Segment Disclosures | 9 Months Ended |
Sep. 30, 2013 |
Segment Reporting [Abstract] | ' |
Segment Disclosures | ' |
9 | Segment Disclosures | | | | | | | | | | | | | | | |
We have two reportable business segments: System One and In-Center. |
Our System One segment includes revenues from the sale and rental of the System One and PureFlow SL equipment and the sale of disposable products in the home and critical care markets. The home market is devoted to the treatment of ESRD patients in the home, while the critical care market is devoted to the treatment of hospital-based patients with acute kidney failure or fluid overload. Some of our largest customers in the home market provide outsourced renal dialysis services to some of our customers in the critical care market. Sales of product to both markets are made primarily through dedicated sales forces and distributed directly to the customer or the patient, with certain products sold through distributors internationally. The results of our international business are included in the System One segment. |
Our In-Center segment includes revenues from the sale of blood tubing sets and needles for hemodialysis primarily for the treatment of ESRD patients at dialysis centers and needles for apheresis. Nearly all In-Center products are sold through national distributors. |
The remainder of our operations and financial information, included within the Other category, relates primarily to (1) the manufacturing of dialyzers for sale to Asahi Kuraray Medical Co., or Asahi, (2) certain business development activities, including our continuing work on establishing centers of excellence, which are dialysis clinics focused on the provision of home therapy and flexible in-center options, and (3) research and development and general and administrative expenses that are excluded from the segment operating performance measures. |
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The accounting policies of our reportable segments are the same as those described in Note 2 to the consolidated financial statements included in our 2012 Form 10-K. Our chief operating decision maker allocates resources to our business segments and assesses segment performance based on segment profit (loss), which consists of revenues less cost of revenues, selling and marketing and distribution expenses. |
The following summarizes the operating performance of our reportable segments (in thousands): |
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| | System One | | | In-Center | | | Other | | | Total | |
Three Months Ended September 30, 2013 | | | | | | | | | | | | | | | | |
Revenues from external customers | | $ | 44,337 | | | $ | 21,269 | | | $ | 1,267 | | | $ | 66,873 | |
Segment profit (loss) | | | 5,518 | | | | 4,214 | | | | (14,145 | ) | | | (4,413 | ) |
Depreciation and amortization | | | 4,511 | | | | 332 | | | | 1,328 | | | | 6,171 | |
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Three Months Ended September 30, 2012 | | | | | | | | | | | | | | | | |
Revenues from external customers | | $ | 41,024 | | | $ | 19,637 | | | $ | 491 | | | $ | 61,152 | |
Segment profit (loss) | | | 6,330 | | | | 2,905 | | | | (11,581 | ) | | | (2,346 | ) |
Depreciation and amortization | | | 4,584 | | | | 362 | | | | 969 | | | | 5,915 | |
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Nine Months Ended September 30, 2013 | | | | | | | | | | | | | | | | |
Revenues from external customers | | $ | 130,003 | | | $ | 61,207 | | | $ | 2,769 | | | $ | 193,979 | |
Segment profit (loss) | | | 17,644 | | | | 11,950 | | | | (42,814 | ) | | | (13,220 | ) |
Depreciation and amortization | | | 13,440 | | | | 1,014 | | | | 3,976 | | | | 18,430 | |
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Nine Months Ended September 30, 2012 | | | | | | | | | | | | | | | | |
Revenues from external customers | | $ | 120,428 | | | $ | 55,477 | | | $ | 1,207 | | | $ | 177,112 | |
Segment profit (loss) | | | 17,716 | | | | 6,848 | | | | (33,860 | ) | | | (9,296 | ) |
Depreciation and amortization | | | 13,605 | | | | 1,069 | | | | 2,821 | | | | 17,495 | |
Substantially all of our revenues have been derived from the sale of the System One and related products, which cannot be used with any other dialysis system, and from needles and blood tubing sets to customers located in the U.S. |
The following table summarizes the customers who individually comprise greater than 10% of total revenues and their respective portion of total revenues: |
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| | Three Months Ended September 30, | | | Nine Months Ended September 30, | |
| | 2013 | | | 2012 | | | 2013 | | | 2012 | |
Customer A | | | 21 | % | | | 20 | % | | | 22 | % | | | 20 | % |
Customer B | | | 8 | % | | | 11 | % | | | 10 | % | | | 10 | % |
Customer C | | | 13 | % | | | 11 | % | | | 13 | % | | | 12 | % |
Customer D | | | 14 | % | | | 11 | % | | | 13 | % | | | 11 | % |
Sales to Customer A and D are nearly all in the System One segment and sales to Customer B and C are to significant distributors in the In-Center segment. A portion of Customer B’s sales of our products are to Customer A. All of Customer C’s sales of our products are to Customer A. |