Segment Information

9 Months Ended

Sep. 30, 2022

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. 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,
	2022		2021		2022		2021
Net sales:
Asia	$	47,878	$	48,417	$	141,370	$	127,708
Europe	19,328		21,813		58,204		65,468
North America	31,504		37,738		101,567		112,872
Latin America and Other	5,796		6,778		18,020		20,097
Total net sales	104,506		114,746		319,161		326,145
Contribution margin (1):
Asia	21,268		21,421		64,639		55,203
Europe	7,189		6,959		18,157		20,343
North America	10,839		17,193		35,858		48,892
Latin America and Other	2,508		3,961		7,703		11,355
Total contribution margin	41,804		49,534		126,357		135,793
Selling, general and administrative expenses (2)	36,792		39,528		114,281		108,666
Operating income	5,012		10,006		12,076		27,127
Other loss, net	(2,281)		(886)		(3,037)		(2,290)
Income before provision for income taxes	$	2,731	$	9,120	$	9,039	$	24,837

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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 $2.5 million and $11.3 million for the three and nine-month periods ended September 30, 2022, respectively, compared to $5.2 million and $11.7 million for the three and nine-month periods ended September 30, 2021. These service fees are included in selling, general and administrative expenses.

From an individual country/region perspective, the United States, South Korea and Taiwan comprise 10 percent or more of consolidated net sales for the three and nine-month periods ended September 30, 2022 and 2021, as follows (dollar amounts in thousands):

 

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Net sales:
United States	$	29,077	$	34,960	$	93,789	$	104,258
South Korea	14,967		15,985		43,085		48,340
Taiwan	13,465		7,361		35,148		14,860
Other	46,997		56,440		147,139		158,687
	$	104,506	$	114,746	$	319,161	$	326,145

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,
	2022		2021		2022		2021
Asia
General health	$	14,705	$	13,150	$	40,010	$	37,140
Immune	654		463		2,779		1,048
Cardiovascular	14,626		13,018		41,498		35,181
Digestive	8,599		10,427		28,625		25,045
Personal care	2,758		4,201		7,384		12,015
Weight management	6,536		7,158		21,074		17,279
	47,878		48,417		141,370		127,708
Europe
General health	$	8,638	$	9,308	$	25,162	$	28,447
Immune	1,899		2,285		5,973		6,119
Cardiovascular	2,385		2,774		7,168		8,602
Digestive	4,849		5,700		14,921		16,807
Personal care	1,087		1,167		3,529		3,592
Weight management	470		579		1,451		1,901
	19,328		21,813		58,204		65,468
North America
General health	$	14,241	$	16,573	$	44,509	$	49,192
Immune	3,546		5,056		12,479		14,031
Cardiovascular	3,427		4,171		11,162		12,406
Digestive	8,096		9,079		25,734		28,558
Personal care	1,397		1,978		4,961		5,631
Weight management	797		881		2,722		3,054
	31,504		37,738		101,567		112,872
Latin America and Other
General health	$	1,597	$	1,959	$	5,012	$	5,807
Immune	709		806		2,225		2,314
Cardiovascular	438		448		1,250		1,351
Digestive	2,569		2,941		7,961		8,813
Personal care	329		406		1,050		1,149
Weight management	154		218		522		663
	5,796		6,778		18,020		20,097
	$	104,506	$	114,746	$	319,161	$	326,145

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, 2022		December 31, 2021
Property, plant and equipment:
United States	$	43,886	$	46,595
Other	3,468		4,262
Total property, plant and equipment, net	$	47,354	$	50,857

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

	September 30, 2022		December 31, 2021
Assets:
Asia	$	89,570	$	104,659
Europe	16,872		15,486
North America	110,087		131,207
Latin America and Other	6,979		7,522
Total assets	$	223,508	$	258,874