v2.4.0.6
Business Segment, Geographic and Concentration Risk Information
 6 Months Ended
Jun. 29, 2012
Business Segment, Geographic and Concentration Risk Information [Abstract]  
BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION

15. BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION

 

The Company operates its business in two reportable segments – Implantable Medical and Electrochem Solutions (“Electrochem”). The Implantable Medical segment (formerly Greatbatch Medical) is comprised of our Greatbatch Medical and QiG Group brands and designs and manufactures medical devices and components for the cardiac rhythm management (“CRM”), neuromodulation, vascular access and orthopaedic markets. Additionally, the Implantable Medical segment offers value-added assembly and design engineering services. As a result of the strategy put in place over three years ago, the Implantable Medical segment 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 QiG Group and leverages the component technology of Greatbatch Medical in the Company's core markets: cardiovascular, neuromodulation and orthopaedic. The devices designed and developed by the QiG Group are manufactured by Greatbatch Medical.

 

Electrochem designs, manufactures and distributes primary and rechargeable batteries, and battery packs for demanding applications in the portable medical, energy, environmental monitoring and security markets among others. Portable medical product line sales were primarily obtained through the Micro Power acquisition.

 

The Company defines segment income from operations as sales less cost of sales including amortization and expenses attributable to segment-specific selling, general, administrative, research, development, engineering and other operating activities. 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 Six Months Ended
     June 29,  July 1,  June 29,  July 1,
 Sales: 2012  2011  2012  2011
 Implantable Medical           
  CRM/Neuromodulation$ 80,025 $ 77,724 $ 155,160 $ 155,761
  Vascular Access  12,481   10,769   24,117   21,243
  Orthopaedic  32,860   37,922   63,906   77,511
   Total Implantable Medical  125,366   126,415   243,183   254,515
 Electrochem           
  Portable Medical  20,407   2,012   39,127   4,151
  Energy/Environmental  16,879   16,016   35,249   31,858
  Other  3,896   2,081   8,092   4,834
   Total Electrochem  41,182   20,109   82,468   40,843
   Total sales$ 166,548 $ 146,524 $ 325,651 $ 295,358

    Three Months Ended Six Months Ended
     June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Segment income from operations:           
  Implantable Medical$ 11,396 $ 17,700 $ 21,508 $ 36,647
  Electrochem  6,199   4,852   10,670   9,259
 Total segment income from operations  17,595   22,552   32,178   45,906
 Unallocated operating expenses (6,504)  (4,249)  (9,889)  (9,637)
 Operating income as reported  11,091   18,303   22,289   36,269
 Unallocated other expense (4,221)  (5,539)  (9,300)  (5,678)
 Income before provision for income taxes$ 6,870 $ 12,764 $ 12,989 $ 30,591

    Three Months Ended Six Months Ended
     June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Sales by geographic area:
  United States$ 84,378 $ 61,092 $ 166,784 $ 126,293
 Non-Domestic locations:           
  Puerto Rico  26,681   24,651   50,221   50,832
  Belgium  15,053   17,628   30,391   36,597
  United Kingdom & Ireland  12,331   17,626   24,688   28,119
  Rest of world  28,105   25,527   53,567   53,517
   Total sales$ 166,548 $ 146,524 $ 325,651 $ 295,358

 Four customers accounted for a significant portion of the Company’s sales as follows:
               
    Three Months Ended Six Months Ended
     June 29,  July 1,  June 29,  July 1,
   2012  2011  2012  2011
 Customer A 18%  19%  19%  20%
 Customer B 15%  17%  14%  17%
 Customer C 10%  14%  10%  14%
 Customer D 6%  8%  7%  8%
     49%  58%  50%  59%

 Long-lived tangible assets by geographic area are as follows (in thousands):
  As of
   June 29,  December 30,
   2012  2011
 United States$ 123,362 $ 113,693
 Rest of world  33,018   32,113
 Total$ 156,380 $ 145,806