SEGMENT AND GEOGRAPHIC INFORMATION

6 Months Ended

Jun. 30, 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 and six months ended June 30, 2014 and 2013 are as follows:

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(In thousands)
				(As adjusted)*						(As adjusted)*
Segment Net Sales
U.S. Neurosurgery	$	60,559		$	41,767		$	114,942		$	80,763
U.S. Instruments	39,505			41,048			76,225			78,896
U.S. Extremities	34,424			32,009			66,337			61,971
U.S. Spine and Other	45,087			43,434			86,153			87,481
International	51,776			47,289			102,753			93,088
Total revenues	$	231,351		$	205,547		$	446,410		$	402,199
Segment Profit
U.S. Neurosurgery	$	30,569		$	19,786		$	58,357		$	36,690
U.S. Instruments	11,832			12,136			22,313			22,250
U.S. Extremities	14,171			11,943			25,924			21,495
U.S. Spine and Other	14,716			12,636			26,693			26,199
International	17,167			14,350			34,379			27,004
Segment profit	88,455			70,851			167,666			133,638
Amortization	(2,985		)	(3,073)			(6,018)			(6,624)
Corporate and other	(73,078		)	(62,222		)	(140,518		)	(123,648		)
Operating income (loss)	$	12,392		$	5,556		$	21,130		$	3,366

* See Note 1 of these condensed consolidated financial statements for discussion of the impact of the change in accounting for the medical device excise tax.

Certain 2013 segment revenues and the related impact on segment profit above have been reclassified in order to conform with the current year's presentation.

Revenue by major product category consisted of the following:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
Orthopedics	$	93,069	$	90,377	$	180,308	$	179,737
Neurosurgery	93,258		68,459		177,628		131,644
Instruments	45,024		46,711		88,474		90,818
Total Revenues	$	231,351	$	205,547	$	446,410	$	402,199

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 June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
	(In thousands)
United States	$	178,806	$	157,166	$	342,187	$	307,185
Europe	25,851		23,776		51,176		47,393
Rest of World	26,694		24,605		53,047		47,621
Total Revenues	$	231,351	$	205,547	$	446,410	$	402,199