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 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. 8. 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 External revenue $ 441,924 $ 84,129 $ 24,544 $ — $ 1,120 $ 551,717 Intercompany revenue — 16,180 6,294 — (22,474 ) — Total revenue 441,924 100,309 30,838 — (21,354 ) 551,717 Direct costs 366,983 48,901 19,077 — (20,910 ) 414,051 Gross profit 74,941 51,408 11,761 — (444 ) 137,666 Selling, general and administrative expense 10,677 9,542 7,660 16,981 — 44,860 Operating income (loss) before sale or disposal of assets 64,264 41,866 4,101 (16,981 ) (444 ) 92,806 Business interruption insurance gain — — (4,523 ) — — (4,523 ) Net loss on sale or disposal of assets 175 — 72 3 — 250 Operating income (loss) $ 64,089 $ 41,866 $ 8,552 $ (16,984 ) $ (444 ) $ 97,079 Depreciation and amortization $ 16,520 $ 2,731 $ 1,181 $ 588 $ (549 ) $ 20,471 Property and equipment additions $ 19,429 $ 5,735 $ 127 $ 2,773 $ (1,115 ) $ 26,949 Three Months Ended External revenue $ 395,820 $ 77,394 $ 25,397 $ — $ 966 $ 499,577 Intercompany revenue — 14,509 4,684 — (19,193 ) — Total revenue 395,820 91,903 30,081 — (18,227 ) 499,577 Direct costs 327,283 46,879 19,945 — (18,287 ) 375,820 Gross profit 68,537 45,024 10,136 — 60 123,757 Selling, general and administrative expense 9,269 8,610 8,023 16,890 — 42,792 Operating income (loss) before sale or disposal of assets 59,268 36,414 2,113 (16,890 ) 60 80,965 Impairment of goodwill and other long-lived assets — — 27,019 — — 27,019 Net loss (gain) on sale or disposal of assets 598 7 — (135 ) — 470 Operating income (loss) $ 58,670 $ 36,407 $ (24,906 ) $ (16,755 ) $ 60 $ 53,476 Depreciation and amortization $ 15,201 $ 2,671 $ 1,781 $ 688 $ (479 ) $ 19,862 Property and equipment additions $ 17,224 $ 2,391 $ 1,123 $ 2,025 $ (649 ) $ 22,114 8. Lines of Business, continued Animal Hospital Laboratory All Other Corporate Eliminations Total Nine Months Ended External revenue $ 1,270,326 $ 252,645 $ 73,895 $ — $ 3,089 $ 1,599,955 Intercompany revenue — 47,858 19,839 — (67,697 ) — Total revenue 1,270,326 300,503 93,734 — (64,608 ) 1,599,955 Direct costs 1,066,516 144,410 59,160 — (62,506 ) 1,207,580 Gross profit 203,810 156,093 34,574 — (2,102 ) 392,375 Selling, general and administrative expense 32,351 27,894 24,088 49,410 — 133,743 Operating income (loss) before charges 171,459 128,199 10,486 (49,410 ) (2,102 ) 258,632 Business interruption insurance gain — — (4,523 ) — — (4,523 ) Net (gain) loss on sale or disposal of assets (445 ) 41 92 78 — (234 ) Operating income (loss) $ 171,904 $ 128,158 $ 14,917 $ (49,488 ) $ (2,102 ) $ 263,389 Depreciation and amortization $ 49,032 $ 7,940 $ 3,509 $ 1,755 $ (1,602 ) $ 60,634 Property and equipment additions $ 45,506 $ 11,813 $ 1,427 $ 5,349 $ (2,625 ) $ 61,470 Nine Months Ended External revenue $ 1,134,184 $ 233,497 $ 68,055 $ — $ 2,820 $ 1,438,556 Intercompany revenue — 42,895 13,859 — (56,754 ) — Total revenue 1,134,184 276,392 81,914 — (53,934 ) 1,438,556 Direct costs 953,511 139,245 54,161 — (53,984 ) 1,092,933 Gross profit 180,673 137,147 27,753 — 50 345,623 Selling, general and administrative expense 28,261 24,909 23,782 47,211 — 124,163 Operating income (loss) before charges 152,412 112,238 3,971 (47,211 ) 50 221,460 Impairment of goodwill and other long-lived assets — — 27,019 — — 27,019 Net loss (gain) on sale or disposal of assets 1,180 (71 ) (1,087 ) (195 ) — (173 ) Operating income (loss) $ 151,232 $ 112,309 $ (21,961 ) $ (47,016 ) $ 50 $ 194,614 Depreciation and amortization $ 45,053 $ 7,769 $ 5,921 $ 2,333 $ (1,417 ) $ 59,659 Property and equipment additions $ 38,411 $ 5,676 $ 2,801 $ 4,769 $ (1,564 ) $ 50,093 At September 30, 2015 Total assets $ 2,147,136 $ 304,807 $ 76,969 $ 391,471 $ (489,193 ) $ 2,431,190 At December 31, 2014 Total assets $ 2,021,725 $ 258,550 $ 89,596 $ 270,414 $ (308,265 ) $ 2,332,020 |