Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.20.2
Segment Reporting
 9 Months Ended
Sep. 30, 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 September 30, 2020, the Company operated or managed 63 clinics under this segment. The Franchise Operations segment is composed of the operating activities of the franchise business unit. As of September 30, 2020, the franchise system consisted of 497 clinics in operation. The Corporate segment 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. The Corporate segment also provides the necessary administrative functions to support the Company as a publicly-traded company. A portion of the expenses incurred by the Corporate segment are allocated to the operating segments.
The tables below present financial information for the Company’s two operating business segments.
Three Months Ended Nine Months Ended
September 30, September 30,
Revenues:
 2020 2019 2020 2019
Corporate clinics
 $ 8,403,844  $ 6,829,576  $ 22,554,946  $ 18,245,940 
Franchise operations
 7,006,709  5,896,801  19,089,886  16,329,792 
Total revenues
 $ 15,410,553  $ 12,726,377  $ 41,644,832  $ 34,575,732 
Depreciation and amortization:
Corporate clinics 636,734  489,623  1,828,643  1,155,779 
Franchise operations 342  342  1,027  799 
Corporate administration 77,212  48,407  232,267  151,937 
Total depreciation and amortization $ 714,288  $ 538,372  $ 2,061,937  $ 1,308,515 
Segment operating income:
Corporate clinics
 $ 1,313,717  $ 821,228  $ 2,662,643  $ 2,225,252 
Franchise operations
 3,404,723  2,874,609  8,778,537  7,894,934 
Total segment operating income
 $ 4,718,440  $ 3,695,837  $ 11,441,180  $ 10,120,186 
Reconciliation of total segment operating income to consolidated earnings before income taxes:
Total segment operating income $ 4,718,440  $ 3,695,837  $ 11,441,180  $ 10,120,186 
Unallocated corporate
 (3,013,084) (3,055,458) (8,723,890) (8,048,531)
Consolidated income from operations 1,705,356  640,379  2,717,290  2,071,655 
Bargain purchase gain
 —  —  —  19,298 
Other expense, net (25,667) (16,697) (55,248) (43,469)
Income before income tax expense $ 1,679,689  $ 623,682  $ 2,662,042  $ 2,047,484 

Segment assets: September 30,
2020		 December 31,
2019
Corporate clinics $ 23,294,320  $ 25,389,147 
Franchise operations 8,502,811 7,466,629
Total segment assets 31,797,131 32,855,776
Unallocated cash and cash equivalents and restricted cash 18,445,926 8,641,877
Unallocated property and equipment 1,122,063 996,385
Other unallocated assets 687,691 1,211,629
Total assets $ 52,052,811  $ 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.