Reportable Segment and Major Customers Information

6 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Reportable Segment and Major Customers Information

4. Reportable Segment and Major Customers Information

Meridian was formed in 1976 and functions as a fully-integrated research, development, manufacturing, marketing and sales organization with primary emphasis in the fields of in vitro diagnostics and life science. Our principal businesses are (i) the development, manufacture and distribution of diagnostic test kits primarily for gastrointestinal, viral, respiratory and parasitic infectious diseases; 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, and the contract development and manufacture of proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

In the fourth quarter of fiscal 2013, we aggregated our Diagnostics operating segments into a single reportable segment, thereby resulting in our reportable segments being Diagnostics and Life Science. The prior period information reflected herein has been conformed to the current period presentation.

The Diagnostics segment is headquartered in Cincinnati, Ohio, which also serves as the base of manufacturing operations and research and development. The Diagnostics segment has sales and distribution facilities in the United States, Europe and Australia. 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 a sales and business development location in Singapore. The Life Science segment also includes the contract development and manufacture of cGMP clinical grade proteins and other biologicals for use by biopharmaceutical and biotechnology companies engaged in research for new drugs and vaccines.

Amounts due from two Diagnostics distributor customers accounted for 15% and 17% of consolidated accounts receivable at March 31, 2014 and September 30, 2013, respectively. Revenue from these two distributor customers accounted for 35% and 42% of the Diagnostics segment third-party revenue during the three months ended March 31, 2014 and 2013, respectively, and 36% and 44% during the six months ended March 31, 2014 and 2013, respectively. In addition, approximately $3,500 of our accounts receivable at both March 31, 2014 and September 30, 2013 is due from Italian hospital customers whose funding ultimately comes from the Italian government, representing 13% of consolidated accounts receivable in each of the respective periods.

Within our Life Science segment, two diagnostic manufacturing customers accounted for 23% and 18% of the segment’s third-party revenue during the three months ended March 31, 2014 and 2013, respectively, and 17% and 18% during the six months ended March 31, 2014 and 2013, respectively.

Segment information for the interim periods is as follows:

	Diagnostics		Life Science		Eliminations(1)			Total
Three Months Ended March 31, 2014
Net revenues -
Third-party	$	37,061	$	13,073	$	—		$	50,134
Inter-segment		154		225		(379	)		—
Operating income		12,301		3,306		59			15,666
Goodwill (March 31, 2014)		1,250		22,257		—			23,507
Other intangible assets, net (March 31, 2014)		2,968		5,873		—			8,841
Total assets (March 31, 2014)		111,319		115,444		(48,608	)		178,155
Three Months Ended March 31, 2013
Net revenues -
Third-party	$	36,403	$	10,862	$	—		$	47,265
Inter-segment		105		350		(455	)		—
Operating income		12,494		3,046		(287	)		15,253
Goodwill (September 30, 2013)		1,250		21,865		—			23,115
Other intangible assets, net (September 30, 2013)		1,561		6,496		—			8,057
Total assets (September 30, 2013)		112,054		110,111		(45,417	)		176,748
Six Months Ended March 31, 2014
Net revenues -
Third-party	$	71,898	$	23,030	$	—		$	94,928
Inter-segment		263		484		(747	)		—
Operating income		21,685		5,567		40			27,292
Six Months Ended March 31, 2013
Net revenues -
Third-party	$	72,072	$	20,544	$	—		$	92,616
Inter-segment		203		508		(711	)		—
Operating income		23,834		4,680		(170	)		28,344

(1) Eliminations consist of inter-segment transactions.

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