Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.19.2
Segment Reporting
 6 Months Ended
May 31, 2019
Segment Reporting [Abstract]  
Segment Reporting
Note 3
–
Segment Reporting
During the third quarter of fiscal 2018, the Company purchased the assets and assumed contracts that Cord:Use used in the operation of its cord blood business (See Note 2). The Company evaluated and determined that this acquisition qualifies as a separate segment.
The Company is organized in three reportable segments:
 
  1.
The cellular processing and cryogenic storage of umbilical cord blood and cord tissue stem cells for family use.    Revenue is generated from the initial processing and testing fees and the annual storage fees charged each year for storage (the “Umbilical cord blood and cord tissue stem cell service”).
 
  2.
The manufacture of Prepacyte
®
 CB units, the processing technology used to process umbilical cord blood stem cells. Revenue is generated from the sales of the Prepacyte
®
 CB units (the “Prepacyte
®
-CB”).
 
  3.
The cellular processing and cryogenic storage of umbilical cord blood stem cells for public use. Revenue is generated from the sale of the cord blood units to the National Marrow Donor Program (“NMDP”), which distributes the cord blood units to transplant centers located in the United States, and around the world.
The following table shows, by segment: net revenue, cost of sales, depreciation and amortization, operating profit, interest expense, and income tax (expense) benefit for the three and six months ended May 31, 2019 and May 31, 2018:
 
 
 
 
 
 
For the three

months ended

May 31, 2019
 
 
For the three

months ended

May 31, 2018
 
Net revenue
 
 
 
 
 
 
 
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
 
 
 
 
$
7,881,697
 
 
$
6,498,614
 
Prepacyte
®
-CB
 
 
 
 
 
 
12,040
 
 
 
26,849
 
Public cord blood banking
 
 
 
 
 
 
234,115
 
 
 
—
 
Total net revenue
 
 
 
 
 
$
8,127,852
 
 
$
6,525,463
 
Cost of sales
 
 
 
 
 
 
 
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
 
 
 
 
$
2,218,926
 
 
$
1,726,259
 
Prepacyte
®
-CB
 
 
 
 
 
 
4,621
 
 
 
50,879
 
Public cord blood banking
 
 
 
 
 
 
404,744
 
 
 
—
 
Total cost of sales
 
 
 
 
 
$
2,628,291
 
 
$
1,777,138
 
Depreciation and amortization
 
 
 
 
 
 
 
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
 
 
 
 
$
46,269
 
 
$
27,185
 
Prepacyte
®
-CB
 
 
 
 
 
 
9,065
 
 
 
9,063
 
Public cord blood banking
 
 
 
 
 
 
—
 
 
 
—
 
Total depreciation and amortization
 
 
 
 
 
$
55,334
 
 
$
36,248
 
Operating income
 
 
 
 
 
 
 
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
 
 
 
 
$
3,001,600
 
 
$
1,182,829
 
Prepacyte
®
-CB
 
 
 
 
 
 
(1,644
)
 
 
(33,093
)
Public cord blood banking
 
 
 
 
 
 
(2,503,392
)
 
 
—
 
Total operating income
 
 
 
 
 
$
496,564
 
 
$
1,149,736
 
Interest expense
 
 
 
 
 
 
 
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
 
 
 
 
$
424,287
 
 
$
304,094
 
Prepacyte
®
-CB
 
 
 
 
 
 
—
 
 
 
—
 
Public cord blood banking
 
 
 
 
 
 
—
 
 
 
—
 
Total interest expense
 
 
 
 
 
$
424,287
 
 
$
304,094
 
Income tax expense
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
 
 
 
 
$
50,943
 
 
$
315,921
 
Prepacyte
®
-CB
 
 
 
 
 
 
—
 
 
 
—
 
Public cord blood banking
 
 
 
 
 
 
—
 
 
 
—
 
Total income tax expense
 
 
 
 
 
$
50,943
 
 
$
315,921
 
 
 
 
For the six

months
ended

May 31, 2019
 
 
For the six

months ended

May 31, 2018
 
Net revenue
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
$
15,216,724
 
 
$
12,698,681
 
Prepacyte
®
-CB
 
 
37,760
 
 
 
54,900
 
Public cord blood banking
 
 
368,480
 
 
 
—
 
Total net revenue
 
$
15,622,964
 
 
$
12,753,581
 
Cost of sales
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
$
4,257,530
 
 
$
3,281,581
 
Prepacyte
®
-CB
 
 
164,627
 
 
 
97,065
 
Public cord blood banking
 
 
672,361
 
 
 
—
 
Total cost of sales
 
$
5,094,518
 
 
$
3,378,646
 
Depreciation and amoritzation
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
$
94,186
 
 
$
54,666
 
Prepacyte
®
-CB
 
 
18,128
 
 
 
18,127
 
Public cord blood banking
 
 
—
 
 
 
—
 
Total depreciation and amortization
 
$
112,314
 
 
$
72,793
 
Operating income
 
 
 
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
$
4,131,863
 
 
$
2,197,165
 
Prepacyte
®
-CB
 
 
( 144,993
)
 
 
(60,292
)
Public cord blood banking
 
 
(2,636,644
)
 
 
—
 
Operating income
 
$
1,350,226
 
 
$
2,136,873
 
Interest expense
 
 
 
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
$
831,212
 
 
$
585,071
 
Prepacyte
®
-CB
 
 
—
 
 
 
—
 
Public cord blood banking
 
 
—
 
 
 
—
 
Total interest expense
 
$
831,212
 
 
$
585,071
 
Income tax expenses
 
 
 
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
$
155,610
 
 
$
3,518,588
 
Prepacyte
®
-CB
 
 
—
 
 
 
—
 
Public cord blood banking
 
 
—
 
 
 
—
 
Total income taxes
 
$
155,610
 
 
$
3,518,588
 
The following table shows the assets by segment as of May 31, 2019 and November 30, 2018:
 
 
 
 
 
 
 
 
 
 
As of May
31, 2019
 
 
As of November

30, 2018
 
Assets
 
 
 
 
 
Umbilical cord blood and cord tissue stem cell service
 
$
27,155,586
 
 
$
26,239,260
 
Prepacyte
®
-CB
 
 
241,112
 
 
 
319,802
 
Public cord blood banking
 
 
13,492,687
 
 
 
15,831,081
 
Total assets
 
$
40,889,385
 
 
$
42,390,143