Note 13 - Segment and Geographical Information

12 Months Ended

Dec. 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 Topic 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, case management and other related services) is as follows (in thousands):

Revenues:	For the years ended December 31,
	2012		2013		2014
IME and other related services (1)	$	476,847	$	567,070	$	674,229
Peer and bill reviews, Medicare compliance and case management services (1)		44,390		48,946		101,386
Total revenues	$	521,237	$	616,016	$	775,615

(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 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.

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

	United						United
	States			Canada			Kingdom			Australia			Total
2012
Revenues	$	340,200		$	27,595		$	131,278		$	22,164		$	521,237
Segment profit		44,515			4,942			24,810			5,522			79,789
Depreciation and amortization expense		34,338			8,381			12,341			3,491			58,551
Capital expenditures		(5,071	)		(164	)		(564	)		(42	)		(5,841	)
Total assets (3)		398,163			42,223			196,365			103,750			740,501
Long-lived assets (3)		337,831			34,919			99,140			94,291			566,181
2013
Revenues	$	374,817		$	31,131		$	143,418		$	66,650		$	616,016
Segment profit		46,934			5,137			29,439			15,951			97,461
Depreciation and amortization expense		31,787			9,518			11,566			9,877			62,748
Capital expenditures		(3,197	)		(19	)		(1,781	)		(1,547	)		(6,544	)
Total assets (3)		396,635			30,061			221,681			84,136			732,513
Long-lived assets (3)		315,748			23,056			100,796			72,979			512,579
2014
Revenues	$	468,419		$	32,889		$	189,755		$	84,552		$	775,615
Segment profit		76,065			4,673			32,921			18,481			132,140
Depreciation and amortization expense		34,302			2,824			12,048			11,106			60,280
Capital expenditures		(7,687	)		(37	)		(1,254	)		(1,916	)		(10,894	)
Total assets (3)		577,974			25,807			239,260			87,103			930,144
Long-lived assets (3)		473,800			18,178			96,635			73,721			662,334

(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):

	2012			2013			2014
Segment Profit	$	79,789		$	97,461		$	132,140
Depreciation and amortization		(58,551	)		(62,748	)		(60,280	)
Share-based compensation expense		(13,756	)		(17,157	)		(20,024	)
Acquisition related transaction costs		(1,655	)		(2,134	)		(3,535	)
Other expenses		(702	)		(1,353	)		(1,201	)
Income from operations	$	5,125		$	14,069		$	47,100