Quarterly report pursuant to Section 13 or 15(d)

Note 11 - Segment Information

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Note 11 - Segment Information
 6 Months Ended
Jun. 30, 2024
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 June 30,

    

Six Months Ended June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Net sales:

                                

Primary Reporting Segment

   $ 10,023     $ 10,139     $ 20,489     $ 21,470  

China

     336       247       720       663  

Russia and Kazakhstan

     116       125       217       239  

Total net sales

   $ 10,475     $ 10,511     $ 21,426     $ 22,372  
                                 

Income (loss) from operations:

                                

Primary Reporting Segment

   $ 1,710     $ 1,501     $ 3,336     $ 3,328  

China

     (76 )     (243 )     (170 )     (263 )

Russia and Kazakhstan

     (17 )     (26 )     (57 )     (84 )

Income from operations for reportable segments, net

     1,617       1,232       3,109       2,981  

Unallocated corporate expenses

     (1,855 )     (1,975 )     (3,712 )     (4,118 )

Other income, net

     519       442       1,082       1,123  

Income (loss) before income taxes

   $ 281     $ (301 )   $ 479     $ (14 )

 

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

 

   

Three Months Ended June 30,

    

Six Months Ended June 30,

  
   

2024

    

2023

    

2024

    

2023

  

Net sales from external customers:

                                

United States

   $ 263     $ 272     $ 525     $ 551  

Canada

     142       157       253       327  

Peru

     284       483       504       810  

Hong Kong1

     8,468       8,306       17,642       17,979  

China

     336       247       720       663  

Taiwan

     486       454       823       908  

Japan

     55       107       121       189  

Malaysia and Singapore

     66       68       119       153  

Russia and Kazakhstan

     116       125       217       239  

Europe

     157       199       309       385  

Other foreign countries

     102       93       193       168  

Total net sales

   $ 10,475     $ 10,511     $ 21,426     $ 22,372  

 

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” in our most recent Annual Report on Form 10-K.