Lines of Business

12 Months Ended

Dec. 31, 2011

Lines of Business [Abstract]

Lines of Business

14. Lines of Business

Our reportable segments are Animal Hospital and Laboratory. 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 other operating segments included in “All Other” in the following tables are our medical technology business, which sells digital radiography and ultrasound imaging equipment, related computer hardware, software and ancillary services to the veterinary market and our Vetstreet business, which provides online communications, professional education, marketing solutions to the veterinary community and an ecommerce platform for independent animal hospitals. These operating segments do not meet the quantitative requirements for reportable segments. Our operating 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. We also operate a corporate office that provides general and administrative support services for our other segments. Although we have animal hospitals and laboratories in Canada, we have not disclosed any geographic segment information as our Canadian operations are immaterial to our financial statements as a whole.

The accounting policies of our segments are the same as those described in the summary of significant accounting policies included in Note 2, Summary of Significant Accounting Policies. 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 Hospital		Laboratory		All Other			Corporate			Intercompany Eliminations			Total
2011
External revenue	$	1,150,120	$	272,468	$	62,773		$	—		$	—		$	1,485,361
Intercompany revenue		—		44,329		17,657			—			(61,986	)		—
Total revenue		1,150,120		316,797		80,430			—			(61,986	)		1,485,361
Direct costs		970,310		173,007		59,459			—			(55,872	)		1,146,904
Gross profit		179,810		143,790		20,971			—			(6,114	)		338,457
Selling, general and administrative expense		24,342		27,864		19,136			49,770			—			121,112
Goodwill impairment		—		—		21,310			—			—			21,310
Net loss on sale of assets		327		21		27			7			—			382
Operating income (loss)	$	155,141	$	115,905	$	(19,502	)	$	(49,777	)	$	(6,114	)	$	195,653
Depreciation and amortization	$	40,319	$	10,111	$	5,022		$	2,853		$	(1,317	)	$	56,988
Capital expenditures	$	45,753	$	6,082	$	6,448		$	7,299		$	(2,097	)	$	63,485
Total assets at December 31, 2011	$	1,439,103	$	232,423	$	202,187		$	142,793		$	(21,138	)	$	1,995,368
2010
External revenue	$	1,052,462	$	273,616	$	55,390		$	—		$	—		$	1,381,468
Intercompany revenue		—		37,038		8,623			—			(45,661	)		—
Total revenue		1,052,462		310,654		64,013			—			(45,661	)		1,381,468
Direct costs		880,072		168,458		44,736			—			(42,962	)		1,050,304
Gross profit		172,390		142,196		19,277			—			(2,699	)		331,164
Selling, general and administrative expense		23,539		26,243		14,507			59,252			—			123,541
Net loss on sale of assets		273		22		71			8			—			374
Operating income (loss)	$	148,578	$	115,931	$	4,699		$	(59,260	)	$	(2,699	)	$	207,249
Depreciation and amortization	$	32,456	$	9,738	$	2,437		$	2,474		$	(1,036	)	$	46,069
Capital expenditures	$	52,243	$	5,176	$	857		$	5,516		$	(1,841	)	$	61,951
Total assets at December 31, 2010	$	1,320,619	$	215,483	$	69,082		$	175,297		$	(14,059	)	$	1,766,422
2009
External revenue	$	994,215	$	277,528	$	42,764		$	—		$	—		$	1,314,507
Intercompany revenue		—		32,529		5,793			—			(38,322	)		—
Total revenue		994,215		310,057		48,557			—			(38,322	)		1,314,507
Direct costs		810,517		166,565		32,721			—			(36,528	)		973,275
Gross profit		183,698		143,492		15,836			—			(1,794	)		341,232
Selling, general and administrative expense		21,174		22,895		12,885			38,715			—			95,669
Net loss on sale of assets		652		11		11			3,361			—			4,035
Operating income (loss)	$	161,872	$	120,586	$	2,940		$	(42,076	)	$	(1,794	)	$	241,528
Depreciation and amortization	$	26,769	$	9,325	$	2,000		$	2,307		$	(830	)	$	39,571
Capital expenditures	$	40,137	$	7,518	$	919		$	3,994		$	(1,767	)	$	50,801
Total assets at December 31, 2009	$	1,158,891	$	207,043	$	71,019		$	201,024		$	(10,573	)	$	1,627,404