. Segment Information

Our busine

ss 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 distribute 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 segment does

t include corporate general and administrative expenses, interest expense and other miscellaneous income and expense items. Corporate general and administrative expenses, which are

not

allocated to any segment, include, but are

not

limited to: human resources, corporate legal, finance, information technology, and other corporate level related expenses. 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

2017

Annual Report.

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

	Three Months Ended September 30,
	2017		2016
Net Sales
Private label contract manufacturing	$	22,222	$	27,379
Patent and trademark licensing		5,852		6,688
Total	$	28,074	$	34,067

	Three Months Ended September 30,
	201 7			201 6
Income from Operations
Private label contract manufacturing	$	2,257		$	3,314
Patent and trademark li censing		1,188			1,900
Income from operations of reportable segments		3,445			5,214
Corporate expenses not allocated to segments		(1,562	)		(1,678	)
Total net sales	$	1,883		$	3,536

	September 30, 201 7		June 30, 201 7
Total Assets
Private label contract manufacturing	$	67,795	$	60,489
Patent and trademark licensing		13,154		12,122
Total assets	$	80,949	$	72,611

Our private label contract manuf

acturing products are sold both in the U.S. and in markets outside the U.S., including Europe, Australia and Asia, as well as Canada, Mexico and South Africa. Our primary market outside the U.S. is Europe. Our patent and trademark licensing 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 September 30,
	201 7		2016

United States	$	15,194	$	15,225
Markets outside the Unite d States		12,880		18,842
Total net sales	$	28,074	$	34,067

Products manufactured by NAIE accounted for

75%

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

three

months ended

September 30, 2017,

and

48%

for the

three

months ended

September 30, 2016.

products manufactured by NAIE were sold in the U.S

during the

three

months ended

September 30, 2017

and

2016

Assets and capital expenditures by geographic region, based on the location of the company or subsidiary at whic

h they were located or made, were as follows (in thousands):

	Long-Lived Assets				Total Assets				Capital Expenditures
									Three Months Ended
	September 30, 201 7		June 30, 201 7		September 30, 201 7		June 30, 201 7		September 30, 201 7		September 30, 2 01 6
United States	$	10,491	$	10,753	$	53,045	$	47,777	$	89	$	1,227
Europe		7,878		7,383		27,904		24,834		867		489
	$	18,369	$	18,136	$	80,949	$	72,611	$	956	$	1,716