Operating Segments

12 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Operating Segments

12. 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. For financial accounting and reporting purposes, the Company reports its results for the two reportable 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.

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 noted above.

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):

	2013			2012			2011
Revenue:
Medical Device	$	41,153		$	37,883		$	39,606
In Vitro Diagnostics		14,979			14,045			13,150
Total revenue	$	56,132		$	51,928		$	52,756
Operating income (loss):
Medical Device	$	21,164		$	18,431		$	19,997
In Vitro Diagnostics		4,222			4,542			4,314
Total segment operating income		25,386			22,973			24,311
Corporate		(6,566	)		(6,631	)		(8,788	)
Total operating income from continuing operations	$	18,820		$	16,342		$	15,523
Depreciation and amortization:
Medical Device	$	1,255		$	1,414		$	1,604
In Vitro Diagnostics		864			774			799
Corporate		767			741			756
Total depreciation and amortization	$	2,886		$	2,929		$	3,159

The Corporate category includes expenses for administrative corporate functions, such as executive, corporate accounting, legal, human resources and Board of Directors related, that have not been fully allocated to the Medical Device and In Vitro Diagnostics segments. Corporate also includes expenses, such as litigation, which are not specific to a segment and thus not allocated to the operating segments.

Segment results above for fiscal 2013 include restructuring charges of $0.5 million in Corporate and recovery of legal fees associated with the SRI litigation of $1.0 million.

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.

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:

	2013			2012			2011
Medtronic		19	%		19	%		18	%
Johnson & Johnson		**			**			16	%

** -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:

	2013			2012			2011
Domestic		79	%		79	%		73	%
Foreign		21	%		21	%		27	%