Lines of Business

3 Months Ended

Mar. 31, 2015

Segment Reporting [Abstract]

Lines of Business

Lines of Business

Our Animal Hospital and Laboratory business segments are each considered reportable segments in accordance with the FASB's guidance related to Segment Reporting. 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 the “All Other” category 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, our Vetstreet business, which provides online and printed communications, professional education, marketing solutions to the veterinary community and an ecommerce platform for independent animal hospitals, and our Camp Bow Wow business, which primarily franchises a premier provider of pet services including dog day care, overnight boarding, grooming and other ancillary services at specially designed pet care facilities. 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.

The accounting policies of our segments are the same as those described in the summary of significant accounting policies included in our 2014 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.

7. Lines of Business, continued

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

	Animal Hospital		Laboratory			All Other			Corporate			Eliminations			Total
Three Months Ended March 31, 2015
External revenue	$	393,026	$	78,809		$	26,533		$	—		$	1,085		$	499,453
Intercompany revenue	—		15,163			7,694			—			(22,857		)	—
Total revenue	393,026		93,972			34,227			—			(21,772		)	499,453
Direct costs	337,542		45,990			22,803			—			(20,744		)	385,591
Gross profit	55,484		47,982			11,424			—			(1,028		)	113,862
Selling, general and administrative expense	11,221		8,865			8,687			15,625			—			44,398
Operating income (loss) before sale or disposal of assets	44,263		39,117			2,737			(15,625		)	(1,028		)	69,464
Net loss on sale or disposal of assets	294		6			9			26			—			335
Operating income (loss)	$	43,969	$	39,111		$	2,728		$	(15,651	)	$	(1,028	)	$	69,129
Depreciation and amortization	$	16,072	$	2,504		$	1,152		$	592		$	(523	)	$	19,797
Property and equipment additions	$	12,082	$	3,216		$	800		$	1,064		$	(636	)	$	16,526
Three Months Ended March 31, 2014
External revenue	$	351,588	$	74,783		$	22,201		$	—		$	935		$	449,507
Intercompany revenue	—		13,751			5,920			—			(19,671		)	—
Total revenue	351,588		88,534			28,121			—			(18,736		)	449,507
Direct costs	302,788		45,503			18,152			—			(18,387		)	348,056
Gross profit	48,800		43,031			9,969			—			(349		)	101,451
Selling, general and administrative expense	9,128		8,018			8,348			15,946			—			41,440
Operating income (loss) before sale or disposal of assets	39,672		35,013			1,621			(15,946		)	(349		)	60,011
Net loss (gain) on sale or disposal of assets	168		(71		)	(1,184		)	(134		)	—			(1,221		)
Operating income (loss)	$	39,504	$	35,084		$	2,805		$	(15,812	)	$	(349	)	$	61,232
Depreciation and amortization	$	14,742	$	2,535		$	2,136		$	819		$	(465	)	$	19,767
Property and equipment additions	$	13,068	$	1,981		$	758		$	1,411		$	(599	)	$	16,619

At March 31, 2015
Total assets	$	2,037,578	$	294,826	$	85,645	$	273,051	$	(366,098	)	$	2,325,002
At December 31, 2014
Total assets	$	2,021,725	$	258,550	$	89,596	$	270,414	$	(308,265	)	$	2,332,020