Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.19.3
Segment Reporting
9 Months Ended
Aug. 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 months and nine months ended August 31, 2019 and August 31, 2018:
 
    For the three months
ended August 31, 2019
    For the three months
ended August 31, 2018
 
Net revenue
               
Umbilical cord blood and cord tissue stem cell service
  $ 8,029,797     $ 7,776,339  
Prepacyte
®
-CB
    33,035       29,308  
Public cord blood banking
    160,561       65,575  
   
 
 
   
 
 
 
Total net revenue
  $ 8,223,393     $ 7,871,222  
   
 
 
   
 
 
 
Cost of sales
               
Umbilical cord blood and cord tissue stem cell service
  $ 2,240,257     $ 2,149,778  
Prepacyte
®
-CB
    25,180       27,740  
Public cord blood banking
    323,898       308,662  
   
 
 
   
 
 
 
Total cost of sales
  $ 2,589,335     $ 2,486,180  
   
 
 
   
 
 
 
Depreciation and amortization
               
Umbilical cord blood and cord tissue stem cell service
  $ 38,223     $ 43,008  
Prepacyte
®
-CB
    9,063       9,064  
Public cord blood banking
    —         —    
   
 
 
   
 
 
 
Total depreciation and amortization
  $ 47,286     $ 52,072  
   
 
 
   
 
 
 
Operating (loss) income
               
Umbilical cord blood and cord tissue stem cell service
  $ 2,175,563     $ 1,170,704  
Prepacyte
®
-CB
    (19,146     ( 7,496
Public cord blood banking
    (163,336     (243,086
   
 
 
   
 
 
 
Total operating income
  $ 1,993,081     $ 920,122  
   
 
 
   
 
 
 
Interest expense
               
Umbilical cord blood and cord tissue stem cell service
  $ 413,942     $ 410,366  
Prepacyte
®
-CB
    —         —    
Public cord blood banking
    —         —    
   
 
 
   
 
 
 
Total interest expense
  $ 413,942     $ 410,366  
   
 
 
   
 
 
 
Income tax expense
               
Umbilical cord blood and cord tissue stem cell service
  $ 498,748     $ 303,072  
Prepacyte
®
-CB
    —         —    
Public cord blood banking
    —         —    
   
 
 
   
 
 
 
Total income tax expense
  $ 498,748     $ 303,072  
   
 
 
   
 
 
 

 
    For the nine months
ended August 31, 2019
    For the nine months
ended August 31, 2018
 
Net revenue
               
Umbilical cord blood and cord tissue stem cell service
  $ 23,246,521     $ 20,475,020  
Prepacyte
®
-CB
    70,795       84,208  
Public cord blood banking
    529,041       65,575  
   
 
 
   
 
 
 
Total net revenue
  $ 23,846,357     $ 20,624,803  
   
 
 
   
 
 
 
Cost of sales
               
Umbilical cord blood and cord tissue stem cell service
  $ 6,497,788     $ 5,431,359  
Prepacyte
®
-CB
    189,806       124,805  
Public cord blood banking
    996,259       308,662  
   
 
 
   
 
 
 
Total cost of sales
  $ 7,683,853     $ 5,864,826  
   
 
 
   
 
 
 
Depreciation and amortization
 
       
Umbilical cord blood and cord tissue stem cell service
  $ 132,409     $ 97,674  
Prepacyte
®
-CB
    27,191       27,191  
Public cord blood banking
    —         —    
   
 
 
   
 
 
 
Total depreciation and amortization
  $ 159,600     $ 124,865  
   
 
 
   
 
 
 
Operating (loss) income
 
       
Umbilical cord blood and cord tissue stem cell service
  $ 6,307,426     $ 3,521,625  
Prepacyte
®
-CB
    (164,141     (67,788
Public cord blood banking
    (2,799,978     (243,087
   
 
 
   
 
 
 
Total operating income
  $ 3,343,307     $ 3,056,995  
   
 
 
   
 
 
 
Interest expense
 
       
Umbilical cord blood and cord tissue stem cell service
  $ 1,245,154     $ 995,437  
Prepacyte
®
-CB
    —         —    
Public cord blood banking
    —         —    
   
 
 
   
 
 
 
Total interest expense
  $ 1,245,154     $ 995,437  
   
 
 
   
 
 
 
Income tax expense
 
       
Umbilical cord blood and cord tissue stem cell service
  $ 654,358     $ 3,821,660  
Prepacyte
®
-CB
    —         —    
Public cord blood banking
    —         —    
   
 
 
   
 
 
 
Total income tax expense
  $ 654,358     $ 3,821,660  
   
 
 
   
 
 
 
The following table shows the assets by segment as of August 31, 2019 and November 30, 2018:
 
    As of August 31, 2019     As of November 30, 2018  
Assets
               
Umbilical cord blood and cord tissue stem cell service
  $ 28,132,949     $ 26,239,260  
Prepacyte
®
-CB
    202,408       319,802  
Public cord blood banking
    13,492,399       15,831,081  
   
 
 
   
 
 
 
Total assets
  $ 41,827,756     $ 42,390,143