10.

Business Segments

The Company operates in two reportable segments: the ophthalmology segment and the aesthetics segment. In each segment the Company develops, manufactures, and markets medical devices. Our revenues arise from the sale of consoles, delivery devices, consumables and service and support activities.

Information on reportable segments for the three and six month periods ended July 2, 2011 and July 3, 2010 is as follows:


	Three Months Ended July 2, 2011							Three Months Ended July 3, 2010
(in thousands)	Ophthalmology		Aesthetics		Total			Ophthalmology		Aesthetics		Total
Revenues	$	8,085		2,713	$	10,798		$	7,668	$	2,222	$	9,890
Direct cost of revenues		2,413		864		3,277			2,289		589		2,878

Direct gross profit	$	5,672		1,849		7,521		$	5,379	$	1,633		7,012
Total unallocated indirect costs						(6,439	)						(6,127	)

Pre-tax income					$	1,082						$	885


	Six Months Ended July 2, 2011							Six Months Ended July 3, 2010
(in thousands)	Ophthalmology		Aesthetics		Total			Ophthalmology		Aesthetics		Total
Revenues	$	16,281		5,729	$	22,010		$	15,272	$	5,376	$	20,648
Direct cost of revenues		4,827		1,830		6,657			4,373		1,613		5,986

Direct gross profit	$	11,454		3,899		15,353		$	10,899	$	3,763		14,662
Total unallocated indirect costs						(13,607	)						(13,236	)

Pre-tax income					$	1,746						$	1,426

Direct cost of revenues includes standard product cost (direct material, labor and fringe) and any warranty and unit royalty due. Indirect costs of manufacturing, research and development, sales and marketing, and general and administrative costs are not allocated to the segments.

Our revenues by reportable segment by geographic region, based on the location at which each sale originates, is summarized as follows:


	Three Months Ended July 2, 2011						Three Months Ended July 3, 2010
(in thousands)	Ophthalmology		Aesthetics		Total		Ophthalmology		Aesthetics		Total
Domestic	$	4,376	$	1,378	$	5,754	$	4,056	$	1,613	$	5,669
International		3,709		1,335		5,044		3,612		609		4,221

Total revenues	$	8,085	$	2,713	$	10,798	$	7,668	$	2,222	$	9,890


	Six Months Ended July 2, 2011						Six Months Ended July 3, 2010
(in thousands)	Ophthalmology		Aesthetics		Total		Ophthalmology		Aesthetics		Total
Domestic	$	8,965	$	2,991	$	11,956	$	8,080	$	3,282	$	11,362
International		7,316		2,738		10,054		7,191		2,095		9,286

Total revenues	$	16,281	$	5,729	$	22,010	$	15,271	$	5,377	$	20,648

No one customer accounted for more than 10% of total revenue for the three months ended July 2, 2011 and July 3, 2010, respectively.

The Company's assets and liabilities are not evaluated on a segment basis. Accordingly, no disclosure of segment assets and liabilities is provided.