XML 39 R28.htm IDEA: XBRL DOCUMENT v3.5.0.2
Business Segments
 9 Months Ended
Sep. 30, 2016
Segment Reporting [Abstract]  
Business Segments
Business Segments
The company operates in four primary business segments: North America/Home Medical Equipment (North America/HME), Institutional Products Group (IPG), Europe and Asia/Pacific. The North America/HME segment sells each of three primary product lines, which includes: lifestyle, mobility and seating and respiratory therapy products. IPG sells, and rented prior to the disposition of the rentals businesses, long-term care medical equipment, health care furnishings and accessory products. Europe and Asia/Pacific sell product lines similar to North America/HME and IPG. The accounting policies of each segment are the same as those described in the summary of significant accounting policies for the company’s consolidated financial statements. Intersegment sales and transfers are based on the costs to manufacture plus a reasonable profit element.

As of the third quarter of 2016, the company redefined the measure by which it evaluates segment profit or loss. Segment performance is measured and resources are allocated based on a number of factors, with the primary profit or loss measure being segment operating profit (loss). Segment operating profit (loss) represents net sales less cost of products sold less selling general and administrative expenses. Segment operating profit (loss) excludes unallocated corporate general and administrative expenses not allocated to the segments and intersegment sales and profit eliminations, which are included in All Other. In addition, segment operating profit (loss) further excludes charges related to restructuring activities, asset write-downs and gain or loss on sales of businesses (as applicable). The previous performance measure was earnings before income taxes. With the issuance of convertible debt during 2016, this performance measure has not been utilized by the Chief Operating Decision Maker (CODM) as the interest expense incurred by the company is related to the company’s financing decision to issue convertible debt as compared to the operating decisions resulting from allocation of resources and segment operating income performance. In addition, earlier this year, the company included an operating income line on the consolidated statement of comprehensive income (loss) to emphasize the CODM’s emphasis on operating income (loss).

As noted, this performance measure, segment operating income (loss), is used by the CODM for purposes of making decisions about allocating resources to a segment and assessing its performance. In addition, this metric is reviewed by the company’s Board of Directors regarding segment performance and is a key metric in the performance management assessment of the company's employees. The information by segment is as follows (in thousands): 
 
For the Three Months Ended September 30,
 
For the Nine Months Ended September 30,
 
2016
 
2015
 
2016
 
2015
Revenues from external customers
 
 
 
 
 
 
 
North America/HME
$
98,023

 
$
114,605

 
$
313,957

 
$
358,792

Institutional Products Group
15,343

 
17,604

 
49,702

 
68,888

Europe
143,038

 
140,514

 
403,242

 
397,736

Asia/Pacific
11,741

 
11,053

 
33,833

 
33,657

Consolidated
$
268,145

 
$
283,776

 
$
800,734

 
$
859,073

Intersegment revenues
 
 
 
 
 
 
 
North America/HME
$
25,259

 
$
29,753

 
$
79,963

 
$
85,026

Institutional Products Group
998

 
469

 
2,201

 
823

Europe
2,320

 
2,776

 
7,577

 
7,411

Asia/Pacific
4,663

 
5,110

 
14,802

 
16,222

Consolidated
$
33,240

 
$
38,108

 
$
104,543

 
$
109,482

Restructuring charges before income taxes
 
 
 
 
 
 
 
North America/HME
$
490

 
$
20

 
$
1,213

 
$
710

Institutional Products Group
—

 
1

 
—

 
73

Europe
—

 
—

 
—

 
160

Asia/Pacific
18

 
(10
)
 
86

 
(3
)
Consolidated
$
508

 
$
11

 
$
1,299

 
$
940

Operating profit (loss)
 
 
 
 
 
 
 
North America/HME
$
(10,991
)
 
$
(8,402
)
 
$
(23,899
)
 
$
(23,599
)
Institutional Products Group
1,497

 
1,437

 
4,453

 
6,067

Europe
11,622

 
13,609

 
24,384

 
27,731

Asia/Pacific
(559
)
 
(362
)
 
(1,599
)
 
(2,537
)
All Other(1)
(5,832
)
 
(6,106
)
 
(17,703
)
 
(16,029
)
Charge expense related to restructuring activities
(508
)
 
(11
)
 
(1,299
)
 
(940
)
Gain on sale of business
7,386

 
24

 
7,386

 
24

Consolidated operating income (loss)
2,615

 
189

 
(8,277
)
 
(9,283
)
Net gain on convertible derivatives
1,192

 
—

 
2,282

 
—

Net Interest expense
(4,402
)
 
(979
)
 
(11,021
)
 
(3,038
)
Loss from continuing operations before income taxes
$
(595
)
 
$
(790
)
 
$
(17,016
)
 
$
(12,321
)
 
 
 
 
 
 
 
 
________

(1)
Consists of un-allocated corporate SG&A costs and intercompany profits, which do not meet the quantitative criteria for determining reportable segments, and gain or loss on convertible debt derivatives.