Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Segment Information

v3.10.0.1
Segment Information
6 Months Ended
Jun. 30, 2018
Segment Reporting [Abstract]  
Segment Information
Segment Information
The Company has two operating segments for which it recognizes revenue; Clinical Services and Pharma Services. Our Clinical Services segment provides various clinical testing services to community-based pathology practices, hospital pathology labs and academic centers with reimbursement from various payers including client direct billing, commercial insurance, Medicare and other government, and patients. Our Pharma Services segment supports pharmaceutical firms in their drug development programs by supporting various clinical trials and research.

In the fourth quarter of 2017, changes were made in the information provided to our Chief Operating Decision Maker (“CODM”); greater detail was provided regarding the performance of our Pharma business and our Clinical business as there was an increased focus on this financial data due to the growth of our Pharma business.  Our CODM also changed the way he was using this financial information to make strategic decisions regarding allocation of resources and evaluating performance of the Company.  This resulted in a change in our operating segments to align with how the CODM views our business which resulted in two operating segments; a Pharma Services segment and a Clinical Services segment.  

We have presented the financial information reviewed by the CODM including revenues, cost of revenue and gross margin for each of our operating segments. The segment information presented in these financial statements has been conformed to present segments on this revised basis for all prior periods.  Assets are not presented at the segment level as that information is not used by the CODM.  

The following table summarizes segment information for the six month periods ended June 30, 2018 and 2017, respectively (in thousands).   
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2018
 
2017
(as adjusted)
 
2018
 
2017
(as adjusted)
Net revenues:
 
 
 
 
 
 
 
 
Clinical Services
 
$
59,540

 
$
55,547

 
$
116,511

 
$
108,455

Pharma Services
 
8,206

 
6,717

 
14,658

 
11,238

Total Revenue
 
$
67,746

 
$
62,264

 
$
131,169

 
$
119,693

 
 
 
 
 
 
 
 
 
Cost of revenue:
 
 
 
 
 
 
 
 
Clinical Services
 
$
32,035

 
$
30,997

 
$
63,076

 
$
61,704

Pharma Services
 
5,181

 
3,915

 
10,260

 
7,688

Total Cost of Revenue
 
$
37,216

 
$
34,912

 
$
73,336

 
$
69,392

 
 
 
 
 
 
 
 
 
Gross Profit:
 
 
 
 
 
 
 
 
Clinical Services
 
$
27,505

 
$
24,550

 
$
53,435

 
$
46,751

Pharma Services
 
3,025

 
2,802

 
4,398

 
3,550

Total Gross Profit
 
$
30,530

 
$
27,352

 
$
57,833

 
$
50,301

 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
General and administrative
 
$
20,983

 
$
18,432

 
$
38,050

 
$
35,450

Research and development
 
1,073

 
947

 
2,029

 
1,809

Sales and marketing
 
7,680

 
6,132

 
14,455

 
11,779

Total operating expenses
 
29,736

 
25,511

 
54,534

 
49,038

Income from Operations
 
794

 
1,841

 
3,299

 
1,263

Interest expense, net
 
1,407

 
1,411

 
2,892

 
2,775

Other expense
 
124

 

 
62

 

Income (loss) before taxes
 
(737
)
 
430

 
345

 
(1,512
)
Income tax (benefit) expense
 
(357
)
 
(53
)
 
81

 
(832
)
Net Income (Loss)
 
$
(380
)
 
$
483

 
$
264

 
$
(680
)