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Business Segment Information
9 Months Ended
Sep. 30, 2019
Segment Reporting [Abstract]  
Business Segment Information

13.

Business Segment Information

Our business consists of two segments: our “OSUR” business consists of the development, manufacture, marketing and sale of oral fluid diagnostic products and specimen collection devices using our proprietary technologies, other diagnostic products including immunoassays and other in vitro diagnostic tests that are used on other specimen types. Our molecular collections systems or “DNAG” business consists of the development, manufacture, marketing and sale of specimen collection kits that are used to collect, stabilize, transport and store samples of genetic material for molecular testing in the consumer genetic, clinical genetic, academic research, pharmacogenomics, personalized medicine, microbiome and animal genetics markets. Our collection kits are also used for the collection of first-void urine for liquid biopsy in the prostate and bladder cancer markets; and in the sexually transmitted infection screening market. In addition, our DNAG business provides microbiome laboratory services that accelerate research and discovery for customers in the pharmaceutical, agricultural, and academic research markets. Effective as of January 4, 2019, the financial results of CoreBiome and Novosanis are included in our DNAG segment. Our cryosurgical system business was included in our OSUR segment and the impact of the sale of that business in August 2019 is reflected in the results presented below.

We organized our operating segments according to the nature of the products included in those segments. The accounting policies of the segments are the same as those described in the summary of significant accounting policies (see Note 2). We evaluate performance of our operating segments based on revenue and operating income. We do not allocate interest income, interest expense, other income, other expenses or income taxes to our operating segments.  Reportable segments have no inter-segment revenues and inter-segment expenses have been eliminated.

Operating income (loss) for the three and nine months ended September 30, 2018 has been modified to conform to the classification of the intercompany service fee presentation for 2019.  Beginning with the first quarter of 2019, we have included the fees for intercompany services in our segment operating income (loss) in order to more accurately reflect the results of each segment.

The following table summarizes operating segment information for the three and nine months ended September 30, 2019 and 2018, and asset information as of September 30, 2019 and December 31, 2018:

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

Net revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OSUR

 

$

17,730

 

 

$

19,258

 

 

$

56,335

 

 

$

65,623

 

DNAG

 

 

18,259

 

 

 

26,627

 

 

 

48,602

 

 

 

65,874

 

Total

 

$

35,989

 

 

$

45,885

 

 

$

104,937

 

 

$

131,497

 

Operating income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OSUR

 

$

8,080

 

 

$

(2,344

)

 

$

4,595

 

 

$

(13,654

)

DNAG

 

 

4,972

 

 

 

13,201

 

 

 

9,931

 

 

 

29,571

 

Total

 

$

13,052

 

 

$

10,857

 

 

$

14,526

 

 

$

15,917

 

Depreciation and amortization:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OSUR

 

$

889

 

 

$

879

 

 

$

2,555

 

 

$

2,883

 

DNAG

 

 

1,033

 

 

 

963

 

 

 

2,977

 

 

 

2,705

 

Total

 

$

1,922

 

 

$

1,842

 

 

$

5,532

 

 

$

5,588

 

Capital expenditures:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OSUR

 

$

1,796

 

 

$

908

 

 

$

5,341

 

 

$

3,682

 

DNAG

 

 

652

 

 

 

546

 

 

 

2,620

 

 

 

2,256

 

Total

 

$

2,448

 

 

$

1,454

 

 

$

7,961

 

 

$

5,938

 

 

 

 

 

September 30, 2019

 

 

December 31, 2018

 

Total assets:

 

 

 

 

 

 

 

 

OSUR

 

$

181,133

 

 

$

190,178

 

DNAG

 

 

158,088

 

 

 

125,393

 

Total

 

$

339,221

 

 

$

315,571