Segment Information

6 Months Ended

Jun. 30, 2017

15. Segment Information

We have two reportable segments organized according to our products and services: Medical Devices and Preservation Services. The Medical Devices segment includes external revenues from product sales of BioGlue® Surgical Adhesive; BioFoam® Surgical Matrix; On-X products, since the acquisition of On-X; CardioGenesis cardiac laser therapy; PerClot; PhotoFix; HeRO Graft, through the second quarter of 2016; and ProCol, through the date of the sale of the ProCol product line in the first quarter of 2016. The Preservation Services segment includes external services revenues from the preservation of cardiac and vascular tissues. There are no intersegment revenues.

The primary measure of segment performance, as viewed by our management, is segment gross margin, or net external revenues less cost of products and preservation services. We do not segregate assets by segment; therefore, asset information is excluded from the segment disclosures below.

The following table summarizes revenues, cost of products and preservation services, and gross margins for our operating segments (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Revenues:
Medical devices	$	30,094	$	30,045	$	57,490	$	57,063
Preservation services		17,724		17,038		35,387		33,036
Total revenues		47,818		47,083		92,877		90,099

Cost of products and preservation services:
Medical devices		6,959		7,698		14,976		14,701
Preservation services		7,954		9,084		15,484		17,476
Total cost of products and preservation services		14,913		16,782		30,460		32,177

Gross margin:
Medical devices		23,135		22,347		42,514		42,362
Preservation services		9,770		7,954		19,903		15,560
Total gross margin	$	32,905	$	30,301	$	62,417	$	57,922

The following table summarizes net revenues by product and service (in thousands):


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2017		2016		2017		2016
Products:
BioGlue and BioFoam	$	16,683	$	16,187	$	32,364	$	31,503
On-X		9,862		9,554		18,722		16,269
CardioGenesis cardiac laser therapy		2,056		1,860		3,641		3,844
PerClot		936		1,042		1,755		2,033
PhotoFix		557		490		1,008		871
HeRO Graft		--		912		--		2,325
ProCol		--		--		--		218
Total products		30,094		30,045		57,490		57,063

Preservation services:
Cardiac tissue		8,477		7,548		15,979		13,976
Vascular tissue		9,247		9,490		19,408		19,060
Total preservation services		17,724		17,038		35,387		33,036

Total revenues	$	47,818	$	47,083	$	92,877	$	90,099