Segment and Geographic Information

6 Months Ended

Mar. 31, 2024

Segment Reporting [Abstract]

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.