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Segment Disclosures and Concentrations of Risk
12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segment Disclosures and Concentrations of Risk

18.

Segment Disclosures and Concentrations of Risk

Background and Basis of Organization

 

Following the acquisition of Nutrisystem in March 2019, we organize and manage our operations within two reportable segments, based on the types of products and services they offer: Healthcare and Nutrition.  The Healthcare segment derives its revenues from SilverSneakers senior fitness, Prime Fitness and WholeHealth Living.  The Nutrition segment provides weight management products and services and derives its revenues from Nutrisystem and South Beach Diet products. Prior to the acquisition of Nutrisystem, we had one reportable segment.

 

Segment Revenues, Profit or Loss, and Assets

 

Our chief operating decision maker evaluates performance and allocates resources based on each segment’s EBITDA excluding acquisition and integration costs and restructuring and related charges.  The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies.  There are no intersegment revenues or costs.  Transactions between the segments consist of payments made by one segment on behalf of the other segment, which are recorded as current assets and eliminated in consolidation.  The following table presents information about reported segment revenues, profit or loss, and assets, as well as a reconciliation of each such amount to consolidated totals:

 

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year Ended December 31, 2019

 

 

 

 

Healthcare

 

 

Nutrition

 

 

Total Segments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenues

 

$

633,066

 

 

$

498,091

 

 

$

1,131,157

 

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated income (loss) before income taxes

 

 

 

 

 

 

 

 

 

$

(326,409

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisition and integration costs

 

 

 

 

 

 

 

 

 

 

37,068

 

 

Impairment loss

 

 

 

 

 

 

 

 

 

 

377,100

 

 

Restructuring and related charges

 

 

 

 

 

 

 

 

 

 

7,024

 

 

Interest expense

 

 

 

 

 

 

 

 

 

 

76,566

 

 

Depreciation and amortization

 

 

 

 

 

 

 

 

 

 

50,775

 

 

Adjusted EBITDA

 

$

142,561

 

 

$

79,563

 

 

$

222,124

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total assets as of December 31, 2019

 

$

526,013

 

 

$

1,099,892

 

 

$

1,625,905

 

(1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based employee compensation expense

 

$

5,602

 

 

$

13,230

 

 

 

18,832

 

(1)

Expenditures for long-lived assets

 

 

14,545

 

 

 

10,168

 

 

 

24,713

 

(1)

 

 

(1)

The figure for total segments equals the consolidated figure for each such item.

 

Geographic Information

Approximately 99.8% of our consolidated revenue from external customers was generated in the United States for the year ended December 31, 2019, and 100% of such revenue was generated in the United States for the years ended December 31, 2018 and 2017.

Major Customers

During 2019, we had one customer in our Healthcare segment that comprised approximately 13% of our consolidated revenues for 2019. No other customer accounted for 10% or more of our consolidated revenues in

2019. In addition, at December 31, 2019, we had two customers that each accounted for 10% or more of our consolidated accounts receivable, net and individually comprised approximately 16% and 31% of our consolidated accounts receivable, net at December 31, 2019.

During 2018, we had three customers that each accounted for 10% or more of our consolidated revenues and individually comprised approximately 20.0%, 14.6%, and 10.0%, respectively, of our revenues for 2018.  No other customer accounted for 10% or more of our consolidated revenues in 2018. In addition, at December 31, 2018, we had two customers that each accounted for 10% or more or our consolidated accounts receivable, net and individually comprised approximately 26% and 13% of our consolidated accounts receivable, net at December 31, 2018.

Dependence on Suppliers

In 2019, approximately 12% of inventory purchases in the Nutrition segment were from a single supplier. In the Nutrition segment, we outsource 100% of our fulfillment operations to a third-party provider. Additionally, approximately 97.5% of our direct to consumer orders are shipped by one third-party provider and approximately 91.2% of our orders for the retail programs are shipped by another third-party provider.