Segment Information

9 Months Ended

Sep. 30, 2020

Segment Reporting [Abstract]

Segment Information

Segment Information

We have four business segments (Asia, Europe, North America, and Latin America and Other) based primarily upon the geographic region where each segment operates, as well as the internal organization of our officers and their responsibilities. Each of the geographic segments operate under the Nature’s Sunshine Products and Synergy® WorldWide brands. The Latin America and Other segment includes our wholesale business in which we sell products to various locally-managed entities independent of the Company that we have granted distribution rights for the relevant market.

Net sales for each segment have been reduced by intercompany sales as they are not included in the measure of segment profit or loss reviewed by the chief executive officer. We evaluate performance based on contribution margin by segment before consideration of certain inter-segment transfers and expenses.

Reportable business segment information is as follows (dollar amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net sales:
Asia	$	38,099	$	33,717	$	101,814	$	102,475
Europe	18,006		14,640		54,098		45,312
North America	37,557		34,161		110,785		105,304
Latin America and Other	6,588		6,006		16,765		17,429
Total net sales	100,250		88,524		283,462		270,520
Contribution margin (1):
Asia	17,981		16,236		48,560		48,638
Europe	5,954		4,865		17,987		14,692
North America	12,065		12,169		38,388		37,587
Latin America and Other	2,765		2,608		7,161		7,348
Total contribution margin	38,765		35,878		112,096		108,265
Selling, general and administrative expenses (2)	33,294		31,177		92,863		96,048
Operating income	5,471		4,701		19,233		12,217
Other income (loss), net	671		(1,243)		(230)		(985)
Income before provision for income taxes	$	6,142	$	3,458	$	19,003	$	11,232

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(1)   Contribution margin consists of net sales less cost of sales and volume incentives expense.

(2)  Service fees in China totaled $3.2 million and $8.0 million for the three and nine-month periods ended September 30, 2020, respectively, compared to $2.8 million and $7.3 million for the three and nine-month periods ended September 30, 2019. These service fees are included in selling, general and administrative expenses.

From an individual country perspective, the United States and South Korea comprise 10 percent or more of consolidated net sales for the three and nine-month periods ended September 30, 2020 and 2019, as follows (dollar amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net sales:
United States	$	35,062	$	31,579	$	103,048	$	97,734
South Korea	16,592		15,226		47,447		52,677
Other	48,596		41,719		132,967		120,109
	$	100,250	$	88,524	$	283,462	$	270,520

Net sales generated by each of our product lines is set forth below (dollar amounts in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Asia
General health	$	10,055	$	9,450	$	27,364	$	28,287
Immune	85		105		465		462
Cardiovascular	10,622		9,997		29,284		33,390
Digestive	9,935		6,309		24,482		18,417
Personal care	2,575		3,472		7,457		9,559
Weight management	4,827		4,384		12,762		12,360
	38,099		33,717		101,814		102,475
Europe
General health	$	7,725	$	5,232	$	22,501	$	16,352
Immune	1,510		1,176		5,324		3,539
Cardiovascular	2,581		2,433		7,693		8,050
Digestive	4,541		3,374		13,254		10,555
Personal care	1,023		1,905		3,492		5,065
Weight management	626		520		1,834		1,751
	18,006		14,640		54,098		45,312
North America
General health	$	15,839	$	14,823	$	46,190	$	45,505
Immune	5,790		3,731		18,637		11,289
Cardiovascular	4,138		4,780		11,984		14,791
Digestive	8,635		7,946		24,734		25,190
Personal care	1,963		1,617		5,867		4,563
Weight management	1,192		1,264		3,373		3,966
	37,557		34,161		110,785		105,304
Latin America and Other
General health	$	2,038	$	1,929	$	5,002	$	5,324
Immune	837		664		2,326		1,874
Cardiovascular	429		378		1,070		1,078
Digestive	2,682		2,499		7,008		7,680
Personal care	384		267		848		784
Weight management	218		269		511		689
	6,588		6,006		16,765		17,429
	$	100,250	$	88,524	$	283,462	$	270,520

From an individual country perspective, only the United States comprised 10 percent or more of consolidated property, plant and equipment as follows (dollar amounts in thousands):

	September 30, 2020		December 31, 2019
Property, plant and equipment:
United States	$	52,129	$	54,470
Other	4,035		5,042
Total property, plant and equipment, net	$	56,164	$	59,512

Total assets per segment is set forth below (dollar amounts in thousands):

	September 30, 2020		December 31, 2019
Assets:
Asia	$	80,613	$	65,959
Europe	18,476		15,187
North America	129,573		124,337
Latin America and Other	8,758		7,585
Total assets	$	237,420	$	213,068