Note H - Segment Information

3 Months Ended

Sep. 30, 2020

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

H

. 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 of these segments based on a number of factors. The primary performance measures for each segment are net sales and income or loss from operations before the allocation of certain corporate level expenses. 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. above and in the consolidated financial statements included in our

2020

Annual Report.

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

	Three Months Ended September 30,
	20 20		2019
Net Sales
Private-label contract manufacturing	$	37,047	$	26,009
Patent and trademark licensing		2,679		3,186
Total Net Sales	$	39,726	$	29,195

	Three Months Ended September 30,
	2020			2019
Income (Loss) from Operations
Private-label contract manufacturing	$	3,424		$	1,613
Patent and trademark licensing		670			213
Income from operations of reportable segments		4,094			1,826
Corporate expenses not allocated to segments		(2,009	)		(1,881	)
Total Income (Loss) from Operations	$	2,085		$	(55	)

	September 30, 2020		June 30, 2020
Total Assets
Private-label contract manufacturing	$	107,730	$	100,094
Patent and trademark licensing		20,826		20,109
	$	128,556	$	120,203

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, were as follows (in thousands):

	Three Months Ended September 30,
	2020		2019
United States	$	19,785	$	18,185
Markets outside of the United States		19,941		11,010
Total	$	39,726	$	29,195

Products manufactured by our Swiss subsidiary ("NAIE") accounted for

86%

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

three

months ended

September 30, 2020.

Products manufactured by NAIE accounted for

89%

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

three

months ended

September 30, 2019.

No

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

three

month periods ended

September 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, were as follows (in thousands):

	September 30, 20 20		June 30, 20 20
United States	$	21,272	$	21,769
Europe		18,463		18,108
Total Long-Lived Assets	$	39,735	$	39,877

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

	September 30, 20 20		June 30, 20 20
United States	$	72,768	$	66,489
Europe		55,788		53,714
Total Assets	$	128,556	$	120,203

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):

	Three Months Ended
	September 30, 20 20		September 30, 201 9
United States	$	249	$	406
Europe		1,230		712
Total Capital Expenditures	$	1,479	$	1,118