Quarterly report pursuant to Section 13 or 15(d)

Segment Reporting

v3.20.1
Segment Reporting
3 Months Ended
Feb. 29, 2020
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 ended February 29, 2020 and February 28, 2019:
 
     For the three
months
ended February 29,
2020
    For the three months
ended February 28,
2019
 
Net revenue
    
Umbilical cord blood and cord tissue stem cell service
   $  7,406,288     $  7,335,027  
PrepaCyte®-CB
     60,407       25,720  
Public cord blood banking
     154,079       134,365  
  
 
 
   
 
 
 
Total net revenue
   $ 7,620,774     $ 7,495,112  
  
 
 
   
 
 
 
Cost of sales
    
Umbilical cord blood and cord tissue stem cell service
   $ 2,055,075     $ 2,038,616  
PrepaCyte®-CB
     41,117       160,006  
Public cord blood banking
     406,952       267,605  
  
 
 
   
 
 
 
Total cost of sales
   $ 2,503,144     $ 2,466,227  
  
 
 
   
 
 
 
Depreciation and amortization
    
Umbilical cord blood and cord tissue stem cell service
   $ 37,327     $ 47,917  
PrepaCyte®-CB
     6,894       9,063  
Public cord blood banking
           —    
  
 
 
   
 
 
 
Total depreciation and amortization
   $ 44,221     $ 56,980  
  
 
 
   
 
 
 
Operating income
    
Umbilical cord blood and cord tissue stem cell service
   $ 1,489,548     $ 1,130,251  
PrepaCyte®-CB
     12,396       (143,349
Public cord blood banking
     (252,874     (133,240
  
 
 
   
 
 
 
Total operating income
   $ 1,249,070     $ 853,662  
  
 
 
   
 
 
 
Interest expense
    
Umbilical cord blood and cord tissue stem cell service
   $ 365,299     $ 406,925  
PrepaCyte®-CB
           —    
Public cord blood banking
           —    
  
 
 
   
 
 
 
Total interest expense
   $ 365,299     $ 406,925  
  
 
 
   
 
 
 
Income tax expense
    
Umbilical cord blood and cord tissue stem cell service
   $ 252,380     $ 104,667  
PrepaCyte®-CB
           —    
Public cord blood banking
           —    
  
 
 
   
 
 
 
Total income tax expense
   $ 252,380     $ 104,667  
  
 
 
   
 
 
 
The following table shows the assets by segment as of February 29, 2020 and November 30, 2019:
 
     As of February 29,
2020
     As of November 30,
201
9
 
Assets
     
Umbilical cord blood and cord tissue stem cell service
   $  31,001,108      $  28,975,002  
PrepaCyte®-CB
     270,095        289,804  
Public cord blood banking
     13,459,243        13,621,354  
  
 
 
    
 
 
 
Total assets
   $ 44,730,446      $ 42,886,160