Note H - Segment Information

9 Months Ended

Mar. 31, 2021

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 March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
Net Sales
Private label contract manufacturing	$	42,196	$	22,650	$	124,569	$	73,490
Patent and trademark licensing		4,124		2,832		9,560		10,290
Total Net Sales	$	46,320	$	25,482	$	134,129	$	83,780

	Three Months Ended March 31,						Nine Months Ended March 31,
	2021			2020			2021			2020
Income (Loss) from Operations
Private label contract manufacturing	$	3,241		$	(3,123	)	$	13,511		$	187
Patent and trademark licensing		1,541			813			2,740			1,870
Income (loss) from operations of reportable segments		4,782			(2,310	)		16,251			2,057
Corporate expenses not allocated to segments		(2,082	)		(1,913	)		(6,074	)		(5,637	)
Total Income (Loss) from Operations	$	2,700		$	(4,223	)	$	10,177		$	(3,580	)

	March 31, 2021		June 30, 2020
Total Assets
Private-label contract manufacturing	$	95,502	$	100,094
Patent and trademark licensing		22,959		20,109
	$	118,461	$	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 March 31,				Nine Months Ended March 31,
	2021		2020		2021		2020
United States	$	27,674	$	12,908	$	70,534	$	48,682
Markets outside of the United States		18,646		12,574		63,595		35,098
Total	$	46,320	$	25,482	$	134,129	$	83,780

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

65%

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

three

months ended

March 31, 2021

and

79%

for the

nine

months ended

March 31, 2021.

Products manufactured by NAIE accounted for

88%

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

three

months ended

March 31, 2020

and

90%

for the

nine

months ended

March 31, 2020.

No

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

three

or

nine

month periods ended

March 31, 2021

and

2020.

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):

	March 31, 2021		June 30, 2020
United States	$	21,325	$	21,769
Europe		17,682		18,108
Total Long-Lived Assets	$	39,007	$	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):

	March 31, 2021		June 30, 2020
United States	$	67,624	$	66,489
Europe		50,837		53,714
Total Assets	$	118,461	$	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):

	Nine Months Ended
	March 31, 2021		March 31, 2020
United States	$	1,788	$	1,110
Europe		2,463		2,322
Total Capital Expenditures	$	4,251	$	3,432