Segment Information

9 Months Ended

Sep. 30, 2013

Segment Information

Segment Information

(8) Segment Information

The Company has three business segments. These business segments are components of the Company for which separate information is available that is evaluated regularly by the chief executive officer in deciding how to allocate resources and in assessing relative performance.

The Company has two business segments that operate under the Nature’s Sunshine Products brand and are divided based on the characteristics of their Distributor base, similarities in compensation plans, as well as the internal organization of NSP’s officers and their responsibilities (NSP Americas, Asia Pacific and Europe; and NSP Russia, Central and Eastern Europe). The Company’s third business segment operates under the Synergy WorldWide brand, which distributes its products through different marketing and Distributor compensation plans and products with formulations that are sufficiently different from those of NSP Americas, Asia Pacific and Europe; and NSP Russia, Central and Eastern Europe to warrant accounting for these operations as a separate business segment. Net sales revenues 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. The Company evaluates performance based on contribution margin by segment before consideration of certain inter-segment transfers and expenses.

During 2012, the Company engaged in a reorganization process in which the business segments, the roles of upper management responsible for operating the business segments, and the information provided to the chief executive officer were reevaluated.  As a result of the reorganization process, the two historical NSP segments (NSP United States and NSP International), which were separated based on their geographical operations, were divided into two new segments (NSP Americas, Asia Pacific and Europe; and NSP Russia, Central and Eastern Europe) based on the nature of their business activities, and the information presented to the chief executive officer. NSP Americas, Asia Pacific and Europe distributes products through a mixture of retailing, practitioners and direct selling while NSP Russia, Central and Eastern Europe is more oriented to a network marketing approach. The new NSP segments conform to a revised internal management structure, and report their operating results separately to the chief executive officer. There was no change to the Synergy WorldWide segment.  The presentation of the comparative information has been revised to conform to the new presentation.

Reportable business segment information is as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013		2012
Net sales revenue:
NSP Americas, Asia Pacific and Europe	$	50,560		$	51,783		$	157,113	$	159,254
NSP Russia, Central and Eastern Europe	14,577			13,187			45,695		41,986
Synergy WorldWide	27,321			26,262			79,804		75,851
Total net sales revenue	92,458			91,232			282,612		277,091
Contribution margin (1):
NSP Americas, Asia Pacific and Europe	19,973			20,513			64,234		63,708
NSP Russia, Central and Eastern Europe	5,409			5,043			16,915		16,069
Synergy WorldWide	9,501			9,377			27,313		27,555
Total contribution margin	34,883			34,933			108,462		107,332
Selling, general and administrative	28,170			26,228			86,996		79,142
Total operating income	6,713			8,705			21,466		28,190
Other income (expense), net	(269		)	(214		)	1,543		(159		)
Income before provision for income taxes	$	6,444		$	8,491		$	23,009	$	28,031

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

From an individual country perspective, only the United States comprises 10 percent or more of consolidated net sales revenue for the three and nine month periods ended September 30, 2013 and 2012 as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Net sales revenue:
United States	$	37,209	$	38,243	$	116,552	$	118,390
Other	55,249		52,989		166,060		158,701
	$	92,458	$	91,232	$	282,612	$	277,091

Revenue generated by each of the Company’s product lines is set forth below:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
NSP Americas, Asia Pacific and Europe:
Herbal products	$	29,372	$	28,888	$	90,757	$	89,809
Vitamin, mineral and other nutritional supplements	19,102		20,379		59,672		61,566
Personal care products	1,179		1,560		3,786		4,861
Other products	907		956		2,898		3,018
	50,560		51,783		157,113		159,254
NSP Russia, Central and Eastern Europe:
Herbal products	$	6,656	$	5,834	$	20,692	$	18,389
Vitamin, mineral and other nutritional supplements	6,854		5,954		21,337		18,686
Personal care products	1,016		1,354		3,511		4,775
Other products	51		45		155		136
	14,577		13,187		45,695		41,986
Synergy WorldWide:
Herbal products	$	9,520	$	10,005	$	31,608	$	29,982
Vitamin, mineral and other nutritional supplements	15,967		14,510		42,725		40,575
Personal care products	1,471		1,394		4,405		4,020
Other products	363		353		1,066		1,274
	27,321		26,262		79,804		75,851
	$	92,458	$	91,232	$	282,612	$	277,091

From an individual country perspective, only the United States and Venezuela comprise 10 percent or more of consolidated property, plant and equipment as follows:

	September 30, 2013		December 31, 2012
Property, plant and equipment:
United States	$	23,001	$	20,923
Venezuela	3,297		3,535
Other	3,049		3,492
Total property, plant and equipment	$	29,347	$	27,950