Segment Information | 10. Segment Information The Company previously operated its business in two reportable segments, Human Services and Post-Acute Specialty Rehabilitation Services ("SRS"). Effective as of October 1, 2016, the Company re-aligned its businesses within our Human Services reporting segment to a service line organizational structure. As a result of such change our Human Services reporting segment has been divided into two reporting segments: the Intellectual and Developmental Disabilities ("I/DD") segment and the At-Risk Youth ("ARY") segment. This change aligns with the Company's service offerings and how it conducts and operates its businesses commencing in the first quarter of fiscal 2017. The Adult Day Health ("ADH") operating segment, which was previously aggregated in the Human Services segment, is now included in Corporate and Other. There has been no change to the SRS segment. The change results in the Company having three reportable business segments: the I/DD segment, the SRS segment, and the ARY segment. Through the I/DD segment, the Company provides home- and community-based human services to adults and children with intellectual and developmental disabilities. Through the SRS segment, the Company delivers services to individuals who have suffered acquired brain injury, spinal injuries and other catastrophic injuries and illnesses. The operations of the SRS segment have been organized by management into two operating segments, NeuroRestorative and CareMeridian, based upon service type. The NeuroRestorative operating group provides behavioral therapies to brain injured clients in post-acute community settings and the CareMeridian operating group provides a higher level of medical support to traumatically injured clients . Through the ARY segment we provide home- and community-based human services to youth with emotional, behavioral and/or medically complex challenges. Each operating group is aligned with the Company’s reporting structure and has a segment manager that is directly accountable for its operations and regularly reports results to the chief operating decision maker, which is the Company's Chief Operating Officer, for the purpose of evaluating these results and making decisions regarding resource allocations. The Company evaluates performance based on EBITDA. EBITDA for each segment is defined as income (loss) from continuing operations for the segment before income taxes, before depreciation and amortization, and interest income (expense). Activities classified as “Corporate and Other” in the table below relate to the results of our ADH operating segment and unallocated home office expenses, management fees, and stock-compensation expense. Total assets included in the Corporate and Other segment include assets associated with our ADH operating segment and assets maintained by our corporate entity including cash, restricted cash, and other current and non-current assets. The following table is a financial summary by reportable segments for the periods indicated (in thousands): For the three months ended June 30, I/DD SRS ARY Corporate and Other Consolidated 2017 Net revenue $ 243,496 $ 77,758 $ 35,368 $ 15,723 $ 372,345 EBITDA 34,098 13,778 5,786 (14,377 ) 39,285 Total assets 469,612 261,129 85,393 264,971 1,081,105 Depreciation and amortization 9,451 5,858 1,407 2,445 19,161 Purchases of property and equipment 7,093 2,865 329 1,899 12,186 2016 (1) Net revenue $ 233,836 $ 73,506 $ 35,364 $ 11,257 $ 353,963 EBITDA 34,161 14,391 5,993 (18,282 ) 36,263 Depreciation and amortization 9,717 5,827 1,433 1,657 18,634 Purchases of property and equipment 5,444 2,497 692 4,003 12,636 (1) The previously reported segment information for the three months ended June 30, 2016 has been revised to reflect the new composition of the reportable segments. A reconciliation of EBITDA to income from continuing operations before income taxes on a consolidated basis is as follows (in thousands): For the three months ended June 30, 2017 2016 EBITDA $ 39,285 $ 36,263 Less: Depreciation and amortization 19,161 18,634 Interest expense, net 8,339 8,490 Income from continuing operations before income taxes $ 11,785 $ 9,139 The following table is a financial summary by reportable segments for the periods indicated (in thousands): For the nine months ended June 30, I/DD SRS ARY Corporate and Other Consolidated 2017 Net revenue $ 719,207 $ 229,301 $ 106,784 $ 38,846 $ 1,094,138 EBITDA 99,971 40,670 16,614 (48,344 ) 108,911 Total assets 469,612 261,129 85,393 264,971 1,081,105 Depreciation and amortization 27,988 17,483 4,255 6,420 56,146 Purchases of property and equipment 18,390 8,016 961 5,614 32,981 2016 (2) Net revenue $ 694,351 $ 213,549 $ 113,279 $ 24,214 $ 1,045,393 EBITDA 102,114 40,471 15,883 (58,402 ) 100,066 Depreciation and amortization 28,638 17,639 4,407 4,268 54,952 Purchases of property and equipment 15,327 7,774 1,508 7,046 31,655 (2) The previously reported segment information for the nine months ended June 30, 2016 has been revised to reflect the new composition of the reportable segments. A reconciliation of EBITDA to income from continuing operations before income taxes on a consolidated basis is as follows (in thousands): For the nine months ended June 30, 2017 2016 EBITDA $ 108,911 $ 100,066 Less: Depreciation and amortization 56,146 54,952 Interest expense, net 25,112 25,300 Income from continuing operations before income taxes $ 27,653 $ 19,814 Revenue derived from contracts with state and local governmental payors in the state of Minnesota, the Company’s largest state operation, which is included in the I/DD segment, accounted for approximately 15% of the Company’s net revenue for the three and nine months ended June 30, 2017 and 2016 . |