Note H - Segment Information

9 Months Ended

Mar. 31, 2022

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 March 31,				Nine Months Ended March 31,
	2022		2021		2022		2021
Net Sales
Private label contract manufacturing	$	37,623	$	42,196	$	104,894	$	124,569
Patent and trademark licensing		4,750		4,124		13,546		9,560
Total Net Sales	$	42,373	$	46,320	$	118,440	$	134,129

	Three Months Ended March 31,						Nine Months Ended March 31,
	2022			2021			2022			2021
Income from Operations
Private label contract manufacturing	$	3,605		$	3,241		$	10,065		$	13,511
Patent and trademark licensing		1,813			1,541			6,206			2,740
Income from operations of reportable segments		5,418			4,782			16,271			16,251
Corporate expenses not allocated to segments		(2,144	)		(2,082	)		(6,368	)		(6,074	)
Total Income from Operations	$	3,274		$	2,700		$	9,903		$	10,177

	March 31, 2022		June 30, 2021
Total Assets
Private-label contract manufacturing	$	105,552	$	95,324
Patent and trademark licensing		29,936		24,957
	$	135,488	$	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 March 31,				Nine Months Ended March 31,
	2022		2021		2022		2021
United States	$	29,382	$	27,674	$	78,279	$	70,534
Markets outside of the United States		12,991		18,646		40,161		63,595
Total	$	42,373	$	46,320	$	118,440	$	134,129

Products manufactured by our Swiss subsidiary ("NAIE") accounted for 85% of net sales in markets outside the U.S. for the three months ended March 31, 2022 and 84% for the nine months ended March 31, 2022. 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. No products manufactured by NAIE were sold in U.S. markets during the three and nine month periods ended March 31, 2022 and 2021.

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, 2022		June 30, 2021
United States	$	39,729	$	21,109
Europe		14,720		17,039
Total Long-Lived Assets	$	54,449	$	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):

	March 31, 2022		June 30, 2021
United States	$	81,917	$	67,307
Europe		53,571		52,974
Total Assets	$	135,488	$	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):

	Nine Months Ended March 31,
	2022		2021
United States	$	20,766	$	1,788
Europe		702		2,463
Total Capital Expenditures	$	21,468	$	4,251