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Segments (Notes)
12 Months Ended
Dec. 31, 2016
Segment Reporting [Abstract]  
Segments
Segments
On January 1, 2016, we acquired DMS Health. With the acquisition of DMS Health, we now operate the Company in four reportable segments:
1.Diagnostic Services
2.Diagnostic Imaging
3.Mobile Healthcare
4.Medical Device Sales and Service
Diagnostic Services. Through Diagnostic Services, we offer a convenient and economically efficient imaging and monitoring services program as an alternative to purchasing equipment or outsourcing the procedures to another physician or imaging center. For physicians who wish to perform nuclear imaging, echocardiography, vascular or general ultrasound tests, we provide the ability for them to engage our services, which includes the use of our imaging system, qualified personnel, and related items required to perform imaging in their own offices and bill Medicare, Medicaid, or one of the third-party healthcare insurers directly for those services. These services are primarily provided to smaller cardiology and related physician practice customers, though we do provide some services to hospital systems.
Diagnostic Imaging. Through Diagnostic Imaging, we sell our internally developed solid-state gamma cameras and camera maintenance contracts. Our systems include nuclear cardiac imaging and general purposes nuclear imaging as well. We sell our imaging systems to physician offices and hospitals primarily in the United States, although we have sold a small number of imaging systems internationally.
Mobile Healthcare. Through Mobile Healthcare, we provide contract diagnostic imaging, including PET, CT, MRI, and healthcare expertise to hospitals, integrated delivery networks (“IDNs”), and federal institutions on a long-term contract basis, but can also provide provisional services to institutions that are in transition. These services are provided primarily when there is a cost, ease and efficiency component of providing the services directly rather than owning and operating the related services and equipment directly by our customers.
Medical Device Sales and Service. Through Medical Device Sales and Service, we provide contract sales and service efforts with our exclusive contract with Philips Healthcare within a defined region in the upper Midwest region of the United States. We primarily sell Philips branded imaging and patient monitoring systems, and collect a commission on these sales, though we never take title to the underlying equipment. We also provide warranty and post-warranty services on certain Philips equipment within this territory related to equipment we have sold or other equipment sold in the territory.
Our reporting segments have been determined based on the nature of the products and/or services offered to customers or the nature of their function in the organization. For financial reporting purposes, our Digirad Imaging Solutions and Telerhythmics cardiac monitoring operating segments are aggregated within our Diagnostic Services reportable segment due to their similar economic and operational characteristics.
We evaluate performance based on the gross profit and operating income (loss) by each segment. Beginning in the first quarter of 2016, the definition of our segment operating income excludes transaction and integration costs of DMS Health. Prior periods have been recast to retroactively reflect this change. There were no other changes to our historical reportable segments as a result of the DMS Health acquisition beyond creating the reportable segments Mobile Healthcare and Medical Device Sales and Services. We do not identify or allocate assets by operating segment. Accordingly, assets are not being reported by segment because the information is not available by segment and is not reviewed in the evaluation of performance or making decisions in the allocation of resources. Summarized annual data for segments are as follows (in thousands):
 
 
Year ended December 31,
 
 
2016 (1)
 
2015 (2)
 
2014 (3)(4)
Revenue by segment:
 
 
 
 
 
 
Diagnostic Services
 
$
48,305

 
$
46,407

 
$
42,170

Diagnostic Imaging
 
13,870

 
14,419

 
13,438

Mobile Healthcare
 
47,206

 

 

Medical Device Sales and Service
 
16,086

 

 

Consolidated revenue
 
$
125,467

 
$
60,826

 
$
55,608

Gross profit by segment:
 
 
 
 
 
 
Diagnostic Services
 
$
10,486

 
$
10,439

 
$
10,449

Diagnostic Imaging
 
7,116

 
7,470

 
6,191

Mobile Healthcare
 
9,510

 

 

Medical Device Sales and Service
 
8,661

 

 

Consolidated gross profit
 
$
35,773

 
$
17,909

 
$
16,640

Income (loss) from operations by segment:
 
 
 
 
 
 
Diagnostic Services
 
$
220

 
$
372

 
$
220

Diagnostic Imaging
 
2,581

 
3,740

 
2,298

Mobile Healthcare
 
(101
)
 

 

Medical Device Sales and Service
 
2,306

 

 

Segment income from operations
 
5,006

 
4,112

 
2,518

Unallocated items (5)
 
(1,921
)
 
(1,338
)
 

Consolidated income from operations
 
3,085

 
2,774

 
2,518

Other income (expense), net
 
212

 
(233
)
 
2

Interest (expense) income, net
 
(1,412
)
 
(24
)
 
17

Consolidated income before income taxes
 
$
1,885

 
$
2,517

 
$
2,537

 
 
 
 
 
 
 
Depreciation and amortization of tangible and intangible assets by segment:
 
 
 
 
 
 
Diagnostic Services
 
$
2,880

 
$
2,150

 
$
1,672

Diagnostic Imaging
 
244

 
291

 
263

Mobile Healthcare
 
5,736

 

 

Medical Device Sales and Service
 
1,029

 

 

Consolidated depreciation and amortization
 
$
9,889

 
$
2,441

 
$
1,935


(1) On January 1, 2016, we acquired DMS Health. The results of DMS Health are included in Mobile Healthcare and Medical Device Sales and Service since the acquisition date (See Note 3).
(2) On March 5, 2015, we acquired MD Office. The results of MD Office are included in Diagnostic Services since the acquisition date (See Note 3).
(3) On March 13, 2014, we acquired 100% of the membership interest of Telerhythmics. The results of Telerhythmics are included in Diagnostic Services since the acquisition date.
(4) Included in the Diagnostic Imaging income from operations for the year ended December 31, 2014, are approximately $0.7 million of charges associated with various restructuring initiatives.
(5)  
Includes transaction and integration costs associated with the DMS Health acquisition.
Geographic Information. The Company's sales to customers located outside the United States for the years ended December 31, 2016, 2015, and 2014 was $0.8 million, $0.7 million, and $0.6 million, respectively. All of our long-lived assets are located in the United States.