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SEGMENT AND RELATED INFORMATION
 6 Months Ended
Jun. 30, 2011
SEGMENT AND RELATED INFORMATION  
SEGMENT AND RELATED INFORMATION

 

 

NOTE L — SEGMENT AND RELATED INFORMATION

 

The Company has identified three reportable segments in which it operates based on the products and services it provides. The Company evaluates segment performance and allocates resources based on the segments’ income from operations. In December 2010, as a result of the acquisition of ACP, the Company realigned its reportable segments and identified the third operating segment. Therapeutic Solutions includes ACP and IN, Inc., which previously was included in Other. The results of IN, Inc. have been reclassified to Therapeutic Solutions in all years presented.

 

The reportable segments are: (i) Patient-Care Services (ii) Distribution, and (iii) Therapeutic Solutions. The reportable segments are described further below:

 

Patient-Care Services—This segment consists of the Company’s owned and operated patient-care centers and fabrication centers of O&P components. The patient-care centers provide services to design and fit O&P devices to patients. These centers also instruct patients in the use, care and maintenance of the devices. Fabrication centers are involved in the fabrication of O&P components for both the O&P industry and the Company’s own patient-care centers.

 

Distribution—This segment distributes O&P products and components to both the O&P industry and the Company’s own patient-care practices.

 

Therapeutic Solutions—This segment consists of the leasing of rehabilitation equipment by ACP as well the operations of IN, Inc. ACP is a developer of specialized rehabilitation technologies and provides evidence-based clinical programs for post-acute rehabilitation. IN, Inc. specializes in bringing emerging MyoOrthotics Technologies® to the O&P market. MyoOrthotics Technologies represents the merging of orthotic technologies with electrical stimulation.

 

Other—This consists of Hanger corporate and Linkia. Linkia is a national managed-care agent for O&P services and a patient referral clearing house.

 

The accounting policies of the segments are the same as those described in the summary of “Significant Accounting Policies” in Note B to the consolidated financial statements.

 

Summarized financial information concerning the Company’s reportable segments is shown in the following table. Intersegment sales mainly include sales of O&P components from the Distribution segment to the Patient-Care Services segment and were made at prices which approximate market values.

 

(In thousands)

 

Patient-Care
Services

 

Distribution

 

Therapeutic
Solutions

 

Other

 

Consolidating
Adjustments

 

Total

 

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

192,976

 

$

25,578

 

$

16,067

 

$

130

 

$

—

 

$

234,751

 

Intersegments

 

—

 

48,940

 

986

 

—

 

(49,926

)

—

 

Depreciation and amortization

 

3,029

 

299

 

2,575

 

1,793

 

—

 

7,696

 

Income (loss) from operations

 

39,005

 

7,479

 

811

 

(14,371

)

(42

)

32,882

 

Interest (income) expense

 

7,094

 

848

 

1,440

 

(1,591

)

—

 

7,791

 

Income (loss) before taxes

 

31,911

 

6,631

 

(628

)

(12,781

)

(42

)

25,091

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 30, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

181,160

 

$

24,230

 

$

351

 

$

67

 

$

—

 

$

205,808

 

Intersegments

 

—

 

43,282

 

982

 

154

 

(44,418

)

—

 

Depreciation and amortization

 

2,845

 

261

 

106

 

1,248

 

—

 

4,460

 

Income (loss) from operations

 

35,622

 

7,727

 

(1,484

)

(18,678

)

(39

)

23,148

 

Interest (income) expense

 

7,094

 

855

 

—

 

(443

)

—

 

7,506

 

Income (loss) before taxes

 

28,527

 

6,872

 

(1,484

)

(18,234

)

(39

)

15,642

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2011

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

353,527

 

$

49,038

 

$

32,323

 

$

302

 

$

—

 

$

435,190

 

Intersegments

 

—

 

90,567

 

1,732

 

—

 

(92,299

)

—

 

Depreciation and amortization

 

5,990

 

583

 

5,077

 

3,338

 

—

 

14,988

 

Income (loss) from operations

 

61,378

 

14,366

 

1,562

 

(26,099

)

60

 

51,267

 

Interest (income) expense

 

14,210

 

1,697

 

2,880

 

(2,617

)

—

 

16,170

 

Income (loss) before taxes

 

47,168

 

12,669

 

(1,318

)

(23,482

)

60

 

35,097

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

7,058

 

630

 

2,006

 

5,575

 

—

 

15,269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2010

 

 

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

 

Customers

 

$

337,206

 

$

46,047

 

$

664

 

$

207

 

$

—

 

$

384,124

 

Intersegments

 

—

 

81,436

 

2,119

 

—

 

(83,555

)

—

 

Depreciation and amortization

 

5,619

 

502

 

220

 

2,430

 

—

 

8,771

 

Income (loss) from operations

 

60,057

 

13,861

 

(2,961

)

(33,514

)

(83

)

37,360

 

Interest (income) expense

 

14,183

 

1,706

 

—

 

(841

)

—

 

15,048

 

Income (loss) before taxes

 

45,874

 

12,155

 

(2,961

)

(32,673

)

(83

)

22,312

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital expenditures

 

9,938

 

755

 

666

 

2,381

 

—

 

13,740

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2011

 

1,216,050

 

157,570

 

138,020

 

(448,668

)

—

 

1,062,972

 

December 31, 2010

 

1,054,270

 

146,166

 

142,970

 

(281,927

)

—

 

1,061,479