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, 2021
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,

  
   

2021

    

2020

    

2021

    

2020

  

Net sales:

                                

Primary Reporting Segment

   $ 13,576     $ 13,294     $ 41,679     $ 42,718  

China

     501       640       1,596       2,156  

Russia and Kazakhstan

     199       190       622       602  

Total net sales

   $ 14,276     $ 14,124     $ 43,897     $ 45,476  
                                 

Income (loss) from operations:

                                

Primary Reporting Segment

   $ 2,558     $ 2,715     $ 7,803     $ 6,038  

China

     5       134       51       64  

Russia and Kazakhstan

     5       (59 )     (101 )     (37 )

Income from operations for reportable segments, net

     2,568       2,790       7,753       6,065  

Unallocated corporate expenses

     (2,089 )     (2,122 )     (6,669 )     (6,662 )

Other income (expense), net

     (53 )     385       (92 )     603  

Income before income taxes

   $ 426     $ 1,053     $ 992     $ 6  

 

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

 

   

Three Months Ended September 30,

    

Nine Months Ended September 30,

  
   

2021

    

2020

    

2021

    

2020

  

Net sales from external customers:

                                

United States

   $ 279     $ 338     $ 918     $ 1,202  

Canada

     140       132       481       536  

Peru

     608       357       1,752       954  

Hong Kong1

     11,201       11,132       34,227       36,238  

China

     501       640       1,596       2,156  

Taiwan

     584       771       1,990       2,261  

South Korea

     51       52       202       220  

Russia and Kazakhstan

     199       190       622       602  

Europe

     258       259       869       747  

Other foreign countries

     455       253       1,240       560  

Total net sales

   $ 14,276     $ 14,124     $ 43,897     $ 45,476  

 

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.