Quarterly report pursuant to Section 13 or 15(d)

Note 12 - Segment Reporting

v3.8.0.1
Note 12 - Segment Reporting
 9 Months Ended
Sep. 30, 2017
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
Note
12:
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, 2017,
the Company operated or managed
47
clinics under this segment. The Franchise Operations segment is comprised of the operating activities of the franchise business unit. As of
September 30, 2017,
the franchise system consisted of
342
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,
    2017   2016   2017   2016
Revenues:                
Corporate clinics   $
2,930
     $
2,341
     $
8,106
     $
6,137
  
Franchise operations    
3,616
      
3,163
      
10,128
      
8,605
  
Total revenues   $
6,546
     $
5,504
     $
18,234
     $
14,743
  
                                 
Segment operating (loss) income:                                
Corporate clinics   $
(196
 )   $
(1,527
 )   $
(1,233
 )   $
(4,863
 )
Franchise operations    
1,671
      
1,195
      
4,479
      
3,197
  
Total segment operating (loss) income   $
1,475
     $
(332
 )   $
3,246
     $
(1,666
 )
                                 
Depreciation and amortization:                                
Corporate clinics   $
379
     $
599
     $
1,222
     $
1,625
  
Franchise operations    
-
      
-
      
-
      
-
  
Corporate administration    
90
      
97
      
328
      
283
  
Total depreciation and amortization   $
469
     $
696
     $
1,550
     $
1,908
  
                                 
Reconciliation of total segment operating income (loss) to consolidated earnings (loss) before income taxes (in thousands):                                
Total segment operating (loss) income   $
1,475
     $
(332
 )   $
3,246
     $
(1,666
 )
Unallocated corporate    
(1,853
 )    
(2,287
 )    
(6,195
 )    
(7,620
 )
Consolidated loss from operations    
(378
 )    
(2,619
 )    
(2,949
 )    
(9,286
 )
Other (expense) income, net    
10
      
6
      
(34
 )    
5
  
Loss before income tax expense   $
(368
 )   $
(2,613
 )   $
(2,983
 )   $
(9,281
 )
 
 
    September 30,   December 31,
    2017   2016
Segment assets:                
Corporate clinics   $
9,250
     $
10,481
  
Franchise operations    
2,353
      
2,003
  
Total segment assets   $
11,603
     $
12,484
  
                 
Unallocated cash and cash equivalents and restricted cash   $
2,786
     $
3,344
  
Unallocated property and equipment    
655
      
781
  
Other unallocated assets    
604
      
446
  
Total assets   $
15,648
     $
17,055
  
 
“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.
 
The Company reclassified approximately
$545,000
of assets from Other unallocated assets to Corporate clinics segment assets for the year ended
December 31, 2016
to align with current period presentation of segment assets.