Segment Information

6 Months Ended

Jun. 30, 2011

Segment Information

Segment Information

Note 5 – Segment Information

Reportable Operating Segments

We manage and evaluate our operations in two reportable segments. The two reportable segments are Housekeeping (housekeeping, laundry, linen and other services), and Dietary (dietary department services). Although both segments serve the same client base and share many operational similarities, they are managed separately due to distinct differences in the type of service provided, as well as the specialized expertise required of the professional management personnel responsible for delivering the respective segment's services. We consider the various services provided within each reportable segment to comprise an identifiable reportable operating segment since such services are rendered pursuant to a single service agreement, specific to that reportable segment, as well as the fact that the delivery of the respective reportable segment's services are managed by the same management personnel of the particular reportable segment.

Differences between the reportable segments' operating results and other disclosed data as compared with our consolidated financial statements relate primarily to corporate level transactions and recording of transactions at the reportable segment level which use methods other than U.S. GAAP. Additionally, included in the differences between the reportable segments' operating results and other disclosed data are amounts attributable to Huntingdon, our investment holding company subsidiary. Huntingdon does not transact any business with the reportable segments. Segment amounts disclosed are prior to any elimination entries made in consolidation.

Housekeeping provides services in Canada, although essentially all of its revenues and net income, 99% in both categories, are earned in one geographic area, the United States. Dietary provides services solely in the United States.

	Housekeeping Services		Dietary Services		Corporate and Eliminations			Total
Quarter Ended June 30, 2011
Revenues	$	158,681,000	$	52,897,000	$	(71,000	)(1)	$	211,507,000
Income before income taxes		16,195,000		2,521,000		(3,999,000	)(1)		14,717,000
Quarter Ended June 30, 2010
Revenues	$	149,519,000	$	43,420,000	$	15,000	(1)	$	192,954,000
Income before income taxes		14,492,000		2,119,000		(2,430,000	)(1)		14,181,000
Six Months Ended June 30, 2011
Revenues	$	315,143,000	$	104,554,000	$	200,000	(1)	$	419,897,000
Income before income taxes		33,390,000		5,990,000		(12,324,000	)(1)		27,056,000
Six Months Ended June 30, 2010
Revenues	$	290,415,000	$	86,374,000	$	(34,000	)(1)	$	376,755,000
Income before income taxes		29,350,000		4,309,000		(7,401,000	)(1)		26,258,000

⁽¹⁾  Represents primarily corporate office cost and related overhead, recording of transactions at the reportable segment level which use methods other than U.S. GAAP and consolidated subsidiaries' operating expenses that are not allocated to the reportable segments, net of investment and interest income.

Total Consolidated Revenues from Clients

The following revenues earned from clients represent their reporting in accordance with U.S. GAAP and differ from segment revenues reported above due to the inclusion of adjustments used for segment reporting purposes by management as noted on the previous page's table. We earned total revenues from clients in the following service categories:

	Quarter Ended June 30,
	2011		2010
Housekeeping services	$	106,715,000	$	100,680,000
Laundry and linen services		51,266,000		48,591,000
Dietary services		52,922,000		43,115,000
Maintenance services and other		604,000		568,000
	$	211,507,000	$	192,954,000
	Six Months Ended June 30,
	2011		2010
Housekeeping services	$	212,463,000	$	195,335,000
Laundry and linen services		101,440,000		94,126,000
Dietary services		104,772,000		86,202,000
Maintenance services and other		1,222,000		1,092,000
	$	419,897,000	$	376,755,000

Major Client

We have one client, a nursing home chain ("Major Client"), which accounted for the respective percentages of our revenues as detailed below:

	Quarter Ended June 30,
	2011			2010
Total revenues		9	%		11	%
Housekeeping		11	%		11	%
Dietary services		5	%		9	%
	Six Months Ended June 30,
	2011			2010
Total revenues		9	%		11	%
Housekeeping		11	%		11	%
Dietary services		6	%		9	%

Additionally, at both June 30, 2011 and December 31, 2010, amounts due from such client represented less than 1% of our accounts receivable balance. The loss of such client, or a significant reduction in revenues from such client, would have a material adverse effect on the results of operations of our two operating segments. In addition, if such client changes its payment terms it would increase our accounts receivable balance and have a material adverse effect on our cash flows and cash and cash equivalents.