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Segment Information
 12 Months Ended
Dec. 31, 2011
Segment Information [Abstract]  
Segment Information

Note 12—Segment Information

Reportable Operating Segments

We manage and evaluate our operations in two reportable segments. With respect to the CES acquisition, as described in Note 2, its operations are comparable to ours and therefore reported within our reportable operating segments in 2009 (since the date of acquisition). The two reportable segments are Housekeeping (housekeeping, laundry, linen and other services), and Dietary (dietary department services). Although both segments serve the same client base and share many operational similarities, they are managed separately due to distinct differences in the type of service provided, as well as the specialized expertise required of the professional management personnel responsible for delivering the respective segment's services. We consider the various services provided within Housekeeping to be one reportable operating segment since such services are rendered pursuant to a single service agreement and the delivery of such services is managed by the same management personnel.

Differences between the reportable segments' operating results and other disclosed data and our consolidated financial statements relate primarily to corporate level transactions and recording of transactions at the reportable segment level which use methods other than generally accepted accounting principles, and transactions between reportable segments and our warehousing and distribution subsidiary that was sold on March 1, 2009. Prior to disposition, the subsidiary's transactions with reportable segments were made on a basis intended to reflect the fair market value of the goods transferred. Additionally, included in the differences between the reportable segments' operating results and other disclosed data are amounts attributable to our investment holding company subsidiary. This subsidiary does not transact any business with the reportable segments. Segment amounts disclosed are prior to any elimination entries made in consolidation.

Housekeeping provides services in Canada, although essentially all of its revenues and net income, 99% in both categories, are earned in one geographic area, the United States. Dietary provides services solely in the United States.

 

   

Housekeeping

Services

     

Dietary
Services

     

Corporate and

Eliminations

     Total  

Year Ended December 31, 2011

          

Revenues

   $ 654,886,000       $ 234,247,000       $ (68,000 )(1)    $ 889,065,000   

Income before income taxes

     63,395,000         11,678,000         (17,261,000 )(1)      57,812,000   

Depreciation and amortization

     3,428,000         614,000         345,000        4,387,000   

Total assets

     135,223,000         57,034,000         97,438,000 (2)      289,695,000   

Capital expenditures

   $ 4,697,000       $ 372,000       $ 476,000      $ 5,545,000   

Year Ended December 31, 2010

          

Revenues

   $ 595,924,000       $ 178,061,000       $ (29,000 )(1)    $ 773,956,000   

Income before income taxes

     56,087,000         7,584,000         (9,552,000 )(1)      54,119,000   

Depreciation and amortization

     2,874,000         595,000         295,000        3,764,000   

Total assets

     124,494,000         39,683,000         113,757,000 (2)      277,934,000   

Capital expenditures

   $ 3,693,000       $ 144,000       $ 337,000      $ 4,174,000   

Year Ended December 31, 2009

          

Revenues

   $ 532,723,000       $ 159,845,000       $ 127,000 (1)    $ 692,695,000   

Income before income taxes

     52,375,000         7,782,000         (10,822,000 )(1)      49,335,000   

Depreciation and amortization

     2,455,000         465,000         309,000        3,229,000   

Total assets

     116,240,000         38,379,000         111,273,000 (2)      265,892,000   

Capital expenditures

   $ 1,602,000       $ 150,000       $ 402,000      $ 2,154,000   

 

(1)

represents primarily corporate office cost and related overhead, recording of transactions at the reportable segment level which use methods other than generally accepted accounting principles, as well as consolidated subsidiaries' operating expenses that are not allocated to the reportable segments, net of investment and interest income.

 

(2)

represents primarily cash and cash equivalents, marketable securities, deferred income taxes and other current and noncurrent assets.

 

 Total Revenues from Clients

The following revenues earned from clients differ from segment revenues reported above due to the inclusion of adjustments used for segment reporting purposes by management. We earned total revenues from clients in the following service categories:

 

    Year Ended December 31,  
  2011      2010      2009  

Housekeeping services

   $ 440,924,000       $ 399,031,000       $ 361,644,000   

Laundry and linen services

     210,896,000         194,258,000         168,877,000   

Dietary services

     234,542,000         178,271,000         159,767,000   

Maintenance services and other

     2,703,000         2,396,000         2,407,000   
 

 

 

  
  $ 889,065,000       $ 773,956,000       $ 692,695,000   
 

 

 

  

Major Client

We have one client, a nursing home chain, which in 2011, 2010 and 2009 accounted for 9%, 11% and 12%, respectively, of total revenues. In the year ended December 31, 2011, we derived 11% and 5%, respectively, of the Housekeeping and Dietary segments' revenues from such client. Additionally, at both December 31, 2011 and 2010, amounts due from such client represented less than 1% of our accounts receivable balance. Although we expect to continue the relationship with this client, there can be no assurance thereof. The loss of such client, or a significant reduction in revenues from such client, would have a material adverse effect on the results of operations of our two operating segments. In addition, if such client changes its payment terms it would increase our accounts receivable balance and have a material adverse effect on our cash flows and cash and cash equivalents.

 

    Year Ended December 31,
  2011   2010    2009

Total revenues

   9%   11%    12%

Housekeeping

   11%   11%    13%

Dietary services

   5%   9%    11%