Lines of Business

6 Months Ended

Jun. 30, 2011

Lines of Business [Abstract]

Lines of Business

9. Lines of Business

     Our reportable segments are Animal Hospital, Laboratory and Medical Technology. These segments are strategic business units that have different services, products and/or functions. The segments are managed separately because each is a distinct and different business venture with unique challenges, risks and rewards. Our Animal Hospital segment provides veterinary services for companion animals and sells related retail and pharmaceutical products. Our Laboratory segment provides diagnostic laboratory testing services for veterinarians, both associated with our animal hospitals and those independent of us. Our Medical Technology segment sells digital radiography and ultrasound imaging equipment, related computer hardware, software and ancillary services to the veterinary market. We also operate a corporate office that provides general and administrative support services for our other segments.

     The accounting policies of our segments are essentially the same as those described in the summary of significant accounting policies included in our 2010 Annual Report on Form 10-K. We evaluate the performance of our segments based on gross profit and operating income. For purposes of reviewing the operating performance of our segments all intercompany sales and purchases are generally accounted for as if they were transactions with independent third parties at current market prices.

     The following is a summary of certain financial data for each of our segments (in thousands):

	Animal					Medical					Intercompany
	Hospital			Laboratory		Technology		Corporate			Eliminations			Total
Three Months Ended June 30, 2011
External revenue	$	291,332		$	72,955	$	11,818	$	—		$	—		$	376,105
Intercompany revenue		—			11,430		4,391		—			(15,821	)		—
Total revenue		291,332			84,385		16,209		—			(15,821	)		376,105
Direct costs		238,392			43,716		11,419		—			(14,254	)		279,273
Gross profit		52,940			40,669		4,790		—			(1,567	)		96,832
Selling, general and administrative expense		6,044			6,853		3,584		10,182			—			26,663
Net loss on sale and disposal of assets		51			7		2		—			—			60
Operating income (loss)	$	46,845		$	33,809	$	1,204	$	(10,182	)	$	(1,567	)	$	70,109
Depreciation and amortization	$	9,533		$	2,508	$	668	$	685		$	(318	)	$	13,076
Capital expenditures	$	13,236		$	1,728	$	258	$	1,627		$	(449	)	$	16,400
Three Months Ended June 30, 2010
External revenue	$	267,595		$	73,259	$	13,065	$	—		$	—		$	353,919
Intercompany revenue		—			9,713		1,537		—			(11,250	)		—
Total revenue		267,595			82,972		14,602		—			(11,250	)		353,919
Direct costs		218,567			42,416		10,255		—			(10,803	)		260,435
Gross profit		49,028			40,556		4,347		—			(447	)		93,484
Selling, general and administrative expense		5,673			6,527		3,404		25,441			—			41,045
Net (gain) loss on sale and disposal of assets		(35	)		—		14		7			—			(14	)
Operating income (loss)	$	43,390		$	34,029	$	929	$	(25,448	)	$	(447	)	$	52,453
Depreciation and amortization	$	7,630		$	2,396	$	605	$	618		$	(250	)	$	10,999
Capital expenditures	$	9,849		$	1,506	$	124	$	858		$	(461	)	$	11,876

	Animal					Medical					Intercompany
	Hospital			Laboratory		Technology		Corporate			Eliminations			Total
Six Months Ended June 30, 2011
External revenue	$	561,273		$	142,051	$	27,904	$	—		$	—		$	731,228
Intercompany revenue		—			21,883		7,401		—			(29,284	)		—
Total revenue		561,273			163,934		35,305		—			(29,284	)		731,228
Direct costs		468,780			86,535		26,057		—			(26,754	)		554,618
Gross profit		92,493			77,399		9,248		—			(2,530	)		176,610
Selling, general and administrative expense		12,127			13,489		7,140		20,090			—			52,846
Net loss on sale and disposal of assets		129			18		2		—			—			149
Operating income (loss)	$	80,237		$	63,892	$	2,106	$	(20,090	)	$	(2,530	)	$	123,615
Depreciation and amortization	$	19,406		$	4,979	$	1,325	$	1,365		$	(619	)	$	26,456
Capital expenditures	$	22,771		$	2,964	$	1,017	$	2,585		$	(903	)	$	28,434
Six Months Ended June 30, 2010
External revenue	$	514,263		$	142,659	$	27,731	$	—		$	—		$	684,653
Intercompany revenue		—			18,493		2,668		—			(21,161	)		—
Total revenue		514,263			161,152		30,399		—			(21,161	)		684,653
Direct costs		423,558			84,068		21,221		—			(20,473	)		508,374
Gross profit		90,705			77,084		9,178		—			(688	)		176,279
Selling, general and administrative expense		11,260			12,681		6,919		36,325			—			67,185
Net (gain) loss on sale and disposal of assets		(51	)		1		54		7			—			11
Operating income (loss)	$	79,496		$	64,402	$	2,205	$	(36,332	)	$	(688	)	$	109,083
Depreciation and amortization	$	14,982		$	4,809	$	1,206	$	1,199		$	(490	)	$	21,706
Capital expenditures	$	22,977		$	2,338	$	206	$	3,185		$	(781	)	$	27,925
At June 30, 2011
Total assets	$	1,338,034		$	228,571	$	64,851	$	229,608		$	(17,652	)	$	1,843,412
At December 31, 2010
Total assets	$	1,320,619		$	215,483	$	69,082	$	175,297		$	(14,059	)	$	1,766,422