,884
Amortization	(3,551		)	(4,720		)	(3,073		)	(4,647)			(6,624)			(9,367)
Corporate and other	(59,280		)	(49,217		)	(59,800		)	(51,812		)	(119,080		)	(101,029		)
Operating (loss) income	$	(44	)	$	17,467		$	7,978		$	18,021		$	7,934		$	35,488

The segment profits for the U.S. Instruments and U.S. Extremities segments, and Corporate and Other for the three and six months ended June 30, 2012 have been revised. The segment profits for the U.S. Instruments and U.S. Extremities segments for the three months ended March 31, 2013 and 2012 have been also revised.

Revenue by major product category consisted of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(In thousands)
Orthopedics	$	91,434	$	95,695	$	181,694	$	181,847
Neurosurgery	68,459		67,775		131,644		133,832
Instruments	45,654		46,700		88,861		90,676
Total Revenues	$	205,547	$	210,170	$	402,199	$	406,355

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 June 30,				Six Months Ended June 30,
	2013		2012		2013		2012
	(In thousands)
United States	$	157,166	$	163,483	$	307,185	$	312,157
Europe	23,776		22,884		47,393		46,552
Rest of World	24,605		23,803		47,621		47,646
Total Revenues	$	205,547	$	210,170	$	402,199	$	406,355