Note H - Segment Information

6 Months Ended

Dec. 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 2021 Annual Report.

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

	Three Months Ended December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
Net Sales
Private label contract manufacturing	$	33,677	$	45,326	$	67,271	$	82,373
Patent and trademark licensing		4,050		2,757		8,796		5,436
Total Net Sales	$	37,727	$	48,083	$	76,067	$	87,809

	Three Months Ended December 31,						Six Months Ended December 31,
	2021			2020			2021			2020
Income from Operations
Private label contract manufacturing	$	2,761		$	6,843		$	6,461		$	10,270
Patent and trademark licensing		1,757			529			4,393			1,199
Income from operations of reportable segments		4,518			7,372			10,854			11,469
Corporate expenses not allocated to segments		(2,117	)		(1,980	)		(4,225	)		(3,992	)
Total Income from Operations	$	2,401		$	5,392		$	6,629		$	7,477

	December 31, 2021		June 30, 2021
Total Assets
Private-label contract manufacturing	$	99,746	$	95,324
Patent and trademark licensing		27,612		24,957
	$	127,358	$	120,281

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, Mexico 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 December 31,				Six Months Ended December 31,
	2021		2020		2021		2020
United States	$	25,402	$	23,074	$	48,897	$	42,860
Markets outside of the United States		12,325		25,009		27,170		44,949
Total	$	37,727	$	48,083	$	76,067	$	87,809

Products manufactured by our Swiss subsidiary ("NAIE") accounted for 89% of net sales in markets outside the U.S. for the three months ended December 31, 2021 and 84% for the six months ended December 31, 2021. Products manufactured by our Swiss subsidiary ("NAIE") accounted for 83% of net sales in markets outside the U.S. for the three months ended December 31, 2020 and 85% for the six months ended December 31, 2020. No products manufactured by NAIE were sold in U.S. markets during the three and six month periods ended December 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):

	December 31, 2021		June 30, 2021
United States	$	38,976	$	21,109
Europe		15,307		17,039
Total Long-Lived Assets	$	54,283	$	38,148

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):

	December 31, 2021		June 30, 2021
United States	$	74,290	$	67,307
Europe		53,068		52,974
Total Assets	$	127,358	$	120,281

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):

	Six Months Ended December 31,
	2021		2020
United States	$	19,250	$	1,033
Europe		394		2,001
Total Capital Expenditures	$	19,644	$	3,034