v2.3.0.15
Business Segment, Geographic and Concentration Risk Information
9 Months Ended
Sep. 30, 2011
Business Segment, Geographic and Concentration Risk Information [Abstract] 
BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION

14. BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION

 

The Company operates its business in two reportable segments – Greatbatch Medical and Electrochem Solutions (“Electrochem”). The Greatbatch Medical segment designs and manufactures medical devices and components for the cardiac rhythm management (“CRM”), neuromodulation, vascular access and orthopaedic markets. Additionally, Greatbatch Medical offers value-added assembly and design engineering services for products that incorporate Greatbatch Medical components. As a result of the strategy put in place over three years ago, Greatbatch Medical now offers its customers complete medical devices including design, development, manufacturing, regulatory submission and supporting worldwide distribution. This medical device strategy is being facilitated through the Company's QiG Group and leverages the component technology of Greatbatch Medical and Electrochem in the Company's core markets: cardiovascular, neuromodulation and orthopaedic.

 

Electrochem designs, manufactures and distributes primary and rechargeable batteries, battery packs and wireless sensors for demanding applications in markets such as energy, security, portable medical, environmental monitoring and more.

 

The Company defines segment income from operations as sales less cost of sales including amortization and expenses attributable to segment-specific selling, general and administrative, research, development and engineering expenses, and other operating expenses. Segment income also includes a portion of non-segment specific selling, general and administrative expenses based on allocations appropriate to the expense categories. The remaining unallocated operating and other expenses are primarily administrative corporate headquarters expenses and capital costs that are not allocated to reportable segments. Transactions between the two segments are not significant.

 

An analysis and reconciliation of the Company's business segment, product line and geographic information to the respective information in the Condensed Consolidated Financial Statements follows. Sales by geographic area are presented by allocating sales from external customers based on where the products are shipped to (in thousands):

    Three Months Ended Nine Months Ended
    September 30, October 1, September 30, October 1,
 Sales:2011 2010 2011 2010
 Greatbatch Medical           
  CRM/Neuromodulation$ 70,731 $ 69,376 $ 226,492 $ 225,139
  Vascular Access  11,396   9,059   32,639   28,232
  Orthopaedic  31,131   28,046   108,642   87,975
   Total Greatbatch Medical  113,258   106,481   367,773   341,346
 Electrochem  18,460   21,009   59,303   58,968
   Total sales$ 131,718 $ 127,490 $ 427,076 $ 400,314

    Three Months Ended Nine Months Ended
    September 30, October 1, September 30, October 1,
  2011 2010 2011 2010
 Segment income from operations:           
  Greatbatch Medical$ 12,030 $ 12,904 $ 48,677 $ 45,117
  Electrochem  3,631  4,593   12,890  11,677
 Total segment income from operations  15,661   17,497   61,567   56,794
 Unallocated operating expenses  (2,773)   (4,328)   (12,410)   (12,312)
 Operating income as reported  12,888   13,169   49,157   44,482
 Unallocated other expense  (3,649)   (4,879)   (9,327)   (15,677)
 Income before provision for income taxes$ 9,239 $ 8,290 $ 39,830 $ 28,805

               
    Three Months Ended Nine Months Ended
    September 30, October 1, September 30, October 1,
  2011 2010 2011 2010
 Sales by geographic area:
  United States$ 61,502 $ 61,025 $ 187,795 $ 186,414
 Non-Domestic locations:           
  Puerto Rico  21,522   20,272   72,354   66,409
  Belgium  11,958   12,759   48,555   43,471
  United Kingdom & Ireland  14,466   12,801   42,585   37,850
  Rest of world  22,270   20,633   75,787   66,170
   Total sales$ 131,718 $ 127,490 $ 427,076 $ 400,314

               
 Four customers accounted for a significant portion of the Company’s sales as follows:
               
    Three Months Ended Nine Months Ended
    September 30, October 1, September 30, October 1,
  2011 2010 2011 2010
 Customer A 18%  19%  20%  22%
 Customer B 20%  19%  18%  18%
 Customer C 11%  11%  13%  12%
 Customer D 9%  9%  8%  8%
     58%  58%  59%  60%

 Long-lived tangible assets by geographic area are as follows (in thousands):
  As of
  September 30, December 31,
  2011 2010
 United States$ 110,311 $ 126,519
 Rest of world  33,996   36,095
 Total$ 144,307 $ 162,614