SEGMENT AND GEOGRAPHIC INFORMATION

9 Months Ended

Sep. 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 nine months ended September 30, 2013 and 2012 are as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	(In thousands)
Segment Net Sales
U.S. Neurosurgery	$	45,114		$	43,269		$	125,877		$	125,776
U.S. Instruments	41,798			41,469			118,737			120,732
U.S. Extremities	33,541			32,961			98,440			91,596
U.S. Spine and Other	46,904			49,188			133,414			142,821
International	45,889			43,197			138,977			135,514
Total revenues	$	213,246		$	210,084		$	615,445		$	616,439
Segment Profit
U.S. Neurosurgery	$	23,080		$	23,201		$	59,770		$	66,247
U.S. Instruments	12,654			11,811			33,172			33,860
U.S. Extremities	14,570			14,996			38,529			37,484
U.S. Spine and Other	(31,437		)	14,771			(5,970		)	42,166
International	14,693			14,550			41,697			45,456
Segment profit	33,560			79,329			167,198			225,213
Amortization	(3,036		)	(4,618)			(9,660)			(13,985)
Corporate and other	(60,138		)	(54,975		)	(179,218		)	(156,004		)
Operating (loss) income	$	(29,614	)	$	19,736		$	(21,680	)	$	55,224

The segment profits for the U.S. Instruments segment and Corporate and Other for the three and nine months ended September 30, 2012 have been revised.

Revenue by major product category consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
	(In thousands)
Orthopedics	$	93,331	$	94,186	$	275,025	$	276,033
Neurosurgery	72,639		69,667		204,283		203,499
Instruments	47,276		46,231		136,137		136,907
Total Revenues	$	213,246	$	210,084	$	615,445	$	616,439

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 September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
	(In thousands)
United States	$	166,555	$	165,930	$	473,740	$	478,087
Europe	21,543		20,351		68,936		66,903
Rest of World	25,148		23,803		72,769		71,449
Total Revenues	$	213,246	$	210,084	$	615,445	$	616,439