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, 2022
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 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,

  
   

2022

    

2021

  

Net sales:

                

Primary Reporting Segment

   $ 10,877     $ 12,770  

China

     481       508  

Russia and Kazakhstan

     188       191  

Total net sales

   $ 11,546     $ 13,469  
                 

Income (loss) from operations:

                

Primary Reporting Segment

   $ 1,915     $ 2,699  

China

     8       (7 )

Russia and Kazakhstan

     (47 )     (48 )

Income from operations for reportable segments, net

     1,876       2,644  

Unallocated corporate expenses

     (2,259 )     (2,424 )

Other income, net

     110       20  

Income (loss) before income taxes

   $ (273 )   $ 240  

 

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

 

   

Three Months Ended March 31,

  
   

2022

    

2021

  

Net sales from external customers:

                

United States

   $ 256     $ 311  

Canada

     137       171  

Peru

     482       516  

Hong Kong1

     8,776       10,322  

China

     481       508  

Taiwan

     569       691  

Japan

     235       149  

Malaysia and Singapore

     125       75  

Russia and Kazakhstan

     188       191  

Europe

     201       350  

Other foreign countries

     96       185  

Total net sales

   $ 11,546     $ 13,469  

 

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.