Annual report pursuant to Section 13 and 15(d)

Segment reporting

v3.7.0.1
Segment reporting
12 Months Ended
Jul. 31, 2017
Segment Reporting [Abstract]  
Segment Reporting Disclosure [Text Block]

Note 15 - Segment reporting


The Company has three reportable segments: Life Sciences, Clinical Labs and Therapeutics. The Company’s Life Sciences segment develops, manufactures, and markets products to research and pharmaceutical customers. The Clinical Labs segment provides diagnostic services to the health care community. The Company’s Therapeutics 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, which may result in settlements recognized in another segment and other general corporate matters are considered a component of the Other segment. Legal fee expense specific to other segments’ activities have been allocated to those segments.


Legal settlements, net, represent activities for which royalties would have been received in the Company’s Life Sciences segment and expenses related to an investigation within the Clinical Labs segment. 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.


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


Year ended July 31, 2017   Clinical
Labs
    Life
Sciences
    Therapeutics     Other     Consolidated  
Revenues:                                        
Clinical laboratory services   $ 77,407                       $ 77,407  
Product revenues         $ 29,192                   29,192  
Royalty and license fee income           1,205                   1,205  
Total revenues     77,407       30,397                   107,804  
                                         
Operating costs and expenses:                                        
Cost of clinical laboratory services     45,400                         45,400  
Cost of product revenues           14,078                   14,078  
Research and development           2,311     $ 617             2,928  
Selling, general and administrative     24,465       11,232           $ 8,313       44,010  
Provision for uncollectible accounts receivable     2,718       57                   2,775  
Legal fee expense     146       79             1,454       1,679  
Total operating costs and expenses     72,729       27,757       617       9,767       110,870  
                                         
Operating income (loss)     4,678       2,640       (617 )     (9,767 )     (3,066 )
                                         
Other income (expense)                                        
Interest     (112 )     46             450       384  
Other     137       (60 )           48       125  
Foreign exchange gain           135                   135  
                                         
Income (loss) before taxes   $ 4,703     $ 2,761     $ (617 )   $ (9,269 )   $ (2,422 )
                                         
Depreciation and amortization included above   $ 1,586     $ 1,913     $     $ 99     $ 3,598  
                                         
Share-based compensation included in above:                                        
Cost of clinical laboratory services   $ 6     $     $     $     $ 6  
Selling, general and administrative     111       74           $ 640       825  
Total   $ 117     $ 74     $     $ 640     $ 831  
                                         
Capital expenditures   $ 1,363     $ 390     $     $     $ 1,753  

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


Year ended July 31, 2016   Clinical
Labs
    Life
Sciences
    Therapeutics     Other     Consolidated  
Revenues:                                        
Clinical laboratory services   $ 70,915                       $ 70,915  
Product revenues         $ 30,337                   30,337  
Royalty and license fee income           1,521                   1,521  
Total revenues     70,915       31,858                   102,773  
                                         
Operating costs, expenses and legal settlements, net:                                        
Cost of clinical laboratory services     42,859                         42,859  
Cost of product revenues           14,331                   14,331  
Research and development           2,720     $ 804             3,524  
Selling, general and administrative     22,882       11,761           $ 8,943       43,586  
Provision for uncollectible accounts receivable     2,375       (39 )                 2,336  
Legal fee expense     134       11             6,239       6,384  
Legal settlements, net     1,500       (58,750 )                 (57,250 )
Total operating costs, expenses and legal settlements, net     69,750       (29,966 )     804       15,182       55,770  
                                         
Operating income (loss)     1,165       61,824       (804 )     (15,182 )     47,003  
                                         
Other income (expense)                                        
Interest     (105 )     47             (78 )     (136 )
Other     10       38             74       122  
Foreign exchange gain           (474 )                 (474 )
                                         
Income (loss) before taxes   $ 1,070     $ 61,435     $ (804 )   $ (15,186 )   $ 46,515  
                                         
Depreciation and amortization included above   $ 1,676     $ 2,091     $     $ 73     $ 3,840  
                                         
Share-based compensation included in above:                                        
Cost of clinical laboratory services   $ 6     $     $     $     $ 6  
Selling, general and administrative     51       30           $ 438       519  
Total   $ 57     $ 30     $     $ 438     $ 525  
                                         
Capital expenditures   $ 1,216     $ 314     $     $     $ 1,530  

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


Year ended July 31, 2015   Clinical
Labs
    Life
Sciences
    Therapeutics     Other     Consolidated  
Revenues:                                        
Clinical laboratory services   $ 63,414                       $ 63,414  
Product revenues         $ 31,690                   31,690  
Royalty and license fee income           2,495                   2,495  
Total revenues     63,414       34,185                   97,599  
                                         
Operating costs, expenses and legal settlements, net:                                        
Cost of clinical laboratory services     39,589                         39,589  
Cost of product revenues           15,183                   15,183  
Research and development           2,608     $ 742             3,350  
Selling, general and administrative     20,666       12,168           $ 8,235       41,069  
Provision for uncollectible accounts receivable     2,418       (134 )                 2,284  
Legal fee expense     196       (67 )           8,659       8,788  
Legal settlements, net           (11,458 )                 (11,458 )
Total operating costs, expenses and legal settlements, net     62,869       18,300       742       16,894       98,805  
                                         
Operating (loss) income     545       15,885       (742 )     (16,894 )     (1,206 )
                                         
Other income (expense)                                        
Interest     (86 )     10             (169 )     (245 )
Other     28       9             58       95  
Foreign exchange gain           (936 )                 (936 )
                                         
(Loss) income before income taxes   $ 487     $ 14,968     $ (742 )   $ (17,005 )   $ (2,292 )
                                         
Depreciation and amortization included above   $ 1,443     $ 2,254     $ 3     $ 89     $ 3,789  
                                         
Share-based compensation included in above:                                        
Cost of clinical laboratory services   $ 5     $                 $ 5  
Research and development           2                   2  
Selling, general and administrative     43       15           $ 364       422  
Total   $ 48     $ 17           $ 364     $ 429  
                                         
Capital expenditures   $ 1,557     $ 226                 $ 1,783  

Geographic financial information is as follows:


Net sales to unaffiliated customers:   2017     2016     2015  
United States   $ 99,469     $ 94,016     $ 87,875  
Switzerland     2,371       2,709       3,131  
United Kingdom     1,673       1,730       1,904  
Other international countries     4,291       4,318       4,689  
Total   $ 107,804     $ 102,773     $ 97,599  

                         
Long-lived assets at July 31,   2017     2016          
United States   $ 17,241     $ 18,730          
Switzerland     649       917          
United Kingdom     185       244          
Other international countries     173       197          
Total   $ 18,248     $ 20,088          

The Company’s reportable segments are determined based on the services they perform, the products they sell, and the royalties and license fee income they earn, not on the geographic area in which they operate. The Company’s Clinical Labs segment operates 100% in the United States with all revenue derived there. The Life Sciences segment earns product revenue both in the United States and foreign countries and royalty and license fee income in the United States. The following is a summary of the Life Sciences segment revenues attributable to customers located in the United States and foreign countries:


    2017     2016     2015  
United States   $ 22,062     $ 23,102     $ 24,461  
Foreign countries     8,335       8,756       9,724  
    $ 30,397     $ 31,858     $ 34,185