Operating Segments and Related Information

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Operating Segments and Related Information

Operating Segments and Related Information

We conduct our operations through three reportable segments:

Recovery Audit Services – Americas represents recovery audit services (other than Healthcare Claims Recovery Audit services) provided in the United States of America (“U.S.”), Canada and Latin America.

Recovery Audit Services – Europe/Asia-Pacific represents recovery audit services (other than Healthcare Claims Recovery Audit services) provided in Europe, Asia and the Pacific region.

New Services represents Profit Optimization services and Healthcare Claims Recovery Audit services.

Additionally,Corporate Support includes the unallocated portion of corporate selling, general and administrative expenses not specifically attributable to the three reportable segments.

We evaluate the performance of our reportable segments based upon revenue and measures of profit or loss we refer to as EBITDA and Adjusted EBITDA. We define Adjusted EBITDA as earnings from continuing operations before interest and taxes (“EBIT”), adjusted for depreciation and amortization (“EBITDA”), and then further adjusted for unusual and other significant items that management views as distorting the operating results of the various segments from period to period. Such adjustments include restructuring charges, stock-based compensation, bargain purchase gains, acquisition transaction costs and acquisition obligations classified as compensation, intangible asset impairment charges, certain litigation costs and litigation settlements, certain severance charges and foreign currency transaction gains and losses on short-term intercompany balances viewed by management as individually or collectively significant. We do not have any inter-segment revenue. Segment information for the three and six months ended June 30, 2013 and 2012 (in thousands) is as follows:

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific			New Services		Corporate Support			Total
Three Months Ended June 30, 2013
Revenue	$	29,392	$	10,770		$	10,043	$	—		$	50,205
Net earnings											$	1,831
Income tax expense											586
Interest expense, net											53
EBIT	$	6,771	$	(74	)	$	369	$	(4,596	)	2,470
Depreciation of property and equipment	1,356		126			545		—			2,027
Amortization of intangible assets	698		452			182		—			1,332
EBITDA	8,825		504			1,096		(4,596		)	5,829
Foreign currency transaction losses (gains) on short-term intercompany balances	171		69			—		(15		)	225
Acquisition obligations classified as compensation	—		—			44		—			44
Transformation severance and related expenses	80		537			—		—			617
Stock-based compensation	—		—			—		1,155			1,155
Adjusted EBITDA	$	9,076	$	1,110		$	1,140	$	(3,456	)	$	7,870

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		New Services			Corporate Support			Total
Three Months Ended June 30, 2012
Revenue	$	29,592	$	13,411	$	8,655		$	—		$	51,658
Net earnings											$	1,002
Income tax expense											584
Interest expense, net											529
EBIT	$	6,469	$	1,554	$	(821	)	$	(5,087	)	2,115
Depreciation of property and equipment	990		87		502			—			1,579
Amortization of intangible assets	767		490		202			—			1,459
EBITDA	8,226		2,131		(117		)	(5,087		)	5,153
Foreign currency transaction losses on short-term intercompany balances	71		406		20			—			497
Acquisition obligations classified as compensation	—		—		94			—			94
Transformation severance and related expenses	23		21		232			—			276
Wage claim costs	328		—		—			—			328
Stock-based compensation	—		—		—			1,239			1,239
Adjusted EBITDA	$	8,648	$	2,558	$	229		$	(3,848	)	$	7,587

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		New Services			Corporate Support			Total
Six Months Ended June 30, 2013
Revenue	$	55,634	$	21,787	$	17,885		$	—		$	95,306
Net earnings											$	1,334
Income tax expense											642
Interest income, net											(164		)
EBIT	$	12,225	$	367	$	(792	)	$	(9,988	)	1,812
Depreciation of property and equipment	2,724		238		1,073			—			4,035
Amortization of intangible assets	1,396		848		364			—			2,608
EBITDA	16,345		1,453		645			(9,988		)	8,455
Foreign currency transaction losses (gains) on short-term intercompany balances	223		375		—			(16		)	582
Acquisition obligations classified as compensation	—		—		100			—			100
Transformation severance and related expenses	80		537		—			—			617
Stock-based compensation	—		—		—			2,473			2,473
Adjusted EBITDA	$	16,648	$	2,365	$	745		$	(7,531	)	$	12,227

	Recovery Audit Services – Americas		Recovery Audit Services – Europe/Asia- Pacific		New Services			Corporate Support			Total
Six Months Ended June 30, 2012
Revenue	$	58,405	$	27,716	$	17,186		$	—		$	103,307
Net earnings											$	1,294
Income tax expense											1,081
Interest expense, net											1,033
EBIT	$	12,030	$	3,211	$	(1,619	)	$	(10,214	)	3,408
Depreciation of property and equipment	1,905		127		1,060			—			3,092
Amortization of intangible assets	2,353		1,029		404			—			3,786
EBITDA	16,288		4,367		(155		)	(10,214		)	10,286
Foreign currency transaction losses on short-term intercompany balances	8		149		1			—			158
Acquisition obligations classified as compensation	—		—		195			—			195
Transformation severance and related expenses	113		78		327			—			518
Wage claim costs	577		—		—			—			577
Stock-based compensation	—		—		—			2,640			2,640
Adjusted EBITDA	$	16,986	$	4,594	$	368		$	(7,574	)	$	14,374