SEGMENT INFORMATION

At December 30, 2017, we were organized into two reporting segments, OEM Laser Sources (“OLS”) and Industrial Lasers & Systems (“ILS”), based upon our organizational structure and how the chief operating decision maker ("CODM") receives and utilizes information provided to allocate resources and make decisions. This segmentation reflects the go-to-market strategies and synergies for our broad portfolio of laser technologies and products. While both segments deliver cost-effective, highly reliable photonics solutions, the OLS business segment is focused on high performance laser sources and complex optical sub-systems, typically used in microelectronics manufacturing, medical diagnostics and therapeutic medical applications, as well as in scientific research. Our ILS business segment delivers high performance laser sources, sub-systems and tools primarily used for industrial laser materials processing, serving important end markets like automotive, machine tool, consumer goods and medical device manufacturing. Rofin's operating results have been included primarily in our Industrial Lasers & Systems segment.

We have identified OLS and ILS as operating segments for which discrete financial information is available. Both units have dedicated engineering, manufacturing, product business management and product line management functions. A small portion of our outside revenue is attributable to projects and recently developed products for which a segment has not yet been determined. The associated direct and indirect costs are presented in the category of Corporate and other, along with other corporate costs as described below.

Our Chief Executive Officer has been identified as the CODM as he assesses the performance of the segments and decides how to allocate resources to the segments. Income from continuing operations is the measure of profit and loss that our CODM uses to assess performance and make decisions. As assets are not a measure used to assess the performance of the company by the CODM, asset information is not tracked or compiled by segment and is not available to be reported in our disclosures. Income from operations represents the net sales less the cost of sales and direct operating expenses incurred within the operating segments as well as allocated expenses such as shared sales and manufacturing costs. We do not allocate to our operating segments certain operating expenses which we manage separately at the corporate level. These unallocated costs include stock-based compensation and corporate functions (certain research and development, management, finance, legal and human resources) and are included in the results below under Corporate and other in the reconciliation of operating results. Management does not consider unallocated Corporate and other costs in its measurement of segment performance.

The following table provides net sales and income from continuing operations for our operating segments and a reconciliation of our total income from continuing operations to income from continuing operations before income taxes (in thousands):



	Three Months Ended
	December 30, 2017			December 31, 2016
Net sales:
OEM Laser Sources	$	325,657		$	238,736
Industrial Lasers & Systems	151,908			107,337
Total net sales	$	477,565		$	346,073

Income (loss) from continuing operations:
OEM Laser Sources	$	127,717		$	83,590
Industrial Lasers & Systems	1,213			(16,508		)
Corporate and other	(19,607		)	(24,882		)
Total income from continuing operations	109,323			42,200
Total other income (expense), net	(8,500		)	5,172
Income from continuing operations before income taxes	$	100,823		$	47,372

Major Customers

We had one customer during the three months ended December 30, 2017 that accounted for 32.8% of net sales. The same customer accounted for 23.0% of net sales for the three months ended December 31, 2016. The customer purchased primarily from our OLS segment.

We had one customer that accounted for 27.2% and 19.0% of accounts receivable at December 30, 2017 and September 30, 2017, respectively. We had another customer that accounted for 15.0% and 10.0% of accounts receivable at December 30, 2017 and September 30, 2017, respectively. The customers purchased primarily from our OLS segment.