Quarterly report pursuant to Section 13 or 15(d)


3 Months Ended
Mar. 31, 2020
Segment Reporting [Abstract]  
The Company sells products to a member network that operates in a seamless manner from market to market, except for the China market where it sells to some consumers through an e-commerce platform, and the Russia and Kazakhstan market where the Company’s engagement of a third-party service provider results in a different economic structure than its other markets. Otherwise, the Company believes that all of its other operating segments have similar economic characteristics and are similar in the nature of the products sold, the product acquisition process, the types of customers products are sold to, the methods used to distribute the products, and the nature of the regulatory environment. Therefore, the Company aggregates its other operating segments into a single reporting segment (the “Primary Reporting Segment”).

The Company reviews its net sales and operating income (loss) by operating segment, and reviews its assets and capital expenditures on a consolidated basis and not by operating segment. As such, net sales and operating income (loss) are presented by reportable segment and assets and capital expenditures by operating segment are not presented. Segment operating income (loss) is adjusted for certain direct costs and commission allocation.
The Company’s operating information by geographic area are as follows (in thousands):
  Three Months Ended March 31,
  2020 2019
Net sales:  
Primary Reporting Segment $ 14,008    $ 18,054   
China 698    1,056   
Russia and Kazakhstan 242    218   
Total net sales $ 14,948    $ 19,328   

Income (loss) from operations:  
Primary Reporting Segment $ 1,315    $ 822   
China (83)   (311)  
Russia and Kazakhstan (82)   (25)  
Total income from operations for reportable segments 1,150    486   
Unallocated corporate expenses (2,598)   (3,195)  
Other income, net 93    432   
Loss before income taxes $ (1,355)   $ (2,277)  
The Company’s net sales by geographic area are as follows (in thousands):
  Three Months Ended March 31,
  2020 2019
Net sales from external customers:    
United States $ 491    $ 541   
Canada 261    286   
Peru 360    688   
Hong Kong1
11,413    15,366   
China 698    1,056   
Taiwan 940    634   
South Korea 127    106   
Russia and Kazakhstan 242    218   
Europe 233    343   
Other foreign countries 183    90   
Total net sales $ 14,948    $ 19,328   
1 Substantially all of our Hong Kong revenues are derived from the sale of products that are delivered to members in China. See “Item 1A. Risk Factors” in this report and in our most recent Annual Report on Form 10-K.