Annual report pursuant to Section 13 and 15(d)

SEGMENT INFORMATION

v3.19.1
SEGMENT INFORMATION
12 Months Ended
Dec. 31, 2018
Segment Reporting [Abstract]  
SEGMENT INFORMATION 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.

There is no separate segment manager who is held accountable by the Company’s chief operating decision-makers, or anyone else, for operations, operating results and planning for the China market or the Russia and Kazakhstan market on a stand-alone basis, and neither market is material for the periods presented. As such, the Company believes that all operating segments should be aggregated into a single reportable segment for disclosure purposes.
 
The Company’s net sales by geographic area are as follows (in thousands):
 
Year Ended December 31,
 
2018
 
2017
Net sales from external customers:
 
 
 
United States
$
3,637

 
$
3,348

Canada
1,710

 
1,938

Peru
1,635

 
508

Hong Kong1
169,452

 
174,926

China
7,744

 
7,282

Taiwan
3,964

 
5,591

South Korea
493

 
466

Russia and Kazakhstan
868

 
913

Europe
1,644

 
2,278

Other foreign countries
763

 
313

Total net sales
$
191,910

 
$
197,563


_____________________________ 
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”.
 
The Company’s net sales by product and service are as follows (in thousands):
 
Year Ended December 31,
 
2018
 
2017
Net sales by product and service:
 
 
 
Product sales
$
181,865

 
$
187,591

Freight and other
13,329

 
13,676

Less: sales returns
(3,284
)
 
(3,704
)
Total net sales
$
191,910

 
$
197,563


 
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,
 
2018
 
2017
Long-lived assets:
 
 
 
United States
$
521

 
$
648

Hong Kong
145

 
78

China
61

 
112

Other foreign countries
207

 
311

Total long-lived assets
$
934

 
$
1,149