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 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®

and SR CarnoSyn® trade names.

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

not

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 December 31,				Six Months Ended December 31,
	2017		2016		2017		2016
Net Sales
Private label contract manufacturing	$	29,355	$	23,864	$	51,577	$	51,243
Patent and trademark licensing		3,980		6,695		9,832		13,383
Total Net Sales	$	33,335	$	30,559	$	61,409	$	64,626

	Three Months Ended December 31,						Six Months Ended December 31,
	2017			2016			2017			2016
Income from Operations
Private label contract manufacturing	$	3,385		$	2,148		$	5,641		$	5,462
Patent and trademark licensing		504			2,340			1,692			4,240
Income from operations of reportable segments		3,889			4,488			7,333			9,702
Corporate expenses not allocated to segments		(1,608	)		(1,375	)		(3,169	)		(3,053	)
Total Income from Operations	$	2,281		$	3,113		$	4,164		$	6,649

Total Assets	December 31, 201 7		June 30, 201 7
Private label contract manufacturing	$	72,115	$	60,489
Patent and Trademark Licensing		12,472		12,122
Total	$	84,587	$	72,611

Our private label contract manufacturing 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 December 31,				Six Months Ended December 31,
	2017		2016		2017		2016

United States	$	16,426	$	13,654	$	31,620	$	28,879
Markets outside of the United States		16,909		16,905		29,789		35,747
Total	$	33,335	$	30,559	$	61,409	$	64,626

Products manufactured by NAIE accounted for

81%

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

three

months ended

December 31, 2017,

and

79%

for the

six

months ended

December 31, 2017.

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 were sold in the U.S. during the

three

month or

six

month periods ended

December 31, 2017

and

2016.

Assets and capital 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, 201 7		June 30, 201 7		December 31, 201 7		June 30, 201 7		December 31, 201 7		December 31, 201 6
United States	$	10,461	$	10,753	$	53,353	$	47,777	$	426	$	1,812
Europe		8,272		7,383		31,234		24,834		1,669		1,550
	$	18,733	$	18,136	$	84,587	$	72,611	$	2,095	$	3,362