Quarterly report pursuant to Section 13 or 15(d)

Note 14 - Segment Reporting

v3.19.3
Note 14 - Segment Reporting
 9 Months Ended
Sep. 30, 2019
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, 2019,
the Company operated or managed
58
clinics under this segment. The Franchise Operations segment is comprised of the operating activities of the franchise business unit. As of
September 30, 2019,
the franchise system consisted of
430
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).
 
    Three Months Ended   Nine Months Ended
    September 30,   September 30,
    2019   2018   2019   2018
        (as adjusted)       (as adjusted)
Revenues:                                
Corporate clinics   $
6,830
     $
4,854
     $
18,246
     $
14,328
  
Franchise operations    
5,896
      
4,388
      
16,330
      
12,365
  
Total revenues   $
12,726
     $
9,242
     $
34,576
     $
26,693
  
                                 
Segment operating income:                                
Corporate clinics   $
821
     $
385
     $
2,225
     $
801
  
Franchise operations    
2,875
      
2,130
      
7,895
      
5,919
  
Total segment operating income   $
3,696
     $
2,515
     $
10,120
     $
6,720
  
                                 
Depreciation and amortization:                                
Corporate clinics   $
490
     $
276
     $
1,156
     $
824
  
Franchise operations    
-
      
-
      
-
      
-
  
Corporate administration    
48
      
113
      
153
      
358
  
Total depreciation and amortization   $
538
     $
389
     $
1,309
     $
1,182
  
                                 
Reconciliation of total segment operating income (loss) to consolidated earnings (loss) before income taxes (in thousands):                                
                                 
Total segment operating income (loss)   $
3,696
     $
2,515
     $
10,120
     $
6,720
  
Unallocated corporate    
(3,056
 )    
(2,762
 )    
(8,048
 )    
(7,115
 )
Consolidated income (loss) from operations    
640
      
(247
 )    
2,072
      
(395
 )
Bargain purchase gain    
-
      
-
      
19
      
30
  
Other income (expense), net    
(17
 )    
(11
 )    
(43
 )    
(32
 )
Income (loss) before income tax (expense) benefit   $
623
     $
(258
 )   $
2,048
     $
(397
 )
 
    September 30,   December 31,
    2019   2018
Segment assets:  
 
  
(as adjusted)
Corporate clinics   $
25,223
     $
8,828
 
Franchise operations    
5,411
      
4,455
 
Total segment assets   $
30,634
     $
13,283
 
                 
Unallocated cash and cash equivalents and restricted cash   $
7,996
     $
8,855
 
Unallocated property and equipment    
2,086
      
487
 
Other unallocated assets    
1,063
      
803
 
Total assets   $
41,779
     $
23,428
 
 
“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.