SEGMENT AND GEOGRAPHIC INFORMATION

3 Months Ended

Mar. 31, 2014

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 and a description of their activities are described below:

• 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, information systems, 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, 2014 and 2013 are as follows:

	Three Months Ended March 31,
	2014			2013
	(In thousands)
				(as adjusted)
Segment Net Sales
U.S. Neurosurgery	$	54,383		$	38,996
U.S. Instruments	36,720			36,948
U.S. Extremities	31,912			31,361
U.S. Spine and Other	41,067			43,548
International	50,977			45,799
Total revenues	$	215,059		$	196,652
Segment Profit
U.S. Neurosurgery	$	27,788		$	17,768
U.S. Instruments	10,481			10,084
U.S. Extremities	11,753			10,791
U.S. Spine and Other	11,977			13,213
International	17,212			12,878
Segment profit	79,211			64,734
Amortization	(3,033		)	(3,551)
Corporate and other	(67,440		)	(63,373		)
Operating income (loss)	$	8,738		$	(2,190	)

Revenue by major product category consisted of the following:

	Three Months Ended March 31,
	2014		2013
	(In thousands)
Orthopedics	$	87,239	$	90,260
Neurosurgery	84,370		63,185
Instruments	43,450		43,207
Total Revenues	$	215,059	$	196,652

The Company attributes revenues to geographic areas based on the location of the customer. There are certain revenues managed by the various U.S. segments 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,
	2014		2013
	(In thousands)
United States	$	163,382	$	150,019
Europe	25,324		23,617
Rest of World	26,353		23,016
Total Revenues	$	215,059	$	196,652