Quarterly report pursuant to Section 13 or 15(d)

Note 11 - Segment Information

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Note 11 - Segment Information
 3 Months Ended
Mar. 31, 2021
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

11.    SEGMENT INFORMATION

 

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 (including its Hong Kong operating segment) 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,

  
   

2021

    

2020

  

Net sales:

                

Primary Reporting Segment

   $ 12,770     $ 14,008  

China

     508       698  

Russia and Kazakhstan

     191       242  

Total net sales

   $ 13,469     $ 14,948  
                 

Income (loss) from operations:

                

Primary Reporting Segment

   $ 2,699     $ 1,315  

China

     (7 )     (83 )

Russia and Kazakhstan

     (48 )     (82 )

Total income (loss) from operations for reportable segments

     2,644       1,150  

Unallocated corporate expenses

     (2,424 )     (2,598 )

Other income, net

     20       93  

Income (loss) before income taxes

   $ 240     $ (1,355 )

 

The Company’s net sales by geographic area are as follows (in thousands):

 

   

Three Months Ended March 31,

  
   

2021

    

2020

  

Net sales from external customers:

                

United States

   $ 311     $ 491  

Canada

     171       261  

Peru

     516       360  

Hong Kong1

     10,322       11,413  

China

     508       698  

Taiwan

     691       940  

South Korea

     68       127  

Russia and Kazakhstan

     191       242  

Europe

     350       233  

Other foreign countries

     341       183  

Total net sales

   $ 13,469     $ 14,948  

 

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.