Business Segments

9 Months Ended

Sep. 30, 2019

9. BUSINESS SEGMENTS

The Company provides services to healthcare organizations and other members within the healthcare industry. The Company’s services are focused on the delivery of workforce development products and services (HealthStream Workforce Solutions) and provider credentialing, privileging, and enrollment products and services (HealthStream Provider Solutions).

As noted above, the sale of the PX business on February 12, 2018 resulted in the Company’s divestiture of the Company’s Patient Experience Solutions segment. Beginning with the first quarter of 2018, the Company classified the results of its Patient Experience segment as discontinued operations in its Condensed Consolidated Statements of Income and Cash Flows for all periods presented. See Note 8 for additional information.

The Company measures segment performance based on operating income before income taxes and prior to the allocation of certain corporate overhead expenses, interest income, interest expense, and depreciation. The Unallocated component below includes corporate functions, such as accounting, human resources, legal, investor relations, administrative, and executive personnel, depreciation, a portion of amortization, and certain other expenses, which are not currently allocated in measuring segment performance. The following is the Company’s business segment information for the three and nine months ended September 30, 2019 and 2018 and as of September 30, 2019 and December 31, 2018 (in thousands).

	Three Months Ended September 30,						Nine Months Ended September 30,
Revenues, net:	2019			2018			2019			2018
Workforce Solutions	$	51,023		$	49,128		$	157,739		$	141,043
Provider Solutions		11,427			10,797			33,678			30,748
Total revenues, net	$	62,450		$	59,925		$	191,417		$	171,791
Operating income from continuing operations:
Workforce Solutions	$	10,274		$	10,013		$	30,694		$	29,074
Provider Solutions		1,385			1,684			4,206			2,973
Unallocated		(7,911	)		(7,036	)		(23,516	)		(19,393	)
Total operating income from continuing operations	$	3,748		$	4,661		$	11,384		$	12,654

Segment assets *	September 30, 2019		December 31, 2018
Workforce Solutions	$	117,890	$	104,668
Provider Solutions		138,468		145,637
Unallocated		223,839		191,643
Total assets	$	480,197	$	441,948

Segment assets include accounts and unbilled receivables, prepaid and other current assets, other assets, capitalized software development, certain property and equipment, goodwill and intangible assets. Cash and cash equivalents and marketable securities are not allocated to individual segments and are included within Unallocated. A significant portion of property and equipment assets are included within Unallocated.