Note 13 - Segment and Geographical Information

6 Months Ended

Jun. 30, 2015

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

Revenues:	For the three months ended June 30,				For the six months ended June 30,
	2014		2015		2014		2015
IME and other related services (1)	$	172,968	$	175,488	$	327,508	$	342,833
Peer and bill reviews, Medicare compliance services and case management services (1)		23,477		33,250		41,965		62,221
Total revenues	$	196,445	$	208,738	$	369,473	$	405,054

(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 and case management 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 and Ability Services Network and MedAllocators in June of 2014, Medicare compliance services and case management services have been added to the presentation above. None of the individual services within the peer and bill reviews, Medicare compliance services and case management services category above represent more than 10% of consolidated revenues.

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

	United						United
	States			Canada			Kingdom			Australia			Total
Three months ended June 30, 2014
Revenues	$	117,343		$	8,578		$	48,665		$	21,859		$	196,445
Segment profit		20,629			1,165			8,378			4,407			34,579
Depreciation and amortization expense		8,169			711			3,094			2,885			14,858
Capital expenditures		(2,462	)		(8	)		(228	)		(201	)		(2,899	)
Six months ended June 30, 2014
Revenues	$	223,392		$	16,085		$	90,718		$	39,278		$	369,473
Segment profit		36,583			2,263			15,459			8,284			62,589
Depreciation and amortization expense		15,888			1,522			6,269			5,521			29,200
Capital expenditures		(2,864	)		(9	)		(517	)		(220	)		(3,610	)
Total assets (3)		575,153			28,904			244,176			101,459			949,692
Long-lived assets (2)(3)		486,176			21,411			107,338			88,826			703,751
Three months ended June 30, 2015
Revenues	$	132,125		$	9,672		$	46,012		$	20,929		$	208,738
Segment profit		22,752			1,350			7,482			4,773			36,357
Depreciation and amortization expense		9,071			108			2,097			2,453			13,729
Capital expenditures		(1,653	)		(55	)		(245	)		(661	)		(2,614	)
Six months ended June 30, 2015
Revenues	$	253,843		$	17,621		$	93,456		$	40,134		$	405,054
Segment profit		42,274			1,984			15,182			8,869			68,309
Depreciation and amortization expense		18,482			690			4,480			4,925			28,577
Capital expenditures		(3,323	)		(169	)		(434	)		(917	)		(4,843	)
Total assets (3)		699,371			24,212			251,876			85,726			1,061,185
Long-lived assets (2)(3)		472,161			16,041			97,286			67,077			652,565

(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 June 30,						For the six months ended June 30,
	2014			2015			2014			2015
Segment Profit	$	34,579		$	36,357		$	62,589		$	68,309
Depreciation and amortization		(14,858	)		(13,729	)		(29,200	)		(28,577	)
Share-based compensation expense		(4,627	)		(6,565	)		(9,980	)		(12,701	)
Acquisition related transaction costs		(762	)		(134	)		(1,954	)		248
Other expenses		(186	)		(66	)		(186	)		(276	)
Income from operations	$	14,146		$	15,863		$	21,269		$	27,003