Note N - Segment Information

12 Months Ended

Jun. 30, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

N

. Segment Information

Our business consists of

two

segments for financial reporting purposes. The

two

segments are 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 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. Transfers of raw materials between segments are recorded at cost. The accounting policies of our segments are the same as those described in the summary of significant accounting policies in Note A.

Our operating results by business segment for the years ended

June 

30

were as follows (in thousands):

	20 20		2019
Net Sales
Private-label contract manufacturing	$	106,291	$	121,598
Patent and trademark licensing		12,585		16,692
	$	118,876	$	138,290

	20 20			2019
(Loss) Income from Operations
Private-label contract manufacturing	$	4,030		$	11,232
Patent and trademark licensing		2,508			2,892
Income from operations of reportable segments		6,538			14,124
Corporate expenses not allocated to segments		(8,047	)		(8,163	)
	$	(1,509	)	$	5,961

	2020		2019
Assets
Private-label contract manufacturing	$	100,094	$	74,431
Patent and trademark licensing		20,109		19,059
	$	120,203	$	93,490

Our private-label contract manufacturing products are sold both in the U.S. and in markets outside the U.S., including Europe, Canada, Australia, New Zealand, and Asia. Our primary markets outside the U.S. are Europe and Asia. Our patent and trademark licensing activities are primarily based in the U.S.

Net sales by geographic region, based on the customers' location, for the

two

years ended

June 

30

were as follows (in thousands):

	20 20		2019
United States	$	66,912	$	67,000
Markets outside the United States		51,964		71,290
Total net sales	$	118,876	$	138,290

Products manufactured by NAIE accounted for

89%

of consolidated net sales in markets outside the U.S. in fiscal

2020

and

78%

in fiscal

2019.

No

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

June 

30,

2020

and

2019.

  

Long-lived assets by geographic region, based on the location of the company or subsidiary at which they were located or made, for the

two

years ended

June 

30

were as follows (in thousands):

	2020		2019
United States	$	21,769	$	10,977
Europe		18,108		10,108
Total Long-Lived Assets	$	39,877	$	21,085

As a result of the implementation of ASC

842,

operating lease right-of-use assets are now recorded as part of long-lived assets for segment reporting.

Total assets by geographic region, based on the location of the company or subsidiary at which they were located or made, for the

two

years ended

June 

30

were as follows (in thousands):

	2020		2019
United States	$	66,489	$	54,785
Europe		53,714		38,705
Total Assets	$	120,203	$	93,490

Capital expenditures by geographic region, based on the location of the company or subsidiary at which they were located or made, for the

two

years ended

June 

30

were as follows (in thousands):

	2020		2019
United States	$	1,530	$	1,746
Europe		3,011		3,581
Total Capital Expenditures	$	4,541	$	5,327