Quarterly report pursuant to Section 13 or 15(d)

Segment reporting

v3.6.0.2
Segment reporting
 6 Months Ended
Jan. 31, 2017
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]

Note 11 – Segment reporting


The Company has three reportable segments: Clinical Labs, Life Sciences, and Therapeutics. The Clinical Labs segment provides diagnostic services to the health care community. The Life Sciences segment develops, manufactures, and markets products to research and pharmaceutical customers. The Therapeutic segment conducts research and development activities for therapeutic drug candidates.


The Company evaluates segment performance based on segment income (loss) before taxes. Costs excluded from segment income (loss) before taxes and reported as “Other” consist of corporate general and administrative costs which are not allocable to the three reportable segments. Legal fee expense incurred to defend the Company’s intellectual property and other general corporate matters is considered a component of the Other segment. Legal fee expense specific to other segments’ activities has been allocated to those segments. Legal settlements, net represent activities for which royalties would have been received by the Company’s Life Sciences segment had the Company had agreements in place with plaintiffs for the patents or products covered by the settlements.


Management of the Company assesses assets on a consolidated basis only and, therefore, assets by reportable segment have not been included in the reportable segments below. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies contained in the Company’s Annual Report on Form 10-K for the year ended July 31, 2016.


The following financial information represents the operating results of the reportable segments of the Company:


Three months ended January 31, 2017   Clinical
Labs		     Life
Sciences		     Therapeutics     Other     Consolidated  
Revenues:                                        
Clinical laboratory services   $ 18,837       —       —       —     $ 18,837  
Product revenues     —     $ 6,983       —       —       6,983  
Royalty and license fee income     —       440       —       —       440  
      18,837       7,423       —       —       26,260  
Operating costs, expenses and legal settlements, net:                                        
Cost of clinical laboratory services     11,052       —       —       —       11,052  
Cost of product revenues     —       3,520       —       —       3,520  
Research and development     —       516     $ (33 )     —       483  
Selling, general and administrative     5,897       2,905       —     $ 2,363       11,165  
Provision for uncollectible accounts receivable     594       85       —       —       679  
Legal fee expense     49       16       —       305       370  
Total operating costs, expenses and legal settlements, net     17,592       7,042       (33 )     2,668       27,269  
                                         
Operating income (loss)     1,245       381       33       (2,668 )     (1,009 )
                                         
Other income (expense):                                        
Interest     (28 )     12       —       95       79  
Other     17       —       —       7       24  
Foreign exchange loss     —       (94 )     —       —       (94 )
Income (loss) before income taxes   $ 1,234     $ 299     $ 33     $ (2,566 )   $ (1,000 )
                                         
Depreciation and amortization included above   $ 394     $ 501     $ —     $ 20     $ 915  
                                         
Share-based compensation included in above:                                        
Cost of clinical laboratory services   $ 1       —       —       —     $ 1  
Selling, general and administrative     23     $ 15       —     $ 202       240  
Total   $ 24     $ 15     $ —     $ 202     $ 241  
                                         
Capital expenditures   $ 175     $ —     $ —     $ —     $ 175  

Three months ended January 31, 2016   Clinical
Labs		     Life
Sciences		     Therapeutics     Other     Consolidated  
Revenues:                                        
Clinical laboratory services   $ 17,523       —       —       —     $ 17,523  
Product revenues     —     $ 6,578       —       —       6,578  
Royalty and license fee income     —       459       —       —       459  
      17,523       7,037       —       —       24,560  
Operating costs, expenses and legal settlements, net:                                        
Cost of clinical laboratory services     10,535       —       —       —       10,535  
Cost of product revenues     —       3,206       —       —       3,206  
Research and development     —       661     $ 200       —       861  
Selling, general and administrative     5,649       2,773       —     $ 2,858       11,280  
Provision for uncollectible accounts receivable     467       (8 )     —       —       459  
Legal fee expense     57       5       —       2,349       2,411  
Legal settlements, net     1,500       (13,150 )     —       —       (11,650 )
Total operating costs, expenses and legal settlements, net     18,208       (6,513 )     200       5,207       17,102  
                                         
Operating income (loss)     (685 )     13,550       (200 )     (5,207 )     7,458  
                                         
