8.	Reportable Segments and Major Customers Information

Meridian was formed in 1976 and functions as a fully-integrated life science company with principal businesses in (i) the development, manufacture, sale and distribution of diagnostic test kits, primarily for certain gastrointestinal, viral, respiratory, and parasitic infectious diseases, and elevated blood lead levels; and (ii) the manufacture and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells, and bioresearch reagents used by researchers and other diagnostic manufacturers.

Our reportable segments are Diagnostics and Life Science. The Diagnostics segment consists of manufacturing operations for infectious disease products in Cincinnati, Ohio; manufacturing operations for products detecting elevated lead levels in blood in Billerica, Massachusetts (near Boston); and the sale and distribution of diagnostics products domestically and abroad. This segment’s products are used by hospitals, reference labs and physician offices to detect infectious diseases and elevated lead levels.

The Life Science segment consists of manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; Luckenwalde, Germany; and Sydney, Australia; and the sale and distribution of bulk antigens, antibodies, PCR/qPCR reagents, nucleotides, competent cells, and bioresearch reagents domestically and abroad, including sales, business development and distribution facilities in Singapore and Beijing, China to further pursue growing revenue opportunities in Asia. This segment’s products are used by manufacturers and researchers in a variety of applications (e.g., in-vitro medical device manufacturing, microRNA detection, next-gen sequencing, plant genotyping, and mutation detection, among others).

Amounts due from two Diagnostics distributor customers accounted for 15% and 11% of consolidated accounts receivable at June 30, 2018 and September 30, 2017, respectively. Revenues from these two distributor customers accounted for 28% of the Diagnostics segment third-party revenues during each of the three month periods ended June 30, 2018 and 2017, and 29% and 28% during the nine month periods ended June 30, 2018 and 2017, respectively. These distributors represented 19% and 20% of consolidated revenues for the fiscal 2018 and 2017 third quarters, respectively, and 21% and 20% for the respective year-to-date nine month periods, respectively.

Within our Life Science segment, two diagnostic manufacturing customers accounted for 17% and 10% of the segment’s third-party revenues during the three months ended June 30, 2018 and 2017, respectively, and 18% and 17% during the nine months ended June 30, 2018 and 2017, respectively.

Segment information for the interim periods is as follows:


	Diagnostics		Life Science		Unallocated Costs and Eliminations(1)			Total
Three Months Ended June 30, 2018
Net revenues -
Third-party	$	36,368	$	15,369	$	—		$	51,737
Inter-segment		80		96		(176	)		—
Operating income		7,166		3,647		(2,078	)		8,735
Goodwill (June 30, 2018)		35,213		19,563		—			54,776
Other intangible assets, net (June 30, 2018)		22,749		1,226		—			23,975
Total assets (June 30, 2018)		183,233		71,375		(625	)		253,983
Three Months Ended June 30, 2017
Net revenues -
Third-party	$	35,949	$	14,191	$	—		$	50,140
Inter-segment		71		129		(200	)		—
Operating income (2)		914		3,388		2			4,304
Goodwill (September 30, 2017)		35,213		19,713		—			54,926
Other intangible assets, net (September 30, 2017)		24,973		1,731		—			26,704
Total assets (September 30, 2017)		180,226		69,938		(387	)		249,777
Nine Months Ended June 30, 2018
Net revenues -
Third-party	$	113,640	$	46,831	$	—		$	160,471
Inter-segment		281		363		(644	)		—
Operating income		22,926		10,007		(8,459	)		24,474
Nine Months Ended June 30, 2017
Net revenues -
Third-party	$	107,529	$	43,545	$	—		$	151,074
Inter-segment		278		361		(639	)		—
Operating income (2)		17,152		11,226		197			28,575

(1)

Unallocated costs for the three and nine months ended June 30, 2018 total $2,081 and $8,475, respectively, and are comprised of Executive Transition and Realignment Costs, and Litigation Costs, as set forth within the accompanying Condensed Consolidated Statements of Operations. Eliminations consist of inter-segment transactions.

(2)	Diagnostics’ operating income includes the effect of the Magellan goodwill impairment charge in the amount of $6,628 during the three and nine month periods ended June 30, 2017.

Transactions between segments are accounted for at established intercompany prices for internal and management purposes, with all intercompany amounts eliminated in consolidation.