Note G - Segment Information

6 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

G. Segment Information

Our business consists of

two

segments for financial reporting purposes, identified as (i) private label contract manufacturing, which primarily relates to the provision of private label contract manufacturing services to companies that market and distribu

te nutritional supplements and other health care products; and (ii) patent and trademark licensing, which primarily includes direct raw material sales and royalty income from our license and supply agreements associated with the sale and use of beta-alanine under our CarnoSyn® trade name.

We evaluate performance based on a number of factors. The primary performance measures for each segment are net sales and income or loss from operations before corporate allocations. Operating income or loss for each segm

ent does not include corporate general and administrative expenses, interest expense and other miscellaneous income and expense items. Corporate general and administrative expenses include, but are not limited to: human resources, corporate legal, finance, information technology, and other corporate level related expenses, which are not allocated to any segment. The accounting policies of our segments are the same as those described in Note A above and in the consolidated financial statements included in our

2016

Annual Report.

Our operating results by business segment were as follows (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2016		2015		2016		2015
Net Sales
Private label contract manufacturing	$	23,864	$	21,619	$	51,243	$	37,884
Patent and trademark licensing		6,695		5,292		13,383		10,612
Total Net Sales	$	30,559	$	26,911	$	64,626	$	48,496

	Three Months Ended December 31,						Six Months Ended December 31,
	2016			2015			2016			2015
Income from Operations
Private label contract manufacturing	$	2,148		$	2,543		$	5,462		$	4,603
Patent and trademark licensing		2,340			1,692			4,240			2,691
Income from operations of reportable segments		4,488			4,235			9,702			7,294
Corporate expenses not allocated to segments		(1,375	)		(1,500	)		(3,053	)		(2,831	)
Total Income from Operations	$	3,113		$	2,735		$	6,649		$	4,463

Total Assets	December 31, 20 16		June 30, 2016
Private label contract manufacturing	$	62,742	$	66,375
Patent and Trademark Licensing		10,052		7,800
Total	$	72,794	$	74,175

Our private label contract manufacturing products are sold both in the U.S. and in markets outside the U.S., including Europe, Australia, Asia, Canada, Mexico and South Africa. Our primary market outside the U.S. is Europe. Our patent and trademark licensi

ng activities are primarily based in the U.S.

Net sales by geographic region, based on the customers

’ location, were as follows (in thousands):

	Three Months Ended December 31,				Six Months Ended December 31,
	2016		2015		2016		2015
United States	$	13,654	$	12,498	$	28,879	$	25,291
Markets outside of the United States		16,905		14,413		35,747		23,205
Total	$	30,559	$	26,911	$	64,626	$	48,496

Products manufactured by NAIE accounted for

60%

of net sales in markets outside the U.S. for the

three

months ended

December

31,

2016,

and

53%

for the

six

months ended

December

31,

2016.

Products manufactured by NAIE accounted for

71%

of net sales in mark

ets outside the U.S. for the

three

months ended

December

31,

2015,

and

74%

for the

six

months ended

December

31,

2015.

No

products manufactured by NAIE were sold in the U.S. during the

three

or

six

months ended

December

31,

2016

and

2015.

Assets and capit

al expenditures by geographic region, based on the location of the company or subsidiary at which they were located or made, were as follows (in thousands):

	Long-Lived Assets				Total Assets				Capital Expenditures
									Six Months Ended
	December 31, 2016		June 30, 2016		December 31, 2016		June 30, 2016		December 31, 2016		December 31, 2015
United States	$	10,897	$	9,678	$	46,424	$	49,755	$	1,812	$	320
Europe		6,572		5,489		26,370		24,420		1,550		1,090
	$	17,469	$	15,167	$	72,794	$	74,175	$	3,362	$	1,410