Commitments and Contingent Obligations

12 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingent Obligations

(16) Commitments and Contingent Obligations

(a) Royalty Commitments - We have entered into various license agreements that require payment of royalties based on a specified percentage of net revenues from licensed products, with such percentages generally ranging from approximately 3% to 10%. During the year ended September 30, 2022, royalty expense associated with these agreements totaled approximately $2,300, with 40% and 60% of such expense relating to our Diagnostics and Life Science segments, respectively. These royalty expenses are recognized as the related revenues are earned and are recorded as a component of cost of sales. Annual royalty expenses associated with these agreements totaled approximately $5,200 and $1,900 for the years ended September 30, 2021 and 2020, respectively, with the Diagnostics/Life Science segment split of such net revenues equating to approximately 25/75 and 80/20 in each of these years, respectively.

(b) Purchase Commitments - Excluding the operating lease commitments reflected in Note 9, we have purchase commitments primarily for inventories and service items as part of the normal course of business. Commitments made under these obligations are $40,182 for fiscal 2023 and $1,109 for fiscal 2024 through fiscal 2026. No purchase commitments have been made beyond fiscal 2026.

(c) Litigation - We are a party to various litigation matters from time to time that we believe are in the normal course of business. The ultimate resolution of these routine matters is not expected to have a material adverse effect on our consolidated financial position, results of operations or cash flows. Additionally, the Company has also become a party to certain legal matters that are outside the normal course of business. See Note 5 for a discussion of Magellan’s DOJ LeadCare legal matter.

(d) Indemnifications - In conjunction with certain contracts and agreements, we provide routine indemnifications related to our performance obligations. The terms of these indemnifications range in duration and in some circumstances are not explicitly defined. The maximum obligation under some such indemnifications is not explicitly stated and, as a result of our having no history of paying such indemnifications, cannot be reasonably estimated. We have not made any payments for these indemnifications and no liability is recorded at September 30, 2022 or 2021.