Segment and Geographic Information | 15. Segment and Geographic Information Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and to assess performance. The Company’s Chief Executive Officer is the Company’s CODM. Effective October 1, 2023, the Company realigned its organizational structure to three principal business segments to enhance its commercial strategy for accelerating growth and to enable additional profitability initiatives. These segments align with changes in how the Company’s CODM manages the business, allocates resources, and assesses performance. The Company’s operating and reportable segments consist of the following: ● Sample Management Solutions . SMS operates as a single business unit offering end-to-end sample management products and services, including: Sample Repository Solutions and Core Products (Automated Stores, Cryogenic Systems, Automated Sample Tube, and Consumables and Instruments). ● Multiomics . The Multiomics business resources operate under a single business unit that provides genomic and other sample analysis services, including gene sequencing and gene synthesis. ● B Medical Systems . B Medical Systems business resources operate as a single business unit focused on the manufacturing and distribution of temperature-controlled storage and transportation solutions in international markets to governments, health institutions, and non-government organizations. The segment realignment had no impact on the Company’s consolidated financial position, results of operations, or cash flows. All segment information is reflective of this new structure, and prior period information has been recast to conform to our current period presentation. Management considers adjusted operating loss, which excludes charges related to amortization of intangible assets, purchase accounting impact on inventory, transformation costs, restructuring charges, goodwill and intangible impairment, merger and acquisition costs and costs related to share repurchase, governance-related matters, and other unallocated corporate expenses, as the primary performance metric when evaluating the segments’ operations. The following is the summary of the financial information for the Company’s reportable segments for the three and six months ended March 31, 2024 and 2023 (in thousands): Three Months Ended March 31, Six Months Ended March 31, 2024 2023 2024 2023 Revenue: Sample Management Solutions $ 74,137 $ 71,043 $ 153,142 $ 146,498 Multiomics 62,218 62,236 124,938 123,325 B Medical Systems 22,779 15,122 35,371 56,944 Total revenue $ 159,134 $ 148,401 $ 313,451 $ 326,767 Adjusted operating loss: Sample Management Solutions $ (1,567) $ (6,076) $ (2,423) $ (9,074) Multiomics (2,966) (3,810) (6,417) (7,075) B Medical Systems (1,153) (3,367) (5,562) 2,936 Segment adjusted operating loss (5,686) (13,254) (14,402) (13,213) Amortization of completed technology 6,373 4,901 12,000 9,070 Purchase accounting impact on inventory — 2,912 — 5,781 Amortization of intangible assets other than completed technology 6,654 7,509 13,516 14,882 Transformation costs (1) 4,446 10 4,487 (55) Restructuring charges 7,344 1,499 8,464 2,961 Impairment of goodwill and intangible assets 115,975 — 115,975 — Contingent consideration - fair value adjustments — (17,145) — (17,145) Merger and acquisition costs and costs related to share repurchase (2) 426 19 4,747 11,857 Other unallocated corporate expenses 51 18 41 98 Total operating loss (146,955) (12,977) (173,632) (40,662) Interest income, net 9,565 10,394 19,646 21,059 Other income (expense), net 250 (2,668) 932 (1,523) Loss before income taxes $ (137,140) $ (5,251) $ (153,054) $ (21,126) (1) Transformation costs represent non-recurring expenses for strategic projects with anticipated long-term benefits to the Company focused on cost reduction and productivity improvement that do not meet the definition of restructuring charges. These costs are directed at simplifying, standardizing, streamlining, and optimizing the Company’s operations, processes and systems to permanently alter the Company’s operations for the long term. For a project to be considered transformational, successful completion of the project must be expected to bring long-term material benefits to the organization and involve significant changes to process and/or underlying technology. Transformation costs in the period result from actions taken as part of the Company’s 2024 transformation plan, and primarily relate to one time asset write downs associated with changes in technology, one time inventory write downs relating to restructuring actions taken in the period, and third-party consulting costs associated with process & systems re-design. (2) Includes expenses related to governance-related matters. The Company has corrected the segment adjusted operating (loss) income for the three and six months ended March 31, 2023 period as certain corporate expenses that are not part of the Company’s CODM’s review of operating segment performance were improperly included in the previously disclosed segment adjusted operating (loss) income. The previously disclosed amount of total segment adjusted operating (loss) income for the reportable segments was understated by $8.0 million and $16.5 million, respectively, for the three and six months ended March 31, 2023. The total net loss before income taxes remained unchanged in each period. The following is the summary of the asset information for the Company’s reportable segments as of March 31, 2024 and September 30, 2023 (in thousands): Assets: March 31, 2024 September 30, 2023 Sample Management Solutions $ 845,641 $ 675,708 Multiomics 462,684 534,437 B Medical Systems 248,880 511,640 Total assets $ 1,557,205 $ 1,721,785 The following is a reconciliation of the segment assets to the corresponding amounts presented in the Condensed Consolidated Balance Sheets as of March 31, 2024 and September 30, 2023 (in thousands): March 31, September 30, 2024 2023 Segment assets $ 1,557,205 $ 1,721,785 Cash and cash equivalents, restricted cash and marketable securities 975,358 1,134,256 Deferred tax assets 925 571 Other assets 30,009 29,108 Total assets $ 2,563,497 $ 2,885,720 Revenue from external customers is attributed to geographic areas based on locations in which the product is shipped. Net revenue by geographic area for the three and six months ended March 31, 2024 and 2023 are as follows (in thousands): Three Months Ended March 31, Six Months Ended March 31, 2024 2023 2024 2023 Geographic Location: United States $ 88,398 $ 86,572 $ 178,990 $ 174,321 Africa 18,942 8,627 26,453 25,837 China 13,646 11,979 28,544 25,387 United Kingdom 5,641 5,789 11,340 11,202 Rest of Europe 23,850 21,432 48,682 60,854 Asia Pacific/Other 8,657 14,002 19,442 29,166 Total revenue $ 159,134 $ 148,401 $ 313,451 $ 326,767 The Company had one individual customer that accounted for 10% or more of its consolidated revenue for the three months ended March 31, 2024 and none that accounted for 10% or more of its consolidated revenue for the three months ended March 31, 2023. This individual customer is a distributor shipping to end users in 14 countries. The Company had no individual customer that accounted for 10% or more of its consolidated revenue for the six months ended March 31, 2024 and one individual customer that accounted for 10% or more of its consolidated revenue for the six months ended March 31, 2023. This individual customer is a distributor shipping to end users in 17 countries. There were no customers that accounted for more than 10% of the Company’s accounts receivable balance as of March 31, 2024 and September 30, 2023. |