Significant Market Segments And Customers

12 Months Ended

Dec. 31, 2018

Significant Market Segments And Customers

Significant Market Segments And Customers

Note 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 2018 and 2017, our direct sales to Baxter aggregated approximately 26% and 27% of sales, respectively, and we had a receivable from Baxter of $2,824,051 and $1,863,412 as of December 31, 2018 and 2017, respectively. 

One customer, DaVita Healthcare Partners, Inc., accounted for 46% of our sales in 2018 and 50% of our sales in 2017.  Our accounts receivable from this customer were $2,538,503 and $2,406,257 as of December 31, 2018 and 2017, 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 domestic customers accounted for more than 10% of our sales in any of the last two years. 

The majority of our international sales in each of the last two years were sales to domestic distributors that were resold to end users outside the United States.  Our sales to foreign customers and distributors accounted for approximately 14% of our total sales in 2018 and 2017. However one customer, Nipro Medical Corporation, accounted for 10% and 7% of our sales for 2018 and 2017 respectively. Our total international sales, including sales made through domestic distributors for resale outside the United States, aggregated 14% and 12%, of our overall sales in 2018 and 2017, respectively.