Operating Segments

12 Months Ended

Sep. 30, 2012

Operating Segments [Abstract]

Operating Segments

11. Operating Segments

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker who is the Company’s Chief Executive Officer, in deciding how to allocate resources and in assessing performance. On November 17, 2011, the Company completed its sale of SurModics Pharmaceuticals. Accordingly, beginning in the first quarter of fiscal 2012, all results of operations, cash flows, assets and liabilities of SurModics Pharmaceuticals for all periods presented are classified as discontinued operations. Following the sale of SurModics Pharmaceuticals which was previously reported as a separate operating segment, the Company is now organized into two segments, as follows: (1) the Medical Device unit, which is comprised of surface modification coating technologies to improve access, deliverability, and predictable deployment of medical devices, as well as drug delivery coating technologies to provide site-specific drug delivery from the surface of a medical device, with end markets that include coronary, peripheral, and neuro-vascular, and urology, among others, and (2) the In Vitro Diagnostics unit, which consists of component products and technologies for diagnostic test kits and biomedical research applications, with products that include protein stabilization reagents, substrates, antigens and surface coatings.

The tables below present segment revenue, operating income from continuing operations and depreciation and amortization, for the years ended September 30, as follows (in thousands):

	2012			2011			2010
Revenue:
Medical Device	$	37,883		$	39,606		$	43,294
In Vitro Diagnostics		14,045			13,150			11,194
Total revenue	$	51,928		$	52,756		$	54,488
Operating income (loss):
Medical Device	$	18,431		$	19,997		$	19,461
In Vitro Diagnostics		4,542			4,314			3,296
Corporate		(6,631	)		(8,788	)		(10,766	)
Total operating income from continuing operations	$	16,342		$	15,523		$	11,991
Depreciation and amortization:
Medical Device	$	1,414		$	1,604		$	2,136
In Vitro Diagnostics		774			799			828
Corporate		741			756			656
Total depreciation and amortization	$	2,929		$	3,159		$	3,620

Segment results above for fiscal 2012 include costs of $0.5 million in Corporate associated with the “modified Dutch auction” tender offer.

Segment results above for fiscal 2011 include restructuring charges of $1.6 million in Corporate. There were no restructuring charges for the year ended September 30, 2012.

Segment results above for fiscal 2010 include restructuring charges of $1.2 million and asset impairment charges of $3.0 million in Corporate.

The Corporate category includes expenses for administrative corporate functions, such as executive, corporate accounting, legal, human resources and Board related, that have not been fully allocated to the Medical Device and In Vitro Diagnostics segments. Corporate also includes one-time charges, such as restructuring costs, which are not specific to a segment.

Asset information by segment is not presented because the Company does not provide its chief operating decision maker assets by segment, as the data is not readily available.

Major Customers

Revenue from customers that equaled or exceeded 10% of total revenue was as follows for the years ended September 30:

	2012			2011			2010
Medtronic		19	%		18	%		16	%
Johnson & Johnson		**			16	%		22	%

** -less than 10%

The revenue from the customers listed is derived from all three primary sources: licensing, product sales, and research and development.

Geographic Revenue

Geographic revenue was as follows for the years ended September 30:

	2012			2011			2010
Domestic		79	%		73	%		79	%
Foreign		21	%		27	%		21	%