Quarterly report pursuant to Section 13 or 15(d)

Note 14 - Segment Reporting

v3.10.0.1
Note 14 - Segment Reporting
 9 Months Ended
Sep. 30, 2018
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
Note
14:
Segment Reporting
 
An operating segment is defined as a component of an enterprise for which discrete financial information is available and is reviewed regularly by the Chief Operating Decision Maker (“CODM”) to evaluate performance and make operating decisions. The Company has identified its CODM as the Chief Executive Officer.
  
The Company has
two
operating business segments. The Corporate Clinics segment is comprised of the operating activities of the company-owned or managed clinics. As of
September 30, 2018,
the Company operated or managed
48
clinics under this segment. The Franchise Operations segment is comprised of the operating activities of the franchise business unit. As of
September 30, 2018,
the franchise system consisted of
374
clinics in operation. Corporate is a non-operating segment that develops and implements strategic initiatives and supports the Company’s
two
operating business segments by centralizing key administrative functions such as finance and treasury, information technology, insurance and risk management, legal and human resources. Corporate also provides the necessary administrative functions to support the Company as a publicly-traded company. A portion of the expenses incurred by Corporate are allocated to the operating segments.  
 
The tables below present financial information for the Company’s
two
operating business segments (in thousands). The prior period comparatives have been adjusted to reflect the changes from ASC
606.
 
 
 
Three Months Ended
 
Nine Months Ended
 
September 30,
 
September 30,
 
 
2018
 
2017
 
2018
 
2017
 
 
 
 
(as adjusted)
 
 
 
(as adjusted)
Revenues:
 
 
 
 
 
 
 
 
Corporate clinics
 
$
3,675
 
 
$
2,930
 
 
$
10,352
 
 
$
8,106
 
Franchise operations
 
 
4,387
 
 
 
3,608
 
 
 
12,365
 
 
 
9,939
 
Total revenues
 
$
8,062
 
 
$
6,538
 
 
$
22,717
 
 
$
18,045
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Segment operating (loss) income:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate clinics
 
$
440
 
 
$
(196
)
 
$
466
 
 
$
(1,651
)
Franchise operations
 
 
2,130
 
 
 
1,643
 
 
 
5,919
 
 
 
4,321
 
Total segment operating (loss) income
 
$
2,570
 
 
$
1,447
 
 
$
6,385
 
 
$
2,670
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate clinics
 
$
276
 
 
$
379
 
 
$
825
 
 
$
1,222
 
Franchise operations
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
Corporate administration
 
 
113
 
 
 
90
 
 
 
357
 
 
 
328
 
Total depreciation and amortization
 
$
389
 
 
$
469
 
 
$
1,182
 
 
$
1,550
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of total segment operating income (loss) to consolidated earnings (loss) before income taxes (in thousands):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total segment operating (loss) income
 
$
2,570
 
 
$
1,447
 
 
$
6,385
 
 
$
2,670
 
Unallocated corporate
 
 
(2,761
)
 
 
(1,853
)
 
 
(7,116
)
 
 
(5,776
)
Consolidated loss from operations
 
 
(191
)
 
 
(406
)
 
 
(731
)
 
 
(3,106
)
Bargain purchase gain
 
 
-
 
 
 
-
 
 
 
75
 
 
 
-
 
Other (expense) income, net
 
 
(11
)
 
 
10
 
 
 
(33
)
 
 
(34
)
Loss before income tax expense
 
$
(202
)
 
$
(396
)
 
$
(689
)
 
$
(3,140
)
 
For the
nine
months ended
September 30, 2017,
$418,000
of loss on disposition/impairment has been reclassified from unallocated corporate to the corporate clinic segment operating loss to align with current year presentation.
 
    September 30,   December 31,
    2018   2017
Segment assets:  
 
  
(as adjusted)
Corporate clinics   $
8,906
     $
8,998
  
Franchise operations    
4,221
      
3,888
  
Total segment assets   $
13,127
     $
12,886
  
                 
Unallocated cash and cash equivalents and restricted cash   $
5,796
     $
4,320
  
Unallocated property and equipment    
234
      
765
  
Other unallocated assets    
647
      
465
  
Total assets   $
19,804
     $
18,436
  
 
“Unallocated cash and cash equivalents and restricted cash” relates primarily to corporate cash and cash equivalents and restricted cash (see Note
1
), “unallocated property and equipment” relates primarily to corporate fixed assets, and “other unallocated assets” relates primarily to deposits, prepaid and other assets.