Note 13 - Segment and Geographical Information

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

(13)           Segment and Geographical Information

The Company applies the provisions of ASC Topic 280, Segment Reporting, (“ASC 280”). ASC 280, which is based on a management approach to segment reporting, establishes requirements to report selected segment information quarterly and to report annually entity-wide disclosures about products, major customers and the geographies in which the entity holds material assets and reports revenue. An operating segment is defined as a component that engages in business activities whose operating results are reviewed by the chief operating decision maker (“CODM”) and for which discrete financial information is available. Based on the provisions of ASC 280, the Company has determined that it operates in four geographic segments: the United States, Canada, the United Kingdom and Australia. The CODM evaluates segment performance based on revenues and segment profit, as defined below. The Company’s corporate costs and assets are all incurred in the United States and are included in the United States segment, as this is consistent with how they are presented and reviewed by the CODM. The accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.

Information relating to the Company’s product groups (IMEs, peer review, bill review, Medicare compliance and other related services) is as follows (in thousands):

Revenues:	For the three months ended March 31,
	2013		2014
IME and other related services (1)	$	137,334	$	154,540
Peer and bill reviews and Medicare compliance services (1)		11,369		18,488
Total revenues	$	148,703	$	173,028

(1) Includes the results of certain of the Company’s service centers acquired whose revenues are generated substantially through the indicated product group. Outside of this presentation, other product groups are not tracked within the Company’s financial systems. Additionally, other related services, which include any Medicare compliance services completed at the Company’s historic service centers in the periods presented, are not separately captured within the Company’s financial systems and have been included with IME services in the above presentation as separate presentation is not practicable. With the Company’s acquisition of Gould & Lamb in February of 2014, Medicare compliance services related to this business have been included with Peer and bill reviews in the presentation above. None of the individual services within the peer and bill reviews and Medical compliance services category above represent more than 10% of consolidated revenues.

Information relating to the Company’s geographic segments is as follows (in thousands)(1)(2): 

	United States			Canada			United Kingdom			Australia			Total
2013
Revenues	$	91,178		$	7,421		$	33,767		$	16,337		$	148,703
Segment profit		10,919			1,285			6,844			3,957			23,005
Depreciation and amortization expense		8,623			2,037			3,042			2,624			16,326
Capital expenditures		(919	)		(11	)		(736	)		(104	)		(1,770	)
Total assets (3)		398,040			40,321			190,671			102,578			731,610
Long-lived assets (3)		329,947			31,995			92,642			92,189			546,773
2014
Revenues	$	106,049		$	7,507		$	42,053		$	17,419		$	173,028
Segment profit		15,954			1,098			7,081			3,877			28,010
Depreciation and amortization expense		7,720			811			3,175			2,636			14,342
Capital expenditures		(402	)		—			(290	)		(20	)		(712	)
Total assets (3)		488,362			28,293			230,597			100,373			847,625
Long-lived assets (3)		403,354			21,169			105,373			88,856			618,752

(1) For segment purposes, the Company defines segment profit as earnings before interest expenses, income taxes, depreciation and amortization, share-based compensation expenses, acquisition related transaction costs and other expenses. A consolidated reconciliation from segment profit to income from operations is included below.

(2) Long-lived assets are noncurrent assets excluding deferred tax assets and deferred financing costs.

(3) Total assets and long-lived assets include goodwill. Goodwill recorded in connection with certain tax benefits to be realized in the Company’s U.S. income tax returns has been reflected in the United States segment.

A reconciliation of segment profit to consolidated income from operations is as follows (in thousands):

	For the three months ended March 31,
	2013			2014
Segment Profit		23,005			28,010
Depreciation and amortization		(16,326	)		(14,342	)
Share-based compensation expense		(4,131	)		(5,353	)
Acquisition related transaction costs		(449	)		(1,192	)
Other expenses		(363	)		—
Income from operations	$	1,736		$	7,123