Segment Reporting

3 Months Ended

Mar. 31, 2017

Segment Reporting [Abstract]

Segment Reporting

SEGMENT REPORTING

The Company operates in one distinct line of business consisting of developing, manufacturing, marketing, and distributing disposable products and a proprietary excimer laser system to treat certain vascular and coronary conditions.

Within this line of business, the Company has two operating segments, which are identified on a geographic basis: (1) U.S. Medical and (2) International Medical. U.S. Medical and International Medical offer substantially the same products and services but operate in different geographic regions, have different distribution networks, and different regulatory environments. The primary performance measure for the operating segments is revenue.

Additional information regarding each operating segment is discussed below.

U. S. Medical

Products offered by this segment include medical devices used in minimally invasive procedures within the cardiovascular system, including fiber-optic devices and non-fiber-optic products (disposables), an excimer laser system (equipment), and the service of the excimer laser system (service). The Company is subject to product approvals from the U.S. Food and Drug Administration (“FDA”) and Health Canada. The Company’s products are used in multiple vascular procedures, including peripheral atherectomy, crossing arterial blockages, coronary atherectomy and thrombectomy, and the removal of cardiac lead wires from patients with pacemakers and cardiac defibrillators. This segment’s customers are primarily located in the United States and Canada.

U.S. Medical also includes the corporate headquarters of the Company. All manufacturing, research and development, and corporate administrative functions are performed within this operating segment. For the three months ended March 31, 2017 and 2016, a portion of research, development and other technology expenses, and general and administrative expenses incurred in the U.S. has been allocated to International Medical based on a percentage of revenue because these expenses support the Company’s ability to generate revenue within the International Medical segment.

Manufacturing activities are performed within the U.S. Medical segment. Revenue associated with intersegment product transfers to International Medical was $2.8 million and $3.4 million for the three months ended March 31, 2017 and 2016, respectively. Revenue is based upon transfer prices, which provide for intersegment profit eliminated upon consolidation.

International Medical

The International Medical segment serves Europe, the Middle East, Asia Pacific, Latin America, and Puerto Rico. Products offered by this segment are substantially the same as those offered by U.S. Medical, except that Stellarex and AngioSculptX™ DCB products are available for sale in Europe and certain other international markets but are not yet approved for sale in the U.S. The Company is subject to product approvals from various international regulatory bodies. The International Medical segment is engaged primarily in distribution activities, with no manufacturing or product development functions.

Summary financial information relating to reportable segment operations is shown below. Intersegment transfers as well as intercompany assets and liabilities are excluded from the information provided (in thousands):

	Three Months Ended   March 31,
	2017		2016
Revenue:
U.S. Medical:
Disposable products	$	55,878	$	50,475
Laser, service, and other	2,535		2,507
Subtotal	58,413		52,982
International Medical:
Disposable products	9,603		8,533
Laser, service, and other	1,664		1,369
Subtotal	11,267		9,902
Total revenue	$	69,680	$	62,884

	Three Months Ended   March 31,
	2017			2016
Segment operating loss:
U.S. Medical	$	(13,105	)	$	(12,328	)
International Medical	(1,878		)	(1,591		)
Total operating loss	$	(14,983	)	$	(13,919	)

	As of
	March 31, 2017		December 31, 2016
Segment assets:
U.S. Medical	$	378,765	$	392,776
International Medical	36,970		37,302
Total assets	$	415,735	$	430,078

For the three months ended March 31, 2017 and 2016, no individual customer represented 10% or more of consolidated revenue. No individual country, other than the United States, represented 10% or more of consolidated revenue for the three months ended March 31, 2017 or 2016.

Revenue by Product Line

Summary revenue information by product line is shown below (in thousands):

	Three Months Ended   March 31,
	2017		2016
Revenue
Disposable products:
Vascular Intervention	$	46,448	$	41,912
Lead Management	19,033		17,096
Total disposable products	65,481		59,008
Laser, service, and other	4,199		3,876
Total revenue	$	69,680	$	62,884