Quarterly report pursuant to Section 13 or 15(d)

Note 11 - Segment Reporting

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Note 11 - Segment Reporting
 9 Months Ended
Sep. 30, 2016
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]
Note 11:      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, 2016, the Company operated or managed 61 clinics under this segment. The Franchise Operations segment is comprised of the operating activities of the franchise business unit. As of September 30, 2016, the franchise system consisted of 293 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, litigation 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
September 30,		   Nine Months Ended
September 30,
    2016   2015   2016   2015
Revenues:                                
Corporate clinics   $ 2,341     $ 1,198     $ 6,137     $ 2,209  
Franchise operations     3,163       2,940       8,606       7,864  
Total revenues   $ 5,504     $ 4,138     $ 14,743     $ 10,073  
                                 
Segment operating (loss) income:                                
Corporate clinics   $ (1,523 )   $ (941 )   $ (4,857 )   $ (1,526 )
Franchise operations     1,194       1,271       3,274       3,063  
Total segment operating (loss) income   $ (329 )   $ 330     $ (1,583 )   $ 1,537  
                                 
Depreciation and amortization:                                
Corporate clinics   $ 599     $ 353     $ 1,625     $ 611  
Franchise operations     -       -       -       -  
Corporate administration     97       68       283       211  
Total depreciation and amortization   $ 696     $ 421     $ 1,908     $ 822  
                                 
Reconciliation of total segment operating income (loss) to consolidated earnings (loss) before income taxes (in thousands):                                
Total segment operating (loss) income   $ (329 )   $ 330     $ (1,583 )   $ 1,537  
Unallocated corporate     (2,286 )     (2,381 )     (7,708 )     (7,350 )
Consolidated loss from operations     (2,615 )     (2,051 )     (9,291 )     (5,812 )
Bargain purchase gain     -       384       -       384  
Other income, net     2       16       10       18  
Loss before income tax expense   $ (2,613 )   $ (1,651 )   $ (9,281 )   $ (5,410 )
 
    September 30,
2016		   December 31,
2015
Segment assets:                
Corporate clinics   $ 14,266     $ 12,426  
Franchise operations     2,266       2,580  
Total segment assets   $ 16,532     $ 15,006  
                 
Unallocated cash and cash equivalents and restricted cash   $ 3,863     $ 17,178  
Unallocated property and equipment     896       802  
Other unallocated assets     835       376  
Total assets   $ 22,126     $ 33,362  
 
“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.