Segment and Geographic Information

9 Months Ended

Jun. 30, 2023

Segment and Geographic Information

Segment and Geographic Information

19. 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 in deciding how to allocate resources and to assess performance. The Company’s Chief Executive Officer is the Company’s chief operating decision maker.

The Company operates in two reportable segments, the Life Sciences Products segment and the Life Sciences Services segment. These reportable segments also represent the Company’s operating segments. The Company previously operated in three reportable segments, the Semiconductor Solutions Group segment, the Life Sciences Products segment, and the Life Sciences Services segment.

The Company’s Life Sciences Products segment provides automated cold storage solutions for biological and chemical compound samples. The Company’s storage systems provide reliable automation and sample inventory management at temperatures down to -190°C and can store anywhere from one to millions of samples. The Company’s sample management solutions include consumable vials and tubes, polymerase chain reaction, plates, instruments for supporting workflows, and informatics. This portfolio provides customers with the highest level of sample quality, security, availability, intelligence, and integrity throughout the lifecycle of samples providing customers with complete end-to-end cold chain of custody capabilities. The Company also provides controlled rate thawing devices for customers in the medical, biotechnology and pharmaceutical industries.

The Company’s Life Sciences Services business is a leading provider of solutions addressing the many needs of customers in genomic analysis and the management and care of biological samples used in pharmaceutical, biotechnology, healthcare, clinical, and academic research and development markets. The Company processes millions of samples every year, each containing valuable information that must be delivered or preserved with the sample. The Company’s genomic services provide a broad capability to customers for sequencing and synthesis of genes. The Company’s sample management services include off-site storage, transport, and laboratory services, as well as interactive informatics solutions. The storage services include short- and long-term sample storage and management of the cold chain of custody from collection, to storage, to retrieving the sample which ultimately may go back into the research workflow.

Management considers adjusted operating income, which excludes charges related to amortization of completed technology, purchase accounting impacts on inventory, amortization of other intangible assets, restructuring charges, contingent consideration fair value adjustments, tariff adjustments, and other unallocated corporate expenses, as the primary performance metric when evaluating the Company’s operations.

The following is the summary of the financial information for the Company’s reportable segments for the three and nine months ended June 30, 2023 and 2022 (in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Revenue:
Life Sciences Products	$	74,571	$	47,369	$	223,091	$	150,861
Life Sciences Services		91,377		85,366		269,624		267,070
Total revenue	$	165,948	$	132,735	$	492,715	$	417,931
Operating income / (loss):
Life Sciences Products	$	(4,878)	$	1,965	$	(25,077)	$	11,173
Life Sciences Services		(3,813)		697		(13,302)		10,759
Segment operating (loss) income		(8,691)		2,662		(38,379)		21,932
Amortization of completed technology		4,656		1,810		13,725		5,424
Purchase accounting impact on inventory		2,956		—		8,737		—
Amortization of other intangible assets		7,522		5,745		22,403		18,064
Restructuring charges		812		25		3,773		319
Contingent consideration - fair value adjustments		(1,404)		—		(18,549)		—
Tariff adjustment		—		—		—		(486)
Other unallocated corporate expenses		(7,397)		155		(11,970)		8,717
Total operating (loss) income		(15,836)		(5,073)		(56,498)		(10,106)
Interest income		11,347		6,822		32,406		9,933
Interest expense		—		(2,101)		—		(4,111)
Loss on extinguishment of debt		—		—		—		(632)
Other, net		819		630		(704)		(1,617)
(Loss) income before income taxes	$	(3,670)	$	278	$	(24,796)	$	(6,533)
Assets:			June 30, 2023		September 30, 2022
Life Sciences Products			$	948,701	$	378,790
Life Sciences Services				824,018		849,603
Total assets			$	1,772,719	$	1,228,393

The following is a reconciliation of the segment assets to the corresponding amounts presented in the Condensed Consolidated Balance Sheets as of June 30, 2023 and September 30, 2022 (in thousands):

	June 30,		September 30,
	2023		2022
Segment assets	$	1,772,719	$	1,228,393
Cash and cash equivalents, restricted cash, and marketable securities		1,296,074		2,305,081
Deferred tax assets		—		1,169
Other assets		623		181,479
Total assets	$	3,069,416	$	3,716,122

Revenue from external customers is attributed to geographic areas based on locations in which customer orders are placed. Net revenue by geographic area for the three and nine months ended June 30, 2023 and 2022 are as follows (in thousands):

	Three Months Ended June 30,				Nine Months Ended June 30,
	2023		2022		2023		2022
Geographic Location:
North America	$	91,018	$	88,380	$	267,437	$	272,750
Rest of Europe		23,594		17,148		84,448		57,177
Africa		19,064		86		44,901		1,305
China		12,766		12,906		38,153		39,704
Asia Pacific/ Other		10,700		6,114		37,767		23,780
United Kingdom		8,806		8,101		20,009		23,215
Total revenue	$	165,948	$	132,735	$	492,715	$	417,931

Revenue for the United States comprises 99% of the revenue for North America for each of the three and nine months ended June 30, 2023 and 2022.

Significant Customers

The Company had one individual customer that accounted for 10% or more of its consolidated revenue for the three months ended June 30, 2023 and no individual customer that accounted for 10% or more of its consolidated revenue for the three months ended June 30, 2022. The Company had one individual customer that accounted for 10% or more of its consolidated revenue for nine months ended June 30, 2023 and no individual customer that accounted for 10% or more of its consolidated revenue for the nine months ended June 30, 2022. This customer is the same for each of the fiscal 2023 periods and is related to the Life Science Products segment and is a distributor shipping to end users in approximately 30 countries. There were no customers that accounted for more than 10% of the Company’s accounts receivable balance as of June 30, 2023 and September 30, 2022.