BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION | BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION As a result of the acquisition of Lake Region Medical, the Company has three reportable segments: Greatbatch Medical, QiG and Lake Region Medical. During the first quarter of 2016, the Company completed the Spin-off of a portion of its QiG segment. See Note 2 “Divestiture and Acquisition” for further description of these transactions. As a result of the Lake Region Medical acquisition and the Spin-off, the Company is re-evaluating its internal management and financial reporting structure, which may change its product line and segment reporting in the future. This process is expected to be finalized in 2016. Greatbatch Medical designs and manufactures medical devices and components where Integer either owns the intellectual property or has unique manufacturing and assembly expertise. Greatbatch Medical provides medical devices and components to the cardiac, neuromodulation, orthopedics, portable medical, vascular and energy markets among others. Greatbatch Medical also offers value-added assembly and design engineering services for medical devices that utilize its component products. The QiG segment focuses on the design and development of complete medical device systems and components for our OEM customers. After completion of the Spin-off, the operations of QiG primarily consists of CCC. The medical devices QiG designs and develops are full product solutions that utilize the medical technology expertise and capabilities residing within Greatbatch Medical and Lake Region Medical. QiG revenue consists primarily of sales of various medical device products such as implantable pulse generators, programmer systems, battery chargers, patient wands and leads to medical device companies. Once the medical devices developed by QiG reach significant production levels, the responsibility for manufacturing these products may be transferred to Greatbatch Medical. Lake Region Medical has operated as a segment for Integer since it was acquired during the fourth quarter of 2015. This segment specializes in the design, development, and manufacturing of products across the medical component and device spectrum, primarily serving the cardio, vascular and advanced surgical markets. Lake Region Medical offers fully integrated outsourced manufacturing, regulatory and engineering services, contract manufacturing, finished device assembly services, original device development, and supply chain management. As a result of the Lake Region Medical acquisition and the Spin-off, the Company has recast its product line sales into the following four categories: • Cardio and Vascular: Includes the legacy Greatbatch Vascular product line sales plus the legacy Lake Region Medical Cardio and Vascular product line sales less the legacy Lake Region Medical Cardiac/Neuromodulation sales. Products include introducers, steerable sheaths, guidewires, catheters, and stimulation therapy components, subassemblies and finished devices that deliver therapies for various markets such as coronary and neurovascular disease, peripheral vascular disease, interventional radiology, vascular access, atrial fibrillation, and interventional cardiology, plus products for medical imaging and pharmaceutical delivery. • Cardiac/Neuromodulation: Includes the legacy Greatbatch Cardiac/Neuromodulation and QiG sales plus the legacy Lake Region Medical Cardiac/Neuromodulation sales previously included in their Cardio and Vascular product line sales. Products include batteries, capacitors, filtered and unfiltered feed-throughs, engineered components, implantable stimulation leads, and enclosures used in implantable medical devices. • Advanced Surgical, Orthopedics, and Portable Medical: Includes legacy Greatbatch Orthopedics and Portable Medical product line sales plus the legacy Lake Region Medical Advanced Surgical product line sales. Products include components, sub-assemblies, finished devices, implants, instruments and delivery systems for a range of surgical technologies to the advanced surgical market, including laparoscopy, orthopedics and general surgery, biopsy and drug delivery, joint preservation and reconstruction, arthroscopy, and engineered tubing solutions. Products also include life-saving and life-enhancing applications comprising of automated external defibrillators, portable oxygen concentrators, ventilators, and powered surgical tools. • Electrochem: Includes the legacy Greatbatch Energy, Military and Environmental product line sales. Products include primary (lithium) cells, and primary and secondary battery packs for demanding applications such as down hole drilling tools. 15. BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION (Continued) An analysis and reconciliation of the Company’s business segments, product lines 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 (in thousands): Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Product line sales: Cardio and Vascular $ 148,273 $ 14,107 $ 426,142 $ 37,370 Cardiac/Neuromodulation 95,781 75,577 284,479 248,450 Advanced Surgical, Orthopedics, and Portable Medical 95,190 44,976 290,836 150,795 Electrochem 8,870 11,977 30,361 46,232 Elimination of interproduct line sales (1,547 ) — (4,631 ) — Total sales $ 346,567 $ 146,637 $ 1,027,187 $ 482,847 Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Business segment sales: Greatbatch Medical $ 140,458 $ 144,021 $ 413,231 $ 473,784 QiG 2,708 2,776 8,829 10,564 Lake Region Medical 203,913 — 607,122 — Elimination of intersegment sales (a) (512 ) (160 ) (1,995 ) (1,501 ) Total sales $ 346,567 $ 146,637 $ 1,027,187 $ 482,847 (a) Greatbatch Medical sales include approximately $0.2 million and $0.5 million of intersegment sales for the three and nine months ended September 30, 2016 , respectively. Lake Region Medical sales include approximately $0.3 million and $1.3 million of intersegment sales for the three and nine months ended September 30, 2016 , respectively. Intersegment sales for the three and nine months periods of 2015 are included in the Greatbatch Medical segment. Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Segment income (loss) from operations: Greatbatch Medical $ 15,986 $ 21,512 $ 41,565 $ 72,179 QiG 562 (7,680 ) (5,347 ) (20,132 ) Lake Region Medical 29,906 — 78,461 — Total segment income from operations 46,454 13,832 114,679 52,047 Unallocated operating expenses (9,592 ) (12,637 ) (37,414 ) (28,429 ) Operating income 36,862 1,195 77,265 23,618 Unallocated expenses, net (28,145 ) (1,189 ) (80,623 ) (1,857 ) Income (loss) before provision (benefit) for income taxes $ 8,717 $ 6 $ (3,358 ) $ 21,761 15. BUSINESS SEGMENT, GEOGRAPHIC AND CONCENTRATION RISK INFORMATION (Continued) Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Sales by geographic area: United States $ 206,663 $ 71,545 $ 612,876 $ 217,102 Non-Domestic locations: Puerto Rico 41,745 26,816 120,217 98,247 Belgium 14,256 12,305 52,913 45,690 Rest of world 83,903 35,971 241,181 121,808 Total sales $ 346,567 $ 146,637 $ 1,027,187 $ 482,847 Three customers accounted for a significant portion of the Company’s sales as follows: Three Months Ended Nine Months Ended September 30, 2016 October 2, 2015 September 30, 2016 October 2, 2015 Customer A 18% 17% 18% 20% Customer B 18% 19% 16% 18% Customer C 11% 10% 12% 12% Total 47% 46% 46% 50% Long-lived tangible assets by geographic area are as follows (in thousands): As of September 30, 2016 January 1, 2016 United States $ 263,347 $ 264,556 Rest of world 118,324 114,936 Total $ 381,671 $ 379,492 |