Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.20.1
Segment Reporting
 3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
Segment Reporting 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 and one non-operating business segment. The Corporate Clinics segment is composed of the operating activities of the company-owned or managed clinics. As of March 31, 2020, the Company operated or managed 61 clinics under this segment. The Franchise Operations segment is composed of the operating activities of the franchise business unit. As of March 31, 2020, the franchise system consisted of 469 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.

Three Months Ended
March 31,
Revenues:
 2020 2019
Corporate clinics
 $ 7,294,295    $ 5,639,076   
Franchise operations
 6,350,191    5,040,300   
Total revenues
 $ 13,644,486    $ 10,679,376   
Depreciation and amortization:
Corporate clinics 577,543    312,654   
Franchise operations 342    169   
Corporate administration 76,364    52,855   
Total depreciation and amortization $ 654,249    $ 365,678   
Segment operating income:
Corporate clinics
 $ 783,706    $ 839,981   
Franchise operations
 2,844,298    2,389,349   
Total segment operating income
 $ 3,628,004    $ 3,229,330   
Reconciliation of total segment operating income to consolidated earnings before income taxes:
Total segment operating income $ 3,628,004    $ 3,229,330   
Unallocated corporate
 (2,874,654)   (2,285,658)  
Consolidated income from operations 753,350    943,672   
Bargain purchase gain
 —    19,298   
Other expense, net 4,337    11,645   
Income before income tax expense (benefit) $ 749,013    $ 951,325   

Segment assets: March 31,
2020		 December 31,
2019
Corporate clinics $ 25,084,849    $ 25,389,147   
Franchise operations 7,880,855 7,466,629
Total segment assets 32,965,704 32,855,776
Unallocated cash and cash equivalents and restricted cash 10,969,469 8,641,877
Unallocated property and equipment 1,236,556 996,385
Other unallocated assets 1,242,392 1,211,629
Total assets $ 46,414,121    $ 43,705,667   
“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. Certain unallocated property and equipment balances were reclassified
to Corporate clinics and Franchise operations segments as of December 31, 2019 to conform to the current year presentation.