NOTE 18. SEGMENT REPORTING INFORMATION

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

Abaxis develops, manufactures and markets portable blood analysis systems for use in human or veterinary patient care setting to provide clinicians with rapid blood constituent measurements. We identify our reportable segments as those customer groups that represent more than 10% of our combined revenue or gross profit or loss of all reported operating segments. We manage our business on the basis of the following two reportable segments: (i) the medical market and (ii) the veterinary market, which are based on the products sold by market and customer group. For the products that we manufacture and sell, each reportable segment has similar manufacturing processes, technology and shared infrastructures. The accounting policies for segment reporting are the same as for the Company as a whole. We do not segregate assets by segments since our chief operating decision maker, or decision making group, does not use assets as a basis to evaluate a segment’s performance.

Medical Market

In the medical market reportable segment, we serve a worldwide customer group consisting of physicians’ office practices across multiple specialties, urgent care, outpatient and walk-in clinics (free-standing or hospital-connected), health screening operations, home care providers (national, regional or local), nursing homes, ambulance companies, oncology treatment clinics, dialysis centers, pharmacies, hospital laboratories, military installations (ships, field hospitals and mobile care units), pharmaceutical clinical trials and cruise ship lines. The products manufactured and sold in this segment primarily consist of Piccolo chemistry analyzers and medical reagent discs.

Veterinary Market

In the veterinary market reportable segment, we serve a worldwide customer group consisting of companion animal hospitals, animal clinics with mixed practices of small animals, birds and reptiles, equine and bovine practitioners, veterinary emergency clinics, veterinary referral hospitals, universities, government, pharmaceutical companies, biotechnology companies and private research laboratories. Our veterinary market product offerings include VetScan chemistry analyzers and veterinary reagent discs, VetScan hematology instruments and related reagent kits, VetScan VSpro specialty analyzers and related consumables, VetScan i-STAT analyzers and related consumables, urinalysis instruments and related consumables and VetScan rapid tests. Financial information pertaining to our AVRL business is presented as a discontinued operation. See Note 4, “Discontinued Operations.”

Total Revenues, Cost of Revenues and Gross Profit by Segment

The table below summarizes revenues, cost of revenues and gross profit from our two operating segments and from certain unallocated items and represents our results from continuing operations for the three and six months ended September 30, 2017 and 2016 (in thousands).

	Three Months Ended September 30,				Six Months Ended September 30,
	2017		2016		2017		2016
Revenues:
Medical Market	$	9,282	$	9,381	$	18,144	$	18,478
Veterinary Market		48,536		48,290		96,904		96,021
Other (1)		1,036		881		2,064		1,749
Total revenues		58,854		58,552		117,112		116,248
Cost of revenues:
Medical Market		5,101		5,133		10,065		9,987
Veterinary Market		21,511		21,124		42,818		41,884
Other (1)		81		37		124		118
Total cost of revenues		26,693		26,294		53,007		51,989
Gross profit:
Medical Market		4,181		4,248		8,079		8,491
Veterinary Market		27,025		27,166		54,086		54,137
Other (1)		955		844		1,940		1,631
Gross profit	$	32,161	$	32,258	$	64,105	$	64,259

(1) Represents unallocated items, not specifically identified to any particular business segment.