Segment Information

9 Months Ended

Sep. 30, 2017

Segment Information

Segment Information

12.Segment Information

Our reporting segments consist of Medical Equipment Solutions (“MES”), Clinical Engineering Solutions (“CES”) and Surgical Services (“SS”). Certain operating information for our segments as well as a reconciliation of total Company gross margin to loss before income taxes and noncontrolling interest was as follows:

Medical Equipment Solutions

(in thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Revenues	$	70,714	$	73,463	$	223,769	$	228,633
Cost of revenue		32,945		33,146		100,156		104,640
Medical equipment depreciation		13,005		14,008		39,750		42,389
Gross margin	$	24,764	$	26,309	$	83,863	$	81,604

Clinical Engineering Solutions

(in thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Revenues	$	34,173	$	26,926	$	103,938	$	77,968
Cost of revenue		26,766		21,278		81,156		61,946
Gross margin	$	7,407	$	5,648	$	22,782	$	16,022

Surgical Services

(in thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Revenues	$	18,885	$	17,559	$	54,926	$	51,091
Cost of revenue		9,932		9,461		29,363		27,183
Medical equipment depreciation		1,760		1,537		5,072		4,403
Gross margin	$	7,193	$	6,561	$	20,491	$	19,505

Total Gross Margin and Reconciliation to Loss Before Income Taxes and Noncontrolling Interest

(in thousands)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
Total gross margin	$	39,364	$	38,518	$	127,136	$	117,131
Selling, general and administrative		28,794		28,757		93,742		88,853
(Gain) on settlement		—		—		—		(2,750)
Interest expense		13,284		13,081		39,796		39,210
Loss before income taxes and noncontrolling interest	$	(2,714)	$	(3,320)	$	(6,402)	$	(8,182)

Total Assets by Reporting Segment

(in thousands)

	September 30,		December 31,
	2017		2016
Medical Equipment Solutions	$	559,181	$	584,597
Clinical Engineering Solutions		131,654		131,537
Surgical Services		103,998		101,989
Total Company Assets	$	794,833	$	818,123

The following table provides additional detail on percentage of revenue for each group of similar products sold or services provided in the MES, CES and SS segments:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
MES
Equipment usage solutions	55.5	%	59.1	%	56.6	%	60.0	%
Equipment/disposable sales	1.6		3.2		1.8		3.9
	57.1		62.3		58.4		63.9
CES
Service solutions	27.6		22.8		27.2		21.8
SS
Equipment usage solutions	15.1		14.7		14.2		14.1
Equipment/disposable sales	0.2		0.2		0.2		0.2
	15.3		14.9		14.4		14.3
Total revenues	100.0	%	100.0	%	100.0	%	100.0	%