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| Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Assets Held for Sale | Assets Held for Sale In 2023, the Company initiated plans to re-franchise the majority of its corporate-owned or managed clinics with plans to retain a small portion of high-performing clinics. The clinics identified to re-franchise make up approximately 76% of the corporate-owned or managed clinic portfolio. The clinics are in varying stages of sales negotiations with approximately 50% of them expected to close within one year with an estimated fair value of $30.2 million at March 31, 2024. The clinics identified to commit to sell within one year did not represent a major strategic shift because the clinics identified to commit to sell within one year do not involve exiting a major line of business or exiting a major geographic area. As a result, the results of these clinics will continue to be reported in the Company’s operating results and in its Corporate Clinics segment until the sales are each finalized. Effective with the designation as held for sale, the Company discontinued recording depreciation on property and equipment, net, amortization of intangible assets, net and amortization of ROU assets for the clinics as required by GAAP. The Company also separately classified the related assets and liabilities of the clinics as held for sale in its March 31, 2024 condensed consolidated balance sheet.
Long-lived assets that meet the criteria for the held for sale designation are reported at the lower of their carrying value or fair value less estimated cost to sell. As a result of its evaluation of the recoverability of the carrying value of the assets and liabilities held for sale relative to the agreed upon sales prices or the clinics estimated fair values, the Company recorded an estimated loss
on disposal of $0.2 million for the three months ended March 31, 2024 as Net loss on disposition or impairment in its condensed consolidated income statement.
During the first quarter of 2024, in connection with the sale of a company-managed clinic classified as held for sale as of December 31, 2023, the Company sold $0.2 million Assets held for sale, net of a $0.1 million valuation allowance and $0.1 million of Liabilities to be disposed of in the condensed consolidated balance sheet as of March 31, 2024.
The principal components of the held for sale assets and liabilities as of December 31, 2023 and March 31, 2024 were as follows:
The pre-tax income of the clinics designated as held for sale was $1.2 million and $1.1 million for the three months ended March 31, 2024 and 2023, respectively, the results of which exclude the allocation of overhead.
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