Segment Reporting

6 Months Ended

Jun. 30, 2013

Segment Reporting [Abstract]

Segment Reporting

10. Segment Reporting

Operating segments are defined as components of an enterprise for which separate financial information is available and evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance.

The Company develops, manufactures and sells products that unlock genetic information from very small amounts of tissue. Products, consisting of instruments, consumables and related services, are currently provided to researchers in the life sciences industry and will be provided to clinical laboratories providing diagnostic testing. The Company is organized as, and operates in, two reportable segments: life sciences segment and diagnostics segment. The life sciences business provides instruments, consumables and services efficiently profiling the activity of hundreds of genes from a single tissue sample. The diagnostics business provides molecular diagnostic kits to pathology labs enabling complex molecular testing on a distributed basis.

The Company’s chief operating decision maker is the chief executive officer. The chief operating decision maker reviews financial information presented on a total Company basis, accompanied by information about segment revenue and certain direct sales and marketing expenses by segment. The chief operating decision maker does not review segment information related to cost of revenue, research and development or other selling, general and administrative expenses. The Company’s chief operating decision maker evaluates performance based on these two measures.

Operating results for each segment and a reconciliation of segment profit to loss from operations are as follows (in thousands):

	Three Months Ended June  30,						Six Months Ended June 30,
	2013			2012			2013			2012
Product revenue:
Instruments	$	2,320		$	2,579		$	3,959		$	4,079
Consumables		4,305			3,054			8,004			5,757
Service revenue		390			310			728			609
Total life sciences segment		7,015			5,943			12,691			10,445
Diagnostics segment
Instruments		203			—			203			—
Total diagnostics segment		203			—			203			—
Total revenue		7,218			5,943			12,894			10,445
Selling, general, and administrative expenses:
Life sciences segment		2,642			1,759			4,845			3,274
Diagnostics segment		1,240			176			2,680			517
Life sciences segment profit		4,373			4,184			7,846			7,171
Diagnostics segment loss		(1,037	)		(176	)		(2,477	)		(517	)
Total segment profit		3,336			4,008			5,369			6,654
Adjustments:
Cost of revenue		(3,522	)		(3,334	)		(6,404	)		(5,990	)
Research and development expenses		(3,626	)		(2,971	)		(6,685	)		(5,168	)
Unallocated selling, general and administrative expenses		(2,826	)		(1,316	)		(5,309	)		(2,627	)
Loss from operations	$	(6,638	)	$	(3,613	)	$	(13,029	)	$	(7,131	)

The following table is based on the geographic location of distributors or end users who purchased products and services. For sales to distributors, their geographic location may be different from the geographic locations of the ultimate end user. Revenue by geography was as follows (in thousands):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2013		2012		2013		2012
North America	$	5,218	$	3,898	$	9,695	$	7,060
Europe & Middle East		1,494		1,006		2,110		1,998
Asia Pacific		506		1,039		1,089		1,387
Total revenue	$	7,218	$	5,943	$	12,894	$	10,445

Total revenue in the United States was $4.3 million, $3.8 million, $7.9 million and $6.6 million for the three and six month periods ended June 30, 2013 and 2012, respectively.

The Company’s assets are primarily located in the United States and not allocated to any specific segment or geographic region. Substantially all of the Company’s long-lived assets are located in the United States.