Annual report pursuant to Section 13 and 15(d)

Note 13 - Segment Information

v3.24.0.1
Note 13 - Segment Information
 12 Months Ended
Dec. 31, 2023
Notes to Financial Statements  
Segment Reporting Disclosure [Text Block]

13.    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 retail 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):

 

   

Year Ended December 31,

  
   

2023

    

2022

  

Net sales:

                

Primary Reporting Segment

   $ 42,209     $ 46,558  

China

     1,235       2,017  

Russia and Kazakhstan

     480       559  

Total net sales

   $ 43,924     $ 49,134  
                 

Income (loss) from operations:

                

Primary Reporting Segment

   $ 7,067     $ 7,783  

China

     (534 )     139  

Russia and Kazakhstan

     (134 )     (166 )

Income from operations for reportable segments, net

     6,399       7,756  

Unallocated corporate expenses

     (8,070 )     (8,026 )

Other income, net

     2,416       872  

Income before income taxes

   $ 745     $ 602  

 

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

 

   

Year Ended December 31,

  
   

2023

    

2022

  

Net sales from external customers:

                

United States

   $ 1,157     $ 1,175  

Canada

     710       664  

Peru

     1,497       1,417  

Hong Kong1

     34,898       38,436  

China

     1,235       2,017  

Taiwan

     2,181       2,493  

Japan

     450       676  

Russia and Kazakhstan

     480       559  

Europe

     733       891  

Other foreign countries

     583       806  

Total net sales

   $ 43,924     $ 49,134  

 

1 Substantially all of the Company's Hong Kong revenues are derived from the sale of products that are delivered to members in China. See “Item 1A. Risk Factors.”

 

The Company’s net sales by product and service are as follows (in thousands):

 

   

Year Ended December 31,

  
   

2023

    

2022

  

Net sales by product and service:

                

Product sales

   $ 42,108     $ 44,159  

Administrative fees, freight and other

     2,014       5,193  

Less: sales returns

     (198 )     (218 )

Total net sales

   $ 43,924     $ 49,134  

 

Due to system constraints, it is impracticable for the Company to separately disclose sales by product category for the years presented.

 

The Company’s long-lived assets by geographic area are as follows (in thousands):

 

   

December 31,

  
   

2023

    

2022

  

Long-lived assets:

                

United States

   $ 121     $ 186  

Hong Kong

     54       111  

China

     77       78  

Other foreign countries

     14       19  

Total long-lived assets

   $ 266     $ 394