Quarterly report pursuant to Section 13 or 15(d)

Note 14 - Segment Reporting

v3.10.0.1
Note 14 - Segment Reporting
 6 Months Ended
Jun. 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
June 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
June 30, 2018,
the franchise system consisted of
365
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
June 30,		   Six Months Ended
June 30,
    2018   2017   2018   2017
Revenues:  
 
  
(as adjusted)
  
 
  
(as adjusted)
Corporate clinics   $
3,421
     $
2,680
 
   $
6,677
     $
5,176
 
Franchise operations    
4,136
      
3,320
 
    
7,978
      
6,331
 
Total revenues   $
7,557
     $
6,000
 
   $
14,655
     $
11,507
 
                                 
Segment operating (loss) income:                                
Corporate clinics   $
(86
 )   $
(438
)
   $
25
     $
(1,455
)
Franchise operations    
1,974
      
1,445
 
    
3,789
      
2,678
 
Total segment operating (loss) income   $
1,888
     $
1,007
 
   $
3,814
     $
1,223
 
                                 
Depreciation and amortization:                                
Corporate clinics   $
245
     $
400
 
   $
548
     $
844
 
Franchise operations    
-
      
-
 
    
-
      
-
 
Corporate administration    
160
      
103
 
    
244
      
237
 
Total depreciation and amortization   $
405
     $
503
 
   $
792
     $
1,081
 
                                 
Reconciliation of total segment operating income (loss) to consolidated earnings (loss) before income taxes (in thousands):                                
Total segment operating income   $
1,888
     $
1,007
 
   $
3,814
     $
1,223
 
Unallocated corporate    
(1,989
 )    
(2,003
)
    
(4,353
 )    
(3,924
)
Consolidated loss from operations    
(101
 )    
(996
)
    
(539
 )    
(2,701
)
Bargain purchase gain    
75
      
-
 
    
75
      
-
 
Other (expense) income, net    
(11
 )    
(24
)
    
(23
 )    
(43
)
Loss before income tax expense   $
(37
 )   $
(1,020
)
   $
(487
 )   $
(2,744
)
 
For the
six
months ended
June 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.
 
    June 30,
2018		   December 31,
2017
Segment assets:  
 
  
(
as adjusted)
 
Corporate clinics   $
8,533
     $
8,998
 
Franchise operations    
4,015
      
3,888
 
Total segment assets   $
12,548
     $
12,886
 
                 
Unallocated cash and cash equivalents and restricted cash   $
4,708
     $
4,320
 
Unallocated property and equipment    
846
      
765
 
Other unallocated assets    
686
      
465
 
Total assets   $
18,788
     $
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.