Significant Market Segments And Customers

12 Months Ended

Dec. 31, 2017

SIGNIFICANT MARKET SEGMENTS

SIGNIFICANT MARKET SEGMENTS AND CUSTOMERS

5. SIGNIFICANT MARKET SEGMENTS AND CUSTOMERS

We operate in one market segment, the hemodialysis market, which involves the manufacture, sale and distribution of hemodialysis products to hemodialysis clinics, including pharmaceutical, dialysis concentrates, dialysis kits and other ancillary products used in the dialysis process. In October 2014, we entered into the Distribution Agreement with Baxter, which was amended in June 2017, pursuant to which Baxter received exclusive distribution rights for our concentrate products in the United States.  Our domestic customer contracts for the supply of dialysis concentrate products that permitted assignment to Baxter without consent have been assigned to Baxter.  As a result, for 2017, 2016 and 2015, our direct sales to Baxter aggregated approximately 27%,  24% and 28% of sales, respectively, and we had a receivable from Baxter of $1,863,412 and $2,430,159 as of December 31, 2017 and 2016, respectively. 

One customer, DaVita Healthcare Partners, Inc., accounted for 50% of our sales in 2017, 52% of our sales in 2016 and 48% of our sales in 2015.  Our accounts receivable from this customer were $2,411,367 and $2,224,046 as of December 31, 2017 and 2016, respectively.  DaVita and Baxter and the accounts administered by Baxter are important to our business, financial condition and results of operations.  The loss of any significant accounts could have a material adverse effect on our business, financial condition and results of operations.  No other customers accounted for more than 10% of our sales in any of the last three years. 

The majority of our international sales in each of the last three years were sales to domestic distributors that were resold to end users outside the United States.  Our sales directly to foreign customers and distributors accounted for less than 5% of our total sales in 2017, 2016 and 2015.  Our total international sales, including sales made through domestic distributors for resale outside the United States, aggregated 12%,  12% and 13%, of our overall sales in 2017, 2016 and 2015, respectively.