Quarterly report pursuant to Section 13 or 15(d)

Note 11 - Segment Information

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Note 11 - Segment Information
 9 Months Ended
Sep. 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 September 30,

    

Nine Months Ended September 30,

  
   

2024

    

2023

    

2024

    

2023

  

Net sales:

                                

Primary Reporting Segment

   $ 9,951     $ 10,249     $ 30,440     $ 31,719  

China

     601       254       1,321       917  

Russia and Kazakhstan

     139       112       356       351  

Total net sales

   $ 10,691     $ 10,615     $ 32,117     $ 32,987  
                                 

Income (loss) from operations:

                                

Primary Reporting Segment

   $ 1,511     $ 1,880     $ 4,847     $ 5,208  

China

     160       (160 )     (10 )     (423 )

Russia and Kazakhstan

     (31 )     (47 )     (88 )     (131 )

Income from operations for reportable segments, net

     1,640       1,673       4,749       4,654  

Unallocated corporate expenses

     (1,915 )     (1,965 )     (5,627 )     (6,083 )

Other income, net

     441       585       1,523       1,708  

Income before income taxes

   $ 166     $ 293     $ 645     $ 279  

 

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

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2024

    

2023

    

2024

    

2023

  

Net sales from external customers:

                                

United States

   $ 274     $ 276     $ 799     $ 827  

Canada

     134       180       387       507  

Peru

     340       365       844       1,175  

Hong Kong1

     8,356       8,412       25,998       26,391  

China

     601       254       1,321       917  

Taiwan

     454       552       1,277       1,460  

Japan

     81       152       202       341  

Malaysia and Singapore

     58       54       177       207  

Russia and Kazakhstan

     139       112       356       351  

Europe

     164       182       473       567  

Other foreign countries

     90       76       283       244  

Total net sales

   $ 10,691     $ 10,615     $ 32,117     $ 32,987  

 

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.