Segment Information | 11. Segment Information Operating segments are defined as components of a company that engage in business activities from which it may earn revenues and incur expenses, and for which separate financial information is available and is regularly reviewed by the Company’s chief operating decision makers, to assess the performance of the individual segments and make decisions about resources to be allocated to the segments. The Company operates as a multi-state provider of three distinct but related business segments providing in-home services. In its personal care segment, the Company provides non-medical assistance with activities of daily living, primarily to persons who are at increased risk of hospitalization or institutionalization, such as the elderly, chronically ill or disabled. In its hospice segment, the Company provides physical, emotional and spiritual care for people who are terminally ill as well as related services for their families. In its home health segment, the Company provides services that are primarily medical in nature to individuals who may require assistance during an illness or after hospitalization and include skilled nursing and physical, occupational and speech therapy. The tables below set forth information about the Company’s reportable segments for the three and six months ended June 30, 2020 and 2019 along with the items necessary to reconcile the segment information to the totals reported in the accompanying consolidated financial statements. Segment assets are not reviewed by the Company’s chief operating decision maker function and therefore are not disclosed below. Segment operating income consists of revenue generated by a segment, less the direct costs of service revenues and general and administrative expenses that are incurred directly by the segment. Unallocated general and administrative costs are those costs for functions performed in a centralized manner and therefore not attributable to a particular segment. These costs include accounting, finance, human resources, legal, information technology, corporate office support and facility costs and overall corporate management. For the Three Months Ended June 30, 2020 (Amounts in Thousands) Personal Care Hospice Home Health Total Net service revenues $ 156,268 $ 24,525 $ 3,783 $ 184,576 Cost of services revenues 115,822 10,924 2,833 129,579 Gross profit 40,446 13,601 950 54,997 General and administrative expenses 14,603 6,297 883 21,783 Segment operating income $ 25,843 $ 7,304 $ 67 $ 33,214 For the Three Months Ended June 30, 2019 (Amounts in Thousands) Personal Care Hospice Home Health Total Net service revenues $ 137,477 $ 8,437 $ 3,001 $ 148,915 Cost of services revenues 102,829 4,322 2,071 109,222 Gross profit 34,648 4,115 930 39,693 General and administrative expenses 12,777 1,548 656 14,981 Segment operating income $ 21,871 $ 2,567 $ 274 $ 24,712 For the Three Months Ended June 30, 2020 2019 (Amounts in Thousands) Segment reconciliation: Total segment operating income $ 33,214 $ 24,712 Items not allocated at segment level: Other general and administrative expenses 20,667 14,786 Depreciation and amortization 2,940 2,535 Interest income (155 ) (95 ) Interest expense 721 680 Income before income taxes $ 9,041 $ 6,806 For the Six Months Ended June 30, 2020 (Amounts in Thousands) Personal Care Hospice Home Health Total Net service revenues $ 316,933 $ 49,737 $ 8,122 $ 374,792 Cost of services revenues 234,850 23,242 5,868 263,960 Gross profit 82,083 26,495 2,254 110,832 General and administrative expenses 30,205 12,754 1,905 44,864 Segment operating income $ 51,878 $ 13,741 $ 349 $ 65,968 For the Six Months Ended June 30, 2019 (Amounts in Thousands) Personal Care Hospice Home Health Total Net service revenues $ 265,371 $ 16,354 $ 5,697 $ 287,422 Cost of services revenues 198,825 8,092 3,985 210,902 Gross profit 66,546 8,262 1,712 76,520 General and administrative expenses 25,316 3,138 1,343 29,797 Segment operating income $ 41,230 $ 5,124 $ 369 $ 46,723 For the Six Months Ended June 30, 2020 2019 (Amounts in Thousands) Segment reconciliation: Total segment operating income $ 65,968 $ 46,723 Items not allocated at segment level: Other general and administrative expenses 39,873 29,227 Depreciation and amortization 5,827 4,609 Interest income (489 ) (310 ) Interest expense 1,629 1,298 Income before income taxes $ 19,128 $ 11,899 |