Other income (expense)                                        
Interest     (23 )     17       —       (36 )     (42 )
Other     (1 )     —       —       12       11  
Foreign exchange loss     —       (388 )     —       —       (388 )
Income (loss) before income taxes   $ (709 )   $ 13,179     $ (200 )   $ (5,231 )   $ 7,039  
                                         
Depreciation and amortization included above   $ 411     $ 524     $ —     $ 17     $ 952  
                                         
Share-based compensation included in above:                                        
Cost of clinical laboratory services   $ 2       —       —       —     $ 2  
Selling, general and administrative     9     $ 5       —     $ 94       108  
Total   $ 11     $ 5     $ —     $ 94     $ 110  
                                         
Capital expenditures   $ 354     $ 84     $ —     $ —     $ 438  

Six months ended January 31, 2017   Clinical
Labs		     Life
Sciences		     Therapeutics     Other     Consolidated  
Revenues:                                        
Clinical laboratory services   $ 37,395       —       —       —     $ 37,395  
Product revenues     —     $ 14,409       —       —       14,409  
Royalty and license fee income     —       740       —       —       740  
      37,395       15,149       —       —       52,544  
Operating costs, expenses and legal settlements, net:                                        
Cost of clinical laboratory services     21,948       —       —       —       21,948  
Cost of product revenues     —       6,829       —       —       6,829  
Research and development     —       1,143     $ 162       —       1,305  
Selling, general and administrative     11,849       5,851       —     $ 4,939       22,639  
Provision for uncollectible accounts receivable     1,260       88       —       —       1,348  
Legal fee expense     101       28       —       613       742  
Total operating costs, expenses and legal settlements, net     35,158       13,939       162       5,552       54,811  
                                         
Operating income (loss)     2,237       1,210       (162 )     (5,552 )     (2,267 )
                                         
Other income (expense):                                        
Interest     (57 )     22       —       160       125  
Other     119       —       —       24       143  
Foreign exchange loss     —       (455 )     —       —       (455 )
Income (loss) before income taxes   $ 2,299     $ 777     $ (162 )   $ (5,368 )   $ (2,454 )
                                         
Depreciation and amortization included above   $ 795     $ 1,009     $ —     $ 38     $ 1,842  
                                         
Share-based compensation included in above:                                        
Cost of clinical laboratory services   $ 3       —       —       —     $ 3  
Selling, general and administrative     40     $ 26       —     $ 323       389  
Total   $ 43     $ 26     $ —     $ 323     $ 392  
                                         
Capital expenditures   $ 587     $ 102     $ —     $ —     $ 689  

Six months ended January 31, 2016   Clinical
Labs		     Life
Sciences		     Therapeutics     Other     Consolidated  
Revenues:                                        
Clinical laboratory services   $ 34,613       —       —       —     $ 34,613  
Product revenues     —     $ 14,265       —       —       14,265  
Royalty and license fee income     —       859       —       —       859  
      34,613       15,124       —       —       49,737  
Operating costs, expenses and legal settlements, net:                                        
Cost of clinical laboratory services     20,867       —       —       —       20,867  
Cost of product revenues     —       6,817       —       —       6,817  
Research and development     —       1,328     $ 400       —       1,728  
Selling, general and administrative     10,935       5,832       —     $ 4,738       21,505  
Provision for uncollectible accounts receivable     1,175       (12 )     —       —       1,163  
Legal fee expense     66       (17 )     —       3,963       4,012  
Legal settlements, net     1,500       (19,950 )     —       —       (18,450 )
Total operating costs, expenses and legal settlements, net     34,543       (6,002 )     400       8,701       37,642  
                                         
Operating income (loss)     70       21,126       (400 )     (8,701 )     12,095  
                                         
Other income (expense)                                        
Interest     (42 )     31       —       (71 )     (82 )
Other     3       39       —       23       65  
Foreign exchange loss     —       (518 )     —       —       (518 )
Income (loss) before income taxes   $ 31     $ 20,678     $ (400 )   $ (8,749 )   $ 11,560  
                                         
Depreciation and amortization included above   $ 808     $ 1,054     $ —     $ 40     $ 1,902  
                                         
Share-based compensation included in above:                                        
Cost of clinical laboratory services   $ 3       —       —       —     $ 3  
Selling, general and administrative     19     $ 10       —     $ 189       218  
Total   $ 22     $ 10     $ —     $ 189     $ 221  
                                         
Capital expenditures   $ 791     $ 152     $ —     $ —     $ 943